Sontag v. Stix
| Citation | 199 S.W.2d 371,355 Mo. 972 |
| Decision Date | 13 January 1947 |
| Docket Number | 39899 |
| Parties | William Sontag, Curator of the Estate of Rose Anna Huwe, Non Compos Mentis, Appellant, v. Charles H. Stix, Co-Executor of the Estate of Harry F. Stix, Claire N. Stix, Co-Executor of the Estate of Harry F. Stix, Charles H. Stix, Frederick A. Arnstein and Edwin R. Waldemer, Co-Partners, d.b.a. Stix & Company |
| Court | Missouri Supreme Court |
Rehearing Denied February 10, 1947.
Appeal from Circuit Court of City of St. Louis; Hon. William H Killoren, Judge.
Affirmed.
Julius H. Drucker, Harvey B. Cox and Roberts P. Elam for appellant.
(1) The purchase of the bonds in question was an unlawful diversion of the funds of plaintiff's insane ward. Sec. 418, R.S 1939; In re Keisker's Estate, 350 Mo. 727, 168 S.W.2d 96; Woodard v. Bird, 105 Tenn. 671, 59 S.W. 143; Freeman v. Citizens Natl. Bank, 167 Tenn. 399, 70 S.W.2d 25; Humphries v. Manhattan Savings Bk. & Tr. Co., 174 Tenn. 399, 122 S.W.2d 446. (2) The illegality of the purchase of such bonds cannot be cured by the order of the probate court purportedly authorizing the insane person's curator to purchase such bonds. Woods v. Boots, 60 Mo. 546; Porterfield v. Farmers' Exchange Bank of Gallatin, 327 Mo. 640, 37 S.W.2d 936; In re Keisker's Estate, 350 Mo. 727, 168 S.W.2d 96; Humphries v. Manhattan Savings Bk. & Tr. Co., 174 Tenn. 399, 122 S.W.2d 446. (3) Defendants, knowing that they were selling the bonds to plaintiff in his capacity as curator of an insane person's estate, and that he was using his insane ward's funds to make the purchase, were charged with knowledge of his lack of authority. Defendants, by selling these bonds to plaintiff with such knowledge, participated in an unlawful transaction and became liable to the insane ward's estate for the loss resulting therefrom. Porterfield v. Farmers' Exchange Bank of Gallatin, 327 Mo. 640, 37 S.W.2d 936; Round Prairie Bank of Fillmore v. Downey, 64 S.W.2d 701; Woodard v. Bird, 105 Tenn. 671, 59 S.W. 143; Freeman v. Citizens Natl. Bank, 167 Tenn. 399, 70 S.W.2d 25; Humphries v. Manhattan Savings Bk. & Tr. Co., 174 Tenn. 399, 122 S.W.2d 446. (4) Defendants are not excused from liability because the plaintiff curator was a party to the illegal transaction and may himself be liable to his insane ward's estate. The cause of action is in the insane ward, and it is plaintiff curator's duty to prosecute the suit thereon. Porterfield v. Farmers' Exchange Bank of Gallatin, 327 Mo. 640, 37 S.W.2d 936; Round Prairie Bank of Fillmore v. Downey, 64 S.W.2d 701; Grove v. Reynolds, 100 Mo.App. 56, 71 S.W. 1103; Williams v. Maxwell, 82 S.W.2d 270; Redmond v. Quincy, O. & K.C.R. Co., 225 Mo. 721, 126 S.W. 159; Secs. 461, 470, R.S. 1939. (5) The cause of action set up in the second count of plaintiff's second amended petition, although first set up in plaintiff's amended petition filed February 15, 1941, more than five years after the cause of action accrued, and more than a year after first publication of the issuance of letters testamentary on the estate of Harry F. Stix, deceased, is not barred by the statute of limitations nor the statute of non-claim. Secs. 182, 183, 1014, 1020, R.S. 1939; Bernhardt v. Perry, 276 Mo. 612, 208 S.W. 462; Lindell Real Estate Co. v. Lindell, 142 Mo. 61, 43 S.W. 368; Kneuven v. Berliner's Estate, 54 S.W.2d 494; Brunnert v. Boeckmann's Estate, 258 S.W. 768; Grier v. Robbins' Estate, 158 S.W. 389; Elliott v. Landis Machine Co., 236 Mo. 546, 139 S.W. 356; 6 A.L.R. 1689; 128 A.L.R. 1379.
McDonald, Bartlett & Muldoon for respondents; Daniel Bartlett, J. D. Hennigan and Elmer E. Hilpert of counsel.
(1) Liability as trustee ex maleficio depends on a persons's actual knowledge that a guardian's purchase of securities is in breach of trust or on his negligence in failing to discover that such purchase is in breach of trust. Restatement of Trusts, Sec. 201 and Comment (a) thereto, Secs. 205 and 283-326 -- especially Secs. 288, 297 and Comment (a) thereto, and 326 and Comments (a) and (b) thereto; 2 Scott on Trusts, Sec. 201, p. 1085; Sec. 205, p. 1098; Sec. 297, p. 1632; and especially Vol. 3, Secs. 326 and 326.1, pp. 1759, 1760, and the cases there cited; Porterfield v. Farmers' Exchange Bank of Gallatin, 327 Mo. 640, 37 S.W.2d 936; Round Prairie Bank of Fillmore v. Downey, 64 S.W.2d 701; Georgia Railroad Bank & Trust Co. v. Liberty Natl. Bank & Trust Co., 180 Ga. 4, 177 S.E. 803; Woodard v. Bird, 105 Tenn. 671, 59 S.W. 143; Freeman v. Citizens' Natl. Bank, 167 Tenn. 399, 70 S.W.2d 25; Bates v. Dunham, 58 Iowa 308, 12 N.W. 309; Easton v. Somerville, 111 Iowa 164, 82 N.W. 475; Kowalke v. Evernham, 210 Iowa 1270, 232 N.W. 670; Dorsey v. Murphy, 188 Miss. 291, 194 So. 603; Hurst v. Marshall, 75 Tex. 452, 13 S.W. 33; Smoot v. Richards, 8 Tex. Civ. App. 146, 27 S.W. 967; Natl. Surety Co. v. Manhattan Mortgage Co., 185 A.D. 733, 174 N.Y.S. 9, affirmed 230 N.Y. 545, 130 N.E. 887; Matter of Title & Mortgage Guarantee Co. of Buffalo, 246 A.D. 435, 284 N.Y.S. 335, affirmed, 270 N.Y. 629, 1 N.E.2d 364. (2) Defendants did not actually know in 1929 that the guardian's purchase of securities was in violation of R.S. Mo., Sec. 418. R.S. 1929, Sec. 418 (); In re Keisker's Estate, 350 Mo. 727, 168 S.W.2d 96. (3) Defendants were not negligent in 1929 in failing to discover that the guardian's purchase of securities was in violation of R.S. Mo., Sec. 418. R.S. 1929, Secs. 506, 418, and especially 394 (these also appear thus numbered in R.S. 1939); Porterfield v. Farmers' Exchange Bank of Gallatin, 327 Mo. 640, 37 S.W.2d 936; Round Prairie Bank of Fillmore v. Downey, 64 S.W.2d 701; In re Keisker's Estate (1943), 350 Mo. 727, 168 S.W.2d 96. (4) There was no finding that defendants actually knew in 1929 that the guardian's purchase of securities was in violation of R.S. Mo., Sec. 418; and there was no finding that defendants were negligent in 1929 in failing to discover that the guardian's purchase of securities was in violation of R.S. Mo., Sec. 418. Opinion of the St. Louis Court of Appeals in this case (1946), 191 S.W.2d 988; 1945 Constitution of Missouri, Art. V, Sec. 10; Code of Civil Procedure, Sec. 114(a). (5) The Latin maxim, "Ignorantia juris neminem excusat," does not apply in civil cases. It does not mean that "Everyone is presumed to know the law" in the sense that it was employed in the decision in the Court of Appeals. And, in any event, it is not the true basis of a person's liability as trustee ex maleficio. Broom's Legal Maxims, Classified and Illustrated (9th Ed., 1924), p. 179; Jones v. Randall (1774), Cowp. 37; Montriou v. Jefferys, 2 Car. & P. 113; Martindale v. Martindale, 2 C.B. 706, 719 Lansdown v. Lansdown (1730), Moseley 364; Culbreath v. Culbreath, 7 Ga. 64, 50 Am. Dec. 375. (6) Under Missouri cases liability as trustee ex maleficio depends on a person's actual knowledge that the guardian's purchase of securities was in violation of R.S. Mo., Sec. 418, or on his negligence in failing to discover that such purchase was in violation of that Section. Such liability is not based merely on a supposed presumption that "Everyone knows the law." Porterfield v. Farmers' Exchange Bank of Gallatin, 327 Mo. 640, 37 S.W.2d 936; Round Prairie Bank of Fillmore v. Downey, 64 S.W.2d 701; Restatement of Trusts, Secs. 201, 205, compared with Sec. 326 and Comment (a) thereto; In re Keisker's Estate, 350 Mo. 727, 168 S.W.2d 96; Woods v. Boots, 60 Mo. 546; R.S. 1929, Sec. 506 (this also appears thus numbered in R.S. 1939). (7) The Humphries case, cited and relied on by plaintiff, is in error. It is also distinguishable on its facts from this case and from the Missouri authorities. It should, therefore, not be followed as persuasive authority in this case. 2 Scott on Trusts, Sec. 201, p. 1085; Sec. 205, p. 1098; Humphries v. Manhattan Savings Bank & Trust Co., 174 Tenn. 17, 122 S.W.2d 446; Woodard v. Bird, 105 Tenn. 671, 59 S.W. 143; Freeman v. Citizens' Natl. Bank, 167 Tenn. 399, 70 S.W.2d 25. (8) Missouri probate courts have authority to issue orders approving guardians' purchase of securities with their wards' funds. R.S. 1929, Chap. I, Arts. 16, 18, especially Secs. 394, 418, 506 (); In re Lietman, 149 Mo. 112, 73 Am. St. Rep. 374, 50 S.W. 307, noted as a leading case in 1 A.L.R. 991. (9) Orders of the probate courts of Missouri have the same finality and conclusiveness, if not appealed from within time, as the orders, judgments and decrees of other courts. Hence, the order of the probate court herein, not having been appealed from within time, is final and conclusive. The decision of the Court of Appeals is in error; and it should, therefore, be reversed by the Supreme Court. 1875 Constitution of Missouri, Art. VI, Sec. 34 (now found in 1945 Constitution, Art. V, Sec. 16); R.S. 1939, Sec. 2436; Sheehan v. First Natl. Bank in St. Louis, 346 Mo. 227, 140 S.W.2d 1; Jones v. Peterson, 335 Mo. 242, 72 S.W.2d 76; Smith v. Black, 231 Mo. 681, 132 S.W. 1129; Lucas v. Central Missouri Trust Co., 349 Mo. 537, 162 S.W.2d 569; 28 C.J. 1140, sec. 234; 34 C.J. 518, sec. 824; 88 A.L.R. 325, 116 A.L.R. 437; Munday v. Leeper, 120 Mo. 417, 25 S.W. 381; In re Estate of Judy, 166 Mo. 13, 65 S.W. 993; Wilson v. Wilson, 255 Mo. 528, 164 S.W. 561; McIntyre v. St. Louis-S.F. Ry. Co., 286 Mo. 234, 227 S.W. 1047; In re Duren (Guerry v. Hicks), 195 S.W.2d 745.
From a judgment in favor of defendants, plaintiff appealed to the St. Louis...
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