State ex rel. Wolff v. Berning

• Decision Date: 31 October 1881
• Citation: 74 Mo. 87
• Parties: THE STATE TO THE USE OF WOLFF v. BERNING, Appellant.
• Court: Missouri Supreme Court

74 Mo. 87

THE STATE TO THE USE OF WOLFF

v.BERNING, Appellant.

Supreme Court of Missouri.

October Term, 1881.

Appeal from St. Louis Court of Appeals. The case is reported in 6 Mo. App. 185.

AFFIRMED.

Louis Wolff died leaving a will, by which he devised the residue of his estate, after the payment of specified legacies, to his widow, Dorothea. On the 25th of July, 1872, Christian Staehlin qualified as executor, giving a bond in the sum of $60,000, with Henry B. Berning and others as sureties, and immediately took into his possession assets of the estate to the value of $45,993.89. On the 27th of September, 1873, by order of the probate court, and upon the petition of the residuary legatee, he gave a new bond, on which Berning was not surety. On the 14th of March, 1874, the probate court ordered him to pay to the residuary legatee $5,000. This order was complied with. On the 21st of January, 1875, the executor made final settlement, from which it appeared that he was in debt to the estate in the sum of $30,806.09, and he was ordered to pay to the residuary legatee $30,614.74.

This sum not having been paid over, Mrs. Wolff instituted this suit against Berning as surety in the first bond. At the same time she instituted a suit against the sureties in the second bond, and in that suit recovered a judgment for $27,706.60. In the present case the petition charged that the executor before the giving of the second bond, converted and appropriated to his own use all the assets of the estate, and assigned as breaches of the first bond: (1) That the executor, during the period covered by the first bond, misappropriated $45,993.89, and in consequence thereof did not pay over to relator $30,614.74. (2) That he did not pay to relator $30,614.74 adjudged to be due her on final settlement, for the reason that he did, during the period covered by the first bond, appropriate and convert to his own use $45,993.89, and in consequence is indebted to the relator in the sum of $30,614.74. (3) That he failed to pay to the relator the sum of $30,614.74, adjudged to her by the probate court of St. Louis county on the 21st day of January, 1875, upon the final distribution of the estate of Louis Wolff, the failure so to comply being the result of and occasioned by the wrongful conduct of said executor during the period covered by the first bond, in that he misappropriated and converted to his own use during that period $45,993.89, and is, in consequence thereof, indebted to relator in the sum of $30,614.74.

The answer denied the breaches alleged.

At the trial, in support of the allegations of the petition, plaintiff offered evidence that Staehlin kept his bank account at the Central Savings Bank of St. Louis; that he had no separate account as executor; that on the 3rd of October, 1872, being then in embarrassed circumstances, and the cashier of the bank being aware of his embarrassment, he negotiated with the bank a note signed by him as executor of L. Wolff, deceased, for $12,000, payable ninety days after date, pledging as collateral security for the payment of said note, three notes, belonging to the estate, executed respectively by Gehrke, Ittner and Adamson, and of the face value, in the aggregate of $18,000; that these notes were all payable to L. Wolff, the deceased, and were delivered without indorsement; that the proceeds of this loan were deposited to the credit of Staehlin's account at the bank; that the loan was twice renewed with the same collateral; and that in the year 1874 the Gehrke and Ittner notes were paid, and the proceeds applied upon Staehlin's note. Defendant then showed that in June, 1875, the bank caused a deed of trust, by which the Adamson note was secured, to be foreclosed, and became the purchaser of the property. Defendant then offered the order of partial distribution, of date March 14th, 1874, and the judgment obtained by relator against the sureties in the second bond; but, on the objection of the relator, they were both excluded by the court. Several instructions were given and refused, but none of them need be noticed, except that in relation to the measure of recovery, which the court declared would be the aggregate amount of the principal and interest of the three misappropriated notes computed up to the time of the conversion, together with interest upon such aggregate at the rate of six per cent per annum from the time of the conversion.

The court found for the plaintiff in the sum of $23,029.22 and rendered judgment accordingly. On appeal to the St. Louis court of appeals this judgment was affirmed, and defendant brought the case, by appeal, to this court.

Alex. J. P. Garesche for appellant.

The court erred in excluding the judgment on the second bond. That bond was not supplementary, but covered a different period. Hence, if Schaeffer was responsible, Berning could not be; and the judgment in plaintiff's favor against Schaeffer, if not conclusive against her in this suit, was at least admissible as evidence to be weighed by the jury. The action being one for conversion, three elements are essential to recovery: (1) Ownership by plaintiff at time of conversion; (2) The then right to immediate possession; (3) Then or since possession by defendant. Now, appellant never was in possession. True, Staehlin was; but this is an action against the defendant on his bond, and he is responsible, not in an action of conversion, but in covenant, for a breach of his obligation that the executor should faithfully account. And the damages to be recovered are the sum due the estate by the executor after full accounting. Again, at date of the conversion cestui que use had neither the ownership nor the right to the immediate possession. Her right was acquired by the order of distribution. State v. Fulton, 35 Mo. 325; Naylor v. Moffett, 29 Mo. 129; Salmon v. Davis, 29 Mo. 180; State v. St. Gemme, 31 Mo. 230; Smith v. Denny, 37 Mo. 23; Collins v. Dulle, 45 Mo. 272; Kerrin v. Roberson, 49 Mo. 254. Staehlin's commissions should have been deducted. Frost v. Winston, 32 Mo. 495; Clyce v. Anderson, 49 Mo. 37. There was never any legal transfer of the notes to the bank. Wag. Stat., 89, § 40; Stagg v. Linnenfelser, 59 Mo. 342; Weil v. Jones, 70 Mo. 560; Prosser v. Leatherman, 4 How. (Miss.) 240; Middlesex B'k v. Minott, 4 Met. 325; Bank v. Dubuque, etc., R. R., 8 Iowa 280; Nations v. Hawkins, 11 Ala. 862; Phillips v. Martiney, 10 Gratt. 333. Up to date of his final settlement Staehlin had the right to recover them back. He was not estopped. Herman on Estoppel, 246; Bigelow on Estoppel, (2 Ed.) 255; 59 Mo. 344; Hopper v. Mc Whorter, 18 Ala. 231; Pierrepont v. Bernard, 5 Barb. 375; Thomas v. Bowman, 29 Ill. 426; Magee v. Gregg, 11 Sm. & M. 77. The loss accrued, therefore, not by this invalid pledge, but by Staehlin's neglect to reclaim it. Defendant should not have to answer for a technical, only for the actual loss. State v. Drury, 36 Mo. 286; Pinkstaff v. People, 59 Ill. 151.

R. E. Rombauer also for appellant.

In order to entitle plaintiff to recover substantial damages, it is essential for her to show affirmatively either that the entire estate has been lost by the misconduct of the executor, or that she is the only party interested in the estate, and no one else can complain of that misconduct but herself, because no one else has sustained injury, or that she has such separate and distinct interest in the property or funds converted, as entitle her to maintain a separate action in regard thereto. The petition makes the proper averments upon these points, but they are all denied by the answer, and there is no proof to sustain them. State v. Matson, 44 Mo. 308; State v. Campbell, 10 Mo. 724; State v. Morton, 18 Mo. 53. Plaintiff cannot maintain her action because she has no exclusive right of property in the notes and no immediate right of possession. Petit v. Bouju, 1 Mo. 64; 1 Chitty's Plead., 164; Hume v. Tufts, 6 Blackf. 136; Kier v. Peterson,41 Pa. St. 363; Vanzant v. Hunter, 1 Mo. 71. The court erred in excluding the order of distribution offered in evidence by defendant. It was the only testimony in the entire cause which even tended to fix and determine plaintiff's interest. The answer alleged that such an order was made and complied with; the reply denied it. Whether viewed as testimony fixing the extent of plaintiff's interest, or as a part of a chain of evidence showing that defendant's principal, and, consequently, defendant also, was entitled to certain credits, it should have been admitted. Testimony that is competent and relevant for any purpose should not be excluded. U. S. Sav. Asso'n v. Edwards, 47 Mo. 448. The instruction as to the measure of plaintiff's recovery is objectionable because it wholly disregards the right of every creditor, and of every other legatee, and the extent of plaintiff's interest in the estate. It tells the jury that plaintiff may, in this action, recover for the whole extent of the injury inflicted by the misconduct of the trustee--not upon her, but upon the estate, entirely regardless of the extent of her own interest, and entirely regardless even of the fact, whether that interest, whatever it may be, is exclusive or severable. Defendant was entitled to have the executor's commissions deducted. The evidence shows that commissions were allowed him on final settlement on the entire amount, including these notes for $18,000 and interest. On what imaginable principle should the surety on the first bond be deprived from receiving the benefit of these commissions, and the surety on the second bond receive them exclusively? The distributees were entitled to the property only after deducting the executor's commissions.

J. M. & C. H. Krum and Kehr & Tittman for respondent.

If the pledge of the notes in October, 1872, worked a conversion of them to the executor's own use, then the appellant is liable, although the executor did give an additional bond, and made settlements carrying down the...