Walls v. Erupcion Min. Co., 3591.

• Decision Date: 03 November 1931
• Docket Number: No. 3591.,3591.
• Citation: 36 N.M. 15,6 P.2d 1021
• Parties: WALLSv.ERUPCION MIN. CO.
• Court: New Mexico Supreme Court

36 N.M. 15

6 P.2d 1021

WALLS

v.ERUPCION MIN. CO.

No. 3591.

Supreme Court of New Mexico.

Nov. 3, 1931.

Syllabus by the Court.

Order of probate court appointing attorney to act as agent for administrator in sale of property belonging to estate and determine advisability of sale held coram non judice and void (Comp. St. 1929, § 34-413).

Ratification cannot be charged to person not advised of all material facts.

1. A probate court has no jurisdiction to appoint a broker or agent to act for the administrator in the sale of the property of an estate with power to determine the advisability of such sale, and such order is coram non judice and void.

2. No ratification can be charged to a person who is not advised of all the material facts concerning the matter.

Appeal from District Court, Hidalgo County; Dunifon, Judge.

Suit by S. R. Walls, administrator of the estate of Andrew Bain, deceased, against the Erupcion Mining Company. Judgment for the defendant, and plaintiff appeals.

Reversed, and cause remanded with directions.

Ratification of unauthorized acts of agent, to be binding, must be made with full knowledge of material facts. Civ.Code, §§ 2310, 2311.

Henry I. Broulett, of Los Angeles, Cal., and Walton & Wiley, of Silver City, for appellant.

E. R. Wright, of Santa Fé, and Knapp & Boyle, of Tucson, Ariz., for appellee.

PARKER, J.

The plaintiff as administrator of the estate of Andrew Bain, deceased, brought suit in the district court in Hidalgo county for the recovery of damages for the alleged unlawful transfer of 3,000 shares of stock in the Erupcion Mining Company against the said company, in the sum of $9,000, and in addition thereto for the sum of $4,000 or more, which had been paid upon the said stock as dividends subsequent to said alleged unlawful transfer of said stock down to the time of bringing suit. The defendant company answered admitting the transfer of the said stock upon the books of the company, but alleging that the same was lawfully and regularly taken; it denied that the value of the stock at the time of such transfer was the sum of $3 per share, and denied that the defendant had since such transfer paid dividends upon the said shares in excess of $4,000. This denial, however, is unimportant, as the defendant afterwards during the trial admitted that the said stock after being transferred was sold for $3 per share, and that it paid dividends upon the said stock in the sum of $6,975.

The transfer of the said stock upon the books of said company was accomplished by reason of an order of the probate court of Grant county directing the sale and transfer of the same. This order or judgment of the probate court was obtained upon the motion or petition of one Jack Stevens, then administrator of the estate of Andrew Bain, deceased, in which he applied to the court for authority to sell the said stock at the then present market price thereof, and alleged that said administrator was in need of funds with which to pay off and discharge certain outstanding, pressing indebtedness and obligations, and that it was to the best interest of the said estate and the heirs of Andrew Bain, deceased, that said stock be sold on the present market. This motion or petition was signed by one C. C. Royall, as attorney for said Jack Stevens, administrator. Thereupon the said probate court did grant said motion or petition and did order, adjudge, and decree that the said administrator be authorized, directed, and empowered to sell and dispose of the stock aforesaid.

For some reason unknown to this court, or to any one else so far as known, except Mr. C. C. Royall, said attorney, said probate court inserted in its order the following paragraph: “It is further by the court ordered, adjudged and decreed that in all things affected by this order, C. C. Royall, of Silver City, N. M., the attorney for the said administrator, do be and he is hereby given the right and authority to represent the said estate and the said administrator and to sell and dispose of the above bonds and stock in conformity with this order and to do any and all things hereunder which the said administrator could do, with the right to execute bills of sale and assignments of said bonds and stock and endorse and sign and deliver the said stock upon such sale.”

[1][2] It is upon this part of the order of the probate court that defendant relies for its justification in transferring upon its books the said 3,000 shares of stock. If this part of the order of the probate court was void upon its face for want of jurisdiction, then the judgment of the district court which was in favor of the mining company is erroneous. On the other hand, if said order was merely erroneous and voidable, then in the absence of some showing of fraud on the part of the defendant company, it had a right to rely upon the same and to transfer the said stock on its books. In examining this order of the probate court, it is at once apparent that this paragraph of the order is not within the scope of the application to the probate court, which was simply for authority for the administrator to sell and transfer the said stock. In the second place, it is apparent that in appointing the said C. C. Royall to sell and dispose of the said stock, the probate court was merely appointing a broker or salesman for the sale of the said stock. He was a person irresponsible to the said court or to the said estate, in the sense that he had given no security of any kind for the fidelity of his action. The mere fact that he is designated in the said order “the attorney for the said administrator” adds nothing whatever to his status. He was merely a broker or salesman. Jack Stevens, the administrator, at the time testified that the said order was made without his knowledge or consent, and there is no evidence in the record to contradict his statement. In fact, he testified that he did not know that the transfer had been effected until long after the same had been done. No authority emanating from the administrator was ever granted to C. C. Royall to sell and transfer this stock. He simply induced the probate court to insert in the judgment granting the said motion of the administrator this paragraph for reasons not shown in the record.

The folly of such an order authorizing an irresponsible person to sell and transfer the assets of an estate without authority from the administrator is made more apparent by allusions in the briefs of counsel that thereafter the said C. C. Royall embezzled the said proceeds of the said sale and pleaded guilty to the charge of embezzlement in the district court. However, this case must be determined upon the question as to whether the probate court without the knowledge of an administrator has authority and jurisdiction to appoint a person unknown to the law and confer upon him the authority to sell and transfer the assets of the estate. The question is not whether Royall embezzled the funds which were the proceeds of the sale. This has nothing to do with the case. So far as the defendant corporation is concerned, there is nothing in this record to show any fraud or carelessness on its part. It simply relied upon this order as authority for Royall to transfer the stock. If the order was void, the corporation is liable regardless of its good faith in the premises.

This proceeding is undoubtedly a collateral attack upon the judgment of the probate court. It seeks to ignore that portion of the order which authorizes Royall to transfer the stock and to proceed against the defendant corporation as if the order had never been made. There seems to be no question about this, and undoubtedly there could be none. In this connection, it is to be remembered that this judgment is a judgment of a court of inferior and limited jurisdiction. It is, however, provided by statute in this jurisdiction that the same presumptions in favor of the judgment of the probate court shall be entertained as are entertained in regard to courts of general jurisdiction. See 1929 Comp. § 34-413. We have then a case of a judgment of a court which is being collaterally attacked and as to which the same presumptions as to jurisdiction and regularity prevail as prevail in regard to judgments of courts of general jurisdiction. But presumptions in regard to jurisdiction do not create jurisdiction in any court where jurisdiction does not in fact exist. Jurisdiction is the power of the court over the subject-matter and under any circumstances the right to hear and determine litigation in regard thereto. If the court has not the power under any circumstances to hear and determine questions concerning a given subject-matter, then it has no jurisdiction and no presumption in favor of any such jurisdiction will avail the litigant. The judgment in such a case is a nullity, and as Mr. Freeman says in his work on Judgments, p. 643, vol. 1: “A judgment void upon its face and requiring only an inspection of the record to demonstrate is invalidity is a mere nullity, in legal effect no judgment at all, conferring no right and affording no justification. Nothing can be acquired or lost by it; it neither bestows nor extinguishes any right, and may be successfully assailed whenever it is offered as the foundation for the assertion of any claim or title. It neither binds nor bars anyone. All acts performed under it and all claims flowing out of it are void. The parties attempting to enforce it may be responsible as trespassers. The purchaser at a sale by virtue of its authority finds himself without title and without redress. No action upon the part of the plaintiff, no inaction upon the part of the defendant, no resulting equity in the hands of third persons, no power residing in any legislative or other department of the government, can invest it with any of the elements of power or of vitality. It does not terminate or discontinue the action in which it is entered, nor merge the cause of...