Webber v. Spencer
| Decision Date | 06 June 1947 |
| Docket Number | 32187. |
| Citation | 27 N.W.2d 824,148 Neb. 481 |
| Parties | WEBBER v. SPENCER et al. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Section 38-601, R.S.1943, sets forth the purposes for which a guardian may be authorized to sell real estate of his ward upon obtaining a license therefor and proceeding therein as provided in sections 38-601 to 38-643, R.S.1943, and must be complied with to enable the guardian to sell his ward's real estate.
2. Before a guardian may proceed to sell the real estate of his ward he must comply with section 38-607, R.S.1943, which provides 'In order to obtain a license for such sale, the guardian shall present to the district court, or judge thereof in vacation, of the county in which he was appointed guardian, a petition therefor, setting forth the condition of the estate of his ward, and the facts and circumstances on which the petition is founded, tending to show the necessity or expediency of a sale, which petition shall be verified by the oath of the petitioner.'
3. Failure on the part of a guardian to comply with the foregoing statutory provisions to sell the lands of his ward renders a contract for sale thereof void and against public policy.
4. A contract by a guardian to sell his ward's land in advance of legal authority is contrary to public policy and void.
5. A void contract is one without legal effect or force, and incapable of ratification.
6. The rule of caveat emptor applies to a purchaser under a contract of sale of an insane ward's lands as well as a guardian's sale of the real estate of a ward.
7. Whether the doctrine of subrogation is applicable to a particular case depends upon the peculiar circumstances of such case.
8. There are distinctions between the rights, powers, and duties of a guardian and those of a trustee, in that a trustee has title to the trust property with an equitable interest in the beneficiary, whereas a guardian has no title, but only certain powers and duties to handle therewith for the ward's benefit, the ward having the title.
9. Where a surety on a guardian's bond is compelled to make good a loss to the property of the ward which is in excess of the value thereof, and by doing so makes the estate of the ward whole in such respect, under these circumstances the surety is subrogated to all rights and interests of the ward in such property.
Ginsburg & Ginsburg, of Lincoln, for appellants.
William Niklaus, of Lincoln, for appellees.
Heard before Simmons, C. J., and PAINE, CARTER, MESSMORE, YEAGER CHAPPELL, and WENKE, JJ.
This is a suit to quiet title in the plaintiff as owner of Lot 8, Block 2, Second East Park Addition, Lincoln Nebraska, against Harry A. Spencer and the unknown heirs of W. R. Shankland, also known as William R. Shankland who will hereafter be referred to as W. R. Shankland, and Celia R. Shankland, husband and wife, deceased, defendants. The plaintiff claims title as purchaser at a mortgage-foreclosure sale, and alleges in substance in his petition that on November 23, 1943, the defendant, Harry A. Spencer, caused to be filed in the office of the register of deeds of Lancaster County, a certain affidavit wherein said defendant set out a copy of a contract providing for the sale of the property heretofore described, dated July 1939, between W. R. Shankland and Clifford L. Rein; and further alleges that such affidavit casts a cloud on the plaintiff's title. The petition also alleges that the estates of W. R. Shankland and Celia R. Shankland have never been administered, and all right, title, and interest, if any, of the defendants and each of them, is junior and inferior to the plaintiff's title; and prays judgment quieting title in him.
Defendant, Harry A. Spencer, disclaims any interest in the property in controversy. The defendants, Katherine R. Shankland and Jeane Shankland, claim title to the property set forth in the contract between W. R. Shankland and Clifford L. Rein vested in them and the other heirs at law of W. R. Shankland and Celia R. Shankland, deceased, and pray judgment accordingly.
The record discloses that Fannie E. Griggs, a mental incompetent, was placed under guardianship August 10, 1920. On or about June 29, 1927, Clifford L. Rein was appointed guardian of her person and estate. On August 24, 1927, Katherine R. Shankland became the owner of the property in controversy. August 22, 1927, the guardian was authorized by the county court to loan Katherine R. Shankland $2,500, taking a first mortgage on the property as security. Subsequently, on May 1, 1928, the loan was increased, by the authorization of the county court, to $3,500, and a first mortgage on the property was taken as security. On March 2, 1931, Katherine R. Shankland was unable to pay the mortgage and offered to convey the property to the estate of the ward. By order of the county court March 3, 1931, the guardian was authorized to accept the conveyance, and to allow Katherine R. Shankland to occupy the premises rent free for one year from September 1, 1930, the date of the deed tendered by Katherine R. Shankland. The record shows a quitclaim deed from Katherine R. Shankland to Fannie E. Griggs, dated September 1, 1930. The guardian made application to the county court April 27, 1931, to mortgage the property for $1,800, which application was approved by an order of the county court on April 27, 1931. The Conservative Mortgage Company, a corporation, Trustee, became the mortgagee. On July 9, 1934, this mortgage was released as paid, and a mortgage for $800 was placed on the property and filed June 22, 1934, running to the same mortgagee.
During July 1939, a contract was entered into by and between Clifford L. Rein and W. R. Shankland. This contract appears in the record as exhibit 5, and will hereafter be referred to in the opinion as the contract. The contract provides, in substance, that W. R. Shankland was to pay $100 down at the time of entering into the contract, and the balance of $300 in 90 days, and to enter into possession of the premises without payment of rent as provided therein; in addition, to assume and agree to pay an $800 first mortgage, a lien on the property, and have the privilege to designate the person who should take title. The contract was signed personally by Clifford L. Rein. The ward held the title to the property and Clifford L. Rein was, at the time of entering into the contract and up to about April 1, 1943, the duly appointed, authorized, and acting guardian of Fannie E. Griggs, incompetent.
On November 20, 1939, the guardian filed an application in the county court, which appears in the record as exhibit 9, calling the court's attention to the fact that the property was encumbered by an $800 mortgage, as heretofore mentioned, which was past due as of May 1, 1939; that the mortgagee refused to renew the mortgage and the estate had insufficient funds to pay the same; further, that the property had not been worth to exceed $1,500 and was worth $1,200 at that time, and would require the expenditure of $150 per year for upkeep, and would not rent for an amount to exceed $12.50 per month; that W. R. Shankland would bid $1,200 at any foreclosure sale of the property and pay the same; that this amount would pay the mortgage and delinquent interest and leave $150 to $200 to the ward's estate; prayed the court to approve the action of the guardian in behalf of the defendants in the foreclosure action and the filing of an answer in the form of a general denial, and to direct the guardian not to proceed further in resisting the foreclosure. The county court, on November 21, 1939, by order, approved the application. The order recited that there was a bidder available who would pay $1,200 for the property.
The guardian testified the mortgagee was going to bid the property in at the foreclosure sale for the amount as stated in the contract, and W. R. Shankland was to make a new mortgage and pay off the existing mortgage of $800 and thereby acquire title to the property. Under the circumstances the Shanklands were not made parties to the foreclosure action. The attorney for the mortgagee testified that the guardian informed him that W. R. Shankland was to bid at the sale and pay $1,200. The attorney bid for Celia R. Shankland as a party to take over the title, as provided for in the contract and as the guardian requested. The guardian testified that he complained of the attorney for the mortgagee bidding in behalf of Celia R. Shankland, as that was not the deal.
Prior to taking possession pursuant to the contract, the Shanklands paid rent for the premises in the amount of $12.50 per month.
W. R. Shankland, in his lifetime, paid the $400 as provided for by the contract and as shown by the endorsements thereon, the last one being September 5, 1939. He designated his wife, Celia R. Shankland, as the person to take title to the property. He died prior to February 1940, and his estate has not been administered. Celia R. Shankland died subsequent to June 4, 1941, but in the year of 1941. Her estate has not been administered. Six adult daughters were the sole and only heirs at law of both W. R. and Celia R. Shankland. Some of the heirs continued to live in the property until Jeane Shankland entered the military service in 1943.
The action to foreclose the $800 mortgage was filed October 13, 1939. Decree of foreclosure was entered December 19, 1939. The property was sold to Celia R. Shankland for $1,200 on February 27, 1940. Thereafter, on December 21, 1940, a motion was filed to set aside the sale, for failure to complete the purchase. On June 4, 1941, Celia R. Shankland filed a motion to confirm the sale in her, supported by an affidavit of her attorney, Harry S. Spencer, setting forth that the...
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