Yeager v. Bank of Kentucky

• Decision Date: 09 January 1908
• Citation: 127 Ky. 751,106 S.W. 806
• Parties: YEAGER ET AL. v. BANK OF KENTUCKY ET AL.
• Court: Kentucky Court of Appeals

106 S.W. 806

127 Ky. 751

YEAGER ET AL. v. BANK OF KENTUCKY ET AL.

Court of Appeals of Kentucky.

January 9, 1908

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

"To be officially reported."

Action by F. J. Yeager, administrator de bonis non of the estate of W. H. Yeager, deceased, and others, against the Bank of Kentucky and its successor, the National Bank of Kentucky. From a judgment for defendants on demurrer, plaintiffs appeal. Affirmed.

Barnett & Barnett, for appellants.

Alex. G. Barrett, for appellees.

LASSING J.

W. H Yeager, a resident of Jefferson county, Ky. died in 1891. His will was probated in the county court of that county. By the term of his will his wife, Nannie R. Yeager, was entitled to receive all of the income from the estate during her life. No disposition was made of the remainder of his estate after the death of his wife, and it therefore passed to and vested in his collateral heirs. A portion of his estate consisted of 10 shares of the capital stock of the Bank of Kentucky, and the appellee the National Bank of Kentucky is the successor of the Bank of Kentucky. Some six years after the death of her husband, Nannie R. Yeager, his wife, made known to the bank that she desired to sell these shares of stock, and the bank procured a purchaser for her for said stock. In 1904 Nannie R. Yeager died. This action was instituted against the Bank of Kentucky and the National Bank of Kentucky, seeking to recover of them for the conversion of these shares of stock. General and special demurrers were filed by the defendant banks to this petition, and, the court having sustained both the plaintiffs appealed, and this court reversed the judgment; the opinion being found in 100 S.W. 848, 30 Ky. Law Rep. 1287. In that opinion two questions are decided: First that the administrator de bonis non did not have the right to maintain the suit, but that it must be brought in the name of the heirs and remaindermen; and, second, that the statute of limitations, to be available, must be pleaded affirmatively. Upon the return of the case the pleadings were amended, so that the heirs and remaindermen were made parties plaintiff to the action. To the petition as thus amended an answer was filed pleading the statute of limitations. To this answer a reply was filed, denying that the plea of limitation was available, and also stating that the cause of action was on a continuing and subsisting trust. To this reply a demurrer was interposed and sustained. The plaintiffs declining to plead further, their petition was dismissed, and they again appeal.

The question in issue in this case is sharply drawn, the facts all being admitted. For appellee it is contended that the statute of limitations begins to run against remaindermen before the termination of the particular estate. This proposition is denied by appellants. The pleadings show that the sale and transfer of these shares of bank stock was made on February 6, 1897, and that the plaintiffs, appellants, learned of this sale in 1899. The suit was instituted May 13, 1905; hence it is admitted, not only that the sale had been consummated and the title passed to the purchaser by Nannie R. Yeager more than eight years before the institution of this suit, but that appellants had actual notice, more than five years before the institution of their suit, that she had so sold and divested herself of the title to said stock. The petition charges that the bank assisted Mrs. Yeager in selling and transferring this stock, and thereby enabled her to convert it to her own use; that it was charged with notice of the provision of the will of her husband, and knew that she had no power to sell the stock; that such a sale was a constructive, if not actual, fraud upon the rights of the remaindermen in said estate. The action being based upon fraud, it is insisted for appellees that section 2515 of the Kentucky Statutes of 1903 applies. For appellants it is contended that limitation does not begin to run from the time of the sale and transfer of the stock, or from the time that notice of such sale and transfer was brought home to them, but that it can only begin to run from the death of the life tenant, as she was entitled to the free use and enjoyment of the proceeds of such sale during her lifetime.

In the case of Coffey v. Wilkerson, 1 Metc. 101, plaintiffs were the owners of some slaves, subject to the life estate of their father in said slaves. They alleged that the defendant Coffey, had purchased their father's life estate and afterwards sold the absolute title to the slaves to Southern traders, and they sought to recover of Coffey the value of the slaves with interest. The sale to Coffey by their father had been made more than five years before the action had been brought, but the action was brought less than two years after the death of their father. In passing upon the right of plaintiffs to maintain that suit, this court said: "The tenant for life of slaves, or any purchaser under him, will be restrained by a court of equity, on the application of the owners of the estate in remainder, from doing any act that will jeopardize their interest, upon the representation of such a state of case as shows the existence of good grounds to apprehend that the person holding the life estate has the commission of such an act in contemplation; and where, as in this case, the person holding the life estate converts not merely the life estate, but the absolute and entire estate, in the property to his own use, and that with the effect of defeating the enjoyment of the estate in remainder, he becomes immediately responsible for the act to the persons entitled in remainder, who have a right to recover against him the full value of their estate. The cause of action accrues so soon as the wrong has been committed. It consists in the injury which has been done to the estate in remainder. It exists independent of the life estate, and is not affected in any manner by its termination. An action for the injury can be maintained during the existence of the life estate, or after it has ended; but, as the cause of action accrues at the time of the conversion, the statute of limitations runs from that time, and consequently forms a bar to the present action." The case at bar is very similar to the case from which we have just quoted. The subject-matter under consideration in the two cases is the sale of personal trust property. In each a life estate was created--in the one in favor of the father of plaintiffs, and in the present case in favor of the wife of the decedent. In each case the property was sold and transferred to the purchaser more than five years before the institution of the action seeking its recovery, although in each case the life tenant had died less than five years before the institution of the action. We are unable to draw any distinction or see any difference...