Case ID: ohio-st_56/html/0264-01.html
Source: Caselaw Access Project
Author: {"author": "Shauck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Brown, Executor, Etc. v. Reed.
    
      Testamentary powers- — Bad faith of executor — Sale of land for less than value — Executor charged with true value— Wills.
    
    An executor who, in the exercise of a testamentary power to sell lands for the payment of debts, in bad faith sells them for a price that is manifestly less than their true value, should, on exeeption to his account in the probate court, be charged with the difference between such inadequate price and the true value of the lands.
    (Decided April 27, 1897.)
    Error to the Circuit Court of Huron county.
    Robert Brown died testate and seized in fee of lOlf acres of land in Huron county. His will, which was duly admitted to probate in that county, contained the following’ :
    ‘ ‘ Item 3. I do hereby nominate and appoint my son, Henry L. Brown, executor of this iny last will and testament, hereby authorizing- and empowering- him to compromise, adjust, release and discharge, in such manner as he may deem proper, the debts and claims due me. I do also authorize and empower him, if it shall become necessary in order to pay my debts, to sell by private sale, or in such manner, upon such terms of credit or otherwise, as he may think proper, all of my real estate and personal property, and deeds to purchasers to execute, acknowledge and deliver in fee simple, and .after the payment of my debts, funeral expenses and costs of administration, the residue to be equally divided among the legatees hereinbefore mentioned, according- to the provisions of this will.”
    Henry L. Brown qualified as executor. The tract of land was indivisible, and it became necessary to sell the whole of it for the payment of debts, though but a small portion of the proceeds was required for that purpose. Under this power the executor sold the land to three of the legatees for $1,200, and in his account charg’ed himself with that sum. on account thereof. The defendant in error, also a legatee, filed exceptions to the account upon the ground that said sale was not made in good faith, nor for the reasonable value of the land, nor for the highest price obtainable. In the probate court the exception was sustained and the executor was charged with the additional sum of $2,800.
    The executor appealed to the court of common pleas, where the exceptor offered evidence tending to show that the land at the time of the sale was worth $4;500.00, and further to show that the executor had refused to accept an offer of $4,000.00, made in good faith, for the land. The executor’s objection to the evidence was sustained, and the exception to the account overruled, upon the ground that the probate court, and the common pleas court on appeal, were without jurisdiction to • charge the executor’s account with the difference between the price for which the land was sold and that for which it might have been sold, or its value.
    The judgment of the common pleas court was reversed by the circuit court.
    
      O. P. and L. W. Wickham and Andreios Bros., for plaintiff in error.
    The contention of the plaintiff in error is that the land having been sold and all the proceeds actually derived from it, having been accounted for, neither the probate court nor the court of common pleas on appeal had. jurisdiction to surcharge his account with the claimed value, of the land above the amount received, on the ground that he had, with intent to defraud the plaintiff: in error, colluded with the purchasers and sold them the land for less than its value.
    Section 6179, Revised Statutes.
    The remedy of the defendant in error, assuming that the land was sold for less than its value, which the plaintiff in error denies, was by action on the bond of the executor, under the statute. Sections 6210, 6211 and 6212, R. S., prescribe izi what cases resort may be had to the bond, and their provisions are ample to meet every eznerg-ency, including the very one which the defendant in error claims has arisen in this case.
    This suit in cases when the breach of the bozid is alleged to consist of a failure to return an inventory or wastizig and converting assets, should be brought for the benefit of the estate. 25 Ohio St., 443; and probably in ease of every other breach provided for in the section.
    Now, here we have a provision for the very wrong alleged and complained of in this case. The language of this section, taken in connection with that of section 6179, R. S., we insist poizits out the remedy and the only remedy for a wrong such as is complained of. It provides for every case of failure of duty on the part of an executor, except the duty of paying creditors or legatees .or distributees. The Selectmen v. Boylston, 4 Mass., 318; Lawson Rights and Remedies, section 988.
    The amount, above $1,200, that the probate court found should be charged to the plaintiff in error in his account, never has eozne into his hands. It Is not claimed that it did; but only that it should have come into his hands. Touchstone, 496. Gray v. Siuain, 2 Hawks (N. C.), 15; De Valengin v. Duffy, 10 Peters (U. S.), 280; Williams on Executors (7th Eng. Ed.), 1667; Williams Exrs. (7th Eng*. Ed.), 1669; Buggies v. Sherman, 14 John (N. Y.), 446; 105 N. Y., 194.
    At most, only the land, the proceeds of which were required for the payment of debts, would be regarded as converted into personalty. There was required in this case of the proceeds of the sale only about one hundred dollars. The whole farm was sold because it could not well be sold divided, without injuring its value. So that all of the $1,200, derived from the sale, above the small sum required for payment of the debts, still retained the character of real estate. If this were so, with relation to money that came into the hands of the executor from the sale, a fortiori it was true of the imaginary proceeds that he never received. Sprague Mfg. Go. v. Hoyt, 29 Fed., Rep 421; Allen v. Witfvrow, 110 U. S., 119; Foster’s Appeal, 74 Pa. St., 391; In rt Codding, 9 Fed. Rep., 849; 6 A. & E. Enc., 671; Orrich v. Boehm, 49 Md., 72; Ohome v. Penbroke, 66 Md., 193; 6 A. & E. Enc., 671.
    
      S. A. Wildman, and G. Bay Craig, for defendant in error.
    Although an executor is named as such by the testator, he has no power to act, no control of the decedent’s estate, and can convey no title to either realty or personalty, until he has received from the probate court his letters testamentary, and has qualified, to the approval of that court, giving his bond, if required, conditioned for the faithful performance of his duties. Revised Statutes, 5995.
    In other words, the executor or administrator is an officer of the probate court, and that court (or the common pleas sitting on appeal as a court of probate) is clothed with exclusive jurisdiction to review his transactions with the estate represented by him, and to charge him, upon settlement of his accounts, not only with moneys actually received by him, but also with all losses to the estate, incurred through his mismanagement of the trust confided to him. A wasting- or destruction of any part of the estate, applicable to the payment of the testator’s debts or legacies, is such mismanagement of the trust.
    Such malfeasance of an executor, by which the estate suffers, is technically a “devastavit,” whether or not there is any actual wasting or destroying of assets which have come into the executor’s possession. 7 Encye. of Law, 346, et seq. Anderson’s Law Diet., 353; Williams on Executors, (7th Eng. Ed.,) 1796, and 7 Encyc. Law, 349.
    It is clear, then,/that whether any particular specie-s of property is to be'deemed “assets’"’ of the estate, or not, does not depend upon whether or not it is inventoried or appraised. It seems equally clear that any property, real or personal, of the deceased, chargeable with the payment of his debts, is to be treated as part of the assets of the estate, and liable to be wasted by the malfeasance of the representative of the estate. Sheldon v. Newton, 3 Ohio St., 495.
    If the executer was a trustee of the whole estate, how can it be argued that he is not chargeable in his account of his trust, for losses entailed by his bad management? Rorer, Judicial Sales, (2d. ed.) section 320; Giauque’s Settlements of Decedent’s Estates, 281; Favorite v. Booker's Aclmr., 17 Ohio St., 548.
    We know of no state where the power conferred on the probate court in directing the conduct of executors and administrators and settling their accounts, is broader than that given by the constitution and laws of Ohio, and the narrow limitation of the jurisdiction of that court held in this case by the court of common pleas, is not warranted either by any statute of our own state or the adjudications of any other. Shroker v. Richmond,, et al., 16 Ohio St., 445; Borntraeger v. Borntraeger, 3 W. L. B., 891; 3 Williams Executors, (1837) Footpaging etc.; Raab’s Estate case, 16 Ohio St., 273; Woerner’s American Law of Administration, 1179; Hall v. Qrovier, 25 Mich., 428; Loomis v. Armstrong, 49 Mich., 521. Lire Estate of Herteman (Cal., 1887), 15 Pac., 121.
    If such devastavit as that above mentioned be properly chargeable, why not any other by which the title to realty is lost to the devisees or creditors? 3 Field’s Briefs, p. 481, section 480. . Williams v. Benedict, 8 How. U. S., 107; Bank v. Horn, 17 How., 160; Yonzey v. Lavender, 21 Wall, U. S., 276; Hayne v. Besslein, 25 Ark., 499; Bason v. Hughart, 2 Texas, 479; and McMillier v. Butler, 22 Tex., 402; Corrington v. Comngton, Ills., 1888, 16 N. E. Rep.., 252; Haight v. Brisbin, 100 N. Y., 219; Dundas Appeal, 64 Pa. St., 325; Springer’s Estate Case, 51 Pa. St., 342; Feagan v. Kendall, 43 Ala., 628 ; Doan et al. v. Bately, 49 Ohio St., 594.
    There is certainly nothing in the nature of the power which we contend should be exercised by the probate court, inconsistent with the general powers conferred on that court, nor does there seem any sufficient reason for so splitting the matter of the account as to have one part of it passed on by that tribunal and another part by another court in another kind of an action or proceeding.
   Shauck, J.

It is said that the circuit court erred because the summary determination of a question of the character of this on exception to the executor’s account denies his constitutional right to the intervention of a jury. But the constitution preserves the right to trial by jury in those cases only where it existed previously to its adoption. Both before and since the adoption of the constitution it has been usual to call executors and other trustees to account in courts having-equity or probate jurisdiction, and without the intervention of a jury to determine any question affecting- the state of their accounts.

The eighth section of the fourth article of the constitution ordains that ‘ ‘the probate court shall have jurisdiction in probate and testamentary matters, the appointment of administrators and guardians, the settlements of the accounts of executors, administrators,” etc. It is expressly provided in section 6400 of the Revised Statutes that “all questions, except those arising- in criminal actions and proceeding’s, unless otherwise provided by law, shall be determined by the probate judge, unless, in his discretion, he shall order the same to be tried by a jury or referred. ”

The case concedes that the executor charged himself with the entire price which he actually received for the land; and his counsel concede that for such malfeasance as the exceptor offered to prove she, as legatee, would have a remedy. The precise question, therefore, is whether it is the legal duty of the executor, having and exercising such a power of sale, to account in the probate court for the land; or whether that duty is discharged by accounting for the price received, although its inadequacy and other circumstances show that in making the sale he acted in bad faith.

The general provisions of the statute upon the subject make it the duty of the executor to administer according to law and the will of the testator all the assets which may come into his hands. They require his account to show the results of the performance of that duty and to afford the basis for an adjudication that the estate has been fully administered according to law and the will. While it is true that usually administration is had of the chattels only of a deceased person, in view of the third item of this will the land was conditionally in the hands of the executor as assets upon his qualification. His power and duty to administer it became absolute when it was ascertained that the personal estate of the testator was not sufficient for the payment of his debts. When the executor, acting under an order of the court to sell real estate, or exercising for that purpose a testamentary power like this, sells in good faith and with due regard to the duty which he owes to creditors and legatees, his duty to account is performed by charging himself with the proceeds of the sale. He thus accounts for that portion of the assets in his hands for administration. But if such faith is not exercised, the price received does not represent the performance of his legal duty; and if that price only is charged there is, in that respect, a failure to account. While the probate court is of limited jurisdiction, the limitations chiefly relate to subject-matters. In view of the constitutional and statutory provisions referred to, its jurisdiction to correct the account of an executor in such a case as the rejected evidence tended to show is ample.. This conclusion is in harmony with the view generally taken of the subject, and with the unvarying tendency to enlarge the jurisdiction of the probate court with reference to the subjects which it embraces. Raab’s Estate, 16 Ohio St., 273; Doan et al. v. Biteley, 49 Ohio St., 588; Worener’s Law of Adm. section 534 ; Schouler’s Exr's., section 539; Haight v. Brisbin, 100 N. Y. 219; Corrington’s Estate, 124 Ill., 363; Hall v. Grovier, 25 Mich., 428.

All concede that in a case of this character the authority of the probate court originally, and that of the common pleas court on appeal, are identical.

Judgment affirmed.