62 Mo. 150 | Mo. | 1876
delivered the opinion of the'court.
The creditors of the estate of A. S. Merritt, deceased, presented their petition to the probate court, praying for the sale of real estate sufficient to satisfy their claims. An order was granted in accordance with their request, and the defendant, who had an interest in the estate as a devisee, under the will of the decedent, appealed. In the circuit court the case was heard anew, and the judgment of the probate court was affirmed, and the defendant has prosecuted his appeal to this court.
The ground of resistance to the order of sale is, that the administratrix having the estate in charge,'was guilty of malversation, and misappropriation of the assets, and that if she was compelled to properly account, there would be sufficient personal assets to pay the debts without resorting to a sale of the realty. It is insisted here that the creditors have no concern in regard to the improper conduct or acts of the administratrix, and that they have a right to have the real es
The issue is, whether it is necessary to apply the real estate; and, to determine that question, the court is required to hear testimony and form its judgment upon all the facts in evidence. The only object or purpose in hearing testimony on the subject, is to ascertain whether the personal estate is sufficient to pay the debts of the estate, and if sufficient, then no sale of the land is ordered; but if not sufficient, then the court orders a sale. If the personal estate becomes insufficient to pay the debts in consequence of the devastavit or neglect of duty of the administratrix, the law furnishes a speedy and efficient remedy on the administration bond, which should in the first instance be pursued..
The controversy between the parties grows out of the administratrix continuing to keép the St. James Hotel after the death of her husband, without any order from the court, and which course, it is alleged, proved disastrous to the interests of the estate. It appears from the record that Merritt in his lifetime leased the St. James Hotel for seven years, at an annual rental of $12,000, to be paid in instalments of $1000 per month.
Previous to his death, he had been carrying on the business for about nine months, and in that time lie bad lost $S000. At his death Mrs. Merritt took out letters of administration with the will annexed, and continued the business for a little over one year, when she sold it out. This
In all the instances enumerated in this section of the statute, the executor or administrator has full authority to act, and whatever he does is legalized. In other eases, if lie .proceeds without the direction or sanction of the court, he does so at his peril, and he will be held to a strict accountability. "Where the executor carries on the trade of the testator, by provisions contained in the articles of co-partnership, or by the directions of the will, or in pursuance of the decree of a court of chancery, he is accountable for any profits realized, but not for any loss, in such cases, since he is acting according to his duty as trustee.
.But it has been held, that, where the trustee adventures the trust fund in business of his own, or others, from which he expects to derive a benefit beyond the legal rates of interest ; if he fails to receive any return, or even where the principal itself is lost, wholly or in part, he must make the fund
An executor or administrator is regarded as a trustee, and where he wrongfully uses the trust funds in his hands for his own purposes, or embarks them in enterprises distinct from the management of the estate, expecting to realize a-personal pyofir, nothing can be more just than the rule above announced.
The cestui que trust always has the right to follow the trust funds and avail himself of any gain that has been made out of them ; and if the trustee has lost by his speculations, he must submit to it as a penalty for his unauthorized and unlawful act. But where the administrator, acting prudently and in good faith for what he deems the best interests of the estate,, though it afterwards turns out that he was mistaken in judgment, the rule has been to some extent modified and applied with less rigor.
In the case of Byrd vs. Governor (2 Mo., 102), it was shown that previous to the death of the intestate, he had dug and walled a cellar, and that, after his death, and before the estate had been declared insolvent the administratrix went on and built a brick house thereon. The house was subsequently sold in payment of debts of the estate, and it was claimed that the administratrix was entitled to an equitable credit for the amount the house sold for. The circuit court rejected the claim and gave judgment for the full amount wasted, without regard to the benefit resulting to the estate from the sale of the'house.
In reversing the judgment of the lower court, this court said, that as to the strict law of the case, there could be no
It cannot in fairness, or with justice, be said in this case, that Mrs. Merritt, the administratrix, adventured the funds in business of her own, from which she expected to derive a personal benefit. She was deeply interested in the preservation of the estate, one-half of it being left to her by the terms of her husband’s will. "When her husband died, a hotel with iurniture was left on hand, which she could not dispose of. The furniture was appraised at $11,415.92, but the testimony is, that it would not have brought more than $8000, if it had been put up and sold at auction. She, therefore, determined to continue the business till a more favorable time for selling out arrived. The rent was going on, and the estate was bound for that at all events. She kept the hotel for a little over a year, and finally found an advantageous opportunity to sell. She disposed of the furniture for $20,000, receiving one-tliird cash down, and the other two-thirds were to be payable in two equal annual instalments, payment of which was secured by a deed of trust on the property. The first deferred instalment she collected, but when the second became