61 Wash. 304 | Wash. | 1910
This suit was instituted by the plaintiff, for the purpose of obtaining a decree of the superior court for King county, settling his account as executor and trustee under the last will and testament of Alice S. Hill, deceased, and discharging him from the obligations of that trust. The issues here involved arise upon the cross-complaint of William Curtis Hill and James Marshall Hill, sons of Alice S. Hill, deceased, wherein they allege certain acts of the plaintiff to have been unlawful and fraudulent, resulting in loss to Alice S. Hill and her estate. These acts, which we will notice later, all occurred during the lifetime of Alice S. Hill, while the plaintiff was administrator of the estate of William C. Hill, the
William Curtis Hill, the husband of Alice S. Hill, died in the year 1890, leaving property in the state of Washington. He left a will making his widow, Alice S. Hill, his sole devisee, but failed to mention any of his children therein, and for that reason the will was declared void by this court as to the children. Hill v. Hill, 7 Wash. 409, 35 Pac. 360. Mrs. Hill continued to administer her deceased husband’s estate until June, 1895, when she resigned and the respondent, William H. Lewis, was appointed administrator in her place, by the superior court for King county. The administration of that éstate was brought to a close on February 1, 1904, when, by the usual court proceedings, final settlement and distribution was-decreed, and an order entered discharging respondent as administrator. Thereafter, on August 9, 1904, Alice S. Hill died at Washington, D. C., where she had been living for some years previous, leaving property in the state of Washington. She left a will, giving certain specific property to each of her children, and giving the residue, being by far the larger part
“.The estate of Alice S. Hill may, for the purposes of this, suit, be regarded as the successor of the estate of her husband, William C. Hill, deceased. The theory upon which the cross-plaintiff William Curtis Hill and the intervener James Marshall Hill have raised the issues involved in this appeal is that plaintiff while administrator of the estate of William C. Hill, deceased, wrongfully appropriated to his wife property and funds belonging to that estate, and that he defrauded their mother of property and of the proceeds of other property which belonged to her as the beneficiary of that estate. The relief sought is the restoration to Mrs. Hill’s estate of that property and of the proceeds of such as has been sold.”
At the time of the death of William C. Hill in 1890, he and Alice S. Hill had eight children; the two sons who are these appellants; a daughter, Elizabeth, who afterwards became the wife of respondent; and five other daughters. As these children became of age, all except the youngest daughter deeded to their mother, Alice S. Hill, their interest in their father’s estate; and the youngest daughter becoming of age after the mother’s death, deeded to respondent her interest in her father’s estate, in compliance with a provision in the will of the mother, as a condition to that daughter receiving certain benefits under that will. Therefore, since these appellants are claiming rights against respondent only as residuary legatees under their mother’s will, we are to deal with this controversy as if it was being waged between their mother,,
In the course of the administration of the estate of William C. Hill by respondent as administrator, the title to a considerable portion of the property thereof passed to Elizabeth Hill Lewis, the wife of respondent. The greater portion of the property so passing to Mrs. Lewis, was taken in trust for her mother, Alice S. Hill, and the remainder of it was taken in her own right. The latter is the source of this controversy, and the story of its bringing about is, in substance, as follows: From the time of the appointment of. respondent as administrator of the estate of William C. Hill in 1895 until the fall of 1899, that estate was embarrassed by the importunities of creditors, and was in a condition bordering upon insolvency. The total of the estate’s obligations was near the amount of the appraised value of its property. In 1899 the estate was indebted upon claims of creditors and for taxes as follows:
Alice S. Hill (Preferred claim)..........................$18,487.29
Alice S. Hill............................................. 25,332.55
Schwabacher Brothers................................... 8,450.00
John Thomas........................................... 5,920.00
William Knight......................................... 5,472.09
John Leasure........ 5,472.00
J. H. Parsons........................................... 1,720.00
Taxes; the larger part of which were delinquent for several years past and to which statutory penalties and interest had attached; but if paid before November 1, 1899, thereby saving the remitted penalties and reduced interest under the special act of 1899 (Law of 1899, p. 339) amounted to........................................... 27,923.22
Total..............................................$98,777.06
There was also due upon attorney’s and administrator’s fees sufficient to make the total indebtedness of the estate approximately $100,000. The administrator had made repeated efforts since his appointment in 1895 to sell property
Prompted by these considerations, in the summer of 1899 tentative arrangements were made with all the creditors, including Alice S. Hill, to sell to them property of the estate, at its appraised value, sufficient in amount to satisfy each of their claims. To accomplish the payment of the claims in this manner, it was, of course, absolutely necessary that all of the creditors should agree to such an arrangement. Otherwise such a sale would not have the effect of a cash sale, and the possibility of some of the creditors being unlawfully preferred would not be avoided. It was accordingly planned— Mrs. Hill and all of the creditors j oining therein, no one else having any interest whatever in the estate so far as concerns this inquiry, as we have already noticed — that an order of sale of the property of the estate for the payment of the debts, of the estate should be obtained from the court by the usual proceedings, and at the sale to be made in pursuance thereof there should be bid in by or in behalf of each creditor a sufficient amount of the property, at its appraised value, to satisfy their respective claims, thus giving the sale the effect of a cash sale. Up to a very short time before the
It is quite evident from this record that if Thomas, Knight and Leasure had proceeded with the original arrangement and bid in property in satisfaction of their claims, as was done by or in behalf of the other creditors, instead of selling their claims to Mrs. Lewis and she taking their place, this controversy would never have been heard of. It appears that Knight, Thomas and Leasure were finally unwilling to take property for their claims, in view of its uncertain value, its then lack of marketableness, and the burden or raising sufficient cash to pay the taxes prior to November 1. These were the risks and burdens assumed by Mrs. Lewis and for which she was compensated by the discount in the purchase of the claims. In after years she profited considerably by the increase of the value of this property, and this is the principal thing that appellants seek to compel respondent, her husband, to account for; basing their contention upon the theory that the purchase of the claims of Knight, Thomas and Leasure in this manner was in law a fraudulent speculation by the respondent as administrator in claims against the estate, and that all profits flowing -from such dealing became in
The evidence in this case warrants the conclusion that Alice S. Hill, whom we have seen was the only person interested in the estate besides the creditors at the time of the doing of the acts complained of, with full knowledge of all the material facts relating to those acts, acquiesced in and sanctioned them, and profited materially by the liquidation of the debts of the estate brought about in this manner we have narrated. The learned trial court, viewing the evidence in this light, reached the conclusion that Alice S. Hill was not in a position to complain of - the acts of respondent, and that these appellants, of course, had no higher right. It was upon this theory that appellants cross-complaint was dismissed. The question of the knowledge and acquiescence of Alice S. Hill is only one of fact. Upon this question we deem it sufficient to say that the evidence convinces us, as it evidently did the learned trial court, of the truth of the following: Alice S. Hill knew, before the sale of the Thomas, Knight and Leasure claims to Mrs. Lewis, that those claims could be purchased at a discount. She had an opportunity to buy them herself if she desired. She learned by correspondence from respondent very soon after the sale, if she did not know of it before, that Mrs. Lewis had purchased these claims and bid in property as other creditors did in satisfaction thereof. She may not have then known the exact amount Mrs. Lewis paid for the claims,
Although learned counsel for appellants strenuously argue to the contrary, we are convinced from the evidence that respondent took great pains to keep Alice S. Hill fully and fairly informed as to all facts she was entitled to know touching the purchase of these claims for Mrs. Lewis, and the liquidation of the same with all other claims by the sale of the estate’s property. She lived for more than four years after these things occurred, continuing friendly business relations with respondent, during which period she repeatedly evidenced her satisfaction with his conduct in bringing about the liquidation of the debts of her deceased husband’s estate, and in his administration of that estate. During this period the increase of value in real property in the state of Washington resulted in large profits to all creditors who had taken property of the estate in settlement of their claims. She shared in this profit, and of course knew that her daughter,
With these facts before us, the law of the case seems a simple matter. We have seen that, for the purpose of this inquiry, Alice S. Hill will be regarded as the only person with any right whatever to object to the acquisition by her daughter, Elizabeth Hill Lewis, of the property of the estate in the settlement of the Thomas, Knight and Leasure claims. Alice S. Hill is, in effect, the sole cestui que trust; and when her rights are not invaded, no one can complain. Such, reduced to its simplest terms, are the limits of this inquiry. Assuming now that Mrs. Lewis’ acquisition of this property was for the community and not as her separate property, and that therefore the matter must be dealt with as if respondent was acquiring an interest in it, we think the principle of law con-' trolling the rights of the parties may be stated in the language of Chief Justice Fuller, speaking for the supreme court of the United States in Hammond v. Hopkins, 143 U. S. 224, 251, as follows:
“Undoubtedly the doctrine is established that a trustee cannot purchase or deal in the trust property for his own benefit or on his own behalf, directly or indirectly. But such a pur*313 chase is not absolutely void. It is only voidable, and as it may be confirmed by the parties interested, directly, so it may be by long acquiescence or the absence of an election to avoid the conveyance within a reasonable time after the facts come to the knowledge of the cestui que trust.”
See, also, Brown v. Cowell, 116 Mass. 461, 465; Miggett’s Appeal, 109 Pa. St. 520; Butterfield v. Cowing, 112 N. Y. 486, 20 N. E. 369; Ungrich v. Ungrich, 131 App. Div. 24, 115 N. Y. Supp. 413, 417.
We are of the opinion that Alice S. Hill acquiesced in the acts of respondent, and that whatever might be said as to those acts being technically unlawful, as against those who had a right to complain, they are not such acts as she had the right to complain of at the time of her death, and hence these appellants, who claim only as her devisees, have no better right..
The other things complained of by appellants occurred in connection with personal dealings between respondent and Alice S. Hill. They consist of alleged inducements made by respondent, resulting in the transfer of certain of her property to him for inadequate consideration. These contentions we regard wholly without merit. A review of them in detail would disclose a condition of affairs somewhat like that which we have reviewed above, so far as her knowledge of conditions surrounding them is concerned. The evidence, we think, clearly shows that in these transactions she knew what she was doing, got all the consideration she agreed for, and that to a considerable extent they were transactions of her own suggestion.
Some question is made upon the admissibility of certain testimony brought out upon cross-examination of respondent by his attorney while upon the stand as a witness for appellants. This testimony related to conversations between respondent and Mrs. Hill during her lifetime, and for that reason was objected to by appellants’ counsel. We will not attempt to solve-this question, since'we are of the opinion that the other evidence consisting, among- other things, of a vast
We are of the opinion that the dismissal of appellants’ cross-complaint should be affirmed. It is so ordered.
Rudkin, C. J., Mount, Fullerton, and Gose, JJ., concur.