STATE OF MISSOURI, to the use of MARGARET ENYART, Defendant in Error, v. M. F. DOUD, and FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a corporation, Plaintiffs in Error.
St. Louis Court of Appeals
March 3, 1925
216 Missouri Appeal Reports 480
2. ————: ————: ————: Sold to Pay Decedent‘s Debts: Surplus: Retains Character of Real Estate for Purpose of Succession or Distribution. Where real estate is sold under order of the probate court for the payment of the debts of the decedent, the surplus of the proceeds of the sale remaining, after payment of the debts, retains the character of real estate for the purpose of succession or distribution, and goes to the person in whom the title to the real estate was vested when it was converted.
3. EXECUTORS AND ADMINISTRATORS: Real Estate: Sold to Pay Debts: Devisee‘s Deed of Trust on Undivided Interest to Secure Note: Surplus: Belongs to Beneficiary to Amount of Note: Failure of Administrator to Discharge Note Constituted Breach of Trust for Which He and Surety on Bond Were Liable. Where devisee by her deed of trust conveyed to the trustee therein named, her undivided share of the real estate devised to her, the conveyance was made in trust to secure the payment of her note, and when the land was sold for the payment of debts, her share of the surplus arising from the sale not needed for the payment of the debts, in equity belonged to the beneficiary in the deed of trust to the amount of the note secured thereby, and as the administrator received such surplus in his capacity as administrator, he held it in trust for the beneficiary in the deed of trust, and it was his duty to pay over to the beneficiary out of such surplus the amount necessary to discharge devisee‘s note, and his failure to do so was a breach of his trust for which he and the surety on his bond were liable.
4. ————: ————: ————: ————: ————: Executed After Order of Sale by Probate Court: Effective Conveyance. A deed of trust given by a
5. ————: ————: ————: ————: ————: Probate Courts: Jurisdiction: Without Jurisdiction to Determine Title to Proceeds of Sale of Realty as Between Devisee and Beneficiary in Devisee‘s Deed of Trust. The probate court, by order of distribution, is without jurisdiction to determine the right or title to a surplus arising from the sale of real estate remaining in administrator‘s hands after the payment of decedent‘s debts, as between devisee and beneficiary in a deed of trust of devisee‘s undivided interest; therefore such order of distribution did not conclude the beneficiary, and it afforded the administrator no protection for the wrongful disbursement of the funds belonging to the beneficiary, and for his wrongful failure to pay over the same to her.
6. ————: ————: ————: ————: ————: Bonds of Administrators: New Bond: Distributive Share Paid Devisee in Disregard of Rights of Beneficiary in Deed of Trust Prior to Execution of Second Bond: Liability of Surety. The fact that the records of the probate court showed that the devisee had received her entire distributive share under an order of the probate court when a second bond of the administrator was executed, does not relieve the surety from liability for the administrator‘s wrongful disbursement of funds belonging to the beneficiary in devisee‘s deed of trust, as the deed of trust was of record in the office of the recorder of deeds, and the records of the probate court showed that the funds in question were derived from the sale of real estate conveyed by the deed of trust, and the surety must be held to have known that the probate court was without jurisdiction to determine the rights of the parties to these funds.
7. ————: Bonds of Administrators: Sureties: Liability: Determined by Contract. The liability of a surety on an administrator‘s bond is determined by its contract, and not by its knowledge or lack of knowledge of the condition of the estate at the time of the execution of the bond.
8. ————: ————: ————: ————: New or Additional Bonds: Relate Back: Surety Liable for Wrongful Distribution to Devisee of Proceeds of Sale of Realty Though Made before Execution of Bond. Under
*Headnote 1. Descent and Distribution, 18 C. J., Section 133; 2. Conversion, 13 C. J., Section 55; 3. Executors and Administrators, 24 C. J., Section 2562; 4. Executors and Administrators, 24 C. J., Section 1733; 5. Descent and Distribution, 18 C. J., Section 179; Executors and Administrators, 24 C. J., Section 1385; 6. Executors and Administrators, 24 C. J., Section 2539 (1926 Anno); 7. Executors and Administrators, 24 C. J., Section 2533; 8. Executors and Administrators, 24 C. J., Section 2539.
Error to the Circuit Court of the city of St. Louis.—Hon. J. Hugo Grimm, Judge.
AFFIRMED.
W. H. Douglass for plaintiff in error.
(1) The motion in arrest of judgment should have been sustained in this case as to the defendants, for the petition does not state facts which would entitle the plaintiff to recover, as the administrator would not be liable to plaintiff under the facts stated, and the defendant Fidelity & Deposit Company, as it signed the bond without notice of plaintiff‘s claim, for the record showed that Julia Ann Lockett had been paid in full by order of the court. See Authorities under Point 2. (2) Under the law a lien would not attach to funds obtained from the sale of real estate by an administrator by order of the probate court to pay debts merely because a distributee gave a deed of trust on her distributive share, and especially when the order of sale by the probate court was made long prior to the deed of trust. Hopkins v. Thompson, 73 Mo. App. 401; In re Winnegar Estate, 118 Mo. App. 445; Bank v. Estate, 221 S. W. 796; Ball, Admr., 90 Ind. 75; Nelson v. Murfee, 69 Ala. 598; Ford, Admr.
Kinealy & Kinealy for defendant in error.
(1) Bill of exceptions not having been filed during the term at which the motion for new trial was overruled and no extension granted, and no appeal pending at the time of signing the bill of exceptions, the court can only consider errors appearing in the record proper.
SUTTON, C.—This action is upon the bond of the administrator de bonis non cum testamento annexo of the estate of Sarah Ann Lockett, deceased. M. F. Doud is the administrator and the Fidelity & Deposit Company of Maryland is surety on the bond. The bond is in statutory form and is in the penal sum of three thousand dollars. Sarah Ann Lockett died testate in the city of St. Louis March 6, 1914, seized and possessed of an undivided one-half part of certain real estate situate in said city. This she bequeathed to her four children, Joseph H. Lockett, John A. Lockett, Grace H. Lockett, and Julia Ann Lockett, in equal shares. On September 14, 1915, the probate court of the city of St. Louis ordered the administrator to sell this real estate for the payment of the debts of the deceased. On February 21, 1916, Julia Ann Lockett borrowed $550 from Margaret Enyart, and executed her note therefor, and to secure this note executed a deed of trust upon her undivided one-eighth part of said real estate. At the time the money was borrowed the administrator was informed of the fact and of the execution of the deed of trust to secure the loan. The deed of trust was recorded in the office of the Recorder of Deeds of the city of St. Louis on the day it was executed. Afterwards, the administrator, in compliance with the order of the probate court, sold the real estate for the payment of debts and received therefor $16,000. This sale was reported to the probate court on April 1, 1916. The sale was thereupon approved by the court and deed was made accordingly to the purchaser. Out of the
The cause was tried before the court without a jury. The court gave judgment in favor of the plaintiff and against both defendants for $3000, the penal sum of the bond, to be satisfied upon the payment of $890.60, with
Defendants insist that under the law no lien attached to the surplus funds arising from the sale of the real estate for the payment of debts, in favor of Mrs. Enyart by virtue of the deed of trust given by Miss Lockett upon her undivided share of the real estate, that Mrs. Enyart had no right, title, or interest in or to said funds, that the administrator was under no obligation or duty to pay the note secured by the deed of trust, out of said funds, that the failure of the administrator to pay the note did not amount to a breach of his bond, and that, therefore, the judgment of the court below should be reversed.
It is well settled law that when a person dies the owner of real estate, the title to such real estate passes to and vests in the heir or devisee eo instante, subject to the right of the administrator or executor to sell the same for the payment of the debts of the decedent. If the real estate is sold by order of the probate court for the payment of the debts of the decedent, any surplus of the proceeds of the sale remaining after payment of the debts goes to the heir or devisee, and if the heir or devisee has conveyed the real estate the surplus belongs to her grantee. In other words, when real estate is converted into money for the payment of the debts of the decedent, the surplus of the proceeds of the sale remaining after payment of the debts retains the character of real estate for the purpose of succession or distribution, and goes to the person in whom the title to the real estate was vested when it was converted. In this case Miss Lockett by her deed of trust conveyed to the trustee therein named her undivided share of the real estate devised to her. The conveyance was made in trust to secure the payment of her note. When the land was sold for the payment of debts, her share of the surplus arising from the sale not needed for payment of the debts, in equity belonged to the beneficiary in the deed of trust to the amount of the note secured thereby. The administrator received this surplus in his capacity as administrator
It is urged in argument that since the deed of trust in question was not given until after the order of sale was made by the probate court, the deed of trust therefore conveyed no title. We cannot agree to this view. The order of sale did not divest the devisee of her title. This was not effectuated until the sale was made and approved and the deed executed and delivered.
Defendants further insist that the order of distribution made by the probate court is a final judgment and that the administrator was required to pay the money in accordance with the order unless the funds were arrested or reached under some process of law before he had paid the funds to the devisee under the order. This view is untenable. The probate court was without jurisdiction to determine the right or title to the funds as between the devisee and the beneficiary in the deed of trust. The order of distribution does not conclude the beneficiary, and it affords the administrator no protection for the wrongful disbursement of the funds belonging to the
It is argued that because at the time of the execution of the bond the records of the probate court showed that the devisee had received her entire distributive share under an order of the probate court and that the order so far as the surety knew or could know was a valid and binding judgment, the surety had a right to rely upon the records in executing the bond, and that therefore there is no liability on the part of the surety. We are unable to perceive how this state of the records could affect the liability of the surety. The deed of trust
Defendants further argue that there is no liability on the bond in suit for the reason that the money to which Mrs. Enyart was entitled was paid to the devisee before the bond was executed. The universally accepted rule is that, where an administrator or executor is required to give a new or additional bond, the new bond relates back and the sureties thereon become liable for any breaches of the trust occurring prior to its execution. If there is any case holding the contrary, it has not been brought to our attention. [Scofield v. Churchill, 72 N. Y. 565, l. c. 568; Dugger v. Wright, 51 Ark. 232, l. c. 234, 11 S. W. 213; Elizalde v. Murphy, 163 Cal. 681; Pinkstaff v. People, 59 Ill. 148, l. c. 150; Bankers Surety Co. v. Wyman, 141 Iowa, 574; Brown v. State, 23 Kas. 235, l. c. 243; Commonwealth v. Gould, 118 Mass. 300; Morris v. Morris, 9 Heiskell 814, l. c. 822; Bobo v. Vaiden, 20 S. C. 271; Pickens v. Miller, 83 N. C. 543, l. c. 547; Corrigan v. Foster, 51 Oh. St. 225; State v. Fields, 53 Mo. 474; State v. Berning, 74 Mo. 87, l. c. 98; Wolff v. Schaeffer, 74 Mo. 154, l. c. 158; State v. Paul‘s Exec., 21 Mo. 51.]
The rule thus announced by the authorities with such great unanimity accords with the true meaning and intent of our statute on the subject. The grounds for requiring an administrator to give a new bond under our statute are that the surety on the original bond has or is likely to become insolvent, or has died, or has removed from the State, or that the principal in such bond has or is likely to become insolvent, or is wasting the estate, or that the penalty of the bond is insufficient, or that the
Nor do we think the statute contemplates that, where a defaulting administrator has given a succession of bonds, the distributees of the estate shall be put to the task of ascertaining which of the several bonds operates to secure each separate breach or devastavit, before they could safely institute proceedings upon any of such bonds to recover for the losses suffered. It is not the intention of the statute that the rights of distributees should rest upon such precarious grounds. The courts ought and do exhibit a jealous solicitude for the preservation of the estates of deceased persons to the end that such estates may go unimpaired to the rightful distributees. The statute will not be so construed as to make it easy to defeat this end.
The Commissioner recommends that the judgment of the circuit court be affirmed.
PER CURIAM:—The foregoing opinion of SUTTON, C., is adopted as the opinion of the court. The judgment of the circuit court is accordingly affirmed. Daues, P. J., and Becker and Nipper, JJ., concur.