Opinion
No. 38955.
July 3, 1944. Rehearing Denied, September 5, 1944.
1. JUDGMENTS: Fraud: Rule for Setting Aside Judgments. The rule for setting aside judgments on the ground of fraud is stated.
2. JUDGMENTS: Judicial Sales: Insane Persons: Guardian and Ward: Collateral Attack on Probate Judgment Not Permitted. Issues of irregularity and mismanagement of the estate of a person of unsound mind may not be reviewed by a collateral attack on the judgment.
3. JUDICIAL SALES: Judgments: Mortgages and Deeds of Trust: Insane Persons: Fraud: Guardian and Ward: Undervaluation by Appraisers: Alleged Conspiracy: Mortgagee Not Charged With Notice. Defendant Sanford acquired a mortgage from the purchaser at the probate sale without knowledge of an alleged conspiracy with the appraisers to undervalue the land and with nothing on the face of the record to charge him with notice. He was not required to investigate the appraisement proceedings.
4. JUDICIAL SALES: Judgments: Fraud: Guardian and Ward: Fraudulent Appraisement Not Shown. The evidence did not establish that there had been a fraudulent appraisement in connection with the guardian's sale. The deed may not be set aside on mere suspicion.
Appeal from Buchanan Circuit Court. — Hon. Emmett J. Crouse, Judge.
REVERSED AND REMANDED ( with directions).
S.P. Reynolds, for appellant Jennie Farr Bodine.
(1) The Revised Statutes of Missouri authorize the sale of property of the ward for her support and maintenance when the personal estate shall be insufficient for payment of debts and maintenance of herself and family, then and in that case the probate court may make an order of sale for that purpose. In the present case, the petition prays for an order of sale because the income from the real estate is insufficient instead of the personal estate. This did not give jurisdiction to the probate court to proceed and it had no jurisdiction to make an order of sale and such order is absolutely void and not binding on this plaintiff. R.S. 1939, sec. 475. (2) The statement of the financial condition of the ward's estate did not cover the entire estate and for that reason it was void, and for that reason, the trial court should have sustained plaintiff's motion for new trial. R.S. 1939, sec. 476. (3) The trial court erred in putting a charge on plaintiff's land in favor of defendant Cunningham because the court further in its decree finds that all of the defendants were guilty of fraud upon plaintiff in getting plaintiff's property from her, while she was insane and now and at all times was insane and she should be restored in full to her property and the defendants left where the court finds them as to her. The plaintiff, an insane ward, has and had no say in the control of her property and the statutory trustee cannot put a charge on her property by any act and the statutory trustee cannot put a charge on her property by any act he does, and if Cunningham, defendant, has been badly used it was the company he chose and not the plaintiff that caused it. Kitchen v. Greenabaum, 61 Mo. 110; Story's Equity (14 Ed.), sec. 302, p. 302. (4) The trial court erred in its accounting because it did not take into consideration $82.41, which plaintiff says he did not account for, and the rent for 1943, and the $125, which defendant Farr says was borrowed money, and which he had no right to borrow, and which the probate court record shows that he had no right to borrow, and it failed to take into consideration the amounts expended by said Farr in procuring this order of sale which he paid to his attorneys and himself, and his paying $70 for an abstract of this property given to defendant Cunningham, and the probate court costs all unnecessarily made. Under the law, it was the duty of the trial court to consider all of these items. Sec. 2100, R.S. 1939. (5) According to the decree of the trial court, the defendants being coadjutors and conspirators in obtaining the property of plaintiff, who could not and cannot take care of herself, obtained her property by fraud, as found by the court, when she was not and could not have anything to say, and their rights the court should let them settle between themselves as between them without expense to plaintiff when they should have been left as the court found them in their fraud. Such action was not according to equity and justice. Kitchen v. Greenabaum, 61 Mo. 110; Story's Equity (14 Ed.), sec. 302, p. 302. The law authorizing the appointment of a statutory trustee provides that before he takes charge of such estate property he must have witnesses and appraisers. This was not done in this case. Secs. 462, 464, 465, R.S. 1939. Neither the petition or the statement of the financial condition complied with the law and all the actions thereafter under said petition were void and cannot and do not affect the rights of plaintiff in her property. Secs. 475-6, R.S. 1939. When the property is taken from the insane it is in the custody of the law to be directed by proper authority, and this authority cannot charge the property of the insane person unless there is the strictest following of the law in all respects. Grove v. Reynolds, 100 Mo. App. 56, 71 S.W. 1103.
Maurice Pope for appellants Glenn L. Cunningham and John Sanford.
(1) Probate courts have jurisdiction over the appointment of guardians of persons of unsound mind; settling the accounts of such guardians; and the sale of lands by guardians. Mo. Const., Art. 6, Sec. 34. (2) Judgments and orders of probate courts in the exercise of probate jurisdiction are entitled to the same favorable presumption and intendments that are accorded to orders and judgments of the circuit courts. Murphy v. DeFrance, 105 Mo. 53. (3) Where a sale is ordered and confirmed by a court having jurisdiction thereof, it cannot be collaterally attacked for any defects or irregularities in the proceedings to obtain the order or for any defects in the order itself or the proceedings subsequent to the order; and, within this rule, jurisdiction will be presumed where the record does not show a want of it. 28 C.J., p. 1200, sec. 350; Cox v. Boyce, 152 Mo. 576. (4) A court of equity will not set aside an order of a probate court approving an administration sale, unless there was fraud in procuring it; a wrongful approval is not sufficient, as it could have been appealed from. Murphy v. DeFrance, 105 Mo. 53. (5) A person dealing with a curator must ascertain authority, but authority may be relied upon when the probate court has duly authorized the curator to act. It is not necessary to go behind the finding and order of the probate court to ascertain if the order of the court was based upon sufficient facts. Phillips v. Phoenix Trust Co., 58 S.W.2d 318. (6) Real property sold by a guardian at private sale need not bring three-fourths of its reasonable market value. It need sell for only three-fourths of its appraised value. R.S. 1939, sec. 406. (7) Mere inadequacy of consideration is not enough to warrant the setting aside of a judicial sale unless the inadequacy is such that in itself it raises the presumption of fraud. Rorer on Judicial Sales (2 Ed.), sec. 549, p. 233. (8) If the court had jurisdiction to order the sale, and the proceedings were regular on their face, one who purchases the property in good faith, for a valuable consideration, without knowledge of any defect which would make the sale voidable, will be protected in his title, and will not be ousted because of fraud of the guardian inducing the sale where the purchaser did not participate in or have knowledge of such fraud. 28 C.J., p. 1201, sec. 351. (9) The cancellation of a deed is an exertion of the most extraordinary power of a court of equity, which ought not to be exercised except in a clear case, and upon strong and convincing evidence. Dreckshage v. Dreckshage, 176 S.W.2d 7. (10) Fraud is never to be presumed, but proof thereof must be positive and definite and a transaction will be held honest if facts proven consist as well with honesty as with fraud. Langley v. Imperial Coal Co., 138 S.W.2d 696.
Groves Watkins, Fred M. Wanger and O.W. Watkins, Jr., for appellant Sam Farr.
(1) The probate court has exclusive jurisdiction over all matters pertaining to probate business, the appointment of guardians and curators of persons of unsound mind, and the settling of their accounts and the sale of lands by guardians and curators. Mo. Const., Art. 6, Sec. 34; Scott v. Royston, 223 Mo. 568, 123 S.W. 454. (2) A court of equity will act only when there is no adequate remedy at law. 30 C.J.S., sec. 20, p. 338; Strong v. Crancer, 76 S.W.2d 383. (3) The objection to the introduction of any evidence should have been sustained, because the petition does not state a cause of action and is meaningless. State ex rel. Hendrix v. American Surety Co. of New York, 176 S.W.2d 67. (4) In an equity case the Supreme Court will review the entire record and if the findings of the trial court are not supported by the evidence, this court will reverse the decision of the trial court. Dreckshage v. Dreckshage, 176 S.W.2d 8; Jones v. Peterson, 72 S.W.2d 76. (5) This being a collateral attack upon the judgment of the probate court, it is necessary for plaintiff to show from the face of the records of the probate court that that court was without jurisdiction or that the judgment was obtained through fraud. Jones v. Peterson, 72 S.W.2d 76; Hedrick v. Hedrick, 168 S.W.2d 69. (6) Fraud is defined as deceit, deception or trick, and is never presumed, but the proof must be positive, and where the facts consist as well with honesty as with fraud, the transaction will be held honest. Webster's Universal Unabridged Dictionary, World Publishing Company Edition; Langley v. Imperial Coal Co., 138 S.W.2d 696; Stubblefield v. Husband, 106 S.W.2d 419; Ransberger v. McLennon, 252 S.W. 49; Feil v. Wells, 282 S.W. 25; Farmers Merchants Bank v. Funk, 92 S.W.2d 587. (7) There is a presumption of proper acting by the probate court, and that a guardian has accounted for all of his ward's property where final settlement has been made. Jones v. Peterson, 72 S.W.2d 76; Smith v. Denny, 34 Mo. 219; Ansley v. Richardson, 95 Mo. App. 332; State ex rel. Hendrix v. American Surety Co., 176 S.W.2d 67. (8) Where there is no evidence to overcome prima facie correctness of an item claimed as a credit by a guardian, it should be allowed. State ex rel. Tygard v. Elliott, 82 Mo. App. 458; Myers v. Myers, 98 Mo. 262, 11 S.W. 617. (9) Inadequacy of price alone does not constitute fraud, unless it is so gross as to shock the conscience. Judah v. Pitts, 62 S.W.2d 715; Phoenix Trust Co. v. Holt, 312 Mo. 563, 279 S.W. 714; Rogers v. Dent, 292 Mo. 576, 239 S.W. 1074. (10) The guardian's sale must have been for not less than three-fourths of the appraised value of the real estate, and not three-fourths of the actual cash value of the real estate as found by the trial court. Secs. 406, 479, R.S. 1939. (11) Plaintiff cannot, after judgment, change the theory of her case. Benz v. Powell, 93 S.W.2d 877. (12) The failure to have appraisers appointed for the property of the ward prior to the time the guardian takes charge of the same does not render void the guardianship proceedings. Overton v. Johnson, 17 Mo. 442; Smith v. Black, 231 Mo. 681, 132 S.W. 1129; Noland v. Barrett, 122 Mo. 181, 26 S.W. 692.
Attack on the judgment of the probate court of Buchanan County ordering and approving the sale of about fifty-three acres of land owned by a person of unsound mind. (Thirty-five acres tillable, balance timber land, access dirt road.)
The rule follows:
"A judgment cannot be set aside on the ground of fraud unless it is shown that fraud was practiced in the very act of obtaining the judgment; that the fraud went to the manner in which the judgment was procured rather than operating upon matters pertaining to the judgment itself; that the fraud prevented the unsuccessful party from presenting his case or defense; or that the fraud otherwise went to extrinsic, collateral acts or matters not before the court for examination or determination in the suit or proceeding in which the judgment was rendered.
"Such a proceeding cannot be used to obtain a further hearing upon matters, which were or could have been brought before the court to make a case or defense, either because the parties found further evidence bearing upon the truth or falsity of the testimony there, or because the parties neglected to litigate such matters in the original case. `Courts of equity do not grant such relief for the purpose of giving the defeated party a second opportunity to be heard on the merits of case.'" [Hockenberry v. Cooper County State Bank, 338 Mo. 31, 88 S.W.2d 1031, l.c. 1036.]
On June 1, 1940, the defendant Sam Farr, brother of Jennie Farr Bodine, of unsound mind, was appointed by the probate court guardian of the person and curator of the estate of his sister. In due course the court approved his first and second annual settlements. On May 13, 1942, he petitioned the court for an order to sell the above mentioned fifty-three acres of land. The petition alleged that the ward was indebted to a bank in the sum of $175.00 and that the income from her real estate was insufficient to pay her debts and provide money for her support. Attached to the petition was an itemized statement of the personal property of the ward amounting to $13.23. On said date the court found the facts, as stated in the petition and statement, to be true and ordered the land sold at public or private sale after due appraisement. On May 15, 1942, three householders of the county appraised the land at $1000 and so reported to the court. On [175] May 16, 1942, Farr, as guardian and curator, reported to the court a sale of the land to defendant Cunningham at private sale for $1000. On May 26, 1942, no exceptions having been filed, the court approved the sale. Thereupon the guardian and curator conveyed the land to Cunningham, who in due course paid the $1000 to the guardian and curator.
On October 3, 1942, Cunningham executed and delivered to defendant Sanford a deed of trust on the land to secure the payment of money loaned by Sanford to Cunningham.
On May 1, 1943, the plaintiff Minnie L. Gordon succeeded Farr as guardian and curator. On May 12, 1943, she filed this suit as guardian and curator of Jennie Farr Bodine. On May 24, 1943, the final settlement of Farr was approved and he was discharged as guardian and curator. On said day he delivered to Minnie L. Gordon as guardian and curator the balance due the estate as shown in his final settlement. She gave him a receipt for the amount.
As above stated, plaintiff seeks to have set aside the deed of Farr, as guardian and curator, to Cunningham. She also seeks to have set aside the deed of trust given by Cunningham to Sanford four months after Cunningham purchased the land. She also seeks an accounting from Farr of his administration of the estate.
In substance the petition alleged that Farr perpetrated a fraud on the court by selecting dishonest appraisers who undervalued the land; that he did so intending to purchase the land himself; that Cunningham purchased the land for Farr; that Cunningham paid no consideration for the land; that defendant Sanford had knowledge of the fraud perpetrated on the court and for these reasons the deed and deed of trust should be set aside. Defendants denied the allegations of the petition.
Plaintiff introduced in evidence the administration of the estate by Farr, as shown by the records of the probate court. She also introduced in evidence the files connected therewith. She also introduced in evidence the testimony of witnesses as to the value of the land on May 26, 1942, the date of the sale. Defendants also introduced in evidence the testimony of witnesses as to the value of the land on said date. The value of the land, as shown by the evidence, ranged from $1000 to about $2000.
The chancellor below found that the statement of Farr attached to the petition, which statement purported to show the condition of the estate, was fraudulent and not a correct account of his administration of the estate, and for that reason the deed to Cunningham was void.
He found that Farr was authorized by the court to borrow $125.00; that he borrowed $175.00, which the court approved. He also ruled this was a fraud upon the estate. He found that the reasonable market value of the land at the time of the sale was $35.00 per acre, and that the sale of the land at $18.75 per acre was less than three-fourths of its actual cash value. He ruled that the deed of trust was void for the reason Cunningham had no title to the land. He also found that after the sale of the land and with the consent of Cunningham, Farr permitted logs and trees of the value of $135.90 to be removed from the land, and that plaintiff is entitled to damages in said sum.
He entered judgment for the plaintiff against Farr for the $50.00 borrowed without authority of the court and for the $135.90 for the timber removed from the land, with six per cent interest per annum from the date of the judgment and for costs. He also entered judgment setting aside Farr's deed conveying the land to Cunningham and vested title to the same in Jennie Farr Bodine, subject to a lien in favor of Cunningham for the $1000 Cunningham paid for the land, with six per cent interest per annum from the date of the judgment. He also entered judgment directing the plaintiff, guardian and curator, to pay Cunningham $600.00 belonging to the estate as a credit on the lien in favor of Cunningham. Plaintiff appealed from the judgment lien of $1000 on the land. Defendants appealed from the judgment.
Issues of irregularity and mismanagement in the administration of the estate of a person of unsound mind are for the consideration of the probate court on the statements, reports and settlements of the guardian. All persons interested are accorded a hearing by the court on such issues. An interested party may have the judgment on such issues reviewed on appeal. Under the rule said parties are not authorized to have the same reviewed by a collateral attack on the judgment. [31 Am. Jur., Sec. 654, p. 230.] Plaintiff filed this suit on May 12, 1943. She alleged in the petition that Farr had not accounted for [176] all of the money and property of the ward in his possession. Farr did not file his final settlement until May 24, 1943. In this situation the plaintiff could have presented her claims of fraud to the court. If dissatisfied with the ruling on the questions, she could appeal.
It follows that the only charge of fraud on the court is the allegation in the petition that the defendants and the appraisers conspired to defraud the ward by an undervaluation of the land and the sale of the same to Cunningham, brother-in-law and business associate of Farr, for the use and benefit of Farr.
There is no evidence tending to show that Sanford, who loaned money to Cunningham on the land, knew or had reason to believe that there was fraud in connection with the sale of the land. The court had jurisdiction to order the sale and there is no irregularity on the face of the record. In this situation Sanford is not required to investigate the proceedings connected with the appraisement of the land. [Phillips v. Phoenix Trust Co., 332 Mo. 327, 58 S.W.2d 318.]
Furthermore, the uncontroverted evidence shows that Cunningham purchased the land, paid for the same, went into possession and rented the land the following year to Farr's son. If Cunningham owned the land, and, as stated, there is no evidence to the contrary, he could rent the same to Farr's son and he could permit either Farr or his son to take timber from the land. Furthermore, there is no evidence tending to show that timber sold by either Farr or his son was taken from the land.
The witnesses did not agree on a valuation of the land. A daughter of one of the appraisers married Farr's son, and another appraiser was a tenant on the land at the time of the appraisement. There is nothing in the record tending to show that this influenced the appraisement of the land. Two of the appraisers testified that $1000 was a fair valuation of the land. The other appraiser was not a witness. Other witnesses fixed the value at about $1000. The testimony of other witnesses ranged as high as $2000. There is nothing to indicate that any witnesses fraudulently valued the land. It increased in value after the sale to Cunningham. We are not authorized to set aside the deed and deed of trust on mere suspicion of the plaintiff.
The judgment is reversed and the cause remanded with directions to dismiss the petition. All concur.