Adams v. Smith

19 Nev. 259

• Court: Nevada Supreme Court
• Decided: January 15, 1886
• Docket: No. 1202
• Status: Published

Opinions

By the Court,

Leonard, J.:

Charles P. Adams, in his lifetime, became the lessee of a certain town lot in Virginia City, and the owner of a wooden building thereon, described in the complaint herein. Before the lease expired, March 12,1878, Adams borrowed of defendant eight hundred dollars, through U. Smith, defendant’s brother, and to secure the payment of the same assigned said lease to defendant. The lease expired December 1, 1881, and the note given by Adams for the money loaned by defendant was due, one half September 12, 1878, and the balance March 12, 1879. By the terms of the lease Adams had the right to-remove the wooden building above mentioned at the end of the term, but not before. After the maturity of the note, November 19, 1879, when the principal was still unpaid, Adams died intestate, and plaintiff was appointed administratrix of his estate, January 10,1880. Defendant never presented any claim to plaintiff or the district judge for allowance. Other claims were regularly presented and allowed, which were unpaid, and the estate is insolvent. January 15,1880, plaintiff as administratrix authorized U. Smith, in writing, to collect all the rents coming from the building on the leased premises, and apply the same to the satisfaction of the eight-hundred-dollar note, less one hundred dollars per month ground-rent, and other necessary expenditures for repairs, etc. The power of attorney just mentioned was not authorized or approved by the court. On December 1,1881, plaintiff revoked the authority previously given to U. Smith, and notified the tenants to pay no more rents to him. This action was brought to recover from defendant the rents collected by U. Smith, upon the theory that the latter wras the agent of the former in all that he did under said power of attorney; that the rents belonged to the estate; and that plaintiff had no authority to execute said power of attorney, or to pay or authorize the payment of said claim, or any part thereof, without its presentation and allowance in the manner prescribed by law. Plaintiff recovered judgment for two thousand four hundred dollars, and this appeal is from the judgment and an order overruling defendant’s motion for a new trial.

Before plaintiff could recover any part of the sum sued for, it was absolutely necessary for her to prove that the rents collected by U. Smith belonged to the estate, and that U. Smith was, by previous appointment, the agent of defendant, or that his acts in relation to the rents had been ratified by defendant. But there was nothing to hinder U. Smith from acting as the agent of both plaintiff and defendant, — as pi aintiff’s in colleetin g the rents, and defendant’s in collecting and receiving them in payment of the note, — since in so acting the agent’s duties would have been consistent with the interests of both parties, according to their contract, the common object having been to pay the note from the rents. (Bish. Cont., sec. 333; Insurance Co. v. Buffum, 115 Mass. 345.)

At the trial, the judgment roll, in a case entitled like the one under consideration, from the first judicial district court, marked “Exhibit E,” was admitted in evidence on behalf of plaintiff, for the purpose of estopping defendant from asserting any title to the premises from which the rents in question were derived, and from attempting to prove that, in all that U. Smith did, as alleged in amended complaint, in collecting rents, defendant was not the principal, and U. Smith his agent. Defendant objected to the admission of the roll on many grounds, but it Was admitted, “ to go to the jury for what it was worth.” After plaintiff rested, defendant offered himself as a witness. He was asked nineteen questions, all of which were objected to, because “they tended to contradict the record, Exhibit E, admitted in evidence, by which, in law, defendant was conclusively bound as to tho agency of U. Smith, and as to the title to the premises described in plaintiff’s complaint.” The objection was sustained. To the same effect the court instructed the jury; and counsel for respondent in this court endeavor to maintain the correctness of the rulings of the court below upon these points.

It is urged by counsel for appellant that, for many reasons stated, said judgment-roll, and the papers connected therewith, were not admissible to prove an estoppel, and that they were not conclusive upon the question of title or agency. Our conclusions are such that it will not be necessary to examine many of the objections urged. To the extent of the eight-hundred-dollar claim, we are satisfied plaintiff cannot recover. The record shows that she acted according to the advice of her counsel in executing the power of attorney to U. Smith, whom she undoubtedly regarded as the agent of defendant. There is nothing to show that U. Smith or defendant took any advantage of her, or that she was deceived or mistaken as to any material fact, and she must be presumed to have known the law. We must presume that she was cognizant of the fact that she was not obliged to pay defendant’s claim, although it was secured by mortgage (Harp v. Calahan, 46 Cal. 222; Pitte v. Shipley, Id. 154; Clark v. Davis, 32 Mich. 155), if it was not presented for allowance as provided by statute. It is not shown, even, that when she caused the claim to be paid she supposed the estate was solvent. In other words, it appears that when this action was brought, the contract between plaintiff and defendant had been fully executed, that plaintiff paid the claim voluntarily, and in her own wrong.

This is not a case of payment of a Claim that was not legally •exigible. It was due from the Adams estate to defendant, although no action could have been maintained thereon without due presentment to the administratrix and the judge; and the payment made, albeit in an irregular manner, released the estate from a legal charge. It is not a case of money paid by mistake of fact, or by reason of fraud.

Herron v. Marshall, 5 Humph. 443,¹ was an action to recover a negro slave sold by the administrator of the estate of Robert Parrish to one Doyle, without authority of court, when the statute declared that the sale of a slave so made should be void. Doyle kept the slave until his death. The plaintiffs were devisees under the will of Robert Parrish, and the defendants were executor and executrix of the last will and testament of Doyle. After reciting the provisions of the statute, the court said: “ Consequently, the sale of the negro in controversy from Matthew F. Parrish, administrator of Robert Parrish, * * * conveyed no title to Michael Doyle, the testator of the defendants; and the complainants are entitled to the relief sought, unless their claim be barred by the statute of limitations. It is not argued that the devisees, under the will of Robert Parrish, are barred by reason of a neglect on their part to assert their rights within the proper time; for some of them were under age at the time the bill was. filed. But it is contended that, inasmuch as the sale is declared by the statute to be void, no right whatever passed thereby to the vendee, Doyle; and that the administrator of Robert Parrish might have commenced suit, notwithstanding the sale, against Doyle, imme? diately, to regain the possession of the negro; that therefore the statute of limitations commenced running in favor of Doyle the moment he took possession of the negro, and no suit having been brought within three years thereafter, he is protected by the statute of limitations. To this reasoning we cannot assent. The statute was passed for the protection of legatees and distributees, and to hold that an executor or administrator might, in violation of the provisions of the statute, sell negroes of the estate, and make that sale good and valid by a neglect to sue for their recovery, within three years thereafter, would be utterly destructive of the statute, and render it inoperative and unavailable. But, furthermore, we do not think that the administrator or executor could, in such case, set aside his own sale, and sue to recover the possession of the negro; and this upon the well-settled principle that a man shall not be permitted to set up his own illegal acts to vitiate his own contracts. In other words, we think that the executor or administrator would, in a suit against their vendee, be estopped from saying that they had violated the statute in selling the negro. The consequence is, that the legatees or distributees may sue, and, if they do so within time, will be permitted to recover.”

Sloan v. Stevenson, 24 La. Ann. 278, was an action by administrators and heirs to recover the price of cotton sold by the former, on the ground, among others, that the contract was null because it was a private sale of succession property. Said the court: “ The contract being executed, the administrators will not be listened to, in a court of justice, when alleging their own turpitude and dereliction of duty.”

In Egbert v. Rush, 7 Ind. 707, the administrator of an estate, without any order of court, voluntarily paid apart of the assets to the widow and heirs before the settlement of the estate. Sufficient means not having been left to pay the debts and compensate the administrators for their services, they brought their action against the widow and heirs to recover a sufficient sum out of the amount advanced to them to discharge the unpaid residue of the debts and compensate the administrators. The court held that the suit would not lie, and said: “ So far as the basis of the decree before us is disclosed, it may be resolved into two elements: (1) Money actually advanced to the widow and heirs of the intestate: (2) Money due to the administrators for services as such. The first was paid over to the widow and heirs without any order of court to that effect. It does not appear that any order for distribution was ever made. The payment was the act of the administrators without any legal authority. It must be taken as made, too, with a full knowledge of all the facts. As administrators they must have known the situation of the estate. At least, they had the means of knowing, and must be presumed to know how it stood. Their own reports show the debts and liabilities. It is not pretended that this money was ever advanced by them to save the sacrifice of any property of the estate. It was a voluntary payment of money, without any authority, or any plausible pretext of ignorance as to the facts. It was clearly waste. We know of no principle of 'law, and, certainly, no consideration of public policy, that can be invoked in aid of the administrators. Even as against adults the law would raise no assumpsit in their favor. Much less in this case against infants.” (And see Walker v. Hill, 17 Mass. 383; Pistole v.Street, 5 Port. (Ala.) 64; Parker v. Hall, 2 Head, 645; Stronach v. Stronach, 20 Wis. 129; Succession of Marr, 23 La. Ann. 718; Miller v. Harrison 34 N J. Eq. 374; Haile v. McGhee, 29 La. Ann. 350; Succession of Margaret McAuley, 29 La. Ann. 38; Cook v. City of Boston, 9 Allen, 393; Benson v. Monroe, 7 Cush. 125;¹ Patterson v. Cox, 25 Ind. 261; Williams v. Colby, 44 Vt. 41; Awalt v. Eutaw B. Ass'n., 34 Md. 435.)

We shall now consider whether or not'any valid objections exist against plaintiff’s recovery of the balance collected, after satisfaction of the eight-hundred-dollar note. Should we agree with counsel for defendant that the court erred in ruling that by the judgment roll, Exhibit E, he was estopped to deny that the title to the leased property was in the estate of Adams, or that U. Smith was the agent of defendant under the power of attorney, it would still be true that the roll was admissible and competent to go before the court and. jury for what it was worth, to establish, or as tending to-establish, the two facts claimed by plaintiff in relation to title and agency.

The constitution provides that “judges shall not charge juries in respect to matters of fact, but may state the testimony and declare the law.” In cases tried by juries, courts cannot take from them material disputed questions of fact. But when facts are admitted by the pleadings, or proven by one party, and not controverted by the other, it is not error for the court to take them from the consideration of the jury. (Sharon v. Minnock, 6 Nev. 377; U. S. v. Tillotson, 12 Wheat. 181.) In either case there are no disputed questions of fact. “When facts are undisputed, the question whether an agent has the requisite authority to bind his principal is a question of law for the court, whether such authority is sought to be sustained by a previous authorization or by subsequent ratification.” (Gulick v. Grover, 33 N. J. Law, 473.²) Upon an undisputed state of facts, whether such facts operate as a ratification is a question of law. (Bank of Orleans v. Fassett, 42 Vt. 439; and see Bigelow v. Denison, 23 Vt. 564; Commercial Bank v. Jones, 18 Tex. 828; Fay v. Richmond, 43 Vt. 28; Copeland v. Copeland, 28 Me. 543; Bradley v. Lee, 38 Cal. 366; Terry v. Sickles, 13 Cal. 429; Caulfield v. Sanders, 17 Cal. 573; Tompkins v. Mahoney, 32 Cal. 235; Rumsey v. Schmitz, 14 Kan. 546; Durham v. Carbon C. & M. Co., 22 Kan. 243.)

Although defendant in his answer denied that the title to. the premises from which the rents were derived was in the estate, or that U. Smith was his agent, or that he ever ratified his brother’s acts, our opinion is that, upon the uncontested facts disclosed at the trial, it is true in law that the title was in the estate during the period of collection by U. Smith, and that U. .Smith was defendant’s agent under the power of attorney executed by plaintiff.

And, first, upon the question of title, and consequently of plaintiff’s right to receive the rents. The estate’s title and interest were a leasehold estate in the land, and the absolute ownership of the building thereon, with the right to remove the latter at the end of the term, but not before. Defendant’s title, until December 1, 1881 (and during that time nearly, if not quite, all the rents were collected), was an assignment of the Adams lease as a mortgage to secure payment of the eight-hundred-dollar note. On December 1, 1881, the owners of the lot on which the rented building stood leased the ground to defendant, through U. Smith, upon his representation that he had bought the building, the lease to continue as long as defendant should pay sixty dollars rent monthly. But plaintiff kept possession of the property until about September 11,1882, when she threatened to remove the building, and a compromise was made between her and the lessors. By order of the court she conveyed the building to the lessors, and received three hundred dollars, besides the bank rents, and an acquittance of all ground-rent. The assignment by Adams to defendant did not provide for payment of any rent to the latter; but it was agreed therein that, in case of default in payment of the note when due, the title of Adams in said'lease, and his interest in and to the land described therein, should vest absolutely in defendant. The note was not paid at maturity. The assignment to defendant as a mortgage did not entitle him to receive the rents. (Polhemus v. Trainer, 30 Cal. 687; 1 Jones, Mortg., sec. 670.)

It is claimed by defendant’s counsel that the assignment of the lease to defendant was simply a chattel mortgage; that, upon condition broken, the law vested the title to the lease, and the interest of Adams therein, in defendant, prior to the death of Adams; and that neither the lease, nor the right to collect rents, ever became a part of the Adams estate. But the answer to this claim is, that the leasehold interest assigned to defendant is an interest in lands. (Comp. L. 283, 302, 1292; Trustees v. Dunn, 22 Barb. 402; Tay. Land. & Ten., sec. 14, note 2; Id., sec. 455; 1 Wash. Real Prop. 436.) Defendant’s only remedy was by foreclosure and sale. (Comp. L. 1309; Polhemus v. Trainer, supra.)

We nowr come to the question of agency. Although there was much evidence sustaining the court’s conclusion upon this subject, and little, if any, against it, still, as our opinion rests upon the fact of ratification by defendant, we shall only review the evidence which, directly or indirectly, bears upon that question.

The judgment roll, Exhibit E, admitted in evidence, shows, and the facts are undisputed, that on January 5,1882, plaintiff, as administratrix of the estate of Charles P. Adams, commenced an action in justice’s court, Storey County,, against Marshall Plutchinson, a tenant of the building before mentioned, to recover forty dollars rent for the months of December, 1881, and January, 1882. The rent having been claimed by both plaintiff and defendant, Hutchinson deposited in court the amount due, and asked the court to'substitute defendant herein as defendant in that case. Defendant also, by his attorney, petitioned the court to the same effect. On the tenth and sixteenth of January, 1882, the attorney for plaintiff in the justice’s court wrote defendant, and informed him fully of the acts of U. Smith and plaintiff in the matter of rents, and especially that, during the whole time, U. Smith, acting as his agent, had collected four thousand dollars or more of rents belonging to the Adams estate, and had paid no>part of it to plaintiff. Pie was informed of the suit against Hutchinson, and what it was for; that U. Smith, with an attorney, had petitioned the court to substitute Cyrus Smith’s name as defendant, claiming that the rents belonged to him. Defendant received those letters January 24, 1882, together with a letter from his attorney in that case. Defendant, upon receipt of the letters, went immediately to Virginia City, riding all night, consulted with his attorney about the case, authorized U. Smith in writing to attend to his interests in the suit then pending, and authorized and requested that his name be substituted in place of Hutchinson as defendant therein. That was January 25, and the case was tried January 31. His power of attorney to U. Smith was filed January 25. The order of substitution was then made, and at the same time defendant, by bis attorney, filed his answer, in which, among other things, he alleged that “plaintiff, Ellen Adams, administratrix of the estate of Charles Adams, deceased, for a valuable consideration, executed to him, defendant, through his attorney in fact, U. Smith, a power of attorney, dated January 15, 1880, authorizing him to collect the rents coming from and payable on the building set forth in said complaint, and that the sums so collected should be applied by defendant to the payment of an indebtedness of eight hundred dollars, due from the estate of Charles Adams, deceased, and from plaintiff herein to defendant herein; that the said indebtedness is now due and owing to said defendant; and that the said power of attorney from plaintiff to defendant was given to enable defendant to pay himself said indebtedness from the rents to be collected as aforesaid.”

Although on December 1, 1881, plaintiff notified U. Smith that his power of attorney to collect rents was revoked, it is quite evident that the one ground of defendant’s claim of right to receive the forty dollars rent was, that the power of attorney to IT. Smith was irrevocable, because coupled with an interest, until the eight-hundred-dollar note was paid. So his attorney .advised him in his letter of January 22,1882, before the trial; .and IT. Smith testified in this case that he “ refused to recognize such revocation” for the same reason. So it appears that defendant endeavored to recover the forty dollars rent in question in that case in part upon the ground that he was entitled to receive it by reason of the power of attorney given by plaintiff to him through his attorney in fact, U. Smith. Although the power of attorney was upon its face to U. Smith, it was competent for Cyrus Smith, in that case, as it was for plaintiff in this, to show that U. Smith was, in fact, the agent of Cyrus Smith in taking it, and in acting under it, so as to give the benefit of the contract on the one hand to, and charge with liability on the other, the unnamed principal. (Story on Ag., sec. 161, note.)

That defendant’s answer in that case, under all the circumstances, was and is a complete ratification of the contract entered into between plaintiff and U. Smith by the power of attorney, and of the acts of the latter thereunder, admits of no doubt; and it follows that defendant is responsible in this action to the same extent that he would have been if the power of attorney from plaintiff had been given to him, and he had acted under it as did his brother. (Story, Ag., secs. 239, 242, 244; Simmers v. Foote, 28 Miss. 671; Walker v. Mobile & O. R. Co., 34 Miss. 255; Memphis & C. R. Co. v. Scruggs, 50 Miss. 297; Meyer v. Morgan, 51 Miss. 24;¹ Hoyt v. Thompson, 19 N. Y. 207; Dove v. Martin, 23 Miss. 589; Gibson v. Norway Sav. Bank, 69 Me. 582; Greenfield Bank v. Crafts, 4 Allen, 453; Wellington v. Jackson, 121 Mass. 159; Forsyth v. Day, 46 Me. 177; Knight v. Nelson, 117 Mass. 458; Garrett v. Gonter, 42 Pa. St. 144.)

Indeed, if the agency and acts of U. Smith could have been ratified, it is not denied that there was a complete ratification, or that it was made with full knowledge of all material facts. But it is said that the act's of U. Smith, in receiving the power of attorney from plaintiff, and collecting the rents thereunder, for the purpose of satisfying defendant’s note, were unlawful, because the claim had not been allowed as the statute requires, and it was unlawful to pay the same without an allowance; that the agency in question was for the purpose of misappropriating the funds of the estate; and that neither such agency, nor the acts of U. Smith thereunder, could be ratified by defendant. We deem this objection frivolous. It was undoubtedly lawful on the part of defendant to receive payment of his note, either before or after allowance, if plaintiff was willing to pay him. The statute does not directly or indirectly prohibit him from doing so. On his part, the only penalty attached to a failure to present his claim is to deprive him of the right to maintain an action thereon. If plaintiff had offered voluntarily to pay him in money, he would have had a right to receive it. If that would have been lawful, he could have collected rents, and paid himself therefrom. With equal reason might it be argued that an ordinary creditor of an estate must see that all preferred claims are paid before he can lawfully receive voluntary payment of bis own, or that the administrator pays him only his pro rata share, if the estate is unable to pay in full. The statute in relation to the payment of claims is for the guidance of administrators and the protection of creditors, legatees, and distributees. Plaintiff need not have paid the note, except according to the statute, and ought not to have done so. But the wrong was her own, not defendant’s. As between him and her, the payment was lawful on his part. Whether, as to creditors, the arrangement was voidable, we -need not stop to inquire.

Undoubtedly defendant might have claimed and shown, if such was the fact, that when he ratified the acts of his brother in receiving the power of attorney, and making collections under it, he misapprehended the material facts; but such was not his defense, and in no other way could he have escaped the legal effect of ratification. Admitting that the court refused to allow defendant to answer the nineteen questions asked him, for a wrong reason, yet if his answers must have been immaterial, no injury was done. None of the answers could have shown, nor were they intended to show, that defendant was deceived, or that he misapprehended the facts when he filed his answer in the justice’s court, and any other evidence was immaterial. (Story, Ag., sec. 239, note; Id., sec. 242.) “A ratification supposes knowledge of the thing ratified; and in case of a contract, the inference from the ratification is that its provisions were known. When the ratification is proved, this inference necessarily follows; and if there was any mistake or misapprehension, the fact must be shown.” (Blen v. Bear River & A. W. M. Co., 20 Cal. 613.¹)

If he had testified that he did not, in person, sign the appeal bond, it would still have been true that he authorized his brother to attend to his interests in the suit, and requested his name to be substituted in the place of Hutchinson, as defendant; that he appeared by attorney in justice’s and district courts, as well as by his brother, whom he authorized to attend to his interests; and that he paid his attorney for both trials. Had defendant testified that he never authorized his attorney, Mr. Whitcher, to appear for him, or to make and file his answer in the justice’s court, it would still have been undisputed that his brother had power to do so, and that he never objected to what was done. He did not propose to testify that he was in fact ignorant of the contents of his answer in the justice’s and district courts, or that it was untrue. Whether he ever ratified the acts of his brother, done under the power of attorney from plaintiff, was a question of law for the court to decide upon the admitted facts, or for the jury, if the facts were controverted. The'other questions are so plainly immaterial we shall not consider them.

It was claimed by counsel for defendant in the court below that if U. Smith was agent for defendant for the purpose of receiving payment of the note, his agency ceased when he had received sufficient money to satisfy the same, and that defendant was not bound for anything he did in excess of receiving payment of the note. Under the agreement between plaintiff and U. Smith, the latter undertook to collect the rents, and out of them pay ground-rent, make repairs, etc., and the balance, whatever it might be, to apply upon the note. Neither party knew what the expenses would be, or the length of rime that would be required to satisfy the note. It was a part of U. Smith’s duty to keep a correct account, and cease collection when payment was made. Defendant recognized this when in his answer he said, in substance: “The power of attorney was given to me through my attorney in fact, U. Smith. Through him I have collected the rents; but I have paid it all out, and the note is still unpaid.” He put himself in the place of his brother, and expressly ratified all he had done.

1 81 Am. Dec. 132.

The result of the foregoing is that plaintiff is entitled to recover the amount of rents collected, less the sum due on the eight-hundred-dollar note, and such disbursements as were made for ground-rent, repairs, etc. This much was collected without authority, and is retained without right. From the amount collected the court authorized the jury to deduct all the above items of expenditure, but not the amount due on the note. We see no occasion, however, for a new trial. The testimony shows that two thousand five hundred and fifty dollars were paid by defendant for ground-rent and repairs before the power of attorney was revoked by plaintiff". U. Smith, defendant’s witness, testified that he collected more than five thousand dollars. Plaintiff testified that U. Smith told her the total receipts were five thousand two hundred and forty dollars. The jury found a verdict for two thousand four hundred dollars. This sum, less the amount due on the note, was justified by the evidence. The entire evidence shows that after the death of Adams the receipts for rents gradually became less. Defendant must have received more in the first part of the agency than the last. For defendant, then, it is safe to take the monthly average of the amount found by the jury to have been received above the sums paid out (about one hundred dollars), as the sum paid each month on the note. The interest was paid by Adams until November 12,1879, — a few days before his death. Proceeding upon the basis above stated, and including interest at two per cent per month until January 10,1880, when letters of administration were issued to plaintiff, and interest thereafter at ten per cent per annum (Comp. L. 612), the amount of principal and interest before payment could not have exceeded eight hundred and seventy-five dollars. This sum should be deducted from the amount of the judgment.

It is therefore ordered that the cause be remanded to the court below, with instructions to modify the same by striking therefrom the words and figures, “ twenty-four hundred dollars ($2,400),” and inserting in lieu thereof the words and figures, “fifteen hundred and twenty-five dollars ($1,525),” if, within ten days after the remittitur is filed in the court below, plaintiff files her written consent thereto; and the judgment so modified is' affirmed. If such consent be not filed as herein stated, the order and judgment appealed from are reversed, and the cause remanded for a new trial, plaintiff to pay costs of appeal in either event.

1 42 Am. Dec. 444.

1 54 Am. Dec. 716.

2 5 87 Am. Dec. 728.

1 24 Am. Rep. 617.