Matson v. Pearson

97 S.W. 983, 121 Mo. App. 120, 1906 Mo. App. LEXIS 457

• Court: Missouri Court of Appeals
• Decided: December 11, 1906
• Status: Published

Opinion

NORTONI, J.

(after stating the facts) — 1. The court refused the defendant’s request for a jury. The defendant maintains that this is an action at law and therefore he was entitled to the verdict of a jury on the issues. Contra to this, the . plaintiffs maintain that the suit is in equity and therefore the court properly refused the request for a jury. From the allegations and prayer of the bill, it is obvious that the pleader intended to and does seek equitable relief, hence the question arises whether or not a court of equity has jurisdiction to entertain the bill on the facts stated. It is determined and abundantly supported by both principle and authority that a court of equity will not assume jurisdiction of a claim against an estate of a deceased person until it has been made to appear that the probate court cannot afford the requisite relief. [2 Woerner’s Law of Administration, 815-816; 1 Woerner’s Law of Administration, 356; Adams v. Adams, 22 Vt. 57; Harris v. Douglas, 64 Ill. 466-469; Blanchard v. Williamson, 70 Ill. 647-651; Miller v. Woodward, Admr., 8 Mo. 169; Pearce v. Calhoun, 59 Mo. 271; Titterington v. Hooker, 58 Mo. 593; In re Estate of Meeker, 45 Mo. App. 186; Meeker v. Straat, 38 Mo. App. 239; Overton v. McFarland, 15 Mo. 312.] The principle thus announced pervades the entire system of equity jurisprudence and is to the effect that equity interposes only to supply the deficiences of the law and therefore if it appears that a party has an adequate remedy at law, equity will point him to that court for relief and decline to assume jurisdiction. It is suggested, however, that even though the claims presented in the bill be demands against the estate within the meaning of the administration law, and as such, cognizable in law courts, this equitable proceeding may be sustained upon the principle that inasmuch as under the English rule, courts of chancery assumed jurisdiction in nearly or about all manner of instances with respect to estates of deceased persons and the administration thereof, and that the doctrine is firmly, established to the effect that whenever chancery once had and entertained jurisdiction, such jurisdiction continues and the subsequent grant of remedy at law will not oust the court of ejuity of its jurisdiction in the premises unless the equitable remedy is extinguished by direct and positive prohibitory provisions in the statute conferring such remedy at law. There is no doubt but such is the rule which obtains with us and elsewhere. [Woodward v. Woodward, 148 Mo. 241, 49 S. W. 1001; Stewart v. Caldwell, 54 Mo. 536; 1 Story, Eq. Juris. (13 Ed.), sec. 64-I and 80.] Now, it appears that in England, the subject of the settlement and disposition of estates of deceased persons, is or was, a matter over which the ecclesiastical and chancery courts, to a very large extent, exercised what seemed to be a concurrent jurisdiction, and it is pointed out in the history of that jurisprudence that the courts of chancery so lightly esteemed the proceedings of the ecclesiastical courts with respect to matters of administration that they did not hesitate to take the subject from them, etc., but upon examination of the authorities, the reason for the exercise of this jurisdiction by the courts of chancery is discovered to be that the chancery courts asserted the prerogative on account of the inadequacy of the powers and infirmities of the ecclesiastical courts to meet the exigencies presented and to render complete justice to all concerned. So we ascertain the true ground upon which the chancery courts assumed jurisdiction in these cases to be, either, that the remedy at law did not exist at all or was not “full, adequate and complete.” [Miller v Woodward, 8 Mo. 161 173; Adams v. Adams, 22 Vt. 50-57; 1 Story, Eq. Juris. (13 Ed.), sec. 534.] And indeed this was but the application of the same ancient principle of equity jurisprudence heretofore adverted to. It has been pointedly decided, however, by our Supreme Court that the reason on which equity interposed in matters of administration in the old days does not obtain with us and that the principle suggested has no' application in view of our statutes with respect to administration. It is pointed out that they are so full and complete, abounding with apt and pertinent provisions to administer full, complete and adequate relief at law, and that their provisions are so ample with respect to matters of administration that they amount to an exclusion in fact, of the chancery jurisdiction asserted unless there be some fact or facts involved which renders the case one where adequate relief at law cannot be had. [Miller v. Woodward, Admr., 8 Mo. 169-174; Overton v. McFarland, 15 Mo. 312; Titterington v. Hooker, 58 Mo. 593; Pearce v. Calhoun, 69 Mo. 217; Adams v. Adams, 22 Vt. 50-57; 1 Woerner’s Amer. Law of Administration, 355-356.] It appearing therefore that the jurisdiction of courts of equity no longer extends to matters of this nature except it be upon the ground of an inadequate remedy at law, it remains to ascertain whether in this case the plaintiffs have such adequate remedy; that is, such a remedy at law as .will afford to them the full and complete redress to which they are entitled, and this involves an examination of the nature of the claims presented. The opinion generally prevails, and under the old law it was quite true, that those claims which are considered as demands against an estate arise only by virtue of some contract or undertaking of the deceased in his lifetime and were either demands against him at the time of his death or would have become such in due time had he lived, and such other claims as are specifically enumerated as such by the statute; for instance, funeral expenses, which are of course contracted after the demise. 'The principle underlying this doctrine of the old law results from the fact that all contracts, entered into by the administrator during the course of the administration, were his undertakings and not those of the estate in such a sense as would obligate him in his representative capacity so that they could be enforced at law and be satisfied out of the estate. [Presby Church v. McIlhaney, 61 Mo. 540; Thompson v. Smith, 64 N. H. 412; see also Judge Bond’s opinion in Yeakle v. Priest, 61 Mo. App. 47, and cases cited therein.] This rule, however, does not obtain in this State to the full extent of its influence at common law, but, on the contrary, the principle has become firmly imbedded in the jurisprudence of Missouri to the effect that the “administrator is a statutory trustee to the end that the property of the estate may be collected, preserved and disposed of according to law.” [Smarr v. McMaster, 35 Mo. 349; Nichols v. Reyburn, 55 Mo. App. 1-7.] And upon this principle, adjudications have followed until it is now the well settled rule of law that the administrator has the j)ower to- bind the assets of the estate in his hands whenever authority to do so is given by the statute and that within the limitations of the statute, he may incur obligations which are enforceable at law against the estate. [Nichols v. Reyburn, 55 Mo. App. 1; Yeakle v. Priest, 61 Mo. App. 47-50; Powell v. Powell, 23 Mo. App. 365; Lycan v. Miller, 56 Mo. App. 79-84.] Now, inasmuch as sec. 92, R. S. 1899, requires the administrator or executor to commence and prosecute or defend actions to which the estate is a party and- sec. 223, ibid, authorizes the probate court to allow him a reasonable charge for legal advice and services, it has been adjudged upon the reasoning indicated by both this court and the Kansas City Court of Appeals that claims fo-r attorney’s fees such as presented in the first count here, are demands against the estate within the meaning of the administration law. [Nichols v. Reyburn (St. L.), 55 Mo. App. 1; State ex rel. v. Walsh (K. C.), 67 Mo. App. 348; Lycan v. Miller, 56 Mo. App. 79-84; see also Kingsbury v. Joseph, Admr., 94 Mo. App. 298, 68 S. W. 93.] The latter case originated as a demand filed against the estate in the court of common-pleas in Cape Girardeau, which court possessed probate jurisdiction in that county. See also McDonald v. Tittman, Admr., 96 Mo. App. 526, which case originated as a demand filed in the probate court of the city of St. Louis as appears by reference to the original files here, which we have examined. [See also Nave v. Salmon, 51 Ind. 159; Long v. Rodman, 58 Ind. 58; Scott v. Dailey, 89 Ind. 477; Portis v. Cole, 11 Tex. 157.] Indeed, under the authorities, there are numerous claims arising after the decease and out of contracts of the administrator entered into within the limits of his statutory authority which are adjudged to be demands against the estate within the meaning of the administration law and as such, enforceable at law against the estate. [State ex rel. v. Tittmann, Admr., 103 Mo. 553-556, 15 S. W. 936; Powell v. Powell, 23 Mo. App. 365; Lycan v. Miller, 56 Mo. App. 79.] And the will, having conferred upon the executor the broad power to sell the lands of the estate, there is no doubt but that he was thereby incidentally authorized to employ real estate agents to assist him in making a sale thereof and that the services so rendered by them under contract with the executor, if the sale wras actually consummated satisfactorily to the executor and as contemplated by sec. 223, R. S. 1899, would be services beneficial to the estate in that sense which would entitle them to enforce their claim asserted in the second count against the estate as a demand arising in the nature of an expense of administration to the extent at least which the statute authorizes compensation to the executor for the same services, as indicated in Jacobs v. Jacobs, 99 Mo. 427, 12 S. W. 457. Now, under the authorities, the subject of this suit being demands against an- estate, are they demands in the sense that they may be presented and allowed against and satisfied out of the estate in the ordinary procedure provided by statute for the allowance and payment of demands so that the plaintiffs can recover the full measure of relief to which they are entitled? If the demands be such, then the law affords adequate relief and a court of equity is without jurisdiction. Section 223, R. S. 1899, contemplates that the executor may employ counsel at a reasonable expenditure, compensate him or them for services rendered and then present the amount paid out in that behalf to the probate court as a credit in his settlement and it becomes the duty of the court to allow a reasonable amount to the executor as a credit therefor. It was upon a strict construction of this statute that the Kansas City Court of Appeals in Stephens v. Cassity, 104 Mo. App. 210, held that a suit at law by an attorney could not be maintained against an administrator on account of such, services, announcing the doctrine that such a claim was not a demand against the estate and that the probate courts only have authority to allow the same in settlements of administrators and executors. This case, however, is not in harmony with the prevailing adjudications on the subject. It seems to ignore the entire trend of the adjudicated law in this State with respect to matters of this sort and directly conflicts with both Nichols v. Reyburn, decided by this court, and State ex rel. v. Walsh, 67 Mo. App. 348, decided by the Kansas City Court of Appeals. It will therefore not be further noticed.

Under the circumstances of this- case, Col. Lonergan, the executor, having died without making a settlement of his executorship and without asking such allowance from the probate court for plaintiffs’ services, this avenue of the law, is foreclosed to them. It is suggested, however, that it is now settled by the case of State ex rel. v. Walsh, 67 Mo. App. 348, in point, and by analogy, in Mac Donald v. Tittman, Admr., Powell v Powell, and Kingsbury v. Joseph, supra, that these plaintiffs, the meritorious parties, may present their demands directly to the probate court and have them allowed as demands against the estate and therefore an adequate remedy at law exists. It is true that the demands could have been so presented and upon such allowance, had the demands been presented to the probate court as of the date this suit was filed, such date being within one year from the issuance of the first letters on the estate, under sec. 184, R. S. 1899, it would have been the duty of the probate court to classify the same as demands of the fifth class and in event the estate were solvent they would no doubt be paid in due time. In such case, however, if the assets of the estate were consumed by the demands of the first, second, third and fourth classes, these plaintiffs would receive nothing for their services, by which the estate had been benefitted. It is true that the plaintiffs might have instituted their suit at law, and reduced the same to judgment in the circuit court under the provisions of sec. 191, R. S. 1899, which section confers upon the circuit court concurrent jurisdiction with the prohate court for the adjudication of demands against the estate. [Wernse v. McPike, 100 Mo. 486, 13 S. W. 809; Richardson v. Palmer, 24 Mo. App. 480-488; Nichols v. Reyburn, 55 Mo. App. 1; State ex rel. v. Tittman, 103 Mo. 553; Jamison v. Wickham, 67 Mo. App. 575-579; Miller v. Woodward, Adrar., 8 Mo. 167; Chapman v. Merritt, 45 Mo. App. 179.] And upon a recovery of judgment in that court, the same could have been exhibited by the plaintiffs for allowance to the probate court, as pointed out in the statute, and the suit having been instituted at law in the circuit court, under the provisions of sec. 187, it would be considered as an exhibition of the demands against the estate as of date of the service of process upon the administrator cle bonis non, and in this case the date of such service being within one year from the grant of the first letters on the estate, under section 208 and 187 R. S. 1899, it would be the duty of the probate court to classify such demand as pointed out by the statute. [Wernse v. McPike, 100 Mo. 476-486.] Under these circumstances, they would have become demands of the fifth class and in due time the plaintiffs Avould receive their compensation, provided sufficient funds remained after the payment of demands of the classes prior thereto. It therefore appears that they have two remedies at law whereby the plaintiffs could have obtained adjudications and allowances of their demands as of the fifth, class. This, then, is an adequate remedy at law and as such precludes a suit in equity for the demands asserted in the bill unless the plaintiffs are entitled to have their claims allowed and paid prior to the fifth class. If they are entitled to priority of payment, the remedies suggested are neither adequate nor complete and a court of equity will entertain the bill.

As said before, the solution of this problem involves the ascertainment of the character of the demand, for while we have discovered that the claims asserted are demands, we have not yet examined the precise nature of such demands. While the cases have declared such claims to be demands, we do not understand that the courts have thereby intended, by the mere employment of the word “demand” to convert a legitimate expense of administration into a demand of the fifth or any other class. We may denominate the claims here asserted as . demands or what not, but the fact remains nevertheless that so much of the same as relates to attorneys’ fees is now and has been recognized, since Gamble v. Gibson, 59 Mo. 585 as, and in truth is, a legitimate and proper expense of administration. While the claim for compensation as real estate agents employed by the executor under power in the will to dispose of the real estate is no doubt as well a proper expense of administration, provided the real estate is actually sold, such expenses of administration are and of right ought to be first or prior obligations of the estate. This follows, of course, from the fact that such expenses are contracted in protecting the estate and otherwise rendering services whereby the estate is benefitted in the interest of the creditors, heirs, legatees or other persons interested therein. Such obligations are burdens of the administration and the creditors must be and are postponed to their payment. [Elstroth v. Young, Admr., 88 Mo. App. 418; 11 Amer. & Eng. Ency. Law (2 ed.), 1232-1240-1252; 2 Woerner’s Amer. Law of Administration, 756-766.] For it is certainly only fair and equitable, where litigation which imperils the assets of of an estate is defeated by the diligence of attorneys and the assets of an estate thereby preserved for the benefit of the creditors and heirs, that the attorneys who have thus rendered the services for the protection of the fund should he first paid, at any rate, should not he postponed to the fifth class, and the same would apply with equal force to a case of real estate agents employed by an executor who had the authority to contract such employment and they had rendered services whereby the estate was benefited. Such last mentioned expenses of administration, arising by virtue of beneficial services rendered to the estate, are certainly entitled to be paid first to creditors not excluding, however, the executor’^ compensation for the same services. The claims asserted in the bill are of this class and as such are entitled to be paid in priority to the creditors. It therefore appears that as there are no provisions in the administration law whereby they could have been classified in preference to the creditors and paid first to them, the bill presents a case in which the plaintiffs had no adequate remedy at law which could afford the measure of relief to which they are entitled. The case stated is of equitable cognizance and being such, it was not error to refuse the request for a jury. [Hagan v. Bank, 182 Mo. 319-345, 81 S. W. 171.]

We have examined the facts in proof and find substantial evidence tending to support the finding of the court on the first count, and the judgment will therefore be affirmed.

2. The cause of action set out in the second count is for commission alleged to have accrued to plaintiffs on account of a contract with the executor, Col. Lonergan, whereby they were employed to procure a purchaser for the lands which the executor was authorized by the will to sell. The proof shows- that they had such a contract; that they performed on their part by procuring a satisfactory purchaser who was ready, able and willing to buy the same at a satisfactory price and that the executor declined to execute the deed because Hr. Pearson had succeeded to the interests of the heirs, as detailed in the statement of facts accompanyirg the opinion.

The allegation of the bill predicates the right of recovery against the estate and compensation therefor out of the funds thereof in the hands of the administrator de bonis non, upon the proposition that such services so rendered were beneficial to the estate. Now it is obvious that this proposition cannot be sustained on the evidence, for while under such circumstances the sale was made as between the agents and principal', within the meaning of the law, so as to have permitted the agents to recover their commission from the principal therefor (Sallee v. McMurray, 113 Mo. App. 253, 88 S. W. 157; Brown v. Smith, 113 Mo. App. 59, 87 S. W. 556), no actual sale of the lands was made by them, so that the estate could have been benefited by the services rendered. The fact is, no sale was made; the lands remained the property of the estate, and the estate was neither benefited nor injured by the services rendered but remained in statu quo. [Grove v. Reynolds, 100 Mo. App. 56, 71 S. W. 1103.] We do not rest the judgment of the court on this feature of the case, however. Aside from this, there are reasons which, in our opinion, have such influence, over the facts in proof as to render it imperative upon this court to reverse the judgment on this count. We desire to say, however, that we. have sought diligently for authority upholding the same but our labors have been in vain in view of the controlling decision of the Supreme Court in Jacobs v. Jacobs, 99 Mo. 427, 12 S. W. 457. Upon reflection, we are persuaded that the authority of that case controls the judgment of the court here. We hope we may be pardoned, however, for making some observations on what seems to us should be the law of this case on principle. Now, the will conferred upon the executor, in broad terms, power to- sell the lands, and it was unquestionably within the power of the testator to authorize the executor to sell his real estate. It was likewise unquestionably within his power to leave the time, manner and terms of the contemplated sale to his executor and it is true that under this power, the executor could have an abstract prepared, if necessary, to effectuate the sale, at the expense of the estate. He could have contracts and deeds prepared at the expense of the estate for the same purpose and likewise under this broad power conferred by the will, he could, if he deemed it essential and for the best interest of the estate in that behalf, in order to obtain a fair price for the lands, employ agents or brokers to procure a purchaser or purchasers or to aid and assist him thereabont, and contract to pay snch agents or brokers commissions for rendering the services in aiding the sale and effectuating the power conferred by the will. In fact, it seems clear that the broad power conferred by the will necessarily implied in the executor, power incidental thereto to do any and all things reasonably essential to effectuate the power conferred. [Ingham v. Ryan, 71 Pac. (Colo. App.) 899; Dyer v. Winston, 77 S. W. (Tex. Civ. App.) 227; O’Brien v. Gilleland, 79 Tex. 602; McCown v. Terrell, 9 Tex. Civ. App. 74.] And, upon principle, it seems that under such circumstances, the contracts of the executor in that behalf entered into confessedly within the power conferred by the will, ought to obligate him in his representative capacity to render compensation therefor out of the estate. We know of no good reason on principle, why the estate should not ordinarily he held to respond to the contracts of its executor made within the power of the will. [Ingham v. Ryan, 71 Pac. (Colo. App.) 899; Wade v. Pope et al., 44 Ala. 690-695; Brown v. Evans, 15 Kan. 88; Bostwick v. Beach, 103 N. Y. 414-421; 9 N. E. 41.] In a case somewhat similar to this, it was adjudged by the Colorado Court of Appeals in Ingham v. Eyan, supra, that when lands were sold by an agent, acting for the executor, who derived his authority through the power in the will, as here, that such contract of the executor with the agent for which commissions far in excess of those allowed by the statute for the sale of lands, was valid and could be enforced against the estate, nothwithstanding such statute prescribed the commissions to which executors and administrators are entitled generally for the sale of real estate. Be that as it may, however, we are confronted with what we regard as authority in point and controlling on this question, which sets the proposition at rest, so far as this court is concerned. [Jacobs v. Jacobs, 99 Mo. 427-428, 12 S. W. 457.] In that case, as here, the executrix was authorized by the will to sell certain lands. To effectuate this power, she employed agents. The agents having made the sales, for there were several, the executrix compensated them therefor and charged the same in her-final settlement as a credit against the estate, and also charged the executrix’s commission of five per cent on the money arising from such sales. The Supreme Court refused to allow the executrix credit for the amount paid to the real estate agents, holding that section 223, R. S. 1899, which allows administrators and executors “a commission of five per cent on personal property and on money arising from the sale of real estate,” is the measure of the executor’s compensation, and whether the duties prescribed by the will be performed by the executrix herself or her agents, there could be but one compensation therefore which is fixed at five per cent by the statute. Now, it is a well-settled rule with us that compensation of administrators and executors is not a matter within the discretion of the courts, but, on the contrary, is a matter fixed by the statute above referred to, and that- the commission of five per cent allowed for their services is not earned by the administrator or executor until the services for which it is claimed have been fully performed. [Garrison v. St. L., etc., Trust Co., 77 Mo. App. 333; In re Boothe, 38 Mo. App. 456; Hawkins v. Cunningham, 67 Mo. 418; Hitchcock v. Mosher, 106 Mo. 582, 17 S. W. 638. Our statute above referred to does not purport to allow the executor commissions on the value of the lands, which is a parcel of the estate, nor on the amount at which it might have been spld, but it alloAvs him commission only Avben the lands have been actually sold and the five per cent is due him upon the amount of moneys arising from the sale. The language is: “A commission of five per cent ... on the money arising from the sale-of real estate.” [Sec. 223, Ibid.] Prom the cases cited supra, it is obvious that the statute Avith respect to the subject of commissions is to be strictly construed for the benefit and in the interest of the estate and that no commissions are to be allowed and taken from the corpus of the estate except they are earned within the spirit or letter of the statute. The converse of the proposition that commissions Avill he allorved on such assets as he actually administered, is that no commission can be allowed on those enumerated AA'hich do not fall Avithin the terms of the statute and do not come into his hands virtide officii. [11 Amer. & Eng. Ency. LaAv (2 Ed.), 1292.] The real estate Avas not sold. There was no money “arising from the sale of the real estate” and therefore the executor, Col. Lonergan, could have claimed no commissions therefor and the court Avould have no authority to allow such commissions to him. Now, the suit is not against Col. Lonergan nor is it against his estate, but it is against the estate of Avhich he Avas executor, and seeks to recover therefrom, upon the proposition that the plaintiffs Avere the executor’s agents, compensation which Avas not earned from the estate by their principal. Under the authority of Jacobs v. Jacobs, supra, the executor could not obligate the estate for commissions beyond the limitation of the statute, for the reason that the assets of the estate are not to be diminished by the payment of commissions not earned, under the statute supra. The executor himself had performed no services, nor had his agents under a contract Avith him which operated under the limitations of the statute, to obligate the estate to pay commissions which are only affixed as obligations of the estate by actual sale of the lands, which was not accomplished in this instance. The statute and the adjudications theron were essentially a parcel of the contract between the parties and must be so considered by this court with reference to the claim asserted in the second count. For the reasons stated, the judgment on the second count will be reversed. It is so ordered.

Bland, P. J., and Goode, J., concur.