Summary
1. Ejectment — Administrator's Sale — Partnership Estate-Fraud — Estoppel. In an action to recover the possession of real estate sold by an administrator to pay debts of a partnership, and fraudulently bought in by him, and for rents and profits of the same received by the defendant for thirteen years, the latter averred in his answer a settlement of the partnership estate, of which he was surviving partner and administrator, an accounting and final discharge from his trust in the probate court, and the payment of over $3000 to the plaintiff, who was one of the heirs of the deceased partner. To avoid the effect of the estoppel so pleaded, the plaintiff replied that defendant had fraudulently used notes belonging to the partnership estate for the purchase of other real estate, the title to which was taken in his own name, and had sold different pieces thereof, and received $8000 per year rent for the same for about fifteen years; and in all his reports to the probate court had failed to charge himself with, or account for, said sales or rents, and purposely concealed the transaction, for the purpose of defrauding the plaintiff, until shortly before the commencement of the action. Held, that the allegations of the reply showed a lack of necessity for the sale of the property in controversy to pay partnership debts, and fraudulent concealment of facts, which avoided the estoppel pleaded in the answer.
Error from Jackson district court; Louis A. Myers, judge.
STATEMENT.
This was an action of ejectment tried in Jackson county, the venue having been changed from Shawnee county. The plaintiff below alleged in the petition that ever since October 7, 1875, she had been the owner in fee simple and entitled to the possession of an undivided one-fourth interest in lot 165, on Kansas avenue, in the city of Topeka. That since December 13, 1881, the defendant, John S. Branner, had unlawfully and wrongfully kept her out of possession of the same. The second cause of action was for the recovery of the use, rents and profits of said interest.
The amended answer of defendant below, John S. Branner, contained three defenses, the first being a general denial; the second an allegation that defendant had been in the exclusive, continuous, and notorious possession of the premises for more than fifteen years prior to the commencement of the action under a claim of right, he being the legal and equitable owner thereof in- fee simple, and that if plaintiff ever had any cause of action the same was barred by the statute of limitations; and the third, in substance, as follows :
On or about May 10, 1865, Oramel Griffin, who was at the time the owner of the property, executed and delivered to John S. Branner and Jacob Klein, as trustees, a deed of general warranty for the same. At the time of said conveyance John S. Branner and Jacob Klein were partners doing business as Branner & Klein, and defendant and Klein continued to own and hold said real estate as joint tenants until the death of Jacob Klein, on or about October 10, 1875. Jacob Klein left as. his sole and only heirs plaintiff, Millie Nichols (then Millie Klein), aDd Josie Klein, now Josie Webb. At the time of the death of Jacob Klein there was a large amount of indebtedness outstanding against said partnership. Shortly after the death of Klein, defendant filed his bond, as provided by statute, as the surviving partner of the firm of Branner & Klein, and by reason thereof became the custodian and special trustee of all the property belonging to said firm.
Defendant, in the year 1881, as such surviving partner, under the 'order of the probate court of Shawnee county, sold the undivided .one-half of said real estate for the sum of $3000, and by reason of defendant being the owner of the undivided one-half of the same and liable for an equal proportion of the indebtedness against the partnership, defendant accounted to the firm of Branner & Klein and charged himself as surviving partner on account of the sale of said lot with the sum of $6000, that amount representing the purchase-price of the whole of said lot 165. The property sold for a fair price. At the time of the sale there was due defendant by the firm of Branner & Klein, by reason of money advanced by him as surving partner in the payment of partnership debts, the sum of $2000. The unpaid debts of the firm at the time of the death of Jacob Klein amounted to about $8000, which were due, and it became necessary to dispose of some property to meet said obligations, and lot 165 was the least productive and hence most available to sell at the time. Said lot was unimproved, except that a small wooden building of little or no value was situated thereon. Defendant sold one-half of the' property as aforesaid to Otto Kuehne for the consideration of $3000, with the understanding that the defendant would take the property from him at that sum. He took a deed from Kuehne in good faith, and the conveyance to Kuehne having been approved by the probate court. In his final account filed in the probate court in 1892, defendant charged himself with $6000, the purchase-price of the real estate, and used said consideration in the payment of legal debts of the firm of Branner & Klein. By reason of said sale other real estate was prevented from being sacrificed for the payment of debts. The money was used for the payment of debts of the firm in the years 1881 and 1882.
On or about the 20th day of April, 1892, the defendant, as surviving partner as aforesaid, made a final settlement with the heirs of Jacob Klein and filed his final account in the probate court of Shawnee county, Kansas, in which he charged himself with $6000 in the joint account of Branner & Klein with this defendant as surviving partner. Plaintiff had full knowledge at the time of said settlement that $6000 was charged as the purchase-price of the real estate, and voluntarily received and accepted the same as such, which she has since retained. Ever since the year 1881 defendant has paid taxes on the whole of said real estate as the owner thereof, amounting to the sum of $200 per year for the entire period. In 1887 and 1888, believing he had a good and perfect title, he erected a large and substantial three-story- and-basement brick and stone building on said lot at a cost of about $12,000, and has paid insurance on said property amounting to the sum of about $500, and has expended $500 in repairs. Plaintiff had actual notice of said improvements and made no objection to their being made. Plaintiff, by reason of her long acquiescence in said sale and permitting said defendant to make lasting improvements, has forfeited any right she might have had from setting the sale aside, and is estopped from claiming any interest in the property. The purchase-price of the real estate (being $6000) was included in the final settlement with plaintiff, and defendant was indebted to her on account of the administration of said partnership estate in the sum of $3350.44, which amount plaintiff received from defendant long after said final settlement, and long after she had full knowledge that said amount of indebtedness had accrued and was created by reason of said sum of $6000, as the purchase-price of the real estate, being included in the final settlement.
At the time of the final settlement plaintiff, in person and by her attorneys, was represented, and defendant’s report was fully investigated and considered by the probate court and by plaintiff and her counsel, and no objection was made thereto. The same was adjudicated and defendant ordered to pay the plaintiff the sum of $3350.44, which has been done, and no offer has been made by her to refund the same. At that time, and long prior thereto, plaintiff had full knowledge of the manner in which said property was sold, and that $6000 was charged against this defendant in his final account as the purchase-price of the real estate. The defendant’s final report was approved by the probate court on or about the — day of April, 1892, and he was, by order of said court, fully released and discharged from his trust. Defendant has- been in the actual and continuous possession of the real estate for more than five years prior to the commencement of this action. This suit was not commenced for more than five years after the recording of the deed executed by the surviving partner and administrator of said partnership estate.
The plaintiff replied to this amended answer, first, admitting that at the time of the commencement of the suit said defendant was in actual and exclusive possession, adverse to plaintiff, of lot 165; that title to the property was derived as stated in the answer, the partnership of Branner & Klein, and the heirship of Josie Klein and Millie Klein, and denying all other allegations not admitted. For a second defense, she alleged that John S. Branner never had any power or authority to make the deed to Otto Kuehne alleged in the answer; and for a third defense, that defendant never executed any good and sufficient deed to Otto Kuehne ; and fourth, that the instrument alleged in the amended answer to have been executed to Otto Kuehne by John S. Branner, as surviving partner and administrator of said partnership estate, was fraudulently made by John S. Branner for the purpose of converting the property therein described to the use of the defendant; that said Kuehne received the deed on behalf of the defendant as his agent, and immediately thereafter, in pursuance of defendant’s direction, made a deed of the property to defendant. The fifth defense was, in substance, as follows :
The accounts and settlements of defendant in the probate court, and the judgments and orders of the probate court, were fraudulently made and procured by the defendant under the following circumstances : In all his accounts and settlements in the probate court defendant has treated the estate of Jacob Klein and the partnership as separate estates, and in all orders and proceedings with reference thereto, the probate court has also treated them as such. On December 29, 1880, defendant rendered to the probate court his third and .final account, which was then allowed, and an order discharging the defendant as administrator then entered on the records. Prior to said date, defendant filed an inventory and one annual account. Branner continued to act as administrator of the partnership estate, and to hold and manage all the assets thereof, until February 22, 1892, when he presented his final account as administrator of said partnership estate, in which were in-eluded various items, matters and transactions of Ms management as the guardian of the estate of plaintiff and her sister, whereby said account purported to be a final account of his administration of the estates of said plaintiff and her sister. In the final account defendant wilfully and falsely represented that, as administrator of said partnership estate, he had sold the undivided one-half of lot 165 to Otto Kuehne, when, in truth and in fact, he had sold it indirectly to himself.
At the time of the death of Jacob Klein there was due from Frederick Ortman to said partnership estate the sum of $500, which defendant did not include in his inventory as such administrator or surviving partner, but in December, 1876, took from Ortman a note due in one year, with twelve per cent, interest, payable to John S. Branner and John S. Branner, as administrator, which note was secured by a mortgage on land in Wabaunsee county. In November, 1879, he commenced an action in the district court on said note and to foreclose the mortgage. In the action John S. Branner and John S. Branner, as administrator, were plaintiffs. Afterward judgment was rendered, the land sold, and a sheriff’s deed ordered to be made to John S. Branner and John S. Branner, administrator of the estate of Jacob Klein, deceased. Defendant, by an erasure in the sheriff’s return, secured a deed to himself in his individul capacity, and in March, 1882, sold the land and received $2500 therefor. For' the purpose of defrauding plaintiff and her sister, he unlawfully concealed and omitted to include in any of his accounts to the probate court the proceeds of said note and mortgage.
On November 5, 1877, there were in the hands of defendant as administrator of the partnership estate three promissory notes executed by Frederick Ortman and secured by a mortgage on real estate in the city of Topeka, including lot 167 and the north twenty feet of lot 169 on Kansas avenue. The notes, with interest to February 7, 1878, amounted to $7101.47. There were liens on said real estate prior to the mortgage, amounting, on that date, to $13,000, but the real estate was worth much more than that sum. On November 5, 1877, defendant in his own name instituted an action in the district court on said notes and mortgage and made the prior lien-holders defendants. He recovered a judgment in his favor for $7101.47, and said prior lien-liolders recovered a judgment in the same suit, the latter having priority. In December, 1878, all of the real estate was sold for the sum of $14,157. Sale was confirmed and a sheriff’s deed executed to John S. Branner on January 27, 1879. Said action was brought by Branner for the fraudulent purpose of acquiring title to the mortgaged premises for his own use and benefit, at the cost and expense of said partnership estate. Pursuant to said fraudulent purpose Branner, at the sheriff’s sale, took advantage of the effect which his judgment lien for $7101.47 had in deterring other persons from bidding, and bought in the real estate at' a price barely sufficient to cover the prior lien, whereby he acquired the legal title to the real estate without cost or expense to himself individually, and by the use of the funds and property of the partnership estate. Prom the rents of the real estate and from other assets of said partnership defendant received, long prior to 1892, and still holds, much more than the amount necessary to pay off said liens, but has never paid or extinguished the same. More than $13,000 thereof now subsist as mortgage-liens on said property. Immediately after obtaining the title defendant sold and conveyed a part of said property, and has ever since collected and received the rents of a portion thereof remaining unsold. In March, 1882, he sold and conveyed lot 117 and received therefor $2800. In January, 1881, he sold and conveyed lots 99 and 101 and received therefor the sum of $300. Ever since January 27, 1879, defendant has received for rents of said lot 167 and the north twenty feet of lot 169 about $8000 for each year.
For the purpose of defrauding plaintiff and her sister, defendant has purposely and fraudulently concealed and failed in all the accounts heretofore rendered by him to the probate court to charge himself with, or in any manner account for, the money so received from the proceeds of the sales of said real estate or for the rents of the same. At the time of the alleged settlement there was in the hands of the defendant, of the proceeds of said partnership estate, more than $50,000, which he has not in any manner accounted for as administrator of said partnership estate or as guardian of the estate of plaintiff and her sister. All the orders of the probate court which have been made concerning said alleged settlement, and all receipts and acknowledgments of satisfaction which have been made or given by the plaintiff at and since the alleged settlement, have been procured by the defendant fraudulently and by means of false representation. The plaintiff did not discover any of the frauds of defendant heretofore stated, and that his said account and representations were untrue, until after January 1, 1894. All of the final accounts and settlements, and all of the orders of the probate court approving said final accounts and releasing and discharging defendant from his trust as guardian, administrator, or surviving partner, were by said probate court, in June, 1898, upon a regular trial and full hearing, vacated and set aside for frauds perpetrated by defendant in making and procuring the same.
A trial was had, the issues being submitted to a jury, which returned a verdict in favor of plaintiff for $4742.20, and in addition thereto answered certain particular questions of fact, as follows :
“1. Did the defendant herein, John S. Branner, charge himself, as surviving partner, with the sum of $6000, as the purchase-money for lot No. 165 on Kansas avenue, in the city of Topeka, Kan., and report the same in his final report as surviving partner, filed in the probate court of Shawnee county, Kansas, on or about the 20th day of April, 1892? Ans. Yes.
“2. Did the partnership firm of Branner & Klein receive the benefit of $6000 as the purchase-money for lot No. 165 on Kansas avenue in the city of Topeka, Shawnee county, Kansas, in the final settlement of John S. Branner, as surviving partner of said firm? A. No.
“3. Was the said $6000 purchase-money for lot No. 165 on Kansas avenue in the city of Topeka, Kan., used by said John S. Branner, as surviving partner, towards the payment of the debts of the partnership firm of Branner & Klein? A. No.
“4. Did John S. Branner, as surviving partner of the firm of said Branner & Klein, wilfully or intentionally purchase, or become the owner, of lot No. 165 on Kansas avenue in the city of Topeka, Shawnee county, Kansas, for the purpose of wilfully or intentionally defrauding the plaintiff herein, as one of the heirs of Jacob Klein, deceased? A. Yes.
“5. Was $6000 a full and fair price for said lot No. 165 on Kansas avenue in the city of Topeka, Shawnee county, Kansas, at any time during the year 1881? A. Yes.
“ 6. What was the fair and reasonable market value of said lot No. 165 on Kansas avenue in the city of Topeka on 13th and 14th days of December, 1881? A. No evidence.
“7. Did J. B. Whitaker represent the plaintiff, Millie Nichols, and her sister, in and about the making of the final settlement in the probate court of Shawnee county, Kansas, on and prior to the 20th day of April, 1892? A. Yes.
“8. Did J. B. Whitaker, on and prior to the settlement made in the probate court of Shawnee county, Kansas, on or about the 20th day of April, 1892, have knowledge of the manner in which the undivided one-half of lot No. 165 on Kansas avenue in the city of Topeka, Shawnee county, Kansas, was transferred to Otto Kuehne, and afterwards transferred by Otto Kuehne to John S. Branner, the defendant herein ? A. He had knowledge of the record.
“9. Did J. B. Whitaker investigate the title to all of the Branner property, including lot No. 165 on Kansas avenue in the city of Topeka, Shawnee county, Kansas, prior to the date of the settlement in the probate court of Shawnee county, Kansas, and prior to the 20th day of April, 1892 ? A. Yes, partially.
“ 10. Did J. B. Whitaker investigate the title to lot No. 165 on Kansas avenue, Topeka, Kan., prior to the date of the settlement in the probate court of Shawnee county, Kansas, and prior to the 20th day of April, 1892 ? A. Yes, he investigated the record title.
“11. Did J. B. Whitaker advise with and notify the plaintiff herein of the defect in the title to lot No. 165 on Kansas avenue in the city of Topeka, Shawnee county, Kansas, as the same was conveyed to Otto Kuehne and afterwards conveyed by said Otto Kuehne to John S. Branner ? A. Yes, in 1894.
“12. Did J. B. Whitaker, as the representative of the plaintiff herein, advise the plaintiff herein, on or prior to the 20th day of April, 1892, that the defendant, John S. Branner’s, title to lot No. 165 on Kansas avenue in the city of Topeka, Kan., was invalid, and in his opinion she and her sister, Josie Webb, could recover the undivided one-half of said lot No. 165 on Kansas avenue, Topeka, Kan., on account of said invalidity or defects in said title? A. No.
“ 13. Did J. B. Whitaker, as the representative and attorney of the plaintiff herein, on and prior to the 20th day of April, 1892, inform the plaintiff, that from his investigation of the title to said lot No. 165 on Kansas avenue, Topeka, Kan., he was satisfied that said John S. Banner was really the purchaser at his own sale, and that the party bidding off the property in the first instance was not a bona fide purchaser, but a mere bidder for the accommodation of John S. Branner? A. No.
“14. Did J. B. Whitaker and Senator Martin, as the representatives of the plaintiff herein, at and prior to the 20th day of April, 1892, talk and consult with each other in reference to the question of the defect in John S. Branner’s title to lot No. 165 Kansas avenue, Topeka, Kan., and whether plaintiff herein could recover any interest in said lot? A. No.
“15. If you answer the above question in the affirmative, then did said J. B. Whitaker and said Senator Martin, on or prior to the 20th day of April, 1892, as the representatives of said plaintiff, also talk with and consult with said plaintiff in reference to the invalidity of the title of John S. Branner to said lot No. 165 on Kansas avenue in the city of Topeka, Kan.? A. No answer.
“16. At the time of the final settlement in the probate court of Shawnee county, Kansas, upon the filing of the final report of John S. Branner, as surviving partner, did J. B. Whitaker and Senator Martin examine said report and ascertain and know that said John S. Branner had reported, in his said final report, $6000 as the purchase-price of said lot No. 165 on Kansas avenue, Topeka, Kan.? A. Whitaker did. No evidence as to Martin.
“17. In the final settlement between John S. Branner, and Millie Nichols and Josie Webb, heirs of Jacob Klein, deceased, in the probate court of Shawnee county, Kansas, made- on or about the 20th day of April, 1892, was the said $6000 allowed by said probate court as a credit to said Millie Nichols and Josie Webb and charged against the said surviving partner, John S. Branner ? A. Yes.
“18. After the final settlement between John S. Branner as surviving partner, and Millie Nichols and Josie Webb, heirs of Jacob Klein, deceased, made in the probate court of Shawnee county, Kansas, on or about the 20th day of April, 1892, did John S. Branner pay to the said Millie Nichols the amount found due by the probate court in said settlement to said Millie Nichols from said John S. Branner ? A. Yes.
“19., After the final settlement between John S. Branner as surviving partner of the firm of Branner & Klein, and Millie Nichols and Josie Webb, made in the probate court of Shawnee county, Kansas, on or about the 20th day of April, 1892, did John S. Branner and said Millie Nichols settle in accordance with the terms of the said decree of the probate court of Shawnee county, Kansas, and did Millie Nichols receive the amount found due her by said probate court from said John S. Branner? A. Yes.”
“22. If you find that John 'S. Branner did cheat, wrong or defraud the plaintiff herein in the sale and purchase of said lot 165, please state in what particular he did so. A. He presented false accounts and kept money and property belonging to the plaintiff.
“23. If you find that the defendant, John S. Branner, failed to report any money in his final settlement in the probate court of Shawnee county, Kansas, made as hereinbefore mentioned, state the amount of such money, and from what source said money was derived. A. About ($30,000) thirty thousand dollars from rents and sales of real estate.
“ 24. If you find that the defendant, John S. Branner, failed to report any personal property other than money in his final settlement in the probate court of Shawnee county, Kansas, which should have been reported in said final settlement, as surviving partner, please state what property was so omitted by said defendant, and describe the same. A. No evidence.
“25. If you find that the defendant in the above-entitled cause failed to report any real property in his final settlement as surviving partner, in the probate court of Shawnee county, Kansas, which should have been reported, please state what property was so omitted, and describe the same, and state its reasonable value at the time the said settlement was made. A. Lots 165-167 and north 20 feet of lot 169 Kansas avenue, and 40 acres ; and the tract 25 by 70 feet on Kansas avenue, ($75,000) seventy-five thousand dollars.”
“27. In the final settlement made on or about the 20th day of April, 1892, by John S. Branner, in the probate court of Shawnee county, Kansas, as surviving partner of the firm of Branner & Klein, did the probate court find and adjudicate 'how much money was due from the said John S. Branner to the plaintiff herein, and if you find that it did so find and adjudicate, please state the amount? A. Yes. ($3350T4/a-) thirty-three hundred and fifty and ¶%4„-dollars.
“28. After the defendant herein, John S. Branner, had made his final report and settlement as surviving partner of the firm of Branner & Klein, in the probate court of Shawnee county, Kansas, on or about the 20th day of April, 1892, did the plaintiff herein, Millie Nichols, and John S. Branner settle in accordance with, said report, and has said John S. Branner paid to the said Millie Nichols, the plaintiff herein, the full amount found due to her by the decree of said probate court? A. Yes.
“29. After the making of the final settlement by John S. Branner, as surviving partner of the firm of Branner & Klein, in the probate court of Shawnee county, Kansas, on or about the 20th day of April, 1892, and after the bringing of this action, has the plaintiff herein, Millie Nichols, been accepting and receiving the amount of money so found due to her by said probate court of Shawnee county, Kansas, in said final settlement? A. Yes, in allotments of fifty dollars per month.
“31. At the various times that the plaintiff herein, Millie Nichols, has received portions of the money so found due her by the probate court of Shawnee county, Kansas, in the final settlement of John S. Branner, made in said probate court on or about the 20th day of April, 1892, did said plaintiff, Millie Nichols, know what said money was paid to her for, and by whom the same was paid? A. Yes.”
“33. When the plaintiff, Millie Nichols, at various times received the amount of money found due her from John S. Branner by the probate court of Shawnee county, Kansas, in his final settlement, made on or about the 20th day of April, 1892, did the plaintiff receive the same knowing why it was paid her? A. Yes.”
Syllabus and headnotes are prepared by the reporter or publisher, not the court, and are not part of the opinion.
