Anderson v. Ketcham

WHITING, J. Upon the final distribution of the estate of one Emma B. Ketcham, deceased, there were three quarter sections of land in Beadle county, S. D., to' be partitioned among the heirs — ¡Frank H. Ketcham, 'husband of deceased, Mrs. Ella G. Anderson, sister of deceased, and five nephews and nieces of the — 519 — deceased. The commissioners appointed to partition said property ■concluded' that it could not be divided in kind. They appraised the land, made a report of such appraisal, reported that the husband was willing to accept the whole of said land and pay or secure its value, and they recommended the acceptance of his offer. This report was confirmed- by the county court over the objection of Mrs. Anderson, and a decree -made in accordance therewith. Upon appeal the circuit court made a like decree or judgment, and from such judgment and an order denying a new trial Mrs. Anderson h-as appealed. Among other things appellant contends that the facts and circumstances revealed by the evidence disclose that there was perpetrated what constituted a fraud in law sufficient to require the setting aside of the judgment confirming the commissioners’ report. Deceased- and) her husband were residents of Illinois, and the husband continued to reside there after her -death. Mrs. Anderson resided in Beadle county. The other heirs were scattered in different parts of the United States — one living at Chicago, one in California, the address of one was unknown, and those af the others do not appear. The husband was the administrator of the estate. One W. was his attorney as administrator; also his attorney in his individual capacity, and the attorney of May H. Hill, and, as such, conducted for her all the negotiations and transactions to which she was a party. W. was a resident of Huron, and Miss Hill his stenographer. The.board of commissioners consisted of three men, one of whom -was a brother of Miss Hill; but there is no evidence to show that any one of these commissioners was influenced by any improper motive in what he d-id; neither is there any direct evidence that W. or Miss- Hill was so influenced. We make our decision herein assuming that there was no fraudulent intent upon the part of either respondent, Ketcham, his attotrney, or -Miss Hill. The commissioners met on November 15th with appellant the only heir present, determined that the lands- could not be divided without prejudice and proceeded to and did appraise the several tracts. It is -perfectly clear that, in making this appraisement the commissioners acted upon the supposition and belief that the land would be offered for sale; the question of its being set over to -one — 520 — of the heirs was not in the minds of such commissioners, at leapt, until after the appraisement had been made. But we. deem this fact not material. After the appraisement was made, W. advised the commissioners that the absent heirs, other than Mr. Ketcham,. would not take the land and pay or settle for same. Appellant announced that she did not want it. W. then advised the commissioners that he would wire to respondent and ascertain if he desired to take it. Respondent was in 'Chicago. The commissioners made no report on the 15th but left the matter open, undoubtedly for further advice in relation to whether _ respondent would take the property. It is perfectly clear that none of the heirs, other than Ketcham and appellant, were ever advised as to the appraised value or given any opportunity, after knowing the appraised value, to determine whether he desired to take the property at its appraised or any other value. The source of W.’s information to the effect that the other heirs would not take the property, and upon what such information was based, does not appear. On November 16th, Ketcham wired W. that he would take the property, and, upon the same day, at Chicago, he acknowledged a deed conveying all said land to May H. Hill. On the 16th, W. wrote to at least two of the other heirs, one living in Chicago and the other in California, advising each that he was forwarding to a bank, subject to call, a check for a share of the proceeds upon distribution; and that such check would be delivered upon delivery to the bank of a quitclaim deed running to ‘May H. Hill, “who is furnishing the money to Mr. Ketcham to purchase this property in accordance zvith the partition decreeParenthetically we would suggest, that it is not apparent how W. could know on the 16th that the commissioners would recommend setting over the land to Ketcham-, and that the court would, by its decree, -confirm such report — no decree was actually made for some time after November ióth. Each letter stated the price at which the land was appraised, the expenses of the partition, and the share that would come to such heir, and closed by advising that “under our statute, an interested party could take the whole of this land at the appraised value, giving preference to the oldest male interested party. Mr. Ketcham concluded to take it at the appraised yalue.’i — 521 — [1] From the above and other evidence, it is perfectly clear that, before the commissioners ever appraised this land, there had been some negotiations carried on between W. and Ketcham looking to the purchase of this land by Miss Hill, provided the appraisement was at a figure low enough to satisfy her — in other words, entirely unknown to the commissioners, there were negotiations afoot under which a party, not an heir, was to get this land at the appraised value and without a sale. But even if there had been no negotiations prior to the appraisement of this land, it stands .absolutely undisputed that, as early as the 16th, such negotiations were had and an agreement reached under which this' land‘would be set over, at the appraised value, to a stranger to the estate, and this without a public sale. On the 18th of November, without being in any manner advised as to the negotiations and transactions between respondent and Miss Hill, but after being advised that Ketcham elected to take the land, the commissioners filed their report. This report was prepared by W. and was signed by the commissioners under the belief on their part that Ketcham had the absolute right,'as the oldest male heir, to take this property at its appraised value, and that therefore there was nothing for them to do but sign the report recommending the setting over of the property to Ketcham. That, under all the above facts, tlie decree, confirming the report and setting over the property to respondent, should be set aside upon the ground of fraud in law, is too clear to admit of argument. Counsel for respondent says: “There was no conflict of interest between Frank H. Ketcham as administrator, Frank H. Ketcham personally, and May H. Hill.” [2] This is a novel proposition. As administrator it was the duty of Ketcham, in case the land was not divided in kind, to get every cent out of such land that was possiblé. Personally, if he thought there might be no division in kind, and believed that, as oldest male heir, he was entitled to take the land at the appraised value, he was directly interested in a low appraisement. Miss Hill was certainly interested in a low appraisement. Furthermore, it was the administrator’s duty, upon the appraisement, to- advise the commissioners 'Of every fact affecting this transaction — a trustee — 522 — cannot be allowed: to occupy inconsistent and antagonistic positions. It was his duty to reveal everything that in any way bore upon the merits of the appraisement, even though such revelation might be against his individual interests. That duty rested upon W. to the same extent as on the administrator. It was W.’s bounden duty, at the meeting on the 15th, to disclose all the negotiations that had then taken place, and he should have disclosed how much Miss Hill stood ready to pay for this land. We must remember that any information given W. by Miss Hill was information with which the administrator was charged. If the commissioners had been fully advised of the true facts, either on the 15th or the r8th of November, it is quite possible they would have returned a different report; certain it is, that if the commissioners had received the advice they should have received, Miss Hill’s brother could not properly have joined in the report. We may also mention as a matter worthy of consideration that Miss Hill was the duly appointed resident agent of Ketcham, and, as such, received compensation from the estate and occupied a fiduciary relation thereto.- [3] Respondent also contends that, after the appraisement was made and respondent had expressed a willingness to take the land, no notice to the other heirs was necessary before the commissioners made their report recommending the setting over of the land to respondent, “because the statute states just what they must -d:o under these circumstances, and such acts are only ministerial after the value has been fixed.” In asserting such proposition respondent is clearly in error. Section 317, Probate Code (being section 3479, Rev. Code 1919), relied upon by respondent, does not give the oldest male heir preference, except as between children. Respondent was entitled to no preference as against the other male heirs, of which there were two. We do not deem it necessary to pass upon the constitutionality of the above-mentioned section; but, if constitutional, it was yet incumbent, after the appraisement, to advise the heirs of the values at which the several tracts had been appraised, and give each an opportunity, in the light of such appraisement, to determine whether he desired to take the land. [4] Where trustees have failed - to properly discharge their — 523 — duties, courts will not inquire as to whether such failure has resulted in actual fraud or in loss to a cestui que trust; but, as against the party in fault, will, in all cases, set asidle the transaction wherein the trustee failed to fulfill his trust. It is sufficient, in this case, to require us to set aside the judgment appealed from, that the course pursued by Ketcham, acting through his attorney and by .Miss Hill, acting through the same attorney, gave opportunity for the perpetration of a most grievous fraud on the court and on the other heirs. [5] Upon the appraisal of the property the commissioners were bound, under said section 317, to appraise the land at its “true value”; and also, under such section, the heir who took the property was bound to take it at its “true value.” The value fixed by the commissioners was the price at which, according to respondent’s own witnesses, the land could have been sold at a forced cash sale; and the trial court found that the land was appraised at “the price which said land .was worth when sold at public sale for cash.” The trial court should have rejected the report of the commissioners, as the evidence of these witnesses showed that the “true value” was some $5 to $10 per acre above the appraised value. This court has held that there is a marked distinction between .the term “full and true value” and the term “full and true cash value.” Richardson v. Howard, 23 S. D. 86, 120 N. W. 768. The finding was insufficient to sustain the conclusions and judgment rendered. The judgment appealed 'from is reversed, and the trial court directed to enter a judgment rejecting the report of the commissioners, reversing the judgment o.f the county court, and remanding the cause to the county court for further proceedings in harmony with this opinion.