Macfadden v. Jenkins

Grace, J. Appeal from an order and decision of the district court of Cass county. The substantial facts in the case are as follows: Hallett H. Jenkins died intestate August 20, 1908. Until about four years prior to the time of his death he was in partnership in the real estate and loan business with one Ellsworth, under the film name and style of Ells-worth & Jenkins. About four years prior to the time of Jenkins's death he and Ellsworth agreed to dissolve the partnership theretofore existing between them, since which time the partnership did no further business other than that which related to the liquidation of the partnership business, which liquidation matters were being conducted by Jenkins, and were not completed at the time of his death. After the partnership went into liquidation, Jenkins continued the real estate and loan business at Nargo,- North Dakota, and was the owner of such business at the time of his death. At the time Jenkins died there survived him his widow, Eva M. Jenkins, and a posthumous child, Hallett H. Jenkins, Junior, who were-his sole heirs. Jenkins died August 20, 1908. W. O. Macfadden was appointed administrator September 5, 1908, and duly qualified. E. A. Engebretson was duly appointed guardian of Hallett H. Jenkins, Junior, resigning from such position in May, 1910, when L. L. Twitchell was appointed to succeed him. Macfadden as administrator filed his first annual account March, 1910, and his final account was filed about the time of his resignation as administrator, which was in the latter part of October, 1910. M. — 434 — W. Murphy was then appointed administrator, and later, in the month of February, 1915, resigned, after which Alexander Bruce, the present administrator, was appointed. Part of the decedent’s estate was in Minnesota and part in North Dakota. The appellant was appointed administrator of the decedent’s estate in Minnesota by the probate court of Clay county, Minnesota. His administration of the estate in Minnesota was ancillary to the probating of the decedent’s estate in North Dakota. Throughout appellant’s administration of the decedent’s estate the appellant assumed that the surviving partner, J. H. Ellsworth, and the administrator of the decedent’s estate, were tenants in common with respect to the property of Ellsworth & Jenkins partnership, and proceeded with the liquidation of the partnership in consonance with this assumption. Acting on this assumption, the appellant considered the decedent’s estate to be the owner of an undivided one-half interest in all the partnership property, and as such administrator sold and disposed of such half interest, and charged- his account as administrator with the proceeds. At the time of Jenkins’s death, he had overdrawn his account with the partnership of Ellsworth & Jenkins to the amount of $10,744.14. In September, 1908, Macfadden, Barney Simonitseh, and Mrs. Eva M. Jenkins, widow of the deceased, organized a corporation under the laws of North Dakota, the corporate name of which was Ells* worth-Jenkins Company, which commenced business operations shortly subsequent to its organization. Of this corporation the appellant was president, Simonitseh secretary and treasurer, and Mrs. Jenkins vice president. Simonitseh was the active business manager. The purpose for which this corporation was organized was one of the matters in controversy between the respective parties to this action. The testimony relative thereto will be discussed more in detail when we subsequently analyze the legal propositions presented in this case. The appellant as administrator sold the partnership lands to the Ellsworth-Jenkins Company. The appellant as administrator also sold to Ellsworth-Jenkins Company certain land which belonged individually to H. H. Jenkins. The interest of the estate in eleven pieces of land, and in a contract which was known as the Knuth contract, and in the Haworth mortgage, were sold by the administrator to the — 435 — Ellsworth-Jenkins Company, and the estate credited with $7,011.97. The corporation also purchased and took over at administrator’s sales Jenkins’s interest in two pieces of land which he jointly owned with the administrator. The main office of the corporation of EllsworthJenkins Company is at Minneapolis, Minnesota, and the name has been changed to Ellsworth Land Company. Simonitsch had been in the employ of Jenkins for several years next preceding the latter’s death, and was employed in the capacity of bookkeeper, and continued in charge of the office of Jenkins for about two months following Jenkins’s death, being so employed by the administrator Macfadden for the reason that Simonitsch had knowledge and was familiar with the business which Jenkins had been conducting. That about the month of January, 1909, Ellsworth sold and assigned to the corporation all his interest and rights in the Ellsworth-Jenkins partnership property, the corporation assuming all of Ellsworth’s obligations as a surviving partner. The corporation paid Ellsworth for Such assignment the sum of $4,000. The circumstances surrounding this transaction will be discussed more in detail in a subsequent part of the opinion, where the legal effect of such assignment will be treated in connection with the relationship of the administrator, the corporation, and Ellsworth, to and with each other. These are the main facts around which the legal propositions range themselves. It is not necessary, and the statement of facts would be exceedingly long, were all items thereof incorporated in the statement of facts. There are several hundred items, and no further reference need be made to them, excepting as they appear to be such items as are controverted. Wo will therefore direct our attention to the analysis of the legal questions presented to us by this appeal. This action is one for an accounting, and such accounting involves many hundreds of items. It would be impractical to attempt to write a statement of facts which would refer to all the facts in this case, or to the many hundreds of items of the account. Though no reference may be made to many of the facts, either in the opinion or the statement of facts, they nevertheless will have been considered. The trial court found a balance due from the appellant to the respondents of $26,217.65. We will direct our attention to the analysis of the legal questions — 436 — presented to us by this appeal in order to determine whether the trial court was in error in deciding the legal questions in the case in the manner in which it did. If the trial court’s theory and conclusion upon the various legal questions presented to it at the trial are correct, the balance which it found due and owing from Maefadden to the respondents is substantially correct. The case is one exceedingly complicated, and presents the necessity of separating the main questions from the mass of material presented, in order that the cardinal legal propositions may receive consideration by this court. The cardinal legal questions presented in this case are quite numerous. Each should receive a separate and thorough consideration, and with that end in view are classified in the order of their importance as follows: (1) The Ellsworth-Jenkins Company, its organization and purpose; (2) the partnership, its organization, dissolution, and liquidation; (3.) the administrator, his duties, the nature of his relation or trust, his failure to perform them, and his liability therefor. Under this head may also be included the fraud, either legal or actual, of the administrator, if any. These subdivisions include all the major questions of this case. Other minor questions there are, but they naturally group themselves about one or the other of these main subdivisions, and are largely dependent upon them or some of them. The disposition of the major questions of law involved in the three subdivisions necessarily carries with it a disposition of the minor questions of law. Addressing ourselves to the first of these legal propositions, the Ellsworth-Jenkins Company, a corporation, we find it is incumbent upon us to determine from the records the purpose of this corporation. To do this it is necessary to examine all the surrounding circumstances attending its organization, and from such source draw our conclusion as to the reason of the origin and existence of such corporation. Ellsworth & Jenkins had been engaged in the real estate and loan business for a number of years, and accumulated and held considerable property, both real and personal. The partnership was dissolved about four years prior to Jenkins’s death, and Jenkins continued the business for himself, and while doing so was also liquidating or trying to liquidate the partnership of Ellsworth & Jenkins, At the time of Jenkins’s death he owned an undivided one-half inter — 437 — est in all the property of Ellsworth & Jenkins, subject to any partnership liabilities. Such partnership owned at the time of Jenkins’s death various tracts of land in the state of North Dakota, and some in Minnesota. Jenkins also owned several tracts of land individually, and owned a couple of tracts in common with Macfadden, the appellant. The respondents claim that the corporation was organized at the solicitation of appellant under the representation that it would be a convenient method of handling the business of the estate and facilitate the handling thereof. The appellant claims there was no such purpose in the organization’ of the corporation. It seems from exhibits in the record that the authorized capital was $25,000, which was later increased to an authorized capital of $50,000, the par value of the shares being $100 each. When the organization was perfected with the officers we have enumerated in the statement of facts, each of the incorporators, Macfadden, Simonitsch, and Mrs. Jenkins, were given fifteen shares each at the organization meeting in October, 1908. The forty-five shares were entered on the books, crediting capital with $4,500, and charging loss and gain with a similar amount. In connection with the issuing of the stock, a notation was made on the books of the company as follows: “Paid for good will of.company fifteen shares’ stock to E. M. Jenkins, fifteen shares to Macfadden, and fifteen shares to B. Simonitsch.” What is the meaning of such entry? Why was such entry made? The able counsel for appellant contends in his brief that “the entry manifestly does not purport to be any contract on the part of the corporation whereby it agreed to buy Jenkins’s business and good will and pay $4j500 therefor.” The same counsel also uses the following language: “If the entry is evidence against Macfadden at all, it could only be as an admission, but what does it admit ? If it admits anything, it only admits that the company gave fifteen shares of stock to each of the three incorporators for such good will as it acquired from them.” And the same counsel continuing says: “The plain language of the entry means, and could only mean, that the corporation was issuing to each of the three incorporators fifteen shares of stock for their good will.” The able counsel further undertakes to substantiate this view by — 438 — showing the stock was charged to loss and gain. But is the reasoning of the counsel sound when examined by the searchlight of surrounding circumstances? If, as the appellant contends, this corporation, was organized for the purpose of conducting a real estate and loan, business, and without taking into consideration, or having any reference to Jenkins’s estate, if it were organized for the purpose of going abroad to seek its business upon its own initiative and responsibility, to build up its own business by advertising, to make its real estate loan connections, and its real estate connections, it is hardly to be conceived they would have thought of taking Mrs. Jenkins into such corporation. It does not appear from the testimony she was a business woman, that she ever had any experience in real estate business or in the loan business, or that she was ever engaged in any similar business; neither does it appear that she was possessed of any capital outside of what she might receive from her husband’s estate and his life insurance. It does not appeal to one’s reason that a woman, under these circumstances, would be taken into such a corporation which subsequent events showed to be a very paying institution, unless she was valuable in some way to such corporation. Simonitsch had been the bookkeeper for Jenkins; he was to be the secretary and business manager of the new corporation. What did he bring to the corporation ? What did he put in at the inception of such corporation? Did he contribute capital when the corporation was organized? What did Macfadden contribute to the corporation in its inception ? It does not appear that he put any money in at the outset. There is some testimony regarding certain notes given by Macfadden and Simonitsch, to which we will later refer. Macfadden was connected with a certain bank in Fargo, but whether such connection was to aid the new corporation we cannot say, but certain it is that the bank had no connection with the corporation. What did the new corporation do? Into what field did it go seeking its first profits? Did they spend some money advertising? Did they have correspondence with people who had money to loan ? Did they expend any money for traveling to build up real estate and loan connections ? Did they start out to build up a brand new business without any reference to Jenkins’s estate? The appellant contends that the good will, referred to meant the good will of the three individuals who formed such corporation. Such contention we believe to be untenable. The — 439 — words, “good will,” as used in connection with the sale of an established business, have in law a well-understood meaning. Words & Phrases contain several definitions of the term, “good will,” as defined by eases therein cited. Some of them are as follows: “The good will of a partnership may he defined as every possible advantage acquired by the firm in carrying on its business, whether connected with premises, name, or other matter. Farwell v. Huling, 132 Ill. 112, 23 N. E. 438.” “ ‘Good will’ as used in sales of business or professional locations, and the good will of the business, includes not only the established business and patronage or clientage thereof, but also an implied covenant that the seller will not engage in the same business in the same locality. French v. Parker, 16 R. I. 219, 27 Am. St. Rep. 733, 14 Atl. 870.” “The good will of a business is not the business, but is one result springing out of it. It would be too narrow to construe the word ‘business’ to be the good will of the business. McGowan v. Griffin, 69 Vt. 168, 37 Atl. 298.” In the case of Bristol v. Bristol & W. Waterworks, 23 R. I. 274, 49 Atl. 974, it was said: “The probable retention of customers is what is meant by the ‘good -will.’ ” “The good will of a business is the reputation it has established in the community, including the customers which usually trade there, and therefore, if a business is sold and with it the owners’ good Avill, that amounts to a warranty that the seller will not thereafter attempt to draw off any of the customers which he had previously had, from the purchaser. Snow v. Holmes, 71 Cal. 142, 11 Pac. 856.” “The good will of a partnership includes among other things the tradename, to the extent that the purchaser may stand as a successor of the former firm; and upon the death of the last survivor of a firm, although no provision for the sale of the name is made by statute, and although that name itself is not assignable by the administrators, still they may sell, in addition to the property and trademarks, the good will of the firm, which shall include the right of the purchaser to .advertise himself to the public thereafter as being the successor to the property and business of the firm which has become extinct. Fisk v. Fisk, 77 App. Div. 83, 79 N. Y. Supp. 37.” “As used in a contract of sale whereby a partnership is dissolved, — 440 — and one of the partners transfers to the others all his interests in the firm business and assets, together with the good will, with the understanding that they are to succeed to the business of the old firm, the term ‘good will’ includes the firm name. Brass & I. Works Co. v. Payne, 50 Ohio St. 115, 19 L.R.A. 82, 33 N. E. 88.” [4 Words & Phrases, 3128-3130.] Section 5465, Comp. Laws 1913, reads as follows: “The good will of a business is the expectation of continued public patronage, but it does not include a right to use the name of any person from whom it was acquired.” Section 5466 reads as follows: “The good will of a business is property, transferable like any other.” In the case of Mapes v. Metcalf, 10 N. D. 601, 88 N. W. 713, the principle is recognized that the sale of “good will” may become the subject of contract. . The respondent claims that the only good will that Jenkins had was the same kind of good will that a lawyer, doctor, or professional man acquires, and as to that kind of persons it is nothing but a personal reputation, and is not the kind of a good will which attaches to a trading or manufacturing business, or business of similar character, claiming in the latter cases the good will attaches to the business or establishment itself, and that good will must always rest upon some property, or tangible thing, and that it can never arise as an asset of a partnership where the members only contribute as capital their professional skill and reputation. The respondent further claims that the film name cannot become a part of the good will in eases of business which depend upon the personal attributes of the partners engaged therein, and that no forced sale or transfer can be made of the good will when based upon reputation, standing, or business connections. To sustain this view the respondent cites the case of Sheldon v. Houghton, 5 Blatchf. 285, Fed. Cas. No. 12,748; Read v. Mackay, 47 Misc. 435, 95 N. Y. Supp. 935; Slack v. Suddoth, 102 Tenn. 375, 45 L.R.A. 589, 73 Am. St. Rep. 881, 52 S. W. 180; Rice v. Angell, 73 Tex. 350, 3 L.R.A. 769, 11 S. W. 338; Masters v. Brooks, 132 App. Div. 874, 117 N. Y. Supp. 585. It may be observed there is a division of authority upon theso matters. The rule contended for by the respondent is rather the old and — 441 — narrow rule first laid down by Lord Eldon, which was: “Good will means nothing more than a probability that the old customers will resort to the old place,” but Vice Chancellor Wood in the case of Churton v. Douglas, 5 Jur. N. S. 887, a leading case, said: It would be taking “too narrow a view of what is laid down by Lord Eldon there to say that it is confined to that. ‘Good will,’ I apprehend, must mean every advantage — positive advantage, if I may so express it— as contrasted with the negative advantage of the vendor not carrying on the business himself, that has been acquired by the old firm carrying on its business,” whether connected with the premises on which the business was previously carried on, or with the name of the late firm, or with any other matter carrying with it the benefit of' the business. The law, as other big institutions of modern society, is advancing. It has broadened in its conception of human rights, including properly rights. Things which were not considered property several decades in the past, by reason of the evolution and development of modem society have become property rights. Professional business, such as surgery, dentistry, law, and many other kindred professions, have with the march of progress made big advances, and the law applicable to such professions has advanced. Good will by reason of the great progress of society is considered to be a property right in a great many instances, and under a great many conditions to which it was formerly held not to apply. Under the more modern view, courts are extending the meaning of good will so that even professions may be included. We quote from 12 R. C. L. p. 978 as follows: “While it has frequently been held that in commercial or trade partnerships only can good will exist, and that it cannot arise in a professional business depending on the personal skill and confidence in the particular partner, yet, where a person acquires a reputation for skill and learning in a particular profession, as, for instance, in that of a lawyer, a physician, or an editor, he often creates an intangible but valuable property by winning the confidence of his patrons, and securing immunity from successful competition for their business, and it would seem to be well settled that this is a species of good will which may be the subject of transfer, and the courts have not infrequently adjudicated rights relating to good will in such cases with seemingly no question as to the real — 442 — ity of the existence of this property right. The good will of a professional business or practice often forms an exception to the general rules relating to good will.” Cowan v. Fairbrother, 118 N. C. 406, 32 L.R.A. 829, 54 Am. St. Rep. 733, 24 S. E. 212; Morgan v. Perhamus, 36 Ohio St. 517, 38 Am. Rep. 607; French v. Parker, 16 R. I. 219, 27 Am. St. Rep. 733, 14 Atl. 870; Cook v. Johnson, 47 Conn. 175, 36 Am. Rep. 64. In the case of Cowan v. Fail-brother, supra, the court said, with ref.eronce to good will: “Neither an editor, a lawyer, nor a physician, can transfer to another his style, his learning, or his manners. Either, however, can add to the chances of success and profit of another who embarks in the same business in the same field by withdrawing as a competitor. So that the one sells and the other buys something valuable, and the policy of the law limits the right to enter into such contracts of sale only to the extent that they are held to injure the public .by restraining trade. The one sells his prospective patronage, and the other buys the right to compete with all others for it, and to be protected .against competition from his vendor.” The case of Tichenor v. Newman, 186 Ill. 275, 57 N. E. 826, is one where a physician sold certain property and the good will in a general medical practice to another, and contracted to perform certain acts for the purpose of securing to the purchaser such good will. To facilitate the transfer of the good will, the seller and purchaser formed a partnership. The seller was to make known the fact of the partnership .and introduce the purchaser to the families of the different patrons of the physician as a man worthy of confidence, and so far as possible establish the purchaser in the practice. The seller failed to keep his contract, and the purchaser brought an action for damages, and- the court held that an action at law to determine the damages was maintainable, and that such action did not involve an adjustment of the partnership Recounts. That Newman, the seller, contracted to deliver to Tichenor certain property and the. good will of his business. The obligations of Newman as to the real estate and good will were held to be personal to Tichenor, — not the firm. Largely to the same effect is the case of Dwight v. Hamilton, 113 Mass. 175, and also the case of Butler v. Burleson, 16 Vt. 176. — 443 — In the case of Bloom v. Home Ins. Agency, 91 Ark. 367, 121 S. W. 293, ¶ 3 of the syllabus is as follows: “Good will is the possibility that old customers will resort to the old place for the purpose of trade, and is recognized as a thing of value which may be sold.” In some instances good will is said to be the subject of appraisal and inventory as an asset of an estate, and transmissible by sale. He Vivanti, 138 App. Div. 281, 122 N. T. Supp. 954. In Maxwell v. Sherman, 172 Ala. 626, 55 So. 520, it is said: “The good will of the business is property which the law protects and for injuries to which damages may be recovered.” In 20 Cyc. 1277, it is said: “The good will of an established business is incorporeal property which may be mortgaged, sold, or leased in connection with the business, but it cannot be sold by judicial decree or otherwise, unless it be in connection with the sale of the business on which it depends.” The trial court made a finding of fact that Mrs.- Jenkins joined in the organization of the corporation with the understanding and with the suggestion made to her that the corporation be organized to continue her husband’s business at the same place; that the corporation would take over the estate lands; would be used as a corporation to which all property of the estate would go for convenience, but that in the end all' profits would appear assembled for the benefit of the estate, and those who shared with her in carrying on. the corporation. The trial court also found that the Ellsworth & Jenkins Company took over and acquired the good will of the decedent which at that time was an asset of the H. Jenkins estate and worth the sum of $4,500; and that it ought to have been inventoried and accounted for as an asset of the decedent’s estate. While this is a special proceeding, and the trial court’s findings of fact are not conclusive upon this court, they nevertheless should have great weight, and should not be disregarded unless the trial court is plainly in error. We see no reason why the findings of the trial court on these matters should be disturbed. Mrs. Jenkins, in answer to a question as to the purpose of the organization of the corporation, testified that it was to sell the-land and carry on the business. The appellant seeks to show that there could be no good will for the — 444 — reason that Jenkins’s business was not a paying one. This is a disputed, question between the parties, the respondent making a very good showing that the business was a paying one, and the appellant on a different theory sets forth what he claims to be good proof that it was not a paying business. We are of the opinion that neither the fact that the business is very profitable or successful, nor that it is not a very profitable and even a losing business, is the only test of good will. A business may not be profitable, and may even be a losing business, and still be possessed of a good will. Where a business is very profitable it is apparent that those who deal with the owners of such business are the persons upon whom such good will depends. If they like the person or the company engaged in the business, even though they are aware of all the profits which the owners of such business are making and which the clients of such business are paying, such business may be said to have a good will. On the other hand, the business of a person, company, or partnership that pays poorly, and eve", sustains a loss, may have a very good will. If, for instance, the company is a mortgage loan company loaning money upon farms, if it has made its loans at a very moderate rate of interest and has not made much profit thereby, its business might not be a paying one. It might even be a losing business. Yet, the clients who received the loans from the company might be exceedingly well satisfied, having received a cheaper rate of interest, or having had their business done for them for a more moderate charge than was customary. Such clients might have, and most likely would have, a very good feeling towards such company who did their business and made them their loans at a lesser rate of interest than other companies doing a more profitable business loaned their money. Such company doing a losing business might have a very good name and a good reputation, and might have the good will of all or most of the clients with which it did business, and there would be, therefore, a desire of such clients to continue business relations which were satisfactory, agreeable, and profitable to the clients. As we view the matter, a profitable business is not necessarily accompanied by the good will of its clients, nor does it follow that a business which pays poorly or which is operated at a loss is not — 445 — possessed of a good will, in view of the fact that good will may be said to be a desire of old clients to resort or return and continue business relations where the clients have been accustomed to do business, and such clients are just as apt to return, and continue business with those who have not made so much profit for them as they are to return and do business with those who have taken much profit from them. We cannot take space and quote any more testimony, but we are of the opinion that as a whole it tends strongly to support the findings of the trial court; that the findings of the trial court are strongly supported by many of the circumstances attendant upon the organization of the corporation, and the business transactions by it subsequent to its organization. In the light of these definitions and the surrounding circumstances attendant upon the organization of the corporation, appellant’s contention that the good will referred to was the good will of the incorporators, is not maintainable, and we cannot agree that the notation made upon the books with reference to good will had any reference to the good will of the incorporators of the corporation. We are of the opinion that such notation referred to the good will of the Ells-worth & Jenkins Company. Upon the dissolution of the partnership of Ellsworth & Jenkins, Jenkins succeeded to the name and good will of the Ellsworth & Jenkins Company. It was a company which had been in existence for a long period of time; had transacted a great deal of business both at home and abroad; it had built up business connections in other states for the loaning of money. It had undoubtedly become a firm whose name was well known. We conclude that the good will referred to in the notation on the books referred to the good will of Ellsworth & Jenkins. Turning to the consideration of the partnership, we find that it is one organized and formed for the purpose of conducting a real estate and loan business, the members of the same being J. H. Ellsworth, of McGregor, Iowa, and H. H. Jenkins. The partnership had been engaged in business for a considerable period of time prior to 1904, when it was dissolved by mutual consent, and Hallett H. Jenkins succeeded to the business and the firm name, and continued the business until the time of his death, in August, 1908, and, after the disso — 446 — lution, was also trying to liquidate the partnership, and was the liquidating partner until the time of his death. During the existence of the partnership there was accumulated considerable partnership-property, a complete list of which appears in the testimony and findings of fact by the court. Shortly subsequent to the death of Jenkins, Macfadden was appointed the administrator of his estate. As such administrator he assumed that he was a tenant in common with J. H. Ellsworth, the surviving partner, in all the partnership property, and proceeded upon this theory. In pursuance of this theory the partnership property was inventoried by the administrator, petitions were filed in the county court for license to sell the various partnership lands, and permission was granted by the court to make sale thereof, and sales of the same were made to Jenkins-Ellsworth Company through the county court, which sales were confirmed by the county court. No appeal was taken from any of the orders of the county court with reference to such sales, and they became final orders until some action is directly maintained to set them aside and establish their illegality. During Macfadden’s administration of the estate large amounts of personal property came into his possession, such as life insurance, bills receivable, proceeds of crops from the land, and other items of personal property, — all of which the court has in a proper manner charged to IVIacfadden’s account. It appears, the theory that the administrator and the surviving partner were tenants in common is erroneous when viewed in the light of § 6425, Comp. Laws 1913, which is as follows: “On the death of a partner the surviving partners succeed to all the partnership property, whether real or personal, in trust for the purposes of liquidation, even though the deceased was appointed by agreement sole liquidator; and the interest of the deceased in the ultimate distribution of the partnership assets passes to those who succeed to his other personal property.” This statutory provision is somewhat peculiar to North Dakota, most of the other states having no such statute. It will be observed that this statute vests all partnership property in the surviving partner in trust for the purpose of liquidation. The appellant claims that the heirs or legal representatives of the deceased partner acquire no — 447 — title to the partnership property, bnt only a claim or canse of action for the final balance representing the deceased partner’s share of the final settlement of the partnership affairs; and that such interest in the ultimate distribution of the assets is personal property, and must be disposed of as such even though the assets may consist entirely of real estate. The appellant intended the force of this argument to be, as based upon such statutory provision, that neither the heirs nor administrators of Jenkins’s estate had any title to any part of the real or personal property belonging to the Ellsworth & Jenkins partnership ; that they acquired only the right to receive any balance, of money or property ultimately remaining, and which would be due the estate of decedent after the settlement of all partnership affairs. From this reasoning the appellant contends that the probate court never acquired any jurisdiction over any of the partnership property in the administration of Jenkins’s estate, and contends that all the sales made through the county court of Jenkins’s undivided half of the partnership lands were nullities, and that the entire title to all the property was in Ellsworth or his assignee in trust. The district court, while recognizing the force of the statute in question, assumed the position that none of the orders of the county court, including those confirming the sales of Jenkins’s undivided half in the partnership lands, having been appealed from, they became final, and would be treated as valid orders so far as the proceedings in the district court was concerned, and took the position that the administrator having a trust to perform, and it having been shown that he was the president of the corporation to whom such undivided half of the partnership lands belonging to Jenkins was sold, and at the time of such sales was the administrator of Jenkins’s estate, and that such sales were in violation of his trust as such administrator, he should be held to be liable as for equitable conversion for the value of Jenkins’s one half of such lands and property, the value of which was. to be determined so far as the conversion was concerned by the price for which Jenkins’s half interest in such lands was sold by the county court on the petition of the administrator. All partnership real estate, under the circumstances of this case and under the laws of this state, is considered as personal property, — 448 — and the purchase price for which any land was sold through the probate court, which purchase price came into the hands of the administrator or under his control, is personal property, — all of which could be the subject of conversion. The court further held that the value of such undivided one half of the partnership lands would not preclude respondents in a proper action from showing the real value of such land, but that in the action in the district court by reason of the apparent validity of the order of the county court, -while they remained in force and not set aside by direct attack thereon, they were to be considered valid. Proceeding upon this theory, the district court itemized the property converted, and ordered that the order of the county court of Cass county, dated November 7, 1914, settling the account of the administrator, W. O. Macfadden, be vacated and set aside, and the report and account of said W. C. Macfadden as administrator of the estate of IT. H. Jenkins, deceased, were settled and allowed as stated in the findings of the district court; and further ordered Macfadden to turn over to the present administrator, Alexander Bruce, the sum of $26,217.65, with interest from the 1st day of February, 1916, which was the amount of property of the estate of Jenkins which the district court found had been converted by Macfadden as administrator. Assuming at this point, before we have analyzed the trust relations of the administrator, that the transfer of the property by the administrator through the probate court to the Ellsworth-Jenkins Company was in effect a transfer to himself, he being interested in the corporation and sharing in the profits thereof; and assuming, further, as the learned district court has found, that Macfadden was guilty of legal and actual fraud in the execution of his office of administrator in forming a corporation to which the lands and property in question were transferred, we are of the opinion that the procedure in the district court holding Macfadden liable as for equitable conversion of the property was proper, and we see no reason to interfere with the coui't’s conclusion and orders resulting from its theory of the liability of Macfadden. The meaning of § 6425, hereinbefore fully set out, is that the surviving partner has possession of all of the partnership property. That by operation of law the equitable title to all the partnership property, — 449 — whether real or personal, vests in the surviving partner or partners immediately upon the death of one of the partners, hut in trust only, and for the sole purpose of liquidating the partnership. This being true, the equitable title to all the partnership property upon the death of Jenkins having by operation of law vested in E.llsworth in trust, and in trust only, there remained but one duty for Ellsworth to perform, and that was to liquidate the partnership. In the process of the liquidation of the partnership the surviving partner could sell all of the partnership property and use the proceeds to discharge the liabilities or debts of the partnership; and where the purchaser of such partnership property, in case of such sale, is an innocent purchaser, and has no notice of the trust relations, and the surrounding circumstances are such as not to put a prudent person upon inquiry, such purchaser will be held to hold such property free, ánd not impressed by any trust. But if the purchaser has knowledge of the trust relations, or by reason of the circumstances and facts ought to have known of the trust relations, he will be held to have purchased such property impressed with the trust. Where, as in this case, the surviving partner undertook to sell all his interest in the partnership, and did sell the same to a person who had knowledge of the partnership affairs and trust relations, or who was in such position that he must be held to have known of the trust relations of the partnership and the trust character of the property when he purchased the same, he takes such property impressed with the trust and holds it subject to the trust impressed thereon, and in fact can have no greater rights than the trustee from whom he received such property, which would be the right only to liquidate the partnership and to share in the balance of the partnership property or money, remaining after the payment of all liabilities of the partnership, in proportion as the interest of the partnership which he purchases bears to the whole partnership. This would be the right, and the only right, the purchaser of an interest in the partnership would acquire even if the purchaser were not responsible and accountable by reason of certain other trust relations which would result if the purchaser was bound by trust relations arising out of the administratorship of the estate of Jenkins. The corporation, in addition to claiming the ownership of Jenkins’s interest in such partnership and partnership property by reason of — 450 — such purchase, claimed the ownership of a certain claim and the right to collect $10,000 and interest against the estate of Jenkins. Even if there were no other trust relations on the part of the purchaser which conflicted with this purchase, we believe the true rule to be that where one partner has made advances to the firm, or another has received advances from it, such advances do not constitute debts, strictly speaking, until the partnership is wound up, but such advances really only constitute items in the account between the parties. Where one of the partners has made advances to the firm, he is not really a creditor of the firm. He has no moans of compelling payment of his debts unless he has taken separate security. The only way the creditor could proceed in such case to collect his debt would be to proceed to dissolve the partnership and have the property applied to the discharge of his obligation, or proceed in equity for an accounting. It would seem to be well settled that all such advances made or received cap. only constitute items of account, and until there is a full accounting or liquidation, the exact status of the account between the parties cannot really be determined. If a partner has made advances to the partnership, upon an accounting it might be shown that his share of losses sustained were greater than the advances made, and it would seem until the amount of profit and loss be ascertained by a full accounting, or the complete liquidation of the partnership affairs, no partner has a remedy against, or liability to, the others for payment of advances. It would seem that where an advance is made to one of the partners, his manner of reimbursement would proceed as follows: After an accounting or liquidation of the partnership, the profits of the partner to whom such advancement is made would be first' applied in. payment of the advance, and if that is insufficient, then his capital should be applied, and after that he would then be considered a debtor to the partnership, and he having no more property or interest in the partnership out of which to pay such obligation which will be determined on a full accounting, and liquidation of the partnership, then recourse would be had to his individual property for the payment of such balance. In other words, advances made or received in partnership matters do not establish the relation of creditor and debtor. In the case at bar,- until a full accounting was had, and until the partnership was fully liquidated, as a matter of law,. — 451 — there could be no claim against any of the partners individually for advances made or received; nor could a claim be filed against the estate of the deceased partner until there had been a full accounting or liquidation of the partnership, by which determination of the amount of the individual claim, if any, could be had, and a showing that all his interest in the partnership, whether of profits or capital, had been first applied to the discharge of such obligation. The general rule is stated in 30 Cyc. page 461, and is as follows: “As a rule an action at law by one partner against his copartners will not lie on a claim growing out of the partnership transactions until the business is wound up and the account is finally settled.” Under this note is cited numerous cases from many of the states supporting this rule. Analyzing this rule, the following language will be found in 30 Cyc. page 461: “It follows that a partner cannot sue a copartner on a contract between himself and the firm in the absence of legislation permitting it; nor can he maintain trespass or replevin against his copartner for any part of the firm property. The remedy of the complaining partner in such cases is to be sought ordinarily in an equity action for an accounting and settlement of the partnership affairs. The principal reasons for requiring an accounting and settlement between copartners as a condition precedent to an action at law by one against another upon partnership claims and transactions are these: (1) A dispute of this nature ordinarily involves the taking of a partnership account, for until that is taken it cannot be known but that plaintiff may be liable to refund even more than he claims in the particular suit; (2) in partnership transactions a partner does not as a rule become the creditor or the debtor of a co-partner, but of the firm.” These principles are sustained by a great number of decisions from various states. (See 30 Cyc. 463, and eases cited.) This being true, it would seem to follow conclusively, that a claim could not be filed against the estate of an individual partner until there had been an accounting of the partnership or a liquidation thereof, and the balance, if any, of money or property due the individual partner first applied upon his obligation before he could be proceeded against as a debtor and sued, or, in case of his death, a claim be filed against his estate. Even though the testimony in this case tends strongly to show, — 452 — and even though it is conceded that Jenkins had overdrawn his account in the partnership, or had received $10,000 more of the partnership fund or property than Ellsworth, yet, as a matter of law, he could not have been sued upon such claims under such circumstances until a full accounting had been had, or the partnership fully liquidated, and in the event of his death the claim could not be filed against his estate by the surviving partner, or anyone else to whom such surviving partner had sold his interest, until full accounting of all partnership matters had been had, and the liquidation of such partnership fully completed, and the balance, if any, of partnership property due or belonging to the deceased partner first applied upon his obligations. There has never been a full accounting of the partnership affairs of Ellsworth & Jenkins Company, nor has the partnership been liquidated. The corporation which assumed to purchase Ellsworth’s interest in the partnership and assumed to purchase the $10,000 claim against Jenkins had no greater rights than Ellsworth would have had. The corporation, therefore, in law could not file the $10,000 claim, with interest against the estate of Jenkins, in the absence of a showing of a full accounting of the partnership and the liquidation thereof. This is the position in which the purchaser of Ellsworth’s interest in the partnership would be if such purchaser was not charged with other-trust relations relative to such property. Other trust relations, however, exist in the case at bar, and arise out of the trust relations of Macfadden as administrator of Jenkins’s estate. Maefadden was the president of the corporation, and under the evidence and circumstances of this case had, or must be held to have had, knowledge of all the partnership affairs, the trust character of the partnership property, and his trust relations as administrator. We will now consider the position of the administrator and his trust relations. It is elementary that the position of the administrator of the estate of a deceased person is a position of trust, and that all the property of the estate, whether it be real or personal, is impressed with such trust. It is a general principle of law thoroughly established that it is the duty of an executor or administrator to care for the estate and act in relation thereto for the exclusive benefit of the cestui que trust, and that such administrator or executor cannot profit individually from his dealings with the estate.- On-the eon — 453 — trary, lie must act in the highest of good faith, and not seek to acquire any adverse interest in the estate. 11 Am. & Eng. Enc. Law, 982. Section 6282, Comp. Laws 1913, is as follows: “A trustee may not use or deal with the trust property for his own profit or for any other purpose unconnected with the trust in any manner.” So far as material to this case, § 6283, Comp. Laws 1913, is as follows : “Neither a trustee nor any of his agents may take part in any transaction concerning the trust in which he or any one for whom he act as agent has an interest, present or contingent, adverse to that of his beneficiary.” The rule is well settled that the trustee administering the trust must act for the beneficiary, and not for himself; his acts must not be antagonistic to the interests of the beneficiary; he cannot use his position to gain a benefit for himself, nor place himself in a position where his own interest will or may conflict with his duties as trustee. 39 Cyc. 296. We quote from 39 Cyc. page 366, and cases therein cited: “The law does not stop to inquire into the fairness of the sale or the adequacy of price, but stamps its disapproval upon a transaction which creates a conflict between the self-interest and integrity of the trustee. The rule embraces not only direct purchases, but also indirect purchases through third persons, and applies regardless of whether the sale is private or under decree, or whether the cestui que trust is an infant or an adult, and even though the purchaser is one of several cotrustees, or is acting as agent for a third person. The rule is also applicable where the trustee is a corporation or where the trustee transfers property to a corporation in which he is a large owner”. It would hardly seem possible that a trustee, such as an administrator or executor, could in good faith, either directly or indirectly, acquire an interest or benefit from the property which in his relation as trustee he holds, controls, or sells for his cestui que trust. It is his duty when selling such trust property to sell it to the greatest advantage possible for his cestui que trust. It is his duty to make the best sale for the highest price obtainable. If the trustee is permitted to become purchaser of the property which he is selling, it is self-evident there is an interposition of his own self-interest adverse to that of the cestui que trust. To permit such to be done would open wide the flood — 454 — gates of fraud, and ofttimfes permit unscrupulous trastees who desire to advance their own selfish interest and individual profit to acquire interest adverse to the cestui que trust. In the case at bar, Macfadden was appointed administrator of Jenkins’s estate. The respondent in effect claims that matters were so manipulated by Macfadden as to secure his appointment. However this may be, it does appear that the petition for his appointment was signed by Mrs. Jenkins while she lay desperately sick in the hospital. Her husband was suddenly stricken by death. The shock of her husband’s death prostrated Mrs. Jenkins, and she was in the hospital for a considerable period of time very ill. An examination of the testimony and all the circumstances surrounding the case indicates at least that there was no particular need for haste in his being appointed administrator. The appointment was made, however, and the administrator duly qualified and entered upon the discharge of his duties. Some time after Macfadden’s appointment as administrator, and after he entered upon the discharge of his duties as administrator, the idea of the corporation was conceived by Macfadden, or Macfadden and Simonitsch. The purpose of such corporation as found by the trial court was for the convenient handling of the property of the estate, talcing over the estate lands and the continuing of the business of H. H. Jenkins, who, as we have seen, succeeded to the business of Ellsworth & Jenkins. We think the court was correct in making such finding; that the testimony tends to support such finding; and the same will not be disturbed. If the corporation was organized for taking over the lands and the business of Jenkins, and was to be an organization through which most of the estate’s business should be handled, and if, as subsequently appeared, a large part of the estate’s property and interest were sold to such corporation, it is self-evident there would be a direct conflict of the trust relations of Macfadden as administrator of the estate, with his self-interest represented by the corporation of which he was president, and which corporation became the purchaser of a great deal of the estate’s property. It is apparent that it would be to the interest of Macfadden as a part owner of the stock of the corporation to purchase the property from the estate of Jenkins as cheaply as it could be purchased. As administrator under these circumstances it — 455 — would be to Macfadden’s personal interest and individual gain to sell 'tbe lands and property of tbe estate at as low a price as he could to the corporation. Macfadden could not under these circumstances sell the property to the corporation thus formed and remain true to his trust of administrator, nor remain in a position to protect the interest of the cestui que trust. His trust relations as administrator were in direct conflict with his relations with the corporation of which he was president. Hpon an examination of the entire record in this case it is clear that Macfadden gained an advantage for himself by selling the property of the estate to the corporation. The appellant cites the case denominated Hall’s Appeal, 40 Pa. 409, wherein he undertakes to prove the principle, by the citation of several cases, that the administrator or executor may purchase interests of decedent’s estate; as, for instance, where one partner dies and the legal title to the property and assets was in the surviving partner, and were purchased by the administrator of the deceased partner’s estate; or, as where the-administrator purchased the interest of a share of an heir or legatee in the estate. The main cases, among others cited by the appellant to sustain this contention, are the case we have just discussed, and the case of Stark v. Brown, 101 111. 395. The eases cited to some extent tend to support the appellant’s theory, but even so, we do not believe they are the weight of authority, but, if they may be considered authority at all, are exceptions to the general rule. If an administrator or executor can purchase the interest of the legatee or an interest in the estate property, and by his doing so secures an advantage to himself in money or property, he does so in violation of his trust as administrator. Where a partnership is dissolved by death, and all the partnership property passes to the surviving partner, it passes only in trust, and the representatives of the deceased partner have an exclusive right to the ultimate balance of money or property remaining after the liquidation of the partnership. By what manner of reasoning, then, could it be held lawful for the administrator of the deceased partner to purchase the partnership property, directly or indirectly, if in doing so he made an individual profit and gained any money or property? It is clear that such a purchase would be in direct violation of the trust duties of the administrator. If it is ever possible for the administrator or exec — 456 — utor to purchase property of the estate or legatee, or a partnership, where he is the administrator of the deceased partner, it would be only where the administrator or trustee can affirmatively show that the purchase was advantageous to the beneficiary, and further affirmatively show he was not guilty of fraud, concealment, undue influence, and. that no unconscientious advantage was taken by him. In view of all these facts and circumstances in the case, such as the appointment of the administrator, his qualification and entry upon the discharge of his trust duties, and the further fact that the corporation was later formed, of which Macfadden became president, which corporation purchased an interest in the partnership lands which were sold by the administrator, and that the corporation also purchased Ells-worth’s interest in the partnership in the name of the corporation, it must be held that all such purchases were purchases by the administrator, and that any advantage gained or profit made by the corporation by reason of such purchases accrued not to .the corporation, but to the cestui que trust, or the legal representatives of the deceased. The purchase by the corporation of Ellsworth’s interest in the partnership and the partnership property included also the purchase of the claim for $10,000 and interest against the deceased. Whatever ultimate profit or gain there Avas in such purchase, including the $10,000 claim and interest by reason of the trust relations of Macfadden, would inure to the cestui que trust or representative of the deceased; and it is held that such purchase by the corporation under the circumstances of this case was for the benefit of the estate of the deceased. This is another reason why the $10,000 claim could not be properly filed against the estate. Considering at this time the question of fraud, we find that the trial court in its 20th finding of fact uses the following language: “Because of the wrongful and fraudulent conversion of the partnership property by the administrator through the corporation, Ellsworth-Jenkins Company, I charge the administrator Avith the cash Avalué of the real estate at the date of conversion, January 1, 1909, and the value of the personal property, which I fix as follows, together Avith interest at the rate of 6 per cent per annum, on the same.” Finding No. 8 of the court’s findings of fact is as follows: “On or about January 1, 1909, as the result of negotiations conducted by Mr. — 457 — Simonitsch and Mr. Macfadden on behalf of the corporation, EllsworthJenkins Company, with J. H. Ellsworth, through which they hoped to make a personal profit, the latter, said Ellsworth, sold, transferred, and assigned to that corporation all his, said Ellsworth’s rights and interest in the Ellsworth & Jenkins partnership property; and the corporation assumed all of said Ellsworth’s obligations as a surviving partner. The corporation paid to said Ellsworth for said assignment the sum of $4,000; and thereafter Mr. Macfadden considered said corporation as the lawful assignee of said Ellsworth’s rights as a surviving partner in said firm, and dealt with it accordingly. Mr. Macfadden, acting on the advice of counsel, believed that said transaction was proper and lawful,, and that the corporation thereby acquired and succeeded to all the rights of J. H. Ellsworth as a surviving partner. The court, however, further finds that in total disregard of the rights of Mrs. Jenkins and the interest which she in fact represented as a stockholder in said Ellsworth-Jenldns Corporation, the said Macfadden, together with said Simonitsch, knowingly, willingly, and fraudulently sought to deprive her and said estate of all interest in said corporation, and the property thus secured from said estate, by canceling her stock in said corporation. All of which the court holds was in the nature of, and is evidence of, a conversion of the property of said estate by said Macfadden as of the date of the sale to the corporation of the Ellsworth interest; to wit, January 1, 1909. “The court further holds that said transaction was unlawful because the decedent’s estate being interested in the partnership estate, which was the subject of said transaction, and Mr. Macfadden being a stockholder and officer in the corporation to whom the assigmnent was made, the transaction necessarily placed him in a situation where his personal interests were or might be in conflict with his duty as administrator. “The court therefore holds that as a matter of law the transaction must be treated and dealt with, not as a purchase by and assignment to the corporation, but as a conversion by Mr. Macfadden of the property of which he was a trustee, through the medium of the corporation.” The effect'of these findings of fact by the court is to hold that Macfadden converted the property sold to the corporation to his own use in a fraudulent manner; that such fraud is further shown by the forcing of Mrs. Jenkins out of the corporation and canceling her stock. We — 458 — are of the opinion, that the finding of the trial court is supported by the testimony. It would seem that the administrator being first appointed and having entered upon the discharge of his duties, and his position being one strictly of trust, and after having entered upon the performance of his trust as administrator, having formed the corporation of which he became president, which took over the business of the decedent, and which purchased through the administrator the property hereinbefore referred to, and having represented to Mrs. Jenkins the objects for which the corporation was formed, and thereafter the corporation having forced her out of the corporation, that it must be held the corporation was not conceived in good faith, but only as a medium through which the administrator could act and operate and secure undue advantage and profits to himself and those who were permitted to continue to share with him. This would in effect be a fraud against the interest of the cestui que trust, or the representatives of the deceased. The $1,500 notes given by Macfadden and' Simonitsch, whether given at the time the corporation was formed or just before they forced Mrs. Jenkins out of the corporation, do not place Macfadden in a more favorable position, nor is the giving of such notes any proof that Macfadden acted in good faith. At whatever time such notes were given they were immediately charged off to profit and loss. As we already in effect have held, the shares of stock of the corporation first issued to Macfadden and Simonitsch were issued to them for the good will of the Ellsworth & Jenkins business, Mrs. Jenkins also at the .same time receiving fifteen shares. The stock issued to Macfadden and Simonitsch was never paid for otherwise than out of the profits of the corporation. Mrs. Jenkins was forced out of the corporation on the ground that she did not pay for her stock. It further appears that Simonitsch in 1908 paid into the corporation $1,000, receiving therefor ten shares of stock, but very shortly thereafter borrowed from the corporation $900. Later Macfadden received $1,500 worth of stock for his interest in the Sobcrg farm, the estate receiving $750 credit for the same interest. Macfadden later on paid $2,500 in cash and a half interest in another certain piece of land. The correspondence between Macfadden and Ellsworth shows the activity of Macfadden in and about purchasing Ellsworth’s interest in such partnership, including the $10,000 claim and interest of Ells-worth against Jenkins. Macfadden, after his appointment as adminis — 459 — trator, hastened to collect the life insurance, which the record shows he did collect and which Jenkins carried, and out of the $10,000 policy made payable to the partnership he hastened to pay a $5,000 note which Ellsworth held against Jenkins, and in addition a claim of $1,000, all of which were exclusive of the additional amount claimed to be due from Jenkins to Ellsworth in the sum of $10,000. After these transactions, Macfadden proceeded to purchase the interest of Ellsworth in the partnership, including the $10,000 claim, — all of which was purchased on behalf of the corporation, and the $10,000 claim and interest was thereafter filed against the estate of Jenkins. It is unnecessary to go into detail and set out the correspondence between Macfadden and Ellsworth leading up to the purchase of Ellsworth’s interest in the partnership. It would seem from the correspondence and from all of Macfadden’s acts with reference to his haste in being appointed administrator, the collection of the insurance and the forcing of Mrs. Jenkins out of the corporation, and many other circumstances and facts in the case, that Macfadden was acting in bad faith and was violating his every trust as administrator. Macfadden’s actions are not placed in a more favorable light because he acted through a corporation. There is no doubt of the general rule of authority that a corporation is a legal entity, and will be considered as .such until there is sufficient cause to consider it otherwise. Corporations, however, cannot be used as a cover under which wrongs may be committed and fraud perpetrated. If corporations are sought to be used as a cover for fraud and wrong, the court will look through the form of the corporation to ascertain its actual purpose and intent. Cook on Corporations, § 664, contains the following: “The disabilities of the corporation are not disabilities of the stockholders, nor are the disabilities of the stockholders tho disabilities of the corporation. Hence it is that a corporation is often organized as a ‘cloak’ for frauds. Such cases as these are becoming common, and the courts are becoming more and more inclined to ignore the corporate existence when necessary in order to circumvent the fraud.” No corporation can become so securely organized and protected as a legal entity as to become a cover for wrong and fraud, and thereby defeat the rights of innocent parties. A corporation cannot be greater than law and equity, nor by reason of its legal entity be immune from answering for fraud and wrong. In such case the protecting hands of — 460 — equity will brush aside the outward forms of the corporate entity, and analyze the foundation purpose and intent of the corporation; and if the-purpose and intent of the corporation are not embedded in good faith, and are but a cover for wrong and fraud against the innocent, the corporate entity will afford no protection for such wrong and fraud in a court of equity. Corporations in the transaction of business have a legitimate use as a matter of convenience, and when so used for the accomplishment of a legitimate purpose are not looked upon with disfavor either by courts of' law or equity; and the legal entity of such corporations when engaged in a legitimate enterprise is recognized both at law and in equity; but neither law nor equity will ever recognize the right of a corporate entity to become the receptacle or cover for fraud or wrong based upon deception for the purpose of defeating the right of innocent parties. The appellant has asked to be stricken from the account as stated by the learned trial court the following items: The good will item of $6,457.50. The appellant also asks that there be stricken from the account all the receipt items shown in the trial court’s finding No. 23, which items immediately follow the good will item and include all the-items to the end of the receipts, such items being so voluminous, and not enumerated herein. The appellant further asks that, in addition to-the above items being stricken from the account, all other partnership items should be stricken therefrom. We are of the opinion that such items were properly included and should remain as stated by the trial court. The court made a proper allowance of the Wheeler and Derner claims, allowing them for the actual amount which the administrator paid in making settlement of them, such claims being settled at a discount by the administrator, who sought to include the full amount of such claims in his account. The administrator may not purchase claims against the estate at discount and receive credit in his account of his administration for the full amount of the claim, thereby securing a profit to himself. The court was also right in disallowing the $160 item paid by the administrator to Ellsworth-Jenkins Company as commission for selling the Lee farm, upon the same principle just stated with reference to purchasing claims against the estate. The payment of a commission by the administrator to the Ellsworth-Jenkins Company was in effect a payment of a connnission to himself; for, being a member of the — 461 — 'Corporation and president thereof, he must have received a part of the profits. The appellant complains that he is charged with property, money, and effects between the time of the death of Jenkins and the time when the corporation, according to the claim of the appellant, actually commenced business, which was about the-1st of the year 1909. It must be borne in mind, however, that this accounting is against W. C. Macfadden as administrator of the estate of H. H. Jenkins. Whatever property, money, or effects had or owned by Jenkins at the time of his death which came under the control of Macfadden must be accounted for. It is not shown that Mrs. Jenkins had anything to do with handling the money or property either before or after the appointment of the administrator; nor is it shown that any other person came into possession of any of the property, money, or effects of H. H. Jenkins after the time of his death, excepting W. O. Macfadden. W. C. Macfadden was appointed administrator on the 2d day of September, 1908. The corporation was organized and doing business, or about ready to do business, on October 3, 1908. All of the property of the H. H. Jenkins estate, whether of his personal estate or of the partnership, came into the possession and control of W. O. Macfadden, considerable of which, as we have seen, was sold by him to the corporation, of which he was president. It seems, therefore, that it is proper that he should account for all the property, money, or effects H. H. Jenkins possessed, or had an interest in, at the time of his death, whether it be his individual property or his interest in the partnership property. Appellant seeks to show that, if he is to be charged with the property, money, or effects of H. H. Jenkins, deceased, and during the time before the corporation was organized, and down to December 31, 1908, that then certain disbursements aggregating $11,363.39 should be allowed, Macfadden, the appellant, claiming that such disbursements had not been allowed; but in this we think the appellant is mistaken. One of the main disbursements which appellant claims should be allowed is a note of $5,000 to J. E.'Ellsworth, and interest thereon aggregating $1,480, in all $6,480. Another of the disbursements is a note for.$1,500 to the Equitable Insurance Company. Another is a note for $500 to the Eargo National’ Bank. At first glance his claim would appear plausible, but upon further examination it is found that the court, instead of charging the ap-. — 462 — pellant’s account with the $10,000 insurance payable to Ellsworth &• Jenkins, charged only $1,538.11. This is the amount of that insurance-policy remaining after the payment of such claims. If the disbursements were to be allowed in the manner contended for by the appellant,, then the court would have charged his account also with $10,000 on account of the insurance payable to the partnership, instead of the balance which was left after paying the above claims, which was $1,-538.11. Two of the important items in the disbursements which are claimed should be allowed is one of $900 and one of $808.10, which are amounts the appellant claims he paid out on the Bowers farm to pay up a $1,600 mortgage. At the time the Bowers farm was sold the petition for the sale thereof showed there were two mortgages against it, one for $2,500 and one for $1,600. As a matter of fact there was only the-$2,500 against the farm at the time of its sale through the probate court. The farm sold through the probate court for $1,500. It is apparent that said farm was sold with the idea that there was a $2,500 mortgage and a $1,600 then in force and effect, and the farm must have been sold subject.to these two mortgages. It appears, therefore, that no credit is due the appellant for the $900 and $808.10 items. The other items of disbursement which the appellant claimed should be allowed are several small items the appellant claims to have expended in regard to the Daley farm, Hipan farm, Bowers farm, Loomis farm, Van Vloct farm, Emerson farm, and the Henning property, together with certain amounts claimed to have been paid out for interest on mortgages against the Bowers, Ripan, Loomis, and Van Vleet farms. We are of the opinion that the court must have considered all these matters at the time of its findings of fact and the statement of account which it has set forth in its findings of fact. We notice, also, that in the statement of account of the receipts where charges of the various sums of money were made against the appellant, there appears to be no charges for any crops that might have been grown on the four farms above mentioned. If there were any crops for the year 1908 on such farms, they do not appear to be charged to the appellant. If there were crops upon such farms, and the appellant used the proceeds of such crops to pay the interest, then he has already been reimbursed. The court below held in effect that all orders made by the probate court, and not appealed from Avithin thirty days, became binding, and — 463 — were to remain effective, and were not to be disturbed unless by direct action. It also would not receive any testimony as to- tbe value of the land sold by the administrator through the probate court to the corporation ; and the price of the equities of the land so sold to the corporation would be the measure of damages in this particular accounting. Whatever the whole price of the equity of any piece of the partnership land or other land belonging to the decedent at the time of his death, or in which he had an interest which was sold by the administrator through the probate court to the corporation, would be the true measure of damages and the value of such equity to be charged to the account of the-administrator in this action. In other words, the court held that in this proceeding no other value could be shown of the lands so sold by the administrator through the probate court except the cash value as determined by the sale of such land through the probate court; and no appeal having been taken from the orders confirming the sales, such orders became binding upon the district court so long as such orders remained in force, even though such orders were voidable orders and sales. This we believe to be the proper rule. We notice, however, the court in fixing the value of the equity of the land so sold increased the price of the land in the court’s final account. That is, the court allowed a greater value for the equity in a given piece of land in making up the account which the court did make on the same piece of land, than the value-of the-equity of the same piece of land appears to have been as determined by the price for which such equity in such tract of land was sold in the probate court. For instance, the equity in the southeast quarter of section 27, township 140, range 50, was sold by the administrator through the probate court for $1,500, but the court in its account charged the account of Maefadden for the same piece of land $2,100, with interest on $2,100 from January 1, 1909, to February 1, 1916. This we believe to be an incorrect charge under the rale which governs in this case. As we view the matter, for the piece of land just described the court should have charged Macfadden’s account $1,500, together with 6 per cent interest thereon from the date of the sale of such land through the probate court; and so it appears to be with other tracts of land, the equities of which were sold through the probate court by the administrator to the corporation. Wherever the administrator is charged with the value of an equity in a tract of land which was sold by him through the probate — 464 — court to thé corporation, he should be charged the full value of such equity as determined by. the price received for the same in the sale through the probate court, with interest on the price paid for such equity in the probate court at the rate of 6 per cent. And wherever the lower court has affixed a greater value to the equity of any given tract of land sold by the administrator through the probate court to the corporation than the price for which such equity of such tract of land sold in the sale through the prohate court, the administrator’s account is entitled to a credit of the difference between what the land sold for through the probate court and the amount with which the court charged the administrator for the equity in such piece of land in the account stated by the court. In other words, taking the southeast quarter of section 27, township 140, range 50 as an example, interest should be figured on $1,500, the price in the probate court, from the date of the sale to February 1, 1916, and that amount should be deducted from $2,992.50. The difference thus found should be credited to Macfadden’s account as such account was stated by the lower court. Of course the estate will be entitled to receive interest until the time when the amount found to be owing from Macfadden to the estate is paid. Whatever difference the calculation in accordance with this requirement makes in regard to the manner and method of determining Maefadden’s liability, which we have outlined, should be deducted from the whole amount found to be owing by him by the trial court, which was $26,217.65. This would not prevent, as we view the matter, under the theory under which this case has been tried, the exercise of any right of action which the respondent might have of a separate action to recover the balance of the value of the equities, if any, of the lands sold through the probate court by the administrator. The court below held that there could be charged to the appellant only the cash selling price of the land at the time they were sold, and the sale of the farms was made only of the equity that remained in them at the time of the sale. The court held that no other value could be shown of •such farms in these proceedings except the cash value as determined by the sale of such land through the probate court, the orders of which sales and the consummation thereof, not having been appealed from, were. binding upon the district court so long as such orders remained in force,. and even though they were voidable orders and sales. We are of the — 465 — opinion that the trial court took into consideration all the items of disbursement which the appellant claimed he should be allowed from the time of the death of Jenkins until the 31st of December. We see no reason for disputing the findings of fact of the trial court, nor its account as stated in its findings of fact, except as we have indicated and set forth. We might also further add that under the circumstances of this case the court might very well have disallowed any administrator’s fees to the appellant, he not having performed his trust as administrator in the manner required by law. A further fact to be taken into consideration is that Mrs. Jenkins has been put to great expense in litigation extending over a period of several years. Her mind has been in suspense, not knowing whether she would ever come into possession of that part of the proceeds of her husband’s estate to which she was rightfully and lawfully entitled; and she having been denied for all these years the benefits of the use of the proceeds of her husband’s estate by reason of the unfaithfulness of the administrator to his trust in not looking after all the property of the estate of the deceased with care and faithfulness, as he is required to do in obedience to the laws of this state. Courts cannot, or at least should not, look with favor upon the acts of one who occupies a trust relation and who by such acts in any manner fails to fairly, fully, and conscientiously execute his trust duties. Courts will scrutinize carefully the acts of persons in trust relations. Administrators are appointed by the courts which have jurisdiction over them, for the reason that such courts at the time of such appointment have confidence and implicit faith in the good faith, integrity, honest intention, and unquestionable character and ability of the one appointed as such administrator to fully execute the duties of what may be termed his sacred trust. Where a man after many years of ceaseless struggle and toil has acquired some competence, some little property interest, or money, which is being accumulated for the protection and support of those dependent upon him, and for their use and benefit when the accumulator can no longer struggle for their support by reason of being called upon to answer the summons of the dread messenger of death, he has every reason to expect that in pursuance to the laws of the state such property, money, or effects will be safeguarded for the benefit of his dependents in order — 466 — that they may not become charges of the state, and in order that they may continue to maintain the same respectable place in society which they occupied during the lifetime of the decedent. Courts are exceedingly jealous, therefore, in the enforcement of such trust relations, and in holding those who assume those trust relations such as exist in this ease, to strict accountability, to the end that the decedent’s property held in trust by the administrator may pass to those representatives entitled to receive the same. Any balance in Macfadden’s favor in the ancillary administration in Minnesota may be offset against the amount which Macfadden is owing the estate in the principal administration in North Dakota, and also the amount of any credits he may be entitled to by what we have heretofore said with reference to the price or value of any equity as determined by the sale in the probate court. These deductions, if any, should be made from the amount of $26,217.65, the amount found owing ‘by the trial court in its account stated. The order and decision appealed from are affirmed, with costs. Bruce, Ch. J., and Robinson and Birdzell, JJ., concur in result.