Hall v. McAllaster

Mr. Chief Justice Shepard delivered the opinion of the court: ■ Had there been a denial of the trust by John M. Clapp while living, or by the trustees' of his estate after his decease, the heirs of Edwin E. Clapp who conveyed their interests- in the lands of his estate to. John M. Olapp while administrator of Edwin E. Clapp’s estate, claiming that -their conveyances were in [99] trust for tbe salo and distribution among them of tbe net pro-' coeds of sales thereafter to be made, would have been compelled to file a bill to establish the trust. While living, John M. Clapp made such distributions of the proceeds of such sales as were made by him, and his trustees, one of whom is his son, recognize the trust in their petition. The allegation of the petition is: “The petitioner John H. Clapp knows of his personal knowledge, and the petitioner Joseph J. Darlington is informed and believes, that it was always the purpose of the said John M. Clapp to account Jo the grantors’ for their full share of the proceeds of any and all lands belonging to the said E. E. Clapp.” Actuated by this knowledge and belief, they asked authority to distribute the proceeds of sales of the remaining lands that had been made by them. The parties claiming the bexxefit of the tx*ust were not therefore put to the necessity of filing a bill for relief, and answered with a brief but sufficient statement of their equitable rights. John H. Clapp, not only a trustee, but also a son, of John M. Clapp, expx*essly acknowledged those rights. Another child, Alice J. Clapp, admitted the rights in her answer. The remaining child, Frances 0. Hall, made no denial of the allegations of the petition, bxxt stated that, by reasoxx of the interests of her infant children, Anna P. Hall and others named, she was deprived of the right to request the court to grant or refuse the prayer of the petition. The infant defendants, through their guardians, neither admitted nor denied the allegations of the petition, but submitted their interests to the determination of the court. At the time of the conveyances to him, John M. Clapp was the administrator of the estate of Edwin E. Clapp. By the law of administration prevailing in the State of Pennsylvania, where the estate was situated, lands, as well as personal property, are subject to administration and sale for the payment of debts. Horner v. Hasbrouck, 41 Pa. 169, 179; Lucass Appeal, 53 Pa. 404, 407. The executor or administrator of an estate consisting of lands and personalty occupies a fiduciary relation to the parties entitled thereto, and a purchase by him of the same is voidable. Beeson v. Beeson, 9 Pa. [100] 279. It is a rule of universal application fhat one under a fiduciary obligation may not enter into engagements that may possibly conflict with that obligation. United States v. Darter, 217 U. S. 286, 306, 54 L. ed. 769, 775, 30 Sup. Ct. Rep. 515, 19 Ann. Cas. 594, and cases cited. It is unnecessary, however, to apply that principle -in the present case, and it would be unjust to the memory of John M. Clapp to affirm the decree on that ground. The surrounding circumstances indicate that it was to the interest of all that the several interests in the lands of the estate should be placed in the hands of John M. Clapp for sale. The parties entitled to two fourths were numerous and lived in distant states. These made deeds to John M. Clapp, which enabled him to make sales and conveyances without delay. The McLains, who owned the remaining fourth, lived near by, and they, without conveyances, intrusted their interest to him for sale, and ratified his sales by conveyances to the purchasers procured by him of the entire estate. The consideration for the conveyances was the then estimated value of the interests of the grantors. That the conveyances were made under those conditions, and that John M. Clapp recognized his obligation to account for any additional amounts realized from sales by him, is shown by his letters, particularly that to his sister dated February 2, 1903. Had the conveyances not been made for the' purposes and upon the trust indicated, it is reasonable to infer that no inquiry would have been made of him regarding his subsequent sales. That he recognized the equitable rights of the parties is shown by the full report made by him of the sales that had been made, and by the remittance to the several grantors of their proportions of the purchase money in excess of the amount originally paid them. ■ We attach no importance to the report of the auditor, as it was based upon a question of law that should have been determined by the court before ordering the account to be stated. Easter v. Ralston, 32 App. D. C. 12, 18. The account of the auditor having been made so as to apply to either view that the court might take of the law of the case,, there was no necessity [101] for another reference The decree of the court is right and is therefore affirmed with costs. Affirmed.