Heirs of Cogswell v. Freudenau

GOODE, J.- In 1859 or 1860, John C. Cogswell and William Ereudenau the defendant, were partners in the milling business in the city of St. Louis. The co-partnership paid sundry taxes to the Hnited States government, which turned out to have been illegally collected and were afterwards refunded by the government between the years 1868 and 1897, the last- money being refunded in the latter year and amounting to thirteen hundred and six dollars. Congress passed an act for the relief of Cogswell & Company in 1897, on learning of which the heirs of John C. Cogswell set up a claim to one-half the money which was to be refunded, before the proper department of the government, and William Ereudenau made a claim to all of it as his individual property by virtue of an assignment from his former partner, John 0. Cogswell. Cogswell’s heirs consulted an attorney on learning of said act of Congress, and while the matter was in the hands of this attorney and being pushed by him before the department, he learned of Ereudenau’s claim, which was likewise being pushed by the latter’s attorney. Some correspondence and interviews ensued between Ereudenau and Maginn, the attorney of the Cogswell heirs, in which Ereudenau made known to Maginn his claim to the whole of the fund on the ground that it had been assigned to him by Cogswell, and Maginn asserted against this claim, that the amount was a partnershipi asset and half of it belonged to his clients, the heirs of John C. Cogswell. The Federal government refused to pay it to any one except a duly qualified administrator of the estate of Cogswell — 486 — & Company, and Ereudenau, as the surviving partner, took out letters of administration on the partnership estate in the probate court of the city of St. Louis. His application for letters was as follows: “Application for Administration of Partnership Estate. “State of Missouri, City of St. Louis, ss. “To the Hon. Leo Rassieur, Judge of the Probate Court of the City of St. Louis: “The petition of the undersigned William Ereudenau respectfully presents: That he is the surviving partner of the late firm of Cogswell & Go. which was composed of your petitioner and John C. Cogswell; that said John C. Cogswell died on or about the twenty-eighth day of March, 1894; that he was a resident of the city of St. Louis, in tire State of Missouri; that the interest of said deceased in the property and assets of said co-partnership does not exceed the sum of six hundred and fifty-three dollars in value. “Consisting of a claim against the United States by aforesaid firm for $1306, said claim being allowed by an act of the 54th Congress, to be adjusted by the commissioner of internal revenue. “Wherefore your petitioner desires to give bond and qualify as such surviving partner, and to take charge of and administer said partnership estate. “William Ereudenau. “The above named William Ereudenau being duly sworn, on his oath says that the matters and facts set forth in the foregoing petition are true, to the best of his knowledge, information and belief. “William Ereudenau. “No. 3421 Barrett Street.” — 487 — It will be seen from the foregoing application that Ereudenau stated the interest of John C. Cogswell, deceased, in the property and assets of the co-partnership did not exceed the sum of six hundred and fifty-three dollars in value, and that the assets consisted solely of a claim against the United States by the aforesaid firm for one thousand three hundred and six dollars, thus designating as a partnership asset the very money now in controversy. The United States paid the money to Ereudenau as administrator, who placed it to his credit as administrator in the Mississippi Valley Trust Company and afterwards checked it out and used it for his own benefit. When the time came for him to make final settlement, instead of making one, he filed in the probate court a statement in regard to the administration in which he referred to the old firm of Cogswell & Company and recited that at the time of the dissolution of it Cogswell assigned to him all his interest in the non-available assets, including the claim against the United States government; that during the lifetime of Cogswell he collected a large amount of those unavailable claims with the knowledge of Cogswell who never demanded any part thereof nor was asked to defray any part of the cost of collection; that one of those assets, was the item in controversy, in order to collect which he (Freudenau) was compelled by the; comptroller of the United States treasury to take out letters of administration as surviving partner; that he had filed no inventory of the assets, but had collected the sum of twelve hundred and eighty-seven dollars and sixty-seven cents, from which his attorney in Washington had deducted three hundred dollars for a fee, and he (Ereudenau) had been out various expenses, leaving the net proceeds of the claim only six hundred and thirty-eight dollars and ninety-six cents. The statement then concludes as follows: “But the undersigned insists that this amount does not belong to the estate of Cogsrvell & Company, of which firm he is the surviving partner; he denies that the estate of John — 488 — C. Cogswell has any interest therein; which is evidenced by the certified copy of the writing executed by the said John C. Cogswell, and filed in your court when the motion for ‘no process’ was made, and under these circumstances he now, as administrator and surviving partner, reports to your honorable court as follows: That he has no money or other assets in his possession or under his control belonging to the estate of Cogswell & Company, and that having no money belonging to said estate he has paid out none on account thereof.” It thus appears that Ereudenau set up a claim to the entire fund which he had collected from the United States as administrator by virtue of the assignment alleged to have been theretofore made to him by Cogswell and took a position directly opposed to the one taken by him in his application for letters. Exceptions were filed to this settlement, or excuse for not making a settlement, by the Cogswell heirs, and • when said exceptions were sustained, Maginn,' their counsel, took out letters of administration on the estate of John 0. Cogswell, who died in 1894, in order to collect half of the fund after deducting expenses, which the probate court adjudged was due to the Cogswell estate. An appeal was taken by Ereudenau from the judgment of the probate court to the circuit court, and by both sides from the last-named court to this one; defendant appealing on the ground that he was entitled to all the money, and the plaintiffs because they were dissatisfied with some credits allowed the defendant. Ereudenau introduced in evidence the following assignment : “To all whom it may concern: This is to certify that I have sold all of my interest in and to the assets of the firm of Cogswell & Company, of whatsoever description and not heretofore conveyed or assigned, to the Union Steam Mill Company, including the award of damages by the city of St. — 489 — Louis for the opening of the wharf, to William Ereudenau, my late surviving partner. “In witness whereof I have hereunto set my hand and . seal this the third day of July, 1868. “John C. Cogswell.'” It should be stated in this connection that the firm of Cogswell & Company had sustained a heavy loss by fire and thereafter assigned most of their assets to the Union Milling Company, composed of them and- certain of their creditors who took stock in the Union Steam Milling Company in proportion to their claims against Cogswell & Company. The demand against the United States government on account of illegal taxes, however, was not assigned to the Union Steam Milling Company as is conceded, and therefore fell within the terms of the foregoing assignment to Ereudenau. We agree with the probate and circuit courts that it was out of the question for Ereudenau to qualify as administrator of the partnership estate on an application verified by his affidavit that Cogswell’s estate owned half of this very fund, collect the fund from the United States in his capacity of administrator and thereafter claim it was never a partnership asset because it had been previously assigned to him. Such a course as that was a fraud on the Cogswell heirs, who acquiesced in the payment of the money to Ereudenau after he took the foregoing steps to collect it, as their right was recognized and conceded thereby. The defendant claims said heirs were not prejudiced, as the demand had been assigned to him and they could never have come in for any part of it. But the evidence shows they contested the assignment from the first and claimed this particular fund was a partnership asset in which they were entitled to share, that they were asserting their rights before the proper department of the Federal government and never in any manner conceded that Ereudenau was entitled to the entire fund. Their status was — 490 — distinctly altered by bis collection of the money as administrator, inasmuch as their claim was not thereafter against the government, but against the partnership, and it is no answer to their complaint to say they could not have gotten the money from the government in any event on account of the assignment. No one knows whether they could or not; but it clearly appears they ceased the contest before the department and allowed him to receive the fund, solely because he did so in a fiduciary capacity that was consistent with their claim, which they notified him they would still insist on after it should be paid to him as administrator. State ex rel. v. Branch, 151 Mo. 639. If this fund was not partnership property, the probate court had no jurisdiction of it and the acts of the defendant in receiving it as partnership property and inducing the court to take jurisdiction was a fraud on the law and the court, as well as on the plaintiffs. A party who knows all the facts and is laboring under no mistake as to his rights, can not invoke the jurisdiction of a court to confer on him a fiduciary character and after this has been done and he has collected money or assets by that means, repudiate his fiduciary obligations and appropriate the fund to his own use. Bombeck v. Bombeck, 18 Mo. App. (K. C.) 26; State ex rel. v. Dorton, 145 Mo. 312; Estate of Glover & Shepley, 127 Mo. 153; Cunningham v. Jacobs, 120 Ind. 306; Folnestock v. Gilham, 77 Ill. 637; Bates v. Williams, 43 Ill. 494; People v. Falconer, 2 Sandf. 81; Hines v. Mullins, 25 Ga. 696. It is said the circuit court erred in excluding the evidence offered by the defendant that John C. Cogswell owed him large sums of money on account of the partnership estate and that he was therefore entitled to retain this money in partial satisfaction of that indebtedness. His claim that Cogs-well was indebted to him is based on payments of debts owing by the firm of Cogswell & Company, which he claims to have made out of his individual money prior to 1870. Cogswell — 491 — died, as we have seen, in 1894, and certainly his indebtedness to Erendenau on account of all such payments was barred; for the statute had been running against it for twenty-seven years or longer. The court committed no error in that ruling. Neither do we think it was erroneous to allow the heirs of John C. Cogswell to file exceptions to Ereudenau’s final settlement as administrator of the partnership estate. Defendant contends no one but the administrator of Cogswell’s individual estate could except; but no administration of the individual estate of Cogswell had as yet been granted, and his heirs were certainly sufficiently interested in whatever was coming to his estate to give them a standing in court as ex-ceptors to an unjust and illegal settlement. 2 Woerner’s Administration Law, sec. 541. The only remaining question is in regard to the credits which were allowed to Ereudenau, and in this respect the judgment of the circuit court certainly dealt liberally with him. Plaintiffs have not set forth what allowances they object to, nor the reasons why they object, but we presume their objections go to some of the counsel fees paid by Ereudenau while he was pushing his claim before the department ; but as plaintiffs have not chosen to present this matter to us in their brief, we will not trouble ourselves further about it, but affirm the judgment. Bland, P. Jand BarclayJ., concur.