Moore v. Petty

HOOK, Circuit Judge, after stating the case as above, delivered the opinion of the court. The assignments of error present but four propositions which require consideration: Had plaintiffs, as foreign executors, authority to maintain the action in the state of Iowa? Did the Circuit Court commit error in permitting the plaintiffs to amend their petition on the eve of trial? Was the fact that no writing in the form of a verdict was signed by or on behalf of the jury fatal to the judgment ? Did the Circuit Court err in directing a verdict for the plaintiffs upon the evidence adduced at the trial? 1. The will of the testatrix was duly probated in Allegheny county, Pa., and, the plaintiffs having qualified as executors, letters testamentary were there issued to them in due course. An- attested copy of the will and a transcript of the probate proceedings were recorded in the county in Iowa in which the land was situated. By an order of the probate court in Iowa the same' executors were appointed as such in that state, but they did not there qualify or give bond or receive letters testamentary. We will not pause to consider whether the language of the order in Iowa invested the executors with a domestic character, and whether the failure to qualify, give bond, and take out letters testamentary in that state can be urged in this proceeding. It may be assumed for the purposes of this cause that they were purely foreign executors; possessing, however, under an express provision of a statute of Iowa, the power to sell and convey the real property of the testatrix in that state. Proceeding with this assumption, did they have the right to maintain the action in Iowa for the recovery from their agents of the proceeds of a sale of land made under their authority? This question was presented by the defendants’ answer, wherein it was alleged that the plaintiffs were appointed and qualified as executors only in the state of Pennsylvania, and that they had never been qualified or authorized to' act as such under the laws of the state of Iowa. The general rule undoubtedly is that an executor or administrator in his representative capacity cannot maintain an action in the courts of any sovereignty other than that under whose laws he was appointed and qualified, without obtaining an ancillary grant of letters in the state where the action is brought, unless the right so to do is conferred upon him by the law of the forum. Fenwick v. — 673 — Sears’ Administrators, 1 Cranch, 259, 2 L. Ed. 101; Dixon’s Executors v. Ramsay’s Executors, 2 Cranch, 319, 2 L. Ed. 453; Doe v. McFarland, 9 Cranch, 151, 3 L. Ed. 687; Kerr v. Moon, 9 Wheat. 565, 6 L. Ed. 161; Vaughan v. Northup, 15 Pet. 1, 5, 10 L. Ed. 639; Noonan v. Bradley, 9 Wall. 394, 19 L. Ed. 757; Johnson v. Powers, 139 U. S. 156, 11 Sup. Ct. 525, 35 L. Ed. 112. The rule as to foreign guardians is the same. Morgan v. Potter, 157 U. S. 195, 15 Sup. Ct. 590, 39 L. Ed. 670. But whenever the cause of action declared upon by the foreign executor or administrator is one which involves an assertion of his own right, rather than one of the deceased, or which has accrued directly to him through his contract or transaction, and was not originally an asset of the estate in his charge, he may maintain an action in another state for the enforcement thereof, although express authority so to do may not be found in a statute of the forum. The principle underlying this modification of the general rule is that, when the cause of action accrues directly to the executor or administrator, it is assets in his hands for which he may sue in his personal capacity, and, if he sues as executor or administrator, the words so describing him will be regarded as merely descriptive, and be rejected as surplusage. See Talmadge, Adm’r, v. Chapel, 16 Mass. 71, in which it was held that, where a judgment had been recovered in New York by an administrator appointed in that state, he could bring suit upon the judgment in Massachusetts without taking out letters of administration there. This case was approved in Biddle v. Wilkins, 1 Pet. 686, 692, 7 L. Ed. 315. See, also, Mowry v. Adams, 14 Mass. 327; Williams v. Moore, 9 Pick. 432; Kane v. Paul, 14 Pet. 33, 42, 10 L. Ed. 311. The general rule is recognized and applied in Iowa (McClure v. Bates, 12 Iowa, 77), and also the qualification which has been stated (Greasons v. Davis, 9 Iowa, 219; Chamberlain v. Wilson, 45 Iowa, 149). In Greasons v. Davis the plaintiffs, foreign executors, brought an action in Iowa upon transcripts of judgments rendered in Pennsylvania. One of the defenses was that the plaintiffs were not qualified to sue when the action was commenced. It appeared that the plaintiffs’ testator recovered the judgments in Pennsylvania, and, having died, the plaintiffs, as executors, were substituted on the record, which, under the practice in that state, put them in the position of judgment creditors, as though they had been the original plaintiffs in the actions. The trial court in Iowa was requested to instruct the jury that, if the plaintiffs were not appointed and qualified as executors under the laws of Iowa at the commencement of the action, they could not recover. A refusal of the instruction was sustained by the Supreme Court of Iowa, which said: “If they had not been made parties in Pennsylvania, they could not sue without talcing out letters here. * * * other reasons may require that they should still take out letters, in order to administer his estate here, but these reasons do not require it before suing in the present case.” The doctrine is more clearly illustrated in Chamberlain v. Wilson., Chamberlain, a citizen of Nebraska, died, holding a note executed by a resident of Iowa, and secured by mortgage upon real property in — 674 — the latter state. Letters of administration were issued in Nebraska to Van Horn, who, in his representative capacity, took possession of the note. He sent the note for collection to one Wilson, in Iowa, who collected a portion thereof from the maker, and had the money in his hands, ready to pay to the party entitled. A son of the deceased took out letters of administration in Iowa, demanded the money from Wilson, and sued him in that state upon his refusal to pay. The Nebraska administrator filed his petition as intervener, and claimed the money. It was held that, as the foreign administrator took actual possession of the note in question, embraced it in his inventory, and was charged with the principal and primary administration of the estate, he was entitled to the further control of it and its proceeds, which he did not lose by sending it to Iowa for collection. The court said: “He may, in our opinion, maintain an action against Wilson for the proceeds of the note collected and in his possession, in his own name, without taking out new letters of administration. Probably, under the doctrine of McClure v. Bates, 12 Iowa, 77, he might not be enabled to maintain an action as administrator for the collection of the note. But the note came rightfully into his possession in virtue of the administration granted in Polk county, Nebraska. It was collected, and the proceeds were in the hands of Wilson, so that the right to maintain an action upon the note is not involved.” This doctrine is elsewhere generally recognized. In Trecothick v. Austin, 4 Mason, 16, Fed. Cas. No. 14, 164, Mr. Justice Story said: “But it is by no means clear that, if Trecothick’s executors were now suing, they would be obliged in the present case to take out administration here before they could proceed. The demand against Ivers or the defendant [J. L. Austin] is not a demand which accrued in Trecothick’s lifetime, or out of any contract with him. But it is a demand which accrued under agencies created by them, in their character as executors, after the death of Trecothick. They might, under such circumstances, have maintained a suit in their own names for an account against their agent, and need not have sued in their representative capacity. See Cockerill v. Kynaston, 4 Term R. 280; Cowell v. Watts, 6 East, 405; Thompson v. Stent, 1 Taunt. 322; Toll, Ex’rs, bk. 3, c. 10, p. 439. The agent would be estopped to deny their right to receive what he had collected in virtue of their authority. See Nickolson v. Knowles, 5 Madd. 47; 10 Vin. Abr. ‘Estoppel,’ M; 2 Comp. 11.” In Lawrence v. Lawrence, 3 Barb. Ch. (N. Y.) 71, Chancellor Walworth said: “As a general rule, a foreign executor is not entitled to sue in our courts without having proved the will and taken out letters testamentary thereon in the proper probate court of this state. These rules, however, are only applicable to suits brought by executors for debts due to the testator, or where the foundation of the suit was based upon some transaction with the testator in his lifetime. They do not prevent a foreign executor from suing In our courts upon a contract made with himself as such executor.” To the same effect are Fox v. Tay, 89 Cal. 339, 24 Pac. 855, 26 Pac. 897, 23 Am. St. Rep. 474; State v. Kaime, 4 Mo. App. 479; Tyer v. Milling Co., 32 S. C. 598, 10 S. E. 1067; Lewis v. Adams, 70 Cal. 403, 11 Pac. 833, 59 Am. Rep. 423; Barton v. Higgins, 4 Md. 539; Rogers v. Hatch, 8 Nev. 35; Wayland v. Porterfield’s Ex’r, 58 Ky. 638; Barrett v. Barrett, 8 Me. 346; Trotter v. White, 18 Miss. (10 Smedes & M.) 607; Johnston v. Wallis, 41 Hun, 420; Terrell v. Crane, — 675 — 55 Tex. 81; Griswold v. Railroad Co., 9 Fed. 797, 798; Goodyear v. Hullihan, 2 Hughes, 492, Fed. Cas. No. 5,573. In the case at bar the cause of action did not exist in the lifetime of the deceased. The proceeds of the sale sued for were never assets of her estate. The employment of defendants as agents to make the sale of the land was by the plaintiffs as executors. The right to recover the avails of any such sale accrued directly to the plaintiffs, and they were authorized to assert it in Iowa without procuring new letters in that state. 2. The allowance of the amendment of the petition was within the discretion of the trial court. The defendants did not suggest to the court that they were taken by surprise, and request additional time to meet the interpolated averment. It is claimed by them that the amendment changed the proceeding from an action at law to a suit in equity, but we are unable to concur in that view.- If, as was charged, the defendants, whilst their agency subsisted, purchased for themselves the land of their principals, using the name of another for that purpose, and resold the same at a higher price, the benefit of the resale inured to the principals, and an action at law was maintainable for the profit which was received and retained. 3. Complaint is made that the trial court ignored the jury, sustained a motion for judgment, and rendered judgment thereon, without the mediation of a verdict. The record, however, does not sustain this contention. The journal entry, which imports verity, recites that the plaintiffs moved the court to instruct the jury to return a verdict; that the motion was sustained by the court; that, under the instruction of the court, the jury returned a verdict; and upon that verdict the judgment was rendered. While the usual and the better practice, where the result is determined by the court as matter of law, is that a formal verdict in writing be returned by the jury, the absence thereof is not fatal to the validity of the proceedings. Cahill v. Railway, 74 Fed. 285, 20 C. C. A. 184. 4. Bearing in mind the rules that control a court in its duty to submit controverted questions of fact in an action at law to the jury, arid in its duty, equally imperative, to direct a verdict when the state of the proofs requires it, we are of the opinion that the action of the Circuit Court was right. It was shown conclusively that the relation of principal and agent between the plaintiffs and the defendants did not cease with the preparation and signing of the contract of sale with Gray. The defendants had expressly agreed that, for the compensation which they were to receive, they would look after the interests of the plaintiffs until the business was concluded and the money fully paid. Moreover, the contract of sale which was signed by them as agents of the plaintiffs contained an unauthorized provision binding the latter to the execution of a warranty deed to Gray. In that condition it was unenforceable against the plaintiffs, nor did Gray at any time before the defendants took, his place in the transaction so obligate himself that the plaintiffs could have held him to a purchase. The matter proceeded with the important condition respecting the character of the deed left un — 676 — settled and undetermined by any obligatory writing signed by Gray, down to the time the notes, mortgage, and the cash payment were sent to the plaintiffs, and possibly to the time when, two months later, they struck from the proposed deed the clause of warranty, and executed and returned it to the defendants. But before either of these things were done, Gray, the grantee in the deed, had ceased to have or claim any interest whatever in the property. Before the notes and mortgage were sent to plaintiffs, and before the payment on the purchase price was made, and whilst the trust relation between the plaintiffs and defendants existed, Gray came to the latter, and expressed regret at having made the purchase, and a desire to withdraw therefrom. This was an important fact materially affecting the interests of the plaintiffs, and of which they were entitled to be fully and fairly advised by their agents. Whatever of benefit under the circumstances might accrue from the willingness of Gray to abandon his purchase or attempted purchase ought not to have been secretly reserved by the agents for their own advantage. They were bound to the utmost good faith, and to the subordination of their own interests to those of their principals. Facts then within the knowledge of the defendants evidenced fit least a probability that a higher price could be secured for the land than Gray was to pay, and the defendants did pay as his successors. It will not do to draw lines too nicely to aid agents who have, during the existence of their relation of trust and confidence, assumed a position with reference to the business in their charge which is antagonistic to their principals. What we have said concerning the state of the negotiations when the defendants took the place of Gray in the purchase indicates a clear distinction between the case at bar and that of Robertson v. Chapman, 152 U. S. 673, 14 Sup. Ct. 741, 38 L. Ed. 592, upon which reliance is placed. In that case the court said: “The sale to O’Donohoe was so far consummated that neither party was at liberty to undo what had been done. O’Donohoe executed his notes for the deferred payments, and, his wife uniting with him, gave a mortgage to secure them. The notes and mortgage were delivered to and accepted by the plaintiff, who executed a deed to O’Donohoe, and placed it in the hands of Polk, to be delivered to O’Donohoe whenever a decree for the sale of the property was obtained, and upon the payment of the $1,000 stipulated to be paid in cash. So that, at the time Polk took the property from O’Donohoe, it was not in the power either of the plaintiff or of O’Donohoe to rescind the contract between themselves, and Polk’s agency for the sale of the property had, in every material sense, terminated. Nothing then stood in the way either of O’Donohoe’s agreeing that Polk should take the property, or of Polk’s becoming a purchaser from him. If the sale to O’Donohoe was an actual sale, in good faith, so far as Polk had any agency in effecting it—if the contract between the plaintiff and O’Donohoe had been so far executed at the time Polk took O’Donohoe’s place in the purchase that it could not be rescinded by either party to it—then Polk’s agency in selling the property did not prevent him from purchasing from O’Donohoe.” The foregoing being sufficient for the disposition of this contention of the defendants, we need not determine whether, aside from the nonexistence of a binding contract of sale when the rights of Gray were taken over by the defendants, the action of the Circuit — 677 — Court was or was not justified by other features of the case. The sale finally made by the defendants at the advanced price should therefore be held to have been made by them as agents, and for the benefit of their principals. The judgment of the Circuit Court is affirmed.