Smith v. Worthington

SHIRAS, District Judge, (after stating tbe facts.) Counsel for the appellants, in tbe brief and argument submitted by them, bave very fully discussed tbe several provisions of tbe statutes of Arkansas regulating tbe method of administering tbe estates of decedents, and bave pointed out tbe various proceedings bad in tbe course of tbe .administration of this estate, which, it is claimed, were without warrant of law. These may be grouped under five general beads, as follows: First, there was no authority in law for tbe orders made touching tbe renting from year to year tbe realty belonging to tbe ■estate, nor for incurring expense in repairing tbe fences and cabins upon the plantations, nor for any of tbe expense created thereby; second, tbe allowances made from year to year for tbe traveling ex- ' penses, commissions, and extra compensation to tbe administrators were illegal and fraudulent; third, there was no authority in law for tbe order providing for the sale of tbe realty; fourth, there were •omissions in tbe annual accounts of tbe administrators of property •or money with wbicb they should bave charged themselves; fifth, tbe settlement of tbe estate, instead of being closed up within tbe statutory period, was prolonged for years, to tbe detriment of tbe heirs, and to tbe benefit of tbe administrators. To obtain relief in a court of chancery in cases of this kind, it is not sufficient for tbe complainant to show that in tbe progress of tbe administration, as conducted and controlled by tbe proper probate court, errors both of law and fact may bave been committed. Thus in Jones v. Graham, 36 Ark. 383-401, it is said that— “All persons interested in the action of the administrator, to he affected by his. settlement, are charged with due notice of its filing. They are required to follow the regular statutory proceedings of the probate court; and taire notice of what may affect them. Administrations must, perforce, go through these — 981 — courts; and they would he attended with additional hardships, delays and expense, if special notice to every one interested was required. * * * There are many allowances of an improper nature, especially concerning attorney’s and agent’s fees, and, as already noticed, commissions. The court seems to have been more liberal to the administrator than is consistent with a due regard to the rights of the heirs and distributees. These objectionable points, except as above stated, all range themselves under the class of errors. There is very little of a material nature which might not have been corrected at the time, or prevented, if the guardians of the children, or their mother, or any friend, had taken an interest in their affairs. The error should have been corrected by appeal, cr some other supervisory proceeding.” In Grocery Co. v. Graves, 43 Ark. 171, the court said: “This is a hill in chancery to open an administrator’s account, which has 5>een confirmed by the probate court, for alleged fraud in obtaining credits for traveling expenses while on business of the estate, and for excessive commissions. It was stated that the clerk had omitted to give notice of the filing of said account The hill was dismissed on demurrer. It is the settled doctrine of lilis court that mere errors of the prohalo courts in making allowances to administrators can he corrected only on appeal, and that they afford no ground /or impeaching the settlements iu a court of chancery. Ragsdale v. Stuart, 8 Ark. 268; Ringgold v. Stone, 20 Ark. 527; Mock v. Pleasants, 34 Ark. 64; Jones v. Graham, 36 Ark. 383. There is no pretense that these allowances wore obtained by misrepresentation, deception, or imposition upon the court, hut only «hat they were illegal. It is a very great irregularity for the probate court i o confirm an administrator's account before the notice prescribed by law has been given. 'But the clerk's omission of his duty does not render the account fraudulent.” Without attempting an exhaustive definition of the grounds necessary to exist to sustain a bill in equity to set aside the judgments and. orders of a court acting within the general lines of its jurisdiction, it may he said, generally, that it must appear that, in obtaining the judgment complained of, fraud has been- practiced upon the court rendering the judgment, or upon th^party complaining of the judgment, whereby he was'prevented. from appearing or being heard, or was kept in ignorance of some material matter, and thereby prevented from, properly securing'his rights; and, futhermore, it must appear that the party invoking the aid of the court of equity is himself free from, fault or negligence. Insurance Co. v. Hodgson, 7 Cranch, 332; U. S. v. Throckmorton, 98 U. S. 61. Under the provisions of the statutes of Arkansas regulating the administration'of estates, the heirs and others interested therein are bound to take notice of the filing of the reports made annually, and the other statutory steps taken in the regular course of administration. Thejjv have the right to appear and be heat'd in the probate court for the protection of their rights, and they can invoke the aid of that count in controlling the action of the administrator, and by appeal or otherwise can invoke, also, the supervisory control of the supreme c/ourt of ihe state, so that ample provision is made for the protection/ of the rights of all parties interested in estates. The provisions bpas made for the benefit of those interested in estates are not, howe/er> self-acting or self-executing. To be available they must be set in/ motion by those for whose protection they are created; and un1<;SS ¿prevented from so doing by some fraud, deception, accident, or mís*ake, a failure to avail one’s self of these statutory methods will — 982 — be deemed to be negligence, and to be a bar to invoking the aid of a court of chancery. In the light of these general rules, let us examine briefly the several grounds relied upon by complainants for invoking equitable revision of the administration proceedings connected with the estate of Elisha Worthington. It is said that there was no authority in law for the orders made for the renting, from year to year, of the realty belonging to the estate, nor for the incurring the expenses caused thereby; that the power of the probate court is merely to subject the lands to the payment of the debts due at the time of the death of the intestate; and that the heirs, subject to the rights of creditors, are entitled to the rents and profits of the realty. Granting that such is the law, the record shows that the complainants did not assert their rights at the proper time. The evidence shows that at the time of the death of Elisha Worthington, the plantations owned by him were in bad condition. The levees needed for their ' protection were greatly injured, and no rents or profits could be expected therefrom, unless outlays wei*e made thereon, and care and supervision over the same were strictly exercised. ’ The record shows that the heirs of the deceased were very numerous, numbering at least 40, and “widely scattered. It also appears that when the letters of administration were issued, in November, 1873, there was a family meeting at which there were representatives of four fifths of the interests in the estate, and at this meeting it was agreed that E. T. Worthington and Isaac M. Worthington should be appointed administrators, one of whom was to reside upon the realty, and have the active management thereof, and for his services was to be paid such sum, in addition to the statutory commissions, as might be fixed by the probate court.' — There'cprtainly appears nothing illegal or inequitable-in thé arrangement thfiSvagreed upon. Certainly those who were present, and consented theret%should be bound by it; and those who were not then represente^'but who have for years acquiesced in what was then done, and whoViever expressed dissatisfaction with the action then taken, should nowgbe held equally bound. Until the bill was filed in the present case, in'jRecember, 1885, more than 12 years after this arrangement was made, -not a single one of the heirs of Elisha Worthington made any objection to the action taken, or expressed even a wish for a change in tlit\uianagement of the property of the estate. If no letters of administration had ever been taken out, but this family meeting had been held\in November, 1873, - and E. T. Worthington and Isaac M. Worthington had been selected to take charge of the property in the interest of ah the heirs, and they had in fact done so, and had continued such management for a period of 12 years, without let or hindrance, certainly & court of equity, if then appealed to, could not rightfully ignore tl\e family arrangement thus entered into, and acquiesced in for so manty years, and treat the parties who had undertaken the supervision of tl\e property as wrongdoers from the beginning. On the contrary, it\ would be the duty of the court to recognize this arrangement as valid, Vncl to settle the rights of the parties accordingly. Certainly the legality °f the arrangement made for the management of the property wap not vitiated because the parties intrusted with tbe management oil the — 983 — realty were appointed the administrators of the estate, and thereby became subject to the control of (he probate court,. The action of the probate court in regard to the renting of the realty, thus recognizing the family agreement entered into, cannot be excepted to on the ground of a want of authority in the court to control the real estate, and its rents and profits, as against, the heirs, for in so doing it was simply recognizing the action taken by the heirs for the protection of their interests in the realty. In connection with this general subject, the action of the administrators in selling certain mules to the teuants on the realty, in order that they might be enabled to make a crop, and the order of the probate court authorizing such action, are vigorously assailed as without warrant of law, because the st,atufes of Arkansas require the personalty to be sold at public auction. Such action could aii'ect only two classes of persons interested in the estate, to wit, creditors and the heirs. All the debts of the estate have been paid in full, and the creditors have never objected to this action on part of the court and the administrators. By the family arrangement already referred to, the administrators undertook the management of the realty. The cultivation of the plantations, whether done directly by the administrators, or indirectly through tenants, would require the use of mules. If the mules already on tho plantations were sold at puolie auction to third parties, the administrators would be compelled to supply (heir places witti others, or the crop could not be raised. It is not made to appear that any loss was caused to the heirs by the action complained of; and certainly the administrators, acting as trustees for the heirs under the arrangement, already described, cannot be held liable for the value of the mules, when it does not appear that the heirs have not received the full value thereof. The second general ground of exception to the action of the probate court and the administrators in the settling of the estate is that excessive commissions and allowances for traveling expenses and for extra, compensation to the administrators were authorized by the court. The amounts to be allowed for commissions, traveling expenses, and counsel fees for defending the suits against the estate were all matters clearly within the jurisdiction of the probate court; and its action therein cannot be impeached in a court of equity, except it appears that the probate court was imposed upon, or that tho heirs were fraudulenly misled or deceived in regard thereto, so that they were deprived of the opportunity to be beard in the probate court. There is nothing in the evidence upon which, to found the claim that either the court or the heirs were fraudulently deceived in regard to these matters; and, as no appeal was taken from the orders of the court in readjusting and settling the annual reports of the administrators, the same are conclusive. In regard to the allowances made from time to time for extra compensation to the administrators, acting in the capacity of trustees for the heirs in the management of the realty, no ground for equitable relief against the same is shown in the evidence. It had been agreed that the trustees should he paid such sum as the probate court would allow as proper compensation. From year — 984 — to year the allowance was made without objection from any one. The evidence justifies the finding that the heirs had agreed to the payment of a proper sum to be fixed by the probate court. That court has fixed the amount in settling the annual accounts, and no one has excepted thereto. It is a general rule of equity that in settling trusts, the court may allow proper compensation for services rendered by a trustee. Lent v. Howard, 89 N. Y. 179; Bendey v. Townsend, 109 U. S. 665, 3 Sup. Ct. Rep. 482. The third ground relied upon for equitable relief is that there was no authority in law for the order providing for the sale of the realty. In the amendment filed to the bill the complainants withdrew that part of the prayer for relief which asked that the sale of the lands might be set aside for fraud, and that they be sold under the direction of this court, and that the administrators be charged with the reasonable rents of the lands while in their possession. In cases of sales actually ordered and had, but without sufficient authority therefor, the owners of the realty may waive the question of authority, and affirm the sale, and this is the effect of the amendment to the bill in this instance. The sale being affirmed, it stands as though there had been originally sufficient authority for making it, and the owners of the realty are remitted to the proceeds realized, unless possibly in cases wherein it is proven that the property was sacrificed ‘ wrongfully by the trustee, and where in fact it appears that the trustee was interested in the purchase. It is charged in the bill that Isaac M. Worthington was in fact interested in the purchase made of the realty by W. W. Ford, and that the same was sold for less than its fair value, but there is no sufficient evidence to support these allegations. The lands were appraised by three appraisers at $21,038, and were sold to Ford for the sum of $25,815. Ford testifies that he bought the lands at the administrators’ sale, and that he afterwards sold Isaac M. Worthington a half interest therein. The evidence wholly fails to shows that the lands did not sell for all they were worth, or that the administrator was interested in the purchase made by Ford. There is nothing, therefore, made to appear which would justify a court of equity in charging the- trustee for any sum greater than that he in fact received from the purchaser of the realty, and which he reported to, and accounted for in his settlement of the estate in, the probate court. In regard to the- fourth and fifth grounds of attack upon the settlement of the estate, to wit, that there were omissions in the annual accounts of the administrators, and that the settlement of the estate was prolonged beyond the statutory period, for the benefit of the administrators, it is sufficient to say that there is not evidence of any fraudulent omission to account for property, of such a nature as to justify a court of equity in opening up the administrators’ accounts, and certainly no action can be taken in the courts of the United States to compel the closing of an administration. Whether there are circumstances which require the keeping open of an estate is primarily for the probate court to determine, and its action can be controlled by the state courts having direct supervisory power over it. — 985 — If the complainants herein desired to bring about a more prompt administration of Oils estate, the way was open to them hy proper action in the state courts. Having neglected to avail themselves of the proper remedy, they cannot complain in this court of the results of the delay, for which they are partly responsible. In fact it may be said generally of tbe attack made upon tbe proceedings connected with the settlement of the estate now in question that it is largely based upon matters which were entirely within the control and discretion of the probate court in the first instance. It appears more than possible that many of the criticisms made upon the action of the administrators have good foundation, and if exception had been taken thereto at the proper time, and in the proper court, much that is now complained of might have been avoided. We agree in general with the views advanced hy counsel touching the evil of allowing estates to remain open without good reason, and in condemning the absorption of tbe properly of (‘states in useless expenditures and liberal allowances for commissions and the like; hut the remedy for such evils does not lie in encouraging the parties Ínteres! ed in the estate to remain inactive for years, and then, when the estate has been finally wound up by the probata court, to maintain a, bill in equity against the administrator and his sureties, which; In effect only proposes to reinvestigate and resettle the accounts of the administrator, which have already been passed upon and ap-j proved by tbe court primarily charged with that duty. The remedy! for these evils, as is pointed out by the supreme court of Arkansas, consists in the exercise of diligence and watchfulness on the part of those interested in the estate, whereby all mistakes or wrongs can be promptly righted, and an effectual remedy he provided against; the recurrence thereof in the future. ; Under the facts developed in the evidence in this case, we find no, sufficient ground calling for the interposition of a court of equity in setting aside the order of the probate court; discharging the administrator and his sureties from further liability and in undertaking to restate tbe accounts passed upon by that court. The decree of the circuit court, dismissing the bill on the merits, is therefore affirmed, at costs of appellants.