Summary
holding that the sale of estate assets to an executor's spouse is "not void."
Summary of this case from Verhoff v. VerhoffOpinion
No. 36204
Decided June 15, 1960.
Executors and administrators — Sale of estate property by administrator to his spouse — Voidable at election of heirs — Action to so void — Defense of laches applicable, when.
1. A sale of estate property by an administrator to his spouse is voidable at the election of the heirs.
2. In an equitable action by an heir to set aside such a sale, the defense of laches is applicable to such an heir who, with full knowledge of the circumstances of the sale and subsequent events, delays the filing of his action for a period of 17 years.
APPEAL from the Court of Appeals for Clermont County.
In the Court of Common Pleas this action was instituted by the two plaintiffs as heirs of Louis E. Christman who died intestate on October 18, 1933.
Two of the numerous defendants are a son of the decedent and this son's wife. This son was appointed administrator de bonis non of his father's estate, included in which was a tract of approximately 101 acres of land.
On January 18, 1940, by order of the Court of Probate, the defendant son, as administrator, was authorized to sell the land at private sale for not less than the appraised value of $4,000. Thereafter on February 6, 1940, he sold the land to his wife for that price and accordingly executed a deed to her four days later. The sale was confirmed by the Court of Probate, and no exception was filed thereto although the plaintiffs lived in the neighborhood and knew of the transaction.
Seventeen years and eight months subsequent to the sale, the plaintiff heirs filed this suit to set aside the administrator's deed on the ground "that the said sale was contrary to Section 10506-49 of the General Code of Ohio (now Section 2109.44 of the Revised Code of Ohio) and was in violation of his duties as fiduciary, and that the said sale is void and of no force and effect."
The Court of Common Pleas held in part:
"Upon due consideration thereof, the court finds that the plaintiffs have slept upon their rights and have been guilty of laches, causing the defendant Ethel L. Christman to change her position in regard to said real estate by making valuable and extensive improvements on the real estate in the petition described. The court further finds that she, Ethel L. Christman, had sold numerous lots to other persons since the year 1951, who had been innocent purchasers for value thereof, and that many of them have made valuable improvements on said lots so purchased by them from Ethel L. Christman. The court also finds that the plaintiffs' cause of action is barred by the statute of limitations, to wit: R.C. 2305.09."
On the plaintiffs' appeal to the Court of Appeals on questions of law and fact, that court found "that the plaintiffs have slept upon their rights and have lost whatever rights they might have had by reason of laches and that the equities in this case favor the defendants."
The cause is in this court for a review by reason of the allowance of the plaintiffs' motion to certify the record.
Messrs. Nichols, Speidel Nichols, for appellants.
Messrs. Ely, White Davidson and Mr. John S. Moore, for appellees.
In its opinion the Court of Appeals made the following comment:
"The trial court held, that under the circumstances, plaintiffs were guilty of laches; that the statute of limitations, Section 2305.09, Revised Code, applies because the gist of the suit is based on fraud; that four years having elapsed, plaintiffs can not now maintain their suit. It is unnecessary to pass upon the statute of limitations. What has given this court the most difficulty is the case of Magee v. Troutwine, 166 Ohio St. 466, 143 N.E.2d 581. This case holds that: `Where a Probate Court issues an order for the private sale of realty by the administratrix of an estate and she then makes such a sale to her spouse, the sale is voidable at the election of the heirs.' (Emphasis added.) This is exactly the factual situation in the case at bar, except that, here, the husband is the administrator and he conveyed to his wife. We have read and studied the Magee case and nowhere does it appear that the claim of laches was raised. It is suggested in the second last paragraph of Chief Justice Weygandt's opinion that, `Inasmuch as this is a chancery action, the trial court has plenary jurisdiction to render a decree in conformity with the equities of the matter.' We are wondering what the decision of the Supreme Court might have been if the defense of laches had been set up. This court has `plenary jurisdiction' to apply all of the rules of equity in determining what decree should be entered here. It is fundamental that he who seeks equity must do equity, and that he must come into court with clean hands. There is no doubt that the sale to Christman's wife was improper, and that the brother and sister could have set aside the sale at the time it was made, or within a reasonable time thereafter. But may they, with full knowledge, sit by for 17 years, and, in the face of what has happened to this property, claim relief in equity? The Supreme Court said in the Magee case that the sale was voidable, not void; that the defendants were entitled to the application of all the rules of equity. Laches is one of those rules. In our opinion, the equities in this case favor the defendants."
The foregoing analysis of the Magee case by the Court of Appeals is apt and conclusive. That and the instant case are readily distinguishable. In that case there is no mention of the matter of laches, while here it is the paramount issue. In this case, it was discussed by the Court of Common Pleas, by the Court of Appeals and by counsel in their briefs in all three courts. The applicability of this salutary equitable principle to the particular circumstances of this case seems too patent for cavil. The plaintiffs are a sister and a brother of the defendant administrator and recommended his appointment; they lived in the neighborhood; they knew that their brother was living on the old family farm; they visited their brother on the farm; they knew of the sale; they filed no exception thereto; they observed valuable improvements made by their brother and his wife on the land, part of which was allotted and sold to many different innocent purchasers for different purposes including the construction of a public school building; and they watched these events transpire for a period of more than 17 years before taking this action which is equitable in nature. This is hardly a situation justifying the intervention of a chancellor.
The judgment of the Court of Appeals is affirmed.
Judgment affirmed.
ZIMMERMAN, TAFT, MATTHIAS, BELL, HERBERT and PECK, JJ., concur.