Opinion
No. 31586.
March 11, 1935.
1. EXECUTORS AND ADMINISTRATORS.
Since judgment fraudulently obtained may be set aside, court, notwithstanding approval of administrator's sale of intestate's merchandise, properly required administrator to charge himself with true value of merchandise which administrator sold and subsequently repurchased after fraudulently inducing widow not to bid.
2. EXECUTORS AND ADMINISTRATORS.
Since heirs under statute could challenge administrator's final steps until two years after final account was approved, judgment approving administrator's sale was interlocutory, and hence court at subsequent term could require administrator to charge himself with true value of merchandise sold and subsequently repurchased by administrator after fraudulently inducing widow not to bid (Code 1930, section 1744).
APPEAL from the chancery court of Calhoun county.
HON. N.R. SLEDGE, Chancellor.
Proceeding wherein Earl Rea, administrator of the estate of J.D. Rea, deceased, was cited to show cause why he should not be removed. The chancellor removed such administrator and appointed Sam Smith as administrator, and directed the former administrator to file a final account, and the former administrator appeals. Affirmed.
C.A. Bratton, of Oxford, for appellant.
The court had no right, under the law, to set aside the sale that he had confirmed, after the adjournment of the court in which he had rendered the decree.
Griffith Mississippi Practice, sec. 621; Cole v. Miller, 21 Miss. 229; Kimball v. Alcorn, 45 Miss. 150; Ex Parte Stanfield, 53 So. 538.
The proof in this case showed conclusively that the stock of merchandise did bring its fair market value.
W.J. Evans, of Calhoun City, and Joe H. Ford, of Houston, for appellee.
The only questions raised on this appeal are purely questions of fact which were passed on by the chancellor on the trial of the issues in the court below. Before this court can reverse the holding of the lower court on the only two issues raised on this appeal, this court will have to say that the findings of fact on the conflicting evidence on those issues by the chancellor were manifestly wrong.
A. V.R. Co. v. Bolding, 69 Miss. 255, 13 So. 844, 30 Am. St. Rep. 541; Kemp v. Turnman, 104 Miss. 501, 61 So. 548; Aldridge v. Bogue Phalia Drainage District, 106 Miss. 626, 64 So. 377; Brooks-Scanlon Co. v. Stogner, 114 Miss. 736, 75 So. 596; Aaron v. Citizens' Insurance Co., 144 Miss. 480, 110 So. 120; Ellis v. S. Pellegrini, Inc., 163 Miss. 385, 141 So. 273.
When appellant became the indirect purchaser of this stock of goods at his sale thereof, he violated the very terms of the statute itself.
Section 1799, Hemingway's 1927 Code; Section 1687, Code of 1930.
The purchase by an administrator at his own sale under the statute is at least voidable at the instance of the heirs and parties interested in the estate.
Main v. McGee, 1 S. M. 208; Bland v. Muncaster, 24 Miss. 62; McAnulty v. Hodges, 33 Miss. 579; 24 C.J. 217; McGowen v. McGowen, 48 Miss. 553; Chapman v. Sims, 53 Miss. 154; Myer v. Myer, 106 Miss. 638, 64 So. 420; 11 R.C.L. 358, 363, pars. 423, 429; 24 C.J. 121, par. 570; 24 C.J. 121, par. 571; 24 C.J. 122, par. 573; 24 C.J. 174, par. 656; 24 C.J. 175, par. 658; 24 C.J. 219, pars. 740, 741; 24 C.J. 635, par. 1591.
The court below held appellant in this case liable for the actual value of the stock of goods purchased by him at his own sale as administrator and taken over by him in the very face of the statute forbidding him to do so.
Argued orally by C.A. Bratton, for appellant.
In the early part of the year 1927, J.D. Rea, a citizen of Calhoun county, died intestate, and shortly thereafter Earl Rea was appointed administrator of his estate. Among other assets of his estate was a stock of merchandise in the village of Sarepta in said county. On or about April 18, 1927, a petition was filed by Earl Rea, both as administrator and as an individual heir of J.D. Rea, for the sale of said stock of goods in bulk, and joined in said petition the widow of said J.D. Rea, his stepmother, and her minor children, alleging in said petition that the sale would be for the best interest of said estate as it would convert the stock of goods into money, which would be better than to attempt the continuation of the business.
The chancery court ordered the sale to be made, which was done, and the stock was ostensibly purchased by one Edwards for nine hundred dollars. About two months later Edwards transferred the stock of goods to Earl Rea for a purported consideration. An inventory showed the stock of goods to be worth more than two thousand dollars. Thereafter, the administrator, being in default in making a report of his administration, was cited to appear and show cause why he should not be removed as administrator, and, at said hearing, the widow of J.D. Rea testified that she did not consent to be joined in the petition for the sale of the stock of goods, and that the sale was for the purpose of defeating her rights, and that Earl Rea had promised, after the sale was ordered, to buy the stock of goods in for her, but that he procured Edwards to buy the stock for his own benefit, and no money passed, and that the sale was made, in fact, to the administrator for an inadequate consideration, and that he had, by misrepresentations, induced her not to appear and bid for herself, telling her he would procure the stock of goods for her at the least possible price, but after the sale he represented to her that he had been advised that he could not bid on it. The brother of the widow of the deceased testifed that he came down from his home near Blue Mountain for the purpose of bidding on the stock of goods, and that his sister told him that the appellant was going to bid the stock in for her, and, for that reason, he did not appear at the sale and bid as he intended to do.
It was proven that another merchant living at Sarepta bid eight hundred fifty dollars for the stock of goods. There was testimony that the stock of goods was worth at least five hundred seventy-five dollars more than the amount bid for it.
The widow also contested the account filed on the ground that the rent for the building had not been charged therein, and that it was worth ten dollars per month. There was other testimony placing the rent at from five to six dollars per month, and some as low as three to three dollars and fifty cents per month.
The appellant testified that he did not put the money paid him by Edwards into any bank or depository, and that he used it promptly in paying obligations, including some of his own, having been advised by some attorney that it would be all right, so long as he had the money when he was called to pay it over.
The chancellor removed the appellant as administrator, and appointed Sam Smith, the appellee here, in his stead, directing said Earl Rea to file a final account charging himself with rent at six dollars and fifty cents per month, and also with an item of forty-five dollars collected from another party and not reported, and for an additional amount of five hundred seventy-five dollars on the value of the stock of goods sold at the above-mentioned sale.
It is argued that the court had approved the administrator's sale, and that term of court had been adjourned, and that the court did not have the power to change its approval of said sale, and that said judgment had become final and beyond the control of the court.
There was ample proof to justify the decree of the chancellor finding that the sale was procured through fraudulent and unauthorized representations, and that the goods at the sale were really purchased for the appellant rather than for Edwards, and it is familiar law that a court may set aside a judgment obtained by fraud.
We also think the court had full control over the administrator, and that, under section 1744, Code 1930, the heirs could challenge the final steps of the administrator until the expiration of two years after the final account was approved. The judgment, therefore, approving the sale was interlocutory rather than a final judgment.
We find no reversible error, and the decree of the court below will be affirmed.
Affirmed.