Griffith v. Godey/Opinion of the Court

It is well established that a settlement of an administrator's account, by the decree of a probate court, does not conclude as to property accidentally or fraudulently withheld from the account. If the property be omitted by mistake, or be subsequently discovered, a court of equity may exercise its jurisdiction in the premises, and take such action as justice to the heirs of the deceased, or to the creditors of the estate, may require, even if the probate court might, in such case, open its decree and administer upon the omitted property. And a fraudulent concealment of property, or a fraudulent disposition of it, is a general and always existing ground for the interposition of equity. Here, all the property of which the defendant Godey, as administrator of the deceased, took possession, belonged to the partnership of which the complainant was the surviving partner. The portion coming to the deceased was merely the one undivided half after payment of the debts of the partnership. Only upon such portion could the court properly authorize administration. The administrator, however, interpreted the consent of the complainant that he might settle the estate of the deceased as authority to take the whole partnership property under his control equally as if it were the separate property of the deceased, though the consent expressly reserves the rights of the complainant as surviving partner. The complainant, it appears, was a man of weak intellect, without any knowledge of business and hardly able to read and write; and it is evident that he was ignorant of the nature and extent of his rights over the partnership property after the death of his brother, who had had the principal management of it. Under such circumstances, the administrator was bound to the utmost good faith in his dealings with the property, and should be held, in its disposition, to the responsibilities of a trustee of the complainant, though we leave the proceedings of the probate court undisturbed.

The cattle range, which constituted the property of greatest value belonging to the partnership, was not taken possession of by the administrator, though by the law of California, then in force, all property of an intestate, real or personal, went into the hands of that officer for purposes of administration. Curtis v. Sutter, 15 Cal. 259, 264. He plainly had a design to secure the range to himself at a trifling cost, knowing that a large price was offered for it, and could at any time be obtained. The whole administration seems to have been conducted by him to carry out this design. He first takes steps to have the cattle and horses of the partnership sold as perishable property, upon the representation that they were likely to decrease in value, become worse by keeping, and were subject to loss and expense, and therefore that their sale would be best for the estate; yet he well knew that a sale of the cattle separate from the range would be much less advantageous than with it; and the falsehood of the alleged necessity appears from the fact that the range was amply sufficient for the support of the cattle, and that they were never removed from it. He next persuades the complainant to declare his intention to become a citizen, and to file a claim to 160 acres of the range, inclosing the springs, and then obtains a deed from him for the trifling consideration of $500. The complainant alleges that he never knew the contents of the instrument he signed and never received the consideration named. But, assuming that he is mistaken in this particular, he was not informed of the value of the range; nothing was said to him of the price offered for it, and which Godey knew was ready to be again offered.

No sooner was this coveyance obtained than Godey opened communication with Altube, offering to sell the range and stock for $13,000. The offer was accepted on a condition which was complied with by an expenditure of $500. A sale was then effected, and the $13,000 paid to the defendants, and, as if to show that the transaction was the result of a conspiracy, the proceeds were equally divided between them. It was a case of deception and fraud practiced upon a man of weak intellect, and the rule which is stated in Allore v. Jewell, 94 U.S. 511, to be settled law is applicable: 'That wherever there is great weakness of mind in a person giving a conveyance of land, arising from age, sickness, or any other cause, though not amounting to absolute disqualification, and the consideration given for the property is grossly inadequate, a court of equity will, upon proper and reasonable application of the injured party, or his representatives or heirs, interfere and set the conveyance aside.' The complainant does not ask to have the conveyance to Godey set aside, but he asks that Godey may be compelled to account to him for the amount received for the property of which he had thus fraudulently obtained a conveyance.

It is plain, also, that the defendant Williams participated in the fraudulent design. He never paid anything on his bid for the horses and cattle at the probate sale until weeks afterwards, and then less than one-fourth of the amount. It was not until after the cattle and horses were purchased by Altube that he paid the balance, although he knew that the probate sale could be made only for cash, and that the amount bid by him had been reported to the court as cash paid. He knew, also, that the property did not belong to the deceased, but to the partnership between him and the complainant, and that the latter had not relinquished his partnership rights. He therefore took the property with notice of those rights, and of the relation as trustee which the administrator bore to the complainant. The record shows that all the partnership property was sold within six months after the death of the deceased, so as to net over $12,000, and that out of that sum the complainant received only $500. The defendants made a large profit out of the transactions, which they divided between them. They should therefore be required to account to the complainant, as surviving partner of the deceased, for their unjust gains. In such accounting, they should be charged with the amount received by them from the sale to Altube, and be credited with the amount paid by defendant Williams at the probate sale, the sum of $500 paid by defendant Godey for the conveyance of the possessory claim, and the $500 paid to remove the squatter from the land; the balance to draw interest until decree.

The error of the court below arose from treating the possessory right to the cattle range on the public lands-as it was then held by the partnership on the death of John Griffith-as not constituting any property of value which could be recognized as such by the courts, the claimants being both aliens who had never taken any steps to be naturalized. But the constitution of California, then in force, invested foreigners who were bona fide residents of the state with the same rights, in respect to the possession and enjoyment of property, a native-born citizens. Article 1, § 17. And the possessory right to the range, though held by aliens, was respected by their neighbors and all cattle dealers of the country, and had a market value, as shown by the price which others were ready to pay for it. The responsibility of trustees does not depend upon the validity of the title of the grantor of the trust property. If the right or interest transferred to them can be sold for a valuable consideration, it is to be treated as property, and corresponding duties devolve upon the trustees with respect to its sale as upon the sale of property, the title of which is undisputed.

The decree of the court below must be reversed, and the cause remanded, with directions to enter a decree in conformity with this opinion; and it is so ordered.