Highsmith v. . Whitehurst , 120 N.C. 123 ( 1897 )

In January, 1883, B. C. Highsmith died intestate, and soon thereafter (9 April, 1883), the defendant M. D. Whitehurst was appointed and qualified as his administrator. There being an insufficiency of personal assets to pay the indebtedness of his intestate, the defendant administrator applied for and obtained an order to sell the real estate. The proceedings to obtain this order for the sale of land was put in evidence and is made a part of the case on appeal. And while it is not as formal as it might have been, it appears to have been substantially correct and authorized the defendant administrator to sell the land. This he proceeded to do on 3 December, 1883, when the defendant Barnhill bid it off for the defendant administrator at the price of $1,211.

This sale was reported by the administrator and confirmed by the Court, and the defendant administrator has since the sale made a deed to Barnhill and Barnhill has made a deed to W. D. Whitehurst, a son of the administrator, by and under his directions.

That since this, William Whitehead and other creditors of the intestate brought a creditor's bill against the administrator Whitehurst, which was also put in evidence and made a part of the case on appeal, in which an account of defendant's administration was taken. And in this account the defendant administrator was charged with this $1,211 and interest thereon, which he has since paid to the creditors of his intestate under the order and decree of the Court.

In this creditor's bill it was found by the Referee that the whole amount of intestate's estate, including the $1,211 for which the land sold, was only sufficient to pay a pro rata on said indebtedness of less than fifty cents on the dollar.

This report of the Referee was in all things confirmed byWhitaker, J., at Fall Term, 1890, and under this decree the (125) defendant administrator has paid the creditors of his intestate every dollar for which he was found to be liable, including the $1,211 and interest thereon.

Under this state of facts, the plaintiffs, the widow and children and heirs at law, bring this action, which as originally constituted was an action of ejectment dependent upon plaintiff's legal title. But by several amendments to the complaint it was turned into an equitable action in which it is asked that the proceeding, order of sale, sale and order of confirmation, be set aside; and, if this can not be done, that defendants be declared trustees for plaintiffs, and required to convey to them. And upon the case coming on for trial the defendants proposed to convey to plaintiffs the lands bought by Barnhill, if the plaintiffs would pay them the $1,211, the amount for which it sold. This proposition was declined by plaintiffs.

The plaintiffs have shown no sufficient reason to set aside and vacate the order of sale, as it is not contended but what it was necessary to sell the land to pay the debts of intestate. And this is shown to be so by the undisputed evidence.

This being so, the administrator had the authority to sell, and the purchase by Barnhill, the acceptance of his bid, the report and confirmation of the sale, and the deed to Barnhill passed the legal title out of plaintiffs. It is true, equity will vacate and declare such sales void; but this is the work of equity and equity will not do an inequitable and unjust thing.

The plaintiffs had neither the legal nor the equitable title to this land when they commenced this action. The legal estate that descended to them upon the death of their ancestor had been taken out of them (126) by the proceedings to sell for assets, the order of sale, the sale, report and confirmation and deed to Barnhill.

They had no equitable interest because there was not one dollar of the proceeds of the sale going to them. And the cestuis que use the creditors of their ancestor, to whom the money was going, had ratified and approved said sale by receiving and accepting the money — the proceeds of said sale. And there is no intimation that there was any collusion between the creditors and the administrator to defraud the plaintiffs. Indeed, it is shown that the plaintiffs could not have been injured by the purchase of Barnhill, though made for the administrator, as the land sold for $1,211, when the jury on the trial of this case found that at the date of the sale it was only worth $1,200.

In no view of the case presented by the record could the plaintiffs have the defendants declared trustees for their benefit, and certainly not without putting them in statu quo by paying the money the administrator had paid for the estate. And this much may be said to his credit (and we are not willing to say that he has acted nicely in all this administration), that he offered to convey to plaintiffs the land sold and reconveyed to him upon the payment to him of $1,211, the amount of Barnhill's bid; although he was charged with and paid the creditors for this land the sum of $1,659.07, this being principal and interest, while he had only been in possession of the land a part of the time. This proposition to convey upon the payment of $1,211 while not necessary, as we have seen, to his defense in this action, relieves it from the appearance of oppression.

We do not undertake to pass upon any rights the parties may have as to dower and homestead.

It is a well settled principle that courts of equity, or courts exercising equitable jurisdiction, will set aside sales where the administrator becomes the purchaser, either directly or indirectly. (127) And to do this it is not necessary to allege or show fraud; but it will not do so after there has been a ratification and the purchase money paid. And certainly not after the purchase money has been paid and accepted by those entitled to receive it, without requiring the purchase money to be repaid.

Error.

Cited: Gorrell v. Alspaugh, post 374; Shute v. Austin, post 442; McNeillv. Fuller, 121 N.C. 213; Russell v. Roberts, ib., 325; Gorrell v.Alspaugh, 122 N.C. 561; Card v. Finch, 142 N.C. 148.