Galbraith v. Tracy , 153 Ill. 54 ( 1894 )

Mr. Justice Baker

delivered the opinion of the court:

For a number of years Jesse Kemp and John J. Kemp carried on the business of raising and dealing in live stock, in partnership. The stock, machinery, implements and other personal property employed in such business were partnership property. The 400 acres of land on which the business was conducted stood in their joint and joined names, and was presumably purchased for the purposes of the partnership business, and seems to have been used and regarded by them as partnership property. When John J. Kemp died, Jesse Kemp, the surviving partner, became a trustee in respect to the property and assets of the late partnership. In equity, a surviving partner is treated as a trustee, with the fiduciary relation of trustee and cestuis que trust existing between- him and the representatives of the deceased partner. There is a conflict in the authorities upon this point, but in this State the law is as stated. Nelson v. Hayner et al. 66 Ill. 487; 17 Am. & Eng. Ency. of Law, pp. 1154,1155, and cases cited in notes.

Jesse Kemp, the surviving partner, filed in the county court an inventory of the real and personal estate of the late partnership, under oath, and in it was a schedule of the lands here in question. Then Jesse Kemp died, and Franklin Galbraith became administrator of his estate, and assumed and undertook the administration of the trust in respect to the partnership property. Among other things he reported to the county court that there was “property in his hands of the late firm of John J. & Jesse Kemp, of which partnership said Jesse Kemp was the survivor,” and he applied for and obtained an order .for the sale of all the personal property contained in the inventory and appraisement bill, stating it was the property “of said late firm,” and he realized from the sale thus made, the sum of $1341.12.

In the event of the death of both the partners before the settlement of the partnership affairs, the administrator of the last survivor stands in the shoes of his intestate, and he is charged with the duty of completing the settlement, as a trustee, the relation between him and the legal representatives of the partner first deceased being that of trustee and cestuis que trust. (Dayton v. Bartlett, 38 Ohio St. 357; Thompson v. Thompson, 1 Bradf. 24; Brooks v. Brooks, 12 Heisk. 12; 17 Am. & Eng. Ency. of Law, 1158.) In equity the real estate of a partnership is regarded as, and stands on the same footing with, personal property, no matter in whom the legal title may be vested. (Bopp v. Fox et al. 63 Ill. 540; Simpson v. Leech, 86 id. 286; Trowbridge v. Cross, 117 id. 109; Alkire et al. v.Kahle, 123 id. 496.) But whatever remains of it after the partnership debts shall have been discharged is held in common by the heirs, subject to dower, or goes to the devisees. Strong et al. v. Lord et al. 107 Ill. 25.

It is urged that Franklin Galbraith, administrator of Jesse Kemp, took no interest in the lands,.—only a power to sell them for the payment of debts,—and that therefore no duty devolved upon him to redeem the lands from the sales made by the master in chancery, and that after the expiration of the time allowed by law for the redemption of the lands to the widows and children of Jesse Kemp and John J. Kemp, if not before, he had the right to purchase the certificates of sale or buy the lands. This claim is inconsistent with the position he occupied as trustee in respect to the partnership propertju Besides this, it was expressly held in McCreedy v. Mier et al. 64 Ill. 495, that an administrator is not a stranger, in all respects, to the real estate of his intestate ; that it is, .under some circumstances, his duty to redeem from a sheriff’s sale, and that under the facts of that case he became trustee for the heirs. The case was quite like the case at bar. The administrator procured an assignment of the certificate of purchase to be made to his brother. This court said: “It is plain that the same principle which forbids him to become a purchaser at a sale under order of court, must forbid him to buy, on his own account, a certificate of purchase given by the sheriff or master on a sale made in the lifetime of the deceased.”

It is urged that only $1341.12 came to the hands of Franklin Galbraith, the administrator, in money, and that such sum was wholly insufficient to redeem from the $3000 mortgage, the two $500 mortgages, and pay the claims against the estate, and costs and expenses of administration. The 160 acres in section 34 sold for $1241. The other four tracts were sold separately, one for $1780, one for $324, one for $670, and one for $1340, and in order to redeem one tract it was not necessary to redeem all. The total sum called for by the five certificates of purchase was $4907.69. Deducting therefrom the $1341.12 in money would leave only $3566.57, plus interest to time of redemption, to be arranged for in order to redeem all the land from the .mortgage sales. The lands were worth from $12,000 to $14,000,—a value more than three times, and almost four times, the amount of the required sum. It is almost certain that Galbraith, with the business and financial- ability that this record indicates that he possessed, could readily have arranged, through the unsecured creditors or otherwise, to save the whole or some portion of the 400 acres of land to the two widows and their children, if he had felt so inclined. As for the widows and children, they had no money or means or business capacity.

Even, if it should be said that the record does not justify these surmises and conclusions, yet that would make no difference in the decision of this case. A trustee is not allowed to put himself in a position in which to be honest must be a strain on him. (Staats v. Bergen, 2 C. E. Green, 554; Tyler v. Sanborn, 128 Ill. 136.) The very next day after the right of the widows and heirs to redeem from the sales under the $3000 mortgage had expired, the trustee purchased the four certificates of purchase from Moir, and immediately upon the expiration of the statutory fifteen months he received a deed from the master in chancery, and at once took possession of the 240 acres of land. In the county court he waived process and entered his appearance, and raised no objections, and allowed judgments to be entered on the Moir and Peterson claims. Then Moir and Peterson redeemed the 160 acres in section 34 from Priscilla Trimmer, and, there being no bid over and above the redemption money, they forthwith received a deed from the sheriff. That deed bears date December 5, 1885, and nine days thereafter, on December 14, 1885, they conveyed to Galbraith, the trustee, he paying them the amount of the redemption money and the amounts of their respective claims against the Kemps. As matter of course, this whole thing was pre-arranged. It cannot, in reason, be deemed otherwise.

We forbear to enter into any discussion of the evidence tending to prove that Galbraith and others took steps to prevent any competition at the sale made by the sheriff, and other like matters. Thus Galbraith, the trustee, got the whole of the lands at just half of their then actual value. It is unnecessary to consider much, if any, of the oral testimony that was taken at the hearing, other than that in regard to values. The quiet records of the county and circuit courts, and those that rest in the recorder’s office, though they are dumb yet they speak, and they establish the cases of the complainants in the two cross-bills.

It is urged in behalf of the cross-errors assigned, that there is no evidence in the record upon which the heirs of John J. Kemp can be bound, showing a partnership interest in the lands; that Galbraith, at least so far as relates to the 160 acres in section 34, “was in no way connected with the widow and heirs of John J. Kemp, or with his estate,” and that therefore the circuit court erred in directing an account to be taken of any sum or sums of money that Galbraith may properly have laid out or expended for or on account of the respective undivided halves of said lands. We think that the evidence sufficiently establishes that the 400 acres of land were partnership lands, and we do not see upon what theory the equities of the widow and' children of John J. Kemp can be worked out, in respect to the whole of the 400 acres, as against the title of appellants, other than on the theory that Franklin Galbraith, as administrator of Jesse Kemp, the surviving partner of John J. Kemp, stood in a fiduciary relationship to the widow and heirs of said John J. Kemp in respect to such land. How, otherwise, can they have any relief whatever in respect to the 240 acres? Counsel, in their brief, say: “So far, then, as any partnership property or liabilities were concerned, Galbraith represented the interests of both partners, hence occupied the same relative position to the one set of heirs as he did to the other. By his obligation as administrator of the estate of the survivor he was bound to care for the interests of all.” And they make use of numerous other like arguments and expressions'. It is not admissible that one should blow both hot and cold with reference to the same transactions. Allegans contraria non est audiendus.

Where parties seek, in a court of equity, to divest others of a legal title to land,' the court may impose equitable terms on which relief will be granted, and if it appears that the parties divested have advanced money for the purchase and improvement of the property, the court, in its decree finding -it to belong to the parties making claim to the land, may properly require the money so advanced to be refunded, with legal interest. (St. Patrick's Catholic Church v. Daly, 116 Ill. 76.) The decree of the circuit court in that behalf, and in regard to all other matters, does justice and equity between the parties.

The decree is in all things affirmed.

Decree affirmed.