Pullins' Administrator v. Smith , 106 Ky. 418 ( 1899 )

JUDGE HOBSON

delivered the opinion of the court.

Appellant brought suit in equity against appellee, asking a personal j udgment on a note for $852.65 executed by appellee to his intestate for a tract of land, and to enforce the lien on the land retained in the deed to secure its payment. After admitting the execution of the note, the defendant, in his answer, set up the following defense in bar of the action: “Further answering, defendant says that when this action was instituted in the Madison Circuit Court, and prior thereto, this plaintiff’s intestate, the said Alva Pullins, was indebted to this defendant in a large amount of money, for services rendered by this defendant to the said intestate from the year 188— to jrhe year 18 — , inclusive, at the said intestate’s special instance and request; that the said Pullins, by an instrument of writing duly signed and executed, and recorded in the Garrard Circuit Clerk’s office, engaged his said services, and promised to pay him therefor a reasonable compensation; that, at the time of the institution of this action, he still owed him a large amount of money; that this defendant, on the -day of-, 1896, presented the said claim to this plaintiff, as administrator of the said Alva Pullins; that it was distinctly agreed, by and between this plaintiff and defendant, then and there-, that the said claim was valid and just, and that, in payment and settlement of same, this note and interest sued on in this action should be paid and canceled, and the said lien retained to secure its payment should be released, and plaintiff was to pay to this defendant $400 additional, or apply same to the cancellation and payment of a note held by Harrison Burnam’s committee, and upon which an action has been instituted in this court; and that, as a further consideration for the said settlement of the defendant’s said claim against the said intestate in the manner aforesaid, this defendant was to release the said Alva Pullins as security on about a $1,900 note to B. L. Price, and on about a $1,100 note to James Estill.

“He says that he has complied with the terms of the said settlement by releasing the said Alva Pullins as security on the said note of this defendant to B. L. Price, and by releasing the said Alva Pullins as security on the said note to James Estill; and that he has in every respect complied with the terms of said settlement, and that the said administrator has failed to release the said lien and pay the said $400.”

It will be observed that appellee does not allege what services he rendered the intestate, or what they were worth, or what he had been paying him; and, from all that appears in the pleadings, only a nominal sum may be due him, if anything. He does not allege that he was insolvent, or that there was any danger of the intestate’s estate losing anything as his surety, or that he expended anything in securing its release on the notes referred to. So; for all that appears, the personal representative, for a nominal consideration, released the debt, • amounting to about $1,-200, and assumed, in addition, a liability of $400 for the estate.

Appellant moved the court to require the blanks in the plea to be filled. This the court refused to do — and as we think, improperly. For it, at least, would have given some idea of <the nature of the claim, more than is conveyed by the pleading as it stands. The personal representative had no knowledge of these facts, and it was peculiarly important to him to have the blanks filled, that he might properly understand what he was to answer.

After overruling appellant’s motion that the blanks in the plea be filled, the court gave appellant ten days to file a reply. He did- not file his reply in the time allowed, and when he subsequently tendered it the court refused to allow it to be filed, on the ground that it was not tendered in time; and, the action being then submitted, gave judgment m favor of appellee, canceling the note sued on, and requiring appellant to pay the $400 above referred to. The reply tendered by appellant is not made a part of the record, and so the only question before us is, did the allegations of the answer which we have quoted above warrant the judgment?

In Clay v. Williams, 2 Munf., 105, [5 Am. Dec., 453], it was held that: “A court of equity will not assist in carrying into effect compositions of claims by executors or other fiduciaries, unless the party praying it will first unfold and disclose the whole circumstances of the case to the court, that it may see there has been no fraud and that everything was fair.” And, on page 460 [5 Am. Dec.], the court say that “such compositions are not favored in equity.” And the appellant was refused relief because he failed to show “the particulars on which such composition is founded.” This case only applies a well-known rule of equity scrutinizing the acts of fiduciaries, and never enforcing their contracts against those they represent, unless “within the range of a reasonable discretion as to the true interests of the estate.” Schouler, on Executors, sec. 298.

For all that appears in this case, the administrator was guilty of a devastavit in making the alleged agreement. He had no power to waste the estate of his intestate; and, if he did agree to waste it, a court of equity will not enforce his contract against the estate. In order that this alleged contract may be enforced in a court of equity, it must be shown that it was to the interest of the estate, and a proper one for the executor to make, in the exercise of a reasonable discretion, for the protection of the interests committed to him.

Pursuant to the principles above referred to, our statute provides: (Kentucky Statutes, sec. 3882): “In actions for the settlement of decedents’ estates, the court may direct the sale' of choses in action, including judgments, and may authorize the personal representative to compromise claims growing out of contract or tort due the estate, as well as claims on contract or tort against the estate; and a personal representative may compromise and settle any claim or demand for damages growing out of injury to or the death of the decedent.”

In Bitteler v. Bitteler’s Adm’r, 13 Ky. Law Rep., 368, an administrator agreed with one who was surety for. the intestate to release him from liability on the notes, in consideration of his paying a debt due the estate by another. It was held that the administrator had no power to bind the estate by such án agreement, and that, though he might be liable personally for the amount so paid, the estate was not.

It is not averred that the alleged compromise was authorized by the judgment of the court, and it clearly should not have been enforced, unless facts were alleged sufficient to .authorize the court to direct the compromise to be made if presented to him before it was made. Geigers v. Kaigler, 9 S. C., 401.

Equity never lends its aid to the enforcement of contracts unless they appear fair. This doctrine is peculiarly applicable to suits against fiduciaries: In Pomeroy on Contracts, section 180, the rule is thus stated:

“Contracts whose provisions, if carried into operation, would constitute or require a breach of trust by the party performing................ will never be specifically enforced by a court of equity.................If tbe agreement does not involve any actual breach of trust, still a court of equity is always reluctant to enforce an agreement against trustees which may injuriously affect their interests or those of their beneficiaries.”

On the return of the case to the lower court, appellee will be allowed to fill the blanks in his answer and amend his pleading, if he desires to do so; appellant will then be allowed a reasonable time to file reply.

Judgment reversed, .and cause remanded, for further proceedings in conformity to this opinion.