In the State of Ohio, one freehold surety to a guardian's land
for the faithful discharge of his duties is sufficient if he has
enough property to make the bond required by the statute good.
Arrowsmith v. Harmening, 42 Ohio St. 259, followed as
to the validity of the sales attacked in these proceedings.
A guardian's bond executed by a surety upon condition that
another surety should be obtained is valid against third parties in
a collateral proceeding although no such surety was obtained.
The other conditions of jurisdiction being satisfied, a circuit
court of the United States has jurisdiction in equity to set aside
a sale of an infant's
Page 129 U. S. 87
lands, fraudulently made by his guardian, under authority
derived from a probate court, and may give such relief therein as
is consistent with equity.
The case was stated by the court as follows:
This suit involves the title to certain lands inherited by the
plaintiff and sold some years ago by his statutory guardian, the
defendant Gleason, under authority conferred by proceedings
instituted by him in the Probate Court of Defiance County, in the
State of Ohio. The plaintiff attacks the order of sale as invalid,
prays that the deeds executed to the purchaser be declared void,
that an accounting in respect to rents and profits be had, and that
such other relief be granted as may be proper. The court below
sustained demurrers to the bill and dismissed the suit. We are
therefore to inquire upon this appeal whether the bill discloses a
cause of action entitling the appellant to relief in a court of
equity.
The case made by the bill is substantially as follows:
This suit involves the title to certain lands inherited by the
plaintiff, and sold some years ago by his statutory guardian, the
defendant Gleason, under authority conferred by proceedings
instituted by him in the probate court of Defiance County, in the
State of Ohio. The plaintiff attacks the order of sale as invalid,
prays that the deeds executed to the purchaser be declared void,
that an accounting in respect to rents and profits be had, and that
such other relief be granted as may be proper. The court below
sustained demurrers to the bill, and dismissed the suit. We are
therefore to inquire, upon this appeal, whether the bill discloses
a cause of action entitling the appellant to relief in a court of
equity.
The case made by the bill is substantially as follows:
The lands in controversy formerly belonged to John C.
Arrowsmith, who died in 1869, his wife, and the plaintiff, his only
child and heir-at-law, surviving him. On the 15th of July, 1869,
Gleason petitioned said probate court to be appointed guardian of
the estate of the plaintiff, then but six years of age. He applied
to one Henry Hardy, a freeholder, to become surety upon his bond as
guardian in the penalty of $5,000, which Hardy did upon the express
agreement that before the bond was delivered, Gleason would procure
another surety of equal responsibility. Gleason filed the bond in
the probate court without obtaining the signature of an additional
surety. The bond contained no condition except that if Gleason
"shall faithfully discharge all his duties as guardian, then the
above obligation is to be void, otherwise to remain in full force."
Upon its being filed, an order was made appointing Gleason guardian
of the plaintiff's estate, and letters of guardianship were issued
to him.
On the 22d of July, 1869, Gleason filed a petition in the
Probate Court of Defiance County representing that no personal
estate of the ward had ever come to his possession or
Page 129 U. S. 88
knowledge, and that there was no such estate dependent upon the
settlement of the father's estate or upon the execution of any
trust. That his ward was the owner of the fee simple of certain
tracts of lands in Defiance County, one being section 36 in that
county, containing 640 acres, less a small strip containing 6.25
acres used and occupied by the Wabash, St. Louis and Pacific
Railroad Company as way-ground, and others aggregating 400 acres,
and, in addition, a tract of about seven acres in Paulding County.
That the ward was also the owner of the fee simple, by virtue of
tax titles, of certain other described tracts of lands in Defiance
County, aggregating nearly 1,000 acres, all of which, the petition
alleged, were wild lands, yielding no income. That he had received
no rents whatever from any of the ward's real estate. That its sale
was necessary for the maintenance and education of the ward, who
was indebted for boarding and lodging in the sum of $210. That
there were no liens upon it to his knowledge, and that the widow
had a dower interest in said lands. The prayer of the petition was
that the infant and widow be made defendants; that dower be set off
to the latter; that the guardian be ordered to sell the real estate
for the purposes above set forth, and that petitioner have such
other relief as was proper. The court ordered notice to be served
upon the widow and infant of the hearing of the petition on the
10th day of August 1869. Personal notice was given to the former,
and the latter was notified by a written copy being left at the
residence of his mother. The widow filed an answer in the probate
court, waiving a formal assignment of dower by metes and bounds and
asking such sum out of the proceeds of sale, in lieu of dower, as
was just and reasonable.
On the 10th of August, 1869, the cause was heard, the probate
court deciding that the real estate named therein should be sold.
Thereupon appraisers were appointed to report its fair cash value.
On the 17th of August, 1869, the probate court, without having
taken any bond from the guardian except the one above referred to,
which was conditioned simply for the faithful discharge of his
duties, made
Page 129 U. S. 89
this order:
"It is therefore ordered by the court that the same [the report]
be, and it is hereby, approved and confirmed, and the said Edward
H. Gleason having upon his appointment as such guardian given bond
with reference to the value and sale of the said real estate of his
said ward, which bond is now adjudged to be sufficient for the
purposes hereof, therefore the giving of additional bond is hereby
dispensed with."
And on the 10th day of November, 1869, the following order of
sale was entered in said cause:
"Said guardian is ordered to proceed to sell said lands, or any
parcel thereof at private sale, but at not less than the appraised
value thereof, and upon the following terms: one-third cash in hand
on the day of sale, one-third in one year, and one-third in two
years, with interest, payable annually, and the deferred payments
to be secured by mortgage on the premises sold."
Within a few days after this order was made, Gleason reported to
the probate court that he had sold to John Frederick Harmening at
private sale, and for the sum of $1,537.50, "that being the full
amount of the appraised value thereof," the southeast quarter of
said section 36, excluding the small strip occupied by the railway
company. The sale was approved, and the guardian directed to make a
conveyance to the purchaser, reserving for the widow, in lieu of
dower, the sum of $400 out of the proceeds.
The bill charges that on the 15th of February, 1873, more than
three years after the said order of sale was entered and without
any new or further appraisement of plaintiff's lands, though their
value, as he was informed, had greatly advanced, and without any
additional bond's having been executed, Gleason, "for the purpose
of getting money into his hands for his own private gain, and
without reference to the true interest of his ward," and "willing
to allow the said Harmening to get at a low and under price the
lands" of the plaintiff, and "though there was no necessity
whatever for said sale, as he, the said Gleason, and the said
Harmening well knew," sold to the latter at private sale, for the
sum of $872.10, the east half of the southwest quarter of section
36 in Defiance County, containing eighty acres, and the
Page 129 U. S. 90
tract of 7.21 acres in Paulding County, which sale, being
reported to the probate court, was by it wrongfully approved and a
deed directed to be made and was made to the purchaser, the sum of
$200 being reserved out of the proceeds, pursuant to the order of
the court, for the dower interest of the widow.
The plaintiff also alleges that notwithstanding there was no
necessity for any further sale or sacrifice of his estate of
inheritance, Gleason, on the 4th day of December, 1874, although
having in his hands, unexpended, large sums derived from the sale
of the above premises as well as considerable sums received from
the release of tax titles, all of which was known to Harmening, and
without any new appraisement of the plaintiff's lands, though they
had risen greatly in value, and without giving an additional bond
or obtaining a new order of sale,
"for the purpose of getting money into his hands for his own
private gain, without reference to the true interest of your orator
in the premises, and willing that the said Harmening should get the
lands bought at a low and under price, connived and colluded with
him, the said Harmening, to sell the said lands hereinafter
described, in violation of his duties and the trust imposed on him,
claiming to act on the said order of sale long since entered in
said court, sold, December 4, 1874, to Harmening the following
described lands, situated in Defiance County aforesaid,
viz., the north half of section thirty-six, in township
four north, of range three east, and the west half of the same
section in the same township and range, containing together four
hundred acres, for the sum of six thousand dollars, and reported
the sale to the said court on the same day, and the same was
without proper examination or opportunity for the friends of the
said ward, your orator, or his relatives, to examine the same and
advise the said court or the said Gleason in the premises,
improperly -- illegally confirmed the said sale, and ordered the
said guardian to make, execute, and deliver a deed for the same to
the said Harmening on his compliance with the terms of sale, and
further ordered the said guardian to pay out of the proceeds of
said sale the sum of fifteen hundred dollars as and for the dower
interest therein held by the said Mary Arrowsmith. "
Page 129 U. S. 91
The bill further charges that the order authorizing said sales
to be made, as well as the orders confirming them, was illegal;
that the sales made by Gleason were in violation of his trust and
in fraud of his rights, "as the said Harmening and the said Gleason
well knew;" that he has never received from said Gleason, or from
any source, to his knowledge, any of the proceeds of such sales,
nor to his knowledge, belief, or information, has any part thereof
been applied for his benefit, and that the deeds placed upon record
by Harmening so cloud his title to said lands that he cannot sell
them or otherwise enjoy the beneficial use of them. After averring
that he has been a nonresident of Ohio since 1869; that Harmening
enjoyed, up to his death, all the rents and profits of said lands;
that his heirs at law, who are infants and defendants herein, are
in possession of them, claiming to hold them under said pretended
sales and deeds, and that Gleason has been for a long time
hopelessly insolvent, so that an action at law against him would be
unavailing, he prayed that a decree be rendered setting aside and
vacating the order of sale in the probate court and all proceedings
therein affecting his title to the lands and declaring the same, as
well as the deeds executed by his pretended guardian, to be void
and of no effect. He also prayed for the additional relief,
specific and general, indicated in the beginning of this
opinion.
MR. JUSTICE HARLAN delivered the opinion of the Court.
Page 129 U. S. 95
One of the grounds of demurrer was that the plaintiff had, upon
his own showing, a plain, adequate, and complete remedy at law --
namely an action of ejectment for the recovery of the lands in
controversy. The statute of Ohio in force at the time Gleason was
appointed guardian as well as when these lands were sold by him
provides that
"Before any person shall be appointed guardian of the person and
estate, or of the estate only, of any minor, he . . . shall give
bond, with freehold sureties, payable to the State of Ohio, . . .
which bond shall be conditioned for the faithful discharge of the
duties of said person as such guardian, and shall be approved by
the court making such appointment."
Rev.Stat. Ohio, p. 671, Swan & Critchfield, 1860. The same
statutes prescribe the mode in which, and the purposes for which,
the real estate of a minor may be sold. They give power to the
probate court, by which the guardian of the person and estate, or
of the estate only, was appointed, upon the application by petition
of such guardian, to order the sale of the minor's real estate,
whenever necessary for his education or support or for the payment
of his just debts or for the discharge of any liens on his real
estate or when such estate is suffering unavoidable waste, or a
better investment of the value thereof can be made, and if it is
satisfied that his real estate ought to be sold, then three
freeholders must be appointed to appraise, under oath, its fair
cash value. It is further provided:
"SEC. 27. Upon the appraisement of said real estate being filed,
signed by said appraisers, the court shall require such guardian to
execute a bond, with sufficient freehold sureties, payable to the
State of Ohio, in double the appraised value of such real estate,
with condition for the faithful discharge of his duties and the
faithful payment and accounting for of all moneys arising from such
sale according to law."
"SEC. 28 [as amended by Act of February 15, 1867.] Upon such
bond's being filed and approved by the court, it shall order the
sale of such real estate: . . .
provided, however, that if
it is made to appear to such probate court that it will be more for
the interest of said ward to sell such real estate at private sale,
it may authorize said guardian to sell,
Page 129 U. S. 96
either in whole or in parcels and upon such terms of payment as
may be prescribed by the court, and in no case shall such real
estate be sold at private sale for less than the appraised value
thereof."
Rev.Stat. Ohio, 1 Swan & Critchfield (1860) 671, 672, 675;
§§ 6, 22 to 28, inclusive; 1 S. & S. 383.
It is evident that the bill was framed upon the theory: 1. that
the bond given by the guardian at the time of his appointment was
void because filed in violation of Gleason's agreement with Hardy
and because it contained the name of but one surety; 2. the probate
court was without jurisdiction, and its proceedings were absolutely
void, because the guardian did not execute the additional bond
required by the two sections last above quoted. If these
propositions were sound, it might be, as contended, that the
plaintiff has a plain, adequate, and complete remedy at law. But we
are of opinion that they cannot be sustained. As to the first one,
it is clear that the delivery of the bond that Hardy signed without
procuring an additional surety was a thing of which he, but not the
plaintiff, may complain. Besides, the statute, upon any reasonable
interpretation, does not require a bond with more than one freehold
surety. The words "with freehold sureties" are not to be taken
literally, so as to forbid the acceptance of a guardian's bond with
one surety having sufficient property to make it good for the
entire amount prescribed by the statute.
As to the suggestion that the proceedings in the probate court
were void because of its failure upon the return of the
appraisement to require from the guardian an additional bond
conditioned "for the faithful discharge of his duties, and the
faithful payment and accounting for of all moneys arising from such
sale, according to law," we are of opinion that it is fully met by
the decision of the Supreme Court of Ohio in
Arrowsmith v.
Harmening, 42 Ohio St. 254, 259. That was an action at law by
the present appellant against Harmening to recover possession of
the real estate now in controversy. The question was there
distinctly made by him that the order of sale by the probate court
was void by reason of its
Page 129 U. S. 97
neglecting to take this additional bond. Adhering to its prior
decision in
Mauarr v. Parrish, 26 Ohio St. 636, the court
held that although the order of sale and the confirmation of the
sales may have been erroneous, the probate court had jurisdiction
of the subject matter, and of the parties, and its action therefore
was not void. It further said that the decision in
Mauarr v.
Parrish had become a rule of property in Ohio, and could not
be disturbed without consequences of a mischievous character. It is
thus seen that the question now presented as to the jurisdiction of
the probate court to make the order for the sale of the lands now
in controversy and to confirm the several sales reported by the
guardian has been determined adversely to the appellant in an
action brought by him against the present appellees. As this
construction of the local statute should, under the circumstances
stated by the Supreme Court of Ohio, be followed by the circuit
court, we cannot approve the suggestion that the appellant has an
adequate remedy by an action of ejectment for the recovery of these
lands.
But is the appellant without remedy for the wrong alleged to
have been done to him? We think not. If all the substantial
averments of his bill are true -- and upon demurrer they must be so
regarded -- he makes a case of actual fraud upon the part of his
guardian in which Harmening to some extent participated, or of
which at the time he either had knowledge or such notice as put him
upon inquiry. According to these averments, there was no necessity
whatever for these sales -- at least for the sale of the east half
of the southwest quarter of section 36, township 4 north, range 3
east, in Defiance County, containing eighty acres, or of the
smaller tract in Paulding County, or of the four hundred acres in
Defiance County that were sold in December, 1874. It is alleged,
and by the demurrer it is admitted, that when the last sale was
made, Gleason had in his hands unexpended, as Harmening well knew,
large sums derived from the previous sales, as well as considerable
amounts received from releases of tax titles on lands held by
appellant, and yet, by collusion with Harmening and in order that
the latter might get the
Page 129 U. S. 98
lands for less than their value, he made the sale of the four
hundred acres.
But it is insisted that the circuit court of the United States
sitting in Ohio is without jurisdiction to make such a decree as is
specifically prayed for -- namely a decree setting aside and
vacating the orders of the Probate Court of Defiance County. If by
this is meant only that the circuit court cannot by its orders act
directly upon the probate court, or that the circuit court cannot
compel or require the probate court to set aside or vacate its own
orders, the position of the defendants could not be disputed. But
it does not follow that the right of Harmening in his lifetime, or
of his heirs since his death, to hold these lands, as against the
plaintiff, cannot be questioned in a court of general equitable
jurisdiction upon the ground of fraud. If the case made by the bill
is clearly established by proof, it may be assumed that some state
court of superior jurisdiction and equity powers, and having before
it all the parties interested, might afford the plaintiff relief of
a substantial character. But whether that be so or not, it is
difficult to perceive why the circuit court is not bound to give
relief according to the recognized rules of equity, as administered
in the courts of the United States, the plaintiff being a citizen
of Nevada, the defendants citizens of Ohio, and the value of the
matter in dispute, exclusive of interest and costs, being in excess
of the amount required for the original jurisdiction of such
courts.
A leading case upon this point is
Payne v.
Hook, 7 Wall. 425,
74 U. S. 430.
That was a suit, in the Circuit Court of the United States for
Missouri, by a citizen of Virginia against a public administrator
to obtain a distributive share of an estate then under
administration in a court of Missouri. It was objected that the
complainant, if a citizen of Missouri, could obtain redress only
through the local probate court, and that she had no better or
different rights by reason of being a citizen of Virginia. But this
Court, observing that the constitutional right of the citizen of
one state to sue a citizen of another state in the courts of the
United States, instead of resorting to a state tribunal, would be
worth nothing, if the court in
Page 129 U. S. 99
which the suit is instituted could not proceed to judgment and
afford a suitable measure of redress, said:
"We have repeatedly held"
"that the jurisdiction of the courts of the United States over
controversies between citizens of different states cannot be
impaired by the laws of the states which prescribe the modes of
redress in their courts, or which regulate the distribution of
their judicial power."
"If legal remedies are sometimes modified to suit the changes in
the laws of the states and the practice of their courts, it is not
so with equitable. The equity jurisdiction conferred on the federal
courts is the same that the High Court of Chancery in England
possesses, is subject to neither limitation nor restraint by state
legislation, and is uniform throughout the different states of the
union. The Circuit Court of the United States for the District of
Missouri therefore had jurisdiction to hear and determine this
controversy notwithstanding the peculiar structure of the Missouri
probate system, and was bound to exercise it if the bill, according
to the received principles of equity, states a case for equitable
relief. The absence of a complete and adequate remedy at law is the
only test of equity jurisdiction, and the application of this
principle to a particular case must depend on the character of the
case as disclosed in the pleadings."
While there are general expressions in some cases apparently
asserting a contrary doctrine, the later decisions of this Court
show that the proper circuit court of the United States may,
without controlling, supervising, or annulling the proceedings of
state courts, give such relief, in a case like the one before us,
as is consistent with the principles of equity. As said in
Barrow v. Hunton, 99 U. S. 80,
99 U. S. 85, the
character of the case is always open to examination
"for the purpose of determining whether,
ratione
materia, the courts of the United States are incompetent to
take jurisdiction thereof. State rules on the subject cannot
deprive them of it."
This whole subject was fully considered in
Johnson v.
Waters, 111 U. S. 640,
111 U. S. 667.
That was an original suit in the Circuit Court of the United States
for the District of Louisiana. It was brought by a citizen of
Kentucky against citizens of
Page 129 U. S. 100
Louisiana. Its main object was to set aside as fraudulent and
void certain sales made by a testamentary executor under the orders
of a probate court in the latter state. It was contended that the
plaintiff was concluded by the proceedings in the probate court,
which was alleged to have exclusive jurisdiction of the subject
matter, and that its decision was conclusive against the world,
especially against the plaintiff, a party to the proceedings. This
Court, while conceding that the administration of the estate there
in question properly belonged to the probate court and that, in a
general sense, the decisions of that court were conclusive and
binding, especially upon parties, said:
"But this is not universally true. The most solemn transactions
and judgments may, at the instance of the parties, be set aside or
rendered inoperative for fraud. The fact of being a party does not
estop a person from obtaining in a court of equity relief against
fraud. It is generally parties that are the victims of fraud. The
court of chancery is always open to hear complaints against it,
whether committed
in pais or in or by means of judicial
proceedings. In such cases, the court does not act as a court of
review, nor does it inquire into any irregularities or errors of
proceeding in another court, but it will scrutinize the conduct of
the parties and, if it finds that they have been guilty of fraud in
obtaining a judgment or decree, it will deprive them of the benefit
of it and of any inequitable advantage which they have derived
under it,"
citing 2 Story's Eq.Jur. §§ 1570, 1573; Kerr on Fraud
and Mistake 352, 353;
Gaines v. Fuentes, 92 U. S.
10, and
Barrow v. Hunton, 99 U. S.
80.
So, in
Reigal v. Wood, 1 Johns.Ch. 402, 406:
"Relief is to be obtained, not only against writings, deeds, and
the most solemn assurances, but against judgments and decrees, if
obtained by fraud and imposition."
To the same effect is
Bowen v. Evans, 2 H.L.Cas. 257,
281:
"If a case of fraud be established, equity will set aside all
transactions founded upon it, by whatever machinery they may have
been effected and notwithstanding any contrivances by which it may
have been attempted to protect them. It is immaterial, therefore,
whether such machinery and contrivances consisted of a decree of a
court
Page 129 U. S. 101
of equity, and a purchase under it, or of a judgment at law, or
of other transactions between the actors in the fraud."
See also Colclough v. Bolger, 4 Dow, 54, 64;
Barnesly v. Powel, 1 Ves.Sen. 120, 284, 289;
Richmond
v. Tayleur, 1 P.Wms. 736;
Niles v. Anderson, 5 How.
(Miss.) 365, 386. These principles control the present case, which,
although involving rights arising under judicial proceedings in
another jurisdiction, is an original independent suit for equitable
relief between the parties, such relief being grounded upon a new
state of facts, disclosing not only imposition upon a court of
justice in procuring from it authority to sell an infant's lands
when there was no necessity therefor, but actual fraud in the
exercise, from time to time, of the authority so obtained. As this
case is within the equity jurisdiction of the circuit court as
defined by the Constitution and laws of the United States, that
court may, by its decree, lay hold of the parties and compel them
to do that, according to the principles of equity, they ought to
do, thereby securing and establishing the rights of which the
plaintiff is alleged to have been deprived by fraud and
collusion.
The decree is reversed, and the cause remanded, with
directions to overrule the demurrers, to require the defendants to
answer, and for further proceedings consistent with law.
