*1 186 17; December on November affirmed

Submitted briefs re Patton’s Estate v. PATTON CHARLTON (2d) 402) (132 P. *3 Justice, Before Chief Belt, Kelly, Bailey, Brand, Associate Justices. Lusk, Band, Bossman appellant. for Winslow, Salem, G.W. respondent. Salem, Carson, cB Carson *4 190 parties ap The circuit court and

BRAND, J. provisions L. A. parently had in mind the of O. C. county regulates procedure before the 19-704which presented to an creditor’s claim has been court awhen rejected. provides that That statute county court “* * * power to hear and deter- shall have against summary manner all demands in a

mine * * * have been so re- estate jected rejection or the order of allowance this statute Under regarded action a an at law. a claim is as (2d) P. Estate, 365, 157 Or. In re Anderson’s accordingly (1937), tried and cases cited. The issue was pleadings, summary formal but in a manner without procedure adopted, parties notwithstanding all equity, proceeded as if in court seem to have the circuit expresses appellant to that view still adherence and the court. in this was filed the creditor’s claim with sure,

To be and the cause October, was trans the executrix years later in form circuit court five to the ferred objections and it is true that a account, the final probate hearing upon a final account when tried judgment. But in decree, not this results court upon objections only presented, issue case the validity of Mrs. was the Charlton’s final account, hardly argued It that an will as a creditor. claim against claim an on a contested executor at law action *5 transformed be could at the instance of the claimant asserting equity by simple a device of into suit in the objections final account, in form to the the claim the of right jury thereby defeating a executor in the the attaches to a trial or to the conclusive effect which judgment. over But in this case the claim was allowed the'objection appeals. She, now executrix, who allowing does not assert that the order the course, claim is conclusive as a at law. She intro- purely equitable cognizance duced evidence of and still proceeding equity, in insists this court that the was in perhaps hearing upon final because on the a final a account court does render decree. L. A. O. C. provides 19-1006. L. A. Our O. C. in statute, 13-502, probate substance that contested in matter county upon court other than a creditor’s claim for less than on shall, motion, transferred $500 county court to the circuit court * * proceed and therein and be tried and

“* determined in the same manner and with like effect (except provided) as hereinafter otherwise though proceeding being it were tried and county appeal determined in the court ®.An Supreme shall lie to the Court from the decree or appealable other determinative order of the circuit court in such matter, contested in like manner and though with like effect as it were from a decree or appealable other determinative order of such circuit equity.” court in a suit in procedure actually view the followed in this case difficulty applying quoted provision we find no determining A. from L. 13-502 and in O. C. the cause * * in like manner and with like effect as though appealable it from a or were decree other order of determinative equity.” such court in a suit The rent the sum claim Mrs. Charlton conclusively $1,173.48 from established controversy only evidence of the executrix herself. The against validity charges relates valid, asserted executrix if Charlton and which, equal would or exceed Mrs. credit for rent. Charlton’s consider We now the facts on which predicates claim of her set-off. long prior 19,1929,

For time to December E. Cooke *6 partners in Patton Hal D. and Patton were the owner- operation ship the book located and of store business Oregon, city in and known Salem, on street the State partnership Bros. The business continued as Patton in 1929. December, until death of E. Cooke Patton E. Pat- LaLonde Patton was the Sadie wife Cooke daughter. and Luella M. Charlton was his deceased, ton, following E. Patton contains the The will of Cooke partnership provision reference to the with business: “I owner of an undivided one-half interest am partnership Patton business of Brothers my being Oregon, D. Hal Patton brother, Salem, undivided one-half interest of the other the owner hereby I that and direct in the event business said my my Patton, Hal D. con- death brother shall operate and said business as the to conduct tinue hereby manager him thereof I authorize sole operate said business for time such to conduct inas his he shall manner and in such interests of said and in business deem best my LaLonde Sadie shall wife, Patton, the event shall be entitled to one-half me she receive survive of profits my in the net interest said one-half during period for and partnership business or until said be natural life business shall of her said business shall event sustain sold my any LeLonde Patton, Sadie shall bear wife, loss, apportioned against shall loss as such one-half of my said one-half interest in said and her business, proportion from paid of said loss shall be deductions revenues to which she shall become my entitled from estate. the event said business during my shall be sold the lifetime of wife, Sadie proceeds LaLonde then Patton, one-third of the net belonging my my of said sale one-half interest to estate virtue of paid in said business shall be my wife, Sadie LaLonde Patton, for her own use absolutely.” and benefit

Under the terms of the will Mrs. Charlton as heir of her father received all of his half interest in the busi- Bros, property except ness and of Patton the interest bequeathed therein which was by to Sadie LaLonde Patton foregoing provision September, of the will. In purchased Charlton all of said interest of thereby Sadie LaLonde Patton and became, at least in equity, the owner aof full one-half interest formerly business conducted Patton Bros. Pursuant provisions to the Hal D. will, Patton continued carry on business of partnership the former until July his death on 23, 1934. Edith Louise Patton appointed executrix of the estate of her husband, Hal D. and it is Patton, she who now, as the executrix, *7 against a claim asserts Mrs. Charlton as a set-off against acknowledged the rent claim. It is the conten- tion of the executrix that under the terms of the will partnership a new was formed between Mrs. Charlton Hal D. Patton and and that between the time of the of E. Patton in death Cooke December, 1929, and the July of Hal D. Patton death on alleged 1934, the partnership of Mrs. Charlton and Hal D. Patton suf- losses to such an extent that fered the entire investment wiped store business in the book was out and that liquidation of all after the of the assets of the business alleged partnership in a indebted the would still be amount. substantial theory

Proceeding upon Patton, Edith Louise this D. her Patton, of Hal secured executrix of the estate appointment alleged partner- of the also ship Mrs. Four of Hal D. Patton and Charlton. estate applied D. Patton she after of Hal months the death “part- county permission court for to sell to the nership” property. authorized, made, The sale was May county approved court on 29,1935. and was produce pay sufficient to That sale failed to funds apparent reports of the liabilities as shown executrix. complete

Apprehending ex a net loss after capital invested the executrix demanded of the haustion of the loss as that she bear one-half Mrs. Charlton partner Mrs. denied Hal D. Patton. Charlton liability, whereupon in the executrix October, 1936, declaratory judgment against brought suit for a Mrs. unnecessary repeat detail It is Charlton. say pleadings is sufficient to that the in that case. It set and the relation forth, Patton was of E. Cooke will ship and Mrs. under the Hal H. Patton Charlton operation placed of the business was will directly that issue. It was the business had prayer losses” and the “tremendous suffered complaint for a declaration to the effect that partners Hal D. Patton were from the Charlton Patton to death of Hal D. Patton E. Cooke death of “* decreeing (Mrs. that defendant Charl any deficiency ton) liable for one-half of that may disposed against the estate remain in order after all the * #.” ^[*] fully assets liquidate the claims estate are *8 denying the Charlton, answered defendant, The liability partnership any The for losses. August circuit court and on 9,1937, canse was tried, entered a wherein it was held: decree

“1. HAL D. were That defendant and PATTON partners doing dur- not business as ‘Patton Bros.’ ing operation the time of the of said business known as ‘Patton Bros.’ from the PATTON to the death of Hal D. E. death of COOKE that Patton; any is not of said defendant liable for debts any alleged partnership virtue of business rela- tion with said Hal D. Patton or otherwise. purchase

“2. That bv reason of the defendant’s interest of SADIE LaLONDE PATTON in the estate of E. Cooke Patton, such interest in hands of defendant is liable for losses sus- pro- tained said business of Patton as Bros., vided in the will E. of Cooke Patton party It litigation is true that neither to the instant up adjudication set pleading, has the former in but in the case at pleadings, bar there were no formal placed upon adjudication reliance only is the former evidentiary purposes establishing as certain issues present litigation. which are also in involved The judgment declaratory judgment roll in the case was by stipulation parties. introduced evidence judgment That was rendered between the identical opposed litigation. adversaries are who the instant It determined certain issues which the executrix seeks adjudication re-litigate here. That is conclusive here upon such issues were then decided and are now litigation. estoppel by judgment

“The rule that an to be pleaded apply must available does not where as in case at bar the being instead of upon relied in bar of attempted action, to be *9 merely of some as conclusive in evidence introduced such, formerly adjudicated. case, particular fact pleaded conclu- to make it in not order it need Davis, Bank v. & sive.” Farmers 93 Or. Fruit-Growers’ (1919). p. 184 P. 275 655 at 665, by strongly supporting reached conclusions the As declaratory see case, trial court on 22 N. 5 160, N. Y. E. 328, Robinson, v. Stewart § (1889) 666. and 47 C. J. L. R. A. 410 ‘‘ liable for is not Mrs. Charlton that We conclude by any of an virtue of said business debts partnership Hal D. Patton.” said with provides: declaratory judgment also

But purchase by of in the defendant’s reason of “That PATTON of SADIE LaLONDE interest such interest Patton, E. of Cooke the estate liable for losses sustained is of defendant hands by provided Bros., of Patton business said * * Patton E.of Cooke the will necessary extent determine the to becomes It therefore E. Cooke Patton” provided in the will “as Patton in the LaLonde of Sadie interest the former Charlton) is (now of Mrs. liable hands estate by E. The will of the business. losses sustained provides: Patton Cooke “* said business shall in the event and my any LaLonde wife, Patton, Sadie loss, sustain appor- loss as shall be such one-half bear shall tioned my against one-half interest in said said proportion said loss shall be her

business, any to which revenues she paid deductions from my (Italics estate.” entitled become shall from ours.) partnership any liability In the absence of solely npon provision Charlton rests of the this npon assignee the fact that she is of the interest will subject LaLonde Patton, Sadie whose interest was provision concerning will losses. It will specifically provided that be observed it is that any, if to be borne Mrs. losses, Charlton shall be paid from deductions revenues to which she shall become entitled from E. the estate of Cooke Pat whereby purchased ton. The contract Mrs. Charlton Sep the interest of Sadie LaLonde Patton was dated tember 19, 1930, evidence as Exhibit N. The E. will of Cooke Patton inwas evidence as Exhibit M. Concerning appellant instruments, these in her *10 says: brief

“This contract and the will of E. Cooke Patton (Exhibit M) disclose that the assets and income from the estate which Sadie LaLonde Patton would have received had she not sold out would have been amply sufficient to take care her share of this loss.” may indulge presumption a

We property that the real by inherited Sadie LaLonde Patton under the will of purchased by E. Patton Cooke Mrs. Charlton together with the interest which Sadie LaLonde Patton had in the book store business under the will of her aggregate husband would amount to as much alleged as or more than the share the losses of charge business which the executrix against seeks to quoted portion Mrs. Charlton. But of the will dis- any closes that one-fourth of loss in the business shall paid be deductions from revenues to which Sadie assignee, LaLonde Patton or her Mrs. Charlton, should become entitled from the Sadie LaLonde Patton share E. the estate of Cooke Patton. We have searched any concerning record in vain for evidence

amount of such revenues. amount of Thus, even if the proportion the loss in the business were and the known, paid by to be Mrs. Charlton were fixed at one-fourth speculate we would still left to thereof, be to as whether the revenues from such to losses were paid pay have been sufficient to the same. If there liability though revenues, were no there no even proved. losses be attempt charge

However, the to a portion the “losses” to Mrs. Charlton is met a question more serious The final obstacle. is whether apportioned. there are losses to be The issue is succintly presented" in the brief of the executrix- appellant : it conceded

“We believe will be claimant that if right charge salary, a Hal D. Patton had a salary charged was not excessive, if the there was hand, Patton, loss. the other On execu- I). estate, Patton trix of the Hal will concede that I). charge salary not entitled to if Hal Patton was during connection with is no this time then there deficit or loss the business.” E. death of After the Cooke Hal D. Patton, operated the business under the terms of the Patton manager thereof”, authorized as “sole will “* operate conduct and said business time and in such manner as in his such *11 best for the interests of deem said he shall busi- *” ness power In the exercise of to sell. these broad with interest in the powers the one-half business over belong acting Hal D. to him Patton was not as did chargeable with duties as and was such for trustee part M. as to a of Luella Charlton heir the benefit assignee of the one-half interest which of the balance belonged such trustee he to E. Cooke Patton. As had compensation. to reasonable was entitled “Except to the §243, as stated in trustee is entitled

compensation out of the trust estate for his provided unless it is trustee, otherwise services agrees terms of trust or unless the the he to forego compensation.” I or waives Restatement of p. § 242. 740, of Trusts, Law “If the trustee commits a breach of trust, may deny compensa- in its discretion him all court tion or allow him a reduced him full compensation or allow compensation.” I Restatement of Law p. § 750, 243. Trusts, carry frequently of a trust to In the case on business, compensation percentage determined a fixed proceeds of the net from the but business, providing “In absence of statute a definite fixing compensa- rule the amount of the trustee’s is entitled tion, he fair value of his services carrying on the I business.” Restatement p. (c). § 242 Trusts, Law of exceptions certain it is With also the rule that a trustee indemnity is not entitled to out of the estate for ex- properly penses incurred not him in the administra- of the trust. See I tion Restatement the Law of § 245. Trusts, fact, however, The that he was entitled compensation some reasonable does not mean that he to all he entitled assumed to take. A consideration convinces us that salary the evidence his claims the circumstances, under excessive. were, perhaps Losses business were inevitable period during great depression, and it should *12 200 of willful violation no evidence there was that

be added but fact trustee, duty his as D. Patton of Hal entire management his sole under that remains determining out. wiped was investment capital ex- he claimed was which the compensation whether of his the nature and results must consider cessive, we accrued to his bene- if which any, benefits, labor, circumstances. all of the pertinent and ficiary a should trustee the compensation Ordinarily, and al his account as such the settlement await he compensation If appropriates the court. lowance allowed so at his fixed and he does has been it before later revision the court. Such to subject risk, own is in the form com compensation rule when is 912, 808, and the same principle § 65 C. J. missions, If he salary. he appropriates ap when apply

should in an excessive amount his salary account propriated an with such amount himself surcharged paid should excess of reasonable compensation. as is in salary v. 539, 98 P. 1006. Kinney Uglow, Or. (2d) See the condition and concerning opera- The evidence confusing, unorganized business of the tion it we but from gather unsatisfactory, following an 1930, 1, inventory showed mer- January On facts: of $15,350.06, the amount rose to chandise 31, 1931. On October January 1, on it $16,953.14 1934, a loss of $11,742.46, $5,210.68 four fallen to years. had of the appraisers inventory partner- The 8, 1934, on October estate filed presumably ship showed that the 23,1934, July as of merchandise taken $9,534.21. All of fallen had merchan- inventory fixtures were sold by furniture dise, The assets of the 1935, $4,850. business on April, $21,027.54 with 1930, were 1, January liabilities of showing a over liabili- net balance of assets $7,488.54, By ties of December that balance $13,539.00. 31, 1931, had shrunk it $9,625.45, 31, 1933, and on December only report The first $2,347.78. the executrix concerning January the business under date of *13 1935, $6,661.64 showed assets of and liabilities in the January $9,655.70. amount of From 1, 1934, July management under the 23,1934, Hal D. Patton July 23, and from until the sale 1934, of the business April, management 1935, under of Edith Louise Patton as executrix and from the date of that sale to period (January 25, June a total 1935, 1,1934, to June 1935) year of less than a 25, and a half, the loss as by the shown books was $5,341.84.How much of this prior loss was to the death of Hal D. Patton and how much thereafter we cannot ascertain. The record does during year show that 1930 the business lost year In that $1,379.32. Hal D. Patton credited himself charged salary. and the business with $3,000 In 1931 the business lost $2,534.23,and Hal D. Patton credited salary. $2,000 himself with 1933 the net loss was Hal D. and Patton $3,669.57, credited himself with salary. We $2,400 are unable segregated to find figures appear for but 1932, it does January that from until his death Hal D. 1, 1930, Patton credited himself charged and business with $11,138.60.In 1930 the merchandise sales of amounted to $25,215.13.In 1933 they expenses $11,933.02.In were were $8,102.18 they reports in 1933 were $6,719.36. and Two of Lester expert an Barr, accountant, dated December 2,1931, and respectively, March 25, 1932, were received in evidence partial analysis contain a of the business. After set- ting forth the decrease in report business, the states, “However, with decrease sales the cost doing business is excessive.” His calculation shows that the expense per of total to sales in 1930 was 44.03

ratio ten it 57.97 cent, first months 1931 was per cent. evidence,

In view of the available we think salary that the taken Hal D. Patton was excessive. year example, if In the the entire in business, belonged Hal D. he Patton, stead of one-half had $1,269.57, would have suffered a net loss of would manager salary have received no at but as of busi all, by him one-half of which was owned and one-half ness, salary, apparent Charlton, $2,400 he drew with honestly per book loss $3,669.57. His labors were but services of little or no to the formed, his were value position but never claimant. He was of trustee report made a such to court and never received any adjudication concerning compen the amount of his After sale Mrs. in sation. his death the Charlton’s irregular, being the direction terest was made under county *14 of the court Edith Louise Patton purported partnership of a estate which never existed. proper showing In the absence of as to the amount of compensation reasonably Hal D. to which Patton was compelled upon meager are to act entitled, we evi only presented question in the records. The dence be any, as to if amount, fore us is in net loss complete after the the business exhaustion of its assets. compensation amount of Hal The allowable to D. Patton only may upon as it material bear is existence alleged specific make loss. We need no determina salary amount of to which Hal D. tion of the Patton was during period trusteeship, of his entitled but we do that the loss the business hold after the sale salary was due to excessive its assets credits as D. Patton. Hal serted ” “

There no loss to being apportion, or decree of the circuit court must affirmed. That sum court found that the claimant was entitled less credit thereon the sum of $1,173.48, $91.14 an indebtedness claimant represented business. The claim of Luella M. Charlton amount $1,082.34 allowed.

Neither shall party recover costs in this court. The late Mr. Justice Band did not participate this opinion.