173 P. 790 | Mont. | 1918
delivered the opinion of the court..
On May 26, 1916, Andrew J. Davis, special administrator of the estate of Rachael E. Williams, deceased, presented in court his final account. The general administrator and the guardian of Dorothy Alice Williams interposed certain objections, and after a hearing the court entered its order of May 29, 1917, as amended by an order of June 16, 1917, sustaining some of the objections and overruling others. The objectors have appealed from the order as amended in so far as it fails to charge the special administrator with interest on funds of the estate in his possession, and the special administrator has likewise appealed from it in so far as he deems himself aggrieved. The appeals are consolidated and will be considered in their order.
We enter upon our consideration of these appeals indulging
1. The objectors’ appeal: Apparently the objectors seek to charge the special administrator with interest upon either of two theories: (1) Because he could have loaned the funds of the estate and did not, and was therefore guilty of negligence in its management and should be held to pay interest at the legal rate; (2) because he did employ the money of the estate in such manner that it realized a profit to him personally and he should be held to account for the profit or be required to pay interest in lieu thereof.
It is worthy of note, in passing, that the duty to loan the funds of an estate is not imposed upon an executor or general administrator as such. (Brenham v. Story, 39 Cal. 179.) The duty might be required by statute, but in this state- it has not been done. (Davis’ Estate, 35 Mont. 273, 88 Pac. 957.) Such an officer may, however, be directed, by order of court made after notice, to loan the funds for a limited period and upon certain specified securities only. (Sec. 7652, Rev. Codes.)
(2) The statute which enumerates the powers of a special
The only question then is: Did the special administrator receive any profits from funds which constituted a part of this
The facts disclosed are that, when Eachael E. Williams died
It is not contended that a solvent bank is not a proper depositary for the safekeeping of estate funds, or that Davis received directly anything for the use of these funds by the bank; but it is insisted that, as these funds were mingled with other funds of the bank, the aggregate of which produced the profits made by the bank, Davis did profit by their use by reason of his ownership of bank stock. In other words, a certain proportion of the dividends paid to Davis represents earnings of the funds of this estate. As already observed, the duty imposed by statute was to exercise ordinary care to beep these funds safely and in condition to be turned over to the general administrator at any time. So long as the funds were so kept, the place of their keeping is of no consequence. They might have been locked in a private safe, in a safe deposit vault, or deposited in a solvent bank subject to payment on demand without interest, and. in either event payment over to the general administrator of the funds so received, less legitimate expenses incurred, would have operated to exonerate the special administrator. Does the fact that Davis owned stock in the bank which was the depositary alter the situation? If he is
The only theory upon which a special administrator can be held for profits accruing upon estate funds in his hands by virtue of his office is that he has made an unlawful use of the funds, for, as we have already pointed out, he cannot lawfully invest them, loan them, or use them. In what respect did Davis violate the law in keeping these funds in the First National Bank? The funds were kept safely and subject to payment on demand at any time. They were kept in the depositary selected by the deceased in her lifetime for her own funds, and in an institution over which the special administrator had supervision, and of the solvency of which he had personal knowledge. The fact that Davis owned stock in the bank does not convert into an unlawful act that which otherwise would have been lawful. When these funds were deposited, the money became the property of the bank and the bank became debtor to the estate, or, more strictly speaking, to the special administrator. (Stadler v. First Nat. Bank, 22 Mont. 190, 74 Am. St. Rep. 582, 56 Pac. 111; Murphy v. Nett, 51 Mont. 82, L. R. A. 1915E, 797, 149 Pac. 713.) When the bank used these funds to make profit, it was using its own funds, not the funds of the estate, and dividends paid to Davis were profits earned upon the bank’s own money, not upon money owned by this estate.
If it can be said that the corporate entity, “First National Bank of Butte,” is a mere phantom, or that the name is but an alias under which Andrew J. Davis conducts his private business, then, upon the authority of Barnes v. Smith, 48 Mont. 309, 137 Pac. 541, and Hanson Sheep Co. v. F. & T. State Bank, 53 Mont. 324, 163 Pac. 1151, we would say that a deposit with the bank was a deposit with himself, and use of this money by the bank was use of it by Davis and he must account for any profits accruing from such unauthorized use. This institution
The order of the trial court refusing to charge the special administrator with interest is clearly correct and must be affirmed.
2. The special administrator’s appeal: Complaint is made that the court erroneously refused to allow to the special administrator as credits: (a) Certain costs and expenses incurred in the Henry Williams estate; (b) an attorney fee; (c) certain taxes paid; and likewise erroneously charged him with (d) an item of $3,950.23, (e) an item of $500, and (f) the entire costs of this hearing.
(a) It appears from the record that the court costs were
(b) Rachael E'. Williams died about March 3, 1907. On
(c and d) Three thousand nine hundred and fifty dollars and twenty-three cents came into the possession of the special administrator by virtue of ancillary administration had in England. No third party disputed the title of the estate to this money, and it was not a part of Mr. Davis’ duty to raise any question so long as he does not claim it himself. Prima facie the money belonged to the estate and the court properly charged it to the special administrator.
In June, 1916, the special administrator delivered to the
(e) Among the effects of Rachael E. "Williams at the time of
(f) The court taxed all the costs of this hearing against the
It is conceded by counsel.for objectors that an item of $30 is erroneously included in the cost bill. It appears that the
The cause is remanded to the district court, with directions to modify the order as amended, by crediting the special administrator with $750 paid Geo. F. Shelton as an attorney fee in the Short proceedings, by eliminating the item of $500 for depreciation of furniture, and by deducting $123.20 from the cost bill, and, when thus modified, the order will stand affirmed, but the special administrator will be entitled to deduct from the funds of the estate now in his possession one-half of his costs of these appeals. Except as herein otherwise directed, -,ach party will pay his own costs of these appeals.
Modified.