*1 49,670 No. Stahl, Glenn B. Deceased. the Matter of the Estate of Leon Ely, Stahl, Meredith, Meredith, Mildred Marian A. John Ely, Ely, Ely,

Wheeler Charles Noble Adison Van Nellie Margaret Sayre, Appellants, v. R. L. L. Goodyear, Trustee, Barber, Beneficiary of the Leon Stahl and Chloe Trust, Appellees. 121) P.2d

(596 Opinion filed 1979. June Unrein, Davis, Topeka, argued Hummer, Gray, Freidberg, Franklin J. Pool, Unrein, Davis, cause, Jr., A. and Lance Charles L. Michael J. firm, appellants. same were with him on the brief for Rice, Bryan, Topeka, argued Rice, Jones, Schroer, cause Frank M. appellees.

and was on the brief for the opinion delivered of the court was dispute between the result of This case arose as Prager, J.: over the settlor’s administrator an inter trust and trustee of vivos property should be personal question whether certain deceased, Leon included as assets of the estate of prior Leon Stahl properly were the trust created assets of essentially dispute are in the case are not death. The facts a written trust executed 29,1975, Leon Stahl April On as follows: beneficiary agreement the trust principal agreement. The certain specifically described The trust Chloe Barber. estate, including three placed in the trust personal property *2 Bank Au- Security State by the deposit issued certificates of agreement, the trust burn, At the time of the execution Kansas. trustee, $32,460.86. named R. The had a value of the certificates as trustee. Goodyear, accepted appointment L. An 1975. administra- intestate October

Leon Stahl died on Osage probate court of in the tion of his estate was commenced appointed was L. Swarts County November 1975. Ellis deposit The three certificates of the Stahl estate. administrator safety in the were the administrator mentioned above found three listed the deposit The administrator box of Leon Stahl. Leon Stahl deposit property belonging to certificates of as point, At this a his estate. included them in the the administrator. controversy the trustee and arose between Barber, trustee, Goodyear, beneficiary, and later the Chloe inven- deposit from the petitions the three certificates of to strike part of the trust tory, were contending that the three certificates estate. probate Osage court of litigated

That issue was first that County. probate court found hearing, After a full in fact were deposit the estate but certificates of were not assets of the three 28, 1976, July court ordered trust assets. On inventory. That deposit the estate certificates of stricken from court of appealed by to the district decision was the administrator Thereafter, was held before Osage County. a trial de novo After a full petitions strike. F. Honorable Robert Stadler on evidentiary taken under advisement hearing, the matter was prior any Subsequent the district court. Stadler, filed a the administrator being Judge decision made 13, 1977, advising the district court September heirs, R. Good- administrator, L. representative as tentatively trustee, Barber, beneficiary, had year, trust and Chloe settlement, copy which entered into requested petition. was attached to enter into authorizing for an order settlement, $10,000 the terms of settlement. Under trustee, Goodyear, would be from the funds in the hands of the be re- would paid The Stahl estate into Leon Stahl estate. sponsible the funeral of Leon Stahl. remain- paying bill funds, deposit, ing including trust the three certificates of would property to be distributed become sole trust Barber, beneficiary, with the trust agree- Chloe accordance ment. Judge

A on the au- was held Stadler thority Following to enter into 11, 1977, hearing on the district court entered an October granting to the administrator negotiate “to in behalf of the estate and to behalf of the estate settlement in relation within the inven- inclusion tory (Emphasis supplied.) of the estate of Leon deceased.” Upon order, then basis of Swarts, entered into on October between Ellis L. Goodyear, trustee, Stahl administrator of the estate and R. L. Barber, beneficiary Chloe trust. of the Leon Stahl This settlement *3 conformed to the settlement which had been to attached Some, the petition administrator’s to the authorize of compromise Stahl heirs were with the and dissatisfied settlement brought timely appeal to this court. appeal,

On the the in dissatisfied heirs contend substance the compromise administrator of the estate could not the issue to the ownership deposit the three of certificates of the without estate, consent of all including appellants. heirs of the the The objecting heirs maintain that the trial court’s order was too broad scope, in its any since it authorizes the administrator compromise in relation to the inclusion of within that, the of the estate all and under of circumstances, they were their right denied to contest the claim of the trustee deposit. to the three certificates of The trustee and beneficiary authority contend that the administrator’s for only authority sought trustee’s claim to enter specific compromise into the settlement which was attached to petition, that, although journal entry signed judge district was broader in its authorization requested, had did, fact, in enter a com- into promise exactly conformity in with the set- tlement petition and, therefore, attached to his no substantial rights prejudiced. of the They heirs were further maintain that administrator of an estate has the a claim estate, approval of provided against made beneficiary then is obtained. The trustee district court first that, compromise specific since the contend court, all was, effect, approved the district present compromise settle- requirements procedural object- Hence, they argue, ment were satisfied. ing merit. heirs without

The are whether administra- issues to be basic determined a claim filed power or settle tor of an estate has and, exists, procedural re- against the if such quirements necessary for the administrator to followed be issues, power. determining these it would be exercise such law helpful which have principles to examine certain basic of estates de- guide been established to the administration in this cedents state:

(1) of demands and which the exhibition governs statute determining their procedural steps to be followed 59-2237, provides

validity as follows: K.S.A. which thereon; allowance without “59-2237. of demands and Exhibition Any person may hearing, her demand the estate of when. exhibit his or proper filing petition court. Such decedent for its allowance petition. duly filing date of said demand shall be deemed exhibited from the is entitled. shall which contain statement of all off-sets advisable, request must court shall from time to time as it deems administrator, any having request exhibited creditor executor or or at demands, demand, place such notice of which time fix persons given direct. shall be manner as the court shall such and to such “Any ($200), duly exceeding itemized demand not two hundred dollars administrator, verified, may allowed, writing be if executor petition, compliance any provisions relating to without of this act may hearing, deemed notice of demand or otherwise. The verification Upon prima validity filed. facie written defense thereto is evidence of unless a *4 adjudication any demand, judgment allowing shall enter its or the court of adjudication, disallowing judgment the amount it. Such show the date of shall allowed, relating disallowed, Judgments if the amount and classification allowed. (Emphasis contingency.” contingent shall the nature of demands state supplied.) 59-2237, interpreting In held that the sole K.S.A. this court has against a demand probate judge, function of after a 59-2237, allowing an either or judgment estate under enter is to 352, Fast, 225 170 Kan. disallowing demand. In re Estate of necessarily (1951). P.2d view of the 1056 This result follows express “upon adjudication language of of K.S.A.59-2237 that

52 any demand, judgment allowing enter its court shall disallowing it.”

(2) person property A possession claim of a that certain in the

of the decedent at death inventoried belongs properly him an and is not asset of the estate subject provisions constitutes “demand” and is of K.S.A. 59-2237. Paronto, 7,

We so held in In re Estate 172 Kan. 238 P.2d 464 of (1951); Pratt, 512, In (1948); re Estate 164 Kan. 190 P.2d 872 of Bourke, (1945). re Estate 159 Kan. 501 It 156 P.2d should emphasized applicable only personal that the rule is where property possession is in the at of the decedent the time of his death. property possession Where is in the of another the time decedent, death person asserting ownership property required is not to file a claim the court administering the decedent’s estate. In that situation the placed burden upon personal representative decedent bring against person possession recovery an action property. Oswald Weigel, v. 215 Kan. 529 P.2d 117 (1974).

(3) estate, personal administrator or executor of

representative, ordinarily only one authorized to represent Johnson, the estate. In re Estate 164 Kan. (1947). 187 personal representative P.2d 376 is obli- gated protect only not the interests of the heirs but also Tieman, interests of creditors. Richards v. (1939). P.2d (4) An power administrator or executor has the

a disputed estate, against subject claim approval to the court either at the time the settlement is entered into or on final settlement of his account.

It generally recognized at law that common an executor or power administrator had the compromise disputed to settle or doubtful subject claims to the court. The rejected by settlement would be the court only proof bad faith or fraud. This common-law has been require somewhat personal restricted statutes which representative prior approval to secure of the court before binding compromise 2d, settlement is executed. See 31 Am. Jur.

53 C.J.S., 259; Executors and 34 Executors and Administrators § supporting cases at 469; with Administrators annotation § recognized rule is 72 A.L.R.2d 250. The common-law (1916). In Co., 29, 160 Pac. 990 Deposit v. Kan. Sarbach 99 by a Sarbach, challenged a a claim settlement of part- aof accounting time and settlement creditor nership probate court. compromise a

(5) statute, may By an executor or administrator probate approval debt owed to the estate with provides as 59-1714 follows: regard, court. In this K.S.A. appears Compromise it for the best interests “59-1714. with debtor. Whenever estate, court, fiduciary may, effect a fair and reasonable on order of the obligor.” with debtor or other or administrator recognizing right Cases of an executor probate compromise a with debt owed Co., Pac. 74 74 Kan. 87 court are Van Dusen v. Woolen-mill Adm’x., (1906) Swayze, 30 Kan. Aetna Ins. v. Co. Life (1883). Pac. 36 estate, (6) compromising against In a demand settling or duty good the utmost is to exercise administrator’s adequate implies honesty, dealing, fair faith which object acting with the ultimate of his information Rubow, Estate Lohse v. the estate. In re best interests of (1971). 483 P.2d 1048 a the decedent filed In and the heirs of judgment Lohse creditor because court for removal of by the deceased’s insurance demand settlement refusal to trial the estate. The wrongful against carrier claim filed death was sustained removal court’s refusal to order administrator’s on the to this court. whether an administrator or

In issue of determining basic against compromise a demand executor has heirs, we must consider the consent of all estate without prior together our express provisions K.S.A. 59-2237 above, makes K.S.A. 59-2237 subject. law on the As noted a demand mandatory allowance of repre- personal request at the estate to set for allowed or either be that the demand sentative or a creditor and statute, us it obvious to applying disallowed the court. must either a demand *6 approved disapproved by the district court at the the in the either determination of demand order for demand to be allowed or disallowed the district court.

In approving disapproving proposed compromise settle demand, ment of a a district court has a broad discretion. Before a compromise however, approved, settlement is the district court must find that the administrator or executor exercised the utmost good information, faith honesty, adequate fair dealing, and and that compromise the is best Lohse, interests of the estate. In re Estate 207 Kan. 36. If the of district approving compromise court in settlement of a demand requisite makes the findings, findings supported by and the are evidence, the upon the decision the binding district court is creditors and heirs of the estate. After the approved, has been judgment district court should then enter allowing or disallowing part the demand either in in whole or as required by K.S.A. 59-2237. When a final judgment has been manner, entered in any that aggrieved heir or creditor is afforded the right appeal. an appeal to An heir right has the to from Smith, demand. Smith v. allowance 107 Kan. 193 Pac. (1920). Lennen, v. 467, 218 In (1923), Pac. 996 Gift purchases held that one who land estate from heirs is appeal entitled to from an allowing demand Sarbach, estate. creditor right appeal aof from the allowance aof demand against an estate was recognized.

With these principles mind, established lawof we turn ato resolution of the case We have before us. concluded that district court had the approve proposed compromise settlement of the trustee’s demand for the three certificates of deposit opposition over the heirs, provided of certain the trial findings made of fact and conclusions of law that administrator had good honesty, exercised the utmost faith with fair dealing, adequate information, that settlement was in the best Following interests of estate. specific settlement, trial court proceeded should then have to allow or disallow the demand either in part required by whole inor as K.S.A. 59-2237. At point, that a final judgment would been entered from appeal which an could aggrieved party. be taken an We emphasize wish to objecting right heirs had opposition to the settle- offer evidence the allowance or They right ment. further had the compro- upon disallowance of demand based supported by findings mise If trial court are discretion, an showing evidence and no is made of abuse of judgment binding the heirs and district court upheld appeal. creditors estate and should be difficulty presented the order this overly scope above. In its court was broad in noted order, granted the district court to the administrator of Leon negotiate Stahl the “to behalf of any compromise in behalf of the estate relation within inclusion of (Emphasis supplied.) estate of Such Leon deceased.” *7 beyond The the of the district was court. specific compromise court have a hearing should held on proposed approved disapproved and either disapproved settlement. If it settle- ment, proceeded the trial court have to determine should petitions demand estate as contained beneficiary. proposed trustee and If the trial court compromise settlement, have the demand it then allowed should beneficiary part with trustee and in accordance whole circumstances,

Under all the that the case we concluded with must be and remanded the district court direc- reversed petitions trustee the trust benefi- tions consider of the and then ciary and along with proceed parties in accordance rights to determine the of the opinion. legal procedures forth in this principles and set and remanded. is reversed judgment of district court what said Holmes, J., While I with much of dissenting: agree the result by respectfully from majority, I must dissent was the below reached in case. The sole issue before court this by entered into petition compromise agreement a the Leon beneficiary of and the administrator and the trustee a into trust Mr. Stahl entered Stahl inter vivos trust. R. L. was transferred

April certain wherein specified in Goodyear, Included assets as trustee. face value of deposit with a agreement were three certificates of $32,000.00. The administrator claimed the certificates as assets of they the decedent’s estate while the maintained were trustee petition assets of the trust. The trustee filed to strike inventory appraisal certificates from the admin- istrator which was contested the administrator and ten of the heirs of Leon Stahl. petition originally trustee’s was hearing set for

probate proper par- court given notice was to all interested Stahl, ties. All except heirs-at-law of Leon Lillabelle niece, represented by were While counsel. Lillabelle received participate notice of all proceedings, she did not with the other heirs in contesting trustee. original petition to strike the certificates from the

was July 28, heard 1976. A full held, was proper notice, after parties except with all Lillabelle participating. After a decision adverse to the administrator heirs, was taken to the district again court where full hearing parties was held with all contesting being present person represented by and/or competent Following counsel. hearing the matter was taken under advisement the Hon. Stadler, Robert F. District Judge. While the matter was under advisement, and trustee reached a settlement prepared proposed “Compromise Settlement.” The admin- istrator then filed a with the asking district court that the approved. Attached to the was a copy settlement agreement. copy A petition, agree- ment and notice again parties all served on *8 their respective petition specifically counsel. The ap- sought proval of the agreement attached as an ex- hibit and did not ask for anything Paragraph else. 6 of the administrator’s reads: “6. That the administrator feels that it best interest of the estate and accept compromise offer, heirs thereof to said and asks this Court for an order authorizing directing representative and heirs, the administrator as the sole person and the having authority heirs, exclusive on behalf of the to said settlement.” 11, 1977,

On October parties all again appeared interested in person by or court, counsel and the district hearing, after a full entered its subject order which appeal. is now the may of this It be journal conceded that entry poorly on that was

57 prepared overly However, and in fact broad its terms. remains question that the sole before the trial on October compromise was the approve specific to agreement nothing and else. The subse- quently by signed parties was identical attached one by majority with and heard the trial court. The states “The have court should held specific compromise approved and either disapproved exactly settlement.” That what happened. specific compromise only settlement was the issue before the court and judge gave

proceed only with approving settlement. He have been could specific only settlement agreement which was the issue before court.

Leon Stahl died 1975. pending October This has been for over years three and I one-half and do be in not believe justice, heirs, the best trust, interests of the estate proceedings extend these further due to the failure of the scri- vener specific journal to be drafting entry. more in parties day court; fact, they have their had three had days by way in court three hearings. different $10,000 already to the estate when it was faced with an adverse decision from the appear court would reasonable evidently so viewed the district court when it the settlement. Inc., Tatge Co., Mann v. Chemical 440 P.2d (1968), we stated: points cross-appeal, respect “We have examined with to the raised findings, though language court’s some instances the used the court might explicit, have been we which could said more find no error be to affect a right litigation. substantial are result Technical errors to be disre- error, garded, reversal, grounds to be must be such as to affect the rights parties. (2A Error, Digest, Appeal substantial West’s Kansas 1027; Error, Digest Ed.], Appeal 509.) [Rev. Hatcher’s Kansas Such § § being opinion the case we shall not burden this further discussion of those

points.” p. 339. rights No substantial administrator and heirs have been adversely proceedings affected the trial court. This litigation brought be is left should close so what may parties estate and trust inure to benefit of entitled delayed by technicality thereto and should not further *9 actually place what took properly state pleading which failed to in the trial court. principles with the basic general

While amI they be majority, must law I cannot concur set forth question applied the real issue in in this when facts actually proper trial after notice has court been determined con- hearing. disagree I broad statements further majority syllabi paragraphs 2 and 4 wherein the tained in only at settlement can be determined states that hearing on demand and after Compromises court must allow or disallow the demand. always a favorite of settlements of been contested claims by the given law court and should serious consideration addition, compromise settle- stage proceedings. once a approved, ment has been reached and there is no reason already allow or the same has disallow the demand parties been the court. resolved I would affirm the trial court’s decision. join dissenting JJ., foregoing McFarland,

Miller opinion.