Enright v. Sedalia Trust Co.

• Decision Date: 04 October 1929
• Docket Number: 27756
• Citation: 20 S.W.2d 517,323 Mo. 1043
• Parties: Michael Enright, J. W. Murphy, Thomas Enright, J. E. Murphy, Maggie Downs, Elizabeth Downs, Della McTigue, Katherine L. Friday, Mary Ann Houston and Paul Murphy v. Sedalia Trust Company and Richard Murphy, Executors of Last Will of John W. Murphy, Appellants
• Court: Missouri Supreme Court

20 S.W.2d 517

323 Mo. 1043

Michael Enright, J. W. Murphy, Thomas Enright, J. E. Murphy, Maggie Downs, Elizabeth Downs, Della McTigue, Katherine L. Friday, Mary Ann Houston and Paul Murphy v. Sedalia Trust Company and Richard Murphy, Executors of Last Will of John W. Murphy, Appellants

No. 27756

Supreme Court of Missouri

October 4, 1929

Appeal from Pettis Circuit Court; Hon. Dimmitt Hoffman Judge.

Affirmed.

A L. Shortridge, W. D. Steele and Montgomery & Rucker for appellants.

(1) The statute requires the probate court to fix the interest rate at each settlement. Respondents ought not to be permitted to complain concerning the failure of the court to require executors to account for interest after the adjournment of the term at which the settlement was made. Sec. 223, R. S 1919. (2) Respondents allowed a period of four years to elapse before they claimed any interest on the funds in the hands of the executor. Under these circumstances, equity will not compel the executors to pay more than the rate of interest fixed by the statute. Albert v. Sanford, 201 Mo. 133. (3) The probate court's action in setting aside the final settlement filed and directing another settlement to be made, was not an order on the final settlement, and an appeal from such an order will not lie. For that reason, the circuit court was without jurisdiction to hear and determine this cause. Woods v. Yarnell, 261 S.W. 943; Tamboin v. Lead & Zinc Co., 161 Mo.App. 296. (4) Under the facts in this case and the law applicable thereto, the executors were only chargeable with interest at the rate of two per cent compounded annually. Sec. 11801, subsec. 8, R. S. 1919. But for the statute requiring trust companies when acting as executors, to pay not less than two per cent on moneys belonging to an estate, no interest should be required in this case, as there was no unnecessary delay in settling the estate, the executors being prevented from making settlement. Gregory v. Menefee, 83 Mo. 413. (5) "An administrator is not chargeable with interest on money in his hands as a matter of course; such question is to be determined by the existing circumstances." Madden v. Madden, 27 Mo. 454; Wenzell v. O'Neal, 243 S.W. 395. (6) There is no evidence of any certification to the probate court by the circuit court of the determination of the suit instituted for the purpose of construing the will, and until such certification to the probate court the executor was not liable to the legatees for interest. Good Samaritan Hospital v. Trust Co., 137 Mo.App. 183; In re Lewis, 210 Mo.App. 82.

Bohling & Bohling, Paul Barnett and D. S. Lamm for respondents.

(1) Respondents' appeal from the probate court to the circuit court was proper, and the circuit court's ruling sustaining such appeal was likewise proper. Branson v. Branson, 102 Mo. 613; Sec. 282, R. S. 1919; See, also, Secs. 222, 223, 213, 289, R. S. 1919; Re Estate of Boothe, 38 Mo.App. 456. (2) The fact that in the probate court the final settlement was not approved does not change the fact that a final order was made determining the executors' liability for interest. Plaintiffs prayed that the executors be charged with interest and for an accounting. A full hearing was had and the relief was denied. This was a "final decision" of a "matter arising under the provisions of Articles I to VIII, inclusive" under Sec. 282, R. S. 1919. Branson v. Branson, 102 Mo. 613; McCrary v. Menteer, 58 Mo. 446; Ruff v. Doyle, 56 Mo. 301. (3) The executor trust company had complete charge of the handling of the estate funds. It had the complete control of the estate funds and could legally place them in its deposits if it wanted to. This it elected to do. Under proper court orders, it could have invested estate funds in Liberty or other bonds or in many other ways. But, having placed the money in its general deposits, even though rightfully, and having used it to its own profit, the profits belonged to the estate, not to the executor. Furthermore, if the executor trust company had wished to be excused from legal liability for profits made by it from the use of estate funds, or had desired to use estate funds in its business with the expectation of paying into the estate less than the actual profits made, it was its duty to petition the probate court and obtain an order to that effect, the beneficiaries consenting. It will not do to say that an executor can arbitrarily use and make profits on estate funds in any manner the executor wishes and keep the profits, which belong to the beneficiaries. (4) Secs. 222 and 223, R. S. 1919, are mandatory. Wolfort v. Reilly, 133 Mo. 467; State ex rel. v. Morrison, 244 Mo. 210. (5) And even though the settlement of the estate may be delayed by a justifiable cause, yet if the executor makes use of estate funds in the meantime, the executor is liable for interest or profits. 31 L. R. A. (N. S.) 362, Note IX. (6) The fact the executor is a bank or trust company does not change the rule of liability. St. Paul Trust Co. v. Kittson, 62 Minn. 408; Union Trust Co. v. Preston Natl. Bank, 144 Mich. 106; Knagenhjelm v. Hospital Trust Co., 43 R. I. 570; St. Paul Trust Co. v. Strong, 85 Minn. 12. (7) When an executor has used estate funds, the executor should be charged with the actual interest or profits made from the use thereof. The burden is on the executor to show this. If the executor does not show the actual interest or profits received, the executor is always chargeable with at least the legal rate. 37 A. L. R., notes, pp. 447-459. (a) The evidence in the case at bar shows the executor made personal loans at seven and eight per cent and secured real estate loans at five and six per cent plus a commission of two or three per cent. (b) In order actually to recompense the estate, the interest should be compounded annually, that is, "with annual rests." In re Davis, 62 Mo. 450; Cruce v. Cruce, 81 Mo. 676; 3 Woerner, Am. Law of Administration (3 Ed.) sec. 511, p. 1764; Berry v. Berry, 218 S.W. 691. (8) Annual settlements are only partial and interlocutory, and open to further action of the probate court, to be corrected and modified at the final settlement if deemed necessary. Respondents in the case at bar excepted to the "final" settlement and other settlements just as soon as respondents learned appellants proposed to become discharged without accounting to the estate for interest or profits. In re Wickards Est., 282 S.W. 175. (9) The only authority for a trust company acting as executor is a statute (Subsec. 9, Sec. 11799, R. S. 1919; Laws 1915, p. 165). State ex rel. Burnes Natl. Bank v. Duncan, 302 Mo. 130, 144. And this authority is granted with the express statutory enactment that the trust company executor is held to the same accountability as a natural person. Subsec. 6, Sec. 11801, R. S. 1919. A trust company must under the statute exercise special care in handling estate funds. State ex rel. v. Duncan, 302 Mo. 146. If it does not see fit to follow the statutes, but mingles estate moneys with or places them in its general deposits, certainly no presumption will be indulged in favor of the trust company to permit it to pay only two per cent to the estate, when its general deposits were loaned out and bringing more than three times as much to itself. Without any attempt being made to penalize it for its actions, the trust company, under Subsec. 6, Sec. 11801, is as accountable under Secs. 222 and 223, R. S. 1919 as a "natural" person. (10) When two statutes are not absolutely irreconcilable, both will be enforced. State ex rel. v. Penman, 282 S.W. 498; State ex rel. v. Buder, 315 Mo. 791; Barnett v. Bellows, 315 Mo. 1100; Lefman v. Schuler, 296 S.W. 808.

Henwood, C. Davis and Cooley, CC., concur.

OPINION

HENWOOD

This controversy originated in the Probate Court of Pettis County, where respondents, residuary legatees under the will of John W. Murphy, deceased, excepted to the final settlement of appellants, executors of the will, on various grounds, including the failure of the executors to account for interest on funds of the estate deposited in the Sedalia Trust Company. The probate court overruled this exception, holding that the estate was not entitled to interest on funds so deposited, but sustained other exceptions and ordered the executors to file an amended final settlement in conformity with its findings. On the appeal of the legatees, the Circuit Court of Pettis County held that the Sedalia Trust Company should pay interest to the estate in the sum of $ 10,629.93, and rendered judgment accordingly. From that judgment, the executors have perfected an appeal to this court.

The exceptions of the legatees to the final settlement of the executors and the answer of the executors thereto, filed in the probate court, constitute the pleadings in the case.

Relating to interest on funds of the estate, the legatees say, in their exceptions, that the executors had possession and control of the property and funds of the estate, from May 1, 1919, to November 12, 1924; that the settlements filed by the executors on November 17, 1919, July 20, 1920, December 20, 1922, and November 12, 1924, show balances of money in their hands, varying in amounts from $ 22,224.53 on November 17, 1919, to $ 65,372.55 on July 20, 1920; that, throughout the period of administration, the Sedalia Trust Company used the funds of the estate in carrying on its own business and collected interest thereon and did not account therefor to the estate; and that the settlements filed by the executors, including their final settlement of November 12, 1924, do not show any interest on funds in their hands.

In their answer, the executors say that on November 10, 1924 all of the respondents, except Elizabeth Downs, Katherine L. Friday and Mary Ann...