In re Harper's Estate

• Decision Date: 26 December 1934
• Docket Number: 7301.
• Citation: 40 P.2d 51,98 Mont. 356
• Parties: In re HARPER'S ESTATE. v. HARPER et al. FIRST NAT. BANK & TRUST CO. OF HELENA
• Court: Montana Supreme Court

40 P.2d 51

98 Mont. 356

In re HARPER'S ESTATE.

FIRST NAT. BANK & TRUST CO. OF HELENA v. HARPER et al.

No. 7301.

Supreme Court of Montana

December 26, 1934

Rehearing Denied Jan. 18, 1935.

Appeal from District Court, Lewis and Clark County, First District W. H. Poorman, Judge.

In the matter of the estate of Frederick Harper, deceased. From an order approving a report of the First National Bank & Trust Company of Helena, as testamentary trustee, Frederick Richard Harper and another, beneficiaries under deceased's will appeal.

Affirmed.

Paul W Smith and David R. Smith, both of Helena, for appellants.

T. B. Weir and Harry P. Bennett, both of Helena, for respondent.

ANDERSON Justice.

Frederick Harper died on August 16, 1928, in Lewis and Clark county, leaving estate and property therein. His will was admitted to probate on September 8, 1928. By the terms of his will his estate was left to the Montana Trust & Savings Bank, as trustee, with power "to take, hold, manage, invest and re-invest the same, with full power to sell, convey, transfer, mortgage, exchange and, or, lease the same, or any part thereof."

The beneficiaries of the trust created by the will were Frederick R. Harper, his son, and Elizabeth Igel Harper, his daughter, both of whom were of lawful age at the time of his death. The property of the estate consisted of a house, lot, furnishings, and a considerable number of bonds. The bonds were chiefly those of private corporations.

On September 16, 1929, the property of the estate was distributed to the Montana Trust & Savings Bank, as trustee, as provided by the will of the deceased. By its terms the beneficiaries of the trust were to receive the income therefrom, and the property of the trust was to be divided in equal parts to the beneficiaries; and, as the beneficiaries should progress in age, at stipulated intervals of time each was to be paid one-third of his or her portion.

Thereafter, on May 23, 1931, the Montana Trust & Savings Bank was duly consolidated with the First National Bank & Trust Company, which continued in the administration of the trust.

On May 25, 1932, the trustee filed in the district court of Lewis and Clark county a first account, report, and petition for settlement of the affairs of this trust. This report contains a detailed statement of the conduct of the affairs of the trust, showing the receipts, disbursements, and the investments. Thereupon the beneficiaries filed their objections to the report and petition. By their objections they sought to have the court require the trustee to substitute securities, to be approved by the court, for certain securities which the trustee reported it was holding for the benefit of the trust, and which it had purchased with trust funds received upon the payment of bonds distributed to the trustee. The alleged objectionable bonds were three Middle West Utilities Company, 5 per cent. notes, due June 1, 1933, which were purchased on September 17, 1930, for the sum of $3,000; two Minneapolis, St. Paul & Sault Ste. Marie Railway, 4 per cent. bonds, due in 1938, purchased November 5, 1930, for $1,775; and fifteen bonds of the same railway company and of like maturity, which were purchased on December 31, 1930, for $13,143.75.

The trustee in its petition asserted that these particular securities, and others, were purchased with the approval of Frederick R. Harper, one of the beneficiaries, and with the written authorization of the other beneficiary. The beneficiaries denied these allegations by their objections, and asserted affirmatively that these securities were purchased without their consent or approval. It was further alleged in the objections that Elizabeth Igel Harper was in effect not mentally competent to sign an authorization or consent.

Without further detailing the various allegations, we think it sufficient to say that the issue was raised whether or not, concerning these alleged objectionable securities, the report of the trustee should be approved, or the trustee required to substitute other approved securities for those to which objection was made.

On these pleadings a hearing was had before the court sitting without a jury. Timely demand was made on behalf of the objectors for trial by jury, which the court denied. Inasmuch as it will be necessary to discuss the evidence later, we deem it more appropriate to defer all mention of it until it becomes essential in the orderly discussion hereinafter of the various questions necessary to a decision.

The trial court thereafter approved the report, except the item of $1,000 therein of the Middle West Utilities Company's notes, charged to Elizabeth Igel Harper's portion of the trust, was disallowed and directed to be treated as funds belonging to her uninvested part of the trust. The objectors have appealed from this order. The trustee has perfected no appeal and has made no cross-assignments of error as to the portion of the order adverse to their contentions below.

Objectors assign error on the ruling of the court denying their demand for a jury trial. They rely upon the provisions of section 10033, Rev. Codes 1921, which declare in part that "when a jury is demanded, the district court must impanel a jury to try the case, in the manner provided for impaneling juries in courts of record." The omitted provisions of the section relate to the conduct of the trial after a jury is impaneled. This section is a part of the chapter of our Code relating to the contest of wills. Section 10368 provides that the issues of fact joined in probate proceedings must be tried in conformity with the requirements of sections 10032 to 10038 of the Code.

The jurisdiction of the court to hear a proceeding of this nature arises out of the provisions of section 10352, which provides that a trustee of this character may from time to time pending the execution of his trust, or at the termination thereof, render and pray for the settlement of his account as such trustee before the district court in which the will was probated, and in the manner provided for the settlement of the accounts of executors and administrators. It is further provided in this section that where any trust has been created by or under any will to continue after distribution, the district court shall not lose jurisdiction of the estate by final distribution, but shall retain jurisdiction thereof for the purpose of settlement of accounts under the trust.

Section 10033 was first introduced into our statutory law by the provisions of section 21 of the Probate Practice Act passed in 1877 (Laws 1877, p. 245). Section 10368 was first incorporated in our law by section 326 of the Probate Practice Act of 1877 (Id., p. 324).

Section 10369 provides that if on written demand a jury is called by either party, and the issues are not sufficiently made up, the court or judge, after notice, must settle and frame the issues to be tried, and submit the same, together with the evidence of each party, to the jury, on which it must render a verdict. It is further provided therein that either party may move for a new trial upon the same grounds and errors as provided in the Code for a civil action. Thus far the provisions of section 10369 are identical with the provisions of section 327 of the Probate Practice Act of 1877 (Laws 1877, p. 325). When we adopted our first Codes in 1895, the following provision was added to this section, being section 2924 of the Code of Civil Procedure of 1895: "If the trial of issues joined requires the examination of an account, the court or judge must try the matter or refer it, and no jury can be called." The sentence just quoted is not found in the corresponding section of the California Code of Civil Procedure, section 1717, which Code is the source of many of our Code sections. Prior to our adoption, however, of the California Code, the Supreme Court of that state, in the case of In re Moore's Estate, 72 Cal. 335, 13 P. 880, had reached the conclusion that their section, without the addition made by our Legislature in 1895, did not warrant the granting of a request for a jury in the settlement of accounts, basing its conclusions largely upon the provisions of other statutes deemed to be of importance as evidencing a legislative intention in accordance with its conclusions.

Section 10352 provides that the settlement of the account shall be in the manner provided for the settlement of accounts of administrators. Section 10302 provides that on the settlement of such accounts, the court or judge may appoint one or more referees to examine the accounts and make reports thereon subject to confirmation.

Apparently the Legislature, when it enacted section 10369 in 1895 (as section 2924 of the Code of Civil Procedure of 1895) in its amended form, desired to remove all obscurity in the various sections, as pointed out by the California court in the case of In re Moore's Estate, supra.

In view of these various statutory provisions, without question the objectors were not entitled to a jury trial, and no error was committed by the trial court in refusing their demand.

The court below made no special findings on the various issues raised by the pleadings. The objectors, by numerous assignments of error, seek to review the correctness of various implied findings of that court necessary in order to sustain the general finding.

The district court, when proceeding under the provisions of section 10352, has the same general jurisdiction and powers as are exercised by a court of equity over trusts. Philbrick v. American Bank & Trust Co., 58 Mont. 376, 193 P. 59; In re Estate of Hubbell, 121 Cal.App. 38, 8 P.2d 530; Parkman v. Superior Court, 77 Cal.App. 321, 246 P. 334; 11B Cal. Jur. 838.

The objectors urge that the...