In re Rutherford's Estate

• Decision Date: 08 November 1941
• Docket Number: 35273.
• Citation: 154 Kan. 361,118 P.2d 553
• Parties: In re RUTHERFORD'S ESTATE. v. BARTLEY et al. FINLEY et al.
• Court: Kansas Supreme Court

118 P.2d 553

154 Kan. 361

In re RUTHERFORD'S ESTATE.

FINLEY et al. v. BARTLEY et al.

No. 35273.

Supreme Court of Kansas

November 8, 1941

Syllabus by the Court.

The trustee of an express trust has duty of keeping clear and accurate accounts respecting administration of trust, and not to mingle trust funds with his own funds.

A trustee is entitled to credit on his accounting for sums advanced from his own funds in exercise of powers expressly or impliedly granted by trust instrument or by court order.

Trustee's claim for reimbursement for funds advanced and compensation for services in caring for, and maintenance of, incompetent beneficiary, though in form a demand against estate of deceased testator who created trust was not within nonclaim statute where it was, in fact, made as part of trustee's accounting of trust estate. Gen. St.Supp.1939, 59-2239.

The fact that trustee's claim for reimbursement for funds advanced and compensation for services for care and maintenance of incompetent beneficiary of trust was filed over five years after services and funds were furnished did not bar claim under the five-year statute. Gen.St.1935 60-306.

The general rule is that statute of limitations does not run between trustee and beneficiary of an express trust so long as trust relationship exists. Gen.St.1935, 60-306.

The allowance of claim of trustee for reimbursement for funds advanced and compensation for services in caring for incompetent beneficiary of testamentary trust was within discretion of trial court, notwithstanding trustee had failed to keep and render proper accounts and had mingled trust funds with his own funds, where there was no intention to defraud estate.

1. It is the duty of the trustee of an express trust to keep clear and accurate accounts with respect to the administration of the trust, and not to mingle trust funds with his own funds.

2. A trustee is entitled to be credited on his accounting with sums advanced by him from his own funds when such payments were in the exercise of powers expressly or impliedly granted to him by the trust instrument, or which were made by the order of the court.

3. In an accounting by a trustee under an express trust, the record is examined and held that the claim of the trustee for reimbursement for funds advanced and for compensation for services rendered for the care and maintenance of an incompetent beneficiary was not barred by the nonclaim statute, G.S.1939, Supp. 59-2239, nor by the statute of limitations, G.S.1935, 60-306.

Appeal from District Court, Brown County; C. W. Ryan, Judge.

Accounting of J. F. Bartley, executor of the last will and testament of John J. Rutherford, deceased. A claim by J. F. Bartley against a trust estate created by the will of testator for benefit of Orda Rutherford, an incompetent person, of which estate claimant was trustee, was denied by the probate court. From an order of the district court setting aside the order of the probate court and allowing the claim, Robert M Finley, special administrator of decedent's estate, and others, appeal.

Roy V Nelson and Robert M. Finley, both of Hiawatha, for appellants.

Walker F. Means and John S. Haney, both of Hiawatha, for appellees.

ALLEN Justice.

This is an appeal from an order and judgment of the district court of Brown county allowing the claim of J. F. Bartley against a trust estate. The trust was created by the will of John J. Rutherford who died in 1929. The will of Rutherford provided:

"I give, devise, and bequeath my estate as follows: that is to say First--The sum of Six Thousand Dollars ($6,000.00) in trust, to Frank Bartley, as trustee for my youngest son, Orda Rutherford.

"The said trustee to invest said sum in first class securities, and to use the interest in caring for and maintaining the said Orda Rutherford, and at his, the said Orda Rutherford's death, the principal sum of Six Thousand Dollars, shall be divided among my children, share and share alike.

"Second--I give and bequeath to my beloved children Edward Rutherford; Eva Woodcock, and Ada Bartley, the remainder of my estate, share and share alike.

"I make, constitute and appoint my son-in-law, Frank Bartley, of Brown County, State of Kansas, executor of this my last Will and Testament."

The testator died in October, 1929. The will was duly admitted to probate and J. F. Bartley was appointed executor of the will. The assets of the estate as shown by the inventory amounted to $17,255.24. In November, 1929, the executor made a partial distribution of $1,500, and in September 1930, a partial distribution of $600 to the legatees. In January 1931, the executor filed his first accounting. No further accounting was filed until November 1940. In this accounting J. F. Bartley asked reimbursement for expenses incurred in behalf of Orda Rutherford, an incompetent who was the beneficiary in the trust created by the will of John J. Rutherford.

Ada Bartley, wife of J. F. Bartley the executor, was a sister of Orda Rutherford. Orda Rutherford lived with J. F. Bartley from November 1, 1929, until April 10, 1935. He was an epileptic and required constant care. Bartley claimed reimbursement for money that was expended for clothes and medicine and for the reasonable value of his board and room.

The allowance asked for by Bartley was denied by the probate court, but on appeal to the district court the order of the probate court was set aside and the claim allowed. The appeal is from the order and judgment entered by the district court. Bartley was designated as trustee of the trust fund and also as executor of the will.

In Restatement of Trusts, § 6, Comment b, it is stated:

"Duties. The duties of an executor are limited to the winding up of the estate of a decedent and are temporary in their character. In the absence of a statute otherwise providing the duties of an executor are: (1) to reduce to possession the personal assets of the testator; (2) to pay the testator's debts; (3) to pay legacies; and (4) to distribute the surplus, if any, among the testator's next of...