Peyton v. The Chase County National Bank

• Decision Date: 07 January 1928
• Docket Number: 27,720
• Parties: J. H. PEYTON, as Administrator of the Estate of S. T. SLABAUGH, Appellant, v. THE CHASE COUNTY NATIONAL BANK, Appellee
• Court: Kansas Supreme Court

262 P. 595

124 Kan. 763

J. H. PEYTON, as Administrator of the Estate of S. T. SLABAUGH, Appellant, v. THE CHASE COUNTY NATIONAL BANK, Appellee

No. 27,720

Supreme Court of Kansas

January 7, 1928

Decided January, 1928

Appeal from Chase district court; ISAAC T. RICHARDSON, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. LIMITATIONS OF ACTIONS--Computation of Statutory Period--Person Capable of Being Sued. Where one person represents both sides of a conflicting claim, the general rule is that the statute of limitations does not begin to run until there is someone in existence by whom, and a different person against whom, the claim may be enforced.

2. SAME--Person Capable of Being Sued. In an action by an administrator, with a will annexed, against the former executor of the estate under the will and a bank, of which the executor was president, to recover moneys of the estate alleged to have been wrongfully used by the former executor and the bank officials for the benefit of the bank, the statute of limitations did not begin to run against either of the defendants until the administrator, with the will annexed, was appointed.

Dudley Doolittle, Henry C. O'Reilly, both of Strong City, W. L Huggins and O. T. Atherton, both of Emporia, for the appellant.

Charles E. Davis, of Cottonwood Falls, and Gilbert H. Frith, of Emporia, for the appellee.

OPINION

HARVEY, J.:

This is an action by an administrator, with the will annexed, against the former executor of the estate under the will, and a bank of which the executor was president, to recover moneys of the estate alleged to have been wrongfully used by the former executor and bank officers for the benefit of the bank. Plaintiff recovered judgment against the former executor, from which no appeal has been taken. At the trial the court sustained the bank's motion for judgment in its favor on the pleadings and opening statement of counsel. Plaintiff has appealed. The sole question before us is whether plaintiff's action against the bank was barred by the statute of limitations.

S. T. Slabaugh, a resident of Chase county and the owner of considerable real and personal property, died in April, 1921, leaving a will by which he authorized and directed his executor to sell, within two years, all his real property and from the proceeds pay certain bequests to his widow and children, and to convert his personal property into cash and divide the same among his children share and share alike. He requested that J. B. Sanders be appointed executor without bond. The will was duly admitted to probate April 16, 1921, and the executor appointed as requested in the will. For some years prior thereto, and continuously until about the first of the year 1925, J. B. Sanders was the president and an active managing officer of the Chase County National Bank. On July 8, 1924, he reported to the probate court that he had a balance of cash on hand belonging to the estate of $ 43,467.86, and on August 18, 1924, the probate court made an order for a partial distribution of the estate. On February 23, 1925, J. B. Sanders applied for leave to resign as executor. His resignation was later accepted, and on April 27, 1925, J. H. Peyton was duly appointed administrator, with the will annexed. On May 6, 1925, he made demand on J. B. Sanders for all moneys and property in his hands belonging to the estate. Sanders refused to pay over any money, but tendered to plaintiff certain notes, the face value of which aggregated $ 45,191.55, bearing various dates from December 23, 1923, to June 24, 1924, executed by various parties. Some of them had been made payable to J. B. Sanders; others to the bank, and these were indorsed "Pay to the order of J. B. Sanders, Ex., without recourse, The Chase County National Bank by C. H. Garrison, Vice President." The real value of any of these notes is not shown; perhaps they are worthless. Plaintiff declined to accept them.

The petition, filed March 25, 1926, alleges substantially the facts above stated, and further, that the officers of the bank knowingly and wrongfully used the moneys of the estate for the benefit of the bank, which was in a precarious financial condition. The bank filed an answer admitting formal matters, but in effect a general denial. When the case came on for trial, in December, 1926, after the jury was selected, the opening statements made and a witness sworn, the defendant bank moved for judgment in its favor for the reason "that the petition does not state a cause of action in favor of the plaintiff and against the defendant." This motion was argued, considered and overruled. The bank then interposed a further demurrer to the petition and motion for judgment in its favor on the pleadings, as to all but one item (one of the notes which Sanders tendered to plaintiff was dated June 24, 1924--less than two years before the petition was filed), for the reason that the action, as to all other items, was barred by the statute of limitations. The argument is that the action is for conversion, and that the conversion took place at the time the money was wrongfully used, as shown by the dates of the several notes. The court took this view of the matter; plaintiff declined to try the case as to the one item only; the motion was sustained and judgment was rendered for the defendant bank. Plaintiff complains of this ruling. It was error.

There was no reason to treat the peculations of defendants as separate items, with plaintiff's right to recover to depend upon the dates of notes tendered by Sanders to plaintiff. Sanders had no authority to invest the money of the estate in notes, or in any other kind of property. His duty, under the will, was to convert the property of the estate into cash and to disburse that as the will directed. He had no authority from the probate court to loan the money of the estate or to invest it in any kind of property. Hence, the dates of the notes tendered to plaintiff, at most, pertain to details as to when or how the money was used. They have but little bearing upon the question of the bank's liability to plaintiff.

The gist of plaintiff's action against the bank is found in the allegations of the petition to the effect that the officers of the bank, conniving or conspiring with the executor of the estate, wrongfully used the money of the estate for the benefit of the bank. Just how they so used it is but a detail of the proof.

Appellee argues that, conceding for the purpose of the motion, that the money was wrongfully used as alleged, that such wrongful use amounts to a conversion to which the two-year statute of limitations applies; that there was at all times an executor of the estate, or an administrator, with the will annexed and that an action might have been brought for the wrongful conversion at any time after such conversion. There are three difficulties with this argument. First, plaintiff is not required to base an action on conversion as a tort, but may treat it as an action for money had and received. (Washbon v. Bank, 87 Kan. 698, 704, 125 P. 17.) But this theory need not be resorted to in this case. Second, the general rule is that the participant in a breach of trust cannot invoke the defense of the statute of limitations any more than the unfaithful trustee himself can do so. (Washbon v. Bank, ...