Smith v. St. Louis Union Trust Co.

• Citation: 104 S.W.2d 341,340 Mo. 979
• Parties: Clarke Stull Smith, Executor of the Estate of Orian E. Smith, Appellant, v. St. Louis Union Trust Company, a Corporation, Executor of the Will of Ludwig Kotany; St. Louis Union Trust Company, a Corporation, Trustee Under the Will of Ludwig Kotany; St. Louis Union Trust Company, a Corporation; O. H. Moberly, as Finance Commissioner, and Ruth Gregg Farrar, Appellees
• Decision Date: 21 April 1937
• Court: United States State Supreme Court of Missouri

104 S.W.2d 341

340 Mo. 979

Clarke Stull Smith, Executor of the Estate of Orian E. Smith, Appellant, v. St. Louis Union Trust Company, a Corporation, Executor of the Will of Ludwig Kotany; St. Louis Union Trust Company, a Corporation, Trustee Under the Will of Ludwig Kotany; St. Louis Union Trust Company, a Corporation; O. H. Moberly, as Finance Commissioner, and Ruth Gregg Farrar, Appellees

Supreme Court of Missouri

April 21, 1937

Appeal from Circuit Court of City of St. Louis; Hon. M. G Baron, Judge.

Affirmed.

Smith & Pearcy for appellant.

(1) The probate court did not have exclusive jurisdiction. Under the general probate statutes of Missouri an executor is required to give bond with two or more sufficient sureties, resident in the county. R. S. 1929, sec. 18. The form of this bond is prescribed by statute, which sets out the language in haec verba in which the condition of the bond must be drawn. R. S. 1929, sec. 19. The probate statutes prescribe that the bond of any executor may be sued on at the instance of any party injured, in the name of the State, to the use of such party, for waste, mismanagement, or other breach of condition. R. S. 1929, sec. 282. Suit may be filed on such bond against the executor while administration is still pending, and before final settlement, provided all debts and other charges have been paid, or provision made for their payment. R. S. 1929, sec. 279. Even though there has been no final settlement, yet if the administration has been completed and all debts and claims paid, suit may be brought in the circuit court against the executor for waste or mismanagement. State ex rel. Wann v. Dickson, 213 Mo. 90; State ex rel. Fagan v. Grigsby, 92 Mo. 424; State ex rel. Gott v. Fidelity & Dep. Co., 317 Mo 1088, 209 S.W. 87; Kelley v. Thornton, 56 Mo. 327. (2) If the Legislature had intended to repeal as to trust companies the provisions of Sections 282, 279, Revised Statutes 1929, giving an interested party the right to bring suit in the circuit court against executors, that intention would have been expressly stated in the act. Repeals by implication are not favored. Maurizi v. Western Coal & Mining Co., 11 S.W.2d 281; White v. Greenway, 303 Mo. 697, 263 S.W. 105; State ex rel. Hyde v Buder, 315 Mo. 797, 287 S.W. 309; State ex rel. Moseley v. Lee, 319 Mo. 989, 5 S.W.2d 88.

Bryan, Williams, Cave & McPheeters for respondents.

(1) The petition does not state facts sufficient to constitute a cause of action in equity. (a) An action at law cannot become one of equitable cognizance merely because an accounting is sought. Johnston v. Star Bucket Pump Co., 274 Mo. 414; Bennett v. Crane, 220 Mo.App. 607. (b) The petition shows on its face that there is no question of avoiding a multiplicity of suits, which would give equitable jurisdiction. (c) Although respondent trust company is claimed to be a trustee, the petition shows that in fact no such trust relationship exists. Judson v. Bennett, 233 Mo. 706; Schlickman v. Bank, 129 S.W. 623; Koelling v. Citizens' Bank, 237 S.W. 176. (2) The circuit court was without jurisdiction of the alleged cause of action, because (a) the probate court has jurisdiction of settling and surcharging the accounts of executors and administrators. Mo. Const., Art VI, Sec. 34; Sec. 2046, R. S. 1929. (b) The circuit court has exclusive original jurisdiction in all civil cases not otherwise provided for, and concurrent jurisdiction with and appellate jurisdiction from inferior tribunals as is or may be provided by law. Mo. Const., Art. VI, Sec. 22. (c) The circuit court could not have exclusive jurisdiction of an executor's accounting because the jurisdiction of the probate court is specifically provided for by the Constitution and statute above cited. (d) Nor does the circuit court have concurrent jurisdiction in a suit of this character, for no provision is made for such suit by statute or otherwise. Burns v. Woolfolk, 303 Mo. 595. (e) The Legislature has provided a definite method for the protection of the beneficiaries and creditors of decedents' estates where a trust company is executor. Secs. 5463, 5936, R. S. 1929. (f) Section 282, Revised Statutes 1929, relied upon by appellant, only provides for suits on executors' bonds and at the relation of the State. There can be no suit on an executor's bond if there is no bond. Sec. 282, R. S. 1929.

Westhues, C. Cooley and Bohling, CC., concur.

OPINION

WESTHUES

Orian E. Smith brought this suit to recover a judgment in damages against appellant, St. Louis Union Trust Company, executor of the last will and testament of Ludwig Kotany, deceased. The petition charged a breach of duty in delaying the selling of securities belonging to the estate, which, it was alleged, resulted in a loss to the estate. The trial court sustained a demurrer to the petition and plaintiff declined to plead further. Judgment for the defendants was entered and this appeal followed. Thereafter plaintiff died, and Clarke Stull Smith, executor of plaintiff's estate, continued the prosecution of this appeal.

The defendants named in the petition were: St. Louis Union Trust Company, a corporation, individually and as executor and also as trustee under the will; O. H. Moberly, as Finance Commissioner of the State of Missouri; and Ruth Gregg Farrar, a residuary legatee. O. H. Moberly was made a defendant, because as finance commissioner he held securities deposited by the defendant trust company for the purpose of qualifying under the law to act as executor and administrator of estates generally. It was alleged that defendant, Ruth Gregg Farrar, and Orian E. Smith were named as residuary legatees in the will.

The demurrer, filed by the defendant Moberly alleged that the circuit court was without jurisdiction of the alleged cause of action set up in plaintiff's petition; also that the petition failed to state a cause of action as against him. The trust company filed a demurrer alleging that the circuit court was without jurisdiction and that the probate court had exclusive jurisdiction of the case. We will discuss only the jurisdictional question, as we are of the opinion that that will be decisive of the case.

The suit was filed prior to a final settlement of the estate. It was alleged, however, and we may concede that all debts of the estate had been paid. The provisions of the will, which plaintiff alleged imposed a duty upon the executor, and which duty was violated, read as follows:

"'For the purpose of paying any lawful debts owing by me at the time of my death, costs of administration of my estate, inheritance or estate taxes or any taxes which may be assessed against my estate, or for the purpose of making any settlement or distribution of my estate, my said executor is authorized and empowered to sell any real or personal property belonging to me at the time of my death, at such times and prices and upon such terms as may to it seem desirable and proper without the approval or order of any court having jurisdiction of my estate, and also to execute and deliver such deeds or other conveyances as may be necessary to carry such sales into effect.'"

Plaintiff further alleged that the trust company received, as executor of the estate, stocks of the fair market value of approximately $ 420,000; that due to the negligence of the trust company in failing to timely sell the stock, plaintiff herself, as one of the residuary legatees, sustained a loss of at least $ 100,000. Plaintiff also asked for an accounting and that a special master or referee be appointed.

Appellant asserts that the trust company had qualified generally, to act as executor or administrator of estates without giving bond, by complying with Section 5463, Revised Statutes 1929, and depositing securities of the value of $ 200,000, as required by the above section. Appellant takes the position that the trust company's compliance with the provisions of Section 5463, supra, had the same effect as the giving of bond required of executors and administrators generally by Section 18, Revised Statutes 1929. The argument is then advanced that plaintiff in this case had the legal right to maintain an action in the circuit court for waste or mismanagement of the estate as provided for in Sections 282 and 279, Revised Statutes 1929. Section 282 reads as follows:

"The bond of any executor or administrator may be sued on at the instance of any party injured, in the name of the state, to the use of such party, for the waste or mismanagement of the estate, or other breach of the condition of such bond; and the damages shall be assessed thereon as on bonds with collateral conditions."

That a party interested in an estate, who has been injured through the neglect of an executor or administrator in managing the estate, may maintain a suit in a circuit court on the bond of such executor or administrator is well settled. State ex rel. v. Shelby, 75 Mo. 482, l. c. 484, was a suit on such bond. This court said:

"The circuit court had jurisdiction. The probate court had none."

It is also well settled law that a suit on an administrator's, or executor's, bond for waste, etc., may be brought by a residuary legatee in a circuit court, prior to a final settlement of the estate when the debts of the estate have been paid. [State ex rel. v. Dickson, 213 Mo. 66, 111 S.W. 817.] In State ex rel. v. Thornton et al., 56 Mo. 325, this court said:

"Distributees may maintain an action on an administrator's bond before final settlement. The facts of this case show a breach of the bond, and that the distributees are the only parties entitled to the funds in the hands of the administrator; and they are therefore the only parties who can maintain the action as relators."

That rule is still in force. [See State ex rel....