Stell Co., Inc. v. Smith, 28777.

• Decision Date: 30 January 1943
• Docket Number: 28777.
• Citation: 16 Wn.2d 388,133 P.2d 811
• Parties: STELL CO., Inc., v. SMITH et al.
• Court: Washington Supreme Court

133 P.2d 811

16 Wn.2d 388

STELL CO., Inc., v. SMITH et al.

No. 28777.

Supreme Court of Washington

January 30, 1943

Department 1.

Action by Stell Company, Inc., against Maebelle A. Smith individually and as executrix of the estate of Harvey Randolph Smith, deceased, on an assigned claim against estate, wherein by amended complaint Hartford Accident &amp Indemnity Company, as surety on executrix' bond, was made a party defendant. From a judgment of dismissal as to surety entered upon refusal of plaintiff to plead over after defendants' demurrer had been sustained, plaintiff appeals.

Reversed with directions.

Appeal from Superior Court, Chelan County; Fred Kemp, Judge.

Elliott & Kells, of Seattle, for appellant.

Crollard & O'Connor, of Wenatchee, for respondents.

MILLARD Justice.

More than one year subsequent to entry of order by the superior court for Grant county setting aside all of the assets of the estate in question to the widow in lieu of homestead, this action was instituted in the superior court for Chelan county to recover against Maebelle A. Smith, individually, and as executrix of the estate of her deceased husband, on an assigned claim against the estate. By amended complaint Hartford Accident & Indemnity Company, surety on the bond of the executrix, was made a party defendant. Defendants' demurrers on the grounds that (1) the action was barred by the one-year statute of limitations; (2) claim for relief should have been presented in probate proceedings in Grant county; (3) order setting aside property to the widow was a final order, hence may not be collaterally attacked; and (4) plaintiff's claim was not that of a preferred creditor payment of which was a condition precedent to award in favor of the widow, were sustained. This appeal is prosecuted by plaintiff from judgment of dismissal as to the surety company entered upon refusal of plaintiff to plead over.

The allegations, admitted by the demurrer to be true, are as follows: In December, 1934, the petition of Maebelle A. Smith, executrix of her deceased husband's estate, which was being probated in superior court for Grant county, for authority to compromise a claim of Columbia Valley Bank of Wenatchee in the amount of $17,644 against the estate, was granted. Pursuant to that authorization the bank accepted in full settlement of its claim (discounting same $3,150) $8,000 to be obtained from federal bank loan to the executrix, $1,319 cash paid at time of compromise estate's interest in certain real property, and $1,000 to be paid in cash when returns were made from sale of the then present fruit crop, or $1,000 from other sources.

June 20, 1935, Mrs. Smith, who did not have sufficient cash to pay $1,000 due to the bank under the foregoing agreement, individually and as executrix of the estate of her deceased husband, executed a note in the amount of $1,000 payable to the bank on or Before December 1, 1935. That note, on which nothing was paid except interest to May 27, 1936, was assigned to appellant. Payment could have been made, however, as there were available assets of appraised value of $9,885.76 which were removed from the estate without any accounting therefor. Other property remaining in the estate was set over to Mrs. Smith in lieu of homestead by order of the superior court for Grant county entered February 13, 1940, from which order no appeal was taken. The pertinent portion of the order reads as follows:

'This cause came on regularly for hearing Before the above entitled court on February 13, 1940, upon the petition to set aside property in lieu of homestead, as filed by Maebelle A. Smith, executrix; the executrix was present. * * * Harvey Jean Smith, minor daughter of said decedent, was represented by * * * attorney, acting as guardian ad litem * * *; it appearing to the satisfaction of the court from the records and files herein that due and timely notice of the time and place of this hearing was given as provided by law, and from the testimony adduced at said hearing it appears to the court's satisfaction that the funeral expenses and expenses of last sickness and of administration have been paid or provided for, that the only property remaining in said estate consists of the real property hereinafter described and that neither the decedent nor his surviving spouse, Maebelle A. Smith, have heretofore claimed any homestead * * * and that the value of all the property hereinafter described is less than $3,000, and the court being fully advised in the premises,

'It is here and now considered and ordered and adjudged that * * * the remaining property in the above entitled estate, be and the same is hereby set aside and awarded to Maebelle A. Smith, * * * in lieu of homestead.

'It is further considered and ordered that there being no other property in said estate for administration, that the executrix thereof be and she is hereby discharged and released from further responsibility in said estate, and her bond and bondsmen are hereby released from further responsibility therein.'

The executrix was discharged and the estate closed without a final settlement or order of court approving such final settlement.

Appellant insists that it is entitled to a money judgment against the surety on the bond of the executrix and does not contend that it is entitled to a general accounting and the setting aside of the homestead if the property is in such condition that that relief may be afforded. In other words, appellant's position is that the estate has been wrongfully depleted of property of the value of $9,855.76, and that other property was wrongfully set aside to the widow in lieu of homestead; which properties, in either case, should have been applied to payment of appellant's preferred claim in the amount of $1,000; therefore, the proper relief of which appellant may avail itself in this situation where all the properties have been abstracted from the estate is an action upon the bond of the executrix.

The first question presented is whether the following section of the statute--under any other statute of limitation appellant's action was timely--which bars maintenance of certain actions if same are not commenced within the period of one year after the cause of action accrued, operates to bar appellant's right to maintain, this action since it was brought nineteen months after entry of order, from which no appeal was taken, setting aside property to widow in lieu of homestead: '2. An action by an heir, legatee, creditor, or other party interested, against an executor or administrator, for alleged misfeasance, malfeasance or mismanagement of the estate within one year from the time of final settlement, or the time such alleged misconduct was discovered.' Rem.Rev.Stat. § 161. (Italics ours)

Appellant's privy submitted to the jurisdiction of the superior court for Grant county by filing its claim for payment therein, which claim was approved and an order entered, as recited above, authorizing a compromise of that claim. Appellant's predecessor in interest was not entitled (in the absence of written request therefor and no such request was made) to special notice in the probate proceedings of petition, and hearing thereon, of executrix for setting aside to her property of the estate in lieu of homestead, Rem.Rev.Stat.Supp. § 1434. Appellant can not successfully challenge the validity of the order awarding the property to the widow as that order, which is a final order, was entered, pursuant to provisions of homestead statute, Rem.Rev.Stat. § 1473, after due and proper notice, and hearing thereon of petition of the widow for property of the estate in lieu of homestead. In re Backstrom's Estate, 191 Wash. 93, 70 P.2d 784.

Counsel for respondent argue that appellant's right of recovery against the surety on the bond of the executrix is barred for the reason that the order entered February 13, 1940, is a final, appealable order under Rem.Rev.Stat. § 1473. That order, it is true, was final within its limited field of setting aside property to the widow in lieu of homestead, but it is not a valid order approving the executrix's final report and petition for distribution and discharge of the executrix and surety from further responsibility in the estate, as there was an utter disregard of the statutory procedure prerequisite to the validity of such an order. It follows that the one-year statute of limitations, Rem.Rev.Stat., § 161, is not applicable as there has not been a final settlement of the estate. See Bartels v. Gove, 4 Wash. 632, 30 P. 675; Gerry v. Gerry, 135 Wash. 468, 238 P. 5; In re Krueger's Estate, 11 Wash.2d 329, 119 P.2d 312; In re Petersons' Estates, 12 Wash.2d 686, 123 P.2d 733.

The notice required by the statute, ...