Riddell Nat'l Bank Etc. v. Englehart

105 N.E.2d 357, 123 Ind. App. 517, 1952 Ind. App. LEXIS 167

• Court: Indiana Court of Appeals
• Decided: April 21, 1952
• Docket: 18,226
• Status: Published

Opinions

Crump acker, J.

This is an action for damages brought by the appellees, adult children and heirs at law of Theodore W. Englehart, deceased, against the appellant who had served as administrator de bonis non in the settlement of their father’s estate. The first paragraph of the complaint charges the appellant with the violation of its statutory duties as such administrator in that it failed and refused to close said estate by filing its final report within the time prescribed by statute and thereby permitted claims based on three alleged lost notes to be filed by three different claimants and prosecuted to judgment, although none of said claims was filed until more than two years after issuance of letters and publication of notice of administration, and each claim would have been barred had the appellant filed its final report within the time prescribed by statute. The second paragraph of the complaint alleges that the appellant made no adequate defense against the allowance of said claims and, despite records containing obvious errors, it refused to seek new trials or permit the appellees to do so in its behalf. Both paragraphs allege that the estate was rendered insolvent by the allowance and payment of said claims and the appellees’ distributive shares thereof were lost to' them. Issues of fact were joined on this complaint and tried to the court which found for the appellees on both paragraphs thereof and assessed their damages in the sum of $20,221.66 for which judgment was entered.

The facts, pertinent to the first paragraph of the complaint, indicate that on September 27, 1939, one Albertis Moon filed in the office of the clerk of the Clay-Circuit Court a claim against the estate of Theodore W. Englehart founded on a lost note in the sum of - $3,000 and up to that time no other claims against said estate had been so filed. The appellant was then the duly-appointed and acting administrator de bonis non of said estate and his final report was due on October 20, 1939. At and for several years prior to his death the said Theodore W. Englehart was an active partner in the firm of Klingler-Englehart Company doing business in Brazil, Indiana. That said-business became insolvent and in 1938 a receiver was appointed by the Clay Circuit Court to liquidate its affairs. When the appellant’s -final report became due it knew that such receivership was pending and “that there were some very large liabilities which, no doubt, exceeded the assets, and that the Englehart estate would be called upon to contribute.” For these reasons the appellant did not file its final report when due nor did it, on said date, make a formal showing of such facts to the court and procure an order of-record continuing the administration of the estate. In the meantime other claims, also founded on lost notes, were filed and aggregated, with the Moon claim, the sum of $29,000. Due to the appellant’s failure to file its final report on the due date all of said claims had been on file more than 30 days before final settlement was eventually made and therefore were not barred by the provisions of Burns’ Stat., §6-1001, as they otherwise would have been. This resulted in the prosecution of said claims to judgment and the consequent insolvency of the estate whereby there were no assets remaining for distribution.

In our opinion these facts do not support the court’s judgment on this paragraph of the complaint which rests upon the following provision of the probate code: “Any executor or administrator may be sued on his bond by any . . . heir . . . for any of the following eaúses, viz: . . . Eighth. Failure to render an accoúnt of his proceedings whenever required by the court or the provisions of this act.” Burns’ Stat., 1933, §6-2101. This statute creates no actionable wrong on the part of an administrator for the unexcused failure to file his final report when due under the law unless such failure results in a devastavit. Granting that the appellant neither filed its final report when it was due nor was excused from doing so by the court in which the estate was pending, such violation of its statutory duty resulted in nothing more than subjecting the assets of the estate to the payment of claims which the court concluded, after a full and complete hearing, were valid debts of the decedent. It is true that had the appellant filed its final report on October 20, 1939, the claims in controversy would have been barred and said creditors could not have been heard to complain, Burns’ Stat., §6-1001, but its failure or refusal to adopt a statutory procedure whereby it would be relieved of its obligation to pay the decedent’s honest debts does not constitute a devastavit nor have the appellees lost anything to which they were entitled in equity and good conscience. Devastavit is any act of omission, negligence or misconduct of an administrator by which loss occurs to the estate, Ayers v. Lawrence (1874), 59 N. Y. 192; Beardsley, Executor v. Marsteller (1889), 120 Ind. 319, 22 N. E. 315, and we do not believe that an estate can be said to have suffered a loss through the payment of valid claims against it even though the law furnishes a maneuver by means of which payment could have been avoided.

As heretofore stated the second paragraph of the complaint seeks damages on the theory that the appellant made no adequate defense against the allowance of the lost note claims and despite trial records containing obvious errors it refused to seek new trials or permit appellees to do so in its behalf, all of which resulted in the estate’s insolvency and consequent loss. to the appellees.

The facts pertinent to this paragraph of complaint indicate that the appellees petitioned the court to be allowed to “assist” the appellant in resisting the allowance of the claims involved and were given authority to do so. Through their attorneys they were present at the trial of each of said claims and, although the control of the litigation remained with the appellant, they participated in the defense thereof. They requested the appellant to file an affidavit for a change of venue in each claim from Clay County which it refused to do and they thereupon made such application themselves which the court denied, presumably because they were not parties to the litigation. A bill of exceptions containing the evidence on each claim was filed • in Clay Circuit Court and each was received in evidence in this case and the trial court, by its general finding, evidently concluded that each of said records reveals reversible error. The appellant refused to file a motion for a new trial in either of the lost note cases because it thought fair trials had been had and correct results reached and thereupon, within the time allowed for filing motions for new trials, the appellees served upon the appellant a written demand that it file such motions or, in the event of the appellant’s refusal to do so, that it permit them to do so at their own expense and, through their attorneys, to file such motions in the appellant’s name as administrator and the appellees tendered with such demand a prepared motion for a new trial in each of said cases but the appellant’s consent to their filing was not given. The appellees then tendered to the Clay Circuit Court their own motion for a new trial in each of said cases with their petition that the court permit their filing thereof but the court by its order in each case denied said petition and refused to permit the appellees to file any motion for a new trial.

The appellant’s final report was filed September 25, 1941, and shows the estate to be insolvent to the extent of $15,460 by reason of the allowance of said lost note claims and proposed the settlement thereof at something less than 50-cents on the dollar. This report was met by exceptions filed by the appellees in which they objected to its approval in 14 particulars, all but 1, 2 and 4 of which were stricken out on motion of the appellant. The exceptions so stricken, when considered in their entirety, seek to defeat the final report on exactly the same grounds and on. the same theory that damages are sought in the present action. On the trial of the remaining exceptions the court declined and refused to try any issue tendered, by the exceptions which had been stricken out but confined the hearing to . the matters raised by exceptions 1, 2 and 4, which are not involved here. After an amendment to the final report said exceptions were overruled and the report approved as amended.

The appellant contends that upon these facts we must conclude that the present case is a collateral attack on the lost note judgments and the court’s judgment in approval of its final report. It is apparent that. the appellees, although present and assisting in the defense of the lost note claims, were not parties to said actions and had no control over them and had they been ordinary civil suits the judgments rendered therein would not have been binding upon the appellees merely because of their participation in the trials from which they resulted. Restatement, Judgments, §84; Tobin v. McClellan (1947), 225 Ind. 335, 73 N. E. 2d 679, 75 N. E. 2d 149; City of Louisville v. Babb (1934), 7 F. Supp. 658. However the disposition of these claims was merely incidental to the administration of the Englehart estate and the proceedings involved were neither actions at law nor suits in equity. They were special proceedings provided for and controlled by the probate code.

Burns’ Stat., §6-2001, provides that: “Any person considering himself aggrieved by any decision of a circuit court, or judge thereof in vacation, growing out of any matter connected with a decedent’s estate may prosecute an appeal to the Supreme Court. . . .” (Emphasis supplied). The right of appeal granted by this section of the code is not limited to the parties to the judgment involved and therefore the appellees, being aggrieved by the decisions on the lost note claims, had the right to appeal therefrom. Jaqua v. Reinhard, Admr. (1934), 99 Ind. App. 261, 190 N. E. 887. They contend however that they were circumvented in the exercise of this right by the refusal of the appellant to file motions for new trials and the refusal of the court to permit them to do so in their own behalf. Certainly a statute that gives an aggrieved person the right to appeal, whether a party to the record or not, must include, by implication, the right to take such preliminary steps as are necessáry to make the appeal effective. So in this case, if a motion for a new trial was necessary to properly present alleged error to this court, the appellees had the right to file Such a motion and have it ruled upon. In State ex rel. Balsley v. St. Joseph Superior Court (1948), 226 Ind. 372, 81 N. E. 2d 373, the Supreme Court held that where the trial court strikes out a party’s motion for a new trial his remedy is by appeal. The same remedy is necessarily available where the trial court refuses to permit the filing of the motion because such action is no different, in principle and result, than striking out such á motion after it has already been filed.

Furthermore if the appellees could not have appealed from the lost note judgments without first having filed motions for new trials therein, the court, by refusing to accept such motions, denied the right of appeal granted them by §6-2001, supra, and in aid of its appellate jurisdiction this court, on proper application, could have mandated the Clay Circuit Court to receive such motions. Burns’ Stat., §3-3301; State ex rel. Gilkison v. Clifford (1950), 120 Ind. App. 84, 89 N. E. 2d 630. The appellees neither appealed from the court’s decision refusing their ■ motions for new trials, as they had the right to do under the authority of State ex rel. Balsley v. St. Joseph Superior Court, supra, nor did they seek relief through mandamus proceedings.

We are not now concerned with the question of whether or not the appellees had the right to have all the matters, of which they complain in this action, adjudicated by way of exceptions to the final report. They sought to do so but all such exceptions were stricken out upon the appellant’s motion and safd report, after a hearing on the remaining exceptions, was approved. If the appellees considered themselves aggrieved thereby they were entitled to appeal from this approval order even though the admin-' istrator had not yet been formally discharged, Taylor v. Burk, Executor (1883), 91 Ind. 252, and assign as error the striking of the exceptions above mentioned. This they made no effort to do.

While we agree with the appellees that the issues involved in the present litigation did not become res judicata through the court’s approval of the appellant’s final report yet the fact remains that the lost note judgments are the sine qua non of both paragraphs of the complaint. Said judgments are not void and to recognize a judgment for damages based on the fact that they are erroneous because of an inadequate defense and the refusal of the appellant to pursue a remedy that was also available to the appellees, would be to sanction a collateral attack upon them and upon the court’s order approving the final report which gave them full faith ánd credit.

Judgment reversed and cause remanded with instructions to grant the appellant’s motion for a new trial.

Royse, J.', not participating.

Bowen, C. J. and Martin, J., dissent.