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(- Nev. - 221 Pac. 241.) had turned over to the appellant the ceased, or charges such as the rightestate upon her qualification, the es- ful representative might have been tate would have been liable for all compelled to pay, he would not be necessary expenses incurred in its

allowed to show the same in mitigapreservation and protection, plus tion of damages in an action of troher commission. Why should it not ver, institued by such executor or

pay the expenses in administrator. In thus compelling -llability for expenses of pres- curred by the re- him to account with only the right

spondent in pre- ful representative, the statute does serving it? In what way has it been not purport or undertake to deprive damaged? Counsel says appellant him of any proper or legitimate demight have handled the estate at fense. The title of executor de son much greater saving than did the tort may be repudiated, but the jusrespondent. Perhaps she might; tice of the law will remain, to disbut, on the other hand, she might tinguish between acts which are have incurred much greater expense beneficial and those which are inin handling it. But this is pure jurious to an estate." speculation. The lower court found But it is said that the lower court that the indebtedness so incurred gave credit for certain items of exwas necessary and proper for the pense incurred by the respondent protection of the estate, and, as ap- which he had not paid and hence pellant did not bring up the evi. should not have been allowed. It is: dence, the presumption is conclusive said that not an authority can be in favor of the findings so made. found holding that such items

Our attention is directed to the should be allowed. It can as well case of Slate v. Henkle, 45 Or. 430, be said that not one has been cited 78 Pac. 325, as sustaining the con- holding the contrary. We think, clusion we have reached. It re- however, the case of Slate v. Henkle, viewed the authorities as to an supra, is contrary to appellant's executor de son tort, and qotes ap- contention. It was there held that provingly as follows from Ruther- the item of $100 claimed by Slate ford v. Thompson, 14 Or. 236, 12 should have been allowed if the seryPac. 382: “The person who inter- ices were rendered in preserving or meddles with the goods of the de- caring for the property of the esceased is now only responsible to tate. In any event the estate got answer in an action to the rightful the benefit of the articles enumeratexecutor or administrator. And, ed, and should pay for them. There whether we consider the intermed- is no more reason dler as an executor de son tort, or for allowing credit -allowance for as a wrongdoer, the liability to re- for things actually spond to the rightful executor or ad- paid for and which benefited the esministrator is the same, and unaf- tate, than for those which were not fected, and the law unchanged. The paid for, if they benefited the esfiction of offense may be gone, but tate. the unauthorized act of intermed- Another suggestion is made by dling remains, to be dealt with judi- counsel for appellant, but it goes cially, according to the principles of rather to a matter of policy than to right and justice, as applied by the a question of law, and we decline to law in such cases. Now, from the fact consider it. that the intermeddler with the goods Perceiving no prejudicial error, of a deceased is only liable to respond the order and judgment are afto the rightful executor or adminis- firmed. trator for the value of the goods, etc., it by no means follows, if what he

Ducker, Ch. J., and Sanders, J., did was of benefit and not injury to

concur. the estate, as the payment of fu- A petition for rehearing having neral expenses, or debts of the de- been filed, Coleman, J., on April 14,

unpaid bills.

1924, handed down the following pose of both of them upon the additional opinion: (- Nev. , ground that a point urged for the 224 Pac. 807):

first time in a petition for a rehearA lengthy petition for a rehearing ing will not be considered. Nelson has been filed. It urges the granting

v. Smith, 42 Nev. 302, 176 Pac. 261,

178 Pac. 625. of a rehearing upon several grounds. So far as the argument advanced

As to the ground which is anwhich goes to support the contention

tagonistic to the original theory, it that we erred in our ruling upon

may be said it is a well-established the matters presented and consid

rule that, when a case has been tried ered originally, we wish simply to

upon one theory, a party will not be say that we are entirely satisfied

permitted to shift his position and with our former disposition of them.

urge a theory diametrically opposed

to the one originally relied upon. We may observe that the petition urges two additional theories why

The petition for rehearing is de

nied. we should grant a rehearing, one of which is antagonistic to that urged Ducker, Ch. J., and Sanders, J., in the original brief. We could dis- concur.

ANNOTATION.

Allowance for expenses and disbursements by executor or administrator after

revocation of his letters.

This annotation is not concerned with any question of the right of an administrator or executor whose letters have been revoked to claim an allowance for any expense incurred or disbursement made on behalf of the estate prior to the revocation of his letters, but is limited to disbursements or expenses in that respect which are made thereafter.

While it is stated that an executor de son tort has no inherent right to pay claims out of the assets of the estate, he is held to be entitled to reimbursement for an expenditure which he has made out of his own moneys for the relief of the estate, or for sums paid out while acting in the capacity of an executor de son tort, not for his own benefit, if he can affirmatively show that the sums paid were correct. 11 R. C. L. P. 463. The reported case (RE PEDROLI, ante, 841), proceeding upon the assumption for the purposes of the case, without deciding the point, that there can be no such thing under the local practice as an executor de son tort, and that consequently the respondent, after the revocation of his letters, must be held liable as a wrong. doer for all assets of the estate which come into his hands, nevertheless

holds that he is entitled to an allowance from the estate for all expenses incurred by him for its preservation, since he is entitled to protection for all acts which a rightful executor might have done, which are not for his benefit.

But in Bradley's Estate (1875) 32 Phila. Leg. Int. (Pa.) 257, it was stated that an estate would clearly not be liable for professional services to persons appointed administrators which were rendered after the letters of administration were revoked. The statement appears, however, to be but a dictum, as it did not appear at what date the services were rendered, and the court in fact allowed a part of the claim against the estate for the services. In this case the father of the decedent, who was 'entitled to administer upon the estate, had, after some delay caused by defendants, who had secured letters of administration, obtained a decree removing the defendants as administrators and appointing himself instead; the defendants had resisted his action in this respect, as well as attempts on his part to settle the estate after his appointment; and the court held that the defendants were properly chargeable with expenses caused by their un- ceeding and on appeal, for which he justifiable conduct in interposing un- had not actually paid during the time founded claims and causing delays in he was executor and which were not the settlement of the estate.

entered as paid in the original account It has been held that the authority filed after revocation of the letters, of an executor to make any payment but as an amount due from him, noton account of an estate, or to act for withstanding that, after a ruling that the estate, ended with the revocation he could only be allowed for amounts of his letters testamentary, and the actually paid, he was allowed by the account was to be settled as of the surrogate to file a supplemental actime of the revocation of letters testa- . count in which he alleged that the sum mentary. Re Blair (1900) 49 App. had actually been paid by him; it apDiv. 417, 63 N. Y. Supp. 678. In that pearing that such payment had been case a person named as executor in an made by the giving of his promissory instrument purporting to be a will, note to the attorney after that ruling. who secured a decree of the surro- The reported case (RE PEDROLI, gate's court admitting the instrument ante, 841) holds, however, that the to probate and issuing letters testa- fact that one who intermeddles with mentary to him, which were thereafter an estate after his letters of adminisrevoked following a decision of the tration are revoked has not paid bills general term, affirmed by the court of incurred for its preservation does not appeals, reversing the surrogate's de- bar his right to an allowance for the cree, was denied an allowance against amount of such expenses when he the estate for legal services of counsel turns the estate over to the rightful employed by him in the probate pro- executor.

G. S. G.

A. L. BETTS et al., Appts.,

v.
W. M. HACKATHORN.

Arkansas Supreme Court — June 25, 1923,

(159 Ark. 621, 252 S. W. 602.) Trust - exemption declarations - effect.

1. A declaration is a so-called “Massachusetts trust,” exempting the trustee from personal liability for obligations of the trust, does not affect the liability which the law fixes upon him; and, where the declaration of trust also provides for full control of the property by the trustee and exempts the cestui que trust from liability, the trustee is personally liable.

[See note on this question beginning on page 851.] - trustee as principal.

of the property in the trustee, relieves 2. A trustee is a principal, and not the cestuis que trust from liability for an agent of the cestui que trust. obligations incurred, and gives them [See 26 R. C. L, 1317.]

the right to share in the profits only, - personal liability of trustee. are not liable as partners or as prin

3. The trustee, and not the cestui cipals for debts of the enterprise. que trust, is personally responsible [See notes in 7 A.L.R. 612; 10 A.L.R. for indebtedness growing out of trans- 887.] actions in relation to the trust estate. Partnership

Partnership — test of. [See 26 R. C. L. 1317.]

5. The test of whether or not a busi- liability of shareholders.

ness is a partnership is the intention 4. Holders of shares in a so-called of the parties.

"Massachusetts trust" the declara- [See 20 R. C. L. 831; 3 R. C. L. Supp. tion in which vests absolute control 1104; 4 R. C. L. Supp. 1379.]

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- construction of indenture.

Joint-stock company manager as 6. Whether a partnership or strict agent. trust is created by an indenture de

7. Managers in a joint-stock com

pany are agents for the shareholders. pends on the language and provisions

[See 20 R. C. L. 1076, 1077; 3 R. C. of the instrument involved.

L. Supp. 1124.]

APPEAL by defendants from a judgment of the Circuit Court for Hempstead County (Haynie, J.) in favor of plaintiff in an action brought to recover an amount due for goods sold and delivered to defendants as alleged members of a certain partnership. Affirmed as to defendant trustees and reversed as to the other defendants.

The facts are stated in the opinion of the court.

Messrs. Gentry & Purkins, for ap- tal Trust Co. v. Copeland, 39 R. I. 193, pellants:

98 Atl. 273; Howe v. Wichita State Practically every court that has Bank & T. Co. Tex. Civ. App. passed upon the question has upheld 242 S. W. 1091; Sergeant v. Goldsmith the validity of the "common-law trust Dry Goods Co. 110 Tex. 482, 10 A.L.R. relation,” and where the courts have 743, 221 S. W. 259. declared the “declaration” to create a All the defendants are liable as partnership relation, the turning point partners to third persons

on the has been upon the construction of the grounds of public policy. particular "declaration of trust" un- Wells v. Mackay Teleg.-Cable Co. der construction.

Tex. Civ. App. 239 S. W. 1001; Crocker v. Malley, 249 U. Ş. 223, 63 Jacoway v. Denton, 25 Ark. 634; DoyleL. ed. 573, 2 A.L.R. 1601, 39 Sup. Ct. Kidd Dry Goods Co. v. Kennedy, supra. Rep. 270; Williams v. Milton, 215 Mass. 1, 102 N. E. 355; Simson v. Klipstein,

Humphreys, J., delivered the opin

ion of the court: 88 N. J. Eq. 229, 102 Atl. 242; Rhode Island Hospital Trust Co. v. Copeland,

Appellee instituted suit against 39 R. I. 193, 98 Atl. 273; Home Lum- appellant in the circuit court of ber Co. v. Hopkins, 107 Kan. 153, 10 Hempstead county, to recover $180 A.L.R. 879, 190 Pac. 601; Wells-Stone for goods sold and delivered to the Mercantile Co. v. Grover, 7 N. D. 460, Hope Oil Trust, a concern doing 41 L.R.A. 252, 75 N. W. 911; Davis v. business under a written declaration Hudgins, - Tex. Civ. App. — 225 S.

commonly known as the “MassachuW. 73; Wilson v. Todhunter, 137 Ark.

setts trust.” The suit is based up80, 207 S. W. 221; Sears, Trust Estates, p. 138, ( 90; Mehaffy v. Wilson, 138

on an allegation that the Hope Oil Ark. 281, 211 S. W. 148; Buford v.

Trust is a partnership, and that apLewis, 87 Ark. 416, 112 S. W. 963. pellants are members thereof, and,

Mr. E. F. McFaddin, for appellee: as such, are individually liable for

The trustees themselves are certain the indebtedness of the concern. ly individually liable.

The six appellants first named were Taylor v. Davis (Taylor v. Mayo)

denominated trustees in the declara110 U. S. 330, 28 L. ed. 163, 4 Sup. Ct.

tion. They filed a separate answer, Rep. 147; Sears, Trust Estates, pp. 44, 45; Thompson, Business Trusts, pp.

admitting the amount of the account 35, 36.

and that the goods were sold to the The shareholders or beneficiaries Hope Oil Trust, but denying indiare liable to plaintiff.

vidual liability, upon the ground Doyle-Kidd Dry Goods Co. v. Ken- that they are exempted from liabilnedy, 154 Ark. 573, 243 S. W. 66; Mc- ity under paragraph 21 of the decCamey v. Hollister Oil Co. - Tex. Civ. laration, which in part is as follows: App. 241 S. W. 689; Baker-McGrew

"Every act done, power exercised, Co. v. Union Seed & Fertilizer Co. 125 Ark. 146, 183 S. W. 571; Wells V.

or obligation assumed, by the trusMackay Teleg.-Cable Co. - Tex. Civ.

tees, pursuant to the provisions of App. -239 S. W. 1001; Home Lumber

this agreement, or in carrying out Co. v. Hopkins, 107 Kan. 153, 10 A.L.R. the trusts herein contained, shall be 879, 190 Pac. 601; Rhode Island Hospi- held to be done, exercised, or as(159 Ark. 621, 252 S. W. 602.) sumed, as the case may be, by them tion of the personal liability of the as trustees, and not as individuals, trustees and certificate owners in and every person or corporau.on the business operated under the contracting with the trustees, as trust declaration. The instrument well as every beneficiary hereunder, is long, and it would unduly extend shall look only to the fund and prop- this opinion to set it out in extenso; erty of the trust for payment under a statement of the substance theresuch contract, or for the payment of of being sufficient for the purposes any debt, mortgage, judgment, or

of this cause. In short the instrudecree, or the payment of any mon- ment reflects that trustees associatey that may otherwise become due ed themselves together for the puror payable on account of the trusts pose of selling certificates of stock herein provided for, and any other in the name of Hope Oil Trust and obligation arising under this agree- of using the proceeds for investment ment in whole or in part; and nei- in securities and enterprises for the ther the trustees nor the sharehold- equal benefit of the shareholders. ers, present or future, shall be per- The trustees reserved the entire sonally liable therefor.'

management and control of the busiThe two last-named appellants ness in themselves, the right to hold are shareholders, and filed a sep- the title to all the property and disarate answer denying liability, upon pose of same, and to elect their own the ground that under the terms of successors in case of the resignation the declaration they are cestuis que or death of either one of them. The trust. They claim exemption under indenture in effect provided that the paragraph 21, quoted above, and trustees should be masters of the paragraphs 9 and 20, which are as trust property as well as the busifollows:

ness, without suggestion, supervi9. "The trustees under this agree. sion, or interference on the part of ment shall have the sole legal title the stockholders. No authority or to all property, in any part of the power whatever was conferred upon United States of America, or in any the stockholders. In fact all auforeign country, at any time held, thority and control of the property acquired, or received by them as and business was withheld from trustees under the terms of this them. No provision was even made agreement, or in which the share- for a meeting of the stockholders at holders under this agreement shall any time for any purpose. Under have any beneficial interest as such the terms of the declaration they shareholders, and they shall have were nonparticipants, save to share and exercise the exclusive manage- in dividends and profits that might ment and control of the same, in any be declared and distributed among manner that they shall deem for the them by the trustees. The parabest interest of the shareholders, graphs of the declaration exempting with all the rights and powers of ab- the shareholders from personal liasolute owners thereof."

bility have been set out in full. 20. “Shareholders hereundershall The statutes of this state provide not be liable for any assessmentfor and regulate two kinds of busiand the trustees shall have no power ness concerns,-limited partnerto bind the shareholders personal ships and corporations. The other

business organizations operate in Demurrers were filed to the sep- this state under the general law of arate answers and sustained by the the land, not under statutory proteccourt. Appellants stood upon their tion and restrictions. General partanswers and refused to plead fur- nerships, joint-stock companies, ther, whereupon the court rendered business trusts, and other associajudgment against them, from which tions, are not prohibited from doing is this appeal.

business in this state. With these The appeal involves the sole ques- preliminary remarks we proceed at

31 A.L.R.-54.

ly.”

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