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State v. Superior Court of Lewis County (Wash.)

Terry v. Southwestern Bldg. Co. (Cai.

605

App.)

212

.1104

447

556

State, Tearney v. (Okl. Cr. App.).
State, Torrez v. (Ariz.).

State v. Treacy, two cases (Mont.).

State v. Watts (Ariz.).

State, Weaver v. (Okl. Cr. App.).

State, Welch v. (Okl. Cr. App.).
State v. Whisler (Idaho).

State v. White (Or.)...

State v. Williams (Nev.).

State, Winston v. (Okl. Cr. App.).

State v. Wolf (Mont.).

832 Thrasher v. Board of Medical Examiners of State of California (Cal. App.).

Tevis v. Ferguson (Cal. App.).

987

360 Thayer v. Denver & R. G. R. Co. (N. M.) 542 774 Theodore v. Williams (Cal. App.).

.1014

934 Thiel Detective Service Co. v. Yavapai County (Ariz.)

933

119 Thomas, Orr v. (Kan.).

.1046

845 Thomas, Thompson v. (Cal. App.).

427

298 Thompson v. Thomas (Cal. App.).

427

459 Thornton v. Evans (Utah)..

454

.1006

State v. Woods (Kan.).

21 Tindolph, Clark v. (Colo.)..

64.8

State, Wyncoop v. (Okl. Cr. App.). State Board of Equalization, State (Mont.)

839

Titlow v. Pierce County (Wash.).

575

V.

Torrez v. State (Ariz.).

360

708

.....

State Industrial Commission of Oklahoma,
Francis Vitrio Brick Co. v. (Okl.).
525
Stauffer, Livingston v. (Kan.)..
728
Steamboat Canal Co. v. Garson (Nev.)... 801
Steamboat Canal Co. v. Garson (Nev.)....1119
Steele, Henry L. Doherty & Co. v. (Colo.).. 257
Sterling v. Carter (Kan.)...
Stewart v. Bowie (Cal. App.).

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11

868

Travelers' Ins. Co., Hasselman v. (Colo.) 343
Travelers' Ins. Co. v. Middlekamp (Colo.) 335
Treacy, State v., two cases (Mont.).
Tujunga Water & Power Co., Telander v.
(Cal. App.)...

774

504

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Stockgrowers' State Bank, Rapier V.

Turner v. Bush (Cal. App.)..

190

(Kan.)

888

Turner's Estate, In re (Cal.)..

171

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Umstead v. Automobile Funding Co. of America (Cal. App.)

.1011

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Union Oil Co. of California v. Purissima 478 Hills Oil Co. (Cal.)....

381

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Superior Court in and for Lake County,
Yolo Water & Power Co. v. (Cal. App.). 195
Superior Court in and for Los Angeles
County, Gloyd v. (Cal. App.)..
Superior Court in and for Mendocino Coun-
ty, Drew v. (Cal. App.).
Superior Court in and for San Diego Coun-
ty, Department 4, Israel v. (Cal. App.)... 682
Superior Court of California in and for
Los Angeles County, Rossbach v. (Cal.
App.)
Superior Court of California in and for
Sacramento County, Walsh v. (Cal. App.) 998
Superior Court of California in and for
San Joaquin County, Takeba v. (Cal.
App.)

879

Vallejo High School Dist. of Solano County v. White (Cal. App.). . .

302

Van Buren v. Peterson (Wash.).

572

995

Vandecar, Almada v. (Or.)..

907

680

Van Demark v. California Home Extension Ass'n (Cal. App.)....

866

Vandling v. Griffith (Kan.).

23

Varrois v. Gommet (Cal. App.)..

...1001

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406

Superior Court of City and County of San Francisco, Taylor v. (Cal. App.).

Walsh v. Superior Court of California in and for Sacramento County (Cal. App.) 998 Ward v. Ward (Or.)..

906

994

Superior Court of Lewis County, State v. (Wash.)

Warner, Brewer v. (Kan.). Warner v. Pile (Kan.)..

889

....

605

Superior Court of Mohave County, Miller

Warren, Gentle v. (Cal. App.) Waters' Estate, In re (Cal.)

..

.1041

481

951

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REHEARINGS DENIED

[Cases in which rehearings have been denied, without the rendition of a written opinion, since the publication of the original opinions in previous volumes of this Reporter.]

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Farmers' & Bankers' Life Ins. Co. v. Whit- State v. Bonner, 181 P. 586.
ney, 182 P. 645.

Horville v. Lehigh Portland Cement Co., 182
P. 548.

Paulich v. Nipple, 180 P. 771.
Riffe v. Walton, 182 P. 640.

St. Paul Fire & Marine Ins. Co. v. Bigger,
182 P. 184.

185 P.

OKLAHOMA.

Harris v. State, 175 P. 627.

OREGON. Nickell v. Bradshaw, 183 P. 12. (xvi)†

THE

PACIFIC REPORTER

VOLUME 185

(105 Kan. 434)

HART et al. v. CITIZENS' NAT. BANK. (No. 22027.)

(Supreme Court of Kansas. Nov. 8, 1919.)

(Syllabus by the Court.)

LIMITATION OF ACTIONS 174(2)-AFFECTING

TRUSTEE ALSO BAR TO BENEFICIARY.

Leo I. Stadden, one-third to her daughter, Lillian M. Prager, and one-third to Leo I. Stadden as trustee for the testatrix's grandchildren, the plaintiffs, who were children of a deceased daughter, Nellie Stadden Hart. The beneficiaries were minors, and were not to receive the trust estate until they arrived at the age of 25 years. Until that time, the trustee was vested with title, and with power and A testatrix devised and bequeathed proper-discretion over management and disposition ty to a trustee for the benefit of her grand- of the estate, as complete and absolute as children. The beneficiaries were minors, and language could express. The following clause were not to receive the trust estate until they reached the age of 25 years. Until that time the of the will related specifically to property of trustee was vested with title and with full pow-the kind in controversy. er and discretion respecting management and disposition of the trust property. A portion of the property consisted of bank stock, which the trustee disposed of to the defendant, under such circumstances as to constitute a breach of trust, in which the defendant knowingly participated. Afterwards the trustee resigned, and another trustee was appointed who became vested with the same title and authority as her predecessor. She suffered her right of action to recover the bank stock, or its proceeds or value, from the defendant, to become barred by the statute of limitations. Held, subsequent action by the beneficiaries, after they became of age, against the bank for the same relief, was barred.

Appeal from County.

"My said trustee is also empowered to continue to hold any and all stocks coming into his power as trustee and receive the dividends therefrom, or to sell the same and loan or invest the proceeds from such sale as to him may seem best and proper."

The trustee duly qualified, and entered upon administration of the trust.

The husband of the testatrix was a wholesale grocer. After his death the business was incorporated as the I. Stadden Grocery Company, the entire capital stock of which was subscribed by the testatrix and her children, Leo Stadden and Lillian Prager. The testatrix used the grocery company very much District Court, Bourbon as other people use a bank, for the purpose of depositing and withdrawing funds. A part others of the assets of the trust estate consisted Judg-of a share of a large credit which she had appeal. on the books of the grocery company at the time of her death-and it may be said that the grocery company was considered to be as sound financially as the defendant bank itself. A part of the personal property disposed of by the will consisted of shares of

Action by Stadden S. Hart and against the Citizens' National Bank. ment for defendant, and plaintiffs

Affirmed.

Sheppard, Sheppard & Sheppard, of Ft. Scott, and John B. Hart, of Seattle, Wash., for appellants.

John H. Crain and A. M. Keene, both of stock of the grocery company and shares of Ft. Scott, for appellee.

BURCH, J. The action was one for relief by beneficiaries of a trust, regarding bank stock belonging to the trust estate which the trustee disposed of to the defendant. The plaintiffs were defeated, and appeal.

The will of Nellie D. Stadden devised and bequeathed one-third of her estate to her son,

the capital stock of the defendant bank. By virtue of a division of property between the legatees named in the will, shares of grocery company stock and shares of bank stock were set off to the trust estate, and, on application of the trustee, the defendant issued a certificate for 20 shares of its capital stock to "Leo I. Stadden, trustee."

The grocery company was indebted to the

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
185 P.-1

bank. The president of the bank desired of fact, and the basis of its judgment can the indebtedness reduced, and in order to only be surmised. Under the well-understood do so, in February or March, 1902, Leo I. rule, the judgment includes a finding of all Stadden, trustee, indorsed in blank and de- facts supported by evidence and inferences livered to the bank the certificate which had from evidence favorable to the defendant, been issued to him, at its par value of $100 which will sustain the decision on any legalper share. The bank gave the grocery com-ly tenable theory. pany credit on its indebtedness, and the About the time this suit was commenced, trustee's account with the grocery company Lillian M. Prager asked to be relieved as truswas given proper credit. The bank contin- tee. The beneficiaries intervened in the proued to own the stock until July or August, ceeding, and charged her with various derelic1904, when it was disposed of to purchasers tions of duty, whereby the trust estate had for value, and, assuming the present action been greatly depleted, to their detriment. to be well grounded, it was not possible for The matter was tried, and the court made the plaintiffs to recover the identical shares. extensive findings of fact, covering adminSome of the facts just stated are disputed; istration of the trust from the time it was but, for the purpose of the decision, the plain-created, including the bank-stock transaction. tiffs' version of what occurred is accepted. The trial followed the trial of the present It is also assumed, as the plaintiffs contend, action. The two cases were taken under adthat the bank knew the fiduciary capacity visement, and were decided on the same day. and relation in which Leo I. Stadden held With reference to the bank-stock transaction, the certificate. the court, in the matter of the trusteeship of Lillian M. Prager, made the following finding:

Leo I. Stadden resigned as trustee in May, 1902, and his sister, Lillian M. Prager, was duly appointed in his stead. She qualified as trustee, and became vested with full title to the trust estate, and vested with all power and discretion over it conferred by the will. Because the bank stock had been disposed of by her predecessor, it did not come into her possession; but there did come into her possession as part of the trust estate a large credit to the account of the trustee on the books of the grocery company, composed in part of the proceeds of the sale of the bank stock. Evidence for the plaintiffs indicated that Lillian M. Prager knew the bank stock had been applied on the grocery company's indebtedness to the bank about the time the transaction occurred. Her husband, William Prager was then secretary and treasurer of the grocery company. He transacted all, or substantially all, of his wife's business as trustee. Immediately after her appointment, Lee Hart, father of the plaintiffs, who was then living, told William Prager that Leo had disposed of the bank stock, and it would not be among the things turned over. William Prager was informed that the bank stock went to the credit of the children on the books of the grocery company, and if Lillian M. Prager did not, as she testified, personally know the fact at the time, she was charged with knowledge directly after she became trustee.

On May 26, 1902, the grocery company sold its merchandise, went out of business, and proceeded to wind up its affairs. The trustee did not attempt to recover the stock from the bank, or attempt to recover its value from either Leo I. Stadden or the bank, and the value of the stock was not realized from the credit on the books of the grocery company. In April, 1916, the beneficiaries commenced this action on their own account.

"In thus using the capital stock held by him as trustee in reducing the indebtedness of the grocery company to the bank, and in increasing the indebtedness of the grocery company to himself as trustee, Leo I. Stadden acted in good faith, without any intent to injure or endanger the trust estate, and in the honest belief that the change of investment of this portion of the circumstances, and would not result in any loss trust fund was the best thing to do under the to the trust estate; and I find that in so doing he was guilty of no act which would render him responsible for loss, if any occurred, and that he was exercising fairly and honestly his judgment and discretion in the handling of the trust estate, in accordance with the power conferred upon him by the trust instrument."

It is likely the decision in the suit against the bank was rested on a similar finding, not formally stated. However this may be, substantially at the close of the evidence in the bank's case, leave was asked and granted to amend the answer to raise the bar of the statute of limitations. The application was resisted, and the ruling permitting the answer to be amended is assigned as error. The subject was clearly one within the discretion of the court. All the facts had been fully developed. Nothing additional was offered, or indicated as available, which would affect the starting or the running of the statute of limitations, and the plaintiff suffered no legal prejudice from the amendment.

Assuming that in disposing of the stock to the bank the trustee was guilty of a breach of trust, and that the bank, having knowledge of the breach, and participating in it, became itself trustee ex maleficio of the stock, the present action by the beneficiaries was barred. After the spoliation occurred, a new trustee was appointed. As soon as Lillian M. Prager qualified as trustee, she took title

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