Opinion
No. 2454-A.
July 13, 1925.
James Wickersham, of Juneau, for administratrix and heirs.
Hellenthal Hellenthal, of Juneau, for National Surety Co.
The several questions raised by the demurrer filed by the counsel for the heirs and administratrix have required much consideration, and I have been very much in doubt as to the authority of the probate court to reopen the final decree. As to the first question, whether the probate court had jurisdiction of the person of the administratrix or the subject-matter of the petition, I am of the opinion that it had. The petition alleges that the administratrix is the duly qualified and acting administratrix of the estate. This allegation is confessed by the demurrer. The final decree also provides that the administratrix shall not be discharged until she complies with the terms of the decree. She appeared in the probate court, and is appearing in this court, in her representative capacity of administratrix, and it seems to me conclusive that the probate court has jurisdiction over her person.
As to jurisdiction over the subject-matter of the petition, the petition alleges that certain matters were not incorporated in the final account, and not passed upon in the final decree. It cannot be seriously contended that the probate court had not original authority over the matter of the accounts of the administratrix, and the only theory upon which it could be seriously insisted that it has no jurisdiction over the subject-matter of the petition is that, when the court rendered its final decree on the final accounting of the administratrix, it lost jurisdiction to require further accounting.
The question is a vexed one. A number of states provide by statute for such contingencies. Others hold that, by virtue of the inherent equity jurisdiction, the probate courts may review, reopen, and set aside final settlements for the purpose of correcting mistakes or relieving against fraud. See Woerner, Am. Law Administration (3d Ed.) par. 507; 24 C.J., "Executors and Administrators," par. 2492. Our statute is silent on the subject. It provides, however (section 1696, C.L.A.), that the final decree in any other action or proceeding between the parties interested is primary evidence of the correctness of the final account as allowed and settled. It is also provided by section 1597 that the mode of proceeding in probate courts shall be in the nature of a suit in equity, as distinguished from that at law.
The petition of the surety is to surcharge the final account of the administratrix, alleging that certain credits properly applicable to the credit of the administratrix were omitted from the final account; that certain moneys were collected by her and not accounted for, and that none of the items were passed upon or adjudicated upon by the decree; and that these omissions from the account had increased the amount due from the administratrix and rendered the liability of the surety greater — and concludes that such omission from the final account was through mistake, or because of express design or collusion between the administratrix and the heirs. Our statute, quoted above, provides that the final decree is primary evidence between the parties interested in any other action as to the correctness of the final account as allowed and settled. It does not foreclose or settle matters not before the probate court.
It is true that under the decision of the Supreme Court of Oregon in Bellinger v. Thompson, 26 Or. 320, 37 P. 714-720, 40 P. 229, and the authorities there cited, the final decree of settlement is conclusive in an action against the surety on the bond of the administrator, because of privity between the surety and principal; but where the administrator, by mistake, omits from his final account items properly applicable to his credit, it would seem to be inequitable for the court, having control and jurisdiction over the acts of the administrator, not to determine whether such mistake was in fact made as pointed out, and therefore not passed upon by the decree. If this was a case where certain money or property received by the administratrix was not accounted for by her, and a petition to surcharge her account for that reason was filed by an heir, distributee, or legatee, undoubtedly the court would have authority to pass upon the petition, and I see no reason why the surety of an administratrix, being liable for the acts of the principal, should not in like manner equitably be entitled to point out the mistakes of the administratrix to the probate court, and suggest items which had not been passed upon by the probate court in its final decree, so as to have the same credited to the account of the administratrix.
Although there is some conflict of authority on the question, I think that under our statute the surety not only has the right of appeal from a decree settling a final account, but may petition for a review of the decree in proper cases. If the surety can defend an action against himself on his bond on the ground of fraud or collusion, it appears to me that it would be equitable for him to have authority to appear in the probate court, and show, if that be a fact, that there was a mistake of fact in the final account, or fraud or collusion in the entering of a decree fixing the liability of the principal and his own contingent liability. If the surety, because of being in privity with his principal, could not appeal from a final decree settling the final account, he would not, as a party interested, be entitled to appear at the final settlement and object to the allowance of any item against his principal. He would be bound by the account as presented by his principal. Yet in equity he might set aside the decree for fraud and collusion, and, in some jurisdictions, for mistake in the final account. His obligation is a direct obligation to the parties interested that his principal shall execute the trust according to law. Because of this liability, I think he is entitled to an appeal from a decree adverse to his principal, especially in default of an action by the principal. This is in accord with the trend of authority. Switzer v. Switzer, 201 Mo. 66, 98 S.W. 461, 119 Am. St. Rep. 731, and notes; Woerner on Administration, par. 255, and notes. If the surety has such an interest as would entitle him to appeal from a final decree, he certainly may petition for further accounting by his principal when, as alleged in this petition, certain items, both of credit and charge, are omitted from the final account and now passed upon in the final decree.
In my opinion, therefore, the probate court erred in sustaining the demurrer to this petition. It should have entertained the petition, and considered whether or not assets came into the hands of the administratrix, and were not accounted for in her final account or passed upon in the final decree. If the items mentioned in the petition were passed upon in the final decree, it settles the matter as to such items in the petition. The probate court should further have considered whether there was extraneous fraud or collusion, justifying the setting aside of the decree, whereby the liability of the administratrix and the contingent liability of the surety was enlarged. It is a reasonable presumption that all the assets were accounted for in the final account, and further accounting should not be ordered, unless it clearly appears that there are other matters, not embodied in the former account, which have not been accounted for by the administratrix. If the surety was entitled to appeal from the final decree as an interested party, then the decree is binding upon him, in the absence of appeal as to all items passed upon. In this case there was a failure to appeal from the final decree, and I am of the opinion, therefore, that matters passed upon by the probate court, especially errors of law, are not reviewable under the petition. In other words, the court is confined to the items set up in the petition for review not taken up in the final account and passed upon in the final decree, except, of course, that, if there was fraud or collusion in obtaining the decree, the whole decree may be set aside.
The matter is remanded to the probate court, to entertain the petition and proceed as herein directed.