No. 12118 INTHE SUPREME COURT OF THE STATE OF MONTANA 1973

INTHE MATTER OF THE ESTATE OF ARNOLD C. SCHUEREN, DECEASED,



# ...................................... ELEANORE A. SCHUEREN

## , Plaintiff and Appellant,

UNION BANK AND TRUST COMPANY, a Corporation, Defendant and Respondent.

Appeal from: District Court of the SixthJudicial District, Honorable L. C. Gulbrandson, Judge presiding. Counsel of Record : For Appellant: Small, Cumminsand Hatch, Helena, Montana Floyd 0. Small argued and Robert Cumins appeared,

Helena, Montana For Respondent : Luxan and Murfitt, Helena, Montana H. 

### J. Luxan and Walter S. Murfitt argued, Helena,

Montana

Submitted: June 18, 1973Mr. JusticeWesley Castles delivered the Opinion of the Court.

This is an appeal from a judgment for defendant entered on

a jury verdict after a motion for new trialwas denied. The case

was tried in Park County, Hon. L.C. Gulbrandson, presiding. Plaintiff EleanoreA. Schueren, asbeneficiary of the estate of Arnold Schueren, filed a negligence action against defendant Union Bank and Trust Company as executor of the estate of Arnold C. Schueren. The claimed negligence and mismanagement of the executor was that defendant (1) failed to collect assets owned by the decedent on the date of his death January 30, 1967, or in the alternative (2) failed to discover that those assets had been fraudulently disposed of by decedent's agent Leston B. Nay during decedent's lifetime and for failing topresent toNay a claim for the value thereof and to collect thereon. The Seventh Circuit Court of Appeals described the aforementioned agent Leston Nay in its Cause No. 71-1422, 

### 466 F.2d 1035, decided August 1, 1972, in this manner: "This isanother sad chapter inthe case of Leston B. Nay and the frauds he perpetrated over a long period of xears against a great number of innocent investors. We set this forth atthis time to set the stage forwhat follows. Nay murdered hiswife and committed suicide on June 3, 1968, leaving many innocent investors to suffer. Plaintiff-appellant contends the issues inthe casewere the question of negligence and damages resulting therefrom. We agree. Appellant sets out some fourteen claimed errors; some are merely the contentions set out above. It isclear thejury believed, as ithad a right todo, that defendant was not negligent; and, that in any event no damage resulted because therewas no loss of estateproperty or assets occasioned by actions of the executor. In otherwords, the alleged value of the estatewas simply not there. A substantial part of ~chueren's estatehad

### been embezzled and stolenprior to his death; thus no damage occurred by reason of defendant's activities. The other claimed errors have to do with the evidence admitted and the instructions given and refused. Before discussing these claimed errors,we set forth the agreed facts. Arnold C. Schueren during his lifetimewas a resident of Chicago, Illinois,engaged in a smallmanufacturing business in that city. In 1954, Schueren retired frombusiness, sold his interest in the company,and moved to a ranchnear Pray,Montana. In approximately 1936 Schuerenbecame acquaintedwith Leston B. Nay, also of Chicago,a stock salesman employed by the brokerage firm ofWebber, Darch & 

### Company. OnApril 16, 1936, Schuerenmade, executed, and delivered to Leston BeNay a power of attorney which vested Nay with broad discretionand authority to dealwith all securities owned by Arnold Schueren including the right to sell and dispose of such securities. A 

### newpower of attorneywas given by Arnold Schueren to Leston B. Nay on July 7, 1937,and contained the same broad powers. 

### Itwas ~chueren's policy to leave securitieswhich he had purchased in the possession ofNay and/or the brokerage firmwith which Nay was then associated. In 1942,Nay became an employee of the brokerage firm of Ryan-Nichols & 

### Co. During the course of the next severalyears,Nay acquired all of the stock of RyanNichols & 

### Co. and subsequentlychanged the name of the brokerage firm to First Securities Company of Chicago. Nay was president of that firm at the time of his death and owned ninety percent of the outstanding stock. Thebrokerage firms with which Nay was associatedwere allmembers of the Midwest Stock Exchange. Nay, as a long time friend and trusted business associate ofArnold Schueren, retained in his custody almost all securities, whether stocks or bonds, purchased for Schueren's account. The records of First SecuritiesCompany of Chicago show that it would purchase securities for Schueren and the stock certificateswere delivered to 

### Schueren. Receiptswere signedby Schueren acknow-ledging he had received the certificates. After each transaction, Schueren would deliver the securities to Leston Nay and would receive in return a document entitled "safekeeping receipt.II In sending the income to Schueren, Nay would issue, over the letterhead of First Securities Company of Chicago, typewritten monthly income statements reflecting the amount of dividends and/or interest purportedly received for Schueren's account and remit the amounts shown to Schueren by cashier's checks. Nay purchased the cashier's checks from various Chicago banks. Periodically, upon request of Schueren, Nay would send to Schueren a detailed list of stocks and bonds which were purportedly held by Nay for ~chueren's account. The correspondence between Nay and Schueren reveals that attimes Schueren, who kept accurate records, would question the inventory statements and/or the income statements. Arnold Schueren died on January 30, 1967. Thereafter, after due notice and hearing, hiswill, dated April 1, 1963, was admitted toprobate on February 

### 28, 1967 and the Union Bank and Trust Company was appointed executor thereof. ~chueren's willprovided that allof his property was tobe distributed to the Union Bank and Trust Company, as trustee. One-half of his estate after payment of debts, taxes and administrative costs, was tobe held intrust for Eleanore Schueren 

### his widow, with income from such one-half tobe paid toher monthly. The trustee was given the power to invade the principal of the trust in the event the income

was insufficient toprovide forMrs. ~chueren's support and maintenance. Mrs. Schueren has the power to dispose of any of the assets remaining in the trust for her benefit toany person whom she desires, upon her death. The other one-half of ~chueren's estate isheld ina trust designated the "residuary trust". Mrs. Schueren is toreceive allof the income from the residuary trust and the trustee has the authority to disburse from the principal of the residuary trust such sums asmay be required toprovide forher support, but only inthe event that allof the assets of the trust over which

### she has a power of appointmenthave been exhausted. Upon her death, all of the assets in the residuary trust are distributable to the Montana Heart Association. Following its appointment as executor,Union Bank on March 3, 1967, wrote to Leston BeNay requesting that all assets owned by Schuerenbe turned over to it,as executor. The response fromNay
was almost immediate and he pledged his cooperation to Union Bank and promised to furnish an inventory of all the securities owned by Arnold Schueren. Nay advised Union Bank it would be necessary to transfer the securities to the name of Union Bank and Trust Company, as executor,and requested twenty-five certified copies of Letters Testamentary to effect the transfers. These documents

were mailed to Nay on March 13, 1967. An 

### inventorywas received from Nay in the latterpart of April 1967, togetherwith valuations of all securities, computed by Nay. The inventory failed to include any stock or bond certificatenumbers. At various times fromMay 13, 1967, through February 8, 1968,Nay requested and

was furnishedby Union Bank the same documentationand additional documentation including inheritance taxwaivers issued by the state of Montana, affidavits of domicile for the state of New York and for the state of California, all purportedly required by the various transfer agents. In the latter part of February 1968,Union Bank began to investigate the reason for its not having received the securities fromNay. Inquirieswere made of its correspondent bank in Chicago, Continental Illinois National Bank of Chicago,and to certain selected transfer agents, and thereafter in May 1968, to all companies and transfer agents in which Arnold Schuerenwas supposed to hold stocks or bonds. In April 1968,Nay mailed to Union Bank purported copies of letters to all transfer agents showing the request for transfer. After 

### N~Y'S death, itwas established that the original requests had never been mailed to the transfer agents.

### While the investigationwas inprogress, Leston B,Nay on June 3, 1968,murdered his wife and committed suicide. No securitieswere delivered to Union Bank by First Securities Company or LestonNay prior to June 3, 1968. Following advice of ~ay's suicide,an officer of Union Bank went to Chicago to determine what course of action to take to recover the securities whichwere purportedly held by First Securities Company for the account of Arnold Schueren. The firm of Pope,Ballard, Shepard & 

### Fowlewas employed. Upon learning of the claim of Union Bank

as executor ofArnold Schueren's estate, the Securites and Exchange Commission immediately filed an action in the United States District Court of Illinois and a receiverwas appointed to take charge of the assets and property of First Securities Company of Chicago. A bank officer appeared at the hearing. That action is entitled "In the District Court of the United States for the Northern District of Illinois,Eastern Division, Securities and Exchange Commission, Plaintiff,vs. First Securities Company of

I' 

### Chicago, Defendant,No. 68C 1053. A specialmaster was appointed by the court to hear the various claims of persons claimingmonies and/or securities due fromFirst Securities Company, including the claim of Union Bank as executor of the last will and testament ofArnold Schueren. Union Bank onApril 30, 1968,prior to Nay's death, and as requiredby law, filedwith the InternalRevenue Service at Helena, Montana, a United States Estate TaxReturn (Form 706) with respect to ~chueren'sestate reporting assets of the value of $565,291.20 and concurrently therewith paid inheritance tax in the amount of $17,369. During the period between March 1967, throughApril 1968, thirteen remittancesby cashier's checks purporting to be 

### remittances of specific dividend and interest income theretofore receivedby First Securities Company of Chicago with respect to securities held by it for the account of Schueren,accompanied in each instance by a memorandum itemizing the specific dividend and interest incomeremitted therewith, aggregating the 

### sum of $20,254.59, 

### were receivedby Union Bank. InAugust 1968, Union Bank filedwith the receiver, a petition forreclamation of allsecurites set forth on the list furnished by Nay inApril 1967, and requesting the receiver to turn over allof the listed securities. Union Bank also filedwith the receiver a proof of claimclaiming thevalue of allsecurities appearing on the Nay list. Petition forremoval of the executor and complaint in the instant actionwas filed on June 16, 1969, by plaintiff-appellant herein. Union Bank, defendant-respondent, filedan inventory and appraisement in thismatter on June 25, 1969, showing assets in 

### itspossession owned by Arnold Schueren on the date of his death tobe: individually owned property

# - $46,800.04; jointly owned property with Eleanore Schueren

# - $16,342.14. On August 19, 1969, Union Bank filed 

### its firstinterlocutory account and report and petition for settlement thereof. Appellant filed objections tohearing of the account. On August 14, 1969, an orderwas entered inthe receivership proceedings pending inChicago, requiring the receiver toturn

over toUnion Bank, as executor, allof the securities found in the office of First Securities Company of Chicago, which were registered inthe name of Arnold C. Schueren. On September 17, 1969, afterreceipt of the securities, Union Bank filed 

### its first supplemental inventory and appraisement showing thevalue of the securitiesreceived tobe $98,399. 44. On June 30, 1970, the special master appointed by the federal court inIllinois tohear thevarious claims, afterhearing proof

on the claim of Union Bank, as executor, recommended the claimbe denied upon the grounds that the powers of attorney granted by Schueren toNay in 1936 and 1937 empowered Nay todispose of all of the certificatesentrusted tohim and as such Nay was not acting



### as an officer or agent of First Securities Company, but was acting as the agent of Schueren. The specialmaster atthe same timerecommended the claim of Eleanore Schueren be accepted and approved.

### On March 22, 1971, the court adopted the recommendations of the specialmaster and entered an order denying the claim of Union Bank, as executor, and approving the claim of Eleanore Schueren. Subsequent to the filing of the pretrial order in the instant case, the order of the federal district court entered in the Chicago receivershipproceedings denying the claim of Union Bank,

as executor ofArnold Schueren's estate,was appealed to the United States Court ofAppeals, Seventh Circuit. On August 1, 1972, that court reversed the order of the federal district court and allowed the claim of Union Bank, as executor. The decision entitled "~ecurities and Exchange Commission, Plaintiffv. First Securities Company of Chicago, Defendant;Union Bank & 

### Trust Company, Helena, Montana, Claimant-Appellant,

# -- Keith S. 

### McKy, Receiver-Appellee,Customer Creditors Committee,Appellee.11 

### appears at 466 F.2d 1035. Union Bank has not filed an estate inheritance tax return with the state of Montana but did, on February 12, 1971pursuant to the laws of the state ofMontana, deposit with the clerk of this Court the amount of $2,537.08 as and for Montana inheritance tax estimated to be due from the estate. Union Bank, as executor,has disbursed to Eleanore A. Schueren, survivingwidow ofArnold Schueren,as and for a widow's allowance, cash sums in the total amount of $62,000. Leston Nay died testate. No proceedings for the probate of his will or for the administration of his estate have been filed. During the course of the trial in the district court in the instant case, other factswere developed including generally customs and practices in the securities industry; the proof that no securities (the loss ofwhich is the alleged subject of the suit) existed on January 30, 1967, the date of ~chueren'sdeath; a death or suicide note written by Leston Nay documenting his own fraudulent disposition of securitiesand money entrusted to him; and, certain othermatters prior to Schueren's death and subsequent to ~ay's death, 

### -8-The claimed errors,as we have regrouped them, are: (1) On the question of negligence, the evidence should have been confined toa period of timefrom February 28, 1967, (when respondent Union Bank became executor) toJune 3, 1968, (when Leston Nay killed himself). (2) That the court erred inadmitting into evidence the death statement or suicidenote of Leston Nay. (3) Error inadmitting matters in thereceivershipproceedings inChicago against First Securities Company in September 1969.(4) Error inadmitting letters fromvarious transfer agents inJanuary 1970, stating they did not have any record of securities inthe name of Arnold Schueren. (5) Errors claimed ininstructions given and refused. (6) The actions of the Union Bank inallowing Nay to participate inmarshalling the assetsmade it a guarantor or raised an equitable estoppel against it. Under claimed error (I), appellant contends no evidence concerning the handling of this estate should have been received which related to any period of time prior to February 28, 1967,

or subsequent toJune 3, 1968. This contention does not conform tothe conduct of pretrial investigation, the preparation and approval of the pretrial order, or the trialof the case. The agreed statement of facts as contained inthe pretrial order

covers the period from 1936 through March 22, 1971, including the commencement of Arnold ~chueren's relationship with Leston Nay (1936) through the appointment of Union Bank asexecutor, 

### its filingof a claim inthe receivership proceedings inChicago, itsparticipation inthose proceedings and the filingof the inventory and appraisement and supplement thereto, and petitions for settlement of itsaccount. In addition, appellant introduced the inventory dated June 25, 1969, and questioned Mr. Mayer, a Union Bank trust officer, with respect to the Chicago proceedings, and Mr. Dion, a UnionBank trust officer, with respect to the filing of a claim against Nay or First Securities. The happenings afterJune 3, 1968, were included as a part of the hypothetical question asked of Mr. Finger, appdant's witness. Introduced and received in evidence without objection of appellant's counselwere defendant's Exhibit R (complaint filed inthe receivershipproceedings by the Securities & Exchange Commission against First Securities Company of Chicago

on June 10, 1968); Exhibit S (the affidavit of the senior security investigator on the staff of the Securities & Exchange Commission which was filedwith the complaint); Exhibit T (the order of the federal district court appointing Keith D. McKy as receiver); Exhibit U (the petition forreclamation filed on behalf of Union Bank, as executor of the estate of Arnold Schueren); Exhibit V (proof of claim filedby Union Bank, as executor); and Exhibit W (the order of the federal district court requiring the turnover of certain stock certificates toUnion Bank, as executor of the estate of Arnold Schueren, relating tocertain securitiesregistered in the name of Arnold Schueren). It 

### is clear appellant waived the claimed error. See: Charliev. Foos, Mont

# . , 503 P.2d 538, 29 St.Rep. 927. Appellant complains that respondent Union Bank insisted upon the right to take depositions of various individuals in the Chicago area for use during trial. A great deal of the evidence required by respondent toproperly present itscasewas located in and about the cityof Chicago. In addition, each of the transfer agents having the records of the companies inwhich Arnold Schueren

was purportedly 

### a stockholder orbondholder have offices inthe midwestern and eastern cities of the United States. Appellant was advised of the nature of the evidence which respondent intended to produce attrial. Appellant was furnished with a copy of the transcript of the hearing of the receivership claims of Eleanore Schueren and Union Bank, as executor, and copies of the proceedings in the Chicago litigationwhich respondent intended touse atthe the trial, allwell inadvance of the trial. The following

### stipulationbetween counsel appears in the pretrial order:

~t

### The parties stipulate and agree that all pleadings, exhibits and all the testimony by deposition or at the hearings before the Court or Special Master in the cause entitled In the District Court of the United States for the Northern District of Illinois,Eastern Division, Securities and Exchange Commission, plaintiff, vs. First Securities Company of Chicago, defendant,No. 68C 1053,may be used by either party heretowith like effect as if the witnesseswere present in Court and testifying." Appellant reserved all objections save and except as to foundation. Therewas no suggestionby stipulation or otherwise,nor does the record reveal, that appellant intended to attempt to limit the evidence to the period of time now claimed. It has long been the law of Montana that failure to make timely objection constitutes a waiver. Seder v. Kiewit sons' Co., 156 Mont. 322, 479 P.2d 448;Charliev. Foos, supra. Appellant's contention that the evidencewith respect to the financial condition of First Securites or Nay should have been excluded as being immaterial and too remote in time is without merit. The Nay suicidenote was admittedlywritten by Nay before he died on June 

### 3, 1968. The notewas written within the time limitation urged by appellant, which should obviate any objection or claimed irregularitywith respect thereto. The note is evidence of#ap's deceit of Arnold Schueren, the theft of the securities including the time the thefts commenced (1936) and the method used (sold as collateral for loans), and the effect of this deceit on the financial condition of First Securities. Other documents received in evidence, over objection as being too remote in time and immaterial,were defendant's exhibits G-1, H-1, 1-1and J-1. The first three numbered exhibits are the reports of the specialmaster in the Chicago proceedings regarding the claims ofvarious creditorsreferred to as "the escrow 

### claimants". The reportswere written after hearings at which evidence was taken and the amount due each of the creditorswas proved. The total of the claims filedwas over $1,300,000, of which approximately $1,000,000 was proved as.due. A reading of

### the synopsis of the evidence produced at the hearings shows Nay's financial condition as far back as 1953. ~efendant's exhibit G-1,wherein the receiver concluded the total claims proved was $972,500, evidencewas produced showing Nay had paid

as interest for the years 1953 through 1967 the sum of $639,551.24. The specialmaster stated: "During the last several years prior to ~ay's death, his interest payments to the claimants on the escrow funds became irregular and delinquent.11 

### The evidence is clear that Nay was heavily indebted to third persons and was in fact insolvent long prior to the death of Arnold Schueren and the appointment of Union Bank as executor. The special master recommended the claims of the "escrow claimants" against First Securitiesbe denied on the ground that Nay was not an agent of First Securities. This recommendation

was adopted by the federaldistrict judge whose order was appealed to the Court of Appeals, Seventh Circuit. That court reversed the decision and concluded that Nay inhis defalcationswas acting

as an agent ofFirst Securities and the claimswere properly claims against First Securities. Securities & 

### Exchange Commissionv, First Securities Company of Chicago

# --- Olga ~#chfelder, et al, Claimants-Appellants, Keith S. McKy, Receiver-Appellee,Customers Creditors Committee, Appellee, 463 F.2d 981, 988. The statement of facts in the above entitled action outlines the method by which Nay succeeded in duping the claimants into selling legitimate securities,and investing in the so-called

11



### escrow account". Nay acknowledged receipt of cash either by a hand-written receipt or by giving promissory notes to each claimant. Nay made the interest payments due thereonwith his own personal checks. Nay deducted these interestpayments from his own 

### personal income tax return, In connectionwith Internal Revenue Service audits in 1956 and 1965,Nay requested and received from each claimant a letter verifying the amount of his indebtedness. From time to time, some of the claimants referred to their escrow investments in correspondencewith Nay as being personal loans tohim. Nay was very secretivewith respect to the escrow accounts and established, aspresident of First Securities, an office rule forbidding anyone other than himself toopen mail addressed to him or toFirst Securitiesmarked forhis attention. The principal basis for the reversal was the violationby First Securities of the Securities Exchange Act of 1934, and the Rules of Fair Practice of the National Association of Securities Dealers, Inc. The Court of Appeals stated: "We have no doubt that the enforcement of Nay's rule regarding the opening of the mail is sufficient without more toconstitute a violation of Rule 27. Such violations provide a basis for private damage actionswhere the ruleviolated serves toprotect the public. [citing cases] First Securities is properly liable for Nay's fraud because of 

### itsviolation of Rule 27 of the N.A.S.D."

The evidence of the extent of Nay's indebtedness, as reflected in the pleadings, evidence and decisions, which came to light only afterNay's death, was certainly admissible to show his financial condition during the period arbitrarily setby appellant and to further show the inability of either First Securities or Nay topay toUnion Bank the sum of approximately $400,000, the market value of the securities stolenby Nay from Arnold Schueren. One of the issues raised by the pleadings here was the value of the estate's claim against First Securities orNay as an

1I

asset" of the estate. To support her allegation that thebank's failure as executor to fullycollect the claimresulted in a loss to the estate, itwas incumbent upon appellant to prove the financial ability of the debtor topay the claim, Appellant failed toproduce such evidence. Moreover, respondent produced evidence affirmatively showing the debtor did not have the financial ability topay the claim, had one been presented, and was hopelessly insolvent. As another "irregularity1', appellant states that Union Bank has taken inconsistent positions in the Chicago litigation and in this action. The original complaint requestlngthe federal court toappoint a receiver was drafted by attorneys for the Securities & Exchange Commission and filed in

### itsbehalf and 

### isnot an admission by Union Bank that ~ay's deceitful and deceptive practices started

### after its appointment. 

### It is an allegation only and the proof subsequently developed during those proceedings indicated the deceit had been practiced for over thirtyyears. 

### In the Chicago proceedings, Union Bank on July 31, 1968, filed its "Petition for Reclamation" requesting the turnover of all Schueren's securities and further requesting all cash proceeds of any of such securities asmay have been sold. Thereafter,when the extent of Nay's fraudulent practices had been established and itwas certain that the missing securitieshdd long been disposed of,Union Bank in 1968 filed its "Proof of Claim". Union Bank

was desirous of obtaining possession of such existing securities

(if any) as were registered in the name ofArnold Schueren or
as held in streetname for his account by First Securities, together with the value of such of Schueren's securities as could not be accounted for. As executor, Union Bank has recovered securities of the value of approximately $98,000. Subsequent investigation revealed that no other securities belonging to Schuerenwere in existence at the time ofhis death. What was originally believed to be assets having a "market value" is now merely a claim against an insolvent,bankrupt company and/or against a decedent's estate. Union Bank pursued the claim of its testator in the Chicago proceedings and was successful in obtaining a judgment requiring the receiver to allow the claim as a valid claim against First Securities. The executor is chargeableby lawwith only those assets which are in existence on the date of the decedent's death. Since the stolen securitieswere nonexistent at ~chueren'sdeath, the

11

### asset" is the claim against First Securities and/or Nay for their value. Proceedings for the administration of Nay's (insolvent) estate have understandablynot been commenced. Union Bank followed the only fruitful course available under the circumstances by filing

a claim against First Securities for the value of the stolen securities. The value of that claim (as distinguished from thevalue ofthe converted securities) depends upon 

### itscollectability and this has not as yet been determined. It willnot be determined until the receivership proceedings have been terminated and the amount of money available for distribution toreceivership creditors has been ascertained. The evidence isclear that except for the securitiesregistered inthe name of Arnold Schueren, none of the missing securities

was inexistence on the date Arnold Schueren died and that ~ay's representations to the contrary, made to Union Bank during the period following ~chueren's death and until ~ay's suicide, were fhlse and fraudulent. It is admitted that Arnold Schueren believed until the day he died that the securities contained on the Nay listwere held in some form forhis account by First Securities and Nay. The instant actionwas commenced inJune 1969, more than one year afterNay's suicide. Appellant alleges the securities set forth on the Nay listwere inexistence and were assets of the estate; that they were lost and the losswas due tonegligence

on the part of Union Bank. The defense of Union Bank isbased upon the known facts that the securities did not exist and that the only asset of the estatewas a claim, the value of which was unknown. There isno inconsistency as contended by appellant. It 

### is the duty of the executor to collect allcollectible assets owned by the decedent. The Union Bank has pursued this duty. Appellant's theory in this action seems tobe that because Arnold Schuerenwas the victim of the fraudulent, deceitful and unlawful conduct of Nay, and Union Bank did not promptly discover that fact, it, as executor, succeeds toArnold ~chueren's position and must suffer the loss. Under Montana law it is clear that an executor is chargeable with only such assets asare in existence

on the date of the testator's death. Inre Dolenty's Estate, 53 Mont. 33, 161P. 524; Section 91-3402, R.C.M. 1947. In this estate, the "asset" inquestion is the claim that existed atthe testator's death for the value of securities stolen from him during his lifetime.

### For the foregoing reason alone, the trial courtmight well have granted the motion for a directedverdict; that is,no loss

was shown as a result of the executor's action. The foregoing discussion answers appellant's contentions (I), (3), and (4), heretofore set forth. As to contention (2), the admissibility of the death statement or suicidenote, even without it there is sufficientproof towarrant the conclusion that the securities involved did not exist. As to thenote, one Roy Campbell, the office manager, cashier, secretaryand director of First Securities, testified by deposition. The notewas read in its entiretyby Campbell without objection and this would constitute a waiver. Moreover, the notewas properly admissible as a declaration against interest and a business record. Section 93- 1101-17(1), R.C.M. 1947;MacDonald v. Protestant Episcopal Church, 150Mont. 332, 435 P.2d 369; Section 93-801-2,R.C.M. 1947. The note was proven as to authenticityand was clearlyrelevant. No

errorwas committed. As to appellant's contention (5), errors concerning instructions given and refused,we have examined them and find no error. First,as we have said heretofore, therewas a failure of proof of any loss occasioned by the executor and the trial court might well have granted a directed verdict. Thusno error in instructions occurred. Second, appellant's contentions on admissibility of evidence not having merit, heretofore discussed,many of the claimed

errors in instructionsare not applicable. ' 

### We have dwelled herein largely on the matter ofwhether any losswas occasionedby the actions of the executor Union Bank. Appellant's contention (6) is that Union Bank, as executor,was negligent in allowingNay to perform duties inmarshalling the assets of the estate during the period of over one year. Further, that Union Bank failed to file an inventory and appraisement of the estate for over two years. We do not herein approve of the actions of Union Bank,'sinceit could have and shouldhave gone to the court for an extension of time,but the jury did not find those actions to be negligence.Appellant urges that when Union Bank allowed Nay toperform 

### its duties of marshalling the assets, it, the Bank, became a guarantor for the acts of Nay as its agent. We recognize that such 

### is the rule ina proper case, if that delegation of authorityresults in a loss. But, we emphasize again, there must be proof of a loss. Appellant alsourges that the actions of Union Bank and its inaction, failure to filethe inventory, raised an equitable estoppel against the Bank. That is, that the Bank 

### isestopped from denying the amount of assets asserted initspetition for appointment. The equitable estoppel principle simply isnot applicable. It isregrettable that Leston Nay was so successful in gaining and keeping the trust and confidence of Arnold Schueren. Nay, a super conman, a liarand a thief, reached the ultimate depths of depravity when he murdered his invalidwife and then committed suicide. He obviously could not face the disgrace he knew he would suffer. The economic loss suffered by the Sbhuerens cannot be attributed to any negligence of Union Bank, but must be placed squarely on the shoulders of Leston Nay. The jury, afterhearing the evidence, found in favor of respondent Union Bank and Trust Company. The verdict isupheld and thejudgment affirmed.

Chief Justic



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