No. 12118 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1973 

IN THE 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 Sixth Judicial 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, 1973 
Mr. Justice Wesley 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 trial was denied. The case 

was tried in Park County, Hon. L.C. Gulbrandson, presiding. 

Plaintiff Eleanore A. Schueren, as beneficiary 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 to present to Nay 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 is another sad chapter in the 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 at this time to set the stage for what follows. 

Nay murdered his wife and committed suicide on June 3, 1968, 

leaving many innocent investors to suffer. 

Plaintiff-appellant contends the issues in the case were 

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 is clear the jury believed, as it had a right to do, that defendant was not negligent; 

and, that in any event no damage resulted because there was no 

loss of estate property or assets occasioned by actions of the 

executor. In other words, the alleged value of the estate was 

simply not there. A substantial part of ~chueren's estate had 
been embezzled and stolen prior 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 lifetime was a resident of 

Chicago, Illinois, engaged in a small manufacturing business in 

that city. In 1954, Schueren retired from business, sold his 

interest in the company, and moved to a ranch near Pray, Montana. 

In approximately 1936 Schueren became acquainted with Leston 

B. Nay, also of Chicago, a stock salesman employed by the brokerage 

firm of Webber, Darch & Company. On April 16, 1936, Schueren made, 

executed, and delivered to Leston Be Nay a power of attorney which 

vested Nay with broad discretion and authority to deal with all 

securities owned by Arnold Schueren including the right to sell 

and dispose of such securities. A new power of attorney was given 

by Arnold Schueren to Leston B. Nay on July 7, 1937, and contained 

the same broad powers. 

It was ~chueren's policy to leave securities which he had 

purchased in the possession of Nay and/or the brokerage firm with 

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 several years, Nay acquired all of the stock of RyanNichols & Co. and subsequently changed 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. The brokerage firms with which Nay was 

associated were all members of the Midwest Stock Exchange. 

Nay, as a long time friend and trusted business associate 

of Arnold Schueren, retained in his custody almost all securities, 

whether stocks or bonds, purchased for Schueren's account. The 

records of First Securities Company of Chicago show that it would 

purchase securities for Schueren and the stock certificates were 

delivered to Schueren. Receipts were signed by 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 at times 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, his will, dated April 1, 1963, was admitted 

to probate on February 28, 1967 and the Union Bank and Trust Company was appointed executor thereof. ~chueren's will provided 

that all of his property was to be distributed to the Union Bank 

and Trust Company, as trustee. One-half of his estate after 

payment of debts, taxes and administrative costs, was to be held 

in trust for Eleanore Schueren his widow, with income from such 

one-half to be paid to her monthly. The trustee was given the 

power to invade the principal of the trust in the event the income 

was insufficient to provide for Mrs. ~chueren's support and maintenance. Mrs. Schueren has the power to dispose of any of the 

assets remaining in the trust for her benefit to any person whom 

she desires, upon her death. 

The other one-half of ~chueren's estate is held in a trust 

designated the "residuary trust". Mrs. Schueren is to receive 

all of the income from the residuary trust and the trustee has 

the authority to disburse from the principal of the residuary 

trust such sums as may be required to provide for her support, but 

only in the event that all of the assets of the trust over which 
she has a power of appointment have 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 Be Nay requesting that all assets owned by 

Schueren be turned over to it, as executor. The response from Nay 

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 inventory was received from 

Nay in the latter part of April 1967, together with valuations 

of all securities, computed by Nay. The inventory failed to include any stock or bond certificate numbers. At various times 

from May 13, 1967, through February 8, 1968, Nay requested and 

was furnished by Union Bank the same documentation and additional 

documentation including inheritance tax waivers 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 

from Nay. Inquiries were 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 Schueren was 

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, it was established that the original requests had never been mailed to the 

transfer agents. 
While the investigation was in progress, Leston B, Nay on 

June 3, 1968, murdered his wife and committed suicide. No 

securities were delivered to Union Bank by First Securities 

Company or Leston Nay 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 

which were purportedly held by First Securities Company for the 

account of Arnold Schueren. The firm of Pope, Ballard, Shepard 

& Fowle was employed. Upon learning of the claim of Union Bank 

as executor of Arnold Schueren's estate, the Securites and Exchange 

Commission immediately filed an action in the United States 

District Court of Illinois and a receiver was 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 special master was appointed 

by the court to hear the various claims of persons claiming monies 

and/or securities due from First Securities Company, including 

the claim of Union Bank as executor of the last will and testament 

of Arnold Schueren. 

Union Bank on April 30, 1968, prior to Nay's death, and as 

required by law, filed with the Internal Revenue Service at Helena, 

Montana, a United States Estate Tax Return (Form 706) with respect 

to ~chueren's estate 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, through April 1968, 

thirteen remittances by cashier's checks purporting to be remittances 

of specific dividend and interest income theretofore received by 

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 income 
remitted therewith, aggregating the sum of $20,254.59, were 

received by Union Bank. 

In August 1968, Union Bank filed with the receiver, a petition 

for reclamation of all securites set forth on the list furnished 

by Nay in April 1967, and requesting the receiver to turn over 

all of the listed securities. Union Bank also filed with the 

receiver a proof of claim claiming the value of all securities 

appearing on the Nay list. 

Petition for removal of the executor and complaint in the 

instant action was filed on June 16, 1969, by plaintiff-appellant 

herein. Union Bank, defendant-respondent, filed an inventory and 

appraisement in this matter on June 25, 1969, showing assets in 

its possession owned by Arnold Schueren on the date of his death 

to be: individually owned property - $46,800.04; jointly owned 

property with Eleanore Schueren - $16,342.14. 

On August 19, 1969, Union Bank filed its first interlocutory 

account and report and petition for settlement thereof. Appellant 

filed objections to hearing of the account. 

On August 14, 1969, an order was entered in the receivership 

proceedings pending in Chicago, requiring the receiver to turn 

over to Union Bank, as executor, all of the securities found in 

the office of First Securities Company of Chicago, which were 

registered in the name of Arnold C. Schueren. On September 17, 

1969, after receipt of the securities, Union Bank filed its first 

supplemental inventory and appraisement showing the value of the 

securities received to be $98,399. 44. 

On June 30, 1970, the special master appointed by the federal 

court in Illinois to hear the various claims, after hearing proof 

on the claim of Union Bank, as executor, recommended the claim be 

denied upon the grounds that the powers of attorney granted by 

Schueren to Nay in 1936 and 1937 empowered Nay to dispose of all 

of the certificates entrusted to him 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 special master at the same time recommended the claim of Eleanore Schueren be accepted and approved. 
On March 22, 1971, the court adopted the recommendations 

of the special master 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 receivership proceedings denying the claim of Union Bank, 

as executor of Arnold Schueren's estate, was appealed to the 

United States Court of Appeals, 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, Plaintiff v. 

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, 1971 pursuant 

to the laws of the state of Montana, 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, 

surviving widow of Arnold 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 facts were developed including generally customs 

and practices in the securities industry; the proof that no 

securities (the loss of which is the alleged subject of the suit) 

existed on January 30, 1967, the date of ~chueren's death; a death 

or suicide note written by Leston Nay documenting his own fraudulent disposition of securities and money entrusted to him; and, 

certain other matters 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 to a period of time from February 28, 1967, 

(when respondent Union Bank became executor) to June 3, 1968, 

(when Leston Nay killed himself). 

(2) That the court erred in admitting into evidence the 

death statement or suicide note of Leston Nay. 

(3) Error in admitting matters in the receivership proceedings in Chicago against First Securities Company in September 

1969. 

(4) Error in admitting letters from various transfer agents 

in January 1970, stating they did not have any record of securities in the name of Arnold Schueren. 

(5) Errors claimed in instructions given and refused. 

(6) The actions of the Union Bank in allowing Nay to 

participate in marshalling the assets made 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 to June 3, 1968. This contention does not conform 

to the conduct of pretrial investigation, the preparation and 

approval of the pretrial order, or the trial of the case. The 

agreed statement of facts as contained in the 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 as executor, its 

filing of a claim in the receivership proceedings in Chicago, 

its participation in those proceedings and the filing of the 

inventory and appraisement and supplement thereto, and petitions 

for settlement of its account. 

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 Union 
Bank trust officer, with respect to the filing of a claim against 

Nay or First Securities. The happenings after June 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 counsel were defendant's Exhibit 

R (complaint filed in the receivership proceedings 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 filed with the complaint); Exhibit T (the order of the 

federal district court appointing Keith D. McKy as receiver); 

Exhibit U (the petition for reclamation filed on behalf of Union 

Bank, as executor of the estate of Arnold Schueren); Exhibit V 

(proof of claim filed by Union Bank, as executor); and Exhibit W 

(the order of the federal district court requiring the turnover 

of certain stock certificates to Union Bank, as executor of the 

estate of Arnold Schueren, relating to certain securities registered 

in the name of Arnold Schueren). It is clear appellant waived the 

claimed error. See: Charlie v. Foos, Mon t . , 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 to properly present its case was located 

in and about the city of Chicago. In addition, each of the transfer 

agents having the records of the companies in which Arnold Schueren 

was purportedly a stockholder or bondholder have offices in the 

midwestern and eastern cities of the United States. Appellant was 

advised of the nature of the evidence which respondent intended to 

produce at trial. 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 litigation which respondent intended to use at the 

the trial, all well in advance of the trial. The following 
stipulation between 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 hereto with like effect as if the 

witnesses were present in Court and testifying." 

Appellant reserved all objections save and except as to foundation. There was no suggestion by 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; Charlie v. Foos, supra. 

Appellant's contention that the evidence with 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 suicide note was admittedly written by 

Nay before he died on June 3, 1968. The note was written within 

the time limitation urged by appellant, which should obviate 

any objection or claimed irregularity with 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, 1-1 and J-1. The first three numbered exhibits are the 

reports of the special master in the Chicago proceedings regarding 

the claims of various creditors referred to as "the escrow 

claimants". The reports were written after hearings at which 

evidence was taken and the amount due each of the creditors was 

proved. The total of the claims filed was 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, evidence was produced showing Nay had paid 

as interest for the years 1953 through 1967 the sum of $639,551.24. 

The special master 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 Securities be denied on the ground that 

Nay was not an agent of First Securities. This recommendation 

was adopted by the federal district judge whose order was appealed 

to the Court of Appeals, Seventh Circuit. That court reversed the 

decision and concluded that Nay in his defalcations was acting 

as an agent of First Securities and the claims were properly claims 

against First Securities. Securities & Exchange Commission v, 

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 thereon with his own personal 

checks. Nay deducted these interest payments from his own personal income tax return, In connection with 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 correspondence with Nay as being personal loans to 
him. Nay was very secretive with respect to the escrow accounts 

and established, as president of First Securities, an office rule 

forbidding anyone other than himself to open mail addressed to 

him or to First Securities marked for his attention. The principal 

basis for the reversal was the violation by 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 to constitute a violation of Rule 27. 

Such violations provide a basis for private damage 

actions where the rule violated serves to protect the 

public. [citing cases] First Securities is properly 

liable for Nay's fraud because of its violation 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 after Nay's death, was certainly admissible to 

show his financial condition during the period arbitrarily set by 

appellant and to further show the inability of either First 

Securities or Nay to pay to Union Bank the sum of approximately 

$400,000, the market value of the securities stolen by Nay from 

Arnold Schueren. 

One of the issues raised by the pleadings here was the 

value of the estate's claim against First Securities or Nay as an 

1 I asset" of the estate. To support her allegation that the bank's 

failure as executor to fully collect the claim resulted in a loss 

to the estate, it was incumbent upon appellant to prove the 

financial ability of the debtor to pay the claim, Appellant failed 

to produce such evidence. Moreover, respondent produced evidence 

affirmatively showing the debtor did not have the financial ability 

to pay 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 

to appoint a receiver was drafted by attorneys for the Securities 

& Exchange Commission and filed in its behalf and is not 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 thirty years. 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 as may have been sold. Thereafter, when the 

extent of Nay's fraudulent practices had been established and 

it was certain that the missing securities hdd 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 of Arnold Schueren or 

as held in street name 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 Schueren were in existence 

at the time of his 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 chargeable by law with only those assets 

which are in existence on the date of the decedent's death. Since 

the stolen securities were nonexistent at ~chueren's death, 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 understandably not 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 the value of 
the converted securities) depends upon its collectability and this 

has not as yet been determined. It will not be determined until 

the receivership proceedings have been terminated and the amount 

of money available for distribution to receivership creditors has 

been ascertained. 

The evidence is clear that except for the securities registered 

in the name of Arnold Schueren, none of the missing securities 

was in existence 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 

list were held in some form for his account by First Securities 

and Nay. 

The instant action was commenced in June 1969, more than one 

year after Nay's suicide. Appellant alleges the securities set 

forth on the Nay list were in existence and were assets of the 

estate; that they were lost and the loss was due to negligence 

on the part of Union Bank. The defense of Union Bank is based 

upon the known facts that the securities did not exist and that 

the only asset of the estate was a claim, the value of which was 

unknown. There is no inconsistency as contended by appellant. 

It is the duty of the executor to collect all collectible assets 

owned by the decedent. The Union Bank has pursued this duty. 

Appellant's theory in this action seems to be that because 

Arnold Schueren was the victim of the fraudulent, deceitful and 

unlawful conduct of Nay, and Union Bank did not promptly discover 

that fact, it, as executor, succeeds to Arnold ~chueren's position 

and must suffer the loss. Under Montana law it is clear that an 

executor is chargeable with only such assets as are in existence 

on the date of the testator's death. In re Dolenty's Estate, 53 

Mont. 33, 161 P. 524; Section 91-3402, R.C.M. 1947. In this 

estate, the "asset" in question is the claim that existed at the 

testator's death for the value of securities stolen from him during 

his lifetime. 
For the foregoing reason alone, the trial court might well 

have granted the motion for a directed verdict; 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 suicide note, even 

without it there is sufficient proof to warrant the conclusion that 

the securities involved did not exist. As to the note, one Roy 

Campbell, the office manager, cashier, secretary and director of 

First Securities, testified by deposition. The note was read in 

its entirety by Campbell without objection and this would constitute a waiver. Moreover, the note was 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, 

150 Mont. 332, 435 P.2d 369; Section 93-801-2, R.C.M. 1947. The 

note was proven as to authenticity and was clearly relevant. No 

error was 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, there was a failure of proof 

of any loss occasioned by the executor and the trial court might 

well have granted a directed verdict. Thus no error in instructions 

occurred. Second, appellant's contentions on admissibility of 

evidence not having merit, heretofore discussed, many of the claimed 

errors in instructions are not applicable. ' 

We have dwelled herein largely on the matter of whether any 

loss was occasioned by the actions of the executor Union Bank. 

Appellant's contention (6) is that Union Bank, as executor, was 

negligent in allowing Nay to perform duties in marshalling 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,'since it could have and should have 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 to perform 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 in a proper case, if that delegation of authority results 

in a loss. But, we emphasize again, there must be proof of a loss. 

Appellant also urges that the actions of Union Bank and 

its inaction, failure to file the inventory, raised an equitable 

estoppel against the Bank. That is, that the Bank is estopped 

from denying the amount of assets asserted in its petition for 

appointment. The equitable estoppel principle simply is not 

applicable. 

It is regrettable that Leston Nay was so successful in 

gaining and keeping the trust and confidence of Arnold Schueren. 

Nay, a super conman, a liar and a thief, reached the ultimate 

depths of depravity when he murdered his invalid wife 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, after hearing the evidence, found in favor of 

respondent Union Bank and Trust Company. The verdict is upheld 

and the judgment affirmed. 

Chief Justic 

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I-, /- A iaK4y-- 

/ C ~Gyciate Justices.