Case Name: In the Matter of the ESTATE OF John ALTHEN, Deceased
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1988-09-28
Citations: 429 N.W.2d 745
Docket Number: Nos. 15847, 15872
Parties: In the Matter of the ESTATE OF John ALTHEN, Deceased.
Judges: HENDERSON, Acting C.J., and SABERS, J., concur.
Reporter: North Western Reporter 2d
Volume: 429
Pages: 745–749

Head Matter:
In the Matter of the ESTATE OF John ALTHEN, Deceased.
Nos. 15847, 15872.
Supreme Court of South Dakota.
Argued Jan. 11, 1988.
Decided Sept. 28, 1988.
John L. Morgan of Morgan, Theeler, Cogley & Padmos, Mitchell, for appellant Estate of Bess McQuade.
Douglas R. Bleeker, Mitchell, for appel-lee Florence Gjesdal.
E. Steeves Smith of Tinan, Smith & Taylor, Mitchell, for appellee Commercial Trust & Sav. Bank.

Opinion:
TSCHETTER, Circuit Judge.
This is an appeal from a final decree of distribution of trial court. Trial court had approved prior accountings of executors. Trial court was requested to set aside the approval of first accounting of executors and refused to do so. We affirm the trial court on the issue of the finality of the first accounting. We remand for specific findings of fact regarding fraud of attorney on matters relating to final accounting.
FACTS
John Althen (decedent), a bachelor, died on January 24, 1976. The decedent's Last Will and Testament, prepared by attorney Douglas R. Bleeker (Bleeker), was duly admitted to probate. The decedent's niece, Florence Althen Gjesdal (Gjesdal), and the Commercial Trust and Savings Bank of Mitchell, South Dakota, (bank) were appointed as the executors. They retained Bleeker as attorney. The final evaluation of the decedent's estate was $1,517,436.00. The residuary heirs, legatees and devisees of decedent's estate were Casper Althen, Gjesdal, Helen King, Charles R. Schultz and Bess Coffee McQuade (McQuade). Al-then was to receive 80% of the estate, while Gjesdal, King, Schultz and McQuade were each to receive 5%. McQuade is now deceased and the executor of her estate is a professional corporate trust department in Duluth, Minnesota.
On July 6, 1982, the executors' first accounting was presented to the trial court and heirs for approval. Notice was sent to each of the heirs including the trustee of the McQuade Estate (appellant). An order approving the initial accounting was signed on July 30, 1982. No objection had been made to the first accounting. No appeal was taken from the approval of the order. In the order approving the first accounting, attorney's fees and expenses of $57,491.00 and executor fees of $67,282.00 were approved.
Four years later, the executors filed for the final account and report and a petition for final distribution on August 4, 1986. McQuade filed objections to the final account. Some of the objections filed by McQuade dealt with matters that had been included in the executors' first approved accounting. A hearing was held with respect to the final accounting, and the trial court allowed McQuade to go into the matters contained in the first accounting. An audit was conducted on the executors' accounting and Bleeker's trust account. The audit disclosed several conflicting, unexplained receipts and disbursements. The audit also reflected some commingling of funds between the estate and the Bleeker trust account, certain municipal bonds and treasury bills which had not been included in the first accounting, and other mistakes regarding the accounting.
The trial court, in entering its findings of fact and conclusions of law noted these deficiencies and also noted that there were no objections raised at the hearing on the first accounting. The trial court approved the final accounting of the executors subject to several exceptions. Finally, the trial court did not determine that Bleeker was guilty of fraud or deceit.
DECISION
Appellant claims the trial court erred by not finding that Bleeker was guilty of fraud and deceit. The trial court's finding of fact shall not be set aside unless clearly erroneous. A finding is clearly erroneous when upon reviewing the entire evidence, we are left with a definite and firm conviction that the trial court has erred. Matter of Estate of Gosmire, 331 N.W.2d 562 (S.D.1983); Estate of Nelson, 330 N.W.2d 151 (S.D.1983); Matter of Estate of Pierce, 299 N.W.2d 816 (S.D.1980). Due regard is afforded to the trial court's opportunity to judge the credibility of witnesses. Matter of Estate of Gosmire, supra; People in Interest of P.M., 299 N.W.2d 803 (S.D. 1980).
It should be noted that the parties only presented two of the five transcripts of the hearing conducted. However, after reviewing the record presented to this court, we are not convinced that the trial court was clearly erroneous. The trial judge had ample opportunity to observe Bleeker while testifying. Bleeker attempted to explain the discrepancies in the audit to the trial court. Although Bleeker's handling of the estate was questionable at best, his inability to properly handle the estate, in the trial court's opinion, apparently does not rise to the level of fraud and deceit. Therefore, we affirm the trial court on this issue.
Appellant next contends that trial court erred by failing to reopen the first accounting. SDCL 30-25-33 provides:
The settlement of the account and the allowance thereof by the court, or upon appeal, is conclusive against all persons in any way interested in the estate, saving, however, to all persons laboring under any legal disability, their right to move for cause to reopen and examine the account or to proceed by action against the executor or administrator, either individually or upon his bond, at any time before final distribution; and in any action brought by any such person, the allowance and settlement of such account is prima facie evidence of its correctness, (emphasis added).
If the parties seeking to reopen the estate are not under legal disability, then the accounting is final. In re Nelson's Estate, 26 S.D. 615, 129 N.W. 113 (S.D.1910). Further, an intermediate or first account of an executor or administrator from which no appeal is taken is binding, and cannot be impeached upon the final accounting. Melstrom v. Terry, 170 Minn. 338, 212 N.W. 902 (1927). This would be the situation even if the accounting were erroneous in some respects. White v. White, 76 S.D. 503, 81 N.W.2d 606 (S.D. 1957).
The record clearly reflects that the estate of McQuade was given notice of hearing on the first accounting. No objections were filed nor appeal taken from that accounting. Therefore, the accounting would be considered conclusive against the McQuade estate.
Appellant contends that a court may rescind an order entered when it is tainted by fraud. SDCL 15-6-60(b); Gifford v. Bowling, 200 N.W.2d 379 (S.D.1972). Four years passed between accounting one and final. No objection was made. No motion to set aside on the grounds of fraud or mistake was made. No appeal was taken. Under these circumstances we cannot find the trial court to be clearly erroneous in giving credence to the order approving first account. The trial court did not err in refusing to rescind the order allowing the first accounting.
There are, however, issues of fraud which were raised in the objections to the final account. The findings are silent as to fraud or absence thereof in the four year interim period between accounting number one and final. The circumstances surrounding the "missing $5,000.00 bond" are perplexing at best. According to all the evidence presented this missing bond had to have had a 1991 maturity date. The $5,000.00 bond returned by attorney in 1986 had a maturity date of 2006. This fact coupled with other troublesome anomalies requires an inquiry into, and specific findings regarding fraud.
We remand for rehearing by the trial court and issuance of findings on the existence or absence of fraud and its effect during the interim period between the two accountings.
HENDERSON, Acting C.J., and SABERS, J., concur.
MILLER, J., and McKEEVER, Circuit Judge, concur in part and dissent in part.
TSCHETTER, Circuit Court Judge, sitting for WUEST, C.J., disqualified.
McKEEVER, Circuit Court Judge, sitting for MORGAN, J., disqualified.