Case Name: MONTGOMERY et al., Appellants, v. FIRST NATIONAL BANK OF DILLON et al., Respondents
Court: Montana Supreme Court
Jurisdiction: Montana
Decision Date: 1943-03-23
Citations: 114 Mont. 395
Docket Number: No. 8259
Parties: MONTGOMERY et al., Appellants, v. FIRST NATIONAL BANK OF DILLON et al., Respondents.
Judges: Associate Justices Erickson and Anderson, and the Honorable Guy C. Derry, District Judge, sitting in place of Mr. Justice Angstman, concur.
Reporter: Montana Reports
Volume: 114
Pages: 395–428

Head Matter:
MONTGOMERY et al., Appellants, v. FIRST NATIONAL BANK OF DILLON et al., Respondents.
(No. 8259.)
(Submitted December 1, 1942.
Decided March 23, 1943.
Amended Opinion Filed May 3, 1943.)
[136 Pac. (2d) 760.]
Messrs. J. E. Kelly, 8. P. Wilson, H. L. Maury and A. G. Shone, for Appellants, submitted an original, a reply and a supplemental brief; Mr. Wilson and Mr. Maury argued the cause orally.
Messrs. Gunn, Basch at Gunn, Messrs. Poore & Poore, Messrs. Gilbert & Gilbert and Mr. T. F. McFadden, for Respondents, submitted an original and a supplemental brief; Mr. Carl Basch and Mr. J. A. Poore argued the cause oraRy.

Opinion:
HONORABLE RUDOLPH NELSTEAD,
District Judge, sitting in place of Mr. Chief Justice Johnson, disqualified, delivered the opinion of the court.
Two orders of the district court of Beaverhead county in the probate of the estate of William Montgomery, deceased, are presented for review: (1) An order based on a petition of the First National Bank of Dillon and the Daly Bank and Trust Company of Anaconda, creditors of the deceased, directing the sale of the remainder of the decedent's real estate and personal property to pay their claims, and (2) an order settling the account of J. H. Gilbert as trustee of Montgomery's estate. The hearings on the petition for sale, the account and a petition for the appointment of William G. Montgomery as administrator with will annexed, as successor of Gilbert, were consolidated in the trial court, and the testimony in connection therewith constitutes one record in this court. Appellant George H. Montgomery first commenced suit in 1931 in the United States District Court of Montana against Gilbert, the First National Bank of Dillon, and others, attacking, upon the ground of fraud, certain orders and decrees of the district court of Beaverhead county in connection with the administration of the estate. A decree dismissing this action was affirmed in 1935 by the Circuit Court of Appeals on jurisdictional grounds. (Montgomery v. Gilbert, 9 Cir., 77 Fed. 2d 39.) Thereupon the three appellants in the present proceedings, James K. Montgomery, George H. Montgomery, and William G. Montgomery, sons of the deceased, to whom was devised the real estate which the creditors now propose to sell, commenced separate suits against the same parties in the district court of Beaverhead county to recover the property of their father's estate, to quiet appellants' title thereto, and for an accounting. This litigation was finally terminated by a decision of this court in Montgomery v. Gilbert, 111 Mont. 250, 108 Pac. (2d) 616, in which remittitur to the district court was issued December 4, 1940. Pertinent facts previous to the commencement of the proceedings on which the present appeals are based appear in this court's opinion in Montgomery v. Gilbert, supra, including the material provisions of Montgomery's will and the fidings of fact and conclusions of law by the trial judge. A statement of the facts essential to the determination of the issues presented in the present appeals entails to some extent repetition of the facts set forth at length in the opinion in the prior litigation.
William Montgomery died October 24, 1919. His will was admitted to probate November 25, 1919, and Gilbert was then appointed executor of his estate. The claim of the Daly bank against the estate was approved by the executor for $34,760, and allowed by the court September 9, 1920. Several claims by the First National Bank aggregating $94,518 were approved by the executor, and allowed by the court March 21, 1921. Between the date of the executor's appointment and the approval of his account in 1926 payments were made on these claims, but additional money was borrowed for expenses of administration and the ranching business. Montgomery's estate consisted of three ranches devised to the appellants, unimproved lots in the town of Wisdom, livestock, farm machinery and implements, and $40,000 in life insurance. William G-. Montgomery, the oldest son, was foreman of the ranches until 1924. The last payment of family allowance to the widow was made in 1925 by four checks of $300 each. Previously, on November 26, 1923, the widow had deeded to the executor as partial consideration for money paid for family allowance certain lands which had been set aside to her after she elected to take her dower in lieu of the legacy in the will. So far as the record discloses, none of the decedent's family had any connection with the estate property or received any benefit therefrom subsequent to 1925. In February, 1926, after the disposition of the greater part of the livestock, the assets consisted of the three ranches, the town lots, farm machinery and certain other personal property. For a period of years thereafter the ranching operations were conducted by the executor personally and, in the later years, preceding the filing of his account now presented for review on appeal, the ranches were leased on a yearly basis for a cash rental.
During the time the executor occupied that position — from November, 1919, to April, 1941, a period of over twenty-one years — he filed three accounts. The first was approved May 24, 1924; the second, which has been referred to in prior litigation as his final account, was approved February 23, 1926; and the third — designated first account of trustee— from which one of the present appeals is taken, was approved July 1, 1941. We deem it appropriate to here emphasize the statement which has been made time and again in decisions of this court, that probate proceedings must be conducted with dispatch to the end that an estate shall not be wasted by needless expense incident to delay. One who accepts appointment as executor or administrator of an estate occupies a position of trust, and particularly must be diligent in accounting so that the court, the heirs and other persons interested in the estate may be fully informed regarding the status of the estate property. The vigilance in this respect by one who assumes to act in such representative capacity must be greater where, by the terms of a will, particular confidence has been reposed by the testator and broad powers granted in the administration of the estate. It is true that circumstances over which the executor may have no control, such as adverse economic conditions, may prevent an early settlement of the estate. But by lapse of time, without accounting, evidence disclosing the true nature of the executor's transactions and his conduct of the estate is obscured and it becomes increasingly difficult to determine the truth.
An error in the trial court's findings in Montgomery v. Gilbert, supra, which findings appear verbatim in the opinion, page 257 et seq. of 111 Mont., page 619 of 108 Pac. (2d), concerning which from an analysis of the record there can be no controversy, should be noted at this point. Finding 28 recites that Gilbert was discharged as executor and his final account approved on February 23, 1926. Finding 30 states that, after his discharge as executor, he continued in control as trustee of the estate's property as directed in Montgomery's will. The fact is that Gilbert was not released and discharged as executor of the estate until April 23, 1941, and that the estate property was never set aside to him as trustee. He never accepted the trust created by Montgomery's will, nor did he qualify as trustee. The document dated February 23, 1926, which is designated Decree of Settlement of Account and Order Discharging Executor did not discharge Gilbert as executor. This order merely approved the account filed February 9, 1926, and provided further (1) that the balance of cash remaining in the hands of the executor be applied by him as a payment on the debts due to the First National Bank of Dillon and the Daly Bank and Trust Company of Anaconda, and (2) that upon the payment of said sums the -executor be discharged from his trust. No further proceedings were had in the probate of the estate until 1941. It is apparent from the record that both the executor and the two creditors considered the Montgomery estate closed in February, 1926, and that an account was'filed in March, 1941, only by reason of the fact that this court in Montgomery v. Gilbert, supra, ordered the executor to file one.
In May, 1925, the executor made two fictitious probate sales of the ranches. (See trial court's findings 19 to 23, inclusive, in Montgomery v. Gilbert, supra, 111 Mont. pages 263-265, 108 Pac. (2d) pages 622, 623.) A portion of the land was ostensibly sold to Alfred N. Peterson for $82,665.20, and the remainder to George M. Clemow for $41,749. In August, 1925, Clemow deeded part of the land conveyed to him to Jules Wenger for $15,630.93, which sum was paid in cash to the executor, and listed among the receipts in his account. Peterson and Clemow thereupon mortgaged the remainder of the lands not conveyed to Wenger to the Federal Land Bank of Spokane for $50,000. The creditors acknowledge in their petition for sale of the property that $33,000 of this amount was applied on the claim of the First National Bank, and $15,000 on the claim of the Daly bank. The executor never received any consideration for the conveyances to Clemow and Peterson. From finding 23 in the prior litigation it appears that the executor followed this procedure in order to secure money by way of a loan to apply on the indebtedness to the two creditors. On October 15, 1925, Peterson and Clemow each signed deeds describing all estate lands excepting the parcel conveyed to Wenger, in which the names of the grantees were omitted and left blank, and delivered them to the executor. The lands were at no time reconveyed to appellants, who have been the owners thereof since their father's death. It is elementary that the real property of a deceased person vests in his devisees "from the moment of his death, subject only to the right of the executors to posesssion for the purposes of administration." (First State Bank v. Mussigbrod, 83 Mont. 68, 85, 271 Pac. 695, 702; In re Estate of Deschamps, 65 Mont. 207, 212 Pac. 512.) In explanation of the above procedure the executor, at the hearing in April,' 1941, testified on direct examination as follows: "The reason for taking them in that manner was, that we anticipated a sale of the properties. I had a verbal understanding with the parties that gave me the deeds to insert in the name of the purchaser. As I recall it, we were going to save the amount of revenue stamps. In my opinion, I was holding them as security for the creditors and the heirs; and that is as near as I can interpret what I intended to do with them." To the following question on cross-examination: "If that transaction had gone through, and if you had sold the lands to some purchaser that you had in mind, then those deeds would have been delivered without any further order of court, and without any further publication for bids. Is that true?" the answer was: "I would have determined my status in that, but that was my interpretation of what I intended to do with them." In the executor's account, approved by the order dated February 23, 1926, the property of the estate was treated as sold, and the cash assumed to have been received therefor applied on the claims of the creditors. The order also clearly indicates that the creditors had agreed to such arrangement.
Clemow died April 13, 1933, and his estate was thereafter probated in Beaverhead county. At the time of the hearing on the petition for sale in April 1941, quitclaim deeds to J. H. Gilbert, trustee, from Alfred N. Peterson and from the heirs of George M. Clemow, each dated March 24, 1941, and filed for record April 21, 1941, were received in evidence. Assuming that these deeds were sufficient to properly reconvey the lands in question, it appears from the record that for a period of over fifteen years title was held by third persons, who were mere "dummy" purchasers and had no interest in the estate. At the hearing the appellants offered to prove that the Daly Bank and Trust Company, through its president, requested the executor to make the sales to Peterson .and Clemow in the manner in which he did, and that the executor as president of the First National Bank of Dillon, as well as all of the other directors of the bank, agreed to the plan. Such testimony was competent, not to prove fraud— the good faith of the parties was established in the prior litigation — but as bearing on the question raised by appellants' objections to the petition for sale of property, whether the creditors' claims were then barred by laches. It is appar•ent, however, from other testimony admitted, that the creditors, through officers and directors, actively participated in .all of these transactions, which, although made in good faith, were clearly contrary to law. The creditors planned the sales to Peterson and Clemow; they were responsible for the mortgage on the real property to the Federal Land Bank in order to secure funds to apply on their claims; they acquiesced in the action of the executor in withholding reconveyance of the property to the estate, and in the litigation in Montgomery v. Gilbert, supra, they contested the title of the heirs. The identity of interest of the executor of the estate and the creditors is very apparent from the record. In 1925 and for some time thereafter the president of the Daly bank was a director of the First National Bank. The executor during this period was president of the First National Bank. W. W. Hawkins, field man for the First National Bank in 1919, vice-president of the bank at the time of the sales to Peterson .and Clemow, and subsequently president, had direct supervision of the ranches during the time they were leased on a yearly basis. He testified that to his knowledge tax notices since 1935 were in the names of Peterson and Clemow and sent to the First National Bank. Subsequent to this latter date the executor did not visit the ranches on an average of more than twice each year. According to the testimony of "William (4. Montgomery, which is not contradicted, the exec utor advised him after the youngest brother George became of age in 1931, that the estate property had been "taken up" to pay debts. It serves no useful purpose to review the evidence in detail because it is clear that the creditors at all times had an intimate connection with, and had complete knowledge of, the business of the Montgomery estate through their respective officers.
In their objections to the granting of the creditors' petition to sell, appellants have pleaded that the creditors' claims are barred (1) by statutes of limitations — subd. 1, sec. 9028, secs. 9029 and 9041, Revised Codes 1935 — and (2) by the •creditors' laches. At the trial appellants objected to testimony relating to the indebtedness then claimed to be due to each of the creditors, specifying error on this appeal from adverse rulings of the trial court.
1. Limitations. Under the statutes of Montana, claims against the estate of a deceased person, duly approved, are not liens on the property of the estate, and no execution for their enforcement can issue. They are merely acknowledged debts payable in the course of administration. (Secs. 10177 and 10185, Rev. Codes 1935.) Chief Justice Brantly, writing the opinion in In re Tuohy's Estate, 33 Mont. 230, 83 Pac. 486, 491, said that "when claims have been presented and allowed, and are not contestable, for the reason that they have not been presented in time, under section 2603, supra [now sec. 10173, Rev. Codes 1935], or that they are barred at the time of presentation by the particular statute applicable, none of the statutory limitations run as against them." Reasons for this rule are enumerated in the opinion in In re Estate of Schroeder, 46 Cal. 304, cited with approval in the Tuohy Case. It may, therefore, be definitely stated as settled law in this state that statutes of limitations have no application to creditors' claims in probate which have been approved by the personal representative and allowed by the court.
2. Laches. Is the defense of laches permissible in a proceeding to enforce the payment of an approved claim against an estate by tbe sale of tbe decedent's property? If it is, does the decision in tbe prior litigation (Montgomery v. Gilbert, supra) bar resort to it as a defense in tbe case now under consideration? In answering tbe first question in tbe affirmative we quote tbe language of tbe Supreme Court of California in Re Estate of Crosby, 55 Cal. 574, 584; "But while, under our system, tbe Statute of Limitations may not apply, every consideration arising from tbe evident intention tbat proceedings for tbe settlement of tbe estate should progress with all reasonable dispatch, and tbat tbe Probate Judge should employ a discretionary power to deny a petition for tbe sale of real estate where unreasonable delay has occurred, should have full force and vigor. From tbe very nature of tbe proceedings and tbe character of tbe duties imposed upon courts where tbe estates of deceased persons are administered, courts of probate retain tbe power, and it is their duty, to refuse an order granting leave to sell, when tbe delay amounts to laches." Citing tbe decision in tbe Crosby case, tbat laches is available in proper cases as a defense, Chief Justice Brantly says in In re Tuohy's Estate, supra, [33 Mont. page 247, 83 Pac. page 491] : "Contention is made tbat tbe court, in tbe exercise of its sound discretion, should have denied tbe application on tbe ground of tbe palpably unreasonable delay of tbe executor in presenting it. Whether or not gross negligence or palpable laches on tbe part of the executor or administrator is sufficeint reason for denying an order of sale in a .given case, we do not deem it necessary to discuss or decide. There is abundant authority in support of tbe affirmative of tbe proposition. ([In re] Estate of Crosby, 55, Cal. 574; Mooers v. White, 6 Johns, Ch., [N. Y.], 360; Wolf et al. v. Ogden, 66 Ill. 224; McCrary v. Tasker, 41 Iowa 255; Ricard v. Williams et al., 7 Wheat. 59, 5 L. Ed. 398; In re Allen, 15 Mass. 58; 2 Woerner on tbe American Law of Administration, sec. 465.) Tbe policy of tbe statute requires tbe administration to be conducted speedily to a close."
Bespondents contend tbat it was definitely decided in In re Stinger's Estate, 61 Mont. 173, 201 Pac. 693, 700, that the defense of laches cannot be invoked at all. The language in the opinion relied upon to sustain this argument reads: "The obligation to settle the estate and pay the claims rests upon the administrator, and while the owners of the claim may take action to expedite payment of his claim where there has been unreasonable delay in the administration, yet that is not obligatory upon him, but he has a right to assume that the administrator will pay claims in the due course of administration when the estate is in a condition for such payment." As applied to the facts in the Stinger Case this statement is undoubtedly correct. But it cannot be given so broad an interpretation that it excludes in a proper case consideration of unreasonable delay caused by the creditor himself.
Neither does the decision in Montgomery v. Gilbert, supra, deprive appellants of the right to object to the granting of the petition for sale of the property on the ground of the creditors' laches. The statement on rehearing that the petitioners' claims could only be discharged by payment was not within the issues presented to the court on that appeal. Although the indebtedness to the creditors was determined in the order approving the account dated February 23, 1926, nevertheless, appellants in the present proceeding were entitled to their day in court. A proceeding for the sale of real estate in probate is in the nature of an action of which the presentation of the petition is the commencement and the order confirming sale is the final judgment. (In re Ryan's Estate, ante p. 281, 134 Pac. (2d) 732.) Before such a petition may be heard by the court an order must be issued directing all persons interested to appear and show cause, (sec. 10212, Rev. Codes), and service of the order must be made as required by section 10213. At the hearing the heirs have a right to oppose the sale and to be heard. "At such hearing they may offer any evidence tending to show that the sale is unnecessary, and since a necessity for the sale is the only condition upon which it may be ordered, if they are successful iu their contention, the court is without authority to make the order. For example: Upon the hearing the heirs may contest the validity of the claims which constitute the indebtedness upon the existence of which the petition to sell is based (Beckett v. Selover, 7 Cal. 215, 68 Am. Dec. 237; [In re] Schroeder's Estate, 46 Cal. 304; [In re] Crosby's Estate, 55 Cal. [574], 582); or they may be able to show that the realty is yielding income sufficient to discharge all valid claims or to pay them in part, and thereby either dispense with the necessity for a sale altogether, or reduce the amount of the realty to be sold (Haynes v. Meeks, above [20 Cal. 288]); or they may be able to convince the court that the best interests of the estate will be served by borrowing the money (sec. 7547, Rev. Codes), or mortgaging the property instead of selling it (sections 7600, 7601); (Lamont v. Vinger, 61 Mont. 530, 541, 202 Pac. 769, 772.) In addition, the heirs may present any other defense available to them, including* laches.
Laches is a doctrine of equitable cognizance and has existed since the beginning of equity jurisprudence. It may be considered by a probate court as a necessary incident to the powers expressly granted to it. "There is no absolute rule as to what constitutes laches or staleness of demand, and no one decision constitutes a precedent for another; each ease is to be determined according* to its own particular circumstances." (30 C. J. S., Equity, sec. 115.)
Laches is negligence or omission seasonably to arrest a right. "The idea is embodied also' in the words 'acquiescence,' 'election,' 'estoppel,' 'abandonment,' 'ratification,' and 'waiver'." (19 Am. Jur., See. 493, page 340.) This court in Riley v. Blacker, 51 Mont, 364, 370, 152 Pac. 758, 759, made the following statement: "Laches, considered as a bar independent of the statute of limitations, is a concept of equity; it means negligence in the assertion of a right; it is the practical application of the maxim, 'Equity aids only the vigilant;' and it exists when there has been unexplained delay of such dura tion or character as to render the enforcement of the asserted right inequitable." As said by the Supreme Court of the United States: "We need only refer to the many cases decided in this court and elsewhere, that a neglected right, if neglected too long, must be treated as an abandoned right which no court will enforce. [Citing cases.] There always comes a time when the best of right will, by reason of neglect, pass beyond the protecting reach of the hands of equity, and the present case fully illustrates that proposition." (Moran v. Horsky, 178 U. S. 205, 20 S. Ct. 856, 857, 44 L. Ed. 1038.)
The petition for sale of the decedent's property in the present proceedings was filed February 15, 1941 — over twenty-one years after the admission of Montgomery's will to probate and the appointment of the executor. Almost sixteen years had elapsed since the fictitious sales to Peterson and Clemow in 1925, during which time title to the estate lands remained in the names of third persons who had no interest in the estate. No attempt is made to excuse the unusual procedure whereby the estate property was alienated for this period. None can be given. The death of Clemow in 1933 further complicated the condition of the title. Had the names of proper grantees been inserted in the deeds from the two ostensible purchasers in 1925, and these deeds immediately recorded, the intention to preserve the property for the heirs as well as the creditors could have been urged with more consistency, and the creditors would now be in a more favorable position to meet the charge of laches. But the conduct of the creditors subsequent to 1925 leads to a definite conclusion that the right given them by statute to sell the property at probate sale was voluntarily abandoned. That the heirs of Montgomery suffered detriment cannot be questioned. During a period of over fifteen years subsequent to 1925 they received no benefit from the estate property. The real estate had been encumbered by a mortgage of $50,000, and its title placed in the names of third persons who had no interest in the estate. In the meantime the creditors' original claims more than doubled because of accrued interest. The appellants were compelled to carry on litigation, which, although it did not establish fraud, did determine that the procedure followed by the creditors and the executor was contrary to law. Only by reason of this litigation was the "property restored to the estate. It is reasonable to conclude from a consideration of the entire record that, if appellants had not instituted the prior litigation terminating in the decision in Montgomery v. Gilbert, supra, no proceedings would ever have been taken by the creditors to seek payment of their claims by petitioning for the sale of decedent's property.
Respondents attempt to excuse their delay on two grounds: (1) That they were prevented from asserting their right to sell by appellants' acts in commencing the prior litigation, and (2) that the right is given by statute to the heirs as well as to the creditors to petition for the sale of the property if the executor neglects to act, and therefore the heirs cannot urge laches as against the creditors. Respondents argue that the right conferred on a creditor by statute, (see. 10219, Rev. Codes), to sell decedent's property to satisfy their claims, is optional and not obligatory, that there can be no laches where there is no duty to act, and that such is the general rule stated in the Stinger Case. But this argument fails to take into consideration the facts peculiar to the present case. The devisees could not petition to sell because title to the property was not in the estate. That the executor did not intend to follow the law regarding probate sales is clear from his own testimony. Because of his relationship with the creditors as an officer and director, the creditors in effect controlled the disposition of the estate property. The creditors' delay in petitioning for the sale of the property in probate was not due to litigation commenced by the appellants, but it was due to the fact that the creditors had no intention until after the decision on appeal in Montgomery v. Gilbert in 1940 of presenting any such petition at all. Prior to this decision the creditors were satisfied with the procedure adopted by the executor, and in the previous litigation defended his position as well as their own in that regard.
Respondents present the argument that they were not guilty of any delay of which appellants were not equally guilty; that therefore neither can avail himself of the delay by the other as laches (citing City of Parkersburg v. Baltimore & O. R. Co., 4 Cir., 296 Fed. 74, 75; Charleston Library Society v. Citizens & South National Bank, S. C., 23 S. E. (2d) 362; Marshall v. Meyer, 118 Iowa 508, 92 N. W. 693). By section 10210, Revised Codes, 1935, when a sale of property is necessary to pay a decedent's debts, the executor may obtain an order of sale. If the executor neglects to apply for an order of sale when it is necessary, "any person in interest may make application therefor." (See. 10219, Rev. Codes.) It is true, as argued by respondents, that appellants as devisees are given by this statute the same right as creditors to apply for an order of sale to pay decedent's debts, but their failure to do so is not justification for delay by the creditors. "The proceeding for the sale of real property is hostile to the heirs, and there is no principle which makes it their duty to initiate a suit adversely to themselves, the failure to commence which by the property party may result to their benefit." (In re Estate of Crosby, supra, 55 Cal., page 585.) In any event, a sale of the property on petition of Montgomery's heirs would have been ineffectual because at no time after the transfers to Peterson and Clemow in 1925 was the title to .the property in the estate, but it remained in the names of third persons until the time of the hearing on the creditors' petition for sale in April, 1941.
The additional argument is advanced that because of the first provision of Montgomery's will authorizing the -executor to borrow money to operate the ranching business and to pay debts and make the payment of such loans a charge against the estate, it follows that the creditors have a lien on the estate property which cannot be barred by laches. We do not understand that the word "charge" as used in the will has a meaning different from its use in section 10195, Rev. Codes, by the provisions of which all of the property of the-decedent is chargeable with the payment of his debts. As heretofore observed, by the statutes of Montana, claims against an estate in probate, whether they be duly approved, or rejected but judgment subsequently rendered in favor of claimant in suit thereon, are not liens upon the property of the estate. They are merely acknowledged debts payable in the course of administration. (Secs. 10177, 10185, Rev. Codes.)
Reference has been made to certain testimony given at the- trial in Montgomery v. Gilbert. Section 9745, Revised Codes, provides what constitutes the record on appeal from an order in probate. The testimony in the prior litigation is not a part of the present record. Although we do-not see wherein it has any bearing on the issues presented by respondents' petition to sell and appellants' objections-thereto, nevertheless, if it has, we may not look to that testimony for the purpose of supplying facts not presented in the-record for review in the present proceeding. (5 C. J. S.,. Appeal and Error, p. 121, sec. 1481; Jones Hardware Co. v. Telford, (Tex. Civ. App.), 63 S. W. (2d) 735; Soper v. Foster, 256 Ky. 157, 75 S. W. (2d) 1080; Catts v. Phillips, 217 Ala. 488, 117 So. 34.)
In view of all the facts and circumstances, we are of the-opinion that the creditors have voluntarily abandoned any right given them by statute to sell the estate property at probate sale, and that their claims are barred by laches.
The final account. This report covers the period from January, 1926, to March, 1941. During this time the total receipts were $357,475.67. the disbursements $351,109.77. The balance in the sum of $6,365.90 was delivered to the administrator with will annexed on the approval of the account.
Considerable time has been devoted to an examination of the account. We have concluded that the order approving it should be affirmed, excepting as to the two creditors' claims,, which we hold to be barred by laches.
Appellants charge the executor with fraud. Alleged fraudulent transactions with reference to the estate property are not now open to question. The orders approving accounts dated May 24, 1924, and February 23, 1926, are conclusive as to matters prior to those dates. (Sec. 10303, Rev. Codes-1935.) Aside from this fact, however, charges of fraudulent transactions by the executor were litigated in Montgomery v. Gilbert, supra, decided by the trial court March 28, 1938. It was there adjudicated that there was no actionable fraud in the administration of the estate. It is argued, however, that if this decision is res adjudicada, it is so as to the three appellants personally and in their individual capacities, and not as to William G. Montgomery, as administrator with will annexed. The answer to this argument appears in the general rule stated in 1 Freeman on Judgments, 5th Ed., par. 421; "And where a party, although appearing in two actions in different capacities, is in effect litigating the same right, there is in effect the requisite identity of parties, and the former adjudication is res judicata."
The order approving the account is affirmed excepting as-to claims of the First National Bank of Dillon and the Daly Bank and Trust Company, which are barred by laches. The order directing the sale of the estate property is reversed with direction to dismiss on the merits the petition therefor.
Associate Justices Erickson and Anderson, and the Honorable Guy C. Derry, District Judge, sitting in place of Mr. Justice Angstman, concur.