In re the Estate of Belt

The opinion of the court, was delivered by

Mount, J.

This is a proceeding brought in the court below by a creditor of the estate of Iloratio 1ST. Belt, deceased, to compel the administratrix thereof to show' cause why she should not, as such administratrix, inventory as assets of the estate the proceeds of a, certain judgment rendered in favor of the decedent during his life time, and affirmed after his death by this court in favor of the administratrix, who had in the mean while been substituted in decedent’s stead.

The petitioner, the appellant here, first became a creditor of the decedent by virtue of a judgment rendered against the decedent, August 12, 1898, and during the latter’s lifetime, for the sum of $1,994.72, with costs and interest. This has never been paid or satisfied. At the time of the rendition of this judgment Horatio' H. Belt was possessed of certain choses in action against the Washington Water Power Company, a corporation, upon which he afterwards brought suit and recovered a judgment, for $21,016, with costs and interest. The facts in relation to this last named judgment are as follows: In 1892 the Washington Water Power Company gave to Horatio H. Belt and Isaac Kaufman and others a contract for building a street railroad, which the company never built. Suit was brought against the company for damages for failure to build the road. This suit was brought in the name of Horatio H. Belt. Kaufman’s interest .therein was sold to W. L. and H. C. Belt, who ■were sons of Horatio 1ST. Belt. All of the interest of IT. M. Belt, the plaintiff therein, a short time after the suit was brought, was sold for a valuable consideration to his wife, Martha J. Bielt, but the suit, was prosecuted to *537judgment in the lower court in the name of TIoratio FT. Belt. The case was thereupon appealed to this court, but before the affirmance of the judgment by this court Horatio FT. Belt died, and Martha J. Belt, his widow, was, as administratrix, substituted in his stead as a party plaintiff, so that the remittitur from this court in its essential portion read thus:

“Adjudged and decreed that the judgment of the said superior court be, and the same is hereby affirmed with costs, and that the said Martha J. Belt as administratrix of the estate of H. FT. Belt, deceased, substituted respondent, have and recover from the said Washington Water {Power Company and from the Fidelity & Deposit Company of Maryland the sum of $21,016, with interest thereon.”

This judgment of affirmance was rendered on May 6, 1901. On May 14, 1901, Martha J. Belt, as such administratrix received and receipted for the proceeds of the judgment in full. On May 15, 1901, Martha J. Belt, as administratrix of the estate of Horatio^ FT. Belt, deceased, returned and filed her inventory of the estate, containing no account of the proceeds of the judgment against the Washington Water Power Company, and showing noi assets whatever.

On June 4, 1901, this proceeding was commenced by J. J. Browne, a creditor of the estate of H. FT. Belt, deceased A petition was filed in the superior court in the estate of Horatio FT. Belt, deceased, in which petition it was alleged that the petitione wras a crerditor of said estate in the sum of $2,001.92; that he had presented his claim, which had been allowed; that the administratrix had received the sum of $21,016, which was the proceeds of a judgment in favor of Horatio U. Belt, deceased; that Martha J. Belt, as administratrix, had filed an inventory of the estate, which in*538ventory failed to contain any account of the said sum of $21,016, and failed, to show any assets whatever of said estate; that a demand had been made npon said adminisr tratrix to include the said $21,016 in her inventory of said estate, which demand was refused; and concluded with a prayer that said administratrix he required to1 inventory the said-sum of $21,016, or show cause why she should not do so. An order was issued as prayed for. In answer thereto the administratrix admitted that she had received the proceeds of the1 judgment in question as administratrix, but alleged by way of affirmative matter that the action in which said judgment was rendered had been prosecuted by deceased during his life time as agent and trustee for the use and benefit of Martha J. Belt, and his two sons, W. L. and H. O. Belt, and that by virtue of certain declarations of trust and assignment of the cause of the action all interest in tihe judgment thereon was in the widow and children, and that the proceeds thereof were not assets -of the estate of Horatio H. Belt, deceased. The petitioner demurred to the affirmative matter in the answer on the ground that it did not state matters constituting a defense. The demurrer being overruled, a reply was filed denying the allegation of new matter, and also- alleged that Martha J. Belt, having received the proceeds of the said judgment as administratrix, is estopped to deny that it does not belong to the estate of H. H. Belt, deceased. Upon the issues made the cause was tried by the judge of the superior court sitting in probate in the estate of H. H. Belt, deceased, and the court found that the proceeds of the judgment was not the property of the estate, ar.d dismissed the petition. From this order this appeal is prosecuted.

Appellant argues the errors assigned under three heads, substantially as follows: (L). Respondent having recovered the judgment and received the proceeds thereof as *539administratrix, she is, as such administratrix, estopped in a proceeding against her as such, to> deny that said proceeds constituted assets of the estata (2). Assuming that there is no> estoppel upon tho administratrix, the prohate court had no power toi hear, try, or determine in this proceeding, the title of third parties claiming the fund in question. (3). Assuming that the probate court had power to determine the title of third parties to the money in question, and that the evidence stowed it to1 have been held hy decedent as a trust fund, yet having been recovered and received hy the administratrix, in that capacity, it had to be held and accounted for, in the form in which it was recovered.

Appellant cites a number of cases in support of the first point, hut- upon examination we find all these to be cases where the money was actually the property of the estate, and liable for the debts, thereof. They do not discuss the point whether trust funds, as such, are assets of the estate, 'and liable for the debts of the decedent; nor do they hold that, where an administrator receives and receipts for a fund which is a trust fund, that such funds must he inventoried and held by him as other property of the estate liable for decedent’s personal debts. Where a person dies possessed of trust funds, such funds do not, by reason of the death of the trustee, become liable for the debts of his estate. The relation of the cestui que trust is not changed. The property still belongs to' him. While the administrator is no doubt entitled to' the possession of the trust funds, he is liable to account therefor to his principal either in his. individual or representative capacity. De Valengin's Admrs. v. Duffy, 14 Pet. 282. He is not hound to proceed in the execution of the trust, but must preserve the fund for those entitled thereto. 2 Woerner, American Law of Administration (2d ed.) § 321. It has been held that *540an inventory is not conclusive as to the decedent’s ownership of the property, either against a third person or against an executor or administrator. Lamme v. Dodson, 4 Mont. 560 (2 Pac. 298); Anthony v. Chapman, 65 Cal. 73 (2 Pac. 889); Baker v. Brickell, 87 Cal. 329 (25 Pac. 489, 1067); Fulcher v. Mandell, 83 Ga. 715 (10 S. E. 582); Stewart's Estate, 137 Pa. St. 175 (20 Atl. 554); White v. Shepperd, 16 Tex. 163. If the filing of an inventory is not conclusive against the claim of an administrator to property therein contained, certainly where the administrator comes into possession of property, and refuses to inventory it upon the claim that it does not belong to the estate, but belongs to some third person or to' himself, no estoppel as to the title can be pleaded simply because, as in this case, the property was received in a representative capacity.

It is next argued .that the probate court had no power in this proceeding to determine the title of third parties claiming the fund in question. This court held in Stewart v. Lohr, 1 Wash. 341 (25 Pac. 457, 22 Am. St. Rep. 150) that the probate court is without jurisdiction to try the title to property as between the representatives of an estate and strangers thereto. See, also Huston v. Becker, 15 Wash. 586 (47 Pac. 10), and In re Alfstad’s Estate, 27 Wash. 175 (67 Pac. 593). Under these decisions the superior court sitting in probate had no jurisdiction to determine the title of third parties claiming the fund. But we do not understand from the record in this proceeding that the court undertook to determine the title of any person to the property. The court- found as a fact “That the moneys mentioned in the petition are not any part of the assets of the estate of said deceased,” and for that reason dismissed the petition. The statute provides at § 6201, Ballinger’s Code:

*541“Every executor and administrator shall make and return, upon oath, into' the court, within one month after his appointment, a true inventory of the real and personal estate of the deceased, which shall come to his possession or knowledge.”

Section 6204:

“The inventory shall also contain an account of all moneys belonging to the deceased, which shall have come to the possession or knowledge of the executor or administrator ; and if none shall come to his possession or knowledge, the fact shall be so stated in the inventory.”

Section 6209:

“Whenever property not mentioned in an inventory shall come to the knowledge and possession of the executor or administrator, he shall cause the same to be appraised in the manner prescribed in this, chapter, and an additional inventory to be returned, subscribed and sworn to as is provided in this chapter, as soon as practicable after the discovery thereof, and the making of such inventory may be enforced, after notice, by attachment to which may be added the revocation of the letters. ”

These proceedings were instituted under this last section by a petition filed by appellant in the estate of Horatio- N. Belt, deceased, in the probate department of the superior court. The respondent wTas notified to include the money in question in the inventory or show cause why she did not do so. She appeared in obedience to the notice1, and showed that the property did not belong to the estate.. One •of two rules, must obtain; viz., respondent was either entitled to. bo discharged upon her answer, or the court had jurisdiction to determine the question whether the property belonged to the estate, or there was a. reasonable claim thereto by the estate. Neither rule.aids the appellant, because, if the first rule obtains, it was the duty of the court to dismiss the petition when the answer was. filed. ■ The second rule was followed, and wei think this, rule must pre*542vail, — that when a question arises, in the administration of an estate, whether property shall he inventoried as a part of the estate or not, the probate court may hear evidence sufficient to determine whether the property in question belongs to the estate; or the estate has any interest therein, or has reasonable claim thereto, which claim may become an asset of the estate; not for the purpose of judicially determining- the title of any property claimed by any third person, hut to determine the good faith of the claim. Thei statute does not require property or money to be inventoried, unless it belongs to- the estate, and the court will not require money to be inventoried which does not belong to the estate, and is not an asset thereof. Mr. Schouler, in his work on Executors (3d ed.) at § 205, says:

“If goods, money, or securities belonging toi another person lie amongst the goods of the deceased, capable of identification, and they come altogether to> the hands of the-personal representative; such other person’s things are not to be reckoned among assets of the estate. Mor is money collected by an attorney, factor, or agent, and kept distinct and unmixed with thei rest of his property. So-, property held by a trustee or fiduciary officer is not assets in the hands of his oxecut-ors, administrators or assignees; but a new trustee should rather he appointed to- hold the fund in the- stead oo: the decedent. Only those things- in which the decedent had a beneficial interest at his- death are assets, and not those which he holds in trust or as the bailee or factor of another.”

Mr. Woerner, in his work on the American Law of Administration (Vol. 2 [2d ed.], § 311), says:

“The executor or administrator can be required to- inventory only the property which belonged to the decedent at the time of his death, in his own right, o-r to which the personal representative is entitled in his official capacity, as distinguished from the heir, legatee, widow, or donee mortis causa, of thei testator or intestate. The court has no *543power, therefore, to compel the administrator to inventory property not clearly belonging to the estate*. On the other hand, the court should not reject an inventory exhibited because it contains property the title of which is in dispute; because, as appears in a former chapter, the probate court has no power to try the title to property between the personal representatives and strangers.”

Seei, also, Snodgrass v. Andrews, 30 Miss. 472 (64 Am. Dec. 169); First National Bank v. Hummel, 14 Colo. 259 (8 L. R. A. 788 and note); 11 Am. & Eng. Enc. Law (2d ed.), p. 849, and authorities cited.

In a case of this kind the court has jurisdiction to* determine prima facie the fact whether or not the property belongs to1 the* estate and is an asset thereof. This adjudication is not binding upon any person afterwards claiming the property in another forum, but is for the purpose only of determining whether the administrator shall be forced to make an inventory thereof.

Appellant’s last point, viz., assuming the money in question to* be a trust fund, yet, having been recovered and received by the administratrix acting in that capacity, it must be held and accounted for in the form in which it was received, cannot aid him. Much of what is said above on the first point applies equally to* this one. But if we concede that appellant is correct in this position, we are • unable to* see how he is interested therein, because he is a creditor of the estate of Horatio* H. Belt, deceased. Only the assets of that estate are liable for this claim. If these funds are trust funds, not belonging to* the estate, and which deceased, as agent, was engaged in collecting in his lifetime for his principal, and to be accounted for by Mrs*. Belt as administratrix, she must account to her principal for the whole thereof. 2 Pomeroy, Equity Jurisprudence (2d ed.) § 1063 et seq. -The personal debts of Horatio U. *544Belt cannot be paid from these funds. The personal creditors o-f Horatio H. Belt therefore have no interest in having the same included in the inventory of his estate.

There is noi error in the record and the cause is affirmed.

Beavis, C. J., and White, Anders, Hadley and Dunbar, JJ., concur.