APPEAL from an order of the Superior Court of the County of Maricopa. J. C. Niles, Judge. Reversed and remanded with directions.
Messrs. Moore & Romley, for Appellant.
Messrs. Lewkowitz & Wein, for Appellee.
[54 Ariz. 371] ROSS, C.J.
This is an appeal from an order in probate approving and settling the final account of Hattie Torrey, executrix of the last will and testament of her son Phil Torrey, deceased. The appeal is by the deceased's widow, Vivian Craig Torrey, now Vivian Craig Steward.
The deceased and appellant intermarried August 8th, were divorced October 15th and remarried December 12, 1935, and were living in Phoenix, Arizona, August 16, 1936, the date of Torrey's death. Decedent left a will dated April 8, 1936, by the terms of which all of his property was devised and bequeathed to his mother, except $1 which he bequeathed to his wife. This will did not and could not dispose of the wife's one-half interest in any property belonging to the community. In his will deceased named his mother, Hattie Torrey, as his executrix, who qualified and entered upon her duties September 16, 1936. On February 13, 1937, she filed an inventory and appraisement of the assets of the estate and therein showed the appraised value to be $12,906.75, which was all listed as the separate property of the deceased.
Subsequently, in an action by appellant against the appellee and others, it was adjudged that the community was the owner of a promissory note of the Novelty Supply Company, Inc. (hereinafter referred to as the company) for $9,485.15, bearing date December 3, 1936, payable on demand. On January 21, 1938, there was filed a supplemental inventory and appraisement in which said note was listed as community property and was valued by the appraisers at its face value. In such supplemental inventory and appraisement there was an item of $6,359.52 due the Phil Torrey estate upon an open account from the company, which was returned as the separate property of the deceased. Appellant, in her objections to the final account, insisted [54 Ariz. 372] that appellee be required to account to her in cash for one-half of the community note. She also insisted that the item of $6,359.52 due the estate from the company was a community debt. At the hearing on the objections there was much evidence introduced by both the executrix and the appellant. From an adverse ruling on appellant's two objections, above stated, she has appealed.
The item of $9,485.15 represented by the note of the company is community property. It was, in the opinion of the appraisers on January 21, 1938, worth its face value. That value so fixed is prima facie the correct value. United States Fidelity & Guaranty Co. v. Greer, 29 Ariz. 203, 240 P. 343. The statutes provide that the executor is chargeable with the estate's assets that come into his possession at the value of the appraisement (except as otherwise provided) and with all the interest, profit and income thereon, but that he is not accountable for debts due the decedent if it appears that they remained uncollected without his fault. Sec. 4048, Revised Code of 1928. These provisions of our statute are the same as like provisions in the California statute. In In re Loheide's Estate, 17 Cal.App. 475, 120 P. 56, 59, the court said:
"An administrator is chargeable in his account with the whole of the estate of the decedent coming into his possession at the value of the appraisement contained in the inventory. Code Civ. Proc., § 1613. He is not accountable for any debts due to the decedent, 'if it appears that they remain uncollected without his fault.' Id. § 1615. But, if it does not so appear to the court, the administrator must be held answerable for the amount of a debt due the decedent, as appraised in the inventory. In re Sanderson, 74 Cal. 199, 203, 15 P. 753. Merely charging himself with the note and crediting himself with it is not a statement that it remained uncollected 'without fault' on the part of the administrator. Id. It was also held in that case that there is no presumption of duty performed. The presumption [54 Ariz. 373] is that the administrator could have collected the note, in the absence of satisfactory showing that it was not collected without any fault in him."
The evidence is that the executrix as devisee and the appellant as survivor of the community owned and controlled all of the stock of the company and that the executrix came into the possession of the physical property of such company soon after her qualification as executrix. It is also shown from the records of such company that the executrix had received from such company, subsequent to August 16, 1936, sums aggregating approximately $22,000 and that she had returned to the company only $10,011.69. It also appears that at the time of Phil Torrey's death the assets of such company were approximately $50,000 and its liabilities did not exceed $20,000. It seems clear that if the executrix did not reduce the note to cash it was her fault. It appears the maker of the note had plenty of assets out of which to pay it and the executrix had the control of such assets. We feel that she should account to the appellant for one-half of said note in cash, and that the court erred in not so ruling. The above figures are cited by appellant in her brief as correct and we do not find in appellee's brief any effort to correct them if erroneous or any effort to explain their effect away.
As to the open account due from the company to the estate, the situation is different and rather difficult to solve. That item represents advances or loans made by the decedent to the company, in part from his business as a restaurateur (but how much is not shown), from January, 1936, until his death, August 16, 1936. When the appellant and the deceased were married, the deceased owned two lunch counters or restaurants appraised at $3,035, one located at Roosevelt Street and North Central Avenue and the other at Roosevelt and Seventh Streets. He owned these places both before [54 Ariz. 374] and after his marriage and had quite an income from them, averaging during 1935 around $600 net per month, and the evidence is that it was out of this income that he made part of the loans to the company. Deceased's bookkeeper testified that
"a portion of the money came from the bank account of the stands (meaning lunch counters or ...