COX et al.
Reversed and remanded with directions.
M. L. Ollerton, of Phoenix, attorney for appellants.
Jennings, Strouss, Salmon & Trask, J. A. Riggins, Jr., Henry S. Stevens, Burr Sutter, all of Phoenix, attorneys for appellee.
Kelly, Superior Judge. La Prade, C. J., and Udall, Stanford and De Concini, JJ., concur. Justice M. T. Phelps having disqualified himself, the Honorable Henry C. Kelly, Judge of the Superior Court of Yuma County, was called to sit in his stead.
Kelly, Superior Judge.
[70 Ariz. 310] In the court below judgment was rendered against defendants for the recovery of the amount of a claim of plaintiff as a creditor presented in the course of settlement of an estate of which the individual defendant and appellant was administrator and his corporate co-party the surety upon his official bond. That judgment is here for review. The circumstances out of which this litigation has grown are unfortunate and extraordinary.
In years past, the elapsed time being unimportant for no questions of limitations or of laches enter into the cause, the individual defendant became administrator of a decedent's estate, an ample one with assets adequate for the payment of all claims and a substantial residue over to the heirs. At the death of decedent an action against him was pending for a debt alleged to be owing to plaintiff. A claim was presented to the administrator, rejected, and, with his endorsement of its rejection, filed by him with the clerk among other papers of the record of the probate proceeding. The abated action for the debt was revived against the administrator by the timely substitution of him for the decedent as party defendant. Both the civil action for the debt and the probate proceeding were pending causes before the Superior Court of Maricopa County, but in different divisions thereof.
In this posture of the two matters, one in probate and one on the law side of the court, the administrator filed his verified final report alleging "that all of the claims against the estate have been paid," and prayed for the settlement of his account. Separately, but upon the same day, he petitioned for distribution of the estate and prayed to be discharged from his trust. The requirements of the Probate Code as to order for notice, and notice, were complied with, and upon the hearing the account was settled and petition for distribution granted by separate orders, and soon thereafter upon the production of receipts from the distributees the administrator was formally discharged.
Meanwhile the pending action by the plaintiff against the administrator was undisposed of. It was dismissed upon plaintiff's motion, and this action begun against the former administrator and his surety for the loss sustained by reason of the negligent conduct of his duties in his official capacity in failing to disclose to the probate [70 Ariz. 311] court the pendency of the action upon the rejected claim, and in making the averment in his final report that "all claims against the estate have been paid," thereby depriving plaintiff of the fruits of his claim, and of the benefit of Sec. 38-1320, A.C.A.1939, requiring that a fund shall be set up to provide for the payment of any claim made but not yet established, pending the issue of the processes by which it might be determined whether the claim should or should not be allowed for payment from the estate.
At the threshold of the proceedings below the point was raised, and it is still the main reliance of appellant, that the decrees of settlement of account and of discharge in the probate court are conclusive and have the effect of closing the book on all of his proceedings as administrator, and that they foreclose plaintiff of his remedy in this action at law. The plea was determined adversely to him, and in the trial upon the merits a judgment was rendered which by inference is tantamount to a determination that the claim as originally presented should have been in part allowed. Not by open concession, but from the stress upon the principle of res judicata and the implied abandonment of argument upon the factual merits, it will be considered that the claim as made against the decedent and filed with the administrator was a just one to the extent of the judgment rendered in this ...