(118 Wash. 234) Clark. The makers were Schurtz and wife, (Supreme Court of Washington. Jan. 9, 1922.) Yates. At the trial it appeared that the re 1. Executors and administrators 169--Cannot pledge notes and mortgages without order of court. Choses in action are not excepted from the provisions of Rem. Code, § 1491, that no sale or mortgage of any property by an executor or administrator shall be valid unless made under order of court, and an executor had no authority to pledge notes and mortgages as collateral security without an order of the court, and the pledgee thereby obtained no rights in the notes or their proceeds. 2. Executors and administrators 153-Have no powers not given by statute, and acts are always under direction of the court. In Washington an executor or administrator acts only and always in a representative capacity and has no powers except such as are given by statute, and his acts are always under the direction of the court. spondent held the Schurtz and Forbes notes and mortgages, but that the Yates and Peterson notes had been collected while in its possession. The court gave judgment requiring the defendant to surrender to the plaintiffs the Schurtz and Forbes notes and mortgages, but refused to give any money judgment against it on account of the notes it had collected. The plaintiffs have appealed because the court refused to give the money judgment. We find the prevailing and controlling facts to be as follows: On August 10, 1915, Ada S. Clark died, leaving surviving her Harold J. Clark, her husband, and two minor children. The notes and mortgages above mentioned were her separate property. She was also the owner of a community interest in certain real estate and personal property. 3. Banks and banking 130(1)-Pledgee of Her will devised all of her separate property note receiving payment and permitting exec- to the Security Savings & Trust Company, a utor to check out part of proceeds liable corporation, of Portland, Or., in trust for therefor. the use and benefit of her two minor daughWhere an executor pledged notes and mort-ters, and gave all of her interest in the comgages to a bank as collateral security for his munity property to her husband, and apindividual debt, and on payment of one of the notes pledged turned over the proceeds to the pointed him as executor of the will. Shortbank which credited a part thereof on the exec-ly after her death the husband was appointutor's debt and placed the rest to his individual account and permitted him to check it out with information of facts putting it on notice that he was using it for his own advantage, it was lia ble for the whole amount collected on the note. 4. Appeal and error 863-Refusal to give judgment on one matter not considered when not appealed from. In an action by administrators to recover the possession of notes and mortgages or their proceeds if collected by defendant, where they did not appeal from the court's refusal to give judgment for the amount collected on a particular note, their claim with respect thereto could not be considered by the Supreme Court. En Banc. ed and duly qualified. Thereafter he filed in the probate matter an inventory showing that the notes and mortgages above mentioned were the separate property of his deceased wife. After his appointment and qualification as executor, Mr. Clark, on December 10, 1915, borrowed from the respondent $1,000 and executed and delivered to it his note as exHe also delivered ecutor for that sum. Appeal from Superior Court, Klickitat placed with respondent were also to secure County; Wm. T. Darch, Judge. Action by Mabel S. Harden and others against the State Bank of Goldendale. From a judgment for plaintiffs for insufficient relief, they appeal. Reversed, with directions. Miller, Wilkinson & Miller, of Vancouver, for appellants. this note. The court having charge of the probate proceeding did not at any time authorize the executor to execute the two notes made by him to the respondent, or to turn over to the respondent the notes and mortgages above mentioned as collateral security. It does not appear that the estate of the decedent ever received any benefit from the John R. McEwen, of Goldendale, for re- moneys borrowed by Mr. Clark, but that, spondent. BRIDGES, J. By this action the plaintiffs sought to recover from the defendant possession of four promissory notes and mortgages securing the same, or, if the defendant had collected any of the notes, then on the contrary, he used all such sums in his own private affairs. Before the institution of this suit the Peterson note was paid in full by the maker in the sum of $587.50. It would appear that this money was paid directly to Mr. Clark, who delivered it to the respondent, and the For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes (203 P.) latter then surrendered the note so paid either to Mr. Clark or to the maker thereof, and the amount so paid was credited upon the notes given by the executor. It further appears that before the suit was instituted Mr. Yates, maker of one of the other notes, paid the same to Mr. Clark in the sum of $859. Thereupon Mr. Clark took the money to the respondent and the bank then surrendered the paid note either to Mr. Clark or to the maker, and at Mr. Clark's request credited $500 of the money so paid on the notes given by him as executor, and placed to his individual account the balance of the amount so paid, to wit, $359. Some months after these detailed transactions Mr. Clark died, and Mabel S. Harden and Regina Curl were appointed administratrices of the estate of Ada S. Clark, deceased, and they instituted this action. The estate of Ada S. Clark, deceased, did not obtain any of the moneys collected from the Yates and Peterson notes. [1, 2] The appellants argue that the respondent is liable for the amounts collected by it on the Yates and Peterson notes, because the court did not authorize the giving of the notes by the executor or the putting up of the estate's notes and mortgages as collateral security. The respondent argues that the title to the notes and mortgages put up as collateral security vested absolutely in the executor with power to sell or pledge them without any order of the court, and that one taking choses in action as a pledge from an executor takes them as freely as they could from the owner. The Probate Code as it existed prior to the enactment of the 1917 Probate Code is controlling here, because the transactions under consideration occurred prior to the passage and going into effect of the 1917 Code. Section 1491, Rem. Code, provides that "No sale or mortgage of any property shall be valid unless made under order of the court, unless otherwise provided by law." of the estate apply with equal force to If court, and the state derives benefit therefrom, and the court afterwards approve the executor's acts, it may be that the proceeding is legal. But such is not the situation here, and we are not called upon to decide that question. It must be conceded that there are a number of excellent cases and authorities which The respondent contends that this statute seem to support the respondent's contention. does not cover and include choses in action, Some of these are: 11 Am. & Eng. Encyc. and that it was not necessary for the execu- (2d Ed.) 1010; Weider v. Osborn, 20 Or. 307, tor to obtain the order of the court to place 25 Pac. 715; Smith v. Ayer, 101 U. S. 320, these collateral securities with the respond- 25 L. Ed. 955. In the case of Weider v. Osent. We cannot agree with this contention. born, supra, the Oregon Supreme Court In this state an executor or administrator elaborately discusses the question and cites acts only and always in a representative most of the authorities in support of its capacity. He has no powers except such as view. Some of the cases holding to the conare given by statute. His acts are always trary view are: Winningham v. Holloway, under the direction of the court. The statute 51 Ark. 385, 11 S. W. 579; Pierce v. Batten, quoted expressly and plainly says that no 3 Kan. App. 396, 42 Pac. 924; Smith v. Grifproperty of an estate shall be sold or mortgag-fin, 32 Ga. 81; Wickersham v. Johnston, 104 ed without the order of the court. We cannot see any good reason for holding that a chose in action should be excepted from its provisions. The reasons which require the executor to obtain the permission of the court to sell or mortgage the ordinary personal property 203 P.-2 Cal. 407, 38 Pac. 89, 43 Am. St. Rep. 118; 18 Cyc. 358, 359. We prefer to follow the rule of the cases last cited, because they are in accord with the express wording and the spirit of our Probate Code. [3] Respondent, in any event, objects to judgment against it in the whole amount collected on the Yates note, because it retained only $500 of that amount, and paid the balance, to wit, $359, to Clark, who was the executor. But the testimony shows that the respondent was possessed of such fact as required it to learn and know that Clark, as executor, gave the notes and put up the collateral security belonging to the estate, solely for his own advantage, and that the estate did not, nor was it contemplated that it would, obtain any benefit whatever from the transaction. It is true respondent did not obtain the benefit of the $359, but paid it directly to Mr. Clark. But respondent was doing a banking business and placed that sum of money to Clark's private banking account, and knew that he was checking against such account for his own private ends. With all of this information at hand the respondent must be held liable for the whole amount it collected from the collateral which it unlawfully held. Manifestly respondent considered that the executor had a lawful right to put up these notes as se curity, and that it was under no obligation to inquire as to what disposition was made of the money collected therefrom; consequently it was free from intentional wrong, but it must bear the burdens resulting from its mistaken judgment. [4]. The appellants have asked judgment for a certain amount collected on what has been called the Dayton note. We do not con sider this claim because they did not appeal from the refusal of the court to give judg ment on that instrument. The trial court is directed to enter judgment against the respondent and in favor of the appellants in the sum of $1,446.50, together with interest from the dates of the collection by the respondent of such amount. HAMES et ux. V. SPOKANE-BENTON COUNTY NATURAL GAS CO. et al. (No. 16578.) (Supreme Court of Washington. Jan. 3, 1922.) 1. Corporations 320 (6)-Cause of action held common to all stockholders, for which one may sue for benefit of all. A cause of action against officers for payment to themselves of unreasonable expenses, salaries, and commissions, if any, is common to all stockholders, and one for which, under Rem. Code 1915, § 190, one stockholder may sue for the benefit of all. 2. Action 50 (9)-Cause of action common to stockholders could not be joined with cause of action personal to plaintiffs. Under Rem. Code 1915, § 296, an action against officers of a corporation for paying to themselves unreasonable expenses, salaries and action against such officers and a corporation commissions, cannot be joined with a cause of for recovery of money loaned and for the foreclosure of security given therefor, since such causes of action do not affect all the parties to the action, the first being common to all stockholders, and the second existing only in favor of the plaintiffs. TOLMAN, J. Appellants, plaintiffs below, after a demurrer had been sustained to their complaint, refused to plead further, and elected to stand upon their complaint, whereupon a judgment of dismissal was entered against them, from which they have appealed. The complaint purports to set up two causes of action. The first cause of action is set forth in five paragraphs, alleging, respectively, the corporate existence of the defendant corporation; that the individual defendants are officers and trustees and in full control of the affairs of the defendant corporation; that plaintiffs are stockholders in the defendant corporation, and bring this acand on behalf of all other stockholders who tion in their own behalf as such stockholders, may join in the action. The fourth paragraph sets out the objects and purposes for which the defendant corporation was organized, and alleges that since its incorporation it has been engaged in carrying on the business for which it was incorporated, and has acquired property and property rights. The fifth paragraph, disregarding conclusions and liberally construing it with reference to such facts as are meagerly stated, pleads that the individual defendants, while acting as officers and trustees of the corporation, caused the corporation to enter into contracts with themselves for the payment to them of unreasonable expenses, salaries, and commissions on the sale of stock, which they have caused to be paid to themselves from the funds of the corporation. The second cause of action consists of three paragraphs. By the first the plaintiffs adopt the allegation in the first four paragraphs of the first cause of action, and the remaining two, in substance, plead that the For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes (203 P.) all of the defendants with liability for the sum alleged to have been loaned. It is at once apparent that the second cause of action has nothing to do with the first, and that the stockholders of the corporation, as such, have no interest whatsoever therein. We find no provision in the statute, Rem. Code, § 296, with reference to the joinder of causes of action which permits the joinder in the same suit of the two causes of action pleaded. In the section referred to, after specifying what causes of action may be joined, the statute provides: individual defendants, through misrepresen- | assume that the pleader intended to charge tations, procured plaintiffs to loan to the corporation $3,450, and take its treasury stock as collateral security therefor, and then caused the transaction to be entered and shown on the books of the corporation as a sale of treasury stock, and paid to themselves a commission on such sale of $1,380, placing in the treasury of the corporation only the remainder of the sum loaned. terwoven therewith are allegations of a wrongful disposition of the property purchased with the borrowed money, which have no relation to plaintiffs' individual cause of action for the money loaned, and which could give rise only to a cause of action by the corporation or its stockholders. In A judgment is demanded against all of the defendants for the amount loaned, with interest, for the foreclosure of the collateral security, and also for the appointment of a receiver for the corporation, and for other and general relief. To this complaint the defendants separate ly and severally demurred, as to the first cause of action upon the ground that plaintiffs have no legal capacity to sue, and that the complaint does not state facts sufficient to constitute a cause of action. To the second cause of action the demurrer is based upon the same grounds, and, in addition, that several causes of action have been improperly united, and to the whole complaint, upon the ground that several causes of action have been improperly united. "But the causes of action so united must affect all of the parties to the action, and not require different places of trial, and must be separately stated." It is too plain for argument that the causes of action sought to be united here do not comply with this rule. The first cause of action, being purely a stockholders' action, stockholders, cannot be united with the secbrought on behalf of, and common to, all ond cause of action, which is personal to the action seems to fall under subdivision 7 of plaintiffs only. Moreover, the first cause of the section referred to, permitting the uniting of claims against a trustee by virtue of a contract, or by operation of law, while the second cause of action falls under subdivision 1 of the statute, permitting the uniting of causes of action growing out of contract, express or implied. firmed. PARKER, C. J., and MITCHELL, FULLERTON, and BRIDGES, JJ., concur. (118 Wash. 132) (No. 16569.) Dec. 29, ~~228 (1) SWAN v. DILLABOUGH. Executors We are forced to the conclusion that the [1, 2] The first cause of action, considered demurrers in the light of Wonderful Group Min. Co. v. therefore the judgment must be, and is, afwere properly sustained, and Rand, 111 Wash. 557, 191 Pac. 631, and Sacajawea Lumber, etc., Co. v. Skookum, etc., Co., 198 Pac. 1112, which lay down the salutary rule that a trustee of a corporation has no power to vote upon a question in which his individual interest is opposed to that of the corporation, perhaps states a cause of action, and, if so, a cause of action which is common to all stockholders of the corporation, and one for which, under Rem. Code, § 190, one stockholder may sue for the benefit of all. We hold that by the first cause of action plaintiffs pleaded only a cause of action common to all stockholders of the defendant corporation. The second cause of action, applying the same rule of liberal construction, states a cause of action not common to all of the stockholders of the defendant corporation, but existing only in favor of the plaintiffs for the recovery of money loaned, with interest, and the foreclosure of the security given therefor. If it attempts to do more, the further attempt is abortive because not separately stated. It is somewhat doubtful whether this cause of action, as pleaded, is against the corporation or the individual defendants, but, as the prayer is Appeal from Superior Court, Clarke Counfor judgment against "the defendants," we ty; Geo. B. Simpson, Judge. and Claim need not be filed with clerk of court within six months after going into effect of Probate Code. Where, estates were being administered upon prior to the passage of the Probate Code of 1917, procedure to be followed was under the old law, except where otherwise provided, and where notice to creditors of an estate was published in 1911, the court had authority to allow a claim presented to it for allowance February 3, 1921, and filed with the clerk on April 26, 1921, which had been properly presented to the executor and allowed in 1911, under Probate Code 1917, §§ 107, 222, 223. Department 2. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes was not necessary for the claim to be filed within any certain time. Under the Probate Code of 1917, § 107, it is necessary that the claim be served on the executor or adminis In the matter of the estate of James C., with the provisions of the Probate Code in Cunningham, deceased, of which Edgar M. effect before 1917. Under the old law it Swan is executor. From an order allowing a claim filed by D. C. Dillabough as administrator of the estate of Mildred E. Dillabough, deceased, the executor appeals. Affirmed. Edgar M. Swan and R. C. Sugg, both of Vancouver, for appellant. J. G. Arnold and Henry Bauer, both Portland, Or., for respondent. of HOLCOMB, J. Appellant is the executor of the estate of James C. Cunningham, de ceased, which is being administered in the superior court of Clarke county. Respondent is the administrator of the estate of Mildred E. Dillabough, deceased, being administered in the same court. Notice to creditors in the Cunningham estate was first published on January 12, 1911. On November 4, 1911, respondent presented to appellant a claim against the Cunninghas estate, in the sum of $1,800, which was allowed by appellant. The claim was not presented to the court for allowance until February 3, 1921. It was not filed with the clerk of the superior court until April 26, 1921. On February 3, 1921, the court made an order allowing the claim, and from that order the appellant has appealed. trator, or his attorney of record, and filed with the clerk of the court, together with proof of such service, within six months after the date of the first publication of notice to creditors, and if it is not so filed within the time prescribed it is barred. Section 107 of the Probate Code of 1917 provides: * "Every executor or administrator shall, immediately after his appointment, cause to be published in some newspaper printed in the county, * * a notice that he has been appointed and has qualified as such executor or administrator, and therewith a notice to the creditor of the deceased, requiring all persons having claims against the deceased to serve the same. There is nothing in the Probate Code of 1917 that in terms makes it retroactive except it is retroactive in saving the benefits of all probate proceedings had before the taking effect of the act of 1917, and making them valid. Section 222 of the Code of 1917. And section 223 of the Code of 1917 pro Appellant contends that the superior court vides that in all estates in probate at the was in error in allowing the claim, for the time of the taking effect of the act, where reason that it was not filed with the clerk notice to creditors had been given, or is beof the court within six months after the Pro-ing given, under the prior law, they shall bate Code of 1917 (Laws 1917, p. 642) went It is contended that within six months after the Probate Code of 1917 went into effect it was essential that this claim be filed with the clerk of the superior court, it not having been theretofore filed or presented to the court, and not having been filed within six months after the Probate Code of 1917 went into effect, it became barred, citing Moore v. Brownfield, 7 Wash. 23, 34 Pac. 199; McAuliff v. Parker, 10 Wash. 141, 38 Pac. 744; McQuesten v. Morrill, 12 Wash. 335, 41 Pac. 56; and In re Estate of Anna Thompson, 110 Wash. 635, 188 Pac. 784. have the time such notices specified within which to present claims. Assuredly it was never the intent of the Legislature in framing the Probate Code of 1917 to make executors and administrators of estates then in process of probate begin all over again. That would be the effect of appellant's contention. "Retroactive statutes are generally regarded with disfavor. Those not remedial will not be construed to operate retrospectively unless the intent that they shall do so is plainly expressed. Endlich on Interpretation of Statutes, § 281." Sutherland, Statutory Construction, § 463; Rogers v. Trumbull, 32 Wash. 211, 73 Pac. 381. Where estates were being administered upon prior to the passage of the Probate Code of 1917, the procedure to be followed was under the old law, except where otherwise provided in the new Code, and certainly it was not otherwise provided in the new Code as to notice, filing, and presentation of claims. The trial court was right, and its order is affirmed. PARKER, C. J., and MAIN, MACKINThe claim was presented in accordance | TOSH, and HOVEY, JJ., concur. |