Carter

Seth G. Beach died on August 4, 1968, leaving an estate valued at over $2.4 million. His will, after making a number of smaller dispositions, placed the bulk of his estate in a testamentary trust for the benefit of his four children and named the Bank of California as both executor and trustee. The estate included 27,700 shares of Reserve Oil and Gas Company (Reserve) common stock appraised at $391,262.50, or $14,125 per share. In June 1969 the executor sold 3,000 shares of the stock for approximately $16 per share to raise funds toward the payment of claims, taxes and expenses of administration. By the time the remaining 24,700 shares were distributed to the testamentary trustee in September 1970, their value had declined to little more than $6 per share.

Three of the four residuary trust beneficiaries filed a contest of the executor’s first account (Prob. Code, § 927) 1 claiming the estate was entitled to damages from the executor for the latter’s alleged negligence in not selling the stock while its market price was above its appraised value at the date of death. After discovery proceedings and a six-day nonjuiy trial, the trial court found that the executor had…