SECTION 2.-THE PRESENTATION OF CLAIMS CROSS et al. v. LONG. * (Supreme Court of Kansas, 1903. 66 Kan. 293, 71 Pac. 524.) BURCH, J.10 * The only important question for determina tion is whether appearance in probate court at a hearing upon a claim against an estate, and consent to the allowance of such claim by one of two joint executors, without notice to or the concurrence of the other, is sufficient to bind the estate. In Clark's Adm'rs v. Parkville & G. R. R. Co., 5 Kan. 654, the record disclosed a notice to both administrators, but proof of service of such notice upon only one of them; and the syllabus of the case is as follows: "Service on one of two administrators, of notice of the presentation of a claim against the decedent's estate in the probate court, is sufficient." Since the only purpose of notice is to advise the party of the hearing, notice may be waived, and appearance at the hearing without objection is equivalent to such waiver. And there can be no distinction between executors and administrators in this respect. While it is true that in many matters the joint action of all the representatives of an estate is essential, the presentation of a claim against the estate to one of them is by the law of many states sufficient. 8 A. & E. Encycl. of L. § 1074. This is for the reason that all the executors are regarded in law as one person, and as having joint and entire authority over the whole estate, so that the act of any one of them in respect to its administration is the act of all. The decision in Clark's Adm'rs v. Parkville & G. R. R. Co., supra, has furnished the basis of probate procedure in such cases since 1865, without legislative intervention; and it should not now be disturbed, even if its doctrine were not entirely satisfactory. Since, under its authority, notice to one rep- HELD resentative is sufficient to bind the estate, it must follow that the appearance and consent of one alone is likewise sufficient. The judgment of the district court is therefore affirmed. note, joined in by a second executor, but against the objection of the third executor. To a bill brought by the administrator of the son's estate against the executors of the father's estate, the protesting executor pleaded the statute of limitations. The court decided that, because the executor who was next of kin to the son was thereby to profit out of the acknowledgment, it could be set aside by any one interested, even if otherwise the acknowledgment would be all right. The court pointed out that "it has never been decided in Massachusetts that a payment made by one of two executors against the objection of his coexecutor upon a note which was barred by the statute in the lifetime of the testator would revive the note, nor has it been so decided in England. The Lords Justices of the Court of Appeal, in a late case, preferred to leave this subject open for future consideration. Midgly v. Midgly, [1893] 3 Ch. 282." 10 Part only of the opinion is given. off state not presented? Gies off placing 606 PROBATE AND ADMINISTRATION. (Part 3 HALL v. GREENE. (Supreme Court of Rhode Island, 1902. 24 R. I. 286, 52 Atl. 1087.) DOUGLAS, J. In this case the plaintiff, as administrator, sued the defendant in assumpsit for the price of a chattel sold by his intestate. Defendant pleaded in set-off a claim against the intestate of a character which would have been available in set-off if the action had been brought by the intestate in his lifetime. To the introduction of evidence in support of this claim the plaintiff objected on the ground that the claim had not been presented to the administrator for allowance or rejection as required by statute. The objection was allowed by the court, the evidence was excluded, and the defendant duly excepted to the ruling, and now alleges it as ground for a new trial. We think the ruling would have been correct if it had been made up on a replication to the plea. The right of set-off at common law is purely statutory. The effect of the statute is to allow the trial together of two cross-actions between the same parties, and each claim must stand or fall upon its own merits. Our statute does not permit this. unless the claim presented in set-off is one which the holder may presently sue in his own name. In the case of mutual claims between an insolvent estate and a creditor or a debtor, as we have recently decided in the case of Troup v. Bank, 24 R. I. 377, 53 Atl. 122, set-off takes place by operation of law upon principles of equity, and independently of the statute; but the considerations which govern in that case have no application to an estate which is solvent. Upon a similar provision to the one we are considering, the Supreme Court of New Hampshire held that a claim not presented to the administrator could not be allowed in set-off. Jones v. Jones, 21 N. H. 219. ་ We think, however, that by joining issue upon the plea in set-off the plaintiff has waived his rights to the objection. The defendant's claim, so pleaded, is to all intents and purposes an action against the administrator. It was prematurely brought, and, if the administrator had pleaded the fact, must have been abated. Instead of urging the matter in abatement, he joins issue and goes to trial on the merits of the claim. The question which came before the court was then one of evidence, and it is not contended that the evidence offered was not pertinent to the issue joined. It was too late to change the pleadings after the case had been opened to the jury. New trial granted.11 11 See Moore v. Gould, 151 Cal. 723, 91 Pac. 616 (1907); Cohn v. Carter, 92 Miss. 627, 46 South. 60 (1908). In Helms v. Harclerode, 65 Kan. 736, 70 Pac. 866 (1902), it is held that, where a claim is allowed against an insolvent estate in favor of a debtor of the estate, the debtor, when sued for his debt, may set off the full amount of his allowed claim. But in Van Dusen v. Topeka Woolen Mill Co., 74 Kan. 437, 87 Pac. 74 (1906), it is held that a debtor to an insolvent estate may not set off against his debt a claim against the estate bought by him at a discount after decedent's death. Time claims. MUTUAL BENEFIT LIFE INS. CO. v. HOWELL (Court of Chancery of New Jersey, 1880. 32 N. J. Eq. 146.) Bill to foreclose. On final hearing on bill and answer. THE CHANCELLOR [THEODORE RUNYON]. The question presented for decision is, whether the complainant is entitled to a decree for deficiency against the administrators of the estate of John S. Smith, deceased. The liability of the estate to a decree for deficiency is based on an assumption, by the intestate, of the complainant's mortgage, in a deed from the mortgagor to him for the mortgaged premises, and a bond given to the complainant by the intestate, with condition to pay to the complainant the mortgage debt in one year from the date of the bond, February 24, 1876, with interest. The intestate died in March, 1878, and the bill was filed in November of that year. The intestate, at the time of his death, lived in Morris county. The administrators took an order, April 6, 1878, to limit creditors in nine months from that date. The nine months expired in January, 1879. The complainant has never presented any claim against the estate, unless the filing of the bill for foreclosure, praying a decree for deficiency, may be so considered. By their answer, the defendants claim that they have complied. with the requisites of the statute as to publication of the order, and that the complainant, not having presented its claim, according to law, within the time limited by the order, is barred of all action against them therefor. The complainant might have presented its claim under the order to limit creditors. It had the intestate's bond, a legal liability for the payment of the debt, in addition to the equitable claim arising upon the assumption. The filing of the bill cannot be regarded as equivalent to doing so. The statute provides that when an order to bring in debts and On set-off or counterclaim as affecting estates of deceased persons, see 8 "A further objection is made that the items set out in the answer as a payment on the note were never presented to the probate court as a claim against the estate of the deceased, and allowed by the court. If these items were pleaded as a set-off, this objection would be good; but such is not the case. The items [four for work and labor at an agreed price] | are set up as payments made upon the note, it being specifically alleged that Hass [plaintiff's intestate] agreed to credit these several items on the note as a payment of so much cash." Duffie, C., in Parker v. Wells, 68 Neb. 647, 649, 94 N. W. 717, 718 (1903). See Printy v. Cahill, 235 Ill. 534, 85 N. E. 753 (1908). While courts of law can recognize only claims presented in time, it has been held that an allowance by the probate court of a claim presented after the time fixed by statute is not an error going to the jurisdiction. O'Brien v. Larson, 71 Minn. 371, 74 N. W. 148 (1898). On whether an executor or administrator is in such privity with a legatee, distributee, or creditor that he may assert a personal defense of the latter to a claim against the estate, see 8 L. R. A. (N. S.) 212, note. On the binding effect on the administrator of the settlement by the sole distributee of a claim belonging to the estate, see 11 L. R. A. (N. S.) 148. claims against the estate of any decedent shall be made, all claims and demands of the creditors of the deceased shall be presented in writing, specifying the amount claimed and the particulars of the claim, and shall be verified under oath, or the bringing in of the same shall be of no effect. Rev. p. 764. It also provides that any creditor who shall have neglected to bring in his debt, demand or claim within the time. limited, shall, by the final decree to be made after the expiration of the limited period, be forever barred of his action against the executor or administrator, unless, after the final settlement of the account of the executor or administrator, such creditor shall find some other estate not accounted for; in which case he shall be entitled to have his debt, demand or claim paid thereout, or to a ratable proportion thereof in case other creditors shall be barred of their debts, demands or claims. Id. Not having complied with the provisions of the law, the complainant is absolutely barred of its action against the administrators. Ryan v. Flanagan's Adm'x, 38 N. J. Law, 161. Where an executor or administrator is sued in a foreclosure suit for deficiency, unless it appears to be clear that a decree should be made against him, requiring him to pay the deficiency as soon as it shall have been ascertained, and consequently that no rights of other creditors will be prejudiced by such decree and the execution thereof, there will be no decree against him. The decree, if made at all, unless where the executor or administrator is liable at law or in equity to the payment of the deficiency, will be for the payment of the deficiency only in a due course of administration. The statute (Rev. p. 119) authorizes this court to make a decree for deficiency against any party to the suit who is liable at law or in equity for the payment thereof, and unless the executors or administrator is liable at law or in equity to pay the deficiency, there will be no decree. Leonard v. Morris, 9 Paige (N. Y.) 90; Jones on Mort. § 1717. Of course, where it appears that the action against the executor or administrator is barred, no decree will be made against him. Rhodes v. Evans, Clarke's Ch. (N. Y.) 169. There will be none in this case.18 (12 But in Clayton v. Dinwoodey, 33 Utah, 251, 93 Pac. 723 (1908), it was held that the commencement of a suit by the filing of a verified complaint containing all the averments required in a presented claim and the service of the complaint upon the executors within the time fixed for presenting claims operated as a presentation of the claim. Compare Moss v. Mosley, 148 Ala. 168, 41 South. 1012 (1906). The cases on the point are collected in 14 Am. & Eng. Ann. Cas. 931, note. (13 On the effect on the mortgage of a failure to present a claim, see Townsend v. Thompson, 24 Colo. 411, 51 Pac. 433 (1897); Athearn v. Ryan, 154 Cal. 554, 98 Pac. 390 (1908). Kirman v. Powning, 25 Nev. 378, 60 Pac 834, 61 Pac. 1090 (1900); Mathew v. Mathew, 138 Cal. 334, 71 Pac. 344 (1903). But see Bush v. Adams, 22 Fla. 177 (1886). EXTENT OF CLAIM OF SECURED CREDITOR HAVING INSUFFICIENT SECURITY. -"Now the chief thing that we have to notice in this region is an old rule Ch. 3) THE PAYMENT OF DEBTS OF THE ESTATE. 609 THOMAS v. CHAMBERLAIN. (Supreme Court of Ohio, 1883. 39 Ohio St. 112.) MCILVAINE, J.14 * * The only question which remains to be considered, as arising upon the demurrer to the sixth defense, as it appears to us, is that the plaintiff's claim was not allowed by Thomas. as executor of Truex, within the period of four years after his giving bond as such executor. During the whole of this period Thomas was executor of the creditor as well as of the debtor estate. In such double relation he could Its of equity about the rights of a creditor who has a security, but an insufficient security, for his debt. A. dies owing X £2,000, and his debt is secured by a mortgage of Blackacre. X. realizes his security. He sells Blackacre, but the sale produces only £1,000. Well, of course, X. is still entitled to be paid another £1,000, and if A.'s estate is sufficient for the payment of all his debts then X. will get that other £1,000. But suppose that A.'s estate is insolvent; X. will certainly be entitled to something besides the £1,000 that he got out of Blackacre. It would, I think, be natural to say that X.'s right is to prove against the testator's estate a debt of £1,000, and take a dividend, whatever it may be, say five shillings in the pound, proportional to that debt of £1,000; for £1,000 is what is due to him after Blackacre has been sold. Now that was the rule to which the Court of Bankruptcy came in the administration of the insolvent estates of living persons. rule was this: The creditor with an insufficient security may do one of two things: He may abandon his security (abandon Blackacre) and prove for his whole debt (prove for £2,000), or he may realize his security and prove for what still remains due to him after such realization. Thus in the case I have put he may pocket £1,000, the price of Blackacre, and then claim a dividend on the other £1,000 which still remains due to him. But the Court of Chancery in its administration of the estates of dead persons came to another rule, usually known as the rule in Mason v. Bogg [(1837) 2 My. & Cr. 443]. The mortgagee may realize his security, and may also prove against the general estate for the whole of his debt, provided always that he is not to get more than twenty shillings in the pound. Thus in our case X. might keep the £1,000 that he gets from the sale of Blackacre, and then he may also prove against the general estate of the dead man for the whole £2,000; but, of course, he is not to get in all more than the whole debt, the whole £2,000 that is due to him. This rule may seem to you unjust, and it has seemed unjust to Parliament. It seems to favor the secured creditor unduly at the expense of unsecured creditors. However you can see that there was a certain logic in it. The mortgagee has two distinct rights, the right in personam, the personal right against the debtor, and the real right, the right in Blackacre. Why should he not use both of these? Why should the fact that he has used one of them hamper him when he desires to make good the other? He sells Blackacre. Well and good; but the dead man owed him £2,000. Why should he not prove against the dead man's estate for the whole of this debt? However, it is needless now to consider whether or no there was much justice in this reasoning; for a section of the judicature act of 1875-section 10-declared in effect that in the administration of the estates of dead persons the bankruptcy rule was to prevail as between the secured and the unsecured creditors." Maitland's Equity and the Forms of Action at Common Law, 194, 195. For the conflict of authority in the United States on this point, see 2 14 The statement of facts is omitted, and part only of the opinion is given. COST. WILLS-39 |