74 Colo. 571 | Colo. | 1924
delivered the opinion of the court.
The record shows an unusual and an anomalous procedure, which may be due, in part, to the fact that the administratrix and the claimants seem to have conducted proceedings themselves and without aid of legal counsel, until after the administratrix had despaired of paying debts of the estate and after the claimants had made their own case in their own way. It sufficiently appears from the record, however, that the debt represented by these notes signed by the administratrix, was contracted by the intestate during his lifetime, and that it was secured by a chattel mortgage upon his live stock and the crop of hay then growing upon his lands. The date of the intestate’s note or notes and chattel mortgage is not shown. Letters of administration were granted to Fannie Austin as administratrix of the estate November 18, 1918, her husband having died on November 10. She qualified on the same day. The adjustment day for filing of claims was fixed for January 28, 1919, and the proper statutory notice was published. The claimants, who were the payees in these notes given by Mr. Austin, did not appear on the adjustment day and have never appeared in the county court, or filed for allowance a claim represented by, or based upon these original notes. Why they did not is not specifically disclosed by the evidence, but probably they had no intention of filing their claim under the fifth subdivision of section 5331, C. L. 1921, (which provides that, to be payable out of general assets, all debts and demands of whatever quality shall be filed in the county court within one year from the granting of letters of administration and, if allowed, shall compose the fifth class), but, in lieu thereof, having a mortgage which they deemed equivalent to the value of the amount of the notes, they were relying entirely upon that security and did not intend to have their claim established as a debt against the estate, to be paid in whole or in part out of its unincumbered assets. This purpose is indicated by further and later proceedings by them which
On June 10, 1920, more than one year after adjustment day, the administratrix addressed a letter to the judge of the county court stating that it was necessary for the interests of the Austin estate that the intestate’s note of §19,000 to Haley Brothers, maturing June 19, 1920, be renewed in that sum, together with interest, and that the renewal papers should be drawn in favor of Haley & Hollis, their successors, and requested, in the letter, that the judge grant her authority to make and sign as administratrix renewal thereof. On June 19, 1920, the court, finding that it was for the best interest of the estate that the renewal of such date should be made, ordered the administratrix to renew the same, and apparently the intention, which was carried out, was to effect renewals by giving new notes signed by the administratrix. Authority was also given to renew the renewal note, from time to time, if it became necessary for the best interest of the estate. The administratrix thereafter and upon order of the court, in responses to her applications, on June 14, 1921, made a second renewal note for the same reason, and on December 1, 1922, a third renewal, and on May 21, 1923, a fourth renewal. These three renewal notes of the fourth series were secured by a chattel mortgage and they constitute the claim presented to, and disallowed by, the order and judgment of the court, which wé áre now reviewing.
The claimants contend that the presented claim or debt was not contracted by the intestate in his lifetime, but that it is an original debt, created as the result of the acts of the administratrix in asking for, and obtaining authority of the court to make, and making, the renewals. They insist it is the same as a loan directly to the administratrix, a debt at that time contracted by her under authority
Such being the undisputed facts, the trial court in its judgment of disallowance was right. Neither one nor all of these renewals constituted the creation of an indebtedness against the estate. The most that can be said about them is that they constitute a recognition by the administratrix and the court of the existence of a pre-existing secured indebtedness of the intestate. We do not understand that it is competent for the administratrix to waive the statute of nonclaims, or that the court may toll "the statute of nonclaims by authorizing a renewal of an outlawed original debt. “Where a note is given merely in renewal of another note and not in payment, the renewal does not extinguish the original debt nor in any way change the debt except by postponing the time for payment; and as a general rule the holder is entitled to the same rights and remedies as if he was proceeding on the original note.” 8 C. J. p. 443, Section 656. See also sections 793 to 796. Of course the parties may, by giving a new note for an old one, thereby extinguish the original debt. Whether or not they do so depends upon various circumstances and their intent. There is not the slightest evidence in this record that, in the giving of these new notes by the administratrix under the authority of the court, there was any intent that the former note or the original debt was thereby extinguished or paid. The application in each instance by the administratrix was for “renewal,” not to give a new note in payment, and it is doubtful, although it is not necessary definitely so to decide, if the court or the administratrix, or both, as against creditors whose claims had been allowed, would have the power thus to extinguish the original debt by giving new notes, after the original debt has been barred by the statute of nonclaims, and thus
This debt, being barred by the statute of nonclaims, in so far as the right to satisfaction out of estate property not included in the chattel mortgage is concerned, it necessarily follows that the claimants were not entitled to a foreclosure of the mortgagee securing the renewal notes. The note is the principal thing, the mortgage merely an incident. Were it otherwise, under section 5344 C. L. 1921, the court, in which administration is had, can not grant permission or authority to a claimant to foreclose a mortgage securing an indebtedness of an estate, unless the claim for such indebtedness shall have first been proven and allowed by the court. There has been no allowance by the court of any debt of the estate. This is conclusive against the foreclosure sought.
There is a proviso to the fifth clause of section 5331 as follows: “That any claims secured by valid mortgage, * * * may be filed and allowed after the expiration of one year from the granting of letters, and before the final settlement of said estate or the outlawing of said claim, to be in such case satisfied only out of the land or other property upon which the claim is secured.” This proviso is not discussed by either of the parties. The reason therefor would be merely guess work on our part:’ The construction as to the meaning, force and effect of this proviso, so far as it applies to the facts before us, or as to the facts that might appear in some other proceeding, should not now be made, or forecast, since we have not been asked to do so, and neither party bases any right upon it in their briefs.
In her written notice to the claimants, holders of the
It appears from the evidence offered by the claimants that other claims to the amount of about §2,000, in favor of other creditors, had' been allowed against the estate. Although the court rejected this evidence, we say that the court ought not to have entered upon a hearing of the issues raised below without requiring the parties to bring in the creditors and all others interested in the estate. But its error in that respect is harmless, both as to claimants and other creditors. The judgment here entered, so far as it goes, is in the interest of all of the creditors of the estate, except the mortgagee claimants, and probably would not be objected to by the general unsecured creditors; but if judgment had been as prayed, it would have been a useless proceeding so far as concerns creditors not brought in.
This judgment must be affirmed. In doing so the rights of the claimants, if any they have, under the proviso of subdivision 5, section 5331, or on other grounds, are not to be considered as determined on this review.. If claimants still hold the original note or notes given by the intestate in his lifetime to Haley & Haley, which, and not the renewal notes, constitute the only debt against The estate, if any, they are at liberty, if they see fit to do so,
Judgment affirmed.
Mr. Chief Justice Teller and Mr. Justice Sheafor concur.