255 N.W. 241 | Minn. | 1934
Lead Opinion
There is no controversy as to the facts. On August 31, 1932, the Bank of Glencoe, a state bank, was taken over by relator for liquidation, and on December 2, 1932, he filed an order assessing the outstanding capital stock of the bank 100 per cent. When the bank closed and the assessment order was made, the books of the bank showed that eight shares of the bank stock were held and owned by Henry L. Simons and two by Anna L. Simons. Henry L. Simons died testate several years prior to 1923, and his estate was probated in McLeod county. Anna L. Simons was the sole legatee; but, before final distribution, Anna L. Simons died, in November, 1923, testate, and letters testamentary were granted by the probate court of Hennepin county to James E. O'Brien as executor. An order was made limiting the filing of claims to six months after December 17, 1923, and a hearing was had on claims June 17, 1924. Her estate has not been closed, and no petition has been filed asking for distribution. The final decree in the estate of Henry L. Simons, made after the death of the sole legatee, Anna L. Simons, distributed his personal estate to James E. O'Brien as executor of her estate. In May, 1933, relator's predecessor in office petitioned the probate court of Hennepin county to extend the time for filing claims against the estate of Anna L. Simons and permit the claim arising out of the assessment of said ten shares of bank stock to be filed. The petition set up the facts above stated. It was denied. Certiorari to *45 review the order issued from the district court and was on hearing discharged.
It is conceded that a claim arising from the double liability imposed by the constitution (art. 9, § 13, subd. 3) upon stockholders in a state bank is a contingent claim and so remains until, in a proceeding to liquidate the bank, it becomes necessary to enforce such liability by an assessment. As long as it remains contingent it may not be presented or allowed by the probate court against such a stockholder's estate. When an assessment is made by the state bank examiner in a proceeding to liquidate an insolvent bank, the contingent claim becomes absolute and a proper claim to enforce against the estate of a deceased stockholder, provided the time has not expired for so doing. Neither party to this appeal disputes these propositions. The question here is whether or not the time had expired for presenting or allowing any claim against the estate of Anna L. Simons based upon the assessment by relator of the holders of stock in the Bank of Glencoe. We need not consider whether the assessment against the eight shares of stock owned by Henry L. Simons could, in any event, be presented or allowed by the probate court as a claim against the estate of Anna L. Simons, for we reach the conclusion that the courts below rightly denied the claim, arising from the assessment of the two shares standing on the books of the bank in the name of Anna L. Simons, to be filed or considered as a claim against her estate.
Our statutes governing the administration of the estates of deceased persons disclose a purpose to speed settlement and distribution thereof. In our complicated business affairs a person is apt to incur varied contingent obligations. The statutes, while so drawn as not to permit the existence of such contingent claims or obligations to delay the, settlement and distribution of estates of a decedent, carefully preserve to the holders thereof the right, when the claims become absolute, to enforce them against the next of kin, legatees, or devisees to the extent of the assets received by them from the estate. 2 Mason Minn. St. 1927, § 8809, directs the court, upon granting letters testamentary or of administration, to make an order limiting the time to present claims against the estate. The *46 discretion of the court in that respect is restricted to narrow limits, by § 8811, providing that "the court, in its discretion, may receive, hear, and allow a claim when presented before the final settlement of the administrator's or executor's account, and within one year and six months after the time when notice of the order was given." Section 8812 reads:
"All claims against the estate of a decedent, arising upon contract, whether due, or not due, or contingent, must be presented to the court for allowance, within the time fixed by the order, or be forever barred: Provided, that contingent claims arising on contract, which do not become absolute and capable of liquidation before final settlement, need not be so presented or allowed."
Section 8815 provides:
"No action at law shall lie against an executor or administrator for the recovery of money upon any demand against the decedent allowable by the probate court, and no claim against the decedent shall be a charge upon his estate unless presented to the probate court for allowance within five years after his death: Provided, that nothing in this section shall be construed as preventing an action to enforce a lien existing at the date of decedents death, nor as affecting the rights of a creditor to recover from the next of kin, legatees, or devisees to the extent of assets received."
These statutes plainly direct the probate court, as soon as jurisdiction is taken of an estate of a decedent, to fix a limit for filing claims against it, such time not to exceed one year. However, the court is given discretionary power to permit a claim to be filed when presented before the final settlement of the executors' or administrator's account, and within one year and six months after the time when notice of the order to present claims was first given. In State ex rel. Scherber v. Probate Court,
"If the next of kin neglect to apply for an administration, creditors, or others interested in the estate, may do so; and, if creditors permit the estate to go unadministered for the period of five years from the death of the intestate, their claims are as effectually barred as though an administrator had been appointed and they had failed to present them for allowance."
In fact, the wording of § 8815 is so plain, direct, and clear as to be open to but one construction when it says, "no claim against a decedent shall be a charge upon his estate unless presented to the probate court for allowance within five years after his death." The conclusion is inescapable that the probate court is prohibited from permitting a claim against an estate to be considered or allowed *48
unless presented or filed within five years from the death of the decedent. The act of allowance makes it a charge against the estate. If allowed, it becomes a charge to be paid out of the estate. The claim here involved was not capable of presentation as a claim against the estate of Anna L. Simons until long after the expiration of five years from her death. So, while it was barred from being allowed and paid out of the estate, § 8815 saves to the holder thereof the right to recover of the next of kin, legatees, or devisees of Anna L. Simons to the extent of assets received from the estate. Berry-hill v. Peabody,
In the following cases cited by relator the claim was asserted or could have been asserted against the estate before the expiration of five years from decedent's death. In re Estate of Mills,
The judgment is affirmed.
Dissenting Opinion
The appeal presents the question of whether a contingent claim against the estate of a decedent, which becomes absolute more than five years after decedent died but before his estate is closed and while the estate is still pending in the probate court, can be allowed as a claim by that court. The majority opinion holds that the claim is barred by § 8815 of our statutes. The three sections of the statutes specifically relating to the presentation and allowance of claims against in estate are §§ 8809, 8811, and 8812. An extended analysis of these sections is not here undertaken.
Only claims based on contract are presented to the probate court. These claims are of two kinds: Claims which are direct liabilities of decedent, certain in amount or capable of determination as to amount by hearing of evidence thereon, whether due or not due at the time; and claims which are contingent, so that the liability depends on some future event which may or may not happen. If a claim is a present and certain obligation, not yet matured, it may be presented and allowed as a claim not yet due; but, if the claim depends on the happening of some uncertain future event, which may or may not happen, then it is a contingent claim and cannot be presented or proved until the event occurs and the contingency ceases. *50
No mention of contingent claims is made in any of the sections of the statutes noted except in § 8812. That section requires:
"All claims against the estate of a decedent, arising upon contract, whether due, not due, or contingent, must be presented to the court for allowance, within the time fixed by the order, or be forever barred."
The order there referred to is the order made pursuant to § 8809, limiting the time to be fixed for the presentation of claims to not more than one year nor less than six months. If the quoted first sentence of § 8812 is literally accepted, it would contradict and render inoperative § 8811, which provides that, for cause shown, the probate court, in its discretion, may receive and allow a claim presented before the final settlement of the executor's or administrator's account, and within one year and six months after the time when notice of the order limiting the time to present claims was given. That such is not the effect of this provision of § 8812 is well settled. Turner v. Anderson,
The first sentence in § 8812 contains a proviso reading as follows:
"Provided, that contingent claims arising on contract, which do not become absolute and capable of liquidation before final settlement, need not be so presented or allowed."
This proviso, following immediately after the statement that all claims arising upon contract, whether contingent or not, must be presented within the time limited by the order for presentation of claims or be barred, seems to me to be reasonably construed as meaning that contingent claims which do become absolute before final settlement of the account of the executor or administrator shall be presented to and may be allowed by the probate court; in other words, that the only limitation on the presentation of such claims is that they must be presented before the final settlement of the account. That this was the intention of the legislature in enacting the proviso seems to be the only reasonable conclusion. Otherwise the proviso is superfluous and has no effect. The statement that such claims "need not be so presented" can have no other meaning than that they need not be presented within the time *51
limited by the preceding sentence, but that they may be presented up to the time of the final settlement of the account. Ebert v. Whitney,
The remaining question is whether § 8815 limits the presentation of contingent claims so that they cannot be presented in any event after five years from the death of the debtor. That section provides:
"No action at law shall lie against an executor or administrator for the recovery of money upon any demand against the decedent allowable by the probate court, and no claim against a decedent shall be a charge upon his estate unless presented to the probate court for allowance within five years after his death."
Then follows the proviso that the section shall not prevent an action to enforce a lien existing at the time of the decedent's death nor affect the rights of creditors to recover from the next of kin, legatees, or devisees to the extent of assets received.
No mention is made of contingent claims or of the time of the settlement of the estate. The provision that no claim against the decedent shall be a charge upon his estate unless presented to the probate court within five years after his death, standing alone, might be construed to mean that contingent claims, not becoming absolute until more than five years after such death, are barred. But, as already noted, contingent claims are in a different class from other claims and are nowhere mentioned except in § 8812. Reading these sections together, it seems reasonable to conclude that contingent claims were not embraced in § 8815, nor was the question of whether the estate was closed or in course of administration therein considered. Up to this time this court has never directly passed on the question. O'Brien v. Larson,
In Berryhill v. Peabody,
"Obviously, the five-year limitation was designed to cover the claims provable under section 4511 [now contained in § 8812], and not those depending on a contingency, and for that reason not provable at all. It was not intended to govern where the claims in question could not be presented or allowed as provided in the probate code because of their contingent character, when the probate court was required to act."
In Martz v. McMahon,
Under these decisions a contingent claim which becomes absolute more than five years after the death of debtor but before his estate is finally settled in the probate court where administration is pending is not barred, but may be enforced by suit in the district court against the representative of the estate. Judgment recovered in such a case, I take it, will stand in the same position as an allowed claim, and, upon being filed in the probate court, will be paid out of the funds of the estate. In re Estate of Koffel,
In Oswald v. Pillsbury,
In Hunt v. Burns,
"We concur with defendants, and hold that, as the claim matured and became absolute before the administration of the estate was finally closed and the distribution of the property made, the claim should have been presented to the probate court for allowance, and, not having been so presented, is barred."
In the case of Hantzch v. Massolt,
In Ebert v. Whitney,
Up to the present time no case has been found, as far as called to my attention, where this court has held directly that a contingent claim, rendered absolute more than five years after the death of the debtor but before his estate is closed or distributed, is not provable against his estate. The trend of our decisions indicates that § 8815 does not apply to such a claim, and that, if promptly presented as soon as rendered certain and absolute and before the estate is closed, the probate court has jurisdiction and power to allow same.
It is pointed out that it is desirable that probate proceedings be expedited and estates promptly closed. But one having a contingent claim which does not become certain or absolute until more than five years after the debtor's death is under no duty and has no authority either to initiate administration or expedite it until the contingency ends. If he then uses due diligence, he should not be barred of his claim, if administration continues. He should not be charged with any delay in administration which he had no power to prevent. It is otherwise with ordinary creditors. They have power to initiate administration, if not promptly commenced by those having prior rights thereto, and they are entitled to appear in probate court and require prompt action in the settlement of the estate.
It is suggested that at the time such a contingent claim is filed there may have been a partial distribution so that the filing of another claim might result in prejudice to later distributees or to creditors. I believe the probate court has ample power and discretion to protect against any prejudice or discrimination in that respect, even to the extent of wholly disallowing such contingent claim if necessary.
The proviso of § 8815, that it shall not affect the right of creditors to recover from the next of kin, does not appear to me to be of much importance. It may well have reference to claims for torts or other *55 claims not provable in probate court. A contingent claim, when it becomes absolute, is a claim that can be proved.
Dissenting Opinion
I concur with Mr. Justice Olsen.
Dissenting Opinion
I am in full accord with what Mr. Justice Olsen has stated in his dissenting opinion.