93 P. 1010 | Cal. | 1908
On May 26, 1903, S.A. Vance made and delivered to Hammond Lumber Company, a corporation, his promissory note, reading as follows: —
"$65,000.00.
"SAN FRANCISCO, CALIF., MAY 26, 1903.
"On or before five years after this date, I promise to pay to the order of Hammond Lumber Company sixty-five thousand dollars, United States gold coin, with interest thereon, payable semi-annually at the rate of four per cent per annum from date until paid.
"This note is secured by pledge of six hundred and fifty shares of the first preferred cumulative stock of the stock of Vance Redwood. Lumber Company, and is payable, at my option, by transfer and delivery of as many of said shares as shall at the time of such transfer and delivery be the equivalent at par of the then unpaid part of this note.
(Signed) "S.A. VANCE."
Thereafter, S.A. Vance died, leaving a will in which he named his wife, Marie H. Vance, as executrix, and gave all of his estate in equal shares to his said wife and a minor son. Letters testamentary having issued, notice to creditors was published, and, within the time allowed, the Hammond Lumber Company presented a claim, setting forth the instrument above quoted, and alleging the payments of interest and nonpayment of the principal. The claim was allowed by the executrix and approved by the court. The estate is solvent. *762
After the expiration of the time for presenting claims, the executrix filed a petition, alleging that the six hundred and fifty shares of stock referred to in the claim had been appraised at thirty-eight thousand seven hundred and fifty dollars, and that it was to the best interests of the estate that the claim be paid by transfer of said six hundred and fifty shares, which at par were the equivalent of the unpaid portion of the note. The prayer of the petition was for authority to deliver said stock to the claimant in full payment of its claim. In response to a citation, the claimant, Hammond Lumber Company, appeared and opposed the petition. Over its objection, the court made an order authorizing and directing the executrix to transfer and deliver to Hammond Lumber Company, in full payment of the note and claim, a certificate for six hundred and fifty shares of the first preferred cumulative stock of Vance Redwood Lumber Company, being the shares mentioned in the note. The order further provided that upon such transfer the claim and note "shall be fully paid and satisfied."
From this order the Hammond Lumber Company has appealed.
The points made in support of the opposition in the lower court, and now urged on this appeal are, first, that the option to pay the note by transfer and delivery of the stock was a right personal to S.A. Vance, the maker, and expired with his death; second, that the superior court as a court of probate had no jurisdiction to make the order directing the payment of the claim by a transfer and delivery of the shares of stock.
1. We see no good reason for holding that the option to pay in stock was a mere personal right of the maker. The note is payable on or before five years after date, and is payable, at the option of the maker, in money or in stock. Two options were here reserved to the maker — the option to pay at any time prior to the expiration of the five years, and the option to pay in stock instead of money. The payee had no right to insist on payment at any time before the end of the five years' period, nor to receive payment in money if the maker should elect to pay in stock, orvice versa. Both of the options so reserved are valuable rights. It is not suggested that the right to pay before the expiration of the five years was *763 lost to Vance's estate by his death. The right to pay in stock rather than in money stands on no different ground. The option to pay in this manner was reserved solely for the benefit of the maker. The appraised value of the stock ($38,750.00) shows that this option, at the time of filing the petition, was worth twenty-six thousand two hundred and fifty dollars, the difference between such value and sixty-five thousand dollars. Why should the death of the maker be held to transfer this twenty-six thousand two hundred and fifty dollars from Vance's estate to the Hammond Lumber Company? When the claimant took the note, it contracted for and received, not an obligation to pay sixty-five thousand dollars, but an obligation to do one of two things, — i.e. to pay sixty-five thousand dollars or to transfer six hundred and fifty shares of stock. The only right it bargained for was the right to receive the one of these two modes of performance which should prove to be to the advantage of the maker. The maker's death did not transform or enlarge this into an absolute right to receive sixty-five thousand dollars. The option reserved was in the nature of a valuable property right, and, as such, passed to the estate of the decedent. Since it had reference to the performance of an obligation of the decedent, its exercise necessarily devolved upon the executrix, who was charged with the duty of carrying out, subject to the direction of the probate court, all binding contracts made by the testator.
The appellant lays great stress upon the proposition that upon the death of one owning property, the property passes at once to his heirs, devisees, or legatees. (Civ. Code, sec. 1384; Beckett
v. Selover,
2. The contention that the probate court was without jurisdiction to make the order appealed from is, in a measure, answered by what has already been said. If the option reserved in the note was a right that passed to the estate, and was to be exercised by the executrix, it will hardly be questioned that the exercise of that option for the purpose of satisfying an approved claim was a matter to be passed on by the probate court. "The objects of probate proceedings are to administer, settle and distribute the estate of deceased persons." (Maddock v. Russell,
The order is affirmed.
Angellotti, J., and Shaw, J., concurred. *765