| Iowa | Nov 16, 1926
I. It appears that the plaintiff acquired the note and mortgage in suit from the executors of the estate of B.F. Prunty, deceased, pursuant to an arrangement whereby the plaintiff surrendered to said executors a certain note and mortgage held by the plaintiff for the sum of $5,000, known in the record as the Hoch note and mortgage. The Hoch note and mortgage were originally the property of B.F. Prunty, deceased, during his lifetime, who was at that time closely associated in the management of the plaintiff-bank. The Hoch note and mortgage were sold by Prunty to the plaintiff-bank. These had been drawn payable to C.O. Prunty (now one of the executors), and were negotiated by his indorsement, without recourse. Such note and mortgage were given for purchase money in the *656 sale of a certain farm in Minnesota by Prunty to Hoch. B.F. Prunty, at the time of his death, held the vendor's interest in the executory contract of sale, which was still unperformed by Hoch. The executors of the estate of Prunty desired to forfeit the contract for non-performance. In order to do so, it was requisite that they should acquire the $5,000 note and mortgage, in order to tender it back to the vendee, Hoch, pursuant to their proposed forfeiture. They presented a request to the plaintiff-bank that the plaintiff should accept from the estate of Prunty, in exchange therefor, the $5,000 note and mortgage in suit herein. This was acceded to by the formal resolution of the board of directors. The exchange was made without profit to either party, — the difference in accrued interest being adjusted between them. The executors presented to the probate court an application setting forth the proposed arrangement between them and the plaintiff-bank, and asking authority to transfer to the plaintiff-bank, pursuant to such arrangement, the note herein in suit, and that they be authorized to indorse the same. Such application was granted by the court, and authority toindorse in blank was granted in express terms. The executors did so indorse, and delivered the note to the plaintiff. The principal contention now made by the executors is that the indorsement made by them was intended only as a transfer of the property, and that it was not intended thereby 1. APPEAL AND to assume any liability as such indorser, and ERROR: that such was the express agreement of the reservation parties. As against this, the appellee urges of grounds upon us that the issue thus presented here was belated never made in the district court. No such reservation. defense was pleaded. The plaintiff's petition did allege the indorsement. The defendants' answer denied the same. Such denial avails the appellants nothing, because the allegation of the petition at that point is established by the undisputed evidence of both parties. The point thus urged by the appellee is ignored in the reply argument of the appellants. Manifestly, we are not permitted to seek an issue beyond the pleadings, in order to reverse the decree of the district court. We must hold, therefore, that the principal point urged by appellants on this appeal is not available to them, for want of issue tendered thereon in their pleading.
II. The appellants did plead in the district court that the *657 claim sued on had never been presented or filed, as required by statute, and that, therefore, no liability on the part of the 2. EXECUTORS estate can be established thereon. The claim AND sued on was an asset, and not a liability, of ADMINIS- the decedent's at the time of his death, and of TRATORS: the executors of his estate up to the time they claims: transferred the same to the plaintiff-bank. The filing statute pertaining to the filing of claims excused. against an estate has no application thereto.
It was further pleaded that the executors had no authority to create a liability against the estate by their indorsement. The arrangement into which the executors entered, and which was approved by the court, was so entered into for 3. EXECUTORS the benefit of the estate, and was a part of the AND process of collection of the assets of the ADMINIS- estate. In transferring this asset to the TRATORS: plaintiff, the executors received presumably settlement full value therefor. There is no evidence to the of estate: contrary. They were not acting as brokers, nor indorsement were they speculating for the estate. Neither of note: was the plaintiff-bank speculating. In inducing effect. the plaintiff-bank to accept the asset, the executors neither gained nor lost anything for the estate by guaranteeing the same. If the executors received full consideration for an uncollectible asset, their concurrent liability by the indorsement thereof worked no greater loss to the estate than it would have sustained if it had continued as owner of the asset. We see no lack of power in the executors to enter into such arrangement, when approved by the probate court. Nor can we conceive of any reason, equitable or legal, why, in such a case, the indorsement of the estate by its executors should not carry the same burden as that of any other indorser of paper for value. We reach the conclusion, therefore, that the indorsement of this paper by the executors, under the circumstances appearing in the record, worked no wrong upon the estate. It operated simply to require it to bear its own ultimate losses, if any, in the failure of its assets.
The decree of the district court is, accordingly, affirmed. —Affirmed.
De GRAFF, C.J., and ALBERT and MORLING, JJ., concur. *658