Betor v. Chevalier

• Decision Date: 19 April 1948
• Docket Number: 8776.
• Citation: 193 P.2d 374,121 Mont. 337
• Parties: BETOR et al. v. CHEVALIER.
• Court: Montana Supreme Court

193 P.2d 374

121 Mont. 337

BETOR et al. v. CHEVALIER.

No. 8776.

Supreme Court of Montana

April 19, 1948

Rehearing Denied May 25, 1948.

Appeal from First Judicial District Court, Lewis and Clark County Harry A. Bolinger, Judge.

Action by Victoria Betor and Georgette Betor against P. H Chevalier, also known as Philip Chevalier, for a balance due on loans made to defendant by plaintiff Georgette Betor's guardian from funds of her estate. Judgment for plaintiffs and defendant appeals.

Affirmed.

Sherman W. Smith and Lloyd J. Skedd, both of Helena, for appellant.

Ralph J. Anderson and Albert C. Angstman, both of Helena, for respondents.

METCALF Justice.

On June 7, 1924, B. Betor was appointed guardian of the estate of Georgette Betor, then seven years old. In his capacity as guardian B. Betor came into the possession of approximately $10,000 in cash as part of the estate belonging to his ward. On March 15, 1946, Georgette Betor filed a complaint in which she alleged that her guardian B. Betor had loaned P. H. Chevalier, the defendant, several thousand dollars from the funds of her estate, some of which had been repaid but that on July 1, 1937, there was still due and owing the sum of $3,760, and that these loans made by the guardian to the defendant from the funds entrusted to him were made without authorization or confirmation of the court.

The plaintiffs alleged that on or about July 1, 1937, as evidence of the then existing indebtedness and as a new promise to pay, a promissory note was executed by the defendant in the sum of $3,760 due five years after date with interest at the rate of 4% per annum, payable to B. Betor. On April 4, 1940, the note was assigned to the plaintiffs Georgette Betor and Victoria Betor, her cousin. The plaintiffs pray for judgment in the amount of $3,760, together with interest at the rate of 4% per annum from the first day of July, 1937, and for attorneys' fees and costs of suit.

A motion to strike was interposed on March 30, 1946, and on that date district judge A. J. Horsky issued an order granting defendant 20 days in which to further plead. Thereafter Judges Horsky and Padbury disqualified themselves and Judge R. M. Hattersley was called in. On March 31, 1947, Judge Hattersley overruled defendant's motion to strike and ordered 'that the defendant may have 20 days from the filing of this order with the clerk of the above entitled court within which to file his answer to the complaint of the plaintiffs on file herein. * * *' (Italics added.) Thereupon the defendant answered, generally denying the material allegations of the plaintiffs' complaint and as affirmative defenses alleging that the defendant had made a full, complete and final settlement of all amounts which he had borrowed from B. Betor and that the note for $3,760 which was executed by the defendant and payable to B. Betor was made with the understanding that it would not be paid until all of the other indebtedness of the Chevalier ranch had been satisfied; that the note was never delivered to B. Betor but was delivered to Sherman W. Smith, an attorney-at-law, Helena, Montana, and was kept by Mr. Smith at all times until the order of the court to produce it. As a further affirmative defense the defendant alleged that the cause of action was barred by virtue of section 9030, Revised Codes of Montana 1935.

In their reply the plaintiffs set up three separate grounds for the avoidance of the defendant's plea of the statute of limitations, one of which was:

That the defendant on July 1, 1937, made and delivered to B. Betor his promissory note for $3,760 as an acknowledgment of the existing debt and as a new promise to pay.

The case was tried before a jury and they returned a verdict in favor of the plaintiffs in the sum of $3,760 with interest at 4% from July 1, 1937. Judgment on the verdict was entered and this appeal is from that judgment.

There was conflicting evidence on the issue as to whether the note was made with the understanding that it was not to be paid until all the other indebtedness of the Chevalier ranch was satisfied. The issue was presented to the jury and decided adversely to the defendant.

At the beginning of the trial, counsel for the defendant objected to the introduction of evidence or to the hearing of the case for the reason that as a result of Judge Hattersley's order requiring him to 'file his answer' he was denied the right to demur or otherwise test the sufficiency of the complaint and was required to answer prematurely. The defendant never attempted to file a demurrer as he was authorized to do under Judge Horsky's order previously filed nor did he ever give the trial court an opportunity to correct or clarify the order about which he is complaining. If the defendant had believed himself prejudiced by the order requiring him to answer, he could have submitted a demurrer under the right given him by Judge Horsky's order or he could have requested the court for leave to file a demurrer under the provisions of section 9187, Revised Codes 1935. Failing to do either of these things he has waived his right to demur or move to make definite and certain. He did have an opportunity to test the sufficiency of the complaint because at the commencement of the trial he objected to the introduction of evidence on the ground that the complaint failed to state sufficient facts to constitute a cause of action. At this time the defendant also made a motion to require the plaintiff to elect, contending that the complaint was duplicitous in that a cause of action on a promissory note and a cause of action on a debt owing to the guardianship estate of the plaintiff Georgette Betor were so intermixed that the complaint was ambiguous and unintelligible. It is true that the plaintiffs' complaint prayed for attorneys' fees and from that it might be inferred that the action was on the promissory note, but taking the complaint as a whole it is apparent that the plaintiffs were suing to recover a debt owed to the ward's estate and that they were relying on the promissory note only as a new promise to toll the statute of limitations. Thus there was but one cause of action, that of the original indebtedness. This was recognized by the court when he instructed the jury:

'You are instructed that the plaintiffs have elected to sue on the debt if any owed by the defendant to the estate of Georgette Betor and that the promissory note which has been introduced in evidence is to be considered by you only in determining whether it amounts to an acknowledgment of the previous indebtedness, if any, and promise to pay, for the purpose of avoiding the statute of limitations as elsewhere defined in these instructions.'

The jury was also instructed that they could not include attorneys' fees in the amount of their verdict.

In his motion to require an election the defendant quoted from a brief filed by the plaintiffs in opposition to the motion to strike and in that brief the plaintiff stated that this was not an action on a promissory note but an action for a debt due the plaintiffs' estate. That was the theory of the case from its inception. It was tried on that theory and the jury was instructed on that theory. The defendant was informed of the issues from the beginning. The motion to strike and the motion to require the plaintiff to elect were properly overruled.

During the minority of the plaintiff Georgette Betor, her guardian had absolute control over the care and management of her estate subject to the authority of the court. Secs. 10407 and 10419, Rev.Codes 1935. But when she reach her majority she could sue in her own name for any debts due the estate. Mitchell v. McDonald, 114 Mont. 292, 136 P.2d 536. The guardianship was terminated when the ward arrived at her majority (Mitchell v. McDonald, supra) but the guardian still had the duty of making a final accounting and settlement. Berkin v. Marsh, 18 Mont. 152, 44 P. 528, 56 Am.St.Rep. 565; 25 Am.Jur., Guardian and Ward, sec. 53. Assuming arguendo that the defendant is correct in his contention that on July 1, 1937, the statute of limitations had run so that neither the guardian nor the ward could have successfully prosecuted an action to collect the original debt, it was still the guardian's duty to make every effort to collect from the defendant for the benefit of his ward. It is uncontradicted that the money loaned the defendant came from the guardianship funds. Even though the statute of limitations had run on the debt, the debt itself was not discharged. The moral obligation to pay the debt still remained. Hicks v. Stillwater County, 84 Mont. 38, 274 P. 296; Berkin v. Healy, 52 Mont. 398, 158 P. 1020.

The original debt whether barred by the statute of limitations or not was sufficient consideration for the note and the new promise to pay. 34 Am.Jur., Limitation of Actions, sec. 298; Opitz v. Hayden, 17 Wash.2d 347, 135 P.2d 819; Easton v. Ash, 18 Cal.2d 530, 116 P.2d 433; Meridianal Co. v. Moeck, 121 Ore. 133, 253 P. 525. Therefore the promissory note executed on July 1, 1937, revived the obligation and the statute of limitations did not again begin to run until 1942, when the note came due. It is immaterial that the note was payable to B. Betor the guardian. As trustee for the ward, anything that he collected from the debtor would be for the benefit of the ward's estate and she acquired the same rights as her guardian had. Breese v. O'Brien, 102 Mont. 547, 59 P.2d 65.

But the defendant contends that it was error to admit the note in evidence because of insufficient evidence of the execution and identification of the note. However, Castie Betor, one of the witnesses for the plaintiffs, testified that the signature on the note was that of the...