Bowers v. Hammond
| Citation | 31 N.E. 729,139 Mass. 360 |
| Parties | Caleb B. Bowers, administrator, v. Henry B. Hammond, executor[1] |
| Decision Date | 03 May 1885 |
| Court | United States State Supreme Judicial Court of Massachusetts |
Appeal by the surviving executor of the estate of Benjamin E. Bates from a decree of the Probate Court, made on January 2, 1883 on the petition of the administrator of the estate of William W. Bowers, filed November 8, 1882, ordering the said surviving executor to pay to the petitioner interest at the rate of seven and a half per cent on $ 12,000, from November 1, 1877, to April 5, 1881.
The case was heard by C. Allen, J., and reserved for the consideration of the full court, upon the following agreed facts:
The estate of said Bates having been represented insolvent commissioners were appointed, who allowed the claim of the petitioner, as such administrator, for $ 12,184.93. This claim was founded on a note bearing interest at seven and one half per cent, upon which $ 12,000 of the principal was due on November 1, 1877. The sum allowed by the commissioners was made up by computing interest on $ 12,000 at seven and one half per cent from November 1, 1877, to January 14, 1878, the time of the death of Bates. On October 28, 1880, pursuant to the order of the Probate Court, the executors paid the petitioner $ 6092.46, being fifty per cent of the sum allowed.
On April 5, 1881, upon the petition of creditors representing that the estate was solvent, the court ordered "that said executors set aside such sum as shall be sufficient to pay all the disputed claims against them, and to convert so much of the property of said estate into money as shall be sufficient to pay a second and final dividend of fifty per cent upon the claims which have been allowed against said estate, and from which allowance no appeal has been taken and is now pending, with interest on said claims, and that said executors pay such final dividend and interest on the first day of June, 1881."
On June 1, 1881, the executors paid the petitioner $ 6092.46, being the remaining half of the principal of the claim allowed, and the additional sum of $ 2254.20, being interest at six per cent from January 14, 1878, to the times of payment on $ 12,184.93.
The estate is solvent, and the executors have in hand assets sufficient for the payment of the petitioner's claim, and all other claims proved against the estate.
If the petitioner was entitled to interest in addition to the amount already paid, and if it was competent for the judge of probate to allow the same on the petition now pending, the decree appealed from was to be amended, and judgment entered for the sum of $ 519.62, being interest at seven and a half per cent on $ 12,000 from November 1, 1877, to the times of payment, less the interest already received.
Decree accordingly.
G. Putnam, for the appellee.
A. S. Wheeler & J. H. Young, for the appellant.
Morton C. J.
It is settled in this Commonwealth, that, where a note specifies the rate of interest, the holder is entitled to interest at the rate specified after the maturity of the note and up to the time of the verdict or judgment; after verdict or judgment, our statutes fix the rate of interest at six per cent. Brannon v. Hursell, 112 Mass. 63. Union Institution for Savings v. Boston, 129 Mass. 82.
It follows that, if the estate of Benjamin E. Bates, the maker of the petitioner's note, had been settled in the usual course, it would have been the duty of the executors to pay to the petitioner the balance of the principal due on the note, with interest thereon at the rate specified in the note up to the time of payment. But the estate of Bates was represented insolvent, and commissioners were appointed, who allowed the claim of the petitioner for $ 12,184.93. This amount was reached by allowing $ 12,000, the balance of the principal, and interest computed at seven and a half per cent, the rate fixed by the note, up to the time of the death of Bates. The estate turned out to be solvent, and the executors now have sufficient assets to pay all known claims against it.
The claim of the executor is, that the petitioner is entitled to recover only six per cent interest since the death of Bates, upon the ground that the adjudication of the commissioners conclusively fixed the amount which the petitioner was entitled to recover of the estate, and was in the nature of a judgment, upon which, under our statute, interest is to be allowed at the rate of six per cent. Pub. Sts. c. 171, § 8.
The reason why a judgment stops the running of interest according to the contract is that the contract is merged in the judgment. The note or other contract upon which the judgment is rendered cannot afterwards be sued, because it is extinguished, and a new and higher security substituted for it. Interest on a judgment is recoverable, not as a sum due by the contract of the parties, but as damages; and our law has deemed it wise that such damages should in all cases be estimated at the rate of six per cent on the amount of the judgment. Clark v. Child, 136 Mass. 344.
The statutes provide for the appointment of commissioners to receive and examine the claims of creditors of an estate of a deceased person which the executors represent to be insolvent, and to return a list of claims allowed by them. Pub. Sts. c. 137.
This was intended as a convenient mode of providing for the equal distribution of the assets among creditors, where the estate is insolvent and unable to pay them in full. To this end the commissioners are to return a list of all claims against the estate. If it appear that the assets exceed the debts, the estate is to be settled upon the same principles as if no representation of insolvency had been made. Greenwood v. McGilvray, 120 Mass. 516. Pub. Sts. c. 137, § 22. If the debts exceed the assets, the judge of probate is to make a decree for the distribution of the...
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