Boyd's Estate v. Thomas, 24372.
| Citation | 202 N.W. 60,162 Minn. 63 |
| Decision Date | 06 February 1925 |
| Docket Number | No. 24372.,24372. |
| Parties | BOYD'S ESTATE v. THOMAS. |
| Court | Supreme Court of Minnesota (US) |
Appeal from District Court, Polk County; William Watts, Judge.
In the matter of the estate of J. M. Boyd, deceased. From an order of the probate court disallowing items in final account of the executor, R. E. Thomas, he appealed to the district court, and from its judgment, affirming the decision of the probate court, the executor appeals. Affirmed.
A. N. Eckstrom, of Warren, and W. E. Rowe, of Crookston, for appellant.
Grady & Fosmark, of Crookston, for respondent.
By his will J. M. Boyd, now deceased, appointed H. L. Wood executor thereof. Among other things, the will in the usual language directed the executor to pay his debts. It directed certain lands to be held by the executor in trust for five years. It further provides:
"It is also my wish that all personal property which I may own at the time of my death and the residence property which I have in the city of Warren, shall be sold by my executor as soon as possible and that the proceeds thereof be applied upon my indebtedness, and the said executor is hereby directed to sell and dispose of said property accordingly."
The will was admitted to probate on January 31, 1919. On February 6, 1919, an order was made limiting time to file claims to 6 months from that date, and fixing August 7, 1919, as the day for hearing on claims. No claims were filed, and hence none were allowed. On July 14, 1919, the executor was licensed to sell the residence in Warren. Report of sale was made September 4, 1919, and the same was confirmed upon that date. The executor resigned October 27, 1923, and on that date filed his final account in which he credited himself with money paid as interest on a mortgage on some of the land, and with payment of claims of creditors as follows, to wit:
1919
Dec. 17. First Nat. Bank paid to apply on
interest ....................... $ 121 15
1920
Nov. 20. First Nat. Bank paid to apply on
interest ....................... 172 18
Claims of Creditors
Lundgreen, Wittensten & Co. ...... 430 31
Warren Machine & Iron Works Co. .. 2,085 15
Peoples Trading Co. .............. 116 79
First Nat. Bank, Warren, Minn. ... 1,485 00
_________
Total ....................... $4,410 58
The deceased left a widow, and also seven children who had reached their majority. The widow filed objections to the allowance of the account in respect to the items aggregating the $4,410.58 on the ground that the executor had no right to pay them because they were not filed with and allowed by the court as provided by statute. The probate court disallowed these items in the account, and the executor appealed to the district court. Upon the trial in the district court the executor's evidence and offers to prove, by which he attempted to show: (1) Payment of the several items; (2) that one of the items was paid, at the special request of the heirs of the estate of J. M. Boyd; (3) that the claims were all provable claims against the estate; (4) that the personal property and the residence were sold and the proceeds used to pay these debts; (5) that decedent at the time of making the will mentioned these creditors as the ones he wished paid; (6) that all the heirs had full knowledge of the payment of these claims and made no objection to payment thereof, were excluded. All this evidence was excluded by the court because the claims had not been filed with and allowed by the probate court. The district court affirmed the probate court, and the executor has appealed to this court.
May an executor pay claims arising on contract against the estate without their having been first allowed by the court and then include them in his final account as a disbursement?
Section 7323, G. S. 1913, specifically provides that all claims arising on contract must be presented to the court for allowance or be forever barred. This statute means just what it says, and a creditor has lost his claim of such character if he does not so present the same to the probate court for allowance. Fitzhugh v. Harrison, 75 Minn. 481, 78 N. W. 95; Gilman v. Maxwell, 79 Minn. 377, 82 N. W. 669; Clark v. Gates, 84 Minn. 381, 87 N. W. 941; Jorgenson v. Larson, 85 Minn. 134, 88 N. W. 439; Security Trust Co. v. Black River Nat. Bank, 187 U. S. 211, 23 S. Ct. 52, 47 L. Ed. 147; Bunnell v. Post, 25 Minn. 376; Winter v. Winter, 101 Wis. 494, 77 N. W. 883; Fields v. Mundy, 106 Wis. 383, 82 N. W. 343, 80 Am. St. Rep. 39; Woerner, Am. Law of Admin. (3d Ed.) vol. 2, § 400. It is not sufficient to present such claims to the administrator or executor. "That, under our probate practice presentation of claims against an estate must be made to the court and not to the administrator, is clear from the fact that the administrator may not pay any claim or receive credit therefor in his account, unless the court, within the time limited by the order referred to, acted thereon." State ex rel. Scherber v. Probate Court, Hennepin Co., 145 Minn. 344, 177 N. W. 354, 11 A. L. R. 242. If an administrator or executor may disregard the noncompliance with the statute and pay claims to which it relates without allowance by the court this mandatory statute would be a nullity. An act of the Legislature could not be plainer than this one, and its construction is easy. It must be obeyed. By section 7322, G. S. 1913, the probate court is authorized to extend the time for cause and receive and allow a claim when presented before final settlement and within 1 year and 6 months after the time when notice of the order was given. Schurmeier v. Ins. Co., 171 F. 1, 96 C. C. A. 107. Opportunity under this statute expired August 7, 1920. Whether a claim must be made against an estate within a limited time does not depend upon the discretion of the court. The probate court fixes the time in the first instance. Between 6 and 18 months the probate court may have power of discretionary action on good cause shown. Having fixed the time at 6 months, as was done in this case, any extension of that time could only be had, upon good cause shown, within the limit of 18 months, which has long since expired. Security Trust Co. v. Black River Nat. Bank, 187 U. S. 211, 23 S. Ct. 52, 47 L. Ed. 147. The representative has no authority to pay an unsecured claim arising out of contracts until it is formally allowed by the court. The statute is not only a rule of law, but it is a rule of property. The representative cannot waive the bar created by statute. He cannot abrogate the statute either in his own interest or in favor of others. The creditor must comply with the statute which is universal in its application to a specified class of creditors. The decedent cannot extend the time by agreement before his death. McDaniel v. Putnam, 100 Kan. 550, 164 P. 1167, L. R. A. 1917E, 1100.
An effort is made to bring this case within the application of the doctrine of Gordon Ad'm, etc., v. McDougall et al., 84 Miss. 715, 37 So. 298, 5 L. R. A. (N. S.) 355, wherein the court holds that, where the will creates a trust for the payment of debts, unproved claims may be paid by the executor without submitting them to the court. In the Gordon Case the court reached its conclusion because of several unusual and peculiar provisions in the will which were construed as significant, but they are not present here. The only thing that the assertion is based on in this case is the direction to pay debts and the fact certain property is directed to be sold for that purpose, and the fact that certain lands are to be held in trust for five years. In fact in Mississippi, when a specified claim is expressly recognized as a debt and charge on the estate, an authorized trust is saddled on the executors to pay it, and it need not be presented to the court. O'Reilly v. McGuiggan et al., 91 Miss. 498, 44 So. 986, 15 Ann. Cas. 623. Whether a trust has been created so as to call for the application of the rule under consideration depends upon the intention of the testator which is to be derived from the will. In the Gordon Case the court took all the provisions of the will, eight in number, into consideration, and concluded that the language evinced a purpose on the part of the testator to create an express trust for the payment of his debts. In Cohn v. McClintock, 107 Miss. 831, 66 So. 217, the same court held that, where a testator provided, "all my just debts * * * by my executors * * * be paid * * * as soon after my death as shall by them be found convenient," and, second, "after payment of my debts by my executors, who are also trustees herein, a one-sixth interest each of my said estate shall be paid over to my said children from the cash on hand, and as soon as the sale of my property is consummated," this did not create a trust for the payment of debts, rendering it unnecessary for a creditor to file his claim with the probate court, since the first clause meant only to direct his executors to pay his debts which they were required to do by law, and the second clause merely directed the payment of debts in preference to the distribution of the estate, and this, too, was the duty of the executors under the law. In this case, as a comparison to the case under consideration, it may be noted that the executors were expressly made trustees to manage, control, sell, and dispose of several plantations. They were authorized to convey. The will contemplated a trust for 10 years. The facts here are more similar to the facts under consideration than are the facts in the Gordon Case, and the conclusion is more persuasive.
In Carrington v. Manning's Heirs, 13 Ala. 611, a testator said: "It is my will" that certain property "be sold, and the proceeds applied to * * * the discharge of my debts." He directed his executors to...
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