Cameron v. Shuttleworth, 5545

• Decision Date: 16 December 1952
• Docket Number: No. 5545,5545
• Citation: 75 Ariz. 61,251 P.2d 659
• Parties: CAMERON et al. v. SHUTTLEWORTH.
• Court: Arizona Supreme Court

Page 659

251 P.2d 659

75 Ariz. 61

CAMERON et al. v. SHUTTLEWORTH.

No. 5545.

Supreme Court of Arizona.

Dec. 16, 1952.

Rehearing Denied Jan. 13, 1953.

Scott & Green, of Phoenix, for appellants.

Rawghlie C. Stanford, Jr., of Phoenix, for appellee.

TULLAR, Superior Court Judge.

Appellants, defendants below, by this proceeding, appeal from a judgment foreclosing a realty mortgage executed by their deceased father. As heirs at law they claim that the property passed to them free of the mortgage.

The facts as found by the trial court and supported by competent evidence are these. Plaintiff, now appellee, was the owner of a mortgage bearing date May 21, 1946, covering Lots 1 and 3 in Block 1 of Homeland Acres, a subdivision in Maricopa County. The mortgage, duly recorded in the office of the Maricopa County Recorder, was security for a promissory note made by one Lance Showalter (father) upon which at the time of judgment there was a balance due, including interest, of $2949.75.

On September 19, 1940, decedent selected and recorded a declaration of homestead on this later mortgaged property. This claim of homestead was never revoked and, in his estate, it was appraised at less than $4000. Upon his death Showalter's estate promptly proceeded to probate. Within sixty days after the first publication of notice to creditors the duly appointed administratrix sent by registered mail, return receipt requested, two notices addressed to appellee, one to 808 West Magnolia Street, and one to P. O. Box 2122, both in Phoenix, Arizona. Neither of these notices reached appellee who was not in Arizona at that time, but both were received by his son who signed the return receipts, 'F. P. Shuttleworth, by Lloyd D. Shuttleworth atty in fact'.

The said notices gave the date of decedent's death, the name and address of the administratrix, the legal description of the property, the date of the declaration of homestead and the place of its recording; and, lastly, advised that the notice was being given pursuant to the provisions of section 38-907, A.C.A.1939, requiring presentation of claims by lien holders.

Appellee was 75 years old at the time of trial. Because he was absent from Arizona for long periods of time he had given his son, Lloyd, general power of attorney to manage and control his affairs and property in Arizona, which consisted chiefly of notes and mortgages, including that here involved. The power of attorney was duly recorded; the son, who was a Phoenix resident and an adult, had, in fact, exercised the powers thereby granted to him.

Appellee did not see the notices received by his son. He did, however, have actual knowledge of Showalter's death and he discussed this note and mortgage with the administratrix. Upon being urged by the administratrix to file his claim before the time for filing creditors' claims expired, appellee stated that he didn't want to do this but wanted the mortgage to run its full time. No claim was ever filed by or for appellee and, upon the expiration of the statutory period allowed for filing claims, the property was duly set over to appellants as a homestead.

Subsequently appellee filed suit to foreclose the mortgage, the case was tried to the court, judgment foreclsing the mortgage was entered, motion for new trial was ordered denied, and this appeal was duly perfected from the judgment and order.

Appellants, by adequate assignments of error, contend that the provisions of section 38-907, supra, apply, this involving a lifetime-declared homestead; and that appellee, having received adequate notice, should have filed a claim with the administratrix if he expected to recover the amount due on the note and mortgage. His failure to so file, they contend, bars appellee's right to foreclose the mortgage or recover the unpaid balance.

Appellee's sole contention is that he was not notified as required by the said statute and, therefore, his rights under the mortgage remained in full force and effect.

The statute is:

'38-907. Setting apart of homestead--Payment of encumbrances thereon.--If the homestead selected and recorded prior to the death of the decedent be returned in the inventory appraised at not exceeding four thousand dollars ($4,000) in value, or was previously appraised as provided by law, and such appraised value did not exceed that sum, the court shall set it off to the persons in whom title is vested by the preceding section. If there be subsisting liens or encumbrances on the homestead, the claims secured thereby must be presented and allowed as other claims against the estate. If the estate be adequate to pay all claims allowed against the estate, the claim so secured must be paid out of such funds; if not sufficient, the claims so secured shall be paid proportionately with other claims, and the liens or encumbrances on the homestead shall only be enforced against the homestead for the deficiency. The executor or administrator shall within sixty (60) days after the first publication of notice to creditors, notify in writing the record holder of any such lien or encumbrance of the death of the testator or intestate, and unless so notified, the rights of the holder of such lien or encumbrance shall not be affected by his failure to present such claim.'

The statute as it came into our Code in 1901, R.S.1901, sec. 1733, did not require notice to the mortgagee. The last sentence of the above-quoted statute was added in 1921, Laws 1921, Ch. 177, sec. 1, p. 435, to conform to a similar amendment made to the parent California statute in 1917, Calif.Code Civ.Proc., Sec. 1475, as amended, Stats. 1917, ch. 564. Numerous California decisions prior to the amendment held without dissent that the mortgage holder must present his claim within the time allowed for that purpose, and failure to do so was a bar to the right to foreclose the mortgage. Camp v. Grider, 62 Cal. 20; Bollinger v. Manning, 79 Cal. 7, 21 P. 375; Votypka v. Valentine, 41 Cal.App. 74, 182 P. 76; Hinkel v. Crowson, 188 Cal. 378, 206 P. 58.

The statute having been taken from California,...