Church v. Quiner

• Decision Date: 21 April 1924
• Docket Number: 1101
• Parties: CHURCH v. QUINER, EX'R
• Court: Wyoming Supreme Court

224 P. 1073

31 Wyo. 222

CHURCH v. QUINER, EX'R

No. 1101

Supreme Court of Wyoming

April 21, 1924

ERROR to District Court, Washakie County; PERCY W. METZ, Judge.

Petition in probate court by James A. Quiner, Executor of the estate of Henry T. Church, deceased, for approval of his final report and for distribution, to which Nellie E. Church interposed objections. From an order overruling her objections she brings error.

Order modified.

Brome &amp Hyde and Ingle & Demel, for plaintiff in error.

The facts in this case are undisputed and the law applicable thereto, seems clear; there was no authority on the part of the executor to make payments until the decree of distribution had been entered; the executor did not have notice of the assignment to Nellie E. Church, dated April 12 1919, until December 5th, of that year. The bank is not a bona fide purchaser for value; the only consideration for that assignment was an agreement to pay a pre-existing debt from which assignor had been discharged in bankruptcy; the executor had no authority to pay anybody. Where several conflicting equitable assignments have been made, the order of assignment determines the order of priority, but where a subsequent assignee has acquired the legal title for a valuable consideration without notice of a prior equitable assignment, he is usually protected, and as between several bona fide purchasers for value, that one is entitled to preference, who first perfects his assignment by notice to the debtor, 2 R. C. L. 627, 5 C. J. 956; an assignment in consideration of a pre-existing debt is not entitled to priority although taken without notice of prior assignment; The Elmbank, 72 F. 610; the judgment should be reversed.

C. A Zaring and R. B. West for defendant in error.

The assignment to the Manderson State Bank should have priority Lambert v. Morgan, 110 Md. 1; under the facts in this case the rule is supported by the greater number of authorities, Dearle v. Hall, (Eng.) 3 Russ. 1; Clark v. Kimball, (Can.) 4 B. C. 503; Lacledee Bank v. Schuyler, (U. S.) 120 U.S. 511; Graham P. Co. v. Pembroke, (Cal.) 56 P. 627; Nat'l Bank of Rep. v. Co., (D. C.) 17 App. Cases 124; Iowa Bank v. Hewitt, 3 Ia. 102; Lambert v. Morgan, 110 Md. 1, 17 Ann. Cas. 439; Lbr. Co. v. Necomb, (Miss.) 30 So. 608; Houser v. Richardson, 90 Mo. 134; Gamble v. Carlisle, 6th Ohio Dec. 48; Jack v. Bank, (Okla.) 89 P. 219; In re Philips, 205 Pa. 525; Pom. Equi. Juris., Sec. 695, Vol. 2, 2 R. C. L. 627; both assignments were for pre-existing debts; a pre-existing debt is a valuable consideration; the bank did not attend the creditor's meeting in bankruptcy, nor prosecute their claim there, by reason of the assignment; this constitutes a good consideration, 6 R. C. L. 658, 4 Elliott, Con. 620, 13 C. J. 315; 7 C. J. 412; payment without an order of distribution is not illegal, Griffen v. Warburton, 62 P. 765; Methven v. Co. 66 F. 113; the executor's promise to pay the bank was enforceable by suit, 5 C. J. 937; a question as to the jurisdiction of the probate court having been suggested during the argument defendant in error submits the following authorities on that point, Art. V, Sec. 10, Wyo. Const.; Estate of Davis, (Wyo.) 69 P. 412; this action is based on 6974 C. S., a Probate Section et seq. Equitable questions are not within probate jurisdiction; in the Howe case distribution was made subject to a judgment lien and the claims of an assignee of an heir, Howe Estate, 118 P. 515; it is distinguishable from the case at Bar, Martinovich v. Marsicano, 70 P. 459; distribution is a special proceeding within probate jurisdiction, Smith v. Wester-field, 88 Cal. 374, 26 P. 206; Estate of Burton, 93 Cal. 459, 29 P. 36; Estate of Joseph, 118 Cal. 660, 50 P. 768; Estate of Blythe, 110 Cal. 226, 42 P. 641; the probate court had power to determine to whom distribution should be made, Church v. McMillian, 72 Wash. 502; Estate of Davis, 71 P. 757; the question here was within the probate jurisdiction, 6974-6988 C. S., Rice v. Tilton, 14 Wyo. 109; 24 C. J. 490; Ann. Cas. 1913B, 84; May v. McCracken, 92 N.E. 355.

Brome & Hyde and Ingle & Demel in reply.

The decree of distribution is conclusive as to the interests of assignees, Hopkins v. White, 128 P. 780; the assigns are interested parties brought in by notice, In re Rankins' Estate, 127 P. 1034; Conroy's Estate, 93 P. 205; In re Howe's Estate supra might lead to a contrary opinion, see Springenberg v. Springenberg, 126 P. 382; Dunn v. Wallingford, 155 P. 351, 426 C. S.; Probate courts in the settlement of estates have the power of a court of equity to determine conflicting interest of heirs and others in appropriate proceedings, Henry's Estate, 86 P. 842, Yoells Estate 129 P. 1005; Davis Estate, 71 P. 757; Washington has a more limited probate jurisdiction, Decker's Estate, 177 P. 718; Blackinton's Estate, 158 P. 492; the question turns upon the effect of the statute, 18 Cyc. 654; the question was not raised by respondent in either court; he brought plaintiff in error in, and compelled her to litigate the matter; he had notice of both assignments and of the fact that the assignment of plaintiff in error was first in time; he should be required to pay her.

KIMBALL, Justice. POTTER, Ch. J., and BLUME, J., concur.

OPINION

KIMBALL, Justice.

Henry T. Church died testate April 11, 1919. Almon J. Church, son of the decedent and one of the residuary legatees named in the will, made two conflicting written assignments of his interest in the estate. One bears date April 12, 1919, and purports to assign all his interest in the estate to his wife, the plaintiff in error. The other bears date April 19, 1919, and purports to assign a part of the same interest to the Manderson State Bank. Neither assignment contains any reference to the other. On June 14, 1919, the defendant in error was appointed executor of the will. On June 16, 1919, the assignment to the bank was presented to the executor who endorsed thereon a purported acceptance and promise to pay it. On or about December 6, 1919, the assignment to the plaintiff in error was presented to the executor. Thereafter the executor paid out of the funds of the estate the amount called for by the assignment to the bank, and in his final report asked credit for that amount as a charge against the distributive share of the legatee. After the filing of this report, which was accompanied by a petition for distribution of the estate, the plaintiff in error, as assignee of all the interest of said legatee, filed objections to the report, claiming that the assignment to her was prior and superior to the one to the bank, and that she was therefore entitled to said legatee's share undiminished by the payments to the bank. At the hearing of the objections the executor (defendant in error) acted as plaintiff asserting the priority of the assignment to the bank, and the objecting assignee (plaintiff in error) acted as defendant asserting the priority of the assignment to herself. Evidence was submitted by both these parties. The bank was not a party to the proceeding and made no appearance therein, though some of its officers testified as witnesses for the executor. At the conclusion of the hearing the court made an order overruling the objections, and the proceeding in error is for review of that part of the order finding and adjudging that the assignment to the plaintiff in error was inferior to the assignment to the bank, and allowing the executor to take credit for the amount paid the bank.

After the case was taken under advisement in this court we came to doubt whether the district court sitting in probate had jurisdiction to decide the point in issue. No such question had been raised by either party in the district court or here, and we therefore thought it advisable to give counsel an opportunity to present briefs on the point. We did this, and in both briefs filed in response to our suggestion it is contended that the district court had jurisdiction. Needless to say, in these circumstances, we would be happy to overlook the question of jurisdiction or to decide it in accordance with the views of counsel, if we could do so without setting what would seem to us to be a bad precedent in the probate practice. After a somewhat painstaking investigation we are driven to the conclusion that the probate jurisdiction of the district court does not include the power to determine the priority of conflicting assignments of a legatee's interest in the estate.

While in this state the district court is the court of general jurisdiction, and the same court has by the constitution (§ 10, Art. 5) jurisdiction "of all matters of probate," yet, in the exercise of its probate powers, its jurisdiction is limited and special, and when its acts in probate are without the limits of the special jurisdiction conferred, they have no binding effect "even upon those who have invoked its authority." In re Black's Estate (Wyo.), 30 Wyo. 55, 216 P. 1059, 1063. Where, as in Wyoming, the same court that has jurisdiction in probate has also general jurisdiction, the separation of its powers exercised in probate from those exercised in actions at law or in equity might at first seem the result of a merely technical rule of no practical importance; but when it is borne in mind that the court in probate having jurisdiction of the estate can for many purposes acquire jurisdiction of the persons interested in the estate without any actual notice to them, the substantial nature of the distinction, as well as the importance of maintaining it in practice, becomes clear. We deem it unnecessary to refer to other reasons for confining the probate jurisdiction to "matters of probate," as defined by law.

It is laid down as a general principle that probate c...