Converse v. Nichols

• Decision Date: 22 May 1909
• Citation: 89 N.E. 135,202 Mass. 270
• Parties: CONVERSE v. NICHOLS et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

202 Mass. 270

89 N.E. 135

CONVERSE v. NICHOLS et al.

Supreme Judicial Court of Massachusetts, Essex.

May 22, 1909

COUNSEL

Benj. D. Hyde, Bancroft G. Davis, C. A. Severance, and Elmer P. Howe, for plaintiff.

John J Ryan, F. H. Pearl, and B. B. Jones, for defendants.

OPINION

HAMMOND J.

This is a bill in equity, brought by the receiver of a Minnesota corporation under the provisions of Rev. Laws, c. 141, §§ 26-28, inclusive, against the heirs at law of John B Nichols, late of Haverhill, in the county of Essex, deceased, and the legatees under the will of his widow, to enforce his personal liability as a stockholder of that corporation for its indebtedness. The case was heard in the superior court for a final decree upon the bill, answer, replication and an agreed statement of the evidence, and the law of Minnesota, as shown by printed copies of the statutes and the printed reports of its Supreme Court. No question of pleading was raised. The court reserved and reported the evidence and all questions of law for the consideration of this court, 'such decree to be entered thereon as equity may require.'

Two assessments were made, the first on December 22, 1902, and the second on June 11, 1907. Inasmuch as the first was made before the death of John B. Nichols, the stockholder, it is barred by the statute of limitations, and no action to recover the amount thereof can be maintained against either the administrator or the heirs. Rev. Laws, c. 141, §§ 9, 27.

The second assessment, however, was made after the death of Nichols (which occurred on the 1st day of March, 1903), and after April 26, 1905, when his estate had been fully administered; and the main question is with reference to this assessment.

'By the policy and provisions of our laws, the remedy of a creditor upon the heirs and devisees of a deceased person is extremely limited. Every demand which can be made and enforced against the estate of a deceased person is to be pursued against the administrator where it can be done, and the whole estate, personal and real, is in effect made assets in his hands to meet such claims.' Shaw, C.J., in Hall v. Bumstead, 20 Pick. 2, 6. The remedy is that provided by the statute and none other.

The statute upon which the plaintiff relies is Rev. Laws, c. 141, §§ 26-28. These sections in substance provide that under certain conditions therein fully set forth a creditor of the estate of the deceased may recover his claim against the heirs or legatees, but this right to recover does not extend to a claim which comes within the provisions of section 13 of the same chapter. This last-named section, so far as material, runs as follows: 'A creditor of the deceased, whose right of action does not accrue within two years after the giving of the administration bond, may present his claim to the probate court at any time before the estate is fully administered; and if upon examination thereof, the court finds that such claim is or may become justly due from the estate, it shall order the executor or administrator to retain in his hands sufficient assets to satisfy the same. But if a person interested in the estate offers to give bond to the alleged creditor with sufficient surety or sureties for the payment of his claim if it is proved to be due, the court may order such bond to be taken, instead of requiring assets to be retained as aforesaid.'

In discussing the scope of this section we assume, without deciding, in favor of the plaintiff, that his right of action did not accrue within two years after the giving of the administration bond (an assumption without which the plaintiff cannot get on at all); and the question is whether on that assumption it appears that his claim could legally have been presented to the probate court under this section. If it could, then this action cannot be maintained. Sections 26, 27; Pratt v. Lamson, 128 Mass. 528, and cases cited.

The history of the legislation leading up to this section is reviewed to some extent in Bassett v. Drew, 176 Mass. 141, 57 N.E. 384, and need not be repeated here. As originally framed it applied only to cases where at the time of the presentation of the petition to the probate court the claim, though not payable, was justly due; and such was its form for many years. Rev. St. 1836, c. 66, § 5; Gen. St. 1860, c. 97, § 8. And consequently it was held in Ames v. Ames, 128 Mass. 277, that if the existence of the claim depended upon a future contingency it was not a debt within the statute. In that case Morton, J., in giving the opinion of the court (page 278), said: 'To bring himself within this provision, a person must show that he is a creditor of the deceased, * * * and that he has, at the time of his petition, a claim which is 'justly due from the estate.' It is not enough to show that the deceased has entered into a contract with him under which a liability may or may not arise in the future.' And again (page 279): 'The provisions of [the statute] are confined to cases of creditors who have debts due from the estate, either payable presently or in the future. They do not extend to cases where the deceased has entered into a contract which may possibly result in a debt at some future time, but upon which there is no existing debt at the time of the application to the judge of probate. * * * Nothing has become due under this contract. It is entirely uncertain whether or not anything will ever become due. The existence of any demand or debt depends upon a contingency.'

But by St. 1879, p. 454, c. 71, the statute, as it then stood (Gen. St. 1860, c. 97, § 8), was amended by inserting the words 'or may become,' so that it read substantially as it now stands in Rev. Laws, c. 141, § 13. It is easy to see that this amendment has made a radical change in the statutes, but it is not so easy to see how radical the change is, or by a formula to prescribe in advance the exact limits of the change.

In Bullard v. Moor, 158 Mass. 418, 33 N.E. 928, it was said by Holmes, J., that the statute must be construed reasonably, and that it could not have been intended to enable any one who has an outstanding contract made by a deceased person to suspend the settlement of the estate indefinitely without regard to the probability of anything ever becoming due upon the contract; and it was held accordingly that where the holder of a contract of indemnity had no notice of any valid claim against which he was to be indemnified until after the estate of the indemnitor had been fully administered he was not obliged to apply to the probate court for a retention of assets, but could proceed immediately against the heirs.

In Peabody v. Allen, 194 Mass. 345, 80 N.E. 582, this particular feature of the statute was carefully considered. In that case it appeared that the plaintiff and the defendant had bought certain real estate under an agreement to share equally the profits and losses. The purchase money was all advanced by the petitioner. The estate was sold at a loss. Between the purchase...