Denver Joint Stock Land Bank of Denver v. Preston

• Decision Date: 27 July 1937
• Docket Number: 2020
• Citation: 52 Wyo. 132,70 P.2d 584
• Parties: DENVER JOINT STOCK LAND BANK OF DENVER v. PRESTON
• Court: Wyoming Supreme Court

70 P.2d 584

52 Wyo. 132

DENVER JOINT STOCK LAND BANK OF DENVER v. PRESTON

No. 2020

Supreme Court of Wyoming

July 27, 1937

APPEAL from the District Court of Goshen County; SAM M. THOMPSON Judge.

Action by the Denver Joint Stock Land Bank of Denver against Lola Preston, as administratrix of the estate of Archie B Preston, deceased, and Lola Preston, as an individual. Judgment for plaintiff, and defendants appeal.

Affirmed.

For the defendants and appellants, there was a brief and oral argument by Edward T. Lazear of Cheyenne.

No suit can be filed against an administrator, unless a claim is first presented and filed in the Estate. Section 88-3109, R S. After plaintiff filed its claim against the administrator, it submitted itself to the jurisdiction of the probate court and was unauthorized to foreclose under the power of sale. Sec. 88-3113, R. S. The following sections are also pertinent. Secs. 88-2801, 2802 and 3243. The filing of a claim with the administrator was virtually the "commencement of an action." Sec. 71-206, R. S. We also rely upon the following authorities: 3 Bancroft Pro. Pr. 896; O'Keefe v. Foster, 5 Wyo. 354; 1 Wiltsie on Mortgage Foreclosure, 3d Ed. 349; Nesbit v. McDonald (Cal.) 263 P. 108; Giles v. Reed (Cal.) 186 P. 615; Moore v. Russell (Cal.) 65 P. 625; Bernard v. Benson (Wash.) 108 P. 439; Berry v. Scott (Ida.) 255 P. 306; Bank of Los Angeles v. Evanson (Cal.) 25 P.2d 538; Barnhart v. Edwards (Cal.) 44 P. 160; Denton v. Maple (Wash.) 158 P. 1001; Devereaux Mortgage Co. v. Huggins (Ida.) 266 P. 422; 24 C. J. 276; Harwood v. Scott (Mont.) 186 P. 695; Bank v. Glenn (Ida.) 77 P. 627; Seminary v. Arnett (S. C.) 167 S.E. 465; Bank v. Curtis (Cal.) 67 P. 330. A foreclosure by advertisement cannot be had if a suit or proceeding has been instituted. Sec. 71-206, W. R. S. 1931; Clifton v. Mueser (Kan.) 100 P. 646; 14 Dec. Dig. (2d) 1525. It is clear from the authorities cited that a mortgagee holding a mortgage on the property of one who has died must either do one of two things, namely (1) he has the right to foreclose, and in such case he loses his right to a deficiency, and (2) he can file a claim with the executor on his secured notes, and after rejection he can file a suit against the estate for the full amount of the note. But he cannot avail himself of both remedies at one and the same time. We think that defendants' motion for judgment on the pleadings should have been granted.

For the plaintiff and respondent, there was a brief by Reid and More of Torrington, and oral argument by Mr. More.

The claim filed and rejected was on two notes. The claim sued on was on the same two notes. Both claims were based on the same contract. Nesbit v. MacDonald (Cal.) 263 P. 1008; Ross Probate Law and Practice, Section 345, p. 554; Harwood v. Scott (Mont.) 186 P. 695; 24 C. J. 353; Carter v. Smith, 7 A. 575; Smith v. Wilson, 81 A. 851. Had plaintiff foreclosed, without first filing its claim, it would have thereby waived all right to file a claim against the estate. Sec. 88-3109, R. S. does not nullify the right to foreclose a mortgage by advertisement. The filing of a claim against an estate is not the "commencement of an action." The Probate Court was vested with power to decide the claims filed. Clifton v. Clifton, 100 P. 446. Proceedings on the probate side are distinct from those on the civil side of the court. Church v. Quiner, 224 P. 1073; Sec. 89-416, R. S. 1931. Authorities cited by appellant are very general in their nature and not in point. The case of O'Keefe v. Foster, 5 Wyo. 343 merely goes to the point that a mortgage may be foreclosed after presentation of the claim and recourse had to the estate for any deficiency. The case of Clifton v. Meuser is based on a statute.

BLUME, Chief Justice. RINER and KIMBALL, JJ., Concur.

OPINION

BLUME, Chief Justice.

On February 24, 1924, Archie B. Preston and Lola Preston, husband and wife, executed and delivered to the plaintiff, then known as First Joint Stock Land Bank of Cheyenne, two promissory notes in writing, one for $ 5,000 and one for $ 3,000, payable in installments upon an amortization plan. Power was given to declare the whole sum to be due upon default. Certain payments were made, but the installments maturing on April 1, 1932, and thereafter, were not paid, and plaintiff declared the whole debt to be immediately due and payable. The notes were secured by a mortgage, or deed of trust, on the S 1/2 SE 1/4 and S 1/2 SW 1/4 of Section 5; S 1/2 SE 1/4, SE 1/4 SW 1/4 and Lot 7 of Section 6; Lot 1, NE 1/4 NW 1/4, SE 1/4 NW 1/4, NE 1/4 SW 1/4 and N 1/2 NE 1/4 of Section 7, N 1/2 NW 1/4 of Section 8; Township 19 N., Range 63 W. of the 6th P. M., situated in Goshen County, Wyoming. On April 20, 1934, Archie B. Preston, one of the makers of the notes and mortgage above mentioned, died, a resident of Goshen County, Wyoming. On May 7, 1934, letters of administration of the estate of the decedent were duly issued to Lola Preston. She gave due notice to creditors, requiring claims against the estate to be filed within ten months thereafter. Within that period of time plaintiff duly filed its secured claim against the estate, claiming due thereon the sum of $ 7,618.54. The claim was rejected by the administratrix on March 13, 1935, and she caused notice thereof to be given to plaintiff on March 15, 1935. On April 11, 1935, plaintiff commenced to foreclose the mortgage or trust deed hereinafter mentioned by publication. Due notice was given. The amount then claimed to be due was $ 8,150.55. Sale of the premises was duly had pursuant to the publication, and plaintiff bid the sum of $ 7,200, deducting expenses and applying $ 7,137.98 upon the mortgage, leaving due a deficiency of $ 1,055.02. This action was brought for the purpose of recovering the last mentioned amount, with interest thereon. The action was commenced on June 7, 1935, within the time required by law. The plaintiff, in substance, alleged the facts above mentioned. It did not allege that the mortgage or trust deed above mentioned contained a power of sale, and that the sale was had in accordance with such power, and pursuant to the statute in such cases made and provided. The point, however, is not controverted. The case has been argued upon the theory that such power existed, and had been given by the mortgagors. A demurrer was filed to the petition on the ground that it did not state facts sufficient to constitute a cause of action. That was overruled. An answer was thereupon filed. On August 6, 1936, the defendants filed a motion for judgment on the pleadings, for the reason that the petition of plaintiff does not state facts sufficient to constitute a cause of action. The motion was overruled, and the defendants refusing to plead further, judgment was entered in favor of the plaintiff in accordance with the prayer of its petition. From that judgment an appeal has been taken to this court.

Section 88-3103, Rev. St. 1931, provides that: "All claims whether the same be due or not due or contingent, must be filed or exhibited within the time limited in the notice and any claim not so filed or exhibited is barred forever." Section 88-3109 provides: "No holder of any claim against an estate shall maintain any action thereon unless the claim is first presented to the executor or administrator, except in the following cases: An action may be brought by any holder of a mortgage or lien to enforce the same against the property of the estate subject thereto, where all recourse against the property of the estate is expressly waived in the complaint." Other sections of the probate code provide for the sale of real estate in case the personal property is not sufficient to pay the debts of the estate, and authorize interested parties to apply for such a sale Section 88-3243 provides that when a sale is made by an executor or administrator of lands subject to a mortgage or lien, the mortgage or lien must first be satisfied out of the proceeds of the sale, and that the mortgage or lien will continue to exist until such application of payment has been made.

1. Before proceeding to note the specific contentions made by the appellants herein, it may be well to state that, under statutes like or similar to ours, the authorities seem to hold that a mortgagee may, upon the death of a mortgagor, pursue one of the following courses:

(A) He may, under Section 88-3109, supra, disregard the provisions in reference to filing a claim with the representative of decedent's estate and proceed to foreclose his mortgage by an action in a court of equity, provided that he waives all recourse against the general assets of the estate. 24 C. J. 333; Bancroft's Probate Practice, Sec. 791, 793.

(B) He may present his claim in accordance with Section 88-3103, R S. Wyo. 1931. If it is allowed, nothing further need be done at that time. In case it is disallowed, it must of course be established by proper action within the time allowed by law. Rogovin v. Kridel, 116 N.J.L. 97, 182 A. 828. He need not, in that action, ask the foreclosure of the mortgage, unless, perchance, the statute requires that an action on the claim must be pursued in the same action as the foreclosure of the mortgage. See Berry v. Scott, 43 Idaho 789, 255 P. 305; contra, Rogovin v. Kridel, supra. He may wait and have the property sold by the representative of the estate and have the mortgage paid as a prior claim out of the proceeds of the sale in accordance with Section 88-3243, supra. Visalia Savings Bank, v. Curtis, 135 Cal. 350, 67 P. 329. After the application of the proceeds of the sale of encumbered property to the secured debt the remainder, if any, unpaid thereon constitutes a claim against the general assets of the estate. Federal Land Bank v. Tarter (...