Estate of Puddy v. Gillam

• Decision Date: 14 March 1990
• Docket Number: No. CA,CA
• Citation: 785 S.W.2d 254,30 Ark.App. 238
• Parties: The ESTATE OF J.D. PUDDY, Jr., Deceased, Appellant, v. James GILLAM, Appellee. 89-98.
• Court: Arkansas Court of Appeals

Page 254

785 S.W.2d 254

30 Ark.App. 238

The ESTATE OF J.D. PUDDY, Jr., Deceased, Appellant, v. James GILLAM, Appellee.

No. CA 89-98.

Court of Appeals of Arkansas En Banc.

March 14, 1990.

Dan Stripling, Clinton, for appellant.

Robert R. Cortinez, Little Rock, for appellee.

MAYFIELD, Judge.

The administrator of the estate of J.D. Puddy, Jr., filed a petition in the Probate Court of Van Buren County seeking a judgment for the amount alleged to be due the estate by appellee, James Gillam. The appellee filed an answer denying that he was indebted to the estate and denying that a judgment for any amount should be entered against him.

At a hearing on the petition, the administrator presented evidence that at the time of Puddy's death on November 19, 1987, Puddy had in his possession a check for $10,000.00, drawn on the farm account of James Gillam, and signed by James Gillam. Although the check had the notation "Loan" on it, the estate contended that Gillam was actually indebted to Puddy for that amount. Gillam contended that the check was a loan to Puddy.

After the estate introduced its evidence and rested, Gillam moved that the claim be dismissed. The motion was granted on the finding that the estate had not made a prima facie case. The estate has appealed from that ruling, but we are unable to decide the matter on its merits because the probate court had no jurisdiction over the matter presented.

Article 7, § 34, of the Arkansas Constitution, as amended by Amendment 24, provides that courts of probate shall have "such exclusive original jurisdiction in matters relative to the probate of wills, the estates of deceased persons, executors, administrators, guardians, and persons of unsound minds and their estates, as is now rested in courts of probate, or may be hereafter prescribed by law." Statutory jurisdiction, pertinent to this case, is stated in Ark.Code Ann. § 28-1-104 (1987) (formerly Ark.Stat.Ann. § 62-2004(b) (Repl.1971)) as follows:

(a) The probate court shall have jurisdiction over:

(1) The administration, settlement, and distribution of estates of decedents.

In Hilburn v. First State Bank of Springdale, 259 Ark. 569, 535 S.W.2d 810 (1976), the decedent's mother, Jewel Hilburn, filed exceptions to the administrator's inventory on the ground that the real estate listed in the inventory did not belong to the decedent. The administrator then filed a petition asking that it be authorized to sell all the estate's property, and Mrs. Hilburn filed a response again alleging that the real estate sought to be sold belonged to her because the deed to the realty had been obtained from her by fraud and undue influence. The probate court held against Ms. Hilburn, but the Arkansas Supreme Court reversed on the holding that the probate court order was void for lack of jurisdiction. The court first noted that Ms. Hilburn was not an heir, distributee or devisee of her son, or a beneficiary of or claimant against her son's estate, but a "third person" or "stranger to the estate." The court then discussed the jurisdiction of the probate court, saying:

The probate court is a court of special and limited jurisdiction, even though it is a court of superior and general jurisdiction within those limits.... It has only such jurisdiction and powers as are expressly conferred by statute or the constitution, or necessarily incident thereto.

259 Ark. at 572, 535 S.W.2d 810 (citations omitted). The court then stated that "the probate court's lack of jurisdiction to determine contests over property rights and titles between the personal representative and third parties or strangers to the estate has long been recognized." The court also discussed other cases, some of which held or indicated that lack of jurisdiction could be waived. The court in Hilburn concluded, however, that those cases were "aberrations," and said "it is not only the right but the duty of this court to determine whether it has jurisdiction of the subject matter."

The case of Shane v. Dickson, 111 Ark. 353, 163 S.W. 1140 (1914), addressed the issue now before us. In that case, the appellee, as executor of the decedent's last will and testament, instituted an action in circuit court against the husband of the decedent to recover $1,200.00 alleged to be due for money borrowed from the decedent. After a trial, the court determined there was a balance due of $853.69 and rendered judgment in that amount for the appellee. On appeal, the appellant contended that the circuit court was without jurisdiction to determine the case because the probate court had exclusive jurisdiction in matters relative to the probate of wills and the estates of deceased persons, executors and administrators. The Arkansas Supreme Court said:

This contention involves a misconception as to the nature of this action. It is not a matter "relative to the probate of wills, the estate of deceased persons, executors, administrators," etc., but is a suit by the executor to recover a debt due the estate. The probate court has no jurisdiction of contests between an executor or administrator and third parties over property rights or the collection of debts due the estate. Its jurisdiction is confined to the administration of assets which come under its control, and, incidentally, to compel discovery of assets....

The suit was therefore properly brought in the circuit court.

111 Ark. at 357, 163 S.W. 1140 (citations omitted) (emphasis added).

Likewise in the instant case, Gillam is not an heir, distributee, or beneficiary, and was therefore a "third" person or "stranger to the estate." Shane v. Dickson was cited in Ellsworth v. Cornes, 204 Ark. 756, 165 S.W.2d 57 (1942), where the court said:

Aside from this phase of the case, we are convinced that the order of the probate court was void for want of jurisdiction to make it. Throughout its history, this court has held that probate courts are without jurisdiction to hear contests of and determine the title to property between personal representatives of deceased persons and third persons claiming title adversely to the estates of deceased persons.

204 Ark. at 765, 165 S.W.2d 57.

While Shane v. Dickson, supra, was decided prior to the adoption of Amendment 24 to our constitution in 1938, the jurisdiction of the probate court, so far as the issue here is concerned, was the same--"exclusive original jurisdiction in matters relative to the probate of wills, the estates of deceased persons, executors, administrators...." See Complier's Note, Ark. Const. art. 7 § 34, Ark.Stat.Ann. (1947).

In Risor v. Brown, 244 Ark. 663, 426 S.W.2d 810 (1968), involving probate jurisdiction long after the adoption of Amendment 24, the court cited Shane v. Dickson in the following holding:

In the present case, the suit is not a matter "relative to the probate of wills, the estate of deceased persons, executors, administrators, etc.," but is actually a suit by the administratrix seeking contribution from one she alleges to be a distributee and beneficiary (under the provisions of Section 63-150). As pointed out in Shane, the Probate Court's jurisdiction was "confined to the administration of assets which come under its control," i.e., assets which were a part of the estate devised or bequeathed by Mrs. Anderson in her will.

244 Ark. at 666, 426 S.W.2d 810.

In Merrell v. Smith, 226 Ark. 1016, 295 S.W.2d 624 (1956), it was held that the probate court did not have jurisdiction to require specific performance of an agreement the testatrix allegedly made to leave her property to the appellants. The court said while the probate court properly admitted the will to probate, it lacked jurisdiction to decide the issue of specific performance. And in a recent case, Eddleman v. Estate of Farmer, 294 Ark. 8, 740 S.W.2d 141 (1987), a tort claim was filed in probate court against an estate. The probate court ruled that the statute of limitation had run and dismissed the tort action. The Arkansas Supreme Court reversed this ruling because the probate court did not have jurisdiction of the tort case.

It is our conclusion that in the case at bar, the probate court did not have jurisdiction of the suit by the administrator of the estate to collect a debt alleged to be due to the estate by the appellee. Therefore, we reverse the probate court's granting of appellee's motion for directed verdict, or dismissal of claim, on the administrator's suit to recover the alleged debt. The court's ruling was void.

The dissenting opinion agrees that Hilburn, supra, as well as other cases, supports our holding that the probate court lacked subject matter jurisdiction of the petition filed by the administrator in this case. The dissent states, however, that the issue is not "clear" and cites cases which the dissent contends "arguably would support a holding to the contrary."

One case cited is Deal v. Huddleston, 288 Ark. 96, 702 S.W.2d 404 (1986), which held that the probate court had subject matter jurisdiction of a petition filed by the executrix, who was a daughter of the deceased, against her two brothers, who were sons of the deceased. The executrix alleged her brothers had wrongfully taken various articles belonging to the estate, and she asked that they be directed to return this property. The Arkansas Supreme Court cited Snow v. Martensen, 255 Ark. 1049, 505 S.W.2d 20 (1974), and Keenan v. Peevy, 267 Ark. 218, 590 S.W.2d 259 (1979), as authority for its holding that the probate court had jurisdiction of the petition in Deal. The court said it had concluded in Snow v. Martensen "that 'the better rule would be that the probate courts do have jurisdiction to determine the ownership of property ... as between personal representatives claiming for the estates and heirs or beneficiaries claiming adversely to the estates.' " And the court in Deal added that it had in the Keenan v. Peevy case "echoed the statement in Snow."

The Snow v. Martensen case is cited in the dissent to ...