First Sec. & Loan Co. v. Englehart

• Decision Date: 14 May 1919
• Docket Number: 15096.
• Citation: 107 Wash. 86,181 P. 13
• Court: Washington Supreme Court
• Parties: FIRST SECURITY & LOAN CO. v. ENGLEHART.

181 P. 13

107 Wash. 86

FIRST SECURITY & LOAN CO. v. ENGLEHART.

No. 15096.

Supreme Court of Washington

May 14, 1919

Department 1.

Appeal from Superior Court, Yakima County; Harcourt M. Taylor Judge.

Action by the First Security & Loan Company against Gertrude S Englehart, executrix of the last will and testament and trustee of the estate of Ira P. Englehart, deceased. From a portion of the judgment rendered, plaintiff appeals. Affirmed.

Richards & Fontaine, of North Yakima, for appellant.

Rigg &amp Venables, of North Yakima, for respondent.

MITCHELL J.

On June 30, 1916, Ira P. Englehart gave his note for $14,370 to the First National Bank of North Yakima. To secure its payment he deeded to plaintiff, First Security & Loan Company, two pieces of real property, and assigned to it 30 shares of the capital stock of the Klickitat & Simcoe Irrigation Company. A trust agreement in writing was entered into at the same time whereby it was agreed that plaintiff should hold title to the property to protect and secure the indebtedness due the bank. It gave plaintiff the right to sell the property at such price as it deemed advisable at any time the bank considered it necessary. It provided that, if the proceeds of sales of the property were not sufficient to pay the debt, Englehart was obligated to pay the balance. Englehart died on December 8, 1916, leaving a nonitervention will by which he devised all his property to his wife, Gertrude S., and their two children. The will was admitted to probate by the superior court of Yakima county on December 12, 1916, and Gertrude S. Englehart, nominated therein as executrix, was duly appointed and on the same day qualified as executrix. On December 15, 1916, for the purpose of making proof of the solvency of the estate, the attorney for the executrix requested and received from the bank a statement of the Englehart indebtedness. The statement was not verified. No other statement of the claim was ever presented to the executrix or her attorney. Pursuant to an order of the superior court she gave due and proper notice to creditors, the first publication of which was on December 18, 1916. In January, 1917, a part of the property held in trust was sold, with the written consent of the executrix, and the proceeds applied on the note. Thereafter, on February 23, 1917, May 25, 1917, August 10, 1917, and November 7, 1917, the executrix made payments on the note at the bank and was at all times familiar with its face value.

Aftter December 18, 1917, the time within which creditors were allowed to present their claims having expired, the bank was notified that because of its failure to present a duly verified claim the estate would not be responsible for any amount, and that it must look only to the property held in trust to secure the payment of the note. Thereupon the bank assigned its rights and transferred the note to plaintiff, which brought this action demanding judgment against the executrix as such for the amount due on the note; that the trust property remaining on hand be sold and the proceeds applied on the amount found due; and that the deficiency, if any, be declared a just and valid claim against the estate. Upon a trial the court made findings and conclusions, and entered judgment favorable to plaintiff, except that it was not entitled to have the amount due on the note allowed as a claim against the estate, but that it must look solely to the security held by it for the satisfaction of the debt.

Plaintiff has appealed from that portion of the judgment denying it a judgment against the estate, or the defendant as executrix thereof, other than the right to have the trust property sold and the proceeds applied to the payment of the debt.

Appellant states the appeal presents only two questions:

'First. Was it necessary under the existing status of our probate law to present the claim to the executrix, who was administering the estate under a nonintervention will? Second. If presentation was required, what was necessary to constitute such a presentation as would establish the debt as a valid claim against the estate?'

As to the first proposition, it will be observed that the Probate Code of 1917 became effective about the middle of the year within which creditors were notified to present their claims in this estate. Insisting there is a difference in the 1917 law as compared with the law prior thereto, with respect to the matter of the presentation of claims where the estate is being administered under a nonintervention will, appellant contends the later law controls in this case. The difference between the pertinent portions of the old and of the new statute concerning nonintervention wills is that, whereas the prior law (Session Laws of 1897, § 1, p. 285, same being section 1444, Rem. Code) provides:

'* * * That in all such cases the claims against such estates shall be paid within one year from the date of the first publication of notice to creditors to present their claims, unless such time be extended by the court, for good cause shown, for a reasonable time. * * *'

--the present law (Probate Code of 1917, § 92; c. 156, p. 666, Laws of 1917) provides:

'* * * It shall not be necessary to take out letters testamentary or of administration, except to admit the will to probate and to file a true inventory of all the property of such estate and give notice to creditors and to the state board or person having charge of the collection of inheritance tax, in the manner required by existing laws.'

This court, in the case of Foley v. McDonnell, 48 Wash. 272, 93 P. 321, upon quoting the provisions of the nonintervention will statute of 1897 with reference to notice to creditors to present claims, and the statute requiring creditors to present their claims, said:

'These two provisions last above quoted seem to make it clear that, in cases of nonintervention wills, creditors shall present their claims within one year of the publication of notice, and failure so to do bars such claim the same as in other classes of wills. It is true this court held otherwise in Moore v. Kirkman, 19 Wash. 605, 54 P. 24, and possibly in other cases. But these cases arose under the statute before 1897, when the amendments above quoted were made to the statute in force at that time. Under the present statute, we are of the opinion that it is the duty of the executor, under wills like the one in question, to publish a notice to creditors, and failure of the creditors to file a claim within the year bars such claim.'-

Discussing the probate law of 1917, counsel for appellant notices that subdivision 13 of it is devoted to 'Settlement of Estates Without Administration,' con...