Frank v. Wareheim

• Decision Date: 28 June 1939
• Docket Number: 34.
• Citation: 7 A.2d 186,177 Md. 43
• Parties: FRANK et al. v. WAREHEIM.
• Court: Maryland Court of Appeals

7 A.2d 186

177 Md. 43

FRANK et al. v. WAREHEIM.

No. 34.

Court of Appeals of Maryland

June 28, 1939

Appeal from Orphans' Court, Carroll County; J. Webster Ebaugh Lewis E. Green, and E. Lee Erb, Judges.

Proceeding in the matter of the estate of Amelia Snyder, deceased wherein Carroll G. Wareheim, executor, obtained an order authorizing settlement of a claim and filed a final account and Edwin Frank and another filed a petition to set aside the order authorizing settlement of the claim and filed objections to the account. From an order refusing to annul the approval of the settlement of the claim and approving the account of the executor, the petitioners and exceptants appeal.

Affirmed in part and reversed in part and remanded with directions.

OFFUTT J., BOND, C.J., and SHEHAN, J., dissenting in part.

George N. Fringer and Donald C. Sponseller, both of Westminster, for appellants.

D. Eugene Walsh, of Westminster, for appellee.

Argued before BOND, C.J., and OFFUTT, PARKE, MITCHELL, SHEHAN, JOHNSON, and DELAPLAINE, JJ.

PARKE Judge.

The record on this appeal is meagre. The questions arise on the administration of the estate of the testatrix, Amelia Snyder, by her executor, Carroll G. Wareheim. The will is not set forth, but sufficient facts are given to show that, after a conversion of all her real and personal property, the net proceeds were given in equal shares to her five nieces and nephews, Edwin Frank, Lydia Heindel, Amelia A. Bailey, Cora Heindel and John Frank. After stating a first account and making no distribution but retaining the residue in his hands for a further accounting, the executor completed his conversions and collections, and then stated his second and final account in which he distributed the residue of the estate among the five legatees, who were entitled to equal shares.

Cora Heindel, one of the legatees, filed a claim against the estate of the testatrix for personal services rendered her in the sum of $3,150. The Orphans' Court duly approved and passed the account by its ex parte order. Although the executor believed the estate was justly indebted to the claimant, he considered the amount of the account was excessive. Accordingly, he gave the claimant a written notice that the payment of this claim would be refused. After nine months from the time of the giving of the notice had passed and the claimant had not brought suit to recover her claim, the executor reported to the Orphans' Court that the claimant had agreed to accept the sum of $1,000 in full settlement of her claim. The executor represented to the Court that this was a fair and reasonable adjustment of the claim; and that he had no knowledge of any other unpaid debt of the estate. He further stated that he had ample funds in hand to pay this amount, and prayed the Court to pass an order to authorize him to compromise the claim by the payment of the agreed amount. The Court authorized and directed the settlement to be so made by the executor, and the money was paid.

Edwin Frank and Lydia Heindel, two of the five equal residuary legatees, later moved that the ex parte order of the Orphans' Court which sanctioned and directed this agreement be set aside and annulled on the ground that the claim was barred by the failure of the claimant to bring an action on the claim within the period of nine months from the time of the written notice of its rejection.

Before any action was had on this motion, the executor stated his second and final account in the Orphans' Court and claimed an allowance for the $1,000 paid to Cora Heindel in accordance with the authority given. In this administration account, the executor brought in as part of the assets of the estate eleven notes which were severally given by the five residuary legatees to the testatrix; and one which the testatrix had paid as surety for the legatee, Cora Heindel, and a certain Emanuel Heindel. The principal and interest of these twelve notes, which aggregated $8,463.78, was first charged as part of the assets. After the deduction of the costs and expenses, commissions and collateral inheritance tax, the residue was divided equally, and the respective notes of the several legatees credited as part of the whole share received. The two exceptants, Edwin Frank and Lydia Heindel, also objected to the inclusion in the account of the notes, and of the interest due thereon, as part of the estate, and to the allowance of commissions on these charges for the benefit of the executor. The grounds of the objections were that the executor had not collected or been paid anything, and, therefore, could neither charge as corpus any part of these uncollected and stale notes, and retain their respective amounts from the several shares of the distributees; and, further, that commissions could not be allowed on the basis of the inclusion in the estate of the principal and interest of the notes. These questions were all considered together in connection with the approval of the second and final account as stated and presented by the executor. After testimony before the Orphans' Court and a hearing, the Court declined to annul its authorization and approval of the settlement of the claim of Cora Heindel for services to the decedent; and approved the account with reference to the disputed notes and to the basis for the computation of the commissions to the executor.

I. The exceptants rely upon the terms of section 110 of Article 93 of the Code of Public General Laws in support of their position that the executor can not be allowed the $1,000 paid to Cora Heindel in settlement of her claim against the estate. The section cited provides that if a claim shall be asserted against or exhibited to the executor or administrator in any form, whether sworn to or passed by the Orphans' Court, and he shall refuse payment thereof in writing, such claim shall be forever barred unless the creditor shall bring suit upon the same within nine months after such rejection. This language of the statute has been held to be a statutory bar, and not a statute of limitations which may be waived. Bogart v. Willis, 158 Md. 393, 406, 148 A. 585; Baker v. Cooper, 166 Md. 1, 15, 16, 170 A. 556; Davis v. Winter, 172 Md. 341, 191 A. 902.

The use of the term 'waived' is not intended to express the meaning that the executor or administrator may not later bind the estate to a payment of the claim either in whole or in part. In the appeal of Bogart v. Willis, supra, an illustration is afforded of the accuracy of this statement. In that opinion the decision points out that the statute is not the usual statute of limitations whose operation as a bar to the remedy may be variously obviated or abandoned, but a statutory bar which prevents the collection of the claim, unless the creditor shall bring suit on the claim within nine months of its rejection. 158 Md. at page 406, 148 A. 585. In that case a notice of rejection had been given which the court accepted, for the purposes of the decision, as a full compliance with the requirements of the statute. The creditor did not bring an action on the claim within the statutory period of nine months, but the court held the bar of the statute did not apply because, after the notice of rejection, the executors admitted to the creditor the obligation of the estate to pay the claim. While this admission was subsequent to the rejection of the claim, but before the expiration of the full period of nine months, action was not brought on the claim until after the expiration of the period of nine months. Thus the letter of the law was fulfilled to make the bar of the statute effective. The court held, however, that the subsequent admission by the executor of the creditor's claim had the effect of rescinding the notice given. The words of the court are: 'Any other construction would permit a defendant to play fast and loose, and claim the benefits of the statute while at the same time leading the plaintiff to believe that he proposed to pay the claim.' 158 Md. at pages 406, 407, 148 A. at page 590. Thus the court held and established the construction that the meaning of the language of the statute is not to preclude the operation of other principles of law. In Bogart v. Willis, supra, the fundamental basis of the ruling is the undertaking by the executors to pay to the extent of the assets available for the purpose a debt of the testator to the creditor. The contract was implied from the acts of the executors under the facts and circumstances, and the consideration for the promise of the executors was the claim of the creditor and the obligation of the executors to use the assets in their hands for the benefit of the creditor.

So, in the record now before the Court, an analogous case exists. No action was brought within the prescribed nine months, but the testimony tends to support the finding that, notwithstanding the notice, the creditor and the executor continued negotiations until an agreement was reached. The performance of the services and the liability of the testator's estate to pay were not the subjects of dispute, the only question was the worth of these services. The creditor and the executor could not agree on this single issue until the creditor agreed to lessen her claim from $3,150 to $1,000, and the executor promised to pay her that amount. The material difference between the two records is that in the case of Bogart v. Willis, supra, the promise to pay was implied while here it is express. In both instances, the personal representative was acting within the compass of his duty and power.

The statute expressly declares that an executor or administrator is not bound in duty to avail himself of the statute of limitations to bar what he believes is a just claim. The problem is...