Hoffman v. Ness, 6768.

• Decision Date: 18 October 1941
• Docket Number: No. 6768.,6768.
• Citation: 300 N.W. 428,71 N.D. 283
• Parties: HOFFMAN v. NESS et al.
• Court: North Dakota Supreme Court

71 N.D. 283

300 N.W. 428

HOFFMAN

v.NESS et al.

No. 6768.

Supreme Court of North Dakota.

Oct. 18, 1941.

Syllabus by the Court.

1. Where promissory notes are executed and delivered, and money borrowed thereon, and thereafter are renewed by the giving of other promissory notes, the defense of the statute of limitations is of no avail when the action is brought upon the renewed note within six years from the time the renewal note was due, even though the original notes were given many years before.

2. Where an administrator borrows money for the purpose of preserving and caring for the estate, suit may be brought against him in the district court.

3. Where an administrator has borrowed money for the use and benefit of the estate, he has the right to present this to the county court for allowance as part of his expenses as administrator, even though he may not have been authorized by the county court to borrow the money.

4. Where the administrator borrows money for the use and benefit of the estate, and presents the same to the county court for allowance as part of his expenses, it is the duty of the county court to examine the transaction and to allow the same, if it be shown that such action on his part was necessary to preserve the estate, and the money borrowed was used for the benefit of the estate. If so found, the county court will allow this item as one of the expenses of administration to be paid out of the assets of the estate.

5. Under the record in this case, it was error on the part of the trial court to dismiss this action at the close of the plaintiff's case.

6. On the retrial, if it be shown that the administrator borrowed the money for the use and benefit of the estate, and the money was furnished for that purpose, the trial court should ascertain the amount, and order the administrator to present the account to the county court as part of his expenses in the administration of the estate, in order to determine what portion thereof, if any, the county court will allow to the administrator as part of his expenses in the administration.

Appeal from District Court, Richland County; W. H. Hutchinson, Judge.

Action on a note by Ruth J. Hoffman against John M. Ness, administrator of the estate of Christian Ness, also known as Christ Ness, deceased, and others. From a judgment dismissing the action, the plaintiff appeals.

Judgment reversed, and case remanded for further proceedings.

J. E. Hendrickson, of Fargo, and Forbes & Forbes, of Wahpeton, for plaintiff-appellant.

Clifford Schneller, of Wahpeton, for defendants-respondents.

BURR, Chief Justice.

Plaintiff alleges that about May 1, 1928, John Ness, as the administrator of the estate of Christian Ness, “found himself unable to pay the legal charges then due and payable from him as such Administrator or to carry on the farming operations on the real estate belonging to said estate and that the assets then in his hands were insufficient to cover the demands then necessary, and that on said May 1, 1928, for value received, he made, executed and delivered to the said Farmers & Merchants State Bank of Wahpeton, North Dakota, his promissory note in writing, dated on said day, wherein and whereby he promised to pay to the order of said Farmers & Merchants State Bank, the sum of eight hundred dollars ($800.00) on demand with interest at the rate of nine (9) per cent per annum until paid. That thereupon the said John M. Ness as Administrator aforesaid, received from the Farmers & Merchants State Bank, the sum of eight hundred dollars ($800.00) in cash which the said administrator used and expended for the advantage, benefit and preservation of said estate in the payment of claims against said estate, expenses of administration and taxes against said real estate belonging to said estate.

That said estate and the other defendants and heirs at law were mutually benefited thereby and that the assets of said estate were thereby conserved and increased, all of which was done for the preservation of said estate and the interests of each of the defendants herein.”

The plaintiff further alleges that this note was sold, endorsed, and delivered to her, without notice, before maturity, and for valuable consideration; that no part thereof has been paid; that the money represented by the note was used by John M. Ness for the preservation of the estate,of which he is the administrator; and she prays for judgment, finding the amount due on the note “is a legal and valid claim upon and against the property and assets of the estate of Christian Ness, deceased, for the benefit and preservation thereof, and that the same be ordered paid by the Administrator of said estate out of the property and assets of said estate.”

The summons and the complaint were served upon the administrator on April 25, 1934. The defendant administrators answer jointly, denying the allegations of the complaint; and alleging that if John Ness ever gave this promissory note, then said note “was given as a renewal of other notes previously given, and that for said note given on the 1st day of May, 1928, no cash money was ever received, and not receiving any money therefor, no money was spent at said time for the use and benefit of said estate and for the heirs thereof, but that said note if ever given was given as a renewal note of other notes previously given for debts incurred in the operation of the farm lands by said John M. Ness, individually, and that neither on the 1st day of May, 1928, nor at any time thereafter was any money expended from the proceeds of any loan for the use and benefit of the Christian Ness estate.

That since the 17th day of April, 1921, John M. Ness has been the duly appointed, qualified and acting administrator of the estate of Christian Ness, deceased, and that he has personally operated the farm property of said estate and has supervised the farm management thereof, and that because of financial and crop conditions prevailing throughout the territory in which said real estate is situated, such farming operations were not profitable, and that in the running and operation of said farm lands, both personally and in active supervision thereof, the said John M. Ness incurred indebtednesses in the purchase of grain and the payment of operating expenses of such farm, and that the income therefrom was not sufficient to pay such operating expenses and that he borrowed money to meet such expenses and gave several and divers notes for the losses incurred in such operations, and that these notes were given to pay overdrafts at the bank upon checks drawn upon his account and to make up deficiencies in the operation of the farm, and if he ever gave a note on the 1st day of May, 1928, as alleged in Paragraph 6 of plaintiff's complaint the same was given as a renewal note for other notes previously given, and that no present consideration was received for the giving of said note and no benefits were received by said estate by virtue of the giving of said note, and that none of the defendants named were benefited by the conservation of said estate and the increasing in value thereof, and that no claims were paid by virtue of the giving of said note and no taxes were paid nor were any expenses of administration paid by the giving of said note and that the same was given wholly and solely to renew other and different notes.”

Defendants allege also “that the indebtedness set out in the amended complaint as a basis of plaintiff's pretended cause of action herein is barred by the statute of limitations of the state of North Dakota.”

During the trial of the case, the court permitted the plaintiff to amend her complaint to set forth specifically that the note in question was given in renewal of other promissory notes executed “for cash theretofore received by said administrator in behalf of said Estate from said bank, which said cash was used by said administrator in payment of expenses of administration of said estate, and for payment of taxes against the real and personal property belonging to said Estate, and for the repair of buildings and fences upon said real estate, and for the preservation and conservation of all of the assets belonging to said Estate of C. Ness, Deceased.”

The court thereupon permitted the defendants to amend their answer so as to allege “That the indebtedness set out in the amended complaint as a basis of plaintiff's pretended cause of action herein is barred by the Statute of Limitations of the State of North Dakota.”

The testimony of John Ness given at the trial shows he executed this note in question as administrator, and his letter to the plaintiff, dated August 31, 1932, is in evidence. Therein he says, with reference to the note, “How much do you figure your claim against the Estate, we expect to have it closed in a month or six weeks.”

The record shows that this administrator borrowed from the bank mentioned on several different occasions, giving his note at each time he borrowed; that the note in question was the renewal of notes he had given at these various times; that the notes which he had given at the time he borrowed the money aggregated the amount of this note; and that the items borrowed were received by him as administrator of the estate of Christian Ness, were deposited by him in the account of the estate, and checked out by him as administrator, and none of these items included any personal item of John Ness.

The cashier of the bank testified that the first time Ness came into the bank, he wanted to borrow money for the purpose of paying the taxes on the land. However, the trial court sustained an objection to this question, and struck out the answer. The cashier testified that when this note for $800 was given, he returned the old notes to the administrator, and that the records of the bank were in the hands of a receiver. Plaintiff demanded of the defendants the production of the notes, and nine notes were produced. They were...