Lothstein v. Fitzpatrick

• Decision Date: 03 May 1943
• Citation: 171 Or. 648,138 P.2d 919
• Parties: LOTHSTEIN v. FITZPATRICK ET AL.
• Court: Oregon Supreme Court

171 Or. 648

138 P.2d 919

LOTHSTEIN v. FITZPATRICK ET AL.

Supreme Court of Oregon.

Argued at Pendleton May 3, 1943.

Affirmed June 15, 1943.

Courts

1. County courts, when sitting in probate, are courts of general and superior jurisdiction.

Judgment

2. Judgments of courts of probate are "final" and conclusive upon all parties before the court, including creditors.

Appeal and error

3. The decree of a probate court allowing or disallowing an administrator's final account is a "final decree" under statute from which an appeal will lie.

Courts

4. A probate court is without authority to open, revise, amend or vacate its decrees after the expiration of the term in which they are rendered.

Courts

5. Relief from probate court decrees may be had by any party against whom they have been taken through mistake, inadvertence, surprise or excusable neglect, within one year after notice thereof.

Judgment

6. A decree that is absolutely void is a mere nullity and may be vacated at any time, whether before or after expiration of the term during which it was rendered.

Executors and administrators

7. Where an executor or administrator has been guilty of fraud in the administration of the estate, a court of equity has jurisdiction to set aside an order settling his final account, at the suit of any party who has suffered detriment because of such fraud.

Executors and administrators

8. Allegations in administrator's final account, that mortgaged lands were conveyed by the heirs to mortgagee and that title was to vest upon approval of final account and moneys remaining were to be distributed between deceased's surviving partner and heirs, were tantamount to a direct allegation that the conveyance had been accepted by mortgagee in settlement of indebtedness and gave mortgagee notice to raise whatever objections he might have to approval of the account, and any fraud in connection with proceedings was "intrinsic", as distinguished from "extrinsic or collateral", which was not a basis for vacating order approving account.

Mortgages

9. Generally, the doctrine of "merger" applies where the title to a mortgage and title to the mortgaged property become united in the same person, and an extinguishment of the mortgage indebtedness will be presumed unless a contrary intention appears.

Executors and administrators

10. Where administrator's final account alleged that the heirs had conveyed mortgaged property to mortgagee and title was to vest in mortgagee upon approval of final account and moneys remaining were distributed between the heirs and deceased's surviving partner, mortgagee who failed to make objections to approval of final account could not contend in subsequent proceeding to vacate order approving final account that the conveyance was not in satisfaction of mortgage indebtedness.

Evidence

11. A receiver of an insolvent bank is presumed to have armed himself with the required authority to effect compromise of an indebtedness to the bank, since it was his official duty to do so and there is a disputable presumption that official duty has been regularly performed.

Executors and administrators

12. Where receiver of a closed bank had constructive notice of hearing on administrator's final account, alleging that land upon which receiver held a mortgage was being conveyed by the heirs to the receiver and that title was to vest upon approval of the account in satisfaction of the indebtedness, and receiver had opportunity but failed to appear and make objections to allowance of the account, receiver could not contend in subsequent proceeding to set aside order approving account that he lacked necessary authority to compromise the claim.

Pleading

13. A demurrer does not admit all facts pleaded but only those which are well pleaded and every reasonable and proper inference deducible therefrom.

Pleading

14. Allegations in petition to set aside order approving administrator's final account, that administrator distributed cash and closed estate before it was completely administered, and that petitioner's claim had not been paid, waived, or compromised, which allegations merely contradicted allegations of final account were not admitted by a demurrer to the petition, since as to all such matters the decree of the county court approving the account was "res judicata".

Executors and administrators

15. Petitioner's contention in proceeding to set aside order approving administrator's final account, that administrator could not proceed to close estate without having had promissory note surrendered to him or procuring written waiver thereof by petitioner as owner of note, as required by statute, should have been raised before probate court on hearing on administrtor's final account.

Executors and administrators

16. Action of administrator in distributing money remaining on hand before approval of his final account was an "irregularity", but was not ground for setting aside final order approving his account, and such objections should have been presented to probate court.

                  See 21 Am. Jur. 683
                  21 C.J.S., Courts, § 309
                

Before BAILEY, Chief Justice, and BELT, LUSK, and HAY, Associate Justices.

Appeal from Circuit Court, Wasco County.

FRED W. WILSON, Judge.

Action by Sally Lothstein, as successor in interest to the First National Bank of The Dalles, Oregon, against John H. Fitzpatrick, as administrator of the estate of Edward C. Fitzpatrick, deceased, and others, to vacate an order approving the final account of defendant administrator. The county court sustained a demurrer to the petition and an appeal was taken to the circuit court and from an order of the circuit court sustaining the demurrer and dismissing the amended petition, plaintiff appeals.

AFFIRMED.

Celia L. Gavin, of The Dalles, and Ralph E. Moody, of Salem (Gavin & Gavin and Donald E. Heisler, all of The Dalles, on the brief) for appellant.

T. Leland Brown, of The Dalles (Brown & Van Vactor, of The Dalles, and McCamant, King & Wood, of Portland, on the brief) for respondents.

HAY, J.

Edward C. Fitzpatrick and John H. Fitzpatrick, father and son, as copartners, were engaged in farming and sheep raising in Wasco county, Oregon. On June 15, 1932, they executed their promissory note in favor of the First National Bank of The Dalles, Oregon, in the sum of $14,604.33, due one year after date and bearing interest at the rate of eight per cent per annum. As security, they executed and deliverd to the bank a mortgage upon 2240 acres of land in Wasco county.

On December 24, 1932, the bank was declared insolvent and the Comptroller of the Currency appointed a receiver, who took charge of its assets.

On December 23, 1934, Edward C. Fitzpatrick died intestate, and the county court for Wasco county appointed John H. Fitzpatrick as administrator of his estate. The inventory of the property of the estate included 1920 acres of land, covered by the mortgage above mentioned. For some reason not disclosed by the record, no separate administration was had upon the partnership property, and it was included in the general administration. Notice to creditors was duly published, and, on February 25, 1935, the bank, by its receiver, duly presented to the administrator its claim based upon said promissory note, which claim was allowed.

On January 24, 1936, the administrator filed his final account. Therein he stated that he had paid all claims which had been presented against the estate, except one which he had rejected, and, with reference to the bank's claim, alleged as follows:

"The real property as shown in the inventory and appraisement * * * had been mortgaged by the decedent and this administrator to the First National Bank of The Dalles, Oregon, for the sum of $14,604.33. The administrator is unable to pay said indebtedness as shown in the proof of claim filed by O.A. Carlson, as Receiver of said bank, for the payment of said sum of money. The Bank's claim was secured by said mortgage and note and the said Receiver accepted a quitclaim deed executed by all of the heirs of the estate as herein named, and delivered to the said Receiver with the understanding that he is to receive title to all of the lands described therein upon the approval by the Court of this accounting, and title is to vest in said Receiver as soon as the administrator has been discharged from his duties and said estate closed."

The account stated further that there remained in the administrator's hands the sum of $2,201.78 in cash, one-half of which he had distributed to himself as surviving partner of the decedent and the remainder to the heirs at law, leaving no assets on hand. No formal voucher evidencing payment of the bank's claim was produced, nor was any evidence of waiver or relinquishment thereof filed.

The county court fixed February 29, 1936, as the time for hearing of the final account, and due notice of such hearing was published. No objections were filed, and, on the date fixed for hearing, the court made an order approving the account, settling the estate, discharging the administrator and exonerating his bondsman. With reference to the bank's claim, the order contained the following:

"That the real property shown in the inventory and appraisement * * * had been mortgaged by the decedent and said administrator to the First National Bank of The Dalles, Oregon, for the sum of $14,604.33. It further appears that the administrator was unable to pay said indebtedness and that the Receiver accepted a quitclaim deed executed by the heirs of the estate as herein named and delivered to O.A. Carlson, Receiver of said institution as a settlement of said claim and that said quitclaim deed has been recorded in the Deed Records of Wasco County, Oregon."

On April 24, 1937, J.B. McCook, who had succeeded Carlson as receiver of the bank, filed in the county court for Wasco county a petition for an order vacating the order approving the final account. Upon such petition, the court made...