Merritt v. Peterson
| Decision Date | 08 January 1929 |
| Docket Number | 39228 |
| Citation | 222 N.W. 853,208 Iowa 672 |
| Parties | W. N. MERRITT, Administrator, Appellee, v. T. K. PETERSON et al., Appellants |
| Court | Iowa Supreme Court |
REHEARING DENIED JUNE 24, 1929.
Appeal from Webster District Court.--G. D. THOMPSON, Judge.
This was an action by the plaintiff against the defendant T. K Peterson for the conversion of a certificate of deposit while executor of the Susan Chantland estate, and against O C. Knudson and L. E. Larson, as sureties on said former executor's bond. The court directed a verdict for the plaintiff, and the defendants appeal.
Reversed.
Seth Thomas and John M. Schaupp, for appellants.
Robert Healy, for appellee.
Susan Chantland, who was a resident of Badger, in Webster County, died testate, February 25, 1922. Defendant and appellant T. K. Peterson was named executor in the testamentary document. Accordingly, on June 6, 1922, he was appointed as such, and became duly qualified. Two sureties signed his bond. They were the defendants and appellants O. C. Knudson and L. E. Larson.
Peterson, the executor, was a resident of Badger, and a stockholder, director, and managing officer in the Badger Savings Bank. The testatrix, at the time of her death, owned a certificate of deposit issued by said bank in the par value of $ 6,000, payable in 12 months, with interest at the rate of 5 per cent per annum. To more than offset this certificate, however, was a note payable to the Badger Savings Bank, signed by the testatrix and her daughter, Judith Sheldon. This note was dated December 20, 1921, became due 6 months thereafter, and was for the principal sum of $ 10,600, drawing interest at the rate of 8 per cent per annum.
On February 9, 1923, the Badger Savings Bank filed a claim against the estate for the amount of, and based upon, the note. That demand was signed for the bank by appellant, as its cashier. So, on February 13th, Wilhelmine D. Soppeland was appointed special administratrix, and filed objections to the claim. Her attack upon this alleged indebtedness included the defense that it was barred by the statute of limitations, both general and special, and that there were no equitable considerations which would toll the running thereof; and in addition thereto, she asserted that the pretended signature of the testatrix to the note was a forgery. When passing upon the issues, however, August 31, 1926, the court did not sustain the plea of forgery, but did confirm the contention of the special administratrix with reference to the statute of limitations, in the following phraseology:
"The court further finds and determines that said claim of the Badger Savings Bank is barred by the statute of limitations, and that no equitable ground exists to lift said statute of limitations or to relieve said claimant from the rule of said statute of limitations."
During this time, there was written upon the note before described a memorandum, under date of August 30, 1926, to this effect:
It appears that this was done by a bank official, at the suggestion of the state bank examiner, or a representative of his office.
Succeeding these events was the appellant T. K. Peterson's resignation as executor, and the appointment, in January, 1927, of the plaintiff and appellee, W. N. Merritt, as administrator de bonis non, with the will annexed. Shortly thereafter, appellant Peterson filed his final report, which was approved, and the former executor discharged.
Closely following this, appellee, as the new administrator, on January 26, 1927, made a demand upon the Badger Savings Bank for the payment of the certificate of deposit aforesaid. Settlement was refused by the institution, and then appellee asked appellant for the proceeds of that certificate. Upon his refusal to make compensation therefor, this suit was brought; and, as before suggested, it resulted in a directed verdict in appellee's favor. Hence the appeal.
Is there a ground for reversal? Such is the question.
I. Appellee's theory is based primarily upon the ground that there can be no application of the certificate of deposit on the note, for the reason that the court previously held the bank's claim was barred by the statute of limitations. With this proposition, however, we are constrained to disagree. It is true that, because of the former adjudication, the note belonging to the bank could not be affirmatively asserted against the estate. No part of the assets in the hands of the executor or the administrator de bonis non, with the will annexed, could be used, in this event, to pay independently any part of that obligation. But that does not mean that there could not be an application of the certificate on the note, in order to satisfy pro tanto the latter financial liability. Section 11019 of the 1924 Code provides:
" A counterclaim may be pleaded as a defense to any cause of action, notwithstanding it is barred by the provisions of this chapter, if it was the property of the party pleading it at the time it became barred, and was not barred at the time the claim sued on originated; but no judgment thereon, except for costs, can be rendered in favor of the party so pleading it."
Furthermore when the certificate matured, the note was also due. Consequently, the bank had a right to make application of the certificate on the indebtedness due under the note. Ware v. Howley, 68 Iowa 633, 27 N.W. 789; Knapp & Co. v. Cowell, 77 Iowa 528, 42 N.W. 434; Wikel v. Garrison, 82 Iowa 453, 48 N.W. 803; Smith v. Sanborn State Bank, 147 Iowa 640, 126 N.W. 779; Secor v. Siver, 165 Iowa 673, 146 N.W. 845; Porter Auto Co. v....
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