Mitchell v. Smith's Estate, 3038.

• Decision Date: 07 February 1939
• Docket Number: No. 3038.,3038.
• Citation: 4 A.2d 355
• Parties: MITCHELL v. SMITH'S ESTATE et al.
• Court: New Hampshire Supreme Court

4 A.2d 355

MITCHELL

v. SMITH'S ESTATE et al.

No. 3038.

Supreme Court of New Hampshire. Rockingham.

Feb. 7, 1939.

[Copyrighted material omitted.]

Transferred from Superior Court, Rockingham County; James, Judge.

Action by Karl P. Mitchell, executor, against the estate of John W. Smith, and others, on a claim against the estate. On transfer of exceptions by defendants and of question without ruling.

Case discharged.

Bill, under P.L. c. 302, § 28, and also alleging rights of subrogation. The court (James, J.) has transferred without ruling the question whether the motion to dismiss the bill should be granted as matter of law, and has also transferred exceptions to denials of certain requests for findings and "to any findings of fact not supported by the record." The opinion states the facts and exceptions, so far as material.

Cooper & Hall, of Rochester, for plaintiff.

John W. Perkins, of Exeter, for certain defendants.

Batchelder & Wheeler, of Exeter, for other defendants.

ALLEN, Chief Justice.

In 1922 the plaintiff's testator, herein termed the creditor, loaned John W. Smith $1,600, taking a note secured by a mortgage of real estate which "was and is worth substantially less than the amount" of the loan. John borrowed the money to loan to his son Edson for use in the purchase of a home, and Edson gave his father a note with a mortgage on the property he bought as security. Interest was paid regularly for four years on the creditor's loan, and by Edson as a convenience for his father, to whom the creditor sent receipts. In 1927 the father died and his widow was appointed executrix of his will. For that year and three successive years thereafter, Edson continued to send the interest payments to the creditor, who sent receipts to the executrix at Edson's request and with her acceptance. Since 1930 no payments have been made. Early in 1934 the creditor was notified of a tax sale of the property mortgaged to him. Soon afterwards he wrote Edson inquiring what he intended to do about the loan made to his father for him. Edson replied that because of hard times he could do nothing at present but would see the creditor shortly about it. Early in the spring of 1935 the creditor redeemed the property from its sale for taxes. He died a few months later. John's widow died in 1934, and an administrator de bonis non has since been appointed on his estate. Since 1930 Edson has paid no interest on the note he gave his father and no part of its principal has ever been paid. He made no reply to a letter of inquiry from the plaintiff written after his appointment as executor. This bill was brought in 1936 or early in 1937.

The normal periods for demanding payment of a claim against a decedent's estate and bringing suit upon it have expired, and the plaintiff relies upon the statute (P.L. c. 302, § 28) by which the time may be extended "if the court shall be of the opinion that justice and equity require it, and that the claimant is not chargeable with culpable neglect in not bringing his suit within the time limited by law", no judgment to affect "any payments or compromises made before the beginning of the proceedings". The trial court has found that the creditor was not chargeable with culpable neglect in proceeding with his claim within the normal periods or subsequently in letting the claim run, and the finding is attacked on the ground of insufficient evidence to support it. It is to be sustained if it was warranted by the subsidiary findings and by proper inferences from the evidence consistent with the subsidiary findings. LaMarre v. LaMarre,' 84 N.H. 553, 147 A. 747, and cases cited.

The culpable neglect in the prosecution of a claim, as contemplated by the statute, is a faulty one, regardless of effect to delay the expeditious settlement of estates as a general policy of the law. The provision in the statute that distributions and compromises made before the claim is prosecuted shall not be affected, results in satisfaction of the claim only from such part of the estate as then remains unsettled. Delay in the settlement of the estate prior to suit upon the claim is not ascribable to the claimant. It follows that even although the estate would not be sooner settled, the claim is barred unless freedom from culpable neglect is proved.

Culpable neglect has been defined to be that which is censorious, faulty or blamable. Emerson's Sons v. Cloutman, 88 N.H. 59, 62, 184 A. 609. It signifies a lack of due diligence. If no good reason, according to the standards of ordinary conduct, for the dormancy of the claim is found, the claim must be disallowed, although otherwise "justice and equity" sustain it. But if such reason is found, culpable neglect as a presumptive bar has been disproved.

In further definement, under a similar statute in Maine, the meaning of "culpable neglect" has been interpreted to this effect: "It is less than gross carelessness, but more than the failure to use ordinary care. It is a culpable want of watchfulness and diligence, the unreasonable inattention and inactivity of 'creditors who slumber on their rights.' It is the policy of the law to insure the speedy administration and distribution of estates of deceased persons." Holway v. Ames, 100 Me. 208, 60 A. 897, 898. In Massachusetts, where there is also a practically identical statute, the court has said: "It is not easy to give a precise definition of the phrase 'culpable neglect,' as used in the statute; or to lay down a fixed rule of interpretation which may serve as a test of all cases arising under it. 'Culpable' means not only 'criminal' but 'censurable,' and when the term is applied to the omission by a person to preserve the means of enforcing his own rights, 'censurable' is more nearly an equivalent. As he has merely lost a right of action which he might voluntarily relinquish, and has wronged nobody but himself, 'culpable neglect' would seem to convey the idea of neglect for which he was 'to blame'; that is, the neglect which exists where the loss can fairly be ascribed to his own carelessness, improvidence or folly." Waltham Bank v. Wright, 8 Allen 121, 90 Mass. 121, 122.

Considering the special findings and deducible findings consistent therewith under this test, the creditor could not be found free from faulty neglect if no more appeared than that with knowledge of the borrower's death and of the appointment of the executrix of the borrower's will, he took no action against the estate for eight years. But an adequate reason for his nonaction might be found from the evidence that he thought his claim was amply secured by the mortgage. This evidence was received subject to exception, but it was competent as it bore directly on the issue of culpable neglect. It tended to explain why he did nothing in enforcing his rights against the estate. It related to his state of mind, and "when a party's state of mind relates directly to the issues of a case, his statements and conduct are admissible, if they help to show what his state of mind was. Wig.Ev., §§ 1714, 1731". Caplan v. Caplan, 83 N.H. 318, 324, 142 A. 121, 126.

But the defendants say that if the claimant thought his security sufficient, the conclusion is that he had no intention to make any claim against the estate and therefore waived his rights to enforce its liability. Nevertheless, if his belief in the value of...