National Bank of Commerce of Seattle v. Peterson

• Court: Washington Supreme Court
• Writing for the Court: HOLCOMB, Justice.
• Citation: National Bank of Commerce of Seattle v. Peterson, 179 Wash. 638, 38 P.2d 361 (Wash. 1934)
• Decision Date: 10 December 1934
• Docket Number: 25289.
• Parties: NATIONAL BANK OF COMMERCE OF SEATTLE v. PETERSON et al.

38 P.2d 361

179 Wash. 638

NATIONAL BANK OF COMMERCE OF SEATTLE v. PETERSON et al.

No. 25289.

Supreme Court of Washington

December 10, 1934

Department 2.

Appeal from Superior Court, King County; Malcolm Douglas, Judge.

Action by the National Bank of Commerce of Seattle against L. A Peterson, individually and as administrator of the estate of Lars Peterson, deceased, and others. From the judgment rendered, the defendant L. A. Peterson, individually appeals, and the plaintiff cross-appeals.

Affirmed.

James C. McKnight, of Seattle, for appellant.

Kerr McCord & Carey, of Seattle, for respondent.

HOLCOMB Justice.

On September 20, 1924, Lars Peterson died in Seattle leaving an estate, the real property of which was appraised at $224,500 and the personal property appraised at $18,512.05, totaling $243,012.05. At the time of his death there were mortgage and contract indebtednesses against the property in the sum of $63,028.36. Notice to creditors was published October 7, 1924. The following claims were filed: Seattle National Bank, on a promissory note, unsecured, for $6,000 C. A. J. Taylor, unsecured, for $1,500; and Bonney-Watson Company for funeral expenses, unsecured, for $2,800. These were allowed and fully paid by the administrator L. A. Peterson. A claim for $234,666.66 by Neola Taylor Higgins was rejected by the administrator, was sued upon, the rejection sustained, the cause appealed, and affirmed by this court on February 7, 1929. Higgins v. Peterson, 150 Wash. 620, 274 P. 186. In that and a preceding case, In re Peterson's Estate, 137 Wash. 137, 241 P. 964, L. A. Peterson was successful in substantiating himself as the son and sole heir of Lars Peterson, and the claim of Neola Taylor Higgins, for the whole estate, was defeated.

On February 3, 1925, L. A. Peterson personally borrowed from the National City Bank of Seattle $5,000 and secured his note by a warranty deed in which he declared himself a bachelor and sole and only heir at law of Lars Peterson, deceased, conveying the east one-half of lot 2 and the north one-half of lot 3, in block 62 of A. A. Denny's Fifth addition to the city of Seattle, according to the recorded plat thereof. The original note was renewed from time to time, the last renewal being on July 28, 1930.

On September 29, 1925, L. A. Peterson and defendant T. W. Wade executed and delivered to the National City Bank their joint and several promissory note for $6,000, which note was subsequently renewed; the last renewal being on June 17, 1930. Both notes are long past due and no interest has been paid on either since 1930.

On September 23, 1931, the judge then sitting as probate judge made an order allowing the attorney for the administrator a fee of $25,000 in addition to an allowance of $1,000 made when the administrator's first report was approved and allowed a like sum to L. A. Peterson, as administrator of the estate. This hearing was ex parte, and both the administrator and his attorney knew that the state inheritance tax had not been adjudged and paid. The administrator paid the federal inheritance tax several years ago, but has never completed his report to the state inheritance tax department. All other steps in the administration of the estate were practically completed in 1929 or 1930.

This action was brought to recover judgment against L. A. Peterson, individually, and also as administrator, and T. W. Wade, as a co-signer of one of the notes, for judgment for the balance due on both of them; to have the deed mentioned above declared a mortgage and a first and paramount lien against the property therein described prior to the claim of each and all of the defendants herein; that it be foreclosed as a mortgage and a decree entered directing a sale of the property in mortgage foreclosure proceedings, free and clear of all right, title, and interest of any of the defendants named herein; and for such other and further relief as may be meet and equitable.

A trial resulted in a judgment in favor of respondent against L. A. Peterson on each note. The deed was declared to be a valid mortgage upon any interest of his in the property mortgaged, but provided that L. A. Peterson, as administrator, could retain possession of the real estate until the estate was closed and a decree of distribution duly entered. The mortgage was declared to be inferior to the right of the administrator to sell the property to pay the expense of administration, including all allowances made to the attorney for the estate. The decree also provided that the interest of L. A. Peterson, as heir at law, subject to the right of the administrator and the state of Washington, should be sold and the proceeds applied upon the satisfaction of respondent's judgment. The decree further gave respondent judgment against L. A. Peterson and T. W. Wade for $6,000, but decreed that this portion of the judgment was not secured by the deeded property. A very material portion of the decree is: 'And that nothing herein shall be so construed as to interfere with the orderly administration of the estate of the said Lars Peterson, deceased, or prevent the plaintiff from exercising any right that it may have in the matter of the estate of Lars Peterson against said administrator thereof or his attorney, James C. McKnight, in any other proper action or forum. This decree to be without prejudice to the right of plaintiff, if any, to require an accounting of the administration.'

Peterson has not appealed as administrator, but appeals as an individual only.

Respondent has also taken a cross-appeal from the decree of the court, but will be mentioned herein only as respondent.

There is little conflict in the facts and what there is was resolved by the trial judge, upon competent evidence, in favor of respondent.

Appellant emphasizes certain findings...