Phillips v. Elliott

• Decision Date: 03 October 1933
• Parties: PHILLIPS et al. v. ELLIOTT.
• Court: Oregon Supreme Court

25 P.2d 557

144 Or. 694

PHILLIPS et al. v. ELLIOTT.

Supreme Court of Oregon

October 3, 1933

Department 2.

Appeal from Circuit Court, Klamath County; W. M. Duncan, Judge.

Action by Herbert F. Phillips and another against E. L. Elliott, as administrator with the will annexed of the estate of Liszetta B. Hague, deceased. Judgment for plaintiffs, and defendant appeals.

Affirmed.

E. L. Elliott, of Klamath Falls (H. C. Merryman, of Klamath Falls, on the brief), for appellant.

William Ganong, of Klamath Falls, for respondents.

CAMPBELL Justice.

This is an action instituted to collect four promissory notes secured by a mortgage on certain property in Klamath county Or., executed by Liszetta B. Hague to Sarah A. Phillips on December 16, 1928.

On March 4, 1930, Sarah A, Phillips died intestate, and thereafter her estate was administered upon and the said notes became the property of plaintiffs, her sole heirs.

On May 15, 1931, Liszetta B. Hague died testate, and thereafter defendant, E. L. Elliott, was appointed by the county court for Klamath county as administrator, with the will annexed of her estate.

On September 28, 1931, plaintiffs presented to said administrator a claim against said estate for the amounts due and owing on said promissory notes.

On December 11, 1931, said administrator, defendant herein filed with the county clerk of Klamath county said claim with the following qualified indorsement thereon: "Upon examination of the foregoing claim, it appears to the undersigned that said claim should be allowed against said estate only as a part of the purchase price of certain lands upon which claimants hold a mortgage which mortgage is a purchase price mortgage of said lands upon which said mortgage was given."

On January 28, 1932, plaintiffs instituted the instant action in the circuit court for Klamath county against the administrator of the said estate, for the collection of the balances due on said notes together with attorney fees for the prosecution of the said action.

To this complaint, defendant demurred on the grounds that the said complaint did not state facts sufficient to constitute a cause of action. This demurrer was overruled, and thereafter defendant filed an answer which admitted all the material allegations of plaintiffs' complaint except those in reference to the amount of attorney fees. Subsequently, and before trial, it was stipulated by the parties that 10 per cent. of the amount recovered would be a reasonable attorney's fee. For a "Further, Separate and Special Equitable Defense," defendant alleged, in effect, that the notes mentioned in plaintiffs' complaint were secured by a purchase-price mortgage and that plaintiffs were estopped from seeking relief other than foreclosing the mortgage. For a second, further, and separate defense, defendant alleged, in substance, the filing of said claim against the estate, the allowance thereof, and the filing of such allowance of claim with the county clerk for Klamath county by defendant, and as plaintiffs have never contested said allowance of claim, they are now barred and estopped from further prosecution thereof. For a third further and separate defense, defendant alleged, in effect, that inasmuch as plaintiffs had heretofore refused to release the lien of their mortgage on a portion of the land defendant's testate wished to sell as a railroad right of way, until they were paid a portion of their mortgage, they should "by all right of equity be required to pursue the foreclosure of their mortgage lien and the acceptance of the premises in full settlement of their claim."

Thereafter the plaintiffs filed their reply in which they admitted the execution of the said mortgage; denied the allowance of the said claim by the said administrator of the said estate; denied, in effect, all the new matter set up in defendant's several separate answers.

The cause of action as well as the equitable defenses was submitted to the court, by stipulation of the parties, without a jury. The court found in favor of plaintiffs and entered judgment accordingly. Defendant appeals.

1. The appellant contends that upon the disallowance of a claim against an estate by an administrator, the only remedy of the creditor is to present his claim to the probate court and that the creditor cannot sue thereon directly in the circuit court.

Appellant's contention in this respect is not tenable. Upon the disallowance of a claim against an estate by the administrator thereof, the creditor has his choice of remedies. He may, after the expiration of six months from the granting of letters of administration, institute an action for the recovery of the claim directly in the circuit court (Oregon Code 1930, §§ 5-709, 5-710), or he may institute proceedings in the probate court. Oregon Code 1930, § 11-504; Pruitt v. Muldrick, 39 Or. 353, 65 P. 20; In re McCormick's Estate, 72 Or. 608, 143 P. 915, 144 P. 425; Jacobson v., Holt, 121 Or. 462, 255 P. 901.

The administrator filed with the clerk of the county court of Klamath county plaintiffs' claim with his action thereon as above quoted. This did not comply with the law requiring him to indorse the claim "examined and approved," or "examined and rejected." Oregon Code 1930, § 11-504. It was more than sixty days after the presentation of the claim before the administrator...