Plumb's Estate, In re

• Decision Date: 16 July 1964
• Docket Number: No. 51386,51386
• Citation: 129 N.W.2d 630,256 Iowa 938
• Parties: In the Matter of the ESTATE of John H. PLUMB, Deceased. Edwin LEU, Claimant-Appellee, v. The SALVATION ARMY, Moody Bible Institute, and Asbury Theological Seminary, Objectors-Appellants.
• Court: Iowa Supreme Court

Page 630

129 N.W.2d 630

256 Iowa 938

In the Matter of the ESTATE of John H. PLUMB, Deceased.

Edwin LEU, Claimant-Appellee, v. The SALVATION ARMY, Moody Bible Institute, and Asbury Theological Seminary, Objectors-Appellants.

No. 51386.

Supreme Court of Iowa.

July 16, 1964.

Hess, Peters & Sulhoff, Council Bluffs, for objectors-appellants.

Smith, Peterson, Beckman & Willson, Council Bluffs, for claimant-appellee.

GARFIELD, Chief Justice.

Edwin Leu, executor of the estate of John H. Plumb, deceased, filed a claim in probate against the estate for $18,000 and interest for alleged services rendered by him from early in 1955 until September 16, 1960, date of Mr. Plumb's death. A temporary executor was appointed who investigated the claim and reported it was his conclusion the claim should be allowed. Three residuary legatees intervened and filed answer denying the claim and pleading payment and the statute of limitations, section 614.1(9), Code 1962, I.C.A.

When the claim was reached for trial both claimant and intervenors asked the court to adjudicate as law points under rule 105, Rules of Civil Procedure, 58 I.C.A., applicability of the statute of limitations. Claimant also asked an adjudication that the temporary executor's report and alleged allowance of the claim create a prima facie case in favor of the claim. The court ruled the pleadings do not show on their face the claim was barred; also that 'the allowance of said claim by the temporary executor is decreed to be prima facie evidence of its validity and justness.'

On the trial before court and jury, claimant offered testators' will, the preliminary inheritance tax report and probate inventory, the report of the temporary executor, the order appointing him and some other court files in the estate which need not be mentioned. Claimant then rested. Intervenors then examined claimant briefly, evidently in support of their defense the claim had been paid, and they rested. Claimant then moved for a directed verdict on the ground the temporary executor's report made a prima facie case for him and there was no substantial evidence to overcome it. The motion was sustained, the claim allowed and the executor directed to pay it. Intervenors have appealed.

I. The first two assigned errors have to do with the defense of the statute of limitations. Intervenors think the trial court ruled they could not interpose this defense and assign the ruling as error. He did not so rule. However, claimant contends--as he may without appealing--it was error not to rule that intervenors may not interpose such a defense and only the personal representative may do so. Since the order appealed from must be reversed on at least three other grounds and the case may be retried, we deem it our duty to say we disagree with claimant's contention.

It is perhaps sufficient answer to the contention that after a hearing on intervenors petition for leave to intervene, at which the executor (who was claimant) and the temporary executor appeared, the court ordered that intervenors could intervene, file answer and contest the claim. No limitations were placed upon this right. It is not contended this order, which was not ex parte, was erroneous or that intervenors were not entitled to intervene and contest this claim.

However, we are not content to rest our conclusion solely on the ground just suggested. The residuary legatees are the real parties in interest in defense of this claim. They are equitable owners of substantially the entire estate of an estimated net value in excess of $330,000. Incidentally they are all charities to whom testator desired most of his estate to go. We cannot agree that because the temporary executor did not see fit to interpose the defense of the statute of limitations, these legatees may not do so. There is nothing in his report to suggest any consideration was given to his interposing such a defense. So far as shown he was not represented at the hearing on the claim and was not interested in it.

The contention claimant makes at this point is contrary to our holding in the Matter of the Claim of Marjorie Blackman in the Estate of Cora Hunt, Deceased, filed at this sitting. We there point out that heirs or beneficiaries under a will should not in fairness be bound by the personal representative's allowance of a claim. Their interests are directly affected by a diminution of the assets and that they are entitled to be heard in opposition to the claim, even though it has been approved by the fiduciary, is well settled.

We do not understand claimant contends that intervenors may not assert the defense of payment. We perceive no sound or logical reason why they may not also assert the bar of limitations.

Claimant does argue that unless resort to the real estate left by decedent is necessary in order to pay claims against the estate, the decision of the personal representative 'whether he should raise discretionary affirmative defenses is binding upon the beneficiaries.' It is true In re Estate of Baumhover, 151 Iowa 146, 130 N.W. 817, cited by claimant, says an administrator is not necessarily bound to interpose the statute of limitations against a claim he believes to be justly due from the estate. The opinion recognizes the division of authority in other states on this proposition. Whether there had been resort to the Baumhover realty does not appear from the opinion nor the printed record.

In re Estate of Smith, 240 Iowa 499, 514-515, 36 N.W.2d 815, 824, 8 A.L.R.2d 640, analyzes the Baumhover case and other authorities bearing on the right of interested parties to plead the statute of limitations as a bar to a claim, observes the Baumhover opinion 'gives too little information to properly appraise the decision' and points out that since it was filed 'the number of courts holding the majority and contrary view has greatly increased, * * *.' See Anno. 8 A.L.R.2d 660.

The Smith decision concludes its discussion of this point by explaining the error of the trial court there in holding that an heir cannot resist the allowance of a claim except for fraud or collusion, citing as authority In re Estate of Douglas, 140 Iowa 603, 117 N.W. 982. This from the Smith opinion has direct application here (page 529 of 240 Iowa, page 831 of 36 N.W.2d): 'And it most certainly does not mean that in the initial hearing for the allowance of a claim, as was had in the case at bar, a creditor, devisee, distributee, or other person interested adversely to the claimant, cannot base his objections upon the statute of limitations, mistake, payment, or other good grounds, but must limit his complaint to the grounds of fraud or collusion. The case cited by the court does not so hold. The claimant has cited none that does. We have found none holding such a proposition' (emphasis added).

The hearing which led to the order appealed from here was the initial hearing on the allowance of the claim. The only parties resisting the claim were the intervenors. No authority has come to our attention which would deny them the right to interpose the bar of limitations or, we may add, the defense of payment. Any other holding would be contrary to the spirit, if not the letter, of section 638.10, Code 1962, I.C.A., which was in force when this case was tried. It provides, 'Any person interested in the estate may attend upon the settlement of his (executor's or administrator's) accounts and contest the same.'

Code Chapter 638, including the quoted section, was repealed by our new probate Code, chapter 326, Laws 60th General Assembly, affective January 1, 1964. It may be noted section 122 of this chapter more clearly adopts the view we have expressed. It states, 'The acts of the fiduciary without prior approval of court after notice, may be contested by any interested person at or before the entry of the order discharging the fiduciary.' Also section 432 of chapter 326 provides that unless the court allows the claim of a personal representative, even though its allowance is recommended by a temporary administrator, it shall be disposed of as a contested claim.

II. Intervenors' second assigned error is the alleged ruling the claim or part thereof was not barred by the statute of limitations. This is not what the court ruled. As stated, the ruling, prior to the trial, was that the pleadings (which doubtless means the claim) do not show on their face the claim was barred. The statute relied upon is section 614.1, subd. 9, Code 1962, I.C.A., which states actions founded on claims for wages must be brought within two years after their causes accrue, except when otherwise specially declared.

The claim alleges it is for services rendered decedent; early in 1955 decedent then 91, asked claimant to assist him in operating and managing his four farms; this was to and did consist of keeping records, paying bills, collecting and depositing moneys, leasing the farms, consulting tenants and decedent, inspecting and keeping the premises in repair, buying and selling livestock, many sundry duties, almost daily trips to the farms, decedent's home and his bank, and many phone calls; these services were continuous until decedent's death; in July, 1956, decedent asked claimant to oversee his wife's hospitalization and later her funeral, which was done; after Mrs. Plumb died claimant had to arrange for a housekeeper and take over writing all checks; $18,000 is the reasonable value of the services perfomed, over and above total payments of $2145.

Intervenors rely principally on Buckley v. Deegan, 244 Iowa 503, 57 N.W.2d 196, and Roth v. Headlee, 238 Iowa 1340, 1344, 1347, 29 N.W.2d 923, 925-927, which hold the claims there were for 'wages' and, as a matter of law, barred by section 614.1, subd. 9. The Buckley decision is based on Roth v. Headlee. It must be admitted the present claim bears quite a little resemblance to those in the cited precedents. In Buckley the claimant argued that 'wages,' as used in the...