Shibata v. Bear River State Bank
| Decision Date | 28 April 1949 |
| Docket Number | 7224 |
| Citation | 115 Utah 395,205 P.2d 251 |
| Court | Utah Supreme Court |
| Parties | SHIBATA v. BEAR RIVER STATE BANK |
Appeal from District Court, First District, Box Elder County; M M. Morrison, Judge.
Action to invalidate note and for cancellation of crop and real estate mortgages by Ai Shibata, personally and as administratrix of the estate of S. Y. Shibata, deceased against Bear River State Bank. From the judgment, the plaintiff appeals.
Reversed with instructions.
Thatcher & Young, of Ogden, and W. E. Davis, of Brigham for appellant.
Lewis J. Wallace and M. Blaine Peterson, both of Ogden, for respondent.
This suit was commenced by Ai Shibata, personally and as administratrix of the estate of S. Y. Shibata, deceased, to have a certain note secured by crop and real estate mortgages, declared void and for the cancellation of the mortgages. From an adverse judgment she appeals.
The undisputed facts are that: Saburo Shibata and George Shibata, sons of appellant herein and heirs of the estate of S. Y. Shibata, had become indebted to the Bear River State Bank, respondent herein, for a sum somewhat in excess of $ 12,000, which was secured by a lien on a certain truck and trailer. The bank had taken possession of the truck and trailer because the Shibatas had become delinquent in their payments. Saburo Shibata desired to regain possession of the truck and trailer and was told by Peckenpaugh, an officer of the bank, that this could be arranged if he would pay $ 3,000 on account. Saburo said he did not have that amount but thought he could raise that much on a loan from his father's estate. Peckenpaugh then called the attorney for the estate, informed him of the facts and asked if such a loan to be secured by mortgages could be made to the estate. The attorney said it could be arranged. Subsequently, this attorney filed a petition in probate court by Ai Shibata, as administratrix, in which it was represented that it was necessary to procure a loan of $ 3,500 to be secured by real estate and crop mortgages for the purpose of discharging certain delinquent payments due from the estate to the Federal Land Bank of Berkeley and to other creditors and for the further purpose of financing the crops for the following year. This petition was signed for the petitioner by the attorney and also verified by him. After due notice was given, a hearing was held at which the attorney testified as to the facts stated in the petition, whereupon the court granted the petition and signed an order in which it was recited that:
"* * * from the evidence offered, [the court] finds that the mortgages as prayed for are necessary for the advantage of said estate * * *"
A certified copy of this order was mailed by the attorney to the bank along with a request that $ 500 of the amount to be loaned be credited to his account as partial payment for moneys due him from the estate for fees and costs advanced. The bank prepared the note and mortgages and upon advice of the attorney for the estate provided that these be signed both personally and in her capacity as administratrix of the estate by appellant herein. These mortgages and the note were taken to Ai Shibata's home on the farm by two representatives of the bank, one of whom had been a close friend of the deceased, and there signed by her after explanations in Japanese by a daughter, since appellant can neither read nor understand the English language.
What happened at the time the note and mortgages were signed is in dispute. The bank's representatives testifying that they had asked the daughter to interpret and that the daughter had been told that the mortgages were both on the crops and on the land, but the daughter testified that she was never told and therefore did not tell her mother that the mortgages covered both the crops and the land but understood that the mortgages only covered the crops. The daughter at that time was a high school student about 17 years of age and could, of course, read, write and understand the English language. Although the mortgages which were presented to the appellant showed on the faces thereof that one was for crops and the other on the land, these mortgages were not exhibited to the daughter to be read. The bank then applied $ 3,000 of the amount loaned on Saburo's indebtedness and $ 500 on the attorney's account. Appellant was unaware that $ 500 of the amount loaned had been paid out as attorney's fees, nor had she been advised or consulted about her supposed petition to the court asking it to authorize her to borrow the money. She did know that she was signing the mortgages to help her son pay off his indebtedness and get back his truck and trailer.
When appellant discovered that the mortgages covered the land as well as the crops to be grown thereon, she brought this suit for their cancellation.
It is appellant's contention that the court erred in dismissing her suit and entering judgment in favor of respondent herein because the loan which the mortgages secured was made to secure the obligation of a third party and was not made for the benefit of the estate and therefore was not a valid and binding obligation against the estate under the provisions of Sec. 102-10-34, U. C. A. 1943, which states that:
"Whenever in any estate now being administered, or that may hereafter be administered, it shall appear to the court or judge to be for the advantage of the estate to raise money by a mortgage of the property or any part thereof, the court, as often as occasion therefor shall arise in the administration of any estate, may, on petition, notice and hearing, authorize, empower and direct the executor or administrator to mortgage the same or any part thereof upon such terms and for such length of time as to the court may seem necessary or beneficial. * * *"
Appellant cites Stockyards National Bank of South Omaha v. Bragg, 67 Utah 60, 245 P. 966, in support of her argument. In that case this court held that under a statute which authorized the court to allow a guardian to mortgage ward's property when it is satisfied that it is for the best interests of the estate, an order authorizing the mortgaging of such property which on its face and on the face of the record shows that it was made to secure the debts and obligations of third parties and that the protection of the interests of the minors was a mere incident is an invalid order and shows the court exceeded its power and jurisdiction.
Respondent does not find fault with the reasoning of the above case but argues that it is distinguishable from the instant case because here the record and order are apparently valid as the reasons given to the court and upon which it based its orders, were within the provisions of the statutes authorizing such action where it is for the advantage of the estate. This being so, it argues, the order of the court is not subject to...
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