Snyder v. Thieme & Wagner Brewing Co.

• Decision Date: 04 January 1910
• Docket Number: No. 21,590.,21,590.
• Citation: 90 N.E. 314,173 Ind. 659
• Court: Indiana Supreme Court
• Parties: SNYDER et al. v. THIEME & WAGNER BREWING CO. et al.

173 Ind. 659

90 N.E. 314

SNYDER et al.

v.THIEME & WAGNER BREWING CO. et al.

No. 21,590.

Supreme Court of Indiana.

Jan. 4, 1910.

Appeal from Circuit Court, Tippecanoe County; R. P. De Hart, Judge.

In the matter of the final settlement of Frank M. Snyder, administrator of the estate of Peter J. Hengen, and others. Judgment in the Appellate Court (87 N. E. 155) affirming a judgment confirming a master commissioner's report declaring judgments held by the Thieme & Wagner Brewing Company and others to be entitled to priority of payment, and case transferred to the Supreme Court. Reversed and remanded for judgment as directed.

Stuart, Hammond & Simms and C. E. Thompson, for appellants. Wilson & Quinn, for appellees.

JORDAN, J.

In the lower court appellant Snyder, the administrator of the estate of Peter J. Hengen, deceased, filed his final report showing therein that he had been ordered by the court to settle said estate as insolvent. The report disclosed that of the moneys or funds arising out of the sale of real estate made and held by the deceased at the time of his death, after applying the same, first, to mortgage liens thereon, and, second, to the payment of $300-the remainder due the widow of the deceased upon her $500 (statutory allowance)-there still remained in his hands of said money, including the one-third interest of said widow, the sum of $2,525.15. This amount the administrator paid into court for the reason that certain judgment creditors (appellees herein) were claiming that their judgments were entitled to priority, and that they should be preferred in payment over the expenses of administration, funeral expenses of the deceased, and the expenses of his last sickness. This claim of the judgment creditors the administrator in his report controverted. Exceptions were filed by the latter to the final report, and thereupon the court referred the report and exceptions thereto to a master commissioner for examination, and ordered him to report the facts to the court, with his conclusions of law thereon.

It appears that the commissioner, after hearing the evidence in respect to the matters and things involved, concluded, and so recommended to the court by his report, that the final report of the administrator should not be approved; that the judgments held by appellees, rendered by the Tippecanoe superior court against the decedent during his lifetime, were entitled to be first paid in full out of the money in the hands of the clerk in preference to the payment of the expenses of administration, funeral expenses, and expenses of the last sickness of the decedent; and that the administrator be directed to restate his report accordingly. Exceptions were filed to the master's report, which were overruled by the court, and the latter rendered its judgment in accordance with the conclusions of the master commissioner. It appears from the record that the decedent left surviving him a widow and children, and that the total value of his estate was about $5,000, consisting of $200 in personal property, the remainder being real estate situated in Tippecanoe county, Ind. These lands were incumbered by certain specific or mortgage liens. The $200 personal property was taken by the widow upon her $500 allowance, and the remaining $300 was paid to her out of the proceeds arising from the sale of the real estate.

The principal question presented for determination under the facts and the law in this case is, Are the judgment creditors of the decedent to be preferred in the payment of their judgments in full over the payment of the expenses of administration, funeral expenses, and expenses of the last sickness? It is true that in this case the real estate upon which their judgments became liens or charges was ordered by the court to be sold by the administrator under the authority of section 2852, Burns' Ann. St. 1908, to make assets for the payment of the liabilities of the estate. As it appeared that such real estate was incumbered with liens, the court, under the provisions of section 2867, Burns' Ann. St. 1908, directed that the sale thereof by the administrator be made to discharge such liens, including the judgments in question, consequently, under the provisions of section 2867, supra, as all the lienholders were made parties to the proceedings to sell, the purchaser of the lands at the administrator's sale took and held them free of the liens, including the liens of appellees' judgments, and by force and operation of the provisions of said section 2867 such liens attached to the funds arising from the sale. The judgments in question were not specific liens upon the lands, but were mere general liens or charges thereon which were wholly of statutory creation, and as such liens could have been devested by the Legislature at any time before rights thereunder had become vested. Gimbel v. Stolte, 59 Ind. 446;Heberd v. Wines, 105 Ind. 237, 4 N. E. 457;Shirk v. Thomas, 121 Ind. 147, 22 N. E. 976, 16 Am. St. Rep. 381, and authorities there cited. In the latter case, Elliott, J., said: “In strictness, neither a judgment nor an attachment is a lien upon land; both are simply charges against lands existing by virtue of the statute.” By the transfer of the judgment liens to the funds derived from such sale of the real estate in question, such liens in no manner became specific charges against these funds, but still remained only a general charge against the funds, subject to the rights of priority or preference, if any, under the law, in their application by the administrator.

Turning to the statutes which govern the settlement of a decedent's estate, and we find that section 2901, Burns' Ann. St. 1908, declares as follows: “Unless otherwise provided in this act, the debts and liabilities of a decedent, shall, if his estate be solvent, be paid in the following order of classes: First, expenses of administration; second, expenses of the funeral of the decedent; third, expenses of his last sickness; fourth, taxes; fifth, debts secured by liens created or suffered by the decedent in his lifetime; sixth, labor claims; seventh, general debts; eighth, legacies.”

Counsel for appellees insist that this section is modified by sections 2957 and 2958, and that when construed along with these sections it must be held that, where an estate is insolvent, judgment liens upon the lands of the decedent must be preferred in their payment over expenses of administration, funeral expenses, and expenses of last sickness.

Section 2957, supra, provides: “If upon the hearing of such account (that is, the account mentioned in the preceding section) it appears to the court that all of the estate liable to be made assets shall have been converted into money and there be no claim pending against it unallowed, the court shall order the money applied to the expenses of administration and distribute it among the claimants whose claims have been allowed in the order hereinbefore provided pro rata among the claimants of each class, subject to the provisions of the next section.”

Section 2958 declares that “if any portion of the moneys shall have been derived from the sale of real estate, and the same shall have been sold subject to liens, the parties holding such liens shall not be entitled to share in such distribution. If such sale shall have been made to discharge liens on the real estate, the moneys derived from such sale shall be first applied to the payment of such liens in the order of their respective priority, whether legal or equitable; and if any portion of the debts secured by such liens remain unsatisfied after the application of the purchase money, the residue shall be entitled to share in such distribution as general debts.”

It is evident that section 2901 contemplates and intends that the estate of a deceased person, whether such estate be solvent or insolvent shall, in addition to the expenses of administration, be charged with the payment of the reasonable expenses of the funeral of the decedent and the reasonable expenses of his last sickness, and that these expenses shall rank and be preferred over all other liabilities of the estate except specific liens. Certainly the contention of appellees that sections 2957 and 2958, Burns' Ann. St. 1908, supra, which sections profess to deal only with and refer to liabilities of the estate which arose during the lifetime of the decedent, must be construed as modifying section 2901, supra, in regard to the payment, as therein prescribed, of the expenses of administration, of the funeral, and of last sickness of the deceased, cannot in reason be sustained. Evidently the Legislature, in respect to the payment of the expenses in question, did not intend that a rule different should obtain and govern where the estate is insolvent from that which applies to and controls in an estate which is solvent; or, in other words, the Legislature did not intend or contemplate that general liens or charges of judgment creditors, where the estate is insolvent, should in their payment be preferred over the expenses of administration, funeral, and last sickness. Hilderbrand v. Kinney, 87 N. E. 832.

In this latter case, in considering the question in respect to the statute of limitation upon claims or debts of a decedent, we said: “Claims for funeral expenses and burial *** are not debts of the decedent, hence not accounts against him or his estate within the meaning of the statute of limitations. They can arise from no request or obligation of the decedent, express or implied, unless it...