Strumberg v. Mercantile Trust Co., 49138

• Decision Date: 08 April 1963
• Docket Number: No. 49138,No. 1,49138,1
• Citation: 367 S.W.2d 535
• Parties: Edward STRUMBERG, (Plaintiff) Appellant-Respondent, v. MERCANTILE TRUST COMPANY, a Corporation, Executor of the Estate of William R. Trogdon, Deceased, and Mercantile Trust Company, a Corporation, Testamentary Trustee for Philip Dwight Trogdon, (Defendants) Respondents-Appellants
• Court: Missouri Supreme Court

Page 535

367 S.W.2d 535

Edward STRUMBERG, (Plaintiff) Appellant-Respondent, v. MERCANTILE TRUST COMPANY, a Corporation, Executor of the

Estate of William R. Trogdon, Deceased, and Mercantile Trust

Company, a Corporation, Testamentary Trustee for Philip

Dwight Trogdon, (Defendants) Respondents-Appellants.

No. 49138.

Supreme Court of Missouri, Division No. 1.

April 8, 1963.

Motion for Rehearing or to Transfer to Court En Banc Denied

May 13, 1963.

Buckley & Campbell, Robert Lee Campbell, St. Louis, for plaintiff-appellant.

Thompson Mitchell Douglas & Neill, James M. Douglas, William G. Guerri Richard P. Conerly, St. Louis, Kerth, Thies & Schreiber, Dalton W. Schreiber, Clayton, for respondents, Mercantile Trust Co., Executor of Estate of William R. Trogdon, Deceased, and Mercantitle Trust Co., Testamentary Trustee for Philip Dwight Trogdon.

HOLMAN, Commissioner.

Plaintiff, Edward Strumberg, and William R. Trogdon entered into a partnership agreement in January 1945 to establish and operate a business to be known as the Adept Tool and Manufacturing Company, to be located in East St. Louis, Illinois. The agreement contained a provision which reads as follows: 'Each party hereto, under the terms of this agreement, shall own an undivided one-half (1/2) interest in said business, and should either party hereto die while this agreement shall be in force, the remaining party shall within sixty days thereafter purchase the interest of the deceased partner from his heirs, administrators or assigns at a sum not to exceed the book value of his interest at the time of his death, and this agreement shall be binding upon his heirs, administrators, executors and assigns of both parties hereto.' Mr. Trogdon died testate April 20, 1960, while residing in St. Louis County, Missouri. He was survived by his wife Virginia, and a 15-year-old son Philip. Mercantile Trust Company was appointed executor of his estate and testamentary trustee for his son. Mercantile was made a party herein, both as executor and trustee. Virginia Trogdon was made a party as an individual and also as guardian for Philip.

In an effort to comply with the foregoing provision of the contract plaintiff caused an audit to be made to determine the book value of the assets of the partnership and defendants' one-half interest was so valued at $15,058.22. On June 14, 1960, plaintiff's attorney mailed a copy of the audit and a cashier's check for $15,058.22 to Mercantile and advised that such was submitted in compliance with the contract provision heretofore quoted, and requested that Mercantile 'proceed to take all steps necessary to transfer the full ownership of Mr. Trogdon's interest in and to the partnership property, both real and personal, to Mr. Strumberg.'

When Mercantile failed to take any action plaintiff filed this suit in two counts. In the first count plaintiff sought to enforce his alleged contractual right to purchase the Trogdon interest, as heretofore set out. In the second count he relied upon an alleged subsequent oral modification of said purchase agreement (hereinafter more fully detailed) under which he was entitled to the Trogdon interest without the payment of any money, and a decree was sought ordering defendants to convey the decedent's one-half interest to plaintiff and to return to him the sum theretofore tendered. A trial before the court resulted in a judgment for plaintiff on the first count and for defendants on the second count. Mercantile has appealed from the judgment on Count I, and plaintiff has appealed from the judgment on Count II.

We have appellate jurisdiction because the amount in dispute exceeds $15,000. This for the reason that plaintiff has appealed from the judgment on Count II which adjudged that plaintiff was not entitled to the Trogdon interest without payment, and denied plaintiff's prayer for a return of the $15,058.22 he had tendered to Mercantile.

We will first consider the appeal relating to Count I. As stated in Mercantile's brief, 'the sole question we raise on this appeal is the effect of the failure of plaintiff to comply with the provisions of Sections 473.360 and 473.367, RSMo 1959, in that no written notice of the institution of this action in the circuit court was filed by plaintiff in the Probate Court of the Court of St. Louis.' The statutory provisions relied upon by Mercantile read as follows:

'473.360. 1. Except as provided in sections 473.367 and 473.370, all claims against the estate of a deceased person * * * which are not filed in the probate court within nine months after the first published notice of letters testamentary or of administration, are forever barred against the estate, the executor or administrator, the heirs, devisees and legatees of the decedent. * * *

'2. Unless written notice of actions instituted or revived under sections 473.363 or 473.367 is filed in the probate court within nine months after the first published notice of letters, no recovery may be had in any such action on any judgment therein against the executor or administrator out of any assets being administered upon in the probate court or from any distributee or other person receiving such assets. * * *

'473.367. Any action commenced against an executor or administrator, after death of the decedent, is considered a claim duly filed against the estate from the time of serving the original process on the executor or administrator, and the filing of a written notice in the probate court of the institution of such action.'

(Unless otherwise indicated, all statutory references are to RSMo 1959, V.A.M.S.)

The point here presented is raised for the first time on this appeal. We will nevertheless consider it, as it is now settled in this state that the defense of failure to comply with the nonclaim statutes need not be pleaded, cannot be waived, and, if they are applicable, compliance with said statutes is deemed mandatory and, in effect, jurisdictional. Clarke v. Organ, Mo.Sup., 329 S.W.2d 670; Smith v. Maynard, Mo.Sup., 339 S.W.2d 737; State ex rel. Whitaker v. Hall, Mo.Sup., 358 S.W.2d 845.

This suit was filed on September 3, 1960, which was within the nine-month period. The transcript does not disclose whether or not a written notice of the institution of this action was filed in the probate court, but we consider plaintiff's brief as a tacit admission that such was not filed. It would therefore appear that the ultimate question for our decision is whether the relief plaintiff seeks is a 'claim * * * against the estate,' as that phrase is used in Secs. 473.360 and 473.367. The situation in this case is very unusual, and no case has been cited (nor have we found any) in which the facts are similar.

We have concluded that plaintiff has not asserted a 'claim' within the meaning of the nonclaim statutes. As defined in Sec. 472.010(4), "Claims' include liabilities of the decedent which survive whether arising in contract or in tort or otherwise, funeral expenses, the expense of a tombstone and costs and expenses of administration.' The word 'liability,' as used in connection with probate matters usually, if not always, refers to a debt or a pecuniary obligation. It has long been held that a suit to recover specific trust assets in the possession of the administrator is not a claim which would be barred by failure to comply with the nonclaim statutes because such assets are said not to be a part of the estate. Bramell v. Adams, 146 Mo. 70, 47 S.W. 931. The situation in the case at bar is somewhat analogous to that which exists in the trust cases. This is not a proceeding for a money judgment against the estate. Plaintiff is not seeking to enforce a personal liability of decedent or to establish a demand which existed against him. And he does not pray for a judgment to be classified and paid out of the assets of the estate.

It should be noted that the contract did not give plaintiff an option to purchase the interest of the deceased partner. Each partner bound himself to purchase the interest of the partner first dying. The amount to be paid, 'a sum not to exceed the book value,' was somewhat indefinite, but that is not important here as plaintiff tendered the book value, which was the most that could have been required. The book value may have been more or less than the market value but, in either event, the surviving partner was contractually obligated to purchase the interest at its book value. The property was in the possession of and being used by the plaintiff. We think it is reasonable to say that, in a sense, the surviving partner became the equitable owner of the interest upon the death of the other partner, subject however, to the condition that the required amount would be paid or tendered within 60 days. At any rate, it appears clear that the executor was under a duty not to treat the partnership interest in the same manner as other assets, but was required to keep such segregated and apart from the general assets of the estate while awaiting plaintiff's compliance with his contractual obligation to purchase it.

Instead of being a creditor of the estate, plaintiff, upon thedeath of Mr. Trogdon, immediately became a debtor thereof, i. e., to the extent of the book value of the Trogdon partnership interest. The precise amount of that indebtedness is a matter concerning which the parties might not agree. Plaintiff tendered what he deemed to be the amount of the book value. Mercantile did not accept it. This action is in the nature of a declaratory judgment suit to determine the amount plaintiff owed the estate. In other words, plaintiff is not trying to recover some amount from the estate,...