Summers v. Connolly, 33143

CourtUnited States State Supreme Court of Ohio
Citation39 A.L.R.2d 661,159 Ohio St. 396,112 N.E.2d 391
Docket NumberNo. 33143,33143
Parties, 39 A.L.R.2d 661, 50 O.O. 352 SUMMERS et al. v. CONNOLLY et al.
Decision Date13 May 1953

Syllabus by the Court.

1. The statute of limitations bars defenses which are not strict defenses, in the sense that they grow out of the transaction connected with plaintiff's claim, and which therefore, require affirmative action. (Paragraph five of the syllabus in the case of In re Estate of Butler, 137 Ohio St. 96, 28 N.E.2d 186, construed.)

2. Setoffs and counterclaims are not regarded as strict defenses but are regarded as affirmative in character and as requiring affirmative action of the court.

3. A promissory note against which the statute of limitations has run, prior to the death of the payee thereof, can not be set off by the administrator of the payee's estate against the distributive share of the maker of the note in the payee's estate.

4. Where the payee of a note dies after the statute of limitations has run against the note and the payee was not, during the life of the note, indebted to the maker of the note and the maker as an heir of the payee is entitled to a distributive share of payee's estate, cross-demands had not existed between the maker and the payee as required to make Section 11321, General Code, applicable in determining the right of the administrator of payee's to set off the note against payee's distributive share of the estate.

5. The indebtedness of a beneficiary of an estate to such estate, referred to in section 10509-186, General Code, embraces only legally enforceable indebtedness and does not include debts of the beneficiary to the estate which were barred by the statute of limitations at the time of the death of the creditor whose estate is being settled.

6. Where an heir brings an action against the administrator of an estate to recover his distributive share, and the administrator by answer pleads, as a setoff, a note of plaintiff to the decedent, against which note, as shown on the face of the pleading, the statute of limitations had run prior to the death of the payee, and the trial court sustains plaintiff's demurrer to the setoff and renders judgment for plaintiff after the administrator elects not to plead further, and the Court of Appeals holds the demurrer not well taken and reverses the judgment of the trial court, the Court of Appeals can not render final judgment for the administrator, but must remand the cause to the trial court for further proceedings.

Patrick Connolly died intestate on August 22, 1948, seized of real estate which he had inherited from his wife, Margaret Connolly. Under the so-called 'half and half' statute, section 10503-5, General Code, a half interest in that real estate passed to the brothers and sisters of Margaret Connolly. One such sister was Bridget McGovern.

Before they were informed of the interest of the heirs of Margaret, the heirs of Patrick joined in an agreement to sell the entire parcel to one McKendry. An escrow agreement was then executed in May 1949 by all heirs in both groups, under which the deed was to be deposited with a banking institution as escrow agent and in which provision was made for its delivery and recording, deposit of the total amount of the purchase price with the escrow agent and distribution among the heirs in both groups. The purchase price was paid to the escrow agent and the deed was recorded but distribution to the heirs was not made because a question arose as to the rights of said Bridget McGovern.

Bridget McGovern and her husband, John P. McGovern, executed and delivered to Patrick Connolly their promissory note dated June 6, 1930, for $2,600 with interest at 7 per cent. No part of the principal of said note or of the interest thereon had been paid. The administrator of the estate of Patrick Connolly claimed that the amount of this note and accrued interest should be set off against any amount which Bridget McGovern might be entitled to receive from the estate.

On August 16, 1949, the entire group of heirs of Margaret Connolly, including Bridget McGovern, joining as plaintiffs, filed a petition in the Probate Court for a declaratory judgment. The administrator of the estate of Patrick Connolly, all his heirs, the escrow agent and the purchaser of the real estate involved were named as defendants. The petition describes the real estate and recites the interest of the respective parties therein, the sale thereof, the execution of the escrow agreement and the alleged refusal of the escrow agent to make distribution to the plaintiffs in accordance with the escrow agreement. The plaintiffs pray for a declaration of their rights and of the duties of the escrow agent as to distribution.

The only issue raised by the answers was as to the right of setoff of the McGovern note obligation against Bridget McGovern's share of the estate. This was raised by the answer of the administrator in a separate paragraph thereof headed 'Setoff.' The plaintiffs promptly filed a demurrer to the alleged setoff and state the grounds of the demurrer as follows: '* * * and as grounds therefor say that it is apparent upon the face of said setoff that the instruments upon which said setoff is bottomed are barred by the statute of limitations; and secondly, that under the settled law of Ohio, no equitable setoff is permissible or allowable under the circumstances disclosed by the pleadings herein.'

The Probate Court found the demurrer to the setoff well taken and sustained it. The journal entry recites that the administrator of the estate of Patrick Connolly did not desire to plead further and then provides: 'The court renders judgment in favor of the plaintiff, Bridget (Summers) McGovern on the issues raised in the answer and setoff * * *.' The escrow agent was directed to distribute the money in its hands in accordance with the terms of the escrow agreement except that it should hold the amount payable to Bridget McGovern for such time as would permit appeal. The Probate Court made no separate finding of fact. A partial recital of facts is contained in the final journal entry. The escrow agreement is there mentioned but its provisions are not set forth.

Appeal on questions of law was prosecuted to the Court of Appeals by the administrator. There was no bill of exceptions. The administrator claimed that the court erred in sustaining the demurrer to the setoff and in entering judgment in favor of Bridget McGovern without allowing the administrator to set off from the distributive share due Bridget McGovern the amount of her indebtedness to Patrick Connolly.

The Court of Appeals reversed the judgment of the Probate Court and held that the Probate Court erred in sustaining plaintiffs' demurrer to the answer, 'for the reason that the said defendant's answer containing the setoff and counterclaim states a good defense and that only a question of law is presented under the pleadings.' The Court of Appeals then rendered final judgment 'declaring the right of Edward J. Connolly as administrator of the estate of Patrick Anthony Connolly to set off and counterclaim against the plaintiff, Bridget Summers McGovern's distributive share, the amount of the note with interest as set forth in said defendants' answer.'

The cause is in this court upon the allowance of a motion of Bridget McGovern to certify the record.

William P. Barnum and W. E. Stankiewicz, Youngstown, for appellants.

Schermer, Goldstein & Millstone, Youngstown, for appellees.


The appellant makes three claims of error: The first is that the Court of Appeals was without authority to render final judgment against the plaintiffs below--particularly against Bridget McGovern. The second and third are basically the same. They challenge the decision of the Court of Appeals that the outlawed note can be set off against the distributive share of the heir, Bridget McGovern. That is the real question at issue. The McGovern note was executed on June 6, 1930. The payee, Patrick Connolly, died August 22, 1948, It is conceded that the 15-year statute of limitations had run against the note before his death. What is the effect of the running of the statute? That question is not easily answered.

The first statutes limiting the time for bringing personal actions, as distinguished from actions involving real estate, were enacted during the reign of James I of England. Laws of such general character, but in a variety of forms, have been enacted in all the states of the United States. The courts of England and of America have decided many cases construing those statutes and defining rights of litigants thereunder but surprisingly little harmony of decision has resulted. In 53 C.J.S., Limitations of Actions, § 1, p. 900, is the following pertinent statement based on an early decision of a Maryland court:

'It has been remarked that on almost every question connected with the statute of limitations there has been a most embarrassing conflict of judicial opinion'.

A fair approximation of accord has been reached among our courts that basically such statutes are statutes of repose and not of presumption. The original English theory of presumption of payment or discharge of a debt long overdue is no longer generally relied upon to justify such statutes. As statutes of repose, they are considered as designed to secure the peace of society and to protect the individual from being prosecuted upon stale claims. Townsend v. Eichelberger, 51 Ohio St. 213, 216, 38 N.E. 207. It is said that sound public policy justifies a limitation for commencement of actions because of 'The difficulty of preserving evidence, the frailty of the memory and the contingency of the death of witnesses'. See Doyle v. West, 60 Ohio St. 438, 444, 54 N.E. 469; 53 C.J.S., Limitations of Actions, § 1, p. 902.

The practical effect of the theory of 'repose' is that the debtor has the option to assert the statute and defeat recovery ...

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