Tecumseh National Bank of Tecumseh v. McGee

• Decision Date: 17 April 1901
• Docket Number: 11,761
• Citation: 85 N.W. 949,61 Neb. 709
• Parties: TECUMSEH NATIONAL BANK OF TECUMSEH v. MARY A. S. MCGEE
• Court: Nebraska Supreme Court

85 N.W. 949

61 Neb. 709

TECUMSEH NATIONAL BANK OF TECUMSEH v. MARY A. S. MCGEE

No. 11,761

Supreme Court of Nebraska

April 17, 1901

ERROR from the district court for Johnson county. Tried below before STUBBS, J. Affirmed.

AFFIRMED.

S. P Davidson and Frank M. Hall, for plaintiff in error.

Jefferson H. Broady and E. F. Pettis, contra.

OPINION

HOLCOMB, J.

The plaintiff's right of action is based on an alleged deposit of $ 5,000 made by one George W. Harmon in the defendant bank, plaintiff in error in this court. On a former appeal the case was reversed, because, under the answer which, by stipulation, was permitted to be filed after the trial, the plea of payment was tendered, and the instructions failed to properly present to the jury that issue. Tecumseh Nat. Bank v. Harmon, 48 Neb. 222 226, 66 N.W. 1128. Says Commissioner IRVINE in that opinion: "As the issues stood at this time, the petition was on a deposit. The answer was a general denial, and under this answer the defendant could not prove discharge by payment or otherwise; but under the answer as finally filed, while it was perhaps not very artificially drawn, the issue of payment was presented; and the question was not merely whether a deposit had been made on March 6, but it was whether the bank had discharged the liability thereby incurred by collecting the check and paying its proceeds to Russell & Holmes, in pursuance of plaintiff's direction." The issues respecting the alleged deposit and the discharge of the obligation thereby created remain substantially the same as in the first trial. After the case was reversed and remanded for further proceedings, the then plaintiff, George W. Harmon, died, and the action was revived and prosecuted in the name of the administrator of the estate of the decedent. A second trial was had, resulting in a disagreement of the jury. Thereafter the administrator entered into a compromise and settlement of the case by defendant paying $ 800, or $ 200 for each of the four heirs of the estate. A stipulation embodying the terms of the settlement was entered into and filed in the case, upon which judgment was rendered. The stipulation seems to have had the consent and support of three of the heirs, one of whom was also a stockholder in the defendant bank. The fourth heir, who was afterwards substituted plaintiff in the action, and who is now the defendant in error, at the same term of court at which the stipulation of settlement was filed and judgment rendered thereon, presented a motion and objections to the settlement, claiming that it was without her knowledge or consent and unauthorized, and violative of her rights as one of the children of the deceased, an heir to the estate, and that the court was without jurisdiction to enter the order made without her consent, and prayed that the settlement and the judgment thereon be vacated and set aside, and that she be permitted to be substituted as plaintiff and prosecute the action in her own name, in the event the administrator refused or neglected so to do. After a hearing on the motion, the evidence taken at the time not being preserved in a bill of exceptions, the court sustained the motion as to the one-fourth interest in the cause of action set forth in the petition of the party objecting, upon condition that she pay or return to the defendant the $ 200 paid to the administrator as her proportion of the money paid under the terms of the settlement. This she did, and thereupon was permitted to, and did, prosecute the action to final judgment in her favor for one-fourth of the amount found due on the cause of action stated in the petition. From this judgment the defendant prosecutes error to obtain a review of the proceedings had in the trial court.

It is contended that the order substituting and permitting the defendant in error to prosecute the action in her own name as was done, was erroneous, and that she is without legal capacity to sue; that the administrator alone can prosecute the action, involving, as it does, a claim due the estate of which he is the duly constituted and legal representative, and we are cited to the case of Cox v. Yeazel, 49 Neb. 343, 68 N.W. 483 in support of the contention. In the first and second paragraphs of the syllabus in that case it is held: "Generally, an action to recover a debt payable to a deceased intestate must be brought by the administrator of the estate." "Such an action cannot be maintained by the heirs at law, unless there be no demands against their decedent ancestor, and there has been no administration, or the administration has been closed." Says NORVAL, J., in the opinion, page 349: "Counsel for plaintiffs below concede the general rule to be that the heirs cannot sue for assets belonging to an estate of an intestate, but that such action must be brought by the administrator. They insist, however, that this rule has a general recognized exception, that when it is shown that the estate owes no debts and that no letters of administration have been granted, the title to the personal property and choses in action passes to the heirs and they may sue to recover the same, and distribute the assets among themselves without the expense of administration. That such doctrine exists and is abundantly sustained by the authorities, cannot be doubted. Where there are no liabilities or debts against the estate of an intestate, there is no necessity for increasing the expense of administration, and in such case the heirs may maintain an action to recover a debt owing the estate. * * * His estate had not been fully settled, nor is it alleged that even the costs of administration have been paid; hence, the administrator, and not the heirs, had the right to recover the debts due his intestate." The purpose of the rule unquestionably is to prevent different suits on the same cause of action, and it is also necessary because the creditors of an estate have an interest therein, which can be protected only by the personal representative, to whom they may look for the conservation of the estate and its assets until the debts against the same are satisfied and the costs of administration paid, after which no other interests are involved, save those of the heirs, who may then be allowed to prosecute in their own names an action for the recovery of a debt due the estate. There is a marked distinction between the case at bar and the one cited. The conditions are entirely dissimilar. By the stipulation of settlement the defendant agreed to and paid $ 200 to each of the four heirs of the deceased; except the defendant in error, and for her $ 200 was paid to the administrator for her use as the only remaining heir at law of said deceased. This payment she refused to authorize, accept or consent to. No creditors of the estate were concerned in the settlement. It was not made with the administrator for the purpose of swelling the assets of the estate to pay debts. These had evidently been provided for. The right of the heirs at law were recognized, and as to three of them the money, according to the terms of the settlement, was paid direct, and their consent obtained and authority recognized. The money for the fourth heir only was paid to the administrator and for her use and benefit. The defendant bank was a party to all these proceedings and, having recognized the rights and authority of the heirs at law in the premises, ought now to be estopped from denying the substituted plaintiff's right to repudiate the settlement as to her and prosecute on her own behalf for her interest in the debt sued for. The other heirs at law, having accepted the benefits of the settlement so far as it affected them, are not now in a position to claim anything from the defendant by reason of its obligation on the alleged deposit. The case is thus taken out of the general rule respecting the right of the personal representative to prosecute an action and represent the interests of creditors and heirs in a decedent's estate. The right of recovery in the case at bar is restricted to the interest of one only of the heirs at law. The defendant has received from her the $ 200 paid for her use to the administrator, and is thus estopped from claiming a settlement of the controversy as to such interest. The evidence submitted on the motion to vacate the order of dismissal entered on the stipulation of settlement we are to assume is sufficient, and the order can not now be subject to review. We may presume, in the absence of this evidence, that it was shown that the estate was settled up, or so far that all necessary arrangements had been made for the satisfaction of all claims against the estate and the costs of administration, leaving the subject of the present controversy purely one affecting the rights and interests only of the heirs at law. But even if this is not the case, the proceedings must be regarded as an exception to the general rule. By the terms of the compromise the heirs, or the estate, were receiving but little, an insignificant sum compared with the amount claimed in the petition. There was no substantial increase in the general assets of the estate. The sums paid went to the heirs at law. One heir disavowed the settlement, and certainly had the right to be heard in her own behalf, if not for the estate and all interests represented therein. The court found in her favor. This was equivalent to finding that the settlement was unwise and improvident, and prejudicial to her substantial rights or collusive and in fraud of her rights, and that the act of the representative of the estate was not such as to properly protect her interests. Thereupon she was given the right to prosecute in her own behalf. This, we think, was proper to be done under the circumstances of the case,...