Wilson v. Martinez, 2730

• Decision Date: 24 September 1956
• Docket Number: No. 2730,2730
• Citation: 76 Wyo. 196,301 P.2d 785
• Parties: Frances Irene WILSON, Plaintiff and Respondent, v. Casia D. MARTINEZ and Josephine Thompson, Executrixes of the Estate of Catherine Phelan, Deceased, Defendants and Appellants.
• Court: Wyoming Supreme Court

Page 785

301 P.2d 785

76 Wyo. 196

Frances Irene WILSON, Plaintiff and Respondent, v. Casia D. MARTINEZ and Josephine Thompson, Executrixes of the Estate of Catherine Phelan, Deceased, Defendants and Appellants.

No. 2730.

Supreme Court of Wyoming.

Sept. 24, 1956.

Greenwood & Ferrall, Cheyenne, James E. Barrett, Lusk, A. R. McMicken, Rawlins, for appellants.

Lathrop & Lathrop, James A. Tilker, Cheyenne, for respondent.

HARNSBERGER, Justice.

Harry Phelan, father of the plaintiff, died on April 15, 1917, and his widow, Catherine, the plaintiff's mother, was appointed as administratrix of his estate. On May 18, 1920, the court entered its 'Order of Final Settlement and Distribution', wherein the accounts of the administratrix were finally approved and settled, and a finding made that the estate of the deceased consisted of ninety-five shares of the capital stock of Continental Sheep Company, of the value of $230 per share. The order directed the administratrix to sell, at $230 per share, such number of these shares as would provide the money necessary to pay debts, fees and costs of the administration amounting to approximately $9,500, and to pay the same. The court then decreed that the administratrix distribute to the guardian of Frances Irene Phelan, now Frances Irene Wilson, the plaintiff in this action, one-sixth of the estate of the deceased remaining after such payments.

It would have required the sale of 42 shares of the estate's stock at the price stipulated in the decree to raise sufficient money to pay the debts, fees and costs of administration, after which there would have been left in the hands of the administratrix only 53 shares of which the plaintiff's guardian would have been entitled to receive one-sixth or 8 5/6 shares.

At the time of the entry of the order, this plaintiff was of the age of 17 years, having been born on August 22, 1902, and thereafter becoming of full age on August 22, 1923. It is not shown that any guardian for the plaintiff was appointed either at the time of the entry of the order of distribution or at a later date.

The evidence indicates that the administratrix Catherine died about April 23, 1953, and two of her daughters, the defendants Casia D. Martinez, a half-sister of the plaintiff, and Josephine Thompson, a sister of the plaintiff, became the executrixes of their mother's estate, letters testamentary being issued to them on September 16, 1953.

On December 17, 1953, plaintiff filed her creditor's claim against the estate of her mother, Catherine, setting forth as a basis for the same that the order of distribution entered in the matter of the estate of her father, Harry Phelan, deceased, ordered the administratrix to distribute 10 shares of Continental Sheep Company stock to the plaintiff; that she had never received the ten shares nor any dividends paid thereon; that her mother, the administratrix of her father's estate, had collected $5,170 as dividends on plaintiff's stock and appropriated the same, and that in 1949 the administratrix sold the stock for $4,000 and appropriated the proceeds of the sale; that by reason of such appropriation of dividends, proceeds of sale and interest accruing thereon, the estate of her mother, Catherine, was indebted to the plaintiff in a total sum of $26,284.51. The claim was rejected by the executrixes and plaintiff brought this action to recover the amount set forth in her creditor's claim.

The first defense interposed by the executrixes was substantially a general denial. Further defenses included a plea of payment; a plea of the eight year statute of limitation of actions upon a contract not in writing, either express or implied; a plea of the four year statute of limitation of actions for recovery of personal property or for taking the same and a plea of the ten year statute of limitation of actions for relief not otherwise provided for.

The case was tried to the court without a jury and judgment entered in favor of the plaintiff for $16,436.70, plus $20.50 costs. It is from this judgment that the defendants appeal.

The plaintiff seemingly sought recovery because, (1) her mother breached her trust as administratrix and converted the plaintiff's share of her father's estate to her own use, (2) the assets of the father's estate or the proceeds thereof, which were subject to the distribution made by the decree unto plaintiff, remain in the possession of her mother's executrixes, who are the defendants.

The statutes of limitation being pleaded in defense, and the plaintiff challenging the plea on the theory that the deceased administratrix as a trustee for the plaintiff could not invoke the bar of the statute, we should first say that we consider it settled that by operation of law, personal representatives of deceased persons are trustees for all persons interested in the decedent's estate. The kind, extent and particular nature of such trust, and the effect of the trust relationship upon the rights of the parties to this litigation particularly with respect to limitation statutes, will receive further attention in the discussion which follows.

The appellant advances a further contention. Over the appellant's objection, plaintiff was permitted to testify that she had never received from her mother the distributive share of her father's estate which had been decreed. However, on plaintiff's own motion made before judgment, this testimony was stricken. The appellant now says that with the deletion of this testimony, the record is absent of evidence showing plaintiff did not receive her distributive share and that proof of this fact was essential to enable plaintiff to recover.

We will first deal with the trust relationship and whether statutes of limitation are inapplicable in this case because of it.

As more than thirty years passed after the plaintiff reached her majority and before she brought this suit, if the statutes of limitation are applicable, the judgment in this case must be reversed.

There seems to be little, if any, practical difference between legacies and distributive shares, insofar as rights for their recovery are concerned, so it may be worthwhile in analyzing the matter to give consideration to the reasons which molded the law with respect to actions for recovery of legacies, in order that we may properly evaluate the persuasiveness of early holdings that neither statutes of limitation nor the doctrine of laches may be invoked to protect an executor in an action by a legatee for recovery of a legacy, as they may bear upon the right of a distributee to recover an inheritance. Being in legal contemplation a trustee, the law presumed the possession of the executor to be the possession of the legatee, and because of this unity in the possession of the subject matter of the trust, no action at law between them for possession could lie. The parties were not adverse. It followed then, that until something occurred which rendered their positions adverse, such as a denial or repudiation by the executor of the trust relationship, the legatee was without such a right of action at law against the executor as would toll the statute of limitations. Annotation, 122 A.L.R. 286. Furthermore, a legatee was not permitted to sue the executor in a court of law unless the latter gave consent or assented to the action. This resulted in the legatee being frequently compelled to seek relief in equity where the exclusive character of its jurisdiction in such cases left inapplicable statutes of limitation which originally did not specifically apply to suits in equity. But as jurisdiction of claims for legacies and inheritances was extended to law courts, which were subject to the statutes placing limitations upon actions at law, the situation changed.

In order to understand why statutes of limitation have been considered inapplicable to protect personal representatives against belated claims by those claiming to be entitled to legacies or distributive shares, it seems well to make some examination of both texts and cases which have dealt with the subject.

Earlier texts indicated that limitation statutes did not apply although some intimated that after the lapse of 20 years the doctrine of laches would do so in proper cases.

For instance, in Angell on Limitations, 6th Ed., (1876) §§ 90, 93, pp. 91, 92, it is said:

'90. The plea of the statute of limitations to an ordinary action of a legacy has never been known; it has long been a settled principle that the statute does not apply in such a case; and it has been ever so understood in England, both in the common-law and ecclesiastical courts. Chancery has refused to adopt the rule by analogy to the statute, because an executor stands in the relation of a trustee, and whilst the trust subsists, the statute has not been permitted to run.

The same author does however say:

'93. By analogy to the statute of limitations, an artificial presumption has long been established, that where payment of a bond or other specialty was not demanded for twenty years, and there has been no circumstances to show that it was still acknowledged to be in existence, the jury are to presume payment at the end of twenty years. * * *'

Vol. 1, Wood on Limitations, 4th Ed. (1916), pp. 4, 133, 134, 297, 298, says:

'The common law knew no such limitations; but courts of equity, refusing to enforce stale demands, presumed the payment of a bond or other specialty after twenty years, and courts of law adopted the same rule. Such presumption of payment did not depend upon statute, and differed in its effect from the statutory limitation, as it did not bar the action on the original contract, and any competent evidence which tended to show that the debt was unpaid was admissible for that purpose, and it might be overcome by evidence wholly insufficient as against the general statute of limitations.'

This author further says, at pp. 133, 134:

'* * * There being no statutory provision as to...