Summary
In Gerhold, the Supreme Court found that the owner of a promissory note did not have to present his claim to the administrator of an estate under G.C. 10509-112, a predecessor section to R.C. 2117.06, where the administrator was already in possession of the note at the time of his appointment.
Summary of this case from Varisco v. VariscoOpinion
No. 25598
Decided January 8, 1936.
Executors and administrators — Presentation of claims by creditors — Sections 10509-112 and 10509-134, General Code — Owner of promissory note not required to present claim — Fiduciary in possession of note for collection.
The provisions of Sections 10509-112 and 10509-134, General Code (114 Ohio Laws, 320), do not require the owner of a promissory note to present his claim thereunder to an executor or administrator when the executor or administrator at the time of his appointment is already in possession of the note for collection.
CERTIFIED by the Court of Appeals of Summit county.
On January 20, 1934, this action was instituted in the Court of Common Pleas by the plaintiff, Peter Papathanasion, against Emma Louise Gerhold individually and as the administratrix de bonis non of the estate of her deceased husband, Charles H. Gerhold.
In his petition the plaintiff alleges in substance that he is the owner and holder of an $8,000.00 promissory note executed by Emma Louise Gerhold and Charles H. Gerhold on March 14, 1929, in favor of the Wise Home Building Company; that the stipulated schedule of payments thereon was not maintained; that on November 18, 1933, the defendant, Emma Louise Gerhold, was appointed administratrix of her deceased husband's estate; that on December 7, 1933, the plaintiff exercised his option to declare the note due and payable; that on the same date he presented his affidavit or proof of claim therefor to the defendant administratrix for allowance or rejection; and that the claim has not been allowed.
The following joint answer was filed:
"Comes now Emma Louise Gerhold for herself and as administratrix of the estate of Charles H. Gerhold, deceased, and for answer to the petition of the plaintiff alleges that on July 7, 1932, the First Central Trust Company was appointed executor of the estate of Charles H. Gerhold and continued as such until the appointment of Emma Louise Gerhold on the eighteenth day of November, 1933; that during the entire time said First-Central Trust Company was the executor, there is no record of this plaintiff claiming any amount as a creditor of said estate and that plaintiff thereby has waived and lost all right to a claim against said estate, if any he had, by his failure to file a claim for said length of time.
"Answering further, answering defendant denies that plaintiff is the owner of the claim set forth in the petition and that there is due, on the claim plead, the amount claimed."
The trial resulted in a directed verdict and judgment for the plaintiff in the sum of $8,249.01 against the defendant, Emma Louise Gerhold, individually and as administratrix.
Upon the prosecution of error proceedings to the Court of Appeals the judgment of the trial court was affirmed, and the cause was certified to this court on the ground that the decision is in conflict with the judgment pronounced upon the same question by another Court of Appeals, namely, the Court of Appeals of the Second District, in the case of Burton v. Bausman, Executor.
Mr. John McIntosh, for plaintiffs in error.
Mr. William J. Laub, for defendant in error.
It should be noted first that although Emma Louise Gerhold individually is a party plaintiff in error in this court as she was in the Court of Appeals, nevertheless no claim is made that the trial court was in error in directing a verdict and entering judgment against her as a defendant.
The questions of law here presented are procedural in their nature and relate to the defendant solely in her representative capacity as administratrix de bonis non of the estate of her deceased husband. She contends that the plaintiff's action is barred by reason of his failure to present his claim first to the executor, the First Central Trust Company, within four months as required under the provisions of Section 10509-112, General Code, and also by reason of the plaintiff's further failure to make application to the Probate Court for reinstatement of his claim as provided by Section 10509-134, General Code.
Section 10509-112, General Code, reads as follows:
"Creditors shall present their claims, whether due or not due, to the executor or administrator within four months after the date of his appointment. Such executor or administrator shall allow or reject all claims, except contingent claims, within thirty days after their presentation. Any claim presented after the time herein provided shall not prevail as against bona fide purchasers or as against executors and administrators who have acted in good faith, or against a surviving spouse who has made the election to take under the will or at law, and, except as to negotiable instruments maturing subsequent to the expiration of such time, any such late claim shall not prevail as against bona fide distributees."
Section 10509-134, General Code, contains the following provisions:
"Upon petition filed by a creditor or person deriving title from him, whose claim has not been presented within the time prescribed by law, the probate court, if after notice to all interested parties and hearing, it is of the opinion that justice and equity so require, and that the petitioner is not chargeable with culpable neglect in failing to present his claim within the time so prescribed, may permit petitioner to file his claim for allowance, but such allowance shall not affect any payment or distribution made before the filing of such claim, nor shall it prejudice the rights of creditors whose claims were filed within the time prescribed by law."
The defendant insists that these requirements are mandatory, and that failure to comply therewith is a complete bar to this action. However, the unusual circumstances of this case are such that it is unnecessary to discuss the defendant's views as to the application of these statutes in ordinary cases. It is not disputed that at the time the First Central Trust Company was appointed executor it already had the plaintiff's note in its possession for collection, and that one payment thereon was made subsequent to the appointment. Furthermore, it is not claimed that the executor ever demanded a voucher or affidavit from the plaintiff as it had the right to do under Section 10509-114, General Code. Another coincidence is that the administratrix de bonis non is a co-maker on the note. Who could be expected to have more knowledge of the existence and status of this debt than just this executor with the note in its possession for collection, or the administratrix as one of the co-makers thereon? The manifest and commendable purpose of these and related statutes is to secure an expeditious and efficient administration of estates by promptly providing executors and administrators with necessary information relating to all indebtedness thereof. Can it reasonably be said that under the intent and purpose of these statutes this plaintiff was required to go to the trust company after its appointment as executor and again call its attention to his unpaid note already in its hands for collection? Or, assuming that the trust company were serving in the capacities of executor of the plaintiff's estate as well as of the Gerhold estate, could it reasonably be contended that the trust company as executor of the one estate would be required to present itself with notice of the claim of the other? There are at least two complete answers to these questions. In the first place the trust company could not unknow in the one capacity a fact already within its Knowledge in the other; and secondly the law does not require the performance of a vain act.
It is of course true that although the trust company retained possession of the note during the entire period of its service as executor, the plaintiff had not at that time exercised his option to declare the entire amount of the principal due and payable. However, the statute requires notice of claims "whether due or not due."
It should be observed further that there is no contention of rejection of the plaintiff's claim until after the defendant was appointed administratrix. The date of her appointment was November 18, 1933. The claim was formally presented to her on December 7, 1933, and by reason of her failure to allow, dispute or reject it, the plaintiff filed this action on January 20, 1934.
From the foregoing reasoning it is apparent that the judgment of the Court of Appeals must be affirmed.
Judgment affirmed.
STEPHENSON, WILLIAMS, JONES, MATTHIAS, DAY and ZIMMERMAN, JJ., concur.