In Re Estate of Simons

1 Reported in 255 N.W. 241. The appeal is from a judgment of the district court discharging a writ of certiorari issued to the probate court. There is no controversy as to the facts. On August 31, 1932, the Bank of Glencoe, a state bank, was taken over by relator for liquidation, and on December 2, 1932, he filed an order assessing the outstanding capital stock of the bank 100 per cent. When the bank closed and the assessment order was made, the books of the bank showed that eight shares of the bank stock were held and owned by Henry L. Simons and two by Anna L. Simons. Henry L. Simons died testate several years prior to 1923, and his estate was probated in McLeod county. Anna L. Simons was the sole legatee; but, before final distribution, Anna L. Simons died, in November, 1923, testate, and letters testamentary were granted by the probate court of Hennepin county to James E. O'Brien as executor. An order was made limiting the filing of claims to six months after December 17, 1923, and a hearing was had on claims June 17, 1924. Her estate has not been closed, and no petition has been filed asking for distribution. The final decree in the estate of Henry L. Simons, made after the death of the sole legatee, Anna L. Simons, distributed his personal estate to James E. O'Brien as executor of her estate. In May, 1933, relator's predecessor in office petitioned the probate court of Hennepin county to extend the time for filing claims against the estate of Anna L. Simons and permit the claim arising out of the assessment of said ten shares of bank stock to be filed. The petition set up the facts above stated. It was denied. Certiorari to *Page 45 review the order issued from the district court and was on hearing discharged. It is conceded that a claim arising from the double liability imposed by the constitution (art. 9, § 13, subd. 3) upon stockholders in a state bank is a contingent claim and so remains until, in a proceeding to liquidate the bank, it becomes necessary to enforce such liability by an assessment. As long as it remains contingent it may not be presented or allowed by the probate court against such a stockholder's estate. When an assessment is made by the state bank examiner in a proceeding to liquidate an insolvent bank, the contingent claim becomes absolute and a proper claim to enforce against the estate of a deceased stockholder, provided the time has not expired for so doing. Neither party to this appeal disputes these propositions. The question here is whether or not the time had expired for presenting or allowing any claim against the estate of Anna L. Simons based upon the assessment by relator of the holders of stock in the Bank of Glencoe. We need not consider whether the assessment against the eight shares of stock owned by Henry L. Simons could, in any event, be presented or allowed by the probate court as a claim against the estate of Anna L. Simons, for we reach the conclusion that the courts below rightly denied the claim, arising from the assessment of the two shares standing on the books of the bank in the name of Anna L. Simons, to be filed or considered as a claim against her estate. Our statutes governing the administration of the estates of deceased persons disclose a purpose to speed settlement and distribution thereof. In our complicated business affairs a person is apt to incur varied contingent obligations. The statutes, while so drawn as not to permit the existence of such contingent claims or obligations to delay the, settlement and distribution of estates of a decedent, carefully preserve to the holders thereof the right, when the claims become absolute, to enforce them against the next of kin, legatees, or devisees to the extent of the assets received by them from the estate. 2 Mason Minn. St. 1927, § 8809, directs the court, upon granting letters testamentary or of administration, to make an order limiting the time to present claims against the estate. The *Page 46 discretion of the court in that respect is restricted to narrow limits, by § 8811, providing that "the court, in its discretion, may receive, hear, and allow a claim when presented before the final settlement of the administrator's or executor's account, and within one year and six months after the time when notice of the order was given." Section 8812 reads: "All claims against the estate of a decedent, arising upon contract, whether due, or not due, or contingent, must be presented to the court for allowance, within the time fixed by the order, or be forever barred: Provided, that contingent claims arising on contract, which do not become absolute and capable of liquidation before final settlement, need not be so presented or allowed." Section 8815 provides: "No action at law shall lie against an executor or administrator for the recovery of money upon any demand against the decedent allowable by the probate court, and no claim against the decedent shall be a charge upon his estate unless presented to the probate court for allowance within five years after his death: Provided, that nothing in this section shall be construed as preventing an action to enforce a lien existing at the date of decedents death, nor as affecting the rights of a creditor to recover from the next of kin, legatees, or devisees to the extent of assets received." These statutes plainly direct the probate court, as soon as jurisdiction is taken of an estate of a decedent, to fix a limit for filing claims against it, such time not to exceed one year. However, the court is given discretionary power to permit a claim to be filed when presented before the final settlement of the executors' or administrator's account, and within one year and six months after the time when notice of the order to present claims was first given. In State ex rel. Scherber v. Probate Court, 145 Minn. 344, 177 N.W. 354, 11 A.L.R. 242, it was held that the probate court was without power to permit a claim to be presented for allowance after the expiration of one year and six months from the making of the order limiting the time to present claims, the claim being absolute and not *Page 47 contingent during the time limited for filing and presenting claims. But, as to contingent claims which become absolute after the limitation has expired but before the final decree, it was held in Ebert v. Whitney, 170 Minn. 102, 212 N.W. 29,51 A.L.R. 711, that, unless presented and allowed by the probate court against the estate of the decedent, they are barred, and no recourse can be had to the next of kin, legatees, or devisees to recover to the extent of the assets received. To the same effect is Hunt v. Burns, 90 Minn. 172,95 N.W. 1110. It will be noted that in these cases, as well as in those therein referred to, the contingent claim became absolute within five years after decedent's death, and hence § 8815 could not be invoked. In O'Brien v. Larson, 71 Minn. 371,74 N.W. 148, the syllabus, referring to the action of the probate court in allowing a claim presented after five years had expired since the death of the decedent, states: "The probate court erroneously allowed claims not presented within the five years"; but, because no correction of the error was sought in that court or by appeal to the district court, the allowance was held conclusive. We think Granger v. Harriman, 89 Minn. 303,94 N.W. 869, 870, sustains the proposition that no claim may be presented or allowed by the probate court against the estate of a decedent after the expiration of five years from the date of his death. After there calling attention to this statute (§ 8815) the court said [89 Minn. 306]: "If the next of kin neglect to apply for an administration, creditors, or others interested in the estate, may do so; and, if creditors permit the estate to go unadministered for the period of five years from the death of the intestate, their claims are as effectually barred as though an administrator had been appointed and they had failed to present them for allowance." In fact, the wording of § 8815 is so plain, direct, and clear as to be open to but one construction when it says, "no claim against a decedent shall be a charge upon his estate unless presented to the probate court for allowance within five years after his death." The conclusion is inescapable that the probate court is prohibited from permitting a claim against an estate to be considered or allowed *Page 48 unless presented or filed within five years from the death of the decedent. The act of allowance makes it a charge against the estate. If allowed, it becomes a charge to be paid out of the estate. The claim here involved was not capable of presentation as a claim against the estate of Anna L. Simons until long after the expiration of five years from her death. So, while it was barred from being allowed and paid out of the estate, § 8815 saves to the holder thereof the right to recover of the next of kin, legatees, or devisees of Anna L. Simons to the extent of assets received from the estate. Berry-hill v. Peabody, 72 Minn. 232, 75 N.W. 220. The reasons for excluding contingent claims from allowance in the administration of estates is fully considered in Hantzch v. Massolt, 61 Minn. 361,63 N.W. 1069. When claims are allowed against an estate of a deceased person by the probate court, payment should follow without delay if the executor or administrator has funds available or property which may be sold under license from the court. We can readily suppose a case where an executor or administrator had paid such claims and made a partial distribution of the estate so that only a small sum remains, and then, after the expiration of five years from decedent's death, large contingent claims become absolute in the sum of many thousand dollars. In what position will the executor or administrator be placed if the probate court should allow them? Such or like considerations no doubt impelled the enactment of § 8815, which makes clear that no claim may be allowed in the administration of a decedent's estate that has not been filed in the probate court within five years after his death. Another statute (§ 8729), based on the same proposition, has existed for many years and is indicative of a legislative intent to terminate the power of the probate court in the administration of a decedent's estate to allow a claim to become a charge against the estate unless such claim is presented before the lapse of five years from his death. Fitzpatrick v. Simonson Bros. Mfg. Co. 86 Minn. 140, 90 N.W. 378. In the following cases cited by relator the claim was asserted or could have been asserted against the estate before the expiration of five years from decedent's death. In re Estate of Mills, 34 Minn. 296, 25 N.W. 631; State ex rel. Security Tr. Co. v. Probate Court, *Page 49 67 Minn. 51, 69 N.W. 609, 908; State ex rel. Musgrave v. Probate Court, 79 Minn. 257, 82 N.W. 580; Martz v. McMahon,114 Minn. 34, 129 N.W. 1049; Hoidale v. Vogtel, 158 Minn. 106,196 N.W. 939; Baird v. McMillan, 53 N.D. 257, 205 N.W. 682,41 A.L.R. 177. In Hirning v. Kurle, 54 S.D. 334,223 N.W. 212, also cited, no statute similar to § 8815 was involved or invoked. The argument that since there has been no final distribution in the estate of Anna L. Simons the probate court could pass on the claim with less expense and trouble to all concerned than if relator has to resort to a suit against the next of kin, legatees, or devisees of Anna L. Simons should not be allowed to nullify the plainly expressed provision of the applicable statute. The judgment is affirmed.