Litz v. Exchange Bank

Opinion of the court by Hainer, J.: The question presented to this court is, whether or not the holder of a chattel mortgage, who in good faith deems himself insecure, after the death of the mortgagor, who dies intestate, before the debt is due, and prior to the appointment of an administrator, either a special or general, can take possession of and sell the property covered by said mortgage. This action is based upon section 1603 of Wilson’s Annotated Statutes of Oklahoma, of 1903, which provides as follows : “If any person before the granting of letters of testamentary or of administration, embezzles or alienates any of' the moneys, goods, chattels or effects of a decedent, he is chargeable therewith and liable to an action by the executor or administrator of the estate, for double the value of .the prop *570 erty so embezzled or alienated, to be recovered for tbe benefit of the estate." Section 6894 of the same statutes, in regard to the disposition of the property of a decedent, who dies intestate provides as follows: “The property, both real and personal, of one who dies without disposing of it by will, passes to.the heirs of the intestate, subject to the control of the probate court, and to the possession of anyr administrator appointed by that court for the purpose of administration.” Under the provisions of our statute, a mortgage does not convey title to the property mortgaged, but only creates a lien thereon. Hence, a mortgagor has the undoubted right to pay the indebtedness, and thereby extinguish the lien at any time before the property is sold by the mortgagee. One of the objects of the statutory notice of ten days, which is required to be given in case the mortgagee attempts to foreclose his mortgage is to give the mortgagor an opportunity to pay the indebtedness, and thereby extinguish the lien upon the property. It will thus be seen that under the provisions of our statute in. regard to the descent of property of a decedent who dies intestate, the personal property, as well as the real estate, passes to the heirs of the intestate, subject to the control of the probate court, and thence to the possession of the administrator appointed by the court, for the purpose of administration. Hence the right to the possession of personal property, between the time of the death of the intestate and the granting of letters of administration, is, by operation of law, suspended and held in abeyance In vol. 11 Am. and Eng: Ency. of Law, (2 ed.) page 985, the rule is thus’stated: *571 “The title of administrator on the other hand is derived «solely from the court by which his letters are granted, and therefore his title to the decedent’s estate does not vest until the letters are granted.” And on the following page, in a note, this doctrine is announced : “Between the death of the intestate and the granting of letters the legal title to personal property of the intestate is suspended and vested in no one.” See authorities there cited. In the case at bar the mortgagee proceeded to take possession of the property covered by the chattel mortgage the day following the death of the mortgagor, who died intestate on the 14th day of May, 1895, and on the 17th day of May the mortgagee proceeded to advertise the property for sale, and sold the property on the 28th day of May, 1895, before a special or general administrator had been appointed, and before any application for appointment had been made. But since the property of a decedent passed, the moment of his death, to the heirs, subject to the control of the probate court, the right of the mortgagee to foreclose and sell property was suspended and held in abeyance until a special of general administrator was appointed by the probate court, and any attempt to sell or alienate the property during that period was a wrongful intermeddling with the property of the intestate. (Yol. 22 Cent. Dig. 3549.) It is true that by the agreed statement of facts it is admitted that the mortgagee “had reasonable grounds to believe and did believe in good faith, that its security was impaired and was in great danger-of depreciation in the loss and removal of cattle therein described, unless it immediateJy took possession of said property.” But this fact would not *572 warrant the mortgagee in advertising and selling the property before a special or general administrator was appointed. Under the strict provisions of the common law, any in-termeddling with the possession of the property, however slight, was wrongful, and the person so intermeddling was known as an executor de son tort. But this strict doctrine of the common law has been relaxed by modern authorities, and by virtue of the statutes of most of the states; and we think the rule has been modified in this Territory. A mortgagee, if he has reasonable grounds to apprehend, and in good faith believes, that the security is about to be lost or materially impaired, has a right to take posession of the property for the purpose of preserving it, but has no right to sell or alienate the same until a special or general administrator has been appointed, whose duty it is to protect the interests and rights of the estate. We think the manifest purpose of the act of the legislature which provides that any person before the granting of letters testamentary or of administration, alienates any of the money, goods, chattels or effects of a decedent, is chargeable therewith, and liable to an action by the executor or administrator of the estate, for double the value of the property so' alienated, was to prohibit the doing of just such acts as are alleged to have been committed in this action. In other words, from the agreed statement of facts in this ease, we think the defendant comes clearly within the letter and spirit of said act. We have examined the doctrine as announced by the supreme court of Iowa in the case of Coke v. Montgomery, 39 N. W. 386, and the other authorities cited by counsel for defendant in error. In these cases the question under consideration was whether or not the claim should be presented *573 to the administrator before the mortgagee had a right to foreclose his mortgage, and it was there held that it was not necessary to present the claim to the administrator, on the theory that the mortgagor’s contract did not terminate with his death, and that there was no provision of the statute which required a mortgagee of chattels to file his claim, and await the slow process of administration to adjust priorities and determine his rights. And that if the foreclosure was wrongful, or the debt had been paid, the administrator had ample authority for protecting the estate by injunction, or other appropriate action. In all these eases cited by counsel, it appears that an administrator had been appointed, and the sole question was whether or not it was necessary to present the claim to the administrator; and whether a person who had an interest in the estate was a wrongdoer and intermeddler from the mere fact of taking possession of the property in good faith for the purpose of preserving the same. We think there is no conflict between the authorities cited and the doctrine announced herein. Manifestly the contract of the mortgagor does not terminate with his death; but by operation of law it is suspended and held in abeyance until an administrator is appointed'. Our conelustion then is that the court below erred in holding that, prior to the appointment of a special or general administrator, the mortgagee had the power and authority to sell or alienate the property. For the reasons herein stated, the judgment of the district court is reversed, and the cause remanded with directions to grant a new trial. Paneoast, J., who presided in the court below, not sitting; all the other Justices concurring.