Bank of Montreal v. Buchanan

The opinion of the court was delivered by Hadley, J. The. appellant brought this suit and alleged that on November 25, 1890, James A. Buchanan and Mary E. Buchanan, his wife, were indebted to E. Bennett & Son in the sum of $1,680, and that as evidence of such indebtedness the said James A. Buchanan executed and delivered to said E. Bennett & Son three promissory notes, each for $560, maturing respectively on the 1st day of May in the years 1892, 1893, and 1894, which notes were afterwards transferred to appellant; that on or about June 22, 1892, said Mary E. Buchanan died, leaving a last will whereby the said James A. Buchanan was nominated as executor; that, on the 7th day of February, 1893, by an order of the superior court of San Juan county, said will was admitted to probate, and said James A. Buchanan was appointed as executor of said estate; that in accordance with the terms of said order he filed his bond as executor, but neglected to take out letters testamentary until the 7th day of May, 1901, and did not publish notice to creditors until May. 16, 1901; that on the 13th day of August, 1897, said James A. Buchanan, for a valuable consideration, executed and delivered to appellant his three promissory notes for $500 each, the same aggregating the full amount unpaid on the notes first above mentioned, arid maturing respectively in one, two,' and three years from date; that the last named notes were intended as renewals óf the first ones; that during the time-intervening between the maturity of the original note’s and the said 7th day of May, 1901, appellant was negotiating with said James A. Buchanan for a settlement of said indebtedness, and that he repeatedly promised to páy the same, — 484 — stating that, he desired to settle the claim without administering upon the estate, as he wished to avoid the expense of administration; that on July 18, 1901, the claim evidenced by said renewal notes, duly verified as required by law, was presented' to- said James A. Buchanan, as executor, and the same was. indorsed as rejected. Judgment- is demanded against James- A. Buchanan, both as an individual and as executor, for the amount of such renewal notes; together with interest, attorney’s fees; and costs. James A. Buchanan, as, executor, separately demurred to the complaint, on the ground that it does not state facts, sufficient to constitute a cause of action, and also that. the. action is barred by the statute of' limitations. The demurrer was sustained, and the cause dismissed as against: the executor. This appeal is, from that judgment. It is, suggested that the renewal notes declared upon in> the complaint could have been signed by James; A. Buchanan in hut, three possible capacities, viz., as; an individual; as-, executor, or as: survivor of a community. If the notes: were signed by him in his individual capacity, then in that capacity only is. he- liable. The- renewal notes did not, purport upon their face- to hind the- estate; hut in form, appear to he the individual notes of James A. .Buchanan-. If, however, he- undertook to sign them and intended to execute, them in the- capacity- of executor; did they become; obligations; against the estate ?' “An executor- or administrator cannot impose- any- liability on, the- estate by making, drawing, accepting,, or indorsing; any bill or promissory note,, though he-, has; authority to, indorse, negotiable- instruments; for the-, purpose of transferring the decedents title,, when a transfer is-necessary or proper. But such indorsement operates no further, so far as the estate is concerned, than to effect a transfer of title;, and any liability which may arise- on the — 485 — indorsement is the personal liability of the executor or administrator.” 11 Am. & Eng. Enc. Law (2d ed.), p. 936. Humorous decisions are cited in support of the above. It follows that the renewal notes, though the maker may have intended to execute them in the capacity of executor, did not create any new obligation against the estate, and its liability was not thereby enlarged. If the maker be considered as having executed the notes in the capacity of a survivor of a community, the same result follows. In this state, upon the death of either spouse, the entire community estate is subjected to administration. Ryan v. Fergusson, 3 Wash. 356 (28 Pac. 910); Lawrence v. Bellingham Bay, etc., R. R. Co., 4 Wash. 664 (30 Pac. 1099). The estate could not, therefore, be at one and the same time under the control of the executor and also of the survivor of the community as such. Moreover, the community no longer exists after the death of one of the spouses, but its estate is simply held intact by administrative proceedings for the purpose of paying indebtedness created during its existence. The entity called the “community,” is immediately dissolved upon the death of one of its members, and is in law as effectually dead as a deceased individual. What may be done by a survivor must therefore be done as an individual, and not as representing the community. As an individual the survivor can not enter into obligations binding upon the estate of the dead community. Viewed, therefore, from either of the three standpoints mentioned above, the renewal notes, considered as new and distinct obligations or contracts, are without force as against the estate. They were executed after an executor had charge of the estate, after the death of the community, and by their terms matured long after their date. — 486 — The allegations of the complaint are perhaps broad enough to be treated as declaring upon the indebtedness represented by the original notes. That indebtedness was created during the existence of the community. If the complaint be treated as based upon the original notes and the indebtedness of which they were evidence, we must next inquire if this action is barred by the statute of limitations. The g'enérál statute of limitations applicable to said notes provides that the action should have'been brought within six years. Section 4198, Bal. Code. The last of the notes matured May 1, 1894, and the complaint in this action was verified May 2, 1902. It is clear, therefore, that the action is barred, unless the running of the statute has for some reason been suspended. It is argued by appellant that the death of Mary E. Buchanan and the subsequent administrative proceedings had that effect. It is insisted that the general statute of limitations no longer applied, but that the right to maintain the action was thereafter controlled by administrative statutes. Under the latter an executor or administrator is required to publish a notice to creditors, and claims must be presented within one year after the first publication of the notice, or they are barred. §§ 6226, 6228, Bal. Code. The appellant urges that until a notice to creditors was published it was under no obligation to move toward the enforcement of its claim, and that, since it promptly presented its claim after such notice was published, and followed with' this suit, it is within the probate provisions above cited. The argument of appellant leads to the conclusion that the one year period fixed by the probate law for presenting claims has 'the effect to extend the general statute of limitations. We do not think it can be said to have that effect. It was rather intended merely to fix — 487 — a time within which claims not already barred by limitation statutes shall be presented. Whatever may operate to affect the general statute of limitations as against estates must be by virtue of § 4810, Bal. Code. That section provides: “If a person against whom an action may be brought die before the expiration of the time limited for the commencement thereof, and the cause of action survives, an action may be commenced against his representatives after the expiration of that time, and within one year after the issuing of letters testamentary or of administration.” Thus it will be Seen that an action may be commenced against the personal representatives even after the statute of limitations has run. But it must be commenced within one year from the issuing of letters testamentary. Appellant concedes in its brief that under § 6200, Bal. Code, the executor was qualified to act as such, and take charge of the estate when he filed his bond. It is also conceded, and authorities are cited by appellant to the effect, that an executor derives his authority from the will, and that confirm'ation by the court, followed by filing the bond, is equivalent to taking out letters, the letters being but the authentic evidence of the power conferred by the wiíl. It follows that this administration began in February, 1893, and § 4810, supra, therefore, affords appellant no relief in this case, since any extended right of action thereunder must have been limited to the year following the beginning of said administration. However, the statute had not then fully run against any of the indebtedness, and it could have been enforced long afterwards before the period of limitation expired. The appellant alleges that the executor neglected to proceed with the administration, that it was meanwhile negotiating with him for the settlement of its claim, and that — 488 — lie -repeatedly promised to pay it. "While this may be true, yet appellant was during all that time .chargeable with the knowledge of its legal rights, and was also bound to know that the statute of limitations was constantly running against its claim. Having allowed the period of limitation to expire, its .claim was thereafter barred. If the executor negleeted his duty in failing to proceed with the administration, that was no reason why the appellant s'lioiild remain idle and allow the statute to continue to run against its claim. The administration was initiated in 1893, eight years before appellant made any move to force the executor to proceed with the discharge of his trust. The complaint alleges that in May, 1901, appellant instituted proceedings to compel the executor to proceed, and that as a result thereof he did proceed with the administration. Such steps might have been taken by the appellant long before, and when no question as to the statute of limitations could have arisen. Hnder §§ 6161 and 6168, Bal. Code, the appellant could have brought to the attention of the court the fact that the executor was neglecting his duties, which must have led either to the discharge of his duties or to his removal and a new appointment. The appellant at all times had a clear remedy, and any inducements that may have led to the postponement of the use of the remedy did not affect the running of the statute of limitations. We conclude that the demurrer was properly sustained, and the judgment is affirmed. Fullerton, O. J., and Anders and Mount, JJ., concur.