Harp v. Calahan

By the Court, Crockett, J.: In his lifetime one S. W. Calahan, now deceased, made and delivered to the plaintiff his two promissory notes and mortgages on real estate to secure their payment. Subsequently Calahan died, and by his last will and testament devised the land to his widow and minor children. The will was duly probated and letters of administration with the will annexed were issued to the widow. This is an action against the widow and other devisees to foreclose the mortgage, and was commenced in August, 1872. It appears on the face of the complaint that the notes and mortgages were never presented to the administratrix for allowance supported by the affidavit required by the Probate Act in the presentation of claims against the estates of deceased persons. But it does not appear whether a notice to creditors was ever - published by the administratrix as required by law. The Court sustained a demurrer to the complaint, on the ground that the failure to present the claim for allowance was fatal to the action; and the plaintiff declining to amend, a final judgment was entered for the defendants, from which the plaintiff appeals. — 230 — It has never been authoritatively decided by this Court, I believe, whether a creditor holding a debt secured by a mortgage made by a deceased person, whose estate still held the equity of redemption and the legal title to the mortgaged premises, must first present his claim for allowance, as a condition on which he can maintain an action to enforce his mortgage lien. It has, however, been decided that if the mortgagor, after the execution of the mortgage, convey the legal title to a third person and ceases to have any interest in the property, and then dies, the mortgage lien may be enforced without the presentation of the debt for allowance as a claim against the estate of the mortgagor. (Christy v. Dana, 34 Cal. 553.) In another case this Court decided that if a wife make a mortgage on her separate estate to secure a debt of her husband, who subsequently dies, the mortgage may be enforced against the mortgaged premises, though the debt was not presented for allowance as a claim against the estate of the husband. (Sichel v. Carillo, 42 Cal. 493.) In a more recent case, we held that if the mortgagor die, still holding the legal title and equity of redemption, and if the mortgaged premises be set aside by the Probate Court as a homestead for the use of the widow and child, whereby the property was no longer subject to administration as assets of the estate, the mortgage lien may be enforced, though the debt was never presented for allowance as a claim against the estate. (Schadt v. Heppe, 45 Cal. 433.) All these cases proceed on the theory that in requiring claims against the estate of a deceased person to be presented for allowance, within a limited period, the statute contemplates only such claims as are sought to be enforced as a charge against the estate generally, or against specific property in which the estate has at least a residuary interest. In Christy v. Dana, the mortgagor, in his lifetime, had ceased to have any interest in the mortgaged premises. In Sichel v. Carillo the property mortgaged was the separate estate — 231 — of the wife, in which the husband, whose debt the mortgage was made to secure, never had any interest; and in Schadt v. Heppe the mortgaged property was taken out of the administration, and ceased -to be assets of the estate for the payment of debts or for distribution, from the time when it was set apart as a homestead for the use of the widow and child. In these cases, therefore, we held that, inasmuch as neither the mortgage or mortgage debt was sought to be made a charge upon the estate, or upon any property in which creditors or distributees were interested, they were not within the letter, and certainly not within the spirit of the statute requiring claims against the estate to be presented for allowance within a prescribed period. These were not claims against the estate, in the sense of the statute, inasmuch as no remedy was sought to be enforced against the estate, or against any property in which it was in anywise interested. On the contrary, the proceeding was only to enforce a lien against property in which the estate either had never been or had ceased to be interested. The policy which dictated the provision requiring claims against the estate to be presented within a fixed period is perfectly apparent. It was intended to expedite the settlement of the estate, and to enable the administrator and the Probate Court to ascertain speedily, and with certainty, what debts were to be provided for, what sales of property would be necessary, and when the estate would be ready for distribution. But these reasons do not apply to a case in which no claim is asserted against the estate generally, nor against any property in which it is interested. It would be a vain and useless proceeding for a person who claimed nothing from the estate, nor sought to establish a lien against any property in which creditors or distributees were interested, to present to the administrator for allowance a demand, not claimed to be a charge upon the estate generally, or upon any of its property. No possible damage or embarrassment — 232 — can accrue to the estate, from the omission to present such a demand; and the provision in section one hundred and thirty of the Probate Act, that “if a claim be not presented within ten months after the first publication of the notice, it shall be barred forever,” means nothing more than that such a demand shall not thereafter be a charge upon the estate, or upon any property in which it has an interest. On the other hand, if it is sought to charge the estate generally, or any specific parcel of its property, the reasons already indicated establish the necessity of presenting the claim for allowance. If it be a mortgage, or any other form of lien on a specific parcel of property, the general title to which is in the estate, or in which it has a residuary interest which constitutes a fund for the payment of debts, and is or may be subject to distribution, it must be presented for allowance within the prescribed period. The mortgaged premises may be worth more than the amount of the mortgage; and it may be to the advantage of the estate to satisfy the mortgage out of other funds, and thus preserve the property from a forced sale. But whether it be or not, the administrator and the Probate Court are entitled to exercise their judgment in that particular, which they could not do understandingly, unless the claim be presented for allowance, supported by the proper affidavit, showing the amount justly due. It is only claims which have been presented and allowed that the administrator is authorized to pay; and hence, if a mortgage debt be not presented and allowed, the administrator would have no authority to pay it, and thus preserve the property from a forced sale, however much it might be to the advantage of the estate to do so.. For these and other reasons which might be adduced, it is clear that a mortgage debt, under the circumstances stated, must be presented for allowance within the prescribed period, on pain of being thereafter “barred forever,” as a charge upon the estate generally, or upon any specific parcel of its prop — 233 — erty constituting a fund for the payment of debts, or for distribution. It is now too well settled in this State to be open to debate that a mortgage does not convey the title, but only creates a lien on the property, the title remaining in the mortgagor subject to the lien. The demurrer to the complaint was therefore properly sustained. Nor is it material that it does not appear from the complaint whether a notice to creditors was published by the statute. If it had not been published the plaintiff may yet present his claim for allowance, within the proper time after publication. But in no event can he maintain an action to foreclose his mortgage until his claim has first been presented for allowance. If it had been presented and rejected section one hundred and thirty-four of the Probate Act authorizes an action to be brought within three months thereafter if it were then due, or if not then due, within three months after it shall have become due. If it had been presented and allowed he might at any time thereafter, if the debt were then due, have proceeded to foreclose his mortgage in the District Court. (Willis v. Farley, 24 Cal. 491.) But without having first presented his claim for allowance he has no cause of action. Nor did the Court err in striking out portions of the complaint. The portion stricken out in no degree obviated the necessity of presenting the claim for allowance. Notwithstanding the fact that the mortgaged premises were community property, the wife’s interest was subject to the payment of debts of the estate, and was an asset for that purpose in the hand.s of the administrator. Nor could the administratrix waive the necessity of presenting the claim for allowance. It was an obligation imposed by law, and she had no power to dispense with it. In Pitte v. Shipley, ante, 154, we had occasion to consider — 234 — the principal questions involved in this case, and the conclusions at which we arrived were in accordance with those above expressed. Judgment affirmed. Mr. Chief Justice Wallace did not express an opinion.