Holland v. Lowe

JUDGE DuBELLE delivered the opinion oe the court. This suit was brought in equity by certain heirs, distributees and creditors' of James Lowe, deceased, against' the other heirs, distributees and creditors under sections 428 and 429 of the Civil Code, seeking a settlement and distribution of the estate, a reference to the commissioner and an order directing creditors to appear and prove their claims by a named day. The petition averred the amount of debts, nature and value of the property, and made a party defendant one Schuerman, who is alleged to have a contract of lease upon certain real property belonging to the estate, with the privilege of purchasing at the price of $3,000 upon the expiration of the lease. A demurrer was filed to the petition and sustained by the trial court upon the ground, as stated in the briefs, that there must be an allegation of fraud or mismanagement on the part of the administrator to enable plaintiffs to maintain the action, and also an averment of proof of claims and demand , made upon the administrator for the claims mentioned in the petition. An amended petition was filed, charging a combination and confederacy between the administrator and one of his attorneys to delay payment of claims due from the estate in order to permit the attorney to obtain contracts with claimants for a large proportion of their claims as fees for the recovery, and also averring due verification and proof of the claims set up in the original petition, and demand of payment made upon the administrator. A number of matters entirely outside of the record, and not relevant to the issues, are discussed in the briefs, but the [101] principal question for decision is whether a suit for settlement of an estate can be brought in equity against the administrator eight months after his qualification. It is urged against the right to bring such suit that by section 1057, Kentucky Statutes, the county court has jurisdiction to appoint and remove personal representatives; that by section 1062 the county judge is required to make settle*ments with personal representatives, or to appoint a special commissioner to make them; and that by section 1065 the county court is required to settle the accounts of ail fiduciaries once in two years. From these sections it is argued that the administrator has two years in which to settle his accounts, and, therefore, although he might, if the estate were ready for distribution' and settlement, proceed to settle and distribute after nine months from the date of his qualification that a court of equity has no jurisdiction to take charge of and enforce the settlement, except upon an averment of fraud or mismanagement, or that the personalty of the estate! is insufficient, to pay the debts. Counsel relied further, in support of this argument, upon section 385S, requiring the personal representatives to settle their accounts within two years after qualification; and section 3859, providing that a personal representative, after the expiration of two- years from the time he qualifies, shall be charged with interest on the surplus assets in his hands. On the other hand, section 3817, Kentucky Statutes, provides that “six months must run after the date of the qualification of the first personal representative of a decedent’s estate by a court of this Commonwealth before an action shall [102] be commenced against any executor or administrator thereof, except to settle the estate or against an executor de son tort. Any action brought in violation of this section shall be dismissed with costs.” This section would seem to leave the time within which a . suit to settle an estate may be brought without limitation. In this state ithas been expressly held under this section that it was not necessary to wait six months after the death of the intestate to institute suit against the administrator to settle the estate (Murrell v. McAllister, 79 Ky., 317; Maddox v. Williams, 5 Ky. Law Rep., 696); nor is it necessary, in our opinion, to aver that the estate was insufficient to' pay the debts in order to maintain such an action. The statute as given in Stanton, 501, did in terms provide that no suit should be commenced against a personal representative until six months after qualification, with the limitation: “This, section shall not apply to' executors rite son tort, nor to suits to procure a settlement of insolvent estates.” By an amendment adopted in 1865, the word “insolvent” was omitted from the statute, and it wais continued in substantially the same form as given in section 3847, through Meyer’s Supplement, 222, and the General Statutes, chapter 39, article 1, section 23. We conclude, therefore, that it was not necessary to make any special averment to give equity jurisdiction beyond the requirements of sections 428 and 429, of the Code. Nor was it necessary to aver in the petition a demand by claimants and proof of claims under the statute. The clear implication of Thomas v. Thomas, 15 B. Mon [103] roe, 183, is that failure to make proof and demand should be taken advantage of by pleading or by affidavit and motion, and not by demurrer. ¡Moreover, this suit was not an action to recover the claims of creditors or distributees, but an action for a settlement of the estate brought under the Cod.e provisions. (Sections 428 and 429.) The case of Baxter v. Knox, cited by the appellants (31 S. W. 284) was a suit by a creditor on his claim, in which it was held that the averment, “the personalty was not sufficient to pay the debts,” gave equity jurisdiction. It may be that when a suit is brought by a distributee or a creditor to settle an estate without giving the personal representative a reasonable opportunity to collect the assets and disr tribute, or is brought for the mere purpose of harassing and annoying the administrator or of forestalling him in bringing such suit, for the purpose of depriving him of compensation for services of his counsel, the court, in the exorcise of its discretion, may deny the costs and attorney’s fees to the party bringing such suit, but we think the right to; bring the suit is given by the Code. Before the demurrer was sustained Schuerman offered to file an answer and cross petition against the heirs' of decedent, setting up the contract referred to in the petition, reciting the payment of one-third of the purchase money to those heirs of the intestate who were entitled to one-third of the undivided estate, tendering in court the remaining $2,000 of the agreed purchase price, land praying the court to require the remaining heirs of decedent toi execute) proper deeds for the property. To the filing of this answer and cross petition the administrator objected and the court sustained the objection. [104] We do not think that the refusal to permit the answer and cross petition to be filed was proper. Having been made a party, and properly so, under section 128 of the Code, a® having an interest in a part of the property left by the decedent, he was entitled to file his answer and not merely to offer it. Any objection to it should have been taken aifterwards by demurrer or such procedure as might be appropriate. Wherefore, the judgment is reversed, with directions to set aside the judgment, to overrule the demurrer to the petition, and for further proceedings consistent with this opinion.