Court Opinion

ID: 3543905
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:55:23.770919+00
Date Added: 2024-06-11T14:06:22.172972
License: Public Domain

The liability of the stockholders of the Banking Corporation attached upon the failure of the bank on May 2, 1923. (Mitchell
v. Banking Corporation, 83 Mont. 581, 273 P. 1055.)
Plaintiffs began their action against the stockholders on February 27, 1925, and Blair appeared by demurrer on July 31, 1925. He died in September, 1926. His executors duly published notice to creditors, but the plaintiffs did not present any claim to them within the ten months' period required by the statute, nor at all. The executors were made parties defendant in his stead, but that does not suffice if it were necessary to present the claim which is the subject of the cause of action against the decedent.
Section 10183, Revised Codes 1921, provides that "if an action is pending against the decedent at the time of his death, the plaintiff must in like manner present his claim to the executor or administrator for allowance or rejection, authenticated as required in other cases; and no recovery shall be had in the action, unless proof be made of the presentations required."
Granting that only such claims need be presented pursuant to section 10183 as fall within the provisions of section 10173, is the claim here such that if Blair had died prior to the commencement of suit, it would have been necessary to present it to the executors?
The double liability of a bank stockholder under the terms of section 6036, Revised Codes 1921 (as amended), sounds in contract. (Barth v. Pock, 51 Mont. 418, 155 P. 282.) "All claims arising upon contracts, whether the same be due, not due, or contingent, must be presented within the time limited in the notice, and any claim not so presented is barred forever." (Sec. 10173.)
The purpose of these statutes is clear. The requirement of the law is that all claims upon contract shall be presented to *Page 179 
the personal representative of the decedent in the manner prescribed by statute, supported by the oath of the claimant and the necessary vouchers or proofs (sec. 10174), in order that the personal representative may pass upon their validity intelligently, to enable him to "allow them if legal, and reject them if in law they should be rejected," as well as "to justify his acts, in some measure at least, in accounting with the probate court" having jurisdiction of the estate. (Flynn v.Driscoll, 38 Idaho, 545, 223 P. 524, 527, 34 A.L.R. 352.)
If the personal representative approves the claim and his action receives the approval of the district judge, it then becomes an acknowledged debt of the estate, to be paid in due course of administration. (Secs. 10176, 10177.) Thus it will be paid without further expense to the estate. Why should an estate be put to the expense attendant upon a lawsuit if the same end can be reached by the mere presentation of a claim to the personal representative?
In Vanderpool v. Vanderpool, 48 Mont. 448, 138 P. 772,774, this court said: "These statutes of nonclaim are special in character; they supersede the general statutes of limitations, and compliance with their requirements is essential to the foundation of any right of action against an estate upon a cause of action which sounds in contract. * * * Compliance with these provisions involves no difficulty, and a court cannot say that anything less than substantial compliance upon the part of the claimant meets the requirements." (Burnett v. Neraal,67 Mont. 189, 214 P. 955; State ex rel. Paramount Publix Corp.
v. District Court, 90 Mont. 281, 1 P.2d 335.)
"To the end that estates may be promptly settled, it is the common, if not the universal, policy of the several states to bar by legislation claims against the estates of the dead within a less period of time than is required for the assertion of claims against persons who are living." (Mann v. Kleisdorff, (C.C.A.) 16 F.2d 997.) By the overwhelming weight of authority it is necessary for one who seeks to enforce the *Page 180 
liability of a deceased stockholder to present the claim to the executor or administrator of the decedent's estate. (Flynn v.Driscoll, 38 Idaho, 545, 223 P. 524, and note 34 A.L.R. 362 et seq.; Davidson v. Rankin, 34 Cal. 503, 13 Morr. Min. Rep. 472; Geary St., P.  O.R. Co. v. Bradbury Estate Co.,179 Cal. 46, 175 P. 457; Barto v. Stewart, 21 Wash. 605,69 P. 480; First National Bank of Denver v. Hotchkiss,49 Colo. 593, 114 P. 310; Board of Bank Examiners v. GrenadaBank, 135 Miss. 242, 99 So. 903; Garesche v. Lewis,93 Mo. 197, 6 S.W. 54; Ebert v. Whitney, 170 Minn. 102, 212 N.W. 29, 51 A.L.R. 771.)
It is obvious that the nonclaim statutes do not apply if the claim does not arise until after the time has expired for the presentation of claims. (Nathan v. Freeman, 70 Mont. 259,225 P. 1015, 41 A.L.R. 138, and note.) And it is held that if the claim does not arise until after the death of the stockholder the claim need not be presented to the executor or administrator. (Miller v. Katz, 10 Cal. App. 576, 102 P. 946; Drain v.Stough, (C.C.A.) 61 F.2d 668, 669.) This is on the theory "that a statute, requiring the presentation of claims against a decedent, does not apply to claims against his estate arising in the course of administration, that is, to claims against the funds in the hands of the executor or administrator." (Drain v.Stough, supra.) Omitting any comment on the soundness of this distinction, the liability of Blair attached before his death and clearly it was a liability of his estate. The suit was pending against him when he died. Unless we disregard the statutes of nonclaim altogether, it was necessary for plaintiffs in order to maintain their suit to comply with the provisions of section 10183.
The state unquestionably has the right to make a difference in the time within which claims will be barred if not presented on the one hand to an executor, and on the other to a living person. This is the view of the circuit court of appeals of the fifth circuit, in which it is said that the provision in section 5152, Revised Statutes of the United States (12 U.S.C.A., *Page 181 
sec. 66), to the effect that funds in the hands of the legal representative of a deceased person shall be liable in like manner and to the same extent as the deceased person would be if living, does not have the effect of depriving a state of such power. (Mann v. Kleisdorff, supra.)
Practical difficulties stand in the way if the statutes of nonclaim are disregarded. The personal representative of a deceased person is charged with the duty of collecting the assets of his estate, of ascertaining and paying in due course the decedent's debts, and distributing the residue to his heirs, all with convenient speed. If all claims against the estate of a decedent are presented within the time limited by statute, the personal representative is in a position upon the order of the court to pay creditors' claims in full or pro rata, within some definite period and with a high degree of certainty. Any other course necessarily will lead to uncertainty and confusion. I am not unmindful that this may result from the presentation of a claim after the expiration of the period within which claims may be presented, for which provision is made in section 10173, Revised Codes 1921, and with respect to claims which arise after the period has elapsed; but those are situations which will present their own difficulties, are not presented here, and cannot properly be considered in this case.
The majority opinion, following the decision in Springhorn
v. Dirks, 72 Mont. 121, 231 P. 912, in effect declares the law in this state to be that a claim based upon the liability of a bank stockholder need not be presented to the personal representative of a decedent in any case. To the extent that theSpringhorn Case announces that doctrine it should be overruled, for it is contrary to the express command of section 10173, supra, as well as contrary to the great weight of authority. In that case this court fell into error by following Zimmerman v.Carpenter, (C.C.) 84 Fed. 747, a decision by a federal district court. The liability of the stockholder in the Zimmerman Case
attached long after the period for the presentation of claims against the stockholder's estate had *Page 182 
expired. But the judge did not decide the case upon the settled rule that in such a situation the claim need not be presented to the personal representative, but upon the theory that under the provisions of section 5152, U.S. Revised Statutes (12 U.S.C.A., sec. 66), the claim need not be presented in any event. On the facts a construction of that section was unnecessary to the decision. The result in the Zimmerman Case was right, but the unsoundness of its doctrine is pointed out in Mann v.Kleisdorff, supra, where the court refused to follow it. Yet, notwithstanding the wide dissimilarity between the facts of the two cases, this court in the Springhorn Case followed the erroneous doctrine of the Zimmerman Case, and now we are to follow it again. Surely, we are not by tacit recognition of the principle of stare decisis to repeat error even to disregarding the plain command of an applicable statute! (Compare ContinentalOil Co. v. Bell, ante, p. 123, 21 P.2d 65.)
It does not seem to me there is any conflict between section 6036, as amended by Chapter 9, Laws of 1923, and the nonclaim statutes we are considering. Following accepted canons of statutory construction, we should reconcile these statutes, giving effect to each, if it is possible to do so, and I see no difficulty here. Surely it is desirable in the interests of the usual and orderly administration of the estates of the dead to require that "all claims arising upon contracts, whether the same be due, not due, or contingent," be presented to the executor or administrator; and the statute so requires. It likewise requires a compliance with the statute relating to suits pending against the decedent at the time of his death.
Section 10185 reads, in part, as follows: "A judgment rendered against an executor or administrator, upon any claim for money against the estate of his testator or intestate, only establishes the claim in the same manner as if it had been allowed by the executor or administrator and a judge; and the judgment must be that the executor or administrator pay, *Page 183 
in due course of administration, the amount ascertained to be due."
Whether a judgment rendered against an executor or administrator is based upon a cause of action arising before the death of the decedent, or after that event, the judgment necessarily operates against the property of the decedent's estate and must be payable in due course of administration; it cannot be paid otherwise. In the face of this explicit statutory direction, the judgment rendered against the executors in this case does not follow, and indeed is contrary to, the express mandate of the law.
I agree with the rule announced with respect to the allowance of interest.
Rehearing denied May 23, 1933.
MR. CHIEF JUSTICE CALLAWAY:
For the reasons stated in my dissenting opinion, I think the motion for rehearing should be granted.