Court Opinion

ID: 3277147
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:45:54.411394+00
Date Added: 2024-06-11T14:24:47.237652
License: Public Domain

The majority say that, if any amount is realized from the mortgage, the sum realized would have to be applied in reduction of the claim in the probate court, and that, if payments were made on the claim in the probate court, the claim pending in the Ashley Chancery Court would necessarily be reduced by the amount collected in the probate court, and the *Page 58 
cases of Jamison v. Adler-Goldman Commission Co.,59 Ark. 548, 28 S.W. 35, and Merchants' Nat. Bank of Ft. Smith v. Taylor, 181 Ark. 356, 25 S.W.2d 1048, are cited in support of this statement.
The majority have, however, ordered the probate court, notwithstanding this declaration of the law, to proceed to hear and class appellant's demand, notwithstanding another court having full jurisdiction has already assumed jurisdiction and is still asserting it.
Judge BATTLE defined the proper practice to follow in this and similar circumstances in the case of Jamison v. Adler-Goldman Commission Co., supra, where he said: "In regulating the rights of creditors, the statutes give ample time in which to present their claims, and provide that they shall be paid equally according to classes. They take from the administrator the right to prefer one to another. To this extent they cure defects in the common law, and provide for the greater security of creditors. The changes made are commensurate with the evils intended to be remedied. They make no change, however, as to any vested interest that each shall take in the estate. Creditors are required to present their claims for the amount due them when it is presented, and to swear `that nothing has been paid or delivered towards the satisfaction of it, except what is credited thereon, and that the sum demanded naming it, is justly due.' They may present their claims within one year and 364 days after the grant of the first letters — upon the close of the administration — but they must make this oath before their demands can be allowed; the statute thereby showing clearly an intention that they shall not share in the assets of the estate, except upon the basis of what is actually due after all payments are deducted. This being the manifest intention of one, it is presumed that it pervades the other statutes upon the same subject, and that when they say, `if there be not sufficient to pay the whole of one class, such demands shall be paid in proportion to their amounts,' according to an apportionment made by the court, they mean by `amounts' the sum actually due *Page 59 
at the time of the apportionment. When money is received from collaterals or mortgages held as security, in part payment of claims, they are certainly diminished accordingly, and their amounts become the balances due on them. This construction was placed upon similar statutes of Missouri, in a similar case, in Estate of McCune,76 Mo. 200. In Haskill v. Sevier, 25 Ark. 152, the same construction was partially placed upon the statutes of this State. In that case the court directed a foreclosure of a mortgage upon land which was executed by John A. Jordan, deceased, in his lifetime, to secure a debt, and directed that, if the proceeds of the sale were not sufficient to pay the debt, the balance thereafter remaining should be certified to the probate court, and there classed against the estate of Jordan."
In other words, where the mortgagee is unwilling to rely exclusively on his mortgage for the satisfaction of his demand, but wishes to share, as a general creditor, in the distribution of the general assets, he should first exhaust his security and apply the proceeds thereof to the partial satisfaction of his demand, and it is the balance then remaining — and this balance only — which he may probate as a general creditor.
This was the practice, conforming to our own, which was approved by the Supreme Court of Wisconsin in the case of McLean v. McLean, 184 Wis. 495,199 N.W. 459. Speaking of the remedies of a mortgagee against the estate of a deceased mortgagor, the Supreme Court of Wisconsin there said: "Up to the time of the death of Mary E. McLean, as a joint maker of the note, she was liable for the principal and the interest, and her property remained as security by virtue of the mortgage. Upon her death, the owner of the mortgage had the right to pursue one of three remedies as against her: First, she could file her claim for the full amount of the note, with interest, against the estate of the deceased, and thereby recover the full amount of the personal obligation; second, she could file a contingent claim for a possible deficiency on the foreclosure, and then proceed with *Page 60 
a foreclosure suit in the circuit court for the foreclosure of the mortgage; or third, she could rely solely upon her security and the foreclosure of her mortgage." See also 2 Woerner's American Law of Administration (3d ed.) chapter XLIVa.
This was a practice which the probate court was attempting to follow, and would have followed but for the directions of the majority to proceed now, independently of the action of the chancery court, to pass upon and class the full demand, regardless of the credits which may arise from the sale of eight thousand acres of land under the decree of foreclosure in the Ashley Chancery Court.
In his excellent work on Arkansas Mortgages, at 322 thereof, Judge HUGHES says: "So far as the mortgage itself is concerned, the probate court is without power. That court has no jurisdiction in respect of foreclosure or redemption, and even its judgment allowing the mortgage debt as a claim against the estate is not conclusive upon chancery courts as to the amount of the debt in foreclosure or redemption actions subsequently instituted therein." Here, however, the probate court is directed to proceed in a matter over which the chancery court first obtained jurisdiction and in which it is still asserting that jurisdiction.
The views here expressed are not in conflict with the statement of the remedies of a mortgagee against the estate of a deceased mortgagor appearing in Rhodes v. Cannon, 112 Ark. 13, 164 S.W. 752. It was there said that the mortgage creditor might go into the probate court and probate his claim against the estate generally, or might foreclose his lien in the chancery court, or that he might pursue both remedies, but there was not involved in that case, as there is here, any question as to the practice in the pursuit of these remedies.
Here the expressed purpose of the probate court was to treat the demand of appellants as properly filed for allowance, but to postpone the adjudication of the balance due thereon until it became known what credits would *Page 61 
arise from the sale of the lands under the foreclosure proceeding pending in the Ashley Chancery Court, and, as I think this was the proper course for that court to pursue, I dissent from the order of this court awarding a writ of mandamus directing the probate court to allow the demand before knowing what credits should be applied thereon.
I am authorized to say that Mr. Justice BUTLER concurs in the views here expressed.