Summary
affirming the dismissal of a complaint against an estate because the plaintiff-claimant failed to allege that his claim had been timely presented to the estate
Summary of this case from Wilson v. LawrenceOpinion
No. 25747
Decided July 15, 1936.
Executors and administrators — Presenting or reinstating claims of creditors — Sections 10509-112 and 10509-134, General Code — Claims barred unless presented within four months — Reinstating and presenting upon leave by Probate Court.
1. Sections 10509-112 and 10509-134, General Code (114 Ohio Laws, 320), must be construed together.
2. These sections are statutes of limitation (or non-claim statutes) which bar creditors' claims unless presented to an executor or administrator within four months after the date of appointment.
3. A barred claim may be reinstated and presented to an executor or administrator upon leave first obtained from the Probate Court in the manner provided in Section 10509-134, General Code.
ERROR to the Court of Appeals of Cuyahoga county.
In the Court of Common Pleas the plaintiff filed the following petition:
"Plaintiff is the duly appointed and acting Receiver of The Service Savings and Loan Company, a corporation incorporated under the laws of the State of Ohio for the purpose of doing business as a building and loan association.
"Defendant was duly appointed by the Probate Court of Cuyahoga County, Ohio, and is now acting as Executor of the Estate of Jacob B. Lynn, deceased, a record of which estate is found in Docket 256, No. 219906 of the Records of Probate Court of Cuyahoga County, Ohio.
"In his lifetime, to-wit: on July 10, 1922, said Jacob B. Lynn subscribed for ten (10) shares of the Capital Stock of The East Shore Savings Loan Association, an Ohio corporation, and agreed to pay therefor One Hundred ($100.00) Dollars per share, upon which subscription One Hundred ($100.00) Dollars and no more has been paid.
"Thereafter, for a valuable consideration said The East Shore Savings Loan Association transferred and assigned said subscription to said The Service Savings and Loan Company.
"A copy of said subscription is in words and figures as follows to-wit:
"THE EAST SHORE SAVINGS LOAN ASSOCIATION
"Cleveland, Ohio
"Authorized Capital Stock, $150,000.00 " "APPLICATION FOR INSTALLMENT STOCK""The undersigned hereby subscribes for 10 shares (par value $100.00 each) of the capital stock of The East Shore Savings and Loan Association, of Cleveland, Ohio, subject to all the liabilities and duties of stockholders as prescribed by the Constitution and By-Laws of said Association, which are now in force or may hereafter be legally adopted, and the laws of the State of Ohio, and agrees to pay a membership fee of $5.00 per share, which is not redeemable.
"Regular installments upon stock are payable at the rate of $............ per share per month in accordance with the By-Laws of the Association, the first installment being payable first day of the month following date hereof.
Date July 10, 1922 Name J.B. Lynn Number of Shares Ten Address 16220 Saranac Rd. (10) Salesman Cross Zieger
Membership Fee 50.00
"Make all checks payable to The East Shore Savings Loan Association.
"Total Credits: $100.00
"That said Court ordered the unpaid balance upon said subscription contract to be paid on or before March 15, 1934; that there is, therefore, due and unpaid on said subscription contract the sum of $900.00 together with interest thereon at the rate of 6% per annum from and after March 15, 1934.
"On the 16th day of July 1934, plaintiff presented to defendant a verified copy of said subscription together with the amount due thereon and demanded that defendant allow the same as a valid claim against the estate of said Jacob B. Lynn, deceased, and defendant then and there refused to allow the same as a valid claim.
"Wherefore, plaintiff prays for judgment against defendant in the sum of Nine Hundred ($900.00) Dollars together with interest thereon at six (6%) per cent from and after March 15, 1934, and for any other and further relief to which he is entitled either at law or in equity."
To this petition the defendant demurred on the grounds that "the court has no jurisdiction of the subject of the action" and that "the petition does not state facts which show a cause of action."
The trial court sustained the demurrer and rendered judgment for the defendant.
This judgment was affirmed by the Court of Appeals.
The case is in this court by reason of the allowance of a motion to certify.
Mr. Allison M. Gibbons, for plaintiff in error.
Mr. Clyde M. White, for defendant in error.
The defendant contends that the plaintiff's petition is demurrable because it does not allege that the claim was presented to him as executor within four months after his appointment, as provided by Section 10509-112, General Code (114 Ohio Laws, 320), and contains no allegation to the effect that the plaintiff obtained leave from the Probate Court to file his claim for allowance, as provided by Section 10509-134, General Code (114 Ohio Laws, 320). Subsection 112 reads as follows:
"Creditors shall present their claims, whether due or not due, to the executor or administrator within four months after the date of his appointment. Such executor or administrator shall allow or reject all claims, except contingent claims, within thirty days after their presentation. Any claim presented after the time herein provided shall not prevail as against bona fide purchasers or as against executors and administrators who have acted in good faith, or against a surviving spouse who has made the election to take under the will or at law, and except as to negotiable instruments maturing subsequent to the expiration of such time, any such late claim shall not prevail as against bona fide distributees."
Subsection 134 contains the following language:
"Upon petition filed by a creditor or person deriving title from him, whose claim has not been presented within the time prescribed by law, the probate court, if after notice to all interested parties and hearing, it is of the opinion that justice and equity so require, and that the petitioner is not chargeable with culpable neglect in failing to present his claim within the time so prescribed, may permit petitioner to file his claim for allowance, but such allowance shall not affect any payment or distribution made before the filing of such claim, nor shall it prejudice the rights of creditors whose claims were filed within the time prescribed by law."
The important question here presented is whether these recent amendments are statutes of limitation (or non-claim statutes, as they are frequently designated). The difference of opinion between counsel starts with the very first sentence of subsection 112 which contains the definite mandate that "creditors shall present their claims, whether due or not due, to the executor or administrator within four months after the date of his appointment." Although the word "shall" is ordinarily accepted in its full coercive force, the plaintiff contends that in this instance it is mandatory merely to the extent of preventing a "late claim" from prevailing as against bona fide distributees, etc. To substantiate his view he relies upon the language of this subsection and upon the context. The defendant insists that these provisions effectuate the intention of the sponsors of this legislation to establish a definite non-claim statute in order to expedite the orderly and efficient administration of estates in Ohio. It is of course true that such intention cannot be regarded as conclusive nor even persuasive unless subsequently embodied in the language of the Legislature. This court is of the opinion that the simple wording here involved must be regarded as mandatory when viewed in the light of common acceptation. Reduced to its lowest terms, it unambiguously states that "creditors shall present their claims * * * within four months," and no apparent purpose could be served by attempting to torture it into something else. It is at least interesting to now observe whether this view squares with the expressed intention of the sponsors of the act. On page 91 of the third report of the committee (Supplement to Ohio State Bar Association Report, Vol. III, No. 13, June 24, 1930) appears this comment:
"Under the present statutes there is no definite time within which claims of creditors must be presented, the only reference to the subject being in G. C. 10741 to the effect that six months after his appointment the executor or administrator may pay the debts, without liability if creditors later presenting their claims are not paid in full. The new section provides a definite time within which claims are to be filed and gives certain preferences to creditors who present their claims within this limit. The section of this chapter on 'Order in which debts to be paid' likewise places as No. 6 in the list, 'Other debts as to which claims have been presented within four months after the appointment of the executor or administrator,' and includes as No. 7 on the list, 'Debts due to all other persons.' "
The defendant contends further that Subsection 134 sustains his view and would be utterly meaningless unless Subsection 112 is considered as a non-claim statute. He emphasizes the phrase "Reinstatement of barred claim" which appears as the heading for Subsection 134. However, research discloses that this is not the language of the Legislature. Nevertheless the history of this heading is unusual and interesting. Ordinarily when bills are introduced in the General Assembly they do not contain sectional headings, but in this instance the bar committee supplied the headings. However, they were elided by the Legislature during the process of enactment. Then they were restored by the Secretary of State in the performance of his duties under Section 162, General Code.
What is the import of the language of Subsection 134? The plaintiff insists that it is merely permissive and provides simply an unexclusive method for the presentation of claims. The defendant is equally vigorous in his contention that this is interrelated with Subsection 112 and must be construed as providing the only procedure by which a creditor may file a "late claim" for allowance. A careful study of the act indicates that this is the logical view, especially if confusion is to be avoided and if this subsection is to serve any real purpose. Furthermore, no hardship should result from this construction inasmuch as the Probate Court is invested with a discretion sufficiently broad to insure the allowance of meritorious petitions and at the same time prevent unnecessary delay. Again this view seems to be consistent with the following comment appearing on page 94 of the third report of the bar committee:
"This section gives to the court the power to reinstate a barred claim under certain circumstances."
Moreover, an examination of the first and second reports of this committee discloses nothing at variance with this expression.
It is contended further by the plaintiff that the foregoing construction ignores the words "any claim presented after the time herein provided" appearing in Subsection 112. He insists that this phrase strongly implies the right to file a "late claim" without regard to Subsection 134. This court finds no basis for this view, but is of the opinion that this clearly refers simply to "late claims" filed upon the granting of a petition as provided in Subsection 134.
Since the plaintiff failed to allege that his claim was presented within four months or later upon leave first obtained from the Probate Court, the judgment of the Court of Appeals must be affirmed.
Judgment affirmed.
STEPHENSON, WILLIAMS, JONES, MATTHIAS, DAY and ZIMMERMAN, JJ., concur.