Baker v. Snyder

1972 OK 33, 494 P.2d 1238
CourtSupreme Court of Oklahoma
DecidedMarch 7, 1972
DocketNo. 43825
StatusPublished
Cited by2 cases

This text of 1972 OK 33 (Baker v. Snyder) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baker v. Snyder, 1972 OK 33, 494 P.2d 1238 (Okla. 1972).

Opinion

LAVENDER, Justice:

The question presented by this appeal is whether a lessor of a long-term lease of business property is entitled, upon the death of a co-lessee, to have the property of the deceased held up and not distributed to his heirs so that the property will be available to satisfy any breach of the lease agreement which might occur before the expiration of the lease and which might result in loss to the lessor. Under the facts in this case, the surviving co-lessees of decedent had continued paying the rental called for in the agreement and the lease was in no way in default upon either the death of the deceased co-lessee or at any time subsequent thereto. The claimed right of the lessor is under 58 O.S.1971 § 596.

The cited statute provides as follow's:

“Payment of unmatured, contingent, or disputed claims. — If there is any claim not due, or any contingent or disputed claim against the estate, the amount thereof, or such part of the same as the [1239]*1239holder would be entitled to if the claim were due, established or absolute, must be paid into the court, and there remain, to be paid over to the party when he becomes entitled thereto; or, if he fails to establish his claim, to be paid over or distributed as the circumstances of the estate require. If any creditor whose claim has been allowed, but is not yet due, appears and assents to a deduction therefrom of the legal interest for the time the claim has yet to run, he is entitled to be paid accordingly. The payments provided for in this section are not to be made when the estate is insolvent, unless a pro rata distribution is ordered. R.L.1910, § 6452.”

The facts giving rise to the controversy are these:

On June 24, 1964, Paul E. Baker, plaintiff in error, as the lessor, entered into a written lease agreement with Family Thea-tres, Inc., an Oklahoma corporation, L. E. Snyder, Jr. and Marjorie J. Snyder, husband and wife, as lessees. By the terms of that agreement — a copy of which appears in the record — the lease was to run for a term of twenty years; to cover a theatre building, to be constructed by lessor, together with some surrounding lands; and to provide for the lessees to pay Baker the sum of $2,885.00 per month as rent plus an amount to be computed annually upon the basis of profit to be derived by the lessees from operating a motion picture exhibition business in the leased building. The lease contained a number of other provisions including some that pertained to cancellation of the lease agreement in the event the leased premises be condemned for public use or the building be destroyed by action of the elements. The lease contained two ten-year renewal periods optional with the lessees.

The lessor constructed the building and the lessees were engaged in operating under the lease when, on April 28, 1967, Mr. Snyder, the above named lessee, died intestate. Apparently Mr. Snyder left only his wife, the above Marjorie J. Snyder, and his daughter Mary Susan Snyder, as his heirs at law. The daughter was appointed administratrix. Notice to creditors was given by the administratrix and, within the time for the filing of claims against the estate, the plaintiff in error presented a claim for the “balance of lease-hold payments,” although it is admitted that none were then. due. The administratrix allowed the claim as a “contingent claim” and it was subsequently approved as such by the court. No payments were made on the claim or pursuant to the lease agreement out of the assets of the estate of the deceased lessee. At the hearing on the ad-ministratrix’ final account and petition for distribution, the lessor appeared by counsel and objected to the distribution of the estate to the heirs unless provision be made for his “contingent claim” by depositing a sum of money in the court clerk’s office sufficient to take care of all of the future rentals called for by the lease. It seems that at that time the lease had a period of twelve years or so to run and that the total rentals which the lessor could expect under his lease, provided it continued in effect, would be in excess of $350,000.00. According to the inventory and appraisement, the total assets of which Mr. Snyder died the owner equaled $196,407.66.

The trial court refused the lessor’s request to withhold the estate from distribution to the heirs, but did provide in its order allowing the final account and decreeing distribution that the heirs would be liable to the lessor to the extent of the value of the share of the deceased’s property thereby distributed to them. The lessor appealed.

Apparently this particular question has never been decided before in this jurisdiction.

The plaintiff in error, for convenience, will be hereafter referred to as lessor or as Baker. The defendant in error will hereafter be referred to as administratrix or as the estate.

The statute — above quoted — was adopted in the form in which it appears from [1240]*1240South Dakota. A 1929 decision of the Supreme Court of that state is called to our attention by the lessor as persuasive. The facts of the cited case of Le Sueur v. Quillian, 56 S.D. 289, 228 N.W. 380 reveal that the “contingent” claim there was for damages which the claimant, as the grantee of a warranty deed from the deceased grantor, would suffer because of an encumbrance upon the property covered by the deed when it was conveyed to the grantee by the decedent. The covenant of the deed was broken at the time of the conveyance. A cause of action existed against the grantor at the time he died. There was not a mere possibility of liability, but an actual absolute liability dependent upon the balance due on the indebtedness which the grantee would be obligated to pay to protect the property from the lien of the encumbrance. Under those circumstances, the South Dakota court ordered an amount of money be held in the case sufficient to pay the claim when the amount of it would be determined. That case is not applicable here, where, because of the uncertainties of the situation, it is not absolutely certain that the lessor shall ever have a right of action for breach of the agreement enforceable against the property of one of the co-lessees who is now deceased. An Oklahoma case in which it was shown that the assets of a guardianship estate would be liable under a contract and it was only a question of establishing the amount of such liability is the case of Swift v. McKinney (1926), 123 Okl. 1, 251 P. 734.

In re Ross’ Estate, 1935, 141 Kan. 40, 40 P.2d 330 (see also a subsequent treatment by that court of the same case, Jewell v. MacFarland (In re Ross’ Estate), 1935, 142 Kan. 469, 50 P.2d 939) which is cited by the lessor holds that a lessor is entitled to have the estate of a deceased lessee sequestered for the future benefit of the lessor. The Kansas statute quoted in the opinion does not refer to claims in the same way as does our Section 596, but refers to “any creditor of the deceased whose right of action shall not accrue within the (administration period provided by statute) * * and then the statute goes on to provide for authority in the administering court to order sequestration of funds to pay the obligation when it does become due. The Kansas court stated that it could hardly conceive of any other wording by which the Kansas statute could be made more inclusive of all “legal liability” resting upon the deceased.

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Bluebook (online)
1972 OK 33, 494 P.2d 1238, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baker-v-snyder-okla-1972.