Foster v. Featherston

160 So. 689, 230 Ala. 268, 1935 Ala. LEXIS 139

• Court: Supreme Court of Alabama
• Decided: February 28, 1935
• Docket: 3 Div. 121.
• Status: Published

Opinions

FOSTER, Justice.

This is an action against appellant personally on notes signed by him in the following words: “The estate of H. W. Fancher, deceased, by Heirston L. Foster, as executor.” Fancher had borrowed the money from appellee, and had given a mortgage on real estate, due September 7, 1928. The debt was extended by mutual agreement to September 7, 1931. Fancher died before it matured on the latter date. Appellant, as such executor, and appellee agreed to extend it to September 7, 1932. On that day the notes sued on were executed. The mortgage was later foreclosed, and this is a deficiency suit for the balance of the amount after crediting the purchase price at foreclosure sale.

On September 7, 1932, the debt as a personal claim against the estate was barred by nonclaim. Section 5830, Code, was not complied with. Decedent’s will gave him no such authority.

The general rule in Alabama is that when an executor executes.a note which pur ports to be the obligation of the estate, and he is not authorized to bind the estate, he is himself personally liable on the note, and cannot be relieved because there was a mutual intention only to bind the estate. Whiteside v. Jennings, 19 Ala. 784; Vann v. Vann, 71 Ala. 154; Gillis v. White, 214 Ala. 22, 106 So. 166; McCalley v. Wilburn, 77 Ala. 549; Pointer v. Farmers’ Fertilizer Co., ante, p. 87, 160 So. 252; Soper v. Pointer (C. C. A.) 67 F.(2d) 676; section 9048, Code.

But we think it is also well settled that such rule does not apply when the payee has knowledge of the fact that the executor has no such authority, and the note shows clearly that it was the intention of the parties that it was not the personal obligation of the executor, but only that of the estate. Schloss v. McIntyre, 147 Ala. 557, 41 So. 11; Ware v. Morgan, 67 Ala. 461; 2 Corpus Juris 809, and cases in notes; Eliason State Bank v. Montevideo Baseball Ass’n, 160 Minn. 341, 200 N. W. 300; Hunt v. Adams, 111 Fla. 164, 149 So. 24.

We do not think that section 9048, Code, means that the executor is necessarily bound if the principal is not. That is not its language. It is not inconsistent with the theory that neither may be bound, and is not when the payee knows that the executor has no authority to bind the estate, and the note shows, or the intention is otherwise made to appear in a legal manner, that the estate only was to be bound. Eliason State Bank v. Montevideo Baseball Ass’n, supra.

There is no evidence whether appellee had notice that section 5830, Code, had not been complied with. But appellee, the creditor, must present the claim as required by section 5815, Code, amended by Gen. Acts 1931, p. 840, or its payment or allowance is prohibited. He is responsible for a failure in this regard whether he knows the law or not, or knows whether it has been presented by his agent or attorney. So that when the notes sued on were executed he knew that the estate was not liable and could not be made liable, and that the executor could not use the funds of the estate to pay the debt, except that the property on which appellee had a mortgage could be subjected without a presentation under section 5815, Code. Arbo v. State Bank of Elberta, 226 Ala. 52, 145 So. 318.

If with such knowledge appellee accepts a note which purports to bind the estate only, he knows he is not getting a valid obligation, is not deceived or misled, and cannot hold the executor personally liable.

We think that the court trying the case without a jury should have rendered a judgment for appellant. We will therefore reverse the judgment and render one in his he-halt.

Reversed and rendered.

ANDERSON, C. J., and GARDNER and BOTJLDIN, JJ„ concur.