Hearn v. Roberts

77 Tenn. 365

• Court: Tennessee Supreme Court
• Decided: April 15, 1882
• Status: Published

Opinions

Cooper, J.,

delivered the opinion of the court.

Administration on the estate of S. C. Love was granted at the September term, 1874, of the county court. The suggestion of the insolvency of the estate was made to that court at the February term, 1875. This bill was filed in the chancery court on the — day of-, 1879, to transfer • the settlement of the estate, as an insolvent estate, to the chancery court. On August 20, 1880, McKissick & Turley made themselves parties defendant to this suit, claiming to be creditors of the intestate on demands which became due in April, 1879. The funds of the estate had not then been appropriated. The chancellor disallowed these claims upon the ground that they were barred by the statute of limitations of two years, and the claimants appealed.

Ordinarily the bar of the statute of two years only begins to run, on claims not duo at the time of the qualification of the personal representative, from the time the claims fall due: Trott v. West, 9 Yer., 433. And the laws regulating the administration of insolvent estates will not affect the operation of the statute: Marley v. Cummings, 5 Sneed, 479. If the suit be not brought on the claim, or the claim filed within two years from its maturity, it| will be barred, notwithstanding the commencement and pending of an insolvent suit. Will it be barred by the institution and pendency of such suit, when it does not fall due until after the suggestion of insolvency, and is filed before the funds of the estate are appropriated, and within two years after it does fall due? That is the question presented by the record.

The Code contains special provisions touching the administration of insolvent estates in the county court, and other provisions regulating the administration of such estates in the chancery court. In such cases, there is substantially the same provisions for claims not due, namely, that the creditor may file his claim for adjudication, and come in for a ratable distribution. If the debt be paid before due, a discount shall be made therefrom at the rate of six per - cent per annum until the debt falls due; aud if the debt cannot be paid until due, the court may direct a portion of the property to bo sold on lung time to meet it, or have ■ the money loaned out until the debt falls due. The sections of the Code regulating the administration of insolvent estates in the county court contains no' provision in relation to claims not due which would change the time when the statute of limitations would begin to run on such claims, or otherwise affect the legal rights of the holders of such .claims, except the last clause of section 2330, which is: “And any claim not filed on or before the' day fixed (by notice), or before an appropriation of the funds of the estate is made, shall be ' forever barred both in law and equity.” It is clear, therefore, that in the administration of an estate in the county court upon a suggestion of insolvency, a creditor whoso claim is not due will not be barred of his action within the time of the statute after its maturity, if he file the claim at any time before au appropriation of the funds of the estate.

Among the provisions of the Code for the administration of insolvent estates in the chancery court, and immediately following the section, common to the administration of such estates both in the county and chancery courts, allowing claims not due to be filed, ■are these:

“ 2376. All creditors wlio shall fail to bring suit for their demands, or to come in under these proceedings and present their claims within the time prescribed by law, shall be forever barred and prohibited from becoming parties to such proceedings.”

“2377. Creditors whose debts are not due shall be under the same obligation to present their claims as those whose debts are due, and upon failure to do so shall be barred in like manner; but a creditor shall not be bound to present his claim before due, except where the estate is represented to be insolvent as herein provided.”

The “time prescribed by law” in the first of these sections means the time of the statute of limitations. And, therefore, if the creditor bring his suit, or file his claim within the' time of the statute, it is sufficient. Consequently, if he bring his suit within the time, he may file his claim at any time thereafter before the funds are appropriated: Latta v. Sumerow, 4 Lea, 486; Hurley v. Paul, 2 Tenn. Ch., 620, affirmed by this court. If the claim is not barred by the statute of limitations, either because it has been separately sued upon, or because it has not been due for the two years, it may be properly presented at any time “before an appropriation of the funds is made.” The language of section 2377, that “creditors whose debts are not due shall be under the same obligation to present their claims as those whose debts are due,” does not mean that they shall sue within two years from the grant of letters, but, in the words of section 2376, that - they shall bring suit or present their claims in the insolvent case “ within the time prescribed by law;” that is, within the time allowed by law for suing upon such claims “ before an appropriation of the funds of the estate.” The time within which to sue is not changed, but if the funds have been appropriated before suit brought by presenting the claim, the .creditor, again using the words of section 2376, “shall be forever barred and prohibited from becoming parties to such proceedings.” The creditor is barred from becoming a party to the suit, and the claim be prevented from receiving its pro rata of the estate. Any other construction of these provisions would lead to the reductio ad adsurdum, that if the insolvency of the estate is not suggested for more than two years and six months after the grant of letters of administration, claims not due would be barred although they could not possibly have been sued on before.

The chancellor’s decree must be leversed, and the cause remanded for further proceedings.