Rice v. Farmers State Bank

221 P.2d 378, 122 Colo. 244, 1950 Colo. LEXIS 243
CourtSupreme Court of Colorado
DecidedJuly 24, 1950
DocketNo. 16,358
StatusPublished

This text of 221 P.2d 378 (Rice v. Farmers State Bank) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rice v. Farmers State Bank, 221 P.2d 378, 122 Colo. 244, 1950 Colo. LEXIS 243 (Colo. 1950).

Opinions

Mr. Justice Hays

delivered the opinion of the court.

[245]*245Farmers State Bank of Yuma, herein designated as the bank, filed its petition in the county court of Yuma county for an order directing the administratrix to show cause why there should not be distributed to the creditors of the estate funds remaining on hand as assets of the estate. The county court granted the requested relief, and an appeal was taken to the district court. Prior to the determination of the issues in the latter court, the administratrix filed corrected reports, and the only issue before the district court was whether or not the bank was a creditor of the estate. The district court held that the bank was such a creditor, and the administratrix brings the cause here for review by writ of error.

The facts which give rise to this controversy are these: Two claims were filed against the estate, one by the bank in the sum of $4800.00, plus interest, on account of a note signed by the deceased and his father, Charles Crowley; the other was filed by the father, Charles Crowley, in the sum of $13,850 and interest, and was based upon a note in the sum of $7,000.00, and upon certain advances made by the father to the son during the latter’s lifetime, and evidenced by a series of can-celled bank checks. Both claims were allowed by the. county court, and substantial payments made thereon pursuant to the court’s order. From the opening of the estate, January 31, 1933, until January 4, 1937, during which time said claims were allowed, the administratrix was represented by the same attorney; upon the latter date this attorney was discharged and a new one employed, whereupon a petition was filed in the county court to vacate the allowance of the bank’s claim, upon the ground that it was improperly exhibited and filed, and did not constitute a valid claim against the estate. The petition was denied by both the county and district courts, and the judgment of the latter court was reviewed in Crowley, Admr. v. Farmers State Bank, 109 Colo. 146, 123 P. (2d) 407, to which we refer for a more detailed statement of the facts. It was there held that [246]*246the claim of the bank was not properly exhibited and filed in the estate, in that the original note, as required by law, was not filed with said claim; that the claim was barred by the statute of nonclaim; and that the administratrix could not lawfully waive the requirements or limitations of that statute since she was acting as trustee and in a representative capacity. It was further held therein that the county court had full jurisdiction, after the lapse of approximately four years, to vacate the order theretofore entered allowing said claim, upon a proper showing of fraud or mistake; and that in the light of facts there presented, it was the duty of that court to disallow the claim. We there observed that, “this rule is grounded upon the principle that the personal representative is a trustee of the estate for the benefit of its creditors and heirs, and as such cannot by his conduct waive any provision of a statute affecting their substantial rights.” We further said: “In the light of this conclusion it is unnecessary that we consider the assignments of error relating to objections to the report of the administratrix. Likewise, correlated questions which may arise as a result of our disposition, including those concerning the status of the bank as a creditor of the estate by reason of the alleged assignment of the Charles Crowley claim, or from any discovery of other estate not inventoried or accounted for by the administratrix, may not receive our consideration until they are properly presented in due course.” (Italics supplied)

It is apparent from the record here, and from the opinion and record in Crowley, Admr. v. Farmers State Bank, supra, of which we take judicial notice, that the bank is not a creditor of the estate, is not entitled to apply for orders therein, or to otherwise interfere with the due administration thereof, unless it has an interest in said estate by reason of the assignment to it of the Charles Crowley claim.

The assignment above mentioned is, omitting formal parts, as follows:

[247]*247“For and in consideration of the sum of One Dollar and other valuable consideration, I, Charles • Crowley, the undersigned, being the owner of a claim filed against the Estate of John A. Crowley, Deceased, in the sum of $13,850.00, with interest, which claim has been allowed by the administratrix of said estate, do hereby set over and assign'to the Farmers State Bank of .Yuma, Colorado, a corporatidn, all dividends, proceeds and disbursements allotted to-me out of said Estate by reason of my said claim against said Estate.' It is expressly agreed between the assignor and assignee hereto, that all moneys paid upon my said claim from the Estate, are to be paid and applied to the payment of claims of approximately. $5033.89, plus interest, which may have accrued, which is due from the John A. Crowley Estate to the Farmers State Bank of Yuma, Colorado, by reason of certain promissory notes signed by John A. Crowley and Charles Crowley, to said bank, and which notes are a claim against said Estate by said bank.
“It is further expressly agreed between the parties hereto that the said bank, assignee hereto, does not waive any right to an action against the assignor on said notes which it may have by reason of his liability as a cosigner of said notes filed against the said Estate.
“It is further expressly agreed that when the claim of the Farmers State Bank of Yuma, Colorado, against the Estate of John A. Crowley, deceased, has been paid in full, together with- accrued interest, then this assignment is to be void and of no effect, and the said Charles Crowley is to thereupon be subrogated to the rights of the Farmers State Bank of Yuma, Colorado against said Estate, upon said bank’s claim filed herein, and' said bank, upon full payment to it of the amount due upon said promissory notes, is to assign to Charles Crowley, the balance of its claim that was not actually paid out of said Estate’s funds.”
“Charles Crowley “Seal”
Assignor”

[248]*248It appears from the above assignment that it was given as collateral security for the payment of the note which formed the basis for the bank’s claim against the estate, and which, as elsewhere stated herein, was adjudicated invalid. It was not, nor does it purport to be, a general assignment of said claim, and provides in terms that when the bank’s note is paid in full with interest, said assignment thereupon becomes void and of no further force or effect, and further that upon payment of said bank’s claim, the assignor was to be subrogated to all of the rights of the bank against the estate. The bank’s claim having been adjudicated to be invalid in Crowley, Admr. v. Farmers State Bank, supra, it follows that the assignment of the Charles Crowley claim as security for an invalid one conveys no interest in the estate, and the bank should no longer be permitted to harass and annoy the administratrix by filing petitions such as here involved or otherwise interfere with her administration of an estate in which it has no interest.

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Bluebook (online)
221 P.2d 378, 122 Colo. 244, 1950 Colo. LEXIS 243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rice-v-farmers-state-bank-colo-1950.