Shields v. Pauwelyn

83 P. 486, 33 Mont. 230, 1905 Mont. LEXIS 118

• Court: Montana Supreme Court
• Decided: November 6, 1905
• Docket: No. 2,137
• Status: Published

Opinions

MR. CHIEF JUSTICE BRANTLY

delivered the opinion of the court.

Appeal from an order of the district court of Silver Bow-county directing a sale of real estate belonging to the estate of James Tuohy, deceased.

James Tuohy died on or about October 2, 1893, in Silver Bow county. His estate consisted of a small amount of personal property and certain real estate, chiefly undeveloped mining claims. He left a will which, after disposing of most of the estate by special bequests, closes with this clause: “I hereby appoint Cyril Pauwelyn, of Butte, sole heir and executor of this my last will and testament, without bonds.” Cyril Pauwelyn, having qualified as executor under an order of the district court, entered upon the discharge of his duties and has continued therein. Soon after his appointment litigation arose involving the validity of claims against the estate to a large amount, sufficient, if established, together with the undisputed claims, to consume the entire estate. The last of this litigation was finally disposed of about' March 25, 1903, the principal claim having been declared invalid.

On March 22, 1894, the executor filed his petition for an order to sell a portion of the real estate, alleging facts showing a necessity therefor. For some reason, doubtless because of the pending litigation and uncertainty as to the amount of funds necessary to pay claims, this petition was abandoned. Thereafter some of the mining claims were leased, with the expectation that a sufficient amount would be realized from royalties upon ores extracted therefrom, to pay the debts and that a sale would not be necessary. The petition upon which the order now before us was made was filed on April 21, 1904. It appears therefrom that the personal property has been exhausted in the payment of expenses of administration, the principal part of which have been counsel fees and other disbursements in connection with the litigation referred to above. The debts chargeable against the estate as set forth therein amount to $10,572.15. The charges for administration and other expenses already accrued and unpaid amount to $4,845.-28. The executor states that he is unable to estimate the amount of charges and expenses yet to accrue “owing to the uncertainty of the time it will require to close up and settle said estate; the amount or amounts that may be realized from the sale or sales of property belonging to the said estate so as to enable your petitioner to determine the amount of his commissions, and the pendency in this court of an action in which said estate is interested * # * entitled Cyril Pauwelyn Executor, etc., Plaintiff v. Charles A. Elvers, Defendant.” The nature of this claim does not appear. The value of the property belonging to the estate is estimated to be $47,350. The court is asked to grant an order authorizing the executor to sell all of the real property belonging to the estate, alleging that the entire amount derived from the sale thereof will be necessary in order to pay the claims approved and allowed, besides expenses, commissions, etc.

It appears that three parcels of the real estate are not mentioned in the will, namely, an undivided one-half interest in the Malone lode claim, and the Belmont and Amy claims. Specific bequests are made of all the rest of it, Daniel Shields being mentioned as devisee of an undivided one-fourth interest in the Tuolumne lode claim, and Thomas McLaughlin as devisee of a lot and house thereon, in the city of Butte.

Appellants Shields and McLaughlin appeared and objected to the granting of the order of sale. Shield’s objections are, in substance, first, that for more than ten years prior to the filing of the petition he had been in open, notorious, adverse, exclusive, uninterrupted and continuous possession of the one-fourth interest in the Tuolumne lode claim belonging to the estate, and that no ancestor, nor predecessor, nor the executor, had in ten years prior to the filing of the petition been seised of it or any part thereof, and that the executor’s cause of action is barred by the provisions of sections 29 and 30, First Division, Code of Civil Procedure, of the Compiled Statutes of. 1887, and by section 9 of the Political Code, and sections 483, 484 and 3456 of the Code of Civil Procedure of 1895; second, that the interest in this claim was devised to him by deceased for a valuable consideration; that much other property was in the said will devised to charities, without consideration; that such other property is sufficient in..value to pay all debts and ether claims together with the expenses of administration, and that for this reason the property devised to him should not be sold until after all the property so devised should be exhausted; and, third, that certain property had not been devised at all ■ and that it should first be resorted to to pay claims. McLaughlin objected on the two grounds last mentioned. The executor replied to these objections. Upon the issues thus joined a hearing was had' by the court sitting without a jury.

Thereupon the court made its findings of fact and conclusions of law, and entered an order directing a sale. The court found that the debts, costs and expenses of administration already accrued against the estate amount to $14,417.45, with interest; that there was -no money belonging to the estate to pay the same; that the real estate was not yielding any revenue, and ' that the sale of all of it was necessary to pay the debts. The court further found that there had been no unreasonable delay. on the' part of the executor in making application for the order of sale; that the property mentioned in the petition belongs to the estate; that none of it has been delivered to the heirs or devisees by the executor, and that the same is in the control of the executor and under the direction of the court.

As conclusions of law the court declares that the objections of Shields and McLaughlin were without merit; that the executor was entitled to have an order of sale as prayed for; that the property be sold by the executor in the manner and order provided for by the statute, and that he exercise his judgment and option as to which portion or interest or parcel of the property specifically devised should be first offered for sale and sold, and that in making said sale he do not offer for sale, or sell, any more of the property than may be necessary to pay said claims, with interest, and the debts, costs and expenses which may hereafter accrue.

Upon these facts and conclusions of law the court entered its order directing the executor to sell so much of the real estate as may be necessary to pay the debts, claims and expenses of the estate, and the costs and expenses of administration accrued or that may hereafter accrue, either in one parcel or in subdivisions, as the executor should judge most beneficial to the estate, and in the order prescribed by the statute and the foregoing findings and conclusions; and that when he shall have sold sufficient for the purposes aforesaid, he shall not sell or offer for sale any more. From this order, so far as it directs the sale of the interests devised to them respectively, Shields and McLaughlin have prosecuted this appeal.

1. Contention is made that the order cannot be sustained because the court denied the appellants a trial by jury upon the issues presented by their objections. Without pausing now to inquire whether any material issues are presented by the objections, but assuming this to be so, and assuming further that upon every like application wherein material issues of fact arise, the right of trial by jury exists, there is no merit in the contention. The Code of Civil Procedure provides: “Sec. 2923. AJÜL issues of fact in probate proceedings must be tried in conformity with the requirements of Article II, Chapter II, of this Title, and in all such proceedings the party affirming is plaintiff,' and the one denying or avoiding is defendant. * * * Sec. 2924. If no jury is demanded, the court or judge must try the issues joined. If on written demand, a jury is called by either party, and the issues are not sufficiently made up by the written pleadings on file, the court or judge, on due notice to the opposite party, must settle and frame the issues to be tried, and submit the same, together with the evidence of each party, to the jury, on which they must render a verdict. * * * ”

The provisions of Article II, Chapter II, of Title XII, to which section 2923 refers, relate to contests arising over the probate of wills. Section 2340 of Article II, Chapter II, of this Title provides, among other things, that upon the presentation of any one or more of the issues of fact enumerated therein, they must, ‘ ‘ on request of either party in writing, filed three days prior to the day set for the hearing, be tried by a jury. If no jury is demanded, the court or judge must try and determine the issues joined. * * * ” Under this section it is clearly the duty of the court or judge to try the issues joined, without a jury, unless one is demanded in the manner and within the time prescribed therein. Its requirements presuppose issues joined before the demand for a trial by jury is made. The policy of the law is that proceedings of this nature should progress as speedily as they may, to the end that the affairs of the estate may be closed up and the parties in interest discharged from the supervision of the court. The presiding judge is not supposed to know what issues, if any, are to be made until the pleadings are filed, and not then until attention is called to them. If in any case no issue of fact is presented, the presence of a jury is unnecessary. The section, therefore, not only requires the issues to be made up before the demand is made, but also that the demand be made a« sufficient length of time before the hearing to secure the attendance of a jury.

Sections 2923 and 2924, supra, are general in their application, while section 2340 refers only to contests over the probate of wills, but the provisions of the latter must be read into the former and be observed whenever the parties desire an issue of fact to be tried by a jury.

In this ease the objections of Shields were filed on July 18, 1904, and those of McLaughlin on July 23d. The replies of the executor were filed not later than July 25th. The hearing was begun on September 14, 1904. No written demand for trial by jury was ever filed. It is true that the objections filed by the appellants close with a demand for a trial by jury; but, so far as the record shows, these demands were never called to the attention of the court or judge until the hearing began, Under this condition of affairs, a trial by jury is properly denied, no matter what the issues are.

2. The next contention made is, that the order is erroneous in that it directs a sale of all the real estate, including that devised to appellants, whereas it appears from the objections that these devises were respectively made for a valuable consideration, and therefore that the court could not direct a sale of property so devised until after a disposition of all the other property belonging to the estate. We think this contention is without merit for two reasons: First, the application for the order in this case was made under section 2671 of the Code of Civil Procedure, which lays down the procedure necessary to obtain an order for the sale of real estate. The section provides what the verified petition filed in support of the application abnll contain. It must set forth the amount of personal property that has come into the hands of the administrator, and how much, if any, remains undisposed of; the debts outstanding against the decedent, so far as they can be ascertained or estimated; the amount due upon family allowances, or what will be due after the same have been in force for one year; the debts, expenses and charges of administration already accrued, and an estimate of what will or may accrue during the administration; a general description of all the real property of which decedent died seised, or in which he had any interest, or in which the estate had acquired any interest, and the condition and value thereof; and the names of the legatees and devisees, if any, and of the heirs of the deceased, so far as known to the petitioner. Upon these necessary allegations it is not possible for an issue as to the title of real estate to arise. Nowhere else in this Title do we find any provision upon which the court may enter into an investigation of questions of title. It is well settled by the decisions of this court, that the district court sitting as a court of probate has only such powers as are expressely conferred upon it by statute, and such as are necessarily implied in order to carry out those expressly conferred, and that in the exercise of its jurisdiction it is limited by the provisions of the statute. (State ex rel. Shields et al. v. District Court et al., 24 Mont. 1, 60 Pac. 489.) It cannot be presumed, in the absence of an express declaration to that effect, that the legislature intended that the court, when sitting in probate proceedings, should exercise the extensive powers necessary to such investigations and determine the rights involved. While exercising jurisdiction in these matters, its proceedings are all more or less summary and not suited to the adjustment of equities and the adjudication of rights dependent upon them.

In the second place, section 1822 of the Civil Code provides: “The property of a testator, except as otherwise specially provided for in this Code and the Code of Civil Procedure, must be resorted to for the payment of debts, in the following order: 1. The property which is expressly appropriated by the will for the payment of debts. 2. Property not disposed of by will. 3. Property which is devised or bequeathed to a residuary legatee. 4. Property which is not specifically devised or bequeathed; and 5. All other property ratably. * * *”

It will be seen from an examination of this section that no distinction is made between specific devises for charitable purposes, and those made upon consideration. They are placed upon the same footing. If the property mentioned in the first four classes designated by the statute is not sufficient, specific devises, no matter for what purpose, are to be resorted to rat-ably ; for such devises clearly fall in the fifth class in the enumeration. The appellants have no right to have the property devised to them exempted from sale for the payment of debts, or the sale of it postponed until other property specifically devised has been resorted to for that purpose, for the reason that the devises to them were made for valuable consideration, no matter what that consideration may have been, even though it might be conceded, for sake of argument, that the district court when sitting in probate has jurisdiction under the statute to investigate and determine questions of title upon an application for the sale of real estate.

By the terms of the will, as appears from the record, all the property belonging to the estate, except from the interest in the Malone lode and the Amy and Belmont claims, was disposed of by specific devises to the appellants and others. On the theory assumed by the appellants to be correct (and we think it correct, though the will is not now before us for construction), that by the last clause of the will the executor is made residuary legatee, these interests go to him. They therefore fall in the third class in the enumeration and must be resorted to and exhausted before the property devised to appellants is burdened with any part of the debts. (Code of Civil Proe., sec. 2678.) When, however, the property falling in the first four classes has been exhausted, no distinction may be made among specific devises, but all must bear the burden ratably. In view of these express provisions of the statute, the cases cited by counsel for appellants, in which the courts of other jurisdictions have applied the rule contended for, are not in point. In any event, in this state the court, upon a hearing of the application for the sale of real estate, has no power to proceed except in conformity with the statute. If the devise to either of the appellants was made under such circumstances as would warrant a decree requiring the executor to convey to him, the questions involved and a decree thereon can be had only in a court of equity in an action brought for that purpose. The order made in terms directs the executor to proceed to sell in the order prescribed by the statute, and presumably he will do so and first exhaust the property not specifically devised.

3. Evidence was offered by the appellants tending to show that they had been in the possession of the property devised to them respectively, holding the same adversely to the executor, for more than ten years prior to the filing of the petition. This was, on objection, excluded by the court as immaterial. The ruling is assigned as error. The contention is made that an application for the sale of real estate is in the nature of an action to enforce a lien upon the lands of the decedent; that title to the estate vests at once in the heirs or devisees, subject only to the payment of debts; and that, such being the ease, the right to maintain the application is barred by the provisions of the statute (Comp. Stats. 1887, Div. I, secs. 29, 30; Pol. Code 1895, see. 9; Code of Civil Proc., secs. 483, 484, 3456), prescribing the time within which actions may be brought to recover real estate or the possession thereof, and actions arising out of the title to real estate, or the rents and profits thereof, unless the application is made before the limitation has run.

While an application to sell real estate does partake somewhat of the nature of an action (Broadwater et al. v. Richards, Admr., 4 Mont. 80, 2 Pac. 544, 546), it is in no sense of the term an action to recover real estate or the possession of it. Nor is it an action arising out of the title thereto, or the rents and profits thereof. Under our system, the whole of the estate, both real and personal, goes into the possession of the executor or administrator, first for the payment of debts, and then for distribution under the will or the laws of succession. (Civil Code, secs. 1821-1823, 1826, 1850 et seq.; Code of Civil Proc., sec. 2559.) Claims of creditors must be presented for allowance within the time prescribed by law, after notice has been published (Code of Civil Proc., sec. 2603), or they are forever barred, whether they are due, not due, or contingent. If a claim is barred by lapse of time at the date of presentation, it may not be allowed. (Sec. 2609.) If rejected, action must be brought against the administrator in the proper court within three months thereafter, or it is barred. (Sec. 2608.) Upon the coming in of the account, the heirs or devisees may contest and have rejected any claim allowed in violation of these provisions. (Secs. 2784, 2791; In re Mouillerat’s Estate, 14 Mont. , 36 Pac. 185.) And since the petition for the sale must set forth the debts of the estate (sec. 2671), it would seem that the appropriate limitation may then be invoked in order to defeat a particular claim, and therefore the sale pro tanto. But when claims have been presented and allowed, and are not contestable for the reason that they have not been presented in time under section 2603, supra, or that they are barred at the time of the presentation by the particular statute applicable, none of the statutory limitations run as against them. (In re Arguella, 85 Cal. 151, 24 Pac. 641; In re Estate of Schroeder, 46 Cal. 304.) Furthermore, the question of adverse possession as between the executor and a devisee may not be tried by the court upon an application for the sale of real estate. As has been said already, any question as to the title of property belonging to the estate must be settled in the appropriate action brought in the district court as a court of general jurisdiction. (In re Estate of Burton, 63 Cal. 36; In re Estate of Groome, 94 Cal. 69, 29 Pac. 487; Stewart v. Lohr, 1 Wash. 341, 22 Am. St. Rep. 150, 25 Pac. 457.)

4. Contention is made that the court, in the exercise of its sound discretion, should have denied the application on the ground of the palpably unreasonable delay of the executor in presenting it. Whether or not gross negligence or palpable laches on the part of the executor or administrator is sufficient reason for denying an order of sale in a given case, we do not deem it necessary to discuss or decide. There is abundant authority in support of the affirmative of the proposition. (Estate of Crosby, 55 Cal. 574; Mooers v. White et al., 6 Johns Ch. 360; Wolf et al. v. Ogden, 66 Ill. 224; McCrary v. Tasker et al., 41 Iowa, 255; Ricard v. Williams et al., 7 Wheat. 59, 5 L. Ed. 398; Ex parte Allen, 15 Mass. 58; 2 Woerner on the American Law of Administration, see. 465.) The policy of the statute requires the administration to be conducted speedily to a close. This fact also lends support to the rule contended for by the appellants. Here, however, the parties — assuming that such a defense could be invoked — tried the question of laches, and the court decided that under all the circumstances there had been no unreasonable delay. We think the conclusion reached by the •court justified upon the facts presented. Soon after letters were issued to the executor, claims were presented to the amount of more than $30,000. Most of them were rejected. Litigation arose over them. Finally, about one year prior to the making of the application, the principal claims were declared groundless. In the meantime the appellants, desiring that the property belonging to the estate, and particularly that devised to them, should Hot be sold, encouraged the executor to lease certain of the claims in order to raise money to pay the debts and thus avoid a sale. Indeed, they urged him to make leases and took part in the proceedings instituted to secure orders of court at various times authorizing such leases to be made. The claims which were undisputed were small in amount in comparison with those presented and rejected out of which litigation arose. Under these circumstances, we think it would be unjust to the creditors to permit these appellants to assert that the debts finally found to be due from the estate should not be paid. These remarks dispose of all the questions requiring special notice.

(Submitted November 29, 1905. Decided December 4, 1905.)

While the findings and conclusions of the court cover matters not properly within scope of the application and the order is somewhat indefinite in its terms, we think the Court did not commit any prejudicial error, and that the order should be affirmed.

Affirmed.

Mr. Justice Holloway concurs. Mr. Justice Milburn, being disqualified, takes no part in this decision. .