Hoyt v. Bonnett

Full title: EDWIN HOYT et al., Appellants, v . PETER R. BONNETT et al., Executors…

Court: Court of Appeals of the State of New York

Date published: Dec 17, 1872

50 N.Y. 538 (N.Y. 1872)

Opinion

Argued December 12, 1872

Decided December 17, 1872

Wm. Allen Butler for the appellants. C.A. Peabody and A. Wright, Jr., for the respondents.

ALLEN, J.

To entitle an executor or administrator to the benefit of the short statute of limitations, by which one having a claim against the estate of a deceased person may be barred of his action and forfeit his claim, the representative of the estate must, in all essentials, comply with the statute creating the bar. Neither the statute nor the acts of executors or administrators under it are to receive a liberal interpretation or to be extended by implication beyond their natural and ordinary import. With a single exception, courts and judges have regarded the act as penal in its character, and to be strictly construed. By the statute an executor or administrator at any time, at least six months after the granting of letters testamentary, or of administration, by notice published as prescribed by law, and as the surrogate may order, may require all persons having claims against the estate to exhibit the same, with the vouchers, at or before a day to be specified in the notice, at least six months from the day of the first publication. (2 R.S., 88, § 34.) Such notice was published by the executors in this case, and the present appellants exhibited their claim within the time limited by the notice. A subsequent section of the statute (§ 38) provides that if a claim be exhibited to the executor or administrator, and "be disputed or rejected by him," and the same shall not have been referred, the claimant shall, within six months after such "dispute or rejection," if the debt or any part thereof be then due, or within six months after some part thereof shall have become due, commence a suit for the recovery thereof, or "be forever barred from maintaining an action thereon" Justice to the claimant, as well as the reasonable interpretation of the statute, requires that the act of the executor or administrator, in disputing or rejecting the claim which is to put the claimant to an action within the brief period prescribed, upon pain of forfeiting his claim, should not be ambiguous or equivocal, capable of two interpretations, but decided, unequivocal and absolute; such an act or declaration as will admit of no reasonable doubt that the claim is definitively disputed or rejected, so that the claimant will be without excuse for not resorting to his action within the time required to save his claim. To construe and apply the statute in a manner more liberal to the representatives of estates would make it a trap and a snare to claimants. They might be misled, and induced to remain passive until they had lost the right of action by a notice or a declaration so carefully drawn or made as to lull them to rest; while it might be claimed that an intention to dispute or reject the claim was clearly inferable from the language used. The rule is as fairly deducible from the authorities and the statute, upon a reasonable interpretation, that whatever may be the language or declaration of the executor or administrator to the claimant, if in the same notice or declaration, or at the same time, he does or says anything from which the claimant may reasonably infer that the determination to dispute or reject the claim is not final, but that it will be further examined or considered, either upon the vouchers already exhibited or such as may be thereafter presented, the claim is not "disputed or rejected," within the statute. ( Kidd v. Chapman, 2 Barb. Ch. R., 414; Reynolds v. Collins, 3 Hill, 36; Elliot v. Cronk's Administrators, 13 W.R., 35; Barsalou v. Wright, 4 Bradf. R., 164.) The notice of the executors to the present appellants does not advise the latter that the claims were either disputed or rejected. It merely advises them that, as at present advised, they declined to pay them. The ground of such declension is not stated, and the term employed is not equivalent to a refusal to pay; which the chancellor, in Kidd v. Chapman ( supra), said, "if upon any other ground than that the debt, or some part of it, is not legally or equitably due, is not a disputing or rejection of the debt within the statute." From the nature of the claims, there may have been good reasons for declining to pay them, irrespective of their justice. Another paragraph in the same notice conveys the idea very distinctly that they decline to pay the claims at that time, not because they were deemed unjust, or not legal or equitable charges against the estate, and not to be paid at any time, but for some other reason. The executors say that, as they have no other means of information concerning the details of the claims, they will be obliged if the claimants will furnish them a bill of particulars, containing the items of their accounts, the dates when contracted, and a list of the notes with vouchers held for the same. This request is inconsistent and unreconcilable with the pretence that the claim was by the same notice rejected or disputed, and the claimants put to their action. To furnish vouchers and particulars of claims that were definitively rejected or disputed, and which the executors did not propose to examine or re-examine, would have been a work of supererogation which the executors could not have reasonably asked, and such as sensible business men would not have asked. The executors did not reject or dispute the claim so as to put the statute in operation, and bar the claims upon a failure to bring an action within the time prescribed by it.

Another insuperable objection to the bar set up by the respondents, and sustained by the surrogate, arises out of the character of the claims. The estate of the decedent was not primarily chargeable with them. The surviving members of the copartnership and the assets of the respective firms were previously liable for them with the other firm debts, and the estate of the deceased partner could not be resorted to or charged until the remedies against the survivors and the partnership property had been exhausted, or it should appear that an effort to collect the debt from either would be fruitless.

It is well settled in this State that a creditor of a firm cannot proceed against the estate of a deceased partner without showing either that the surviving partners have been proceeded against to execution at law, or that they are insolvent. ( Lawrence v. Orphan House, 2 Denio, 577, affirming the decree of the chancellor in the same case, 11 Paige, 80.) The doctrine has been reaffirmed by this court since the enactment of the Code; and the personal representatives of a deceased partner cannot be joined as a party defendant with the surviving partner in an action for a partnership debt when the complaint does not show the plaintiff's inability to procure satisfaction from the survivor. ( Voorhis v. Childs' Executor, 17 N.Y., 354.)

There was no absolute or certain debt due, either at law or in equity, from the estate of the decedent, to the present appellants at the time they exhibited the claims. The liability was contingent; and while it was proper to present the claims, the statement as made, the truth of which is not controverted, fully disclosed the nature and character of the debts, and the conditions and extent of the liability of the estate. The claims were not, and, so far as appears, are not now an absolute charge upon the estate of Mr. Whitlock; but the contingent liability continues, and cannot be disregarded or rejected by the executors. They do not constitute debts against the estate until the liability has become fixed and certain by an inability to collect the same from the surviving partners. Even if it should be conceded that the claims were rejected or disputed by the notice from the executors of November 9, 1867, the time for commencing the actions has not commenced running, for the reason that, so far as the case shows, the debts have not become due as against the estate; but the claims still exist as contingent, with the possibility of becoming absolute charges upon or debts against the estate for the whole or some part thereof. The surrogate should not have made a final distribution of the estate to the exclusion of the appellants. If, after making reasonable provision for their claims, there was a surplus capable of distribution, that surplus might have been apportioned and paid to those entitled. The statute (2 R.S., 96, § 74) directs the surrogate, if it shall appear that any claim exists against the estate of the deceased which is not due, to allow a sum sufficient to satisfy such charge, or the proportion to which it may be entitled, to be retained to be applied to the payment of the same when due, or when recovered, or of being distributed according to law. These claims are within the letter as well as the spirit of the statute. The decree of the surrogate, as well as the judgment of the Supreme Court, appear to have proceeded upon the theory that the claims of the appellants have been disputed or rejected by the executors, and so brought within the operation and effect of the short statute of limitations; and neither tribunal appears to have considered the fact that the debts were not due so as to require the commencement of an action within six months from the rejection.

The courts were in error in holding that the claims were rejected or disputed, and the judgment of the Supreme Court and decree of the surrogate must be reversed, as well for that reason as for the reason that the debts were not due as against the estate at the time of the hearing before the surrogate, and the statute had not run against them.

The proceedings must be remitted to the surrogate, to be proceeded with pursuant to law.

All concur.

Judgment accordingly.