Summary
In State ex rel. Steinfort v. District Court, 109 Mont. 410, [1] 97 P.2d 341, we commended the practice of placing the exact facts before the executor or administrator in creditors' claims, and held that the creditor had the right, after the time for presenting claims had expired, to amend the claim in such manner as to forestall the contention that there was a variance between the proof and the claim so long as the substance of the claim was not altered. That case has application here.
Summary of this case from State ex rel. Montana Flour Mills Co. v. District CourtOpinion
No. 8,035.
Submitted November 14, 1939.
Decided December 4, 1939.
Executors and Administrators — Claims Against Estates — When Amendment of Claims Permissible After Time for Presentation of Claims has Expired — Supervisory Control — When Writ Lies. Executors and Administrators — Claims Against Estates — When Amendment of Claims After Expiration of Time for Filing Thereof Should be Permitted. 1. After filing of a claim against a decedent's estate within time, an amendment thereof after expiration of such time should be permitted where it effects no substantial change in the claim nor introduces a new or different claim as the basis of recovery, or where the purpose of the amendment is to avoid the effect of the statute of limitations. Same — Amendment of Claim Against Estate After Time for Presentation of Claim has Expired, so as to Show Credit to Estate Permissible. 2. Irrespective of whether a creditor of an estate may or may not so amend his claim against an estate, after the time for presenting claims has expired, as to increase the amount thereof, where the purpose of the amendment is to show a credit to the estate if one has been overlooked or there has been a miscalculation of the amount due, thus reducing the amount of the claim, the basis of the claim is not thereby changed. Same — Case at Bar — Writ of Supervisory Control. 3. Held, on application for writ of supervisory control, that the district court erred in denying leave to a creditor of an estate, after the time for presentation of claims had expired, to amend his claim, filed within time and based on two promissory notes, for the purpose of showing the dates and amounts of interest payments made thereon at such times as to prevent the running of the statute of limitations, the total of the claim being left the same as it appeared on the original claim filed. Same — Effect of Amendments Made Under Above Rules upon Statutes Relating to Presentation of Claims — Doctrine of Relation Back. 4. Where amendments of claims against estates are permitted to be made under circumstances such as the above, the result is not to wipe out the statutory provisions relating to the presentation of claims and the time within which actions must be brought on rejected claims, since the amendments relate back to the time of their original presentation, i.e., the executor or administrator must then pass upon the claim as amended, and if rejected, section 10178, Revised Codes, governs as to time for commencing action. Supervisory Control Writ — Absence of Appeal from Order Complained of in Probate Matter Warrants Issuance of Writ. 5. In the absence of an appeal from an order of the trial court denying leave to amend a claim against an estate under circumstances warranting amendment, the writ of supervisory control lies to correct the error.
Mr. J.D. Taylor, for Relatrix, submitted an original and a supplemental brief, and argued the cause orally.
Mr. R.A. O'Hara and Mr. C.E. Pew, for Respondents, submitted a brief, and argued the cause orally.
This is an application for a writ of supervisory control and seeks a reversal of an order of respondent court denying relatrix the right to amend her claim against the estate of John P. Steinfort, deceased.
The important facts are these: John P. Steinfort died on March 17, 1939; Mary A. Steinfort, the widow, was appointed administratrix of the estate; she gave notice to creditors for presentation of claims, the time therefor expiring on August 6. On July 29 relatrix, a sister of deceased residing in Orange City, Iowa, presented to the administratrix a claim for $4,972 based upon two promissory notes dated May 1, 1924, and executed at Donnelly, Minnesota, in the principal sum of $2,660 and $167.13, respectively, and bearing interest at six per cent., payable annually. The notes were payable May 1, 1926, and May 1, 1925, respectively. Copies of the notes were attached to the claim, and it contained the affidavit in statutory form (section 10174, Revised Codes) that the sum claimed "is justly due to claimant; that no payments have been made thereon which are not credited." The claim did not show that any payments had been made on the notes.
It was rejected by the administratrix on the same day as presented; on August 4 relatrix filed an amended claim in the same amount as the original in which the following endorsements appear upon each note:
"Interest pd. to May 1, 1925.
"Interest pd. to May 1, 1927."
It also stated that no payments had been made on the claim which were not credited. The amended claim was also rejected by the administratrix. On September 20 and after the time for the presentation of claims had expired relatrix filed a petition with the respondent court asking leave to file an amendment to her claim. The proposed amendment sought to set out that the following payments had been made on the claim at the times indicated, but which had not been endorsed on the notes:
"March 26, 1925, received — $160.00 March 23, 1926, received — 135.00 Feb. 15, 1927, received for balance of interest up to May 1, 1927 1931 " 100.00 1932 " 100.00 1933 " 100.00 1934 " 100.00 1935 " 50.00 1936 " 50.00 May 28, 1937, received 50.00"
The proposed amended claim also recites:
"That where the same were known, this claimant has inserted the month and the day on which the payments were made in the above schedule; that, however, as to some of the payments, she has only the record of the total payments made during a calendar year and has so entered the same. That the last payment made by the decedent on said notes was on the 28th day of May, 1939, in the amount of $50.
"3. That all the said payments were taken into account in computing the amount due upon said claim as originally filed herein; but this claimant did not know that the dates of the several payments were material; that her failure to endorse all of said payments upon said notes was not done with any intention of avoiding the allowance of credit, but this claimant regarded the same as unnecessary."
The court, after hearing, denied leave to amend. The court in its order stated that as to the first two claims filed, "It clearly appears that both of these claims, on their face, were barred by the statute of limitations," and were properly rejected. The court further stated, "The proposed amendments show payments on these notes up to May 28th, 1937, and if these payments had been shown on either one of the two claims rejected and filed, they would have avoided the statute of limitations. The amendments are most vital, substantial, in fact, would have the effect of making a good claim out of a worthless one. Under the authority of the statutes and the Montana case of State ex rel. Paramount Publix Corp. v. District Court et al., 90 Mont. 281, 1 P.2d 335, 76 A.L.R. 1371, it seems that this court has no authority at this time to allow such amendments."
The case presents the questions whether the court was correct in holding that it had no authority to allow the amendments, and if authority exists should it have been exercised in favor of the right to amend. Defendants, also by motion to quash and answer, have raised the question whether supervisory control is the proper remedy.
The court was in error in holding that it had no authority to [1, 2] allow the amendments. The general rule is stated in the note in 76 A.L.R. 1380, as follows: "It is generally held that an amendment, after time for filing has expired, of a claim filed against a decedent's estate within time, will be permitted where it effects no substantial change in the claim, nor introduces any new or different claim as the basis of recovery."
Many cases are there cited in support of the general rule. To the same effect is 24 C.J. 354, and 21 Am. Jur., Executors and Administrators, section 376, page 595. And, after the time for filing claims has expired, an amendment to a claim filed within time will be permitted where the purpose of the amendment is to avoid the effect of the statute of limitations and when the essential grounds of recovery are left substantially unchanged. ( Wise v. Outtrim, 139 Iowa, 192, 117 N.W. 264, 130 Am. St. Rep. 301.) Section 9187, Revised Codes is sufficiently broad to permit such amendments. The case of State ex rel. Paramount Publix Corp. v. District Court, 90 Mont. 281, 1 P.2d 335, 76 A.L.R. 1371, is not at variance with what we now hold. That case was by a divided court. As appears from the two opinions in the case, the court divided on the issue as to whether the amendment there involved changed the basis of recovery. The majority of the court held that it did.
It cannot be said that the amendments proposed here change the claim in any essential particular. The balance due on the notes is still the basis of recovery. The amendments simply show facts tending to show that credits already given on the note were paid at such times as to prevent the running of the statute of limitations.
Contention is made by respondents that the amendments if allowed, would, in spite of the statement of relatrix to the contrary, change the amount of the claim, by reducing it. If this be so it would not deprive the court of authority to allow the amendments. They would not change the nature of the claim or the basis of recovery. The claim would still be one based upon the balance due on the notes.
There is some conflict of authority on the point as to whether [3] the amount of the claim can be increased by amendment after the time for presenting claims has expired. Winchell v. Sanger, 73 Conn. 399, 47 A. 706, 66 L.R.A. 935, holds that this cannot be done. The following case holds that it can be done: Maughan v. Burns' Estate, 64 Vt. 316, 23 A. 583. (See, also, Dubbs v. Haworth, 102 Kan. 603, 171 P. 624, and Bogue v. Corwine, 80 Mo. App. 616.) Whatever the correct view may be as to an increase in the amount claimed, granting to the estate a credit when one has been overlooked or there has been a miscalculation of the amount due and thus reducing the amount of the claim does not change the ground or basis of the claim. (Compare Chinn Land Livestock Co. v. Stewart, 69 Colo. 598, 196 P. 189.)
Having determined that the court had the power to allow the amendments, we pass to the point as to whether the court should have done so.
Respondents contend that an amendment was unnecessary and that proof as to when the payments were made would have been admissible in a suit on the amended claim as already presented. It may be that such evidence would have been admissible. (Compare Hurd v. Varney, 83 N.H. 467, 144 A. 266.) It is unnecessary to decide that point here. Had relatrix brought action on the amended claim, which was presented on August 4, she would have been confronted with this situation: She founded her claim upon the notes. They each bore endorsements that interest had been paid to May 1, 1925, and to May 1, 1927. Her amended claim of August 4 contained the affidavit that no payments had been made which were not credited. That claim was in conformity with section 10174. The amendments proposed tend to show that there were credits or payments other than those endorsed on the notes. In a suit on the amended claim of August 4 had evidence been introduced of the credits alleged in the proposed amendments relatrix would have been met with the contention that there was such a variance between the proof and the claim as to amount to a failure of proof within the rule stated in Vanderpool v. Vanderpool, 48 Mont. 448, 138 P. 772, Brown v. Daly, 33 Mont. 523, 84 P. 883, Harwood v. Scott, 57 Mont. 83, 186 P. 693, and Burnett v. Neraal, 67 Mont. 189, 214 P. 955.
Whether the contention would or should have been sustained, if made, need not here be determined. Relatrix had the right to forestall such a contention and should not be forced to assume the chance of either being non-suited or having a favorable judgment reversed by this court. She should be commended for her efforts in attempting to place the exact facts before the administratrix so that when and if suit followed the administratrix would not be taken by surprise on any material matter connected with the claim. It should be said in fairness to the trial judge that he might have allowed the amendments had he believed that he had the right and power to do so. The court should have allowed the amendments to be made.
Respondents suggest that to allow the amendments at this time [4] and to allow relatrix three months after the rejection of the claim as thus amended, within which to file action on the claim, is to wipe out the statutory provisions relating to the presentation of claims and the time within which actions must be brought on rejected claims. We do not so view the matter. When the amendments are made they relate back to the time of the original presentation. ( Davis v. Superior Court, 35 Cal.App. 473, 170 P. 437.) The administratrix then must pass upon the claim as amended. This may be done after the expiration of the time for presenting claims. (Sec. 10176, Rev. Codes.) If rejected as amended, section 10178 governs as to time of commencing action. To be sure the allowance of the amendment in effect renders the action of the administratrix in passing on the claim before the final amendments functus officio, but that is true with amendments to pleadings generally and furnishes no reason for not applying the provisions of section 9187, which permits the allowance of amendments in the furtherance of justice at any stage of proceedings subject to limitations therein stated.
On the point that supervisory control does not lie here, [5] little need be said. There is no appeal from the order denying the amendments. Clearly the case is one for use of this extraordinary writ. (Compare State ex rel. Finley v. District Court, 99 Mont. 200, 43 P.2d 682.)
The writ will issue commanding respondent court to set aside the order denying and to enter an order permitting the amendment as sought.
MR. CHIEF JUSTICE JOHNSON and ASSOCIATE JUSTICES MORRIS, ERICKSON and ARNOLD concur.