Hearing In Bank Denied.
Cross-appeals by plaintiff from a judgment of the Superior Court of Los Angeles County, and by defendants from the judgment and from an order denying their motion for a new trial. William. P. Wade, Judge.
The administrator could not extend the time for the payment of the debt or bind the heirs by contract. (Eisenbise v. Eisenbise, 4 Watts, 134; Landry v. Delas, 25 La. Ann. 181; Matter of Loper, 2 Redf. 545; Rush v. McDermott , 50 Cal. 471; Mulligan v. Smith , 59 Cal. 225.) The defendants lost their right to their claim by not presenting it as a claim against the estate. (McDonald v. McElroy , 60 Cal. 494.)
C. M. Stephens, and Albert M. Stephens, for Plaintiffs.
Chapman & Hendrick, for Defendants.
The administrator had a common-law power to extend time, which was not taken away by the code. (Moulton v. Holmes , 57 Cal. 337.) There never was a contract of sale, consent thereto having been obtained through mistake. (Civ. Code, secs. 1567, 1580; 2 Pomeroy's Equity Jurisprudence, secs. 853, 870.)
JUDGES: Britt, C. Searls, C., and Haynes, C., concurred. McFarland, J., Henshaw, J., Temple, J.
There are two appeals in this case, one by plaintiff from the judgment, the other by defendants from the judgment and order denying their motion for new trial -- plaintiff claiming that the court allowed him to recover less than he was entitled to have, and the defendants insisting that he should have recovered nothing at all. Lawrence Welch was the owner of a tract of land containing about 52 acres in Los Angeles county. On May 19, 1887, he and his wife, Martha A. Welch, made a deed purporting to "grant, bargain, sell, and convey" to defendants a part of the said tract containing 33.29 acres. The price was $ 6,600; and defendants then paid a portion of the purchase money, and for the balance unpaid executed to said Lawrence their two promissory notes for the sum of $ 2,800 each, one to become due on May 19, 1888, and the other on May 19, 1889; these were secured by mortgage of same date as the deed on the premises described in the deed. Said deed was duly recorded in the proper office on the day of its date. On July 9, 1887, one E. J. Baldwin commenced an action in the superior court of said county against Lawrence Welch for the recovery of certain lands, including (as the court found) some part of the tract previously conveyed by said deed to defendants. November 7, 1887, Lawrence Welch and his said wife entered into a written agreement with defendants reciting the execution of said deed and notes and the pendency of said action brought by Baldwin, and providing that the grantors in the deed -- Welch and wife -- would defend the same, and that "in case they should not be successful in defending said action, and any portion of said 33 acres should be lost" to the defendants here, then said Welch and wife would reimburse them for all the said 33 acres which might be lost to them at the rate of $ 200 per acre with interest, at ten per cent per annum from May 19, 1887, to such time as it should be finally decided that the title of the parties to such agreement is not good. Lawrence Welch died December 24, 1887, and his widow, said Martha, in January, 1888, received letters of administration on his estate from the said superior court. On December 18, 1888, in consequence of the pendency of the Baldwin suit, the administratrix indorsed on each of said notes the following: "For valuable consideration [42 P. 140] I hereby extend the payment of the within note till the 19th of May, 1892. Martha A. Welch." No order of court was obtained authorizing or approving such extension of time. On November 20, 1889, judgment was entered in said case of Baldwin v. Welch, whereby Baldwin was adjudged to recover of Welch 10.83 acres of the land described in the mortgage. From the time of the execution of the said deed to defendants, however, until the present, defendants have had exclusive and undisturbed possession of the whole of the mortgaged land. The administratrix caused notice to creditors of said deceased to be first published on January 28, 1888, and the time for presentation of claims against the estate had expired before the commencement of this action. The defendants presented no claim on account of the said agreement of November 7, 1887, for allowance against the estate. Mrs. Welch resigned her office of administratrix in May, 1890, and thereupon Maddock, the present plaintiff, received letters of administration in her stead. This action to foreclose the mortgage was begun June 26, 1890.
Defendants pleaded in defense the matters above outlined relating to the extension of time of payment and the Baldwin suit; and on October 31, 1892, after the trial of this action was partly had, filed an amendment to their answer, alleging that the land described in the deed of Welch and wife to them, and in the mortgage, is not the land which Welch pointed out to them before the sale, and which they supposed they were purchasing; that it was a case of mutual mistake, arising from the location of the land with reference to a certain fence; that Welch showed them land lying south of the fence, and they supposed themselves to be purchasing the land thus shown, but that the land described in the deed lies north of the fence; that Welch did not have the title to the land that he showed them, and the deed conveyed no interest therein; that they did not discover such mistake until after the commencement of the trial; they offer to reconvey such interest as passed to them under the deed upon repayment to them of the sum paid on the purchase of the land, or without repayment if the estate has not means for that purpose, and crave a rescission of the sale. It is not alleged that defendants did not receive from Welch possession of the tract he assumed to sell them or that they have been disturbed in such possession.
Defendants paid the interest on both the said notes to May 19, 1890, and also $ 900 on the principal of the one first maturing. By its judgment the court directed the sale of the mortgaged land, less 10.82 acres thereof included in the recovery in Baldwin v. Welch, and the application of the proceeds to the payment of the amount due on the notes and mortgage -- deducting therefrom, however, the sum of $ 2,164, and ten per cent annual interest thereon from May 19, 1887, in all $ 3,374.33, on account of the agreement of Welch and wife to reimburse defendants at the rate of $ 200 per acre for the land lost in the suit of Baldwin; the net sum thus ascertained to be due to plaintiff was $ 2,097.67, besides counsel fees and costs.
1. The first question arising on the record is upon the effect of the extension of time of payment allowed by the administratrix -- defendants maintaining that it results therefrom that the action commenced by her successor nearly two years before the expiration of the time as thus extended is prematurely brought, and should be dismissed. When we recall the early practice which obtained in the administration of the effects of a decedent -- that it was considered that the persons most fit to have in trust the goods of the deceased were those who in his lifetime administered to the needs of his soul, and hence that control of his personal assets was committed to prelates, who might seize the same, and (excepting the "reasonable parts" of the wife and children, if he had any) might give, alien, or sell them at will, and apply the same, or the proceeds thereof, to pious uses, without any liability to account for their conduct save to God and their consciences (2 Stephen's Commentaries, 230); that, by the common law, the administrator has absolute power of disposal, other than testamentary, over the personal effects of his intestate, and may even pledge or mortgage them, without restriction, so long as his acts are not actually or constructively fraudulent (Williams on Executors, 564, 801, et seq.) -- it must be conceded, we think, that the extension of time granted by the administratrix in this case was valid and effectual if her authority had no limitations beyond the rules of the common law, she being liable to the estate as for waste if the power was indiscreetly exercised. (Berry v. Parker, 3 Smedes & M. 625, 640.) An English statute passed in 1881 expressly provides that an administrator may allow any time for the payment of any debt without being responsible for loss occasioned by his act done in good faith (44 & 45 Vict., c. 41, sec. 37); and this, to the extent that it defines his authority, seems to be merely declaratory of the law. But in this state, it has been said, proceedings for the administration of the estates of deceased persons are purely statutory (Smith v. Westerfield , 88 Cal. 378; Buckley v. Superior Court , 102 Cal. 8; 41 Am. St. Rep. 135), and while it is not meant by this remark that the authority of those charged with the conduct of such proceedings is regulated solely by statute (Moulton v. Holmes , 57 Cal. 337), yet the letter and the spirit of the system established by legislation are to be first consulted as the repository of the law on the subject, and their rule, if they furnish any, must be followed in any case before we resort for guidance to the precepts of the common law. (See People v. Senter , 28 Cal. 505.) Accordingly, it is provided that the property in all assets of a decedent [42 P. 141] passes to his heirs subject to a right of possession in the administrator for purposes of administration only. (Civ. Code, sec. 1384.) The objects of probate proceedings are to administer, settle, and distribute the estates of deceased persons. (In re Burton , 93 Cal. 463.) And it may be added that our system contemplates that these objects shall be accomplished with reasonable dispatch. (Estate of Moore , 72 Cal. 342.) To this end the administrator must collect all debts due to the estate. (Code Civ. Proc., sec. 1581.) He is answerable for the amount of any debts which remains uncollected, unless he can show that he is without fault in failing to collect. (Code Civ. Proc., sec. 1615; In re Sanderson , 74 Cal. 199.) The debts of the decedent, if there are funds for the purpose, are to be paid within a comparatively brief period after the administration of the estate begins. (Code Civ. Proc., secs. 1622, 1628, 1647.) As soon as the estate is in proper condition to be closed, the administrator must render a final account and pray a final settlement. (Code Civ. Proc., secs. 1651, 1652.) After a lapse of one year from the issuance of letters, any heir may have distributed to him his share of the estate, if the interests of creditors are not jeopardized, upon complying with the requirements of section 1663 of the Code of Civil Procedure. Other sections might be cited, but these illustrate the view we entertain of the matter; all look to a speedy close of administration. An administrator having notice of a debt due to the estate is bound to exercise active diligence for its collection. (Harrington v. Keteltas , 92 N.Y. 40.) Evidently such a duty is inconsistent with a power by his contract to incapacitate himself and his successors in the trust estate he represents from proceedings to enforce collection for a series of years. There may be instances where, for the purpose of getting a claim secured, as in Berry v. Walker, above cited, or for other purpose beneficial to the estate, the administrator might, in the exercise of his power to compromise disputes, make a valid agreement to extend the time of payment of an obligation due to the estate; but this case presents no such feature; it is alleged in the answer that the defendants were "about to take steps to protect themselves against said notes for the unpaid purchase money," and thereupon the administratrix, "in order to settle said controversy and in consideration thereof, agreed to extend the payment," etc.; and the court found that the extension was granted till May 19, 1892, "in consequence of the pendency of the Baldwin suit"; but here is no compromise of conflicting claims alleged or found; defendants did not abate, or agree to abate, any part of their contingent demand against the estate; the most that can by inference be extracted from the finding is that the administratrix agreed to delay collection of the entire debt for a period of three years in order to see if a contingent right of setoff in the defendants would become absolute; and this was done at a time when the administration had been in progress nearly a year; when the contingent demand of the defendants had not been allowed as a claim against the estate; and thereby the mortgage security, at least, of the first note was brought within the danger line of the statute of limitations. We think it plain that she did not bind the estate; it was an unwarranted attempt to tie the hands of the heirs and other persons interested in enforcing collection of the debt. (Estate of Page , 57 Cal. 238; Estate of Moore , 72 Cal. 342, and cases cited; Estate of Loper, 2 Redf. 545; Woerner on Administration, secs. 353, 356; Landry v. Delas, 25 La. Ann. 181.)
2. The deed to defendants contained no warranty beyond that implied from the operative word "grant" used therein (Civ. Code, sec. 1113; Bryan v. Swain , 56 Cal. 616); and this did not extend to the claim of Baldwin; hence the partial defense to the notes sustained by the court rests on the agreement of indemnity against loss executed by the Welches November 7, 1887. It is not clear that loss accrued from the judgment recovered by Baldwin in a suit to which defendants were not parties; but, however this may be, that agreement contained nothing to show that it modified the obligation of defendants on their notes and mortgage; it was the mere personal promise of Welch and his wife to "reimburse" the defendants at the rate of $ 200 per acre for so much of the land as might be lost in the Baldwin suit; when the notes fell due they were payable according to their terms, notwithstanding the agreement for indemnity, unless there had then occurred a loss within its meaning, in which event perhaps a right would arise thereon in the nature of setoff against the notes; as a contract creating a contingent liability, therefore, it should have been presented to the administratrix for allowance as a claim against the estate, and not having been so presented, by the terms of the statute, so far as the estate is concerned, it "is barred forever," and the court erred in considering it a proper ground for rebate from the amount due plaintiff on the notes. (Code Civ. Proc., sec. 1493; Verdier v. Roach , 96 Cal. 467; McDonald v. McElroy , 60 Cal. 496; Shelton v. St. Clair , 64 Ala. 565.)
3. Some of the findings of the court concerning the location of the land and the alleged mistake in that behalf are contradictory and unintelligible. The matters appearing in these findings, however, are not essential to the disposition of the case, for other facts are found and not disputed which show that no case for rescission [42 P. 142] is made. It thus appears that at the time of the purchase of the land described in the mortgage the defendants "entered into the possession of the said lands and ever since have been and now are. .. . in the undisturbed possession of the whole thereof." Two views of this finding are possible: 1. If the land thus possessed by defendants is located as the defendants say the description in the deed and mortgage does locate it, i. e., elsewhere than at the place shown to them by Welch, then of course the circumstance of possession as found negatives the idea of any mistake as to its situation; there could be no mistake if they received actual possession of the land which the deed actually conveyed; 2. But if, as was probably the fact, and as the evidence tends to show, the defendants received and yet hold possession of the land which Welch pointed out to them and which they believed they were purchasing from him, then, though it be conceded that the deed and mortgage do not describe that tract, yet the defendants have not taken the steps requisite to entitle them to rescind; they show no offer to restore everything of value received under the contract; this was of course necessary (Civ. Code, secs. 1691, 3407); true, the answer of defendants alleges that they "are now ready and willing and offer to reconvey. .. . all of the right, title, and interest that they have acquired. .. . by reason of said conveyance made by said Welch and wife to these defendants," etc.; but according to their allegations nothing passed by said conveyance; they allege no offer at any time to redeliver possession of the land they actually received nor to account for the profits thereof, nor any showing that the use of the same was of no value. The court did not err in refusing a rescission. (Fratt v. Fiske , 17 Cal. 380; Haynes v. White , 55 Cal. 38; Bryan v. Swain, supra ; Alden v. Pryal , 60 Cal. 215; Hammond v. Wallace , 85 Cal. 532; 20 Am. St. Rep. 239.)
The order denying defendants' motion for new trial should be affirmed, and the cause should be remanded with instructions to the court below to modify its conclusions of law on the findings so as to omit therefrom any deductions in the nature of setoff against the amount found due to plaintiff on the notes in suit, and to modify the judgment so as to direct the recovery by plaintiff of the full amount found due to him without abatement on account of said deductions; and, so modified, the judgment should be affirmed
For the reasons given in the foregoing opinion the order denying defendants' motion for new trial is affirmed, and the cause is remanded with instructions to the court below to modify its conclusions of law on the findings so as to omit therefrom any deductions in the nature of setoff against the amount found due to plaintiff on the notes in suit, and to modify the judgment so as to direct the recovery by plaintiff of the full amount found due to him without abatement on account of said deductions; and, so modified, the judgment is affirmed.