Bidwell v. Beckwith , 86 Conn. 462 ( 1913 )

The assessments were lawfully ordered by the Minnesota court and constituted lawful claims against the estate of Mrs. Bidwell, enforceable so far as properly presented. The claim originating in the first assessment, ordered in 1902, against her estate, accrued within the time limited for presenting claims against the estate, and was not presented within that period to the executor, and so the receiver became "forever debarred of his demand against said estate." General Statutes, § 326.

The claim originating in the second assessment, ordered in 1907, was duly presented against the estate by the receiver, and is a valid obligation of the estate unless, as the defendant insists, Mrs. Bidwell's coverture prior to April 20th, 1877, prevents its collection. Mrs. Bidwell's status, as a woman married in 1872, differed largely from the status attached to that relationship by the common law. Her rights and obligations were in part the same as now expressed in General Statutes, § 591. She was liable upon her contract made for the benefit of herself, or her separate or joint estate. Her acceptance of the bequest of this stock created a contract between her and the company. By force of this contractual relation she became, on the one hand, a joint owner with the other stockholders of the company, and entitled to share in its dividends, when declared, and, on the other hand, she became liable for any part of her share of the capital stock unpaid, upon the faith of which the company conducted its business, and also for the amount of an assessment thereafter arising through an obligation created by law existent at the date of her acquisition of stock imposing upon stockholders a liability equal to the par value of their holding. Bernheimer v. Converse, 206 U.S. 516,27 Sup. Ct. Rep. 755. Her acquisition of the stock was for the benefit of herself and her estate. She was ready to share its benefits; her estate must bear its burdens. The claims arising out of these assessments were obligations springing from her contract and created by law, and, so far as duly presented against her estate, were valid claims. Contracts of a woman married prior to 1877, for the benefit of herself, her family, or her estate, have been frequently sustained by us, and these decisions give good ground for holding these claims obligations of her estate. Shelton v. Hadlock,62 Conn. 143, 154, 25 A. 483; Corr's Appeal, 62 Conn. 403,409, 26 A. 478; Williams v. King, 43 Conn. 569.

Mr. Bidwell had, by law, the life use of all of his wife's personal property, including these shares of stock. The certificate of stock always remained in her name; her husband never took possession of it nor saw it, thus indicating that he had not, in her lifetime, secured its possession or the right to its income. As executor he never caused it to be inventoried, and never accounted for it; it was in fact worthless, and he, as executor, treated it as such. He administered the property as though it had been held to her sole and separate use. We have not before us the terms of the bequest to Mrs. Bidwell, and do not know whether it was made to her sole and separate use or not. The disposition made by her of this stock, and the failure of the husband to assert his statutory right to its possession and income, and the manner in which he administered his trust, unmistakably indicate that she and he regarded and treated these shares of stock as though owned by afeme sole. As a consequence he must be deemed, in law, to have divested himself of his marital statutory rights over this stock, and to have invested her with it as her sole and separate estate. Coe's Appeal,64 Conn. 352, 357, 30 A. 140; State v. French, 60 Conn. 478,481, 23 A. 153; Williams v. King, 43 Conn. 569,574. The trial judge in his memorandum says: "But this property was clearly held by her as her own." Obviously he draws his conclusion from the course of conduct of the parties in interest toward these shares of stock, and not from the terms of the bequest to Mrs. Bidwell, as the defendant seems to think.

If coverture had been a defense to these claims and available to the defendant in spite of his failure to plead it, the fact that the Court of Probate had, upon due application, after actual notice to the defendant, authorized their settlement, and from its order made within its jurisdiction no appeal had been taken, would preclude the defendant from now making this defense. The claims were within the class of "doubtful or disputed claims" (General Statutes, § 347), and the court had authority to order their compromise. The defendant cannot now attack the jurisdiction of the Court of Probate, or question the validity of the claims ordered compromised. Johnson's Appeal, 71 Conn. 590,595, 42 A. 662; Seymour v. Seymour, 22 Conn. 272,280.

When the court has found that an executor has, without knowledge of an existing claim, distributed a testate estate, or the parties in interest have divided it among themselves in accordance with law, and thereafter an accruing claim is presented against the estate, at least two courses are open to the executor by which to secure his release from this claim. He may, after due defense, await judgment and then compel the beneficiaries to repay into the estate a sufficient amount to satisfy the judgment, or he may compel the beneficiaries to repay a sufficient amount to satisfy the claim and his own legitimate expenses in its settlement.Davis v. Vansand, 45 Conn. 600, 604; Mathewson v.Wakelee, 83 Conn. 75, 75 A. 93.

Conceding these positions, the defendant asserts that the trial court erred in holding the transaction between him and the plaintiff, as to the disposition of this estate, to be a distribution and not a sale, and hence did not relieve the defendant from liability for after-accruing claims arising out of these assessments. Our statutes, §§ 310, 395, furnish the necessary legal machinery for making a distribution in testate and intestate estates when the law requires it and the property is other than cash and there be more than one beneficiary, and they also provide the machinery for a mutual division between the parties. These methods, if followed, secure a legal division and protect the administrator or executor against the invalidity and inequity of their making. If the parties make a division which they approve of, and the executor or administrator is willing to take the risk of having the property in his hands so divided, it is as valid as one made under the sanction of the statute. The aim of the law has been attained and a fair division had.Merwin's Appeal, 75 Conn. 33, 40, 52 A. 484; Dickinson'sAppeal, 54 Conn. 224, 6 A. 422.

Mr. Bidwell and the defendant made such a division, each receiving title to and possession of his share free from the claims of the other, and the defendant agreed that the Court of Probate might enter any orders necessary to carry out the instrument of division, and that his interest in the estate, not transferred to him, should be distributed to Mr. Bidwell. The purpose of the parties was plain; it was not to effectuate a sale, but a division mutually satisfactory to each. The subordinate facts, so far as this record discloses, in the finding and proposed draft-finding, confirm the conclusion of the trial court. The defendant proposes a division of the estate and accepts Mr. Bidwell's offer "in settlement of the estate," and the executor files his final account, heading it "mutual distribution." Though the defendant did say during the negotiations that he would "buy or sell," and referred to an "offer looking to such division," the parties did not intend a sale, as the entire transaction, looked at as a whole, shows. The plaintiff pointedly observes that the defendant should not be heard to object to a proceeding "undertaken at his request, consummated by his participation, and the benefits of which he is now enjoying." The division was as the parties wished. The claim arose after it had been made. Neither individually nor as executor did Mr. Bidwell have notice or knowledge of it. It would be the height of inequity if he must suffer the entire loss. There is no greater reason why the life tenant should bear the loss rather than the remainderman; it would indeed seem harsh, when the life tenancy is terminated at the suggestion of the remainderman, that the latter should escape and the former suffer the payment of a subsequently arising claim. Neither in the agreement nor in the recital of facts is there basis for the claim that Mr. Bidwell agreed to relieve the defendant of the obligation of this, or any other after-accruing claim. Equity requires each to pay his proportion of the unexpected claim. Mansfield v. Lynch, 59 Conn. 320, 22 A. 313. The defendant has no right in good conscience to retain more than his pro rata share of the estate after all the debts of the estate have been paid.

The defendant assigns as error the holding of the trial court that there was such an agreement between the plaintiff and the receiver as bound the defendant to pay his pro rata share of the claims ordered compromised, before the claims had been reduced to judgment, and the further holding that the authority to compromise given by the Court of Probate was equivalent to a judgment establishing the validity of the claim. The order of the Court of Probate was over a subject of which it had jurisdiction, and made upon due notice to the defendant. So far as the plaintiff individually and as executor, and the defendant, are concerned, the order was a determination of the existence of a claim or claims, at least for the amount named in the order, and as binding upon the parties before the court as any judgment within its jurisdiction. Johnson'sAppeal, 71 Conn. 590, 42 A. 662; Thomas' Appeal, 85 Conn. 50, 53, 81 A. 972; Mathewson v.Wakelee, 83 Conn. 75, 75 A. 93; Davis v. Vansand,45 Conn. 600, 604.

It is too late for the beneficiary with notice, or the executor, to withdraw. The receiver has not as yet secured the approval of the Minnesota court, but his failure so to do does not affect the validity of the claim allowed, nor lessen the duty of the executor to secure funds from the distributees of the estate with which to pay it. If that court should finally refuse to approve of the agreement of compromise, the executor will hold this fund as executor for application toward payment of this claim, or in case it is not required for that purpose, for division proportionately among its contributors.

The defendant's liability is also contested because the order of compromise included the claim under the first as well as the second assessment, which was already barred. The authorization did not exceed the claim under the second assessment. The receiver's action was on both claims. The order of compromise was of both claims. Ordinary prudence in the administration of this estate dictated this course; the estate will be the gainer in getting rid of an outstanding claim made the subject of a legal action, as well as the claim under the second assessment, at a cost less than the face of the claim under the second assessment. The defendant, having had full opportunity to contest the order of compromise, cannot now attack it on this or any other ground.

The defendant's last claim is that the executor should apply the real estate as found in the inventory, to the payment of this claim before seeking to compel the defendant to pay any part of it. The defendant overlooks the fact that the real estate in the division went to Mr. Bidwell. Upon a mutual division of an estate, it would be highly unjust to compel the beneficiary, receiving real estate as part of his share under the division, to pay the whole of an after-discovered claim. It seems equitable, as the court decreed, that each of the parties should pay a part of the claim proportionate to the assets received on the division. As we understand the record, the defendant does not complain of the manner in which the court made this division.

There is no error.

In this opinion the other judges concurred.