State Ex Rel. Steinfort v. District Court , 111 Mont. 216 ( 1940 )

I dissent. This proceeding seeks to annul an order of the respondent court directing the relatrix, as administratrix, either to allow or reject a claim against the estate of John P. Steinfort, deceased. The facts necessary to be considered are these: John P. Steinfort died intestate, and relatrix, his widow, was appointed administratrix of his estate. Notice to creditors limited the time for presenting claims to August 6, 1939. Mary Steinfort, a sister of deceased, on July 29, 1939, presented a claim against the estate. The claim was rejected by the administratrix on the same day it was presented. Thereafter, and on August 4, 1939, an amended claim was presented and it too was rejected. Thereafter, and after the time for presenting claims had expired, the claimant asked leave of court to file further amendments to her claim. The propriety of allowing those amendments was before this court in State ex rel. Steinfort v.District Court, 109 Mont. 410, 97 P.2d 341. By that opinion we directed the district court to allow the amendments. The return in that case became final on December 20, 1939. No further action was taken with respect to the claim as amended, and in April, 1940, the administratrix filed in the district court her final account. On the hearing of that account on April 23 the claimant filed objections. On May 2 the court entered an order allowing the claimant to amend her claim pursuant to the order of this court, by endorsing certain credits on the notes. On June 20 the district court entered an order directing relatrix to at once allow or disallow the claim. This proceeding followed to annul the order of June 20.

The principal point relied upon by relatrix is that the district court was in error in directing her, as administratrix, to allow or disallow the claim as amended, for the reason that the claim as finally amended was never presented to her as administratrix and, hence, that there was nothing before her upon which she could act.

Further presentation of the claim was entirely unnecessary, and, in fact, we said as much in our former decision. In that case we approved of the proceeding in the case of Davis v.Superior Court, 35 Cal.App. 473, 170 P. 437, 440. In that case the court said: "We can see no embarrassment likely to arise should the learned trial judge decide that the showing is sufficient to justify his making an order allowing the amendment of the claim prayed for. The amendment should, if allowed, be made to take effect as of the date the claim was presented to the executrix. As thus amended, it may be allowed or rejected, at the discretion of the executrix, and the holder of the claim, if rejected, has his action as provided by the statute in which the merits of the claim may be fully passed upon."

In our former opinion in this case we said: "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." From a reading of our entire opinion it will appear that we allowed the amendments on the theory that they did not change the claim which was originally presented. It is true that as originally presented the claim did not disclose that it was not barred by the statute of limitations. The first amended claim showed that interest had been paid to May 1, 1927. It did not disclose when that interest was paid, and therefore did not disclose that the claim was in fact barred. The case ofRieckhoff v. Woodhull, 106 Mont. 22, 75 P.2d 56, illustrates this point. The case was an appropriate one for the administratrix in seeking to act intelligently on the claim to have required "proofs to be produced in support of the claim," as provided under section 10174, Revised Codes, before acting upon it to enable her to determine whether it was barred or not. The effect of the final amendments was to furnish to the administratrix information tending to show that the claim is not in fact barred.

Hence, as we made clear in our former opinion, the claim in question was duly presented to the administratrix within the proper time. The amendments were simply allowed in furtherance of justice so that the merits of the claim might be inquired into in the light of the showing that if the facts stated in the amendments are true, the first amended claim is not in fact barred, as it appeared on its face that there was a possibility that it might have been.

To hold that the claim as finally amended must again be formally presented to the administratrix would be to sacrifice substance for form and encourage the disposition of claims against an estate on technical grounds without regard to their merits. We have resolved against participants in probate proceedings converting the procedure into a game of chess. (State ex rel. Montana Flour Mills Co. v. District Court,110 Mont. 65, 99 P.2d 213.)

The case is analogous to that of In re Blackman's Estate,143 Iowa, 553, 120 N.W. 664, 667, wherein a claim on promissory notes was presented within the statutory time for an aggregate sum of between $4,000 and $5,000. The claimants stated in the claim that they allowed a credit of about $3,300 as proceeds from a mortgage foreclosure sale. By subsequent court proceedings the mortgage foreclosure was held to be invalid and the sum realized from the sale was turned back into the estate for the benefit of creditors. The court in holding that there was no occasion for refiling the claim said: "There was no occasion for a refiling of such claim after the decision which invalidated the mortgage sale for which they [claimants] desired to give credit. The identity of the claim was not destroyed. Their demand was upon the same promissory notes and overdraft described in their statement filed within the six-months period. The fact and nature of the indebtedness have at all times been fully disclosed, and the question of the alleged credit therein goes only to the amount which may be found due. If the prayer or demand for its allowance has mistakenly stated a sum less than the real amount due, its correction by subsequent amendment or supplemental allegation is not the filing of a new claim, nor does it take the claim out of the list where its original filing placed it." To the same general effect, see Chariton Nat. Bank v. Whicher,163 Iowa, 571, 145 N.W. 299.

I think the court was correct in ordering the administratrix either to allow or reject the claim as finally amended.

The majority opinion holds that the court was wrong in directing the administratrix either to allow or reject the claim as amended, and that the most the court should do is to order her either to allow the amended claim or to indicate her wish to stand on her original rejection, and thus cuts off claimants' right to bring an action on the claim as amended if she did not institute such action within three months after the original rejection of the claim. I think the majority opinion is fundamentally wrong, and so much so that able counsel for relatrix never even raised the point either in the briefs or in oral argument.

If that conclusion is sound, then in order for the claimant to protect her rights it was necessary for her to institute action on the claim long before she knew whether it would be allowed or rejected. Such a conclusion makes of our probate statutes a device to entrap creditors and places an unreasonable interpretation upon them. It requires the expenditure of court costs when litigation may be unnecessary.

The majority opinion concedes that when the case was before us the first time, we took a stand different from that now taken by the majority. This they must concede because on the first hearing (109 Mont. 410, 97 P.2d 341, 344) we said: "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." No plainer language could have been used. But the majority say that was dictum. I think they are in error in so holding. It was contended in that case that we could not allow the amendment sought to be made because it would interfere with the operation of the statutes relating to the time of commencing actions. We stated their contention as follows: "Respondents suggest that to allow the amendments at this time 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 then proceeded to hold that the amendments relate back to the time of original presentation and that the administratrix must then pass upon the claim as amended. I do not believe that the holding on this point can be treated asdictum.

That which is within the issue, fully argued by counsel and deliberately considered by the court in its opinion, is notdictum. (Helena Power Transmission Co. v. Spratt, 37 Mont. 60,94 P. 631.) And this is true even though the result might have been the same had the point not been decided (15 C.J. 952), and even though the point is only incidentally involved. (21 C.J.S., Courts, sec. 190, p. 314.) As was stated in MontanaHorse Products Co. v. Great Northern R. Co., 91 Mont. 194,7 P.2d 919, 925: "A decision of this court is authority upon the points actually involved, presented and argued by counsel, and passed upon. Accordingly, the language employed in the DoneyCase above noted is not merely to be considered as obiterdictum."

I think the opinion in 109 Mont. 410, 97 P.2d 341, is notdictum and neither is it erroneous. Here the merits of the claim have never been passed upon by the administratrix. The claim is based upon promissory notes alleged to have been executed by the deceased. It was rejected on the erroneous supposition that it was barred by the statute of limitations. Its merits have never been inquired into. To require action to be brought before the claim is passed upon on its merits is to substitute an entirely different procedure for that provided by the legislature. Such an action would be premature. The legislature contemplated that a ruling be made on the merits of the claim by the administratrix before action should be instituted unless the claimant chose to deem it rejected on the 10th day under section 10176. That section gives the claimant the option to deem the claim rejected on the 10th day. It does not require claimant to do so.

Again, if the opinion in 109 Mont. 410, 97 P.2d 341, is now to be overruled, the new ruling ought not to take effect retroactively. As early as 1931 this court cited with apparent approval the case of Davis v. Superior Court, 35 Cal.App. 473,170 P. 437, but distinguished the case from that before the court. (State ex rel. Paramount Publix Corp. v. DistrictCourt, 90 Mont. 281, 1 P.2d 335, 76 A.L.R. 1371.) In theDavis Case the court said: "As thus amended, it [referring to the claim] may be allowed or rejected, at the discretion of the executrix, and the holder of the claim, if rejected, has his action as provided by the statute in which the merits of the claim may be fully passed upon." In the face of this language I do not see how the majority can justify the statement made by them that they have been unable to find a case holding that the amendment of a claim after time permits or requires a new rejection.

Claimant here had the right to believe that if the proposed amendment did not introduce a new or different claim, she had the right to institute action after the claim, as finally amended, was acted upon by the administratrix. If the decision in109 Mont. 410, 97 P.2d 341, which followed the Davis Case, be regarded as erroneous — a point which I do not concede — still it is the law governing the case, and claimant had a right to rely upon it and the Davis Case. To now hold that she could not rely upon those decisions is, in my opinion, working a gross and unjustifiable hardship.

This court has declared against the proposition that a decision overruling a former case should be given a retroactive effect. (Montana Horse Products Co. v. Great Northern R. Co.,91 Mont. 194, 7 P.2d 919; Continental Supply Co. v.Abell, 95 Mont. 148, 24 P.2d 133.) Such is the rule generally. (15 C.J. 961; 21 C.J.S., Courts, sec. 194, p. 328, notes 95 and 96.)

The majority opinion attempts to point out some mistake in the mathematical calculations in computing the amount due on the notes. If there be any such mistake, that question is not before us now, and would not be a reason for rejecting the whole claim, or for holding that the administratrix need not consider the claim and either allow or reject it.

I think the district court was right in ordering the administratrix either to approve or reject the claim, and that the writ applied for should be denied and the proceeding dismissed.