First National Bank v. Bradshaw

Sedgwick, J.

H. N. Bradshaw died February 21, 1901. At the time of his death he was indebted to this petitioner, the First National Bank of Superior, upon three several promissory notes in the sum of $3,592.24. He left a widow and several children, most of whom were of age. There was no administration • of his estate until more than six years after his death. Upon the application of his heirs letters of administration wTere then issued to one of his sons. Such proceedings were had thereon in the county court of Nuckolls county that within a few months after the letters of administration were issued an order was made by that court completing the settlement of the estate and barring all claims. Afterwards the bank made application to that court to have the order , set aside and to be allowed to file their said claim. This application was refused, and the bank appealed to the district’ court, where the order of the county court was affirmed, and an appeal was taken by the bank to this court.

It appears that the deceased was for many years a stockholder in the bank, and for some time prior to his death a director and its vice-president. This indebtedness had continued for some time, and had been renewed from time to time, and the stock which the deceased held in the bank, of greater par value than the amount of the notes, was by him deposited in the bank as collateral security. After Mr. Bradshaw’s death, pursuant to an understanding between the bank and the heirs of the deceased, a part of the dividends upon this stock was dpplied in payment of the interest on the notes and the remainder of the dividends paid to the widow.

It appears also that the delay in applying for administration was caused by certain agreements between the bank and some of the heirs of the deceased relating to the payment of the notes and matters connected therewith, and it is contended by the bank that, on account of these agreements and various representations connected therewith and alleged fraudulent conduct on the part of the heirs, the county court should have set aside its order and allowed this claim to be filed. We do not find it necessary to discuss the mass of evidence relating to'these conditions, since from our. view of the law the judgment of the district court must be reversed without regard to the agreements between the bank and the heirs or the representations made by the heirs.

The district court made special findings of fact and found all the issues of fact in favor of the bank. From these findings, which are well supported by the record, it appears that the heirs waited about six and one-half years after the death of the deceased and then procured administration of the estate, and that no valid notice of the time limited for filing claims against the estate was given, and that this application of the bank to file this claim was made within a few months after the letters of administration were issued. The court held, as a matter of law, that under section 226 of the decedent act a creditor of the estate must make application for administration of the estate within two years after the death of the decedent or his claim would be forever barred. We do not think that the section in question will admit of such construction.

That section, as section 1, ch. 28, laws 1901, is as follows: “Every person having a claim or demand against the estate of a deceased person whether due or to' grow due, whether absolute or contingent, who shall not after the giving of notice as required in section 214 of this chapter, exhibit 1ns said claim or demand to the judge or commissioner's within the time limited by the court for that purpose shall be forever barred from recovering on such claim or demand or setting off the same in any action whatever; provided, that if any person having such claim or demand shall fail for two years from and after the death of such decedent to apply for or take out letters of administration on the estate of such deceased person or cause such letters to be taken out as provided for in this chapter, then such claim or demand shall likewise be forever barred; this section shall not be construed to limit or affect the time within which a person may enforce any lien against property, real or personal, of such deceased person, nor shall it be construed to affect actions pending against the deceased at the time of his death.”

The statute requires creditors to present their claims within the time limited under the provisions of section 214 when administration proceedings are instituted by the widow or next of kin. If the widow or next of bin fail for 30 days to select an administrator, a creditor may be appointed under section 178 of the act, and, of course, may apply for administration for that purpose. The application by creditors must be made within two years, but they may make the application directly, or “cause such letters to be taken out as provided for in this chapter.” If the creditors make no such application within the two years allowed them for that purpose, they cannot afterwards institute such proceedings. If letters are taken out as provided for in the act, and the estate is administered upon accordingly, it is not necessary that there should be affirmative proof that the creditors caused it to be done; it will be presumed that it was in behalf of all persons interested in the estate. The technical construction contended for would bar claims of creditors when letters of administration were taken out by the widow or next of kin either before or after the expiration of the two years’ limitation, and in all cases, unless such letters were taken out by the creditors in person or through their procurement; this could not be the intention of the legislature.

The judgment of the district court is reversed and the cause remanded for further proceedings, allowing further pleadings in that court if necessary.

Reversed.

Letton, J., not sitting.