Barto v. Stewart

The opinion of the court was delivered by

Fullerton, J.

The Bank of Puyallup was organized as a banking corporation under the laws of the state of Washington on the 10th day of September, 1890, with a capital stock of $100,000, divided into one thousand shares-of the par value of $100 each. On the 26th day of May, 1893, the bank closed its doors and discontinued business-as a going concern, and on the 7th day of June, 1893, in an action brought in the superior court of Pierce county for that purpose, was by that court adjudged insolvent,, and the respondent was appointed receiver of its property, for the purpose of winding up its affairs and distributing its property among its creditors. The receiver took possession of the property of the bank and, under the direction of the court appointing him, reduced its property to cash, and from time to time distributed the same pro rata among the creditors according to the amounts of their respective-claims. The last of this property (so the court found on the trial) was converted into cash on the 5th day of August,, 1897; and until that date it was not ascertained or determined the exact amount there would remain due to the creditors after the property of the bank in the hands of the receiver should be applied thereon. The amount so due was found to be $39,095.52.

At the time of the organization of the Bank of Puyallupone J. P. Stewart subscribed for, and there was issued to him, ten shares of its capital stock. Stewart continued to-be a stockholder therein during the life of the corporation,. and owned such shares at the time the hank was adjudged insolvent. He died testate on the 18th day of January, 1895, leaving estate in the county of Pierce, state of Washington, and in his will named the appellants as executrix and executor thereof, who duly qualified as such. The appellants, immediately upon their qualification, caused the statutory notice to he given, requiring all persons having claims against the estate of the decedent to present them within one year from the date of the first publication, which was made on the 8th day of February, 1895. Ho claim for the liability sued on in this action was presented to the executrix and executor within the year limited for the presentation of claims, nor until the 25th day of September, 1897, at which time the receiver presented a verified written demand for the amount claimed to be assessable against the shares of stock owned by J. P. Stewart under the superadded liability provided for in the constitution (art. 12, §11). The claim was rejected, and the receiver was on the 27th day of the same month ordered by the court to prosecute this action to recover the amount claimed to be due. The action was begun on the 15th day of October, 1897, and resulted in a judgment against the executrix and executor for the sum of $8,909.55, and interest from the date of the commencement of the action. From that judgment this appeal is taken.

While many errors are assigned for reversal, the principal contention is over the statute of limitations. It is contended by the appellants that the action is barred, because of the failure to present the claim within the year limited by law in which to present claims against the estates of decedents. As the view we have taken of this question is decisive of the case, it is unnecessary to discuss the other questions raised.

The statute (§ 6226, Ballinger’s Code) enacts, that every executor or administrator shall, immediately after his appointment, cause to he published in some newspaper printed in the county, a notice to the creditors of the deceased, requiring all persons having claims against the deceased to present them, with the necessary vouchers, within one year after the date of such notice, at a place to be specified in the notice. By § 6228, it is provided,

“ If a claim be not presented within one year after the first publication of the notice, it shall be barred.”

And by § 6235,

“Ho holder of any claim against an estate shall maintain an action thereon, unless the claim shall have been first presented to the executor or administrator.”

The respondent contends that the liability sued on in this action is not a claim, within the meaning of the provisions of the statute above cited. lie argues that the statute refers only to legal demands, and was not intended to apply to. a liability of a purely equitable nature, which the receiver must go into a court of equity to enforce; that the. claim sued on was, at the time the statute was running, of an uncertain and contingent character, and it could not be ascertained during that time what, if anything, would be required to be paid; that the presentation of a claim under such circumstances would be an idle ceremony, and the law does not require a vain and useless thing.' He argues further that this construction is supported by that section of the statute (6229) which requires that “every claim presented to the administrator shall be supported by the affidavit of the claimant that the amount is justly due, that no payments have been made thereon, and that there are no offsets to the same to the knowledge of the claimant,” for the reason that this affidavit could not have been made to the claim sued on in this action during the time the statute was running.

Were the sections of the statutes cited all that appeared on the subject of claims, there would be much force to the contention made. But the statute refers, in terms, to contingent claims. By § 6338 it is provided,

“If there be any claim not due, or any contingent or disputed claim against the estate, the amount thereof, or such part thereof as the holder would be entitled to if the claim were due, established, or absolute, shall be paid into the court, where it shall remain, to be paid over to the party when he shall become entitled thereto; or if he fail to establish his claim, to be paid over or distributed, as the circumstances of the case may require.”

It also refers in terms to claims not due. By § 6245 it isl provided that the executor or administrator is required at stated times to present a statement of claims in which he shall designate “the nature of each claim, when it did or will become due, and whether it was allowed or rejected by him,” and a special provision is made for the payment of claims not due when the administration is ready to be closed (6338). The word claim, in its ordinary use, has a broad meaning, and has been construed as synonymous with cause of action. Northwestern & P. H. Bank v. State, 18 Wash. 73 (50 Pac. 586) ; Minick v. Troy, 83 N. Y. 514. In Gray v. Palmer, 9 Cal. 636, it is said:

“The word claim is certainly a very broad term, when used in certain connections, and in reference to certain matters. Lord Coke truly says, that The word demand is the largest word known to the law, save, only, claim/ ”

It is also a primary rule of statutory construction that all of the parts of an act relating to the same subject shall be construed together, and not each by itself. The object and general intent must be sought for, and one provision may be qualified by another, though it does not profess to have that effect. And, when the object and general intent of a statute is. ascertained, general words may be restrained to it, and. those of narrower import may be expanded to effectuate that intent. As was said by Mr. Justice Field in the Eureka Case, 4 Sawy. 302,

“ Instances without number exist where the meaning of words in a statute has been enlarged or restricted and qualified to carry out the intention of the legislature. The inquiry, whore any uncertainty exists, always is as to what the legislature intended, and when that .is ascertained it controls.”

It is unreasonable to suppose that the legislature would have made provision for the payment of contingent claims by the executor or administrator, did it not also intend to provide that such claims should he presented for payment. And if we are to give effect to all these provisions of the statute, and the general rules of statutory construction applicable thereto, it is obvious that the word “claim” must have a uniform sense throughout the statute and be held to include every species of liability which the executor or administrator can be called on to pay, or to provide for the payment of, out of the general fund belonging to the estate. It is equally obvious that the word “due” was not used in the sense of “mature,” in the statute prescribing the form of affidavit, but was intended to apply to all claims, whether due, to become due, or contingent. The object of this provision is to secure good faith in their presentation, and is satisfied by an affidavit stating the facts to be true out of which the liability is claimed to arise. It follows from this that the claim sued on in this action was barred prior to the commencement of the action, because! not presented to the executrix and executor for allowance or rejection within the year limited for the presentation of claims.

But counsel say, “What claim could the receiver present ? He had no claim whatever on the last day for presenting claims. But suppose he had. He could not comply with one essential element of the statute. The amount could not he stated within thousands of dollars. It could not he said that anything was justly due or would become due at any particular time, or at all.” Answering a like •objection made in a similar case, the supreme court of California, in Verdier v. Roach, 96 Cal. 467 (31 Pac. 554), say,

“It is further contended for appellants that they had no existing claim against Blythe’s estate which could have been presented during the period of ten months after publication of notice to creditors, since Blythe’s liability to indemnify them did not become absolute or due until the contingency happened, two years after that period had expired.

“ It is true that their claim was neither absolute nor due during that period, but it was, nevertheless, an existing valuable claim against the estate of Blythe, assignable, devisable, and descendible (Kenyon v. See, 94 N. Y. 563), and also detrimental to Blythe’s estate. It consisted of a then existing obligation arising from an express covenant of the decedent to indemnify the appellants for one half of all damages they might suffer from water, etc., during the term of the lease. It was substantially a covenant of insurance.

“ Counsel ask, What would have been the effect of an allowance of this claim by the administrator? A sufficient answer to this is, that an allowance of the claim would have admitted and established the validity of the obligation, and would have entitled it To be filed in court and ranked among the acknowledged debts of the estate, to be paid in due course of administration’ (Sec. 1497), 'as the circumstances of the estate required.’ (Sec. 1647.) If still contingent at the time of the settlement of accounts, 'the amount thereof, or such part of the same as the holder would be entitled to if the claim Avere due, established, or absolute, must be paid into the court, and there remain, to be paid over to the party when he becomes entitled thereto.’ (Secs. 1643, 1650, 1651.)

“ It is assumed by counsel for appellants that before the «contingency happens the obligation is not a debt; and hence they conclude that it could not have been 'ranked among the acknowledged debts of the estate.’

'' Conceding, for the sake of the argument, that a contingent claim is not a technical legal debt, it does not follow that it may not be ranked among debts. The first two examples given by Mr. Webster of authorized uses of the verb 'to rank’ are as follows: 'Poets were ranked in the class of philosophers’; 'Heresy is ranked with idolatry and witchcraft.’ .The first does not necessarily mean nor imply that poets are philosophers; nor the second that heresy is idolatry or witchcraft. Mor does the requirement that an allowed claim shall be ranked among debts exclude from the ranks all claims which may not properly be termed legal debts. The statute plainly requires contingent claims to be presented for allowance; and that all allowed claims shall be filed in court and ranked among the acknowledged (allowed) debts, whether all such allowed claims are technical debts or not.”

The counterpart of the sections found in the California Code cited by the court in the foregoing extract are found in our own Code. See, in addition to those above cited, § 6231.

It is said that this court, in Neis v. Farquharson, 9 Wash. 517 (37 Pac. 697), held a contrary doctrine. It is true it was said in that case that it is questionable whether a claim of this character was within the meaning of the statute requiring claims to be presented to the executor or administrator on pain of being barred if not so presented; but that point was not necessary to a decision of the case, and the decision seems to have been put upon an entirely different ground, viz., that the question could not be raised for the first time in this court. The principle, too, appears not to be in accord with some of the earlier decisions of this court. Scammon v. Ward, 1 Wash. 179 (23 Pac. 439) ; Reed v. Miller, 1 Wash. 426 (25 Pac. 334) ; Casey v. Ault, 4 Wash. 167 (29 Pac. 1048). But, however this may be, the case will'be overruled in so far as the point urged conflicts with the conclusion reached in the present case. The judgment of the lower court is reversed and remanded, with instructions to dismiss the action.

Goedon, 0. J., and Dunbar and Reavis, JJ., concur.