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Docket Number

No. 27,660.

Attorney(S)

White White, of Covington, and W.J. Sprow, of Crawfordsville, for appellant. Wallace Wallace, of Veedersburg, for appellees.

Judges

SHAKE, C.J.

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Smart Summary

Coats v. Veedersburg State Bank et al., No. 27,660 (Supreme Court of Indiana, Dec. 29, 1941; rehearing denied Apr. 9, 1942)

Factual and Procedural Background

Joseph L. Coats died intestate on July 28, 1938, survived by his widow and seven children. The administrator of his estate is the appellant. The decedent left no personal property but did own real estate. The Veedersburg State Bank (appellee) held unpaid judgments against the decedent from his lifetime and other estate liabilities (last illness, funeral, administration costs) were unpaid.

On November 2, 1939, the bank filed a petition for an order of execution on its judgments. The administrator filed a petition to sell real estate to create assets on November 20, 1939, and filed a petition to stay the bank's proceedings on December 7, 1939. The trial court denied the petition for a stay and ordered that two-thirds of the decedent's real estate be sold on execution to satisfy the bank's judgments. The administrator's motion for a new trial was overruled and judgment was entered for the bank. The administrator appealed. The appeal was transferred from the Appellate Court under statutory authority.

Legal Issues Presented

Whether a defendant receiver who answered that he had been discharged and had no interest, whose answer was found true and as to whom no judgment was rendered, is a necessary party to an appeal from the judgment.
Whether the appellant's motion for a new trial stating that "the decision of the court is not sustained by sufficient evidence and is contrary to law" sufficiently presented issues for review.
Construction of Acts of 1883, ch. 121, § 17 (codified § 6-1020, Burns' 1933, § 3138, Baldwin's 1934): specifically, as of what time must the administrator have instituted and be diligently prosecuting proceedings to sell real estate to be entitled to a stay of a creditor's enforcement or foreclosure proceeding (i.e., must the administrator have begun within one year after the decedent's death)?

Arguments of the Parties

Appellee's Arguments (Veedersburg State Bank)

Contended the merits should not be considered because Elmer E. Thompson, Receiver, was not made a party to the appeal.
Asserted that the appellant's motion for a new trial was insufficient because it used a combined statutory phrase and therefore did not properly present issues for review.

Appellant's Arguments (Administrator)

Argued that the administrator's petition to stay should be evaluated based on the time the administrator filed his petition for a stay (i.e., that the relevant time for diligence inquiry is the filing of the stay petition rather than an earlier filing to sell real estate).
Relied on his motion for a new trial which alleged the decision was not sustained by sufficient evidence and was contrary to law (substantially in the statute's language).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Elwood State Bank v. Mock (1907), 40 Ind. App. 685, 82 N.E. 1003	Authority that a receiver who has answered he was discharged and had no interest, and as to whom no judgment was rendered, is not a necessary party to an appeal.	Used to support the conclusion that the receiver (Elmer E. Thompson) was not a necessary party to the appeal because his answer was found true and no judgment was rendered as to him.
Wilson, Admx. v. Rollings (1938), 214 Ind. 155, 14 N.E.2d 905	Cited by appellee regarding the form or sufficiency of assignments for a new trial (statutory clause concerning "not sustained by sufficient evidence and is contrary to law").	The court held this rule was not applicable to the situation and that the appellant's motion for a new trial was sufficient to present the alleged errors.
Hankins, Adm'r. v. Kimball (1877), 57 Ind. 42	Principle that an administrator has no power over the lands of a decedent except those powers given by statute.	Invoked to show that statutory enlargement of an administrator's powers must be construed strictly since common law vested real estate in heirs immediately.
Tippecanoe Loan, etc., Co. v. Carr (1907), 40 Ind. App. 125, 78 N.E. 1043	Statutes enlarging the powers of an administrator to sell real estate, being in derogation of the common law, must be strictly construed.	Applied to justify strict construction of the 1883 statute at issue.
Blumenthal v. Tibbits (1903), 160 Ind. 70, 66 N.E. 159	Interpretation concerning changes made by amendment; distinction between substantive and verbal changes.	Used to support the court's view that the 1883 act's changes were mainly timing and party-defendant provisions rather than substantive changes affecting the diligence requirement.
Kohli et al. v. Hall et al. (1895), 141 Ind. 411, 40 N.E. 1060, 1061	Applied to hold that where over a year had elapsed after death and administrator had not diligently prosecuted proceedings to sell real estate, a creditor could obtain foreclosure.	The court said its conclusion was in harmony with Kohli, though that case is not controlling; Kohli's language was quoted approvingly regarding the consequence of delay beyond one year without diligent prosecution by the administrator.
Hawkins, Admr. v. First Nat. Bank (1929), 201 Ind. 228, 165 N.E. 547	Quoted approvingly the language from Kohli regarding the effect of delay and lack of diligence by an administrator.	The court noted Kohli's language had been quoted with approval in Hawkins and relied on that harmony in reaching its conclusion.
114 A.L.R. 1165 (annotation)	Annotation summarizing common-law rules: scire facias to revive judgment against heirs and enforcement against land after debtor's death.	Referenced to describe common-law background (judgment unenforceable by execution on death but revivable by scire facias to enforce against land owned at death).

Court's Reasoning and Analysis

The court addressed three principal questions in sequence.

1) Necessity of the receiver as a party: The receiver had answered specially that he was discharged and had no interest. That answer was not denied, the trial court found it true and rendered no judgment as to the receiver. Citing Elwood State Bank v. Mock, the court concluded the receiver was not a necessary party to the appeal.

2) Sufficiency of the new-trial assignment: The appellant's motion used the statute's language that the decision "is not sustained by sufficient evidence and is contrary to law" (statutory citation § 2-2401, cl. 6). The court observed the clause embraces two distinct grounds but permitted joint assignment of both; it also noted that a decision not sustained by sufficient evidence is, in that respect, contrary to law. The court found the appellant's motion sufficient and held the Wilson precedent cited by the appellee inapplicable.

3) Construction of the 1883 statute (§ 6-1020, Burns'): The court found the statute "palpably ambiguous" as to the time at which the administrator must have instituted and be diligently prosecuting proceedings to sell real estate to obtain a stay. Because the statute enlarges administrator powers (derogatory of the common law), it must be strictly construed. The court examined the common-law background (real estate vested immediately in heirs; judgments unenforceable by execution after death but revivable by scire facias) and the legislative history, comparing the 1883 act to the 1881 act. The court concluded the legislative changes were primarily timing (one year after death) and procedural (administrator to be made party defendant), and that there was no indication of legislative intent to change the requirement that the administrator must have instituted his proceeding to sell within the year following death and be prosecuting it with diligence to be entitled to a stay.

The court articulated pragmatic considerations favoring this construction: it protects creditors' common-law rights against an ambiguous statute; it accords with the statute's legislative history; it provides a practical application avoiding uncertainty and multiplicity of proceedings; and it furthers the public policy that estates be settled without unreasonable delay. Applying this construction to the facts, because the administrator's petition to sell real estate was filed after the one-year period had expired, the administrator's petition for a stay was too late.

Holding and Implications

Affirmed.

Holding: The trial court's denial of the administrator's petition for a stay and its order that two-thirds of the decedent's real estate be sold on execution to satisfy the bank's judgments was affirmed.

Implications:

Direct effect: The bank's judgment and the order of execution/sale were upheld; the administrator's petitions to sell and to stay, having been filed after the expiration of one year from decedent's death, did not entitle him to a stay of the creditor's enforcement proceedings.
Substantive rule stated by the court: A creditor may institute proceedings to enforce a judgment or foreclose a lien any time after one year following the decedent's death, unless the administrator has instituted proceedings to sell the decedent's real estate within that year and is diligently prosecuting them; statutes enlarging an administrator's authority over real property are in derogation of the common law and are strictly construed.
The court indicated this conclusion is in harmony with Kohli v. Hall, though it did not treat Kohli as controlling precedent.

Report reference in opinion: 38 N.E.2d 243.

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COATS v. VEEDERSBURG STATE BANK ET AL.

1. APPEAL — Parties — Necessary Parties — Judgment Not Rendered as to a Receiver — Effect. — Where, in an action by a judgment creditor against an administrator and others to have execution issued on judgments, a defendant receiver who had been appointed in a certain partition proceedings, answered specially that he had been discharged and had no interest in the litigation, which answer was not denied and he was not made a party to the judgment, but the court found that the allegations of the answer were true and rendered no judgment as to him, the defendant receiver was not a necessary party to an appeal from the judgment entered in the action. p. 678.

2. NEW TRIAL — Grounds — Verdict or Decision Not Sustained by Sufficient Evidence or Contrary to Law — Joint Assignment. — While the clause of the statute pertaining to the ground for a new trial, that "the decision of the court is not sustained by sufficient evidence and is contrary to law," provides two distinct causes for a new trial, yet a party may assign these grounds jointly if he believes that he can sustain both. p. 679.

3. NEW TRIAL — Grounds — Verdict or Decision Not Sustained by Sufficient Evidence or Contrary to Law — Construction of Term. — A verdict or decision that is not sustained by sufficient evidence is contrary to law, but the converse is not necessarily true. p. 679.

4. DESCENT AND DISTRIBUTION — Heirs and Distributees — Title to Real Estate — Common-Law Rule. — At common law, title to a decedent's real estate vested immediately and absolutely in his heirs, and the administrator had no power over it. p. 680.

5. DESCENT AND DISTRIBUTION — Heirs and Distributees — Title to Real Estate — Lien of Decedent's Debts — Common-Law Rule. — At common law, if the personal estate of a decedent was insufficient to pay the debts, an unpaid claim was treated as a lien upon the land, which a claimant could enforce in a suit in equity against the heirs. p. 680.

6. EXECUTION — Death of Debtor Before Issuance of Writ — Common-Law Rule — Scire Facias. — At common law, a judgment became unenforceable by execution on the death of the decedent, but it could be revived by scire facias, directed to the heirs and enforced against the land owned by the decedent at the time of his death. p. 680.

7. EXECUTORS AND ADMINISTRATORS — Collection and Management of Estate — Real Property — Power of Administrator. — An administrator has no power over the lands of a decedent, except those powers given by statute. p. 680.

8. EXECUTORS AND ADMINISTRATORS — Sale of Real Estate — Construction of Statute. — Statutes enlarging the powers of an administrator so as to give him authority to sell real estate, being in derogation of the common law, must be strictly construed. p. 680.

9. CONSTITUTIONAL LAW — Distribution of Governmental Powers and Functions — Judiciary — Construction of Statutes. — The effect of a statute is the responsibility of the legislative branch of the government if the enactment is valid and the meaning clear, but where the statute is ambiguous, the courts will endeavor to give it a practical construction. p. 681.

10. EXECUTORS AND ADMINISTRATORS — Collection and Management of Estate — Sale of Real Estate — Stay of Proceedings to Enforce Liens — Statute. — Under the statute providing that no proceedings to enforce liens of judgments rendered against decedent in his lifetime shall be instituted before the end of one year from the death of the judgment debtor, and that, if the administrator or executor shall be diligently prosecuting proceedings to sell real estate for the purpose of making assets to discharge liens thereon, further proceedings by the lienholders for the sale thereof shall be stayed upon application of the administrator or executor, a creditor may institute a proceeding to enforce his judgment or foreclose his lien at any time after the expiration of one year following the death of the decedent, unless the administrator has instituted his proceeding to sell the real estate within that period and is prosecuting the same with diligence ( Kohli v. Hall, 141 Ind. 411, distinguished). p. 682.

11. EXECUTORS AND ADMINISTRATORS — Accounting and Settlement — Time — Public Policy. — It is the declared public policy that decedents' estates shall be settled without unreasonable delay. p. 682.

12. EXECUTION — Death of Debtor Before Issuance of Writ — Petition Requesting Execution — Administrator's Petition to Stay Proceedings — Sale of Real Estate. — Where a judgment creditor of a decedent, more than one year after decedent's death, filed a petition asking for an order of execution on its judgments, the administrator's petition to stay such proceedings was filed too late, where his petition to sell real estate of his decedent was not filed within the year immediately following decedent's death. p. 682.

SHAKE, C.J.

Joseph L. Coats died intestate on July 28, 1938, survived by his widow and their seven children. The appellant is the administrator of the estate. The decedent left no personal property but owned real estate at the time of his death. The appellee The Veedersburg State Bank has unpaid judgments obtained against the decedent in his lifetime, and the expenses of the decedent's last illness and funeral and the costs of administering his estate are also unpaid.

On November 2, 1939, the appellee bank filed its petition asking the court for an order of execution on its judgments; the administrator filed a petition to sell real estate to make assets to pay debts on November 20th; and on December 7, 1939, the administrator filed a petition to stay the proceedings instituted by the bank. The cause was submitted to the court for trial, which denied the appellant's petition for a stay and entered an order that two-thirds of the decedent's real estate be sold on execution to pay and satisfy the bank's judgments. The appellant moved for a new trial, which motion was overruled, and judgment was entered for the bank.

The appellee bank contends that we ought not consider the merits because: (1) Elmer E. Thompson, Receiver, was not made a party to this appeal; and (2) because the only ground 1. assigned in appellant's motion for a new trial is insufficient to present any question. The receiver was originally a defendant, but he answered specially that he had been discharged and that he had no interest in the litigation. The receiver's answer was not denied, but the court found the allegations thereof to be true and rendered no judgment as to him. On this state of the record, the receiver is not a necessary party to this appeal. Elwood State Bank v. Mock (1907), 40 Ind. App. 685, 82 N.E. 1003.

The sole ground for a new trial was that "the decision of the court is not sustained by sufficient evidence and is contrary to law," which is substantially in the language of the 2, 3. statute. § 2-2401, cl. 6, Burns' 1933, § 368, cl. 6, Baldwin's 1934. While it has many times been held that this clause of the statute provides two distinct causes for a new trial, we do not know of any reason why a party may not assign these grounds jointly if he believes that he can sustain both. It may be added that a verdict or decision that is not sustained by sufficient evidence is contrary to law, though the converse is not necessarily true. The rule stated in Wilson, Admx. v. Rollings (1938), 214 Ind. 155, 14 N.E.2d 905, cited by the appellee bank, is not applicable to the situation, and the appellant's motion for a new trial is sufficient to present the alleged errors relied upon.

This case involves the construction and application of Acts of 1883, ch. 121, § 17, § 6-1020, Burns' 1933, § 3138, Baldwin's 1934, which provides:

"No proceedings shall be instituted before the end of one [1] year from the death of the decedent to enforce the lien of any judgment rendered against the decedent in his lifetime upon real estate or any decree specifically directing the sale of such real estate to discharge any lien or liability created or suffered by the decedent nor shall any suit be brought before that time against the heirs or devisees of the deceased to foreclose any mortgage or other lien thereon for the payment of which his personal estate shall be liable; and in case of suit to foreclose any mortgage or other lien thereon, the executor or administrator shall be made a party defendant thereto; and if the executor or administrator shall be diligently prosecuting his proceedings to sell the real estate of the deceased for the purpose of making assets to discharge such liens, further proceedings for the sale thereof by the holders of liens thereon shall be stayed, upon the application of the executor or administrator. This section shall not apply to cases where, before the end of the year, the real estate shall have been sold by the executor or administrator subject to liens thereon, nor to mortgages and judgments in favor of the estate [state]."

Does this statute mean that a creditor's proceeding to enforce a judgment or decree, or to foreclose a lien, shall be stayed, upon a showing of diligence, if the administrator's petition to sell real estate was filed: (1) During the year; (2) prior to the filing of creditor's petition; or (3) prior to the administrator's application for a stay? In other words, as of what time must the administrator have exercised diligence to be entitled to the stay? The parties take extreme views. The appellee bank says that the stay should be denied unless the administrator began his proceeding to sell before the expiration of the year, and the appellant says that the inquiry is of the time that the administrator filed his petition for a stay.

The language of the statute is palpably ambiguous, and we are therefore authorized to make such extraneous inquiries as are proper in such cases. Among these considerations are 4-8. whether the statute is in aid or in derogation of the common law, the history of the legislation on the subject, and the effect and consequences of the various possible constructions. At common law, title to a decedent's real estate vested immediately and absolutely in his heirs; the administrator had no power whatever over it. If the personal estate was insufficient to pay the debts, an unpaid claim was treated as a lien upon the land, which the claimant could enforce in a suit in equity against the heirs. A judgment became unenforceable by execution on the death of the decedent, but it could be revived by scire facias, directed to the heirs and enforced against the land owned by the decedent at the time of his death. 114 A.L.R. 1165 (annotation). By virtue of these principles, it has been held that an administrator has no power over the lands of a decedent, except those powers given by statute. Hankins, Adm'r. v. Kimball (1877), 57 Ind. 42. Statutes enlarging the powers of an administrator so as to give him authority to sell real estate, being in derogation of the common law, must therefore be strictly construed. Tippecanoe Loan, etc., Co. v. Carr (1907), 40 Ind. App. 125, 78 N.E. 1043.

The statute with which we are concerned, Acts of 1883, ch. 121, § 17, § 6-1020, Burns' 1933, § 3138, Baldwin's 1934, is an amendment of Acts of 1881 (Sp. Sess.), ch. 45, § 151. The 9. act of 1881 provided:

". . . And at the end of the year, if the executor or administrator shall be diligently prosecuting his proceedings to sell the real estate of the deceased for the purpose of making assets to discharge such liens, other proceedings for the sale thereof by the holders of liens thereon shall be stayed upon the application of the executor or administrator."

The title of the present act does not state the purpose or scope of the amendment, but a comparison of its terms with the preceding law indicates that the only substantial changes sought to be effected were that the time within which a creditor may bring a proceeding to enforce a judgment or for foreclosure of a lien is now made to begin one year after the death of the decedent, instead of one year after the issuing of letters testamentary and the giving of notice thereof; and that the administrator shall now be made a party defendant to any such proceeding. The other changes made in the act of 1883 appear to be matters of verbiage rather than of substance. Blumenthal v. Tibbits (1903), 160 Ind. 70, 66 N.E. 159. The effect of a statute is the responsibility of the legislative branch of the government if the enactment is valid and the meaning clear, but where the statute is ambiguous, the courts will endeavor to give it a practical application. There can be no doubt that under the act of 1881 the administrator could not have successfully petitioned for a stay unless he had instituted his proceeding to sell real estate before the end of the year, and we find nothing in the present act to indicate a legislative intent to make a change in that regard.

We conclude that a creditor may institute a proceeding to enforce his judgment or foreclose his lien at any time after the expiration of one year following the death of the 10-12. decedent, unless the administrator has instituted his proceeding to sell real estate within that period and is prosecuting the same with diligence. In so holding, certain definite results are accomplished: (1) Judgment creditors and lienholders are protected against an ambiguous statute which is in derogation of their common-law rights; (2) a result is reached which is in harmony with the legislative history of the statute involved; (3) the statute is given a practical application, which avoids uncertainty and a multiplicity of contemporaneous proceedings; and (4) the declared public policy that decedents' estates shall be settled without unreasonable delay is promoted (§ 6-611, Burns' 1933, § 3064, Baldwin's 1934). The appellant's petition for a stay therefore came too late, because his petition to sell real estate was not filed within the year immediately following the death of the decedent. Our conclusion is in harmony with Kohli et al. v. Hall et al. (1895), 141 Ind. 411, 415, 40 N.E. 1060, 1061, though that case may not be relied upon as a controlling precedent. In summarizing, the court said:

"It appears from the special findings that over a year had elapsed since the death of the decedent and before the beginning of this action, and that the administrator had not diligently prosecuted his proceedings to sell the real estate. The special finding of facts taken and considered as a whole, we think, fully sustains the conclusions of law thereon, and authorized the court in awarding a decree of foreclosure in favor of appellees."

This language was quoted with approval in Hawkins, Admr. v. First Nat. Bank (1929), 201 Ind. 228, 232, 165 N.E. 547.

In view of the conclusions reached, it is unnecessary to review the evidence relating to the subject of diligence.

The judgment is affirmed.

NOTE. — Reported in 38 N.E.2d 243.

COATS v. VEEDERSBURG STATE BANK