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FIDELITY MUT. LIFE INS. CO. v. GOLDSTEIN

Supreme Court of Mississippi, Division A.

Jan 2, 1940

Judgment

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Factual and Procedural Background

This case arises from an appeal by Fidelity Mutual Life Insurance Company from a decree of the Chancery Court of Washington County, Mississippi, which disallowed two claims filed by the insurance company against the estate of Nathan Goldstein, deceased. The claims consisted of two promissory notes for $8,523.25 and $8,446. The appellees challenged the validity of the probate of these claims on the ground that the statutory affidavit proving the claims was not physically attached to the original notes as required by statute. The chancery court had disallowed the claims on this basis, prompting the appeal.

Legal Issues Presented

Whether the statutory requirement that the creditor's affidavit be "attached" to the claim requires physical attachment to the original written evidence of indebtedness (the promissory notes), or whether it is sufficient that the affidavit accompany the claim in a manner that clearly identifies the claim.
Whether the filing of an account history along with the proofs, showing original amounts, payments, and balances, constitutes an improper attempt to probate accounts instead of the notes.

Arguments of the Parties

Appellant's Arguments

The statute in force (Chapter 304, Laws of 1934) does not require the clerk's certificate or affidavit to be endorsed on the original written evidences of indebtedness; it is sufficient if endorsed upon the "claim," which refers to the statutory affidavit.
Historical practice in Mississippi counties shows that clerks and attorneys have consistently used printed forms where the affidavit and clerk's certificate are attached to the claim rather than the original notes.
The chancery clerk performs a quasi-judicial act when probating claims, and the ministerial act of signing the certificate should not require writing on original notes, which may be lost or removed from court files.
Precedents indicate that substantial compliance with the statute is sufficient, and that a claim accompanied by a clear statement of credits and debits against the notes satisfies statutory requirements.
The affidavit itself is the claim referred to by the statute, not the original note, which is merely evidence of indebtedness.
The chancery clerk marked and filed the original instruments and certified copies, following suggested procedural safeguards.
Similar claims have been accepted in recent Supreme Court records without physical attachment of affidavits to original notes.

Appellees' Arguments

The statute mandates strict compliance requiring the affidavit to be physically attached to the original note, the written evidence of the debt.
Attaching the affidavit to a statement of account rather than the note itself is noncompliant with the law.
Mississippi case law uniformly requires strict adherence to the statute; the affidavit must be signed by the creditor personally and must be attached to the original note.
Probating copies or accounts instead of original notes is impermissible.
The failure to endorse the clerk's certificate on the original note invalidates the probate, even if the claim is registered in the clerk's office.
The statute's requirements are substantive and necessary to prevent fraud, such as allowing usurious claims to be disguised as non-usurious accounts.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Lehman v. Powe, 95 Miss. 446, 49 So. 622	Interpretation of statutory requirements for probate of claims.	Referenced to support the argument that the certificate need not be endorsed on original notes.
Jordan v. Love, 171 Miss. 523, 157 So. 877	Quasi-judicial nature of chancery clerk's duties and ministerial nature of signing certificate.	Used to argue against requiring endorsements on original notes.
Davis v. Blumenberg, 107 Miss. 432, 65 So. 503	Substance over form in compliance with probate statute.	Supports the view that substantial compliance suffices despite procedural deviations.
Bankston v. Coopwood, 99 Miss. 511, 55 So. 48	Statutory interpretation of claims and where endorsements must be made.	Supports the notion that the affidavit is the claim, not the note itself.
Merchants Manufacturers Bank v. Busby, 172 Miss. 394, 160 So. 577	Proper procedure for probate of claims based on written evidence of debt.	Referenced to show accepted probate practices.
Persons v. Griffin, 112 Miss. 643	Strict compliance with statutory requirements for probate of claims.	Appellees relied on this to argue that failure to attach affidavit to original note invalidates probate.
Merchants Manufacturers Bank v. Fox, 165 Miss. 833	Strict adherence to probate requirements and affidavit attachment.	Used by appellees to support strict compliance argument.
McMahon v. Foy, 104 Miss. 309	Requirement to probate original evidence of debt, not copies or accounts.	Appellees cited to argue invalidity of probate based on accounts instead of notes.
Levy v. Merchants B. T. Co., 124 Miss. 325	Same as McMahon v. Foy regarding original evidence.	Supports appellees' position on strict compliance.
Walker v. Nelson, 87 Miss. 268	Effect of failure to sign affidavit or account on claim validity.	Appellees cited to highlight necessity of creditor's signature.
Saunders v. Stephenson, 94 Miss. 676	Same as Walker v. Nelson on affidavit requirements.	Supports appellees' strict compliance stance.
Stevens v. Dunlap, 108 Miss. 690	Necessity of clerk's endorsement for valid probate.	Appellees cited to argue that absence of endorsement invalidates claim.
King v. Jones, 171 Miss. 886, 158 So. 795	Requirement of clerk's endorsement and proper probate procedure.	Cited by appellees to support strict procedural adherence.
Johnson v. Success Brick Mch. Co., 93 Miss. 169	Preventing usurious claims via proper affidavit requirements.	Used to illustrate importance of statutory compliance to prevent fraud.
Wells v. McCullough, 113 Miss. 401	Same as Johnson v. Success Brick Mch. Co. regarding affidavit and usury.	Supports appellees' argument on the statute's protective purpose.

Court's Reasoning and Analysis

The court analyzed whether the statutory requirement that the affidavit be "attached thereto" to the claim necessitates physical attachment to the original notes. It found that the proofs of the claims stated that the claims were "annexed" and that the originals were presented with the proofs. The claims and proofs were described with such particularity that no mistake could arise as to their identity. The court emphasized that the statute is mandatory as to substance but not as to literal form, concluding that the absence of physical attachment did not invalidate the probate. Furthermore, the court rejected the argument that the history of the accounts given alongside the proofs constituted an improper attempt to probate accounts instead of notes, holding that this did not mislead or harm the estate or other creditors. Thus, the court reversed the chancery court's decree disallowing the claims and rendered judgment for the appellant.

Holding and Implications

The court reversed the decree of the chancery court and entered judgment for the appellant, Fidelity Mutual Life Insurance Company.

This decision holds that substantial compliance with statutory requirements for probating claims against estates suffices even if the affidavit is not physically attached to the original written evidence of indebtedness, provided the claims are clearly identified and described. The ruling clarifies that the statute's substance controls over strict literal adherence, and that providing an account history alongside proofs does not invalidate the probate of claims based on notes. The direct effect is that the two claims by the appellant against the Goldstein estate are valid and allowed. The opinion does not establish new precedent beyond the interpretation of the statute as applied here.

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Watkins Eager and Hardy R. McGowen, all of Jackson, for appellants.

The statute in force at the time these claims were probated against Mr. Goldstein's estate is Chapter 304, Laws of 1934.

The contention was made by appellees upon the hearing of this cause in the court below that the probate of the notes and other evidences of indebtedness was void because the chancery clerk in allowing the claims did not endorse upon the original evidences of indebtedness the words following: "Probated and allowed for $ ____ and registered this ____ day of ____ A.D., ____."

It was our contention upon the hearing of the case in the court below and it is our contention before this honorable court that there is nothing in the wording of the statute which requires this certificate to be endorsed upon the original written evidences of indebtedness but that it is entirely sufficient and in strict compliance with the statute if the above quoted language be endorsed upon the "claim." It being our contention that the word "claim" as used in the statute refers to the statutory affidavit.

Lehman v. Powe, 95 Miss. 446, 49 So. 622.

We personally have examined records of claims based on promissory notes and other instruments of writing on file in the office of the Chancery Clerk of Hinds County at Jackson, Mississippi, our examination going back over a period of over 40 years, and we do not find in any instance where the endorsement was made upon the original evidence of the indebtedness. As a matter of fact, in Hinds County and in Washington County it has been the practice of the clerks and of the attorneys, without exception, to use a printed form containing the statutory affidavit and a form of the clerk's certificate printed at the foot thereof allowing the claim.

Since the court has held that the clerk in probating, registering and allowing a claim against an estate is performing a quasi judicial act and that the clerk in signing his name to such certificate of allowance is performing a ministerial duty, we do not believe that the court will say that the certificate of probate and allowance should be written upon the original notes or original evidences of debt, which papers are, as stated by the court, apt to become lost and certainly are very probably to be withdrawn from the files of the court.

Jordan v. Love, 171 Miss. 523, 157 So. 877.

In the case of Davis v. Blumenberg, 107 Miss. 432, 65 So. 503, this court in a per curiam opinion held that it would not sacrifice substance to form where the statute had in all respects been complied with.

Ellsworth v. Busby, 172 Miss. 399, 160 So. 575.

In the case of First Columbus National Bank v. Holesapple-Dillman, 174 Miss. 234, 164 So. 232, and Wilson v. Yandell, 174 Miss. 713, 165 So. 430, the claims are probated appear to have been held by the court to be incomplete, one for the reason that a promissory note was not presented for probate along with an account and the other for the reason that some explanation or account was not filed along with a note.

In the case at bar, we had a note for $9600, a note for $240, and an extension agreement reciting an indebtedness of $10,200, and we do not think that the claim as probated should be held by this court to be void because of the fact that there was filed along with and as a part of the probate of the claim a simple statement showing credits and debits against all three of these instruments and showing the balance due to be as stated in each of the certificates of allowance as well as in the statutory affidavit which accompanied each claim.

Bankston v. Coopwood, 99 Miss. 511, 55 So. 48.

There is nothing in the statute with reference to claims based upon written evidences of indebtedness which requires that the clerk's endorsement shall be at any place other than upon the claim, and we think that a promissory note or other evidence of indebtedness is not of itself a claim. It is merely an evidence of indebtedness but we do think that an affidavit which expressly recites that a decedent is indebted to a claimant in a specified amount which claim is unpaid, due and owing, etc., does constitute a claim and that the affidavit itself is the claim referred to and intended by the statute is designating the place where the clerk shall make his endorsement probating and allowing a claim. If, as stated by Judge Anderson, in the Bankston case, the statute does not point out any particular place where the claim shall be signed where an account is involved, then we respectfully submit there is certainly not a word in the statute pointing out where a claim shall be endorsed by the clerk in connection with a promissory note or other written evidence of indebtedness.

Jordon v. Love, 171 Miss. 523, 157 So. 877.

In the case at bar, we wish to call the attention of the court to the fact that both methods suggested by Judge Griffith were followed in probating these two claims; that is to say, all of — the original evidences of indebtedness, together with the original instruments securing the same, were all actually presented to the Chancery Clerk and were by him actually marked "Filed" and his signature, together with the official seal of the Chancery Court of Washington County, Mississippi, all appear endorsed upon all of these original instruments, and in addition to this the Chancery Clerk made, retained and filed among the papers in the cause, just as suggested by Judge Griffith, certified copies of all of these original evidences of indebtedness and all of these certified copies are likewise marked "Filed" officially by said Chancery Clerk.

Merchants Manufacturers Bank v. Busby, 172 Miss. 394, (398), 160 So. 577; Merchants' and Manufacturers' Bank v. Fox, 165 Miss. 833, (839), 147 So. 789.

We have examined the last ten or twelve original records filed in the Supreme Court of Mississippi where the validity of claims probated against estates were involved, and we find that in every one of these ten or twelve records the claims were presented to the Clerk in the same form in which these two claims were presented; that is to say, whether the claims were based upon an account or upon a written evidence of indebtedness, in every single case the Clerk's certificate allowing the claim followed the affidavit and in two of these records, namely, Poyner v. Gilmer, 171 Miss. 859, 158 So. 922, the printed form actually appears in the record at Page 18 of the original record, and in the case of King v. Jones, 171 Miss. 886, 158 So. 795, the printed form appears at Page 29 of the record.

D.S. Strauss, of Greenville, for appellees.

This contest is predicated upon the failure on the part of the appellant to comply with the provisions of Ch. 304, Laws 1934, in that the note was the written evidence of the debt, and such being the case, there should have been attached to the original note the statutory affidavit; that making up a statement of account, and annexing or attaching to the statement the statutory affidavit, was not a compliance with the law.

Persons v. Griffin, 112 Miss. 643; Merchants Manufacturers Bank v. Fox, 165 Miss. 833.

The affidavit in the instant case was attached to the account, and the affidavit read that the annexed claim was just, correct and owing and that it was not usurious, and the reference to the note was that it had been received as security for the account, not that the note was the account but that the note was received as security, and the claim which was probated was based upon the note. In other words, a statement of the account, based upon an original loan of $12,000 with interest thereon, was made up and sworn to and this account was attempted to be probated, registered and allowed, in direct contravention to the clear mandate of the law that the creditor shall present to the clerk the written evidence of his claim (the note) and make affidavit, to be attached thereto (to the note, not to the account).

The cases in Mississippi are uniform in their holding that there must be a strict compliance with the mandate of the law, that the written evidence of the debt must be probated, registered and allowed, and no deviation therefrom, however slight, can authorize the probation of a claim. The affidavit must be signed by the creditor himself, and an affidavit signed by an agent of the creditor is insufficient.

Persons v. Griffin, 112 Miss. 643; Merchants Manufacturers Bank v. Fox, 165 Miss. 833.

Our court has further held that you cannot probate a copy of the written evidence of the debt, but you must probate the original evidence of the debt. If you cannot probate the copy of the evidence of the debt, then how can you probate an account alleged to be based upon such written evidence of debt?

McMahon v. Foy, 104 Miss. 309; Levy v. Merchants B. T. Co., 124 Miss. 325.

These claims must be probated in the formal manner required by law. The failure of the creditor to sign the account or the affidavit, vitiates the claim.

Walker v. Nelson, 87 Miss. 268; Saunders v. Stephenson, 94 Miss. 676.

The probate is insufficient if the clerk shall fail to endorse the words that the claim has been probated, registered and allowed, even though the claim is registered in the book of claims on file in the clerk's office.

Stevens v. Dunlap, 108 Miss. 690; King v. Jones, 171 Miss. 886.

This court has been careful to see that the requirements of the law in regard to the probation of a claim should be followed.

Jordan v. Love, 171 Miss. 523; Deposit Guaranty B. T. Co. v. Jordan's Estate, 171 Miss. 332; Levy v. Merchants Bank T. Co., 124 Miss. 325; Fairley v. Fairley, 120 Miss. 400.

The requirement of the statute is not idle. We can easily imagine a case where a note would be usurious and unenforceable. Then a creditor could escape the difficulties of the law by making up a statement of account, not usurious, and swear that the account was not usurious. He could not make the affidavit to the note, because on its face it was usurious. He could make the account up so as to avoid the condemnation of the usury, and in this manner have an account allowed, which could not be allowed if the original written evidence was presented for allowance, with a truthful affidavit as to the real interest rate.

Johnson v. Success Brick Mch. Co., 93 Miss. 169; Wells v. McCullough, 113 Miss. 401.

Argued orally by Pat Eager, for appellant, and by D.S. Strauss, for appellee.

1. EXECUTORS AND ADMINISTRATORS.

The statute requiring that creditor make proof of claim against deceased's estate in the form of an affidavit "attached thereto" is mandatory as to substance, but not as to letter (Code 1930, sec. 1671).

2. EXECUTORS AND ADMINISTRATORS.

Where proof of each of claims against deceased's estate stated that the claim was "annexed" and in addition that "the original thereof being presented therewith," and where proofs described the claims with great particularity and with such accuracy that there could be no mistake as to what claims were referred to, the statute relating to the probating of claims was sufficiently complied with, notwithstanding the claims and proof were not physically joined (Code 1930, sec. 1671).

3. EXECUTORS AND ADMINISTRATORS.

Where claims against deceased's estate were based on notes and along with proofs in the form of accounts there was given a history of the original amounts of the claims, the payments thereon, and the balance due on each at the time proof was made, such procedure was not objectionable on ground that there was an attempt to probate the accounts and not the notes (Code 1930, sec. 1671).

Anderson, J., delivered the opinion of the court.

This is the appeal of the Fidelity Mutual Life Insurance Company from a decree of the Chancery Court of Washington county disallowing two claims filed by the insurance company against the estate of Nathan Goldstein, deceased, one a note for $8,523.25, and the other a note for $8,446. The attack on the probation of the claims is that they were neither physically attached to their proofs, nor sufficiently described therein. The originals and the proofs were sent up with the record in the cause. The proofs are not now, and probably were not when filed with the claims, physically attached thereto. The statute, section 1671 of the Code of 1930, provides, among other things, that the creditor must make proof of the claim in the form of an affidavit "attached thereto."

The proof of each of the claims states that the claim is "annexed," and, in addition, that "the original thereof being presented therewith." Furthermore, the proofs describe the claims with great particularity; in fact, with such accuracy that there could be no mistake as to what claims were referred to. The statute is mandatory as to substance, but not as to letter. What was done was in every respect as effective as the physical joining together of the claims and the proofs.

Along with the proofs in the form of accounts there was given a history of the original amounts of the claims, the payments thereon, and the balance due on each at the time proof was made. It is argued, to sustain the decree, that these facts constituted an attempt to probate the accounts and not the notes. There is no merit in the contention. Perhaps such a history was not necessary, but certainly it could not have been misleading or harmful in any respect to the estate or to other creditors.

Reversed, and judgment here for appellant.