Opinion
No. 3553.
Decided November 6, 1945.
Failure to bring suit for restitution of property alleged to have been held by the testator as a constructive trustee within two years next after the original grant of administration as required by R. L., c. 355, s. 5, is held to be a bar to the right to bring such action unless justice and equity require an extension of time as provided by s. 28. In such case, a finding by the trial Court of the plaintiff's culpable neglect is conclusive of his right to an extension of such time. The purpose of R. L., c. 355, ss. 1, 5, relating to demand and to limitation of actions, is to secure the orderly and expeditious settlement of estates. A constructive trust becomes terminated when the statute of limitations (R. L., c. 355, ss. 1, 5) operates to bar the right to restitution.
BILL IN EQUITY, to compel the defendant, as executrix of the will of Elmer D. Marshall, to transfer to the plaintiff certain bonds and stock standing in the testator's name. Trial by the Court, who dismissed the plaintiff's bill. A motion to set the decree aside as contrary to the law and the evidence was denied subject to the plaintiff's exception.
The material facts are not in dispute. The testator died on October 5, 1935. His will was proved on October 15, 1935, and the defendant was appointed executrix. The plaintiff had been employed as the testator's private secretary for about twenty-eight years. In 1931 she purchased two coupon bonds of the Old Ben Coal Corporation. There was a reorganization of this corporation in 1934 and the bonds were called. The plaintiff testified that because of the condition of the testator's business at that time and in order to assist him in his financial affairs, she sent these bonds to the corporation's transfer agent in New York with the request that they be registered in the testator's name. This request was complied with, and after the reorganization was completed, new bonds together with a dividend of common stock were issued in the testator's name.
After the testator's death the plaintiff assisted the defendant in settling the estate and "noted" the securities in question "in the list of Mr. Marshall's holdings." She made no claim that these securities belonged to her until 1943 when they appreciated substantially in value. In explanation of her failure to claim ownership earlier, she testified: "Mrs. Marshall was very depressed. . . . I didn't want to add to her burden at that time, for the value of the bonds was small. . . . I didn't take the matter up with her because I felt that she had a lot to contend with. It was new to her, going through business, and it was my purpose to help her in any way possible."
The Presiding Justice found that the plaintiff was guilty of culpable neglect in failing to file a demand against the executrix and in not bringing suit within the time limited by law.
The plaintiff's bill of exceptions was allowed by Wheeler, J.
John D. Warren and Albert Terrien (Mr. Terrien orally), for the plaintiff.
Ivory C. Eaton (by brief and orally), for the defendant.
The defendant's answer contains a denial of the allegations of the plaintiff's bill together with a brief statement to the effect that no demand was made upon her as required by section 1 of chapter 302 of the Public Laws (R. L., c. 355, s. 1), and that suit was not brought "within two years next after the original grant of administration" (P. L., c. 302, s. 5; R. L., c. 355, s. 5). This answer is a sufficient plea in bar to the plaintiff's claim. Amoskeag Mfg. Co. v. Barnes, 48 N.H. 25, 29.
The plaintiff contends, however, that the sections above cited do not apply to the maintenance of an action involving a trust relationship such as that here alleged to exist.
It is true that there are cases which hold that where one seeks to recover from the representative of an estate specific property alleged to have been held in trust by the decedent, he is not seeking payment of a claim from the assets of the estate and is not obliged to present his claim under a statute requiring claims to be presented to the executor or administrator before suit. See In re Dutard, 147 Cal. 253; 34 C. J. S. 677; Anno. 34 A.L.R. 389. But these cases are not concerned with the interpretation of statutes identical with our own and are not in accord with the trend of our decisions.
The purpose of our statutory provisions relating to demand and to limitation of actions is to secure the orderly and expeditious settlement of estates. Preston v. Cutter, 64 N.H. 461, 465; Sawyer v. Jefts, 70 N.H. 393, 394. Section 5, which provides that no suit shall be maintained against an administrator or executor (see R. L., c. 352, s. 1) for any cause of action against the deceased, unless it is begun within two years next after the original grant of administration, has been held to apply not only to actions at law but to suits in equity. Sugar River Bank v. Fairbanks, 49 N.H. 131, 139, 140. On the other hand, statutory recognition is given to the fact that section 5 may work hardship in individual instances, and a claimant's rights are substantially augmented by section 28 of chapter 355 of the Revised Laws (P. L., c. 302, s. 28), which grants to the claimant an extension of time in which to bring suit if justice and equity require it, provided the claimant "is not chargeable with culpable neglect in not bringing his suit within the time limited by law."
The present suit is brought for restitution of property alleged to have been held by the testator as a constructive trustee. "A cause of action for restitution may be barred by lapse of time because of the provisions of a statute of limitations." Restatement, Restitution, s. 148 (2). And where property is transferred to a person under such circumstances that he is under a duty to make restitution, and the right to restitution becomes thus barred, "the transferee no longer holds the property upon a constructive trust." Id., s. 179, comment a. See also, American University v. Forbes, 88 N.H. 17, 20. It is our conclusion that the failure of the plaintiff to bring suit within the time limited by section 5 barred her present action unless justice and equity required an extension of time as provided by section 28, and that the finding of the trial Court on the issue of the plaintiff's culpable neglect is conclusive of the plaintiff's right to the benefit of that section. See Emerson's Sons v. Cloutman, 88 N.H. 59, 62.
Exceptions overruled.
All concurred.