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In Re Estate of Lloyd

OCTOBER 23, 1963.




Appeal from the Probate Court of Cook County; the Hon. CHARLES G. SEIDEL, Judge, presiding. Reversed and remanded with directions.


In 1957 Arthur J. Lloyd, Jr., and his wife, Lorraine, entered into a contract with the Oak Park National Bank, trustee, to purchase certain improved property in Oak Park, Illinois, for $205,000. A substantial down payment was made and the contract provided that the balance of the purchase price was to be paid at the rate of $1,155 per month with interest at 5%.

In 1958 the Oak Park National Bank assigned its interest in the contract to the appellants, Paul F. and Alwina Amling. Arthur Lloyd died in December, 1960. In 1961 the Amlings filed a claim against the Arthur Lloyd estate under section 193 of the Probate Act. (Ill Rev Stats 1961, c 3, § 193.) The claim was for $152,942.28, which sum represented the remaining balance of the purchase price. Lorraine Lloyd, the executor of the estate, moved to strike the claim. Her motion was sustained and the Amlings have appealed from the order of dismissal.

Section 193 provides:

"§ 193. Claims Not Due.) A claim against a decedent's estate, that is not due, may be filed and allowed and paid out of the estate as other claims; but interest which has been included as a part of the principal obligation, computed from the time of the allowance of the claim to the time when it would have become due, shall be deducted."

Statutes similar to section 193 have been part of the Administration Act since 1829. The immediate predecessor to section 193 was section 67 of the Administration Act of 1872, Ill Rev Stats (1937) c 3, § 68, which read:

"Any creditor, whose debt or claim against the estate is not due, may, nevertheless, present the same for allowance and settlement, and shall, thereupon, be considered as a creditor under this act, and shall receive a dividend of the said decedent's estate, after deducting a rebate of interest for what he shall receive on such debt, to be computed from the time of the allowance thereof to the time such debt would have become due, according to the tenor and effect of the contract."

Section 67 was interpreted by our courts on several occasions and two rules of construction were established: (a) section 67 was held to authorize the allowance of claims based on an absolute contractual liability, but not claims based on a contingent liability; (b) in determining whether the obligation of a contract was absolute or contingent, it was held that the happening which might make the obligation contingent had to be conditioned upon an outside force and could not be within the control of either party to the contract. In Mackin v. Haven, 187 Ill. 480, 58 N.E. 448, the court said:

"In construing section 67 of chapter 3 . . . we held in Dunnigan v. Stevens, 122 Ill. 396, that, if the obligation is an absolute undertaking, the claim can properly be proved against the estate in the probate court, even where the debt or claim is not due, but that, if the obligation is merely a contingent liability, then the claim is not properly provable in the probate court, and cannot be allowed."

In Union Trust Co. v. Shoemaker, 258 Ill. 564, 101 N.E. 1050, the court stated:

"Section 67 provides that a claim not due may be presented and allowed, with a proper rebate of interest. This section refers only to claims on which there is an absolute liability though the time of payment is postponed, but has no reference to claims dependent upon a contingency which may or may not ripen into a liability. The holder of a claim of the latter class is not a creditor of the estate under the statute and cannot have his claim allowed."

Union Trust Co. v. Shoemaker was discussed in Sanders v. Merchants' State Bank of Centralia, 349 Ill. 547, 182 N.E. 897. The opinion noted that the case concerned a replevin bond executed by Shoemaker. Shoemaker died before a judgment was entered in the replevin suit. The Sanders opinion said:

"Shoemaker having died before judgment, of course no judgment was or could be rendered in the replevin suit against him or his estate. There was no breach of the bond until judgment was rendered, and before that occurred the liability was entirely contingent. There was a potential liability on the bond but no actual liability until the breach by failing to prosecute the suit with effect. Until that time there was no liability, present or future, to pay, and, of course, none for which any claim could be exhibited or prosecuted. The liability was dependent on an event which neither party could control and was therefore contingent."

The Sanders opinion also cited Chicago Title and Trust Co. v. Fine Arts Bldg., 288 Ill. 142, 123 N.E. 300. In the latter case a tenant had a lease for a term of ten years at a monthly rental. The tenant assigned the lease and the assignee died before the term ended. The lessor presented a claim against the assignee's estate for the rent for the remainder of the term. The court held that because of contingencies in the lease the claim could not be said "to present such an absolute liability as that contemplated in section 67 of the Administration Act . . ." The court held, and the Sanders opinion noted, that the claim was contingent ...

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