In Re Estate of Vance

SLOSS, J.

On May 26, 1903, S. A. Vance made and 1 delivered to Hammond Lumber Company, a corporation, his promissory note, reading as follows:—

“$65,000.00.

“San Francisco, Calif., May 26, 1903.

“On or before five years after this date, I promise to pay to the order of Hammond Lumber Company sixty-five thousand dollars, United States gold coin, with interest thereon, payable semi-annually at the rate of four per cent per annum from date until paid.

“This note is secured by pledge of six hundred and fifty shares of the first preferred cumulative stock of the stock of Vance Redwood Lumber Company, and is payable, at my option, by transfer and delivery of as many of said shares as shall at the time of such transfer and delivery be the equivalent at par of the then unpaid part of this note.

(Signed) “S. A. Vance.”

Thereafter, S. A. Vance died, leaving a will in which he named his wife, Marie H. Vance, as executrix, and gave all of his estate in equal shares to his said wife and a minor son. Letters testamentary having issued, notice to creditors was published, and, within the time allowed, the Hammond Lumber Company presented a claim, setting forth the instrument above quoted, and alleging the payments of interest and nonpayment of the principal. The claim was allowed by the executrix and approved by the court. The estate is solvent.

[762]

After the expiration of the time for presenting claims, the executrix filed a petition, alleging that the six hundred and fifty shares of stock referred to in the claim had been appraised at thirty-eight thousand seven hundred and fifty dollars, and that it was to the best interests of the estate that the claim be paid by transfer of said six hundred and fifty shares, which at par were the equivalent of the unpaid portion of the note. The prayer of the petition was for authority to deliver said stock to the claimant in full payment of its claim. In response to a citation, the claimant, Hammond Lumber Company, appeared and opposed the petition. Over its objection, the court made an order authorizing and directing the executrix to transfer and deliver to Hammond Lumber Company, in full payment of the note and claim, a certificate for six hundred and fifty shares of the first preferred cumulative stock of Vance Redwood Lumber Company, being the shares mentioned in the note. The order further provided that upon such transfer the claim and note “shall be fully paid and satisfied.”