I dissent. Defendant, John C. Joor, admits in his answer that "if such note and mortgage were or are in existence they were the property of P. Joor at the time of his death" and he would be a joint owner with plaintiff under the will of decedent. Defendant did not plead payment. On the issue of the existence of the note and its possession by defendant, plaintiff testified:
"I had a conversation concerning the note and mortgage in thissuit with John C. Joor (the defendant) on the street in Maxwell, Iowa, in the fall of 1932 shortly after the bank closed. I told him he would have to take care of it, have to pay it. He said he expected to. The next time I talked to him about the note was in the fall in 1934. I asked him for the note. He said he thought he had it in the house. He went in after it. He came out after a little bit and said he couldn't find it but he knew it was in existence; that it was probably up in the bank.
"Q. Who did he say had it? A. He said he had had it.
"Q. What did he say about it; what did he say, if anything about its being paid? A. Well, he said it had never been paid; never been settled.
"The defendant and I were not interested in any other mortgage save the mortgage I have talked about, and that is the mortgage offered in evidence in this case.
"I asked him to file it but it wasn't done; I asked him a couple of times." (Italics supplied.)
Shortly after the conversation had in 1932, the defendant, on December 20, 1932, wrote plaintiff a letter in which he stated:
"One thing is certain, that mortgage I gave must not show up at this time. It would mean utter and complete ruin for me if it did."
Plaintiff introduced the chattel mortgage signed by defendant which described and acknowledged a $4,500 debt, $3,000 of the debt consisting of "one note for $3,000 dated February 4, 1928 due on demand."
Defendant did not offer any evidence in the case. The failure of the defendant to testify gives rise to the inference *Page 879 that if he had testified his contention would not have been aided by his testimony.
The undisputed evidence and admissions of defendants in their answer established beyond any possible doubt the "existence" of the note and mortgage and that on the death of Mr. Joor, defendant, as co-executor, had possession of the note and mortgage as estate property and after the estate was closed his possession was that of a joint owner with plaintiff.
The note and mortgage were not listed in the inventory as an asset of the estate. This omission was apparently at the request of defendant and with consent of his brother, the plaintiff. There is no evidence that the failure to inventory the note and mortgage constituted a fraud on the creditors of the estate or the parties. All debts of the estate were paid. Though this property was not inventoried, nevertheless, it at all times was an asset of the estate and was the property of plaintiff and defendant under the will of decedent.
When the co-executors stated in their final report that "all property belonging to said estate, and which has come into their hands as executors, has been disposed of as directed by the court" each of them knew the note and mortgage were property belonging to the estate which had come into the hands of John C. Joor. The order on final report merely found that "said report is true and correct and the same is hereby approved, the executors discharged and bond exonerated." The execution of the inventory and final report was the mutual act of the co-executors, each having full knowledge of the facts, both executors stating that they had distributed all property belonging to the estate to the proper parties (plaintiff and defendant) and the present possession by defendant of the note and mortgage must be referable to the distribution made by the co-executors. The final report amounts to a joint declaration that the note and mortgage were distributed under the provisions of the will pursuant to the order of court.
It is true, as contended by appellee, that, as a general rule, a final order of discharge of an executor is conclusive of controversies adjudicated by the order against interested parties in the absence of fraud, duress, mistake or other grounds for equitable relief which do not inhere in the order of discharge. Estate of Holman, 216 Iowa 1186, 250 N.W. 498, 93 A.L.R. *Page 880 1363; Murphy v. Hahn, 208 Iowa 698, 223 N.W. 756; Bradbury v. Wells, 138 Iowa 673, 115 N.W. 880, 16 L.R.A., N.S., 240; Tucker v. Stewart, 121 Iowa 714, 97 N.W. 148.
I am of the opinion that this rule is not applicable to these former co-executors who were joint owners of the note and mortgage. There is no suggestion in the record that either of the brothers, as executors or sole beneficiaries, committed fraud against the other or creditors during the administration of the estate. Plaintiff is not seeking to correct mistakes in the final report under Code Section 12049. He relies on the final report and claims he is the owner of an undivided one-half interest in the note and mortgage through the probate proceedings on the will of his father, P. Joor. He would be bound by the order of final discharge if the issues presented here were or might have been litigated as incidental to the distribution of the estate. It does not appear that there was any misunderstanding or controversy between them over their respective rights in the note and mortgage during the period of administration. Defendant did not claim in the probate proceedings that he was not liable on the note and mortgage. Plaintiff had no reason to suspect that defendant was disclaiming liability during the administration of the estate. On the contrary, defendant joined with plaintiff in stating in the final report that full distribution of all property had been made pursuant to the terms of the will of decedent. He now claims that his note and mortgage did not constitute property belonging to the estate. This litigation was commenced when plaintiff first discovered after closing the estate that defendant was repudiating his obligation. Obviously, the order of final discharge did not adjudicate a controversy between plaintiff and defendant that did not exist.
The majority opinion holds that the issues in this case were or might have been litigated in the probate proceedings, citing Murphy v. Hahn, 208 Iowa 698, 223 N.W. 756.
In the Murphy case the heirs filed objections to the final report of the administrator. The issue was, Who was entitled to the money in the hands of the administrator? The court states:
"Under the record in this case, it is manifest that the final settlement and discharge of the brother, as administrator, constituted an adjudication; that the appellants had a trial, or *Page 881 were in no way prevented from having a trial, as to who and in what proportions they were entitled to the money in the hands of the administrator, as shown by his inventory and final report;" etc.
In the instant case there was no litigation between the beneficiaries under the will and the executors to determine the liability of the defendant to the plaintiff on this note and mortgage. The beneficiaries, plaintiff and defendant, acknowledged that they had received distribution of the personal property belonging to the estate from the co-executors. Plaintiff could not anticipate in the probate proceedings that defendant would repudiate the debt after the estate was closed.
The majority opinion is inaccurate in stating that plaintiff claims that the final report, which the court found was true and correct, is neither true nor correct. The report does not refer to any specific item of property belonging to the estate. It simply states, and the court found, that all property belonging to the estate not just the property inventoried had been properly distributed. Plaintiff's position is that the report is correct, that the note and mortgage were, in the distribution, delivered to the defendant and are now in his possession as joint owner and his right to a decree rests on the will and probate proceedings.
The holding of the majority opinion that the note and mortgage were not assets of the estate because they were not listed in the inventory, and, as the final report recited that all property of the estate had been distributed to the legatees and the final report approved, plaintiff should have attacked the final report under Section 12049 on the ground of fraud and mistake (although there is no claim or evidence of fraud or mistake and the liability of defendant on the note and mortgage, which is the issue in this case, was not adjudicated in the probate proceedings) is erroneous. Defendant had possession of the note and mortgage from the time of his father's death but for some reason did not want these assets listed in the probate proceedings.
Defendant has not proved one element of estoppel against plaintiff.
I would reverse and remand for a decree for plaintiff.
*Page 882BLISS, J., concurs in this dissent.