Estate of NELIA LUCAS, Deceased. GEORGE FEW, as Administrator, etc., Appellant, v. BEN H. BROWN, as Administrator, etc., Respondent.
L. A. No. 18504
In Bank
Dec. 23, 1943
The judgment is affirmed.
Gibson, C. J., Shenk, J., Curtis, J., Edmonds, J., Traynor, J., Schauer, J., concurred.
J. H. O‘Connor, County Counsel, and Ernest Purdum, Deputy County Counsel, for Respondent.
Arch H. Vernon, Earl E. Johnson, Gilbert E. Harris, O‘Melveny & Myers, Overton, Lyman & Plumb and Holbrook & Tarr, as Amici Curiae on behalf of Respondent.
EDMONDS, J.—During the administration of the estate of Nelia Lucas, a suit was commenced to foreclose a mortgage made by her in 1928 as security for a note of $2,500 which, it was alleged, in 1934 had been extended for three years. On behalf of the estate, Ben H. Brown, Public Administrator, demurred to the complaint, pleading the bar of statute of limitations. Later the probate court authorized a compromise of the action for $500. The appeal of George Few, administrator of the estate of Eliza Jacobs, a creditor of the Lucas estate, upon jurisdictional grounds challenges the order of compromise as void.
The note sued upon, by its terms, is in favor of Silvanus J. Reid and was payable in 1931. Its payment was secured by a mortgage upon real property which is the only asset of any value in the Lucas estate. Brown rejected the claim of Reid‘s executor for the payment of the principal and interest assertedly due upon it. Thereupon Reid sued to foreclose the mortgage, alleging that on May 15, 1934, the time for
By his petition Brown presented the facts concerning the pending action and also showed that he had approved the claim of appellant amounting to $1,208. He also told the court of an opinion given by counsel for the Jacobs estate stating that the Reid suit could be defeated both upon the ground of lack of consideration and the statutes of limitation. This opinion included an offer of assistance in the defense of the action. On the other hand, the attorneys representing the plaintiff in the foreclosure action expressed a willingness to dismiss the suit upon an agreement that Brown sell the real estate described in the mortgage and pay 50 per cent of the net proceeds of the sale in compromise of the asserted debt. However, counsel representing the creditor holding the allowed claim objected to an acceptance of the proposed compromise. Because of these circumstances, the petitioner concluded, he asked the court to instruct him whether to compromise the action upon the terms offered, or other terms more favorable to the estate, or to continue the litigation.
To this petition the appellant filed objections asserting that the suit to foreclose the mortgage was one over which the probate court had no jurisdiction; that the note was barred by the statute of limitations and that the allegation in the foreclosure action pleading an extension of the due date of the note was an insufficient compliance with
Six days later, the petition for instructions came on for hearing, and the probate court made its order reciting that a written proposal of the executor of the estate of Silvanus J. Reid, deceased, had been presented offering to accept the sum of $500 in full settlement of his claim against the Lucas
Four months later, the respondent filed his first and final account showing the sale of the real estate at its full appraised value and the carrying out of the compromise. The appellant filed written objections to the settlement of the account, contesting the respondent‘s payment pursuant to the order. According to this pleading, the account discloses upon its face that the claim of Silvanus J. Reid was, at the time of the death of Nelia Lucas, barred by the statute of limitations. Furthermore, it alleges, the mortgage ceased to be a lien upon the real estate after the note was barred by the statute of limitations, and any attempt of the probate court to compromise and settle the foreclosure action brought by the Reid estate was without jurisdiction and void.
At the hearing upon the final account, the court overruled the appellant‘s objections, and made its order allowing and settling the account of the respondent and, finding the estate insolvent, discharged the administrator from further duties and responsibilities. The appeal is from that order.
Under the provisions of
Attacking the order instructing the respondent to enter
The appellant cites Estate of Dobkin, 38 Cal.App.2d 276 [100 P.2d 1091], as authority for his position that the order approving the compromise was not a final one and that it became so only at the time of the hearing on the final account and petition for distribution. In reliance upon this decision, he says, he did not appeal from the order approving the compromise but properly waited until the hearing upon the final account to contest the compromise. In addition, he claims that the order approving and settling the final account of the respondent is defective in that there are neither written findings upon the issues of fact raised by his objections to the final account, nor is there a written decision of the court upon them, as required by
Answering these contentions, the respondent asserts that an order instructing or directing an executor or administrator is appealable under
But even if the appellant were in a position to challenge the order upon the merits, he urges, there is no basis for questioning the court‘s action approving the compromise. The amount claimed was practically ten times that paid in settlement of the compromise. The costs and attorney‘s fees to be paid by the estate would be large if the foreclosure action were to be defended, and because of the possible applicability of mortgage moratorium laws enacted in 1935, 1937 and 1939, only by a decision of this court would it have been finally determined whether the suit upon the note and mortgage was barred by the statute of limitations. And even if the respondent had been successful in defeating the foreclosure suit, he could not have quieted the estate‘s title to the real estate, in order to establish a marketable title, without paying the debt. Furthermore, he says, the interested parties are estates, and the court was justified in approving an arrangement which would take into consideration the best interests of all.
Specifically answering the appellant‘s claim that the order instructing the respondent to enter into the compromise was void because in violation of
In any event, the respondent says, the appellant is estopped from objecting to the payment of the $500 to the Reid estate. For by his conduct, the appellant led the administrator to believe that his original objections to the proposal had been withdrawn and that there would be no further question made as to the propriety of the compromise. Under these circumstances, to require the respondent personally to refund the $500 would be manifestly unjust. And since the decree approving the final account was set out at length in the minute book as required by
The respondent, being in doubt as to the advisability of entering into the proposed compromise with the executor of the Reid estate, sought the assistance of the court in determining the question, since, in any event, no compromise could be effected under
Insofar as the court under the authority of
The judgment roll shows that due notice of the petition for instructions was given. In addition, the appellant‘s knowledge of the petition is shown, first, by the filing of his written “Objections to Allowance of Petition to Compromise Action,” and also by the recital in the order granting the petition for instructions, that “no objection to said proposal having been made, and it having been approved as a fair and proper settlement in open court by” counsel for the appellant, at the hearing upon the amended offer of compromise. As no appeal was taken from the order instructing the respondent to enter into the compromise, within the time allowed by law, it became final and the appellant‘s written objections to the settlement of the first and final account must be considered in the nature of a collateral attack upon the prior decree. (Security-First National Bank v. Superior Court, 1 Cal.2d 749, 755 [37 P.2d 69]; Estate of Keet, 15 Cal.2d 328, 333 [100 P.2d 1045].)
In order to succeed, therefore, the appellant must establish that the order directing the administrator to compromise the claim was not merely erroneous, but was void. Such a position is necessarily predicated upon the theory that the probate court had no jurisdiction to authorize the compromise of a claim or suit such as that contemplated by the order.
At common law, an executor or administrator had the power to settle or compromise claims for or against the estate,
In some states, including California, statutes have been enacted which restrict this common-law power by subjecting the representative‘s action to court approval. (
Of course, if an order approving a compromise is obtained by fraud, relief therefrom may be had in equity. (Estate of Ross, 180 Cal. 651 [182 P. 752]; McPike v. Superior Court, 220 Cal. 254, 259 [30 P.2d 17]; see 11B Cal.Jur., Executors and Administrators, sec. 275, p. 291.) And bad faith is shown where the claim which is the subject of the compromise is wholly without foundation and known by the personal representative to be so. (See McPike v. Superior Court, supra, at p. 259.)
Although from what appears in the record, it may not reasonably be denied that a sufficient showing of advantage to the estate of the compromise was made to the probate court upon the petition for instructions, any inquiry into that question was concluded by the failure to appeal from the order granting the petition for instructions and approving the compromise. And nothing in the record before the court justifies a charge that the respondent or his counsel acted at any time in bad faith or in fraud of the court. On the contrary, his petition for instructions shows his own doubt as to advantage of the compromise as the reason for invoking the aid of the probate court, under
But the appellant asserts that
At the hearing upon the petition for approval of a compromise, any interested party may present such a question as the possible or probable bar by the statute of limitations of the claim sought to be compromised. Such a position, if sustained by law or evidence, obviously would be relevant to any inquiry as to the advantage to be gained by compromise. But, even though the court may be convinced that the claim is barred, additional facts may appear, as they do in the present case, where the estate may benefit by paying something on the claim as consideration for its satisfaction. Thus, the fact that the estate could not quiet title to the real estate without paying the debt, even though the claimant in turn could not successfully foreclose the mortgage (see Boyce v. Fisk, supra, p. 113; Howell v. Dowling, 52 Cal.App.2d 487, 496 [126 P.2d 630]), would make it desirable for the estate to effect some sort of a compromise with him. In addition, the amount of attorney‘s fees which the estate would have incurred, were the foreclosure action to be contested, reasonably should enter into the computation of an amount for which it would be advisable for the estate to effect a compromise. The best interest of the estate, under the facts presented, is the criterion upon which the probate court‘s decision must be based, and in the event of a ruling adverse to the objector, he may appeal from the order approving the compromise. (See Guardianship of Carlon, 43 Cal.App.2d 204 [110 P.2d 488].) But when the time for appeal has passed, as in the present case, the advantage of the compromise approved is no longer open to judicial examination.
The appellant also contends that the order granting the petition for instructions was fatally defective because it
The appellant‘s further contention that, by the order instructing the respondent to enter into the compromise and approving it, the probate court was unlawfully adjudicating the claim of a third person to property of the estate, is specifically answered by the case of McPike v. Superior Court, supra. As there stated (p. 257), “The probate court has the power to authorize the compromise of an adverse claim of a third party to the property of an estate.”
Considering the appellant‘s criticism of the form of the probate court‘s determination approving the final account, for the reasons stated, his objections to the allowance of the $500 item presented no justiciable issue of fact upon the question of the statute of limitations requiring a finding. And the form of the order settling the account is not subject to attack for the decree was “entered at length in the minute-book of the court.” (
The order is affirmed.
Gibson, C. J., Shenk, J., Curtis, J., Traynor, J., concurred.
SCHAUER, J.—I concur in the judgment, and in the opinion generally, but feel that a further answer should be made to appellant‘s contention that “the order approving and settling the final account of the respondent is defective in that there are . . . [no] findings upon the issues of fact raised by his objections to the final account.” Issues of fact as to the bona fides of the mortgage claim, the asserted extension of the mortgage, the compromise of the claim, and the conduct of the county counsel, etc., were raised by such objections and were tried by the court without a jury, and therefore
This appeal was initially taken upon the judgment roll alone. The record has since been augmented by the filing, upon stipulation of the parties, of what is designated “Clerk‘s Supplemental Transcript.” Such supplemental transcript does not purport to be a complete transcript of the proceedings in the case and, in fact, is limited to matters specifically enumerated in the stipulation for the filing thereof. Therefore, for the purposes of the question which we are considering, the effect is the same as though the appeal were upon the judgment roll alone. There is in the record no affirmative showing as to whether findings were or were not waived. Under such circumstances we must presume that they were waived. It was stated in Carpenter v. Pacific Mut. Life Ins. Co. (1937), 10 Cal.2d 307, 326 [74 P.2d 761], “From an early date it has been held in this state that on a judgment roll appeal the mere nonappearance of findings where required by statute does not necessarily establish error. . . . Where findings do not appear, and are required [,] on a judgment roll appeal it will be conclusively presumed, in the absence of a proper record showing the contrary, in support of the judgment, that such requirement was waived.” (See, also, Leadbetter v. Lake (1897), 118 Cal. 515 [50 P. 686]; Bank of Italy v. Bettencourt (1932), 214 Cal. 571, 575 [7 P.2d 174].)
Carter, J., concurred.