Burke v. Maguire

The following opinion was rendered in Department One, April 28, 1908

This is one of nine appeals taken in nine actions against the defendant, each by a different plaintiff. The several plaintiffs are legatees under the will of Hugh McDermott, deceased, and distributees under the final distribution of his estate. Bridget McDermott was the executrix of his estate and each plaintiff is herein suing the administrator of her estate to recover the share of the legacy to which he is entitled under the distribution. The lower court, in each case, sustained a demurrer to the complaint and gave judgment for the defendant, from which plaintiff appeals. The allegations are the same in each case and by order of this court, upon the-stipulation of the parties, the nine appeals have been consolidated and are presented to this court for decision upon the transcript of the record in the case wherein Annie Burke is the plaintiff.

Hugh McDermott died on January 9, 1890. His will bequeathed to these plaintiffs each a separate money legacy, amounting in all to the sum of $16,700. This sum was to be delivered to two persons named as trustees to 'be kept by them

1. The second count of the complaint alleges the facts aforesaid, avers that the money distributed to the trustees was never paid to them, but that Bridget McDermott, until her death, retained possession thereof as executrix of Hugh Mc-Dermott’s estate, and that plaintiff is entitled to a part of the fund of $1593.66 applicable to the legacies and asks judgment against the estate of Bridget McDermott for the share due plaintiff.

The order sustaining the demurrer states that “the same is hereby sustained upon the grounds as heretofore stated in the opinion on file herein.” It is claimed that the order cannot be affirmed, unless this court agrees with the lower court in the opinion referred to-in the order. We do not so understand the law. . If the complaint is insufficient upon any ground properly specified in the demurrer, the order must be sustained, although the lower court may have considered it sufficient in that respect and may in its order have declared it defective only in some particular in which we hold it to be good. The defendant is entitled to the decision of this court on all questions presented by the demurrer and necessary to the decision made. (Wilson v. Garter, 117 Cal. 53 , [ 48 Pac. 983 ]; Wakeham v. Barker, 82 Cal. 50 , [ 22 Pac. 1131 ]; White v. Merrill, 82 Cal. 14 , [ 22 Pac. 1149 ].)

The second count does not aver that any claim for the demand sued on therein was ever presented for allowance

It is urged that this point cannot be considered in this court on appeal because it is in the nature of matter in abatement, and the general demurrer merely states that this count “does not state facts sufficient to constitute a cause of action against said defendant,” without specifjdng this omission as the particular point in which it was claimed to be lacking. It was decided in this state very soon after the adoption of the Practice Act, which in this respect is the same as the present Code of Civil Procedure, that a general demurrer need not specify the particulars wherein the complaint failed to state facts constituting a cause of action, but that, if couched in the language above quoted, it would search the entire complaint, or the count thereof to which it was directed, for any and every failure to state a material fact. (Ellison v. Halleck, 6 Cal. 393 ; Williamson v. Blattan, 9 Cal. 501 .) Afterwards, in Brown v. Martin, 25 Cal. 91 , an exception to this rule was made in eases where the bar!of the statute of limitations appeared on the face of the complaint. Apparently, though not expressly, applying the familiar common law rule that the benefit of this statute is a personal privilege which is waived unless specially pleaded, the court, in that case, held that a general demurrer which did not specify the bar of the statute as the defect relied on was insufficient to present that objection. This

The failure to allege the presentation of a claim does not come within the reason of the exception. The presentation is required in order to protect the estate against unnecessary litigation, the administrator acts in a trust capacity, and it is his duty to insist upon a compliance with the plain provisions of section 1500. Its benefits are not personal to him and it is not his personal privilege to waive them. It has been for many years uniformly considered that this objection was properly presented by a general demurrer not specifying any particulars. (See Moore v. Steele, 149 Cal. 304 , [ 86 Pac. 693 ], and the other cases cited.)

In some cases, where no demurrer was filed, it has been held that the objection could not be raised on appeal, bnt must be first presented in some manner in the trial court. (Hentch v. Porter, 10 Cal. 555 ; Peterson v. Hornblower, 33 Cal. 278 .)

It is difficult to sustain the distinction attempted to be made in these cases, but they have not been questioned. In other cases cited by appellant there was either a defective allegation of the presentation of a claim, which this court held to be sufficient in the absence of a demurrer for uncertainty (Chase v. Evoy, 58 Cal. 353 ; Wise v. Hogan, 77 Cal. 184 , [ 19 Pac. 183 ]; Guerian v. Joyce, 133 Cal. 405 , [ 65 Pac. 972 ]). or a presentation made after the action was begun and which was duly alleged and no demurrer was filed (Dennery v. Woodward, 124 Cal. 574 , [ 57 Pac. 571 ]), or the defendant had died after the suit was begun and before trial and the court held that the objection that there was a failure on the trial to prove:

The appellant argues that the record shows that this point was not presented in the court below because it is not mentioned in the opinion of that court referred to in the order sustaining the demurrer. This does not prove the proposition. The opinion does not purport to state what points were presented in argument.

The share of the $1,593.66 due the respective plaintiffs is less than one hundred dollars, except in two of the cases in which it amounts to $477.14. The demurrer on the ground that the court has no jurisdiction would be well taken but for the circumstance that the amount demanded was fixed to include both counts, and exceeds three hundred dollars in each of the nine eases. (Const., art. VI, sec. 5.)

2. The first count of the complaint alleges, that, upon the death of Hugh McDermott there came into the possession of his widow, Bridget McDermott, some forty thousand dollars in money and ten thousand dollars in notes and mortgages, belonging to his estate, and which belonged to him in his lifetime; that she did not list this property in the inventory of the estate filed by her as his executrix, and did not mention it in her accounts filed, nor account for it in any way, but concealed it from the court and from the plaintiff and other legatees, and falsely represented to the court, and to said parties, that Hugh McDermott, at his death, did not own any property, and none had come to her possession or knowledge except that listed in the inventory and mentioned in her accounts; that the plaintiff, the trustees named, and the other legatees, did not know or discover that Hugh McDermott was the owner of said concealed property, or that Bridget had come into possession of it upon his death, or had concealed its existence from them, or that her statements that the inventory and accounts described all his property and that none other had come to her possession or knowledge, were false, until after her death. That plaintiff was then, for the first time, informed of these facts, “by reason of the administration proceedings”

This count alleges that the trustees failed to qualify, but it does not aver that the $1,593.66, ordered distributed to said trustees, was not in fact paid to them, or that the plaintiff has not received her share thereof. In this count a recovery is sought only for so much of the concealed property as will be sufficient to pay the balance of plaintiff’s legacy, after deducting her share of the $1,593.66, distributed to the trustees. It alleges the due presentation-of a claim for this balance.

The inventory, containing the alleged false list, was filed on October 18, 1890, nearly fourteen years before these actions were begun. It is not alleged that the plaintiff did not know the contents of the inventory. It was a statement of record that the property therein described comprised the entire estate of Hugh McDermott. The several accounts and the petition for distribution were reiterations of the same statement. It is not averred that Bridget McDermott made the alleged false statements to the plaintiff in any other manner, or at any other time or place, than in these documents.

Concerning such belated discoveries this court has said: “After the lapse of so much time, and after the death of the original parties, equity, for the peace of society, scrutinizes with great particularity such bills as this, and it is not satisfied to retain one unless the fullest possible credible showing is made by the applicants for relief. It is not sufficient, therefore, to allege ignorance at one time and discovery at another. The facts and circumstances must themselves be pleaded in order that the court may determine whether the sources of knowledge at last availed of were not at all times open to plaintiffs, whether they were negligently overlooked, whether other circumstances should not earlier have put plaintiff upon discovery, what was the nature of the concealment practiced, whether it consisted in mere silence, or was accompanied by active misrepresentation and fraudulent deception, ... all are questions, which, upon the demand of the demurrer, should be answered by the bill in order that the chancellor, to whose conscience, in the first instance, the equity of the bill is addressed, should satisfy himself that plaintiffs have not

The complaints in these cases leave the court uninformed upon some of the points as to which disclosure is declared to be necessary. They do not state where the plaintiff lived, nor whether or not they were acquainted with Hugh McDermott, in his lifetime, or were familiar with his property and possessions, or were so situated that they had no knowledge thereof. The will, which is annexed to and made part of the complaint, indicates, by its terms, that Hugh McDermott was not acquainted with some of the plaintiffs, and that some of them, at the time it was made, lived out of the state. But these are mere inferences and they cannot take the place of the positive allegations of fact which the law requires the plaintiff to make in order to show that his discovery or imputed knowledge of the fraud was within the period of three years before the action was begun. It is not stated that plaintiffs did not know of the actual existence of the forty thousand dollars in money and ten thousand dollars in mortgages. The latter, it may be presumed, were of record. It does not so appear in the complaints, nor do they state in what county the mortgaged property was situated, or explain why the plaintiffs still remain entirely ignorant of everything concerning them excepting their aggregate amount. By the provisions of the will other legacies were preferred, and the plaintiff’s legacies could not have been paid in full unless Hugh McDermott had possessed an estate worth more than eighty thousand dollars. His will was made December 7, 1889, a month and two days before his death. The petition for its probate, alleging that his entire estate consisted of certain notes and mortgages worth twelve thousand dollars and certain real estate worth six thousand dollars, wa.s filed March 15, 1890, some two months later, and the inventory and appraisement showing its value to be only $18,728.58 was filed in the following October. We must assume that plaintiffs knew of these facts. They were at least sufficient to suggest some inquiry concerning the reasons for the great disparity between the bountiful provisions of the will and the meager ability of the testator to respond to its demands. No inquiry whatever was made.

It is not stated that plaintiffs believed the alleged false representations concerning the estate, nor that it was in reliance

The first count shows on its face that the action is barred by the provisions of section 338 of the Code of Civil Procedure, unless brought within the exception of subdivision 4 thereof. We are of the opinion that it does not aver sufficient diligence to excuse the failure to discover the alleged fraud within three years after it was perpetrated, or before the death of Bridget McDermott; that it does not sufficiently disclose the facts and circumstances surrounding the parties at the time the concealment is alleged to have taken place; and that it is insufficient because it does not aver that they believed the alleged false statement and were thereby led to forego further inquiry.

It is also defective in that it is uncertain as to the description of the property alleged to have been concealed, particularly of the notes and mortgages. A special demurrer presents this objection. No reasonable excuse is given for the alleged inability to give a more particular description of property of this character “discovered” in the manner alleged.

The demurrer was properly sustained.

In each of the appeals the judgment of the superior court is affirmed.

Angellotti, J., and Sloss, J., concurred.

After the rendition of the foregoing opinion a hearing in Bank was granted, and the following is the opinion rendered on rehearing in Bank, October 17, 1908:—

A rehearing was granted in order to consider more fully the question whether or not the second count of the complaint, although insufficient as a complaint on a debt

The complaint is clearly insufficient for that purpose. The general rule as to charging trustees is thus stated: “The general rule is that a plaintiff who seeks to charge a trustee with a breach of trust is bound to state a clear case upon his bill. Therefore acts of a trustee which may, or may not, be breaches of trust must be so alleged that they necessarily appear to be breaches, or a demurrer will be sustained. The presumption is in favor of the performance of his duty by the trustee; the plaintiff must therefore allege and prove affirmatively a breach of the trust.” (2 Perry on Trusts, see. 890.) “All the facts necessary to rebut these presumptions must be specifically averred.” (2 Beach on Trusts, sec. 756.)

No breach of trust, either by Bridget McDermott in her lifetime, or by her administrator, is shown. At the time of the distribution of the estate of her husband, Hugh McDermott, she had on hand the sum of $1593.66 which she was directed by the decree to pay to Byrnes and Maloney as trustees, upon the execution by them of a sufficient bond, the said sum to be by them kept during her lifetime and the income thereof paid to her, and at her death the principal to be paid to the several plaintiffs in these actions, as provided in Hugh McDermott’s will. Byrnes and Maloney never qualified as such trustees, nor did other trustees in their stead, and hence Bridget McDermott could not pay the money to them, but was obliged to keep it herself. It is alleged that until the date of her death, some eight years afterward, she “retained possession thereof as executrix” of her said husband’s will. Under the circumstances, this was her duty. It is not alleged that it was mingled with her own property, or converted to her own use. Neither of these facts can be presumed. Being entitled to the income from it, she had the right to invest it so that it would produce an income, using due care to invest safely. It is presumed that she did her duty as trustee of the fund and, hence, we must assume that she kept it separate from her own property and that, if she invested it, she did so in such manner as to

With respect to the liability of the administrator, personally, the complaint is equally defective. It is not averred that the fund, or any note, mortgage, or chose in action representing it, or any property into which it had been converted, ever came into his possession. It was no part of her estate and, being segregated from the estate, as we must assume, it was not his duty to take possession of it as administrator of her estate. It was held by her as executrix of the estate of Hugh McDermott; he did not succeed to her rights or duties as executrix of that estate, and he had no authority to act in that behalf. Our law so provides. (Code Civ. Proc., sec. 1353; Chevassus v. Burr, 134 Cal. 434 , [ 66 Pac. 568 ]; Bush v. Lindsey, 44 Cal. 124 .) Upon her death the trust ceased to be active and nothing remained to be done under it except for the beneficiaries to take possession of the fund. Under these circumstances, if the administrator of her estate took possession of it he would have ho title or right in it, but would be a mere custodian or depositary, to keep it until the persons entitled applied for it and thereupon to deliver it to them. His duty with respect to it in that case would be the same as with respect to any

The case of Lathrop v. Bampton, 31 Cal. 17 , [ 89 Am. Dec. 141 ], is almost parallel. The complaint there did not allege the presentation of a claim and hence was held insufficient as a complaint on a debt against the estate. A rehearing was granted to consider again whether or not it could be upheld as a complaint to enforce a trust. The court then said: “The defendant cannot be charged and held to account as trustee, except upon the averment that he has come into possession of the trust fund, or its substitute. If, at the time of his death, the defendant’s testator was in possession of the trust fund, or other property into which he may have converted it, and such fund or other property had come into the possession of the defendant, he would have held it upon the same terms as his testator held it. . . . Such fund would have constituted no part of the testator’s assets, and the defendant would not have held it in his capacity as executor, but in his capacity as succeeding trustee to the plaintiff’s ward, and might have been compelled to account as such.” (Italics ours.) (See, also, Rowland v. Madden, 72 Cal. 17 , [ 12 Pac. 226 , 870].)

It is suggested in the petition for rehearing that the case of Elizalde v. Elizalde, 137 Cal. 634 , [ 66 Pac. 369 , 70 Pac. 861 ], is authority for the claim that the complaint herein' states a cause of action in equity to enforce a trust. That ease is clear

James Maguire is not made defendant in-his personal capacity, but solely in his capacity as administrator. The prayer of the complaint is applicable jointly to both counts and it does not ask for the enforcement of any trust, but does ask specifically for judgment “against said defendant” for a stated sum covering the demands set forth in both counts, “all to be made payable in due'course of administration,” which is the appropriate prayer in an action to recover a debt from an estate. These formal indications of intent to plead a mere debt might be disregarded and the complaint held good upon a different theory, in the interests of justice, if the facts alleged would warrant it. But the facts do not authorize it, and these forms of expression serve to emphasize what is reasonably apparent from the complaint as a whole, including both counts, that plaintiff’s counsel believed that some advantage, possibly a jury trial, could be obtained by drafting the complaint as for a debt, instead of as a bill of equity, and that, with that end in view, the averments which might make it possible to hold it good as a cause of action to enforce a trust were purposely omitted.

We adhere to the opinion heretofore rendered in Department and adopt it as the opinion of the court in Bank.

Angellotti, J., Sloss, J., Henshaw, J., and Lorigan, J., concurred.