Jones v. Roberts

Plaintiff L. A. Jones, as guardian of the Estate of Roderie Allan Stellar, an incompetent, instituted this action against defendant Murray H. Roberts, as executor of the estate of Robert W. Stellar, deceased, for moneys allegedly due to the incompetent as a third party beneficiary under the terms of a property settlement agreement between the decedent Robert W. Stellar during his lifetime, and Marjorie Stellar, the parents of the incompetent.

The complaint contained two causes of action, the second of which was dismissed by stipulation at the pretrial hearing. The remaining first cause of action alleged that in connection with a property settlement agreement dated December 26, 1951, the aforesaid parents of the incompetent contracted that the father, Robert W. Stellar, would support the incompetent

The record reflects that the incompetent son is presently confined in the State Hospital at Camarillo, California, suffering from a mental disorder known as schizophrenia. That this affliction will make it impossible for the incompetent son to support and maintain himself and will require his hospitalization and medical care for the duration of his life; that his life expectancy is conceded to be 42 years.

The terms of the aforesaid property settlement agreement insofar as here pertinent are as follows:

“. . .; Husband further agrees to pay all nurses, doctors, institutional and hospital expenses reasonably necessary in the treatment and care of said minor child (Roderic Allan Stellar) (parenthesis added) until he attains the age of twenty-one years. After the said minor attains the age of twenty-one years, should it be necessary to incur doctor, nurse, hospital or institutional expenses in order to treat and care for said child, Husband shall pay the first $300.00 per month on account of said expense and any overage shall be borne by the parties jointly.”

Following execution of this agreement and subsequent divorce of the parents of the incompetent, his father remarried. The latter died on April 15, 1954, leaving as his heirs and legatees his widow Shirley Stellar, a son Charles A. Stellar, his incompetent son Roderic Allan Steller, his posthumous daughter Deborah Stellar, and his brother Arnold T. Stellar. The estate of the deceased father Robert W. Stellar is solvent and financially able to pay the claim which is the subject of this litigation, having gross assets of approximately $350,000 and distributable assets of between Ninety and One Hundred Twenty Thousand Dollars.

Following trial before the court, sitting without a jury, findings were made, and insofar as necessary for the disposition of this appeal, are as follows:

“XIII. That the necessary expenses to provide the said Roderic Allan Stellar, the incompetent herein, with doctors, nursing care, institutional or hospital care, to treat and care for said incompetent, is the sum of Three Thousand Twenty Dollars ($3,020.00) annually. That said sum is made up of the following items of expense: $1,800.00 annually for hospitalization in Camarillo State Hospital; $250.00 annually for

clothing; $250.00 annually for medical examinations; $360.00 annually for expenses and fees of a trustee to administer the trust funds of said incompetent; and the sum of $360.00 annually for the increased costs of hospitalizing said incompetent during his forty-two year life expectancy. (Emphasis added.)

“XIV. That the cost of hospitalizing said incompetent in the Camarillo State Hospital has increased by the sum of $16.00 per month since January 1, 1955, and that further increases in the cost of hospitalizing said incompetent during his life expectancy of forty-two years are reasonably certain to occur.”

“XXI. That to provide Eoderic Allan Stellar, the incompetent herein, with the funds necessary for his care in the sum of $3,020.00 annually, as found in Finding No. XIII herein, for a period of forty-two years, the life expectancy of said incompetent, will require the sum of $69,670.80 drawing interest at the rate of 3%% per annum.”

Judgment was rendered in favor of plaintiff, directing that defendant executor pay to plaintiff guardian the sum of $69,670.80 to be held in trust by plaintiff guardian for the use of the incompetent.

The judgment further provided, ‘1 That in the event the said Eoderic Allan Stellar shall, prior to the expiration of his estimated forty-two years of life expectancy, die or be restored to capacity, then the corpus of said trust funds remaining in the hands of the trustee shall at that time forthwith be distributed in the same manner and to the same persons and in the same respective proportions as shall be made in the decree of final distribution in the Estate of Eobert W. Stellar, Deceased, . . . now pending in this court.” This appeal is prosecuted by defendant executor from the judgment.

As indicated by the findings, the court estimated that the amount necessary to provide the incompetent with medical and institutional care is the sum of $3,020 annually. Using this figure as a basis, extended over a period of 42 years, the agreed life expectancy of the incompetent, the court concluded that the sum of $69,670.80 earning 3% per cent interest would be required. The annual figure of $3,020 was calculated by the court as follows:

(1) The sum of $1,800 annually for hospitalization and care in the State Hospital at Camarillo;

(2) $250 annually for clothing;

(-3) $250 annually for medical examinations;

(4) $360 annually for expenses and fees of a trustee to administer the trust funds in the judgment ;

■ (5) $360 annually for increased costs of hospitalizing the incompetent in the future.

Appellant concedes the validity of the first item of $1,800 for hospitalization and care at the State Hospital, but challenges the remaining four annual figures, contending that the findings thereon are without evidentiary support.

As a prelude to his argument, appellant asserts that, “. . . this is a simple legal action to recover moneys due on a contract. Accordingly, the trial court may not, in this ease, sit as an equity judge would in a domestic relations matter and set certain figures for support or care which in his opinion were equitable. The trial court here may only award the plaintiff such moneys as the plaintiff had, by a preponderance of the evidence, shown he was entitled to under the strict provisions of the contract.”

With this contention we cannot agree. This ease involves the power of the court under section 953 of the Probate Code to make a decree requiring the sequestration of property as security for a claim not due or contingent. That such a proceeding is an action in equity and that the equity side of the court may be invoked to protect the owners of contingent claims which will mature after the period within which distribution in the estate may take place, was the holding in Dabney v. Dabney, 9 Cal.App.2d 665 , 673 [ 51 P.2d 108 ] ; Vallelunga v. Gomes, 102 Cal.App.2d 374 , 382 [ 227 P.2d 550 ].

We are satisfied that appellant’s attack upon the finding that $250 annually was a necessary additional clothing expense under the property settlement agreement cannot be sustained. At the outset it should be noted that neither the incompetent or his guardian has a vested right in the total amount of the judgment entered herein. The respondent guardian has the right to expend from that fund the sums of money, not exceeding $300 monthly in accordance with the property settlement agreement, that are necessary for the maintenance and support of the incompetent. It is also noteworthy that according to the judgment herein, should the incompetent recover to the extent that he could return to a normal life in society, thereby no longer requiring medical care or hospitalization, or should the incompetent die, the unexpended remainder of the fund set aside by the trial court

While the discretion of the trial court in a proceeding such as the one now engaging our attention must not be arbitrary or capricious and must be exercised within reason, it is equally true that an appellate tribunal may not substitute its judgment for that of the court below unless it clearly appears that a case has been made reasonably justifying the conclusion that the questioned finding indicates a lack of ordinary good judgment, and that no reasonable inferences can be drawn from the evidence to support the finding and the judgment predicated thereon. We are satisfied that the finding now under consideration cannot be thus strietured. There was evidence that the only clothing furnished to the incompetent by the state hospital was the “bare necessities,” or “a ward uniform” consisting of “blue denims and an old shirt. ’ ’ In addition to the testimony of respondent guardian wherein he estimated that the cost of providing the incompetent with clothing would be approximately $100 annually there is in the record testimony by Mrs. Marjorie H. Stellar, mother of the incompetent, that she visited the latter on numerous occasions. That the only clothing furnished the incompetent by the state hospital was “bare necessities” as aforesaid. That suits, dress shirts, slacks, ties, shoes and slippers had to be furnished to the incompetent from sources other than the hospital. She further testified that the hospital’s medical staff felt that having “dress-up” clothing was good' for the incompetent’s morale and was part of his therapy and that she, herself, had expended the sum of $130 for-clothing for the incompetent approximately two months prior to the time of the hearing of this matter in the trial court. Appellant does not contend that the allowance made by the trial court for clothing for the incompetent son was not within contemplation of the property settlement agreement, but only that there is no evidence in the record to support the amount of such allowance. When the estimate of respondent guardian is added to the money expended by the incompetent’s mother, and the reasons given for such expenditures, we cannot say that the figure arrived at by the trial court exceeded the bounds of reason, and was devoid of any substantial evidence to support it (Estate of Cornaz, 8 Cal.2d 347 , 355 [ 65 P.2d 784 ] ; Robertson v. Nichols, 92 Cal.App.2d 201 , 207 [ 206 P.2d 898 ]).

In considering the equities involved in this proceeding, regard must be had for the terms of the property settlement agreement, the value of the estate, and the interests of the widow, the infant daughter of decedent, the other son, as well as the incompetent. In the estate of the latter there is at present some $7,200 to which will be added 7/45 of his deceased father’s estate.

A serious question is presented by appellant’s contention that the court erred in sequestering the sum of $360 annually for the expenses and fees of a trustee to administer the trust funds of the incompetent over a life expectancy period of 42 years, totaling $8,196.48. Appellant concedes that respondent guardian is entitled to his reasonable fees and expenses from the estate, under the provisions of Probate Code, section 1556, but urges that such compensation must come from the funds of the incompetent’s estate (consisting of $7,200 and 7/45 of the estate of his deceased father), but not out of the assets of the decedent’s estate being administered by appellant executor. The latter argues that in the present proceeding the court is not appointing a trustee to handle this particular claim of the incompetent under section 953.1 of the Probate Code because the incompetent already had an estate and there was a guardian-trustee acting for the ward. That the court in the instant proceeding is merely determining the amount to be delivered to this guardian-trustee on the incompetent’s claim against the estate of his father. That respondent guardian should look to his ward’s estate generally and in its entirety and this would include the guardian’s fees for handling the total trust estate inclusive of the judgment rendered in the case at bar.

Appellant earnestly contends that his argument finds support in the language of Probate Code, section 953, upon which respondent bases this action and which he contends authorizes only the setting aside from the decedent’s estate “. . . such part of the same as the holder (of the contingent claim) would he entitled to if the claim were due.” (Em

. Prom the judgment entered herein it is at once apparent that the court proceeded under the provisions of section 953.1 of the Probate Code which authorizes the court to appoint a trustee to whom the funds sequestered from the estate shall be paid, and who shall make the payments therefrom as authorized by the court. We are persuaded that the court having appointed a trustee was authorized, under section 953.1 to set aside a sufficient sum of money from which the probate court could at a future time make its order to compensate the trustee upon a proper showing, for his services rendered to the trust estate (Prob. Code, § 1122). Had the court proceeded under section 953 rather than 953.1 it would have been necessary to have set aside from the assets of the decedent father’s estate a sum of money in cash to cover the medical care, hospitalization, etc., required by the incompetent for a period of 42 years, which was the latter’s life expectancy. This cash fund would have been delivered to the county treasurer subject to the continuing jurisdiction of the trial court sitting as a court in equity, to order the monthly payments as required (Vallelunga v. Gomes, supra, p. 379). Had that procedure been followed in the trial court, the sum of $75,600 in cash would have been deposited with the court designated depository to provide the bare essentials of hospitalization and medical care for the incompetent at the rate of $1,800 annually for a period of 42 years. The procedure adopted by the court under section 953.1 of the Probate Code has saved to the estate and the heirs and legatees approximately $6,000.

Appellant strongly urges that there is no provision whatsoever in the property settlement agreement for any obligation on the part of decedent father for trustee’s fees nor is there a trust set up therein. That it is a mere contract partially for the benefit of a third party, the incompetent son. The answer to this contention is that insofar as the provisions of the property settlement agreement with which we are here confronted are concerned, the primary purpose thereof was to provide funds for the medical treatment and care of the incompetent son, and for which purposes the aforesaid agreement provided the decedent father would pay the first $300

Finally, appellant insists that the finding of the court, “. . . that further increases in the cost of hospitalizing said incompetent during his life expectancy of forty-two years are reasonably certain to occur,” and setting aside $360 additional per year for such increased hospitalization costs, is not supported by any substantial evidence. Appellant contends that setting aside the aforesaid sum to cover the anticipated increased cost of hospitalization and care during the ensuing 42 years of life expectancy of the incompetent amounts to mere conjecture and speculation unsupported by substantial evidentiary facts. With this contention we cannot agree. There was evidence before the court that the cost of maintaining this incompetent in the State Hospital at Camarillo has increased at the rate of $16 per month since January 1, 1955, and the court was entitled to take judicial notice of the economic condition of the country, that the cost of living is steadily increasing while the purchasing power of the dollar is steadily decreasing. In determining a matter such as this,

Both appellant and respondent concede a mathematical error in the computation of the court which if the judgment as rendered were affirmed would reduce the amount thereof by the sum of $910.72. However, since the cause must be remanded for further proceedings, the error in question can be corrected.

For the foregoing reasons, the judgment is reversed and the cause remanded with directions to the court below to enter a new and different judgment for plaintiff in accordance with the views herein expressed. The parties will bear their respective costs on appeal.

Fourt, J., and Lillie, J., concurred.