Estate of Moore

• Decision Date: 20 November 1974
• Citation: 43 Cal.App.3d 334,117 Cal.Rptr. 571
• Court: California Court of Appeals Court of Appeals
• Parties: In the Matter of the ESTATE of John Whittier MOORE, Deceased. Judith Wright DI GIOVANNI, Executrix of the Estate of John Whittier Moore, Petitioner and Respondent, v. Charles E. MOORE, III, Executor of the Estate of Anne W. Lachmund, Deceased, Objector and Appellant. Civ. 34027.

Page 571

117 Cal.Rptr. 571

43 Cal.App.3d 334

In the Matter of the ESTATE of John Whittier MOORE, Deceased.

Judith Wright DI GIOVANNI, Executrix of the Estate of John Whittier Moore, Petitioner and Respondent, v. Charles E. MOORE, III, Executor of the Estate of Anne W. Lachmund, Deceased, Objector and Appellant.

Civ. 34027.

Court of Appeal, First District, Division 2, California.

Nov. 20, 1974.

Hearing Denied Jan. 29, 1975.

Foley & Foley by James W. Foley, San Jose, for objector and appellant.

Campbell, Warburton, Britton, Fitzsimmons & Smith by R. C. Ackerman, San Jose, for petitioner and respondent.

TAYLOR, Presiding Justice.

On this appeal from an order overruling objections to the first and final account and petition for final distribution filed by the executrix of the Estate of John Moore, the major questions are whether the trial court properly concluded that objections to the final account are not a proper method for contesting the rejection of a claim and that in any event, the action is barred by the special statute of limitations of Probate Code section 714. For the reasons set forth below, we have concluded that the trial court's rulings were correct and that this appeal must be dismissed as it was taken from a nonappealable order.

The facts were found as follows by the court below: On April 1, 1963, John W. Moore executed a promissory note payable on demand to Anne M. Lachmund, his mother, for $64,000, with five percent interest. John Moore died on January 9, 1965. His will was admitted to probate on February 16, 1965, and his widow, Judith Moore, appointed as executrix. Notice to creditors was published between February 23 and March 16, 1965. On March 30, 1965, Anne Lachmund filed a creditor's claim for $67,400, principal and accrued interest on the promissory note. Shortly thereafter, at an unknown date but prior to March 31, 1966, Judith approved Anne's claim in writing. The signed claim was never presented to the probate court for approval. ¹

On March 31, 1966, Judith listed the claim as 'approved' in her inheritance tax affidavit. Accordingly, the inheritance tax appraiser included a deduction for the claim in his report, which was approved by the court when it made its order fixing inheritance tax. Judith also claimed a deduction for Anne's claim on the federal estate tax return.

Anne Lachmund died on August 27, 1968, leaving a will dated July 14, 1967, that made no mention of the indebtedness of her deceased son, John, or his estate. Thereafter, Anne's son, Charles, was appointed executor of her estate.

On August 26, 1969, Judith filed her first and final accounting and petition for distribution which stated: 'That all claims against said estate have been paid, save and except the claim of Anne Lachmund in the sum of $67,400, the payment of which your petitioner is advised and believes, and therefore alleges, has been waived and forgiven by said claimant, and the payment of the same to close the estate is unnecessary.' No amended or supplemental documents disclaiming the deduction of Anne's claim for purposes of either the state inheritance tax or the federal estate tax were ever filed.

Charles received a copy of the accounting and petition for distribution and filed objections on the ground that Anne's claim had been approved in writing and had not been paid, and denied that Anne or anyone acting for her waived or forgave the claim, and also denied that payment of the claim was not necessary to close the estate.

The above quoted statement in Judith's first and final accounting and petition for distribution constituted a rejection of Anne's claim and was so understood by Charles. Following this written notice of rejection, no suit was filed on Anne's claim by Charles, within three months, as required by Probate Code section 714.

The court then concluded: 1) an objection to the final account is not the proper method contesting the rejection of a claim; 2) the signing of the order fixing inheritance tax did not constitute approval of the claim by the court; and 3) Anne's claim was barred by the special three-month statute of limitations of Probate Code section 714.

Charles argues that his objections were proper as he was merely seeking an order directing payment of an allowed claim and was therefore entitled to a trial on the factual question of Anne's waiver.

Charles first maintains that Judith could not endorse Anne's claim as 'allowed' and then not present it to the court for approval as Probate Code section 711 is mandatory.

Probate Code section 711 ² provides: 'When a claim is presented to the executor or administrator before filing, he must indorse thereon his allowance or rejection, with the date thereof. If he allows the claim, it must be presented to the judge for approval, who must in the same manner indorse upon it his approval or rejection, and, if approved, it must be filed with the clerk within thirty days thereafter.'

While the language of the above statute, when read by itself, appears to support the restrictive interpretation made by Charles, the same is not true when the section is read in the context of the entire statutory scheme for claims. As indicated in Faias v. Superior Court, 133 Cal.App. 525, 529, 24 P.2d 567, the endorsement, pursuant to section 711, is but a manifestation of intention and does not go to the essence of the thing done. ³ Probate Code section 712 provides that if the personal representative does not act on a claim within 10 days, the claimant may choose to deem it rejected and institute an action on the debt (Estate of Doud, 103 Cal.App. 414, 284 P.2d 705). However, the claimant is not bound to do so as he may well believe that his claim will be allowed and not require a separate action (Smith v. County of San Mateo, 57 Cal.App.2d 820, 135 P.2d 372). If, however, the claimant does not act on the deemed rejection, but waits to receive written notice of rejection, his only course is to file an action within three months pursuant to section 714 (Estate of Wood, 117 Cal.App.2d 132, 254 P.2d 940).

Estate of Hilde, 101 Cal.App.2d 41, 224 P.2d 765, and Estate of McKinley, 49 Cal. 152, 154, merely hold, in accord with section 713, that a personal representative cannot disallow a claim After it has been presented to and approved by the court. Section 713 also provides that a claim allowed by the personal representative and approved by the court is not binding on an heir and is subject to attack by any person interested in the estate.

However, if a claim has been originally rejected by the personal representative, the court may later be asked to approve it (Estate of Dobkin, 38 Cal.App.2d 276, 100 P.2d 1091; Faias v. Superior Court, 133 Cal.App. 525, 24 P.2d 567; Estate of Bette, 171 Cal. 583, 153 P. 949). Since the court's order of approval is made ex parte, it may subsequently be set aside if the approval was given under mistake or inadvertence (Bryant v. Superior Court, 16 Cal.App.2d 556, 563, 61 P.2d 483). In Hotel Park Cent. v. Security-First Bk., 15 Cal.App.2d 293, 59 P.2d 606, the court set aside an order approving a claim after the executrix showed it to be invalid. The proper procedure for the claimant is not to move to set aside the vacating order but to again present the claim so that it may either by allowed or rejected, and he may sue on it (Estate of Flint, 15 Cal.App.2d 299, 59 P.2d 609).

As this court (Division Three) pointed out in Claude T. Lindsay, Inc. v. Crocker-Anglo Nat. Bank, 207 Cal.App.2d 199, at 203, 24 Cal.Rptr. 384, at 387: "'. . . that the allowance of a claim against a solvent estate is not equivalent to an ordinary judgment. It is a judgment only in a qualified sense, and does not attain the force and dignity of an absolute judgment until an order of court is made directing the executor or administrator to pay it. Until then it is simply an acknowledged debt of the estate, bearing interest at the contract rate. . . ."'

The trial court properly concluded that since Anne's claim was never presented to the court, the personal representative could properly reject it.

Charles next contends that the court below erred in interpreting the language of the petition for first and final account and petition for distribution as the requisite written notice of rejection of Anne's claim, pursuant to section 714, set forth below, so far as pertinent. ⁴ Faias v. Superior Court, 133 Cal.App. 525, 528, 24 P.2d 567, held that any act in writing by the representative of the estate satisfied the notice requirement of section 714. In San Francisco Bank v. St. Clair, 47 Cal.App.2d 194, 117 P.2d 703, as in the instant case, the rejection was first served on the claimant by the representative's first and final account...