Grant v. De Otte

• Decision Date: 22 January 1954
• Citation: 265 P.2d 952,122 Cal.App.2d 724
• Court: California Court of Appeals Court of Appeals
• Parties: GRANT v. DE OTTE et al. Civ. 4708.

Page 952

265 P.2d 952

122 Cal.App.2d 724

GRANT v. DE OTTE et al.

Civ. 4708.

District Court of Appeal, Fourth District, California.

Jan. 22, 1954.

Wadsworth & Fraser, Los Angeles, for appellant.

Paul N. McCloskey, Jr., Palo Alto, for respondents.

GRIFFIN, Justice.

This is an action for equitable subrogation of a claimed lien to the lien of a deed of trust, or in the alternative to declare an equitable lien upon the proceeds of the sale of the real property formerly covered by the deed of trust. It was brought by plaintiff and appellant Alfred A. Grant III, as executor of the last will and testament of Alfred A. Grant II, deceased, against Donald F. de Otte, as executor of the last will and testament of Ruth de Otte Hitchner, deceased, the Corporation of America, a corporation, and Eugene Best, defendants and respondents. A general demurrer to the amended complaint was sustained without leave to amend, and the action was dismissed. Plaintiff appeals.

The only question presented is whether the facts pleaded would entitle plaintiff to an equitable lien on the property involved. The amended complaint is voluminous. It alleges generally that Ruth and Adam Hitchner were husband and wife and made their promissory note for $20,000 in 1945, to defendant Corporation of America, as trustee. They gave as security a trust deed on acreage and a home in Palm Springs, which they held as joint tenants. The property carried certain rights to water stock appurtenant to it which were also transferred as security. Mr. Hitchner met his death on October 12, 1946. Ruth was charged with his murder. Alfred A. Grant II and defendant Eugene Best, attorneys, were employed by her to defend her, and in December, 1946, she was acquitted.

It is alleged that Ruth agreed to pay Alfred A Grant II $2500 for his fee, and that in November, 1947, an account was stated in this amount between them; that she did not have sufficient money to pay said amount and that she orally agreed that she would sell the real property described and pay this amount from the proceeds of the sale. No claim is made in the amended complaint for this amount.

It is then alleged that in October, 1946, Ruth also employed Grant II for the purpose of assisting her in selling the property; that he listed it with real estate agents and advertised it extensively at his own expense and showed the property until his death on January 9, 1950; that he was unable to effect a sale; that during this period Ruth was unable to pay the monthly installments of principal and interest on the note and trust deed and she defaulted in the payment thereof; that she was also financially unable to care for and keep up the property, as required by the provisions of the trust deed attached to the amended complaint; that Ruth requested Grant II to make the payments necessary for these purposes; that to prevent the loss of his $2500 by reason of the foreclosure of the trust deed then in default, and in reliance on the promise of Ruth to repay him from the proceeds of the sale, he advanced, from November 13, 1946, to February 4, 1949, $7,672.96, as itemized; that after Ruth's death on February 4, 1949, defendant de Otte, as executor of her will, requested Grant II to continue the former payments made, since the estate had no assets and that from February 4, 1949, until his death on January 9, 1950, he advanced $1300.64 for this purpose. He does not make claim to this last mentioned sum in this action.

It then alleges that after Grant II's death plaintiff Grant III was appointed executor of Grant II's estate and the note and trust deed became delinquent for nonpayment of monthly installments, taxes, etc.; that the defendant Corporation of America paid, under the terms of the trust deed, delinquent taxes amounting to $1,197.78 on May 15, 1950; that on May 26, 1950, the trustee gave notice of default and election to sell the property; that de Otte informed Grant III he could not cure the default and requested Grant III to purchase the note and trust deed so that the property could be sold on the market and pay preferred claims; that accordingly plaintiff purchased them on August 12, 1950, for $13,988.99 in cash, and notice of recession was given and recorded; that thereafter he and de Otte, as executor, diligently attempted to sell the property but were unsuccessful; that finally, on June 6, 1951, plaintiff Grant III commenced this action; that thereafter the sale of the property for $35,000 was made and confirmed in the estate; that since this action was a cloud on the title it was stipulated by the executor and plaintiff that upon payment to plaintiff of the principal and interest accrued on the trust deed, plaintiff would release his trust deed lien and that $9500 of the proceeds of the sale would be impounded by the court until the final judgment in this action and that said sum would constitute the only fund or property of the estate of Ruth Hitchner, deceased, of which resort might be had to satisfy any judgment obtained.

It then prayed that said sum of $9500 be declared subject to the lien of the deed of trust in lieu of the real property formerly subjected thereto, and that plaintiff be subrogated to the rights of the defendant Corporation of America, trustee, with respect to the payments of $7672.96, made by Grant II, deceased, plus interest; and that the lien of the trust deed be revived for said purpose, and for equitable relief.

There is no allegation that plaintiff filed any claim in the estate of Ruth Hitchner, deceased, for the amounts advanced, and plaintiff concedes that none was filed. Defendant Eugene Best filed and has an approved claim in the estate for his attorney's fees, totaling $3,000, which remains unpaid. The defendant Corporation of America was eliminated from the action by plaintiff's purchase of the trust deed and note.

It is respondents' contention: (1) that the advancements made under the claimed oral agreement between Grant II and Ruth were only made by Grant II for the protection of his $2500 attorney's fees due him, and not for the protection of the estate; (2) that by the agreement Grant II agreed to advance the money for a particular purpose solely upon the promise of the client to repay him from a particular fund to be created in the future; and that accordingly, repayment was not due until the property was sold, and that thereafter it could not be a lien upon the property but could only be satisfied by means of a claim against the estate, citing such cases as Estate of Dobkin, 38 Cal.App.2d 276, 100 P.2d 1091; Thompson v. Orena, 134 Cal. 26, 66 P. 24; Lesser v. Pomin, 3 Cal.App.2d 117, 39 P.2d 451; and Sec. 707, Probate Code; (3) that the agreement made no provision for interest or security; (4) that as attorney and client a confidential relationship arose, and that accordingly the agreement between them was presumptively void and was without consideration, citing Estate of Kromrey, 98 Cal.App.2d 639, 220 P.2d 805; (5) that the amended complaint fails to state a cause of action because it fails to allege that a probate claim was filed, citing such cases as Estate of Grant, 2 Cal.2d 661, 43 P.2d 266; and Burke v. Maguire, 154 Cal. 456, 463, 98 P. 21; (6) that plaintiff will not be granted relief by...