HILTON v. McNITT

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District Court of Appeal, Second District, Division 1, California.

Ruth M. HILTON, Plaintiff and Respondent, v. Rollin L. McNITT, as Executor of the Estate of Hal H. Hilton, Deceased,

Defendant and Appellant. Ruth M. HILTON, Plaintiff and Appellant, v. Rollin L. McNITT, as Executor of the Estate of Hal H. Hilton, Deceased, Defendant and Respondent.*

Civ. 21938.

Decided: February 06, 1957

Glenn R. Watson and Robert G. Beverly, Los Angeles, for plaintiff and respondent-appellant. Edythe Jacobs, Los Angeles, for defendant and appellant-respondent, Rollin L. McNitt.

Ruth M. Hilton, the above-named plaintiff has appealed from a judgment of the trial court allowing and establishing her claim against the estate of Hal H. Hilton, deceased, but only insofar as such judgment failed to provide for interest on the sums awarded her.

Defendant executor has also appealed from the judgment in its entirety. In the interest of clarity, the parties will be referred to herein as plaintiff and defendant.

As to the factual background surrounding this litigation, the record reflects that on or about July 25, 1953 decedent and plaintiff, then being husband and wife, entered into a property settlement agreement, by the terms of which decedent agreed, among other things, to pay to plaintiff ‘for her support and maintenance’ the sum of $300 per month, on the first day of each month, commencing August 1, 1953, and continuing to and including July 1, 1956.

On August 21, 1953 plaintiff was granted an interlocutory judgment of divorce under the terms of which decedent was ordered to pay to plaintiff ‘$300.00 per month commencing October 1st, 1953, and on the 1st day of each month thereafter until the 1st day of July, 1956,’ and in addition to pay attorney's fees and costs and to pay off an insurance policy loan. The property settlement agreement was neither approved nor referred to in the interlocutory judgment of divorce.

On or about July 25, 1954, Hal H. Hilton died and defendant Rollin L. McNitt was appointed as executor of his estate on August 19, 1954.

On or about September 18, 1954, plaintiff, Ruth M. Hilton, married James R. Tracy.

On July 25, 1953, the date of the property settlement agreement, decedent and plaintiff entered into a stipulation re alimony, attorneys' fees, court costs, title and possession of property in the divorce action, stipulating that decedent shall pay plaintiff, among other sums, ‘the sum of $300.00 per month, commencing August 1, 1953, and continuing thereafter on each and every month, on the first day of such month, until the first day of July 1956’.

With reference to the aforesaid property settlement agreement, the trial court in the action now before us found, ‘* * * that said agreement compromised and settled the community property rights of the parties, which rights and the extent of the community property were in dispute; that the parties to said contract intended said provision for $300 per month to be and the same was an indivisible part of said property settlement agreement; that said contract was and is an inseverable and integrated property settlement agreement.’ The court also found that ‘decedent was ordered to pay to plaintiff the sum of $300.00 for a period of three years, pursuant to written stipulation, in an interlocutory order upon an order to show cause in a divorce action pending between plaintiff and said decedent, being action No. D 454,737 and that the installments remaining unpaid at the time of the interlocutory judgment in said action were ordered to be paid pursuant to the terms of said interlocutory judgment.’

Plaintiff presented to defendant executor a creditor's claim against decedent's estate for $7,500 plus interest, claiming payments of $300 per month, commencing July 1, 1954, and twenty-four consecutive months thereafter, to and including July 1, 1956, under both the terms of the property settlement agreement and the interlocutory judgment of divorce, attached as Exhibits ‘A’ and ‘B’, respectively, to the creditor's claim. Defendant executor gave written notice of approval of the claim to the extent of $300 for support and maintenance of plaintiff due July 1, 1954 (prior to decedent's death) and rejected the balance of the claim accruing subsequent to decedent's death, as a claim based upon support and maintenance of the former wife of decedent which terminated with his death.

Plaintiff filed suit against defendant executor to establish the whole claim against the estate of decedent in the sum of $7,500 plus interest and seeking declaratory relief.

In his answer defendant executor asserted that the property settlement agreement expressly provides that the payments are ‘for support and maintenance,’ that the obligation to make such payments was made the basis of an interlocutory order on an order to show cause in the divorce action and in the interlocutory judgment of divorce, and that such obligation for support and maintenance terminated on the death of the husband, Hal H. Hilton and also on the remarriage of the plaintiff wife.

In addition to the express provision for monthly payments of $300 ‘for support and maintenance’ of the wife, the property settlement agreement contains other provisions with reference to separate and community properties of the parties. It contains no provision for termination of the monthly support payments on death of the husband or remarriage of the wife.

Neither the interlocutory order for payment of similar monthly payments, pursuant to contemporaneous stipulation in the divorce action, dated the same day as the property settlement agreement nor the interlocutory judgment of divorce approves or makes reference to the property settlement agreement.

The trial court concluded that the property settlement agreement ‘is an inseverable and integrated property settlement agreement’ and that the obligation for the monthly payments thereunder and under the interlocutory judgment of divorce ‘was not terminated by the death of the decedent or by the remarriage of the plaintiff.’

The complaint tendered two causes of action, the first of which was based on the provisions of the property settlement agreement and the aforesaid interlocutory decree of divorce. The second cause of action was for declaratory relief. The trial court concluded that declaratory relief was not necessary or appropriate since ‘all issues between the parties can be determined under the first cause of action’.

By its judgment the court allowed and established the claim of plaintiff against the estate of decedent in the sum of $7,500, the total of monthly payments unpaid, but did not allow any interest on such claim against decedent's estate.

Turning our attention first to the appeal of defendant executor from the whole of the aforesaid judgment, it is urged by him that unless property settlement agreements executed subsequent to the 1951 amendment to Section 139 of the Civil Code provide to the contrary, payments for support terminate on death of the obligor or remarriage of the other party whether such payments are severable or included in an inseverable integrated agreement, as the provisions of the 1951 amendment are by implication included in the agreement for such payments.

Prior to the 1951 amendment to Section 139 of the Civil Code, there was contained therein a provision that the obligation of a husband to support his wife terminates upon the remarriage of the latter. In 1951, Section 139 was amended to provide, in part, that ‘Except as otherwise agreed by the parties in writing, the obligation of any party in any decree, judgment or order for the support and maintenance of the other party shall terminate upon the death of the obligor or upon the remarriage of the other party.’

At the outset, it should be noted that the 1951 amendment to Civil Code, Section 139, by its very language restricts the application of such section to any ‘decree, judgment or order’ and provides that the obligation of support contained in such a judicial adjudication terminates on the death of the husband or the wife's remarriage, unless otherwise agreed by the parties in writing. We are loath to believe that by its language terminating the obligation of support contained in a court order, the legislature intended that such termination of support obligations should apply to contracts fairly and equitably made between the parties, without taint of fraud or oppression. Such a forced construction would not only amount to judicial legislation under the guise of construction, but would completely ignore the provisions of Civil Code, Section 158, which expressly provide that a husband and wife may contract with respect to their property.

Appellant's contention that we must regard the provisions of Section 139 of the Civil Code as it read at the time of the execution of the agreement here in question, as written into the contract, and that strong public policy demands that support be terminated upon death of the husband or remarriage of the wife was rejected by the court in the case of Taliaferro v. Taliaferro, 125 Cal.App.2d 419, 424, 270 P.2d 1036, 1040, wherein it was said: ‘Sec. 139 places no limitations upon the rights of husband and wife to contract with each other as they please, and if the husband for adequate consideration contracts to give support beyond that for which he is strictly obligated, he has the right to thus freely contract with his wife. This is not being imposed upon him by the power of the court, but is something which he undertakes voluntarily, and in the present case, with advice of counsel.’

It is now the established law of this state that where the husband agrees to make periodic payments to a divorced wife, such obligation is not terminated by his death or by the remarriage of the wife where such obligation is an integral and inseverable part of a property settlement agreement or where the parties have agreed otherwise in writing. Taliaferro v. Taliaferro, supra, 125 Cal.App.2d at page 424, 270 P.2d 1036; Rosson v. Crellin, 90 Cal.App.2d 753, 756, 203 P.2d 841; Lane v. Bradley, 124 Cal.App.2d 661, 665, 268 P.2d 1092; Harnden v. Harnden, 102 Cal.App.2d 209, 210, 227 P.2d 51; Landres v. Rosasco, 62 Cal.App.2d 99, 106, 144 P.2d 20. In other words, where the support provisions is integrated with provisions for division of property, it would be unfair to hold that such payments were terminated on the death of the husband or remarriage of the wife merely because it was not expressly stated to the contrary.

In the action now engaging our attention the court specifically found that the property settlement agreement of July 25, 1953 ‘compromised and settled the community property rights of the parties, which rights and the extent of the community property were in dispute,’ that the provision for payment of $300 per month was intended ‘to be and the same was an indivisible part of said property settlement agreement’ and that ‘said contract was and is an inseverable and integrated property settlement agreement.’ Conversely, the court also found that such payments were not made as ‘support and maintenance payments, rather than as installments in settlement of the parties marital property rights.’

In the opening paragraph of the property settlement agreement now before us the parties agreed that they ‘desire to effect a final and complete settlement of their property rights.’ Paragraphs X and XI provide for a waiver and release by each of all claimes against the other arising out of the marriage, including any claim for support and maintenance, ‘except as herein provided.’

Reference to the property settlement agreement clearly indicates to us that the parties thereto were attempting to effect a complete adjustment of their property and the benefits thereof were to be accepted in full satisfaction of support, maintenance or alimony. From an examination of the agreement herein we are satisfied that, although the periodic payments were labeled ‘for support and maintenance’ both in the agreement and concededly in the interlocutory decree, the provision for them was an integral part of a property settlement agreement and it would be contrary to the clearly expressed intention of the parties to hold that the provision for monthly payment for a specified time constituted a separable agreement for the payment of alimony, maintenance or support. What we have herein enunciated finds support in the cases of Dexter v. Dexter, 42 Cal.2d 36, 41, 42, 265 P.2d 873; Fox v. Fox, 42 Cal.2d 49, 52, 53, 265 P.2d 881: Taliaferro v. Taliaferro, supra; Lane v. Bradley, supra; Harnden v. Harnden, supra; Rosson v. Crellin, supra; Landres v. Rosasco, supra.

Defendant's contention that the payments here under consideration must be deemed to be alimony because designated as being for ‘support and maintenance’ in the property settlement agreement and in a document filed by the parties in the divorce proceeding entitled ‘Stipulation in Re Alimony, etc.’ is unavailing for the reason stated in Fox v. Fox, supra, 42 Cal.2d at page 53, 265 P.2d at page 883, ‘The labels adopted by the parties are not conclusive, since the agreement must be considered as a whole.’

Equally unavailing is defendant executor's contention that because the interlocutory judgment made no reference to the property settlement agreement that the payments of the husband must be considered as solely alimony and that such obligation terminated with his death. It is manifest from the record that the provisions for payments by the husband in the interlocutory judgment of divorce were adopted from and based upon the agreement of the parties. The provision for payment to the wife of $300 per month on the first day of each month until July 1, 1956, is the same in the decree and in the agreement except for the date upon which payments were to commence. In the agreement, executed July 25, 1953, such payments were to begin on August 1, 1953. In the judgment such payments are ordered to commence on October 1, 1953, a time subsequent to the date the decree was granted on August 21, 1953. Obviously, it was only proper for the decree to order payments to start in the future. We therefore conclude that the trial court was justified by substantial evidence in finding that the obligation of the husband to make periodic payments to his divorced wife for her support and maintenance was an integral and inseparable part of the property settlement agreement here in question, does not come within the purview of the limitations imposed by Civil Code, Section 139, and was not therefore terminated by the death of the husband or plaintiff's remarriage.

We now come to a consideration of the appeal of plaintiff Ruth M. Hilton from that portion of the judgment which failed to provide for interest on the sums due her thereunder.

It is plaintiff's contention that where a rejected creditor's claim has been subsequently adjudged to be valid, interest is properly allowable from the date of the presentation of the claim.

Defendant executor on the contrary asserts that a claim against a decedent's estate, whether allowed by the personal representative or established by judgment of the court after rejection, bears interest at the legal rate only from date of order for payment.

We are in accord with the contention of defendant executor. While it is true that some of the earlier cases relied upon by plaintiff hold that she would be entitled to interest from the time of presentation of her demand to defendant executor, Pico v. Stevens, 18 Cal. 376, 378; In re Kennedy's Estate, 94 Cal. 22, 23, 29 P. 412; White v. Deering, 38 Cal.App. 516, 518, 179 P. 401, we are convinced that the cited cases do not furnish authority for her contention in view of statutory changes in the Probate Code with reference to the prior prevailing rule allowing interest on claims against decedents' estate.

In the case of Estate of Girard, 110 Cal.App.2d 203, 204–203, 242 P.2d 669, 670, the court reviews some of the earlier cases in which it was held that an ‘allowed claim’ bears interest ‘from the date of the allowance’, and calls attention to the fact that since the amendment of Section 713 of the Probate Code, such allowed claim is subject to contest by any person in interest and therefore, concludes that an allowed claim does not bear interest from the date of allowance. That until an order of court is made directing the executor or administrator to pay a claim, it is simply an acknowledged debt of the estate, bearing interest at the contract rate. In the instant case, where the claim is not based upon a contract for the payment of interest, we are satisfied that it is only after the judgment was rendered herein directing defendant executor to pay plaintiff's claim, that such claim would bear interest at the statutory rate.

The judgment is affirmed. In the interests of justice it is ordered that each party bear his respective costs on appeal. Rule 26(a), Rules on Appeal.

WHITE, Presiding Justice.

DORAN and FOURT, JJ., concur.