HARRIS v. HARRIS

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

Russell S. HARRIS, as Executor of the Estate of Susie Aimeda Harris, Deceased, Plaintiff and Respondent, v. Rolland H. HARRIS and Betty May Harris, his wife, Defendants and Appellants. *

Civ. 19509.

Decided: October 24, 1961

Kaiser & O'Neill, Jeremiah F. O'Neill, Jr., Robert A. Kaiser, John E. Nolan, Oakland, for appellants. Clarence DeLancey, Raymond C. Gericke, Myron A. Martin, Oakland, for respondent.

This is an appeal by the defendants Rolland H. Harris and Betty May Harris, his wife, from a judgment in an action to recover community property, in favor of the plaintiff Russell S. Harris as executor of the estate of Susie Almeda Harris.

The plaintiff-executor Russell S. Harris is the son of Marshall C. Harris and Susie Almeda Harris, and the father of the defendant Rolland H. Harris. He brought this action to recover one-half of the community personal property allegedly transferred by Marshall C. Harris, during a period when his wife was an adjudged incompetnet, to his grandson Rolland H. Harris and Betty May Harris, his wife.

The record shows that Marshall C. Harris and Susie Harris were married in 1894. They amassed considerable community property after their marriage and the personal property transferred to defendants, the subject of this action, was part of this community property. In 1945, Susie Harris made a will giving her estate to her husband Marshall C. Harris, if he was alive six months after her death, and if her husband was not alive, then her estate was to go to her son Russell S. Harris. In 1948, Susie Harris was declared incompetent, and remained so until her death. Her husband Marshall C. Harris was appointed her guardian. He relinquished this guardianship to his son Russell S. Harris on March 28, 1957. The son remained guardian until the death of his mother on September 26, 1957. Marshall C. Harris died on December 10, 1957. As he did not outlive his wife Susie by six months, Russell S. Harris succeeded to Susie Harris' estate under the terms of the will. This action was commenced August 27, 1958.

The community personal property transferred to defendants by Marshall C. Harris during the time of Susie Harris' incompetency consisted of cash, stocks and bonds. There was substantial evidence that during this incompetency Susie Harris was unable to understand financial matters, to recognize people, or to take care of herself physically, although there was some testimony that she had her lucid moments. The only consideration alleged for these transfers was ‘love and affection.’ Russell S. Harris, while he was guardian, knew that there were some transfers of community property by his father Marshall C. Harris to defendants, but he did not know the full extent of such transfers until after Susie Harris' death. He took no action to contest such transfers during his period as guardian, although he did not affirmatively consent to them.

There was evidence of prior gifts of considerable community property by Marshall C. Harris, both to the plaintiff and defendants. These were prior to Susie Harris' incompetency, and she had knowledge of them and apparently consented to them. These gifts were not made the subject of this action. There was also evidence that, during the period of Susie Harris' incompetency and the transfers which are the subject matter of this action, the plaintiff and his father were not on the best of terms; that his father's prior will had in effect disinherited him; that after Susie Harris' death the father Marshall C. Harris made out a new will which provided for the plaintiff. The defendants stated the reason for the new will was that they, the defendants, had been adequately provided for by the prior transfers.

The court found that during the period of the transfers Susie Harris was not lucid, nor did she understand financial transactions, nor did she expressly or impliedly consent to or have actual or constructive knowledge of the transfers. Further, that the transfers were made without valuable consideration; that the plaintiff while guardian had knowledge of some of the transfers, and as executor of Susie Harris' estate he had standing to sue.

The court then entered judgment against defendants for one-half of the subject community personal property transferred to them.

The defendants' first contention on appeal is that the plaintiff Russell S. Harris, suing as executor of the estate of Susie Almeda Harris, does not have standing to sue to recover one-half of the community property transferred to defendants by Marshall C. Harris. We agree with this contention.

Civil Code, section 172, states (prior to the 1959 amendments), so far as is pertinent:

‘The husband has the management and control of the community personal property, with like absolute power of disposition, other than testamentary, as he has of his separate estate; provided, however, that he cannot make a gift of such community personal property, or dispose of the same without a valuable consideration, or sell, convey, or encumber the furniture, furnishings, or fittings of the home, or the clothing or wearing apparel of the wife or minor children that is community, without the written consent of the wife.’

A review of the California decisions involving Civil Code, section 172, indicates that the husband's transfer of personal community property, without valuable consideration or without the wife's consent, immediately vests the property in the donee subject to avoidance by the wife upon proof of facts necessary to that end. Spreckels v. Spreckels, 1916, 172 Cal. 775, 784, 158 P. 537; Trimble v. Trimble, 1933, 219 Cal. 340, 344, 26 P.2d 447; Mayr v. Arana, 1955, 133 Cal.App.2d 471, 477, 284 P.2d 21. The wife can set aside the transfer of the personal property by the husband, which is without valuable consideration or her consent, in its entirety druing the lifetime of her husband. Britton v. Hammell, 1935, 4 Cal.2d 690, 52 P.2d 221. After his death, the widow may set aside one-half of the unauthorized transfers (Trimble v. Trimble, supra), or recover one-half of the value from her husband's estate. Fields v. Michael, 1949, 91 Cal.App.2d 443, 448, 205 P.2d 402.

We are of the opinion that the right to so avoid a transfer of community personal property made by the husband in violation of the statute is, however, personal to the wife, intended solely for her benefit and her protection (Italian American Bank v. Canepa, 1921, 52 Cal.App. 619, 621, 199 P. 55; Pomper v. Behnke, 1929, 97 Cal.App. 628, 638, 276 P. 122; Blethen v. Pacific Mut. Life Ins. Co., 1926, 198 Cal. 91, 100, 243 P. 431; Spreckels v. Spreckels, supra; Schindler v. Schindler, 1954, 126 Cal.App.2d 597, 603, 272 P.2d 566), although not so personal that a guardian of an incompetent wife during her lifetime would not have the right to maintain an action on her behalf (Scott v. Austin, 1922, 57 Cal.App. 553, 207 P. 710); the right being purely personal to the wife, it must follow that if she, or her guardian in case of incompetency, fails to act during her lifetime to invalidate a gift of community personal property, the gift becomes valid in its entirety. United States v. Stewart, 9 Cir., 1959, 270 F.2d 894, 900 [applying California law]; Mayr v. Arana, supra; Italian American Bank v. Canepa, supra. A personal right, which is not assignable, does not survive the death of the person entitled to it, even if a wife whose right is involved is incompetent and the guardian has not acted on her behalf during her life. Estate of Blair, 1954, 42 Cal.2d 728, 731, 733, 269 P.2d 612.

We can find no fault with plaintiff's propostions as set forth in Hunt v. Authier, 1946, 28 Cal.2d 288, 169 P.2d 613, 171 A.L.R. 1379; Vragnizan v. Savings Union, etc., Co., 1916, 31 Cal.App. 709, 161 P. 507; Fields v. Michael, supra. However, they concern actions by the surviving spouse against the estate of her deceased husband, and not with an action by her executor after her death.

Hansen v. Bear Film Company, Inc., 1946, 28 Cal.2d 154, 168 P.2d 946, and Pearl v. Pearl, 1918, 177 Cal. 303, 177 P. 845, cited in respondent's reply brief, concern cases wherein transfers of property were made to parties to be held in trust for the transferor. However, the court in the case before us did not find that the defendants held the property in trust and the citations are inapplicable.

Stafford v. Martinoni, 1923, 192 Cal. 724, 221 P. 919, and Makeig v. United Security Bank & T. Co., 1931, 112 Cal.App. 138, 296 P. 673, also cited in respondent's reply brief, concern actions for an accounting of community property which was in the deceased's possession at death, and do not present the same fact situations as found in this case. Likewise, Probate Code, section 201, concerning succession of community property after death, does not affect the husband's management and control during the lifetime of the parties. Trimble v. Trimble, supra, 219 Cal. at pages 340, 345, 346, 26 P.2d 477.

The defendants' next contention is that the evidence is insufficient to show lack of consent to the gifts of community property by Susie Harris. There is no merit in this contention as the evidence supports the finding.

The evidence is more than sufficient to show that Susie Harris, as an incompetent, was incapable, by affirmative conduct, of giving her consent. As often pointed out, ‘The rule is established that when a finding of fact is attacked on the ground that there is not any substantial evidence to sustain it, the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the finding of fact.’ Key v. McCabe, 1960, 54 Cal.2d 736, 738, 8 Cal.Rptr. 425, 356 P.2d 169, 170.

Likewise, defendants' contention that the evidence is insufficient to support the finding that the transfers were made without the actual or constructive knowledge of Susie Harris, and that she did not have the mental condition to have such knowledge, is without merit.

Knowledge has been defined as the act or state of knowing. Witters v. United States, 1939, 70 App.D.C. 316, 106 F.2d 837, 840, 125 A.L.R. 1031. There was substantial evidence that Susie Harris as an incompetent was incapable of understanding or having knowledge of financial matters. It would follow that she was incapable of either actual knowledge or constructive knowledge. The latter is defined as actual knowledge of facts sufficient to put a prudent man on inquiry. (Civ.Code, § 19.)

The defendants' last contention is that ‘love and affection’ constitute a ‘valuable consideration’ for the transfer of the community property and the transfers were not gifts.

The only consideration alleged for the transfer to defendants was ‘love and affection.’ The court found this inadequate. Civil Code, section 172, states that the husband cannot dispose of the community personal property ‘without a valuable consideration.’ A ‘valuable consideration’ is such as money and the like, to be distinguished from blood and natural affection which is not ‘valuable consideration.’ The term ‘valuable consideration’ is equivalent to the statutory term ‘good consideration’ as used in Civil Code, section 1605. Horton v. Kyburz, 1959, 53 Cal.2d 59, 65, 346 P.2d 399; Aden v. City of Vallejo, 1903, 139 Cal. 165, 168, 72 P. 905. Further, it has been held that a transfer for ‘love and affection’ is a gift and not a transfer for consideration. Estate of Hall, 1908, 154 Cal. 527, 531, 98 P. 269.

The court did not err in finding that there was not any ‘valuable consideration’ given for the transfer of personal property to the defendants.

The judgment is reversed, with directions to the trial court to enter a judgment in favor of appellants.

SHOEMAKER, Justice.

KAUFMAN, P. J., and AGEE, J., concur.