NOBLE ET AL v. BEACH ET AL (1941)

Plaintiffs brought this action for declaratory relief for the purpose of securing an adjudication that as judgment creditors of Milton J. Wiren they have a lien on an undivided two–thirds interest in certain real property in Alameda county, or, in lieu thereof, that they have a lien on an undivided one–third interest in certain real property in San Francisco. From a judgment that they have no interest in either parcel, and that certain of the defendants own such property free of any claim of plaintiffs, this appeal is taken on the judgment roll.

The two parcels of real property involved constituted a part of the estate of Amanda W. Wiren, mother of Milton J. Wiren, and of defendants Mildred Tellier and Ruth A. Williams. By her will, Amanda W. Wiren devised these two parcels in equal undivided shares to her three children. Prior to the death of Amanda W. Wiren plaintiffs had acquired a judgment against Milton J. Wiren, and abstracts of the judgment were properly recorded in Alameda and San Francisco counties. After recording their lien the plaintiffs caused execution sales to be had in both Alameda and San Francisco counties of the interest of Milton J. Wiren. They purchased the debtor's interest in the Alameda county property for $700, and his interest in the San Francisco county property for $750. The trial court found that when this action was brought Milton J. Wiren still owed on the judgment on principal and interest the sum of $4,619.49.

Prior to the date of either of the execution sales, one of the daughters of Amanda W. Wiren filed a petition in the probate proceeding for the partition among the three legatees of the Alameda county and San Francisco county properties. The order for the partition was made and entered subsequent to the execution sales. By this order of partition the Alameda county property was allocated to Milton J. Wiren in sole ownership, and the San Francisco county property was divided between the two other legatees. Subsequently, Milton J. Wiren sold his interest in the Alameda county property to defendant Frank Beach, who purported to redeem that parcel from the execution sale by paying to plaintiffs the sum of $777––the amount bid by plaintiffs, plus penalties and interest, for the interest of Milton J. Wiren in the Alameda county property. Thereafter, a final decree of distribution was entered in the estate of Amanda W. Wiren. That decree was in accordance with the order of partition that had been made in the probate proceeding and with the deed of Milton J. Wiren, that is, the interest of Milton J. Wiren in the Alameda county parcel was distributed to Beach as Wiren's assignee. This proceeding was instituted after the decree of distribution had become final. The trial court determined that plaintiffs had no interest in either parcel and quieted the title of defendants to those parcels.

The following table of events sets forth the various steps taken by the parties in the order that they occurred:

June 26, 1934––Plaintiffs obtained a judgment against Milton J. Wiren in Alameda county.

June 29, 1934––Abstract of that judgment duly and properly recorded in Alameda county.

April 18, 1935––Amanda W. Wiren died testate, and her will filed for probate in San Francisco. By that will she devised a parcel of real property in Alameda county and a parcel in San Francisco county to her son Milton J. Wiren, and to her two daughters in equal undivided shares.

October 20, 1935––Plaintiffs recorded abstract of their judgment against Milton J. Wiren in San Francisco county.

November 15, 1935––Execution filed in the records of the estate, and it was recorded in San Francisco county on January 14, 1936.

January 21, 1936––Execution levied by the sheriff on the interest of Milton J. Wiren in the San Francisco county property.

January 23, 1936––Ruth A. Williams, one of the legatees of Amanda W. Wiren, filed a petition in the estate proceedings to partition all of the real property in the estate.

January 26, 1936––Execution levied by the sheriff on the interest of Milton J. Wiren in the Alameda county property.

February 17, 1936––Sheriff's sale of the interest of Milton J. Wiren in the Alameda county property. Plaintiffs purchased the same for $700. Sheriff's certificate delivered to plaintiffs.

February 18, 1936––Sheriff's sale of the interest of Milton J. Wiren in the San Francisco county property. Plaintiffs purchased the same for $750. Sheriff's certificate delivered to plaintiffs.

February 19, 1936––Certificate of sale of the interest of Milton J. Wiren in Alameda county property recorded in Alameda county.

August 13, 1936––Partition ordered in the estate proceedings; all Alameda county property allocated to Milton J. Wiren, and San Francisco county property allocated to the other two legatees.

September 11, 1936––Deed from Milton J. Wiren to Frank Beach by which, for value received, Wiren transferred and conveyed all of his right, title and interest in and to the Alameda county property to Beach. This deed recorded January 8, 1937.

January 8, 1937––Beach redeemed the Alameda county property for the amount bid by plaintiffs, plus interest and penalties.

April 26, 1937––Decree of final distribution in the estate of Amanda W. Wiren made and entered by the probate court in San Francisco, by the terms of which the Alameda county property was distributed to Frank Beach as the grantee of the equity of redemption of Milton J. Wiren.

January 22, 1938––This action instituted by plaintiffs for declaratory relief, and to secure an adjudication as to plaintiffs' rights in the Alameda county and San Francisco county properties.

The procedure adopted by plaintiffs as judgment creditors to obtain a lien on the interest of their debtor in the estate of his mother was proper. A judgment creditor may obtain, before distribution, a judgment lien on the interest of the debtor as heir or devisee of an estate. McGee v. Allen, 7 Cal.2d 468, 60 P.2d 1026; Martinovich v. Marsicano, 137 Cal. 354, 70 P. 459. It is also clear that the interest of an heir, prior to distribution, is subject to execution. § 688, Code Civ.Proc.; Estate of Lind, 1 Cal.2d 291, 34 P.2d 486; 5 Cal.Jur.Supp., p. 751, § 1313. Plaintiffs followed the procedure prescribed by statute.

Plaintiffs contended before the trial court, and contend on this appeal, that an undivided two–thirds interest in the Alameda county property is subject to their judgment lien, or, in lieu thereof, that an undivided one–third interest in the San Francisco county property remains subject to their lien or execution sale. It is their view that the decree of distribution did not conclude their rights because such rights, being dependent on judgment liens, were not cognizable in the estate proceedings.

The crucial question presented on this appeal is whether, when appellants purchased the interest of Milton J. Wiren in the Alameda county and San Francisco county properties, did they then purchase the undivided one–third interest in each parcel then owned by Wiren, or did they purchase the interest to which Wiren would be entitled on final distribution?

The respondents contend that the execution sales were of such interest as the judgment debtor should be entitled to receive on distribution, that is, of the entire interest in the Alameda county property, with the result that the redemption of the property by Beach, transferee of the judgment debtor, vested in Beach sole ownership of the Alameda county property free of any claim of plaintiffs. It is also urged by respondents that appellants have no interest in the San Francisco county property by virtue of their purchase of Wiren's interest at the execution sale prior to distribution, because on distribution the judgment debtor was entitled to no interest in the property. It is also claimed by respondents that appellants should have asserted their rights at the time of distribution.

In this state the law is clear that a legatee's title vests upon the decedent's death, subject to administration. § 28, Prob.Code. Based on this major premise, appellants urge that under the will of Amanda W. Wiren her son, Milton J. Wiren, received an undivided one–third interest in the Alameda county property which, subject to administration, vested in Milton J. Wiren upon her death. The execution sale, in Alameda county, which was held prior to the partition, was of the interest that Milton J. Wiren then had in that property, that is, of the undivided one–third interest. It is settled law that a sheriff's deed following an execution sale conveys only the interest which the judgment debtor had at the date of the execution and date of the sale, and does not, and cannot, convey any after acquired interest. Emerson v. Sansome, 41 Cal. 552; Kenyon v. Quinn, 41 Cal. 325; Frink v. Roe, 70 Cal. 296, 11 P. 820; 11 Cal.Jur., p. 127, § 69; § 700, Code Civ.Proc. It is also a well–settled and general principle that on partition of property held in cotenancy the lien existing on an undivided interest attaches to the land allotted to the cotenant against whose interest the lien was a charge. This rule is codified in this state in section 769, Code of Civil Procedure, which provides:

“When a lien is on an undivided interest or estate of any of the parties, such lien, if a partition be made, shall thenceforth be a charge only on the share assigned to such party; but such share must first be charged with its just proportion of the costs of the partition, in preference to such lien.”

Appellants recognize that a judgment lien, on the interest of a legatee, or even an execution sale of that interest, is subject to being defeated by the costs of administration, or, in certain circumstances, by a partition. But, in the instant case, they have a lien on any real property acquired by Milton J. Wiren in Alameda county by virtue of the recordation of their judgment. During administration, and prior to partition, they purchased at execution sale the then interest of Wiren in the Alameda county property––a one–third undivided interest. They also purchased, at a similar sale, the then one–third interest of Wiren in the San Francisco county property. Subsequently, by the probate partition, Wiren lost his interest in the San Francisco county property, but was allotted the entire Alameda county property––his former one–third plus the two–thirds formerly vested in the other two legatees. By the partition appellants lost all rights in the San Francisco county property. When they purchased at the San Francisco execution sale they did so subject to the right of the legatees to partition. But what happened as to the Alameda county property? Appellants were the owners, subject to administration, of an undivided one–third interest in this parcel by virtue of their purchase of the interest of Wiren. Certainly, by that purchase of an undivided one–third interest, they did not get title to the other two–thirds when it was allotted to Wiren. Such a rule would be highly unfair to a debtor. It would mean, for example, that if a legatee had a one–tenth interest worth, let us say, $1,000, in a piece of Alameda county property under a will, and a judgment creditor bought that interest at an execution sale for its value of $1,000, and then, by virtue of a partition in probate, the judgment debtor was awarded the entire parcel worth $10,000, if respondents are correct, the judgment creditor becomes the owner of the entire tract. That just cannot be, and it is not, the law. Appellants became the owners of an undivided one–third interest in the Alameda county property by virtue of the purchase of that interest at the Alameda county execution sale. That interest was subject to the administration of the estate, which included the possibility that the interest might be defeated by a partition. When Wiren was subsequently allotted the entire interest in the Alameda county parcel in the probate partition, appellants remained the owners of the undivided one–third interest, subject to redemption, and Wiren became the owner of the undivided two–thirds interest. This two–thirds interest immediately became subject to appellants' judgment lien. When Wiren conveyed to Beach, and the latter redeemed, he redeemed only the interest purchased by appellants––the undivided one–third interest. As to the two–thirds, he took that subject to the judgment lien, and now holds it subject to that lien.

The contention of respondents that a partition does not confer a new title on the cotenant is correct as a general proposition (Potrero Nuevo L. Co. v. All Persons, 29 Cal.App. 743, 156 P. 876), but that rule of law cannot operate to confer on an execution purchaser at the expense of his debtor a greater title than that purchased at the execution sale.

Respondents urge, however, that even if appellants had a lien on the undivided two–thirds interest they should have sought protection of that lien in the proceedings for the distribution of the estate, and, having failed to do so, they are barred by the decree of distribution, which is res judicata as to their rights. Under that decree the Alameda county property was awarded to Beach without mention of the judgment lien. It is also urged by respondents that because appellants failed to assert their claims in the distribution proceedings they are estopped to now claim a lien, and that such failure renders them guilty of laches. These contentions are unsound. In this state it is well–settled that the probate court on distribution is without power to pass on the claim of one who has, or claims to have, a judgment lien on the interest of a legatee. Such a claim is not against the decedent's estate as such, but is against the interest of a legatee. In Martinovich v. Marsicano, 137 Cal. 354, 70 P. 459, one Martinovich devised his property to his wife and son. On distribution, one–half the property was distributed to the son as devisee and the other one–half to him as assignee of his mother. Pending administration, and prior to the widow's assignment to the son, a creditor of the widow had acquired a judgment lien on her interest in the estate. He did not assert that lien at the time of distribution. Thereafter, he brought this action to quiet title. The trial court held the judgment creditor should have asserted his lien at the time of distribution. This holding was reversed. The court held that the rights of the holder of a judgment or other lien against the share of a devisee or heir were not a proper subject for the consideration of the probate court; that there was no statutory provision requiring the holder of such a lien to present the same at the time of distribution at the peril of having the land distributed freed of his lien. The court properly recognized that distribution to a voluntary transferee of a legatee is proper, but held that the probate court had no power to pass on the rights of a judgment lien claimant at the time of distribution. The decree of distribution in that case, as in the instant case, was silent as to any lien against the interest of the legatee.

The position taken by the Supreme Court in the Martinovich case, supra, has frequently been approved and followed. One of the latest cases on the subject is McGee v. Allen, 7 Cal.2d 468, 60 P.2d 1026. In that case an attachment and judgment lien creditor purchased the interest of a legatee in certain real property at an execution sale, pending administration. The decree of distribution provided that the rights of judgment and attachment creditors should not be determined by the decree but were expressly reserved. In affirming a judgment protecting the execution sale purchaser in an action subsequently brought, the court stated, page 471 of 7 Cal.2d, page 1028 of 60 P.2d:

“This procedure was proper. There is no provision in the Probate Code for determining the rights of attachment and judgment lien creditors in the heir's or legatee's share of the decedent's estate, and such creditors are not entitled to distribution in the probate proceeding, but may urge their claims in a separate suit. Martinovich v. Marsicano, 137 Cal. 354, 70 P. 459; Id., 150 Cal. 597, 89 P. 333, 119 Am.St.Rep. 254; Estate of Crooks, 125 Cal. 459, 58 P. 89; 11B Cal.Jur. 776. Distribution may be made to an assignee of a devisee or legatee where the assignment is admitted, but, where the assignment is challenged, distribution is properly made as in the will provided, and the decree will not preclude the assignee from establishing his rights in an independent proceeding. Estate of Howe, 161 Cal. 152, 118 P. 515; Estate of Ryder, 141 Cal. 366, 74 P. 993.” See, also, Estate of Feraut, 37 Cal.App.2d 12, 98 P.2d 795.

It is true that in the present case the probate court, in its decree of distribution, did not reserve the rights of the lien claimant as was done in the McGee case, supra. This omission is immaterial. If it is improper for the probate court to determine such lien claims, the silence of the decree adds nothing to the distributee's rights. That was exactly the holding in the Martinovich case, supra.

This holding likewise disposes of respondents' contentions that appellants are estopped or guilty of laches in failing to assert their lien at the time of distribution. Obviously, if the probate court had no power to pass on such claims, such failure cannot constitute the basis of an estoppel or make appellants guilty of laches. It adds nothing to respondents' position that appellants filed in the probate court a request for notices as provided by section 1202 of the Probate Code, to the effect that “any person interested in the estate” may file such a request, or that in July of 1937, which was after the decree of distribution, they filed a waiver of all notices required to be given previous to March 1, 1937. If it was improper for the probate court to consider the rights of the appellants, the filing of the request for notices did not confer that power on the court.

Respondents next urge that appellants are estopped because under the decree of distribution it was provided that the sum of $508.12, which represented Milton J. Wiren's share of cash in the estate, should be delivered to the sheriff pursuant to appellants' execution. Respondents invoke the principle that he who accepts the benefit of a judgment cannot avoid its burdens. It is urged that since appellants took advantage of this portion of the decree of distribution they are bound by the other portions of that decree. It seems quite clear that delivery of this sum to the sheriff by reason of the execution does not create an estoppel against appellants asserting their lien against the realty. The cash was distributed by the decree to the judgment debtor but “to be delivered to the sheriff”. This procedure was in accord with the provisions of section 561, Code of Civil Procedure, which has been held to fix the procedure where the writ is one of execution, as well as where an attachment has been levied. Estate of Lind, 1 Cal.2d 291, 34 P.2d 486. But, as that case implied, delivery to the sheriff does not determine any conflicting claims as between the legatee and judgment creditor. The distribution is to the legatee but delivery made to the sheriff to protect the creditor in whatever rights he may have. It necessarily follows that the decree of distribution gave appellants no rights, the acceptance of which precluded them from thereafter asserting their lien. The point is that neither as to the money nor as to the realty could the decree properly determine whether respondents had a lien.

The last point urged by respondents is that, since the appeal is on the judgment roll, and since the court concluded its findings with the provision that allegations of the cross–complaints and affirmative defenses in the answers were true and supported by the evidence, which allegations raised the defenses of estoppel, laches and res judicata, it must be conclusively presumed on this appeal that evidence was introduced which supports the judgment on these grounds. An examination of the answers and cross–complaints shows that the only grounds of estoppel, laches, and res judicata alleged are that appellants should have asserted their claim in the probate court. This theory, as already pointed out, is untenable. The trial court simply found that the allegations of the pleadings in question were true. Accepting the facts alleged as true, as we must, the legal conclusion that there was an estoppel is erroneous. It certainly cannot be presumed in support of the judgment, that grounds of estoppel neither alleged nor disclosed by the findings were shown by the evidence.

The judgment appealed from is reversed.

PETERS, Presiding Justice.

KNIGHT and WARD JJ., concurred.