Daughters of Jesus v. Gee

457 P.2d 471, 153 Mont. 342, 1969 Mont. LEXIS 434
CourtMontana Supreme Court
DecidedJuly 16, 1969
DocketNo. 11605
StatusPublished
Cited by1 cases

This text of 457 P.2d 471 (Daughters of Jesus v. Gee) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Daughters of Jesus v. Gee, 457 P.2d 471, 153 Mont. 342, 1969 Mont. LEXIS 434 (Mo. 1969).

Opinion

MR. JUSTICE HASWELL

delivered the Opinion of the Court.

Decedent’s creditor recovered a personal judgment against decedent’s heirs in the amount of $2,154.35 plus accrued interest

Decedent is Howard C. Gee, a Lewistown attorney, who died on September 4, 1964 following an extended hospitalization. Plaintiff is St. Peter’s Hospital in Lewistown where decedent was hospitalized for approximately 3% years prior to his death. Defendants are Howard S. Gee and Robert F. Gee, the surviving adult sons and sole heirs at law of decedent.

Decedent was hospitalized in plaintiff hospital from December 12, 1960 until his death on September 4, 1964. On January 1, 1962 decedent owed plaintiff hospital a balance of $2,154.35 for hospitalization and professional care. Thereafter decedent’s account with the hospital was handled in such a manner that his insurance policy, payments by the Fergus County Welfare Department, and payments of Old Age Assistance administered by the Welfare Department sufficed to cover his hospital bills incurred from January 1, 1962 to the date of his death. During this period Old Age Assistance in the amount of $3,056.00 was [344]*344paid and in addition the Fergus County Welfare Department paid plaintiff hospital the sum of $6,952.66.

Decedent’s two sons were not living in Lewistown during the period of their father’s hospitalization prior to his death, one being in Europe and one residing in North Dakota. They came to Lewistown in May, 1961, visiting their father in the hospital and conferring with a Lewistown attorney concerning their father’s affairs. Thereafter they proceeded to handle their father’s estate and business affairs during his lifetime without having been appointed his guardian, and after his death without administrators of his estate.

During this period of time their father’s house was taken by a bank, apparently for mortgage indebtedness; his car was surrendered in satisfaction of a note; his law library was sold and his office equipment taken in connection with payments of back rent; his accounts receivable were turned over to the Credit Bureau of Lewistown for collection and the collections were at least partially applied to pay off other indebtedness of decedent; and on one account over $4,000 was collected and disbursed with the sons receiving part of the proceeds.

After disbursements on decedent’s indebtedness, the sons still have remaining approximately $2100 which they hold individually. No purpose would be served in detailing the specific of these various transactions; suffice it to say that there were numerous transactions involving the transfer and disbursement of the assets of their father’s estate by the sons both before and after his death, all without the benefit of guardianship or probate proceedings.

On October 20, 1966 plaintiff hospital filed the instant case against decedent’s two sons and sole heirs at law to collect the unpaid hospital bill of $2,154.35 with accrued interest. The theory on which recovery was sought was that the sons inter-meddled with and dissipated the assets of decedent’s estate to the point where the remaining assets were insufficient to satisfy plaintiff’s claim; that in so doing they rendered themselves [345]*345personally liable for payment as involuntary trustees for the benefit of plaintiff as a creditor of decedent.

Trial was held before the district court of Fergus County without a jury. Thereafter the district court entered findings of fact and conclusions of law to the effect that decedent owed the hospital the amount in question, that the sons took possession of and distributed his estate in excess of $4,000 in assets, that in so doing they became trustees for the benefit of decedent’s creditors, and that they are individually liable to the plaintiff for the amount of the unpaid hospital bill. Judgment was entered accordingly in favor of plaintiff in the amount of $2,-154.35 plus accrued interest. Defendants appeal from this judgment.

Two underlying issues for review are presented by this appeal: (1) Did the district court err in finding that defendants had disposed of assets of decent exceeding $4,000? (2) Did the district court err in concluding that defendants became trustees for the benefit of the creditors of decedent, specifically plaintiff, and holding defendants personally liable for the creditor’s claim ?

The first issue requires no extended discussion. The district court found “that in disposing of the assets of the said Howard C. Gee they handled in excess of $4,000.00”. The evidence shows that defendants received in cash at least $4,212.65 belonging to their father consisting of payments of accounts receivable, royalties, and dividends. Their disbursement of some of these monies to pay decedent’s funeral expenses, debts, and collection fees in no way reduces the amount they handled in disposing of their father’s assets. The district court was correct in this finding.

The second issue is the principal issue in this ease. It correctly involves two inter-related issues: (1) Did defendant become involuntary trustees of decedent’s assets for the benefit of his creditors? and (2) Can an individual creditor of a decedent recover a personal judgment against the heirs of an estate [346]*346based upon the latter’s disbursement of tbe assets of the estate without probate proceedings?

All the property of an intestate decedent, both real and personal, is chargeable with payment of his debts. Section 91-2801, R.C.M.1947. Such property passes immediately upon his death to his heirs subject to (1) the control of the district court and (2) the possession of any administrator appointed by the court. Section 91-402, R.C.M.1947; Lamont v. Vinger, 61 Mont. 530, 202 P. 769. Thus, in the sense that decedent’s property is subject to the payment of his debts and the title of his heirs is subject to that burden, decedent’s property may be said to be impressed with a trust for the benefit of his creditors. Bancroft’s Probate Practice 2d § 2, p. 5; Madison v. Buhl, 51 Idaho 564, 8 P.2d 271.

But does this authorize a single creditor to recover a judgment against the heirs at law individually on the theory that they breached their duties as involuntary trustees by dissipating the assets of the estate without the benefit of probate rendering them individually liable to him as the beneficiary of the trust? Not at all.

It must be noted that the instant suit is brought by one of many creditors for its sole benefit. This case is in no sense a class action brought for the benefit of all creditors. Although plaintiff claims a right of action as the beneficiary of an involuntary trust and seeks to impose a personal liability on the heirs for breach of that trust, the heirs still hold the remainder of the cash assets of the estate in their individual names which would be subject to immediate execution upon plaintiff’s judgment. Thus that which is properly part of the assets of decedent’s estate is, in effect, available for payment of a personal liability of the heirs.

There áre still other more practical reasons why plaintiff cannot prevail. In effect, the plaintiff has circumvented the Montana probate code. That code provides statutory priorities for the payment of the debts of an estate. Section 91-3601, [347]*347R.C.M.1947.

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Cite This Page — Counsel Stack

Bluebook (online)
457 P.2d 471, 153 Mont. 342, 1969 Mont. LEXIS 434, Counsel Stack Legal Research, https://law.counselstack.com/opinion/daughters-of-jesus-v-gee-mont-1969.