Estate of Cook

64 Cal. App. 3d 852, 135 Cal. Rptr. 96, 20 U.C.C. Rep. Serv. (West) 1342, 1976 Cal. App. LEXIS 2167
CourtCalifornia Court of Appeal
DecidedDecember 15, 1976
DocketCiv. 37951
StatusPublished
Cited by2 cases

This text of 64 Cal. App. 3d 852 (Estate of Cook) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estate of Cook, 64 Cal. App. 3d 852, 135 Cal. Rptr. 96, 20 U.C.C. Rep. Serv. (West) 1342, 1976 Cal. App. LEXIS 2167 (Cal. Ct. App. 1976).

Opinion

Opinion

BRAY, J. *

Petitioner and appellant Connie M. Marks appeals from a judgment of the Monterey County Superior Court.

Issues Presented

1. The probate court had jurisdiction to resolve the claims of appellant.

*856 2. The order is appealable.

3. There is substantial evidence to uphold the court’s determination that the assignment was not fraudulent.

4. The court correctly held that the entire amount of the bank’s claim had priority over appellant’s lien.

Record

On February 16, 1974, Otto Cook died leaving a will and codicil which provided for a legacy to his son Dr. Christopher Cook of $25,000 cash and 500 shares of the Eastman Kodak Corporation. The will and codicil were admitted to probate in Monterey County on March 8, 1974. On March 29, Dr. Cook executed an assignment of his entire interest in the estate to the Chase Manhattan Bank as security for a loan. This assignment was filed with the probate court on April 1. Consideration for the assignment totaling $45,000 was paid to Dr. Cook between March 20 and April 29. On August 14, a writ of execution directed against Dr. Cook’s interest in the estate was served upon Martin May, executor of the estate. The writ was obtained by appellant Connie Marks, divorced wife of Dr. Cook. Dr. Cook was in arrears in alimony and child support payments to appellant in the sum of $28,966 plus $7,513 interest.

On October 25, 1974, appellant filed in the probate court a “Petition for Determination of Entitlement to Distribution of Estate.” On November 8, appellant filed a “Motion for Inquiiy into Circumstances of Assignment of Interest of Legatee (Probate Code Section 1020.1)” on the ground that the assignment to the Chase Manhattan Bank was fraudulent.

A hearing was held in which evidence was taken and the parties stipulated that the court later receive further interrogatories and depositions. The court decided adversely to appellant’s petition and motion. Findings of fact and conclusions of law and judgment in favor of the bank were duly filed.

Facts

On January 11, 1961, appellant Connie Marks and respondent Dr. Christopher Cook were divorced in the Republic of Mexico. On January 26, 1966, by stipulated judgment in the San Francisco Superior Court the *857 validity of the Mexican judgment was affirmed and Dr. Cook was ordered to pay alimony and child support totaling $450 per month. Dr. Cook quickly fell into arrears in his payments. An order to show cause was issued in September 1968 when payments were over $4,000 in arrears; however the order was never served on Dr. Cook because his whereabouts was not known.

Otto Cook, the father of Dr. Christopher Cook, died on February 16, 1974. Included in the will and codicil left by Otto Cook was a legacy for Dr. Cook of 500 shares of stock in Eastman Kodak and $25,000. Martin May, the executor of the estate, informed Dr. Cook of the terms of the will soon after the death of Otto Cook. Dr. Cook, a resident of New York, was in California briefly at his father’s death. Shortly after the death of Otto Cook, Dr. Cook began discussions with Joseph A. Wilson of Chase Manhattan Bank in New York City about obtaining a loan. The bank first rejected the idea of issuing a mortgage on a house Dr. Cook wished to buy. The parties discussed a secured loan and the bank suggested that Dr. Cook use his interest in his father’s estate as collateral. After further discussion Dr. Cook sent a letter of confirmation to the bank, and on March 29, 1974, executed an assignment of his interest in the estate to the bank in return for a $45,000 loan. The assignment was filed with the Monterey County Superior Court Clerk on April 1, 1974.

Chase Manhattan advanced $7,300 to Dr. Cook prior to actual execution of the assignment and extended the rest of the $45,000 by April 29, 1974.

On August 1, 1974, Bryan Jones telephoned Martin May and advised May that he represented Mrs. Connie Marks with respect to support moneys owed her by Dr. Cook.

On August 6, 1974, Dr. Cook applied for a $3,000 increase in the original loan from Chase Manhattan. Dr. Cook and Mr. Wilson, on behalf of the bank, agreed that the additional loan would also be secured by the assignment of Dr. Cook’s legacy. The additional funds were advanced on August 16. Also in August Dr. Cook applied for an installment credit loan through Chase Manhattan. The bank agreed to commit itself to the sum of $10,000. On August 21, funds were advanced to the respondent pursuant to the commitment. Security for repayment included both a passbook account and an interest in any cash proceeds remaining after payment of the principal obligation secured by respondent’s interest in the estate.

*858 On August 14, 1974, Martin May, as the executor of Otto Cook’s estate, was served with a copy of a writ of execution and notice of levy evidencing Dr. Cook’s San Francisco support arrearages of $28,966 plus interest. The next day Mr. May wrote Bryan Jones as follows: “In view of [the] assignment there would be nothing in the estate subject to the levy.” At the same time he advised Dr. Cook of the levy.

The executor of the estate, pursuant to a decree of preliminaiy distribution, had forwarded Dr. Cook’s 500 shares of stock to the bank in late July 1974. The bank sold the Eastman Kodak stock in October 1974 for about $33,000 reducing Dr. Cook’s indebtedness on the $48,000 loan to $15,099. According to the terms of Otto Cook’s will, Dr. Cook is entitled to distribution of an additional $25,000.

The position of Dr. Cook and apparently of the executor of the estate is that the assignment takes precedence over the judgment lien and that the entire legacy of Dr. Cook must be distributed to Chase Manhattan Bank. Appellant contends that the undistributed $25,000 legacy is fully subject to her lien.

1. The probate court had jurisdiction to resolve the claims of appellant.

In Fount-Wip, Inc. v. Golstein (1972) 29 Cal.App.3d 751 [105 Cal.Rptr. 780], a judgment creditor attached the debtor’s interest in a decedent’s estate and the probate court ordered distribution of the interest to the sheriff subject to the claim of the creditor. The former wife of the debtor then filed a third-party claim pursuant to section 689 of the Code of Civil Procedure which sets forth the procedure for litigating the title to personal property upon which there has been a levy, and the creditor responded by filing a petition under the statute to determine title. The creditor made various contentions that the procedure was improper. The trial court however found the procedure followed by the third party claimant was appropriate and that the levy was ineffective against an assignment to her executed prior in time to the creditor’s suit against her former husband.

The question with which we are confronted is whether the procedure followed in Fount- Wip is the exclusive method of determining the issue between an assignee of an interest in an estate and an attaching creditor.

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Bluebook (online)
64 Cal. App. 3d 852, 135 Cal. Rptr. 96, 20 U.C.C. Rep. Serv. (West) 1342, 1976 Cal. App. LEXIS 2167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estate-of-cook-calctapp-1976.