Presumption of Undue Influence Found

In addition to the foregoing there was in the present case active participation on the part of the proponent in the execution of the will. He drew the will, prepared it in his own handwriting, and presented it to the decedent and the subscribing witnesses for execution. It has been said that the drawing of the will by a beneficiary thereunder who was at the time the attorney for the testator, coupled with the latter's age, suffering, and disease, raised the implication or presumption that the will was procured by the undue influence of the attorney. Estate of Morey, 147 Cal. 495, 508, 82 P. 57. Here we have no sufficient showing that the decedent was mentally weak or incapable of performing the testamentary act, but we have the active participation on the part of the beneficiary in the execution of the will. Where one who unduly profits by a will sustains a confidential relationship to the testator and actively participates in procuring the execution of the will, the burden is upon him to show that the will was not induced by his undue influence. Estate of Shay, 196 Cal. 355, 363, 237 P. 1079; Estate of Gallo, 61 Cal. App. 163, 214 P. 496. This is but another way of saying that upon the concurrence of the elements just mentioned, a presumption of undue influence has arisen which must be overcome by the proponent.

In re Lances' Estate (1932) 216 Cal. 397, 403-404

Demenita

Incapacity not found even though dementia present:

Dr. Bowers, who attended Mrs. Merralls while she was confined in the hospital for treatment for the fractured hip, testified that in September, 1929, she was suffering from arteriosclerotic dementia, which had progressed to a degree, according to his opinion, which rendered her incompetent. He said this affliction was progressive in its character and usually slow in its progress, consisting of a hardening of the arteries ultimately resulting in failure to nourish the brain by means of adequate blood supply, and that mental deterioration gradually follows. Arteriosclerosis is usually recognized as an affliction of old age. It may be aggravated by disease or dissipation. It may be evidenced by general debility, atrophied muscles, poor circulation, low temperature, loss of appetite, impaired memory, rambling conversation, and mental and physical exhaustion. It is said that the true arteriosclerosis frequently causes neuralgia of the heart or angina pectoris, which is a common cause of death. It is apparent that the mere existence of arteriosclerosis does not render a person mentally incompetent. The effect of this disease upon the faculties of the mind depends upon its flagrancy and the degree to which it has [130 Cal.App. 682] progressed. Probably most old people suffer to some extent from hardening of the arteries. Many who suffer from angina pectoris or arteriosclerosis retain their mental faculties to the end of life. The question for solution in the present case is not whether the grantor was afflicted with arteriosclerosis, but rather, had that disease progressed to an extent that her mind had become so deteriorated she was incompetent to execute the deed of conveyance which is involved herein?

Doctor Bowers is the only expert witness who testified regarding her mental incompetency. Upon the contrary, Jessie Guilloz, who had been her intimate friend for twenty years, testified that Mrs. Merralls was competent to transact business. Mr. Dunkley, an agent for Marsh & Co., which firm loaned the money which was secured by a mortgage on the premises, visited her at the hospital in March after the execution of the deed, and conversed with her regarding the transaction in which his firm was interested. He said she was then "perfectly rational."

In view of the fact that Mrs. Merralls was a widow of considerable wealth and possessed of various properties; that for many years she had transacted all of her own business affairs; that a prominent financial institution had made loans of money to her upon real estate security without questioning her competency; that with the exception of Charles Merralls, the grantor's son, who said that he thought his mother was incompetent because "she was easily influenced in the transactions of real estate affairs," no acquaintance or individual, other than Doctor Bowers, testified to circumstances or conditions intimating that she was incompetent; that the execution of the deed was in strict accordance with the specific provisions of her former contract for conveyance, which was made by her four years previous thereto, and that the consideration for the property was apparently fair and adequate, we are unable to say there is not an abundance of evidence to support the findings and judgment to the effect that the grantor was competent and that the deed is valid and binding.

The burden of proving that a deed was procured by fraud, mistake, or undue influence ordinarily rests upon the party who challenges the validity of the instrument. 9 Cal. Jur. 231, § 108. When, in the absence of confidential [130 Cal.App. 683] relationship, a conveyance of property is made for a fair and adequate consideration between parties who deal at arm's length, every presumption is in favor of the validity of the transaction, and the burden is upon him who challenges the competency of the grantor to prove the invalidity of the instrument by a preponderance of the evidence. One may be weak-mined or easily influenced, but these conditions alone are insufficient to warrant the canceling of a deed for incompetency or undue influence. If the consideration for the conveyance is adequate, and the transaction is fair and equitable, and the grantor has sufficient intelligence to understand the nature of the deal, the purpose and effect thereof, and the power to exercise her own free will with relation thereto, the validity of the deed should be upheld. 9 Cal. Jur. 224, § 103; Carleton v. Bonham, 60 Cal. App. 725, 739, 214 P. 503.


Merralls v. Slawski (1933) 130 Cal.App. 678, 681-683.

Weakness Of Mind

Before proceeding to discuss the law of contractual incompetency applicable in this state to a contract entered into by a manic-depressive psychotic, we note that the Legislature has catagorized incompetency due to weakness of mind as follows: (1) Total weakness of mind which leaves a person entirely without understanding and renders such person incapable of making a contract of any kind (Civ.Code, s 38); (2) a lesser weakness of mind which does not leave a person entirely without understanding but destroys the capacity of the person to make a contract, thus rendering the contract subject to rescission (Civ.Code, s 39); and (3) a still lesser weakness which provides sufficient grounds to rescind a contract because of undue influence. (Civ.Code, s 1575; see Odorizzi v. Bloomfield School Dist., supra, 246 Cal.App.2d at p. 131, 54 Cal.Rptr. 533.) The last mentioned statute, in subdivision 2 thereof, provides that undue influence consists 'In taking an unfair advantage of another's weakness of mind.' In Odorizzi it is noted that the lesser weakness of mind referred to in [262 Cal.App.2d 835] section 1575 need not be long lasting or wholly incapacitating, but may consist of such factors as lack of full vigor due to age, physical condition, emotional anguish, or a combination of such factors. (P. 131, 54 Cal.Rptr. 533.) It would appear, therefore, that since the manic-depressive psychosis is a mental illness it is clearly a weakness of mind in the context of Civil Code section 1575.


Smalley v. Baker (1968) 262 Cal.App.2d 824, 834-835(Manic depression insufficient weakness to render contract fit for recission).

When is a Section 850 Necessary?

Paulino Ponce died. His youngest daughter alleged that her brothers stole "an estimated $103,000 from Ponce's pockets and personal safe within hours of his death." When the successor trustee filed a petition to confirm distribution, Mota objected and argued that the distribution to her (allegedly) thieving brothers should be reduced by the amount of their prior take.

The trial court ruled that Mota was not entitled to an offset of her brothers’ distribution, because she had filed a section 850 petition. The appellate court overturned that decision and explained that a section 850 petition returns property to the estate. Since Mota was not seeking an order that her brothers return money to the estate, a section 850 petition was unnecessary:


As discussed above, the court concluded Mota was not entitled to an offset against Villalobos because she had not filed a section 850 petition. Mota contends the court’s order creates an irreconcilable conflict between section 17200, which pertains to “internal affairs of the trust,” and 17200.1, which governs “transfers” of trust property. According to Mota, the court’s order would require all disputes concerning trust property to be adjudicated pursuant to section 850, even those pertaining to internal trust affairs. We need not determine whether the statutes conflict, because we conclude section 17200.1 does not govern Mota’s pursuit of an offset.

Section 850 is found within part 19 of division two of the Probate Code, which deals with the “Conveyance or Transfer of Property Claimed to Belong to Decedent or Other Person.” (§§ 850-859.) Under section 850, a trustee or any interested person “may file a petition requesting that the court make an order under this part: [¶] . . . [¶] Where the trustee has a claim to real or personal property, title to or possession of which is held by another.” (§ 850, subd. (a)(3)(B).)3 Section 17200.1 broadens the application of section 850. It provides in full: “All proceedings concerning the transfer of property of the trust shall be conducted pursuant to the provisions of Part 19 (commencing with Section 850) of Division 2.” (§ 17200.1.)

Pursuant to section 17200.1, a trustee or interested person must file a section 850 petition when the “proceedings concern[ ] the transfer of property.” (§ 17200.1.) Because Mota’s objections to the Distribution Petition do not concern “the transfer of property,” she need not file a section 850 petition. Mota contends Villalobos, Paulino, and Marcos stole $103,000 from the Trust and used it to pay their attorney fees and those of two other beneficiaries. Mota does not seek a “transfer of property” from these beneficiaries — she merely seeks a reduction in the amount of money they will receive during the final distribution of the trust estate assets.

If Mota had sought a court order returning the $103,000 to her (or to the trust estate), she would have been obligated to file a section 850 petition. (See, e.g., Estate of Myers (2006) 139 Cal.App.4th 434, 440 [creditor of decedent’s estate had standing to bring section 850 petition seeking an order requiring purchaser of decedent’s property to disgorge profits he obtained from the resale of the property]; Iskenderian v. Iskenderian (2006) 144 Cal.App.4th 1162, 1165 [plaintiff properly filed section 850 petition to adjudicate ownership of a trademark where plaintiff contended she, not the trust, owned the property].) Mota did not seek an order transferring the money to her, or to the trust estate. As a result, the court wrongly concluded she could not pursue an offset claim without first filing a petition pursuant to section 850.

Section 850, subdivisions (a)(1) and (a)(2), also provide a procedure for specific enforcement of written contracts to convey real property or transfer personal property made during the decedent’s lifetime.

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Reading Your Brother's Mail

Mota, the youngest daughter of Ponce (deceased) accused her brother’s of stealing money from their father “within hours of his death.” When the successor trustee petitioned the court for an order of distribution, Ponce objected on the basis that since some of her brothers had already received a “distribution” from their father, their distribution should be decreased by the amount to their self-help.

To that end, Mota sought discovery of financial records from her brother. Her brother objected. Mota moved to compel discovery and the trial court denied the motion. The appellate court overturned the trial court’s order denying the discovery. The court stated two simple discovery rules:

Two simple discovery rules:

1. If a beneficiary files an objection to an account, the beneficiary can conduct discovery – even from a co-beneficiary.
2. If a beneficiary does not object (or otherwise put a fact in dispute), discovery is not proper:


“[T]here is no question but that the discovery procedures found in the Code of Civil Procedure are available for use in probate proceedings.” (Forthmann v. Boyer (2002) 97 Cal.App.4th 977, 987 (Forthmann).) This is so because the Probate Code incorporates the discovery provisions in the Civil Discovery Act. (§ 1000 [“[e]xcept to the extent that this code provides applicable rules, the rules of practice applicable to civil actions, including discovery proceedings . . . apply to, and constitute the rules of practice in, proceedings under this code” (italics added)]; Code Civ. Proc. § 2016.010 et seq.) As a result, parties to probate proceedings “are entitled to conduct discovery — e.g., depositions, interrogatories, requests for admissions, etc.” (Ross et al., Cal. Practice
Guide: Probate (The Rutter Group 2006) ¶ 15:445, p. 15-118.)

A beneficiary who objects to a trustee’s accounting is entitled to conduct discovery. (Forthmann, supra, 97 Cal.App.4th at pp. 987-989; Coberly v. Superior Court (1965) 231 Cal.App.2d 685, 690.) In Forthmann, trustees filed a petition for approval of an accounting. Without filing any objections, a beneficiary sought a continuance to conduct discovery to evaluate whether to object to the accounting. (Forthmann, at p. 981.) The trial court denied the beneficiary’s request for a continuance and approved the accounting. (Id. at p. 980.) The appellate court affirmed. (Id. at p. 985.) It held “the filing of a formal objection or response is a necessary predicate to the conduct of any discovery with respect to the trustee’s interim accounting. Absent an objection or response, even if made only on information and belief, there is no issue joined by which the relevancy of any proposed discovery may be judged.” (Id. at p. 988.) A corollary of the Forthmann rule is that a beneficiary, having filed formal objections to a trustee’s petition, may conduct discovery relevant to those objections.

Unlike the beneficiary in Forthmann, Mota’s objections created an issue of fact to be adjudicated by the court: Whether Villalobos, Marcos, and Ponce stole money from the Trust. Accordingly, she was entitled to conduct discovery relevant to that issue. Villalobos concedes as much in his brief: He notes the “filing of a formal objection or response is a necessary predicate to the conduct of any discovery.” It does not follow, then, that Mota — having objected to the Distribution Petition — could not conduct discovery relevant to her objections.

http://www.metnews.com/sos.cgi?1007%2FG038289

Scrooge

Paulino Ponce died. His youngest daughter alleged that her brothers stole "an estimated $103,000 from Ponce's pockets and personal safe within hours of his death." Such a scene reminds one of Dickens’ A Christmas Carol, where the charwoman, the laundress & the undertaken divide the soils taken from dead Scrooge. Perhaps, if Ponce were alive he would look upon his children with the same feelings as his alleged literary likeness:

Scrooge listened to this dialogue in horror. As they sat grouped about their spoil, in the scanty light afforded by the old man's lamp, he viewed them with a detestation and
disgust, which could hardly have been greater, though they had been obscene demons, marketing the corpse itself.

This case gave rise to two useful findings on the scope of discovery and the need for section 850 petitions, which we will examine in turn.

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Evidence from a Codicil

Facts: Father wrote a will which left everything to his brother. Father then wrote a codicil which disinherited his son. Son sought to have the codicil set aside on the ground of undue influence

Rule: Where codicil does not change manner or extent of testamentary disposition in will, proper question of undue influence must be determined solely by reference to acts bearing upon execution of codicil.


Quote: In a situation such as is here presented, with reference to the question of whether an attempted direction by a testator of the disposition of his property has been unduly influenced by another person, the law is well established that, excepting only as clearly is made to appear to the contrary, a codicil to a will is an affirmation of the provisions contained in the former testamentary declaration. And, since it is here conceded that by no provision or term of the codicil was any attempt made by the testator to change or to modify either the manner or the extent of the testamentary disposition contained in the will proper, it follows that to all intents and purposes the question of whether the will and its codicil, considered as a single instrument, was induced by the undue influence of any person or persons exerted upon the testator, must be considered and determined solely by reference to the acts of such person or persons as they related to or bore upon the execution of the codicil. (253)

In re Estate of Horton 128 Cal.App. 249, 252 (1932)