Opinion
For Opinion on Hearing see, 120 Cal.Rptr. 407, 533 P.2d 1047.
Opinion on pages 650-669 omitted.
HEARING GRANTED
[113 Cal.Rptr. 630]Archbald, Zelezny & Spray, and Kenneth L. Moes, Santa Barbara, for plaintiff and appellant.
Robert R. Stone, Santa Barbara, for defendant and respondent.
COLE, Associate Justice (Assigned).
John L. Cole, Judge of the Superior Court of Los Angeles County, assigned by the Chairman of the Judicial Council.
Plaintiff, the Board of Regents State Universities, State of Wisconsin, appeals from a judgment of the pleadings, entered in favor of defendant in an action to collect, from the estate of a former conservatee, now deceased, a claim for $150,000.
The principal issue raised by this appeal is whether the mere fact of the existence of a conservatorship of an estate deprives the conservatee of capacity to contract, and therefore renders void a contract entered into by him. We conclude that absent a specific showing and adjudication of incompetence, contracts entered into by a conservatee are not void, though they may be subject to avoidance upon any of the grounds applicable to other persons, and the enforcement of a conservatee's contract against the conservatorship estate is limited by the provisions of Probate Code section 1858.
Before reaching this issue it is necessary to consider another: was the complaint in this matter filed within the time established by the three month statute of limitations found in Probate Code section 714? We conclude that it was.
It is convenient to set out the facts relating to both question before discussing either. We do so in chronological order.
On August 25, 1967, Ralph E. Davis, Jr. (now the defendant herein in his capacity as executor of the estate of Ralph E. Davis, deceased) filed a petition for appointment of himself or some other fit person as temporary conservator of the senior Davis. We will refer to the latter as Mr. Davis or the conservatee, and to the former as defendant. The petition alleged that Mr. Davis was over the age of eighty years and was unable to properly care for his property and that it was for his best interest that a conservator of his estate be appointed. It was alleged that Mr. Davis' estimated personal assets were $4,198,018.65, that his estimated liabilities were $2,327,452.90 and that his estimated net worth was $1,870,565.75. On the same day the court appointed defendant as the temporary conservator of the estate of Mr. Davis. Defendant on that day filed his oath and letters of temporary conservatorship issued. Also on August 25, 1967, defendant filed a petition seeking appointment of himself as conservator of the estate of Mr. Davis. This petition alleged that Mr. Davis was unable to properly care for himself or for his property and that it was for his best interest that a conservator be appointed of his estate.
Thereafter a memorandum was filed which referred to a conference held in chambers (the conference is not part of the record) and which suggested that if the court decided that there should be a conservatorship of Mr. Davis' estate a five member committee should be appointed as co-conservators. The memorandum was signed by both defendant and Mr. Davis, and by their respective counsel. The committee was suggested to be composed of four named persons, including defendant; the fifth member was to be either Mr. [113 Cal.Rptr. 631] Davis himself or another individual named in the memorandum. On October 25, 1967, the court ordered that the five individuals, not including Mr. Davis, be appointed as co-conservators. The order contained a finding that the facts alleged in the petition were true. There was neither an allegation in the petition nor a finding by the court that Mr. Davis was either insane or incompetent.
On January 6, 1968, the conservatee signed a writing agreeing to give the sum of $150,000 on a matching basis for a stadium to be built at Wisconsin State University-Platteville.
'January 6, 1968
The appeal herein is from a judgment on the pleadings. The motion for such a judgment performs the function of a general demurrer and is to be treated in the same fashion on appeal. E. g., Colberg, Inc. v. State of California, 67 Cal.2d 408, 411-412, 62 Cal.Rptr. 401, 432 P.2d 3; it therefore 'admits the material facts alleged in the pleadings of the adverse party.' (Hospital Council v. Superior Court, 30 Cal.App.3d 331, 338, 106 Cal.Rptr. 247, 252.) Plaintiff's complaint and exhibits incorporated in it alleged, among other things, that Mr. Davis first pledged the matching amount at a fund raising dinner held by plaintiff at Mr. Davis' request on January 6, 1968, and then reduced the pledge to writing. It was also alleged that plaintiff relied on the pledge and advertised or announced it in various ways, and that persons at the dinner and others in consideration of the pledge had made actual contributions of $54,098.02 and pledges in the sum of $21,132.75 as of November 19, 1068, and 'That prior to the subscription of the deceased he had a long and continuing relationship and interest in the State University at Platteville and had served for a number of years as director of Wisconsin Mining School which institution preceded the institution now known as Wisconsin State University--Platteville.'
On January 15, 1968, letters of conservatorship were issued to the five individuals who had been appointed by the court the preceding October, and they apparently took their oaths and qualified as conservators on that day. (Prob.Code, § 1801.)
On September 10, 1968, the conservators filed in the probate court a petition for an order to show cause why the conservators should not be instructed to rescind Mr. Davis' 'pledge' but Mr. Davis died on September 21, 1968, before the petition could be heard.
Defendant became the executor of Mr. Davis' estate. Plaintiff filed a claim in the probate proceedings, based upon the agreement to match funds. On December 13, 1968, defendant rejected the claim. On December 16, 1968, notice of the rejection was mailed to plaintiff.
The complaint alleges, and the answer admits, that notice of rejection was mailed on December 13, 1968, but the declaration of service states that December 16, 1968, was the mailing date. In right of the view we take of the statute of limitations issue the difference is of no moment.
During the last part of February or the beginning of March, 1969, the clerk's office of the superior court received by mail from the office of the Attorney General of Wisconsin the complaint herein, together with the necessary filing fees. The complaint seeks to recover on the facts set out in the rejected claim. The complaint did not meet the requirements of form prescribed by Rule 201, California Rules of Court. It was signed and verified by the executive director of plaintiff and was also signed by the Wisconsin Attorney General. No member of the State Bar of California signed the document. The clerk's office was not certain whether the complaint was 'acceptable.' Within twenty-four hours it was submitted by the clerk to the presiding judge of the court below for his review as to form and for advice as to whether out of state counsel could file pleadings in the court. The judge immediately determined [113 Cal.Rptr. 632] that the complaint was acceptable for filing so far as its form was concerned. He did not so advise the clerk's office, but instead kept the document until he could decide whether the question concerning counsel affected the right to file the document. The judge kept the complaint in his office until he determined that out-of-state attorneys could file pleadings in the court. He then returned the document to the clerk's office on or about May 2, 1969. A filing stamp bearing that date was put onto the complaint.
Defendant generally demurred to the complaint, urging the two points to be decided in this appeal, and requesting that judicial notice be taken of the facts set forth in the conservatorship proceeding (some of which we have recited above). The demurrer was overruled and defendant answered. Thereafter, on November 1, 1971, defendant moved for judgment on the pleadings on the ground the complaint failed to state a cause of action for the reasons set forth in the demurrer. On January 3, 1972, the motion was denied. On September 13, 1972, defendant renewed his motion for judgment on the pleadings, alleging the Court of Appeal's decision in Place v. Trent, 27 Cal.App.3d 526, 103 Cal.Rptr. 841 (filed August 29, 1972, after the denial of the original motion) required granting of the motion. The renewed motion was granted, and judgment on the pleadings was entered in favor of defendant. Plaintiff appeals.
A defendant whose general demurrer has been overruled properly may renew the objection by way of a motion for judgment on the pleadings. (Shabrick v. Moore, 195 Cal.App.2d 56, 58, 15 Cal.Rptr. 310 [1961]; 4 Witkin, Cal.Procedure (2d ed.) 2822-2823, 'Proceedings Without Trial,' § 170.)
The Complaint is not Barred by Probate Code section 714
Probate Code section 714 requires that actions on rejected claims be commenced within three months after the date of service of the notice of rejection if the claim is then due; if the claim is not due the action must be brought within two months after it becomes due.
The claim filed herein was for the full $150,000 pledged by Mr. Davis. It shows on its face that only $75,230.77 of that amount was then due. Accordingly, as to the not due portion, the complaint was clearly filed on time irrespective of the facts set forth above. (Newhall v. Newhall, 227 Cal.App.2d 800, 810, 39 Cal.Rptr. 144.)
An action is commenced when the complaint is filed with the court (Code Civ.Proc., §§ 350 and 411.10). 'Filing a paper consists in presenting it at the proper office, and leaving it there, deposited with the papers in such office. Indorsing it with the time of filing is not a necessary part of filing. . . . When filed, it is considered an exhibition of it to the court, and the clerk's office in which it is filed represents the court for that purpose. . . .' (Tregambo v. Comanche M. & M. Co., 57 Cal. 501, 506; Andrews v. Metzner, 83 Cal.App. 764, 769-770, 257 P. 203; Estate of Carroll, 190 Cal. 105, 111, 210 P. 817; Hoyt v. Stark, 134 Cal. 178, 180, 66 P. 223.)
Since the complaint which was tendered to him by plaintiff here was not in the form prescribed by Rule 201, subparagraphs (a) through (c) of the California Rules of Court, the clerk did not violate his duties when he turned the papers over to the presiding judge. Rule 201, subdivision (g) provides: 'The clerk of the court shall not accept for filing or file any papers which do not comply with this rule; provided, however, that for good cause shown, the court may permit the filing of papers which do not comply herewith.' Thus, it was perfectly proper for the clerk to inquire of the judge whether to accept the complaint for filing.
Within a day after the complaint had been received and, therefore, well within the time which the complaint had to be filed, the judge determined that insofar as the form of the papers was concerned the complaint was acceptable for filing. [113 Cal.Rptr. 633] At that time the full requirements of Rule 201(g) were met.
It is the duty of the clerk to file properly tendered papers upon delivery, and his failure to do so does not forfeit any right of the party delivering the papers for filing. (Tregambo, supra, 57 Cal. at 506; Beck v. Pasadena Etc. Water Co., 130 Cal. 50, 58, 62 P. 219; W. H. Marston Co. v. Kochritz, 80 Cal.App. 352, 357, 251 P. 959; but cf. City of Los Angeles v. Superior Court, 264 Cal.App.2d 766, 771, 70 Cal.Rptr. 826, where the papers never were put into the custody of the clerk.)
Similarly, the fact that the judge neglected to advise the clerk in this connection because the judge had not yet determined the right of out-of-state counsel to present the complaint should not be considered to have worked a forfeiture of any rights of plaintiff. The judge did in fact determine subsequently that counsel's out-of-state status did not preclude plaintiff from filing its complaint.
'It is common practice, and one sustained by general usage in all of the states of this Union, we believe, to permit upon request an attorney holding a license to practice law from one state to appear in the courts of a sister state and there take part in the trial of an action pending in said courts.' (In re McCue, 211 Cal. 57, 67, 293 P. 47, 51. )
Effective September 13, 1972, long subsequent to the events at issue herein, the Supreme Court adopted Rule 983 of the California Rules of Court which formalizes the procedure to be followed when out-of-state counsel move to be admitted pro hac vice.
The action of the clerk in seeking advice from the presiding judge as to whether to allow the complaint to be filed and the latter's determination that it should be filed in effect was an application of this common practice.
We are not unaware of cases holding that corporations may not appear in propria persona and that pleadings or papers filed by a non-lawyer on behalf of a corporation should be stricken. (Himmel v. City Council, 169 Cal.App.2d 97, 100-101, 336 P.2d 996; Paradise v. Nowlin, 86 Cal.App.2d 897, 898, 195 P.2d 867; see Pickett v. Municipal Court, 249 Cal.App.2d 844, 846, 58 Cal.Rptr. 24 and Roddis v. All-Coverage Insurance Exchange, 250 Cal.App.2d 304, 311, 58 Cal.Rptr. 530; but see Johnson v. Hayes Cal. Builders, Inc., 60 Cal.2d 572, 577, 35 Cal.Rptr. 618, 387 P.2d 394 .) This principle has no application where an out-of-state attorney with the permission of the court is properly allowed to appear in the matter. That, in effect, is what happened here.
The fact that the judge did not make his determination until a date when an otherwise applicable statute of limitations would have run cannot be taken advantage of by defendant. Given the court's approval of the form of the complaint and the standing of counsel, the complaint was a valid document when filed and delay should not be charged against the plaintiff.
Under the circumstances, the complaint was filed with the court (Code Civ.Proc., § 411.10) when first the clerk and then the judge had it in their possession 'to be kept with the papers in the cause' (Tregambo, supra, 57 Cal. at 506). Therefore, the action is not barred by the provisions of section 714 of the Probate Code.
After the initial demurrer was filed by defendant plaintiff moved the court for an order nunc pro tunc to correct the record to reflect that plaintiff's complaint was actually filed prior to March 13, 1969. The motion was supported by declarations setting forth the facts which we have referred to above. The court granted the motion. In light of our conclusion expressed above, we need not consider defendant's argument that the order was void as in excess of jurisdiction.
The Mere Fact that a Conservator is Appointed Does Not Render a Conservatee Incompetent to Contract Although Payment of His Debts Out of the Conservatorship Estate is Subject to the Limitations of Section 1858 of the Probate Code
We then turn to the principal question before us and elaborate the reasons for our holding that the mere fact a conservator is appointed does not render a conservatee's contracts void.
[113 Cal.Rptr. 634]We can start with the proposition that a person who is placed under guardianship is not capable of entering into a valid contract (Hellman Commercial T. & S. Bk. v. Alden, 206 Cal. 592, 608-609, 275 P. 794.) As will be seen in a moment, putting aside the case of minors, the statutes define the only class of persons who may be placed under guardianship as those who are insane or incompetent. (Prob.Code, §§ 1405, 1460). The root basis for our conclusion that conservatees are not ipso facto deprived of contractual competence is founded on the proposition that conservatorships are not to be automatically equated with guardianships, albeit that the two concepts are closely related and may overlap each other in some instances. A study of the history leading to the establishment of conservatorships in California, a comparison of statutory differences between guardianships and conservatorships and prior case authority shows that this is so.
Probate conservatorships first appeared in California law by virtue of a 1957 enactment (Stats.1957, ch. 1902, § 1) adding to the Probate Code Division 5, consisting of sections 1701-2207. The legislation was sponsored by the State Bar of California.
Examination of the legislative history makes it clear that both the State Bar and [113 Cal.Rptr. 635] the Senate Judiciary Committee intended that two objectives be accomplished by enacting Division 5. The first objective was to establish conservatorships as an alternative to guardianships in certain instances. In this connection, a person for whom a guardian would be otherwise necessary could avoid the 'stigma' of being labeled insane or incompetent, by choosing (or having his relatives choose) that he be placed under conservatorship instead. In this situation, it is true 'that for all practical purposes a conservator in the case of adults, is merely a guardian under another name. . . .' (Place v. Trent, supra, 27 Cal.App.3d 526, 531, 103 Cal.Rptr. 841, 844.) Whether a given conservatorship was or was not established for this reason is, of course, a question of fact to be established by appropriate allegations in the petition for appointment of a guardian and by appropriate proof at the hearing.
While the conservatorship bill was pending in the Legislature the State Bar commented: 'This bill would add a new division to the Probate Code, creating and defining the office of conservator and the concept of conservatorship. Conservatorships would be an alternative to guardianships in some instances and would provide the benefits of a conservator in certain others wherein guardianships are not now perpemissible. Many elderly or ill persons are reluctant to ask that a guardian be appointed to conduct their affairs of the label of 'incompetent' which attaches to them under the present law. The proposed legislation, by eliminating all reference to 'incompetency,' seeks to overcome this reluctance. Various changes from guardianship proceedings are also made in procedure. . . .' (32 State Bar J. 23.)
The second objective of the conservatorship statutes was to provide 'a new protective relationship, where none previously had been available.' (32 State Bar J. 585, supra.) To accomplish this purpose, as will be seen, the conservatorship statutes made the appointment of a conservator possible for individuals who were not at all incompetent or insane, but who needed protection for other reasons. When it is this objective which is the reason for a specific conservatorship, then it is clear that a conservator is not merely a guardian under a different name, but rather is charged with the fiduciary responsibility of acting for another under circumstances where a guardian would not even be available. Both the statutory language and the case history of the conservatorship act since its passage illustrate this application of the concept of a conservator's functions, as we now will show.
Whether a conservator is appointed because of the conservatee's incompetency or for reasons totally apart from incompetency, he represents the conservatee in dealings with third persons and is thus sometimes called an agent. (Conservatorship of Stewart, 276 Cal.App.2d 211, 214, 80 Cal.Rptr. 738.)
We turn then to a contrast of some of the provisions of the Probate Code which deal with guardianships and conservatorships.
1. Wards as compared to conservatees: We have already referred to the provisions of sections 1405 and 1460, which identify those for whom a guardian may be appointed.
Unless otherwise identified, all statutory citations hereafter are to the Probate Code.
By contrast the class of persons for whom a conservatorship may be established is much broader. Section 1751 [113 Cal.Rptr. 636] identifies potential conservatees. As can be seen, while insanity or incompetency would readily fall within the definition of a conservatee found in section 1751 many of the other kinds of persons for whom a conservatorship might be established are in no way to be thought of as either insane or incompetent. For instance, a conservatee may be appointed for a person 'who voluntarily requests the same and to the satisfaction of the court establishes good cause therefor. . . .' A conservator might be authorized, for example, at the petition of an individual who is the sole owner of a business and who, by reason of anticipated surgery, contemplates being unable to continue it during his recuperation. Conservatorship of Stewart, supra, 276 Cal.App.2d 211, 80 Cal.Rptr. 738 illustrates a kind of conservatee as to whom no question of mental incompetency was raised. There a conservator was appointed on the petition of the conservatee's wife, consented to by the conservatee. The ground was 'that he had suffered a serious heart attack which made it impossible for him to attend to his business affairs.' (276 Cal.App.2d at 212, 80 Cal.Rptr. at 739.) The opinion also shows that when the conservatee recovered from his heart attack, the conservatorship was terminated.
'Upon petition as provided in this chapter, the superior court, if satisfied by sufficient evidence of the need therefor, shall appoint a conservator of the person and property or person or property of any adult person who by reason of advanced age, illness, injury, mental weakness, intemperance, addiction to drugs or other disability, or other cause is unable properly to care for himself or for his property, or who far said causes or for any other cause is likely to be deceived or imposed upon by artful or designing persons, or for whom a guardian could be appointed under Division 4 of this code, or who voluntarily requests the same and to the satisfaction of the court establishes good cause therefor, or who is an absentee as defined in Section 1751.5. The court, in its discretion, may appoint one or more conservators.' (Emphasis supplied.)
Hillman v. Stults, 263 Cal.App.2d 848, 873, 70 Cal.Rptr. 295, 309, is a second case involving a conservatee who was mentally competent. There it was held that the imprisonment or parole of a felon 'with a consequent limitation of civil rights is a cause or disability within the meaning of the conservatorship law of 1957.'
2. Appointment of guardians and conservators: Another distinction between guardianships and conservatorships is found in the process by which guardians and conservators are appointed.
The two positions are defined in substantially the same fashion. 'A guardian is a person appointed to take care of the person or property of another. . . .' (Prob. Code, § 1400.) 'A conservator is a person appointed to take care of the person and property or person or property of a conservatee as defined in Section 1751.' (Prob.Code, § 1701.)
Section 1404 provides that a parent or spouse of an insane or incompetent person may appoint a guardian for such person by will or by deed to take effect upon the death of the person appointed and section 1462 requires that preference shall be given to such persons. By contrast, section 1752 relating to the appointment of conservators provides that the proposed conservatee may, if he has sufficient capacity to form an intelligent preference, nominate a conservator 'who shall be appointed as such by the court unless the court finds that the appointment of such nominee is not in the best interest' of the proposed conservatee. Section 1753 confirms this preference. In this distinction, too, there is a recognition that not all conservatees are incompetent.
3. Section 1858 expressly recognizes that a conservatee may enter into contracts during the existence of a conservatorship: As amended in 1963, section 1858 provides among other things (a) that the conservator shall pay any debts incurred by the conservatee before creation of the conservatorship and (b) that the conservator 'shall pay any debts incurred by the conservatee after the creation of the conservatorship, except that ability to continue to provide the conservatee with the necessaries of life, out of the estate, shall not be impaired.' (Emphasis added.) The section then states that the conservator 'shall pay debts incurred by the conservatee during the conservatorship for the necessaries of life.' With respect to other debts incurred by the conservatee during the conservatorship, [113 Cal.Rptr. 637] the section provides that the conservator shall pay them 'only if they appear to be such as a reasonably prudent person might incur.' The section also provides that if the conservator has any doubt whether a debt should be paid he may petition the court for instructions. Defendant argues that this section indicates a legislative intent to limit the capacity of the conservatee to contract. The argument is that as originally enacted in 1957 the section was substantially the same as section 1501 which simply requires a guardian to pay the just debts of the ward. Accordingly, defendant reads the section, as amended as limiting the conservator in paying certain debts. From this premise, defendant concludes that the section cannot be read more broadly because to do so 'would defeat the stated purposes of the conservatorship law.' We disagree. Such an argument assumes that all conservatorships are synomymous with guardianships. We have already shown that this is not so.
The language of section 1858 necessarily assumes that the conservatee may have capacity to contract. The conservator, being in possession of the conservatorship estate, is in a position to avoid performance of any of the conservatee's contracts upon any defenses available to any other party (e. g., incapacity or fraud), and, in addition, the conservator is given special defenses for the protection of the estate against improvidently incurred debts, as well as all other debts, which would impair the ability of the estate to support the conservatee. This special protection which the Legislature has written into section 1858 would be unnecessary if the contracts of a conservatee were (like those of a ward) void.
The clear legislative intent is that the conservatee (unless incompetent in fact or adjudicated incompetent) has power to contract, but debts created by him during the conservatorship are not to be paid by the conservator if they impair the latter's ability to continue to provide the conservatee with the necessaries of life from estate funds, or if the debt appears not to be such as a reasonably prudent person would incur. This is fully consistent with the purpose of the conservatorship described above: to provide a service for the protection of a person who is in need of help in caring for his business and property, but who is not necessarily incompetent. But given a competent conservatee, an adequate estate and a proper contract, there is nothing in the statute or in the underlying policy of the law which would militate against enforcement.
We reject defendant's argument that the 'debts' referred to in section 1858 should be construed to mean only liability for torts and quasi-contractual obligations. Nothing in the statute suggests that the word carries such a limited meaning here, and nothing in the history or purpose of the statute requires such a strained and limited interpretation of such a common term.
Examination of other provisions of California law confirms our conclusion that contracts entered into by a conservatee are not ipso facto void. 'Statutes on the same subject matter must be construed together in the light of each other, so as to harmonize them, if possible, [footnote omitted] although they were passed at different times, [footnote omitted] and although one deals specifically and in greater detail with the subject than does the other. [Footnote omitted] . . .' (45 Cal.Jur.2d, § 121, pp. 629-630.) It is the basic law of California that 'All persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights.' (Civ.Code, § 1556.) 'Minors and persons of unsound mind, have only such capacity as is defined by Part 1 of Division First [§§ 25-42] of this Code.' (Civ.Code, § 1557.) Under Civil Code section 38 contracts entered into by persons 'entirely without understanding' are void. (Harris v. Harris, 64 Cal. 108, 28 P. 63.) A person is entirely without understanding when he lacks the capacity to understand transactions of the kind involved. In contrast, section [113 Cal.Rptr. 638] 39 of the Civil Code provides that, 'A conveyance or other contract of a person of unsound mind, but not entirely without understanding, made before his incapacity has been judicially determined, is subject to rescission . . .' and section 40 of the Civil Code provides that with certain exceptions '. . . after his incapacity has been judicially determined, a person of unsound mind can make no conveyance or other contract, nor delegate any power or waive any right, until his restoration to capacity. . . .'
As we have seen it is clear beyond doubt that conservatorships may be established for mentally competent persons (section 1751; Conservatorship of Stewart, supra, 276 Cal.App.2d 211, 80 Cal.Rptr. 738; Hillman v. Stults, supra, 263 Cal.App.2d 848, 70 Cal.Rptr. 295; Estate of Wood, supra, 32 Cal.App.3d 862, 108 Cal.Rptr. 522.) The Civil Code sections just discussed are given full force by our holding here. A contrary result would ignore their mandate that there be a judicial declaration of incapacity to contract before a person is deprived of that right.
Other statutes also recognize that conservatees are not necessarily incompetent to contract. The Lanterman-Petris-Short-Act (Welf. & Inst.Code, § 5000 et seq.) dealing with mentally disordered persons and those impaired by chronic alcoholism provides that persons may be placed under conservatorship pursuant to that act with the procedures to be the same as those provided in the Probate Code for conservatorship. (Welf. & Inst.Code, § 5350.) The act expressly states that unless specifically stated to the contrary no person shall forfeit any legal right or suffer legal disability by reason of its provisions (Welf. & Inst.Code, § 5005) and that reports of the officer providing conservatorship investigation may recommend for or against the imposition of a disability to enter into contracts on the part of the conservatee. (Welf. & Inst.Code, § 5357.)
Case law also shows that the mere fact that a conservator is appointed does not amount to an adjudication of insanity or incompetence, and that when the Legislature, for specific purposes desires to equate the appointment of a conservator with the status of incompetence it knows how to do so in express terms. In Schuck v. Myers (1965), 233 Cal.App.2d 151, 43 Cal.Rptr. 215, the court affirmed a divorce decree and rejected a contention that a conservatee was incompetent to maintain the action. The opinion states (at p. 154, 43 Cal.Rptr. at p. 217) 'The mere fact that a conservator is appointed is not a determination that the conservatee is in any wise 'insane or incompetent." Further, the court stated that, 'it was entirely proper for the trial judge, who had ample opportunity to view and consider the appearance of the respective parties, to presume the competency of respondent Alice Myers; . . ..' (See also Hillman v. Stults (1968), 263 Cal.App.2d 848, 873, 70 Cal.Rptr. 295.)
Subsequent to the trial of the Schuck case, Code of Civil Procedure section 372, [113 Cal.Rptr. 639] relating to actions by persons under guardianship, was amended to provide that for the purposes of that section, 'reference to 'incompetent person' shall be deemed to include a person for whom a conservator may be appointed." That amendment was a part of a package of code amendments sponsored by the State Bar to revise and reconcile Probate Code sections 1431 and 1510 dealing with the compromise or other collection of litigated claims on behalf of minors and incompetent persons. (See 37 State Bar J. 585, 597; 38 State Bar J. 485, 500; id. 780.) Since any money or property recovered by or on behalf of a conservatee should be collected and held by the conservator, it was convenient and proper to classify conservators with guardians in those code sections. This 1963 amendment dealt only with the procedural problem there involved and did not affect the status of the conservator in any other respect. In the recent decision of In re Marriage of Higgason, 10 Cal.3d 476, 484, 110 Cal.Rptr. 897, 902, 516 P.2d 289, 295, the court said in connection with the right of a married conservatee to commence an action for dissolution of the marriage, 'Under the terms of section 372 of the Code of Civil Procedure, when an incompetent person is a party to an action he must appear either by a guardian of the estate or by a guardian ad litem appointed by the court in which the action is pending. Although the mere fact that a conservator has been appointed does not constitute a determination that the conservatee is in any way 'insane or incompetent' (cf. Prob.Code, § 1751; Schuck v. Myers, 233 Cal.App.2d 151, 154, 43 Cal.Rptr. 215), section 372 of the Code of Civil Procedure specifically provides that 'reference to 'incompetent person' shall be deemed to include a 'a person for whom a conservator may be appointed.'' Under the circumstances, if the wife, being under conservatorship, had attempted to prosecute the action in her individual capacity, section 732 of the Code of Civil Procedure could have been raised against her right to bring it.' (Emphasis added.)
Place v. Trent (1972), 27 Cal.App.3d 526, 103 Cal.Rptr. 841, involved the validity of a deed of gift made by a conservatee purporting to convey an interest in real property which was a part of the conservatorship estate. The Court of Appeal declared the deed void and affirmed a judgment quieting title in the conservator. That decision is distinguishable from the case at bench in at least two respects. First, Place involved an attempted gift of specific property which was a part of the conservatorship estate. Second, there was a conservatorship of both the person and estate. Arguably, a conservatorship of the person implies a more serious impairment of the conservatee's capacity than a conservatorship of the estate, thought the Place opinion does not discuss that distinction.
A later decision, Estate of Wood (1973), 32 Cal.App.3d 862, 108 Cal.Rptr. 522 (which upheld the exercise of a power of appointment by a person who was mentally competent but for whom a conservator of the person and estate had been appointed said of Place:
'In the cited case of Place v. Trent, supra, 27 Cal.App.3d 526, 103 Cal.Rptr. 841, the transfer was a present grant of real property in which the conservatee retained a life estate. Such a transfer of a substantial part of the conservatorship assets could not be allowed to stand because it would result in making it impossible to use such an asset to raise money if necessary for the care of the conservatee.' (32 Cal.App.3d at 880, 108 Cal.Rptr. at 533.)
The Wood opinion then went on to explain that the conservatorship was no impediment to the exercise of the power of appointment because the appointment would not take effect until the death of the conservatee.
We regard the Wood decision as a further recognition of the function of the conservator in preserving the property of the estate for the support of the conservatee--a function which does not necessarily require voiding the contracts of the conservatee.
[113 Cal.Rptr. 640]Conclusion
Our conclusion is that the establishment of a conservatorship may but does not necessarily include an adjudication that the conservatee is incompetent. No such adjudication appears in the record of this case.
Where the conservatee is competent, but by reason of physical infirmity, age or other sufficient reason is unable to care for his property effectively, conservatorship offers a means whereby the property may be placed in the hands of a judicially supervised fiduciary, to be managed and conserved for the support of the conservatee. The advantages of such a system, as opposed to the appointment of an agent under a general power of attorney, need no elaboration. Such a beneficial application of the conservatorship statute, which was one of the Legislature's objectives, would be severely impaired if the conservatee were compelled to accept, as a part of the bargain, an adjudication of incompetency. The language of the statute, its history and purpose, and the case law are consistent with the view that a contract made by a competent conservatee is not necessarily void.
The judgment is reversed. The case is remanded to the superior court with instructions to set aside its order granting the motion for judgment on the pleadings.
FILES, P. J., concurs.
DUNN, Associate Justice (dissenting).
On August 25, 1967, defendant filed a petition in the Santa Barbara superior court for the appointment of a conservator for his father, Ralph Davis. The petition alleged that Ralph Davis was unable properly to care for himself or his property; on October 24, 1967, the court made an order determining that the allegations of the petition were true and appointed 5 persons (including defendant) as co-conservators of the estate.
The conservatorship was created pursuant to Division 5 of the Probate Code (§§ 1701-2207), section 1751 of which provides in part: 'Upon petition . . . the superior court . . . shall appoint a conservator of the person and property or person or property of any adult person who by reason of advanced age, illness, injury, mental weakness, intemperance, addiction to drugs or other disability, or other cause is unable properly to care for himself or for his property, or who for said causes or for any other cause is likely to be deceived or imposed upon by artful or designing persons, or for whom a guardian could be appointed under Division 4 of this code . . ..' The court determined that the senior Davis was unable properly to care for himself or his property, (apparently because of advanced age).
While I agree that conservatorships and adult guardianships are distinguishable, that fact and the histories of the pertinent code sections as quoted by the majority, do not lead me to conclude that the contracts only of adult persons adjudged to be incompetent or insane are rendered void by the creation of a conservatorship. The majority opinion rests its interpretation of the code sections, to a great extent, upon statements of the sponsoring State Bar of California as reported by a state senate committee. I do not interpret the sponsor's remarks as conveying the meaning ascribed to them by the majority herein. Furthermore, while such statements may be illuminating (Keeler v. Superior Court, 2 Cal.3d 619, 630, 87 Cal.Rptr. 481, 470 P.2d 617 [1970]; People v. Knowles, 35 Cal.2d 175, 182-184, 217 P.2d 1 [1950]; 'California Legislative Materials,' 4 Stanf.L.Rev. 367) they do not necessarily reflect the intent of the state Legislature as a whole in enacting the bill.
It is true that the adjudication of an adult's insanity or incompetence (Prob.Code § 1460) renders a ward incapable of making a valid contract but it does not follow that, because there has been no such adjudication in a conservatorship proceeding, the conservatee is capable of making a valid contract. The powers granted by statute (Prob.Code § 1851 et seq.) to a conservator are nowhere declared to be dependent [113 Cal.Rptr. 641] upon, or even affected by, the condition of the conservatee which brought about the creation of the conservatorship. While creation of a guardianship for an adult is restricted to adults who are 'insane' or 'incompetent' (Prob.Code § 1460), a conservatorship may be created not only for such a person (Prob.Code § 1751) but also for other causes not available under guardianship proceedings, as, for instance, when a person from whatever cause 'is unable properly to care for himself or for his property.' The condition that warrants appointment of a conservator is that the person in question should be shielded against his own inabilities to manage his estate; an appointment establishes that fact. Inability in fact establishes inability in law.
The objective of a conservatorship, vis-a-vis a guardianship, is to remove the stigma which may attach to guardianship proceedings, while at the same time providing all the protection furnished by guardianship, including the preservation of the conservatee's property by an able person (the conservator) appointed for that purpose. (See: Gold v. Superior Court, 3 Cal.3d 275, 282-283, 90 Cal.Rptr. 161, 475 P.2d 193 [1970]; 1 Appendix to Journal of the California Senate [Reg.Sess.1957], p. 487; Prob.Code § 1701.) In order to accomplish this objective, it seems apparent that a decree ordering a conservatorship is notice to the world that the conservatee is incapable of making a valid contract and it seems further incapable of making a valid contract affecting his property, regardless of the reason for the creation of the conservatorship. Such was the conclusion reached in Place v. Trent, 27 Cal.App.3d 526, 103 Cal.Rptr. 841 (1972) (hearing denied), wherein the court determined that a conservatee, even though not found to be incompetent, lacked the capacity to execute and deliver a deed of gift of her real property, thus rendering the deed void. A reason for a conservatee's incapacity to contract has been stated elsewhere: 'Because the purpose of the conservatorship is to shield the conservatee from his inability to manage his financial affairs, an argument in favor of a conservatee's capacity to contract based on the implication of Prob.C. § 1858 should not be persuasive.' (Johnstone & Zillgitt, 'California Conservatorships' [Cont.Ed.Bar 1968], Sept. 1972 Supp., p. 2, § 1.25. Also see: Place v. Trent, supra, 27 Cal.App.3d at p. 531, 103 Cal.Rptr. at p. 844.)
The trial court did not err in granting defendant's motion for judgment on the pleadings and I would affirm that judgment.
'I, Ralph E. Davis, desire to participate in the program for financing the projected stadium for Wisconsin State University--Platteville, I hereby agree to match funds raised from other sources up to a total of one-hundred and fifty thousand dollars, payable quarterly, as other funds have been collected.
'Ralph E. Davis
/s/ 'RALPH E. DAVIS'
In its report to the Senate the Senate Judiciary Committee distinguished conservatorships from guardianships in the following language:
'The State Bar explained the purpose of the bill, as introduced, as follows:
'Conservatorship
'Senate Bill No. 1045 would add an entirely new division (Division 5) to the Probate Code, creating and defining the office of conervator and the concept of conservatorship. Conservatorships would be an alternative to guardianships in certain instances and would provide the benefits of a conservator in certain others wherein guardianships are not now permissible.
'(1) Purpose. A great many elderly or physically or mentally ill persons are reluctant to ask that a guardian be appointed to conduct their affairs because of the label of 'incompetent' which attaches to them under the present law. Often where the person affected is himself willing to have a guardian appointed, his relatives resist the suggestion for the same reason. For these reasons, there are in California today a great many people whose affairs should be given the protection of a guardianship but for whom such protection has not been sought. The proposed legislation, by calling the person requiring assistance a 'conservatee,' and the person appointed by the court to assist him a 'conservator,' and by eliminating all reference to 'incompetency' seeks to overcome the reluctance to use the protection which should be available under the law. . . .' (1 Senate J. Appendix (1957 reg. session) p. 487.) The Senate Committee's report then proceeded to outline some but not all of the many differences between the statutory scheme for guardians and that for conservators. (Id. at 487-488.)
After passage of the legislation it was discussed in the State Bar Journal as follows:
'Division 4 of the Probate Code, which covers guardianship, provides that a guardian may be appointed only for three classes of persons: the insane, minors and incompetents [§§ 1403-1406]. Because of the stigma, many elderly people and their families hesitate to enter into guardianship, even though such an arrangement might be advantageous. In order to overcome this difficulty, the Legislature, with the State Bar's recommendation (32 S.B.J. 23 (1957)), added to the Probate Code new Division 5. It provides for conservatorship. Under the new provisions people for whom conservators are appointed are known as conservatees, a term defined to include not only the 'wards' of Division 4, but also others who cannot manage their affairs properly or who themselves petition for the appointment of a conservator (§ 1751). Mention of incompetency is avoided. Thus, conservatorship is an alternative to gurdianship for some cases and a new protective relationship, where none previously had been available, for other cases. . . .
'With some exceptions, the provisions of the new Division parallel those of Division 4 relating to guardianship. Where no specific provision of Division 5 applies to a given situation, guardianship provisions and provisions for the administration of decedents' estates will govern so far as they are applicable to like situations. . . .' (Emphasis in the original; 32 State Bar J. 585.)
See also, Lord, Conservatorship v. Guardianship (1957) 33 Los Angeles Bar Bulletin 5.
Section 1405 in pertinent part reads as follows: 'The superior court shall appoint a general guardian of the person and estate, or person or estate, of minors and insane or incompetent persons, whenever necessary or convenient . . .' Section 1460 reads as follows: 'Any superior court to which application is made as hereinafter provided may appoint a guardian for the person and estate or person or estate of an insane or an incompetent person, who is a resident of this State. As used in this division of this code, the phrase 'incompetent person,' 'incompetent,' or 'mentally incompetent,' shall be construed to mean or refer to any person, whether insane or not, who by reason of old age, disease, weakness of mind, or other cause, is unable, unassisted, properly to manage and take care of himself or his property, and by reason thereof is likely to be deceived or imposed upon by artful or designing persons.' (Emphasis supplied.)
The language allowing for the appointment of a conservatee for a person who is an absentee as defined in section 1751.5 relates to federal employees or servicemen who have a 'missing status' (section 1751.5) and was added to section 1751 in 1972 after the events which took place in this case.
Recently enacted legislation also shows a legislative intent the creation of a guardianship constitutes a legal adjudication of incompetence while creation of a conservatorship does not. Chapter 546 of the Statutes of 1973 is concerned with the Lanterman Developmental Disabilities Services Act. That act provides for the appointment of a guardian or a conservator of the person and estate or person or estate of a 'developmentally disabled person.' (Developmental disability is defined in the act (Stats.1973, ch. 546, sec. 16), amending Health and Safety Code section 38003(h) to mean 'a disability attributable to mental retardation, cerebral palsy, epilepsy or other neurological handicap found to be closely related to mental retardation or to require treatment similar to that required for mentally retarded individuals. . . .')
The legislation added section 416.95 to the Health and Safety Code. That section reads in part as follows: 'Prior to the appointment of the Director of Health as guardian or conservator of the person and estate or person or estate of a minor or adult developmentally disabled person, the court shall inform such person of the nature and purpose of the guardianship or conservatorship proceedings, that the appointment of a guardian for his person and estate or person or estate is a legal adjudication . . . on his basic rights. . . .' It is significant that the Legislature, referring to both guardianship and conservatorship proceedings in the same sentence, states that the effect of appointing a guardian is a legal adjudication of incompetence but makes no such statement as to a conservatorship.