Opinion
No. 7084.
May 5, 1952.
APPEAL FROM THE CIRCUIT COURT, STODDARD COUNTY, JAMES V. BILLINGS, J.
J. E. Taylor, Atty. Gen., Aubrey R. Hammett, Jr., Ass't. Atty. Gen., for appellant.
Briney Welborn, Bloomfield, for respondent.
This is an appeal from a judgment of the Stoddard County Circuit Court reversing an order of the State Department of Public Health and Welfare, denying old age assistance on the ground that the applicant had made an assignment or transfer of her property for the purpose of rendering herself eligible to receive old age assistance benefits.
The law governing the duty of the appellate court in passing upon the award made by the State Department of Public Health and Welfare in this case is well settled. We determine whether or not there was substantial evidence to support the findings of the Commission or whether such findings were arbitrary and unreasonable.
In Howlett v. Social Security Commission, 347 Mo. 784, 149 S.W.2d 806, 809, the court states the law:
"What is meant by the statutory language referring to an arbitrary and unreasonable determination by the commission? Any decision of the commission is like a general judgment of a court of law in this: that it involves the solution of two subsidiary questions — a question of fact and one of law. The answers to these questions form the major and minor premises from which the ultimate finding of the commission for or against the applicant must be derived as a conclusion. The commission must, from the evidence adduced before it, first determine what the facts of the case are. It must conclude that from the constitutive facts so found certain legal consequences follow, to-wit: that the applicant is or is not entitled to assistance — a determination of law. It is possible that the commission might act arbitrarily and unreasonably either in finding the facts or in applying the law thereto. We cannot and we do not say that the Commission's decision upon the facts is arbitrary and unreasonable simply because we might possibly have found the facts differently upon the same evidence; this was within their province alone. But if the ultimate decision of the commission is not based upon substantial evidence, the finding must be characterized as arbitrary and unreasonable and the determination reversed. * * *"
In Wooton v. State Social Security Commission, Mo.App., 190 S.W.2d 644, 647, the court gives the following quotation:
"In the case of Howlett v. State Social Security Commission, 347 Mo. 784, 789, 149 S.W.2d 806, 809, 810, our Supreme Court, referring to the above section, said:
"`We cannot and we do not say that the Commission's decision upon the facts is arbitrary and unreasonable simply because we might possibly have found the facts differently upon the same evidence; this was within their province alone. But if the ultimate decision of the commission is not based upon substantial evidence, the finding must be characterized as arbitrary and unreasonable and the determination reversed.' (Emphasis ours.)"
The judgment of the trial court is as follows:
"Now on this day, it appearing to the satisfaction of the Court that respondent has made no award since the order setting their finding aside, it is ordered, adjudged and decreed by the court that this cause be and it is hereby remanded to the Division of Welfare, State Department of Public Health and Welfare of Missouri, Jefferson City, Missouri, and that said Division of Welfare, is hereby ordered to make a new finding on competent and substantial evidence forthwith accordingly."
The first assignment of error made by appellant is that the Circuit Court erred in holding that the finding of the Department was arbitrary and unreasonable and that there was substantial evidence to support the findings of the Director of the Department of Public Health and Welfare.
The evidence shows that respondent applied for old age assistance on April 9, 1950, and that her application was rejected in September, 1950, on the basis that she had made a transfer of property for the purpose of rendering herself eligible for benefits.
The Department of Public Health and Welfare made the following findings of fact upon which it based its opinion:
"Claimant, age 84, a single person, resides in Dexter, Stoddard County, Missouri. The sole question presented at this appeal is whether or not the claimant has transferred property to render herself eligible to receive old age assistance benefits. The evidence reveals that early in 1948, claimant made inquiry regarding old age assistance and that a welfare worker went to her home and explained the points of eligibility and that on May 21, 1948, application for old age assistance was made by the claimant. At the subsequent investigation it was determined that the claimant had executed a warranty deed dated May 10, 1948, on her home property, which was unencumbered, to her nephew, Earl Francis. This property was determined by the welfare office to have a value of $1500.00 or more. The nephew in consideration of the deeding of the property in question conveyed to the claimant a life estate in a four room house, the life estate being of very nominal value. It was claimant's contention that she was not able to keep up the property and that she exchanged her property for her present home in order that she would be close to her nephew `where they could look after me and help me out.' Subsequent to the transfer of the property the nephew had made some improvements thereon and the property is now rented for $35.00 a month. The evidence also shows at or near the time of claimant's application for old age assistance she had approximately $1100.00 in postal savings which she converted into cash. This money has been used by the claimant and her nephew in furnishing her with necessities. There is also some evidence that the nephew has furnished necessities for the claimant when she was unable to do so."
This finding of fact was based upon the entire record of evidence in this case.
The evidence in the case shows that respondent is a widow, 84 years of age, living in Dexter, Missouri.
Freda Edwards, a case worker in the County Welfare Office, testified for appellant that early in 1948 she went to respondent's house, at respondent's request, and explained to her the old age assistance program and points of eligibility; that she told respondent the maximum value of real estate she could own and yet qualify was $1500.00; that respondent did not make an application for assistance at that time.
May 10, 1948, respondent conveyed, by warranty deed, her home, in which she lived, to her nephew, Earl Francis. The consideration shown was $5.00. The testimony, however, shows that Earl Francis, by quitclaim deed, conveyed to respondent a life estate in a new four room house, located near his home, which, Francis testified, cost $3,000 to build.
The witness, Edwards, testified that respondent told her she had light housekeeping rooms rented and had two sleeping rooms. Witness made this statement: "It was my impression that she got around $35.00, but I don't remember exactly." She stated this amount, respondent received per month in addition to her living quarters from the home which she conveyed.
The evidence also shows that respondent was the owner of $1100 in postal savings certificates, which she cashed in at the time of the conveyance of her property. The witness, Edwards, testified that she accounted for only $280 of this money but that respondent specifically stated she had spent the money for living expenses and had no money at the time of the application under consideration.
The witness testified that the first application for old age assistance, made by respondent, was made to one, Irma Ross, a case officer in the welfare department, May 21, 1948; that the application was rejected June 2, 1948, for the reason that respondent had deeded away property worth $1500.00 in order to make herself eligible and also that respondent had $1100.00 in cash.
On July 22, 1949, respondent made another application, which was investigated by another case worker and rejected because respondent had property worth in excess of $2500.00, the statutory limitation for a single person. The witness testified that Earl Francis valued the property at that time at $3000 or $3500. She stated there was no property resource statement made in that case.
The witness testified that the next application she accepted, was made April 4, 1950; that an investigation was made which revealed that respondent had deeded her property away for a life estate in this new property; that Mr. Francis was asked to get an appraisal on the value of the property respondent had deeded away; that he called the welfare office, by telephone, one morning and said that, in his estimation, the property would be worth $2800. The witness gave this testimony:
"A. * * * Now, it was primarily on the basis of that that I rejected the application; that she had deeded away property which was valued at $2800.00. * * *"
This witness testified she asked the advice of the legal department of appellant and was advised the claim should be rejected because respondent deeded away property in excess of the minimum in order to make herself eligible for old age assistance.
The witness stated, when asked about the $1100 postal savings cashed in by respondent, and what she learned as to the amount of money respondent had left, "She said she didn't have any."
On cross-examination the witness read the following statement from the records of the county welfare office:
"A. On 6-11 Mrs. Ross talked to Mr. Earl Francis who stated he had taken over his Aunt's property which he thought would be about $1500.00. We advised Mr. Francis that we had talked with numerous people in Dexter who thought the property was worth at least $3,000. Mr. Francis said, `Well, it might be.' She stated that she understood he had given his Aunt a quitclaim deed to the property where she now lived. He then stated that he had and it had cost him better than $3,000 to build the home. * * *"
On cross-examination the witness gave the value of the life estate, received by respondent, in the four room house, of $1.25.
The witness testified that the rejection was made because respondent deeded her property and couldn't account for the $1100. She gave this answer:
"A. Rejected application because Mrs. Howell had deeded away property in excess of the maximum in order to make herself eligible for old age assistance."
The witness stated that the property was not actually appraised until 1950, except by collateral information.
On cross-examination, this witness testified as follows:
"Q. And she had been living in this house for at least two years, hadn't she, at that time? A. Yes.
"Q. Without any income? A. As far as I knew she had no income. She said Mr. Francis was paying the bills. * * *
"Q. You made no notation to that effect? A. She contended she didn't have any money. Mr. Francis paid her grocery bills or bought her groceries when he bought his."
She gave this answer as to the four room house:
"A. She has a very nice, comfortable, attractive home she is living in now."
The witness testified that respondent had no income since she left her home she deeded away.
Harold Seiling testified, in behalf of the Division of Welfare, that he is county welfare director; that the county welfare record shows that on June 11, 1948, a worker from the office talked to Earl Francis and he stated the home deeded away was worth $1500, and, then, when told that others had said the property was worth $3000.00, stated, `well, it might be.' That statement was made after the transfer of the property on May 10, 1948, to-wit, June 11, 1948.
On cross-examination witness stated that in June, 1948, the value of $3000 was placed on the building conveyed on what Mr. Francis told Mrs. Ross. He testified that witness, Mr. Radican, had appraised the property, the building and lot, on June 14, 1950, at $2800.
Joe Radican testified, for appellant, that he is in the abstract, title and real estate business; that approximately a year ago he appraised the value of respondent's house which was deeded away and valued the lot at around $1700 and the house at about $1000. He gave this testimony:
"Q. Now, what would you say it is worth now? A. I would say it was worth about $2,000.00 or less."
He stated the house was located on a paved street, with concrete sidewalks; that it had waterworks and electric lights, sewerage, but he didn't remember how many rooms. He testified there had been business buildings built since his appraisal near this property which depreciated its value for residential purposes and that he would say the property had depreciated fifty or sixty per cent.
The respondent's testimony consisted of four witnesses. Roy Kilmer testified that he is in the insurance business and has handled real estate; that he inspected the house, conveyed by respondent to her nephew, the last time in September, last year. He stated the dwelling was not worth fixing and, for business property, the house would have to be given away. He testified he was not too familiar with the value of business property but that a lot was sold some four or five years ago for $1500 or $1800, and he thought that was a fair value. He stated the house was old, had been rented to tenants, eaten up with termites, and that the floors and porches were falling through; that this condition had existed for two years. When asked if the house, in 1948, was decent to live in, he gave this answer:
"A. It most certainly wasn't. The porches wasn't safe. I remember this much: I remember the floor in the bedroom there somewhere had fallen through. There was a plank broken in the floor in the bedroom."
On cross-examination, as to value, he gave this testimony:
"Q. What valuation did you place upon this property? A. Well, I would say $1800, not over $2,000."
He stated he was not allowing over $100 value for the house.
Respondent testified she had lived in the house she conveyed 34 years, and, in May, 1948, conveyed it to Earl Francis and his wife. She stated the house she conveyed was in such bad condition and needed repair so badly that she couldn't live in it. She testified she was 84 years old the 20th of March. She stated she got $2 a week for light housekeeping rooms and $2.50 for bedroom when rented and that she had no other income. She stated when she deeded the house she moved right south of where her nephew lived; that she received for her house a new house to be hers as long as she lived. She stated she had heat, running water, etc. She stated her nephew had been helping her to live and eat and have medical care. She gave this testimony:
"Q. Now, tell this Referee whether or not you conveyed this property for the purpose of getting on the old age assistance rolls? A. I positively did not; never had that in mind even, and the one that told that it's just too bad. They made it up."
She specifically denied that her nephew had promised to take care of her as a consideration for deeding the house. When asked why she deeded her property she gave this answer:
"A. I did that because I was not able to keep up the old property and could be over there by them where they could look after me and help me out."
She testified that at the time she made the deed she had $1100 in postal savings; that she drew it out and paid bills and bought some things; that she drew it all out at one time. She stated she didn't think she had made the deed at the time she drew the money out, probably it was a month or two before the deed but that she did draw the money out sometime in 1948. She stated specifically that she had no money left out of the $1100. She said she spent it for things she needed.
Earl Francis testified that respondent was his mother's sister; that at the time the house was deeded to him and he deeded the four room house, there was no agreement between the parties; that he never agreed to furnish groceries or medical treatment; that he did not agree he would take the property so respondent could get old age assistance. He testified respondent purchased furniture and fixtures and appliances for the house where she now lives out of the funds that she had. He stated he had spent $500 on the house and was renting it for $35 a month; that the value of the property was from $1800 to $2000. He stated her $1100 had been spent for a year or over. He admitted he paid for groceries and clothing for respondent.
Robert L. Dodd testified for respondent, that he was a carpenter; was acquainted with the conditions of the house conveyed by respondent and that he estimated it would take $800 or $1000 to put it in shape to live in.
We find that the "Findings of Fact" as made by the Department of Public Health and Welfare, upon which it based its decision, is supported by substantial evidence.
In this Findings of Fact, by appellant, it is stated:
"* * * The sole question presented at this appeal is whether or not the claimant has transferred property to render herself eligible to receive old age assistance benefits. * * *"
Section 208.010 RSMo 1949, V.A.M.S., provides:
"* * * Benefits shall not be payable to any person who:
"(1) Has made an assignment or transfer of property for the purpose of rendering himself eligible for benefits; * * *."
Appellant reasons that claimant's conduct in inquiring as to eligibility requirements to secure old age assistance, the deeding of her home on May 10, 1948, of the value of $1500 or more and receiving therefor a life estate of nominal value, because of her age, then shortly thereafter, on May 21, 1948, making application for old age assistance leads to the logical conclusion that respondent transferred her property for the purpose of making herself eligible for such assistance. This conclusion is strengthened when the conveyance is made to a relative for an inadequate consideration.
To support this theory appellant cites Chapman v. State Social Security Commission, 235 Mo.App. 698, 147 S.W.2d 157. This case holds that an applicant for old age assistance has the burden of proof of eligibility on hearings before the State Social Security Commission. On page 162 of 147 S.W.2d, the court states:
"* * * A `transfer of property' defeating eligibility under subparagraph (1) need not merely be property in excess of the figures mentioned in subparagraphs (2), (3), or (4), but may also be resources which, if retained, would disqualify under subparagraph (6). * * *"
This case also states the rule of law that in determining whether the cause should be remanded to the Commission for redetermination, the Court of Appeals should concluded that a fair and reasonable opportunity to present claimant's evidence in the case reasonably tended to support only the conclusion that claimant was entitled to old age assistance under the social security code.
In Wooton v. State Social Security Commission, supra, at page 647 of 190 S.W.2d, the court states:
"It might be conjectured or suspected that claimant's motive in making said payments to his daughters was to render himself eligible for old age assistance, but we think that neither conjecture nor suspicion rises to the dignity of substantial evidence sufficient to support the finding and award of the Commission. * * * We think the language of the court in Myers v. State Social Security Commission, Mo.App., 181 S.W.2d 565, loc. cit. 568, is applicable. There it was said:
"`While there were other circumstances that might give rise to a suspicion that plaintiff might have fraudulently transferred the note in order to make himself eligible for old age assistance, such circumstances cannot be said to constitute substantial evidence of the ultimate fact upon which the finding and award rest.'"
In Chapman v. State Social Security Commission, supra, at page 159 of 147 S.W.2d, the court states:
"* * * Under the new section, the Commission, not the courts, is the forum where the facts are ultimately to be decided. The sole function of the courts is to see that such decision is made after a fair hearing and is not arbitrary and unreasonable. We cannot conclude that the Commission's hearing or decision in any case is `unfair', or `arbitrary' or `unreasonable,' simply because, with conflicting evidence or with possible conflicting inferences from the evidence, each of which might be reasonable, we would, if empowered ultimately to decide the fact, have reached a different conclusion than was reached by the Commission. Remand for `redetermination' would be proper only if we conclude that a fair and reasonable opportunity to present her evidence in the case reasonably tended to support only the conclusion that claimant was entitled to old age assistance under the statutory provisions. * * *"
The State Department of Public Health and Welfare reached a conclusion under the facts and the law that respondent conveyed her home, of the value of $1500 or more, for the purpose of rendering herself eligible to receive old age assistance benefits. It reached that conclusion from the evidence that respondent first called in a case worker from the county welfare office and had explained to her the requirements necessary to secure such assistance; that she, thereafter, on May 10, 1948, conveyed her home, of the value of $1500 or more, to her nephew in exchange for a life estate in a four room house owned by him; that respondent, at the time, was 84 years old, and the life estate received by her was of nominal value; that immediately thereafter respondent applied for old age assistance benefits, first, May 21, 1948, secondly, July 22, 1949, both of which applications were rejected for the reason that respondent had conveyed her property of the value in excess of the maximum allowed for eligibility for such assistance, and, later her application made April 4, 1950, which is now under consideration. From this evidence the Commission infers that the property was conveyed for the purposes of making respondent eligible for old age assistance.
Are these inferences reasonable and do they rise to the dignity of substantial evidence sufficient to support the findings and award of the Commission?
The court is not unmindful of the law that where one conveys property to relatives, without consideration or adequate consideration, it is the duty of the court to treat with caution such transactions. But, under the evidence in this case, in 1948, respondent possessed $1100 in postal savings and a home of the then value of some $1500 to $3000. Earl Francis was her nephew. There can be no question, from the testimony, that the home in which respondent lived was old and in a dilapidated condition and badly in need of repairs. Respondent conveyed this property, in 1948, to her nephew and received in return a life estate in a new four room house, which cost about $3,000 to build and which house provided respondent with a good home in which to live. We think the only reasonable inference that could be drawn was that the old house, in which respondent lived, was in such condition that respondent could not live there without having the same repaired and she was not financially able to repair it; that the only reasonable inference that could be drawn was that respondent felt that her welfare demanded she move in the new house, which was close to her nephew, and where he could be of assistance in caring for her. The undisputed testimony is that the $1100 was spent in furnishing this new home and for supplies to live on; that her nephew had been paying her grocery bills and had been taking care of her. At the time the application was made in the present case, to-wit, 1950, no inference could be drawn from any testimony in the record that respondent had any money and we think the testimony that the life estate was worth only $1.25 is so ridiculous as not to appeal to any court. It was not only the house that respondent received to live in that was valuable to her but it was also the protection and assistance that her nephew was rendering to her that caused this conveyance. This court must take into consideration the fact that respondent is a widow, 84 years old; that a person of that age must, of necessity, have care and attention and the only reasonable inference drawn from this testimony is that her nephew was furnishing that care and attention. It is true that the testimony shows that, prior to the conveyance, by respondent of her property, she had been renting rooms and apartments for some $20.00 or $24.00 per month, but we think the testimony is undisputed that this house was so deteriorated that that support could not have been maintained unless the house had been repaired.
True enough it might be conjectured or suspicioned that Respondent's motive in conveying her home to her nephew was to render herself eligible for old age assistance. But we think, under the facts in this case, that neither conjecture nor suspicion rises to the dignity of substantial evidence to support the finding and award of the Commission.
We must conclude that the judgment of the Commission herein, on the facts in this case, is arbitrary and unreasonable. This conclusion is not reached simply because there was conflicting evidence or with possibly conflicting inferences from the evidence, but we think that the inferences drawn from the evidence were not reasonable and were merely conjecture and suspicion.
The judgment of the trial court is affirmed. Cause remanded to the Department of Public Health and Welfare.
VANDEVENTER, P. J., and BLAIR, J., concur.