State Department of Social Welfare v. Schwarz

Schroeder, J.,

dissenting: I must respectfully dissent from Syllabus ¶ 1 and the corresponding portion of the opinion.

At best, K. S. A. 39-719a is an ambiguous statute and the construction to be placed upon it by the Supreme Court in the first instance should not be influenced by the manner in which title to homestead property of welfare recipients, who are husband and wife, is held.

*271Here, for example, A. Herman Schwarz and Matilda Schwarz held title to the family home as joint tenants and upon the death of Herman title passed to Matilda, by reason of survivorship.

In the next case of this nature to come before the court, title may be held by the recipients of welfare, who are husband and wife, as tenants in common, or title may stand solely in the name of the first spouse to die. In the latter situation title would descend upon the death of the first spouse in accordance with the law of descent and distribution, one-half to the surviving spouse and one-half to their children. If the state department of social welfare filed no claim in the estate of the first spouse to die, in compliance with the nonclaim statute, it would lose any right to proceed against the one-half interest in the property which descended to the children. This becomes vitally material where the one-half interest of the surviving spouse would be insufficient upon such survivors death to pay the entire amount of old age assistance advanced to both married recipients during their lifetime.

The question presently before the court involves two statutes primarily, K. S. A. 39-719a and K. S. A. 59-2239, commonly called the nonclaim statute.' The first statute is ambiguous while the non-claim statute is clear and covers the precise situation here confronting the court. In my opinion, the ambiguous statute should therefore yield to a construction consistent with the nonclaim statute which is clear.

The nonclaim statute reads in part as follows:

“All demands, including demands of the state, against a decendent’s estate, whether due or to become due, whether absolute or contingent, including any demand arising from or out of any statutory liability of decedent or on.account of or arising from any liability as surety, guarantor, or indemnitor, and including the individual demands of executors and administrators, not exhibited as required by this act within nine months after the date of the first published notice to creditors as herein provided, shall be forever barred from payment: Provided, . . . No creditor shall have any claim, against or lien upon the property of a decedent other than liens existing at the date of his death, unless an executor or administrator of his estate has been appointed within one year after the death of the decedent and such creditor shall have exhibited his demand in the manner and within the time herein prescribed.” (Emphasis added.)

Here the claim of the state department of social welfare for the old age assistance advanced to A. Herman Schwarz during his life is a demand of the state, which was due at his death and payable at the death of Matilda, his surviving wife, and the demand arises out of a statutory liability of A. Herman Schwarz.

*272There is little doubt that the legislature by 39-719a, supra, created a statutory liability against the recipient of old age assistance in favor of the state, which is enforceable against the recipient’s estate upon his death, unless the real estate of the recipient is occupied by the recipient’s surviving spouse or dependent child, in which event it cannot be enforced until such occupancy ceases. In the absence of a statute conferring upon the state the right to recover for old age assistance the sum advanced to a recipient, there could be no recovery at all. (81 C. J. S., Social Security and Public Welfare, §§ 8, 29, 30 and 33.)

The controversy here concerns when the state department of social welfare is obligated to assert its demand for old age assistance paid to Herman, the husband, where Matilda, his widow, also received assistance and occupied the real estate, their only assets, as a homestead prior to her death.

K. S. A. 39-719a reads:

“[1] On the death of any recipient of assistance, the total amount of assistance paid or [2] on the death of the survivor of a married couple, either or both of whom received such assistance, the total amount paid assistance to either or both, [3] shall be allowed as a claim against the estate of such person or persons as a fourth class claim. [4] No such claim shall be enforced against the reed estate of the recipient or the real estate of a person who has been a recipient while it is occupied by the recipient’s surviving spouse or by any dependent child of such recipient or any dependent child of such surviving spouse.” (Emphasis added.)

For purposes of clarity and consistency, numbers have been added as in the court’s opinion.

Ambiguity in the statute commences with the italicized portion set forth in provision [2]. The expression in provision [3], “such person or persons,” makes for further ambiguity. Is “such person” intended to mean the recipient of assistance in provision [1], or the survivor of a married couple, where either or both received assistance during their life? If so, as the court seems to interpret the statute, then are not the words “or persons” in such expression superfluous and without meaning? If legislative meaning is to be given the words “or persons,” it must have intended the amount of old age assistance paid to each of the parties to a marriage created a statutory liability against the estate of each respectively in the total amount of assistance paid to each, to be asserted as a demand against the estate of each respectively.

This construction is fortified and confirmed by the admonition in *273provision [4] of the statute — that no claim shall be enforced against the real estate of the recipient while it is occupied as a homestead by the recipient’s surviving spouse. Such reference to enforcement inferentially means that the claim has previously been asserted in accordance with the provisions of the nonclaim statute. In other words, if the state department of social welfare desired to keep its claim alive against Herman, the first to die, it should have asserted a demand against his estate in accordance with the nonclaim statute.

If the legislature intended that the claim for assistance advanced to both married recipients was to be first asserted as a claim against the estate of the last to die, then a portion of provision [4] would have been superfluous.

This court has consistently held that a creditor or a person having a claim against the estate is a “person interested in the estate,” within the meaning of K. S. A. 59-2221, so that the nonclaim statute confers upon tire creditor the right to petition for administration for the purpose of having his claim exhibited and allowed. (In re Estate of Erwin, 167 Kan. 316, 205 P. 2d 925, Syl. ¶ 2; In re Estate of Brasfield, 168 Kan. 376, 214 P. 2d 305; and in re Estate of Garnand, 177 Kan. 168, 277 P. 2d 602.)

This court has held with respect to the nonclaim statute in the case of In re Estate of Grindrod, 158 Kan. 345, 148 P. 2d 278, as follows:

“The words, ‘all demands,’ as used in G. S. 1943 Supp. 59-2239, which require demands to be exhibited in the probate court within a stated time were intended to be all-inclusive and to include claims or demands of every type and character against a decedent’s estate and to any portion thereof, except in particular cases where a statute may expressly provide otherwise.” (Syl. ¶5.)

(See, also, Burns v. Drake, 157 Kan. 367, 371, 139 P. 2d 386.)

The construction placed upon 39-719a by the court will permit recipients of welfare to defraud the state. For example, the surviving spouse in the instant case could have conveyed clear title to a bona fide purchaser prior to her death and given the proceeds to her children, in which event the state department of social welfare would be without assets to pursue. If, on the other hand, the state department of social welfare were required to assert its claim against the estate of A. Herman Schwarz, the allowance of such demand in the probate court, it being a court of record, would serve notice that the state department of social welfare had a lien against real estate being occupied by Matilda as her homestead.

*274It may be argued that A. Herman Schwarz had no estate whatsoever at the time of his death against which to assert the demand. This argument, however, has never prevailed against the state where a statutory tax liability was created upon the death of a married person who held title to real estate in joint tenancy with his spouse. (See, In re Estate of Rogers, 164 Kan. 492, 190 P. 2d 857.)

The statute requires the appointment of an administrator of an intestate resident, when the creditor of an estate so petitions the probate court, even though it is known that the assets appear to be inconsequential and of little value. (In re Estate of Brasfield, supra, Syl. ¶ 2.)

It is respectfully submitted the claim of the state department of social welfare in the sum of $4,865.52 for old age assistance furnished to A. Herman Schwarz, not having been asserted as a demand against the estate of A. Herman Schwarz after his death, should be disallowed.

Price, C. J., joins in the foregoing dissent.