Department of Social Welfare of State of California v. Stauffer

*705KNIGHT, J., Dissenting.

I am unable to agree with the conclusion reached in the majority opinion that the action herein is barred by the statute of limitations.

As stated in said opinion, the Old Age Security Law declares that no aid shall be granted or paid to any person who owns personal property exceeding the value of $500 or real estate exceeding the value of $3,000; that if during the continuance of aid the recipient shall become possessed of property or income in excess of the amount allowed by said law he shall immediately notify the board of supervisors, which, with the approval of the state agency, may cancel or vary the amount of future aid, and that the excess aid theretofore paid shall be returned and is recoverable as a debt. (§§ 2163, 2164 and 2222, Welf. & Inst. Code.) And section 2223 of said code declares that “If, on the death of a recipient of aid under this chapter, it is found that he was possessed of property or income in excess of the amount allowed under the provisions of this chapter and that he has not disclosed the same to the board of supervisors, double the amount of the aid paid him in excess of that to which he was legally entitled may be recovered by the Department of Social Welfare as a preferred claim from his estate and upon recovery shall be repaid to the county, to the State, and to the United States Government in accordance with the provisions of section 2024.”

The admitted facts of the present case are these: John L. Brues applied to the Board of Supervisors of the city and county of San Francisco for and received old age security amounting in all to $1,025. The periodical payments began on October 1, 1936, and continued up to the date of his death, which occurred on February 15, 1940. On March 18, 1940, letters of administration in the matter of his estate were issued to Freda Stauffer and the first publication of notice to creditors was given on March 21, 1940. Section 600 of the Probate Code directs that an administrator shall file his inventory and appraisement within three months after his appointment, unless the time be extended by court order. So far as the record shows, no extension was here granted, but the administratrix did not file the inventory until February 23, 1941, which was more than eleven months after her appointment and after the first publication of notice to creditors; and by said inventory it was revealed that the decedent was the owner of corporate stock of the Commonwealth Edison Company of the value of $1,300. On March 12, 1941, less *706than three weeks after the filing of the inventory, the state presented its claim against the decedent’s estate for double the amount of aid paid to Brues up to the time of his death. On the following day, March 13, 1941, the claim was rejected, and a week later, to wit, on March 20, 1941, the complaint in the present action was filed. The trial court expressly found that during the period from October 1, 1936 (the date of the first payment of aid), to February 15, 1940 (the date of Brues’ death), Brues was in possession of corporate stock of the Commonwealth Edison Company of the value of $946 and of a bank account ranging from $25 to $150; also that he “did not disclose to the Board of Supervisors of the City and County of San Francisco, State of California, or their duly authorized agents, the Department of Public Welfare of said City and County, the possession of said stock and bank account prior to and during the entire period said decedent received old age security, or at any other time,” and “that the Board of Supervisors of the City and County of San Francisco, and their duly authorized agents, the Department of Public Welfare of said City and County, did not discover the possession of said stock and bank account as aforesaid until subsequent to the death of John L. Brues and after the filing of the inventory and appraisement by Freda Stauffer, the administratrix of said estate.” Nevertheless the trial court gave judgment against the state based upon the following conclusion of law: “That the creditor’s claim of the Department of Social Welfare of the State of California, filed against the Estate of John L. Brues, deceased, on March 12, 1941, arises upon contract and is barred for not having been filed within the six months period after the first publication of notice to creditors of said estate.” (Prob. Code, §§700, 707; italics added.)

The majority opinion holds that this is an erroneous conclusion of law and that the judgment is not sustainable on the ground specified therein. In thus rejecting the legal theory upon which the trial court decided the case against the state, the majority opinion holds that the cause of action sued upon is statutory; that it is created by section 2223 of the Welfare and Institutions Code for the recovery of a penalty, and in no way involves any contractual relationship, express or implied; that therefore the action is not barred for failure to present a claim against the estate within six months after the first publication of the notice to creditors (Prob. Code, §§700, 707); that the controlling statute of limitations in actions *707arising under said section 2223 is the one year statute prescribed by section 340 of the Code of Civil Procedure for the recovery of a penalty. I am in full accord with those portions of the majority opinion. But it then goes on to hold that with respect to actions brought under the authority of said section 2223 the one year statute of limitations prescribed by said section 340 starts to run from the date of the issuance of letters of administration, regardless of the date on which “it is found” by the governmental agency that the recipient was possessed of the excess property; and that therefore, since the action herein was filed two days after the expiration of one year from the issuance of the letters, the action is barred by the provisions of said section 340, despite the express finding of the trial court that the governmental agency was unaware of the existence of the excess property until the administratrix disclosed its existence by filing the inventory, more than eleven months after the issuance of letters of administration.

The position taken in behalf of the state is that the one year statute starts to run when “it is found” by the governmental agency that the recipient was possessed of property in excess of the amount allowed by said law, and it is my conclusion that the plain wording of said section 2223 will admit of no other possible construction. To repeat, it reads: “If, on the death of a recipient of aid ... it is found that he was possessed of property or income in excess of the amount allowed . . . and that he has not disclosed the same . . . double the amount . . . may be recovered ...” etc. (Italics added.) Manifestly, in no case, in the absence of statutory direction to the contrary, does a statute of limitations start to run against the exercise of a remedy for the enforcement of a cause of action until the cause of action itself exists; and here, as will be seen, the statutory cause of action conferred on the state by said section 2223 does not come into being unless and until “it is found” by the governmental agency that the recipient was possessed of property in excess of the amount allowed by said law; necessarily, therefore, no suit for the enforcement of such cause of action could be instituted against the recipient’s estate unless and until it was so found. In the present case, as above stated, the trial court expressly determined as a fact that such discovery was not made until “after the filing of the inventory and appraisement” on February 23, 1941; and in less than a month thereafter the complaint herein was filed. In that state of the record it would *708seem that to hold that regardless of when it was found that the excess property existed, the one year statute of limitations began to run from the date of the issuance of the letters of administration, not only does violence to the provisions of said section 2223 and the trial court’s finding, but judicially revises the section by eliminating therefrom the words “ If . . . it is found,” and incorporating therein a statute of limitations impracticable in its operation and never contemplated by the Legislature.

It is quite true that the general rule in this state is that as to actions -against the estates of deceased persons a statute of limitations starts to run as soon as the representative of the estate is appointed and receives his letters; but in all cases where such general rule is controlling the cause of action against the estate, unlike the one here sued upon, exists at the time of the issuance of the letters.

Referring back to the question of the construction of said section 2223, it may be conceded that the existence of any facts or circumstances sufficient to charge the governmental agency with constructive knowledge that the recipient of aid had died possessed of property in excess of the amount allowed by said law would start the running against the state of the one year statute of limitations, even though the inventory in the estate had not yet been filed. For example, such constructive knowledge might be imparted by the facts alleged in the petition for letters of administration concerning the value and extent of the recipient’s estate; or by the contents of a recipient’s will which had been offered for probate; or even by recorded transactions had prior to the recipient’s death. And obviously the application of the doctrine of constructive knowledge in determining cases based on said section 2223 is entirely consistent with its present provisions, without the necessity of adding any words thereto, because clearly the language employed in framing the opening clause, to wit: “If, on the death of the recipient ... it is found that he was possessed of property or income in excess of the amount allowed ...” (italics added) is amply broad enough in its scope to support the conclusion that it was intended that the section should be so construed. However, in any event, the question of constructive knowledge is in no way involved on this appeal, because the appeal having been taken on the judgment roll, no part of the evidence is set forth in the record; and the trial court expressly found that the governmental agency did not discover the excess property until after the *709inventory was filed. It is beyond the power of this court, therefore, to infer, presume or find to the contrary.

Reference is made in the majority opinion to the absence of allegations of fraud; but it is to be noted that said section 2223 declares without any qualifying language whatever that if on the death of the recipient it is found that he was possessed of excess property “and that he has not disclosed the same to the board of supervisors” etc., the governmental agency may recover double the amount paid him in excess of that which he was entitled to receive. Consequently, in order to invoke or grant the relief provided by said section it is not necessary for the state to allege or prove, nor for the trial court to find, the existence of fraud.

It is my conclusion, therefore, that since under the trial court’s findings of fact plaintiff is entitled to a judgment for the recovery of the penalty provided for by said section 2223, the judgment appealed from should be reversed with directions to the trial court to revise its conclusion of law and thereupon to enter judgment in favor of plaintiff in conformity with the provisions of said section.

A petition for a rehearing was denied February 18, 1943. Knight, J., voted for a rehearing.

Appellant’s petition for a hearing by the Supreme Court was denied March 18, 1943.