Bridge v. Wells Fargo Bank

DRAPER, J. V. C. Morris died August 4, 1957. He was the lessee of premises in which he conducted a retail business. The lease was for a term to expire September 30, 1958, and contained an option to lessee to renew for 10 years, this option to be exercised on or before September 1, 1958. Notice to creditors was first published August 27, 1957. On August 29, 1958, after expiration of the time to file claims, respondent executors gave written notice of their exercise of the option to renew. Both executors joined in this notice, and one of them, Lillian Morris, the widow of decedent, specifically acted also “as sole beneficiary under” decedent’s will.

By petition filed September 11, 1958, respondent executors sought preliminary distribution of decedent’s retail business to the widow, and confirmation of the act of the executors in exercising the renewal option. Appellant lessors, although they had presented no claim, filed written opposition to this petition. They allege that $119,530.80 would become due in rentals over the full renewal term, and that an estimated $10,000 additional would be required to restore the premises to their original condition at expiration of the term, as the lease required lessee to do. They objected to the proposed preliminary distribution on the ground that it would leave too little in the estate to pay the total of these amounts; objected to confirmation of the renewal unless the full amount to fall due in rentals and restoration charges were withheld as security; and affirmatively asked that the sum of $129,-[678530].80 be paid into court under Probate Code, section 953. After hearing, the probate court found the allegations of the executors’ petition to be true, struck appellants’ opposition and petition for affirmative relief on the ground that appellants, having filed no claim, were not persons interested in the estate, and on the ground that the filing of a creditor’s claim is a condition precedent to relief under section 953. The lessors appeal.

The argument of the parties is devoted to the question whether the obligation to pay rent for the extended period is a “claim” which is barred (Prob. Code, § 707) by failure to present it within six months after first publication of notice to creditors. Appellants argue that a liability arising after death is not subject to the claim statute (Prob. Code, § 700; Miller & Lux, Inc. v. Katz, 10 Cal.App. 576 [102 P. 946]), and that, since the renewal of this lease was after the testator’s death, no claim is required. Respondents contend that the lease obligation was incurred by Morris in his lifetime, and that the exercise of the renewal option was thus a contingency requiring filing of a claim to avoid barring of the demand (Prob. Code, § 705; Verdier v. Roach, 96 Cal. 467 [31 P. 554]).