In Old Men's Home, Inc. v. Lee's Estate, 191 Miss. 669, 4 So.2d 235 (1941), a charitable home had taken care of Lee based on Lee's false representations that he was destitute, when unknown to the home, Lee had some $5,000 in the bank.Summary of this case from Larisa's Home Care, LLC v. Nichols-Shields
June 9, 1941. ON MOTION.
1. EXCEPTIONS, BILL OF.
The statute allows an appellant, in cases where court reporter fails to file a copy of his transcribed notes of the evidence, 60 days additional to time allowed reporter in which to file transcript, in which to furnish a bill of exceptions as in cases where no court reporter takes down the evidence (Code 1930, sec. 729).
2. EXCEPTIONS, BILL OF.
Where final decree was entered October 16, 1940, and on October 22 official court reporter was given notice by appellant to transcribe and file official notes, which reporter failed to do, and on December 17 appellant's appeal bond was approved by chancellor, and on March 26, 1941, appellant presented bill of exceptions which was approved on that date, bill of exceptions would not be stricken on theory that one desiring additional time within which to file bill of exceptions must be granted such time before expiration of time allowed reporter for filing his transcript (Code 1930, sec. 725, as amended by Laws 1936, ch. 236; secs. 727, 729).ON THE MERITS. (In Banc. Oct. 13, 1941.) [4 So.2d 235. Suggestion of Error Overruled, Oct. 27, 1941.]
Where aged, infirm man obtained maintenance and care at Old Men's Home by false representations that he was a pauper, whereas at time of entering home and continuously thereafter to date of death he had a bank account amounting to more than $5,000, the Home was entitled to reimbursement from decedent's estate on theory of "quasi or constructive contract" based on obligation imposed by law.
A "quasi or constructive contract" rests upon equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another, and is an obligation created by law in the absence of any agreement, when and because acts of the parties or others have placed in possession of one person money, or its equivalent, under such circumstances that in equity and good conscience he ought not to retain it.
3. EXECUTORS AND ADMINISTRATORS.
A claim against decedent's estate for maintenance and care furnished by Old Men's Home upon decedent's false representations that he was a pauper did not constitute a claim for unliquidated damages for tort, which would not be probated under statute, but rather was a claim for reasonable compensation for care and support (Code 1930, sec. 1671).
APPEAL from the chancery court of Claiborne county, HON. R.W. CUTRER, Chancellor.
L.L. Posey, of Jackson, for appellee, on motion to strike the bill of exceptions.
The motion to strike the bill of exceptions should be sustained. The time allowed by law to file stenographer's notes expired February 15, 1941, and no extension of time having been applied for and obtained within which to file bill of exceptions presented by appellant said bill of exceptions was filed out of time allowed by law and should not have been signed by the trial judge.
Chapter 236, Acts of the Mississippi Legislature, 1936; Section 729 of the Code of 1930, and Mississippi Highway Department v. Meador et als., 185 So. 816.
Butler Snow and O.B. Taylor, all of Jackson, for appellant, on motion to strike the bill of exceptions.
The question comes down to this: Does Section 729 of the Code mean that appellant is allowed, as a matter of right and law, sixty days' additional time after the expiration of the sixty days allowed the Reporter, to tender a bill of exceptions, or whether it means he must apply to the Chancellor and secure sixty days' additional time?
It is the contention of appellant that the purpose of Section 729 is in and of itself to allow the time without application for such allowance to the Judge. The history of the statute shows clearly that sixty days' additional time, under the circumstances mentioned, is allowed as a matter of right and law in which to tender an old-fashioned bill of exceptions.
The material portions of Section 729 of the Code of 1930 are identical with Chapter 145 of the Laws of 1920, except that the word "hereinafter" is omitted, and the last sentence beginning, "In case" is omitted.
It is worthy of comment that the Code Commissioners in their report to the legislature on the "dummy" 1930 code indicate that Section 729 does not change the existing law (see also Millwood v. State, 1 So.2d 582) which had theretofore been construed in the case of Cato v. Ice Company, 108 Miss. 667, which case decided the appellant had the additional time as a matter of right without application therefor.
See also Metropolitan Casualty Insurance Company of New York v. Sullivan, 115 Miss. 399.
Counsel for appellee relies on the case of the State Highway Department v. Meador, 184 Miss. 381. In the Meador case the court simply decided that under Section 729 the appellant had a period of sixty days from date of expiration of the sixty days allowed the reporter in which to file the bill of exceptions. In that case the lower court attempted to grant still another sixty days, making 180 days in all, and the Supreme Court decided that the attempt to grant a total of 180 days was void.
Butler Snow, George H. Butler, Jr., and O.B. Taylor, all of Jackson, for appellant, on the merits.
The question in this case is whether a charitable organization, which has furnished care and support to one under the mistaken belief that the recipient was a pauper, such belief being induced by the fraudulent representations and concealments of the recipient, can recover from the estate of the recipient the reasonable value of the services rendered on discovery of the fraud after the recipient's death.
Appellant's rights are not derived from a true contract arising from the mutually manifested intention of the parties to become obligated. The appellant's rights are quasi-contractual. They rest upon and are based on appellant's right to restitution. Appellant seeks recompense for the money and services which it was induced to furnish decedent on account of his fraudulent pretense of poverty.
Quasi-contracts, or contracts implied-in-law, on the other hand, are not true contracts at all. They are contracts only in the sense that they are enforceable by the contractual remedy of assumpsit. This terminology is a legal fiction adopted for the purpose of fitting the cause of action to the contractual remedy. The liability arises by operation of law, independent of agreement or presumed intention. The intention of the parties is entirely disregarded. The obligation is imposed independent of and often contrary to the intention of the parties, whereas in cases of express contracts and contracts implied in fact the intention is of the essence of the transaction. Quasi-contractual obligations are imposed by law without regard to the assent of the party bound, for the purpose of doing justice.
12 Am. Jur. 498, 502, Secs. 4, 6; 13 C.J. 244; Keener, Quasi-Contracts, pp. 4, 5, 6; City of N.Y. v. Davis, 7 F.2d 566 (C.C.C. 2d); Stipp v. Doran, 18 F.2d 83 (C.C.C. 3d); American LaFrance Co. v. Borough of Shenandoah, 115 F.2d 866, 867 (C.C.C. 3d); Restatement, Contracts, Section 5, Comment (a); First Nat. Bank v. Matlock, 99 Okla. 150, 226 P. 328; 36 A.L.R. 1088; 9 Miss. L.J. 349; Moses v. McFarlan, 2 Burr. 1095 (1760); Miller v. Schloss, 218 N.Y. 400, 407, 113 N.E. 337, 339; Dusenberry v. Speir, 77 N.Y. 144, 150.
By far the most usual application of quasi-contractual liability is to prevent unjust enrichment. A person who has been unjustly enriched at the expense of another is required to make restitution to such other.
The term restitution is used throughout this brief in the sense in which it is employed in the restatement of the subject. A person obtains restitution when he is restored to the position he formerly occupied, either by the return of something which he formerly had or by the receipt of its equivalent in money.
Keener, Quasi-Contracts, p. 19; Restatement, Restitution, Section 1.
Recovery in this case is predicated on the theory that benefits conferred under a mistake as to a basic fact, induced by the fraudulent conduct of the recipients, may be recovered. Mistake as to a basic fact, standing alone, is sufficient to authorize recovery in this character of case. In the case at bar, in addition to mistake on the part of the person conferring the benefits, there is knowledge on the part of the recipient that the other party was acting under a basic mistake; fraudulent concealment of the true facts, and innocent misrepresentations by a third party.
See generally, Keener, Quasi-Contracts, chapter 2; Restatement, Restitution, chapter 2; 3 Page, Contracts, sec. 1552 et seq.; Section 26, A.L.I. Restatement of Restitution; Andrews v. Andrews, 12 Ind. 348; Tuttle v. Doty, 203 Mich. 1, 168 N.W. 990; Re Clark's Estate, 233 App. Div. 487, 253 N.Y.S. 524; Re Marine Trust Co., 156 Misc. 297, 281 N.Y.S. 553; Re Agnew's Will, 132 Misc. 466, 230 N.Y.S. 519.
In the notes to the Restatement of Restitution additional cases are cited as allowing rescission or reformation of gifts bestowed without an intention to claim compensation therefor.
Where the recipient of the benefits has been guilty of fraud, restitution is universally granted to the person who has conferred the benefits in reliance on such fraud.
Sanders v. Ragan, 172 N.C. 612, 90 S.E. 777, L.R.A. 1917B 681; Eggers v. Anderson, 63 N.J. Eq. 264, 49 A. 578; Jones v. Stearns, 122 A. 116, 97 Vt. 37, 31 A.L.R. 653; Re St. John's Estate, 296 N.Y.S. 613; Re Anderson's Estate, 71 P.2d 1013 (1937).
There can be no doubt that the representations and conduct of Lee amounted to fraud within the meaning of the term as employed in the authorities allowing restitution for benefits obtained by fraud.
See Restatement of Restitution, Sections 8, 10, Comment on Subsection (2) d, Section 26, Comment on Subsection (1) b; Restatement of Restitution, Section 6, Comment on Subsection (1) b.
It is clear from the record in this case that Lee, with knowledge that he was not entitled to relief from the appellant in this case, continued to seek such assistance and represented himself to be within the class of needy and destitute persons entitled thereto. Counsel for appellees apparently places emphasis on the fact that at the time the appellant admitted Mr. Lee it did not intend to charge for the services to be rendered him. Where the intention not to receive compensation for benefits conferred is the result of mistake, fraud, coercion, and the like, it is evident that there was no real intention to confer a gratuitous benefit, and the person who has done so is entitled to restitution. Restatement, Sections 26, 40.
L.L. Posey, of Jackson, for appellee, on the merits.
The appellant's rights are quasi-contractual; they are based upon the doctrine of restitution; recompense for fraudulent pretense, says appellant, and in its brief goes into the minute detail of the question without one charge to that effect and without one scintilla of fact or evidence on which to base it. What is a quasi-contract? Let the lawbooks answer: People v. Bradley, 60 Ill. 390-402; Nevada Co. v. Farnsworth (U.S.), 89 Fed. 164, 165; McCorley v. Faulkner, 18 N.Y. Supp. 460, 462; 13 C.J. 244, Section 10; See, also, Morrison v. Ives, 4 Miss. (S.M.) 659.
Appellant has charged in its brief, and nowhere else, the appellee with fraud, deceit and false pretense of poverty with not one word alleged in the court below on which to base the charge; not one word in the evidence that would even indicate a charge of fraud.
Let's see what our courts say with reference to charging and proving fraud necessary to the obtaining of judgment based on such charges. Griffith on Mississippi Chancery Practice: Charging Fraud; Weir v. Jones et al., 36 So. 533; Ramoneda Bros. v. Loggins, 39 So. 1007; Santa Cruz v. Santa Cruz, 44 Miss. 715; Carter v. Eastman-Gardner Lumber Company, 95 Miss. 651, 48 So. 615; Clearman v. Cotton, 66 Miss. 467, 6 So. 156.
Bad motive not presumed, but presumption against it. There is a presumption against bad motive, dishonesty and fraud: Mabin v. Biloxi, 77 Miss. 675, 28 So. 566.
If fraud be charged — proof required to be clear and convincing. See Griffith on Mississippi Chancery Practice; Mabin v. Biloxi, 77 Miss. 675, 28 So. 566; Wherry v. Latimer, 103 Miss. 534, 60 So. 563; Locke v. Keiler, 90 Miss. 5, 43 So. 672.
This is a case where the claim was unknown and not presented until after the death of decedent. The first Mississippi case on this subject is the case of Bell v. Oates, 97 Miss. 790, 53 So. 491. In this case it is held that a claim presented for the first time after the death of decedent is looked on with disfavor and to maintain such a claim, the evidence must clearly show a contract, express or implied, and certainly under the evidence in this case no contract is shown.
See Ellis v. Berry, 145 Miss. 652, 110 So. 211; Gulf S.I.R.R. Co. v. Magee Warehouse Co., 67 So. 648, 109 Miss. 9; Tarver v. Lindsey, 161 Miss. 397, 137 So. 93; Burkett's Estate, 186 So. 834; Gaulden v. Ramsey, 123 Miss. 1, 85 So. 109.
The claimant failed to introduce testimony to show definite amount of the account or indebtedness against said estate of C.P. Lee, deceased, if any it had. This brings the case at bar squarely within the case of King et al. v. Stauddy's Estate, 115 So. 427.
See Hickman v. Slough, 193 So. 443. Butler Snow, of Jackson, for appellant, in reply.
Counsel for appellee apparently takes the position that the claim of appellant, if a valid claim, could not be probated against the estate, but could only be established by a suit at law or in equity. We think this is a total misconception of the nature of the claim and the procedure by which it may be established. The statute (Section 1669, Mississippi Code of 1930) provides for the publication of notice "requiring all persons having claims against the estate" to have the same probated. And Section 1671 of the Code provides how any person "desiring to probate his claim" shall proceed.
The word "claim" is a comprehensive word, but it does not embrace every conceivable obligation against the estate. Thus it does not include a claim for damages for tort, nor a contingent claim not due, but it seems to embrace claims arising from contracts implied in law or implied in fact, such as might be recovered under general assumpsit. And if appellant's theory is correct, this was such a claim.
See A.L.I., Restitution, Part I, pages 5, 6 and 8; Ellis v. Berry, 145 Miss. 652; A.L.I., Restitution, Sec. 108; Hickman v. Slough, 187 Miss. 525; Haralson v. Brown, 178 Miss. 57; First National Bank v. Owen, 177 Miss. 339.
It is made clear by these authorities that recovery may be had upon quantum meruit where the amount of the compensation is not agreed upon.
The reporter of the court below failed to file a transcribed copy of his notes of the evidence, and a bill of exceptions prepared "as in cases where no court reporter takes down the evidence" was tendered to and approved by the judge of the court below. The appellee has filed a motion to strike this bill of exceptions from the record, alleging as a reason therefor that: "Final decree herein was entered in vacation October 16, 1940, and on October 22, 1940, the official court reporter was given notice by appellant to transcribe and file his official notes in this cause as required by law. On December 17, 1940, appellant filed its appeal bond and the same was approved by the Chancery Clerk of Claiborne County, Mississippi, December 17, 1940. The official court reporter never transcribed and filed his notes as required by law. On March 26, 1941, appellant filed and presented to the Chancellor its bill of exceptions which was approved and allowed on March 26, 1941.
"Therefore, the bill of exceptions was filed and presented to the Chancellor and allowed by him out of time allowed by law for filing and presenting bills of exceptions and should be stricken from the record."
Under Section 725, Code of 1930, as amended by Chapter 236, Laws of 1936, this court reporter had sixty days after the filing and approval of the appeal bond herein in which to file a transcript of his notes of the evidence, which time could have been, but was not, extended thirty days under Section 727 of the Code. Section 729 of the Code under which this bill of exceptions was filed provides that "if the original or the copy of the court reporter's notes shall be lost or destroyed, or defaced in any manner, or if the court reporter should die, resign or be unable or otherwise should fail to transcribe his notes, and furnish a typewritten copy of his notes, sixty days additional time shall be allowed for the preparation of a bill of exceptions, or as the case may be, another copy of the transcribed notes. In case a copy of the transcribed notes cannot be furnished, a bill of exceptions may be prepared within the time stated, as in cases where no court reporter takes down the evidence." This clearly allows an appellant in cases where the court reporter fails to file a copy of his transcribed notes of the evidence sixty days additional to the time allowed the reporter in which to file the transcript, in which to furnish a bill of exceptions "as in cases where no court reporter takes down the evidence." The bill of exceptions here was filed within such additional time but the movant says that this additional time if desired by an appellant must be applied for and granted before the expiration of the time allowed the reporter for filing his transcript. The statute does not so require and Mississippi State Highway Department v. Meador et al., 184 Miss. 381, 185 So. 816, 186 So. 642, invoked by the movant, does not so hold though there is language therein that might be so construed.
In that case the court reporter failed to file a transcribed copy of his notes and the appellant obtained an order from the trial judge granting it sixty days from the date of the order in which to file a bill of exceptions. The time thus extended exceeded the limit permitted by the statute. Consequently, the bill of exceptions filed pursuant thereto was stricken from the record. Whether a request for the extension was necessary was not presented for decision.
ON THE MERITS.
Appellant, Old Men's Home, Inc., probated its claim against the estate of C.P. Lee, deceased, the appellee. The claim was contested by his executrix, who is also the sole legatee and devisee in his will. The statement of the claim is in this language: "Amount due for room, board, laundry, nursing and medicine from January 8, 1937, to February 23, 1940, at $30.00 per month for 38 1/2 months, $1155.00." The contest was heard on the pleadings and evidence.
The basis of the claim was that Lee obtained care and maintenance at the Old Men's Home by the false and fraudulent representations that he was over 65 years of age and a pauper, and in such physical condition as to be unable to earn anything, and with no one to depend on for help; when in truth and in fact, at the time he entered the home, and continuously thereafter, up to the time of his death, he had to his credit in a bank in this state something over $5,000, which was unknown to the Superintendent of the Home or any other person connected with it. There was no substantial conflict in the evidence. The Chancellor found that there was no liability on the part of the estate because of the absence of a contract to pay.
The Old Men's Home is a corporation under the laws of this state, with a Board of Trustees, and rules and regulations. Under its charter and governing rules, its purpose and practice is to take care of homeless, helpless, neglected and dependent old men 65 years of age and over, in other words, homeless and helpless paupers.
The funds for the operation and maintenance of the Home are derived from donations from the state legislature, from boards of supervisors of some of the counties and private persons charitably inclined. Sometimes when there was a vacant room in the Home, and an applicant for admission met the requirements, and "some friend or relative was willing to make a donation to the Home which was sufficient with other available funds to enable the Home to provide for the care and maintenance of the applicant, he would be received."
While in the Home Lee was so old and infirm as to be unable to perform any kind of work. The Home furnished him board, lodging, clothing, laundry, nursing care and medical attention. He received, along with other charity patients, "the money contributed by organizations and others for the purpose of being disbursed to the inmates as spending money." The evidence showed, without any conflict, that $30 a month for such care and support was reasonable; that it represented approximately the actual cost to the Home.
It is true, as the Chancellor found, that there was no express contract on the part of Lee to pay the Home anything if it turned out he had procured its services through false and fraudulent representations as to his financial condition; nevertheless, we hold that by reason of such representations the law imposed an obligation on him to make the Home whole. The law denominates it as quasi or constructive contract. Such contracts rest upon the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another. "It is an obligation which the law creates, in the absence of any agreement, when and because the acts of the parties or others have placed in the possession of one person money, or its equivalent, under such circumstances that in equity and good conscience, he ought not to retain it, and which ex aequo et bono belongs to another." Miller v. Schloss, 218 N.Y. 400, 407, 113 N.E. 337, 339. That quotation from the New York Court is supported by the authorities generally. Am. Law Inst. Rest. Law of Restitution, chapter 2, sections 26 and 40; In re Marine Trust Co., 156 Misc. 297, 281 N.Y.S. 553; Sanders v. Ragan, 172 N.C. 612, 90 S.E. 777, L.R.A. 1917B, 681.
The foundation of the principle is equity and good conscience. The same principle applies as in a case of this kind: A induces B, a merchant, by falsely representing himself to be a pauper and unable to earn a living, to furnish him the necessities of life. B acts on such representation, believing it to be true. It turns out to be false, that he has ample means of supporting himself. A, under the law, is due to reimburse B for the value of his contribution.
It is contended on behalf of Lee's estate that the evidence failed to show that he had any financial means when he entered the home, and when he died. There is no merit in that contention. Dr. Harrington, Superintendent of the Home, testified that after Lee's death he had learned that when Lee entered the Home, and continuously, up to the time of his death, he had a credit in a bank exceeding the sum of $5,000.
The contention is further made that under section 1671, Code of 1930, the claim was not probatable because it was made up of unliquidated damages for a tort. There is no merit in that position. It is not sought to recover unliquidated damages. The foundation of the claim is reasonable compensation for care and support. Tarver v. Lindsey, 161 Miss. 379, 137 So. 93, although not directly in point, is illustrative.
We are of opinion that the claim ought to have been allowed by the Chancellor.
Reversed and judgment here for appellant.