Opinion
Nos. 16880 16881
5-22-1956
In the Matter of the ESTATE of Fred Mason CARTER Deceased. AMERICAN CANCER SOCIETY, Shriners Hospital for Crippled Children, Santa Clara County Heart Association, Crippled Childrens Society of Santa Clara County, and National Foundation for Infantile Paralysis, Inc., Contestants and Appellants, v. CHURCH DIVINITY SCHOOL OF THE PACIFIC, and Bank of America National Trust & Savings Association, Respondents. In the Matter of the ESTATE of Mabel C. CARTER, Deceased. AMERICAN CANCER SOCIETY, Shriners Hospital for Crippled Children, Santa Clara County Heart Association, Crippled Childrens Society of Santa Clara County, and National Foundation for Infantile Paralysis, Inc., Contestants and Appellants, v. CHURCH DIVINITY SCHOOL OF THE PACIFIC, and Bank of America National Trust & Savings Association, Respondents.*
Peart, Baraty & Hassard, San Francisco, for American Cancer Society. Gerald S. Chargin, San Jose, for Foundation for Infantile Paralysis, Inc. J. Clark Benson, San Francisco, for Shriner's Hospital for Crippled Children. Richard G. Lean, San Jose, for Crippled Children's Society of Santa Clara County. Douglas, Zingheim & Allen, San Jose, for Santa Clara County Heart Ass'n, Bruce F. Allen, San Jose, of counsel. Ridley Stone, Berkeley, for Church Divinity School of the Pacific. Rea, Frasse & Anastasi, San Jose, for Bank of America Nat. Trust & Savings Assn.
In the Matter of the ESTATE of Fred Mason CARTER Deceased.
AMERICAN CANCER SOCIETY, Shriners Hospital for Crippled Children, Santa Clara County Heart Association, Crippled Childrens Society of Santa Clara County, and National Foundation for Infantile Paralysis, Inc., Contestants and Appellants,
v.
CHURCH DIVINITY SCHOOL OF THE PACIFIC, and Bank of America National Trust & Savings Association, Respondents.
In the Matter of the ESTATE of Mabel C. CARTER, Deceased.
AMERICAN CANCER SOCIETY, Shriners Hospital for Crippled Children, Santa Clara County Heart Association, Crippled Childrens Society of Santa Clara County, and National Foundation for Infantile Paralysis, Inc., Contestants and Appellants,
v.
CHURCH DIVINITY SCHOOL OF THE PACIFIC, and Bank of America National Trust & Savings Association, Respondents.*
May 22, 1956.
Rehearing Denied June 21, 1956.
Hearing Granted July 18, 1956.
Peart, Baraty & Hassard, San Francisco, for American Cancer Society.
Gerald S. Chargin, San Jose, for Foundation for Infantile Paralysis, Inc.
J. Clark Benson, San Francisco, for Shriner's Hospital for Crippled Children.
Richard G. Lean, San Jose, for Crippled Children's Society of Santa Clara County.
Douglas, Zingheim & Allen, San Jose, for Santa Clara County Heart Ass'n, Bruce F. Allen, San Jose, of counsel.
Ridley Stone, Berkeley, for Church Divinity School of the Pacific.
Rea, Frasse & Anastasi, San Jose, for Bank of America Nat. Trust & Savings Assn.
BRAY, Justice.
This is a consolidated appeal from an order in the Estate of Fred M. Carter, deceased, instructing the trustee of the trust created by his will, and from an order in the Estate of Mabel Carter, deceased, instructing the executor of her will. Questions Presented.
The probate court, in the two orders appealed from, determined that Mabel Carter had not exercised her power of appointment over the corpus of the trust established by her husband, Fred. This interpretation gives respondent, the Church Divinity School of the Pacific, all the corpus of the trust. If Mabel did exercise her power of appointment, the respondent and the five appellants will each receive one-sixth of the corpus.
1. What is the effect of section 125, Probate Code?
2. Was extrinsic evidence admissible? Facts.
Fred and Mabel Carter each executed wills on September 30, 1949. Later Fred executed a codicil to his will. He died September 7, 1951. Mabel executed nine codicils to hers. She died April 21, 1954.
Fred's will created two trusts herein referred to as Trusts A and B respectively. Trust A consisted of one-half the residue of Fred's estate. This trust provided that Mabel might transfer her own property to the trust at any time; that the trustee should pay to Mabel, for her life, the entire income from the trust; that the trustee, in its discretion, or upon the directions from Mabel, should pay to her any or all of the corpus; that the trust should terminate upon the death of Mabel, and that she should have a power of testamentary appointment over the corpus of the trust, and that, if there be a failure of disposition, there would be a gift over to Trust B. As to the power of appointment, Fred's will stated: 'With respect to the said Trust A, my said wife is hereby granted a power to appoint the entire corpus thereof free of the Trust, in favor of her own estate or of any other beneficiary or beneficiaries whom my said wife may designate, which power shall be exercisable by my said wife alone, and in all events but shall be effective only if exercised by a valid will of my said wife.'
Trust B consisted of the remaining one-half of the residue of Fred's estate. By this trust Fred directed the trustee to pay the income therefrom to Mabel for her life, and made provisions for invasion of the corpus. He also provided that this trust should terminate upon the death of his wife and, in the event his wife should predecease him or not exercise her power of appointment of Trust A, that the corpus of Trust B should be paid to the same persons named in his will to receive his estate.
Fred's will then listed 28 specific legacies, with the residue given to respondent Church Divinity School. He further provided that if his wife should survive him and should have not transferred her estate to Trust A or should have exercised the power of appointment over Trust A, 13 of the listed 28 legacies should have no effect because they were gifts personal to his wife and would be provided for by her will. One of the clauses which was to remain in effect in any event was that which gave the residue of his estate to respondent.
The pertinent parts of Mabel's will provided for the same 13 legacies which were to have no effect under Fred's will in the event she should survive him and should have not transferred her estate to Trust A or should have exercised the power of appointment over Trust A. She then left the residue of her estate to respondent. In a codicil dated March 1, 1953, the residue clause was amended to read: 'All the rest, residue and remainder of my estate, whether the same be real, personal or mixed, and wheresoever the same may be situated, including any and all lapsed bequests under this will, I give devise and bequeath equally to the following organizations and institutions:' the five appellants and respondent.
Mabel did not transfer her estate to Trust A. The trustee and the executor petitioned for instructions as to whether Mabel had exercised her power of appointment. The probate court held that she did not intend to do so and had not done so. In so holding the court filed an opinion in which it stated that there was no ambiguity in Mabel's will, and hence the attorney's testimony 'was not necessary.'
Section 125, Probate Code reads: 'A devise or bequest of all the testator's real or personal property, in express terms, or in any other terms denoting his intent to dispose of all his real or personal property, passes all the real or personal property which he was entitled to dispose of by will at the time of his death, including property embraced in a power to devise.' (Emphasis added.) California Trust Co. v. Ott, 59 Cal.App.2d 715, 140 P.2d 79, 80, points out that the section is a reenactment of Civil Code sections 1330 and 1331 and is 'one of interpretation.' Childs v. Gross, 41 Cal.App.2d 680, at page 689, 107 P.2d 424, at page 429, is to the same effect, holding 'Section 125 of the Probate Code provides a rule for the construction of wills * * *'. 1. Section 125, Probate Code, Applies.
In determining Mabel's intention we must read section 125 into the will. The testator is presumed to know the law and that the court will if possible read section 125 into the will. See In re Estate of Carroll, 138 Cal.App.2d 363, 291 P.2d 976, where we held that in determining whether a will is ambiguous and that extrinsic evidence should be considered, section 92, Probate Code (the antilapse statute) must be read into the will and that the testator is presumed to know that the court would read that section into the will. The testator's intention must be ascertained from the provisions of the will construed in the light of section 125, if possible.
As said in Harvard Trust Co. v. Frost, 1927, 258 Mass. 319, 154 N.E. 863, at page 864, 'It is well settled that a devise of all one's property is presumed to include a general power of appointment, unless the contrary appears from the will.' (Emphasis added.)
Section 125 provides that a devise or bequest of all a testator's real or personal property in express terms passes 'property embraced in a power to devise.' The codicil of March 1st devised all the remainder (the other portion of her property being devised and bequeathed in other portions of the will) of her estate, real, personal and mixed. Thus the will and codicil constituted a devise or bequest of all testator's property including the property subject to her power to devise. In California Trust Co. v. Ott, supra, 59 Cal.App.2d 715, 140 P.2d 79, the husband and wife created a trust agreement, with a power of appointment in the husband. Thereafter, the husband made a will in which he said "I give, devise and bequesth to my beloved wife * * * all the rest and residue of my estate, both real, personal and mixed * * *." The will having been executed prior to the adoption of section 125 of the Probate Code, the court applied sections 1330 and 1331 of the Civil Code, and held that properly interpreted the will was 'an exercise of the power, to devise the trust property, which the trustor-husband had retained.' 59 Cal.App.2d at page 717, 140 P.2d at page 80. In Childs v. Gross, supra, 41 Cal.App.2d 680, 107 P.2d 424, the testator was one of the beneficiaries of a trust. His will devised and bequeathed all of his property, both real and personal, to an individual. The court applied section 125, Probate Code, to this clause and held that it constituted an exercise of his power of appointment of his interest in the trust. Here, the will disposes of testatrix' entire estate and therefore, under section 125, would appear to include 'property embraced in a power to devise', but an examination of the entire will indicates a contrary intent.
Respondent concedes that section 125 should be read into the will. It contends, however, that doing so and then construing the will as a whole it appears on the face of the will (1) that Mabel did not exercise her power of appointment, or (2) the will is ambiguous and it cannot be determined therefrom whether she did or did not exercise that power. It points particularly to paragraph sixth where it is provided that if at the time of her death she has transferred her estate into the trust provided in her husband's will, then the 13 legacies provided in paragraph fifth shall lapse 'for the reason that the said bequests will have been provided for under the terms of my said husband's will.' However, and his will, in which he bequeaths exactly the same amounts to these same legatees, these bequests were to be effective only if Mabel not only transferred her estate to the trusts but also failed to exercise her power of appointment. Thus, if Mabel were to transfer her estate to the trusts and also exercised her power of appointment, the 13 legatees would get nothing from either estate--nothing from her estate because she had caused the bequests to lapse believing they would come from her husband's estate, and nothing from the latter estate because she had exercised her power of appointment. It must be presumed that Mabel knew the contents of her husband's will because she refers to it, and it is evident that as to these 13 bequests she did not want the legatees to take both under his and her will. She, however, did want them to take under one will or the other. Thus, so far as the effect on paragraph sixth is concerned, it is clear that Mabel did not intend that the provisions of the will should constitute the exercise of her power of appointment. However, in other provisions of her will she provided 34 specific bequests and a residue to six charities, which, in the event mentioned in paragraph sixth, namely, that she transferred her estate into the trusts, could not be satisfied unless she did exercise her power of appointment. Thus, we have one part of the will consistent with her exercising her power, and another part inconsistent therewith.
Appellants argue that Mabel never at any time intended to transfer her estate to the trusts and hence paragraph sixth should not be considered. However, we cannot disregard the plain language of that paragraph which provided for the contingency of her doing so, and which is inconsistent with an exercise of her power of appointment. As said in Childs v. Gross, supra, 41 Cal.App.2d 680, 690, 107 P.2d 424, 430, quoting from Morffew v. San Francisco & S. R. R. Co., 107 Cal. 587, 40 P. 810, "the intent to execute a power must be clear, so that such intent is not left in doubt." In view of the conflict between the provisions of paragraph sixth and the other provisions of the will read with section 125, we cannot say that the testatrix evidenced a clear intent one way or the other. 2. Extrinsic Evidence.
While the court admitted extrinsic evidence, it is interesting to note that in its opinion it stated that the clause in Mabel's will relied upon as an exercise by her of her power of appointment was not ambiguous and therefore the attorney's evidence was not necessary.
To determine this question the circumstances under which the will was made may be considered. Probate Code, § 105. In Morffew v. San Francisco & S. R. R. Co., supra, 107 Cal. 587, at page 600, 40 P. 810, at page 815, the court said: "For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject of the instrument, and of the parties to it, may also be shown, so that the judge be placed in the position of those whose language he is to interpret.' Code Civ.Proc., § 1860.' It is the general rule and is set forth in section 105, Probate Code, that while the circumstances under which a will is made may be shown, the 'oral declarations of the testator as to his intentions' may not. Here, the probate court admitted the testimony of the draftsman of the will as to testatrix' instructions at the time of drawing the will. Such evidence is an exception to the general rule and has been held not violative of section 105. 'There is, of course, a broad difference between testimony of the casual remark of a man as to his intention to leave a portion of his estate to this person or the other, and the positive instructions which he has given to his attorney in the very performance of the testamentary act, and in any proper case such instructions may be received, without doing violence to section 1340 of the Civil Code [now Probate Code, § 105].' In re Estate of Dominici, 151 Cal. 181, 185, 90 P. 448, 450. See In re Estate of Greenwald, 19 Cal.App.2d 291, 297, 65 P.2d 70; In re Estate of Nunes, 123 Cal.App.2d 150, 158, 266 P.2d 574. Thus the testimony of the attorney was properly admitted. The judge in his 'Memorandum of Opinion' stated that the will was not ambiguous, that the attorney's testimony was not necessary, and that 'From the tenor of the will and the surrounding circumstances' it appeared that Mabel did not exercise her power of appointment. 'It is a well recognized rule that different parts of a will must be harmonized if possible, giving expression to all of the terms therein and forming from them one consistent whole.' In re Estate of Halsell, 133 Cal.App.2d 665, 671, 284 P.2d 821, 825. The construction of the will given by the probate court harmonizes the entire will, preventing the lapse of any bequest. Assuming that the court erred in holding that the will is not ambiguous, such error is not important. With the addition of the attorney's testimony and the requirement that the provisions of the will be harmonized if possible, the court could only have reached the same conclusion that it did. Therefore it will not be necessary for the case to be returned to the probate court for further proceedings. Its conclusions are correct. 'If the judgment or order is right on any applicable theory, it must be sustained regardless of the considerations which may have moved the trial court to its conclusion. In other words, it is judicial action, and not judicial reasoning or argument, that is the subject of review, and if the former is correct, the reviewing court is not concerned with the faults of the latter.' 4 Cal.Jur.2d p. 391; see also Lincoln v. Superior Court, 22 Cal.2d 304, 315, 139 P.2d 13.
The orders are affirmed.
PETERS, P. J., and FRED B. WOOD, J., concur. --------------- 1 By Santa Clara County Heart Association, Crippled Childrens Society of Santa Clara County, Inc., American Cancer Society (Santa Clara County Chapter), Shriners Hospital for Crippled Children, and National Foundation for Infantile Paralysis, Inc. (Santa Clara County Chapter). 2 Bank of America National Trust & Savings Association is the trustee of the trust created by Fred M. Carter, and the executor of Mabel Carter's will. 3 It is interesting to note that under Fred's will, after providing for care for his wife for life, the only dispository language is dependent upon the two conditions, (1) that Mabel transfer her estate to the trusts, and (2) that she not exercise her power of appointment. As she did not transfer her estate there was a complete intestacy under Fred's will. This was cured in the decree of distribution in his estate by appropriate language. 4 The attorney who drafted the wills and several of the codicils, particularly that of March 1st which it is claimed constitutes an exercise of the power of appointment, testified over objection that in talking with Mabel concerning said codicil she stated she did not intend by making it to exercise the power of appointment and that he advised her that to exercise the power she would have to do so in express terms. 5 The court never formally ruled on appellants' objections to this testimony. Appellants contend that the court considered it in spite of its statement that the testimony was unnecessary. 6 The only statement that the will is not ambiguous appears in the court's memorandum decision. Normally such opinion cannot be considered "as indicating what operated upon its (the trial court's) mind in coming to a conclusion as to the ultimate facts of the case. * * * The deliberations of the court are conclusively merged in the judgment. The findings of fact and conclusions of law constitute the decision which is the final, deliberate expression of the court." Oldis v. La Societe Francaise, 130 Cal.App.2d 461, 279 P.2d 184, 192, quoting from DeCou v. Howell, 190 Cal. 741, 214 P. 444.