Opinion
7-11-1956
In the Matter of the ESTATE of Joseph FELDMAN, Deceased. Helen Hayner FELDMAN, Petitioner and Appellant, v. ESTATE of Rose F. METZGER, Respondent.* Civ. 21669.
Hanna & Morton, Harold C. Morton, Los Angeles, Max K. Jamison, Porterville, for appellant. Pacht, Ross, Warne & Bernhard, Isaac Pacht, Stuart L. Kadison, Harvey M. Grossman, Los Angeles, for respondent.
In the Matter of the ESTATE of Joseph FELDMAN, Deceased.
Helen Hayner FELDMAN, Petitioner and Appellant,
v.
ESTATE of Rose F. METZGER, Respondent.*
Hanna & Morton, Harold C. Morton, Los Angeles, Max K. Jamison, Porterville, for appellant.
Pacht, Ross, Warne & Bernhard, Isaac Pacht, Stuart L. Kadison, Harvey M. Grossman, Los Angeles, for respondent.
FOURT, Justice.
This is an appeal by Helen Hayner Feldman, the widow of Joseph Feldman, deceased, and one of the beneficiaries under the terms of his will, from an order instructing the trustees to pay to the estate of Rose F. Metzger all monies ascertained to have been received during the period June 24, 1953 1 to January 5, 1954, on the corpus of each of the trusts created by paragraphs Fifth (B) and Fifth (C) of the will of decedent.
Joseph Feldman died on July 24, 1953. Under the terms of his will, dated July 1, 1948, three trusts were created, only two of which are involved in this appeal. The two trusts in question were created by paragraphs Fifth (B) and Fifth (C) of decedent's will, the provisions of which are as follows:
'Fifth: All the rest, residue and remainder of my estate, both real and personal, and wheresoever the same may be situate, shall be divided into three parts of fifty (50%) per cent, twenty-five (25%) per cent and twenty-five (25%) per cent, respectively, which I give, devise and bequeath as follows: * * * * * *
'(B) Another such part of twenty-five (25%) per cent to my Trustees hereinafter named, in trust, nevertheless, to invest the same and keep the same invested, to collect the rents, income and profits thereof, and to pay over the net income arising therefrom to my sister, Rose F. Metzger, during her lifetime, and upon her death to pay over the net income arising therefrom to my wife, Helen Hayner Feldman, and upon the death of my sister and my wife, the principal shall be disposed of as follows:
'(a) In the event my wife predeceases my sister, then upon my sister's death in such manner as my sister, in her uncontrolled discretion, shall have directed and appointed by her Last Will and Testament and in default of such appointment, the principal thereof shall pass to the heirs-at-law of my sister.
'(b) In the event my sister predeceases my wife, then upon my wife's death in such manner as my wife, in her uncontrolled discretion, shall have directed and appointed by her Last Will and Testament and in default of such appointment, the principal thereof shall pass to the heirs-at-law of my wife.
'(C) Another such part of twenty-five (25%) per cent to my Trustees hereinafter named, in trust, nevertheless, to invest the same and to keep the same invested and collect the rents, income and profits thereof and to pay over such portion of the net income arising therefrom to my wife, Helen Hayner Feldman, during her lifetime, monthly, to the extent that my Trustees, in their discretion, deem necessary that the income provided to be paid her under the provisions of paragraph 'Fifth (A)' be supplemented for her proper support and maintenance during that period, and further, if in any calendar year subsequent to the year in which my death shall occur, the income from this Trust should, in the opinion of my Trustees, be insufficient together with the income from the Trust created in paragraph 'Fifth (A)' hereof, to provide for proper support and maintenance for my wife, then to pay over to my said wife out of the principal of this Trust so much thereof as my Trustees deem necessary for her support and maintenance during that period, and during the lifetime of my wife to pay over the balance of the net income, and upon her death the whole of the net income arising therefrom, to my sister, Rose F. Metzger, monthly during her lifetime, and upon the death of my wife and my sister, the principal or so much thereof as shall be remaining in the hands of my said Trustees, shall be disposed of as follows:
'(a) In the event my wife predeceases my sister, then upon my sister's death in such manner as my sister, in her uncontrolled discretion, shall have directed and appointed by her Last Will and Testament and in default of such appointment, the principal thereof shall pass to the heirs-at-law of my sister.
'(b) In the event my sister predeceases my wife, then upon my wife's death in such manner as my wife, in her uncontrolled discretion, shall have directed and appointed by her Last Will and Testament and in default of such appointment, the principal thereof shall pass to the heirs-at-law of my wife.'
Under the terms of the will, Helen Hayner Feldman, Rose F. Metzger and Percival E. Jackson were anmed as executors, qualified as such and acted until January 5, 1954, at which time Rose F. Metzger died. Decedent's will named Rose F. Metzger and Percival E. Jackson, together with the Farmers and Merchants National Bank of Los Angeles as trustees of the trusts created by paragraphs Fifth (B) and (C) of the will.
In their amended first account current and report, the executors reported net income from the estate in the amount of $146,407.45, as of June 30, 1954. Pursuant to an order for partial distribution dated September 2, 1954, the sum of $12,500 from the income cash on hand was distributed to the trustees of the trust created by paragraph Fifth (B) and a similar amount distributed to the trustees of the trust created by paragraph Fifth (C). Pursuant to a further order for partial distribution dated November 12, 1954, the sum of $24,101.86 cash from the income on hand was distributed to the trustees of the trust created by paragraph Fifth (B), and a similar amount distributed to the trustees of the trust created by paragraph Fifth (C).
During the period of administration of the estate Helen Hayner Feldman, the widow of decedent, has received a family allowance from the estate of $5,000 per month. Such sum has been ample, without reference to the income payable to her under the trust established by paragraph Fifth (A) of the will, for her proper support and maintenance. The trustees have made no finding that any additional monies are or were, during the period from July 24, 1953, through January 5, 1954, so needed by Helen Hayner Feldman.
On a petition for instructions Filed by the trustees, the trial court determined that the estate of Rose F. Metzger is entitled to all of the net income received by the executors on the corpus of the trusts created by paragraphs Fifth (B) and Fifth (C) of the will of Joseph Feldman for the period commencing with the date of the death of Joseph Feldman on July 24, 1953, to and including January 5, 1954, the date of the death of Rose F. Metzger, although such income was not distributed to the trustees until September 2, 1954. It is from this decision that the appeal herein is taken.
Appellant contends that the provisions of Section 730.06 of the Civil Code are applicable and that she, as successor beneficiary, is entitled to the income undistributed at the death of Rose F. Metzger, the first life mcome beneficiary.
Section 730.06 of the Civil Code provides as follows: '[Cessation of right of tenant to income.] Whenever a tenant's right to income shall cease by death, or in any other manner, all payments theretofore actually paid to the tenant or in the hands of the trustee for payment to the tenant shall belong to the tenant or to his personal representative; all income actually received by the trustee after such termination shall be paid to the person next entitled to income by the terms of the transaction by which the principal was established.'
It is appellant's contention that, applying the foregoing provisions of Section 730.06 of the Civil Code, when a trust is created to pay the income to a beneficiary for life and thereafter to pay the income to another beneficiary, upon the death of the first beneficiary the second beneficiary is entitled to receive all income from the trust which has not at the date of the death of the first life income beneficiary been paid to such beneficiary or is not yet in the hands of the trustees to pay to such beneficiary.
Respondent, upon the other hand, contends that Section 160 of the Probate Code is determinative of the issue and the construction of Section 730.06 of the Civil Code urged by appellant would nullify Section 160 of the Probate Code and result in a forfeiture of a vested right in those cases wherein the income beneficiary dies prior to the decree of distribution or transfer into the hands of the trustee. Section 160 of the Probate Code provides: 'In case of a bequest of the interest or income of a certain sum or fund, the income accrues from the testator's death.'
Although a bequest of income accrues as of the date of the testator's death, and the beneficiaries of a testamentary trust are entitled to receive the income as of that date, the rule is controlled by the intention of the testator. Probate Code, §§ 160, 163; In re Estate of Platt, 21 Cal.2d 343, 348, 131 P.2d 825; In re Estate of Schiffmann, 86 Cal.App.2d 638, 644, 195 P.2d 484. A decree directing distribution in plain and unambiguous terms operates as an interpretation of the will and binds the parties, precluding resort to the dispositive provisions of the will. In re Estate of Tynan, 129 Cal.App.2d 364, 366, 276 P.2d 809; Cook v. Cook, 17 Cal.2d 639, 652, 111 P.2d 322; In re Estate of Loring, 29 Cal.2d 423, 427, 175 P.2d 524. Also, it is settled that a decree of distribution which has become final is a conclusive construction of the will as against all interested parties, including beneficiaries of a testamentary trust. In re Estate of Van Deusen, 30 Cal.2d 285, 290, 182 P.2d 565; In re Estate of Easter, 24 Cal.2d 191, 194, 148 P,2d 601; In re Estate of Loring, supra, 29 Cal.2d at pages 428-429, 175 P.2d 524; In re Estate of Tynan, supra. Furthermore, once final, an erroneous decree of distribution, like any other erroneous judgment, is as conclusive as a decree that contains no error. In re Estate of Loring, supra, 29 Cal.2d at page 432, 175 P.2d 524.
In the instant case the decrees of distribution of September 2, 1954, and November 12, 1954, ordered distribution of the sum of $36,601.86 to the trustees of the trust created by paragraph Fifth (B) and a similar sum to the trustees of the trust created by paragraph Fifth (C) 'to be held, used, managed and disposed of as follows: (1) To invest the principal of the estate and keep the same invested, and to collect the rents, income and profits thereof, and to pay over the net income arising therefrom' as provided in paragraphs Fifth (B) and Fifth (C) of decedent's will. (Italics added.) The decrees did not order the trustees to pay to the beneficiaries as income the sum distributed, but on the contrary ordered the trustees 'to invest the principal of the estate [so distributed]' and 'to pay over the net income arising therefrom' to the beneficiaries.
An issue concerning income which accrued during probate may be raised upon appeal from a decree of distribution. In re Estate of Platt, supra, 21 Cal.2d 343, 131 P.2d 825; In re Estate of Schiffmann, supra, 86 Cal.App.2d 638, 195 P.2d 484; In re Estate of Tynan, supra, 129 Cal.App.2d 364, 367, 276 P.2d 809. However, since no appeal was taken in the instant case, the decrees have become final and the beneficiaries are bound thereby.
We are of the opinion that under the decrees of distribution of September 2, 1954, and November 12, 1954, the estate of Rose F. Metzger is not entitled to any of the estate distributed to the trustees under those decrees. It is unnecessary, therefore, for us to consider the applicability of Section 730.06 of the Civil Code.
The judgment is reversed.
WHITE, P. J., and DORAN, J., concur. --------------- * Opinion vacated 301 P.2d 627. 1 This is an obvious typographical error in the order which should read 'July 24, 1953'. the date of decedent's death. The findings of fact and conclusions of law correctly give the period in question as July 24, 1953 to January 5, 1954.