Opinion
4-16-1954
In re RESLER'S ESTATE. * RESLER et al. v. ROOS et al. Civ. 15524, 15690.
Jefferson E. Peyser, Guernsey Carson, San Francisco, for appellants. Sullivan, Roche, Johnson & Farraher, San Francisco, for respondents.
In re RESLER'S ESTATE. *
RESLER et al.
v.
ROOS et al.
April 16, 1954.
Rehearing Denied May 14, 1954.
Hearing Granted June 9, 1954.
Jefferson E. Peyser, Guernsey Carson, San Francisco, for appellants.
Sullivan, Roche, Johnson & Farraher, San Francisco, for respondents.
FRED B. WOOD, Justice.
Jacob Resler died testate July 13, 1949. He left surviving him his widow, Fay Lieberman Resler; his stepmother, Yetta Resler; a brother, Abraham Resler; three sisters, Lenore Roos, Gertrude Resler and Mollie Resler Rogers; a nephew, Stanley Resler; a niece, Phyllis Rose Baruch; and no lineal descendant.
Jacob and Fay were married in 1936 and lived together until his death.
Fay has appealed from (1) the findings of fact, conclusions of law and order as to final account of executors, objections thereto, and requests of executors for instructions filed October 10, 1951, and (2) the decree of settlement of final account, supplemental account and final distribution, filed August 8, 1952.
The issues upon these consolidated appeals relate principally to the interpretation properly to be placed upon certain provisions of the will. Specifically, appellant presents these questions: (1) Did the testator dispose of all the community property or only his undivided half-interest therein, and in ascertaining the testator's intent in that regard should the court have entertained appellant's offer of extrinsic evidence? (2) Should the value of certain property held by the testator and a third party as joint tenants have been included in the computation when ascertaining the widow's distributive share under the will? (3) Did the court make proper disposition of the Cambil Roos note? (4) Did the court err in charging the entire estate, including the widow's community interest, with testator's debts, the expenses of administration, and the family allowance? (5) Did the court err in limiting to one year the $2,000 per month family allowance awarded appellant? (6) Did the court err in decreeing that appellant's share is one-half of the property remaining after deduction of estate and inheritance taxes?
(1) Did the testator undertake to dispose of all the community property or only his undivided half interest therein?
'From a reading of the Will,' the trial court found 'that the decedent did not intend to devise or bequeath all of the community property * * * and that he did intend by said Will to bequeath and devise only his half of said community estate.' That is an interpretation of the fourth paragraph of the will, which reads: 'There shall first be set aside to my beloved wife, FAY LIEBERMAN RESLER, property (other than that which I have specifically hereinafter devised and bequeathed) equal in value to one-half ( 1/2) of the community estate of myself and my said wife. In addition thereto, I hereby devise and bequeath to my said wife if she survives me and lives for one hundred and eighty days after my death, such, if any, additional property as with her said share of our community estate shall give to her property of value equal to one-half ( 1/2) of that property which at the date of my death stands in the name of myself or of myself and my said wife (excluding therefrom any property held in the names of my wife and myself as joint tenants with right of survivorship).
'The further provisions of this my Last Will and Testament relate to that portion of my estate remaining after there has been set aside the property to be distributed and devised and bequeathed to my wife in accordance with the foregoing provisions of this paragraph.'
The property parenthetically described as 'that which I have specifically hereinafter devised and bequeathed' consisted of 'all household furniture, personal effects and automobile that I may possess at the time of my death, except as hereinafter specifically devised and bequeathed,' bequeathed to the testator's wife (par. Fifth); $5,000 to his stepmother (Sixth); $2,000 to his sister Frances Resler Rosenfeld (Seventh), which lapsed because she predeceased him; $1,000 to his nephew (Eighth); diamond ring to his niece and wrist watch to his brother (Ninth); his interest in a certain business, operated under the name 'Swift Ltd.,' to his sister Lenore (Eleventh). 1
He gave the residue of the estate to his brother and to his sisters Mollie, Lenore and Gertrude, one-fourth thereof to each, describing the residue as follows: 'All the rest, residue and remainder of my estate, whether the same be real, personal or mixed, of whatever kind or character, and wheresoever the same may be situate, of which I may die seized or possessed, or in which I may have any interest or right of testamentary disposition or power of appointment at my death, and including all failed and lapsed legacies and devises.' (Twelfth.)
A literal reading of this will indicates that the testator dealt with the entire community estate, not merely his half-interest in the community. He dealt with the corpus of that estate, not with his undivided half-interest therein.
First, he directed that 'property' be 'set aside' to his wife, equal in value to one-half the aggregate value of all their community property. (1st sentence of 4th paragraph.) That, in substance, was a direction that the corpus of the community estate be partitioned and, when partitioned, one-half of the corpus (not an undivided half-interest in the whole) be 'set aside' to the wife.
Next, he bequeathed to her 'such, if any, additional property as with her said share of our community estate shall give to her property of value equal to one-half of that property which at the date of my death stands in the name of myself or of myself and my said wife * * * [excluding their joint tenancy property] * * *.' (2nd sentence of 4th paragraph.) This clause applied, at least, to his separate property, whether standing in his sole name or in their names as tenants in common, and augmented the bequest already made from the community estate by giving her 'property' (whether community or separate) equal to one-half the value of all his separate property. This clause, consistently with the first one, dealt with the corpus of the property, not with an undivided interest in it, and required a selection or setting aside of specific items of property, measured by their value. It tends to support, certainly does not cast any doubt upon, our interpretation of the first clause.
Finally, he expressly characterized this 'setting aside' to the wife as testamentary (a devise or bequest) when he declared that the 'further provisions' of his will related to that 'portion of my estate remaining after there has been set aside the property to be distributed and devised and bequeathed to my wife in accordance with the foregoing provisions of this paragraph.' (3rd sentence of 4th paragraph.) Consistently adhering to the concept of setting 'property' (not her undivided interest in property) aside to the wife, he declared the nature and purpose thereof: 'to be distributed and devised and bequeathed to my wife.'
The statement, also, that such 'further provisions' relate to that 'portion of my estate remaining' is additionally consistent with the thought that he was dealing with all the community property (her interest therein as well as his) as if it were a part of 'my [his] estate.'
This 'remaining portion' he dealt with in similar fashion: Specific monetary legacies, to several of his collateral relatives; diamond ring, to his niece; wrist watch, to his brother; other personal effects, automobile, and household furniture, to his wife; his interest in Swift Ltd., to a sister. Each of these provisions is a bequest of the entire interest in a specific item of property. Each tends to confirm, certainly does not negative, the interpretation we have placed upon the first sentence of the fourth paragraph of the will. Respondents argue: (1) the monetary legacies are small in proportion to the amount of cash in the estate, (2) the ring and the watch should be treated as de minimus, (3) the testator's interest in Swift Ltd. may have been his separate property, and, inferentially, (4) he could put the household furniture, automobile and personal effects in his wife's name by simply relinquishing his half-interest therein to her. Such an argument misses the point, which is, simply, that in disposing of the 'portion of my [his] estate remaining' after partitioning the property and giving half of the corpus to his wife, he followed the same pattern, a pattern he could not have followed in respect to community property, without first effecting such a partition. 2
Clearly, the testator intended to and did assert dominion over the entire community estate and undertook to and did dispose of all of it, subject of course to the right of the widow to assert her right to her undivided one-half independently of the will.
It is the 'intent' of the testator which governs in any such case as this. It was so held as early as 1865 in this state: 'The intention of the testator is to be kept in view as the pole star in the construction or interpretation of his will; and it is not to be presumed in the absence of a manifest intent on his part, that he designed to make disposition of any property not his own. But when it does so appear, and the owner of such property accepts a legacy or devise under the will, which acceptance necessarily operates to give effect to the will as an entire disposition by the testator, such acceptance must, by the conditions on which it is founded, be held to be a confirmation of the dispositions of the will. * * * That the testator attempted to deal with the Blucher Rancho [a part of the community estate] as his own property, is evident from the language of his will in respect to it. He uses the language of a sole proprietor, as it would seem, ex industria. He speaks of it as 'my Blucher Rancho' not less than five times in his will.' Morrison v. Bowman, 29 Cal. 337, 350-351.
By 1887, this concept was too well established to require the citation of authority: 'No citation of authorities is required to show that a will is to be construed according to the intention of the testator. Such is the rule prescribed by the Code. It is elementary. It has always been a cardinal canon. As said in Morrison v. Bowman, 29 Cal. 337, the intention of the testator is to be kept in view as the pole star in the construction or interpretation of the will. The language of every clause in the will before us bears evidence of the fact that the testator intended to deal with the whole of the community property; and all the provisions of the will, taken together, afford most convincing proof of the fact that he believed he was dealing with the whole of the community property when he used the words 'all my estate.' He speaks of the home place as 'my residence,' and deals with the household and kitchen furniture as his own, regardless of any claim or right in his wife. He disposes of certain shares of stock as if no one but himself had any interest therein. He refers to a certain stock of grain, and the business in connection therewith, as 'my (his) grain business,' when he must have known (if he was dealing with a half interest only) that his wife would take the other half by operation of law, and with his executors would have the right to control and manage the same after his death, and provides that Major Batte shall wind up the business, and fixes his compensation at two thousand dollars therefor.' In re Stewart's Estate, 74 Cal. 98, 101-102, 15 P. 445, 446.
This unbroken line of authority continues: In re Smith's Estate, 1895, 108 Cal. 115, 119-120, 40 P. 1037; In re Estate of Vogt, 1908, 154 Cal. 508, 510-512, 98 P. 265; In re Estate of Dargie, 1918, 179 Cal. 418, 419-421, 177 P. 165; In re Estate of Moore, 1923, 62 Cal.App. 265, 270-274, 216 P. 981; In re Estate of Emerson, 1947, 82 Cal.App.2d 510, 513-514, 186 P.2d 734; In re Estate of Klingenberg, 1949, 94 Cal.App.2d 240, 243-244, 210 P.2d 514.
The testator having clearly manifested an intent 3 to dispose of the community property in its entirety (the wife's interest as well as his own) and she having insistently elected to take under the will, the will must be given effect in accordance with his intent.
(2) Should the value of certain property held by the testator and a third party as joint tenants have been included in the computation when ascertaining the widow's distributive share under the will?
The parties stipulated and the court found that the whole of the estate of the decedent was community property of himself and his wife.
That would seem to leave no property which would be subject to division, allocation, or bequest pursuant to the provisions of the second sentence of the fourth paragraph of the will.
Yet appellant directs attention to certain property, known as the 'Albany property,' which until testator's death stood in his name and that of his sister, Gertrude Resler, as joint tenants with right of survivorship. It was valued at $40,000.
Appellant claims that property to the amount in value of half of the testator's half interest in the Albany property was devised to her by the provisions of the second sentence of the fourth paragraph of the will. We do not so read the will.
In the first sentence of the fourth paragraph, as we have observed, plaintiff in effect directed partition of the community property, giving his wife half of the corpus of the community as thus partitioned. He then said: 'In addition thereto, I hereby devise and bequeath to my said wife * * * such, if any, additional property as with her said share of our community estate shall give to her property of value equal to one-half ( 1/2) of that property which at the date of my death stands in the name of myself or of myself and my said wife (excluding therefrom any property held in the names of my wife and myself as joint tenants with right of survivorship.'
This 'additional property' would of course be measured by something other than community property. That measure or standard would include his separate property in his estate and subject to his testamentary disposition, whether standing in his name alone or in the names of himself and wife as tenants in common. Conceivably, it might but would not necessarily include separate property of his standing in the names of himself and a third person as tenants in common. But we do not derive from the language used an intent to include property held in joint tenancy with a third person, such as the Albany property.
The normal intendment is that in his will a person deals with property that is actually or potentially subject to his power of disposition; actually, if it is his separate property, or his half-interest in the community; potentially, as we have seen, if it is his spouse's half-interest in the community estate. A testator, of course, has no power of testamentary disposition over his joint tenancy interest, which ceases to exist when he dies. It is no answer to say that here the testator was not undertaking to dispose of his joint tenancy interest in the Albany property, that he was merely using it as a measure of value. Why import into this will an intent to deal with inter-vivos transactions and in effect thwart the result thereof? Where would one stop? Upon what basis could we include a joint tenancy interest and exclude a mere life tenancy? A testator could include either a joint tenancy interest or a life tenancy interest, or both, in his measure of value but the intent to do so must be clearly expressed to overcome the presumption that in his will he deals with and speaks of his disposable interest in property. If we were to go beyond this presumption without a clearly expressed intent which overcomes the presumption in reasonably precise terms, we would enter the realm of fruitless speculation.
This testator has not indicated an intent contrary to the presumption mentioned. Indeed, insofar as he has mentioned a joint tenancy interest, he has indicated an intent to exclude it. When referring to property standing 'in the name of myself and my said wife' he said, 'excluding therefrom any property held in the names of my wife and myself as joint tenants with right of survivorship.'
Yet, appellant would, in effect, read into 'stands in the name of myself' his interest in property standing 'in my name and the name of a third person (other than my wife)' including, not 'excluding,' property held as joint tenants with right of survivorship.
In support of the urge to read this in, appellant says 'It is only natural' that the testator 'would want to compensate his wife for the loss to the estate caused by the various inter-vivos and testamentary gifts of community property' and, having 'taken community property 4 and put it into joint tenancy so that his wife could not reach it, Mr. Resler wanted to compensate her for the loss she was certain to suffer if he predeceased his sister.'
This, we think, proves too much. There was a piece of property which he held in joint tenancy with appellant. She, of course, became sole owner of that property upon his death. We do not know its value. For the purpose of discussion, let us assume it was worth $40,000. His half-interest ($20,000) goes to her automatically. Thus, she receives, according to her formula, more than the one-half which he allotted her by his will. Is she also to receive a further additional $10,000 worth of property out of his estate, predicated upon his already terminated joint interest in the Albany property? If so, she will receive property exceeding by $30,000 the value of the half-interest which, according to her interpretation, he intended she should receive. It is, indeed, a strange 'equalizing' factor that thus disproportionately favors the widow.
We conclude that the trial court correctly found that the Albany property did not come within the purview of the fourth paragraph of the will and that its value could not be considered in determining the value of the property to be distributed to appellant pursuant to the will.
(3) Did the court make proper disposition of the Camil Roos note?
The Camil Roos note, appraised at $32,254.58, was awarded to Lenore, and money in the amount of half the value of the note to appellant. Accumulated interest in the amount of $5,053.39 as of September 4, 1951, was found due the estate but no specific mention of it was made in the decree.
This disposition of the note was erroneous and seems to have resulted from treating the note as the equivalent of the testator's interest in Swift Ltd., which interest the testator gave to Lenore but no longer owned at the time of his death. The bequest was abrogated by destruction of the subject matter. The testator's intent in that regard is clear for in his will he said 'if at the time of my death I am the owner of an interest in that certain business * * * operating under the * * * name of 'Swift Ltd.', I give and bequeath all of my said interest therein to my sister, Lenore Roos' (Emphasis added). This language negatives an intent to bequeath to Lenore the proceeds of the sale of that 'interest.' See In re Estate of Babb, 200 Cal. 252, 256-259, 252 P. 1039; In re Estate of McLaughlin, 97 Cal.App. 481, 275 P. 874.
Accordingly, this promissory note was a part of the community estate of the testator and appellant, not specifically bequeathed by him to Lenore or any other person. It was thus a part of the community estate which by the fourth paragraph of his will was subject to division or partition and allocation.
If, when such division is made, this note is allocated to appellant there will, of course, be no basis for distributing it to Lenore. If, when the division is made, the note is not allocated to appellant, it will go into the residuum and be available for award to Lenore pursuant to a written consent that it be distributed to her, a consent filed by the other residuary legatees; that is, if the note is not needed, as a part of the residuary estate, for the payment of debts, expenses of administration, family allowance and taxes. In the present state of the case the award of the note to Lenore must be annulled.
(4) Did the court err in charging the entire estate, including the widow's community interest, with testator's debts, the expenses of administration, and the family allowance?
The testator did not make provision by his will, and did not designate the estate to be appropriated, for the payment of 'his debts, the expenses of administration, or family allowance'. Nor did he leave any portion of the estate undisposed of by will. Accordingly, 'the property given to residuary legatees and devisees' must be first 'appropriated for that purpose'. Probate Code, § 750; In re Estate of De Santi, 53 Cal.App.2d 716, 717-721, 128 P.2d 434. See also In re Estate of Babb, supra, 200 Cal. 252, 258-260, 252 P. 1039; In re Estate of Bacigalupi, 105 Cal.App. 578, 580-582, 288 P. 122.
The trial court erroneously held the entire estate chargeable with testator's debts, the expenses of administration and family allowance. Instead, the property given the residuary legatees is solely liable if sufficient in amount. The property bequeathed to appellant does not become liable for any part thereof unless and until the residuary property is entirely consumed in paying the debts, expenses and family allowance, and then only for her ratable portion of the remaining unpaid part.
(5) Did the court err in limiting to one year the $2,000 per month family allowance which it awarded the appellant? No.
An order was made allowing appellant, for support and maintenance, $2,000 per month, beginning as of July 13, 1949, and continuing until further order of the court. No further order was made until July 27, 1951, when a minute entry was made declaring, 'Widow entitled to $24,000 family allowance,' followed by this finding in the findings of fact dated September 19th and filed October 10, 1951: 'On August 4, 1949, upon the petition of said Fay Lieberman Resler, widow of decedent, this Court ordered that a family allowance of $2,000.00 per month be allowed and paid to said Fay Lieberman Resler for her support and maintenance beginning as of July 13, 1949, and continuing until further order of the Court. At the time of the hearing on said petition, the attorney for the executors advised the executors that the administration of the estate would be concluded within six or eight months after issuance of letters, and the executors, Camil N. Roos and Lenore Roos, and Lenore Roos individually, in reliance upon said statement, made no objection to the making of the said order for family allowance. Some time prior to the expiration of one year, and in April, 1950, said executrix and widow of said decedent, Fay Lieberman Resler, entered into an oral agreement with her coexecutors, Camil N. Roos and Lenore Roos, that the family allowance should continue for one year following the death of decedent and no further. In reliance upon said agreement, neither the executors, Lenore Roos nor Camil N. Roos nor Lenore Roos individually, made any effort to have the order of family allowance, made as hereinabove set out, vacated or set aside. Following the expiration of said one year period from the date of the death of decedent, and on or about October 11, 1950, said Fay Lieberman Resler, demanded the payment to her of an additional $6,000.00, representing $2,000.00 a month for the period following the end of said one year period, and said $6,000.00 was paid to her upon her executing and delivering to her two coexecutors her agreement in writing that, in the event this Court should determine that the maximum family allowance to which she was or would be entitled to was in the sum of $24,000.00, she would repay to the estate the said $6,000.00. The total amount of family allowance to which said Fay Lieberman Resler is or will be entitled is the sum of $24,000.00, and she is, therefore, indebted to the estate in the sum of $6,000.00, and the executors are directed to reimburse the estate by withholding the sum of $6,000.00 from the amount distributed to her on distribution of the estate. The item in the final account of executors heretofore filed, 'Fay Resler, family allowance to 10/13/50, $6,000.00', which is on page 4 of Exhibit A attached to the account, is disallowed.'
We have examined the record and are convinced that the evidence though in conflict supports this finding of an oral agreement or understanding between appellant, Lenore and Camil.
Accordingly, we conclude that the court properly found and decreed that appellant is indebted to the estate in the sum of $6,000, the excess over $24,000 paid her as family allowance.
(6) Did the court err in decreeing that the widow's share is one-half of the property remaining after deduction of estate and inheritance taxes?
The testator in his will directed that 'all estate and inheritance taxes applicable to or payable on account of all gifts, devises, and bequests made in and by the terms of this my Last Will and Testament be held chargeable to and payable out of my residuary estate and not chargeable to and payable by or collectible from the persons to whom or for whose benefit such gifts, devises and bequests are made.' (Third paragraph of the will.)
The trial court found that this provision had only to do with gifts, devises and bequests made in the will; that the only gift, bequest or devise to appellant is the bequest of household furniture and personal effects, said taxes thereon being payable out of the residuary estate; that the taxes on the other specific bequests (the ring, the wristwatch, the $1,000 to the nephew, and the Camil Roos note to Lenore) are likewise payable out of the residuary estate; and that appellant is entitled to receive 'an undivided one-half of the property hereinbefore listed as remaining for distribution with the execution of the household furniture and jewelry specifically bequeathed, and the promissory note of Camil N. Roos'; i. e., a one-half interest in 'that part of the estate remaining after payment of * * * [expenses of administration, debts of decedent, family allowance, and] * * * the federal estate taxes, if any, assessed against the said estate.'
The error of these findings stems from the erroneous conclusion of law that 'there is no gift or devise or bequest made to Fay Lieberman Resler in article 'Fourth' of the said will.'
Accordingly, all estate and inheritance taxes payable on account of bequests made by the will (including those payable in respect to bequests to appellant expressed in the fourth and fifth paragraphs) must be paid out of the residuary estate.
This means that in allocating specific pieces of property to appellant under the fourth paragraph of the will, the total value of all of the community property (without deduction of any portion of the amount of federal estate or state inheritance taxes) must be used as the yardstick. That total will then be divided by two. The resultant sum will be the measure of the bequest made in the fourth paragraph. Appellant must receive property (in addition to the furniture, automobile and personal effects bequeathed her in the fifth paragraph of the will) which has a total value equal to that sum.
It is apparent that the orders and the decree appealed from must be reversed but that not all the issues involved need be retried. Accordingly, the orders and the decree appealed from are reversed with directions that the trial court revise the findings of fact and conclusions of law, taking such further steps and proceedings in the action as may be meet and proper, and render judgment, all in accordance with the views herein expressed; costs to be borne equally by appellant and respondents.
PETERS, P. J., and BRAY, J., concur. --------------- * Subsequent opinion 278 P.2d 1. 1 Decedent later sold his interest in this business to his brother-in-law Camil Roos, accepting the promissory note of the latter (dated January 4, 1949) in the principal sum of $52,254.58, bearing interest at 6%. By the date of the testator's death, the principal sum had been reduced to $32,254.58. There was interest unpaid which by September 4, 1951, accumulated to $5,053.39. 2 Neither member of the community has the legal capacity by his own act alone whether inter-vivos or by will, to require or to effect a partition of the property of the community. The interests of husband and wife may be segregated only in the instances and in the manner provided by statute; i. e., by agreement of husband and wife, Civ.Code, §§ 158-159, by divorce decree, Civ.Code, § 146, by separate action based upon a divorce decree which made no disposition of community property (Percy v. Percy, 188 Cal. 765, 771), or as the result of an unsuccessful divorce action or action for separate maintenance. Civ.Code, §§ 136, 137, 141. See McClain v. Tufts, 83 Cal.App.2d 140, 142, 187 P.2d 818. 3 In the absence of ambiguity, patent or latent, there is no basis for the consideration of extrinsic evidence bearing upon such intent. 4 We are aware of no proof that the Albany property was community property at any time.