Opinion
For Opinion on Hearing, see 74 Cal.Rptr. 250, 449 P.2d 186
White, Harbert, Fort & Schei by Lawrence A. Schei and Gene E. Pendergast, Jr., Sacramento, for petitioner-appellant.
Chickering & Gregory by Charles G. Stephenson, San Francisco, for contestantrespondent.
PIERCE, Presiding Justice.
E. W. Callnon died testate January 2, 1936. He left the residue of his estate in trust. His son, John W. Callnon, was the life beneficiary of the trust estate. Decedent's younger sister, Anna Elliott, was named as trustee. John W. Callnon died in 1966. The will provided that upon the death of John W. Callnon the 'entire trust estate shall go to and vest in my said Trustee.' Anna Elliott had survived the testator but had predeceased John W. Callnon. The decree of distribution in the estate of E. W. Callnon had added something not contained in the will. It had provided that upon the death of John W. Callnon the remainder of the trust estate 'shall go to and vest in said Trustee, Anna Elliott if said Anna Elliott survives said John W. Callnon.'
The issue before the probate court was, and before us is, whether appellant, John G. Callnon, individually and as trustee for himself and Gene W. and Francis W. Callnon (the three being the children of John W. Callnon), or respondent, Maxine Winrott, administratrix of the estate of Anna Elliott (representing herself and six other children of Mrs. Elliott), are entitled to distribution of the entrusted remaider. The probate court held in favor of the Anna Elliott heirs. We will affirm. We reason that such distribution accords with the will of the testator, E. W. Callnon, and that the language and terms of the decree of distribution in the estate of said decedent do not require a contrary ruling.
A further elaboration of facts is necessary. The next of kin of E. W. Callnon when he died in 1936 were John W. Callnon, his son, aged 50, and his sister, Anna Elliott, aged 62. By his will the testator first devised a life estate in certain San Francisco real property to Mrs. Elliott and a life estate in Sacramento real property to another. The residue of the estate (including by inference the remainder interest in the just-mentioned San Francisco and Sacramento real property) he gave to Anna Elliott in trust, the uses and purposes of which are set forth in the will. After vesting in the trustee the usual general management powers, the will provided that the entire net income was to be applied 'for the care, support and maintenance of my son, John W. Callnon, for and during his life.' Further power was given Anna Elliott as trustee to invade corpus 'in her absolute discretion' during any period of illness 'or other manner or [sic] necessity' affecting the beneficiary. The final paragraph of article 'THIRDLY' provides: 'Upon and at the time of the demise of my said son, John W. Callnon, this trust Upon the death of E. W. Callnon his will was admitted to probate. On November 16, 1936, a final account and petition for distribution was filed by Busick as executor. The form of the petition as it related to the trust estate was in the language of the will, i.e., it provided that upon the death of the son, John W. Callnon, 'this trust shall cease and terminate and the entire trust estate shall go to and vest in said Trustee,' but it added her name, 'Anna Elliott.'
On November 30, 1936, the decree of distribution was signed. In it the language of the will relating to the trust was adopted, excepting that the decree provided that at the time of the death of the son, John W. Callnon, and the termination of the trust 'the entire trust estate shall go to and vest in said Trustee, Anna Elliott if said Anna Elliott survives said John W. Callnon.' (The italics of the portion 'tacked on' to the provisions of the will by the decree are ours.) The decree makes no provision for the disposition or distribution of the remainder of the trust estate upon the termination of the trust in the event Anna Elliott predeceased John W. Callnon (which, as has been noted, she did). The order fixing inheritance tax, dated December 9, 1936, named Anna Elliott as the sole owner of the remainder of the trust estate.
No appeal was taken from the decree of distribution, and, of course, it became final many years ago.
Anna Elliott served as trustee until 1955 when she resigned. She died in that same year. Busick was substituted and served until his death in 1957. Thereafter John G. Callnon served as trustee until the death of John W. Callnon in March 1966. Upon John's death his son, as trustee, petitioned for a distribution of the trust estate to himself and his two brothers. Maxine Winrott, as administratrix of the estate of Anna Elliott filed her opposition. Judgment was entered December 28, 1966.
BACKGROUND RULES
It is settled that when the provisions of a decree of distribution which has become final are clear, certain and unambiguous and purport to dispose of the entire estate, they prevail over the provisions of the will--even when the will is misinterpreted. The decree becomes the measure of the rights of all parties interested in the estate, including property left in trust. (Estate of Van Deusen (1947) 30 Cal.2d 285, 290, 182 P.2d 565; Estate of Loring (1946) 29 Cal.2d 423, 427-433, 175 P.2d 524; Estate of Easter (1944) 24 Cal.2d 191, 194, 148 P.2d 601.) In the case last cited, however, we note the following language (on p. 194, 148 P.2d on p. 603): '* * * Having jurisdiction to determine these matters on distribution, when the decrce does so determine them, although the determination may be incorrect, it is conclusive * * *.' (Italics ours.)
Appellant argues first that the decree did not mistakenly interpret the will; secondly, that, even assuming such a mistaken interpretation, the decree is certain and unambiguous and requires distribution of the trust estate remainder to appellant, individually, and as trustee for his brothers. We examine both contentions.
THE QUESTION OF THE WILL'S PROPER INTERPRETATION
We start with a rule of general application: a construction of a will should follow the intent of the testator and any construction which would lead even to partial intestacy is not favored. (Estate of Appellant analogizes the facts in the Estate of Barnes to the situation here. The majority of this court does not recognize any similarity. In Barnes the gift failed because an express contingency upon which it depended failed. Here, it is not even contended that an express contingency existed in the will. It is only argued there was an implied contingency. Moreover, in Barnes the inheritance, if it were to vest at all, would vest both in title and in possession upon the testator's death--in praesenti. Here, the questioned inheritance is a future interest--an interest in a trust estate remainder to vest in possession upon the termination of a trust. Where future interests are involved the rules, and reasons for the rules, applicable to the question of 'implied contingencies' are quite different. Dealing with future interests 'The uniformly recognized preference for early vesting and indefeasibility generally leads to the conclusion that survival is not required unless there is something in the instrument which affirmatively indicates a contrary intention.' (Prof. Halbach--now Dean Halbach--Future Interests: Express and Implied Conditions of Survival, 49 Cal.L.Rev. 297, at p. 299; see also Estate of Stanford (1957) 49 Cal.2d 120, 124, 315 P.2d 681.)
There is nothing in the Callnon will to indicate an intent by the testator that survival by Anna Elliott was to be a contingency upon which her right was to vest. Of course, since her interest was a future interest it vested in possession only upon the happening of the event--the termination of the trust at the end of the life estate--upon which a right of possession depended. Again quoting from Dean Halbach's article (op. cit., p. 431): '* * * This position [i. e., that courts should not readily imply requirements of survival] is not merely based on the traditional preference for early vesting or for early indefeasibility * * *. Instead, the reasons asserted for generally opposing implied conditions have primarily to do with the adverse consequences of such implied conditions, particularly the interference with probable and natural objectives of a testator * * *.'
As stated by Justice Traynor in his dissenting opinion in Estate of Easter, supra, 24 Cal.2d at page 196, 148 P.2d at page 604: '* * * The word 'vest,' however, has more than one meaning (see 44 Words & Phrases Perm.Ed.1940, 191-194; 2 Simes, Law of Future Interests, § 347, p. 82; Leach, Cases on Future Interests, 2d Ed., 255) * * *.' And the opinion goes on to state that an interest may vest in right as distinct from vesting in possession. It says: 'There is a presumption in favor of the vesting of testamentary dispositions at death. Prob.Code, § 28 * * *; Estate of Newman, 68 Cal.App. 420, 424, 229 P. 898; In re De Vries' Estate, 17 Cal.App. 184, 190, 119 P. 109), and 'words expressive of future time are to be referred to the vesting in possession, if they reasonably can be, rather than to the vesting in right.' * * *' (Italics ours.) It is to be noted that the fact Justice Traynor's observations were stated in a dissenting opinion in no way minimizes their value as precedent. We can and do subscribe to their soundness as a matter of the interpretation of a will. The majority opinion in Easter relates to the question of ambiguity in a decree.
At the outset we affirm that there is no doubt that the testator here referred to Anna Elliott when in his will he stated that upon the death of his son and termination of the trust the 'entire trust estate shall go to and vest in my said Trustee.' The word 'Trustee' was descriptio personae. Up to that point in his will his sister, Anna Elliott, was the only person who had been mentioned as trustee. (Later he named his attorney as a possible successor trustee but obviously he did not intend the trust corpus to go to him.) We, therefore, construe the quoted phrase as vesting the future interest in a named person. And the rule is that where a testamentary gift of a future interest is made to a named person without a contrary intent being expressed by the will, no implied contingency of survival will be court inserted. (See Halbach, op. cit., p. 304.)
The fact that here the testator used words of futurity ('the entire trust estate shall go to and vest in my said Trustee') does not imply a requirement of survival. (Estate of Stanford, supra, 49 Cal.2d 120, 315 P.2d 681; Estate of Wallace (1938) 11 Cal.2d 338, 79 P.2d 1094; Estate of Welch (1948) 83 Cal.App.2d 391, 396, 188 P.2d 797; Estate of Newman (1924) 68 Cal.App. 420, 229 P. 898; Randall v. Bank of America (1941) 48 Cal.App.2d 249, 119 P.2d 754; Rest., Property, § 256; Halbach, op. cit., pp. 303-305.)
Appellant relies upon Estate of Easter, supra, 24 Cal.2d 191, 148 P.2d 601, and Estate of Haney (1959) 174 Cal.App.2d 1, 344 P.2d 16, as the basis for urging that the language 'shall go and vest in' indicates an intention that ownership of the trust remainder is not to vest in title until the death of the life tenant. But both Easter and Haney involved gifts to a class (heirs or children) whose members, inferentially, from the words 'shall vest' were held not to be determined until the death of the life tenant.
We do not have to join in the critical debate by legal scholars regarding the soundness of that reasoning (see Halbach, op. cit., p. 317, and Comment, 32 Cal.L.Rev. 320, at pp. 321-322) whether as applied to the interpretation of a will or the interpretation of a decree.
Easter and Haney can be and have been distinguished upon the basis that they relate to gifts to a class. The reasoning of the court depends upon that fact. Where the gift of a remainder interest in a trust estate is to an individual neither the rule nor the reason for the rule applies. (Estate of Newman (1956) 146 Cal.App.2d 780, 784, 304 P.2d 748.)
We construe the intent of E. W. Callnon, deceased, by his will to have been that the title to the trust estate remainder was to vest in right in his sister Anna Elliott at the time of his death, although, of course, it could not vest in possession until the death of the life tenant and termination of the trust. That construction of intent is not only fortified by aids to construction discussed above, it is fortified by the provisions of the will which (1) evidence a realization in several places that the testator had contemplated the possibility of the death of Mrs. Elliott before the death of the life tenant by providing for a substitute trustee in the event of her death-yet made no substitution of a remainderman of the trust estate in that event, and (2) evidence an intent (by the disinheritance clause) not to make any gift-over to his grandsons.
THE QUESTION OF THE AMBIGUITY AND UNCERTAINTY OF THE DECREE
As we have shown, if the decree is unambiguous, it must supersede the will Appellant concedes that the decree is incomplete; that it does not cover the very important matter of the inheritance of the trust estate remainder should Anna Elliott predecease the life tenant. In short, the decree left a gap in the total distribution of the estate. In leaving that gap the probate court did not fulfill its duty. Its duty had been to decree distribution of the entire residue of the estate. (Prob. Code, § 1020.) '[U]pon final distribution it is the duty of the court to distribute all of the residue to the persons entitled * * *.' (Italics ours.) (Humphry v. Protestant etc., Church (1908) 154 Cal. 170, 172, 97 P. 187, 188.) Appellant contends that because the decree used the language 'if said Anna Elliott survives' we must assume that the decree intended an extension of that statement, namely, that Mrs. Elliott's heirs would not inherit if she did not survive; that upon that happening the laws of succession must apply. In other words, appellant would use an assumption to fill the gap and make the decree complete. As we have seen, Estate of Barnes, supra, 63 Cal.2d 580, 583, 47 Cal.Rptr. 480, 407 P.2d 656, does not so hold. Barnes involved an incomplete will, not an incomplete decree of distribution. Nor does any other case cited so hold. Where a will is incomplete the court will refuse to indulge in conjecture to dispose of undisposed of estate. That is not true where a decree of distribution is incomplete. In the latter case, the courts can and should resort, and have resorted, to the will to determine the testator's actual intent. When it does that it does not have to indulge in conjecture. (Estate of Miner (1963) 214 Cal.App.2d 533, 538-539, 29 Cal.Rptr. 601; Estate of Doyle (1962) 202 Cal.App.2d 434, 21 Cal.Rptr. 123.) In the case last cited the trial court had decided on demurrer that a child unborn at the time the will had been made could not inherit, but the decree of distribution had not compelled that result. On appeal the reviewing court reversed, saying on pages 444-445, 21 Cal.Rptr. on page 130: '* * * The will discloses a basic plan and intent to provide a class gift for the benefit of all the issue of the testatrix' son. The decree does not compel us to thwart that intent; * * * at best, the decree is ambiguous, and we can turn to the will to resolve the uncertainty.' The court adds that to hold to the contrary 'would allow the decree's possible ambiguity to shatter the concrete manifestation of the decedent's intent.'
We have already cited Estate of Stanford, supra, 49 Cal.2d 120, 315 P.2d 681. That case distinguishes (on p. 130, 315 P.2d 681) Estate of Easter, supra, 24 Cal.2d 191, 148 P.2d 601, upon which appellant relies. Estate of Stanford holds that the rules for interpretation of wills do not necessarily apply to the interpretation of decrees.
Since the decree of distribution is incomplete, it is uncertain. We can therefore resort to the will to interpret it. As we have held, a proper interpretation of the will leaves us in no uncertainty as to the testator's intent. The will is complete. It covers the entire inheritance of the remainder interest. The will and not the laws of intestacy should fill the gap in the admittedly incomplete decree.
The judgment is affirmed.
FRIEDMAN, J., concurs.
REGAN, Associate Justice (dissenting).
I dissent. The majority opinion holds that the decree of distribution is incomplete. That being incomplete, the decree is uncertain. That being uncertain, this court can resort to the will to interpret the decree. The alleged uncertainty as set forth in the majority opinion is that the decree of distribution 'does not cover the very important matter of the inheritance of the trust estate remainder should Anna Elliott predecease the life tenant. In short, the decree left a gap in the total distribution of the estate. In leaving that gap the probate court did not fulfill its duty. Its duty had been to decree distribution of the entire residue of the estate. (Prob. Code, § 1020.)'
It affirmatively appears that the probate court did construe the will in the decree of distribution. Its language is clear when it provides that the trust created by the testator shall cease and terminate upon the demise of his son John W. Callnon and thereupon the entire trust estate shall go to and vest in said Trustee, Anna Elliott, if said Anna Elliott survives said John W. Callnon. This is clear although in his final account of executor and petition for distribution of estate the executor alleged that under the terms of the testator's will the estate is devised and bequeathed as follows: 'Upon and at the time of the demise of said son, John W. Callnon, this trust shall cease and terminate and the entire trust estate shall go to and vest in said Trustee, Anna Elliott.' The petition was denied by the probate court in this regard.
I find no uncertainty in the probate court's interpretation that the vesting was to be in Anna Elliott, but only if Anna Elliott survived John W. Callnon. The court's interpretation may be erroneous but it is not uncertain.
'* * * [A] decree of distribution that has become final is a conclusive determination of the terms and validity of a testamentary trust and of the rights of all parties thereunder. * * *
'The administration of a decedent's estate involves a series of separate proceeding, each of which is intended to be final [citation], not only to the parties who appear therein, but also as to all persons 'interested in the estate' whose rights may be affected, although they did not appear therein. * * * Thus, section 1020 of the Probate Code * * * assumes that these rights [including a beneficiary's rights under the trust] will necessarily be adjudicated in the distribution proceedings * * *.' (Estate of Loring, 29 Cal.2d 423, 427-428, 175 P.2d 524.) Loring further holds (at p. 432, 175 P.2d at p. 527): 'It is settled, however, that, once final, an erroneous decree of distribution, like any other erroneous judgment, is as conclusive as a decree that contains no error.'
The decree of distribution supersedes the will and prevails over any provision in the will which may be thought inconsistent with the decree. (Estate of Lingg, 71 Cal.App.2d 403, 409, 162 P.2d 707.)
In Estate of Easter, 24 Cal.2d 191, 194-195, 148 P.2d 601, 602, the court states:
'It is settled, however, as conceded by the appellants, that the effect of a will is controlled by the decree of distribution when final. The decree is said to be 'conclusive as an ascertainment and adjudication of the terms of the trust, and of the rights of all parties claiming any legal or equitable interest under the will. [Citations.] The decree supersedes the will and prevails 'over any provision therein which may be thought inconsistent with the decree.' Goad v. Montgomery, supra [119 Cal. 552, 51 P. 681, 63 Am.St.Rep. 145].' Keating v. Smith, 154 Cal. 186, 191, 9 P. 300, 302. In Luscomb v. Fintzelberg, 162 Cal. 433, 438, 123 P. 247, 250, the court stated, 'It was equally within the jurisdiction of the court, and its duty, to determine * * * what other persons had legal or equitable rights to the distributable property of the estate, and the extent and nature of their interests. Having jurisdiction to determine these matters on distribution, when the decree does so determine them, although the determination may be incorrect, it is conclusive as to the rights of heirs, legatees, and devisees unless corrected on appeal. It is not subject to collateral attack or to be impeached by resort to the terms of the will. The rights of the parties must thereafter be determined by resort to the decree of distribution alone as a final and conclusive adjudication In Estate of Miner, 214 Cal.App.2d 533, 538-539, 29 Cal.Rptr. 601, 604, we note: "It is settled * * * that a decree of distribution that has become final is a conclusive determination of the terms and validity of a testamentary trust and of the rights of all parties thereunder.' [Citation.] The effect of a will is therefore controlled by a decree of distribution when final [citation] and to the extent of any inconsistency between the provisions in the will and those in the decree the latter will control. [Citations.] It is within the jurisdiction of the probate court upon proceedings for distribution to determine and declare in the decree the scope and terms of any trust created by the will and found valid, to make distribution to the trustee of the trust property and 'to determine what other persons had legal or equitable rights to the distributable property of the estate, and the extent and nature of their interests. Having jurisdiction to determine these matters on distribution, when the decree does so determine them, although the determination may be incorrect, it is conclusive as to the rights of heirs, legatees, and devisees unless corrected on appeal. It is not subject to collateral attack or to be impeached by resort to the terms of the will. The rights of the parties must thereafter be determined by resort to the decree of distribution alone as a final and conclusive adjudication of the testamentary disposition which the deceased made of his property.' [Citation.]
'Should the decree be uncertain or ambiguous 'the will itself may be used to establish the true meaning and intent of the decree' [citations] and thus to interpret and clarify, but not to contradict, the decree [citations]. In the absence of uncertainty and ambiguity in its language, it is unnecessary for us to go behind the decree in order to determine the intent of the testator.' (See also Estate of Bissinger (1964) 60 Cal.2d 756, 36 Cal.Rptr. 450, 388 P.2d 682; Universal Land Co. v. All Persons, etc., 172 Cal.App.2d 739, 342 P.2d 958; Budny v. Bank of America, 167 Cal.App.2d 1, 333 P.2d 812; Woodring v. Basso, 195 Cal.App.2d 459, 15 Cal.Rptr. 805; Silveira v. Silveira, 138 Cal.App.2d 698, 292 P.2d 567; Estate of Norris, 78 Cal.App.2d 152, 160, 177 P.2d 299.)
For this court to ignore the express language of the decree of distribution that Anna Elliott shall take the estate assets if Anna Elliott survives John W. Callnon is to contradict the decree, for she failed to so survive.
In summary: On the death of the life tenant, the decree must first be looked to for the distribution of the trust estate remainder. In examining the decree in view of the factual situation which developed, it is found that the decree makes an incomplete disposition of the estate. This is so since Anna Elliott predeceased John W. Callnon and the decree specifically provided that the estate shall go to Anna only if she survives the life tenant. This latter condition was specifically added to the decree by the probate judge and was not contested. The ultimate issue, therefore, is whether the resulting incompleteness created an ambiguity so that resort may be had to the will or whether to complete the distribution of the estate resort must be had to the intestate laws of this state. Although under the facts of this case the question is indeed a close one, in my view the decree is not so uncertain or ambiguous as to permit resort to the provisions of the will. The decree is clear that in order to take the remainder, Anna must have survived the life tenant. That Anna did not so survive does not create an ambiguity but merely creates a situation wherein the decree does not make a complete disposition of the estate. In my opinion, therefore, the rules of intestate succession should control. In this connection it should be noted that the fact that an intestacy occurs does not create an ambiguity; a will, for I would reverse the judgment.