Opinion
As Modified May 22, 1970.
Opinion on pages 627 to 636 omitted
HEARING GRANTED
Rehearing Denied June 4, 1970.
For Opinion on Hearing see, 91 Cal.Rptr. 505, 478 P.2d 17
Sid Mannheim, in pro per.
[86 Cal.Rptr. 901]Thomas C. Lynch, Atty. Gen., and Ariel C. Hilton, Deputy Atty. Gen., for real party in interest, State of California.
STEPHENS, Acting Presiding Justice.
Janet Nieto died intestate in Los Angeles County on March 19, 1968. Her estate is being administered by the Public Administrator. On December 8, 1968 petitioner (attorney for the heirs of decedent's predeceased spouse) filed a petition to determine heirship. Pursuant to this petition, on May 29, 1969 the court made the following order:
'IT IS ORDERED AND DECREED as follows: 1. That deceased, JANET NIETO, died on March 19, 1968, without leaving a surviving spouse, issue or descendants of issue, leaving estate consisting of the property enumerated in the Inventory and Appraisement, and Supplements thereto, on file herein; 2. Said property consists wholly of property which was formerly held in joint tenancy by decedent and her predeceased spouse ALFONSO ENRIQUE NIETO and vested in decedent by right of survivorship upon the death of said predeceased spouse, ALFONSO ENRIQUE NIETO, and is now vested in the below named heirs at law, subject to administration by BALDO M. KRISTOVICH, the duly appointed Public Administrator: PAUL M. NIETO, MRS. DOLORES N. DURAN, GEORGE J. TOUCEY, MRS. JOSEPHINE N. ACOSTA, EVANGELINA N. ESCOBAR.'
This order was apparently made pursuant to Probate Code, section 228, which then provided:
The court made no finding as to whether the property was originally community and therefore governed by Probate Code, section 228, or separate and therefore governed by Probate Code, section 229. However, since the court decreed that the heirs of the predeceased spouse were only entitled to one-half of the estate, we must presume a finding that the property was originally community, and that rights of succession should be governed by Probate Code, section 228.
'If the decedent leaves neither spouse nor issue, and the estate or any portion thereof was community property of the decedent and a previously deceased spouse, and belonged or went to the decedent by virtue of its community character on the death of such spouse, or came to the decedent from said spouse by gift, descent, devise or bequest, or became vested in the decedent on the death of such spouse by right of survivorship in a homestead, or in a joint tenancy between such spouse and the decedent or was set aside as a probate homestead, such property goes in equal shares to the children of the deceased spouse and their descendants by right of representation, and if none, then one-half of such community property goes to the parents of the decedent in equal shares, or if either is dead to the survivor, or if both are dead in equal shares to the brothers and sisters of the decedent and their descendants by right of representation, and the other half goes to the parents of the deceased spouse in equal shares, or if either is dead to the survivor, or if both are dead, in equal shares to the brothers and sisters of said deceased spouse and to their descendants by right of representation.'
No allocation of the remaining one-half of the estate was made, and that portion remains unallocated.
Effective November 10, 1969, the following paragraph was added to section 228;
All section references will be to the Probate Code unless otherwise indicated.
'If any of the property subject to the provisions of this section would otherwise escheat to this state because there is no relative, including next of kin of the decedent or of his predeceased spouse, such property shall be distributed in accordance with the provisions of paragraph 2 of Section 296.4 of this code.'
Section 296.4, as amended in 1968, provides in pertinent part:
'If a portion of the estate which was the community property of the husband [86 Cal.Rptr. 902]and wife would otherwise escheat to the state under this section and Sections 201, 228, and 231 because there is no relative, including next of kin, of one of the spouses to succeed to such portion of the estate, such portion of the estate shall be distributed in equal shares to the children of the other spouse and to their descendants by right of representation, or if such other spouse leaves no children, nor descendants of a deceased child, in equal shares to the parents of such other spouse, or if either is dead to the survivor, or if both are dead, in equal shares to the brothers and sisters of such other spouse and to their descendants by right of representation, or if such other spouse leaves neither parent, brother, sister, nor descendant of a deceased brother or sister, such portion of the estate goes to the next of kin of such other spouse in equal degree, except that when there are two or more collateral kindred in equal degree, but claiming through different ancestors, those who claim through the nearest ancestor must be proferred to those claiming through an ancestor more remote.'
At the time of death, section 231 provided in pertinent part: 'If the decedent leaves no one to take his estate or any portion thereof under the laws of this State, the same escheats to the State as of the date of the death of the decedent.' (Effective November 13, 1968, the section was amended to read 'at the time of his death' instead of 'as of the date of the death.')
On December 23, 1969, petitioner filed a 'Motion for Order Supplementing Prior Decree Determining Entitlement to Distribution of Estate,' in which he sought an order decreeing: (1) that no portion of the estate shall escheat to the State of California, and (2) that the remaining one-half of the estate shall be distributed to his clients, the heirs of the predeceased spouse, pursuant to sections 228 and 296.4, as amended. The court denied this motion on January 2, 1970, and on January 19, 1970, the court denied petitioner's motion to reconsider and clarify its order. Petitioner now seeks a writ of mandate directing the court below to vacate its order denying his motion of December 23, 1969 and to enter a decree that his clients are entitled to the unallocated half of decedent's estate.
We initially note that mandate is the appropriate remedy in the instant case. The court's order denying petitioner's 'Motion for Order Supplementing Prior Decree Determining Entitlement to Distribution of Estate' was not an order determining heirship, which is appealable under section 1240. The time to appeal from the order determining heirship (filed May 29, 1969) has lapsed, and the findings in that order are not challenged. There is therefore no plain, speedy and adequate remedy at law. (Lissner v. Superior Court, 23 Cal.2d 711, 718, 146 P.2d 232.)
It should be noted that it is inappropriate for an attorney to appear as the petitioner in a mandamus proceeding. Inasmuch as the heirs herein appear to acquiesce in such designation, and there being no objection from the real party in interest, we have determined not to preclude consideration of the petition for this reason.
There is no dispute as to the facts. The sole issue in the instant proceeding is whether, as a matter of law, sections 228 and 296.4 as amended control the right of succession to decedent's estate. If they do, the court below is under a legal duty to apply them, and it may be directed by writ of mandate to perform that duty, pursuant to Code of Civil Procedure section 1085. (Bales v. Superior Court, 21 Cal.2d 17, 25, 129 P.2d 685.)
Petitioner contends that since no heirs of decedent have appeared to claim the remaining one-half of the estate, it will escheat to the state unless distributed to his clients. He argues that the amendments to sections 228 and 296.4 should be applied to decedent's estate in order to permit distribution to his clients and give effect to the expressed legislative intent to avoid escheats. We note that in section 4 of Statutes [86 Cal.Rptr. 903]1968, chapter 1407, the Legislature specifically provided that section 296.4 as amended should apply to the estates of persons who died prior to its effective date: 'Section 1 of this act shall apply to any portion of an estate which on the effective date of this act has not vested absolutely in the state or has not permanently escheated to the state whether the decedent died before or after such date.'
The Attorney General, appearing on behalf of the State of California, argues that if the amendments are applied to this estate, they will retroactively divest the 'unknown' heirs of the decedent of the right to inherit one-half of the estate, a right which vested in them as of the date of the decedent's death. He relies upon the rule that the estate of a person dying intestate vests immediately in his heirs, subject only to administration (Prob. Code, § 300; Smith v. Olmstead, 88 Cal. 582, 586, 26 P. 521), and that by reason of this rule, the right of succession which exists at the date of death cannot be divested by subsequent changes in the substantive law of succession. (Estate of Nepogodin, 134 Cal.App.2d 161, 165, 285 P.2d 672.) Therefore, argues the Attorney General, the persons entitled to succeed must be ascertained according to the law in force at the date of the decedent's death (Estate of Dillehunt, 175 Cal.App.2d 464, 468, 346 P.2d 245), and potitioner's clients have already received everthing they were entitled to at the date of decedent's death.
Before we determine whether application of the amended statutes would affect vested rights, we must determine when, if at all, pursuant to these statutes, the remaining one-half of the estate would be distributed to the heirs of the predeceased spouse. Petitioner seems to urge that the property be distributed to his clients upon the conclusion of administration, rather than after the property has been held for five years by the state, pursuant to section 1027.
The amended statutes have not altered section 1027, which provides in pertinent parts, as follows:
'Executors or administrators, public or otherwise, must apply for distribution of an estate at the time of filing a final account. * * * If the court, at the time set for the hearing of the final account, or such time thereafter to which the matter may be continued, does not distribute the entire balance of the estate remaining for distribution to known heirs, devisees or legatees entitled to succeed thereto, it must distribute to the State of California that portion of such estate not distributed to such known heirs, devisees or legatees.
'* * *
'If the court distributes the estate or any portion thereof to the State of California, and the distributing clause contains words otherwise creating a trust in favor of certain unknown or rnidentified persons as a class, such distribution shall vest in the State of California both legal and equitable title to the property so distributed; saving, however, the right of claimants to appear and claim the estate or any portion thereof, as in this section provided.
'Upon the rendition of a decree of distribution, any money distributed to the State of California shall forthwith be delivered to the State Treasurer by the executor or administrator, and all other personal property so distributed shall forthwith be delivered to the State Controller for deposit in the State Treasury.
'* * *
'* * *
'The property so distributed shall be held by the State Treasurer for a period of five years from the date of the decree making such distribution, within which time any person may claim the estate or any part thereof in the manner provided by Title 10 of Part 3 of the Code of Civil Procedure. Rights of nonresident aliens shall be governed by the provisions of Section 1026 of this code.
'Any person who does not appear and claim, as herein required, shall be forever [86 Cal.Rptr. 904]barred, and such property, or so much thereof as is not claimed, shall vest absolutely in the State.'
Section 228 declares that the decedent's property shall be distributed in accordance with section 296.4 if it 'would otherwise escheat.' Since section 231 provides that if a decedent leaves no one to take his property, it escheats 'as of the date of death,' we must determine whether the escheat that section 228 refers to is that which takes place as of the date of death, or that which takes place when the state has held the property for five years pursuant to section 1027 and no one has appeared to claim it.
Sections 231 and 1027 have been interpreted by the courts to provide that only a 'provisional' escheat takes place as of the date of death, and 'that title to property distributed to the state pursuant to the provisions of section 1027 does not vest absolutely and unconditionally in the state, nor is the escheat complete, until the lapse of the five-year period without the appearnce of claimants; theretofore the title held by the state is conditional and subject to divestment by the appearance of legitimate claimants. Thus until the five-year period has elapsed it cannot be finally determined whether the property will go to heirs of deceased veteran or whether * * *--i. e., ultimate escheat to the State of California--will take place.' (Emphasis added.) (Estate of Lindquist, 25 Cal.2d 697, 710-712, 154 P.2d 879, 887.) If petitioner is entitled to distribution at all, it appears that the 'would otherwise escheat' test of section 228 can only be applied after the property has been held by the state for five years, and the unallocated half of the estate can only be distributed pursuant to section 296.4 at that time.
Were we to hold that in the instant circumstance, as in the case of an estate commencing after effective date of the amendment above discussed, distribution pursuant to sections 228 and 296.4 shall take place after the property has been held by the state for five years (pursuant to section 1027), we would no longer be faced with the argument that application of the amended legislation to this estate constitutes a retroactive deprivation of the vested right of the 'unknown' heirs of the decedent to inherit one-half of her estate. We make no such holding. 'A retroactive or retrospective law, in the legal sense, is one that takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability in respect of transactions or considerations already past. However, a statute does not operate retroactively merely because it relates to antecedent events, or because part of the requisites of its action is drawn from time antecedent to its passing, but is retroactive only when it is applied to rights acquired prior to its enactment.' (Footnotes omitted.) (82 C.J.S. Statutes § 412; see also, Aetna Cas. & Surety Co v. Ind. Acc. Com., 30 Cal.2d 388, 391, 182 P.2d 159; Ware v. Heller, 63 Cal.App.2d 817, 822, 148 P.2d 410.) The legislation in question does not affect any rights which were vested in the 'unknown' heirs prior to its enactment. Under the law in effect at the time of decedent's death, the 'unknown' heirs of decedent must come forward to divest the state of its interest, or lose all interest in the estate at the end of the five-year period, and the property would vest absolutely in the state. The amended statutes, if applied to this estate, would divest the state of its interest existent at the time of decedent's death. As the Lindquist case pointed out, where initial distribution of property is made to the State of California pursuant to section 1027, though title has vested in the state, it is subject to divestment by the appearance of legitimate claimants. Since the property provisionally vested in the state as of the time of death (section 231), the state was entitled to possession through distribution of the unallocated portion as of the time of death. Application of the amended statutes in this case would increase the class of persons entitled to divest the state of its right to the property.
We must therefore decide whether section 4 of Statutes, 1968, chapter 1407, [86 Cal.Rptr. 905]requiring retroactive application of the amendment to section 296.4, provides for a gift of public funds, in violation of article 13, section 25 of the California Constitution, which provides in pertinent part:
'The Legislature shall have no power to give or to lend, or to authorize the giving or lending, of the credit of the State, or of any * * * subdivision of the State * * * in aid of or to any person, association, or corporation * * * nor shall it have power to make any gift or authorize the making of any gift, of any public money or thing of value to any individual, municipal or other corporation whatever; * * *.'
Prior to November 8, 1966, the prohibition against gifts of public funds was contained in article 4, section 31 of the California Constitution.
The courts have consistently held that the relinquishment of rights vested in the state, when not made for a public purpose, constitutes an unconstitutional gift of public funds. The concept of public purpose has been broadly construed, and has been held to include money used for street improvements, for building a memorial hall for veterans, for providing funds for the education of veterans, for buying school textbooks, for compensating ranchers whose sick cattle were destroyed by the state, for controlling floods, for relieving the sick and poor, for clearing slums, for treating those who were unable to pay for medical care, for the relief and care of the aged, and to relieve an employer of liability for unpaid unemployment compensation contributions. (See Comment, Retroactive Tax Reduction Constitutional, 5 Stanford L.Rev. 156 and cases cited therein.)
In Gartner v. Roth, 26 Cal.2d 184, 157 P.2d 361, the court held that retroactive application of a statute allowing redemption of property deeded to the state due to nonpayment of taxes was not a gift of state property because the purpose of the law was to return property to the state tax rolls, and, moreover, all the state was entitled to was the payment of taxes, not real property.
When the courts have found that the legislation in question has no substantial public purpose, but only benefits private individuals, they have not hesitated to hold that a retroactive application would constitute an unconstitutional gift of public funds. In Estate of Stanford, 126 Cal. 112, 58 P. 462, the court held that a statute exempting certain classes of persons from inheritance taxation could not be applied retroactively to the date of the decedent's death without unconstitutionally relinquishing sums due the state. (See also Estate of Martin, 153 Cal. 225, 94 P. 1053; Trippet v. State, 149 Cal. 521, 86 P. 1084.) In Doctors General Hospital of San Jose v. County of Santa Clara, 150 Cal.App.2d 53, 309 P.2d 501, a statute enacted May 18, 1953 granting welfare tax exemptions to certain hospitals was expressly made retroactive as to all taxes levied on or after January 1, 1953. The legislation also contained an urgency clause making it effective immediately. The court found that although the taxes were not due until November 1, the right to the taxes had vested in the state as of the first Monday in March, when the taxes became a lien on the hospital property, and the relinquishment of this vested right constituted an unconstitutional gift of state funds. Although the legislation would help promote hospital construction and expansion, the court found that the relinquishment could not be justified under the public purpose doctrine. (Cf. Allen v. Franchise Tax Board, 39 Cal.2d 109, 245 P.2d 297, where it was held that the right to income taxes did not vest in the state until the date they were due, rather than at the end of the tax [86 Cal.Rptr. 906]year, and legislation enacted before this date of vesting could reduce the amount of tax owed.)
'We quite agree with the appellant's counsel that 'an heir or legatee must take his estate on such conditions as at the time the state may have imposed'; and that subsequent legislation could not affect such vested right. And this rule, as already held, applies equally to the state, whose right to the fund in question accrued under the act of 1893.' (Estate of Stanford, supra, 126 Cal. p. 121, 58 P. 466.)
In Estate of Skinker, 47 Cal.2d 290, 303 P.2d 745, the court held that the commissions of an executrix and her attorney, allowed as deductions for inheritance tax purposes, should be the amount of the statutory commissions in effect at the time of the decedent's death, and not the increased fees allowed by subsequent legislation. The taxes became fixed and determined at the date of death, and a subsequent reduction of those taxes would be an unconstitutional gift of public property.
In the instant case, we are unable to discern any public purpose in the relinquishment of the state's right to escheat the unallocated portion of the decedent's estate. The state's right to this portion of the estate became fixed and determined as of the date of death. The state cannot relinquish this right without making a gift of public funds. We therefore find that section 4 of Statutes, 1968, chapter 1407 is unconstitutional.
The alternative writ is discharged, and the peremptory writ is denied.
REPPY, J., and SELBER, J. pro tem., concur.
Assigned by Chairman of the Judicial Council.