IN RE: PLATT'S ESTATE.
Two appeals are prosecuted from portions of the order settling first and final account and decree of distribution, and an order amendatory thereof, in the matter of the estate of Howard Chester Platt, deceased. One appeal is by decedent's widow, Betty E. Platt; the other, by his only son, by a former marriage, Howard C. Platt. It may be convenient herein to refer to Betty E. Platt, appellant in one appeal and respondent in the other, as the wife or widow; and to Howard C. Platt, Jr., likewise appellant and respondent, as the son. Both appeals are taken upon a transcript on appeal in the form of a bill of exceptions containing the will, order settling first and final account and decree of distribution, an order amendatory thereof and specifications of error, said transcript being stipulated by the respective parties to be correct and so certified by the court.
Under the terms of a will dated December 8, 1937, wherein the wife and son were named as executors, without bond, the widow was given, devised and bequeathed the family home, its furnishings and two automobiles; the son, all articles of wearing apparel. The rest, residue and remainder of the estate was given, devised and bequeathed to the Wells Fargo Bank & Union Trust Company, in trust for the following uses and purposes. The investment and reinvestment in its discretion of the principal thereof, income therefrom to be paid the wife in an amount of $250 a month until her remarriage. Should the income exceed such amount, the trustee was directed to pay to the son any surplus thereover up to the sum of $250 a month. Income over $500 a month was to be divided equally between the wife, until she remarried, and the son. Provision was made that should the wife remarry she should receive the definite sum of fifty dollars a month so long as she lived. Upon her remarriage, and until her death, all income from the trust in excess of the $50 a month was to go to the son. On the death of the wife, the trust was to cease and terminate, the entire income and principal therefrom passing to the son, his heirs, administrators, executors and assigns. The trust also provided: “Notwithstanding anything herein to the contrary, my said trustee may, in its discretion, advance to any beneficiary to whom net income is payable as aforesaid, such additional sum or sums out of the principal of the trust estate allocated to such beneficiary as may reasonably be required to pay for the necessaries of life,” etc.
It appears that in the petition for final distribution and settlement of the first and final account, the co–executors, the immediate beneficiaries, requested the probate court to interpret the terms of the trust instrument and to instruct the trustee in the carrying out of such terms as pertain to the priority in right of the widow to payments, the method of making them and accounting, and the date from which the trustee should commence such payments. This necessitated an interpretation of the trust provisions of the will, which might have been accomplished without independent evidence. However, each side introduced evidence, oral and documentary, and the respective parties stipulated that certain facts were true. The widow appeals from certain findings of fact upon the claim that some of the evidence introduced was not material to the issue. The argument is not made that all of the evidence was inadmissible, but only a portion thereof, which will be hereafter mentioned. The trial court considered the terms of the will and the extrinsic evidence introduced. On appeal the same course will be followed.
The court found that Howard Chester Platt, the western manager of a large, nationally known commercial company, died on May 23, 1938; that on June 13, 1938, in connection with the probate of a will drawn by his attorney, and executed by testator on December 8, 1937, $400 a month was fixed as a family allowance for the widow; that such allowance totaled the sum of $4,000 during the approximate ten months' period of administration of the estate; that the family home, held in joint tenancy, appraised with its furnishings at $22,500, vested in the widow; that as co–executor she received the sum of $710; that in addition to benefits under the terms of the will, upon decedent's death she received approximately $8,500 from two life insurance policies.
The decree directed the trustee to hold, manage and control securities and properties coming into its possession; to sell, convey and exchange them, and to invest and reinvest the principal thereof, all as in its best judgment was deemed advisable; and from the income thereof to pay the wife, during her lifetime or until her remarriage, the sum of $250 a month. It further directed that whenever there was a deficiency in such payments, “regardless of any accounting period”, such deficiency should be considered as a charge upon future income of the trust, and that until the deficiency was paid, no payments should be made to the son or his heirs. It also directed that the trustee estimate the regular net income of each trust year or accounting period from and after the operative date of the decree of distribution, and divide said estimated income into twelve equal instalments. It was ordered that the balance of such instalments remaining after payment of the amount due monthly to the widow, be paid to the son in accordance with the terms of the will, and that any excess of undistributed net income be divided equally between them, but that any deficiency in payments to the son should not be treated as a charge upon income of any future trust year. The court determined that the trust was not a trust for the maintenance of the widow during the administration of the estate, and that she was not entitled to payments, as fixed by the trust instrument, from the estate or trust prior to the date of distribution thereof to the trustee.
The appeal by the widow involves the question whether income during the period of administration is payable to her at the rate of $250 per month from the date of the death of the testator. It is her contention that the trust is created at the date of the testator's death, and that whether is embraces the whole or the residue of the estate, unless it is specifically otherwise provided in the will, she, as beneficiary, would be entitled to the actual income from the date of the testator's death, even were the trust not for support and maintenance; but that where it is, the rule applies with special cogency. It is further contended that the beneficiary had no independent means and was supported entirely by the testator; that it is to be presumed that any provision made for monthly payments from income is intended as support and maintenance, and that it may not be inferred the testator intended an interval to elapse during which the beneficiary would receive no support.
The latter contention, relative to the “interval” may be disposed of immediately. A beneficiary would not actually receive payments of income earned during administration until the trust fund reached the hands and control of the trustee. Even then, whether income could be paid at that time would depend upon the facts in each case, namely, whether actual income had accrued during administration or whether the corpus of the estate required investment to produce it. In the present case it may be conceded that the title of the trustee dates from the death of the testator. However, the trust provisions direct the monthly payments to the beneficiaries out of income from investments and reinvestments. Whatever the date may be from which payments commence, it cannot be prior to the time income is available to the trustee for disbursement. “Ordinarily, it is said, the beneficiary has no right to receive payments under the terms of the trust instrument until the trust property is distributed to the trustees.” In re Estate of Marre, 18 Cal.2d 184, 114 P.2d 586, 589.
In support of her contention that, even assuming her share of the income is not for support and maintenance, unless a will provides otherwise the life tenant of a testamentary trust is nevertheless entitled to income commencing from the date of the testator's death, appellant widow urges that if the right of the life tenant to the income does not commence until distribution, her legacy is decreased by the amount so withheld and eventually reaching the remainderman though an enhanced trust corpus. It is also argued that possible delay in probate proceedings is a further reason why the rule contended for should be applicable in this case. The widow overlooks the fact that delay in probate proceedings, with a possible resultant family allowance in excess of payments allowed her under the trust instrument, as here, together with additional expenses of a prolonged period of administration, could result in a dissipation of the corpus of the estate, leaving the remainderman with an abridged or no interest. The widow also seems to overlook the fact that whenever the payments to her commence, under the definite terms of this particular trust, the payments, if any, to the son likewise commence.
The matter of the absence of an express direction fixing the time when the income from a legacy held in trust and payable over a period of time may be paid, has been considered in Re Estate of Marre, supra, where, at page 590 of 114 P.2d a remedy has been suggested to obviate an enhancement or depreciation of the corpus of a trust, and we quote: “It is true that during the administration of the estate, and prior to the distribution of the trust property to appellants, the beneficiary could not have brought action to compel payment against either the trustees or the executors of the estate. In re Mackay's [Estate], supra [107 Cal. 303, 40 P. 558]; [In re] Estate of Dare, supra, [196 Cal. 29, 235 P. 725]. The executors were under no duty to make payments and the trustees could not be compelled to make payment prior to the distribution of the trust property to them. The beneficiary's remedy during that period is confined to asking the probate court to distribute a portion of the trust funds to the trustees to be used for his support. See In re Mackay's [Estate], supra, 107 Cal. page 307, 40 P. 558; [In re] Estate of McGirl, supra, 125 Cal.App. , page 313, 13 P.2d 746.”
The most important question presented on this appeal concerns the intent of the testator as to whether the $250 a month directed to be paid to the widow was for her support and maintenance and consequently payable during the period of probate. The fact that appellant widow, who had no independent income, was entirely maintained and supported by the testator during her married life with him is an important circumstance to consider but is not necessarily controlling.
In addition to cases decided in this state, which we will consider hereafter, each side has cited cases from other jurisdictions to sustain various points on appeal. The widow refers to In re Leitsch's Will, 185 Wis. 257, 201 N.W. 284, 37 A.L.R. 547; Grainger's Ex'rs and Trustees v. Pennebaker, 247 Ky. 324, 56 S.W.2d 1007; In re Stanfield's Estate, 135 N.Y. 292, 31 N.E. 1013, and Restatement of the Law of Trusts, section 234. The son calls attention to an opinion written by Mr. Justice Holmes, Hawaiian Trust Co. v. Von Holt, 216 U.S. 367, 30 S.Ct. 303, 54 L.Ed. 519; also to In re Berbling's Ex'rs, 134 Misc. 730, 236 N.Y.S. 367; Brown v. Knapp, 79 N.Y. 136; Thorn v. Garner, 113 N.Y. 198, 21 N.E. 149; Lyon v. Industrial School, etc., 127 N.Y. 402, 28 N.E. 17. Notwithstanding the diverse views of those courts on the particular phases of the law, almost uniformly in this and other jurisdictions the trial court's conclusion, if reasonable, has been sustained. Sufficient has been said in the California decisions to settle the law on the question before us.
The facts in the present case are different from those in the California cases cited by appellant widow. In Re Estate of Dare, 196 Cal. 29, 235 P. 725, 729, an adopted daughter, who had not been otherwise provided for as was the widow in the present case, was named to receive all of the income and after a period of years all the remainder of trust property. As supporting its conclusion, the court there quoted from 40 Cyc., under the caption of “Income from Residuary Fund”, to the effect that if no time is prescribed in the will, the use of the income is to be computed from the death of the testator. In support of the same conclusion, the court cited Crew v. Pratt, 119 Cal. 131, 51 P. 44, relative to the disposition of an annuity. No annuity is involved in the present case. In re Estate of Bourn, 25 Cal.App.2d 590, 78 P.2d 193. In Re Estate of Rider, 199 Cal. 742, 251 P. 805, 807, the court construed the will and intention of the testator as bestowing on his widow as maintenance all the income from the date of his death. It is interesting to note that in such case there was not only an intention that the widow should be cared for from the date of testator's death, but that her debts and liabilities, funeral expenses, etc., should be paid before the remainder of the trust fund should be paid to other beneficiaries. The executor, acting both in that capacity and as trustee, without bonds, made, and the probate court approved, payments of income prior to distribution. Subsequently the probate court directed the executor to account for all sums of money so paid. This seems to be the vital point on that appeal. The court stated that under the circumstances of the case the “orders * * * approving said accounts were conclusive and binding upon the parties interested in the estate”. In Re Estate of Duffill, 180 Cal. 748, 183 P. 337 and in Re Estate of Gartenlaub, 185 Cal. 375, 197 P. 90, 24 A.L.R. 1, it was held that in connection with income from corporation stock to be paid one for life and to another as remainderman, the remainderman is entitled to a valuation of the stock at the date of the creation of the trust, that is, the date of death of the testator. Upon the authority of In re Mackay's Estate, 107 Cal. 303, 40 P. 558, it was determined in Re Estate of McGirl, 125 Cal.App. 310, 13 P.2d 746 that a bequest was for maintenance and that it was appropriate that one who had taken care of decedent should receive the income from a trust fund from the time of the testator's death.
In the present trust the widow was not to become a remainderman, the son or his issue being named as such, and in case the son died without issue, the entire principal and income was to be paid to decedent's sister. In the Dare case the daughter alone had an interest in the income. Unlike the Rider case, where until her death the widow was to receive the entire income from a trust, the widow here was to receive only a portion thereof, nor is there here a similar manifest intention of maintenance during probate as appears in the Rider case. In the present case the son remainderman does not contend that the valuation of the holdings of the trust shall be fixed as of the date of the creation of the trust (In re Estate of Duffill, supra; In re Estate of Gartenlaub, supra); and the widow is not, nor could it be contemplated by the testator that she might be an object of charity. In re Estate of Mackay, supra. Also, there is no necessity in this case for provision of funds without which an education would have to be discontinued. In re Estate of Marre, supra.
In Re Estate of Mackay, supra, it was held that a legacy “for maintenance” bears interest from the date of death of the testator. In re Estate of Ballou, 181 Cal. 61, 183 P. 440, approved the holding in Re Estate of Mackay, and further held that the receipt of a family allowance is immaterial in determining whether a provision in a will is in fact a legacy for maintenance. In the Mackay case, however, the legatee upon the death of the testator was dependent upon charity, no provision having been made for her support other than the income from a trust fund.
All of the cases brought to our attention holding in effect that under the particular facts of each a beneficiary of a trust who has been supported by a testator, and who is to receive income from such trust, be placed in the category of a legatee for maintenance, with interest upon such legacy from the testator's death (Prob.Code, sec. 162, embracing the provisions of former Civ.Code, sec. 1369), are based primarily upon the holding in Re Estate of Mackay, supra, but in that case at page 308 of 107 Cal., at page 559 of 40 P., the court said: “The testator's intention in the clause of the will containing the legacy in question must be ascertained ‘from the words of the will, taking into view the circumstances under which it was made, exclusive of his oral declarations.’ Civ.Code, § 1318.” See Prob.Code, sec. 105.
Respondent calls attention to other decisions. In re Estate of Brown, 143 Cal. 450, 77 P. 160, is somewhat similar factually to the present case, but the beneficiary there was not a spouse. In that case, pages 454, 455, of 143 Cal., page 162 of 77 P., the court said: “Reliance is placed upon the decision in the case of In re Mackay's Estate, 107 Cal. , 308, 40 P. 558, in which it was held that although the will did not expressly declare that the legacy was for the maintenance of the legatee, yet, if the evidence showed that the legatee had been supported by the testator for many years prior to his death, it would be construed to be a legacy for maintenance. The essential element present in that case, however, is lacking in this. The petition alleged, as before stated, that for many years prior to the death of the testatrix, the petitioner was dependent upon the deceased for her support and maintenance. The court, however, fails to find this fact, but does find that the petitioner was for many years prior to the death of the testatrix a confirmed cripple, and had been in the monthly receipt of sums from the testatrix varying from $20 to $10 per month. In addition to these specific facts, the court found expressly that the legacy bequeathed to the petitioner is not a legacy for maintenance. This was the ultimate fact upon which the decision of the case depended, so far as the right to interest from the death of the deceased was concerned. The specific facts found do not necessarily show that it was a legacy for maintenance. The deceased may have had many reasons for making the monthly payments, other than the reason that it was necessary for her support. * * * But the bequest in this case was not of the interest or income of a certain sum to be paid by the executors of the estate. The testatrix bequeathed the sum of five thousand dollars to certain trustees, and the monthly income was to be paid by the trustees, and not by the executors. Necessarily, the trustees could not begin payment until they received the fund and invested it so as to produce an income. The intention of the testatrix must therefore have been that payments were not to begin until the fund from which it was to be produced was distributed to the trustees who were to make the payments. The distinction is thus stated: ‘Where he absolutely gives the beneficiary a given income, and merely indicates in his will the source from which it is to be obtained, the general rule is that the income in such cases is to be estimated from the death of the testator.* * * But where the bequest is only of the income to be obtained from a certain specified fund, * * * it is held that the beneficiary can receive only the actual income when received from such fund.’ Page on Wills, § 601.” See In re Estate of Lockhart, 21 Cal.App.2d 574, 69 P.2d 1001; In re Estate of Bourn, supra; Clayes v. Nutter, 49 Cal.App. 148, 192 P. 870; In re Estate of Watson, 32 Cal.App.2d 594, 90 P.2d 349. In Fraser v. Carman–Ryles, 8 Cal.2d 143, 64 P.2d 397, in construing a clause similar to one in the present trust instrument in respect to a “share” in the income derived from investment by the trustee, the court declared that it was not an annuity but a gift of income and said (page 145 of 8 Cal.2d, page 398 of 64 P.2d): “In Re Estate of Brown, 143 Cal. 450, 77 P. 160, and Clayes v. Nutter, 49 Cal.App. 148, 192 P. 870, language almost identical with that employed by the probate court in the decree of distribution was held to constitute a gift from income. It was also held that necessarily the payments could not begin until the trustees had received the fund and invested it.”
The Supreme Court in the Marre case was content to state that it may be “presumed” payments for a beneficiary's support should accrue from the date of death. However, the inference or the presumption is not conclusive, but controvertible. There is no statutory presumption applicable in this case. Ordinarily a testamentary disposition is presumed to vest at the testator's death (Prob.Code, sec. 28), unless a contrary intention is expressed in the will. In the present case the corpus from which income was to be derived was expressly given, devised and bequeathed to a bank, in trust, with directions to fulfill certain definite purposes. The legacies depend upon an uncertain event (Prob.Code, sec. 141); that is, the possibility of the corpus of the trust yielding income. The amount of payment to the widow is uncertain. The total income from the trust might be paid her and even then be insufficient to meet the $250 a month due her, or she and the son might, under the terms of the will, in the event the income should be in excess of $500 a month, divide an uncertain amount. “A testamentary disposition when vested [in the present case in the bank], cannot be divested unless upon the occurrence of the precise contingency prescribed by the testator for that purpose.” Prob.Code, sec. 143. Ownership by the legatees, the widow and the son, could be enjoyed only upon the occurrence of precise contingencies. In Re Estate of Blake, 157 Cal. 448, 108 P. 287, the testator devised the legal title to his trustees with payment of income to certain beneficiaries. At pages 460, 466 of 157 Cal., at page 292 of 108 P. the court said: “The meaning of this provision is plain. The trustees simply took the legal title to the trust property to the extent that it was necessary for the fulfillment of their trust duties. There is nothing in it whereby any title was passed to the beneficiaries.” The “rule of presumption to be indulged in only when there is no other language employed by the testator showing a contrary intention”. See, also, In re Estate of Reith, 144 Cal. 314, 77 P. 942; In re Estate of Klein, 23 Cal.App.2d 708, 74 P.2d 79; In re Estate of Watson, supra; San Diego Trust, etc., Bank v. Heustis, 121 Cal.App. 675, 10 P.2d 158. The intent of the testator controls. In re Estate of Beldon, 11 Cal.2d 108, 77 P.2d 1052; In re Estate of Bourn, supra; In re Estate of Watson, supra. In the Marre case, the court said (page 589 of 114 P.2d): “The absence of an express direction that the payments were to accrue from the date of her death does not establish conclusively, however, that the testatrix had no such intent. The intention of the testatrix is the determining factor (Prob.Code, sec. 163), and that intent is to be gathered from the instrument as a whole. Prob.Code, sec. 103; [In re] Estate of Peabody, 154 Cal. 173, 178, 97 P. 184.” Whatever the rule may be in other jurisdictions the theory advanced by appellant widow has not been adopted in this state. In Re Estate of Bourn, supra, 25 Cal.App.2d page 600, 78 P.2d 193, page 198, the court said: “* * * and it is a well–established principle of law that when the construction given an instrument by a trial court appears to be reasonable and consistent with the intent of the party making it, courts of appellate jurisdiction will not substitute another interpretation even though it seems equally tenable.” Adams v. Petroleum Midway Co., Ltd., 205 Cal. 221, 270 P. 668; Kautz v. Zurich Gen. A. & L. Ins. Co., 212 Cal. 576, 300 P. 34; In re Estate of Boyd, 24 Cal.App.2d 287, 74 P.2d 1049; In re Estate of Burnett, 42 Cal.App.2d 427, 109 P.2d 26; Coviello v. Moco Fruit Co., Inc., 42 Cal.App.2d 637, 109 P.2d 765.
The probate court in the present case found that the testator “did not intend that the payments should be paid to her [the widow] for or during the period of the settlement of the estate in order to provide for her maintenance and support during said period” (italics added); that “It was the intention of the testator that the payments which he ordered the trustee to pay to his widow, Betty E. Platt, were to be paid to her from and after the date of the distribution of the estate to the trustee. Testator did not intend that the payments should commence from the date of his death or that the said trustee or his executors should be charged with the duty of making the payments commencing from the date of his death”; that “Testator intended that Betty E. Platt should have a family allowance from his estate for her maintenance and support during the period of the settlement of his estate”.
If the testator intended that family allowance should be maintenance for the widow during the period of administration of his estate, it is reasonable to conclude that he did not intend her to receive the $250 additional. The terms of the will indicate an intention that the property of the estate be placed in trust, to be invested and reinvested in the discretion of the trustee, and that the income therefrom be paid in a designated manner to the widow and the son. Until income was received by the trustee, it could not be distributed. That the testator realized that the payments to the beneficiaries under certain contingencies might not be sufficient for the necessaries of life is demonstrated by his insertion of a clause in the trust instrument permitting the trustee to advance from the principal reasonable amounts to cover such contingency. However, in this regard, until it obtained control of the corpus of the estate, the trustee could be of no assistance in supplying the necessaries of life to the widow. In re Estate of Watson, supra. Assuming that the trustee had petitioned that part of the estate be transferred to it in order to make the specified payments during administration of the estate, still an interval would have elapsed in which the widow would be without funds. The testator was a business man. That he knew the value of the assets of his estate is demonstrated by the amounts he directed to be paid to the widow and the son, which were approximately the return that could be expected from the investment of his holdings. Testator had acted as executor of his mother's will and, it may be assumed, was somewhat familiar with probate proceedings. The present will was drawn by his attorney. This is a circumstance to consider in determining that the terms embodied in the will were selected with care to truly express the intent of the testator. In re Estate of Bourn, supra. The trial court had a right to infer that the attorney and this business testator were familiar with the right of a widow to a family allowance, and understood and intended that payments under the trust provisions should not be made until subsequent to the time the trustee received the principal and obtained income sufficient to pay the widow.
It may be admitted that under certain language in Re Estate of Dare, supra, the probate court might have determined that it was the intention of the testator that his widow should receive payments as specified from the date of his death if she had no other immediate source of income. The fact that the respective parties herein stipulated that the widow “was entirely maintained and supported by testator during her married life with him and had no independent property or income” is not in itself determinative of the question presented if from the “words of the will, taking into view the circumstances under which it was made” (Prob.Code, sec. 105), a contrary reasonable conclusion may be reached. In Re Estate of Gartenlaub, supra, 185 Cal. page 379, 197 P. page 92, 24 A.L.R. 1, the court said: “The apparent conflicts in the decisions can be largely reconciled, however, by taking into account the great variety of circumstances out of which they arose.” Whatever the circumstances may be, the general rule is that a bequest of income accrues from the testator's death (Prob.Code, sec. 160), but this rule is controlled by the intention expressed by the testator (Prob.Code, sec. 163), considering the instrument as a whole. (Prob.Code, sec. 103.) In re Estate of Marre, supra.
The terms of the will evince an intention not only to protect the widow, but likewise, the son. The widow was given priority in payments, but, irrespective of the date of the commencement of payment, if the amount of income exceeded $250 a month the son would be entitled to a part thereof as of the same date. As noted before, testator knew, and the wording of the trust instrument indicates,. that he intended that the income payment to the son should approximate the amount paid the widow. The priority given the widow indicates testator's recognition that she was his first obligation, with due consideration given to the son. During probate proceedings the income of the estate exceeded $2,500; in fact the court found that for several years prior to the death of testator it had amounted to $5,000 a year. Apparently a part of such income received during administration of the estate was used in payment of the family allowance to the widow, taxes, probate costs, etc.; the sum of $1,100 only was turned over to the trustee as income at the end of the period of administration, the court directing that such sum be distributed as income of said trust. If the date of commencement of payments to the widow should be advanced to the date of the testator's death, approximately $2,500 would be due the widow, and perhaps a like amount to the son. This would diminish the income fund of the trust, perhaps to the detriment of the son.
Appellant widow specifies as error the admission of certain evidence over her objection. A great part of such evidence, the correctness of which is not disputed, was in fact a part of the probate record. That which may not have been, for instance, the matter of actual receipt of insurance benefits, or the actual receipt of the family allowance by her was not properly admissible to prove the intent of the testator but may not be classified as prejudicial. The fact that in an insurance policy he had named the widow as beneficiary could be properly considered as a circumstance indicating that he had made ample provision for her immediate support, and that the trust payments could well await receipt of income by the trustee following distribution of the fund to it, thereby affording greater security of payment to both beneficiaries.
Briefly, construing the will in its entirety, giving, devising and bequeathing a home and furnishings to the widow; fixing, by the trust provision, a stated amount to be paid to her, monthly if possible; the evident intention that the son if possible should receive an equal amount; the fact that the widow was not the remainderman; the fixing of a definite sum for life in the event she should remarry; the provision that the trustee could advance to the beneficiaries out of the principal any sum in its discretion “for necessaries of life”, and the fact that the will specifically provided that the payments were to be made from investments, leads us to conclude that a construction that the trust created by it was not one for the maintenance of the widow during the probate of the estate is not unreasonable.
When the above narrated “circumstances under which it was made” are taken “into view”, namely, that the testator had some knowledge of probate proceedings; that he was a business man with full knowledge of the total income to be derived from his assets, as evidenced by his fixing of amounts to be paid his widow, in a preferred position, and to his son; that the trust instrument was prepared under his direction by testator's attorney (whom it must be assumed knew that the widow would be entitled to a family allowance and to fees as an executrix); also, that the wife was named as sole beneficiary in the insurance policies, we must conclude that the probate court was justified in decreeing that the widow was not entitled to income from the trust for the months prior to the date of distribution of the estate.
In the matter of the appeal by the testator's son, the will provided: “If there is any income in addition to the sums mentioned * * *, the said surplus income over and above the sum of Five Hundred ($500.00) Dollars per month shall be divided in equal shares between my said wife, Betty Eldred Platt, until she remarries, and my said son, Howard Charles Platt;”
The question presented by appellant son may be stated as follows: In the event that in any month the widow should receive $250 from the income, and the son a like amount, would the surplus, if any, be divided equally between them, or would such surplus be available to cover a deficiency in prior monthly payments to the widow? The probate court decreed that the trustee should estimate the regular net income for each trust year and divide such amount into twelve equal installments; that upon such basis the widow should be paid $250 per month, and the balance, if any, be paid to the son “provided that no payment shall be made to Howard C. Platt, Jr., or his heirs, while a deficiency exists in the payments granted Betty E. Platt and provided, further, that any deficiency in the payments to Howard C. Platt, Jr., or his heirs, is not to be treated by the trustee as a charge upon the income of any future trust year”. It was further decreed that: “The trustee shall strike a balance at the end of the trust year. Provided that Betty E. Platt has received the sum of Three Thousand Dollars ($3,000) in the trust year and no deficiency exists in the payments provided for her, the trustee shall pay at the expiration of the trust year the undistributed net income, if any, to Howard C. Platt, Jr., or his heirs, in an amount sufficient to make the amount received by him during the year total the sum of Three Thousand Dollars ($3,000). The excess of the undistributed net income above Six Thousand Dollars ($6,000) shall be paid equally to Betty E. Platt and Howard C. Platt, Jr., or his heirs”.
Appellant son contends that the income payments are thus fixed by the annual income received. The will simply provides for the payments “per month”. There is no reference to an annual period. It may be conceded that it is customary to have an annual accounting as the decree provides in the present proceeding. The probate court simply adopted a practical method of dividing additional income. In re Estate of Duffill, supra; In re Estate of Smead, 16 Cal.2d 204, 105 P.2d 589. A period fixed for mere accounting purposes does not restrict the payments of income to the fixed accounting period in the face of a provision in the will that the payments shall be made per month. The decree covers any seeming inconsistency between the accounting period and the direct provision of the will as follows: “To Betty E. Platt from the income of the trust, the sum of Two Hundred Fifty Dollars ($250) each month during her life or until her remarriage. When ever there is any deficiency in the said payments to Betty E. Platt the trustee, regardless of any accounting period, shall consider such deficiency as a charge upon the future income of the trust, and until such deficiency is paid no payments shall be made to Howard C. Platt, Jr., or his heirs.” (Italics added.)
In their respective briefs, the son and the widow set forth numerous contingencies that may arise; the remarriage of the widow, her death, the death of the son, deficiency in the amount due the widow; that no income may be available to the son; amount of surplus payable monthly as distinguished from annually, and other possibilities of either remote or likely occurrence. Through tenuous analyses of the provisions of the will, and the terms of the decree, it is sought by each beneficiary to demonstrate an intent of the testator favorable to him or her. No decision in California exactly in point has been called to our attention. There have been such, however, from other jurisdictions but we do not deem it necessary to comment further upon them due to the different factual backgrounds. It is sufficient to say that we cannot agree with the contention of the son that the provisions of the trust “clearly and unambiguously provide that the payments [to the widow] are to be made only out of the income received in the trust year”. (Italics added.) It does not appear that a yearly accounting is inconsistent with making up monthly deficiencies. The terms of the will as a whole, portions of which have heretofore been referred to or quoted, and the related surrounding circumstances, justify a conclusion that deficiencies in monthly payments to the widow should be made up from subsequent income.
On each appeal, assuming that the will admits of the construction for which the respective appellants contend, it is certainly susceptible also of the interpretation which the respective respondents as such place upon it. If there is any ambiguity in the terms of the document, still the facts as found by the trial court do not compel the conclusion, as a matter of law, on the widow's appeal that the income was to be paid from the date of the death of the testator; or, on the son's appeal, that the widow's right was not to be cumulative. Under the circumstances, an appellate court is powerless to interfere. Furthermore, the trial court's construction seems to be the correct conclusion.
The portions of the order settling first and final account and decree of distribution, and an order amendatory thereof, appealed from by the widow Betty E. Platt, and by the son Howard C. Platt, Jr., are, and each of them is, affirmed.
I concur in that part of the opinion affirming the portion of the decree determining that the right of the widow is cumulative, but I dissent from that portion of the opinion holding that the right of the widow to income did not date from the death of decedent.
The problem involved on the appeal of Betty E. Platt can be simply stated: Where a will creates a trust and provides for the payment of a specified portion of the income thereof to the widow, and a portion over said amount to the testator's son, and the son is named as remainderman, and the will contains no positive direction as to when such income is to start, does the right to such income date from the death of the testator or from the date of distribution? Although the problem can be thus simply stated its solution is by no means easy, because of the apparently irreconcilable language used in some of the prior decisions in this state. However, it seems to me that if certain fundamental principles are kept in mind, the conclusion must follow that if the will is silent on this point, and if there are no surrounding circumstances that compel a contrary conclusion, the right of a life tenant to income of a trust accrues from the death of the testator.
It is elementary law, of course, that in the absence of a contrary intent expressed in the will the title to a bequest or legacy dates from the date of the death of the testator. It therefore follows that the title of the trustee, in the instant case, dated from that time. In re Estate of Wellings, 197 Cal. 189, 240 P. 21. It is equally true that the title of the life tenant to her bequest should date from the death of the testator. This rule is merely part of the general rule applicable to all legacies that title to a legacy is presumed to vest at death. Probate Code, secs. 28, 300.
If it should be held that the right of the life tenant to the income does not commence until the date of the decree of distribution, obviously the portion of the income earned by the trust estate between the date of death and the date of the decree of distribution would be deducted from the interest of the life tenant and given to the remainderman through an enhanced trust corpus. It is undoubtedly for this reason that the great majority of courts to which this problem has been presented, have held that unless otherwise specifically provided in the will, the income of a trust should be paid to the life tenant from the date of death. The general rule is thus stated in section 234 of the Restatement of the Law of Trusts:
“Except as otherwise provided by the terms of the trust, if property is held in trust to pay the income to a beneficiary for a designated period and thereafter to pay the principal to another beneficiary,
“(a) where the trust is created by will, the former beneficiary is entitled to income from the date of the death of the testator, * * *
“Comment on Clause (a):
“a. Where a trust is created by will and by the terms of the trust the income is payable to a beneficiary for a designated period, the beneficiary is entitled to income from the date of the death of the testator, unless it is otherwise provided in the will. The rule here stated is applicable to trusts created by a specific devise or legacy, by a general pecuniary legacy, and by a residuary devise or bequest; and it is immaterial whether the same person is designated as executor and trustee.* * *
“f. Residuary devise or bequest. If the subject matter of the trust is the whole or the residue of the testator's estate, the beneficiary entitled to income, unless it is otherwise provided in the will, is entitled to the actual income received by the executor or trustee from the date of the death of the testator, * * *”.
As stated in In re Leitsch's Will, 185 Wis. 257, 201 N.W. 284, 285, 37 A.L.R. 547, this rule “is supported by well–nigh universal authority”. The Kentucky Supreme Court in Grainger's Ex'rs and Trustees v. Pennebaker, 247 Ky. 324, 56 S.W.2d 1007, 1010, citing many text writers and many cases stated that the rule is “supported by a practical unanimity of the text–writers and the courts* * *”.
These cases, and the many authorities cited therein, demonstrate that none of the provisions of the present will support the finding of the trial court that the testator intended the right to income should date from the decree of distribution. They consider the argument advanced in the majority opinion that since the trustee's right to possession dates from distribution, and that, since the trust provides that the trustees shall pay the income to the life tenant, obviously no income could actually be paid by the trustees to the life tenant until after distribution, and directly hold that such argument does not show an intent that the life tenant should not receive the accrued income at distribution. Every provision contained in the present will has been considered by other courts and found not to override the presumption that the testator intended the right to income to accrue from the time of his death. It must be conceded, therefore, that under the rule in force in other states, if all that was properly before the court in the present case was the will, that then, under such rule, it would be held, as a matter of law, that the finding of intent is unsupported.
This conclusion would undoubtedly also follow in this state if the trust for the widow is one for maintenance. This was expressly settled by the Estate of Dare, 196 Cal. 29, at page 38, 235 P. 725, at page 728, where the court stated: “This brings us to the next inquiry, which is, conceding these provisions in the decedent's will to amount to a bequest for maintenance, to what date did its intended inception relate––that of the testatrix's death, or that of the investment of the trust in the hands of the trustee? By both reason and authority we are compelled to the conclusion that the respondent's right to the income to be derived from the trust properties must be held to have relation to the death of the testatrix. As to the reason of the situation, it would seem to follow that if, as we hold, the provision in said will and in the trust clauses thereof were intended by the testatrix to be in the nature of a bequest for the maintenance of her adopted daughter who, as has been shown, had no other means of support except that of her own exertions, and, also, as has been shown, such adopted daughter had heretofore been supported and maintained by her adopting parents during their lifetime, such intention ought to have relation to a time from and after the death of the testatrix, since by that means only could continuity of such maintenance be assured. This conclusion would derive additional and very cogent support from the fact that the adopted daughter of the testatrix is made primarily the sole beneficiary of the entire substance of the residue of the said estate under the terms of said trust. The foregoing reasoning and conclusion are fully supported by the authorities dealing with similar or analogous situations. In 40 Cyc., under the caption of ‘Income from Residuary Fund,’ it is stated as ‘settled by the great weight of authority that in the case of a life estate in a residuary fund or in some aliquot portion thereof, if no time is prescribed in the will for the commencement of the interest or the enjoyment of the use or income of such residue, the legatee for life is entitled to the interest or income of the clear residue as afterwards ascertained, to be computed from the death of the testator.’ The cases cited in support of this statement fully sustain it. [[[[Citing many cases.]”
This conclusion was recently reaffirmed by the Supreme Court in Re Estate of Marre, 18 Cal.2d 184, 114 P.2d 586. In that case the decedent created a testamentary trust of the residue of her estate, with a direction that the trustees pay out of the income of the trust estate such part thereof as the trustees might determine for the care, maintenance, education and support of her grandson, the balance of the net income to be paid to the testatrix's daughter. Following distribution the grandson sought to compel the trustees to pay to, or for, him expenses incurred in his support, maintenance and education prior to the entry of the decree of distribution. The Supreme Court held that the grandson was entitled to maintenance during distribution. The court placed its decision squarely on the Estate of Dare, supra. See, also, In re Estate of Rider, 199 Cal. 742, 251 P. 805.
In the present case, the court did not determine whether or not the trust was one for maintenance. It found that it was the intention of the testator that payments should be made to the widow from the date of distribution. Based on this finding, it is then found that the testator “did not intend that the payments should be paid to her for or during the period of the settlement of the estate in order to provide for her maintenance and support during said period”. That is not a finding that the purpose of the trust was not for her maintenance. In fact, there would have been no evidence to support such a finding had one been made. The evidence shows that the widow is thirty–eight years of age and that she married the testator in 1931. The will was executed in 1937. The parties stipulated that “she was entirely maintained and supported by testator during her married life with him, and had no independent property or income”. In view of this state of the evidence the only finding that could have been made on this issue is that the trust, regardless of when the right to income accrued, was intended as one for maintenance. See In re Estate of Ballou, 181 Cal. 61, 183 P. 440, where the evidence was substantially similar to that in the instant case and where the Supreme Court reversed a finding that the legacy there involved was not intended as a legacy for maintenance. Moreover, there was a provision in the trust in the instant case reducing the amount payable to the widow upon her remarriage. That definitely indicates that the testator intended the $250 monthly payments to be for her support, but believed that if she remarried, and thus gained some other means of support, the income to the son should be increased by decreasing that payable to the widow. In re Estate of Fitzgerald, 161 Cal. 319, 119 P. 96, 49 L.R.A.,N.S., 615; In re Harris, 61 Misc. 563, 116 N.Y.S. 270.
However, it is not necessary to base the conclusion that the right to income vested as of the time of death solely upon the ground that the trust was one for maintenance. As I read the cases, whether or not the trust is one for maintenance, in the absence of language in the will compelling a contrary conclusion or in the absence of other evidence demonstrating a contrary intent, the presumption is that the right of the life tenant accrues as of the time of death. This is important in this case. This is so because it is a conceded fact that the trust for the son is not one for his maintenance. If it should be held that the trust for the widow was for her maintenance, and for that reason alone she was entitled to her $250 a month during the ten months of the administration of the estate, but that the son's trust was not for his maintenance, it would mean that the widow would receive $2,500, and the son nothing. The trial court found that the income during administration “exceeded” $2,500. At the oral argument, and in letters to this court, counsel conceded that the actual income was “in the neighborhood of $5,000”. If I am correct that both life tenants, regardless of whether their respective trusts were intended for their maintenance or not, are entitled to income from the date of death, under the facts of this case the widow would receive $2,500 and so would the son. This conclusion would follow if it should be held that it will be presumed that the “title” of the life tenant vests upon the death of the testator.
As already pointed out, this “title” theory is accepted by the overwhelming number of other states, and is incorporated in the Restatement of the Law of Trusts above–quoted. As I read the California cases some of them at least have adopted that rule for this state. In the Estate of Gartenlaub, 185 Cal. 375, at page 383, 197 P. 90, at page 93, 24 A.L.R. 1, it is stated: “The doctrine generally adopted by the courts of America, and recognized by this court in [Re] Estate of Duffill [180 Cal. 748], 183 P. 337, is that, where corporate stock forms a part of a trust estate, the income of which is to be paid to one for life with remainder to another, what the remainderman is entitled to is the value of the stock as of the date of the creation of the trust––that is, the testator's death. Any accumulations beyond that date are distributable as profits. [Citing many cases.]” See, also, In re Estate of Duffill, 180 Cal. 748, 183 P. 337; In re Estate of McGirl, 125 Cal.App. 310, 13 P.2d 746; In re Estate of Ballou, 181 Cal. 61, 183 P. 440; In re Estate of Whitney, 171 Cal. 750, 154 P. 855.
In opposition to this rule the respondent and the majority opinion rely on certain language in the following cases: In re Estate of Lockhart, 21 Cal.App.2d 574, 69 P.2d 1001; In re Estate of Bourn, 25 Cal.App.2d 590, 78 P.2d 193; In re Estate of Watson, 32 Cal.App.2d 594, 90 P.2d 349; Clayes v. Nutter, 49 Cal.App. 148, 192 P. 870; Fraser v. Carman–Ryles, 8 Cal.2d 143, 64 P.2d 397; In re Estate of Brown, 143 Cal. 450, 77 P. 160. It must be conceded that the holding in Clayes v. Nutter is contrary to the contentions of appellant. It must also be conceded that there is language in some of the other cases cited which, if separated from its context, supports respondent's position. However, several of the cases did not involve the problem of the right to income before distribution at all. The Lockhart case involved the right to income between the administrator of the life tenant's estate after her death, and the remainderman. The Bourn case turned on the question of the interpretation of the word “annuity” and upon whether a certain bequest was an annuity. The question as to whether the life tenant's right to income accrued from the date of the death of the testator was not involved. In the Watson and Fraser cases, supra, apparently the question as to the right of the life tenant to income prior to distribution was involved, but the life tenants, so far as the opinions disclose, apparently based their case solely on the contention that the bequests there involved constituted annuities. It was assumed that if they were not annuities the right to income would not accrue until distribution. The points heretofore discussed in this dissent are not mentioned in the opinions. In the Brown case the trust consisted of an uninvested sum of money which the trustees were required to invest. Obviously, no income except interest could accrue until the money was distributed to the trustees and invested by them. In the instant case the residue of the estate consisted almost entirely of stocks and bonds, the income from which amounted to about $5,000 per year. However, in fairness to respondent, it should be stated that the theory of the Brown case would seem to be contrary to the theory announced in the Marre, Dare and Rider cases, supra.
In view of this state of the authorities, it is clear that there are cases supporting the appellant, and others supporting respondent. It is quite significant, however, that in every case where the arguments favoring appellant's contentions have been fully considered, the position taken by appellant in the instant case has been sustained. It certainly cannot be contended that the authorities in this state compel the conclusion contended for by respondent. Under such circumstances, we should now adopt the rule that seems to us to be the fair and just rule to be applied to such cases. As already pointed out, the overwhelming weight of authority outside the state, and the Restatement, are contrary to respondent's contentions. For some well–reasoned cases from outside California, see In re Leitsch's Will, 185 Wis. 257, 201 N.W. 284, 37 A.L.R. 547; Grainger's Ex'rs and Trustees v. Pennebaker, 247 Ky. 324, 56 S.W.2d 1007; In re Stanfield's Estate, 135 N.Y. 292, 31 N.E. 1013; Kinney v. Uglow, 163 Or. 539, 98 P.2d 1006. The reasoning of these cases seems to me so compelling, that, in the absence of controlling authority to the contrary, this state should now adopt the majority rule.
From what has heretofore been said, it is my conclusion that the proper rule in such cases is that in the absence of compelling language in the will to the contrary, it will be presumed that the testator intended that the right of the life tenant to income should accrue from the date of his death. It is also clear to me that there is not one word in the present will that can be held reasonably to indicate that the testator's intent was that the right to income should not accrue until distribution. The most that can be said is that the will is silent on this point. So far as the will is concerned, therefore, the presumption heretofore mentioned should control.
It must be conceded that this whole problem depends upon the intent of the testator. If he expresses such intent, that expression is, of course, controlling. But if the will is silent as to intent, and if there is no other evidence of intent, the law presumes that by his silence the testator has expressed the intent of having the right to income vest at his death. It may be conceded that intent may be shown by the surrounding circumstances. The majority opinion, and the trial court, place great reliance on the evidence of surrounding circumstances in the present case. What are these so–called surrounding circumstances? First, it is pointed out that the widow had the right to apply for a family allowance during administration, and that such allowance was applied for and secured. It is stated that the testator must be presumed to have known this fact, and that, therefore, it may be inferred that he intended the right to income should not accrue while the right to a family allowance existed. This reasoning, in my opinion, is unsound. The will made no mention of putting the widow to an election. Either the right to apply for a family allowance does or does not show an intent as to when the right to income shall accrue. It certainly cannot be held that in each case it depends upon the whim or caprice of a trial court as to whether such fact shows such an intent. If silence in the will shows an intent to have the right accrue from the date of death, and if the testator is presumed to know of the right of a widow to a family allowance, and if the testator in fact had this problem in mind, why would he have not specifically provided in his will that the right to income accrued on distribution, if that was in fact his intent? How can the presumption above adverted to be held to be overcome by such a tenuous circumstance? The point is that the circumstance that the widow had the right to ask for a family allowance has no relevancy at all in determining the intent of the testator. In Re Estate of Ballou, supra, it was argued that because the child there involved was entitled to receive a family allowance, this supported the finding that the testator did not intend the legacy to bear interest from the testator's death. At page 65 of 181 Cal., at page 441 of 183 P. the court stated: “That the legatee, as a minor child of deceased, was in fact allowed, and did in fact receive, a family allowance pending administration, as well as a homestead, we must likewise regard as immaterial on this appeal. Obviously such matters can have no bearing on the question of the character of the legacy, and are material, if at all, only upon some such theory as that by accepting certain benefits given her as the child of the deceased by statute, she has elected to take those benefits in place of certain benefits given her by the will. There is, however, nothing in the will upon which it may be claimed that the child was put to an election in this matter, and, this being so, her receipt of the benefits accorded her by the law as a child of deceased from the funds of the estate in no way affects her rights as a legatee. See [In re] Estate of Cowell, 164 Cal. 636, 130 P. 209.” That reasoning is equally applicable in the instant case.
It is also pointed out that prior to his death the testator named his wife as a joint tenant of the family residence, valued at $22,500, and that he named her beneficiary of certain policies of insurance on his life. How can these circumstances support the finding of intent? What relevancy have they to the present question? Can it be held that because of these facts the testator expressed or demonstrated an intent that no right to income accrued until distribution? The testator had no way of knowing whether administration would take ten months, as it actually did, or many years as it actually has in many cases. Should it be held that because the testator knew that his widow had a joint tenancy interest in the residence (which cost $200 per month to maintain) and would receive certain life insurance (which totaled $8,500) that he intended she should receive no income during administration no matter how long that might be? The will discloses a clear intent on the part of the testator to take care of his wife. He recognized throughout that her care and maintenance had prior claims on his bounty. The rights of the son were made secondary. It seems to me that to hold that the circumstances mentioned support the finding of the trial court as to intent is to do violence to the obvious intent of this testator. I am willing to concede that the question of intent is a question of fact, and that if there is any evidence or any reasonable inference from the evidence that will support the trial court's finding, this court must, and should, sustain the trial court. The point is, that there is no evidence and no inference from the evidence that supports the finding in question. Under such circumstance, the presumption heretofore mentioned should prevail. I believe that this portion of the decree should be reversed.
KNIGHT, J., concurred.