IN RE: BRYANT'S ESTATE.

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District Court of Appeal, First District, Division 2, California.

IN RE: BRYANT'S ESTATE. BUSH ET AL. v. GREENLEAF ET AL.*

Civ. 9324.

Decided: January 11, 1934

Murphy & Doherty and Harrison Weil, all of Los Angeles, for petitioners. Zach Lamar Cobb and Earl A. Littlejohns, both of Los Angeles, for contestants.

When Anna K. Bryant died intestate on June 5, 1931, she left an estate subject to distribution under the laws existing prior to the enactment of the Probate Code, which became effective August 14, 1931. Her husband, Thomas Bryant, predeceased her on November 4, 1927. Two groups of heirs claim succession to the property and estate of Anna K. Bryant, the first consisting of three children of Thomas Bryant and a former wife, the second consisting of the next of kin of Anna K. Bryant, a sister, and the children of three deceased brothers. On March 15, 1932, the first group commenced this proceeding under the authority of section 1080 of the Probate Code for the determination of heirship and the right to distribution of the estate. The second group appeared therein as contestants. A judgment was rendered awarding a portion of the estate to the petitioners and the remainder to the contestants. Appeals were taken by both groups and are presented here on the same record. For purposes of convenience the first group will hereafter be referred to as petitioners and the second as contestants. It is well to note that the rights of the parties to succeed to the properties of the estate are controlled by subdivision 8 of section 1386, Civil Code, the decedent having died prior to the effective date of the Probate Code; that, as to all matters of procedure, the Probate Code is controlling.

The three petitioners are the children of Thomas and Nellie Bryant, whose marriage occurred on January 10, 1885. The husband was engaged in mining in the state of Montana, in which he was very successful and built up a considerable fortune. In 1909, at the request of the husband, Mrs. Bryant procured a divorce and immediately thereafter Mr. Bryant married Anna Healy, the decedent herein. No property settlement was made to the wife except a home in Salt Lake City, and no alimony or contribution for the support of the children was awarded. In 1914 Bryant and his second wife moved to California, where he engaged in business and land speculation, through which he made and lost considerable sums of money. In 1923 Mr. Bryant purchased a one–third interest in a partnership operating an electric tramway running between Venice and Ocean Park. The original investment was listed at $60,000 and Mr. Bryant's purchase of the one–third interest therein was evidenced by a note given to Mr. Gibbons, the owner of the remainder. This note was paid out of the earnings of the partnership, and in addition thereto Mr. Bryant was paid in dividends something over $38,000 and as salary something over $11,000. Four years after this investment was made Mr. Bryant died, leaving a will devising all his property to Anna K. Bryant. This will was never offered for probate. When the decedent was divorced from her former husband in 1905 she received no alimony or property, and during the period succeeding her divorce and prior to her marriage to Mr. Bryant she earned some money by giving music lessons, but was supported mainly through a regular allowance contributed by Mr. Bryant. After her marriage to Mr. Bryant she engaged in no income–producing occupation until the death of her husband in 1927. Thereafter she worked intermittently for the tramway concern, receiving a total salary over a period of four years of about $2,400. She had no separate property at the time of her marriage to Mr. Bryant, but thereafter received a small legacy from her mother's estate which, the court found, had not been traced into her estate. During the four years following the death of Mr. Bryant she received in dividends from the tramway concern over $23,000, the interest of Mr. Bryant having been transferred to her on the books of the concern by Mr. Gibbons voluntarily. No administration of the estate of Mr. Bryant was had and all the property accumulated during the union passed into the hands of the wife. Prior to his death Mr. Bryant made separate gifts to his wife of an orange grove located in San Bernardino county, various articles of jewelry, and a note and mortgage known as the “Etz” account, amounting to $3,500. These items are conceded to be the separate property of the decedent to which the contestants herein are entitled to distribution. Subsequent to the death of Mr. Bryant the widow purchased an automobile and made several loans secured by mortgages upon real estate which are listed as bills receivable. As to these items, the petitioners argue that they are the fruits of the community property coming from the dividends of the tramway interest. The trial court found that the tramway interest was community property and as such distributable to the petitioners herein, but made no disposition of the profits thereof received by the decedent. It found that the property conceded to be the separate property of the widow was distributable to the contestants herein and that as to all other property there was a failure of proof as to its community or separate character and for that reason such property was ordered distributed to the contestants.

The burden of petitioners' attack on the judgment rests in finding number seven, which reads: “As to certain properties in this estate, there was no evidence of any kind to indicate their source, character or disposition, and for that reason the Court holds them to have been the separate property of decedent at the time of her death.” The error of this finding is one of law. It disregards the settled rule that a legal presumption is itself evidence and that when not controverted the court or jury is bound to find according to the presumption. Simonton v. L. A. Trust & Savings Bank, 205 Cal. 252, 258, 270 P. 672; Smellie v. S. P. Co., 212 Cal. 540, 549, 299 P. 529. It is in the evidence that during the cohabitation of the parties the husband, in partnership with one Gibbons, operated an electric tram line from which he received during a period of about four years over $38,000 as dividends and over $11,000 as salary. The husband died on November 4, 1927. Upon the death of her husband she took possession without administration of Mr. Bryant's interest in the tramway, and in the period of less than four years following his death she received therefrom in dividends over $23,000. The evidence is that she had no separate property and that at a time not disclosed in the evidence she had received a legacy from her mother's estate which the trial court found had not been traced into her estate. The interest in the tramway was found to be the community property of Mr. and Mrs. Bryant, and for reasons which we will hereafter discuss, this finding is not subject to attack. The household furnishings, the automobile, the bills receivable (other than the “Etz” account), and other property not shown to be the separate property of the decedent, must be held to be community property because of the presumption found in section 164 of the Civil Code in so far as any of these properties were acquired during the continuance of the marriage relation and, as to such as were acquired thereafter, they will be presumed to have been the fruits of the community property taken by Mrs. Bryant at the time of her husband's death. This is the settled rule found in Re Estate of Rolls, 193 Cal. 594, 597, 226 P. 608, and In re Estate of Jolly, 196 Cal. 547, 553–556, 238 P. 353. This conclusion is compelled by the further consideration that upon the death of her husband, Mrs. Bryant became the trustee of his portion of the community property for the benefit of his estate. Stafford v. Martinoni, 192 Cal. 724, 739, 221 P. 919; Civ. Code, § 2219. As such trustee she was not permitted to obtain any advantage against the estate or the heirs thereof and any advantage which she might obtain under such circumstances is presumed to have been obtained without consideration. Section 2235, Civ. Code; McKay v. McKay, 184 Cal. 742, 746, 195 P. 385, 386.

The respondents confidently rely upon In re Estate of Simonton, 183 Cal. 53, 190 P. 442, as authority for the rule that in cases of this kind the burden of proof is on the heirs of the predeceased spouse to show that the property is community. An expression to that effect is found in the Simonton opinion, but no authorities are cited in support of it and we do not find that the case has been cited as authority upon that point. Ample authority may be found to the contrary, particularly where the property has been received in trust, as is the case here. In McKay v. McKay, supra, the controversy involved money obtained by the husband from his wife during the marriage. Invoking the presumption under section 2235, Civil Code, that it had been obtained as a loan and not as a gift, the Supreme Court said: “It is the settled rule that the fact of the receipt by the husband of his wife's money presumptively makes him her debtor and imposes upon him the legal duty of returning it to her, and no affirmative proof is required on the part of the wife to show that the husband received the money as a loan, and not as a gift. To the contrary, the burden is upon the husband, or his heirs claiming the money, to show circumstances entitling him, or them, to retain the same. White v. Warren, 120 Cal. 322, 49 P. 129, 52 P. 723; Wormley's Estate, 137 Pa. 101, 20 A. 621; Stickney v. Stickney, 131 U. S. 227, 33 L. Ed. 136, 9 S. Ct. 677 [see, also, Rose's U. S. Notes].”

But we do not understand that this issue depends entirely upon the question of the burden of proof. When the appellants rested upon the presumption that the property was community followed by the rule that the rents, issues, and profits thereof retain their community status (In re Estate of Brady, 171 Cal. 1, 151 P. 275), they made proof which was binding on the court until overcome by other evidence. With no proof to rebut the presumption it cannot be said that appellants failed to sustain such burden as the law may have cast upon them. Having taken possession of this property without administration, the wife was accountable to her husband's estate to the extent of one–half of the community property under the provisions of sections 1401 and 1402 of the Civil Code as they read at that time. She accordingly came under the rule of Stafford v. Martinoni, 192 Cal. 724, 734–736, 221 P. 919, and the burden was thus cast upon her representatives of showing what portion, if any, of the property, including the notes and mortgages taken by her for loans made during the four years succeeding her husband's death, was derived from sources other than the community property.

At the outset of their appeal the contestants urge that the petitioners are not entitled to participate in any portion of the estate of the decedent because the predeceased husband had expressly disinherited them in a will which he executed on August 26, 1924. No authorities are cited in support of the point and upon every principle of reason outlined in the various statutes of succession the point is without merit. Section 1386 of the Civil Code, under which the petitioners claim, relates to an estate not disposed of by will and the provisions of subdivision eight thereof are founded on the origin of the property in the predeceased spouse. In re Estate of McArthur, 210 Cal. 439, 292 P. 469, 72 A. L. R. 1318. All the interest of the predeceased spouse may have been left to the surviving spouse by will, yet if the latter dies intestate the heirs of the predeceased spouse succeed under the express provisions of this section of the Code, notwithstanding any expressed desires of the predeceased spouse.

It is argued that the petitioners herein are estopped from asserting any rights to the estate because one of them had theretofore gone into the probate court on a petition to set aside the appointment of the administrator and for the issuance of letters to her, and because in that proceeding the probate court made extensive findings purporting to cover all the issues which might arise at any stage of the probate proceedings. This point is equally without merit. Under the provisions of section 422 of the Probate Code the next of kin of the decedent were entitled to letters of administration in preference to the relatives of the predeceased spouse. Under the provisions of section 423 of the Probate Code any person so entitled might nominate a competent person as administrator. Thereupon the probate court has discretion to appoint such nominee or to appoint a person of a class subsequent in rank. But the court is not required to select one of a subsequent rank, and hence when two such persons seek letters of administration the primary question before the probate court is whether the nominee is a competent person for the appointment. This discretion having been exercised, one having a prior right may petition for revocation of the letters under the terms of section 450. The right to so petition, however, seems to be limited in that section to a “surviving spouse, child, parent, brother or sister of the intestate or the public administrator * * *” or a party acting upon the written request of any one of these. The petitioner, as the daughter of the predeceased spouse, does not come under the category of those mentioned in this section of the Code and it would seem therefore that the probate court had no jurisdiction to entertain the petition in the first instance. Assuming, however, that the petitioner was competent, the only issue before the court was whether the petitioner had a prior right to the one who had been appointed. This claim is denied by the express provisions of sections 422 and 423. There was nothing more before the probate court than this issue and for this reason the findings relating to the character of the property, the disposition of the interest in the tramway concern, the effect of the bill of sale thereto and the rights of succession of the various parties herein were all immaterial to and beyond the issues raised in that proceeding. These findings of the probate court on matters which were beyond the jurisdiction of that court and immaterial to the issues in the proceeding before it are not res judicata against the petitioners in this proceeding. 15 Cal. Jur. p. 153; Chapman v. Hughes, 134 Cal. 641, 655, 58 P. 298, 60 P. 974, 66 P. 982. This rule is particularly applicable to the petitioners Thomas Bryant, Jr., and J. Ross Bryant, who were in no sense parties to the proceeding in the probate court for the revocation of letters of administration.

Contestants rely with some apparent confidence on a purported bill of sale which Thomas Bryant executed covering his interest in the tramway partnership. After a full and fair hearing on this question, the trial court found on conflicting evidence that this bill of sale was not made in view of pending death; that it was executed at the request of the partner and with the understanding that both partners would execute similar documents, but that they would not be delivered nor take effect until the death of either partner; that continuously after the execution of the bill of sale and until his death Mr. Bryant exercised and maintained the same exclusive dominion and control over the property as he had exercised prior thereto; that the books and records of the partnership showed Thomas Bryant to be the owner of a one–third interest therein until after his death, and that then, and not until then, they were voluntarily changed by Mr. Gibbons so that Mrs. Bryant appeared to have succeeded to the interest of her husband; that all dividends payable from the interest of Thomas Bryant were paid to him up to the date of his death; and that the bill of sale was at no time presented by Mrs. Bryant to the partnership until after the death of her husband. These findings are fully supported by the evidence. They compel the conclusion that there was no valid gift of the interest in the tramway, but that the bill of sale was executed solely for the purpose of avoiding probate in event of death, that it was thus testamentary in character and invalid for any purpose. These findings fully support the court's conclusion that this interest was community property and as such distributable to the petitioners.

The portion of the judgment awarding the tramway interest to petitioners and determining that they are entitled to distribution thereof is affirmed. The portions of the judgment attacked in petitioners' appeal are modified by affirming the award to contestants of all properties which have been conceded to be the separate property of the deceased and by reversing as to such other properties with directions to retry the issues as to such properties alone. Petitioners to have their costs.

NOURSE, Presiding Justice.

We concur: STURTEVANT, J.; SPENCE, J.