ESTATE TOLER v. <<

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District Court of Appeal, Fourth District, California.

Matter of the ESTATE of Jessie Lee TOLER, Deceased.*

Civ. 5514.

Decided: May 21, 1957

Harold B. Newrock, Whitter, for appellant. Clyde C. Shoemaker, Los Angeles, for respondent.

This is an appeal from an order for preliminary distribution made after a hearing on a petition therefor by Benjamin Edward Toler, an heir at law and devisee under the last will and testament of Jessie Lee Toler, deceased. Appellant, Minnie Carter, who is also a devisee and legatee named in said will, contends that the order is erroneous in that (1) It purports to give the petitioner Benjamin Edward Toler an estate in fee simple, whereas by the terms of the will he is entitled to a life estate in the rest and residue of the estate, with the remainder over to certain beneficiaries; (2) No order appears therein directing that on the death of the life tenant, the remaindermen named in the will shall receive the property in the respective amounts as provided by said will; and (3) The court failed to order that the income from the rest and residue was subject to administration and other expenses set forth in the first paragraph of the will.

Jessie Lee Toler died on September 26, 1946, at the age of 83 years. The pertinent parts of her will, dated June 13, 1946, are as follows:

‘First: I direct my Executor, hereinafter named, as soon as it shall have sufficient funds in its hands therefor, to pay the expenses of my last illness, my funeral charges, all my just debts, and also any inheritance or estate taxes that may become due, by virtue of my demise, or by virtue of any devise or bequest hereunder.

‘Fourth: I give, devise and bequeath the following property and/or sums of money to the following persons:

‘(A) The sum of Five Thousand Dollars ($5,000.00) to my friend, Mrs. Minnie Carter; and

‘(B) The sum of Five Thousand Dollars ($5,000.00) to my sister, Annie Brenot.

‘Fifth: All of the rest and residue of my estate, real, personal, and/or mixed, wherever situated, I give, devise and bequeath to my brother, Benjamin Edward Toler, for and during his natural life, with the right to the full use and benefit of all of the rents, issues and profits therefrom with the remainder over in fee to the following persons and in the following amounts, to-wit:

‘(A) One-half (1/2) thereof to my good friend, Mrs. Minnie Carter;

‘(B) One-fourth (1/4th) to my nephew, Eddie Ponder, or his heirs by right of representation; and

‘(C) The remaining one-fourth (1/4th) thereof to be divided equally among the following persons, or if any be deceased, their heirs by right of representation: Susie Ponder, Annie Brenot, William Morris, Roland Morris, Marie Brenot Murdock, Lillian Brenot Glasman, and Eddie Brenot.’

The will was admitted to probate on October 18, 1946, and the Bank of America National Trust and Savings Association was appointed executor thereof. The appraised value of the real and personal property belonging to the decedent at the time of her death was the sum of $186,657.11 and the principal asset of the estate was a ranch consisting of approximately 75 acres of oranges, 6 of lemons and 3 of avocados, some unimproved land, dry farmed for hay and grain, and a homesite of approximately 2 acres.

In 1947 the executor obtained a court order authorizing it to continue the business of operating the citrus orchards and conducted this operation for approximately 8 years. Notice to creditors was published October 22, 1946, and all claims filed against said estate, amounting to $2,566.20, were paid within six months thereafter. On February 25, 1949, an order settling the first account current, which had been filed for the period from October 18, 1946, to January 6, 1949, was made by the court, in which order it was determined that all inheritance taxes had been paid; that the time for filing and presenting claims against said estate had expired and all claims filed had been paid. On or about August 5, 1954, the ranch belonging to the estate was sold at a probate sale for $291,500 and the sale was confirmed by the court on or about February 15, 1955. The second account current and report of the executor for 1949 to 1955 showed a balance of property on hand as of April 27, 1955, of $311,717.79, of which $309,296.47 was cash.

On December 19, 1955, a petition for preliminary distribution under the provisions of section 1000 of the Probate Code was filed on behalf of said Benjamin Edward Toler by his duly appointed guardian, Susan E. Ponder. The petition was heard by the court on December 30, 1955, and submitted for decision. On February 20, 1956, the court granted the petition and made and entered an order for preliminary distribution of the sum of $200,000, under and according to said will for the use and benefit of said Benjamin Edward Toler. This is the order from which the appeal herein is taken. It is stated therein that there is no dispute between the parties as to the pertinent facts upon which said petition for preliminary distribution was based; that due notice of the hearing of said petition has been given; that all claims filed against said estate have been paid; that all taxes have been paid; that said decedent bequeathed cash legacies of $5,000 each to Minnie Carter and Annie Brenot; devised and bequeathed the entire rest and residue of her estate, real, personal and mixed, to her brother, said Benjamin Edward Toler, for and during his natural life, with the right to the full use and benefit of all the rents, issues and profits therefrom with the remainder over in fee to the persons and in the amounts hereinafter set forth; that both of said cash legacies were fully paid as of June 1, 1955; that the claims of the executor and of the attorneys for the executor for extraordinary commissions and fees mentioned in the petition for preliminary distribution herein and the accounts of said executor are being contested by written objections and exceptions filed herein by Benjamin Edward Toler and other parties interested in said estate; that as of December 15, 1955, the executor had on hand assets of the estate aggregating $308,934.69, of which $307,013.37 was in cash. The order then provides:

‘That said Benjamin Edward Toler is entitled to preliminary distribution of such portion of his legacy, devise or share of said estate under said last will of said decedent as the Court may designate as safe and proper; that although said estate is not in a condition to be finally closed or distributed, there may be safely and properly distributed at this time to said Benjamin Edward Toler, as devisee, and legatee under the last will of said decedent, without loss to the creditors or any creditor of the estate, or injury to the estate, or any person interested therein, the following described property, to wit: the sum of Two Hundred Thousand Dollars ($200,000.00) cash, in lawful money of the United States, the same to be distributed by the executor of said estate to said Susan E. Ponder, as the guardian of the person and estate of said Benjamin Edward Toler, an incompetent person, the possession thereof to be distributed to said guardian on condition that said funds aggregating said sum of $200,000.00 be deposited by said guardian in a trust company, as depositary or custodian, pursuant to and in compliance with the provisions of section 1514 of the Probate Code, in connection with the reduction of the bond of said guardian, in the matter of the estate and guardianship of said Benjamin Edward Toler, an incompetent person, case No. 371353, pending in the Superior Court of the State of California, in and for the County of Los Angeles, and the expenditure and investment of said funds to be through proceedings in the matter of said guardianship and by said Susan E. Ponder, as guardian of the person and estate of said Benjamin Edward Toler; that the giving of any bond by the petitioner herein may be safely dispensed with.

‘It is therefore ordered by the Court that property of said estate consisting of the sum of $200,000.00, in cash, lawful money of the United States, be and the same is hereby distributed to said Susan E. Ponder, as guardian of the person and estate of said Benjamin Edward Toler, an incompetent person, on condition that said sum of $200,000.00 be deposited in a trust company, as depositary or custodian, pursuant to and in compliance with the provisions of section 1514 of the Probate Code, in connection with the reduction of the bond of said guardian, in the matter of the estate and guardianship of Benjamin Edward Toler, an incompetent person, case No. 371353, pending in the Superior Court of the State of California, in and for the County of Los Angeles.

‘It is further ordered that the Bank of America National Trust and Savings Association, a national banking association, as executor of the last will and testament of said Jessie Lee Toler, deceased, shall and it is hereby directed to deliver the possession of said sum of $200,000.00 to said Susan E. Ponder, as guardian of the person and estate of said Benjamin Edward Toler, on condition that said funds be deposited in a trust company as above provided; and that said executor is hereby authorized and directed to deliver said sum of $200,000.00 to such trust company as may be appointed as depositary or custodian of said sum of $200,000.00 in the matter of said guardianship, said appointment to be evidenced by a certified copy of the order directing the deposit of said funds with such trust company, and the receipt of such depositary or custodian shall be a valid discharge and acquittance for said sum of $200,000.00 so delivered.

‘It is further ordered by the Court that the expenditure and investment of said funds on deposit with said depositary or custodian shall be made by and through proceedings in the matter of said guardianship by said Susan E. Ponder, as the guardian of the person and estate of said Benjamin Edward Toler, an incompetent person, subject to the order and direction of the court in which said guardianship proceedings are pending.

‘It is further ordered that the giving of any bond by the petitioner herein be dispensed with and that said preliminary distribution is ordered without bond.’

The statutory provisions governing preliminary distribution in an estate are found in Statutes of 1953, Section 2, Chapter 417, Probate Code, § 1000 et seq. There is no dispute as to the facts upon which the order of distribution was based or the sufficiency of the evidence to support the facts. The law favors the delivery of a legacy or specific property to a legatee, devisee or heir for partial distribution as soon as this can be done without jeopardizing the rights of other persons who are interested in the estate. In re Estate of Morelli, 102 Cal.App.2d 39, 42, 226 P.2d 716. And as is said in Re Estate of Glenn, 153 Cal. 77, 80, 94 P. 230, 231: ‘It is his property, and he has the right to enjoy the same at the earliest possible moment consistent with the proper administration of the estate.’ Here, the court concluded that partial distribution could safely and properly be made without loss to the creditors or any creditors of the estate, or injury to the estate or any person interested therein. This conclusion is not challenged by the appellant.

The appellant contends that the order distributes a fee simple estate in $200,000 to the life tenant, Benjamin Edward Toler, instead of a life estate, as provided by the will. We do not so construe the order. The meaning and effect of the will was not questioned and it is not claimed or contended by petitioner that he is entitled to anything more than a life estate in the remainder of the estate after the payment of the cash legacies. He states that he stands upon his rights to the ‘full use and benefits of all of the rents, issues and profits' of said life estate, as provided by said will. The reporter's transcript shows that at the hearing on the petition, counsel for petitioner stated to the court that preliminary distribution was important ‘because all this money is lying in the bank and the bank hasn't indicated in its account it is paying interest on it’ and that he asked the court to ‘make it possible, if it can be done with safety to the rest of the people, the remaindermen, for the money to go to work so that Mr. Toler may have some income from it.’

The court stated in the order that Toler had a life estate in the remainder of the estate after the special bequests had been paid and that the estate was not in a condition to be closed or distributed; and that the special bequests and all claims filed against the estate have been paid.

Section 818 of the Civil Code provides that the owner of a life estate may use the land in the same manner as the owner of a fee simple, except that he must do no act to the injury of the inheritance. In the instant case the estate was reduced to cash and the life tenant was entitled to the full use and enjoyment of his estate, restricted only in that the estate of the remaindermen should not be permanently diminished in value by his neglect to do what an ordinarily prudent person would do in preserving his own property. Bliss v. Security-First Nat. Bank, 81 Cal.App.2d 50, 55, 183 P.2d 312. It is further held in that case, 81 Cal.App.2d at page 56, 183 P.2d at page 316, that

‘Where a decree distributes a legacy to a person for his natural life with the unused portion thereof to go to a remainderman, it creates a mere life estate in the first taker and vests the unused portion of the estate in the remainderman. And the first taker holds the estate not as owner but as trustee in the sense that he must have due regard for the rights of him who will succeed to the title in fee. This constitutes him an implied trustee. Hardy v. Mayhew, 158 Cal. 95, 104, 110 P. 113, 139 Am.St.Rep. 73; Collins v. Hartford Accident & Indemnity Co., 178 Va. 501, 17 S.E.2d 413, 418, 137 A.L.R. [1046] 1054.’

It follows that the life tenant herein was entitled to the possession of the $200,000 involved, subject to the limitations as to its use as prescribed by the rules heretofore announced. The trial court ordered distribution of this money to Toler's guardian, on condition that it be deposited in a trust company and that the expenditures and investment of said funds be made by and through proceedings in the matter of said guardianship. The order does not provide that the said sum of $200,000 is distributed to Toler in fee and can be reasonably construed to mean that the court did not intend to distribute a fee simple estate therein to Toler.

In 21 Cal.Jur.2d, section 800, page 203, it is said that the probate court has a broad discretion in passing on a petition for preliminary distribution, and in the absence of a clear showing of abuse its conclusion that the estate is in such condition that it may or may not be subject to preliminary distribution will not be disturbed on appeal. And in section 803, page 205, it is said:

‘As to all matters except the act of the representative in himself purchasing estate property, the rule that all presumptions must be indulged in favor of the regularity of a proceeding leading to the rendering of a judgment and in support of the judgment is applied to a decree of preliminary distribution with no less rigor than to any other kind of judgment. It is therefore presumed that the evidence on which a decree of preliminary distribution was predicated was in all respects sufficient and competent and that any legal objections that could have been made against it were made by the party objecting to the granting of the petition and were decided by the court at the hearing.’

The claim of appellant that the order was erroneous in that it failed to direct that on the death of the life tenant the remaindermen named in the will should receive the property in the respective amounts named in the will is without merit, as, under the circumstances shown, it is presumed that Toler's guardian will not dissipate the corpus of the estate. All expenditures from the fund transferred to her are controlled by the court, and when final distribution is ordered in the estate, any further expenses of administration can be properly allocated by the court.

We conclude that the probate court did not intend by its order to distribute the $200,000 involved to the petitioner, Benjamin Edward Toler, in fee; that no such distribution was effected by the order and that the rights of the appellant were not prejudiced thereby. As so construed, the order for preliminary distribution is affirmed.

MUSSELL, Justice.

BARNARD, P. J., and GRIFFIN, J., concur.

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