WESTPHAL ET AL v. WESTPHAL ET AL (1941)

In an action commenced by the widow and children of John C. Westphal, Jr., to establish an involuntary trust, the demurrer of defendants was sustained as to all but two plaintiffs, who were minors, and the other plaintiffs declined to amend.

J. C. Westphal died testate in 1912. He left surviving five sons, three of whom, Theodore, William and George, are the defendants herein. His other two sons were John C., Jr., and Fred. Theodore and William were named as executors in the will which divided the estate into five equal parts of which one part was devised to each of the three defendants, one part to Theodore and George in trust to pay the income to John C., Jr., for his life, the remainder to his widow and children. The fifth part was devised to the same defendants under a similar trust for the benefit of Fred, his wife and children. The one–fifth part of the estate devised in trust for the benefit of John C., Jr., his wife and children is all that is involved in this proceeding.

The plaintiffs' complaint is framed to state two causes of action; the first based upon the allegations that the defendants through fraud procured a distribution of the estate, contrary to the terms of the will; the second based upon the theory that the probate court by mistake made a decree of distribution contrary to the same terms of the will. It is alleged that, because of such fraud and mistake, no part of the estate was distributed to the plaintiffs, nor in trust for their benefit, but the entire estate was distributed in equal shares to the three defendants.

The theory of the first cause of action is that the five sons conspired among themselves to cheat and defraud these plaintiffs by entering into an oral and written agreement whereby Fred and John C., Jr., should institute a simulated contest of the will, but should dismiss the proceedings prior to any hearing upon the contest, and then the defendants herein should petition the court for distribution of the entire estate to them in equal shares and conceal from the court the terms of the will relating to the two trust estates. As a part of this conspiracy it is alleged that the parties agreed that the defendants should represent to the probate court that John C., Jr., and Fred had forfeited their interest in the estate by instituting the contest of the will. It is then alleged that a decree of distribution, entered July 24, 1913, distributed the entire estate to these three defendants pursuant to the alleged conspiracy.

The demurrer challenged the sufficiency of the allegations to plead a cause in equity to set aside the final decree, and also raised the question of the statute of limitations––subdivision 4 of section 338 of the Code of Civil Procedure. As the application of this statute is determinative of this appeal we will confine our discussion to that issue.

The decree was entered July 24, 1913, and became final. John C. Westphal, Jr., died January 29, 1935. This action was commenced August 31, 1937. All the appellants attained legal majority more than three years before the action was commenced. As to the two children who were minors the demurrer was not pressed, was overruled, and the judgment appealed from does not affect their interests. Since the appellants' attack upon the decree of distribution comes twenty–four years after its entry the material question involved is whether their cause of action accrued prior to the death of the husband and father in 1935.

This question must be determined by an examination of the character of the interest which the appellants seek to assert. All parties concede that if the remainder interest given by the will to the appellants was a vested remainder the action is barred by the statute.

The pertinent portions of the will relating to this question of the interest devised read: “Fifth––A: In the event of the death of my said son, John C. Westphal, Jr., after my death, I direct that one–half (1/2) of said fund and property so held in trust, as aforesaid, (the income of which is directed to be paid as aforesaid) immediately vest in, and I hereby give, devise and bequeath to the widow and children of said John C. Westphal, Jr., share and share alike, a vested remainder in fee in and to one–half (1/2) of said property so devised in trust, as aforesaid, and, if he leaves no wife surviving him, then said one–half (1/2) of said trust property shall vest in, and I hereby give, devise and bequeath to the children of said John C. Westphal, Jr., and to the children of any deceased child or children of said John C. Westphal, Jr., by right of representation, a vested remainder in fee in and to one–half (1/2) of said property so devised in trust as aforesaid. In the event that said John C. Westphal, Jr., should die leaving no wife surviving him and leaving no children and leaving no children of a deceased child or children, then I direct that said one–half (1/2) of the said trust property shall immediately vest in Theodore Westphal, William Westphal and George Westphal, named hereinabove, share and share alike, and to their heirs respectively, and, in that event, I do hereby give, devise and bequeath to said Theodore Westphal, William Westphal and George Westphal, share and share alike, and to their heirs, respectively, a vested remainder in fee in and to said one–half (1/2) of said property so devised in trust, as aforesaid, to take effect in possession immediately upon the termination of said trust, as provided in paragraph four of this will.”

Respondents direct attention to those portions of the paragraph quoted reading: “I hereby give, devise and bequeath to the widow and children of said John C. Westphal, Jr., share and share alike, a vested remainder in fee.” “I hereby give, devise and bequeath to the children of said John C. Westphal, Jr., * * * a vested remainder in fee.” It is argued that these portions of the will indicate a clear intention on the part of the testator to vest in those named a present remainder in fee––a present gift of which possession alone was deferred until the termination of the life estate of John C., Jr.

It is a settled principle that all testamentary dispositions will be presumed to vest at the testator's death (section 28 of the Probate Code); that a future interest will not be imposed unless the intention to postpone is clearly manifested; (Williams v. Williams, 73 Cal. 99, 102, 14 P. 394; Estate of De Vries, 17 Cal.App. 184, 190, 119 P. 109; Miller v. Oliver, 54 Cal.App. 495, 498, 202 P. 168); and that the determining factor is what character of interest did the testator intend to create. Estate of De Vries, supra, 17 Cal.App. page 188, 119 P. 109. In section 694 of the Civil Code it is declared that: “A future interest is vested when there is a person in being who would have a right, defeasible or indefeasible, to the immediate possession of the property, upon the ceasing of the intermediate or precedent interest.” In Oliver v. Sperry, 97 Cal.App. 27, 29, 274 P. 1030, the court, in construing a will which devised a life estate to Lydia Sperry with remainder to Frank Sperry and Harriet A. Miller, her children relied upon this Code section and upon Hall v. Wright, 17 Cal.App. 502, 120 P. 429, and Estate of De Vries, supra, in holding that the remainder vested in Frank Sperry and Harriet A. Miller, as of the time of the death of the testator––that “there were two persons in existence at the time of the entry of the decree * * * who would immediately succeed to the possession and enjoyment of the estate in which Lydia J. Sperry was given a life tenure”.

It should not be assumed that the distinction between vested and contingent remainders is simple and well defined. In Estate of Washburn, 11 Cal.App. 735, 740, 106 P. 415, 417, the court said: “There is no subject of the law more abstruse, or in which greater refinement of learning has been displayed, than that of remainders. No definitions ever have been, or ever will be, given which will relieve all cases from doubt.” In Gray “The Rule Against Perpetuities”, sections 101 and 102, the author defines a vested remainder in this language: “Since contingent remainders have been recognized, the line between them and vested remainders is drawn as follows: A remainder is vested in A., when, throughout its continuance, A., or A. and his heirs, have the right to the immediate possession, whenever and however the preceding freehold estates may determine. A remainder is contingent if, in order for it to come into possession the fulfilment of some condition precedent other than the determination of the preceding freehold estates is necessary.

“Section 102. A remainder is none the less vested because it may terminate before the remainderman comes into possession; thus if land be given to A. for life, remainder to B. for life, B. may die before A., yet the remainder is vested, for during its continuance, namely, the life of B., it is ready to come into possession whenever and however A.'s estate determines. This result is not affected by the fact that the termination of the remainder is contingent; that is, that it is subject to a condition subsequent. For instance, if land is devised to A. for life, remainder to B. and his heirs, but if B. dies unmarried then to C. and his heirs, B.'s remainder is vested, although it is possible that he may die unmarried in A.'s lifetime.” This definition has been criticized with as much vigor as it has been approved. See Vol. 29 C.L.R. No. 3, p. 290. But in general accord with the statement and illustration is the following language found in Restatement of the Law of Property (Future Interests) section 157, subd. “h”: “When an otherwise effective conveyance of either land or a thing other than land creates one or more prior interests, the maximum duration of which is measured by lives or by years or by a combination of lives and years, and then provides, in substance, that upon the expiration of such prior limited interests, the ownership in fee simple absolute of the land, or the corresponding interest in the thing other than land, shall belong to a person who is presently identifiable (see Comment i), such person has an indefeasibly vested remainder.” And in Estate of Washburn, supra, 11 Cal.App. page 740, 106 P. page 418, it is said: “if there are words of present gift to a class of persons in existence, the remainder is vested, though it cannot be ascertained until the determination of the particular estate which, if any, members of the class will ultimately take; but if futurity attaches to the gift so that it is not intended to take effect until the determination of the particular estate, the remainder is contingent.”

Here the will clearly disclosed the testator's intention to vest the interest in the wife and children of John C., Jr., upon the termination of the life of the latter, without other condition or limitation. It must be held to be a present gift to a class of persons then in existence, and the vesting of the interest is not defeated by the fact that other children were born to John C., Jr., after the execution of the will. Section 123 of the Probate Code covers that situation in this manner: “A testamentary disposition to a class includes every person answering the description at the testator's death; but when the possession is postponed to a future period, it includes also all persons coming within the description before the time to which possession is postponed.”

It cannot be disputed that the beneficiaries of the trust had a right to sue to protect their respective interests when the trusts were repudiated and defeated through the decree of distribution. Section 863 of the Civil Code provides: “Except as hereinafter otherwise provided, every express trust in real property, valid as such in its creation, vests the whole estate in the trustees, subject only to the execution of the trust. The beneficiaries take no estate or interest in the property, but may enforce the performance of the trust.”

The terms of the section are plain and require no interpretation. Rhoda v. County of Alameda, 134 Cal.App. 726, 732, 26 P.2d 691, 694, upon which appellants rely, is not in conflict with the Code section. That was an action for damages to the remainder brought by the remaindermen after the termination of the life estate. The judgment was based upon the sole ground that the plaintiffs had failed to present a claim to the county before suit was filed. But, in the course of the opinion, the court held that plaintiffs' remainder was contingent and not vested, and for that reason it rejected the county's claim as to the time when plaintiffs' cause of action accrued, using the following language which is pertinent here: “However, it does not follow, as argued by appellant, that, because the remainder had not vested at the time the work complained of was completed, respondents have no cause of action. It is true that prior to the falling in of the life estate they could not sue for the damage done the property interest. Pavkovich v. Southern Pacific Ry. Co., 150 Cal. 39, 87 P. 1097; Chesapeake & O. R. Co. v. Bradford, 6 W.Va. 220. But, if a damage was done to the remainder interest, it would seem clear that the law should not be so powerless as to deny relief to the remaindermen when the remainder became vested in them. It is appellant's theory that, since the life tenant had the only vested interest at the time the tube was completed, she would have the only cause of action for damages. If this is so, then the property of the remaindermen would be damaged without compensation being made therefor as required by the Constitution. Article 1, § 14. It is plain that the life tenant could only recover for damage to her life estate, and if the remaindermen cannot recover for damage to the remainder when their estates vest, there can be no recovery by any one for the damage to the remainder. Such an inequitable rule should only be adopted under the compulsion of absolute necessity.”

Appellants make no special argument in defense of their second cause of action which is predicated upon the alleged mistake of the probate court in entering the decree of distribution. The inconsistencies between the two causes of action are apparent. The will contained a provision forfeiting the interest of any “child” of the testator who should contest it. If the decree of distribution was procured as alleged through the conspiracy and fraud of the testator's sons in representing to the court that John C., Jr., and Fred had contested the will, such representations might have affected the life estates of those two sons, but they would have no effect upon the interests of the remaindermen. Taking the allegations of this cause of action as a whole the trial court was confronted with a pleading which showed nothing more than that the probate court had committed an error at law in assuming that the interest of the beneficiaries under the trusts had been forfeited by the action of the life tenants in filing a contest of the will. There are no allegations of a mistake of fact which would support a plea in equity, and there are none which would support a claim that the running of the statute of limitations had been suspended. For the reasons heretofore given in sustaining the demurrer to the first cause of action the demurrer to the second should be sustained.

The judgment is affirmed.

NOURSE, Presiding Justice.

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