IN RE: STEVENS' ESTATE. (1944)

This is an appeal from an order in probate granting a petition to compromise a creditor's claim. Appellant, Edith Lavenbarg, was remembered in the will of Guy D. Stevens, deceased, to whom she was unrelated. Upon a hearing had upon petition of the administratrix–with–will–annexed, at which appellant and all other parties interested in the estate appeared and were heard, the court made an order interpreting the will, which order has become final. Under this interpretation appellant was declared to have the right to use a residence for a period of five years after the date of the death of decedent, with the right to purchase the property at the end of the five–year period for $2,000, payable at the rate of $20 per month, provided that her right to occupy the premises and to purchase them at the end of the five–year period was to terminate if she failed to pay the taxes as they fell due or if she married a man who was able to support her. If she lost the right of occupancy and the right to purchase by reason of the happening of either of these contingencies the property was to go to Earl Stevens and Elva L. Shetrone, children of decedent, in equal shares, and they were also to take the proceeds of the sale of the property to appellant if she concluded the purchase. All funds in the Bank of America in Santa Monica, California, were bequeathed to the two children. The proceeds of a note of $400 due decedent were to be used for the payment of the expenses of last illness and funeral and of administration, and the remainder, if any, was to go one–third to T. G. Stevens, father of decedent, and two–thirds to the two children.

Vera M. Stevens, divorced spouse of decedent, presented a claim against the estate for $990 and interest and it was allowed and approved. The devise to appellant was appraised at $850 and the claim of Vera M. Stevens, with interest, amounted to more than $1,100. There were no assets available for payment of the claim without recourse to one or more of the legacies. The administratrix took the position that recourse must be had to the legacy of appellant for satisfaction of the creditor's claim before the legacies of the children and the father of decedent could be invaded, and arranged a transfer of appellant's legacy to the creditor in satisfaction of the latter's claim. The order appealed from approved this compromise and settlement.

The first point made by appellant is that decedent's money at the time of his death was in the Bank of America, Highland Park branch, and not in the Santa Monica branch. It is contended that the bequest of the money was adeemed because there was no money in the Santa Monica branch. Evidence was taken at the hearing but has not been brought up in the record on appeal. It must be presumed that the evidence was sufficient to satisfy the court that the testator in transferring the account from one branch bank to another had no intention of disturbing the bequest of the money to his children. Proof of an intention to abrogate the bequests was necessary to show an ademption (Estate of McLaughlin, 1929, 97 Cal.App. 485, 275 P. 875), and it does not appear that the court committed error in ruling that the money went to the children.

The second question is whether the court followed the law in holding that the creditor should be paid from appellant's legacy alone, because she was a stranger to the testator, instead of charging it proportionately against her legacy and those of the father and children.

The code sections to be examined are sections 750, 751, and 752 of the Probate Code, which read as follows:

Sec. 750: “Order of resort to estate assets for payment of debts, expenses, etc. If the testator makes provision by his will, or designates the estate to be appropriated, for the payment of his debts, the expenses of administration, or family allowance, they must be paid according to such provision or out of the estate thus appropriated, so far as the same is sufficient. If insufficient, that portion of the estate not disposed of by the will, if any, must be appropriated for that purpose; and if that is not sufficient, the property given to residuary legatees and devisees, and thereafter all other property devised and bequeathed is liable for the same, in proportion to the value or amount of the several devises and legacies, but specific devises and legacies are exempt from such liability if it appears to the court necessary to carry into effect the intention of the testator, and there is other sufficient estate.”

Sec. 751: “Order of resort for payment of legacies. The property of a testator, except as otherwise provided in this code, must be resorted to for the payment of legacies in the following order:

“(1) The property which is expressly appropriated by the will therefor.

“(2) Property not disposed of by the will.

“(3) Property which is devised or bequeathed to a residuary legatee.”

Sec. 752: “Order of abatement of legacies. Unless a different intention is expressed in the will, abatement takes place in any class only as between legacies of that class, and legacies to a spouse or to kindred shall abate only after abatement of legacies to persons not related to the testator.”

The sections of the Civil Code and Code of Civil Procedure in effect before the adoption of the Probate Code and which related to the subject of the order in which the property of an estate, as well as the order in which legacies, should be appropriated to the payment of debts and legacies, were considered in Estate of Apple, 1885, 66 Cal. 432, 6 P. 7. Sections 1359, 1360, 1361 and 1362 of the Civil Code then read as follows:

Sec. 1359: “The property of a testator, except as otherwise specially provided in this code and the Code of Civil Procedure, must be resorted to for the payment of debts, in the following order:

“One. The property which is expressly appropriated by the will for the payment of the debts;

“Two. Property not disposed of by the will;

“Three. Property which is devised or bequeathed to a residuary legatee;

“Four. Property which is not specifically devised or bequeathed; and,

“Five. All other property ratably. Before any debts are paid, the expenses of the administration, and the allowance to the family, must be paid or provided for.”

Sec. 1360: “The property of a testator, except as otherwise specially provided in this code and the Code of Civil Procedure, must be resorted to for the payment of legacies, in the following order:

“One. The property which is expressly appropriated by the will for the payment of the legacies.

“Two. Property not disposed of by the will.

“Three. Property which is devised or bequeathed to a residuary legatee.

“Four. Property which is specifically devised or bequeathed.”

Sec. 1361: “Legacies to husband, widow, or kindred of any class are chargeable only after legacies to persons not related to the testator.”

Sec. 1362: “Abatement takes place in any class only as between legacies of that class, unless a different intention is expressed in the will.”

The court held that the preference under section 1361 was to be given effect as between legacies of the same class in cases where it was necessary to resort to such legacies for the payment of debts but that it was not to be given effect as between legacies of the same class where such legacies had not been resorted to for the payment of debts but the estate available was insufficient to pay all of them or, in other words, that the preference ran as to the payment of debts but not as to the payment of legacies.

Sections 750, 751 and 752, Probate Code, were considered in Estate of Wever, 1936, 12 Cal.App.2d 237, 55 P.2d 279, and they were construed as giving the spouse and kindred preference over legatees of the same class who were unrelated to the testator, where the available estate was insufficient to pay the legacies in full. The question was not involved and the court expressly refrained from stating whether the preference also existed where resort was had to legacies for the payment of debts. The concluding clause of section 752, Probate Code, at the time of this decision read: “* * * and legacies to a spouse or to kindred are chargeable only after legacies to persons not related to the testator.” It was in 1939 that the words “are chargeable” were changed to “shall abate” and the word “abatement” was added.

The conclusion we reach from a study of the Probate Code sections in the light of the decisions is that the legislature intended that the preference in favor of kindred should exist in the payment of both debts and legacies. We cannot read Estate of Apple, supra, and Estate of Wever, supra, without believing that it was the intention of the legislature in adopting the original sections to create a preference in favor of kindred with relation to the payment of both debts and legacies, although it must be conceded that such intention was not expressed as clearly as might have been done. But however that may be, for nearly 50 years after Estate of Apple was decided, it was the settled law that resort was to be had to legacies of non–relatives before those of kindred for the payment of debts; in fact, as declared in Estate of Apple, that had been the law since 1872. The decision was said by two of the participating Justices to be dictum upon that point, but it has been taken as the basis for text in Cal.Jur. and has never been overruled or departed from. In 1931, when the law on the same subject matter was rewritten, there was, in our opinion, no substantial change in the general plan except, as held in Estate of Wever, to make the preference applicable to the payment of legacies.

Under section 1359, Civil Code, supra, all property of a testator, except as otherwise specially provided in that code and the Code of Civil Procedure, was liable for the payment of debts. This is also true of section 750, Probate Code. The phrase “except as otherwise specially provided”, etc., found in section 1359, supra, is not in section 750, but we attach no importance to that fact. This phrase was not considered as a material one in the Apple decision and, in fact, it was also contained in section 1360 of the Civil Code when that matter was decided. There are other provisions of the code which create exceptions, just as there were before 1931, under which certain of the testator's property may be set apart free from liability for debts. As we read section 750 and former section 1359, we understand that their essential purpose was to direct the order in which the property of the estate should be taken for the payment of debts, expenses of administration and family allowance, which order runs to the several classes of property defined in the sections. All estates come within the scope of this purpose and we would not expect to find in section 750 directions upon the wholly unrelated matter of preference in the payment of legacies to kindred over legacies to others within a single class. Section 751 states the order in which legacies are payable. It differs in phraseology but not at all in meaning from former section 1360 of the Civil Code. Down to this point the law deals with different classes of property and different classes of legacies, giving preference to some classes above others. The legacies we are considering all belong to the class of specific legacies. It is not until we reach section 752, Probate Code, which combines former sections 1361 and 1362 of the Civil Code, that we find a definition of the rights of legatees of a single class as among themselves. Here for the first time the matter of abatement of legacies is dealt with specifically and we find that legacies abate by classes and necessarily ratably within each class but with the exception that “legacies to a spouse or to kindred shall abate only after abatement of legacies to persons not related to the testator.” The words “abate” and “abatement” are more appropriate than the word “chargeable,” which was used in former section 1361, Civil Code, and section 752, Probate Code, before 1939, and which was held to refer to the payment of debts in Estate of Apple and to the payment of legacies in Estate of Wever. To abate means to do away with or nullify or to lessen or diminsh. A legacy is abated when it is used in whole or in part to meet a priority payment, whether of a debt, expense of administration, family allowance, or legacy. The words “abate” and “abatement” are not qualified in any way nor used in a restricted sense in section 752, and we think that legacies to spouse or kindred do not abate until after legacies of the same class to non–kindred have abated, whether resort to the legacies be had by reason of debts or by reason of other legacies having priority. We think this construction follows from a history of the law on the subject, which we have briefly reviewed, and it does not bring section 752 into conflict with section 750. It also follows from the common sense and logic of the situation as well. One who makes a will leaving specific legacies to a spouse or kindred and to persons who are not related to him ordinarily assumes that the estate will be sufficient to pay them all. The preference which the law gives to the spouse and kindred where all the legacies cannot be paid is but the expression of the legislative purpose to do what the testator would naturally have done if he had thought of it, namely, give preference to spouse and kindred above strangers in the contingency that the combined legacies would, for any reason, exceed the estate available for their payment. If the estate of the testator is reduced by the payment of all of his debts during his lifetime to the point where specific legacies to his spouse and kindred and specific legacies to strangers cannot all be paid, the spouse and kindred will be paid first. This is the effect of the holding in Estate of Wever, supra, the soundness of which we think is beyond question. Why then, with debts of the same amount and estate of the same value, should the spouse and kindred lose their preference through the circumstance that the testator neglected to pay his debts and it became necessary for his executor to resort to legacies with which to pay them. If the legislature had intended to change the law, as declared in Estate of Apple, section 752, in providing for abatement of legacies, would have denied the preference to kindred in cases of abatement on account of debts instead of using the new words without any qualification whatever.

We have not overlooked section 753, Probate Code, which reads as follows: “When property given by will to persons other than the residuary devisees and legatees is sold for the payment of debts or expenses or family allowance, all the devisees and legatees must contribute according to their respective interests to the devisee or legatee whose devise or legacy has been sold, and the court, when distribution is made, must settle the amount of the several liabilities and decree the amount each person shall contribute, and reserve the same from his distributive share for the purpose of such contribution.” While appellant does not rely upon this section for a reversal of the order, we have considered it and deem it to be inapplicable to the question before us. Manifestly the section must be read in harmony with the other sections we have discussed and, when so read, it does not destroy the preference given to spouse and kindred over other legatees of the same class. A contrary construction would bring it in conflict with the scheme of the three preceding sections as we understand it. The section is in substance the same as former section 1564 of the Code of Civil Procedure, which was adopted in 1880. That section has never been construed as affecting in any way the preference to kindred over others in a given class. If it had been the intention to nullify the holding in Estate of Apple by destroying the preference to kindred in the payment of debts, we think section 1564, which was in effect when the Apple decision was rendered, would not have been carried into the Probate Code without the expression of that intention.

The order is affirmed.

SHINN, Justice.

DESMOND, P. J., and PARKER WOOD, J., concur.