IN RE: the ESTATE of Della F. BISHOP (1962)

This is an appeal from a judgment determining heirship under a claim to succession based on the provisions of Section 229 of the Probate Code, which confers upon designated relatives of a predeceased spouse the right to succeed to that property in the estate of a surviving spouse which was the separate property of the predeceased spouse and came to the surviving spouse in a designated manner, in the event the latter has not disposed thereof by will and leaves neither spouse nor issue.

A. D. Bishop and Della Bishop were married on October 12, 1908. At the time of marriage Mr. Bishop was the owner, as his separate property, of a 25 acre ranch which is the subject of this proceeding. The trial court found, in substance, that at this time Mrs. Bishop owned some improved real property, which was her separate estate; that she sold the same; and that the proceeds of this sale were put into a home built on the ranch. A few years later, i. e., on July 11, 1914, Mr. Bishop, by grant deed, conveyed 22 1/2 acres of the 25 acre ranch to Mrs. Bishop, including that part thereof upon which the home was situated, and retained 2 1/2 acres. The deed in question was a form; as executed, was printed in part and handwritten in part; and recited that the grant was made in consideration of the sum of ‘Ten Dollars and other valuable considerations', the quoted portion of which was handwritten. Thereafter, a homestead was placed on that part of the ranch occupied by the home, which covered a plot of ground 250 feet by 200 feet in dimension.

Mr. Bishop also owned other separate property; sold a part thereof to one of his sons; caused some of it to be placed in the name of his wife and himself as joint tenants; conveyed other parts to other persons; transferred an interest in one parcel to his wife by deed which recited a consideration of $1.00; and conveyed another parcel to her by a deed which recited a consideration of love and affection.

Mr. Bishop died in 1928. The 2 1/2 acres which he retained from the 25 acre ranch became a part of his estate and was distributed to Mrs. Bishop and Mr. Bishop's sons by probate decree which awarded the former a one-third interest therein and the latter a two-thirds interest. Subsequently Mrs. Bishop purchased the interest awarded to the sons and received from them a grant deed conveying the 2 1/2 acres in question without any reference to their two-thirds interest therein. Thereafter, until her death, Mrs. Bishop managed the whole ranch, which was planted to citrus trees; supervised the workmen; arranged for cultivation of the grove; ordered fertilizer and spraying; replaced some of the trees; planted eucalyptus trces; kept the records; and generally ‘ran it just like if she had been a man.’

Mrs. Bishop did not remarry; died in 1958; left no issue; and did not dispose of the subject property by will. The executor of the estate of one of Mr. Bishop's sons filed the instant proceeding, and he, together with the children of other sons, filed statements of claim to a part of Mrs. Bishop's estate contending that they were entitled to succeed thereto by virtue of the provisions of Section 229 of the Probate Code.

Pertinent parts of the code section in question provide:

‘If the decedent leaves neither spouse nor issue, and the estate or any portion thereof was separate property of a previously deceased spouse, and came to the decedent from such spouse by gift, descent, devise, or bequest, * * * such property goes in equal shares to the children of the deceased spouse and to their descendants by right of representation, * * *.’ (Prob.Code, sec. 229.)

The trial court found and concluded that (1) the 25 acre ranch was the separate property of Mr. Bishop; (2) the conveyance of 22 1/2 acres therefrom to Mrs. Bishop was a gift; (3) one-half of that portion of the parcel so conveyed which had been homesteaded, i. e., the 250 foot by 200 foot home place site, was the separate property of Mr. Bishop, and one-half thereof was the separate property of Mrs. Bishop; (4) the remaining 2 1/2 acres of the ranch was acquired by Mrs. Bishop from Mr. Bishop's sons; (5) that Mrs. Bishop's relatives were entitled to succeed to the 2 1/2 acre parcel and a one-half interest in the home site; and (6) that Mr. Bishop's relatives were entitled to succeed to the 22 1/2 acre parcel, less a one-half interest in the home site. Judgment was entered accordingly. Mrs. Bishop's relatives appealed from that part of the judgment in favor of Mr. Bishop's relatives and the latter appealed from that part of the judgment in favor of the former.

Each side contends, in substance, that the evidence is insufficient to sustain the findings in favor of the other side. General rules applied to such a contention on appeal are that, if there is any substantial evidence, contradicted or uncontradicted, including any inferences reasonably deducible therefrom, which supports the findings, they will be sustained on appeal (Primm v. Primm, 46 Cal.2d 690, 693, 299 P.2d 231; Estate of Bristol, 23 Cal.2d 221, 223, 143 P.2d 689); it is presumed that all conflicts in the evidence, and between all reasonable inferences equally deducible therefrom, were decided by the trial court in favor of the prevailing party (Estate of Schultz, 54 Cal.2d 513, 518, 6 Cal.Rptr. 281, 353 P.2d 921, 81 A.L.R.2d 1106; Thomas v. Hunt Mfg. Corp., 42 Cal.2d 734, 736, 269 P.2d 12); only substantial evidence will suffice to support a finding (Dyer v. Knue, 186 Cal.App.2d 348, 351, 8 Cal.Rptr. 753); to be substantial, evidence ‘must be of ponderable legal significance * * * reasonable in nature, credible, and of solid value’ (Estate of Teed, 112 Cal.App.2d 638, 644, 247 P.2d 54, 58; Dyer v. Knue, supra, 186 Cal.App.2d 348, 351, 8 Cal.Rptr. 753); inferences based only on mere possibility, suspicion, speculation, imagination, guesswork, supposition, conjecture or surmise must be rejected (Di Sandro v. Griffith, 188 Cal.App.2d 428, 435, 10 Cal.Rptr. 595; Krause v. Apodaca, 186 Cal.App.2d 413, 418, 9 Cal.Rptr. 10; Estate of Kuttler, 185 Cal.App.2d 189, 205, 8 Cal.Rptr. 160; Eramdjian v. Interstate Bakery Corp., 153 Cal.App.2d 590, 602, 315 P.2d 19); and a finding will be set aside if the evidence in support thereof ‘is so slight and tenuous that it does not create a real and substantial conflict.’ (Fewel & Dawes, Inc. v. Pratt, 17 Cal.2d 85, 89, 109 P.2d 650, 653; Chance v. Lawry's Inc., 199 A.C.A. 250, 265, 18 Cal.Rptr. 596.)

Where the right of a person as an heir depends not only upon the fact of a certain relationship but also upon the status of property which he claims as heir, he has the burden of proving that status. (Estate of Abdale, 28 Cal.2d 587, 593, 170 P.2d 918; Estate of Rattray, 13 Cal.2d 702, 705–706, 91 P.2d 1042; Estate of Anderson, 142 Cal.App.2d 391, 392, 298 P.2d 105; Estate of Adams, 132 Cal.App.2d 190, 196, 282 P.2d 190.) Section 229 of the Probate Code applies only to separate property of a predeceased spouse which came to a surviving spouse in the manner designated by the statute. As a consequence, in the instant proceedings, among other things, Mr. Bishop's relatives have the burden of proving that his separate property, which they claim as heirs, came to Mrs. Bishop by gift, devise or descent.

In essence, two parcels of property are involved; one being that described in the deed from Mr. Bishop to Mrs. Bishop, dated July 11, 1914, consisting of 22 1/2 acres; and the other is the remaining 2 1/2 acres which became a part of his estate upon death.

As to the first parcel, Mr. Bishop's relatives contend, and the court found, that Mrs. Bishop received the same as a gift. The evidence relied upon to establish this fact is the testimony of witnesses that they had no knowledge that Mrs. Bishop had been employed prior to or after marriage, or that she owned any separate property; the testimony of one of Mr. Bishop's grandsons that, as he interpreted his father's statements to him, who in turn obtained the information from ‘family gossip’, his grandfather had said, apparently referring to Mrs. Bishop and the property in question, ‘She got it away from him,’ and his further testimony that he was told that ‘in the 1920's sometime’ his grandfather said to his father, referring to property thereafter transferred to the latter, ‘Come on, let's go down town and get this deed transacted before I lose that too’; and the testimony of Mrs. Bishop's niece, which in substance, constituted a statement that she did not remember why Mr. Bishop conveyed the subject property to her aunt.

This evidence is not substantial within the meaning of the rule heretofore stated and is not sufficient to sustain the finding that the conveyance under consideration was a gift.

It must be noted that the court found that Mrs. Bishop did own separate property at the time of her marriage which she later vested in the home that was located on the 22 1/2 acre parcel. This home was built after marriage, although prior to execution of the deed in question. As the court did not accept the testimony that Mrs. Bishop had no separate property at the time of marriage, if its finding of a gift was based upon a further and implied finding that Mrs. Bishop had no separate property with which to make a purchase, as is contended by the relatives of Mr. Bishop, the latter determination necessarily related to her separate property status as of the date of execution of the deed. The advancement of separate funds by a wife to her husband for investment in his separate property is presumed to be a loan. (Estate of Abdale, supra, 28 Cal.2d 587, 593, 170 P.2d 918; McKay v. McKay, 184 Cal. 742, 746, 195 P. 385.) Therefore, it must be presumed that Mrs. Bishop loaned her separate funds to Mr. Bishop, and as there is no showing that this loan had been paid, or which would account for it or its proceeds, the implied finding that she had no separate property at the time of the conveyance in question is not supported by the evidence.

Furthermore, a valuable consideration is not limited to the payment of money or other material exchange; may be based on a promise; or consist of the cancellation of a debt; and a transfer for such a consideration is not a gift. (Allied Architects' Ass'n of Los Angeles v. Payne, 192 Cal. 431, 438, 221 P. 209, 30 A.L.R. 1029.) The extent thereof is not important (Driscoll v. Driscoll, 143 Cal. 528, 533, 77 P. 471; Estate of Breschini, 120 Cal.App.2d 154, 156, 260 P.2d 804), although the recital of a mere nominal consideration in an instrument of transfer does not foreclose a finding that the transaction was a gift. (Salmon v. Wilson, 41 Cal. 595, 604; Bertelsen v. Bertelson, 49 Cal.App.2d 479, 484, 122 P.2d 130; Pomper v. Behnke, 97 Cal.App. 628, 636, 276 P. 122.) As a consequence, even assuming that Mrs. Bishop had no separate property at the time of the conveyance to her, this fact is not sufficient to support an inference that there was no consideration therefor. (Estate of Woolman, 187 Cal.App.2d 573, 577, 9 Cal.Rptr. 648.)

The execution of the subject deed raised a presumption that the transfer effected thereby was for a consideration. (Civ.Code, sec. 1614; Driscoll v. Driscoll, supra, 143 Cal. 528, 533, 77 P. 471; Estate of Hobart, 82 Cal.App.2d 502, 509, 187 P.2d 105; Belletich v. Belletich, 40 Cal.App.2d 732, 735, 105 P.2d 954.) The recital therein that the grant was made for $10.00 and ‘other valuable considerations' is a declaration by the grantor (Galland v. Jackman, 26 Cal. 79, 86; Black Eagle Oil Co. v. Belcher, 22 Cal.App. 258, 263, 133 P. 1153) consistent with the presumption that the deed was executed for a valuable consideration, even though the grantee then owned no separate property (Estate of Lissner, 27 Cal.App.2d 570, 578, 81 P.2d 448), although we need not consider the effect of this declaration as proof of a consideration in the instant case. (See Galland v. Jackman, supra, 26 Cal. 79, 86–87; Estate of Lissner, supra, 27 Cal.App.2d 570, 575, 81 P.2d 448.)

The contention of Mr. Bishop's relatives that the testimony of his grandson respecting family gossip and what his father told him, and the testimony of Mrs. Bishop's niece regarding her knowledge of the reason for the conveyance, support an inference that Mrs. Bishop received the 22 1/2 acre parcel from Mr. Bishop as a gift, is without merit. To draw such an inference from the testimony in question, under the circumstances of this case, would require indulgence in conjecture, surmise, speculation, imagination and guesswork. This type of evidence is not of that substantial character which, under the rules heretofore stated, will sustain a finding.

Mr. Bishop's relatives also claim that the deed in question is presumed to have been made for an insufficient consideration because of the fiduciary relationship between husband and wife; that this presumption supports the finding of a gift; and in support of this contention cite Section 2235 of the Civil Code. There is a distinction between a valuable consideration and a sufficient consideration; the former may exist even though the latter does not (Golson v. Dunlap, 73 Cal. 157, 14 P. 576); and, as applied to the present case, the presumption arising from Section 2235 would tend to prove only that the subject deed was made for an insufficient consideration and not that it was made for no consideration. (Metropolis Trust & Savings Bank v. Monnier, 169 Cal. 592, 147 P. 265.) In addition, the presumption in question is intended for the protection of the parties to the fiduciary relationship (Papineau v. Security-First Nat. Bank, 6 Cal.2d 668, 670, 59 P.2d 131) and, for this reason, is inapplicable to the instant case because the controversy here is not between Mr. Bishop and Mrs. Bishop, or their successors, but between persons who claim to be heirs of Mrs. Bishop.

As to the 2 1/2 acre parcel, Mrs. Bishop's relatives contend, and the court found, that she acquired the same from Mr. Bishop's sons and, for this reason, was not subject to disposition under Section 229. In applying the provisions of that section the courts have endeavored to effect disposition of property on the basis of its source. (Estate of Abdale, supra, 28 Cal.2d 587, 590–591, 170 P.2d 918.) If the predeceased spouse was the source of title held by the surviving spouse at the time of the latter's death, distribution is made to the relatives of the predeceased spouse. On the other hand, even though the property originally may have been owned by the predeceased spouse, from whom it was obtained by the surviving spouse in the manner designated by the statute, i. e., gift, descent, devise, etc., if the latter at the time of death owned the property by virtue of an intervening source, i. e., ‘a new title,’ distribution is made to the relatives of the surviving spouse. (Estate of Abdale, supra, 28 Cal.2d 587, 591, 170 P.2d 918; Estate of Putnam, 219 Cal. 608, 28 P.2d 27; Estate of Flood, 55 Cal.App.2d 410, 130 P.2d 811.) Mrs. Bishop's heirs claim that the source of her title to the 2 1/2 acres, at the time of her death, was the deed which she received from Mr. Bishop's sons in culmination of her purchase from them. However, the evidence shows without dispute that at the time of execution of this deed Mrs. Bishop was the owner of a one-third interest in this parcel by virtue of a decree of distribution in Mr. Bishop's estate. This one-third interest was received by ‘descent,’ and was subject to the provisions of Section 229. The remaining two-thirds interest was distributed to his sons who, by their deed, transferred it to Mrs. Bishop, thereby creating a new source of title as to that interest, which was not subject to succession under the provisions of Section 229. The finding that the deed from the sons created a new source of title in Mrs. Bishop to all of the interests in the 2 1/2 acre parcel is not substained by the evidence.

In support of this finding it is contended that by executing the deed in question, Mr. Bishop's sons transferred not only their interest in the 2 1/2 acre parcel, but also the right to inherit any part thereof under Section 229, to which they or their sons might be entitled, and the decisions in Estate of Anderson, 160 Cal.App.2d 552, 325 P.2d 670 and Estate of Wilson, 40 Cal.App.2d 229, 104 P.2d 716, are cited as authority for this position but these cases clearly are inapplicable to the facts at hand. Two of the three sons predeceased Mrs. Bishop; the deed merely described the 2 1/2 acre parcel; she already owned a one-third interest therein and the sons' ownership was limited to a two-thirds interest; no mention is made of any right of inheritance; and there is no evidence from which the court could have concluded that the grantors intended that the deed should affect any right to inherit from the grantee's estate. The contention to the contrary is without merit. (See Sears v. Rule, 27 Cal.2d 131, 143, 145, 163 P.2d 443.)

Mr. Bishop's relatives contend that the purchase of the two-thirds interest by Mrs. Bishop did not change the status thereof for succession purposes; that the only property she owned was the separate property of her husband which she had acquired by gift, descent or joint tenancy terminations; that she had inherited no estate except from him; that she had no source of income except from that property; that, therefore, the purchase in question must have been made with funds consisting of the rents, issues, profits or proceeds from such property; that property purchased from such funds retained the character of the property from which they came; that, through these funds, a part of the property which she had acquired from her husband was transmuted into a two-thirds interest in the 2 1/2 acre parcel which is a part of her estate; and cite the decisions in Estate of Rattray, 13 Cal.2d 702, 707, 91 P.2d 1042; Estate of Jolly, 196 Cal. 547, 556, 238 P. 353; Estate of Brady, 171 Cal. 1, 4–7, 151 P. 275, and Estate of Adams, supra, 132 Cal.App.2d 190, 202, 282 P.2d 190, in support of the legal premise upon which they rely. The fallacy of their contention lies in the factual assumptions that all of Mrs. Bishop's property came to her from Mr. Bishop by gift, descent or joint tenancy termination, and that none of the rents, issues and profits which she received from the property were due to her personal activity, ability or capacity; as to the former, the evidence does not establish that the 22 1/2 acre conveyance was a gift; and with respect to the latter, the court made no finding.

Where the separate property of a predeceased spouse came to a surviving spouse under conditions making it subject to the provisions of Section 229, any increase in the value thereof which is due to the personal activity, ability or capacity of the latter, through services rendered after death of the former, is not subject to succession under those provisions. (Estate of Adams, supra, 132 Cal.App.2d 190, 202, 282 P.2d 190; see Estate of Brady, supra, 171 Cal. 1, 3, 151 P. 275.) The application of this rule to services allegedly rendered by Mrs. Bishop in the operation and management of the ranch, assuming that any part thereof is determined to be subject to succession under Section 229, involves a variety of issues which need not be anticipated and ruled upon in this opinion.

The trial judge orally indicated his intention to find that the homestead parcel, viz., the 250 foot by 200 foot plot upon which the home had been built, was community property of the parties. With respect to this determination he said: ‘I will be frank in stating that I may be making an error in this regard * * *’ In his written findings he found this parcel to be the separate property of the parties, and that each owned a one-half interest therein. In either event, he made an error. The fact that Mrs. Bishop advanced money to her husband which he put into a home on his property, under the circumstances of this case, does not justify the conclusion reached.

There are other contentions raised by the parties respecting other issues in this case but, as they are related to findings made by the court and the status of the evidence upon which those findings are based, in view of the fact that a new trial must be had herein, no purpose would be served in reviewing them.

The judgment is reversed and a new trial ordered as to all issues.

COUGHLIN, Justice.

GRIFFIN, P. J., and SHEPARD, J., concur.