Estate of Warner
Estate of Warner
Opinion of the Court
This is an appeal by the surviving trustees of a trust established by the will of Thomas W. Warner from an order which determined the persons to whom principal
The pertinent facts, stated in chronological order, are as follows: 1. Thomas W. Warner, Sr., died on December 2, 1947, leaving a will which provided for several trusts, the one herein involved being known as Trust Fund Number 2 in which the life beneficiary was Thomas W. Warner, Jr., the son of the testator. 2. On July 10, 1950, in an action brought against Thomas W. Warner, Jr., by his wife, a decree of separate maintenance was entered. That decree contained a provision that “so long as the payments required to be made, or which may become payable under this decree and judgment, or any further orders of this Court, or which have become payable under any orders heretofore made, remain unpaid, that security shall be given by defendant Thomas William Warner, Jr. to plaintiff Anita Lipton Warner in the following manner: 1. That a lien be impressed upon ... (e) All right, title and interest of defendant Thomas William Warner, Jr. as heir, beneficiary, legatee, devisee, or otherwise, in or under the estate of Thomas William Warner, Sr., deceased, which estate is in process of probate . . . and under that certain Trust No. 2, designated, described and created under the last will and testament of said Thomas W. Warner, deceased, which will has been admitted to probate in said estate.” That decree contained a further provision: “That defendant Thomas William Warner, Jr., ... be, and they hereby are, enjoined and restrained (other than for the purpose of satisfying, paying and discharging the obligations of providing maintenance and of making the payments required to be made by him under said orders and judgment) from receiving the corpus or income or any beneficial or distributive share . . . in or under the estate of Thomas William Warner, Sr., deceased ... or in or under that certain Trust No. 2, designated, described and created under the last will and testament of said Thomas William Warner, Sr., deceased; and that . . . the trustees and the attorneys for the trustees of said Trust No. 2 be, and they hereby are, enjoined and restrained from paying, turning over or delivering to defendant Thomas William Warner, Jr., the corpus or income on any beneficial or distributive share of said defendant in or under said . . . trust, except upon express order of the Court therefor made after notice to plaintiff, or except upon order of Court which is based upon stipulation therefor hereafter made by plaintiff and defendant in this action.” 3. On May 23, 1952, Thomas
“I direct that the net income received and derived from said Trust Fund No. 2, and available for distribution shall, by my Trustees be paid over and distributed unto my son, Thomas W. Warner, Jr., during his lifetime, provided that such distribution shall be made in monthly or other convenient installments during the calendar year following the receipt of the income.
“During his lifetime and during the continuance of said Trust Fund No. 2, my son, Thomas W. Warner, Jr., shall also have the right to withdraw the portions of the trust estate hereinafter designated, and I direct that my said Trustees shall, upon the written demands of my son, Thomas W. Warner, Jr., presented from time to time, pay over and distribute to him, in cash or in kind, portions of said fund,*850 (as originally apportioned, or as later augmented) not exceeding the following designated portions thereof:
“1. One-fourth of the corpus of said Trust Fund No. 2 immediately upon distribution or apportionment to the Trustees, as a part of said fund or at any time subsequent thereto;
“2. An additional one-quarter of said Fund five (5) years after the date of such distribution thereof or apportionment to the Trustees, or at any time subsequent to that date; and “3. An additional one-fourth of the corpus of said fund ten (10) years after the date of such distribution or apportionment thereof to the Trustees, or at any time subsequent to that date.
“Upon the death of my son, Thomas W. Warner, Jr., one-fourth of the corpus of the trust fund as originally apportioned for his benefit or as later augmented shall, by my Trustees, be paid over and distributed in equal shares per stirpes, to and among the then living issue of my son, Thomas W. Warner, Jr., and that the residue of said fund shall go to augment and become a part of the Trust Fund No. 3.’’1
“Income accrued and undistributed at the time of the termination of any interest or estate hereunder, shall belong and go to the beneficiary or beneficiaries entitled to the next eventual estate in the same proportion as the principal thereof.” 5. On May 13,1955, Thomas W. Warner, Jr., died. It was stipulated that Thomas W. Warner, Jr., did not at any time make a written or oral demand on the other two trustees for any part of the corpus of Trust Fund Number 2. 6. Thereafter, on June 2, 1958, the surviving trustees of Trust Fund Number 2 filed their first and final account and their petition for a decree terminating the trust and directing the final distribution of the trust assets. Two of the matters thereby presented form the basis of those portions of the order which are questioned on this appeal.
The problem which will be first considered relates to an item of income in the amount of $743.85. The net income for 1954, the year preceding the death of the younger Warner, was $1,115.77. Inasmuch as the provision of the trust with respect to the disbursement of the income to that beneficiary was that ‘ ‘ such distribution shall be made in monthly or other convenient installments during the calendar year following the receipt of the income,” the trustees had divided the income of $1,115.77 into twelve monthly installments of $92.98 and had paid four installments, or $371.92, to Warner, Jr., before his death. This left a balance of $743.85, which the court determined to be payable to the executors of the estate of Thomas W. Warner, Jr., deceased.
The second problem presented is the matter of whether the
With respect to the questions thus presented, the principles which must guide this court are succinctly stated in Union Nat. Bank v. Hunter, 93 Cal.App.2d 669, at page 673 [209 P.2d 621] : “The question for decision is which of these solutions should be followed. The answer depends, ultimately, upon the intention of the trustor as manifested by the language of the trust instrument. (1 Scott on Trusts, § 143, p. 718; Moxley v. Title Ins. & Trust Co., 27 Cal.2d 457, 462 [165 P.2d 15]; 25 Cal.Jur. §145, pp. 286-287.) Since the trial court’s decision was based solely on the terms of the written instruments, the issue is one of law upon which this court is required to make its independent determination. (Estate of Platt, 21 Cal.2d 343, 352 [131 P.2d 825]; First Trust & Sav. Bank v. Costa, 83 Cal.App.2d 368, 372 [188 P.2d 778].)” (See also Estate of Welch, 83 Cal.App.2d 391, 396 [188 P.2d 797].)
There was no error with respect to the item of $743.85. The right of Warner, Jr., to the net income for the year preceding his death had become vested j payment merely and not ownership was postponed until the year 1955. (See Estate of Lockhart, 21 Cal.App.2d 574, 580 [69 P.2d 1001]; Union Safe Deposit & Trust Co. v. Dudley, 104 Me. 297, 311-312 [72 A. 166, 172] ; 4 Bogert on Trusts, § 816, pp. 235-236.) This conclusion is not undermined by the language of the general provision that: “Income accrued and undistributed at the time of the termination of any interest or estate hereunder, shall belong and go to the beneficiary or beneficiaries entitled
“The accepted meaning of ‘distribute’ is to divide among several or many; to deal out, apportion, allot. (Webster’s New International Dictionary (2d ed.).) Undistributed therefore means not apportioned, not dealt out, not allotted.
“While the dividend in question had been declared and was payable as of July 1,1943, it was not available for distribution*854 as income until it was paid to the successor trustee on November 24,1943. Prior to that date the trust estate had terminated and the trustee had died, and as a result the dividend was then payable to appellant as undistributed income, according to the terms of the trust instrument.”
Such interpretation of the language of the testator as embodied in the decree of distribution is in harmony with the statement of the governing principle as found in Estate of Johnston, 47 Cal.2d 265, at page 269 [303 P.2d 1] : “A will must be read as a whole, and all parts thereof must be construed together in relation to each other to form, so far as possible, a consistent whole.” (See also Estate of Northcutt, 16 Cal.2d 683, 689 [107 P.2d 607]; Estate of Hampton, 165 Cal.App.2d 255, 258 [331 P.2d 778].)
With respect to the second problem presented on this appeal, it is the position of the respondents that the language of the trust created a vested right in Warner, Jr., with ' respect to one-quarter of the corpus of Trust Fund Number 2. As stated in Estate of Welch, 83 Cal.App.2d 391, at page 396 [188 P.2d 797] : "While precedents may be looked to for the general principles which have been established, it is well recognized that a case involving the determination of a testator’s intention as expressed in his will is one which, to a large extent, must depend upon its own peculiar facts. (Estate of Lawrence, 17 Cal.2d 1 [108 P.2d 893].) A will must be construed in accordance with the intention of the testator (Prob. Code, § 101), and this is the paramount rule (Estate of Lawrence, supra). It is well settled that the will and the entire scheme of disposition of the testator’s property should be viewed as a whole, and the words used should be considered in reference to the context and construed according to their surroundings. (Estate of Franck, 190 Cal. 28 [210 P. 417].) A construction favorable to testacy should obtain where the language used reasonably admits of such construction. (Estate of Wallace, 11 Cal.2d 338 [79 P.2d 1094].) Several presumptions are provided by statute or are well established by the decisions. Testamentary dispositions, including a devise to a person on attaining his majority, are presumed to vest at the testator’s death. (Prob. Code, § 28.) The law favors the vesting of interests and a presumption in favor of such vesting will prevail unless an intention to the contrary clearly appears in the will. (Estate of Newman, 68 Cal.App. 420 [229 P. 898]; Estate of Ritzman, 186 Cal. 567 [199 P. 783].) In speaking of words which raise some doubt in this regard but
The difficulty with the contention of the respondents, at least as to the period of time prior to the decree of distribution, is that it would also logically lead to the conclusion that Warner, Jr., had a vested interest, with possession alone deferred, in the one-quarter of the fund which Warner, Jr., could have demanded “five (5) years after the date of such distribution thereof or apportionment to the Trustees,” and in the one-quarter of the corpus as to which he could have made a demand 10 years after such distribution or apportionment. But the testator could hardly have intended a vested interest of that nature because he contemplated that upon the death of Warner, Jr., more than one-quarter of the corpus of Trust Fund Number 2 might be available for further disposition. This is evidenced by the language that: “Upon the death of my son, Thomas W. Warner, Jr., one-fourth of the corpus of the trust fund as originally apportioned for his benefit or as later augmented shall, by my Trustees, be paid over and distributed in equal shares per stirpes, to and among the then living issue of my son, Thomas W. Warner, Jr., and that the residue of said fund shall go to augment and become a part of the Trust Fund No. 3.” (Emphasis added.)
The fact that Warner, Jr., survived “distribution or apportionment ... to the Trustees” does not appear to be, in and of itself, sufficient to lead to the conclusion that the interest of Warner, Jr., in one-quarter of the corpus of Trust Fund Number 2 had ripened into full ownership. It is to be noted that he had “the right to withdraw . .. not exceeding the following designated portions thereof,” a provision which meant that, at his election, Warner, Jr., could withdraw any part or all of one-fourth of the corpus upon distribution or apportionment thereof to the trustees. Another factor which supports a conclusion contrary to the position of the respondents is that the ripening of the right to make a demand is not tied down to a particular point in time. Instead, an indefinite period of time in which Warner, Jr., could make his election is found in the words “immediately upon distribution or apportionment thereof to the Trustees ... or at any time subsequent thereto.” What Warner, Jr., had was not a vested interest of the nature found by the court below but rather
It has been noted that the pertinent provision was not that one-fourth of the corpus of the Trust Fund Number 2 would go and be transferred to him “immediately upon distribution or apportionment thereof to the Trustees.” What he was given, upon the happening of such event, was “the right to withdraw the portions of the trust estate hereinafter designated . . . upon the written demands of . . . Thomas W. Warner, Jr., presented from time to time. ...” It is clear
In the absence of a written demand on the trustees by Warner, Jr., there is no basis for a claim on behalf of the executors of the estate of Thomas W. Warner, Jr., to one-quarter of the corpus of the trust. In the case of In re Doerfler’s Will, 247 Wis. 629 [20 N.W.2d 549], there was a provision in a codicil that the testator’s wife “shall be authorized to use so much of the principal as to make her gross income per annum Six Thousand Dollars.” Provision was made for trusts for others after her death. The executor of her estate, in preparing the final account of the trust estate of her deceased husband showing the widow’s administration of the trust as trustee thereof, made claim on behalf of her estate for the difference between the income plus principal used by her and $6,000 per year for the 10-year period that she lived after her husband’s death. The difference was in the amount of $18,655.07. In holding that such claim was without merit, the Supreme Court of Wisconsin said (20 N.W.2d, at p. 550) : “It is considered that by his will and codicil testator authorized the widow to use so much of the principal of the trust as to make her gross income per annum $6,000, but the widow and her estate were, and are, entitled only to the money which the widow withdrew during her lifetime. ’ ’ So, likewise, in the case presently before this court, the rights of Warner, Jr., and of his estate were, and are, measured by the requirement that he make a written demand for a part of the corpus before his right to possession and full ownership thereof, free of the trust, could mature.
The order which is denominated ‘ ‘ Order Settling First and Final Account of Trustees of Trust Fund No. 2, Authorizing Abandonment of Worthless Assets, Allowance of Attorney’s Fees, Findings, and Decree Terminating Trust No. 2 and Directing Final Distribution of Trust No. 2,” is affirmed with the exception of the portion thereof which orders and decrees distribution to Jean M. Warner and Manuel Ruiz, Jr., as co-executors of the estate of Thomas W. Warner, Jr., deceased,
Vallée, J., concurred.
Pertinent provisions with respect to Trust Funds No. 1 (one-half of residue of estate) and Trust Fund No. 3 (one-quarter of residue of estate) were: “I direct that the net income received and derived from said Trust Fund No. 1 and available for distribution shall, by my Trustees, be paid over and distributed unto my wife, Nettie M. Warner, during her lifetime, provided that such distribution shall be made in monthly or other convenient installments during the calendar year following the receipt of income.
“Upon the death of my wife, Nettie M. Warner, said Trust Fund No. 1 shall go to augment equally Trust Fund No. 2 and Trust Fund No. 3 and in equal shares or proportions shall become parts of said trust funds. . . .
“I direct that the net income received and derived from said Trust Fund No. 3 and available for distribution shall, by my said Trustees, be paid over and distributed unto my daughter, Jean Warner Sprague, during her lifetime, provided that such distribution shall be made in monthly or other convenient installments during the calendar year following the receipt of the income.
“During her lifetime, and during the continuance of said Trust Fund No. 3 my daughter, Jean Warner Sprague, shall also have the right to withdraw the portions of the trust estate hereinafter designated, and I direct that my said Trustees shall, upon the written demands of my daughter, Jean Warner Sprague, presented from time to time, pay over and distribute to her in cash, or in kind, portions of said fund not exceeding the following designated portions thereof:
“1. One-fourth (%) of the corpus of said Trust Fund No. 3 immediately upon distribution or apportionment thereof to the Trustees, as a part of said fund or at any time thereafter;
“3. An additional one-eighth (%) of said fund five (5) years after the date of such distribution or apportionment thereof to the Trustees, or at any time thereafter;
“3. An additional one-eighth (Ys) of said fund ten (10) years after*851 the date oí such distribution or apportionment thereof to the Trustees, or at any time thereafter; and
“i. An additional one-fourth (%) of said fund fifteen (15) 3/ears after the date of such distribution or apportionment thereof to the Trustees, or at any time thereafter.
“Upon the death of my daughter, Jean Warner Sprague, one-fourth (%) of the trust fund as originally apportioned for her benefit or as later augmented shall, by my Trustees, be paid -over and distributed in equal shares, per stirpes, to and among the then living issue of my daughter, Jean Warner Sprague, and that the residue of said fund shall go to augment and become a part of the said Trust Fund No. 2.”
It was further provided: “Upon the death of the survivor of my wife, Nettie M. Warner, my son, Thomas W. Warner, Jr., and my daughter, Jean Warner Sprague, I direct my Trustees to dissolve and terminate the Trust Fund then in existence and distribute the accumulated income and corpus thereof unto the then living issue of my son, Thomas W. Warner, Jr., and of my daughter, Jean Warner Sprague, per stirpes and not per capita. ’ ’
In Hackensack Trust Co. v. Bogert, 19 N.J. Super. 124 [88 A.2d 14] (later modified as to a matter not here pertinent, 24 N. J. Super. 1 [93 A.2d 402]), a provision of the trust was as follows: “At any time after my said grandson arrives at the age of thirty years, my Trustee hereinafter named, or its successor or successors shall, upon the written request of my said grandson, pay over to him a sum or sums out of the principal of said part or share, not exceeding in the aggregate fifty per cent of the principal of said part or share. In ease of any such payment or payments, the receipt of my grandson shall absolutely acquit and discharge such Trustee from all liability therefor."
The grandson, having arrived at the age of 30 years, sent a letter to the trustee in which he stated that he requested that there be paid to him fifty per cent of the principal of the trust fund. Thereafter, after receiving some payments, the grandson died. The court referred to the right of the grandson as a “power of invasion of the corpus of the trust” and held that the exercise thereof had been completed and that the required release could be given by the executrix of the grandson.
In the proceedings which form the basis of the present appeal, the remaining balance of such income was ordered distributed to the executors of the estate of Thomas W. Warner, Jr., deceased, and no attack is made upon that portion of the court’s determination.
By the decree of separate maintenance, Warner, Jr., was ordered to pay to his wife, “for her permanent support and maintenance . . . the sum of $600.00 per month [in addition to other provisions]. ...”
Dissenting Opinion
I dissent.
I cannot agree to an interpretation of the will which would defeat the purposes of the testator as I understand them. It is clear to me that the purpose of Warner, Sr., was that there should vest in his son interests in the trust estate as to one-fourth thereof if he survived distribution to the trustees, one-fourth thereof five years thereafter and one-fourth ten years thereafter. This purpose should not be defeated by mere vagueness or ineptitude of expression.
I take it that one who has given to another the right to take and use for himself specific property without restriction or limitation has given the latter that property. Certainly no one could have taken away the right of Warner, Jr., to take and use the interest as he saw fit. The direction to the trustees that they should pay over and distribute to the son portions of the fund, which would include the whole of it until it was exhausted, was superfluous. They would have had that duty anyway. I construe this direction as mere legal tautology and not in any sense a condition to the vesting of ownership. Although one may have full ownership of property he may not be entitled to possession until he has demanded it; but the right to immediate possession should not be confused with ownership.
I cannot permit the unfortunate use of unnecessary and meaningless language to influence my belief as to the intentions of the testator. I believe there were conditions attached, namely, that as to one-quarter interest, the son should survive distribution to the trustees, and that as to the other quarter interests, it was not intended that title should vest unless the son should be living at the respective dates, namely, five years and ten years after distribution.
The son's interest was an entire present ownership from
If the son’s ownership came into existence only with the duties of the trustees to pay over and distribute to him upon his demand and as a result of a demand then I say that neither in law nor equity should his right be forfeited by the absence of a demand for its enforcement, when such a demand would have been utterly useless and ineffective. To say that the son and his estate lost all interest in the fund because he did not demand of the trustees something that they were restrained from doing, and could not do, is as unreasonable as it is unjust.
Although I do not agree that the vesting of the one-fourth interest was conditioned upon the making of a demand, I do believe that as between the son and the trust estate whatever was necessary, if indeed anything was necessary, should be regarded as having been done when nothing whatever remained to be done except to make a demand which could not be complied with. (Allan v. Guaranty Oil Co., 176 Cal. 421 [168 P. 884]; Prichard v. Kimball, 190 Cal. 757 [214 P. 863] ; 1 Cal.Jur.2d 605-606.)
I do not find support for the majority view in the provision that upon the death of the son one-fourth (the final one-fourth) of the trust should go to his then living issue “and that the residue of said fund shall go to augment and become a part of trust fund No. 3.” As I have previously stated, it is my view that the son would have to survive distribution for the respective periods of five and ten years before he would be vested with the interests which would be distributable to him at those times. In the event of his earlier death these shares would represent “the residue of said fund” that would go into trust fund Number 3.
Finally, I am of the opinion that the cases relied upon by the majority for their interpretation of the will do not support it. Constructions placed by other courts upon wills containing patently different testamentary schemes, expressed in different
I would affirm the order and decree.
Respondents' petition for a hearing by the Supreme Court was denied October 13,1960.
Reference
- Full Case Name
- Estate of THOMAS W. WARNER, Deceased. NETTIE M. WARNER Et Al., as Surviving Trustees, Etc., Appellants, v. JEAN M. WARNER Et Al., as Executors, Etc., Respondents
- Cited By
- 6 cases
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- Published