Allie's Estate, In re

Citation50 Cal.2d 794,329 P.2d 903
CourtUnited States State Supreme Court (California)
Decision Date26 September 1958
PartiesMatter of the ESTATE of Elsie M. ALLIE, Deceased. Myrtle MARQUARDT and Stella Kranz, Appellants, v. Mitchell S. CASH, Respondent. S. F. 19782.

Emmet B. Hayes, San Francisco, for appellant.

Cooper, White & Cooper, Sheldon G. Cooper and John E. Schaeffer, San Francisco, for respondent.

SCHAUER, Justice.

From a decree establishing heirship with respect to certain property of the estate of an intestate deceased widow and determining that her surviving brother and sole heir at law is entitled to distribution of all of such property, the surviving sisters of the previously deceased husband of the widow appeal. The issue to be decided is whether the origin of such property, as between the widow and her husband, should be deemed to be community or separate, if either, and, therefore, which of sections 225, 228 and 229 of the Probate Code controls the intestate succession thereto. For the reasons hereinafter articulated we conclude that the property should be treated as community for the purposes of intestate succession, that it should therefore go one-half to the relatives of the decedent and one-half to those of the predeceased husband, and that the decree must be reversed.

The appeal is presented on a settled statement in lieu of clerk's and reporter's transcripts. (Rule 7(b), Rules on Appeal.) From such statement it appears that in March, 1956, Joseph Allie died intestate and without issue. The beneficiary under his National Service Life Insurance policy was his widow Elsie, decedent herein. The following month Elsie died intestate and without issue. The proceeds of the policy were paid into her estate, and constitute the property here in controversy. Elsie's sole heir at law is her brother, respondent herein. The sole surviving heirs at law of Joseph are appellants, his sisters.

Section 225 of the Probate Code (see also section 220) provides that the separate property of a person who dies intestate, leaving neither issue nor spouse, goes to his parent or parents if living and if not to his brothers and sisters and to the descendants of deceased brothers and sisters.

Section 228 provides that 'If the decedent leaves neither spouse nor issue, and the estate * * * was community property of the decedent and a previously deceased spouse, and belonged or went to the decedent by virtue of its community character on the death of such spouse, or came to the decedent from said spouse by gift, descent, devise or bequest * * *, such property goes in equal shares to the children of the deceased spouse and their descendants * * *, and if none, then one-half of such community property goes to the parents of the decedent in equal shares, or * * * to the survivor, or if both are dead in equal shares to the brothers and sisters of the decedent * * *, and the other half goes to the parents of the deceased spouse in equal shares, or * * * to the survivor, or if both are dead, in equal shares to the brothers and sisters of said deceased spouse * * *.'

Section 229 provides that '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' to the heirs at law of the previously deceased spouse.

The settled statement declares that decedent and Joseph were married in 1926, and that 'There is no evidence other than that the assets of the estate were acquired during the marriage by the earnings of the parties. The premiums on the insurance policies 1 were paid during the marriage. There is no evidence that the payments thereon were made from funds other than community property of the parties.'

The trial court, in reliance upon Wissner v. Wissner (1950), 338 U.S. 655, 658-661, 70 S.Ct. 398, 94 L.Ed. 424, declared that 'the community character' of a National Service Life Insurance policy on the life of the husband 'cannot affect the distribution of its proceeds,' and that therefore section 228, which treats of intestate succession to 'community property of the decedent and a previously deceased spouse,' cannot apply. The court further concluded that the policy proceeds should be distributed entirely to the widow's heir at law, respondent herein, seemingly upon the theory that they constituted separate property of the widow rather than originating in either community property of the predeceased husband's separate property. This appeal by the sisters of the predeceased husband followed.

In resolving the issue it must be borne in mind that sections 228 and 229 of the Probate Code refer to the status of property as being either community or separate as of a time when both spouses were living; i. e., prior to the death of the 'previously deceased spouse' mentioned in the two sections. (See In re Estate of Reizian (1951), 36 Cal.2d 746, 749-750(1, 2), 227 P.2d 249; In re Estate of Adams (1955), 132 Cal.App.2d 190, 203(8), 282 P.2d 190.) Further, the rule has been declared that the underlying principle of sections 228 and 229 is that the origin or source of acquisition of the property should and does control its distribution. (In re Estate of Reizian (1951), supra; In re Estate of Abdale (1946), 28 Cal.2d 587, 590-592, 170 P.2d 918; In re Estate of Rattray (1939), 13 Cal.2d 702, 713-714, 91 P.2d 1042.) Thus, in the Abdale case it was held that separate real property of the husband which he had transferred to himself and his wife as joint tenants, and of which he again became sole owner upon her death, should be distributed under section 225 of the Probate Code as being, and having originated wholly from, separate property of the husband, rather than one-half thereof being distributed under section 229 as the separate property of a predeceased spouse (i. e., the wife). (See also Sears v. Rule (1945), 27 Cal.2d 131, 141-143, 163 P.2d 443.) Consequently the question to be determined here is whether for the purposes of administering the pertinent succession statute the origin of the property (which actually came from the United States government) may and should be treated as (1) community, (2) separate property of the 'previously deceased spouse' (here, the husband on whose life the insurance policy was issued), or (3) separate property of the surviving spouse (here, the decedent wife).

The general rule is that where premiums on a life insurance policy issued on the life of one of the spouses were paid with community funds, the policy is community property (Grimm v. Grimm (1945), 26 Cal.2d 173, 175, P.2d 841, and cases there cited), and the policy proceeds retain their community character for purposes of intestate succession, notwithstanding the fact that such proceeds are paid only after dissolution of the community by death. (In re Estate of Castagnola (1924), 68 Cal.App. 732, 737(5), 230 P. 188.) However, a National Service Life Insurance policy is issued pursuant to federal law and the principal consideration for it is the relationship between the policyholder and the government. Premiums, when paid at all, are at a rate far less than the rates normally charged by privately owned insurance companies, and the character of the funds from which premiums are paid cannot affect the character of the rights of the insured with respect to the benefits of the policy. In Wissner v. Wissner (1950), supra, 338 U.S. 655, 70 S.Ct. 398, the United States Supreme Court dealt with a case in which the policyholder had named his mother as beneficiary. Such premiums as accrued were assumed to have been paid with community funds, and upon the insured's death his widow sought to recover one-half of the proceeds of the policy. The California courts had held (Wissner v. Wissner (1949), 89 Cal.App.2d 759, 764-770(2), 201 P.2d 837; hearing by Supreme Court denied by a divided court) that inasmuch as premiums paid by the insured 'were paid from community funds; and * * * plaintiff (wife) had a vested interest in one-half of such community property' (89 Cal.App.2d at page 764, 201 P.2d at page 841), the 'federal government had no power to provide, as it is contended it did in section 454a (of the World War Veterans' Relief Act, 38 U.S.C.A.) that payments made to a beneficiary of a national service life insurance policy shall be exempt from the claims of the widow of the deceased insured to the right vested in her under the laws of this state to one-half of such payments after their receipt by the beneficiary' (89 Cal.App.2d at page 767, 201 P.2d at page 843), and that any such provision would...

To continue reading

Request your trial
14 cases
  • Smith v. Lewis
    • United States
    • California Supreme Court
    • 20 Enero 1975
    ...the intention of Congress. (Wissner v. Wissner (1950) 338 U.S. 655, 658, 70 S.Ct. 398, 94 L.Ed. 424 et seq.; see Estate of Allie (1958) 50 Cal.2d 794, 798, 329 P.2d 903 et seq.) The principle enunciated by the United States Supreme Court in Wissner of giving effect to the statutory provisio......
  • Marriage of Fithian, In re
    • United States
    • California Supreme Court
    • 3 Enero 1974
    ... ... (Waite v. Waite (1972), supra; Phillipson v. Board of Administration (1970), supra; Estate of Perryman (1955), 133 Cal.App.2d 1, 283 P.2d 298; French v. French (1941), supra.) ...         The conclusion follows that husband's ... ...
  • Sehrt v. Sehrt
    • United States
    • California Court of Appeals Court of Appeals
    • 24 Marzo 1960
    ...So. 285; Hollis v. Bryan, 166 Miss. 874, 143 So. 687; Gaskins v. Security-First Nat. Bank, 30 Cal.App.2d 409, 86 P.2d 681; Estate of Allie, 50 Cal.2d 794, 329 P.2d 903, plaintiffs here argue that the deceased could not divest himself of his support obligations to the plaintiffs by making th......
  • Riddell v. Guggenheim
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 3 Agosto 1960
    ...are paid by the named insured from his separate funds is separate property in which the community has no interest.4 In re Allie's Estate, 1958, 50 Cal.2d 794, 329 P.2d 903; New York Life Ins. Co. v. Bank of Italy, 1923, 60 Cal.App. 602, 214 P. However, accepting these items as separate prop......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT