Brock v. Hall

• Court: California Supreme Court
• Writing for the Court: GIBSON, C. J.
• Citation: Brock v. Hall, 33 Cal.2d 885 (Cal. 1949)
• Decision Date: 26 May 1949
• Docket Number: S. F. No. 17625.
• Parties: MILDRED HALL BROCK, Appellant, v. ELBERT J. HALL, Respondent.

33 Cal.2d 885

MILDRED HALL BROCK, Appellant, v. ELBERT J. HALL, Respondent.

S. F. No. 17625.

Supreme Court of California

May 26, 1949

In Bank.

Lloyd W. Dinkelspiel, Donald W. Falconer and Heller, Ehrman, White & McAuliffe for Appellant.

Pillsbury, Madison & Sutro, Maurice D. L. Fuller, Francis N. Marshall and Noble K. Gregory for Respondent.

GIBSON, C. J.—The sole question before us is the proper interpretation of an instrument by which defendant Elbert J. Hall created a trust for the benefit of his two daughters, Mildred and Carolyn. Mildred seeks to recover the assets of the trust on the theory that she became entitled thereto on the death of her sister Carolyn, and she has appealed from a judgment entered upon the sustaining of a general demurrer to the complaint.

The trust instrument which was executed in 1924 provided that the trustee was to hold the property transferred together with the net income until the two daughters, "Mildred Miriam Hall, now sixteen years old, and Carolyn Mary Hall, now six years old, shall have respectively reached the age of eighteen years; provided that when said Mildred Miriam Hall shall have reached the age of eighteen years she shall thereafter be entitled to have paid to her by and receive from the said trustee one-half of the net income from said trust property thereafter accruing until she shall have reached the age of thirty-five years, whereupon she shall be entitled to receive and have turned over to her by the said Trustee and there shall go to and vest in her absolutely one-half of the said trust property together with one-half of the net income thereof, if any, there- tofore accrued and undistributed; and when the said Carolyn Mary Hall shall have reached the age of eighteen years she shall thereafter be entitled to have paid to her by and receive from the said Trustee one-half of the net income from said trust property thereafter accruing until she shall have reached the age of thirty-five years, whereupon she shall be entitled to receive and have turned over to her by the said Trustee and there shall go to and vest in her absolutely the remaining one-half of the said trust property together with the net income thereof, if any, theretofore accrued and undistributed; that is to say, the trust hereby created shall terminate as to one-half of said trust property when said Mildred Miriam Hall shall have reached the age of thirty-five years, and as to the remaining one-half thereof when the said Carolyn Mary Hall shall have reached the age of thirty-five. . . .

"In the event of the death of said Mildred Miriam Hall, or said Carolyn Mary Hall, the portion of said trust property or of the income thereof belonging to such deceased shall, if such deceased shall have married and leave issue, go to and vest in such issue, or if such deceased shall be married and leaving her surviving a husband but no issue, then one-half of her respective share of said trust property shall go to such surviving husband absolutely and discharged of these trusts, and the remaining one-half . . . to the survivor of said Mildred Miriam Hall and Carolyn Mary Hall; or if either of the last mentioned persons shall die, never having married, then the share of such deceased in said trust property shall . . . go to and vest in the other of them surviving. . . ."

Upon reaching the age of 35 Mildred received the portion of the trust estate which was to be paid to her at that time. Carolyn married but her husband died, and she thereafter died before reaching 35, leaving no children. This action involves the portion of the trust estate which would have been paid to Carolyn had she lived.

Their father, the trustor, contends that, since there is no express gift to Mildred if Carolyn died a widow and without issue, such a gift can be raised only by implication, and that gifts may not be implied in inter vivos instruments, but only in wills. The implication of gifts in wills rests upon the primary rule of construction that the duty of the court in all eases of interpretation is to ascertain the intention of the maker from the instrument read as a whole and to give effect thereto if possible, and it is well settled that, where the intention to make a gift clearly appears in a will, although perhaps imperfectly expressed, the court will raise a gift by implication. (Estate of Blake, 157 Gal. 448, 468 ; Estate of Sloan, 7 Cal.App.2d 319, 340 [46 P.2d 1007]; see Estate of Heard, 25 Cal.2d 322, 328 [153 P.2d 553]; Estate of Franck, 190 Cal. 28, 31 [210 P. 417].)

Although there is some authority to the contrary, it has been held that the reasons for implying gifts in testamentary instruments are equally applicable to inter vivos declarations of trust and that gifts may be implied where a trustor establishes a trust during his lifetime. (Eustace v. Dickey, 240 Mass. 55 [132 N.E. 852, 858]; First Nat. Bank & Trust Co. of Yonkers v. Palmer, 261 N.Y. 13 [184 N.E. 477]; Bank of New York v. Vanneck, 68 N.Y.S.2d 226, 234; cf. Manufacturers Trust Go. v. Chase Nat. Bank, 171 Misc. 49 [11 N.T.S.2d 895, 897]; In re Scott's Trust, 322 Pa. 1 [184 A. 245]; see, also, Rest., Property, §§ 115 [com. a], 272 [com. a], vol. 1, Appendix, p. 16; 30 Harv.L.Rev. [1916] 187; 2 Simes, Law of Future Interests [1936] p. 259; but see Chater v. Carter, 238 U.S. 572, 585-586 [35 S.Ct. 859, 863-864, 59 L.Ed. 1462].)

In support of his position that wills should be treated differently from inter vivos instruments the trustor argues that there are considerations affecting the determination of intent in wills which are not present in inter vivos transfers. He asserts that a will necessarily contemplates divesting the testator of all interest in the property disposed of by the will since nothing can come back to him personally and that there is a statutory rule favoring construction against intestacy. (Prob. Code, § 102.) It is true that where a testator makes a will disposing of his property he ordinarily has in mind transferring the entire property and does not intend any interest to pass by intestacy. It is also true that this is a factor which may not be present in the establishment of an inter vivos trust but which may be considered by the court in ascertaining the intent of a testator from an imperfectly expressed testamentary scheme. Where, however, a trustor clearly indicates his desires as to the disposition of the trust property, the absence of a rule of construction similar to that favoring construction against intestacy furnishes no reason for defeating that intent.

It is further argued that the trustor may be alive at the time an inter vivos trust instrument is construed and can make a second disposition of the trust property if the gift fails, and that this furnishes justification for making a distinction between such trusts and wills with respect to the implication of gifts. However, the possibility that the trustor may be alive should have no effect upon the interpretation to be given the trust instrument. Its construction depends upon the trustor's intent at the time of execution as shown by the face of the document and not on any secret wishes, desires or thoughts after the event. (See Foster v. Ypsilanti Sav. Bk., 299 Mich. 258 [300 N.W. 78, 82]; City Bank Farmers Trust Go. v. Macfadden, 65 N.Y.S.2d 395, 397; 2 Scott on Trusts [1939] § 164.1, p. 830; cf., Bixby v. California Trust Co., ante, p. 495 .)

There appear to be no other reasons for treating wills differently from inter vivos transfers in trust with respect to the implication of gifts. As we have seen, the primary duty of the court in construing all documents is to give effect to the intention of the maker, and we can see no justification for any distinction in this regard between instruments operating inter vivos and those taking effect at death since the intention to be gathered from similar words or provisions, whether they be contained in a declaration of trust or a will, would ordinarily be the same. Accordingly, we are of the opinion that implied gifts may be raised in both wills and inter vivos transfers in trust.

When the intention to make a gift clearly appears from the instrument taken by its four corners and read as a whole, considering its general scheme, the property involved, and the persons named as beneficiaries, the gift may be implied. (Estate of Franck, 190 Cal. 28, 31 [210 P. 417].) Although the court may not indulge in conjecture or speculation simply because the instrument seems to have omitted something which it is reasonable to suppose should have been provided, a gift will be raised by necessary implication where a reading of the entire instrument produces a conviction that a gift was intended. (Estate of Blake, supra, 157 Cal. at p. 468; see Estate of Franck, supra, 190 Cal. at p. 32; Estate of Swan, 5 Cal.2d 635, 639 [55 P.2d 1171]; Estate of Vizelich, 129 Cal.App. 347, 353 [18 P.2d 773]; Metcalf v. Framingham Parish, 128 Mass. 370, 374.)

Gifts by implication have been sustained from remote times where no direct language is found to support them, and the tendency is rather to extend than narrow the rule raising such gifts. (Estate of Blake, 157 Cal. 448, 466, 468 [108 P. 287].)

There is no merit in the trustor's argument that, even though an actual, existing intention appears on the face of the instrument, the court may not imply a gift from a construction of the entire instrument, but must find some specific clause which may be construed as operating to make a gift. This argument is obviously contrary to the decided cases and, if accepted, would render the doctrine of gifts by implication unnecessary. (See Estate of McCray, 204 Cal. 399 [268 P. 647]; Estate of Franck, 190 Cal. 28 [210 P. 417]; Estate of Blake, 157 Cal. 448 [108 P. 287]; Estate of Sloan, 7 Cal.App. 2d 319 [46 P.2d 1007]; see, also, Rest., Property, §§ 115a, 258 [com. g], 272, 323 [com. f], 367(2).) Accordingly, in ascertaining the intention of the trustor the court is not...