Estate of Dodge

Citation6 Cal.3d 311,98 Cal.Rptr. 801,491 P.2d 385
CourtUnited States State Supreme Court (California)
Decision Date15 December 1971
Parties, 491 P.2d 385 In re ESTATE of James W. DODGE, Deceased. Barbara Dodge GILL, Petitioner and Appellant, v. Dolores STONE, Claimant and Respondent. L.A. 29922. In Bank

Marshall, Lowthorp, Richards & Hibbs, Oxnard, Edward L. Lascher, and Richard E. Rader, Ventura, for petitioner and appellant.

Heily, Blase, Ellison & Muegenburg, by F. T. Muegenburg, Jr., Oxnard, for claimant and respondent.

TOBRINER, Associate Justice.

Appellant Barbara Gill appeals from an order of the Ventura County Superior Court determining the division of the estate of James W. Dodge. That court held that a bequest of 'personal property' in paragraph 7 of the will of James Dodge encompassed only personal effects, and that cash, bonds, notes and trust deeds owned by testator passed into a testamentary trust for the benefit of testator's children and his housekeeper Dolores Stone, the respondent on this appeal. We have examined the testator's last will and earlier wills on which that last will was based; we have reviewed the testimony of the parties and of the attorneys who drafted the last and prior wills. We conclude that the interpretation adopted by the trial court accords with the intention and objectives of the testator and should be affirmed.

The testator, James W. Dodge, died March 21, 1968, leaving as his last will a document executed on July 29, 1963, and which has been admitted to probate without contest. The will provides for Frank C. Dodge, Thomas S. Dodge, and Barbara Dodge Besser (Gill), the testator's three children, for John Besser, Barbara's former husband, and for Dolores Stone, the testator's housekeeper. Pursuant to direction of the will, the court named Arthur A. Milligan as executor.

The third, fourth, fifth, and sixth paragraphs of the will state a list of 24 specific bequests to Frank, Barbara, John Besser, and Dolores Stone. The items so bequeathed consist of household furniture, appliances, sporting goods, linen, and the testator's dog. 1

The principal controversy in this case concerns the construction of the seventh and eighth paragraphs. Paragraph 7 states: 'I hereby give, devise and bequeath to my three children, THOMAS S. DODGE, BARBARA DODGE BESSER and FRANK C. DODGE, share and share alike, by right of representation, all of the rest, residue and remainder of my Personal property, except all farm equipment and machinery and except my patio furniture, but subject to all other provisions hereof, but my executor shall not deliver any of said personal property until the beneficiaries thereof have delivered to said executor a written agreement as to the method of division of said personal property among them.' (Emphasis added.)

Paragraph 8 establishes a testamentary trust 'to hold, manage and distribute . . . all of the rest, residue and remainder of my property.' 2 The will names Barbara and her issue, Frank and his issue, Thomas, and Dolores as beneficiaries; it makes no provision for the issue, if any, of Thomas and Dolores. It prohibits the beneficiaries from assigning their interests, and protects them against creditors. The trustee is to distribute the income regularly and may, in his discretion, invade principal to provide for reasonable support, care, and education of the beneficiaries. The trust terminates 21 years after the death of the last of testator's children; the res then devolves upon the remaining beneficiaries. The will also provides that Dolores may continue to live in the testator's residence, rent free, for two months after testator's death; thereafter the trustee is to rent the furnished residence separately from all other trust property and use such portion of the net rental to support Thomas as the trustee deems necessary.

The executor filed an inventory and appraisement of the estate. Excluding items of no value, and items subject to specific bequests or disposition, the estate comprises the following assets:

                 1.  Cash .................................... $  2,688.67
                 2.  Bank of America savings account ............ 7,211.90
                 3.  United States Treasury notes .............. 34,650.00
                 4.  Note secured by trust deed
                       executed February 19, 1962
                       hereafter referred to as the
                       "Dellar note," plus accrued interest .... 39,802.50
                 5.  Note secured by trust deed,
                       executed December 16, 1963,
                       hereafter referred to as the
                       "Greenberg note," plus accrued
                       interest ............................... 168,438.27
                 6.  Diamond ring ................................. 100.00
                 7.  Tractor ...................................... 500.00
                 8.  Federal and state tax refunds .............. 2,199.54
                 9.  Due from health insurance
                       company .................................... 231.00
                10.  Testator's residence and
                       furnishings ............................. 45,000.00
                11.  Mayfair Theater property .................. 75,000.00
                12.  Mayfair Theater equipment .................. 4,000.00
                

The parties agree that the diamond ring (item 6) is personal property passing under paragraph 7 of the will, and that the residence (item 10) and Mayfair Theater (item 11) are real property and become part of the trust res. They dispute the disposition of the other listed items. 3 Barbara contends that such items are personal property and should be divided among the three children pursuant to paragraph 7. Dolores contends that the term 'personal property' in paragraph 7 is limited to personal effects and all other items go to augment the trust res under paragraph 8.

When Dolores asked the court to order distribution of all items other than personal effects to the trustee, the executor, uncertain as to which property to distribute, petitioned the court to determine that issue. The superior court, after hearing evidence, found in favor of Dolores; it determined that only the diamond ring of the listed property passed under paragraph 7, and the balance of the listed items were part of the trust under paragraph 8. Barbara appeals from the ensuing order.

We begin our discussion with a statement of the applicable principles of appellate review. As set forth in Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865, 44 Cal.Rptr. 767, 770, 402 P.2d 839, 842, it is 'a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.' The possibility that conflicting inferences can be drawn from uncontroverted evidence does not relieve the appellate court of its duty independently to interpret the instrument; it is only when the issue turns upon the credibility of extrinsic evidence, or requires resolution of a conflict in that evidence, that the trial court determination is binding. (Parsons v. Bristol Development Co., 62 Cal.2d at p. 866, fn. 2, 44 Cal.Rptr. 767, 402 P.2d 839.) 4 These same principles define the appellate function in the construction of wills. (Estate of Russell (1968) 69 Cal.2d 200, 212, 70 Cal.Rptr. 561, 444 P.2d 353.) Since the record in the present case discloses no conflict in the extrinsic evidence, and no issues of credibility, it becomes our task to arrive at an independent interpretation of the will.

In reaching that interpretation, we may utilize extrinsic evidence to aid in construing the will if we find that the will is 'ambiguous' or, more precisely, that in the light of both the language of the will and the circumstances under which it was made, the will is reasonably susceptible of more than one interpretation. (See Estate of Russell (1968) 69 Cal.2d 200, 208--211, 70 Cal.Rptr. 561, 444 P.2d 353.) In the present case, the key phrase--'personal property'--is one whose inherent ambiguity has been noted in many court decisions. 5 The Civil Code gives that term a broad definition, encompassing all property not classed as real property (Civ.Code, § 663), including 'money, goods, chattels, things in action, and evidences of debt' (Civ.Code, § 14). The phrase, however, carries a meaning in the popular sense that denotes 'only such goods and chattels as are subject of personal use or comfort.' (Estate of Kruger (1942) 55 Cal.App.2d 619, 623, 131 P.2d 619, 621; see Estate of Graham (1957) 49 Cal.2d 333, 337, 316 P.2d 945.)

In the instant case among the most valuable items of property where classification is disputed are the Greenberg and Dellar notes and trust deeds. The uncertain meaning of the phrase 'personal property' becomes especially troublesome when the task calls for a classification of debts secured by liens on realty. By one definition, a note and deed of trust merely constitute evidences of debt and therefore fall under the definition of personal property in Civil Code section 14 (Johnson v. National Surety Co. (1931) 118 Cal.App. 227, 229, 5 P.2d 39; see Bank of America v. Sparr R. Co. (1937) 20 Cal.App.2d 10, 66 P.2d 476). Yet attorneys as well as laymen commonly describe the beneficiary of a trust deed as 'owning' a lien upon, or a security interest in, real property. 6 In Estate of Moore (1955) 135 Cal.App.2d 122, 286 P.2d 939, the court reviewed the prior cases involving both mortgages and trust deeds, and concluded that 'any rule that rests upon the assumption that the holder of a trust deed note does not have any interest in the land finds no substantial basis in California law.' (135 Cal.App.2d at p. 132, 286 P.2d at p. 944.) The court then held that a purchase money note and trust deed, not specifically mentioned in the will, passed under the testator's devise of 'real estate owned by me.' (See also Estate of Trainer (1958) 161 Cal.App.2d 353, 354, 326 P.2d 520.)

The bulk of the property in dispute consists of notes secured by trust deeds, government bonds, a bank account, and cash--items which are personal property under the Civil Code definition but which are not so classed under other definitions in common usage. Consequently we find that the language of the will is...

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