Helfman's Estate, In re

• Decision Date: 10 July 1961
• Citation: 14 Cal.Rptr. 482,193 Cal.App.2d 652
• Court: California Court of Appeals Court of Appeals
• Parties: In the Matter of the ESTATE of Joseph HELFMAN, Deceased. Elsie CROSS and Planned Parenthood League of Alameda County, Inc., Appellants, v. Miriam H. LAR RIEU, Executrix of the Last Will and Testament of Joseph Helfman, Deceased, Respondent. Civ. 6493.

Page 482

14 Cal.Rptr. 482

193 Cal.App.2d 652

In the Matter of the ESTATE of Joseph HELFMAN, Deceased.

Elsie CROSS and Planned Parenthood League of Alameda County, Inc., Appellants, v. Miriam H. LAR RIEU, Executrix of the Last Will and Testament of Joseph Helfman, Deceased, Respondent.

Civ. 6493.

District Court of Appeal, Fourth District, California.

July 10, 1961.

Rehearing Denied Aug. 1, 1961.

Hearing Denied Sept. 6, 1961.

McCutchen, Doyle, Brown & Enersen, Mortimer Smith, III, San Francisco, and Lester S. McElwain, Oakland, for appellants.

Fitzgerald, Abbott & Beardsley and Stacy H. Dobrzensky, Oakland, for respondent.

SHEPARD, Acting Presiding Justice.

This is an appeal by two legatees from an order instructing the executrix respecting disposition of corporate stock devised by deceased. Appellant Planned Parenthood League of Alameda County, Inc., adopts the brief of appellant Elsie Cross since it was agreed that all bequests of specific amounts of Parke, Davis & Company stock will be distributed in accord with the decision in this appeal.

Facts

The material facts are not in dispute, and there is no conflicting testimony. In substance they are as follows: On July 28, 1954, the above named decedent was the owner of 23,614 shares of stock in Parke, Davis & Company. On that date he made the last codicil to his will. By the will and codicils thereto, he bequeathed 1,980 shares of Parke, Davis & Company stock to some twelve legatees, along with certain comparatively small bequests to charity and individuals, and the entire residue of the estate in trust to his two daughters and their issue. Included in the bequests of stock in Parke, Davis & Company was one of 300 shares to Elsie Cross, appellant herein. May 24, 1957, he was adjudicated an incompetent and his daughter, Miriam H. Lar Rieu, was appointed guardian of his person and estate. Apparently this guardianship continued to the date of his death on February 24, 1959.

On October 24, 1958, decedent was still the owner of said 23,614 shares of stock. November 12, 1958, Parke, Davis & Company ordered a 'stock split' of three for one. Instead of calling in all stock and reissuing three new shares, the Company ordered that each owner of stock of record on October 24, 1958, would be issued, without charge, an additional two shares of stock for each share so held. A certificate of such additional shares was, in fact, later delivered, so that the original 23,614 shares of stock actually became 70,842 shares. There is no contention that this was intended in any way as a stock dividend, nor is it contended that such 'stock split' represented in any way any additional value. The record does not show that decedent, during his lifetime, was in any way cognizant of the fact that the 'stock split' had occurred nor that he had received such additional number of shares. There is nothing in the record to show that decedent, at the time he made his will, had any information that such 'stock split' was proposed by Company, nor that at any time in 1954 Company even planned such 'stock split'.

Decedent's estate is appraised at $3,657,079.21, of which the total of 70,842 shares of Parke, Davis & Company stock is appraised at $2,851,390.50. The time for presentation of claims has expired and there is no suggestion anywhere in the record that funds are not ample to pay all legacies. Nothing now remains to be done as a prerequisite to distribution except final determination and payment of inheritance and estate taxes and sale of certain securities.

The Controversy

In the case here at bar, respondent contends that on distribution only 300 shares out of the total of 70,842 should be distributed to appellant Cross. Appellant contends that she should receive 900 shares, representing what the 300 shares spoken of by testator were actually converted into. The trial court ordered distribution to said appellant of only 300 shares and, in like manner, ordered distribution to the other legatees of the exact number of shares numerically specified in the will. It is agreed by the parties that whatever decision is made in the matter will determine the distribution to all of the other legatees.

Appellate Review

Respondent suggests that when extrinsic evidence is needed and a conflict appears, the construction given to an instrument by the trial court, which construction appears to be reasonable and consistent with the intent of the testator, will be followed by the courts of appellate jurisdiction even though some other interpretation may seem equally tenable with that accorded by the trial court. Estate of Sandersfeld, 187 Cal.App.2d 14, 9 Cal.Rptr. 447. However, it is also the rule that where no extrinsic evidence is introduced or where there is no conflict in such evidence, the construction of an uncertain provision in a will is a question of law on which the independent judgment of the appellate court is to be exercised. Under such circumstances, there is no issue of fact and it is the duty of an appellate court to make the final determination in accordance with the applicable principles of law. Estate of Platt, 21 Cal.2d 343, 352, 131 P.2d 825; Estate of Wunderle, 30 Cal.2d 274, 280, 181 P.2d 874. In one sense, of course, as was pointed out by Wigmore and noted by American Law Report, extrinsic evidence is always necessary in order to relate the words of the will to the things and persons of which the will speaks. Paley v. Superior Court, 137 Cal.App.2d 450, 456, 290 P.2d 617. In the case here at bar, however, whether or not the evidence relating to the 'stock split' is thought of as extrinsic is of no consequence since there was no conflict whatever in the evidence.

Testator's Intent

One of the most basic of all the rules relating to interpretation of wills is that a 'will is to be construed according to the intention of the testator'. Prob.Code, sec. 101; Estate of Lefranc, 38 Cal.2d 289, 295, 239 P.2d 617; Estate of Avila, 85 Cal.App.2d 38, 39, 192 P.2d 64. In arriving at such construction, each case ordinarily must depend upon its own particular set of facts. Estate of Henderson, 161 Cal. 353, 357, 119 P. 496; Estate of Shumack, 152 Cal.App.2d 208, 213, 313 P.2d 90. While respondent suggests application of the rule that unless a different intention finds expression in the will it should be construed as applying to and disposing of the estate in its condition at the time of the death of the testator (Estate of Chamberlain, 56 Cal.App.2d 458, 461, 132 P.2d 488), it is also true that a testator's intent is to be determined as of the date of the execution of the instrument. Estate of Carter, 49 Cal.App.2d 251, 254, 121 P.2d 540. Thus both rules must be applied together. The court in applying the will as of the date of the testator's death, attempts to ascertain the intent of the testator by the language of the will as understood by the testator at the time he wrote it, related to circumstances then present.

Respondent suggests as persuasive the rule that preference should be given to blood relatives or natural heirs over strangers. Estate of Torregano, 54 Cal.2d 234, 249[16-22a], 5 Cal.Rptr. 137. However, it is also true that where the language is clear the will must be interpreted according to its ordinary meaning and legal import, and the intention of the testator ascertained thereby. Estate of Watts, 179 Cal. 20, 23, 175 P. 415; Estate of Lawrence, 17 Cal.2d 1, 6, 108 P.2d 893.

Stock Split

Neither appellant nor respondent have been able to discover any California authorities in which the precise point here at issue has been determined. This court's independent research has developed none. The point therefore appears to be one of first impression in this State, although there is one dictum in Estate of Cline, 67 Cal.App.2d 800, 805, 155 P.2d 390, 393, in which the court analyzes the intent of the testator respecting his disposition of certain monies inherited from his father. As a portion of such analysis, the court there said:

'The exchange of stock for notes of a corporation is not an ademption; neither is the exchange of specifically devised shares of stock for other shares an ademption; nor is the exchange of stock for bonds.'

California authorities have followed the majority rule that there is no ademption of a specific bequest where there is merely a change of form. Estate of Cline, supra; Estate of Cooper, 107 Cal.App.2d 592, 596[4, 5], 237 P.2d 699; Estate of MacDonald, 133 Cal.App.2d 43, 47, 283 P.2d 271. We are not here confronted with an ademption resulting from deficiency in the number of shares remaining at time of death, such as is presented in Estate of Buck, 32 Cal.2d 372, 376, 196 P.2d 769.

In other State of the United States, outside of California, it is clear that the majority rule on 'stock splits' is that the total number of shares represented by the shares named in the will is ordinarily distributed to the legatee named. Some of the...