Reardon's Estate, In re

• Decision Date: 28 June 1966
• Citation: 243 Cal.App.2d 221,52 Cal.Rptr. 68
• Court: California Court of Appeals Court of Appeals
• Parties: In re ESTATE of Thomas B. REARDON, Deceased. John P. McCORMACK and William K. Stewart, Petitioners and Appellants, v. The CATHOLIC CHURCH EXTENSION SOCIETY OF the UNITED STATES OF AMERICA, Objector and Appellant, John E. Reardon and Dorothy Reardon, Objectors and Respondents. Civ. 22924.

Page 68

52 Cal.Rptr. 68

243 Cal.App.2d 221

In re ESTATE of Thomas B. REARDON, Deceased.

John P. McCORMACK and William K. Stewart, Petitioners and Appellants, v. The CATHOLIC CHURCH EXTENSION SOCIETY OF the UNITED STATES OF AMERICA, Objector and Appellant, John E. Reardon and Dorothy Reardon, Objectors and Respondents.

Civ. 22924.

District Court of Appeal First District,

Division 3, California.

June 28, 1966.

Hearing Denied Aug. 24, 1966.

Stewart & Tuttle, by W. K. Stewart, Pacific Grove, for petitioners.

Andrews, Andrews & Thaxter, James F. Thaxter, Fresno, for the Catholic Church Extension Society of the United States of America.

Burnett, Burnett, Keough & Cali, San Jose, for respondents.

DEVINE, Justice.

This case involves the statutory restrictions on testamentary charitable gifts.

Facts

Thomas B. Reardon died April 19, 1932, leaving a will which he had executed January 6, 1930. His heirs were Mary A. Reardon, his wife; three sisters; and two children of a predeceased brother, John E. Reardon and Dorothy Reardon. A small amount of the estate was community property. The will provides that the widow may allow her community share to go into the trust described below, or may take it outright without diminishing her benefits under the trust. The widow took it outright. The rest of the estate was the testator's separate property. Part of this property, amounting to about one-seventh of the total value, is bequeathed outright to the widow. The remaining six-sevenths is given to a trustee bank to be deposited into four separate trusts. One-half of the total distributed to the trustee is for the benefit of the spouse and one-sixth for each of the three sisters. When the testator died, his spouse's age was 46; the ages of his sisters were 62, 69 and 72. On the death of any sister, the property in her trust is to go to the trust for the spouse. If the spouse were to die before any sister or sisters, the property should be continued in trust for her or their benefit. Finally, upon the death of the last survivor, whether spouse or sister, all of the estate is devised and bequeathed to The Catholic Church Extension Society of the United States of America, which, all parties agree, is a charitable institution within the meaning of the statutes, and which shall be referred to as the 'Charity.' The will provides for invasion of the principal for the care and support of the individual beneficiaries, at the discretion of the trustee. The will makes no bequest to the testator's nephew and niece, but expressly excludes any other, whether heir or not, than the legatees. At the time of distribution to the trustee, the net estate was valued at $37,761.62.

One of the sisters died during admisistration, so that from the beginning of the trust the widow received four-sixths of the income. The second sister died about eight years after the testator, and thereafter the widow received five-sixths of the income. The third sister died in 1947, so that from that time until her death in 1963 the widow received the entire income. By 1963, this came to more than $800 per month. She died December 31, 1963. The estate, which consisted in part of real property, had increased in value to about $300,000. Income had been distributed to the beneficiaries throughout the years and there had been two distributions of corpus, of $500 each, to the sisters.

Orders made by the Superior Court

In the decree of distribution, made on May 28, 1936, the court 'finds and decides that it is impossible for said Court to determine at the date of the making of this decree whether or not such charitable bequest to The Catholic Church Extension Society of the United States of America is in excess of one-third (1/3) in value of the distributable assets of the said deceased Thomas B. Reardon, and that said Superior Court should reserve the right to determine to whom and in what proportion the property which remains in the hands of said trustee at the termination of the trust created by said decedent in his last will and testament shall pass and be delivered.'

Upon the termination of the trust, at the death of the widow, three 'parties' made claim to the estate in proportions at variance with each other. (We consider the nephew and niece to be one party, the widow's legatees a second, and the Charity the third.) The Charity contended, and still does, that it is entitled to the entire residue of the estate. The nephew and niece contended that they were entitled to two-thirds of the estate, but are now content with supporting the court's order, which awards them one-third. The executors of the will of the widow, Mary A. Reardon, contend that the Charity is entitled to one-third and that they, the executors, are entitled to two-thirds for distribution after administration to the legatees (nephews) of Mary A. Reardon. The court's decision awarded one-third to each of the three 'parties.' The reference in the decree of John P. McCormack and William J. McCormack is that they are 'the heirs at law' of Mary A. Reardon and that they 'shall share by right of representation equally in the portion of the Trust Estate going to the Estate of MARY A. REARDON.' There are references in the briefs to the McCormacks as the sole legatees of Mary A. Reardon. But whether they are considered legatees or heirs, unquestionably whatever rights they have derive from the relationship of their aunt as spouse of Thomas B. Reardon.

The Statutes

In 1932, when the testator died, section 41 of the Probate Code provided that no charitable gift may be made unless done by will executed at least thirty days before the date of death of the testator. If made thirty days before death, the gifts are valid but may not collectively exceed one-third of the estate of a testator who leaves legal heirs; if there is such excess, pro rata deduction shall be made. All dispositions made contrary to this section are declared void and shall go to the residuary legatees or devisees or heirs, according to law. Section 43 of the Probate Code provided in part, and still does, that: 'Nothing in this article contained shall apply to bequests or devises made by will executed at least six months prior to the death of a testator who leaves no spouse, child, grandchild or parent.'

There have been amendments to section 41 since the death of the testator (Stats. 1937, ch. 480, § 1, p. 1435; Stats. 1943, ch. 305, § 1, p. 1296), the chief effects of which have been:

1. The restriction on charitable gifts no longer exists if the testator leaves 'legal heirs,' but only in cases where a testator leaves a spouse, brother, sister, nephew, niece, descendant or ancestor, and only where these would otherwise take under the will or the laws of succession.

2. Reference to excess gifts as being void is deleted, and the section says that property bequeathed or devised contrary to the section 'shall go' to the specified heirs to the extent that they would have taken but for the excess devises or legacies.

The nephew and niece

The reasoning of the judge when deciding that the nephew and niece shall receive on-third of the estate is given in a memorandum opinion. It is this: In 1932, the statute made 'void' an excess charitable gift. The gift being void, the laws of succession come into play. The heirs take as if the testator had died without leaving a will. Under Probate Code section 223 the nephew and niece take one-half of the two-thirds remaining after the Charity's one-third, and therefore take between them one-third, the final third going to the widow's legatees. This interpretation, however, overlooks the effect of Probate Code section 43, which, as interpreted in Estate of Bunn, 33 Cal.2d 897, 900, 206 P.2d 635, precludes the nephew and niece from taking because the will was executed more than six months before the testator's death. Section 43 existed in exactly the same form in 1931 as it did at the time of Estate of Bunn (1949) and as it has ever since. It was the reasoning of the court in Estate of Bunn that as to wills executed more than six months prior to death, the class of heirs protected against excess charitable dispositions is limited to those mentioned in section 43. This does not include nephews and nieces. Nor would any advantage be gained by a nephew or niece if it were established that challenged were made by one of the heirs designated in section 43, such as a spouse. (Estate of Gutierrez, 220 Cal.App.2d 6, 9--10, 33 Cal.Rptr. 593.)

Probate Code section 223 does not apply for, although it would be the statute applicable in cases of intestacy, in cases of excess dispositions to charity sections 41 and 43 govern. They are themselves statutes of succession. (Estate of Nicely, 235 Cal.App.2d 174, 184, 44 Cal.Rptr. 804.) The effect of the deletion of the word 'void' by amendment to section 41 in 1937 is discussed more fully in another part of this opinion, but at this point we conclude that the fact that certain excessive charitable dispositions were described as void is not of assistance to the nephew and niece. They simply are not in the preferred class designated in section 43, the only class which gains any protection in the case of a will executed before the six months' period. Estate of Bunn was not decided until some 17 years after testator's death, but since it construes the statute which existed in exactly the same form at that time, the interpretation operates retrospectively. (Tate v. Superior Court, 213 Cal.App.2d 238, 249, 28 Cal.Rptr. 548.)

The nephew and niece also argue that even if the decree of 1936 were erroneous, it is res judicata in their favor because of the lack of appeal. They argue that if the judge had thought that they, the nephew and niece, were without standing to challenge the charitable devise, he would have said so in the decree. But the judge merely reserved the right to decide to whom the residue should pass upon termination of the trust. A judgment is not an...