Stauffer's Estate, In re

• Decision Date: 30 November 1959
• Citation: 53 Cal.2d 124,346 P.2d 748
• Parties: In re ESTATE of Harry C. STAUFFER, Deceased. Anthony J. KENNEDY et al., Respondents, v. Gladys WOLLENBERG, Appellant. Sac. 6921.
• Court: California Supreme Court

Page 748

346 P.2d 748

53 Cal.2d 124

In re ESTATE of Harry C. STAUFFER, Deceased.

Anthony J. KENNEDY et al., Respondents, v. Gladys WOLLENBERG, Appellant.

Sac. 6921.

Supreme Court of California, In Bank.

Nov. 30, 1959.

Rehearing Denied Dec. 30, 1959.

A. M. Mull, Jr., Wilke & Sapunor and Clarence H. Pease, Sacramento, for appellant.

Anthony J. Kennedy and Devlin, Diepenbrock & Wulff, Sacramento, in pro. per., for respondents.

SCHAUER, Justice.

Gladys Wollenberg (one of the beneficiaries named in the will of Harry C. Stauffer) appeals from an order which directs that fees for extraordinary legal services and costs and expenses advanced by respondents (attorneys for the special administrator of Stauffer's estate) be 'shared proportionately by each of the heirs, legatees and beneficiaries of the estate.' All the property which comprises the estate was recovered by the extraordinary legal services of respondents. Part of such property passes to beneficiaries of the will and part of it, because undue influence vitiated portions of the will, passes by intestate succession.

Appellant-objector contends that the ratable apportionment ordered by the trial court improperly contravenes the California probate rule that, in the absence of a contrary expression of testamentary intent, property not disposed of by the will should be first resorted to for payment of debts and expenses of administration. Respondents urge that such apportionment is proper because, under equitable principles, each of those who benefit by the recovery of the estate property should bear his share of the expenses of recovering it. We have concluded that under the statutory and decisional law of this state the trial court should have applied the probate rule rather than ordering ratable apportionment.

Appellant's argument for application of the probate rule is based largely upon asserted intent of the testator, and respondents' argument for ratable apportionment is based largely upon asserted considerations of fairness. In order that the factual bases of these arguments can be appraised it appears necessary to state the history of Stauffer's disposition of his property and the litigation which followed his death.

Stauffer's will is not in the record on this appeal. The facts concerning the will appear in the opinion in Re Estate of Stauffer (1956), 142 Cal.App.2d 35, 297 P.2d 1029. The will, executed in 1944, stated that Stauffer made the following devises and bequests: Certain residential realty to Jessie Snyder; improved business realty to R. N. Philpot and Hilda Kirtlan; $5,000 to Michael David Littlefield; $5 each to named relatives; $50 a month to a sister, Myra Henry, if there was 'sufficient revenue from the estate to warrant' such payments; and the residue 'share and share alike' to Philpot, Jessie Snyder, and Gladys Wollenberg (the present appellant). The will named Philpot executor without bond. When he executed the will Stauffer owned no property which could have passed under the residuary clause if the other dispositions of the will were given effect.

In December, 1949, Stauffer signed a deed of gift of the above mentioned business property (then valued at about $120,000 with income of nearly $2,000 a month) to Philpot and Kirtlan.

When Stauffer died in January, 1952, his heirs at law were his sister Myra and nieces and nephews. A nominee of Myra applied for letters of administration, alleging that Stauffer had died intestate. Philpot offered the will for probate. The heirs contested the will before probate. The superior court found that the will was the product of undue influence of Philpot and Kirtlan except as to the specific devise to Snyder (which had been adeemed by sale of the devised property prior to Stauffer's death) and the $5,000 legacy to Littlefield, and denied probate except as to the latter legacy.

Philpot, Kirtlan, and Wollenberg appealed. (In re Estate of Stauffer (1956), supra, 142 Cal.App.2d 35, 297 P.2d 1029; rehearing and hearing denied.) The District Court of Appeal (at pages 39-40 (1) of 142 Cal.App.2d, at page 1032 of 297 P.2d) upheld the finding that Philpot and Kirtlan were guilty of undue influence. But it determined (at page 41-42(2) of 142 Cal.App.2d at page 1033 of 297 P.2d) that the residuary gifts to Snyder and Wollenberg were not affected by the undue influence. The appellate court pointed out (at page 36 of 142 Cal.App.2d, at page 1030 of 297 P.2d) that the testator's surviving heirs had no communication with him for more than 15 years prior to his death and (at page 42 of 142 Cal.App.2d, at page 1033 of 297 P.2d) that 'the record is devoid of any evidence of love or affection between the testator and his relatives. In fact it was all to the contrary.' Therefore, the appellate court said (at page 42 of 142 Cal.App.2d, at page 1034 of 297 P.2d), the effect of the superior court's order 'was to defeat any possibility of carrying out, except as to minor bequests, the testator's intention * * * since the judgment of the trial court excluded both Snyder and Wollenberg, the only two beneficiaries for whom he was shown to have expressed any affection, except Littlefield, and thereby gave substantially all of his estate (by intestate succession) to the very persons whose participation he emphatically did not want.' The District Court of Appeal concluded (at pages 43-44 of 142 Cal.App.2d, at page 1034 of 297 P.2d) that the business realty ineffectually devised to Philpot and Kirtlan passed under the residuary clause, one third to Snyder, one third to Wollenberg, and one third by intestate succession.

Pursuant to the remand of the District Court of Appeal, the superior court on September 24, 1956, rendered judgment that the will is denied probate except as to the $5,000 legacy to Littlefield and the residuary gifts to Wollenberg and Snyder; that as to the remainder of the residue Stauffer died intestate.

Meanwhile, in July, 1953, Crocker-Anglo National Bank had been appointed special administrator with general powers and had employed respondents as its attorneys. When Stauffer died he had no property standing in his name. Respondents discovered improprieties of Philpot and Kirtlan in dealing with Stauffer, brought an action in which the administrator recovered the business realty which Stauffer had deeded to Philpot and Kirtlan in 1949 and judgment for proceeds of that property which Philpot and Kirtlan had appropriated, and successfully resisted Philpot's and Kirtlan's appeal from such judgment. (Anglo Cal. Nat. Bank of San Francisco v. Philpot (1957), 148 Cal.App.2d 469, 477-478(1, 2), 306 P.2d 970; rehearing and hearing denied.) The estate recovered by respondents was valued at more than $173,000 in September, 1957.

Over objection of Wollenberg the superior court then made the order from which the present appeal is taken. The court found that without respondents' extraordinary legal services to the special administrator there would be no property in the estate; that such services were performed 'in connection with litigation taken for the common benefit of each of the heirs, legatees and beneficiaries of the estate'; that $32,500 is the reasonable value of the services and that respondents advanced $1,311.51 for necessary costs and expenses of such litigation. It ordered that the special administrator pay respondents such $32,500 and $1,311.51, and that 'Said compensation and said costs and expenses are to be borne and shared proportionately by each of the heirs, legatees and beneficiaries of the estate of said decedent, herein, out of his or her respective share in said estate.'

Under the California law of wills, in the absence of testamentary provision controlling payment of claims against the estate, resort must be had first to property undisposed of by will for payment of such claims. (In re Estate of Kelleher (1928), 205 Cal. 757, 761(3), 272 P. 1060; In re Estate of Hall (1920), 183 Cal. 61, 62(1), 190 P. 364; In re Estate of Traver (1904), 145 Cal. 508, 510-511, 78 P. 1058.) 'This is so for the reason that the law endeavors to carry out the intent of the testator as far as possible and, therefore, property not disposed of by the will should be so applied as to render it certain that the dispositions actually made by the testator will be effective.' (In re Estate of Hall (1920), supra, at page 62(1) of 183 Cal., at page 365 of 190 P.) The Kelleher, Hall, and Traver cases point out that the foregoing rule and reason had statutory expression. The present relevant Probate Code provisions are substantially the same as the statutes referred to in those cases and therefore 'must be construed as continuations thereof, and not as new enactments.' (Prob.Code, § 2.)

Section 750 of the Probate Code provides, 'If the testator makes provision by his will, or designates the estate to be appropriated, for the payment of his debts, the expenses of administration, or family allowance, they must be paid according to such provision or out of the estate thus appropriated, so far as the same is sufficient. If insufficient, that portion of the estate not disposed of by the will, if any, must be appropriated for that purpose; and if that is not sufficient, the property given to residuary legatees and devisees, and thereafter all other property devised and bequeathed is liable for the same, in proportion to the value or amount of the several devises and legacies, but specific devises and legacies are exempt from such liability if it appears to the court necessary to carry into effect the intention of the testator, and there is other sufficient estate.' (Italics added.)

Under the italicized language (as under the substantially similar language of former Code Civ.Proc. § 1562) 'The absence of all appropriation is clearly an insufficient one.' (In re Estate of Traver (1904), supra, at page 511 of 145 Cal., at page 1060 of 78 P.) The 'obvious aim' of section 750 (like that of former Code Civ.Proc. §§ 1560, ...