Tassi's Estate, In re

• Decision Date: 25 October 1961
• Citation: 196 Cal.App.2d 494,16 Cal.Rptr. 616
• Parties: In the Matter of the ESTATE of Harold Paul TASSI, deceased. Edwin G. TASSI, Claimant, Appellant and Respondent, v. Marjorie B. TASSI, Petitioner, Respondent and Appellant. Civ. 19531.
• Court: California Court of Appeals Court of Appeals

Page 616

16 Cal.Rptr. 616

196 Cal.App.2d 494

In the Matter of the ESTATE of Harold Paul TASSI, deceased.

Edwin G. TASSI, Claimant, Appellant and Respondent, v. Marjorie B. TASSI, Petitioner, Respondent and Appellant.

Civ. 19531.

District Court of Appeal, First District, Division 2, California.

Oct. 25, 1961.

Hearing Denied Dec. 20. 1961.

Stark & Champlin, John F. Wells, Oakland, for Edwin G. Tassi.

Wallace B. Colthurst, Oakland, Orlando J. Bowman, Edmund L. Regalia, Oakland, for Marjorie Tassi.

SHOEMAKER, Justice.

Petitioner Marjorie Tassi brought this suit to obtain a determination of heirship as the surviving spouse of Harold Tassi, deceased. In her petition, Marjorie Tassi alleged that the last will and testament of Harold Tassi had been admitted to probate, but that said will had been executed by decedent on May 29, 1941, prior to his marriage on January 31, 1942, to petitioner. Since this will made no mention of petitioner as a prospective spouse (although she was left a bequest in her maiden name), petitioner therefore prayed that the will be revoked as to her. She further asserted that all assets acquired by decedent during marriage were community property and prayed that she be awarded all the community property and one-half of decedent's separate property.

Petitioner's attack upon the will was opposed by Edwin Tassi, decedent's brother and principal beneficiary under it. Edwin Tassi (hereafter referred to as 'claimant') denied that petitioner was entitled to assert her rights by way of heirship proceedings, contending that decedent's will had been admitted to probate on March 9, 1953, and that petitioner was barred by sections 380 and 384 of the Probate Code from any attempt to revoke the will. Claimant further alleged that petitioner's right to revoke decedent's will was barred by an oral marriage contract between petitioner and decedent, and also that petitioner was estopped to pursue her proceedings because she had allowed decedent to provide for her by other means and had represented to decedent that because thereof she would not seek to take under his will. Claimant also alleged that the parties were bound by the judgment in the prior action of Tassi v. Tassi, 1958, 160 Cal.App.2d 680, 325 P.2d 872, in which the present petitioner was plaintiff and Edwin Tassi defendant, and wherein the court determined that the business owned and operated by decedent was his separate property, and that all earnings from this business were allocable 27% to community property and 73% to decedent's separate property.

During that part of the present trial which was had before a jury, the trial judge removed two of claimant's defenses from the jury's consideration, namely, estoppel and marriage contract. The parties thereafter waived their right to a jury trial on the remaining issues and the proceedings continued as a court case.

At the conclusion of the trial, the court found that the will of the decedent was revoked as to the petitioner pursuant to Probate Code, section 70, and that petitioner was not barred from asserting her claim or revocation by ythe prior proceedings claim of revocation by the prior proceedings court reaffirmed its ruling as to claimant's defenses of estoppel and the existence of a marriage contract. The court also found that two bank accounts in decedent's name (items 11 and 12 of the inventory) were community property; that both parties were bound by the prior adjudication in Tassi v. Tassi, supra; that the business itself was the separate property of decedent and that all assets which could be traced to net earnings from it were 27% community property and 73% separate property of decedent. However, the court held that this prior action had failed to conclusively establish that this business did not contain undrawn earnings, and that it had taken evidence thereon and concluded that this business did not in fact contain undrawn earnings and was therefore entirely decedent's separate property.

Petitioner Marjorie Tassi now appeals from the court's finding that decedent's business was entirely his separate property and that the earnings therefrom were separate and community property in a 7 3/27 ratio. Claimant Edwin Tassi appeals from the court's finding that the two bank accounts in decedent's name were community property of decedent and petitioner, and from the findings that decedent's will was revoked as to petitioner and that estoppel did not constitute a valid defense to this revocation. ¹

Petitioner's first contention on appeal is that the trial court erred in holding that the judgment in the prior action of Tassi v. Tassi, supra, was res judicata as to petitioner's right to prove that probate assets traceable to earnings of decedent's business were entirely community property. This prior suit was brought by petitioner to recover one-half of various properties which were allegedly gifts of community property made by decedent, without petitioner's consent, to claimant Edwin Tassi, and resulted in the judgment we have mentioned, and which was affirmed, the appellate court holding that the findings were amply supported by the evidence.

Petitioner now contends that this prior determination should not have been considered binding in the instant case because the prior Tassi case did not consider the nature of probate assets but dealt only with assets which were the subject of inter vivos gifts; that probate assets were expressly excluded from the court's consideration by stipulation of the parties. Hence, petitioner argues that the principle of res judicata cannot apply. The contention is not well founded. The principle upon which the lower court held the Tassi case controlling was not that of res judicata, where the causes of action must be the same, but that of collateral estoppel. Where a second action between the same parties is brought on a different cause of action, the first judgment "'operates as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action."' Taylor v. Hawkinson, 1957, 47 Cal.2d 893, 895, 306 P.2d 797, 799; Todhunter v. Smith, 1934, 219 Cal. 690, 695, 28 P.2d 916. In Pacific Mutual Life Ins. Co. of California v. McConnell, 1955, 44 Cal.2d 715, 724-725, 285 P.2d 636, 641, the court stated the rule as follows:

'[I]t is settled that even though the causes of action be different, the prior determination of an issue is conclusive in a subsequent suit between the same parties as to that issue and every matter which might have been urged to sustain or defeat its determination.'

The basic point which petitioner ignores is that the precise issue before the court in both cases was the nature of a specific business, the Associated Meat Company, and the earnings derived from this business. The determination of this issue was necessary in order to determine the amount of community property which went into certain gifts made by the decedent during his lifetime. In the instant case, the issue must be resolved in order to determine the distribution of certain assets within the decedent's estate. In both cases, however, the underlying issue was identical--the community or separate property character of a specific business and the earnings derived therefrom.

Petitioner argues, however, that the 7 3/27 ratio by which the allocation of earnings was made in the prior adjudication was arrived at only after "adjustment for all relevant matters", and that the adjustments made were applicable to inter vivos transfers of earnings but not to earnings which are part of the estate, so that the prior litigation cannot be deemed controlling as to the instant proceedings.

It is petitioner's position that the adjustments made in the prior action were for living expenses and taxes, and that these taxes and living expenses were deducted from the non-probate assets alone. However, petitioner's claim fails, for an examination of the record shows that the court took the overall total of all business earnings from February 1, 1942 through February 19, 1953, and, after deducting the necessary expenses, found these earnings to be 27% community property and 73% decedent's separate property. The various expenses were thus deducted from the business earnings before they were used to acquire various assets, whether these assets were probate or non-probate.

Petitioner's next contention is that the trial court erred in finding that the business itself was entirely decedent's separate property and did not contain any accumulated earnings. Petitioner first argues that the finding in the prior litigation that the business was decedent's separate property was a collateral fact not necessary to the prior decision and should not, therefore, be binding in the instant case. We do not agree that the determination as to the character of the non-probate assets could have been made without first ascertaining the character of the business itself, since all these assets were ultimately traceable to business earnings. At the time that the prior judgment was rendered, petitioner obviously cosidered the character of the business to have been essential to the court's decision since she specifically attacked this finding on appeal, urging that the evidence in support thereof was insufficient. See Tassi v. Tassi, supra, 160 Cal.App.2d at page 688, 325 P.2d 872. Only now does petitioner contend that the character of the business was a collateral issue in this prior action and should not be binding in the instant case. Petitioner's contention is untenable.

Petitioner next attacks the trial court's finding that the business did not contain any accumulated earnings. The trial court allowed this issue to be litigated by the parties because it considered the prior Tassi determination, although finding the business itself to be separate, had not conclusively resolved the question of whether or not this business contained accumulated...