BRAZIL, J. pro tem.
The several appeals are taken from a judgment based on an interpretation of an inter vivos trust agreement. A complaint was filed by plaintiff against the American Trust Company, as trustee, to compel distribution directly to her of the corpus of the trust on the death of the last beneficiary. The trustee cross-complained by naming the heirs of the original trustor, and the devisees and legatees
William Martin Craig made an agreement on July 17, 1934, with the American Trust Company to convey valuable real property to it, in trust for certain expressed purposes. The conveyance was actually made on June 23, 1938; and on November 6, 1939, he made his will. The corpus of the trust was the trustor's separate property, he having married Frances Craig shortly before the date of the original trust agreement. No changes were made in that agreement from the time it was signed until Mr. Craig died, childless, on October 13, 1942. The wife survived him; and she died intestate on January 26, 1954, leaving as her sole heirs three children by a former marriage. Helen O'Farrell appears here as the original plaintiff in her capacity as administratrix of her mother's estate.
The respondents are the persons who claim the remainder as a class of devisees and legatees of the trustor. They are 24 in number, representing 20 living people and estates of four persons named in the will who died after the trustor and before the beneficiary, Mrs. Craig. One group of appellants consists of nine first cousins of Mr. Craig who claim the property as members of a class who otherwise would get the property as heirs under the laws of succession if there had been no will; and the other appellant is the administratrix of the estate of Mrs. Craig representing herself and two others as natural children of Mrs. Craig in whom they claim the property is vested before her death. For the sake of brevity only, and not by way of accurate description, the respondents will be called legatees, the nine appellants, heirs, and the other appellant, the widow.
The dispute arises from an interpretation of paragraph 11 of the trust agreement, by the provisions of which each of these parties claims to be entitled to the corpus of the trust.
"Eleventh: Upon the death of said Frances Rader Craig, unless said trust is sooner terminated as herein provided, said trust shall terminate and all property then in said trust, both corpus and income, after the payment of all expenses of said trust shall be freed therefrom and if said trustor shall then
Over objection of both appellants, the trial judge admitted in evidence as an aid in construing the foregoing paragraph, as indicated in his written opinion, the 1939 will of Mr. Craig, and the report of the inheritance tax appraiser in his estate. Respondent claims the result should be the same whether or not the court was correct in its ruling on the admissibility of such evidence. Each appellant takes a position that there is no ambiguity in paragraph 11, that "according to the probate law" means according to the laws of succession. The widow says the remainder was vested upon trustor's death in her as being trustor's sole heir and so her estate gets the property. The heirs maintain the remainder was vested in them when Mrs. Craig died and, therefore, being members of the class described as next of kin or heirs, the property is lawfully theirs.
The only issue before this court is the interpretation of the quoted dispositive clause of the inter vivos trust agreement, other than issues pertaining to the admission of evidence. Actually, the parties have narrowed the first issue even further to an interpretation of the expression "according to the probate law of the State of California in force at that time." As will be explained later, neither appellant can afford to take the position that the clause in question is so ambiguous as to defy reasonable construction for in such case neither could ultimately prevail.
Despite the express statement of the trial judge appearing in his written opinion that he did not consider the payment of the inheritance tax on the whole estate of the testator-trustor, including the trust fund, as any aid to construction; and that the elements of estoppel were lacking, the respondent persists that both such special defenses are justified by the record.
Both appellants assert it was error to use the will of 1939 or the circumstances surrounding its execution, as an aid in the construction of paragraph 11, claiming that trustor's state of mind or his conduct in 1939 has no bearing whatever on what he intended in 1934 by what he actually said in the trust agreement. In justifying use of the latter will to assist in the interpretation of the trust agreement, the court said "In any event, assuming that section 101 of the Probate Code is not applicable, surely the will may be looked to as extrinsic evidence tending to explain ambiguity in the trust. (Security-First Nat. Bank v. Ogilvie, 47 Cal.App.2d 787 [119 P.2d 25].)" That case does not support the court's observation for there the court was dealing with a contemporaneous property settlement agreement; not an unconnected instrument of a much later date. Respondent cites many other cases for the same purposes, but none of them goes so far as to say that a later executed unconnected document may be received in evidence to construe an earlier ambiguous statement. Limitation of space precludes a discussion of each case so cited and yet differentiation is apparent as is shown in the appendix to appellant-heirs' brief. One of the cases cited by respondent in support of the court's ruling is Estate of Sargavak, 35 Cal.2d 93 [216 P.2d 850, 21 A.L.R.2d 307], which, however, actually points out the distinction which the trial court and respondent have failed to make.
"The extrinsic evidence in this case consists for the most part of the oral declarations of the testatrix before and after the execution of the instrument in question. Such declarations, whether made at, before, or after the execution of the instrument are admissible, if offered for the purpose of ascertaining the intent with which the instrument was executed
Oral declarations of a decedent, whether made before, at the time, or after, are excluded in connection with a matter of construction of a document unless they be instructions to the scrivener. (Prob. Code, § 105.) "An exception to the exclusion of oral declarations of the testator is his instructions to a scrivener when offered to resolve an ambiguity in a will concerning the amount of a bequest." (Estate of Resler, 43 Cal.2d 726, 734 [278 P.2d 1].)
The will of 1939 and the resultant decree of distribution were admissible to indicate the proper disposition to be made of the property in the inter vivos trust if the phrase "probate law" included disposition by will. They were also generally admissible, as they were pleaded in the trustee's cross-complaint to which all parties answered.
It is the claim of the widow that the crucial eleventh paragraph expresses the meaning that the trust property upon the death of the life tenant Frances Rader Craig goes to the heir or heirs of the trustor; that Frances was his only heir; that the property, therefore having at William's death vested in his sole heir, as a vested remainder in her, should be distributed to her heirs, not to the heirs or to the legatees of William. The widow-appellant can prevail only if it be established that Frances had a vested remainder, for her heirs would not be entitled to anything "under probate law" if it vested after her death.
The widow argues that one of the strongest rules of the law is that of favoring the early vesting of future interests, and that, applying that rule to this trust, it should be held that the corpus vested in Frances as early as possible which would be when the trustor died.
The language referring to the remainder certainly speaks in futuro. It refers to the probate law at the time of the wife's death. It is true that the probate code is amended rarely, but that does not mean that it cannot be amended. Why would a trustor, intending to create a presently vested interest, use words of futurity, which could only defeat his purpose? The words of futurity, so used, make it impossible for the remainder to have vested upon the death of the trustor.
Estate of Newman, 68 Cal.App. 420 [229 P. 898], wherein the words "heirs, wherever and whoever they may be" were held to mean "heirs" in the technical meaning of the word, no special significance was attached to the phrase "wherever and whoever they may be." The court construed the last
A determination that the widow did not acquire a vested remainder, so that her children who are unrelated to the trustor, would not take the corpus of the trust, finds support in the general presumption of law that one intends to bequeath to one's heirs by blood, rather than to strangers. Whatever has heretofore been said about the widow's appeal compels affirmance of the judgment against her without regard to a judicial interpretation of the phrase "according to probate law." An additional ground appears for the same result, if the trial court is correct in finding that "according to probate law" applies to testate as well as intestate succession.
Self-interest requires each appellant to assert that the wording of paragraph 11 is not ambiguous, and that its meaning can and should be ascertained from the instrument alone. If it is so ambiguous that its meaning cannot be found, then the property would go to the executor of trustor's will under the rule that a trustor retains all of the trust property not embraced in the trust and not otherwise disposed of (Civ. Code, § 866). The same thing would occur if the trust agreement were construed to give trustor a power of appointment, which power would have been exercised by the will which was admitted to probate.
The appellants and respondents appear agreed that a remainder was created, that the property should pass directly to the persons entitled to it under paragraph 11 of the trust agreement as remaindermen; and that each party represents a class ascertained by resort to the expression "according to probate law," whatever that may mean. The widow and the heirs say that means them because the expression means "under the laws of succession"; and the widow says her estate should get it because the remainder vested on the trustor's death, and the heirs say "not so," it is theirs because the remainder was contingent on the death of Mrs. Craig, the life tenant, at which time the members of the class could be ascertained. The respondent legatees say they are the remaindermen ascertained at the death of Mrs. Craig by resort to a will executed by the trustor. The widow-appellant does not seriously contend that the dispositive clause of paragraph 11 meant a disposition to the heirs of the surviving life tenant directly as a class of remaindermen, for it
"According to probate law" is not an abstruse expression which should cause any great difference of opinion as to its meaning. The fact that counsel has been unable to find a case defining the meaning of the exact words used proves nothing; for it is just as likely that no exact case appears for no one thought the expression ever needed a judicial definition; as it is that the exact wording has never been used before to make a disposition of a remainder. The expression probate law or probate matters are certainly not unfamiliar terms.
The trial judge is correct in referring to the meaning of "according to probate law" when he stated "the words refer to the probate law.
If "according to probate law" be an unambiguous expression, as contended by both the appellants, it cannot reasonably be said that getting property by legacy under a will is not according to probate law; and only getting it by way of intestate succession is according to probate law.
The correctness of the judgment can be ascertained by making and answering the following separate inquiries: When the persons named as legatees in the trustor's will got the corpus of the trust, was the membership of their class as remaindermen determined in accordance with probate law? If the heirs, as distinguished from legatees (the trustor having left a will) had obtained the corpus by determining who they were under the laws of succession, would that determination have been according to probate law?
The American Trust Company, as trustee, appeals in order to clarify its rights and duties in respect to the trust property and to make sure that jurisdiction is retained to settle accounts and award compensation for services performed. The suggested amendment, while correct in its phrasing, is unnecessary for the judgment as it now stands includes all its suggestions at least by necessary implication. Appellant-trustee shall not be entitled to nor shall it be charged with any costs on appeal.
Kaufman, P.J., and Dooling, J., concurred.
Petitions for a rehearing were denied May 3, 1957.