Opinion ID: 1380015
Heading Depth: 1
Heading Rank: 1

Heading: Sufficiency of evidence to establish a trust for the benefit of the heirs of Mrs. Weber.

Text: [1] The chief contention of defendant is that the trial court erred in its interpretation of the will. Most of the matters relating to this issue, however, were considered by the District Court of Appeal on the prior appeal in Sears v. Rule, 45 Cal.App.2d 374 [114 P.2d 57], and, as plaintiffs urge, the sufficiency of the evidence must be considered in the light of that decision which constitutes the law of the case. (Gore v. Bingaman, 20 Cal.2d 118 [124 P.2d 17]; see Allen v. California Mutual B. & L. Assn., 22 Cal.2d 474, 481-482 [139 P.2d 321].) The prior appeal was taken from a judgment given after the sustaining of a demurrer to the complaint and the refusal of the trial court to permit the filing of a second amended complaint which, with minor exceptions, was the pleading subsequently used at the present trial. The chief question before the appellate court was whether or not the proposed pleading states facts sufficient to create a resulting trust in the residue of property not disposed of by will, for the benefit of the heirs according to the rules of succession. ... (45 Cal.App.2d at p. 378.) The proposed complaint then, as it does now, set forth the provisions of the will of Sarah Weber and alleged, among other things, that the testatrix intended to give defendant the residue in trust only, that he had agreed with her to distribute the property in accordance with their previous understanding, and that a secret trust was thereby created. Neither plaintiffs nor cross- complainant have ever attempted to enforce the alleged agreement itself. They do not claim that they are third-party beneficiaries thereof nor do they seek to prove its terms. They merely urge the existence of the agreement or understanding as a part of their proof in establishing that there was an intestacy, and that defendant should be compelled to hold the property as an involuntary trustee for themselves as heirs. The District Court of Appeal, after pointing out that the will did not create a valid trust because it did not mention the subject, purpose or beneficiary, went on to say (45 Cal.App.2d at p. 379): After a careful examination of the provisions of the will, viewed in the light of the facts alleged in the complaint, we are of the opinion the probate court erred in determining that the residue of the estate, other than the household goods and personal effects, were devised absolutely to Charles T. Rule. On the contrary, we are persuaded the testatrix did not intend to make her brother sole beneficiary of her entire estate. It seems clear that she had a previous understanding with him that she would give him the property in trust to be distributed to individuals or for the benefit of charitable causes according to an agreement between them. (See, also, similar expressions at pages 382 and 383 of 45 Cal.App.2d.) This construction was based in part upon the surrounding circumstances as to which considerable supporting evidence was offered at the trial. Other portions of the opinion, however, indicate that both the intention of the testatrix and the existence of an agreement between herself and defendant could be inferred from the language of the will alone. For example, at page 382 of 45 Cal.App.2d the court points out that the will gave defendant, absolutely, all household goods and personal effects, but that it treated the residue in a separate paragraph, whereas if it had been intended to make defendant sole beneficiary, the additional paragraph, together with its qualifying language, would have been unnecessary. Further, the court said at page 382 of 45 Cal.App.2d: In subdivision (b) of paragraph five of the will she uses language which is absolutely conflicting with the theory that she intended to make her brother Charles sole beneficiary of her estate. In effect, she says I trust my brother Charles and am confident he 'will distribute my estate' according to our agreement and my wishes in that regard, as previously expressed in many discussions. That declaration is not a mere expression of a wish or desire. ... It is significant that the will specifically declares the testatrix has confidence to believe her brother 'will distribute' her property ... to the parties or causes previously agreed upon in former conferences. That is inconsistent with the theory that he was en-entitled to distribution of the entire estate as the sole beneficiary thereof. The theory that the testatrix did not intend to convey her entire estate to her brother Charles, and upon the contrary that she intended to convey the residue mentioned in the fifth paragraph to him in trust to be distributed in accordance with their previous agreement, seems to be conclusive from the sixth clause of the will. ... Paragraph seven of the will contains a clause equally inconsistent with the theory that Charles T. Rule was to become sole beneficiary of the entire estate, ... It is apparent the last-mentioned clause contemplates distribution of a part of the estate to minors or an incompetent person. No language could more clearly indicate that Charles was not to become the sole beneficiary or distributee of the entire estate. [2] There is other evidence in the record which, independently of the law of the case, tends to support the judgment. Although defendant declared on the stand that Mrs. Weber told him the property was all to be his, that he could do with it as he saw fit, and that he was not bound to transfer it to anyone else unless he wished to do so, his testimony was not consistent, and some of it was more in accord with the position urged by plaintiffs and cross-complainant. It appears that defendant wrote letters to his brother indicating that he had insisted upon his sister making a will, and he admitted discussing with her what was to be included in her will. The legal effect of the will was explained to Mrs. Weber in defendant's presence, he was familiar with its terms before it was executed, and he knew exactly what it meant. He testified that the will was drawn for the purpose of carrying out her wishes and that he had discussed with her, as stated here in the will, what those wishes were. When asked if Mrs. Weber told him how he should divide the property, he replied, Yes, and made the same reply to the question whether his brothers were to share in this estate or some part of it. And in a deposition taken in connection with another action he stated that after the will was signed an attorney explained about the trust. ... About everything going to [defendant] in trust. At the trial in the present action his only explanation was that this was a misconstruction of his meaning and that the words had been put in his mouth. From the foregoing it appears that the record is sufficient to support the findings that Mrs. Weber did not intend to leave to defendant absolutely any of her property except the household furniture and other items mentioned in article four of the will, and that defendant knew that she intended to leave him the residue of the estate in trust only, for the beneficiaries previously agreed upon and understood between herself and Charles T. Rule. [3] Under these facts a constructive trust arose when the property was distributed to defendant by the probate court. The general proposition is well settled that where a testator devises his property in reliance upon an agreement or understanding with the devisee that the latter will hold it in trust for, or convey it to, a third person, the devisee holds the property upon a constructive trust for the third person. (Weinstein v. Moers, 207 Cal. 534 [279 P. 444]; Curdy v. Berton, 79 Cal. 420 [21 P. 858, 12 Am.St.Rep. 157, 5 L.R.A. 189]; De Laurencel v. DeBoom, 48 Cal. 581; Prior v. Andrews, 83 Cal.App. 782 [257 P. 560]; see Brazil v. Silva, 181 Cal. 490, 496-497 [185 P. 174]; Estate of Lyon, 163 Cal. 803, 805 [127 P. 75]; Estate of Everts, 163 Cal. 449, 454 [125 P. 1059]; cf. Aho v. Kunsert, 12 Cal.2d 687 [87 P.2d 358].) The trust is imposed in order to avoid unjust enrichment of the devisee. (See Rest., Trusts, 55, and comments thereto; Rest., Restitution, 186, and comments thereto.) [4] The issues raised in such a situation are not within the jurisdiction of the probate court, and the will and the decree of distribution remain effective to give legal title to the devisee or legatee named, but the constructive trust is enforced in a separate proceeding in equity without attack on the probate proceedings. (Weinstein v. Moers, 207 Cal 534, 541-542 [279 P. 444]; In re Sharp, 17 Cal.App. 634 [120 P. 1079]; Prior v. Andrews, 83 Cal.App. 782 [257 P. 560]; see Estate of Rath, 10 Cal.2d 399, 405-406 [75 P.2d 509, 115 A.L.R. 836] [stating that although there is an extrinsic agreement, distribution may be ordered only in accordance with the will]; Estate of Everts, 163 Cal. 449, 454 [125 P. 1059]; cf. Brazil v. Silva, 181 Cal. 490 [185 P. 174].) The present case is different from those cited above in that here plaintiffs do not claim to be the beneficiaries of the agreement or understanding between defendant and the testatrix, and the trial court made no finding on the exact terms, purposes, and beneficiaries of the agreement. For this reason it is impossible to enforce a trust in favor of the undisclosed persons who were the intended beneficiaries of the agreement, and we are not at this time concerned with the rights of such persons should their identity become known. Since it was found, however, that an agreement did exist, and that the testatrix, to defendant's knowledge, did not intend that defendant should keep the property, defendant would be unjustly enriched if he were permitted to retain it and, therefore, a constructive trust arises for the benefit of the heirs of Mrs. Weber. The problem is similar to that presented where such an agreement or secret trust may not be carried into effect because its purpose is contrary to law, in which event, if no other disposition is made by the will, the devisee or legatee will be declared to hold the property in trust for the benefit of the heirs of the testator. (See Garner v. Purcell, 173 Cal. 495, 499 [160 P. 682]; O'Donnell v. Murphy, 17 Cal.App. 625, 628 [120 P. 1076]; Rest., Trusts, Comment i to 55.) In view of this conclusion we need not consider the sufficiency of the evidence to support the trial court's findings to the effect that the probate court should have distributed the property to the heirs and that the decree of distribution was procured through the extrinsic fraud of defendant and was consequently void. The judgment, as we have seen, may be sustained without setting aside the decree of distribution. [5] It is, of course, immaterial that the theory upon which the judgment may be affirmed is not identical with that relied upon by plaintiffs or by the trial court, since plaintiffs are required only to plead and prove facts sufficient to justify relief, and the trial court's judgment must be affirmed if the findings, supported by the evidence, are sufficient to warrant the relief granted on any legal theory. (Cf. MacIsaac v. Pozzo, 26 Cal.2d 809 [161 P.2d 449].)