Newman v. Wells Fargo Bank

926 P.2d 969, 14 Cal. 4th 126, 96 Daily Journal DAR 14555, 96 Cal. Daily Op. Serv. 8773, 59 Cal. Rptr. 2d 2, 1996 Cal. LEXIS 6515
CourtCalifornia Supreme Court
DecidedDecember 5, 1996
DocketS048669
StatusPublished
Cited by35 cases

This text of 926 P.2d 969 (Newman v. Wells Fargo Bank) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Newman v. Wells Fargo Bank, 926 P.2d 969, 14 Cal. 4th 126, 96 Daily Journal DAR 14555, 96 Cal. Daily Op. Serv. 8773, 59 Cal. Rptr. 2d 2, 1996 Cal. LEXIS 6515 (Cal. 1996).

Opinions

[129]*129Opinion

BAXTER, J.

We are asked to decide whether, in looking to the law of intestacy as a guide to a testator’s presumed intent when a will provision is ambiguous, a court should consider the law in effect at the time the will or testamentary trust was executed to determine if a child adopted out of a designated ancestor’s family is among the “issue” and “children” the testator intended to benefit, or should apply the law in effect at the death of the ancestor through whom the child may take. Appellant, minor A., a creditor of Jon E. Newman, claims that even though Newman was adopted by Newman’s stepfather in 1946, he remains a “child” of Earl Mitchell, his natural father, within the meaning of the will of Helen Lathrop, Mitchell’s sister, and is entitled to share in a testamentary trust created for the benefit of Mitchell who is now deceased, Mitchell’s siblings, and their children.

Lathrop executed her will and died in 1972. Appellant relies on a 1985 change in the law of intestate succession which permits “adopted-out” children to take if adopted by a stepparent. Other beneficiaries of the trust contend that the law in effect when Lathrop executed the will and when she died applies, as that law presumably will carry out her intent.

The Court of Appeal applied the law governing intestate succession rights of adopted-out children which was in effect at the time Newman’s natural father died in 1993 and held that Newman was a beneficiary notwithstanding the adoption. We conclude that, since Lathrop did not express a contrary intention in the will, the court must look to former Probate Code section 257, the statute applicable both at the time Helen Lathrop executed her will and at the time of her death, to ascertain her presumptive intent. We, therefore, reverse the judgment of the Court of Appeal.

I

Background

Helen Lathrop, a resident of Belvedere, California, died in December 1972. Her will, dated November 3, 1972, left the residue of her estate to a testamentary trust under which the income was to be paid to her six brothers and sisters, or on the death of any of them to that person’s living “issue” by right of representation. On the death of the last of the siblings, the trust estate was to be distributed per capita to the then living children of the siblings. The will was admitted to probate in the Marin County Superior Court early in 1973, and the residue of the Lathrop estate was ordered distributed to Wells Fargo Bank, as trustee of the testamentary trust, in May [130]*1301974. The trust, whose provisions parallel those of Lathrop’s will, is administered by the trustee under the supervision of the San Francisco Superior Court.

Jon E. Newman’s natural father, Earl Mitchell, a brother of Helen Lathrop and an income beneficiary of the trust, died in 1993. Jon E. Newman had been adopted by his stepfather in 1946. In August 1993, the guardian ad litem of minor A. petitioned the superior court for an order attaching 25 percent of Jon E. Newman’s share of the income of the Lathrop trust. The petition alleged that Newman was the defendant in an action pending in the State of Washington, that the guardian and Newman had entered into a settlement agreement that had been approved by the court, and that “John [sic] E. Newman has agreed to stipulate to an order of the California court to attach 25% of his share of the income of the Lathrop Trust.”1 The petition was granted on November 1, 1993, but thereafter Wells Fargo Bank, as trustee, filed a petition for advice and instructions pursuant to Probate Code section 17200.2 The Wells Fargo petition alleges that Newman had been adopted by his stepfather, W. E. Newman, in 1946, and asks if Newman was “issue of’ Earl Mitchell at the time of Mitchell’s death. The petition also sought advice regarding the distribution to Newman of that part of the trust income that had been going to Mitchell. The apparent trust beneficiaries, including Newman, as well as the guardian of minor A., were given notice. Several other income beneficiaries subsequently filed declarations that they had not received notice of the earlier proceeding, and they appeared in the trustee’s proceeding.

On June 28, 1994, the superior court made the order from which this appeal was taken, ruling that under former Probate Code section 257, the law in effect in 1972 when Helen Lathrop executed her will, and Estate of Russell (1971) 17 Cal.App.3d 758 [95 Cal.Rptr. 88] (Russell), Newman was not the child of Earl Mitchell for any purpose, and that there being no contrary expression of intent in the Lathrop trust, Lathrop was found to have intended the terms of the trust to be interpreted in a manner consistent with California law as it stood when the will was executed.3 The court ruled that subsequent changes (§ 6451 [added by Stats. 1993, ch. 529, § 5]; former § 6408 [added by Stats. 1990, ch. 79, § 14, p. 721 and repealed by Stats. 1993, ch. 529, [131]*131§ 4]) did not affect that interpretation since they were expressly inapplicable under the terms of section 6103.4 The court then found that Newman is not a beneficiary of the trust and directed that the trustee make no distributions from the trust to or for the benefit of Newman or any creditor of Newman. In so doing, the court noted that it had not previously adjudicated the issue of whether Newman was a beneficiary of the trust, and that no notice of the earlier petition had been given to the trust beneficiaries. Newman and minor A. filed a notice of appeal. Minor A. is the only party claiming a share of the trust through Earl Mitchell who appeared in the Court of Appeal.5

Appellant conceded that under former Probate Code section 257, from 1955 to 1985, an adopted person did not succeed to the estate of the person’s natural parents under the law governing intestacy. He argued that since 1985, the law, which in 1993 was set out in former section 6408, subdivision (b), provided that Newman should succeed to Mitchell’s interest in the Lathrop trust, as that law presumably reflected Lathrop’s intent when she left income interests to “issue” and the remainder to “children” of her siblings. The Court of Appeal agreed. Turning to rules of construction it believed [132]*132applicable, that court observed that Lathrop was presumptively aware that the laws governing inheritance rights of adopted children might change after her death; that this presumption was strengthened by the fact that the laws governing inheritance had been amended drastically during her lifetime; that she had used a designated ancestor, life estate, and the words “then living” as prerequisites for the gifts; and that her will expressed an intent to benefit the children of each of her siblings. These observations led the Court of Appeal to conclude that whether Newman was “issue” of Mitchell within the meaning of the trust had to be decided under the law in effect when Newman’s father died in 1993, and not the law in effect in 1972 when Lathrop died. The court therefore reversed the order of the superior court and remanded for further findings on whether Newman was the issue of Mitchell under that statute.

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926 P.2d 969, 14 Cal. 4th 126, 96 Daily Journal DAR 14555, 96 Cal. Daily Op. Serv. 8773, 59 Cal. Rptr. 2d 2, 1996 Cal. LEXIS 6515, Counsel Stack Legal Research, https://law.counselstack.com/opinion/newman-v-wells-fargo-bank-cal-1996.