author: CURTIS, J. EDMONDS, J., Dissenting.

text:
    [L. A. No. 16529.
    In Bank.
    June 27, 1939.]
    In the Matter of the Estate of ELIZABETH RATTRAY, Deceased. Honorable MATTHEW MURPHY, Consul of the Irish Free State, etc., Appellants, v. MARY ANN RENNIE et al., Respondents.

      John B. Ehlen, Lloyd R. Massey and Ralph Edgington for Appellants.
    James F. Peck, Oliver Ellsworth and Chas. C. Boynton, as Amici Curiae, on Behalf of Appellants.
    Louis Thomsen and Duque & McKinley for Respondents.
   CURTIS, J.

This is an appeal from an order of partial distribution made and entered in the estate of Elizabeth Rattray, deceased. The contest is between the relatives of said Elizabeth Rattray and relatives of James Rattray, the predeceased husband of the said Elizabeth Rattray. By said decree of distribution, certain property in the estate of Elizabeth Rattray, deceased, was distributed in equal shares, that is to say, one-half thereof was distributed to relatives of Elizabeth Rattray, and one-half thereof to the relatives of James Rattray. The relatives of Elizabeth Rattray entitled to share in her estate are a brother and sister and the several children of a predeceased sister and two predeceased brothers. They have appealed from said order of partial distribution, and will be referred to herein as the appellants. The relatives of James Rattray, seeking to share in the distribution of the estate of Elizabeth Rattray by virtue of their relationship to her predeceased husband, are the brothers and sister of James Rattray, deceased, and will be referred to herein as respondents. The deceased, Elizabeth Rattray, will hereafter be referred to as the decedent.

The estate of Elizabeth Rattray consisted of cash in the amount of $26,890.67, some stock of little or no value, and a parcel of real estate of little value. This property, for the sake of this discussion, may be divided into two classifications : (1) Community property which came to the decedent, Elizabeth Rattray, upon the death of her husband. Said property had been devised and bequeathed to her by the last will and testament of her husband and had been inventoried and accounted for as part of his estate. (2) Property owned by decedent at her death which had not been included in the inventory of the husband’s estate.

At the outset it was readily admitted by appellants that as to that portion of the estate of decedent in the first classification, that is to say, the property which had formerly been the community property of the spouses and which had come to the decedent upon the death of her husband, having been devised and bequeathed to her in his last will and testament, the respondents are entitled under the provisions of section 228 of the Probate Code to share equally with them by virtue of respondents’ relationship to James Rattray, the predeceased spouse of decedent. However, as to that portion of the estate of decedent which had not been included in the inventory of the estate of her predeceased husband, and which amounted to the sum of $18,307.03, appellants object to respondents’ receiving any part thereof, contending that such property was the separate property of the decedent, that as to such property section 228 of the Probate Code has no application, and they, as the sole heirs of decedent, are entitled to receive the whole thereof.

The trial court found, and made its order of distribution accordingly, that “all of the estate of Elizabeth Rattray, deceased, was community property of said decedent and her said previously deceased spouse, James Rattray, and came to Elizabeth Rattray, from James Rattray, by gift, devise and bequest”, and that said respondents “constitute heirs of the within decedent under the provisions of section 228 of the Probate Code of the State of California, and are entitled to succeed to one-half of the estate of Elizabeth Rat-tray.”

It is at once apparent that the order of distribution of the property in the first classification by the trial court was based upon the finding that the property was the community property of the spouses which had come to Elizabeth Rattray from her predeceased husband “by devise and bequest”. There is no question as to the correctness of the order of distribution in so far as it relates to this property. As to the second classification of property, the order of distribution, it is apparent, was based upon the finding that the property was the community property of the spouses which had come to Elizabeth Rattray “by gift”. The correctness of the conclusion of the trial court that respondents as relatives of the predeceased spouse were entitled to share in the distribution of this property depends upon the answer to two questions: Was the finding of the trial court that the property was the community property of the spouses which had come to the decedent by gift from her husband supported by the evidence? Do the provisions of section 228 of the Probate Code control the distribution of the property of a decedent dying intestate without issue who acquired said property as an inter vivos gift of community property from a predeceased spouse ?

We are satisfied that the answer to both questions is in the affirmative and consequently the order of distribution of the trial court with reference to this property is correct.

With reference to the money claimed by appellants to have been the separate property of the decedent, proof was offered to the probate court by appellants that at the time of the death of decedent’s husband in 1930, decedent had on deposit with a bank in her own name, as shown by her bank books, the sum of $16,618.90. A property search report by a title company was also introduced by appellants which tended to show that decedent during her married life, had held title in her own name to several parcels of real estate. Aside from the fact of title being held by her as her separate property, no evidence was produced to explain the source of the funds by which the property was acquired by her as her separate property. If no evidence of probative value was offered by respondents in proof of the fact that the source of this property was the community property of the spouses, respondents would necessarily fail to establish their right to inherit by virtue of their relationship to the predeceased spouse of decedent. Since their right to inherit depended not merely upon the fact of that certain relationship, but upon the fact of such relationship plus the fact that the property claimed by them as heirs had formerly been the community property of the decedent and her predeceased spouse, the burden of showing such additional fact rested upon them. (Estate of Simonton, 183 Cal. 53 [190 Pac. 442].)

The sole evidence available upon this question, and produced by respondents, was the testimony of William Battray, a brother of the predeceased spouse. Undoubtedly the trial court, in accepting as true the testimony of said witness, had in mind his interest in the outcome, and in weighing his evidence, gave due weight to this factor. We are of the opinion that this testimony was sufficiently substantial to support the finding of the trial court with reference to the community character of this property, and the necessary inference therefrom that since all of the property had been the community property of the spouses, and the wife had no other source of income, this property of the wife had come to her as an inter vivos gift from her husband. Briefly summarized, the testimony of William Battray was to the effect that he first met decedent two years after her marriage in 1908 to his brother, James Battray, and that he stayed with them for some little time; and then saw them at intervals for several years; that quite often he had discussions with them relative to their financial affairs; that at the time of the marriage his brother had no property; that his sister-in-law had no property at the time of their marriage; that after their marriage she was a housewife for her husband; that shortly after the marriage his brother started to work for the Los Angeles Water Company and worked for that company for approximately twenty years; that he worked up to the position of foreman in which position he earned $200 a month; that his brother was ill for about a year prior to his death in 1930 and left the employment of the company; that his brother had never inherited anything from anybody and that he had never heard from his sister-in-law or anyone else that she had ever inherited any; that she did nothing to earn her livelihood after her husband’s death but continued to be a housewife; that at the time of the husband’s death they owned one piece of real property, and at different times had sold three other parcels of property; and that they were very frugal in their manner of living. This testimony, although uncorroborated, was likewise uncontradicted by any fact or circumstance which would support in the slightest degree any inference that the source of the property was not community property of the spouses. The property acquired by them totaled an amount commensurate with the income of the husband and their manner of living. The trial court was justified, therefore, in concluding that all of the property of the spouses, including the amount on deposit in the bank in the wife’s name, was acquired by their joint efforts and from the frugality of the spouses during their twenty-two years of married life.

With reference to the sum of $1688.13, acquired by decedent from some unexplained source, and which goes to make up the total of $18,307.03, claimed by appellants as a part of decedent’s estate wholly distributable to them, since the wife engaged in no gainful occupation subsequent to the death of her husband, this money may reasonably be traced as interest upon her bank deposits, and as such fruit of community property, must likewise be deemed to be community property. The contention of appellants therefore, that the evidence does not support the finding of the trial court to the effect that all the property in the estate of the decedent was the community property of the spouses, and that a portion thereof came to the decedent by gift from her predeceased husband, cannot be sustained.

A more difficult problem is presented with reference to the question of whether or not the provisions of section 228 of the Probate Code control the distribution of property of a decedent dying intestate without issue who acquired said property as an inter vivos gift of community property from a predeceased spouse.

Appellants contend that the first paragraph of subdivision 8 of section 1386 of the Civil Code (which upon the adoption of the Probate Code by the legislature in 1931 was reenacted as section 228 of the Probate Code) has been construed as applying only to the community property of the spouses received by the surviving spouse “by will or inheritance or retained by virtue of its character as community property”, and as having no application to community property which had come to the decedent during the lifetime of the spouses as an inter vivos gift from the predeceased spouse, and hence section 228 of the Probate Code must necessarily receive the same construction. (Estate of McCauley, 138 Cal. 546 [71 Pac. 458]; Estate of Simonton, supra.) It cannot be gainsaid that there is a great deal of force in this argument.

Respondents contend that section 228 of the Probate Code and section 229 of the Probate Code should be construed together, as were the two paragraphs of subdivision 8 of section 1386 of the Civil Code upon which the above sections of the Probate Code were based, and as so construed, by an enlargement of the scope of section 229, the scope of section 228 has likewise been enlarged to include the community property of the spouses which came to the decedent by an inter vivos gift from the predeceased spouse.

We are of the opinion that a study of the history of these two sections since the original enactment of subdivision 8 (mistakenly numbered subdivision 9) of section 1386 of the Civil Code in 1880, and an understanding of the obvious purpose behind the enactment of these two provisions, controlling, in the absence of issue or testamentary disposition, the descent and distribution of property of a decedent which had been either the community property of the spouses or the separate property of a predeceased spouse, compels the conclusion that section 228 and section 229 of the Probate Code should be read and construed together.

At the time of its enactment in 1880, subdivision 9 of section 1386 of the Civil Code (later renumbered correctly, subdivision 8) read as follows: “If the decedent be a widow or widower, and leave no kindred, and the estate, or any portion thereof, was common property of such decedent, and his or her deceased spouse, while such spouse was living, such common property shall go to the father of such deceased spouse, or if he be dead, to the mother. If there be no father nor mother, then such property shall go to the brothers and sisters of such deceased spouse, in equal shares, and to the lawful issue of any deceased brothers or sisters of such deceased spouse, by right of representation.” In other words, this subdivision was a mere last resort to prevent property escheating to the state in the event the decedent left no kindred. (See Article, Rules of Descent under Probate Code sections 228 and 229, by W. W. Perrier, Jr., in 25 California Law Review, p. 261.) (Apparently by an oversight issue of the predeceased spouse by a former marriage were not included among the designated relatives entitled to inherit.) Under the section as it then read, the question of the scope of said provision relative to community property was first presented in 1903 for determination. The court in Estate of McCauley, supra, held that the community property referred to in subdivision 9 of section 1386 of the Civil Code as distributable to the relatives of a predeceased spouse of a decedent leaving no kindred, must have been property which came to the decedent on the death of the predeceased spouse and that said section had no applicability to the property which had been the community property of the spouses and had come to the decedent as a gift from such predeceased spouse. In that case a widow who had received the bulk of her estate as an inter vivos gift from her husband died testate leaving no kindred. She bequeathed to nine individuals and five charitable corporations a money legacy. The legatees, other than the charitable corporations, sought to have the legacies to said corporations reduced to one-third of the distributable estate by reason of the provisions of section 1313 of the Civil Code which provided that charitable corporations could not take devises or bequests by will which should collectively exceed one-third of the estate of the testator leaving “legal heirs”. Appellants argued that two nieces of the predeceased husband of decedent (not mentioned in decedent’s will) were “legal heirs” of the decedent by virtue of subdivision 9 of section 1386 of the Civil Code, and that if any of decedent’s property of which she died seised had been common property at any time before the death of her spouse, it must be regarded as community property regardless of any gift to her by her husband in his lifetime, and as her husband left legal heirs, and she left no kindred, such property must be taken into account in determining the “one-third of the estate of the testator leaving legal heirs (Section 1313, Civil Code) ”. The court was impressed by the fact that such a construction would greatly circumscribe the right of the wife of absolute testamentary disposition, if she left no kindred, and held that the nieces of the predeceased husband were legal heirs of the decedent with reference only to the common property “which remained undisposed of” by the predeceased husband at his death. It is quite apparent that the term, “common property of such decedent and her deceased spouse, while such spouse was living” as set forth in subdivision 9 of section 1386 of the Civil Code, could reasonably have been interpreted to include all property in the estate of decedent which had ever been the community property of the spouses. There can be little doubt that the particular factual situation presented by that case was largely responsible for the narrow limitation placed upon the scope of the term “common property of the decedent and a predeceased spouse, while such spouse was living” in that case. Thereafter in 1905, the subdivision was renumbered 8 and enlarged to apply not only to community property of the decedent and the predeceased spouse, but to include property which had been the separate property of the predeceased spouse. It also corrected the apparent oversight with reference to the issue of the predeceased spouse, for by said amendment, said issue were included and given preference over the other designated relatives. A further and most material change was made at this time which transformed the subdivision from a provision to prevent escheat to the state to a provision setting up a wholly new rule of descent. This was accomplished by substituting the word, “issue” in the place of the word, “kindred”, so that the section instead of applying only in the event the decedent left no kindred applied whenever the decedent died intestate leaving no issue. The subdivision as then enacted read as follows: “If the decedent is a widow or widower, and leave- no issue, and the estate or any portion thereof was common property of such decedent and his or her deceased spouse, while such spouse was living, or was separate property of his or her deceased spouse, while such spouse was living, such property goes to the children of such deceased spouse and the descendants thereof, and if none, then to the father of such deceased spouse, or if he is dead, to the mother. If there is no father nor mother, then such property goes to the brothers and sisters of such deceased spouse, in equal shares, and to the lawful issue of any deceased brother or sister of such deceased spouse by right of representation. ’ ’ It will be noted that this provision actually took all the property which had been community property of the decedent and a predeceased spouse away from such close relatives of the decedent as his own parents, brothers, and sisters, and gave it to the same relatives of the predeceased spouse. This only lasted until the next legislature in 1907, when it was amended to provide for an equal division between certain designated relatives of the decedent and of the predeceased spouse of that property which had previously been the community property of the two spouses. At this time, the subdivision was divided into two paragraphs. The first paragraph was concerned with the community property of the spouses and contained no reference as to the manner of acquisition of the property by the surviving spouse. The second paragraph was concerned with property which had been the separate property of the predeceased spouse and contained the provision (possibly to conform to the judicial construction with reference to community property) that it applied to separate property of the deceased spouse which had come to the decedent “by descent, devise or bequest”. In 1920, in Estate of Simonton, supra, upon a final distribution of the estate of a widow, who, after making certain specific bequests, had left the residue of her estate to her “heirs at law as provided by the laws of succession of the state of California”, a contest arose between the next of kin of decedent and the descendants of her predeceased husband. Issue was made as to what property had been formerly community property and should go to the descendants of the predeceased husband and what property was not of this character and should, therefore, go to the decedent’s branch of the family. The court, following and relying upon the decision in Estate of McCauley, supra, held that subdivision 8 of section 1386 of the Civil Code applied only to property received by will or inheritance or retained by virtue of its community character. In arriving at this conclusion, the court in addition to relying on Estate of McCauley, supra, justified its decision by calling attention to the fact that the language of the second paragraph of the subdivision which dealt with property which was the separate property of the predeceased spouse, contained specific language as to how the property must come to decedent in order for the provision to apply, namely, “by descent, devise or bequest”. The court argued that an equivalent provision in the ease of community property would be one limited to property received or retained by the survivor of the community either by will or by inheritance or by virtue of its character as community property, and that as there was a fair presumption that the two provisions were intended to be equivalent, the provision relative to community property should receive a construction similar to that required by the plain language of the equivalent section referring to separate property. In 1930, the phrase, “if the deceased was a widow or a widower” was interpreted by this court in Estate of McArthur, 210 Cal. 439 [292 Pac. 469, 72 A. L. R. 1318], to include a person who had remarried after the death of a former spouse and had died leaving the second spouse surviving. The next year the legislature enacted in its entirety the Probate Code which had been prepared and proposed by the code commission, appointed pursuant to chapter 750, Statutes of 1929, to enter upon a revision, compilation and codification of the laws of the state. The first paragraph of subdivision 8 of section 1386 of the Civil Code was reenacted in almost identical language as section 228 of. the Probate Code with the exception that the words, “If the deceased is a widow,, or widower” were deleted as being meaningless since the decision in the Estate of McArthur, supra, and the words, “was common property of such decedent and his or her deceased spouse, while such spouse was living”, was changed to, “was the community property of the decedent and a previously deceased spouse”. The second paragraph of said subdivision 8 of section 1386 of the Civil Code was reenacted as section 229 of the Probate Code, but the word, “gift” was added to the phrase, “descent, devise, or bequest” in order, as stated by the code commission, “to make the section logically complete”. Obviously, the addition of the word, “gift” enlarged considerably the scope of this provision. The two code sections as they now exist, and as they existed at the time of the death of the decedent read as follows :

“Section 228. No issue: Community property. If the decedent leave no issue, and the estate or any portion thereof was community property of the decedent and a previously deceased spouse, such property goes in equal shares to the children of the deceased spouse and to their descendants by right of representation, and if none, then one-half of such community property goes to the parents of the decedent in equal shares or if either is dead to the survivor, or if both are dead in equal shares to the brothers and sisters of the decedent and to their descendants by right of representation, and the other half goes to the parents of the deceased spouse in equal shares, or if either is dead to the survivor, or if both are dead in equal shares to the brothers and sisters of such deceased spouse and to their descendants by right of representation. ’ ’
“Section 229. No issue: Separate property of deceased spouse. If the decedent leaves no issue, and the estate or any portion thereof was separate property of a previously deceased spouse, and came to the decedent from such spouse by gift, descent, devise or bequest, such property goes in equal shares to the children of the deceased spouse and to their descendants by right of representation, and if none, then to the parents of the deceased spouse in equal shares, or if either is dead to the survivor, or if both are dead in equal shares to the brothers and sisters of the deceased spouse and to their descendants by right of representation.”

It is apparent from the history of these code provisions and the various changes therein that ever since the amendment in 1905, wherein the origin or source of the property was first set up as one of the determining factors in the descent and distribution of the estate of a decedent dying intestate without issue, that there has been a consistent attempt to work out a reasonable, consistent scheme of distribution wherein upon the death of a decedent intestate without issue, instead of the whole property going to the relatives of the last surviving spouse, the property should go back to the relatives of the spouse from which title was derived. The scheme in general, as was fair and reasonable, provided that the separate property of a predeceased spouse should go back in its entirety to the relatives of said predeceased spouse, and that the community property of the spouses should be shared equally by the relatives of the predeceased spouse and the relatives of the surviving spouse since both spouses are deemed to have contributed equally to its acquisition. (Estate of Brady, 171 Cal. 1 [151 Pac. 275] ; Estate of McArthur, supra; Estate of Putnam, 219 Cal. 608 [28 Pac. (2d) 27].) It will be noted that the provisions relative to the separate property of the predeceased spouse and relative to the community property of the spouses were contained in one subdivision of one section of the code (subd. 8 of sec. 1386, Civ. Code) and were intended to furnish one general plan of distribution based upon the same underlying fundamental principle, that the origin or source of the property should determine its distribution. As before noted, in Estate of Simonton, supra, the court in arriving at its conclusion with reference to the community property of the spouses based, in part, its reasoning upon the phraseology of the paragraph of the subdivision relating to the separate property of the predeceased spouse, saying, “There is a fair presumption that upon this point the provisions with regard to community and separate property were intended to be equivalent, for no reason for a difference exists ’ ’.

Logically, therefore, it seems that the only correct conclusion is that the two sections should be construed together. If they are construed together, a consistent scheme of distribution is provided. If they are construed separately an inconsistent scheme of distribution is provided for separate and community property which is not based upon reason or justice and has no relation to the obvious purpose which motivated the enactment of said provisions. If the sections are not construed together the result will be that the separate property of a predeceased spouse which has by inter vivos gift been converted into the separate property of the other spouse will go in its entirety to the relatives of the predeceased spouse, but the community property which has been converted by the predeceased spouse by inter vivos gift into the separate property of the other spouse will go wholly to the relatives of the decedent to the entire exclusion of the relatives of the predeceased spouse. In other words, the rational basis of the system of distribution is destroyed and a mere, arbitrary, inconsistent rule of succession substituted.

While the code commissioners disclaimed any purpose of making any substantial changes in the law as it existed prior to the proposed Probate Code, they did make a far-reaching change by the addition of the word, “gift” to section 229 “to make it logically complete”. It would seem self-contradictory to suppose that in adding the word, “gift” to section 229, which has application to separate property “to make the section logically complete” they intentionally planned to destroy the harmony and consistency of the rule of distribution which had theretofore applied alike to separate and community property. In view of the fact that the two sections had theretofore been construed as being mutually dependent on each other, it seems more reasonable to conclude that the code commissioners in proposing the enactment of the two sections of the Probate Code, and the legislature in enacting them, intended that these provisions should in the future, as they had in the past, be construed as interrelated and mutually dependent upon each other and furnishing by this means a consistent scheme of distribution of property falling within the purview of these provisions.

Appellants argue that more solicitude should be exercised in providing that separate property should go to the relatives of the predeceased spouse than should be exercised in providing that the relatives of the predeceased spouse should share in the community property of the spouses, but we are unable to perceive any logical basis of such distinction between the two classes of property with reference to the rights of succession under the circumstances which entitle the designated relatives in either event to inherit. And any argument based upon a claim that there is any real basis of distinction between the two classes of property must, we think, be held to be untenable.

It is true that in the case of Estate of Miller, 23 Cal. App. (2d) 16, 18 [71 Pac. (2d) 1117], in which a hearing was denied by this court, it was held that where the membership fees and dues in the Widows' and Orphans’ Aid Association had been paid for out of community funds of a husband and wife, and the constitution of the association provided that the widow should be paid the sum of $2,500 if no person had been designated by the insured as beneficiary, and no beneficiary had been so designated, proceeds of the policy were properly payable to the administrator of the wife’s estate (she having died within two weeks of his decease) upon the theory that the payment of the membership fees and dues was an inchoate gift by the husband of community property which became complete upon Ms death, and that section 228 of the Probate Code did not apply to this community property which the husband by gift had converted into his wife’s separate property. While it is true that this is a construction of section 228 of the Probate Code subsequent to its enactment in 1931, and the decision therein is necessarily predicated upon the conclusion that section 228 does not apply to community property of spouses which by inter vivos gift has become the separate property of the surviving spouse, it is apparent from the record in that case that the efforts of counsel for the heirs of the predeceased husband were directed primarily to convincing the court that the property had not become the separate property of the wife by gift, but had remained community property which came to her upon the death of her husband by virtue of its community character. However, upon more careful analysis of the two sections of the Probate Code, section 228 and section 229, we are convinced that the holding in that ease was in error. In Estate of Lissner, 27 Cal. App. (2d) 570 [81 Pac. (2d) 448], the court followed the ruling in Estate of Miller, supra, with reference to a part of the property in controversy which consisted of the proceeds of a life insurance policy in which the wife had been named as beneficiary. At the oral argument it was conceded by respondents that appellants were entitled to succeed to such proceeds in accordance with the holding in the Estate of Miller, supra, and the court so held. In the petition for a hearing to this court, this holding was not mentioned nor questioned. While it is to be regretted that a hearing was not granted by this court of the petition in Estate of Miller, supra, we do not believe that our failure to grant it, should preclude us from arriving at what we consider a correct conclusion when the matter is directly presented to us in the instant ease.

As we read section 228 of the Probate Code it provides that that portion of the estate of a decedent who dies intestate without issue, which has been the community property of said decedent and a predeceased spouse, which has come to said decedent by gift, devise, descent or bequest from such predeceased spouse, or belonged or went to the decedent by virtue of its community character on the death of such predeceased spouse, goes in equal shares to the relatives of the predeceased spouse and the relatives of the decedent designated in said section.

The order of the trial court being in conformance with said construction of section 228 of the Probate Code is affirmed.

Shenk, J., Waste, C. J., Houser, J., and Seawell, J., concurred.

EDMONDS, J., Dissenting.

I cannot agree with the construction placed upon section 228 of the Probate Code by the decision in this case. In my opinion, it is not in harmony with either the letter or the spirit of the law.

As early as 1880 the legislature of California provided that if a widow or widower died intestate leaving no kindred, any portion of his or her estate which was common property of such decedent and a deceased spouse, while such spouse was living, should go to the heirs of the predeceased spouse. (See. 1386, Civ. Code.) Undoubtedly, the legislative purpose of this enactment was to allow the relatives of the one whose death terminated the community to inherit the property accumulated by the spouses rather than to have it es-cheat to the state.

Not until 1903 was this court called upon to determine the meaning of the section. At that time, the appellants in Estate of McCauley, 138 Cal. 546 [71 Pac. 458], contended that if any of the decedent’s cash and real estate was common property at any time before the death of her spouse, it must be distributed as required by the statute. Under that construction community property which Mr. McCauley had given to his wife before his death would pass to his heirs. However, the court adopted “the more reasonable construction”, construing the words “while such spouse was living” to mean “that the common property referred to must be such as remains undisposed of by such spouse at his or her death. ’ ’ The statute cannot mean, said the court, that if that portion of an estate in controversy “happened to be at some time ' common property of such decedent and his or her deceased spouse’, but had, long before the death of such spouse been conveyed by him or her to decedent, that in case of decedent’s intestacy the property would go to the deceased spouse’s heirs”.

This decision definitely and positively established the rule that the statute as then in effect did not include community property which had been the subject of an inter vivos gift. Seventeen years later and after the legislature had amended the code section by adding a rule of succession for any portion of an estate which was separate property of a deceased spouse, while living, “and came to such decedent from such spouse by descent, devise or bequest”, the same question again came before the court and it followed the former case. In construing the provision defining the community property which could be succeeded to under the circumstances mentioned in the statute, it said: “Literally, this would include any property which had once been community property, no matter if it were not such at the time of the husband’s death, as, for example, when the husband had in his lifetime given it to his wife for her separate property. But such a meaning is clearly not what was intended, and it has already been held that it is not the true meaning.” (Estate of Simonton, 183 Cal. 53, 57 [190 Pac. 442].)

Here is a second positive and definite pronouncement of the court, based upon the reasoning of the former decision. But as another ground for its conclusions, the court considered provisions concerning separate property which were not a part of the statute when the McCauley case was decided. Because, said the court, the legislature provided that separate property which came to the decedent, the surviving spouse, by descent, devise or bequest shall go to the latter’s relatives, “there is a fair presumption that upon this point the provisions with regard to community and separate property were intended to be equivalent, for no reason for a difference exists”.

However, the statute concerning community property was enacted in 1880 and its meaning had been construed at a time when separate property was not included in it and there was, of course, no specification concerning the manner in which a surviving spouse succeeded to separate property. Therefore, the provisions of the statute concerning separate property, added many years after the decision which construed the original statute, could not properly have been referred to for the purpose of ascertaining the legislative intent in regard to community property. In Estate of McCauley, supra, where the statute first came before the court, its interpretation of the words “common property of such decedent, and his or her deceased spouse, while such spouse was living”, was reached upon a consideration of their meaning in the light of the purpose of the statute in which they were used and in consonance with fundamental principles of statutory construction.

The true situation then after the legislature added the provision concerning separate property, was as follows: By judicial construction of the code section, the community property which passed under its provisions was that which was such at the time of the death of the predeceased spouse and did not include any which had been the subject of an inter vivos gift; by its express terms the separate property was that which had come to the decedent by “descent, devise or bequest”.

In 1931, when the Probate Code was adopted, that part of section 1386 of the Civil Code relating to community property became section 228 of the new code; the portion concerning separate property was enacted as the following section. In rewriting the former statute, in addition to some slight textual changes the word “gift” was added to section 229 so that the separate property which may be claimed under it by succession now includes that which came to the decedent by “gift, descent, devise or bequest”. But substantially the same words construed in Estate of McCauley, supra, and Estate of Simonton, supra, have been continued through all the revisions of the section, and in considering the application of section 228 of the Probate Code, the same statute which is now in question, to community property taken in the name of a husband and wife as joint tenants, this court again followed the rule of the earlier decisions. (In re Kessler, 217 Cal. 32 [17 Pac. (2d) 117].) It held that under the joint tenancy the interest of each spouse was separate property and that the wife succeeded to the husband’s separate interest by right of survivorship; hence “upon her death her heirs alone were entitled to share therein”.

In three cases then, dating from 1903, the statute in its different forms has been considered by the Supreme Court and the same construction placed upon it by each decision. Also, they have recently been followed by the District Court of Appeal in Estate of Miller, 23 Cal. App. (2d) 16 [71 Pac. (2d) 1117], wherein it was held that “section 228 of the Probate Code is not applicable to community property which the husband, by gift, has converted into his wife’s separate property”.

The present decision holds that because the legislature wrote the word “gift” into the statute concerning separate property, this court must write the same word into the law relating to community property. In my judgment this violates all rules of statutory construction and is entirely illogical.

At the time the Probate Code was adopted, the rule stated in the McCauley ease had stood for 28 years as the law of California. There are many reasons why community property which has been the subject of an inter vivos gift should not be included among that which passes under the statute of succession; those reasons do not apply to separate property. This was alluded to in Estate of Simonton, supra, where the court said that to construe the statute concerning community property as including a gift of it would “place the relatives of a predeceased spouse in a more favorable position with regard to community property than with regard to such spouse’s separate property, when, if any distinction were to be made, it would naturally be just the contrary”.

The legislation here considered represents the old common law rule as to the descent of ancestral property, which allowed only those of the blood of the first purchaser by whom the land was brought into the family to inherit it. However, at common law and in states which have recognized the doctrine of ancestral estates, a sale or exchange of land extinguishes its ancestral character. Also, the doctrine has not generally been applied to personal property.

To construe section 228 of the Probate Code as including property which has been the subject of an inter vivos gift is directly contrary to the principles upon which the doctrine of community property rests. Since 1927, the law has expressly provided that “the respective interests of the husband and wife in community property during continuance of the marriage relations are present, existing and equal”. (Sec. 161a, Civ. Code.) Community property is that which has been acquired after marriage by either husband or wife or both, except that acquired by gift, bequest, devise, or descent, and is frequently the result of the labors of each. Therefore, in consonance with principles of natural justice, not only is the wife’s interest in the community property recognized as being “present, existing and equal”, but since the early years of the state either husband or wife could make a gift of his or her interest in it to the other, and thereafter it was the separate property of the donee. In other words, a husband in recognition of the efforts of his wife in accumulating their community property, or for any other reason, may make a valid gift of it to. her and from the date of that gift it becomes her separate property. Yet by the present decision, the same property, upon her death, must be considered to be community property.

There is still another reason why, in my opinion, the construction stated by the present decision is incorrect. Although the code commission in its report to the Governor and the legislature submitting the proposed Probate Code called attention to material changes in the law of succession which would follow its enactment, there is no suggestion that it would result in a different construction of the language relating to community property from that laid down in Estate of McCauley, supra. It, therefore, seems reasonable that neither the commission nor the legislature intended to include in the term community property as used in section 228, any which had become the separate property of one of the spouses by gift during the marriage relation.

For these reasons I believe that the decree of distribution should be reversed.

Rehearing denied. Edmonds, J., voted for a rehearing.


source: Caselaw Access Project

license: Public Domain

text:
    [S. F. No. 16001.
    In Bank.
    June 27, 1939.]
    In the Matter of the Estate of CORA C. SLACK, Deceased. JOSEPHINE A. SPARKS et al., Appellants, v. JENNIE B. RENWICK et al., Respondents.

      Charles C. Boynton for Appellants.
    W. A. Bradenburger and Wm. A. White for Respondents.
   CURTIS, J.

This is an appeal from a decree determining heirship in a contest between the relatives of the decedent wife and the relatives of the predeceased" husband. Decedent, Cora C. Slack, died on March 1, 1934, intestate, and without issue, and leaving neither father nor mother surviving. The predeceased husband, Charles A. Slack, had died on November 27, 1931, intestate, and without issue, and leaving neither father nor mother surviving. Appellants are the two sisters, seven nieces and two grandnieces of the decedent wife. Respondents are the two nieces and one nephew of the predeceased husband.

The proceedings were instituted by the relatives of the decedent wife by the filing of a petition to determine heirship. The petitioners claimed in said petition to be entitled as heirs of the decedent to have the whole of the estate of the decedent distributed to them by reason of the fact that at the time of the death of the predeceased spouse all of the property which had been acquired by the spouses out of community funds had, prior to the death of the husband, been transmuted into the separate property of the wife. Respondents, answering said petition, claimed that they were entitled, under section 229 of the Probate Code to have distributed to them that portion of the estate of the decedent which had been the separate property of the predeceased husband and had come to decedent from him by gift, descent, devise and bequest, and that they were entitled under the provisions of section 228 of the Probate Code, to share equally with the relatives of decedent in the distribution of the estate of decedent which had been the community property of the decedent and her predeceased husband. The property in the estate of decedent consisted of an apartment house on Baker Street in San Francisco, appraised at $5,750, and a small amount of personal property, including a small amount of cash.

The finding of the trial court was: “That decedent and her predeceased husband were married June 27th, 1894; that neither of them brought any separate property into the community; that the property and estate accumulated by said spouses during their lifetime was the community property of said spouses and now constitutes the estate of Cora C. Slack, the decedent; that said estate consists of the personal property now in the hands of the administratrix herein and that certain real property consisting of a certain apartment house and furnishings located at 1598 Hayes Street in the City and County of San Francisco. ’ ’ The court likewise found that the “entire residue of the estate of said decedent consisting of the aforesaid real and personal property descends as follows: “An undivided one-half thereof to the heirs of Cora C. Slack, the decedent, and an undivided one-half thereof to the heirs of Charles A. Slack, predeceased husband of said decedent. ’ ’

The main controversy between the two groups of contestants revolved around the question as to who was entitled to inherit the apartment house. We are satisfied, as to that portion of the decree determining that each group was entitled to inherit equally, that the trial court reached the correct conclusion, and that the decree in so far as it affects the apartment house must be affirmed.

The evidence adduced at the hearing amply supported the finding of the trial court that neither of the spouses brought any separate property into the community and that the property and estate accumulated by said spouses during their lifetime were community property. At the time of the marriage of the spouses in 1894, the decedent was a dressmaker and her husband was clerking in a grocery store at the corner of Post and Mason Streets in San Francisco. Respondents offered the testimony of a niece of Mr. Slack’s to prove that prior to the marriage, Mr. Slack had received money from his mother with which to set up a grocery store of his own, and it was this witness’s recollection that at the time of his marriage he was already established as proprietor in his own grocery store. However, this witness’s memory for dates was very hazy and several witnesses who had been close friends of Mr. and Mrs. Slack both prior to their marriage and for many years thereafter, testified that it was two or three years subsequent to his marriage that Mr. Slack went into the grocery business for himself and that because of his honesty and reliability he was able to obtain credit from the wholesalers for his goods and thus enabled to establish his business “on a shoestring”. The testimony of each of these witnesses corroborated the testimony of other witnesses to the same effect, and produced conviction that the property acquired by the spouses had been accumulated by their joint efforts during their married life.

It is to be noted that the finding of the trial court is simply to the effect “that the property and estates of the spouses accumulated during their lifetime was the community property of the spouses and now constitutes the estate of Cora C. Slack, the decedent”. There is no specific finding as to how the property, or any part thereof, came into the sole and separate ownership of Cora C. Slack, whether it was by gift, devise, descent, or bequest, by right of survivorship, or whether by virtue of its community character a part belonged to her and a part came to her as her separate property upon her husband’s death.

With reference to the apartment house property, appellants introduced a title insurance report in evidence showing the following chain of title: (1) Deed from Ethel R. McCormick to Chas. A. and Cora C. Slack, recorded June 20, 1917. (2) Deed from Charles A. Slack and Cora C. Slack, to Title Insurance and Guaranty Company, recorded November 22, 1917. (3) Deed from Title Insurance and Guaranty Company to Chas. A. and Cora C. Slack, recorded December 5, 1917. (4) Gift deed from Charles A. Slack to Cora C. Slack, recorded November 27, 1931. The original deed from Ethel R. McCormick to Chas. A. and Cora C. Slack, the deed from the Title Insurance and Guaranty Company, and the gift deed from Charles A. Slack to Cora C. Slack were also introduced in evidence. The date of the execution of the gift deed from Charles A. Slack to Cora C. Slack was March 14, 1923. With reference to the deed of gift from Charles A. Slack to his wife, Mr. Sparks, the brother-in-law of Cora C. Slack, testified that on November 27, 1931, the day following the death of Charles A. Slack, Mrs. Slack had handed him the deed and asked him to have it recorded, stating to him that on the day after she and her husband had returned from a trip to Oroville in June of that year, where they had gone to purchase a burial lot, her husband had handed her the deed, saying to her, “If anything happens to me, you record it—have it recorded.” It is true that the niece of Mr. Slack testified that her aunt, Mrs. Slack, had told her that she and Mr. Slack had executed mutual deeds to each other so that the one who survived would obtain the property without probate and if this was a fact, the deeds whereby each conveyed his or her interest to the other would not affect the title to the property, but this testimony standing alone, is not sufficient to overcome the presumption of valid delivery which arises from the possession of a deed by a grantee. Not only is there in the record the testimony of the positive statement of Mrs. Slack that Mr. Slack handed her the deed, but the circumstances surrounding the trip to Oroville which was to purchase a burial lot by reason of the fact that Mr. Slack had been suffering from heart attacks of increasing severity, strongly supports the truth of Mrs. Slack’s statement. No deed from Mrs. Slack to Mr. Slack was found or produced to substantiate the theory of mutual deeds. And it may well .be that if the spouses had in fact executed mutual deeds in the mistaken belief that they could thereby avoid probate, due to the poor health of Mr. Slack, the deed from the wife had been destroyed prior to the delivery to her of the deed from her husband. The circumstance of Mr. Slack’s ill health likewise disproves, we think, any claim that the delivery of the deed was only a qualified delivery by virtue of the fact that in handing the deed to her he said, “If anything happens to me, you record it—have it recorded. ’ ’

It is apparent, therefore, from the record, that the wife acquired as her separate property, the property which had previouslj been the community property of the spouses, by inter vivos gifts from her husband. She acquired an undivided one-half interest therein by virtue of the original deed from the third party to herself and husband. This is necessarily so by virtue of the form of the deed and the presumption arising from section 164 of the Civil Code at the time of the acquisition of the property. (Dunn v. Mullan, 211 Cal. 583 [296 Pac. 604, 77 A. L. R. 1015]; Estate of Regnart, 102 Cal. App. 643 [283 Pac. 860].) The taking of the property by the spouses by such deed which resulted in a conversion of one-half of the community property into the separate property of the wife constituted an inter vivos gift by the husband of community property. (Pabst v. Shearer, 172 Cal. 239 [156 Pac. 466]; Estate of Regnart, supra.) The deed from the spouses to the Title Insurance and Guaranty Company had no effect on the title since the property was re-deeded almost immediately by the Title Insurance and Guaranty Company to the spouses. By the deed of gift from her husband executed on March 14, 1923, delivered on June 13, 1931, and recorded November 27, 1931, Cora C. Slack became the sole and separate owner of the remaining undivided one-half interest which had theretofore been held in the name of Charles C. Slack as the community property of the spouses. (Dunn v. Mullan, supra.)

Section 228 of the Probate Code provides that, “If the decedent leave no issue, and the estate or any portion thereof was community property of the decedent and a previously deceased spouse, such property goes in equal shares to the children of the deceased spouse, and to their descendants by right of representation, and if none, then one-half of such community property goes to the parents of the decedent in equal shares, or if either is dead to the survivor, or if both are dead in equal shares to the brothers and sisters of the decedent and to their descendants by right of representation, and the other half goes to the parents of the deceased spouse in equal shares, or if either is dead to the survivor, or if both are dead in equal shares to the brothers and sisters of such deceased spouse and to their descendants by right of representation. ” This section has been recently construed to apply to community property which had come to the surviving spouse by inter vivos gift from the predeceased spouse. (Estate of Rattray, L. A. No. 16529 (ante, p. 702 [91 Pac. (2d) 1042]), this day decided.) This being so, the decree of the trial court finding that the two groups of heirs should share equally in the real property is correct.

It may be remarked that even if it be conceded that the deed of gift from Charles A. Slack to his wife was one of two mutual deeds and therefore ineffective to pass title to his wife, under the provisions of the above code section, the respondents would be entitled to share equally with the appellants, for in that event, the one-half interest in the community property which existed at the time of the death of Charles A. Slack, belonged to and went to his wife by virtue of its community character upon his death, and its distribution is controlled by the aforesaid provisions of section 228 of the Probate Code. (Estate of Simonton, 183 Cal. 53 [190 Pac. 442].)

The apartment house and furnishings constitute the entire estate left by the decedent except the sum of $1165.98 in money. This sum of money, it is conceded by respondents was the separate property of the decedent and under section 225 of the Probate Code, the appellants were entitled to have distributed to them the whole amount instead of one-half thereof, as provided by the decree appealed from.

The decree of the trial court in so far as it applies to the real property, and to any personal property, except said sum of $1165.98, is affirmed.

As to said sum of $1165.98, said decree is reversed with directions to the trial court to modify its decree and to distribute to appellants the whole of said sum of $1165.98, after deducting from said sum that portion of the expenses of administration, including funeral expenses, expenses of last sickness, and the amount expended in payment of claims against said estate, which said sum of $1165.98 bears to the total appraised value of said estate.

Costs to be borne by each party.

Shenk, J., Waste, C. J., Houser, J., and Seawell, J., concurred.

EDMONDS, J., Dissenting.

I concur in the conclusion reached by my associates that Cora C. Slack acquired by inter vivos gift from her husband and as her separate property the real estate which had theretofore been their community property, but I disagree with the construction placed upon section 228 of the Probate Code for the reasons stated by me in Estate of Rattray (ante, pp. 702, 717 [91 Pac. (2d) 1042]). I believe, therefore, that the decree appealed from should be reversed in part and that the probate court should be directed to distribute the community property which had become Mrs. Slack’s separate property by inter vivos gift, in accordance with the provisions of section 225 of the Probate Code.

Rehearing denied. Edmonds, J., voted for a rehearing.


author: SHENK, J. EDMONDS, J., Concurring.

text:
    [L. A. No. 16757.
    In Bank.
    June 28, 1939.]
    THE PEOPLE, Appellant, v. PAUL MAHONEY, Respondent.

      Maurice J. Hindin for Respondent.
    Wyckoff, Gardner & Parker and Hubert Wyckoff, Jr., as Amici Curiae, on Behalf of Respondent.
   SHENK, J.

This in an appeal by the plaintiff from a judgment on a directed verdict in favor of the defendant in an action to recover alleged delinquent sales taxes.

The complaint alleged that the defendant was a retailer selling tangible personal property, and as such was liable to the State of California for certain sales taxes, penalties, and interest on account of business done from April 1, 1934, to June 30, 1937, pursuant to the provisions of the Retail Sales Tax Act (Stats. 1933, p. 2599, as amended, Stats. 1935, pp. 1225 and 1252, and Stats. 1.937, pp. 1326 and 2222). The defendant answered, denying that he was indebted to the state for sales taxes in any amount whatsoever. At the conclusion of the plaintiff’s case a motion for a nonsuit was denied. When the evidence was all in the court granted the defendant’s motion for a directed verdict. In addition to the appeal from the judgment an appeal from an order denying the plaintiff’s motion for a new trial was noticed. The latter appeal is dismissed for the reason that the order is not appealable. (Code Civ. Proc., sec. 963; Perumean v. Wells, 8 Cal. (2d) 578 [67 Pac. (2d) 96].)

In the proceeding against the defendant the board purported to act on information in its possession that the defendant had made incomplete and insufficient returns on the business conducted by him and that he should be required to pay an additional tax on his retail sales. In this respect the board acted under the authority granted by section 17 of the act which provides in part as follows:

“For the purpose of the proper administration of this act to prevent evasion of the tax hereby imposed, it shall be presumed that all gross receipts are subject to the tax hereby imposed until the contrary is established. If the board is not satisfied with the return and payment of the tax made by any retailer, it is hereby authorized and empowered to make an additional assessment of tax due from such retailer based upon the facts contained in the return or upon any information within its possession or that may come into its possession. ’ ’

In support of its case the plaintiff offered in evidence the defendant’s “Application for Permit to Engage in Business as a Betailer”, dated September 28, 1934, and to conduct a cafe at 2811 Ocean Park Boulevard, Santa Monica, and an application dated April 27, 1937, to conduct a similar business at 2921 Ocean Park Boulevard. There was also received in evidence on behalf of the plaintiff a duly certified Certificate of Sales Tax Delinquency, dated February 8, 1933, showing that the State Board of Equalization had made the assessment of the sales taxes against the defendant to enforce the collection of which this action was brought.

The record does not disclose the grounds on which the trial court directed the verdict. The main argument of both parties is addressed to the question of the sufficiency of the certificate of delinquency, issued pursuant to section 30 of the act, to establish a prima facie case for the state, and that question is therefore the principal question on this appeal. Section 30 provides, in part, that the board may bring an action in the name of the people to collect the “amount delinquent together with penalties”, and that “in such action a certificate by the board showing the delinquency shall be prima facie evidence of the levy of the tax, of the delinquency and of compliance by the board with all provisions of this act in relation to the computation and levy of the tax”.

The defendant does not question the effect of the foregoing language as establishing prima facie the facts which it purports to establish, but contends that the certificate of delinquency under that section does not establish a prima facie case as distinguished from prima facie evidence of such facts. It is also pointed out that in addition to the introduction of the certificate of delinquency the plaintiff introduced documentary evidence of certain returns submitted by the defendant to the board of retail sales during some of the time in question and of payment of the sales tax in accordance with those returns. It is then argued that in order to prove its case it was necessary for the plaintiff to prove that the defendant transacted more business than his returns showed and that the certificate of delinquency could not serve to establish prima facie that such additional business was done.

Section 1833 of the Code of Civil Procedure provides: “Prima facie evidence is that which suffices for the proof of a particular fact, until contradicted and overcome by other evidence ... ”, and section 1824 of the same code provides: “Proof is the effect of evidence, the establishment of a fact by evidence”. (See Moore v. Hopkins, 83 Cal. 270 [23 Pac. 318, 17 Am. St. Rep. 247].) Proof is something more than evidence. When, therefore, the certificate of delinquency is made pmma facie evidence of the facts it purports to establish under section 30 of the act, it is proof of those facts and as such is sufficient to prove the case for the plaintiff “until contradicted and overcome by other evidence”.

Without the benefit of section 30 of the act it is assumed that in order to make out a case against a delinquent taxpayer under this statute it would be necessary for the state to prove that the tax had been levied in accordance with the statute; that the defendant had been engaged in a business which would subject him to the tax; that the transactions on account of which the tax was assessed had taken place, and that the tax had not been paid. With these matters established the defendant would have to “assume the burden of proving any illegality, defect, or ground of non-liability on which he relies to defeat the action. ...” (61 Cor. Jur., secs. 1401, 1403, pp. 1063, 1065.)

With the aid of section 30 we are satisfied that the certificate of delinquency established, prima facie, the essential proof of the plaintiff's case. That certificate recited that the board had made the assessment under this statute; that it had been made against the defendant by name, giving his address and place of business, and stating period for which the assessment was made, the amounts with penalties and interest, and that the defendant had become indebted in the amounts named, no part of which had been paid. This certificate showed the delinquency of the defendant and the statute by its terms then made the certificate prima facie evidence of such delinquency, of the levy of the tax and of compliance by the board with all provisions of the act in relation to the computation and levy of the tax.

It is true that the statute does not provide specifically that the certificate of delinquency shall constitute prima facie evidence of the plaintiff’s case; but it is not essential that those particular words be used so long as words of similar import and equal significance be employed. Section 30 of the act, supplemented by the code sections above cited, was sufficient to constitute the certificate prima facie proof of the plaintiff’s cause of action and as such sufficient to put the defendant on his proof, if any he had, of any invalidity, irregularity or ineffectiveness of the tax.

The terms of section 30 of the act are as broad and inclusive as those of other statutes having similar provisions and upheld as sufficient to put the defendant to his proof. The numerous statutes to the same effect are not cast in the same mould. The general purpose of all of them, however, is to place the burden on the party attacking the validity of the tax to prove the ineffectiveness of the same, and any statutory provision designed fairly to accomplish that result is sufficient.

Section 49 of the “California Irrigation District Act” (Stats. 1897, p. 254; Deering’s Gen. Laws, 1937, Act 3854, p. 1792, at p. 1835), as originally adopted and as still in effect, provides that the assessment-book or delinquent list, certified by the collector, “showing unpaid assessments against any person, or property, is prima facie evidence of the assessment, the property assessed, the delinquency, the amount of assessments due and unpaid, and that all the forms of the law in relation to the assessment and levy of such assessments have been complied with”. There is nothing in this section which in terms makes the assessment-book or delinquent list so certified a prima facie showing of the plaintiff’s case, as distinguished from prima facie proof of facts sufficient to establish the plaintiff’s case. This court said in Miller & Lux, Inc., v. Secara, 193 Cal. 755, at page 771 [227 Pac. 171], with reference to the effect of the introduction of an irrigation district assessment-book in evidence on behalf of the defendants: “By so doing the defendants established a prima facie case of the validity of the assessment and of the fact that all forms of law in relation to the assessment and levy had been complied with. This showing would not only justify but would compel a finding to this effect unless it was both contradicted and overcome by other evidence in the case”.

The laws of this state providing that a delinquent list shall be sufficient to establish a prima facie case in an action to enforce the collection of a tax are of early origin. In 1860 the legislature passed an act providing that in an action to collect an ad valorem tax the delinquent list, duly certified, should be evidence “to prove the delinquency, property assessed, the amount of taxes due and unpaid, and that all the forms of law in relation to the levy and assessment of such taxes have been complied with.” (Stats. 1860, pp. 139, 140.) This provision was under attack in the case of People v. Seymour, 16 Cal. 332 [76 Am. Dec. 521]. It was held that the terms of the act providing for prima facie proof of liability in an action to collect the tax merely affected the remedy, and was not open to any constitutional objection—in effect leaving the defense to show that the defendant was not liable. “Such seems to be the evident design of the act”, said the court.

The statute of 1860 was re-enacted in almost identical language in 1872 and incorporated in the Political Code as section 3789. (Amendments to the Codes, 1873, 1874, pp. 149, 150; approved March 24, 1874.) On the 28th day of the same month an act was approved providing for the levy of a tax for state purposes, in the enforcement of which it was provided that the delinquent list, duly certified, “shall be prima facie evidence of the validity of the assessment, that the amount therein stated is due, and of every fact necessary to maintain the action.” (Stats. 1873, 1874, p. 748, sec. 15.) The early statutes, with their varying phraseologies, were upheld and applied by this court in numerous cases. (People v. Donnelly, 58 Cal. 144; San Francisco v. Phelan, 61 Cal. 617; Lake County v. Sulphur Bank Q. M. Co., 66 Cal. 17 [4 Pac. 876]; Modoc County v. Churchill, 75 Cal. 172 [16 Pac. 771]; San Gabriel V. L. & W. Co. v. Witmer Brothers Co., 96 Cal. 623 [29 Pac. 500, 31 Pac. 588, 18 L. R. A. 465].)

Uniformity in language appears in numerous later statutes providing that a certified assessment-book or delinquent list shall constitute prima facie evidence. Except for the name of the appropriate board or officer whose duty it is to administer the same, the following statutes contain language identical with the language of section 30 of the act here in question: The Bank and Corporation Franchise Tax Act of 1929 (Stats. 1929, p. 19, sec. 31, as amended, Stats. 1937, p. 2346) ; the Personal Income Tax Act of 1935 (Stats. 1935, p. 1090, sec. 28); the Use Tax Act of 1935 (Stats. 1935, p. 1297, as amended Stats. 1937, p. 1935 at p. 1944); the Private Car Tax Act of 1937 (Stats. 1937, p. 621 at p. 624); the Corporation Income Tax Act of 1937 (Stats. 1937, p. 2184 at p. 2199). A variation in language but with no change in legal effect is found in the Motor Vehicle Fuel License Tax Act of 1923 (Stats. 1923, p. 571, as amended Stats. 1931, p. 105 at p. 111), and the Highway Carrier’s Licensing Law of 1933 (Stats. 1933, p. 928, as amended Stats. 1937, p. 1919 at p. 1930).

Similar provisions of other taxing statutes might be referred to but sufficient examination has been made to indicate beyond question that it has been the intention of the legislature from the early history of the state to make the copy of the assessment-book or delinquent list, duly certified, prima facie evidence of the right to enforce payment of the tax or assessment involved, and that when such showing has been made the burden is placed on the defendant to show the extent of any claimed non-liability. There is no reason to accord the language of section 30 of the act here under consideration any significance other than that given the earlier statutes enacted for the same purpose. In fact the term “levy” as used in this statute may well be given a definition in accord with the comprehensive meaning ascribed to it in numerous authorities cited in support of the text in 61 Corpus Juris, at page 551, where it is said that in its proper sense “it is the formal and official action of a legislative body invested with the power of taxation—whether national, state or local—whereby it determines and declares that a tax of a certain amount, or of a certain percentage or value, shall be imposed on persons and property subject thereto”. In Moore v. Foote, 32 Miss. 469, 479, it was said: “The term 'levy’ imports . . . the performance of such acts as would authorize the tax collector to proceed to collect the taxes.” When the statute makes the certificate of delinquency prima facie evidence of the “levy” as so defined, and also like evidence of compliance by the board with all provisions of the act in relation to the levy and of the delinquency in payment, no more would seem to be required to establish a prima facie case.

The defendant advances the argument that since the plaintiff introduced evidence to the effect that the defendant had paid some sales taxes during the period in question, it was incumbent on the state also to prove that the defendant had not paid all the taxes for that period which were properly chargeable against him. The argument seems to be that, assuming the prima facie showing of the certificate of delinquency, the plaintiff has destroyed its prima facie showing by the additional evidence it produced. The contention cannot be sustained for we are at once confronted with the rule in this state with reference to what evidence may be considered on a motion for a directed verdict. This rule has been repeated so often that a restatement would seem to be unnecessary. A recent ease in which it was reiterated is Engstrom v. Auburn Auto Sale Corp., 11 Cal. (2d) 64 [77 Pac. (2d) 1059]. Under the rule the evidence conflicting with evidence favorable to the plaintiff must be disregarded. If there remains no evidence of sufficient substantiality to support a verdict the motion may be granted, otherwise not.

The additional evidence produced by the plaintiff consisted first of the testimony of the defendant called under section 2055 of the Code of Civil Procedure. This evidence was not binding on the plaintiff. But on the motion for a directed verdict it would weigh for the plaintiff in so far as it was favorable. In so far as it was unfavorable it would be disregarded. (Smellie v. Southern Pac. Co., 212 Cal. 540 [299 Pac. 529] ; Dempsey v. Star House Movers, Inc., 2 Cal. App. (2d) 720 [38 Pac. (2d) 825].) The testimony of the defendant showed that he was engaged in the retail business of selling refreshments, confections, tobaccos, etc., across the street from the plant of the Douglas Aircraft Company in Santa Monica; that the business was run in three units in each of which were one or more cash registers; that those units were run as retail establishments under the name of the defendant and during the period in question with no retail sales permit applicable thereto other than the one issued to the defendant; that the defendant made certain returns to the board and paid the tax in accordance therewith, but that he did not make a return for all of the units nor pay a tax for the operation of all of them. The defendant endeavored to show that he leased certain units on agreements to share the profits, that he was not liable on account of transactions in those uits, and that he had paid all the taxes he was legally bound to pay.

Other evidence on behalf of the plaintiff was to the effect that an auditor of the board had made an extended investigation of the business of the defendant and had submitted his report to the board, including a report based on information obtained from those who were making the sales at defendant’s place of business, and from those who had sold merchandise to the defendant for resale at said place of business, all of which tended to prove that the defendant had not made a true and correct return of his transactions to the board.

There was nothing in the evidence produced by the plaintiff which as a matter of law would overthrow the prima facie case made by the certificate of delinquency. Whatever evidence was produced by the defendant contrary to the prima facie case established by the certificate of delinquency, including any such evidence produced by him when called as a witness under said section 2055, merely created a conflict to be resolved by the jury under appropriate instructions from the court.

The judgment is reversed.

Seawell, J., Langdon, J., Curtis, J., and Spence, J., pro tem., concurred.

Houser, J., dissented.

EDMONDS, J., Concurring.

I concur in the order of reversal, but as I read the record it is unnecessary to consider whether a certificate of delinquency under the Retail Sales Tax Act is prima facie evidence of all of the facts necessary to support a judgment for taxes, and the court may not properly decide that question in the present case.

The evidence before the court at the time the defendant’s motion for a directed verdict was granted shows that in 1934 he applied for a permit to operate a cafe. He admitted that he conducted this business for some months after that date. He then bought a near-by lot, which is located across the street from a large industrial plant, and eventually erected three booths or stands upon this property. The defendant admits that for some of the time in controversy he conducted a retail business in one of these units. According to his testimony he sold cigars, tobacco, ice cream, soft drinks and newspapers. In another unit sandwiches and coffee were sold. Apparently the third unit was built much later than the other two and there is scant evidence concerning its use.

The state claimed taxes upon the sales made in the three units for the period from April 1, 1934, to June 30, 1937. In defending this claim Mr. Mahoney contended that he had operated one of the units for a portion of the time and that he had reported and had paid all amounts due it upon the sales made by him. At all other times during the taxable period in controversy, he testified, each of two units had been rented by him upon an agreement that he should be paid a share of the net profits, and, consequently his lessees were solely responsible for taxes due the state upon the sales made by them. However, the application of one of these persons for a permit to conduct a retail business as the successor of the defendant was denied.

Also, in contradiction of the defendant’s contentions, the persons to whom he leased the premises and girls who worked in one or the other of the units at different times testified to facts from which the jury might reasonably have inferred that Mr. Mahoney, as alleged by the state, was conducting all of the business being transacted on the lot owned by him. Moreover, all of the units were under one roof and from the description of them by the witnesses, it is difficult to believe that they were more than departments of one business.

Under these circumstances there was sufficient evidence aside from the certificate of delinquency relied upon by the state, to support a judgment against the defendant upon the ground that he was conducting all of the business done in the three units. Much of this evidence was offered by the state, apparently for the purpose of proving the defendant’s ownership of a business in which taxable sales were made. The right of the state to rely entirely upon the certificate to prove the existence of taxable transactions is, therefore, not a question properly before the court upon the record in the present case. However, not only is the judgment reversed upon that ground, but a construction is placed upon the statutory provision with which I cannot agree.

Proceedings under tax statutes are in invitum and the statute will be strictly construed in favor of the taxpayer and against the state. (Barker Bros. v. Los A.ngeles, 10 Cal. (2d) 603, 608 [76 Pac. (2d) 97]; Uhl v. Badaracco, 199 Cal. 270 [248 Pac. 917]; United States v. Merriam, 263 U. S. 179 [44 Sup. Ct. 69, 68 L. Ed. 240, 29 A. L. R 1547] ; Gould v. Gould, 245 U. S. 151 [38 Sup. Ct. 53, 62 L. Ed. 211].) In an action to collect taxes the plaintiff must establish every fact essential to his right of recovery. “Any attempt on the part of the state ... to take the property of an individual for public purposes by way of taxation must find an express statutory warrant, and all laws having this object are to be construed strictly in favor of the individual as against the state. Whether his property is to be taken by seizure or by suit the rule is the same. In the one ease the officer must show his warrant for the seizure, and in the other the plaintiff must establish every fact essential to the maintenance of his right of recovery. In either case the proceeding is in invitum and no presumption is to be indulged in favor of the right to take the property, or of any intention that is not distinctly expressed in the statute under which it is sought to be taken. ’ ’ (Merced County v. Helm, 102 Cal. 159, 165 [36 Pac. 399] ; see, also, Estate of Potter, 188 Cal. 55, 64 [204 Pac. 826].)

Under the statutory construction adopted by my associates, when the Board of Equalization issues a certificate of delinquency the state may sue thereon and rely entirely upon it to establish a cause of action. As against this certificate the defendant may show by the most conclusive evidence that he was not the owner of the business as claimed by the state and that he had no connection with it. Yet the trial judge or a jury may only consider this evidence as contradictory of the ex parte certificate of the administrative board and an appellate court would be required to uphold a judgment in favor of the state.

This is contrary to all fundamental principles. The existence of taxable property or taxable transactions is necessary to the validity of a levy and assessment (Brenner v. Los Angeles, 160 Cal. 72, 76 [116 Pac. 397]), and is a basic and fundamental fact which must be proved when put in issue in any action to collect a tax. This rule was applied in an earlier case where the effect of an assessment affirmed by the Board of Equalization was considered and the court said: “Even a body possessing powers so enormous and in certain instances final jurisdiction, may not validate an assessment upon nonexistent property”. (Kern River Co. v. County of Los Angeles, 164 Cal. 751, 755 [130 Pac. 714].)

Unquestionably the legislature has the power to make official tax records or certificates prima facie evidence of a taxing body’s right to recover amounts claimed to be delinquent. Such a provision affects only the remedy by shifting the burden of going forward with the evidence to the party who usually has a superior opportunity for knowledge of the facts. However, none of the decisions cited and relied upon in the opinion of my associates hold that evidence concerning the existence of transactions subject to a tax may be dispensed with. The validity of a statute allowing an assessment book or delinquent list, properly certified, showing amounts unpaid upon certain real property, to be offered as prima facie evidence of unpaid taxes, is determined by principles entirely different from those which apply to excise taxes. Moreover, all of the statutes which have been upheld by this court contain -language much more definite and comprehensive than that used in the Retail Sales Tax Act.