Wells Fargo Bank & Union Trust Co. v. Mills College

CASHIN, J.

An appeal from a portion of a final decree of distribution entered in the matter of the Estate of Isaac H. Morse, deceased. The appeal was taken by Wells Fargo Bank & Union Trust Company and Fremont Morse, executors of the last will and testament of the deceased; Wells Fargo Bank & Union Trust Company, trustee under the will, and Fremont Morse, individually as heir, legatee, and devisee of the deceased.

The last will of the deceased, which was executed on October 15, 1923, contained the following devise to respondent college: “If at the time of my death I am the owner of the real property situate at the northeast corner of Lombard and Montgomery streets, San Francisco, my said wife having predeceased me, I give, devise and bequeath the same unto the trustees of Mills College, now located in Oakland, California, and I request that said trustees shall hold such real property until the amount which can be realized from the sale thereof, plus the net income therefrom, shall equal the sum of one hundred and fifty thousand ($150,000.00) dollars, to be then used by said trustees for the erection of a Residence Hall at Mills College which shall accommodate one hundred women, to be known as ‘The Mary E. Morse Memorial,’ or for some other hall or building at Mills College in the discretion of said trustees, to be known as ‘The Mary E. Morse Memorial.’ ” At the time of the death of the deceased the property devised was subject to a mortgage in the sum of $20,000, held by the Hibernia Savings and Loan Society. The decree distributed the property to the college, and also provided that the latter should be paid out of the residue of the estate the sum of $20,000, together with interest thereon from and after April 14, 1927, with which to satisfy and discharge the mortgage. The decree further provided (this being the portion appealed from): “That the residue of said estate be and is hereby distributed to the said Wells Fargo Bank & Union Trust Company, trustee as aforesaid, subject to a lien in favor of Mills College in the sum of $20,000 with interest thereon at- the rate of six per cent per annum from and after the 14th day of April, 1927.”

[654]

It appears that the testator acquired the property on December 8,' 1919, from Albers Bros. Milling Company, a corporation, for $100,000, the sum of $60,000 being paid in cash and the balance secured by a mortgage thereon to the grantor in the sum of $40,000. Thereafter payments were made on the mortgage, $20,000 being paid in December, 1919, and $5,000 in August, 1920. On October 7, 1920, the present mortgage was executed by the testator and Mary E. Morse, his wife, who predeceased him, and from this sum the balance of the indebtedness to the milling company was paid and its mortgage satisfied. The appraised value of this property was $75,000, the total appraised value of the estate being $454,795.50. In addition to the devise to the college the will devised two lots in Monterey County to Annie H. Morgan if she should survive the testator, the will providing that she should take the same “free of incumbrances excepting only the equity of Mary L. Morgan in said property over and above the amount charged against the property on my books at the time of my death. ’ ’ The will also contained several specific bequests aggregating the sum of $92,000. The residue of the estate, consisting of real and personal property, was devised and bequeathed to appellant Wells Fargo Bank & Union Trust Company, in trust for the purpose of paying the net income therefrom during his lifetime to appellant Fremont Morse, a brother of the testator, it being also provided that upon his death the