Ellis v. McDowell

SHENK, J.

This is an appeal from that portion of a decree of distribution in the matter of the estate of George B. Ellis, deceased, which orders one-fourth only of a cash item of $22,126.43 distributed to Pray Ellis, the surviving widow and appellant herein.

Prior to July 14, 1923, the decedent was a widower having adult children and minor grandchildren. On that day he married the appellant. On November 1, 1924, he died. He left a will whereby he bequeathed one-fourth of his estate to his widow and the remaining three-fourths to his children by the former marriage and to his grandchildren. The estate was originally inventoried at $137,245.74, and it is not questioned but that this estate was the separate property of the decedent. A controversy arose on petition for distribution as to the character of 210 shares of stock of Associated Telephone Company, subsequently inventoried, which on a sale by the executrices netted $22,126.44. It is con

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tended by the appellant that the proceeds of this sale are community property and should be distributed one-half to her as her share of the community and the other half in accordance with the provisions of the will, to wit, one-fourth to her and three-fourths to the children and grandchildren. The respondents claim that the stock was the separate property of the decedent. The circumstances surrounding the acquisition of the stock by the decedent were stipulated to be the following: “That in December, 1923, an arrangement was entered into between four parties, Mr. Fishburn, Mr. Heffley, Mr. Ellis and Mr. Judkins, whereby they had issued by the Associated Telephone Company 843 shares of its capital stock; that those shares of stock were issued in three certificates and were issued in the names of three banks, the First National Bank of Long Beach, the First National Bank of Los Angeles, and the Heilman Commercial Trust & Savings Bank of Los Angeles; that as a part of the same transaction and consummated at the same time these four men either executed as makers or as guarantors, three promissory notes to these banks; that the stock was pledged or held as security for these notes; that none of these men paid anything to the Associated Telephone Company for the stock except the money they received from the banks by signing their notes and putting this stock up as collateral; that that situation remained until the death of Mr. Ellis and that at no time from the date in December, 1923, until Mr. Ellis died, were any payments made on those notes except that the money which was derived from dividends paid on the stock was credited to the payment of the interest on the notes and in a very slight degree to reduce the principal. That these three notes were signed by Mr. Heffley and guaranteed by a separate instrument by the other three gentlemen named; that there was a verbal agreement between these four men to the end that they would use this stock to make some money out of.”