Estate of Lamb

Citations: 19 Cal. App. 3d 859; 97 Cal. Rptr. 46Docket: 28825

Court: California Court of Appeal; September 3, 1971; California; State Appellate Court

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The case involves the Estate of Ruby-Ethel Lamb, whose will, executed on March 7, 1967, left her estate primarily to her sister Alice Grace Lamb. After Alice's death, the estate was to be divided among the remaining siblings, with Mabel Lamb Paulsen as the sole surviving sibling. The will also included a residuary clause bequeathing the remainder of the estate to a charitable entity, The San Francisco Foundation of Otology, which was not established until April 29, 1969. The Foundation aims to support the training of young otologists and fund preliminary research projects. The testatrix had a significant personal history with the Foundation's president, Dr. Francis A. Sooy, who treated her severe hearing loss through innovative surgical procedures. Following her successful treatments, she expressed her gratitude and desire to support future efforts in otology. The court's decision centers on the validity of the bequest to a charity that did not exist at the time of the will's execution or the testatrix's death.

Dr. Sooy indicated that potential donors were hesitant to contribute to the university due to student unrest and suggested a foundation as an alternative recipient for funds related to otology. He learned about an existing foundation in Los Angeles and expressed interest in establishing a similar charitable foundation in San Francisco to support training and research in otology. In 1967, Miss Lamb received a slip of paper from Dr. Sooy's secretary naming "The San Francisco Foundation of Otology" and later communicated her willingness to contribute to Dr. Sooy's efforts.

The estate in question is valued at $158,672.10. Mabel Lamb Paulsen and her relatives claimed the residue as heirs, asserting that the bequest to the foundation failed, leaving Ruby-Ethel Lamb intestate regarding that portion of the estate. Conversely, The San Francisco Foundation of Otology and the Attorney General claimed the entire residue, arguing that the foundation was suitable to fulfill the testatrix's charitable intent. The trial judge ruled in favor of the foundation on two grounds: first, that no California law invalidates the bequest despite the lack of prior incorporation, and second, that the testatrix’s general charitable intention justified the distribution to the foundation.

However, it was concluded that the foundation could not receive the bequest based on the doctrine of cy pres since it was not a legal entity at the testatrix's death. California law specifies that only entities existing at the time of death can receive testamentary dispositions. Although a testator can direct a gift to be made to a corporation formed posthumously, such gifts require an equitable solution until the corporation is established.

A testamentary disposition to a non-existent entity, believed by the testator to be established by the time of their death, raises significant legal questions. In this case, the testatrix, Miss Lamb, assumed The San Francisco Foundation of Otology was a nonprofit corporation at the time of her will's creation. Currently, no California case has applied the cy pres doctrine to support a testamentary gift to a corporation that was not in existence at the testator's death. The Estate of Upham case illustrates that while some jurisdictions have allowed charitable bequests to non-established institutions, Upham's trust benefited an existing orphan’s home at the time of death, demonstrating a key distinction.

California courts favor charitable gifts, emphasizing their validity and liberal construction. While the cy pres doctrine typically requires a formal trust, it can also apply in cases without explicit trust language in the will, as all charitable gifts are presumed to be for trust purposes. The legal principle articulated in the Restatement Second Trusts states that if a charitable entity does not exist, the gift does not fail if the testator intended to support charitable purposes rather than a specific organization. Two conditions must be met for cy pres application: the gift must be genuinely charitable and the donor's primary intent must be to fulfill a charitable purpose, with the specific recipient being secondary. The appellants argue that it is impossible to determine the decedent's intent regarding the foundation since its purposes had never been discussed with her.

Miss Lamb expressed a desire to establish a charitable foundation aimed at aiding individuals suffering from otological afflictions, reflecting her personal experience and appreciation for the field. Her understanding of "otology" indicates her literacy and refinement, supporting the first requirement for applying cy pres. The second condition examines whether her intent was to benefit a specific institution or simply to ensure the charitable work occurred, regardless of the institution's capability. The conclusion is that her dominant purpose was the latter, evidenced by her lack of knowledge about the foundation's organization and her reliance on Dr. Sooy, suggesting she expected an organization to fulfill her wishes. The absence of a specified alternate beneficiary further supports her strong intent for charitable use. Though she left her estate primarily to her sister, she accounted for contingencies, which demonstrates her commitment to ensuring her charitable intentions are realized. The presence of an in terrorem clause signifies her wish for the charitable disposition to be enforced.

The excerpt references legal principles regarding the application of the cy pres doctrine in trust and estate cases. It notes that a clause in the Lamb will was not invoked against Mrs. Paulsen at the respondent's discretion. The appellants argue, citing Estate of Black, that courts are hesitant to apply the cy pres doctrine when a gift fails from the outset. However, both the Estate of Black and Estate of Zilke involved ambiguity regarding the intended recipient, making it difficult to ascertain the testator's intent based solely on the will. In contrast, the current case presented sufficient extrinsic evidence to clarify the testatrix's intent. The judgment was affirmed with concurrence from Justices Rattigan and Christian.

Additionally, the document includes personal letters from Ruby-Ethel Lamb expressing gratitude to Dr. Sooy for his medical care, highlighting her profound appreciation for his skill and the positive impact it had on her life. The letters emphasize the significance of gratitude and the hope that her appreciation may be reciprocated in the future.