Evans

The only question presented by this appeal is whether certain capital gain distributions from regulated investment companies received from 1955 to 1967 (and, therefore, not governed by the 1967 amendments to Civil Code section 730.07) should be treated as principal or income of a trust.

The facts are not in dispute. The testator, Elvira Pernas, died in 1953, leaving a will that created a testamentary trust, naming as life beneficiary respondent, William A. Evans, and as remaindermen, three charitable organizations, including *276 appellants, San Francisco Roman Catholic Orphan Asylum, and the Hanna Boys Center. The will contained no indication of the testatrix's intent as to the allocation to be made between principal and income. The principal assets of the trust were shares of Diversified Investment Fund, Inc. and Fundamental Investors, Inc., both regulated investment companies, commonly known as mutual funds. Between 1955 and 1967, the trustee received from these mutual funds capital stock as a result of capital gains realized. At the time of each distribution, the trustee could have elected to receive the distribution in cash but chose to receive shares of the issuing…