Am. Bible Soc. v. Thronson (In re Hamilton's Estate)

• Decision Date: 05 March 1935
• Citation: 217 Wis. 491,259 N.W. 433
• Parties: IN RE HAMILTON'S ESTATE. AMERICAN BIBLE SOC. ET AL. v. THRONSON ET AL.
• Court: Wisconsin Supreme Court

217 Wis. 491

259 N.W. 433

IN RE HAMILTON'S ESTATE.AMERICAN BIBLE SOC. ET AL.

v.THRONSON ET AL.

Supreme Court of Wisconsin.

March 5, 1935.

Appeals from portions of an order of the County Court of Rock County; Jesse Earle, County Judge.

In the matter of the estate of John M. Hamilton, deceased, wherein Sidney J. Thronson, public administrator for Rock county, and others sued the American Bible Society and another. From portions of an order, defendants appeal.--[By Editorial Staff.]

Reversed.

The order is dated December 27, 1933, and was made and entered in the administration of the estate of John M. Hamilton, deceased. It determined that American Bible Society and the Board of Foreign Missions of the United Presbyterian Church of North America should each pay an inheritance tax. From so much of the order as determined that they were liable for inheritance taxes, the society and the board appealed. The facts will be stated in the opinion.Fisher & Fisher, of Janesville, for appellants.

James E. Finnegan, Atty. Gen., Herbert H. Naujoks, Asst. Atty. Gen., Neil Conway, Inheritance Tax Counsel, of Madison, and Sidney J. Thronson, Public Adm'r, of Janesville, for respondents.

NELSON, Justice.

John M. Hamilton, a resident of Wisconsin, died on the 20th day of May, 1932, at the age of eighty-two years. He left an estate consisting of real and personal property amounting to nearly $34,000. He was a member of the Presbyterian Church. On the 1st day of October, 1919, he paid over to the Board of Foreign Missions of the United Presbyterian Church of North America, a foreign corporation (hereafter called the board), the sum of $1,000. Upon the receipt of said sum the board executed and delivered to him one of its annuity bonds by which it obligated itself to pay to him, so long as he should live, an annuity of $70. Other similar transactions were had by Mr. Hamilton with the board at other times, involving the following amounts and annuities:

+------------------------------------+
                ¦Date              ¦Amount   ¦Annuity¦
                +------------------+---------+-------¦
                ¦March 22, 1916    ¦$1,000.00¦$60.00 ¦
                +------------------+---------+-------¦
                ¦January 15, 1917  ¦1,000.00 ¦60.00  ¦
                +------------------+---------+-------¦
                ¦March 1, 1922     ¦1,000.00 ¦70.00  ¦
                +------------------+---------+-------¦
                ¦September 16, 1925¦1,000.00 ¦70.00  ¦
                +------------------+---------+-------¦
                ¦May 14, 1927      ¦1,000.00 ¦70.00  ¦
                +------------------+---------+-------¦
                ¦September 9, 1929 ¦1,000.00 ¦85.00  ¦
                +------------------+---------+-------¦
                ¦March 5, 1931     ¦1,000.00 ¦70.00  ¦
                +------------------------------------+
                

A similar transaction was entered into by Hamilton with American Bible Society which involved a gift or transfer of the sum of $1,000.

The county court found that at all of the times mentioned Mr. Hamilton was in good health, had full charge and control of his business affairs, including the making of loans and investments; that he entered into said transactions, and each of them, for the purpose of providing for himself a life income; that each of said transfers of money when completed was made absolute and irrevocable; that the parties to each of said transactions intended that the moneys paid by Hamilton and received by the board and the society were to be used in carrying on the work of said corporations; that no control or supervision over said moneys was retained by Hamilton; that the moneys paid by Hamilton were mingled with and became a part of the general fund of the board and the society.

The material provisions of the annuity bonds issued by the board are as follows:

“The Board of Foreign Missions of the United Presbyterian Church of North America incorporated by the Commonwealth of Pennsylvania, in consideration of a gift of one thousand 00/100 dollars the receipt of which is hereby acknowledged issues this life annuity bond and agrees to pay to the order of J. M. Hamilton of Janesville in the State of Wisconsin an annuity or yearly sum of seventy 00/100 dollars in equal semi-annual installments, on June fifteenth and December fifteenth of each year during the remainder of his life and upon the death of said annuitant this obligation shall be void and said annuity shall cease.

The heirs, executors, administrators or assigns of said annuitant shall be entitled to any proportionate share of said annuity from the last semi-annual payment to the date of said annuitant's death.”

The material provision of the annuity bond issued by the society is as follows:

“American Bible Society, Bible House, New York, a New York corporation having its office in the Bible House, New York City, hereby agrees and binds itself and its successors to pay upon demand to John M. Hamilton of Janesville, Wis., during the term of his natural life the annual sum of eighty-six dollars in semi-annual payments on the 10th day of April and October in each year, the first payment of forty-three dollars to be made on the tenth day of October, 1926.

And the said American Bible Society hereby certifies that the said John M. Hamilton desiring to promote the objects of the said Society and in consideration of the execution of this Annuity Bond, has this day contributed and paid to the said Society the sum of one thousand dollars for its general uses and purposes.”

Pursuant to said contracts, annuities were paid to Mr. Hamilton during his life. The court concluded that all of said transactions amounted to transfers of property intended by Mr. Hamilton to take effect in possession or enjoyment at or after his death.

No contention is made by the Attorney General that any of the transactions mentioned involved gifts made in contemplation of death, but he seeks to uphold the conclusion of the county judge on the theory that the moneys paid over to the board and to the society were transfers or gifts of property made by a resident of this state which were intended to take effect in possession or enjoyment at or after his death. Section 72.01 (3), Stats.

The appellants contend that the payments of the several sums to them were either outright gifts intended to take effect in possession and enjoyment immediately, not at the time of his death, or amounted to the purchase of annuities.

The questions for decision therefore are (1) whether the transactions mentioned involved gifts intended to take effect in possession or enjoyment immediately or upon the death of the donor, (2) whether the transactions involved merely the purchase of annuities.

It is very clear, under the undisputed facts, that the several transactions amounted either to the making of gifts to the appellants, the purchase from them of annuities, or a combination of both. Mr. Hamilton was interested in the missionary work of the Presbyterian Church. He was also interested in the work of the American Bible Society. He expressed a desire to do more for the good of the world than he had done and thought he could do it by making the gifts mentioned. Had his sole motive been to acquire an income for the remainder of his life, he no doubt would have purchased from some insurance company regular annuity policies from which the returns would have been much greater. Clearly, his sole motive was not to acquire annuity contracts. He obviously intended that the moneys paid to the appellants were in part at least gifts or contributions to the work the appellants were doing. The money which he turned over to the appellants became their absolute property, to do with as they saw fit. There was no agreement in any way restricting its use or expenditure. There was no agreement that the money should be held in trust, should be invested in securities and held to secure the annuity bonds, or that it should be invested and the income or any part thereof paid to Mr. Hamilton. The appellants were vested with absolute ownership of the money when it was turned over to them. The payment of the annuities was in no manner dependent upon the preservation of the fund or the income arising therefrom. The obligation to pay the annuities was absolute regardless of the use or disposition made of the money turned over. The appellants obtained nothing when Mr. Hamilton died that they did not already have except a release from the annuity bonds. Nothing that the court did added anything to the possession or enjoyment of the money theretofore paid to them by Mr. Hamilton.

[1] Notwithstanding all of this, it is contended by the state that the several transactions involved gifts or transfers of property intended to take effect in possession or enjoyment upon...