Burns v. Burns

• Decision Date: 28 April 1969
• Docket Number: No. 22130,22130
• Citation: 454 P.2d 814,169 Colo. 79
• Parties: Franklin L. BURNS, Plaintiff in Error, v. Evelyn D. BURNS, Defendant in Error.
• Court: Colorado Supreme Court

Page 814

454 P.2d 814

169 Colo. 79

Franklin L. BURNS, Plaintiff in Error, v. Evelyn D. BURNS, Defendant in Error.

No. 22130

Supreme Court of Colorado, En Banc.

April 28, 1969.

Rehearing Denied June 9, 1969.

Hiester, Tanner & Clanahan, Barkley L. Clanahan, Bill Earl Tom, Denver, for plaintiff in error.

Carl H. Noel, Denver, Colo., for defendant in error.

GROVES, Justice.

This controversy was earlier before this court in Burns v. Burns, 155 Colo. 96, 392 P.2d 662, here referred to as the 'former Burns'.

The plaintiff in error here, referred to as Mr. Burns, was the plaintiff in a divorce action. The defendant in error was defendant and is here called Mrs. Burns.

There were incorporated in the divorce decree the provisions of an agreement between the parties made shortly prior to the entry of the interlocutory decree on July 8, 1958. Under these provisions Mr. Burns was to, and did, transfer substantial amounts of property to Mrs. Burns and was to pay her $20,000 annually for several years, one of such payments to be made on June 25, 1959. A further provision was as follows:

'If requested to do so by Plaintiff, (Mr. Burns), Defendant (Mrs. Burns) shall sign for filing a joint Federal income tax return for the calendar years 1957 and 1958. All income taxes due on said 1957 and 1958 returns shall be paid by the Plaintiff, provided that should any tax liability result from the property settlement agreement entered into by the parties, each party shall pay his or her tax resulting therefrom.'

At the request of Mr. Burns, Mrs. Burns joined him in signing a joint federal income tax return for 1958 which Mr. Burns had had prepared. If they had filed separate returns for 1958, according to Mr. Burns the tax under Mrs. Burns' return would have been $20,607.15. This would have resulted both from property transferred to her under the property settlement agreement and from income payable to her. Mr. Burns further testified that, if separate returns had been filed, the tax under his return would have been less than that payable under the joint return. It appears that under a joint return the transfers to Mrs. Burns were not taxable, but would have been under a separate return by her. Mr. Burns stated that the joint return did not reflect any gain or loss to Mrs. Burns as a result of the agreement. It was and is the position of Mr. Burns that, if separate returns had been filed, Mrs. Burns should pay upon the tax accruing under a joint return the amount she would have paid under a separate return by reason of such transfers.

There was no testimony as to the amount of tax under the joint return which resulted from taxable income allocable to Mrs. Burns. Mr. Burns does not take the position that Mrs. Burns was liable for the portion of tax under the joint return resulting from her income; but rather, it is Mr. Burns' position, as stated in his brief, that under the agreement she should pay, 'the amount of the joint tax which represented the taxable distribution to her if separate returns were filed.'

Mrs. Burns was represented by the late David Rosner in the divorce proceedings. During the summer of 1959 Mr. Rosner entered his last illness and discontinued law practice. In late summer Mrs. Burns engaged Colonel Philip S. Van Cise as her attorney. Shortly thereafter Mr. Burns communicated to Colonel Van Cise a request that Mrs. Burns join him in the execution of a joint federal income tax return for the year 1958, which Mr. Burns had had prepared and which he delivered to Colonel Van Cise. The latter procured Mrs. Burns' signature on the return.

On September 10, 1959 there was a meeting in Colonel Van Cise's office attended by him, Mr. and Mrs. Burns and Mr. Burns' attorney, the late C. Blake Hiester. At that time Mr. Burns produced two checks, one payable to Mrs. Burns in the amount of $20,000 and the other payable to the District Director of Internal Revenue in the amount of $309.67. The $20,000 check bore a typed endorsement to the District Director of Internal Revenue. Mrs. Burns signed her name below this endorsement and the return and the two checks were left in the possession of Colonel Van Cise, who made delivery of them to the office of the District Director.

In June 1962 Mrs. Burns filed a motion for judgment with respect to the $20,000 payment payable on June 25, 1959. Mr. Burns contended that this had been paid with the $20,000 check of September 10, 1959. At the close of the evidence presented by Mrs. Burns at the hearing upon her motion, the trial court ruled in favor of Mr. Burns. Mrs. Burns brought the matter here with the resulting former Burns opinion. In former Burns Mr. Justice Moore wrote as follows:

'At the close of the evidence offered in support of the Motion for Judgment, counsel for Franklin moved for judgment, reserving the right to put on evidence on his own behalf in the event the motion should be denied. It was his position that the endorsement of Evelyn constituted a payment, and the check, Exhibit 'B', having been cashed following her endorsement prevented her from asserting that she had not received the proceeds derived therefrom.

'The trial court erroneously agreed with this argument of counsel and entered judgment in favor of Franklin.

'Under the state of the record at the time Franklin's motion was granted, it was undisputed that Evelyn did not receive any of the money represented by the check in question and that the entire amount thereof was received by the Collector of Revenue in payment for income taxes which only Franklin was obligated to pay. Under the record before us Franklin seeks to pay two separate obligations with but one actual payment. He definitely discharged his individual obligation for income taxes by securing the conditional endorsement of Evelyn to a $20,000.00 check, when she believed another check was to be delivered to her in a like sum which she could deposit to her own account. The second check was not delivered.

'It may be that if the trial court had denied the motion for judgment made by counsel for Franklin (as the court should have done) a defense to Evelyn's claim might have been shown by evidence adduced by him.

'Counsel for Franklin reserved the right to call witnesses, and he must be afforded an opportunity to do so.

'The judgment of the trial court relating to the claim for $20,000.00 is reversed and a new trial thereon is ordered.'

On the retrial Mrs. Burns again introduced evidence similar to that which was the basis for the statements of Mr. Justice Moore in the third paragraph above, quoted, except there was no oral testimony--as there had been in the first hearing--that Mrs. Burns expected to receive another...