Hounsell v. Taxation (In re Hounsell's Estate)

• Citation: 252 Wis. 138,31 N.W.2d 203
• Parties: In re HOUNSELL'S ESTATE. HOUNSELL v. WISCONSIN DEPT. OF TAXATION et al.
• Decision Date: 17 February 1948
• Court: United States State Supreme Court of Wisconsin

252 Wis. 138

31 N.W.2d 203

In re HOUNSELL'S ESTATE.HOUNSELL

v.WISCONSIN DEPT. OF TAXATION et al.

Supreme Court of Wisconsin.

Feb. 17, 1948.

Appeal from an order of the County Court of Fond du Lac County; L. E. Lurvey, Judge.

Proceeding in the matter of the estate of Nellie Hounsell, deceased, wherein a determination was sought whether property which stood in the joint names of the deceased and her surviving husband was subject to inheritance tax to the extent of one-half thereof. From an order holding that one-half of the property was subject to inheritance tax, E. J. Hounsell, administrator of the estate of Nellie Hounsell, deceased, opposed by the Wisconsin Department of Taxation and others, appeals.-[By Editorial Staff.]

Order affirmed.Proceeding commenced April 14, 1947, to determine inheritance tax. On July 14, 1947, an order was entered holding property in the joint names of the deceased and her surviving husband to be taxable to the extent of one-half thereof. The husband, as administrator, appeals.

Nellie Hounsell died intestate on December 19, 1946, a resident of the City of Fond du Lac. She left surviving her husband, E. J. Hounsell, as her sole heir. He was made administrator of her estate.

Sec. 230.47(2) and sec. 230.48(2), Stats.1945, require an administrator to include in his inventory the interest which the decedent owned as joint tenant in any property. Accordingly, in his inventory E. J. Hounsell, as administrator, listed the real estate and personal property which belonged to the decedent individually and also listed property which was in the joint names of E. J. and Nellie Hounsell. The property jointly owned included four parcels of real estate, twelve real estate mortgages, one unsecured note and three bank accounts. The parcels of real estate were acquired in 1935, 1939 and 1941. The real estate mortgages were executed or assigned to E. J. and Nellie Hounsell at various times during 1932, 1935, 1936, 1940, 1943 and 1945. The unsecured note was dated October 17, 1941. One savings account was created in 1933 in the name of ‘Mr. and/or Mrs. E. J. Hounsell’; another was created in 1936 in the name of ‘Mr. or Mrs. E. J. Hounsell or the survivor thereof’. The third bank account was a checking account which had originally been in the name of E. J. Hounsell but was changed in 1944 to be in the name of ‘E. J. or Nellie Hounsell.’

At the hearing for determination of the inheritance tax E. J. Hounsell claimed that the property which was in the joint names of him and his wife was in fact only his. He testified that it was only money earned from his business and his investments that went into the joint properties and that Nellie Hounsell had used the bank accounts only at his request. The papers showing title to the joint properties were kept by him, and he always reported the income from those properties on his income tax return.

Objection was made to this evidence as being irrelevant and as constituting testimony of transactions with the decedent in violation of sec. 325.16, Stats.1945. The evidence was taken subject to the objection.

The county court held that one-half of all the property in the joint names at decedent's death was taxable to the surviving husband. This holding was made pursuant to sec. 72.01(6), Stats.1945, which reads as follows: ‘Joint Interests. Whenever any property, real or personal, is held in the joint names of two or more persons, or as tenants by the entirety, or is deposited in banks or other institutions or depositaries in the joint names to two or more persons and payable to either or the survivor, upon the death of one of such persons the right of the surviving tenant by the entirety, joint tenant or joint tenants, person or persons, to the immediate ownership or possession and enjoyment of such property shall be deemed a transfer of one-half or other proper fraction thereof taxable under the provisions of this chapter in the same manner as though the property to which such transfer relates belonged to the tenants by the entirety, joint tenants or joint depositors as tenants in common, and had been bequeathed or devised to the surviving tenant by the entirety, joint tenant or joint tenants, person or persons, by such deceased tenant by the entirety, joint tenant or joint depositor, by will.’

An order determining the inheritance tax was entered July 14, 1947, and E. J. Hounsellas administrator appeals from that part thereof which determines the tax on the joint property.

A. D. Sutherland, of Fond du Lac, for appellant.

John E. Martin, Atty. Gen., Harold H. Persons, Asst. Atty. Gen., and Neil Conway, Inheritance Tax Counsel, of Madison, for respondents.

J. G. Hardgrove, of Milwaukee, amicus curiae.

FAIRCHILD, Justice.

The title to the real and personal property involved in this appeal was so fixed as to make E. J. Hounsell and his wife joint tenants and to bring the property, for inheritance tax purposes, under the terms of sec. 72.01(6), Stats.1945. The language of that statute is clear. It provides that whenever property is held in the joint names of two persons, upon the death of one, the right of the survivor to the immediate ownership of the property shall be deemed a transfer of one-half the property, taxable in the same manner as though the property had belonged to the parties as tenants in common and had been bequeathed or devised to the surviving party by the deceased.

The appellant contends that there was no taxable interest to pass on Nellie Hounsell's death because she had no actual interest in the property. She had not bought an interest in it, and no gift had been made to her of a one-half interest. To show that no valid gift had been made to her, appellant cites a number of cases which are to be distinguished from the one at bar. In Marshall & Ilsley Bank v. Voigt, 1934, 214 Wis. 27, 252 N.W. 355, and Estate of Krause, 1942, 241 Wis. 41, 4 N.W.2d 122, bank deposits in joint accounts were...