In re Cooper's Estate
| Citation | 295 N.W. 448,229 Iowa 921 |
| Decision Date | 31 December 1940 |
| Docket Number | 45317. |
| Parties | In re COOPER'S ESTATE. v. LINN COUNTY et al. AUGUSTINE |
| Court | United States State Supreme Court of Iowa |
Appeal from District Court, Linn County; Chas. J. Haas, Judge.
Proceeding by executor claiming exemption from taxation on the ground that all beneficiaries under the will are educational religious, scientific, or charitable institutions. Defendants answered and asked that the court order the payment of all of said taxes. From an order of court exempting payment of part of the taxes and refusing order as to exemption from remainder, both parties appeal.
Affirmed in part; reversed in part.
G. K Thompson and E. A. Fordyce, both of Cedar Rapids, for appellants and cross-appellees.
Grimm Elliott, Shuttleworth & Ingersoll, of Cedar Rapids, for appellee and cross-appellant.
The defendants Linn county and Frank F. Bates, as treasurer of said county, having first perfected their appeal, they are designated in the caption as appellant and cross-appellee, and the executor as appellee and cross-appellant. For convenience, they will be herein designated as plaintiff and defendants.
The action concerns the taxes on the moneys and credits in the estate of Robert W. Cooper, who died testate May 24, 1937. A. L. Augustine qualified as executor June 17, 1937. All of decedent's property was left to religious, educational, and charitable institutions, as follows: 1/20 to the Young Women's Christian Association of Cedar Rapids, 1/20 to the Young Men's Christian Association of Cedar Rapids, 1/20 to St. Luke's Methodist Hospital of Cedar Rapids, 2/20 to the Home for Aged Women of Cedar Rapids, 2/20 to the Home for the Friendless of Cedar Rapids, 1/20 to Coe College of Cedar Rapids-all of which are corporations organized under the laws of the state of Iowa; 10/20 to the American Bible Society, a corporation organized by the act of the legislature of the state of New York, and 2/20 to the Trustees of the Synod of the Reformed Presbyterian Church of North America, a corporation organized by the act of the legislature of the state of Pennsylvania.
The will directed " that plenty of time be taken in the settlement of my estate, so that as much as possible may be realized out of my estate to distribute as above directed."
This appeal does not involve the estate or inheritance tax. The general tax of 1937 was paid, but the executor resisted payment of the moneys and credits tax of 1938, amounting to $476.69, and the 1939 tax in the sum of $656.75, claiming that the moneys and credits sought to be taxed were the property of religious, educational, and charitable institutions, and exempt under the terms of section 6944 of the Code. The application of the executor, in which he asks this exemption, was filed October 5, 1939. Linn county and Frank F. Bates, treasurer of Linn county, appeared and resisted the application. At the time of the trial the parties entered into a stipulation as follows:
" That the beneficiaries under the will of Robert W. Cooper, Deceased, known and designated as the Young Men's Christian Association of Cedar Rapids, the Young Women's Christian Association of Cedar Rapids, St. Luke's Methodist Hospital, the Home for the Friendless of the City of Cedar Rapids, and Coe College are corporations not for pecuniary profit, organized, existing and operating under the laws of the State of Iowa and doing business within the State of Iowa, and are charitable, educational and religious organizations, within the definition, meaning, and intent of Section 6944, 1935 Code of Iowa.
That the beneficiary under said will, known as the American Bible Society, is also a religious, charitable and educational institution within the definition, meaning and intent of Section 6944, 1935 Code of Iowa. That said society is a corporation organized under the laws of the State of New York, for the purpose of printing and distributing protestant Bibles throughout every state of the United States and foreign countries throughout the world. That said society is not a corporation organized for pecuniary profit, but a non-profit organization existing and operating by virtue of the gifts and bequests which are made to it, and that it distributes its Bibles to any individual or group which desires them at less than cost, that said Bibles are published in more than one hundred different languages and dialects, and are distributed, and said corporation is doing business in many foreign countries and in every state in the union including Iowa.
That the beneficiary under the will of Robert W. Cooper, known as the Trustee of the Synod of the Reformed Presbyterian Church of North America is a charitable, educational and religious institution within the definition, meaning and intent of Section 6944 of the 1935 Code of Iowa, that said beneficiary is a corporation organized and operating under the laws of the State of Pennsylvania, and that it has in Iowa churches and congregations at Hopkinton, Morning Sun, Sharon, and Grundy Center, and that, by order of the Synod of the Reformed Presbyterian Church, the bequest in the Estate of Robert W. Cooper, deceased, when received will be used for the benefit of the educational and religious organizations of this beneficiary of which the congregations of the State of Iowa are a part. That said corporation is doing business in every state in which its churches and schools are located, including Iowa.
That the above named institutions comprise the beneficiaries under the will of Robert W. Cooper, and will receive all of the net proceeds of said estate. That on January 1, 1939, and before said date the period of filing claims which had been presented had been paid, that all taxes on said estate have been paid save the taxes which is the subject of this motion."
On trial to the court a decree was entered December 14, 1939, finding the facts as above stated, and further finding that " the equitable ownership of the property of this estate vested instantly on the death of decedent in the charitable legatees and devisees, who are and always have been the sole equitable owners of the property of this estate." The court further found that the Cooper Estate was liable for the moneys and credits tax for the year 1938, but not liable for such tax for the year 1939 or for subsequent years that might transpire before the estate was finally closed, and decree was entered accordingly. From the order granting exemption for the 1939 tax, defendants appeal, and from the order refusing exemption for the 1938 tax, plaintiff appeals.
As shown by the foregoing, the sole question for determination on this appeal is whether or not, under this state of facts, the property of the estate is taxable for the year 1938 and for the year 1939, while the estate was still in the process of settlement and before any distribution had been made to any of the legatees.
Section 6944 of the 1935 Code of Iowa relates to exemption from taxation, and, so far as the property under consideration is concerned, is as follows:
(7. property of cemetery associations; 8. libraries and art galleries; 9. property of religious, literary, and charitable societies.) " and devoted solely to sustaining them, but not exceeding in amount or income the amount prescribed by their charters or articles of incorporation; and the books, papers, pictures, works of art, apparatus, and other personal property belonging to such institutions and used solely for the purposes contemplated in said subsections and the like property of students in such institutions used for their education."
Defendants, in assailing the exemption of the 1939 tax granted by the court, allege that the court erred in holding that the moneys and credits of the estate in the possession or control of the executor and subject to the orders of the probate court, belonged exclusively to the beneficiaries under the will, devoted solely to sustaining them. One difficulty about this claim of defendants is that the record here shows by stipulation that all of the legatees named were religious, charitable, or educational institutions, within the definition, meaning, and intent of Code, section 6944.
But even if not stipulated, we cannot agree with defendants in their view. That the legatees come within the definition of owners, under Code, section 6944, is we think established by the decisions of this court. This court has always held that the estate property vests immediately upon the death of the decedent. Moore v. Gordon, 24 Iowa 158; Ferry v. Campbell, 110 Iowa 290, 296, 81 N.W. 604, 607, 50 L.R.A. 92; Douglas v. Albrecht, 130 Iowa 132, 136, 106 N.W. 354, 356, and cases cited.
Defendants cite the decisions in the cases of Wapello County Savings Bank v. Keokuk County, 209 Iowa 1127, 229 N.W. 721, and Kirk v. St. Thomas' Church, 70 Iowa 287, 30 N.W. 569, in support of their claim that the moneys and credits of the estate did not belong exclusively to the beneficiaries and devoted exclusively to sustaining them, while in the hands of the executor. The facts in these cases do not support defendants' contention. In the Wapello County case, the bequest was residuary, and the district court and appellate court could not determine the extent thereof, nor was title shown. The case was dismissed without prejudice to a future action after the acquisition of title, if any. The decision in the Kirk case was as to property not used by defendant, which had not even determined that it would in the future be devoted to the uses prescribed by the statute.
Defendants'...
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