In re Estate of Kierstead
| Decision Date | 11 March 1932 |
| Docket Number | 27971 |
| Citation | 241 N.W. 274,122 Neb. 694 |
| Parties | IN RE ESTATE OF SUSAN F. KIERSTEAD. v. METHODIST EPISCOPAL CHURCH OF TILDEN ET AL., APPELLEES MADISON COUNTY, APPELLANT, |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Madison county: DE WITT C. CHASE JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
1. When a will contest has been amicably settled between the beneficiaries named in the will and the heirs at law and they have in good faith stipulated for a decree of distribution in accordance with the settlement, and there is no intent thereby to evade or reduce the inheritance tax, the tax should be computed upon the portion received by each beneficiary under the decree.
2. Evidence of the effect on the property of the estate by the litigation growing out of the contest of the will is admissible to show whether the stipulation was entered into in good faith, without collusion of the parties to evade the inheritance tax.
Appeal from District Court, Madison County; Chase, Judge.
Proceedings for the levy of an inheritance tax on the estate of Susan F. Kierstead, deceased. From a decree of the district court, on appeal from the county court by the Methodist Episcopal Church of Tilden and others, the County of Madison appeals.
Decree of the district court affirmed.
Carl Peterson and Moyer & Moyer, for appellant.
Mapes, McDuffee & Mapes, G. M. Spurlock, W. V. Hoagland and C. W. De Lamatre, contra.
Heard before ROSE, GOOD and DAY, JJ., and CHAPPELL and LANDIS, District Judges.
Susan F. Kierstead died on June 13, 1927, then a resident of Madison county, Nebraska. She left a last will and testament which was filed for probate in the county court of Madison county, Nebraska. At the time of her death she was a widow about seventy years of age, and no issue survived her. In this will a portion of her estate was given to the following institutions: The Methodist Episcopal Hospital of Omaha, the Odd Fellows Home at York, the Mother's Jewels Home, a Methodist orphanage at York, and the Womans Home Missionary Society of the Methodist Episcopal Church.
A sister and twelve nieces and nephews, heirs at law, contested the admission to probate of this will, but it was admitted to probate by the probate court. An appeal was taken by the contestants to the Madison county district court where trial to a jury was had. This trial lasted more than three weeks; the jury were unable to agree and were discharged. The case was again tried in the district court for Madison county, and the second trial lasted more than five weeks; again the jury disagreed and were discharged without rendering a verdict. Thereupon the contestants filed a motion for a change of venue, asking to have the case removed from Madison county and from the ninth judicial district. This motion, supported by numerous affidavits, was sustained and the appealed action was transferred from Madison county to Platte county. After the case had been transferred from Madison county to Platte county the proponents and contestants entered into a stipulation for the purpose of compromising and settling the litigation growing out of the petition for probate and the contest thereof. Pursuant to this stipulation the district court for Platte county entered its decree. Under this stipulation and decree L. P. Pasewalk, the special administrator appointed by the county court of Madison county, paid into the Platte county district court the sum of $ 25,010 for the heirs at law, contestants. The decree contains the following clauses:
One George H. Moyer was appointed by the county court of Madison county to appraise the estate and make his recommendations as to the levying of an inheritance tax. He made his appraisement and assessment and reported the same to the county court. There is no dispute over the valuation established by the appraisement, and there is no dispute over the procedure which he adopted in making the appraisement, but the appraiser, Moyer, held and reported that the $ 25,010 paid by the special administrator to the heirs at law, contestants, was taxable, not to the heirs at law, who received it, but to the legatees named in the will, who received no part of it. The legatees under the will appealed from the appraiser's assessment to the county court where the assessment, as made by the appraiser, was approved. The legatees then appealed to the district court where a trial was had and the case submitted to the court. The district court reversed the county court and held that the $ 25,010 paid to the heirs at law, contestants, was not taxable as property received by the legatees; that the legatees are only liable to taxation upon such property as they actually receive. From this decree of the district court for Madison county, the county of Madison has appealed to this court.
The assignments of error by appellant on appeal are: (1) The district court erred in exempting the sum of $ 25,010 received by the legatees under the last will and testament of Susan F. Kierstead, and paid out by them to the contestants under the stipulation of settlement of the will contest; (2) the district court erred in admitting evidence of the effect on the property of the estate of the litigation growing out of the contest of the last will and testament of Susan F. Kierstead.
Appellees in their brief present one other issue to this court to which appellant has filed a reply brief. Appellees contend that chapter 132, Laws 1931, amends the inheritance tax statute, section 77-2201, Comp. St. 1929, to read as follows: "Provided further, that all bequests, legacies, devises, or gifts, to or for the use of any corporation, organization, association or foundation organized and operated exclusively for religious, charitable or educational purposes, no part of which is owned or used for financial gain or profit to either the owner or user or inures to the benefit of any private stockholder or individual, or to the trustee or trustees exclusively for such religious, charitable or educational purposes, shall not be subject to any duty or tax, and no such duty or tax shall be assessed or collected after the taking effect of this act irrespective of the time of the death of decedent or the fact of pendency of his or her estate."
Appellees contend that they are all charitable institutions and that as legatees under the will they are not subject to any inheritance tax whatsoever by reason of this statute, as it contains a retroactive provision.
A careful examination of the transcript and bill of exceptions discloses that it contains no evidence or stipulation on the question as to whether these appellees were charitable institutions and might thereby come within the provisions of this statute, and appellees have filed no cross-appeal in this court. For this reason, as we view the record, we are not required to determine this question.
Appellant contends, citing many well-reasoned authorities, that all the property composing the estate of Susan F. Kierstead passed by will and that the inheritance tax should be assessed against the right of succession of the legatees named in the last will and testament, under section 77-2201, Comp. St. 1929:
"All property, real, personal and mixed which shall pass by will or by the intestate laws of this state from any person who may die seised or possessed of the same while a resident of this state, or, if decedent was not a resident of this state at the time of his death, which property or any part thereof shall be within this state, or any interest therein or income therefrom, which shall be transferred by deed, grant, sale or gift made in contemplation of the death of the grantor, or bargainer or intended to take effect, in possession or enjoyment after such death, to any person or persons or to any body politic or corporate in trust or otherwise, or by reason thereof any person or body corporate shall become beneficially entitled in possession or expectation to any property or income thereof, shall be and is subject to a tax, at the rate hereinafter specified, to be paid to the treasurer of the proper county for the use of the state, and all heirs, legatees and devisees, administrators, executors and trustees shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed."
Appellant takes the position that the inheritance tax law, section 77-2201, Comp. St. 1929, providing that all property, real, personal and mixed which shall pass by will or by the intestate laws of this state shall be subject to a certain tax, imposes a tax upon the right of succession, not upon the estate, debts and the expenses of administration being the only charges upon the estate, and the tax accrues when the estate vests upon decedent's death and is not affected by any transfer or agreements by those who take the estate, so that a sum which legatees paid out of the estate to contestants of the last will and testament of the deceased, in consideration of their agreement not to further contest the will, is taxable to the legatees. Supporting this contention is cited, among other cases, In re Estate of Sanford, 90 Neb. 410, 133 N.W. 870. The court held in that case:
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