In re Fahnestock's Estate

• Decision Date: 24 September 1943
• Docket Number: No. 27249.,27249.
• Citation: 50 N.E.2d 733,384 Ill. 26
• Parties: In re FAHNESTOCK'S ESTATE.
• Court: Illinois Supreme Court

384 Ill. 26

50 N.E.2d 733

In re FAHNESTOCK'S ESTATE.

No. 27249.

Supreme Court of Illinois.

Sept. 24, 1943.

Proceeding in the matter of the estate of Allen L. Fahnestock, deceased. From an order of the county court fixing and assessing an inheritance or transfer tax in the estate of Allen L. Fahnestock, deceased, Jennie M. Fahnestock appeals, opposed by the People of the State of Illinois.

Reversed and remanded with directions.Appeal from Fulton County Court; George Donaldson, Judge.

W. S. Jewell and Glen Ratcliff, both or Lewistown, for appellant.

George F. Barrett, Atty. Gen. (Bart E. Schmitt, of East St. Louis, of counsel), for appellee.

STONE, Justice.

Appellant seeks reversal of an order of the county court of Fulton county, fixing and assessing an inheritance or transfer tax in the estate of Allen L. Fahnestock, deceased. The estate consisted of personal property only and it is agreed that the net estate, from which the transfer tax is to be computed, amounts to $39,002.52.

Allen L. Fahnestock died leaving appellant, Jennie M. Fahnestock, his widow, and his sister Ida C. Lane, as his sole and only heirs-at-law. They never had children. Ida C. Lane, at the death of the testator, had three children, Frank Lane, Howard Lane and Jennie Lane Ingram. By the second clause of his will he bequeathed to his sister, Ida C. Lane, $500.

The third and fourth clauses form the basis of dispute here and are as follows:

‘Third-All the rest residue and remainder of my estate, both real and personal and wheresoever situated, I give devise and bequeathe unto my wife, Jennie M. Fahnestock of Cuba, Illinois, to have and to hold as her own and do with as she sees fit.

‘Fourth-Upon the death of said Jennie M. Fahnestock I will devise and bequeath the residue of my estate or any portion thereof remaining unexpended by the said Jennie M. Fahnestock unto my legal heirs.’

Appellant was named executrix and as such filed an inheritance tax return showing those benefited as Ida C. Lane, Cramer, Illinois, sister of decedent, who was given a bequest of $500, against which no tax was returned as due, and Jennie M. Fahnestock, widow, who received the residue of the estate amounting to $39,002.52, and widow's award of $1000, and after deducting statutory exemptions a tax of $400.05 was returned as due.

The Attorney General filed objection claiming that Jennie M. Fahnestock took only a life estate in the residuum, and that the remainder went to the legal heirs of said decedent, which remainder was subject to a tax under section 25 of the Inheritance Tax Act, Ill.Rev.Stat.1941, c. 120, § 398, as though the remainder went to one niece or one nephew of the testator. These objections having been overruled by the county judge, the People appealed to the county court, as provided by statute. The cause was there heard before a judge from an adjoining county.

The inheritance tax return filed by the executrix and a stipulation were filed as evidence. Clause 9 of the latter recited, in effect, that if the will of decedent be construed as passing a fee simple estate to the widow, then the tax of $400.05 is the proper tax; but if it be construed as passing a life estate to the widow and the remainder to the legal heirs of decedent living at the time of the death of Jennie M. Fahnestock, then the tax should be assessed under section 25 of the Inheritance Tax Law, in the amount of $1790.51.

The trial court construed the will as vesting in Jennie M. Fahnestock a life estate only, and held that after deducting the value of the life estate the remainder descended to one nephew or one niece of the decedent, as contemplated under section 25 of the Inheritance Tax Act. The court computed the life estate of Jennie M. Fahnestock at $11,121.15, which, allowing statutory exemptions, resulted in no tax against that interest; and that the remainder was taxable under section 25, resulting in a tax of $1790.51.

Appellant's motion to set aside the order and for a new trial having been overruled, this appeal followed. The appellant urges that under either of two theories the trial court was in error: First, that the third clause of the will gave Jennie M. Fahnestock, absolutely and as a fee simple estate, all of the residue of said estate after payment of the debts and bequeathed the legacy of $500 to testator's sister; that the fourth clause is repugnant to the provisions of the third clause and is an attempt on the part of the testator to dispose of property which has been given in fee by the third clause of the will and should therefore be held void, and under this theory the entire residue of the estate passed to the widow under the third clause and the proper tax would be $400.05. Second, that the third and fourth clauses, when construed together, give the widow a life estate in the residue with power to dispose of and consume the entire residue; that the remainder of the residue not disposed of in her lifetime was bequeathed to the heirs of the testator, which gave a vested interest in the heirs of the testator living at his death; that the testator left his widow and his sister as his only heirs-at-law; that if his widow is found to be one of his heirs, then the remainder, after the expiration of the life estate would pass to her under the fourth clause, as all the residue is personal property, and a tax of $400.05 should have been assessed against her. However, counsel concede that the words ‘my legal heirs,’ used in the fourth clause, may mean next of kin or heirs by blood, under which construction the widow should not be construed as being included within the meaning of said words ‘my legal heirs;’ and Ida C. Lane, sister, was the testator's only legal heir and the remainder in the residue after the life estate passed to her under the fourth clause. In which case the tax on this remainder should be fixed at $367.63. Her counsel argue that as a greater tax would be produced on the contingency that the widow would use and dispose of the entire residue as authorized by the third clause of said will, the entire residue should be considered as passing to her and a proper tax would be $400.05. It seems to be agreed in the briefs that the vesting of the estate is not postponed until the termination of the life estate of the widow and that the children of Ida C. Lane were not bequeathed any interest in the estate.

Appellee confesses error and suggests that the tax cannot be sustained on any theory advanced by the trial court. Appellee also concedes that the theory urged by it in the county court was erroneous and that while, under the general rule, appellant is precluded from urging errors inconsistent with the stipulation, or with admissions or theories presented to the trial court in this case, the stipulation concerning the legal effect of admitted facts is inoperative. Stipulations as to the legal effect of admitted facts are inoperative. It is the duty of courts to determine the rights of persons or of property controverted in the cases before them. That power or duty cannot be affected by stipulation of the parties as to the law. People ex rel. Reinhart v. Herrin, 284 Ill. 368, 120 N.E. 274;People ex rel. Hervey v. Vaughan, 282 Ill. 163, 118 N.E. 479;Swift & Co. v. Hocking Valley R. Co., 243 U.S. 281, 37 S.Ct. 287, 61 L.Ed. 722.

The question to be determined here is whether, under the third and fourth clauses of the will, appellant took a fee or a life estate in the residue of the estate of the...