In re Hamilton's Estate

• Decision Date: 08 January 1945
• Docket Number: 15219.
• Citation: 113 Colo. 141,154 P.2d 1008
• Parties: In re HAMILTON'S ESTATE. v. PEOPLE ex rel. IRELAND, Attorney General, et al. HAMILTON et al.
• Court: Colorado Supreme Court

154 P.2d 1008

113 Colo. 141

In re HAMILTON'S ESTATE.

HAMILTON et al. v. PEOPLE ex rel. IRELAND, Attorney General, et al.

No. 15219.

Supreme Court of Colorado, En Banc.

January 8, 1945

Error to County Court, City and County of Denver; Christian D Stoner, Judge.

Proceedings in the estate of Gavin W. Hamilton, deceased, wherein the People of the State of Colorado, on the relation of Gail L Ireland, Attorney General, and Berton T. Gobble, State Inheritance Tax Commissioner, filed a report on which an inheritance tax was assessed against Kilpatrick Brothers Company and to which report and assessment Kilpatrick Brothers Company and Molly G. Hamilton, individually and as administratrix of the estate of Gavin W. Hamilton, deceased filed objections. Judgment against Kilpatrick Company, and the objectors bring error.

Judgment reversed.

G. Dexter Blount, of Denver, for plaintiffs in error.

Gail L. Ireland, Atty. Gen., H. Lawrence Hinkley, Deputy Atty. Gen., and Berton T. Gobble and Hubert D. Henry, Asst. Attys. Gen., for defendants in error.

YOUNG Chief Justice.

The Inheritance Tax Commissioner filed a report in the estate of Gavin W. Hamilton, deceased, pending in the county court of the City and County of Denver, on which an inheritance tax was assessed against Kilpatrick Brothers Company, a corporation, aggregating, with costs and old age pension tax, $1863.50. Kilpatrick Brothers Company and Molly G. Hamilton, widow and sole heir of deceased, individually and as administratrix of decedent's estate, filed objections to the report and the assessment of the tax. Trial of the issues raised by the objections was to the court on stipulated facts. The court overruled the objections and entered judgment against Kilpatrick Brothers Company for the amount of the tax assessed. The protestants seek a reversal of the judgment and specify two points for reversal, only one of which, in view of our conclusions thereon, requires consideration, namely, that on the record Before the county court failure to sustain the protestants' objections was error.

The stipulated facts pertinent to this review are as follows:

An insurance policy was issued by The Travelers Insurance Company to Gavin W. Hamilton, on November 13, 1925, containing three separate contracts to pay money: (1) To pay $75,000 upon maturity of the policy; (2) to pay $25,000 additional if assured's death is accidental; (3) to pay the assured a monthly indemnity of $500 when totally disabled. This policy was assigned to Kilpatrick Brothers Company by written assignment as follows:

'The undersigned Gavin W. Hamilton, the assured, and the undersigned, Molly G. Hamilton, beneficiary in life insurance policy issued by The Travelers Insurance Company of Hartford, Conn., #1179057, under date of Nov. 19, 1925, on the life of said assured, the principal amount of said policy being the sum of $75,000.00 for the purpose of securing any indebtedness now or hereafter owing from Hamilton and Gleason Company, a Corporation, of Denver, Colorado, to Kilpatrick Brothers Company, a Corporation, of Beatrice, Nebraska, and any renewals of said indebtedness, do hereby sell, assign, transfer and convey unto the said Kilpatrick Brothers Company, all our respective rights of every kind in and to said policy, including all rights of election of benefits thereunder and the exercise of any rights thereunder, hereby constituting and appointing the said Kilpatrick Brothers Company, and or any officer thereof our true and lawful attorney in fact, in our names, place and stead, to make any such election or exercise any right accruing to us or either of us, under said policy, including the right to pledge the said policy for any loan or loans up to the full loan value thereof, hereby ratifying in advance all that said attorney or attorneys in fact, or either of them, shall do by virtue of this instrument, and within the limits of the powers herein conferred. And the said attorney or attorneys in fact, or any of them, are hereby given such power irrevocably, which shall include the right to execute in our name, place and stead, any loan agreement and to receive and receipt for any monies due or coming due under said policy; and the said insurance company issuing said policy shall not be bound to inquire as to the right of the said Kilpatrick Brothers Company, or of any of said attorneys in fact to receive such money or exercise any power herein granted.

'In witness whereof, we have hereunto set our hands January 19, 1927.

'Gavin W. Hamilton,

'Molly G. Hamilton.'

In 1936, decedent became so disabled as to be entitled to benefits and waiver of premium under the disability provisions of the policy, and so continued to the date of his death. In June, 1937, Kilpatrick Brothers Company authorized the Travelers Insurance Company to pay the disability benefits provided by the policy to the decedent, under an agreement between Kilpatrick Brothers Company, Hamilton and Gleason Company, and the decedent, that the money so paid should be received by Kilpatrick Brothers Company and applied upon the indebtedness of Hamilton and Gleason Company to Kilpatrick Brothers Company. The decedent thereupon made claim for disability benefits. The claim was allowed by Travelers Insurance Company as beginning December 15, 1936. Travelers Insurance Company paid such monthly disability benefits for the period extending from December 15, 1936, to September 15, 1940. The checks which the insurer issued to the decedent for such benefits were indorsed by the decedent and were cashed by Hamilton and Gleason Company, and the proceeds applied on its indebtedness to Kilpatrick Brothers Company. Decedent did not receive any of the money realized from the cashing of those checks. The obligation of the company to pay disability benefits was in part enforced by suit, but as payment ultimately was made by the company, we deem the fact that in part it was made under compulsion immaterial.

Hamilton and Gleason Company paid all the premiums that were ever paid on the policy assigned to secure its indebtedness to Kilpatrick Brothers Company from the time of its issuance to the policy holder's death.

The Commissioner does not claim that the proceeds of the policy were subject to claims against decedent's estate and hance taxable; but that they are taxable under that portion of the statute providing 'the excess over...