In re Swan's Estate

• Decision Date: 09 June 1938
• Docket Number: 5926
• Citation: 79 P.2d 999,95 Utah 408
• Parties: In re SWAN'S ESTATE. HENDEE v. STATE TAX COMMISSION et al
• Court: Utah Supreme Court

79 P.2d 999

95 Utah 408

In re SWAN'S ESTATE.

HENDEE v. STATE TAX COMMISSION et al

No. 5926

Supreme Court of Utah

June 9, 1938

Rehearing denied November 14, 1938.

Appeal from District Court, Third District, Salt Lake County, Allen G. Thurman, Judge.

Proceeding in the matter of the estate of Blanch Swan, deceased, by the State Tax Commission of Utah for the appointment of an administrator to collect and pay over to the Commission an inheritance or transfer tax claimed to be due the State upon assets lately held in joint tenancy by the decedent, and her daughter, Theo Swan Hendee, with rights of survivorship. From a judgment appointing Coleman D. Creel as administrator and establishing a tax of $ 2,350.31 and 8 per cent. interest thereon from the date of death of the decedent, the surviving joint tenant appeals.

REVERSED AND REMANDED, with instructions to dismiss.

Walter M. Critchlow, of Salt Lake City, for appellant.

Ned Warnock, of Salt Lake City, for respondents.

HANSON Justice. MOFFAT and LARSON, JJ., concur. WOLFE, Justice FOLLAND, Chief Justice, dissenting.

OPINION

HANSON, Justice.

This is a proceeding by the State Tax Commission of Utah under Sec. 80-12-14, R. S. Utah 1933, for the appointment of an administrator to collect and pay over to it an inheritance of transfer tax claimed to be due the State of Utah upon assets lately held in joint tenancy by the decedent and her daughter. Theo Swan Hendee, with rights of survivorship. From a judgment of the District Court establishing a tax of $ 2,350.31 and 8 per cent interest thereon from the date of death of the decedent, the surviving joint tenant appeals.

The material facts are without dispute. The petition listed sundry mining stocks (hereinafter referred to as "stocks") and certain improved real estate in Blocks 53 and 57, respectively, Plat "A," Salt Lake City Survey (herein referred to as Item 1 and Item 2), as assets of the estate of Blanch Swan, deceased, held in joint tenancy with Theo Swan Hendee, with rights of survivorship, of a value in excess of $ 10,000, and prayed that an administrator be appointed to collect the tax from the assets and pay it over to the respondent Tax Commission.

The court appointed Coleman D. Creel special administrator, who caused the assets to be appraised at $ 16,545.00 for the stocks, and Item 1 of the realty at $ 30,000 and Item 2 at $ 60,550.00, or a total of $ 107,095.00, and thereon the court, after allowing the statutory deductions, fixed an inheritance or transfer tax of $ 2,350.31 and decreed its payment from the assets.

On the filing of the petition and of the later amended petition, the clerk set a date for hearing and posted notices of the hearings, but the proof of mailing thereof shows, the names of no persons to whom they were mailed. However, to each petition the appellant, Theo Swan Hendee, appeared and demurred and moved dismissal of the petitions on grounds of (1) insufficient facts; (2) the bar of limitations; and (3) defect of parties plaintiff. These were overruled and Mrs. Hendee answered.

The substantial averments of both the petitions, demurrers and answer are carried into the court's findings and conclusions, which may be summarized as follows: (1) Said Blanch Swan died in California on February 16, 1931, and her daughter, Theo Swan Hendee, was then, ever since has been, and is now a nonresident of Utah, a resident of California, and not present in Utah for a period of one year since her mother's death and before the petition herein was filed, which was on February 23, 1935. (2) That the stocks and real estate were at the time of Mrs. Swan's death held and owned by her and by appellant Mrs. Hendee as joint tenants with right of survivorship, and have been reported, listed, and appraised at the above figures after crediting the allowable deductions. (3) That there has been no previous administration or fixing of the tax on said assets. But that on May 25, 1931, an action was begun by said Theo Swan Hendee in the District Court to terminate said joint tenancy in said property and assets, and that therein the court decreed said joint tenancy terminated. R. S. Utah 1933, Sec. 104-59-1. (4) Ever since the death of said Blanch Swan, said Theo Swan Hendee has been, and is now, the owner of all of said real and personal property, except that in 1932 the said Item 1 of the realty was transferred and conveyed to Theo Swan Hendee and Grant Swan in joint tenancy. (5) All the debts and funeral expenses of Blanch Swan, deceased, except the claimed inheritance tax, have been fully paid by said Theo Swan Hendee. (6) That the transfers and conveyances by which said Blanch Swan and Theo Swan Hendee became the owners as joint tenants of all the said real and personal property were made prior to, and not within three years of, the death of Blanch Swan; and they were not made or caused to be made in contemplation of her death, or to take effect in possession or enjoyment at or after her death. That the consideration for Item 2 of the real property was furnished wholly, and the income therefrom enjoyed wholly, by the said Theo Swan Hendee. And that the consideration for the stocks and the realty in Item 1 was furnished equally and the income therefrom enjoyed equally by said Theo Swan Hendee and Blanch Swan. (7) that during February, 1931, shortly after Mrs. Swan's death, the Attorney General of Utah was notified and his deputy was present when the safety deposit box, in a Salt Lake City bank, owned by Blanch Swan and Theo Swan Hendee jointly, was opened and that then and there a complete inventory of all property held in joint tenancy by said named parties was furnished to said deputy Attorney General.

From said findings of fact, the court drew conclusions and rendered the decree or order to which appellant objects. There are several distinct issues of law presented for decision. We are met at the threshold with appellant's plea of the statute of limitations. Comp. Laws Utah 1917, Sec. 6468; R. S. Utah 1933, Sec. 104-2-26, limiting the time for an action to enforce a statutory liability to one year from the time the cause of action arises. We dispose of that question first, since, if well taken, a decision of the other questions becomes unnecessary. In this connection, Sec. 104-2-31, R. S. 1933, provides that, "The limitations prescribed in this article shall apply to actions brought in the name of, or for the benefit of the state in the same manner as to actions by private parties." And Sec. 104-2-47 provides that the word "action," as used in the chapter, is to be construed as including a special proceeding of a civil nature, wherever necessary.

Our attention has not been called to any previous case in this State where this precise question has been ruled upon. In the recent case of Attorney General of Utah v. Pomeroy, 93 Utah 426, 73 P.2d 1277, 114 A.L.R. 726, the question arose, and was discussed somewhat but not decided. We are satisfied that the present proceeding is a special one of a civil nature, and that the plaintiff's claim is based upon a statutory liability arising upon Sec. 80-12-2, R. S. 1933, which imposes the tax claimed. The claim is certainly not based upon a contract, or a tort, and if not a statutory liability, it is difficult to discover the ground of liability. The bar of the statute (Sec. 104-2-26, supra) has been applied in the case of other statutory obligations than taxes in several cases. Box Elder County v. Harding, 83 Utah 386, 28 P.2d 601, Rodriquez v. Industrial Comm., 86 Utah 273, 43 P.2d 189, Lowe v. Industrial Comm., 87 Utah 413, 49 P.2d 948; Peterson v. Sorensen, 91 Utah 507, 65 P.2d 12. Similar statutes to those of Utah above cited have in other states been construed in harmony with the conclusions we have reached in this case, and we see no reason to doubt their applicability under our statute, either in principle or upon authority. We refer to the cases of State v. Yellow Jacket S. M. Co., 14 Nev. 220; City of San Diego v. Higgins, 115 Cal. 170, 46 P. 923; Board of Comm'rs of Custer County v. Story, 26 Mont. 517, 69 P. 56; Lemhi County v. Boise Live Stock Loan Co., 47 Idaho 712, 278 P. 214; Woods v. Hyde, 64 Cal.App. 433, 222 P. 168; State v. Certain Lands, etc., 40 Minn. 515, 42 N.W. 473; State v. Chicago & N. W. Ry. Co., 132 Wis. 345, 112 N.W. 515; Pine County v. Lambert, 57 Minn. 203, 58 N.W. 990; Bristol v. Washington County, 177 U.S. 133, 20 S.Ct. 585, 44 L.Ed. 701. And on a related question, see Murry v. Monter, 90 Utah 105, 60 P.2d 960, 963.

Such statutes apply to proceedings to collect inheritance taxes. Chambers v. Gallagher, 177 Cal. 704, 171 P. 931; State ex rel. Gallet v. Naylor, 50 Idaho 113, 294 P. 333. The circumstance that the statute makes taxes a lien on property does not affect the question. Both secured and unsecured claims have potential existence even after the remedy to enforce them is barred. They may be revived by a new promise to pay and otherwise.

It may be noted that this Sec. 104-2-26, R. S. 1933, was amended in 1937 (Laws of Utah 1937, Chap. 138), changing the time from one year to three years. But this was after the bar had become effective in this case, and so cannot affect our decision. Ireland v. Mackintosh, 22 Utah 296, 61 P. 901; Chambers v. Gallagher, supra.

Respondent contends that appellant's nonresidence and absence from the State tolled the statute of limitations, and cites the case of Riley v. Howard, 193 Cal. 522, 226 P. 393. The case is not in point. That was a suit in personam by the taxing authority to obtain a personal judgment for the tax against the Howard heirs, and the jurisdiction could be exercised only upon personal service of a summons within the state of the forum. The absence of some of the defendants...