Marsh's Estate, In re, 9027

• Docket Nº: No. 9027
• Citation: 234 P.2d 459, 125 Mont. 239
• Case Date: July 17, 1951
• Court: United States State Supreme Court of Montana

Page 459

234 P.2d 459 125 Mont. 239 In re MARSH'S ESTATE
STATE
v.
MARSH. No. 9027. Supreme Court of Montana. July 17, 1951.

Page 460

[125 Mont. 240] Arnold H. Olsen, Atty. Gen., Charles V. Huppe, Asst. Atty. Gen., H. O. Vralsted, Daniel J. Sullivan, Tax Counsel, Board of Equalization, Helena, for appellant. H. O. Vralsted and Daniel J. Sullivan argued the case orally.

Worden & Worden, Missoula, for respondent. Donovan Worden and Donovan Worden, Jr., Missoula, argued the case orally.

[125 Mont. 241] METCALF, Justice.

This is an appeal by the State of Montana from an order fixing inheritance tax. The executrix, May D. Marsh, is the surviving wife of the decedent, C. H. Marsh. The appraised value of the estate is $154,158.40.

At the time of his death C. H. Marsh was co-owner of 17 United States Savings Bonds, Series E and G. One of these bonds was in the name of C. H. Marsh and his son, W. T. Marsh, as co-owners. Its actual cash value was $86. A second bond of the same value was in the names of C. H. Marsh and his daughter, Hilda Marsh, as co-owners. The remaining 15 bonds in

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the names of C. H. Marsh and his wife, May D. Marsh, as co-owners, had an actual cash value at the time of death of $45,842. The district court determined that but one-half of the value of these bonds was subject to tax and from that determination the state has appealed.

The court found that decedent and his wife had lived in Missoula county as husband and wife for about 60 years and together they accumulated property, 'he taking care of the business and she performing her duties as housewife.' Money earned from Mr. Marsh's business was used to purchase real estate and in 1942 the real property was sold and the proceeds invested in the bonds.

The court's order fixing the tax continued: 'Herein the equities are between the surviving spouse, who has aided and assisted her husband, decedent, in the earning and accumulation of these bonds, and the State Board of Equalization. We are not considering herein a survivor who takes gratuitously but a survivor who over a period of fifty years helped to accumulate this property, i. e., the monies with which these bonds were purchased. This property was accumulated by them, the husband and wife during coverture. * * *

'It is significant that said section 91-4405, R.C.M.1947, includes within its purview not only those properties held jointly as in joint tenancy but also tenancies by the entirety, which are [125 Mont. 242] defined as follows: 'An estate by the entireties is defined as an estate held by husband and wife, by virtue of title acquired by them jointly after marriage'. Vol. 30 C.J., page 564, section 97. From this we may conclude that the provisions of this section of the inheritance tax law were intended by the state legislature to be particularly applicable to joint holdings of property as between the husband and wife and that the survivor should be taxed only on one-half of the value of the property held in joint tenancy or tenancy by the entirety, otherwise the words: 'or tenants by the entirety' as used in said section 91-4405, would not have been used in the section. * * *

'Herein the property involved was acquired jointly by Charles Marsh, decedent, and his surviving spouse, May Marsh, after the marriage, by the joint labor of each.'

Under most conditions, prior to the amendment of R.C.M.1947, Sec. 91-4405, series E and G bonds of the United States government were not joint property taxable under that section, but were the property of the co-owner who retained possession of them and were taxable under R.C.M.1947, Sec. 91-4402, as a transfer intended to take effect at or after death. State Board of Equalization v. Cole, 122 Mont. 9, 195 P.2d 989; In re Brown's Estate, 122 Mont. 451, 206 P.2d 816. R.C.M.1947, Sec. 91-4405, is applicable only...