Nebel v. Nebel
| Decision Date | 15 December 1943 |
| Docket Number | 523. |
| Citation | 28 S.E.2d 207,223 N.C. 676 |
| Parties | NEBEL v. NEBEL et al. |
| Court | North Carolina Supreme Court |
Civil action to require contribution by transferees to common obligation for gift tax assessment paid by plaintiff.
Plaintiff in her complaint, alleges in substance: That on March 14 1941, the Commissioner of Internal Revenue of the United States issued an official assessment of tax deficiency against her and defendants Arthur Nebel and Marie Nebel and each of them in the amount of $20,111.82, plus interest thereon at the rate of six per cent per annum from March 15 1937, until paid--stating that it was determined that during the year 1936 William Nebel had made gifts to plaintiff and said defendants of property having an aggregate value of $142,913.62, on which the tax liability to the Federal Government was $20,111.82, plus interest as above stated, and that the Government, being legally barred from collecting such tax from William Nebel, was assessing the full amount thereof against plaintiff and said defendants and each of them and would collect the full amount of same from plaintiff or said defendants or any one of them as it was by law and statute empowered to do; that by reason of said assessment plaintiff and defendants Arthur Nebel and Marie Nebel and each of them did become legally liable to the United States Government for the payment of the full amount of said assessment; that plaintiff, at large expense and after diligent and continued effort, obtained the consent of duly constituted authorities of the United States Government that said tax assessment would be dismissed and entirely cancelled and terminated upon the payment to the Government of the sum of $6,334.96, plus interest at the rate of six per cent per annum from March 15, 1937; that said authorities refused to dismiss or cancel said assessment in consideration of payment of any lesser sum; that plaintiff requested and demanded of defendants Arthur Nebel and Marie Nebel and each of them that they contribute to the payment of said sum, but that they and each of them failed and refused to contribute any amount whatever toward payment thereof; that plaintiff thereupon being compelled to do so by reason of her legal liability under the aforesaid tax assessment, did on March 24, 1942, pay to the United States Government the sum of $6,334.96, plus interest thereon from March 15, 1937, in the amount of $1,910.89, or a total of $8,245.85, and did thereby procure the dismissal and cancellation of the aforesaid tax assessment and the discharge of the entire liability thereunder on the part of the plaintiff and said defendants and each of them to the United States Government; that by reason of the matters alleged as above set forth plaintiff is now legally entitled to require the defendants Arthur Nebel and Marie Nebel and each of them to make contribution to her for their respective fair and equitable shares of the common obligation which she alone has discharged, as above set forth; that of the aggregate property received by plaintiff and defendants Arthur Nebel and Marie Nebel during the year 1936 and totaling in value $142,913.62 as determined in the aforesaid tax assessment, plaintiff received property having a value of $59,598.54 or 41.71% thereof, the defendant Arthur Nebel received property having a value of $77,120.28 or 53.96%, and the defendant Marie Nebel received property having a value of $6,194.80 or 4.33%; and that, she, the plaintiff, having paid and satisfied the common gift tax liability is entitled to recover of defendant Arthur Nebel 53.96% of the amount she paid, that is $4,449.46, and of Marie Nebel 4.33% of the amount she paid, that is, $357.05, with interest on the respective amounts from date of payment March 24, 1942.
Defendants Arthur Nebel and Marie Nebel, in joint answer filed, deny any liability for gift tax for that they aver that they purchased the stock in question from William Nebel in good faith and for a fair and reasonable consideration, and, for this reason, are not liable to plaintiff for any amount the may have paid. They further deny that plaintiff has paid any amount, as alleged, and aver 'that any money that was paid wass paid by William Nebel, whose primary debt, if any existed, it was', and that plaintiff is not entitled to recover therefor.
Upon the trial the evidence tends to show these facts:
1. In the year 1936 defendant William Nebel, husband of plaintiff, and father of defendant, Arthur Nebel, and father in law of defendant, Marie Nebel, wife of Arthur Nebel, transferred to plaintiff certain cash, real estate and shares of common stock in Nebel Knitting Company, and to defendants, Arthur Nebel and Maric Nebel, each, certain cash and shares of common stock in Nebel Knitting Company, and filed with the constituted authority of the United States a gift tax return for the year 1936, but that no assessment was undertaken or made against him for any deficiency therein.
2. On March 14, 1941, after the statute of limitation had run against the collection from defendant William Nebel of gift tax for the year 1936, the Commissioner of Internal Revenue of the United States, acting under Internal Revenue Statute, Title 26, Chapter 4, 26 U.S.C.A. Int.Rev.Code, § 1000 et seq., relating to gift tax, having determined that the aggregate value of the property so transferred by William Nebel to plaintiff and to defendants, Arthur Nebel and Marie Nebel, valuing the stock received by them at $280 per share, exceeded the amount shown on the return filed by William Nebel for the calendar year 1936 by the amount of $142,913.62, composed of $59,589.54 value of property transferred to plaintiff, $77,120.28 of that to defendant Arthur Nebel and $6,194.80 of that to defendant Marie Nebel, showing thereby a tax deficiency, within the meaning of the gift tax statute, in the amount of $20,111.82, gave separate notices by registered mail to plaintiff and to each of defendants Arthur Nebel and Marie Nebel that 'there is determined for assessment against you the amount of $20,111.82 plus interest as provided by law, constituting your liability as a transferee of property of William Nebel of Charlotte, North Carolina, for gift tax for the calendar year 1936, as shown in the accompanying statement', which contained itemized valuation of property each had received as so determined--the liability of Marie Nebel being limited to value of property received by her, and advised each of them that within ninety days from the date of the mailing of the letter of notification each may file a petition with the United States Board of Tax Appeals for a redetermination of the deficiency. Defendants Arthur Nebel and Marie Nebel, each through counsel W. Latimer Brown, C. P. A., and plaintiff through her attorneys, W. S. Blakeney et al., respectively, filed such petitions in due time,--that of Arthur Nebel being given docket No. 107846, that of Marie Nebel docket No. 107847, and that of plaintiff docket No. 107858--each denying liability, and alleging that the determination as made is erroneous in various respects, among others, that full value had been paid for the stock transferred, and praying that no tax liability be assessed.
3. Thereafter, under date February 5, 1942, the Clerk of the United States Board of Tax Appeals gave separate notices, under caption and docket number of each proceeding, that a Division of the United States Board of Tax Appeals would sit in courtroom, United States Post Office, at Greensboro, North Carolina, beginning on March 23, 1942, for hearing in all proceedings shown on the attached list--called promptly at 10 o'clock A.M.--as indicated, that party notified would be expected to answer the call at that time and be prepared for trial when reached, that no continuance would be granted except for extraordinary cause, that failure to appear would be taken as cause for dismissal in accordance with the Rules of Practice, and that in all other respects the party is expected to be familiar with such rules. The notices in the proceeding of defendants Arthur Nebel and Marie Nebel were addressed to their counsel. The three proceedings appeared on the attached list--hearing calendar--in their numerical order, with name of counsel for petitioner set opposite.
4. In the meantime plaintiff, through her attorneys, having obtained an adjustment by redetermination of values of property transferred in the year 1936 by William Nebel to plaintiff and to defendants Arthur Nebel and Marie Nebel by which same was reduced so that the total gift tax liability therefor was redetermined to be $6,344.96, instead of $20,111.82, and thereupon plaintiff, through her attorneys stipulated and agreed in writing with Bureau of Internal Revenue (a) that 'at law and in equity there is an unpaid liability for Federal gift taxes in the amount of $6,334.96, together with interest thereon as provided by law, due for the taxable year 1936, from this petitioner under Section 526 of the Revenue Act of 1932 as embodied in Section 1025, I.R.C. [26 U.S.C.A. Int.Rev.Code, § 1025] and under Section 510 of the Revenue Act of 1932 as embodied in Section 1009, I.R.C. [26 U.S.C.A. Int.Rev.Code, § 1009] as a transferee and a donee of the assets of William Nebel of Charlotte, North Carolina', and (b) 'that the Board may enter its decision accordingly'. Thereupon, on March 13, 1943, plaintiff, through her attorneys, notified attorney for Arthur Nebel and Marie Nebel by letter, enclosing paper signed by plaintiff, and advising that the amount in this paper would be $6,334.96, and requested that said defendants sign with plaintiff so that plaintiff could proceed to close the matter with the Government. This the said defendants declined to do. And neither Arthur Nebel nor ...
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