Ogden v. Milwaukee Cnty. (In re Ogden's Estate)

• Decision Date: 11 October 1932
• Citation: 209 Wis. 162,244 N.W. 571
• Parties: IN RE OGDEN'S ESTATE. OGDEN v. MILWAUKEE COUNTY ET AL.
• Court: Wisconsin Supreme Court

209 Wis. 162

244 N.W. 571

IN RE OGDEN'S ESTATE.OGDEN

v.MILWAUKEE COUNTY ET AL.

Supreme Court of Wisconsin.

Oct. 11, 1932.

Appeal from an order determining an inheritance tax; John C. Karel, County Judge.

Action by Marion G. Ogden, executrix of the estate of George Whitefield Ogden, deceased, against Milwaukee County and others. From an order determining an inheritance tax, the executrix appeals.--[By Editorial Staff.]

Affirmed.

Petition in this action was filed August 17, 1931; the order determining the inheritance tax was entered November 20, 1931. The portion of the order appealed from determined that a gift of certain real estate was subject to a state inheritance tax because intended to take effect in possession and enjoyment at or after donor's death.

George W. Ogden died at Milwaukee December 24, 1930, at the age of 86 years. The deceased had been a widower for several years, and his daughter, the only child, had devoted herself to the interests of the decedent and her mother during her lifetime, and in consideration Mr. Ogden had at various times made substantial gifts to his daughter which are not in question. The real estate here involved was deeded in 1927 by two warranty deeds. The delivery of the deeds to the daughter occurred three years seven months and twenty-six days before the death of Mr. Ogden.

The deeds contained no reservation of the income or life estate, but were absolute and irrevocable in their terms. There was, however, an understanding under which Mr. Ogden continued to draw the income therefrom as he had done before the execution of the deed; and he continued to draw the income until several weeks prior to his death, when, because of his feebleness, he was unable to manage matters, and in consequence he notified the lessees of the real estate to pay the rent or income to his daughter, and this was then done. The understanding as to the retention of the income by Mr. Ogden was as set out in a letter written by the daughter to her father January 20, 1930, which letter reads:

“To my Father, George W. Ogden:

On April 27, 1927, you gave me deeds of your undivided third of the property known as the south ten feet of lot ten, and all of lot eleven, block 60, Third Street, and your undivided half of the east forty-nine feet of lots fourteen and fifteen Block 60, Wisconsin Avenue, in the Fourth Ward in the city of Milwaukee. This was done with the understanding that you were to have all the income from said property during your life time, you to pay all necessary expenses connected with it during that time. This includes State and Federal income taxes as they become due. Said property on Third Street, known as 172, 174, 176, is leased to the Wisconsin Hotel Realty Company, That on Wisconsin Avenue, known as 218, 220, 222, is leased to the John R. Thompson Company.”

Mr. Ogden made his will in December, 1925. By its terms bequests of several thousand dollars were made to sundry religious and educational institutions and the residue of his estate was left to his daughter, the executrix, who subsequently paid the inheritance tax on all the estate except the gift above referred to. The daughter testified to the effect that the income received from these properties was collected by her father; that they were considered as his property; that he used the same as his own; that the last few weeks of his life, when he was too feeble to handle the money, he wrote to the parties who held the leases and asked them to send the money in her name.

The county court found that the transfers in question were gifts made and intended to take effect in possession or enjoyment at or after the death of the grantor, and were subject to inheritance tax, fixed the value, and imposed the tax. That these deeds were without consideration and constituted gifts is not in dispute, nor is there a dispute over the value fixed by the county court.

K. K. Kennan, of Milwaukee, for appellant.

John W. Reynolds, Atty. Gen., Neil Conway, Inheritance Tax Counsel, of Madison, F. C. Seibold, Asst. Atty. Gen., and Albert B. Houghton, Pub. Adm'r, of Milwaukee, for respondents.

FAIRCHILD, J.

The record discloses a discharge of filial duty that is commendable and disarming. The devotion shown by the daughter in the care of her parents was appreciated, and the father, to show his gratitude, made certain outright and completed gifts, and made a conditional gift by deed and understanding, of real estate. The deeds, which are a part of the transaction, were dated in April, 1927. The gifts were made with the oral understanding that the donor was to have all the income from said property during his lifetime and that the donee was to have neither possession nor enjoyment of the fruits thereof until the death of the donor. That this understanding existed is freely admitted by the appellant, and there is no dispute but that the income from the properties was collected by the donor, considered as his property, and used by him as his own; he paying the expenses in connection therewith, including income taxes. The case is not altered by the fact that the last few weeks before his death the donor asked the lessees of the property to send the rent in donee's name. There is nothing to indicate any relinquishment, or modification of the existing agreement. In addition to evidence bearing upon the agreement referred to, the appellant testified that, at the time of the death of Mr. Ogden, “cash in the bank was not standing in his name but it was his money.”

The facts are simple; but a very able argument is made in support of the proposition that under the conceded facts there was an absolute and irrevocable gift in the form of a valid deed or trust, and that therefore to levy an inheritance or transfer tax thereon is an unwarranted interference with vested rights. A review of cases cited and relied on by appellant causes us to observe that a technical analysis of each step in the sequence of events leading up to and ending in the “possession and enjoyment” by appellant of the property transferred to her warrants the earnestness of counsel, although we reach the same conclusion the trial court did.

The difficulties experienced in building up this system of taxation making it equitable and at the same time preventing tax evasion have been many, and are the sources of much litigation. There is some confusion resulting from decisions on somewhat similar fact situations. The Wisconsin statute attempts to levy an inheritance tax on transfers of this...