Old Nat. Bank of Washington v. Damon

• Decision Date: 30 November 1970
• Docket Number: No. 188--III,188--III
• Citation: 477 P.2d 29,3 Wn.App. 721
• Parties: , 27 A.F.T.R.2d 71-1645 The OLD NATIONAL BANK OF WASHINGTON, Executor of the Estate of Clara A. Bauman, Deceased, Respondent, v. Michael K. DAMON, Guardian of the Estates of Mrgie A. Damon, a Minor, Ginger M. Damon, a Minor, and Sally J. Damon, a Minor, Appellant.
• Court: Washington Court of Appeals

Page 721

3 Wn.App. 721

477 P.2d 29, 27 A.F.T.R.2d 71-1645

The OLD NATIONAL BANK OF WASHINGTON, Executor of the Estate of Clara A. Bauman, Deceased, Respondent, v. Michael K. DAMON, Guardian of the Estates of Mrgie A. Damon a Minor, Ginger M. Damon, a Minor, and Sally J Damon, a Minor, Appellant.

No. 188--III.

Court of Appeals of Washington, Division 3.

Nov. 30, 1970.

Rehearing Denied Jan. 8, 1971.

Fred Shelton, Othello, for appellant.

Howard T. Tustin, Spokane, for respondent.

EVANS, Chief Judge.

This is an action by the respondent bank, as executor of the estate of Clara A. Bauman, deceased, to recover from the appellant, as guardian of the estates of his three minor daughters, who are also the children of decedent's daughter, Peggy Damon, a prorated share of the federal estate tax paid by the executor on the estate of said deceased.

The testatrix, Clara A. Bauman, left an estate with an adjusted gross valuation of $306,521.43.

Under the terms of the will of Clara A. Bauman, deceased, her son, Donald D. Bauman, received all the farmland of which she died seized, and her daughter, Peggy Ann Damon, was bequeathed the remainder of her estate, which consisted primarily of stocks and bonds. Based upon the appraised value of the property, the son received approximately 55 per cent of the total estate devised and bequeathed, and the daughter received approximately 45 per cent.

The face amount of the insurance policy upon the life of deceased, Clara A. Bauman, was $25,000, payable upon her death to her daughter Peggy Damon, and three of Peggy's children, Margie, Ginger and Sally Damon in equal one-fourth shares, I.e., $6250. The total estate tax was $56,607.65, and the prorated share which the trial court found each minor beneficiary of the insurance policy should pay was $1154.24.

Respondent based its claim upon Int.Rev. Code of 1954, § 2206, which provides:

Unless the decedent directs otherwise in his will, if any part of the gross estate on which tax has been paid consists of proceeds of policies of insurance on the life of the decedent receivable by a beneficiary other than the executor, the executor shall be entitled to recover from such beneficiary such portion of the total tax paid as the proceeds of such policies bear to the sum of the taxable estate and the amount of the exemption allowed in computing the taxable estate, determined under section 2051. If there is more than one such beneficiary, the executor shall be entitled to recover from such beneficiaries in the same ratio.

As an affirmative defense the defendant alleged that the last will and testament of Clara A. Bauman 'directs otherwise' for the payment of federal estate taxes, placing liability for their payment upon the two devisees named in her will.

The trial court found as a conclusion of law that section 2206, Supra, was 'totally applicable to the facts as presented', but made no finding of fact as to whether or not the will of Clara A. Bauman, deceased, 'directs otherwise' within the meaning of that section.

Defendant assigns error (1) to the refusal of the trial court to make such a finding of fact, and (2) to the conclusion of law that section 2206, Supra, is 'totally applicable'.

Although a finding of fact that the will of Clara A. Bauman, deceased, did or did not 'direct otherwise' should have been made (CR 52(a)(1)), it clearly appears from the record that before the trial court could find section 2206, Supra, 'totally applicable to the facts as presented', it necessarily had to be of the opinion that paragraph 7 of decedent's will did not 'direct otherwise'. The will was before the court, the facts were not in dispute, the issue was sharply drawn and argued extensively, and the trial court's conclusion that section 2206, Supra, is 'totally applicable' clearly indicates the basis for its decision. It would be a useless act and undue consumption of the court's time to remand the case to make a formalized finding. This is particularly true in view of the fact we find the trial court was in error in concluding as a matter of law that section 2206, Supra, is 'totally applicable to the facts as presented * * *'

We find the only part of section 2206, Supra, applicable to the facts as presented is the phrase: 'Unless the decedent directs otherwise in his will, * * *'

Paragraph 7 of the will of Clara A. Bauman, deceased, provides:

I direct that the Federal Estate Tax * * * to be payable during the administration of my estate shall be prorated between that share from my...