State ex rel. Blankenbaker v. District Court of Eighth Judicial Dist. in and for Chouteau County

• Decision Date: 29 November 1939
• Docket Number: 8012.
• Citation: 96 P.2d 936,109 Mont. 331
• Parties: STATE ex rel. BLANKENBAKER et al. v. DISTRICT COURT OF EIGHTH JUDICIAL DIST. IN AND FOR CHOUTEAU COUNTY et al.
• Court: Montana Supreme Court

96 P.2d 936

109 Mont. 331

STATE ex rel. BLANKENBAKER et al. v. DISTRICT COURT OF EIGHTH JUDICIAL DIST. IN AND FOR CHOUTEAU COUNTY et al.

No. 8012.

Supreme Court of Montana

November 29, 1939

Rehearing Denied Dec. 23, 1939.

Original proceeding by the State of Montana, on the relation of Ella M. Blankenbaker, as executrix of the estate of Virgil F Blankenbaker, deceased, and another, against the District Court of the Eighth Judicial District of the State of Montana, in and for the County of Chouteau, and Honorable H H. Ewing, one of the judges thereof, for a writ of supervisory control, to review the action of the respondent court in denying the petition of relatrix for a rehearing in a proceeding resulting in an order fixing and determining an inheritance tax.

Writ issued in accordance with opinion.

C. R Stranahan, of Havre, and Cooper, Stephenson & Glover and S. B. Chase, Jr., all of Great Falls, for relatrix.

Ralph J. Anderson, of Helena, for respondents.

ANGSTMAN Justice.

This proceeding invokes the supervisory power of this court to review the action of the respondent court in denying the petition of relatrix for a rehearing in a proceeding resulting in an order fixing and determining an inheritance tax. From the record it appears that Virgil F. Blankenbaker died on the 17th day of June, 1936; that during his lifetime and on February 13, 1934, and again on March 5, 1934, he executed deeds covering 6690 acres of land to his wife Ella Blankenbaker, which deeds were recorded on March 7, 1934.

The respondent court in fixing the inheritance tax, included this property as subject thereto, and fixed the value thereof at $3.75 per acre. Relatrix contends that the court was in error in imposing a tax on such transfers, and in appraising all the real estate at $3.75 per acre. She sought to have these questions reconsidered on motion for rehearing.

Prior to 1935 the statute provided "Every transfer by deed, grant, bargain, sale or gift, made within two (2) years prior to the death of the grantor, vendor or donor, of a material part of his estate, or in the nature of a final disposition or distribution thereof, and without a fair consideration in money or moneys worth, shall, unless shown to the contrary, be deemed to have been made in contemplation of death." Subd. 3, sec. 1, Chapter 105, p. 353, Laws of 1927. In 1935 the statute was amended, changing the word "two" to the word "three." Subd. 3 of section 1, Chapter 186, p. 404, Laws of 1935.

The question involved, therefore, is whether Chapter 186 applies to deeds made before that law became effective.

It is elementary that it would have been competent for the legislature to have made this statute retroactive if it saw fit to do so. Reitler v. Harris, 223 U.S. 437, 32 S.Ct. 248, 56 L.Ed. 497. The question here is, Did the legislature intend that Chapter 186 should apply to deeds made before the passage and approval of that act? We think it did not.

Section 3 of the Revised Codes provides: "No law contained in any of the codes or other statutes of Montana is retroactive unless expressly so declared."

There is nothing in Chapter 186 to suggest that the legislature intended that it should apply to deeds theretofore made. It is a general rule that statutes are intended to operate prospectively only unless otherwise expressly stated or clearly and necessarily implied and the presumption is against retrospective operation. 25 R.C.L. 787, 788.

That this rule applies to statutes such as the one we are considering was expressly held by the United States Supreme Court in Shwab v. Doyle, 258 U.S. 529, 42 S.Ct. 391, 393, 66 L.Ed. 747, 26 A.L.R. 1454, where the court in speaking of a statute creating a presumption that a transfer made within two years prior to the death of the grantor was made in contemplation of death said, "We need only say that we have given careful consideration to the opposing argument and cases, and a careful study of the text of the act of Congress, and have resolved that it should be not construed to apply to transactions completed when the act became a law. And this, we repeat, is in accord with principle and authority. It is the proclamation of both that a statute should not be given a retrospective operation, unless its words make that imperative and this cannot be said of the words of the Act of September 8, 1916."

It is contended that a different rule should apply here because of the fact that before the passage of Chapter 186 there was already in effect a statute declaring a similar presumption. That statute created the presumption as to transfers made within two years prior to the death of the grantor. The amended statute extended the period to three years. The only effect of the prior statute is that it and not the amended statute governs this case. We hold that Chapter 186 has no application to deeds made before its enactment.

There is no evidence in the record that the deeds in question here were actually made in contemplation of death. Hence, the only evidence upon which the court's finding can rest is the presumption supposed to arise by virtue of the statute. The court erred in invoking the presumption in this case.

Moreover, the court in its order fixing the tax determined that the interest should be computed thereon at the rate of ten per cent, whereas counsel for relatrix contend that in view of the holding of this court in the case of In re Clark's Estate, 105 Mont. 401, 74 P.2d 401, 114 A.L.R. 496, and in view of the fact that the litigation by and in behalf of relatrix must be at least partially successful, the interest rate should be only six per cent. We agree with the contention of relatrix on this point. We shall not consider other points raised on motion for rehearing.

If we eliminate from the amount of the tax that part based upon the deeds above mentioned, the tax will be reduced by more than $1,500, and if the tax bears but six per cent interest, instead of ten per cent, there will be a further substantial reduction in the amount due. Hence, it is apparent that unless this court grants relief to relatrix a gross injustice will be suffered by her.

Respondents contend that even if the court erred in the particulars above mentioned, we cannot at this time grant to her any relief. They contend that these questions under the circumstances cannot be reviewed in this proceeding. The facts upon which they rely are these: The order fixing the tax was entered on August 3, 1938. On October 3, 1938, relatrix filed her motion for new trial, rehearing and reappraisement. That motion was denied by order on January 5, 1939. An attempted appeal from that order was dismissed on the ground that that order was not appealable. In re Blankenbaker's Estate, 108 Mont. 383, 91 P.2d 401. Specifically, it is the contention of respondents that if relatrix was entitled to any relief from the order of August 3, 1938, or from the order denying a rehearing, she should have appealed from the order of August 3rd and on that appeal reviewed the order denying a rehearing, and not having done so her right to relief was forever dissipated.

There are cases supporting this view in respect to appeals generally. However, it is not a universal rule. Even though the right of appeal exists that fact does not necessarily compel the denial of the remedy of supervisory control. State ex rel. Larsen v. District Court, 78 Mont. 435, 254 P. 414. Supervisory control does not issue as a matter of right, but only in the discretion of the court and each case must be decided on its own facts and circumstances. It will issue when there has been a failure of justice and if the case is exigent, particularly where there is no clear remedy by appeal. Compare State ex rel. Thelen v. District Court, 93 Mont. 149, 17 P.2d 57; State ex rel. Finley v. District Court, 99 Mont. 200, 43 P.2d 682.

Here it is clear enough that the relatrix could have appealed from the order...