State of Cal. ex rel. Houser v. St. Louis Union Trust Co.

• Decision Date: 15 September 1953
• Docket Number: No. 28589,28589
• Citation: 260 S.W.2d 821
• Parties: STATE OF CALIFORNIA ex rel. HOUSER, Atty. Gen. of California, v. ST. LOUIS UNION TRUST CO.
• Court: Missouri Court of Appeals

Page 821

260 S.W.2d 821

STATE OF CALIFORNIA ex rel. HOUSER, Atty. Gen. of California, v. ST. LOUIS UNION TRUST CO.

No. 28589.

St. Louis Court of Appeals, Missouri.

Sept. 15, 1953.

Motion for Rehearing or to Transfer to Supreme Court Denied

and Opinion Modified Oct. 16, 1953.

Rassieur, Long & Yawtiz, Charles D. Long, Milton Yawitz, St. Louis, Robert H. Batts, St. Louis, of counsel, for appellant.

E. Miltenberger Cain, St. Louis, Walter H. Miller, Los Angeles, Cal., of counsel, for State of California.

ARONSON, Special Judge.

The State of California, by its Attorney General, brought this action to collect an alleged deficiency in payment of inheritance tax claimed to be due it from the probate estate in that state of Mary Agnes Rogers, deceased; and was successful in the Circuit Court in obtaining judgment, including interest, for $5023.61 against defendant St. Louis Union Trust Company, trustee. (Originally there were other defendants, but the trial court dismissed the case as to them, and plaintiff has not appealed, so they are now out of the case.) Defendant trustee appealed to the Supreme Court of Missouri, which court determined that it was without appellate jurisdiction and transferred the cause here, in an opinion reported at 248 S.W.2d 592.

The pleadings were summarized by the Supreme Court as follows, 248 S.W.2d loc. cit. 593, 594:

'The facts material here as alleged in the petition are to the following effect. One Mary A. Rogers executed an Indenture of Trust on July 8, 1936, naming defendant Trust Company as trustee and the other defendants contingent beneficiaries; the trust instrument providing that said grantor was to receive the net income from said trust estate for life and also that said grantor reserved the right to alter, or amend, or revoke the terms of said agreement in whole or in part, which said provisions subjected said trust estate to the Federal estate tax law, 26 U.S.C.A. Sec. 800 et seq., and the California inheritance tax law, Revenue and Taxation Code Cal. Sec. 13301 et seq. Mary A. Rogers died on June 14, 1945, a citizen and resident of Los Angeles County, California, having moved her residence and domicile from St. Louis in 1920. The fair market value of the assets of said trust estate in the hands of said Trust Company was $97,614.90 on June 14, 1945, and consisted of intangible property, stocks and bonds. The last will and testament of Mary A. Rogers was probated in the Superior Court of Los Angeles County, California, and her estate in California was administered by the Public Administrator of said county. Under proceedings had in conformity with the applicable laws, Federal estate taxes in the amount of $5,594.26 and California inheritance taxes, following a report of the inheritance tax appraiser and the order, judgment and decree of said Superior Court, in the amount of $6,230.96 were found due the State of California out of the estate of said Mary A. Rogers, Deceased. The payment of said Federal estate tax and $1,881.21 on the inheritance tax due the State of California exhausted the assets in the hands of said administrator. There were no persons or property subject to process of the courts of California for the collection of the deficiency of $4,349.75, principal amount, and interest, on the inheritance tax due the State of California. Plaintiff instituted the instant suit in the Circuit Court of St. Louis County against the individual defendants for the balance of said unpaid inheritance tax, apportioned to and due from the respective defendants, 'and against defendant St. Louis Union Trust Company, as trustee and transferee's for the total of said deficiency and interest.

'The defendants joined in one answer. They denied that Mary A. Rogers had moved her residence and domicile from the city of St. Louis, Missouri; and alleged, among other things, that said Superior Court of the County of Los Angeles, State of California, was without jurisdiction over the assets of the trust estate in the possession of defendant Trust Company and was without jurisdiction over the person of any of the individual or corporate defendants; that the 'alleged judgment for inheritance taxes' was null and void and of no effect on the defendants (referring to the Report of Inheritance Tax Appraiser and the Order of the Superior Court of the State of California assessing the inheritance tax in the estate of Mary A. Rogers, Deceased) because said court was without jurisdiction over defendants or the property comprising the trust estate; 'and defendants further state that said alleged judgment was without due process of law;' and that the Circuit Court of the County of St. Louis was without jurisdiction to enforce the claim of plaintiff, that no provision or procedural machinery existed for said court to assess or determine inheritance taxes alleged to be due from defendants to the State of California.'

We must review the case, tried without a jury, upon both the law and the evidence, as in a suit of an equitable nature; and not set the judgment aside unless clearly erroneous, giving due regard to the finding of the trial court on the facts. Section 510.310 RSMo 1949, V.A.M.S.; Cockrill v. Buchanan, Mo.App., 259 S.W.2d 696.

The only fact issue which was actually litigated was the question of the domicile of the late Miss Rogers. As to this, we agree with the learned trial court that she was, at the time of her death in 1945, a resident of California. The testimony of her cousin, Mrs. Florence May Montgomery, as well as that of her friend, Mrs. Mary E. Aldrich, and of the hotel clerk, Mr. Leslie Jeffries, (all by deposition) is clearly of more weight and cogency than her reference to Missouri as 'home' in the several letters introduced in evidence by the trust company (the latest of which was written in 1941). She actually remained in California for approximately the last quarter-century of her life, with the sole exception of the occasion in 1936, when she brought the ashes of her late sister to St. Louis for burial; on which occasion she executed the trust instrument, mentioned in the pleadings.

Whether she was a resident of California in 1936 is less clear, for neither Mrs. Aldrich nor Mr. Jeffries knew her at that date, and there is naught but Mrs. Montgomery's testimony on the subject. However, we deem it unnecessary to decide her residence in 1936. The important fact is her residence when she died on June 14, 1945, and we are satisfied that she was a Californian then. She had declined to spend her declining years in Missouri, and expected to die in California, as her letters indicate. The inferences to be drawn from her very long actual stay in California supply all elements necessary for a finding that she died a domiciliary of that State. State of Texas v. State of Florida, 306 U.S. 398, 59 S.Ct. 563, 830, 83 L.Ed. 817; Riley v. New York Trust Co., 315 U.S. 343, 62 S.Ct. 608, 86 L.Ed. 1223; Spurgeon v. Mission State Bank, 8 Cir., 151 F.2d 702. She had no place of abode in Missouri; she was long located in California and intended to remain there indefinitely, at least. Lewis v. Lewis, 238 Mo.App. 173, 176 S.W.2d 556.

Since California was the state of the domicile of decedent when she died, it was proper that probate proceedings be had there. It was likewise proper that the State of California seek to assess and collect an inheritance tax, as provided in its statutes. Part 8 of Revenue and Taxation Code, Deering's California Codes Ann. Sec. 13301, ff.

What is the nature of the California statute? In 28 Am.Jur. pp. 8-10 (Inheritance, Estate, and Gift Taxes, Secs. 3, 4) it is said:

'A probate duty and its successor, the estate tax, is a tax upon the transmission of property by a deceased person. Such tax is charged upon the whole estate, regardless of the manner in which it is to be distributed. It is not a tax on what comes to the beneficiaries or heirs, but upon what is left by the decedent. It is treated as an expense of administration, as a proper disbursement by an executor or administrator, for which he will be allowed credit in his account. The estate tax must be measured by the property transferred by the decedent, that is to say, the net estate ascertained in the manner prescribed, and takes no account of the relationship of the recipient or of the amount he takes. The tax comes into existence before and is independent of the receipt of the property by the legatee or distributee.

'A tax imposed upon the clear value of the estate passing from any person who may die seized or possessed thereof is an estate tax, and what passes to the heir or devisee and to which he acquires title is his share of the estate remaining after the payment of the tax.

'Legacy and succession duties or taxes are alike in nature and essential characteristics, except that a succession tax covers both real and personal property. Such tax is an excise on the privilege of taking property by will or by inheritance or by succession in any other form upon the death of the owner. It is imposed upon each legacy or distributive share of the estate, and is never treated as an expense of administration. The statute imposing such tax does not look to the estate or interest which was ended by death, as it would in case of an estate tax, but to the estate or interest which is newly created by death. It is of the essence of such tax to determine the relationship of the beneficiary and the amount he takes or, rather, is entitled to take. There is a tax on the beneficial interest of each beneficiary or heir. If there is more than one beneficiary or heir there is a separate tax on the interest of each, computed on its net clear value, and chargeable against it.'

These definitions are followed in this state. Priedeman v. Jamison, 356 Mo. 627, 202 S.W.2d 900. By these definitions the California tax is a legacy or succession tax. See In re Rath's Estate, 10 Cal.2d 399, 75 P.2d 509, 115 A.L.R. 836, and In re...