State v. Pabst

• Decision Date: 22 May 1909
• Parties: STATE v. PABST ET AL.
• Court: Wisconsin Supreme Court

139 Wis. 561

121 N.W. 351

STATE

v.PABST ET AL.

Supreme Court of Wisconsin.

May 22, 1909.

Appeal from Circuit Court, Milwaukee County; Warren D. Tarrant, Judge.

Proceedings against the estate of Frederick Pabst, deceased, for the assessment of the inheritance tax. From a judgment imposing a tax, Gustav Pabst and others appeal. Reversed and remanded for judgment on the findings as approved.

Timlin, J., dissenting.

This is an appeal from the judgment of the Milwaukee county circuit court in favor of the state and against Gustav Pabst, Frederick Pabst, Jr., Maria Goodrich, and Emma Soehnlein, for $28,353.72 each. The case had been appealed from the county court to the circuit court, and the judgment rendered is for the amount of the inheritance tax found due and unpaid upon the transfer of the estate of Frederick Pabst, deceased, after making allowance for payments already made.

Frederick Pabst resided in Milwaukee and died there testate on January 1, 1904. On July 17, 1903, he executed and delivered a deed of trust and conveyed to the trustees for the purposes set up in the deed 2,840 shares of stock in the Pabst Brewing Company, a corporation organized under the laws of this state. The stock of the Pabst Brewing Company was divided into 10,000 shares of the par value of $1,000 each. The trust deed was as follows:

“I, Frederick Pabst, of Milwaukee, Wisconsin, for and in consideration of love and affection, do hereby give and transfer twenty-eight hundred and forty (2,840) shares of the capital stock of the Pabst Brewing Company, a corporation, as per stock certificate No. 902, this day duly issued to my wife, Maria Pabst, and my sons, Gustav G. Pabst and Frederick Pabst, Jr., in trust, subject to the limitations and terms and conditions herein stated:

First. I reserve to myself the dividend which shall be earned and declared on said stock for the year 1903.

Second. I reserve to myself the right to control the vote of said stock on all questions and at all elections which shall occur in said corporation during my lifetime, and hereby direct said trustees, at all such times, to vote said stock in such manner and for such parties or purpose as I shall direct. After my decease, said trustees shall vote the stock held by them under this instrument, as they or a majority of them shall determine.

Third. Said trustees shall collect and receive the dividends paid on said stock from time to time. The dividend for the year 1903 is to be paid to me. All subsequent dividends are to be paid over by said trustees during my life and that of my wife, Maria Pabst, or either of us, one-fourth to my son, Gustav G. Pabst, one-fourth to my daughter, Maria Goodrich, one-fourth to my son, Frederick Pabst, Jr., and one-fourth to my daughter, Emma Soehnlein, and their respective heirs; provided, however, that in case any of said parties shall die without leaving surviving issue, his or her share of said dividends shall be paid in equal distribution to the other of said parties or their respective heirs.

Fourth. Upon the decease of both myself and my wife, Maria Pabst, the surviving trustees shall transfer one-fourth of said stock to Gustav G. Pabst, one-fourth to Maria Goodrich and one-fourth to Frederick Pabst, Jr., or their respective heirs in case of the death of any of said parties. In case my said daughter, Emma Soehnlein, shall, at such time, have a child or children living, such child or the oldest of such children being not less than ten years of age, then the remaining one-fourth of said stock shall be transferred to said Emma Soehnlein, if she be then living, and said trust shall thereupon cease. If at such time said Emma Soehnlein shall have no living issue, or her issue shall not have attained the aforesaid age, said trust shall continue as to one-fourth of said stock, and the dividends thereof shall be paid to said Emma Soehnlein during her life, provided, that if she have a child or children and the same or any of them attain the age of ten years, she being living, said stock shall then be transferred to her and the trust cease. In case of the death of said Emma Soehnlein during the continuance of said trust, leaving issue surviving her, such issue shall receive said dividends during life and said stock shall be transferred to such issue upon the arrival of the oldest thereof at the age of twenty-one years. In case of the death of said Emma Soehnlein without issue surviving her, or the subsequent decease of all such issue prior to the transfer of said stock, pursuant to the provisions herein contained, the same shall be transferred to my other children herein named, or their respective heirs by representation. The book value of said stock is four million dollars and this transfer is intended, subject to the limitations stated, as a gift of one million dollars to each of my said children.

Done at the city of Milwaukee, this 17th day of July, 1903.

[Signed] Fred Pabst.

In presence of: F. C. Winkler. C. W. Henning.”

On the day the trust deed was executed, the deceased surrendered to the Pabst Brewing Company certificates for 2,840 shares of its stock and caused new certificates for the same number of shares to be issued to the trustees named in the deed. On the same day he also made and executed his last will and testament, disposing of all the rest of his property. The will provided as follows:

“I, Frederick Pabst, of the city of Milwaukee, in the state of Wisconsin, being of sound mind and memory, do hereby revoke all testamentary dispositions heretofore made by me, and declare my last will and testament as follows:

First. I give and bequeath to my beloved wife, Maria Pabst, my homestead, consisting of the premises fronting on Grand avenue, in the city of Milwaukee, and extending to Wells street, house and grounds, out-buildings and stables, with all their contents and all furnishing belonging thereto and in use therewith, both useful and ornamental, to have and to hold during her lifetime, and with power to dispose of any of the personalty without accountability.

Second. I give to my said wife the annual sum of fifty thousand dollars ($50,000), to be paid to her as long as she shall live, in such installments and at such times as she may desire.

Third. Subject to the above provisions I give, devise and bequeath all the property which I may have at the time of my decease, or be in any way interested in, to my executors, in trust during the life of my said wife, the trustees out of the income of said property to pay her said sum of fifty thousand dollars ($50,000) per annum; and also out of said income or said property to them conveyed, to pay all proper expenses for the suitable support and education of my granddaughter and adopted daughter, Emma Maria Pabst, commonly called Elspeth Pabst, until she shall arrive at the age of twenty-one years, and to divide the net income of said property after said payments, annually, or at such times as may be convenient, in equal shares among my children, Gustav G. Pabst, Maria Goodrich, Frederick Pabst, Jr., and Emma Soehnlein, or their respective issue; in case of the death of any of them, such issue to take a parent's share by right of representation. In case any of my children shall die without leaving issue, such income shall be divided among the remaining children or their issue. After her arrival at the age of twenty-one years, said Elspeth shall take an equal share with the other of said children in said distribution of income, subject to the same conditions above provided.

Fourth. Upon the decease of my said wife, the entire estate shall be divided into as many parts as there are children then living, counting the living descendants of any deceased child as the representative of its parent in case of the latter's decease. Said parts shall be equal, except that there shall be transferred to one of said parts, designed for the benefit of my granddaughter, Elspeth, as provided in paragraph sixth of this instrument, such number of shares of the capital stock of the Pabst Brewing Company as shall represent a book value of one million dollars, according to the regularly kept books of said Pabst Brewing Company, so that said part shall exceed each of the other parts by the amount of said shares of stock. The reason for this discrimination is, that I transfer, by way of gift, a like amount in book value of said stock for the benefit of each of my children, Gustav G. Pabst, Maria Goodrich, Frederick Pabst, Jr., and Emma Soehnlein, contemporaneously with the making of this will. One of said equal parts shall be paid over and transferred to my son, Gustav G. Pabst, or his heirs; one to my daughter, Maria Goodrich, or her heirs; and one to my son, Frederick Pabst, Jr., or his heirs.

Fifth. In case my said daughter, Emma Soehnlein, shall, at the time of the decease of my wife, have a child or children living, such child or the oldest of such children being not less than ten years of age, then and in such case said Emma Soehnlein shall be entitled to and receive one of said equal parts of my estate. If at the time of the decease of my wife, said Emma Soehnlein shall have no living issue, or her issue shall not have attained the aforesaid age, then said part of my estate shall continue to be held in trust by my executors and trustees, said Emma receiving the income thereof until a child, of said Emma, either living at the time of my wife's decease or thereafter born to her, shall arrive at the age of ten years, whereupon, such child being living, said Emma shall become entitled to and receive one part of my estate. In case said Emma shall not have a child of said age at the time of my wife's death, and no child of hers shall, after that time, reach said age, then said part of my estate shall continue to be held in trust by my executors and trustees during the life of said Emma, and the income thereof annually paid to her, and the body or principal of said part shall,...