State v. Thompson (In re Dessert's Estate)

• Decision Date: 31 May 1913
• Citation: 142 N.W. 647,154 Wis. 320
• Parties: IN RE DESSERT'S ESTATE. STATE ET AL. v. THOMPSON ET AL.
• Court: Wisconsin Supreme Court

154 Wis. 320

142 N.W. 647

IN RE DESSERT'S ESTATE.STATE ET AL.

v.THOMPSON ET AL.

Supreme Court of Wisconsin.

May 31, 1913.

Siebecker, J., dissenting.

Appeal from Circuit Court, Milwaukee County; Lawrence W. Halsey, Judge.

Proceedings by the State and Milwaukee County against Henry M. Thompson and others for the determination of the amount of inheritance tax payable by the estate of Joseph Dessert, deceased. From a judgment of the Circuit Court fixing the amount of the tax, the State and Milwaukee County appeal. Affirmed.

This is an appeal from a judgment of the circuit court for Milwaukee county determining the amount of inheritance tax payable by the estate of Joseph Dessert, deceased. The county court determined that the value of the estate, including gifts made in contemplation of death, was $711,404.62; that the clear value of the estate at the time of Mr. Dessert's death was $709,704.12; and that the amount of inheritance tax payable thereon was $17,208.12. The executors appealed from this determination to the circuit court. By agreement of the parties the appeal was heard on the evidence taken in the county court. The circuit court reversed the determination made by the county court and made findings of fact and conclusions of law, of which the following is an epitome: The deceased at the time of his death in December, 1910, was 92 years of age. He made his will April 2, 1891, which will provided for certain specific bequests aggregating $7,700, and devised and bequeathed the remainder of his estate to Stella D. Thompson, the only child of the testator. The property which she took under the will, after the payment of administration expenses, was of the appraised value of $207,341.37. Prior to 1904 the deceased was actively engaged in the lumber business at Mosinee for many years. In the spring of that year he removed to Milwaukee and ceased to take an active interest in his business; the same being thereafter attended to by his son-in-law, Henry M. Thompson. The deceased made his home with his daughter the last 22 years of his life, during which time he did not contribute anything towards the maintenance of the household or pay anything for the accommodations which he received there. For more than ten years prior to September 10, 1910, he was in continuous good health and his mental faculties were in no way impaired. His physical and mental condition during this period was unusual for a man of his age, and there is no evidence of any condition, except age, which suggests that he had any reason to believe or suspect at any time prior to a few days before his death that death might be imminent or impending. The deceased maintained an active interest in things generally until the first part of September, 1910, at which time he was overtaken with a seemingly slight indisposition, which marked a change in his condition, and after which he gradually declined until he died, having acute symptoms for only a few days prior to his death. During his lifetime the testator made gifts to Stella D. Thompson and to her husband as follows:

+-----------------------------------------------------------------------------+
                ¦July 6, ¦To Mr. Thompson, cash                                       ¦$ 6,500¦
                ¦1903    ¦                                                            ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Dec. 25,¦To Mr. Thompson, 75 shares of stock Elkhorn Lbr. Co., face  ¦15,000 ¦
                ¦1905    ¦value $7,500, actual value                                  ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Dec. 25,¦To Mrs. Stella D. Thompson, 75 shares of stock of Elkhorn   ¦15,000 ¦
                ¦1905    ¦Lbr. Co., par value $7,500, actual value                    ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦July 1, ¦To Mrs. Thompson, securities of the value of                ¦229,971¦
                ¦1906    ¦                                                            ¦29     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Feb. 11,¦To Mr. Thompson, cash                                       ¦5,000  ¦
                ¦1907    ¦                                                            ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Feb. 24,¦To Mr. Thompson, cash                                       ¦7,100  ¦
                ¦1907    ¦                                                            ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Dec. 25,¦To Mrs. Thompson, stock of Dessert Redwood Co., 813 shares, ¦175,852¦
                ¦1907    ¦par value $81,300, actual value                             ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Feb. 21,¦To Mr. Thompson, cash                                       ¦6,000  ¦
                ¦1908    ¦                                                            ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦June 5, ¦To Mr. Thompson, cash                                       ¦4,000  ¦
                ¦1909    ¦                                                            ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Nov. 27,¦To Mrs. Thompson, cash                                      ¦12,000 ¦
                ¦1909    ¦                                                            ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Oct. 26,¦To Mrs. Thompson, cash                                      ¦12,000 ¦
                ¦1910    ¦                                                            ¦00     ¦
                +--------+------------------------------------------------------------+-------¦
                ¦Dec. 14,¦To Mrs. Thompson, cash                                      ¦6,000  ¦
                ¦1910    ¦                                                            ¦00     ¦
                +---------------------------------------------------------------------+-------¦
                ¦Total amount of gifts prior to death                                 ¦       ¦
                +-----------------------------------------------------------------------------+
                

The gifts made as of December 25, 1905 and 1907, were declared to be Christmas presents at the time they were made. The stocks were actually transferred on the books of the corporation two days later. As soon as the gifts of the securities were made they were turned over to Mrs. Thompson, and deceased never received, either directly or indirectly, any profit or advantage therefrom or exercised any control over them. The same is true in reference to the corporation stocks. None of the transfers of the property of the deceased were made in contemplation of the death of the donor, nor were they intended to take effect in possession or enjoyment at or after such death, except as to the gifts of October 26th and December 14th aggregating $18,000, in reference to which no contention was made by the appellants. In determining the value of the estate of the deceased and the amount thereof and of the property transferred by the deceased prior to his death, the transfers of which are subject to an inheritance tax, the sum of $476,423.29 in gifts should be excluded, and the transfer of the property which was the subject of said gifts, are not subject to any transfer tax under the laws of Wisconsin, except the two items amounting to $18,000 above referred to. As a conclusion of law the court found that the appellants were entitled to judgment, and that the value of the estate of the deceased for the purpose of determining the inheritance tax thereon is $234,741.87, and further adjudged that the clear value of said estate as of the date of the death of the testator, after proper deductions, is $233,041.37; that the transfers of gifts, legacies, and devises aggregating $225,341.37 to Stella D. Thompson are subject to the payment of an inheritance tax. The amount of such tax was adjudged to be $4,723.54 instead of $17,208.12 found by the county court. From this judgment the state of Wisconsin and the county of Milwaukee prosecute this appeal.

Walter C. Owen, Atty. Gen., Walter Drew, Deputy Atty. Gen., of Madison, and Edward Yockey, Dist. Atty., of Milwaukee (John Harrington, of Oshkosh, of counsel), for appellants.

L. A. Olwell, of Milwaukee, for respondents.

BARNES, J. (after stating the facts as above).

[1][2] There is no serious dispute on the facts in this case. The burden of proof was upon the plaintiff to show that the gifts were made in contemplation of death. The only substantial question in the case is whether the circuit court was warranted in drawing the inferences which it did from the testimony. If the evidence fairly justified the drawing of such inferences, the decision of the lower court must be affirmed. Kola Lumber Co. v. Stoughton Wagon Co., 143 Wis. 329, 127 N. W. 974.

It is undisputed that the deceased was active and healthy in mind and body until about three months before he died. The first large gift was made 4 1/2 years prior to his death, and the second a few days less than 3 years before death. All of the gifts were made to his daughter and her husband. Deceased had made his home with his daughter for 22 years before he died.

[3] The contention of the appellants is that the gifts were made in contemplation of death and were in the nature of a final distribution of the estate and are therefore subject to the inheritance tax. The following reasons are urged in support of this contention: (1) The gifts were substantially in accordance with the will of the deceased, made in 1891. (2) They included more than two-thirds of a large estate. (3) The deceased had reached an extreme old age. (4) He had surrendered the management of his property and business.

The first, second, and fourth reasons assigned are not very significant. The will gave practically all of the estate to the daughter. As she was...