Wooster v. Iowa State Tax Commission

• Decision Date: 17 June 1941
• Docket Number: 45539.
• Citation: 298 N.W. 922,230 Iowa 797
• Parties: WOOSTER et al. v. IOWA STATE TAX COMMISSION et al.
• Court: Iowa Supreme Court

298 N.W. 922

230 Iowa 797

WOOSTER et al. v. IOWA STATE TAX COMMISSION et al.

No. 45539.

Supreme Court of Iowa.

June 17, 1941

Appeal from District Court, Boone County; O. J. Henderson, Judge.

Action in equity to require the State Tax Commission to allow plaintiff, as a child adopted by estoppel, the exemption and rate of inheritance tax of a legally adopted child. Opinion states the facts. From decree for plaintiff, the State Tax Commission appeals.

Reversed and remanded.

John M. Rankin, Atty. Gen. of Iowa, and John E. Mulroney, Asst Atty. Gen., for appellants.

Mahoney, Mackey & Roelofs, of Boone, for appellee.

OLIVER, Justice.

This is an action in equity, brought by Grace S. Wooster individually and as executrix of the estate of Delia B. Wooster, to require the Iowa State Tax Commission to allow Grace S. Wooster, as a child adopted by estoppel, the exemption and rate of tax of a legally adopted child in computing the inheritance tax upon property passing to plaintiff under the will of said Delia B. Wooster, and by transfer from her in contemplation of death. The facts were stipulated. Shortly after her birth Grace came into the custody of an orphanage in New York, and in 1888, when she was about two years of age, was taken into the childless family of Samuel M. Wooster and Delia B. Wooster of Boone, Iowa, with whom she lived continuously until their deaths. During this time they treated her as their daughter, and until the year 1937, shortly prior to the death of Delia (who survived her husband), Grace supposed she was their natural child and at all times rendered to them the services of a daughter. No record of statutory adoption was found. " It is conceded that insofar as Delia B. Wooster or Samuel M. Wooster, or persons claiming by, through or under them are concerned, an adoption by estoppel was created" by the actions of the foster parents and child toward each other. The trial court held plaintiff to be entitled to the exemption and rate fixed for an adopted child. Decree was entered accordingly and the Iowa State Tax Commission has appealed.

The pertinent provisions of Code of Iowa 1939 are the following:

" 7312.1 Individual exemptions . * * *

3. Each son and/or daughter including legally adopted sons and/or daughters, or illegitimate sons and/or daughters entitled to inherit under the law of this state, fifteen thousand dollars."

" 7313 Rate of tax . * * *

1. When such property * * * passes * * * to any child * * *, including a legally adopted child or illegitimate child entitled to inherit under the laws of this state, the tax * * * shall be as follows: * * *."

Was Grace S. Wooster " a legally adopted child" within the meaning of said statutes? We have considered the question of adoption by contract or estoppel in a number of cases, the most recent of which, Caulfield v. Noonan, 229 Iowa 955, 295 N.W. 466, was decided after this case was appealed. That case concerned the right of a child, not adopted in accordance with statutory provisions, to share in the estate of a natural son of the foster parents who had predeceased said natural son. It was contended (1) that he is the legally adopted son as truly as though every statutory provision for adoption had been fully complied with and that as an heir of the deceased adoptive parents he would be an heir of their natural son; (2) that if he is not a legally adopted son he has the status of a legally adopted son, because of contract or estoppel, and entitled to the property rights of a child of the foster parents in their estate and consequently he is an heir of their natural son.

The decision, written by Justice Bliss, notes the substantial similarity of numerous cases, in that in each there was an intention to adopt or to give the child property rights ordinarily accompanying a parent and child relationship; a failure in some essential respect to comply with the adoption statutes; mutual relations and conduct of the parties substantially those incident to a parental and child status; and the attempt of the child or those claiming under it to preserve or protect the property rights acquired under the relationship.

The decision cites the early leading case of Chehak v. Battles, 133 Iowa 107, 110 N.W. 330, 333, 8 L.R.A.,N.S., 1130, 12 Ann.Cas. 140. In said case there was a written contract for adoption which provided not only that the adopting parents should accept the rights, duties and relations of a parent to the child but also that the same should include all the rights of inheritance by law. The adopting parents failed to sign the instrument and it was not recorded. The court held the instrument was invalid as an instrument of adoption and that the child was not an heir of the foster parents, but that she was entitled to what would have been her statutory share, as her property right under the contract. And the court said: " The authorities upholding the right to specific performance never decree that the child is entitled to the right of inheritance as an heir. They do not undertake to change the status of either party, but merely to enforce a contract which has been fully performed on one side."

Another case cited is Lamb's Estate v. Morrow, 140 Iowa 89, 117 N.W. 1118, 1120, 18 L.R.A.,N.S., 226. There the state sought to levy a collateral inheritance tax against property received by the natural son of a foster daughter from the foster parent who had never adopted the foster daughter in accordance with statutory provisions. The court said the void articles could not be regarded as establishing the heirship of the son in the estate of his mother's foster parent. " * * * the matters relied upon cannot make one an heir if in fact they do not in law establish that relation."

The Caulfield case also refers to Anderson v. Blakesly, 155 Iowa 430, 136 N.W. 210, which states that the right is not one of technical inheritance which can be created by statute only, but a contract right which a court of equity would enforce. Among other cases discussed are Stiles v Breed, 151 Iowa 86, 130 N.W. 376, and Young v. McClannahan, 187 Iowa 1184, 175 N.W. 26. The Caulfield opinion also refers to Shaw v. Scott, 217 Iowa 1259, 252 N.W. 237, a case in which there was no proof of the contents of the unrecorded adoption papers and the right to the estate of the deceased foster parents was established upon the theory of estoppel. The Caulfield opinion then continues [ 229 Iowa 955, 295 N.W. 471]: " The principle which the court has sought to apply in all of these cases from Chehak v. Battles, supra, and others including Shaw v. Scott, supra, down to and including our latest decisions thereon, is to do justice and equity, as far as possible to one who, though having filled the place of a natural born child, through inadvertence or fault has not been legally adopted. In such case, property recompense has been measured in the amount fixed by the statutes of descent and distribution. But we have never held in any case, including Shaw v. Scott, supra, that in so doing our decision so cured the defects in the adoption as to effect a legal adoption as though the statutory proceedings had been fully complied with. Since the matter of adoption is strictly statutory and cannot be effected by the...