212 P. 516 | Mont. | 1923
prepared the opinion for the court.
On July 2, 1917, Mary Schuh transferred to her sons and daughters, four in number, certain personal property consisting of stocks, bonds, mortgages and certificates of deposits of cash. On the same day (July 2, 1917) the sons and daughters made and executed a trust agreement with the Daly Bank & Trust Company of Butte, Montana, as trustee, whereby they delivered to the trustee all of the property transferred to them by Mary Schuh. On August 22, 1918, Mary Schuh died testate at Phillipsburg, Granite county, Montana, and on October 24, 1918, Albert Schuh, who was named as the executor of the decedent’s will, was appointed the executor thereof by the district court for Granite county, and on November 18, he qualified as such executor. He later filed his inventory of the estate of Mary Schuh, and failed to include therein any portion of the property described in the transfer and trust agreements. On December 1, 1919, he filed his final account, omitting any reference to the property described in the transfer and trust agreements.
The county treasurer of Granite county thereupon advised the county attorney of the foregoing facts, and he then commenced an action by filing his petition alleging substantially such facts, and that the transfer of the property from Mary Schuh to her children and the subsequent transfer to the trust company was made in contemplation of death, and intended to take effect in possession or enjoyment in the children after the death of Mary Schuh, and that the trust estate was subject to an inheritance tax, no part of which had been paid. He recited that there was sufficient property belonging to the estate and subject to the debts thereof, located in Granite county, Montana, and within the jurisdiction of the district court, to pay the claims and demand of the state of Montana
The cause came on for trial on July 2, 1921, when counsel for the state moved the court for judgment on the pleadings. The court sustained the motion and thereupon made findings of fact wherein it was found substantially that on the second day of July, 1917, Mary Schuh, deceased, made, executed and delivered to Albert Schuh, Walter Schuh, Emma Nowak and Mary Hutchinson, an agreement in writing whereby she transferred certain personal property which was at the date of the death of Mary 'Schuh of the value of $45,000, in consideration of which the transferees agreed to pay the grantor during her lifetime an annuity of $2,400, payable semi-annually; that contemporaneously with the making, execution and delivery of the agreement transferring the property to the grantees above named, they mutually made and executed an in
This is a proceeding in probate regulated by statute and is in rem. The object is to subject certain property within the jurisdiction and under the control of the court to the payment of a transfer tax alleged to be due to the state. Section 7743 of the Revised Codes of 1907 of the Inheritance Tax Act provides that: “Whenever the treasurer of any county shall have reason to believe 'that any tax is due and unpaid under this Act, after the refusal or neglect of the persons interested in the property liable to said tax, to pay the same, he shall notify the county attorney * * * in writing of such failure to pay such tax, and the county attorney so notified, if there is probable cause to believe a tax is due and unpaid, shall prosecute the proceedings in the district court of the proper^ county, as provided in sections 7741 and 7742 of this. Act for the enforcement and collection of such tax.”
This proceeding was taken under the provisions of section 7741 above mentioned. This section expressly mentions the persons who shall be made parties to the proceeding, namely, “the person known to own any interest or part of the property liable to the tax.” It cannot be said that the Daly Bank & Trust Company owned any interest or part of the property of the estate of Mary Schuh, deceased. Its interest was not of the proprietary character contemplated by the above-quoted section of the statute. As trustee its only interest was to hold the legal title in trust and administer the trust estate according to the conditions of the trust agreement until the death of
"We are of the opinion also that the word “trustee,” as used in the Inheritance Tax Act, contemplates such trustees as are officers of the court, having in charge property for distribution under the order of the court. This opinion seems confirmed by the provisions of section 7733 of the Inheritance Tax Act, Revised Codes of 1907. This section expressly declares that—“if any executor or administrator or trustee shall fail to perform the duties imposed upon him by this Article the district court upon petition of the county treasurer, or any person interested in said estate may revoke his administration and his bond shall be liable, and the same proceedings shall be had against him as if his administration had been revoked for any other cause.” We are, therefore, of the opinion that the Daly Bank & Trust Company was not a necessary party to this proceeding, and that the court committed no error in oArerruling the demurrer.
Assignments 2, 7 and 8 may be considered together, as they all attack the right of the court to enter judgment against the appellant and the estate of Albert Schuh, deceased, on the pleadings, and the conclusion of the court that the transfer of the property was made by decedent in contemplation of death and intended by all parties to take effect in possession or enjoyment at the death of the grantor. The appellant, so far as the record discloses, has no interest in the estate of Albert Schuh, deceased, which entitles him to appeal from the judgment entered against said estate. The petition sets out in full the transfer and the trust agreements. The answer admits their execution in the form and substance as alleged. No material fact is disputed. The legal effect of the instruments was for the court. In our opinion, on the con
Under the terms of the agreements of transfer and trust, can it be said that the children of the grantor had or were entitled to the immediate possession or enjoyment of the property? The agreement executed by Mary Schuh, transferring the property to her children, recited:
“2. Whereas, the said parties of the second part hereto, in consideration of the gift and transfer to them by the said party of the first part of the personal property hereinafter set forth, have executed an agreement of even date herewith,
The trust agreement referred to by the grantor, Mary Schuh, contains this language: ‘‘It is further agreed and understood that the said trustee shall pay to Mary Schuh, the mother of said first parties, each year during her lifetime, the sum of $2,400, payable semiannually on the 1st day of January and the 1st day of July, said annuity to be paid out of the income of said trust fund, if sufficient thereof, after deducting the taxes and assessments on said trust fund, and the fees of said trustee. If the net income of said trust fund is not sufficient to pay said annuity, then said trustee shall use the moneys in said trust fund sufficient to make up the deficit. 3. That upon the death of said Mary Schuh, said trustee shall pay and set over all of said trust fund, including all of the income and increase thereof remaining on hand at the time, to said first parties, share and share alike. In case any of said first parties are dead at the time of the death of Mary Schuh, the share of said deceased party shall go to the issue of said deceased party. If no issue, then the share of said deceased party shall go to the survivor or survivors of said parties herein named. If at the time of the death of said Mary Schuh, said Mary Hutchinson, Emma Nowak, Walter Schuh, and Albert Schuh, are dead, leaving no issue, then said trust fund shall be paid and delivered over to the legal heirs of said Mary Schuh.”
The two agreements relating to the same subject matter, having been executed contemporaneously and the one dependent upon the other, must be construed together as a single instrument. (Marsh v. Dodge, 66 N. Y. 533; Draper v.
The restrictions as to the use of the estate and the income therefrom during the lifetime of the grantor are utterly incompatible with-the right of present possession or enjoyment. The status of the estate as a trust estate was not to be changed during the lifetime of the grantor. Construed in «the most favorable light for her children, the estate created by the agreements was a vested future interest, to. take effect in pos^ session and enjoyment upon the death of Mary Schuh, defeasible upon the death of the children without issue prior to the death of the grantor. The contention of appellant that title to the property vested in the children upon the execution of the transfer agreement is unimportant here. It was not vested indefeasibly and so far as we are concerned in this case, it matters not whether the title vested indefeasibly or was contingent or subject to be divested. The possession and enjoyment of the estate were not for the children in any event until the death of the grantor. These were reserved for the donor for her full lifetime, and therefore the remainder to her
Error is predicated on the finding of the court that Albert Schuh, deceased, Walter Schuh, Emma Nowak, and Mary Hutchinson were the heirs at law and beneficiaries under the will and testament of Mary Schuh, and were entitled to the residue of the estate. The relationship of mother and children between Mary Schuh and the defendants was established beyond controversy by the transfer and trust agreements, the execution of which was admitted by all parties. Albert Schuh, one of the children, administered upon the estate and filed his final account. After the petition in this matter was filed, he died, and Lawrence Hauck was appointed to complete the administration of the estate. In his answer to the petition he denied “that he had any knowledge or information sufficient to form a belief concerning the allegations of the petition that the defendants were heirs at law and beneficiaries named in the will of Mary Schuh.” The general rule seems to be that a denial by reason of insufficient information upon which to form a belief as to the truth or falsity of the matters alleged by plaintiff or petitioner, of which defendant has knowledge actually or presumptively, or concerning which he could easily obtain the requisite knowledge, will be treated as an evasion and will raise no issue, the allegations thus denied being for all intents and purposes deemed to be admitted. (Ann. Cas. 1912C, 150, note.) This court, in McEwen v. Union Bank & Trust Co., 35 Mont. 470, 90 Pac. 359, said: “It seems to us frivolous to deny any knowledge or information sufficient to form a belief as to the existence of public records.” And again in First Nat. Bank of Butte v. Silver, 45 Mont. 231, 122 Pac. 584, it was said:
The defendant, in his official capacity as administrator with the will annexed, had succeeded to the administration of the estate of Mary Schuh. Tie had access to all the proceedings of his predecessor; he knew the mutually acknowledged relationship of mother and children between deceased and defendants. The will, a copy of which he had, had been admitted to probate and was a matter of public record and likewise the proceedings of his predecessor in the administration of the estate. With the public records concerning the will and administration of the estate available and the mutually acknowledged relationship between the deceased and her children, we believe that he had in his possession information which would have enabled him to admit or deny allegations of the petition, and that the court was justified in disregarding the denial as being frivolous and raising no issue as to the matters so attempted to be denied. The foregoing question has been discussed and decided upon the theory presented by the appellant, and we do not wish to be understood as holding that the question as to whether the defendants are heirs at law and beneficiaries under the will is a material one in this ease. Such question has not been presented for decision.
Finally, it is contended that the court erred in ordering the administrator to pay the entire tax out of the proceeds of the estate of Mary Schuh, in the hands of the administrator. We have concluded that the grant of property by Mary Schuh to her children was not to take effect in possession or enjoyment until the death of the grantor, and therefore the grant or transfer was subject to tax; that the defendants are the heirs at law and beneficiaries under the will of the deceased, and as such are entitled to the residue of
We therefore recommend that the judgment appealed from be affirmed.
For -the reasons given in the foregoing opinion, the judgment appealed from is affirmed.
Affirmed.