201 S.W.2d 441 | Mo. | 1947
Lead Opinion
This cause originated in the Probate Court of the City of St. Louis. Appellant, the widow of John D. Poe, deceased, *279 filed exceptions to the amended final settlement of the estate of John D. Poe, deceased, as filed by the respondents-executors. The exceptions being overruled, an appeal was taken to the Circuit Court of the City of St. Louis where the exceptions were again overruled and a like judgment entered. The cause was then appealed to this court.
John D. Poe died on February 26, 1943, leaving a will dated January 4, 1938, by which he made provision for his wife, Mary, and set up a trust estate of "all the rest, residue and remainder" of his estate for the benefit of his wife, his son, his half sister and others. His wife, Mary, and his half sister predeceased him, and he remarried and died without making provision for his second wife, Virginia Doerr Poe, appellant. It is admitted that testator was survived only by his son, John S. Poe, a legatee under the will; that testator died intestate as to appellant; and that appellant became entitled to dower in real and personal property of her deceased husband and to other statutory allowances. Respondents concede that the personal property of the estate "aggregated $85,162.00" and that the balance on hand at the first settlement, after allowed claims and expenses had been paid, amounted to $56,176.48. The real estate was inventoried at $65,080.00, but respondents agree that it has a value of $108,300.00 and appellant offered evidence that its reasonable value is $143,400.00.
In their final settlement, respondents took credit for real estate taxes paid in the sum of $1783.72. These taxes were assessed June 1, 1942, and were payable in 1943, the year of testator's death. Respondents further took credit for Federal estate taxes paid in the sum of $27,350.02 and proposd to distribute to appellant one-half of the net personal estate remaining after the payment of debts, taxes and the expenses of administration. Appellant refers to her proposed share as amounting to $11,561.76, but this figure appears to be in excess of the amount as determined from facts shown in the agreed statement of the case.
By the exceptions filed, appellant contended (1) that the real estate taxes in question were not payable out of or chargeable to personal property; and (2) that the Federal estate tax charge was improper because the interest of appellant was "not subject to such tax, the same being chargeable to the individual interests of the several beneficiaries and should be allocated." The exceptions were overruled and, when the order of distribution was entered, the Probate Court permitted respondents to reserve $750 to cover the cost of his appeal.
[1] Appellant first contends that the statutory allowance to her as widow under Sec. 323 R.S. 1939 should come to her tax free; that the real estate taxes and the Federal estate taxes, mentioned, should have been paid out of the residuary estate; and that the court erred in permitting respondents to take credit for these items out of personal property before a determination of appellant's distributive share. Appellant further contends that "if the statutory allowances are not *280 tax free to her and are not payable out of the residuary estate, then the taxes, including the Federal estate taxes, should be allocated to the realty and not paid wholly out of the personalty." (All hereinafter references to sections are the Revised Statutes of Missouri, 1939, unless otherwise specified.)
Under Sec. 323, supra, appellant was "entitled absolutely to a share in the personal estate belonging to the husband . . . at the time of his . . . death, equal to the share of a child." No reference is made in this section to the payment of debts, although the next two sections 324 and 325 contain such a provision. Under Sec. 107, the widow, in addition to the absolute property specified by Sec. 106, may select additional personal property "not to exceed the appraised value of four hundred dollars." Section 108 provides that the widow shall apply for the property mentioned in the preceding section before its disposition or sale, and that such property "shall be deducted from her dower in the personal estate, if there be any; but the property so delivered shall in no case be liable for the payment of the debts of the deceased." (Italics ours.)
In support of her contention that her "dower in personal property" is not subject to "the husband's tax debts," appellant refers to Sec. 306, disposing of intestate real [443] and personal property of a deceased person, "subject to the payment of his debts and the widow's dower." The section, however, does not provide that "dower in personal property" under Sec. 323 is free of debts and taxes. On the other hand it has been held that, since the widow receives "a share in the personal estate . . . equal to the share of a child," of necessity the widow's share is equally subject to debts. In re Bernays' Estate v. Major,
As stated, the real estate taxes in question were assessed June 1, 1942 and were payable in 1943. These taxes were, therefore, a lien and a charge against the real estate of deceased prior to his death on February 26, 1943. St. Louis Provident Ass'n. v. Gruner, *281
[2] The Federal estate tax referred to was assessed under the provision of a Federal Statute, 26 U.S.C.A. sec. 810, et seq., which imposed "an excise upon the transfer of an estate upon death of the owner. It was not a tax upon succession and receipt of benefits under the law or the will. It was death duties, as distinguished from a legacy or succession tax. What this law taxes is not the interest to which the legatees and devisees succeeded on death, but the interests which ceased by reason of the death." Young Men's Christian Ass'n. v. Davis,
Appellant's contention (that at least a pro rata part of the tax should be allocated to real estate) is argued as follows: (1) that the Federal statute provides a lien against both real estate and personalty to secure the payment of the tax (26 U.S.C.A. sec. 827; Baumgartner v. Commissioner of Internal Revenue, supra); (2) that a failure to apportion the tax will reduce her share of personalty below the $20,000 exemption allowed under the Missouri inheritance tax statute (Sec. 576); (3) that, if the tax is paid wholly out of the personal estate, "she would be paying the tax for the benefit of the residuary legatees, which is unjust, inequitable and down-right wrong"; and (4) that the theory of exhausting personal property before real estate "is representative of a feudal age when it was desirable to preserve intact the realty because of the appurtenant prestige and social advantage." (40 Col. Law Review, 690, 699). Appellant further points to the statutory law in New York (Sec. 124 of the New York Decedent Estate Law, requiring apportionment of Federal estate taxes among beneficiaries, when there is no direction by will), to the case law of Kentucky (Hampton's Administrators v. Hampton, supra), to the holding In re Bernheimer's Estate,
We think the exceptions to the settlement were properly ruled. Respondents had never had any possession or control of testator's real estate, which passed directly to the devisees under the will (to the trustees of the trust estate), subject to the widow's dower under Sec. 318 and subject to being leased or sold for the benefit of creditors of the estate, if required. State, to Use of Enyart v. Doud,
The proceedings in this cause, the parties here represented and the jurisdiction of the court itself are very different from that shown in many of the cases cited by appellant. Hampton's Administrators v. Hampton,
Appellant insists that Bryant v. Green,
[3] Finally, appellant contends that the allowance of $750 to cover incidental costs of further litigation was improper because such litigation was not for the benefit of the estate. Appellant's theory is that the executors have no interest in who pays the tax; that the contest is between appellant and the residuary legatee; and that the trustees of the trust estate are "the proper parties to contest appellant's contentions, not the executors." As we have stated, the issue presented by the exceptions is essentially respondents' right to take credit for the payments that they were required to make and which they have made from the only funds in their hands or under their control. The trustees and heir at law, referred to by appellant, were not before the court in this proceeding. The contest here is not between appellant and the trustees and heir at law. The court did not err in approving the allowance. Jacobs v. Jacobs,
The judgment is affirmed. Bradley and Van Osdol, CC., concur.
Addendum
The foregoing opinion by DALTON, C., is adopted as the opinion of the court. All the judges concur.