180 P. 813 | Cal. | 1919
This is an appeal from a decree in probate fixing an inheritance tax upon personal property disposed of by the deceased during his lifetime.
The three contentions of the appellant are: (1) That the transfer in controversy was not made in contemplation of death; (2) that the transfer was not made in lieu of a testamentary disposition; and (3) that the transfer having been made pursuant to a marriage settlement did not fall within the purview of the then existing inheritance tax law.
The deceased, Isaac Minor, was married to appellant on the fifth day of August, 1908. He was then seventy-eight years of age. He was a rich man. His former wife had been dead for many years. He had a large family of sons and daughters, all of whom were married and most of whom had families. Appellant was a comparatively young woman, twenty-nine years of age, sensible and accomplished, and employed in the occupation of a practical nurse. Marriage was considered, discussed, and finally agreed upon by her and Isaac Minor. Thereupon an oral antenuptial agreement was entered into by and between them wherein and whereby the deceased, in consideration of her marriage to him, agreed to give, and appellant agreed to take, the sum of one hundred thousand dollars as a marriage settlement. At the time of making this agreement, Isaac Minor was actively engaged in attending to his business interests and was planning for the future. He was then and continued for many years thereafter *293 in good health. He was active in the management of his affairs up to the Lime of his death in December of 1915.
The oral antenuptial agreement was partially performed by Isaac Minor on the day of his marriage to appellant, August 5, 1908, by the payment to her of the sum of fifty thousand dollars in cash. On February 16, 1912, over three years after the marriage, the execution and existence of the oral antenuptial agreement and its previous partial performance were evidenced by a written instrument wherein appellant acknowledged the prior payment of fifty thousand dollars in cash for and on account of the antenuptial agreement and also the transfer and indorsement to her by Isaac Minor, on the day of the execution of the said written instrument, in full and final performance of the oral antenuptial agreement, of a fully secured promissory note in the sum of fifty thousand dollars originally executed and made payable to Isaac Minor. This instrument contained a further clause wherein and whereby the appellant promised on behalf of herself, her heirs, etc., in consideration of the full performance of the antenuptial agreement to "release and forever discharge the said Isaac Minor, Sr., his heirs, executors, and administrators, of and from all manner of actions, causes of actions, suits, debts, dues, sums of money on account of any community interest which she has or may have by descent or inheritance in or to the estate of lsaac Minor, Sr., either in law or in equity. . . ." The whole of Isaac Minor's estale at the time of the marriage and at the time of his death was separate property and subject to his testamentary disposition. The one hundred thousand dollars paid to the appellant in pursuance of the antenuptial contract was at all times held and controlled by her as her separate property.
Early in 1915, Isaac Minor executed his last will and testament, in which he stated: "I give and bequeath to my wife Caroline Minor . . . personal property as follows . . . she having received before this time one hundred thousand ($100,000) dollars in money as her share of my estate." Upon the foregoing facts, which are practically undisputed, the court below based its findings that the transfers to appellant by Isaac Minor, aggregating in cash and its equivalent one hundred thousand dollars, were made without an adequate and valuable consideration, in contemplation of death and in lieu of a testamentary disposition within the meaning of the *294 inheritance tax laws of the state in force and effect on the dates of the said transfers and on the date of the decedent's death. From these findings the conclusion of law was that the transfers in question were covered and controlled by, and therefore taxable under, the inheritance tax law. (Stats. 1905, p. 341.) That law prescribed the imposition of a tax upon the transfer of any property, real, personal, or mixed when the transfer is of property made by a resident, or by a nonresident when such nonresident's property is within this state, "by deed, grant, sale, or gift made in contemplation of the death of the grantor, vendor, or bargainor, or intended to take effect in possession or enjoyment after such death."
[1] The facts hereinbefore narrated do not support the finding of the trial court that the transfers in controversy were made in "contemplation of death" within the meaning of the statute just quoted. This is so whether the statute be considered and construed separately and solely in the light of its own language, or with the aid of the amendments thereto wherein the phrase, "in contemplation of death," is defined to mean that expectancy of death which actuates the mind of a person on the execution of his will, and not merely that expectancy of death which actuates the mind of a person in making a gift causa mortis. (See section 27 of the Inheritance Tax Act as amended in 1911, [Stats. 1911, p. 726].) That is to say, that when measured either by the commonly accepted or by the statutory definition of the phrase, "in contemplation of death," the transaction here involved cannot, upon the undisputed facts of the case, be fairly brought within and subjected to the provisions of the Inheritance Tax Act as it existed and was in force and effect when the transaction was initiated and finally consummated.
[2] The burden of showing that a transfer is subject to a collateral inheritance tax is upon the state. (In reWadsworth's Estate,
It nowhere affirmatively appears that the oral antenuptial agreement involved the relinquishment of any right which appellant might have had in the estate of Isaac Minor as a result of her marriage to him. Consequently, if Isaac Minor had died between 1908 and 1912, appellant, in the absence of any other agreement to the contrary, might have claimed the sum of fifty thousand dollars from his estate upon the *296 theory that it was due to her pursuant to the terms of the, antenuptial agreement, and, obviously, if such a claim had been allowed and paid in satisfaction of a contract supported by the perfectly valid and valuable consideration of marriage, it could not have been subjected to a collateral inheritance tax. But even if it could be said that the evidence clearly and affirmatively reveals the fact that the oral antenuptial agreement was made and based in part upon the consideration of the appellant's relinquishment of all right in the estate of Isaac Minor, nevertheless, the evidence upon the whole indicates clearly enough, we think, and practically without conflict, that the marriage was the primary and controlling consideration for the making and ultimate consummation of that agreement.
Confirmatory of these conclusions is the added fact that the transfers in controversy took effect in full and unqualified possession and enjoyment during the lifetime of Isaac Minor, that admittedly being the intent and purpose of the antenuptial agreement. It is to be noted that when making an antenuptial agreement the parties doubtless may and often do consider the fact that certain property rights result by law from the assumption of the marriage relation. Especially is this so with respect to those rights which take effect upon the decease of one of the spouses. In such a case, the parties desiring a definite and final arrangement of property rights enter into an agreement settling and determining those rights. Obviously, the purpose of such a contract is to effect a disposition of the property as an end in and for itself. It is not made as a condition precedent to obtaining some other and independent benefit. When such a settlement assumes to fix the rights of one spouse in the estate of the other upon his or her death, or in effect to pass property in praesenti in lieu of testamentary or intestate disposition, the transfers involved therein can fairly be said to have been made in contemplation of death. It was this kind of antenuptial contract which was interpreted and the transfer thereunder held subject to tax in People v. Estateof Field,
Concluding as we do that neither the antenuptial agreement itself nor the shown and undisputed circumstances preceding, attending, and following its making indicate that the transfers in question were induced substantially or at all by any thought of death by either party to the agreement, we are constrained to hold that those transfers were not made in contemplation of death and in lieu of a testamentary disposition within the meaning of the inheritance tax law.
The decree appealed from is reversed.
*298Melvin, J., and Wilbur, J., concurred.