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In re Estate of Taylor

Supreme Court of Arizona

November 18, 1940

In the Matter of the Estate of EMMA R. TAYLOR, Deceased.
JOHN D. DRISCOLL, Executor of the Last Will of EMMA R. TAYLOR, Deceased; WILLIAM PETERSEN, as State Treasurer and Estate Tax Commissioner of the State of Arizona, Appellant, HELEN SHIMMEL, NANCY SHIMMEL, ANN SHIMMEL, HARRY S. BROOKS, ELIZABETH BROOKS and ISABELLE WOTHERSPOON, Appellees

APPEAL from a judgment of the Superior Court of the County of Maricopa. J. C. Niles, Judge. Judgment affirmed.

Mr. Joe Conway, Attorney General, Mr. Stephen B. Rayburn, Mr. Frank W. Beer, Legal Assistants to Estate Tax Commissioner, and Mr. William G. Christy, for Appellant.

Messrs. Gust, Rosenfeld, Divelbess, Robinette & Coolidge, for Appellee.


Page 218

[56 Ariz. 275] LOCKWOOD, J.

Emma R. Taylor, hereinafter called deceased, was for many years a resident of Arizona. About August, 1935, she went to visit her sister in Jeffersonville, Indiana, and died there on December 26. Shortly before her death she executed a will in the state of Indiana, in which she said that she was then a resident of Indiana, and appointed John D. Driscoll, of Jeffersonville, Indiana, as executor. Immediately after her death, Driscoll, hereinafter called executor, caused the will to be probated in Indiana, and was issued letters testamentary thereon. On January 24, 1936, he filed a petition for ancillary probate in the superior court of Maricopa county, and on February 4 the will was admitted in that county, and ancillary letters issued to him. An inventory and appraisement of the estate in Arizona was duly filed in February, 1936, which was approved by the special inheritance tax appraiser for the state of Arizona, showing the [56 Ariz. 276] estate situated in Arizona to have a gross value of about $62,000. On December 22, 1936, and some ten months later, the executor filed a petition in the superior court of Maricopa county, praying for an order fixing and determining the value of the estate and the inheritance tax thereon. A copy of this petition was immediately served on the state treasurer and the county treasurer of Maricopa county, and an order was upon the same day made by the judge of the superior court of Maricopa county, sitting in probate in the Taylor estate, fixing the net value of the estate subject to inheritance tax in Arizona at approximately $59,000, and the tax at $1,170.53, subject to the usual cash discount. Thereafter, and on January 22, 1937, the final account and petition of the executor for decree of distribution and discharge came on for hearing, and an order was made on April 28 discharging him. Nothing further was done in the matter until December 24, 1937, when Harry M. Moore, the then state treasurer, hereinafter called the treasurer, who had been the county treasurer of Maricopa county up to January 1, 1937, filed a petition asking that the court set aside the order of December 22, 1936, fixing the inheritance tax, and the order approving the final account and report of the executor and decree of distribution made January 22, 1937. The executor answered and demurred to the petition on several grounds, (a) that it was filed more than six months after the orders sought to be vacated were made, (b) that the records in the cause showed certain facts which made the petition subject to demurrer, and (c) that the petition did not state facts sufficient to constitute a cause of action. The demurrer was sustained, and the treasurer electing to stand thereon, judgment was rendered dismissing the petition, and this appeal was taken.

[56 Ariz. 277] The various objections raised by the treasurer in his petition to set aside the orders may be summarized as being to the effect that the inheritance tax was not fixed in the manner required by law and that, therefore, the order purporting to fix it was void, and if so, that the order discharging the executor was also void. The executor in his demurrer contends first, that even admitting that the statute was not followed, the errors complained of were mere irregularities not going to the jurisdiction, and since more than six months had passed since the last order objected to was made, they could not then be attacked. We think this question has been settled adversely to the contention of the executor in Petersen v. Southern Arizona Bank & Trust Co., 54 Ariz. 506, 97 P.2d 225. Therein it was urged that the decree of final distribution was a final decree rendered by a court of competent jurisdiction, which could not be attacked collaterally. We held that such a decree was only binding as to the rights of the heirs, legatees and devisees, and in no manner binding as to third parties or adverse claimants, and particularly that it was not and could not be binding upon the state, and might be attacked collaterally. We

Page 219

think the objection that the petition to set aside the orders was filed more than six months after they were made cannot be sustained.

We proceed next to the question of whether in passing upon the demurrer the court must assume all the facts stated in the petition were true. This, of course, is the ordinary rule, but it is subject to this exception, that if within the records of the court it appears that certain facts have been judicially and conclusively established, the court should not assume as true any allegations of the petition which contradict such facts. Stewart v. Phoenix National Bank, 49 Ariz. 34, 64 P.2d 101. [56 Ariz. 278]

Does the petition, together with the facts shown by the records in the estate, show that the statutory rules for determining the inheritance tax were substantially departed from, for if they were the state is not precluded from reopening the estate to determine the true amount of tax due.Petersen v. Southern Arizona B. & T. Co., supra; O'Malley v. Moore, 52 Ariz. 138, 79 P.2d 515. The first question is to determine what rule applies to a determination of the inheritance tax in ancillary probate. It is the contention of the executor that the entire subject is governed by section 3170, Revised Code of 1928, which reads as follows:

"Ancillary letters; procedure. Every petition for ancillary letters testamentary or of administration, shall contain a true and correct statement of the decedent's property in this state with the value thereof; and upon the hearing thereof the superior court shall determine the amount of the inheritance tax, and the order for letters may provide for the payment thereof, or the giving of security therefor. The superior court of Maricopa county shall have jurisdiction to determine and adjust inheritance taxes in the estates of non-resident decedents in which administration is not otherwise necessary."

It is urged that the section provides, in substance, that the court may determine the amount of the inheritance tax according to the rules applying to ordinary judgments in courts of general jurisdiction, and that it is not bound by any special rules of procedure, such as we held applied in the Petersen case. Even should we hold this to be true, it would not aid the executor, for the literal language of the section requires that the tax must be determined at the time of hearing the petition for ancillary letters, and at no other time, and it clearly appears from the record that this was not done, nor was there any attempt made by [56 Ariz. 279] the executor to follow the statute in that respect. But we think the section was not meant to leave the determination of the inheritance tax in ancillary probate to the ordinary rules of procedure governing courts of general jurisdiction. It is not to be conceived, unless it is expressly so stated by the legislature, that it intended to apply the special manner of determining inheritance taxes so meticulously set forth in sections 3171, 3172, 3174, Revised Code of 1928, to an original probate, and to leave the same subject in ancillary probate wide open to the unfettered discretion of the superior court. We are of the opinion, construing the different sections of the inheritance tax statute as a whole, that the method for determining the tax is the same in ancillary as it is in original probate.

We come next to the question of whether this procedure, was followed, or whether there was so substantial a deviation therefrom as to require us to apply the rule laid down in the Petersen and O'Malley cases, and hold that the entire estate ...

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