O'Callaghan's Exr's. v. City of Owensboro

Opinion of the court by JUDGE WHITE Reversing. In 1896 the appellee, city of Owensboro, by its officers, attempted to garnishee in the hands of certain banks in the city of Owensboro funds sufficient to pay taxes that had been assessed against Jerry O’Oallaghan, these taxes being for the years 1891, 1892, 1893, 1894, 1895, and 189i6, and amounted to something over $5,000. These garnish [768] ments were returned to the county court, and were all con-' solidated. The appellants, as executors, filed their actions in the Daviess circuit court seeking an injunction to prevent the payment of the taxes out of the attached, fund, ánd to have the assessment of the property declared void, the claim being that Jerry O’Gallaghan had no property subject to taxation, or at all, and that the property, deposits in bank, were due to Eugene O’Callaghan, and were managed by Jerry O’Callaghan, as the agent of Eugene O’Callaghan; that the property was not liable to taxation in the city of Owensboro as the property of Eugene O’Callaghan, because he had not during those years resided in that city, but had at all times resided in the county of Marion, in this State, where the property was taxable, if at all. At all events, appellants claimed the garnished funds as the property of Eugene O’Callaghan, deceased, and that it passed to them as hi» executors. The whole proceeding in the county court was, 'by consent of all parties, transferred to the circuit court, and heard with the case there. Jerry O’Callaghan gave his deposition in the ease, as did the former cashier of the bank that held the deposit that had been assessed for taxation. It is shown without .contradiction that in 1887, prior to any assessment in question, Jerry O’Callaghan made a gift to Eugene O’Callaghan, his brother, of all his property, which consisted principally of cash, and amounted to about $40,000. This was done in writing, and at the same time Eugene O’Callaghan gave to his brother, Jerry, a power of attorney to manage and control the funds as his agent, and invest same in any way that Jerry deemed best. It is shown that in 1888 Jerry O’Callaghan took a certificate of deposit from the bank, reading “Re’d of J. O’Callaghan, Agt. and Atty. in [769] Fact for the Rev. Father E. O’Callaghan,” etc. These deposits drew interest, and at the end of each six months a ■new receipt would be executed for the principal and the accrued interest added, less any sums drawn out by Jerry O’Oallaghan’s checks, usually about twelve dollars per month. These deposits were kept in the name of Eugene O’Callaghan up till after his death, when, except the sums attached, the whole balance was paid to appellants as the executors of Eugene O’Callaghan. Jerry O’Callaghan testified that the gift in 18S7 wgs absolute, and' without reservation, and that he had no interest whatever, and claimed none whatever, in the funds deposited. In October, 1891, Jerry O’Callaghan signed and acknowledged an instrument showing the gift to Eugene, in lieu of the former, which had been destroyed by fire. This latter instrument was recorded in the county clerk’s office of Daviess county. It is shown that prior to the gift in 1887 Jerry O’Callaghan had been compelled to pay some $4,000 in back taxes due, and was averse to paying taxes. It is therefore insisted by counsel for appellee that this gift or pretended gift was not bona fide and real, but was simply an effort to evade the payment of taxes to the city, and that the court can say that Jerry O’Callaghan was the real owner of the property, and owed the taxes. It is admitted that Eugene O’Callaghan was a resident of this State and of Marion county. If the property was in fact that of Eugene O’Callaghan, he being a resident of the State, it is now well settled that it was taxable at his residence, and not at the residence of the agent. If the property was that of Eugene O’Oallaghan, it was not taxable by appellee. Sherley Case, 80 Ky., 76 (3 R., 566) Boske v. Vault Co., (22 R. 182) (56 S. W., 524); City of [770] Lexington v. Fishback’s Trustees 109 Ky., 770 (22 R. 1392) (60 S. W., 727). We are of opinion that this gift inter vwos is fully proven to have- been made, and public record made thereof, and that, whatever might have been the motive prompting Jerry O’Callaghan so to do, the title passed absolutely to Eugene O’Callaghan, except, of course, to then existing creditors, of whom there were none. Jerry O’Callaghan had a perfect right, if he so desired, to give his property to whomsoever he pleased; and, if this gift removed the situs of the property from the taxing jurisdiction of appellee, there is no remedy. While taxes are certain, it has never been held, so far as we are advised, that taxes to be due in the future, and for years in the future, are a debt, so that the sovereign or taxing power could have a gift declared void as a then existing cred: itor. It is always held that, if the property exists, it will ■be taxable somewhere, and the vigilant tax officials will always assess the property that has a situs in their jurisdiction, and that no property will escape. The taxes are due from the owner of the property, and are always assessable to the owner or title holder. In the case here it is clear and conclusively shown that, as between these two parties, the title and ownership of this property passed .absolutely by the gift, and is irrevocable by Jerry O’Callaghan, even if he desired, which he disclaimed any .intern tion or desire to do. The property being that of Eugene O’Callaghan, it was not taxable in Owensboro, and the deposit in bank should have been adjudged to appellants, as his personal representatives. It is not clear that this gift was for the purpose of evading taxes in the city. The facts appear that Eugene O’Callaghan was the only relative of Jerry, and was eight years the junior, so it might reasonably be expected that Eugene would survive, and in [771] herit the whole property from his brother, so that the gift from the old gentleman may be «aid to. be the ordinary and natural thing that might have been expected. For the reasons indicated, the judgment is reversed, and cause remanded for judgment in accordance herewith.