Bogue v. Laughlin

EjlRwiN, J. Aside from some questions of practice, which will be referred to later, the main points raised by the assignments of error are: (1) Whether there was any property in the possession of the plaintiffs May 1, 1907, owned by Sloan in 1904, 1905, and 1906. (2) What items of property, if any, were omitted in said years ? (3) Could there be a lawful reassessment of taxes in 1907 upon property alleged to have, been omitted in 1904, 1905, and 1906, against the representatives of deceased ? (4) Whether, if there was a valid tax, re — 280 — covery could be bad only by filing claim in county court. (5) Was there a proper assessment against tbe plaintiffs as. executors ? Tbe material facts appear from tbe findings, wbicb are set out in the statement of tbe case. 1. On propositions 1 and 2, as to whether there was any property owned by Sloan and omitted from tbe tax roll in 1904, 1905, and 1906 in tbe possession of tbe plaintiffs May 1, 1907, and tbe amount thereof, we think tbe omitted property was properly assessable against tbe executors, under existing statutes, though not in possession of tbe executors May 1, 1907. Sec. 10446, Stats. (Supp. 1906), makes tbe tax roll prima facie evidence of tbe justice and regularity of tbe tax; hence tbe burden was upon plaintiffs in all respects, and especially in this case on tbe question whether tbe property so reassessed was omitted property or merely undervalued property. No evidence was offered tending to- show that it was. undervalued property, hence we must bold it was omitted property, because tbe contrary does not appear. There is no showing whatever, and no effort was made by tbe executors to-show, that tbe property assessed as omitted property was not in fact omitted property, although they were before tbe board on notice several times between tbe 28th of June, 1907, and tbe 3d day of August, 1907, at wbicb times tbe matter of the-assessment of “back taxes” on tbe Hugh Sloan estate for 1904,. 1905, and 1906 was considered, as will appear from findings-set out in tbe statement of tbe case. On August 2, 1907, notice was served upon plaintiffs to tbe effect that tbe board of review bad found and determined to assess for omissions in 1904, 1905, and 1906, and specifying tbe amount in each year, and that tbe executors, plaintiffs, might be beard respecting tbe same. Tbe plaintiffs appeared on August 3,. 1907, and asked for an adjournment, wbicb was refused. .Counsel for respondents insists that this notice was not sufficient because it did not give' six days’ notice as required by — 281 — statute. This objection is not tenable, since the plaintiffs appeared generally before the board in obedience to the notice. It is insisted by appellants that the evidence offered and received before the board of review on ¿he part of defendants was ample to show that the property entered by the board was omitted property during the years in question. But regardless of this evidence, in the absence of any showing on the part of plaintiffs the prima facie case made by the assessment and tax rolls was sufficient. Sec. 1044b., Stats. (Supp. 1906: Laws of 1903, ch. 417). We conclude that the property assessed and entered upon the rolls for the years mentioned must stand as property of Sloan, deceased, omitted in said years. 2. The court below erroneously held and concluded that there could be no assessment of omitted property against the executors of a deceased person, on the ground that there is no statutory authority for such assessment, basing its judgment mainly upon State ex rel. Ashland W. Co. v. Wharton, 115 Wis. 457, 462, 91 N. W. 976; Ashland Co. v. Knight, 129 Wis. 63, 108 N. W. 208; State ex rel. Vossen v. Eberhard, 90 Minn. 120, 95 N. W. 1115. The foregoing Wisconsin cases merely go to the point that statutory authority is necessary to support a “back tax” assessment. This may be conceded, because we think our statutes are sufficiently hroad to warrant the assessment of “back taxes” against the personal representatives of a deceased person, upon property of deceased which escaped taxation, when the personal representatives have personal property in their possession belonging to deceased subject to taxation. Sec. 1059, Stats. (Supp. 1906: Laws of 1899, ch. 50), plainly gives authority to reassess property “omitted from assessment ... by mistake or inadvertence.” But it is argued that this authority does not apply to cases where the property was omitted during the lifetime of a deceased person and justify assessment after his death; that the statute does not authorize an assessment against an heir or personal representa — 282 — tive Raving in his possession personal property of a decedent that escaped taxation during deceased’s lifetime through omission from the tax roll. The Minnesota case (State ex rel. Vossen v. Eberhard, 90 Minn. 120, 95 N. W. 1115) is relied upon by respondents to support the judgment. This case rests upon see. 1631, Gen. Stats. 1894 of Minnesota, which is similar to our statute (sec. 1059), and the Minnesota court grounds its decision upon the fact that, while the assessment is valid as to real estate, it is not valid as to personal property, because there is no personal obligation against the owner and the tax is not made a lien on the property. The court further says that there is a wise reason for the distinction, since it is the policy of the law to permit the free transfer and change of personal property. In State ex rel. Davis & S. L. Co. v. Pors, 107 Wis. 425, 83 N. W. 706, holding that an owner may he assessed for omitted personal property after he has ceased to he the owner, it is said: “The principle at the foundation of these reassessment laws is that the owner of property is under obligation — some authorities say he is indebted — to the government to pay a sum proportioned to the property owned by him on May 1st of each year.” In other jurisdictions where the statute is no broader than ours, personal property omitted before the owner’s death has been held assessable after his death. Reynolds v. Bowen, 138 Ind. 434, 36 N. E. 756, 37 N. E. 962; Graham v. Russell, 152 Ind. 186, 52 N. E. 806; Comm. v. Sweigart’s Adm’r (Ky.) 73 S. W. 758; Sturges v. Carter, 114 U. S. 511, 5 Sup. Ct. 1014. It has also been held that even though a tax has not become a lien at the time of death, yet the fact that deceased had become personally liable to pay it when it should be levied made it a debt of decedent which could properly he paid by his executor out of his estate. 18 Cyc. 420; In re Franklin, 26 Misc. 107, 56 N. Y. Supp. 858. In addition to sec. 1044, Stats. (Supp. 1906), which makes — 283 — property assessable to executors or administrators, cb. 417, Laws of 1903, adding secs. 1044a, 10446, 1044c, and 1044cü, provides that when personal property shall be assessed to an executor or administrator the person so assessed shall be personally liable for the tax, but that he shall have a remedy over against the beneficial owner and a lien on such property. Sec. 10446 makes the tax a debt against the owner. Under the foregoing statutes and others relating to taxation in this state we are convinced that the board of review had authority to assess the omitted personal property after the death of Sloan. True, the court below found that the plaintiffs did not have in their possession on May 1, 1907, any personal property owned by Sloan in 1904, 1905, and 1906, and that there was no evidence as to what specific items were omitted from assessment in 1904, 1905, and 1906. But, as we have seen, it was sufficient that the plaintiffs had in their possession May 1, 1907, personal property subject to taxation, even though not the identical property omitted. The instant case is unlike Hayden v. Roe, 66 Wis. 288, 291, 28 N. W. 186, relied upon by respondents, since in that case the administrator was appointed after May 1st of the year of the assessment, and counsel sought to hold the assessment valid under the rule that the title of the administrator related back so as to include property as of May 1st. In the instant case it is not denied but that the plaintiffs were qualified and acting executors before May 1, 1907.' Counsel for respondents cite several Wisconsin cases from 29 to 107 Wisconsin inclusive, which they argue are to the point that under our statutes the tax or liability for the tax cannot be a charge against the owner. But it is plain that these decisions are not applicable to the present situation under the statutes as they have existed since 1903. Counsel further argue that the statutes authorizing the assessment of omitted property against the representatives of a deceased person as in the instant case are unconstitutional and — 284 — void. Tbis contention, is untenable. We conclude that the assessment was valid. 3. It is next claimed by respondents that, even if valid, it was necessary to1 file the claim against the estate before the expiration of the time limited for filing claims. Under the statutes heretofore referred to, ample power is given to assess against the executors, and they are bound to pay the taxes and reimburse themselves out of the estate in their hands. No reason appears why a different rule should apply in regard to omitted property and other property belonging to the estate, and in each case, under our statutes, the assessment is against the executors. As we have seen, the tax is a debt against the owner, the person assessed liable for the tax, but he has a remedy against the beneficial owner and a lien on the property and can reimburse himself out of the property in his possession. Oh. 41Y, Laws of 1903, and sec. 1061, Stats. (Supp. 1906). Graham v. Russell, 152 Ind. 186, 52 N. E. 806, is against respondents on this contention. The court said, pages 193, 194: “The contention of appellant’s counsel, that the petition ought to have alleged that the taxes in dispute had been filed as a claim against Graham’s estate prior to its final settlement, is without merit. The facts disclose that the decedent had for many years prior to his death failed to list and return for taxation a large amount of his property, and at his death it is charged he was liable for the payment of taxes, on account of his said default, in the sum of $3,000 and over, which had accrued and were due for state, county, and township purposes. “Taxes are not such claims which the law of this state either requires or intends shall be filed for payment against a decedent’s estate. It is true that taxes, in the order prescribed by the statute for the payment of liabilities of a decedent’s estate, come within the fourth provision of such order of payment. . . . The duty, however, rests upon the ad — 285 — ministrator or executor to pay tbe taxes due against tbe estate without tbeir being filed or presented for payment.” 4. It is further contended by respondents that tbe assessment was not properly made against tbe plaintiffs as executors of tbe estate of tbe deceased. A great many cases are cited from this court, but they are cases decided when tbe statutes on tbe subject were quite different from tbe present statutes. True, tbe entry against tbe executors on tbe tax roll was not in as good form as might be, but under our present statutes we think it sufficient as an assessment against tbe plaintiffs as executors. It is quite apparent from the whole record that tbe board intended to make tbe assessment against tbe executors. Sec. 1044a, Stats. (Supp. 1906), provides that failure to enter such assessment separately or to indicate the representative capacity or other relationship of tbe person assessed shall not affect tbe validity of tbe assessment. We think tbe assessment was valid against tbe plaintiffs as executors of Hugh Sloan, deceased.. 5. Several questions of practice respecting tbe sufficiency ■of tbe complaint in equity, and whether tbe plaintiff bad an adequate remedy at law, and whether such objections were waived by failure to demur or answer, are argued in tbe briefs of counsel. But since we bold that no case was made either at law or in equity, it is unnecessary to consider or decide such questions. 6. Tbe defendants set up a counterclaim asking judgment dismissing tbe complaint and that they have judgment against tbe plaintiffs for tbe sum of $1,204.88, being tbe amount claimed due for taxes, and for general relief, together with costs. On tbe trial defendants asked permission to withdraw tbe counterclaim, which was denied and tbe counterclaim was permitted to stand. Cb. 417, Laws of 1903, before referred to, makes tbe tax collectible from tbe executors personally and also makes it a — 286 — debt of tbe decedent. It being established that tbe taxes assessed against tbe plaintiffs are valid, judgment should have been entered in favor of tbe defendants for tbe amount of the debt. It is true that tbe counterclaim asks judgment against tbe plaintiffs — apparently a personal judgment. But this is immaterial under our system of pleading and practice. A judgment de bonis testaioris is a proper judgment in all cases where tbe executor is a party and tbe estate of decedent is liable for tbe debt. 18 Cyc. 1043 et seq.; Woodward v. Howard, 13 Wis. 557; Hei v. Heller, 53 Wis. 415, 10 N. W. 620; Ladd v. Anderson, 58 Wis. 591, 17 N. W. 320; Borchert v. Borchert, 141 Wis. 142, 123 N. W. 628. So in tbe present case judgment may be entered against tbe plaintiffs as executors, with direction that tbe same may be paid out of tbe property of tbe estate in tbe bands of tbe plaintiffs, since it appears from tbe record that there is ample property in tbe bands of tbe plaintiffs as executors to satisfy tbe claim. By the Coivrt. — Tbe judgment of tbe court below is reversed, and tbe cause remanded with directions to enter judgment in favor of tbe defendants upon tbe counterclaim as indicated in this opinion.