Case Title: In Re Messerschmidt's Estate

Citation: 73 N.W.2d 123

Docket Number: 

State: south-dakota

Court: South Dakota Supreme Court

Date: 1955-11-22T00:00:00Z

Document:
73 N.W.2d 123 (1955) ESTATE of Albert J. MESSERSCHMIDT, a/k/a A. J. Messerschmidt, Deceased. STATE of South Dakota and Oliver Bender as Assistant Director of Taxation of the State of South Dakota, Appellants, v. John MESSERSCHMIDT, Executor of the Estate of Albert J. Messerschmidt a/k/a A. J. Messerschmidt, Deceased, Respondent. No. 9533. Supreme Court of South Dakota. November 22, 1955. *124 Phil Saunders, Atty. Gen., Olin C. Thompson, Asst. Atty. Gen., for appellants. Lester H. Herbrandson, Brookings, for respondent. RUDOLPH, Presiding Judge. The state has appealed from a judgment of the circuit court of Brookings County decreeing that certain United States Savings Bonds held jointly in name of the deceased and another are taxable for inheritance tax purposes at one-half of their value. The state contends that such bonds are taxable at their full value. This court in the case of In re Rummel's Estate, 74 S.D. 131, 49 N.W.2d 380, held that the United States Savings Bonds there involved were taxable at their full value, but since the decision in that case there has been enacted Chap. 464, Laws of 1953, upon which the trial court based its decision. As in the Rummel case, so also in this case, the bonds were purchased by decedent and retained in his possession and under his control until his death. In the Rummel case we held that the tax imposed by SDC 57.2104(3) was upon the transfer of property intended to take effect in possession or enjoyment at or after death, and that Government Savings Bonds purchased by decedent with his own funds, kept in his exclusive possession until death gave the named co-owner no interest in the bonds prior to the death of the decedent and that, therefore, the transfer of the right to possession and enjoyment of the bonds took effect upon death and was taxable under the provisions of SDC 57.2104(3). We further held that such bonds were not taxable under Chap. 293, Laws of 1943, (8) SDC Supp. 57.2101(8), for the reason that no joint tenancy was created by the purchase of these bonds and naming a co-owner. We based our decision upon the reasoning of the Pennsylvania and Montana courts in the cases of In re Myers' Estate, 359 Pa. 577, 60 A.2d 50, and State Board of Equalization v. Cole, 122 Mont. 9, 195 P.2d 989. The 1943 law, which we held was not applicable to the bonds in the Rummel case because such bonds were not held in joint tenancy, is as follows: Chap. 464, Laws of 1953, is an amendment of the 1943 law and is as follows: Clearly both the 1943 and 1953 laws relate to joint tenancies, and neither is applicable to the bonds here involved for as stated in the Rummel case the transaction relating to these bonds constituted a transfer of property intended to take effect in possession or enjoyment after death, and no interest was created in the named co-owner at the time the bonds were purchased. As we view the 1953 law it simply changed the method of determining what constituted a taxable transfer upon the death of a joint tenant. Such being the purpose of the law it left unaffected the rule announced in the Rummel case. The judgment appealed from is reversed. All the Judges concur.