Reset A A Font size: Print

District Court of Appeal, Second District, Division 2, California.


Civ. No. 18214.

Decided: March 09, 1951

Frank M. Gunter, Beverly Hills, for appellant. James W. Hickey, Sacramento, Morton L. Barker and Walter H. Miller, Los Angeles, for respondent.

This is an appeal by the executor of the estate of Melanie L. Loewenstein, who is the decedent's son and sole distributee of her estate, from an order fixing the inheritance tax on her estate.

Facts: On October 15, 1939, Henry Meis obtained from the Connecticut Mutual Life Insurance Company an interest income contract No. 4430. The terms of this contract provided that the company agreed to retain the amount of $68,828.54, and pay interest thereon monthly at 3% to Melanie L. Loewenstein during her lifetime and after her death to her husband Daniel Loewenstein during his lifetime, and after the death of the survivor of such persons to their son, appellant Herbert D. Lowell (formerly named Herbert D. Loewenstein), throughout his lifetime.

The agreement further provided that upon the death of the last survivor of those three persons the company would pay the amount then retained to the then surviving widow of said son, or if there be no such widow to the then surviving children of said son in equal shares, or if there be no such children then surviving, one fourth to the University of Cincinnati, one fourth to the Cincinnati Art Museum, one fourth to Hebrew Union College and one fourth to the Jewish Hospital, with certain other provisions which are not here material.

It also provided that prior to November 16, 1939, or after October 14, 1940, decedent ‘with the written consent of said Henry Meis, or if he be deceased, with the written consent of the legal representative or representatives of said Henry Meis, may require the company to pay to her order any portion of the amount retained, interest payments on the amount so paid thereupon to cease.’

The agreement concluded with the following statement: ‘Except as herein specified, said proceeds left with the Company shall not be subject to withdrawal during the lifetime of any payee.’

On October 24, 1947, that decedent's request, appellant, Charles Levy and Sidney J. Eisman, the latter two as executors of the estate of Henry Meis, executed a document reading in part as follows:

‘Whereas said Melanie L. Loewenstein desires to have the right and power to require The Connecticut Mutual Life Insurance Company to pay to her order from time to time such portion or all of the amount retained by said Company pursuant to said agreement; and Whereas Herbert D. Loewenstein (now Herbert D. Lowell) is fully satisfied that his mother Melanie L. Loewenstein shall have such right and privilege and joins in this agreement for the purpose of giving such consent; and Whereas Charles Levy and Sidney J. Eisman, as Executors of the Estate of Henry Meis, deceased, are agreeable to such payments to Melanie Loewenstein and join in this agreement for the purpose of giving their written consent to such payments to Melanie L. Loewenstein: * * *.’

During her lifetime decedent did not require the company to make any payments to her. The inheritance tax collector levied a tax upon the principal amount of the policy payable to appellant.

Question: Were the proceeds of the policy properly subject to tax pursuant to Division 2, Part 8, Chapter 4, Article 3, (§ 13641 et seq.) of the Revenue and Taxation Code?

Yes. The document executed October 24, 1947, completed a gift of the proceeds of the contract from Henry Meis to decedent prior to her death. She could have at any time demanded that the complete amount on deposit with the company be turned over to her. The fact that she did not actually take possession of the sum due her did not prevent the gift from being complete. (Cf. Fisher v. Ludwig, 6 Cal.App. 144, 149, 91 P. 658.)

All rights of beneficiaries were terminated when the representatives of Henry Meis' estate executed the document of October 24, 1947, requiring that the company pay decedent any and all sums due under the contract. Therefore since the property belonged to decedent and appellant received it after her death the estate was subject to the tax levied against it.

There is likewise no merit in appellant's contention that the trial court improperly excluded evidence tending to show that appellant executed the document of October 24, 1947, under an agreement with his mother that she would not withdraw any money from the company without his consent and only then for his benefit, because it was unnecessary under the provisions of the contract with the insurance company for appellant to execute the document of October 24, 1947, it being necessary only that the representatives of Henry Meis' estate execute it. Therefore the motives of appellant in signing it were immaterial.


McCOMB, Justice.

MOORE, P. J., and WILSON, J., concur.

Copied to clipboard