Innes v. McColgan

MARKS, J.

This is an appeal from a judgment requiring defendant, as Franchise Tax Commissioner of the State of California, to pay plaintiff the sum of $107.58. This sum represented a claimed overpayment under protest of $48.82, plus $8.84 interest, on plaintiff’s income tax for 1935, and $36, plus $4.36 interest, claimed overpayment on his income tax for 1936, together with $9.56 accrued interest on those amounts.

The facts of the case are not in dispute nor are they involved. Plaintiff and Katherine D. Innes were formerly husband and wife. They had three children. Mrs. Innes was awarded an interlocutory decree of divorce from plaintiff in 1926, and a final decree in 1927. By the decree he was required to pay her $300 per month for the support of herself and their three children, subject to further order of the court. In 1935, or shortly before, differences arose between plaintiff and his former wife over the payment of this money which was adjusted by agreement between the parties.

Under date of May 8, 1935, plaintiff and Mrs. Innes entered into a written contract whereby plaintiff agreed to pay to Murray Innes, Jr., their son, as trustee, the sum of $25,000 in trust, the income, and such of the

corpus

as might be

[783]

necessary, to be used to pay Mrs. Innes $200 per month for her support during the balance of her life. Plaintiff retained no control over the trust or the trust funds, nor was he obligated to pay her anything if the trust funds became exhausted during her lifetime. After her death the unexpended balance of the

corpus

of the trust was to be divided between the children.

The trust agreement contained the following covenants on the part of Mrs. Innes:

“The party of the second part hereby releases the party of the first part of and from all claims and demands of every name and nature including any claim or cause or causes of action in favor of herself or any of her children against the party of the first part, and covenants and agrees to obtain and procure from each and all of the said three children a general release to the party of the first part; and she further covenants and agrees to cause the dismissal, discontinuance and release of any action or proceeding now pending involving any claim for alimony or support for herself or support, maintenance and education of any of the said three children accrued or to accrue in the future, if any. Said party of the second part also covenants and agrees to consent to the making and entry of any Order or Decree in any action now pending to carry out the provisions of this agreement, including the entry of any Order or Decree modifying or striking out from the Pinal Decree of Divorce of any provision for alimony, support, maintenance and education contained in said Pinal Decree of Divorce, and to make, execute, and deliver all other necessary or proper papers or consents to carry out each and all of the provisions of this agreement. . . .