Estate of Hearst

SHENK, J.

This is an appeal from an order of the superior court, in and for the city and county of San Francisco, fixing the method of computation of interest on inheritance taxes and the balance of such taxes and interest due.

On the thirteenth day of April, 1919, Phebe A. Hearst died testate in the county of Alameda, being at the time of her death a resident of the city and county of San Francisco and leaving an estate in California and elsewhere, including New York, South Dakota, and Mexico. In due time the will was admitted to probate. The inventory was presented by the executors to the appraisers, one of whom was the inheritance tax appraiser, on October 2, 1919. Because of the magnitude of the estate, its scattered properties, and various other problems arising in connection with the appraisal, the report of the inheritance tax appraiser was not filed until August 27, 1923. No question of delinquency, loches, or procrastination on the part of the representatives of the estate or of the inheritance tax appraiser is suggested or involved herein. All parties appear to have proceeded with diligence.

For the purpose of the payment of inheritance taxes the estate was appraised at $8,418,506.18. By order of court duly made on September 13, 1923, the amount of inheritance taxes due the state, inclusive of the tax on certain transfers made in contemplation of death and exclusive of the tax on the value of a certain contingent interest secured by bond, was fixed at the sum of $1,020,671.63-, of which amount the sum of $949,101.04 was chargeable against the

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residuum of the estate. On the same day, to wit, September 13, 1923, the court, upon petition of the executors, made its order fixing the rate of interest to be paid on the inheritance tax. In and by this order the court found that the inheritance tax appraiser had been unable to complete and file his report until the twenty-seventh day of August, 1923, by reason of causes of delay which were unavoidable, and that such unavoidable causes of delay would not be removed until such time as the court should make “its order confirming the report of the inheritance tax appraiser with an allowance of a reasonable time thereafter within which to compute the amount or amounts of interest which may he due upon the various devises, legacies and transfers upon which such taxes may be payable.” Also on the same day the court made an order “that the penalty of ten per cent per annum imposed by Sub. (1) of Sec. 7 of the Inheritance Tax Law of the State of California, Statutes of 1917, for. non-payment or delay in payment of the said tax be not charged upon the inheritance taxes found to be due in the above entitled estate, but that interest at the rate of seven per cent per annum be charged upon the said taxes from the expiration of eighteen months after the death of the said decedent until the cause of delay in such payment be removed, and the date at which such cause of delay will be removed is hereby fixed and specified as ten days from and after the date whereupon this court shall make its order confirming the report of the inheritance tax appraiser herein, filed on the 27th day of August, 1923.” The report of the inheritance tax appraiser was thereupon confirmed. Within the ten-day period the executors tendered to the treasurer -of the city and county of San Francisco the sum of $52,249.96, which, with simple interest computations, was the amount they claimed to be the balance due the state. The treasurer refused to accept said amount in full settlement and demanded an additional sum in accordance with his method of computation. On the thirty-first day of October, 1923, the executors filed in said court a petition for instructions and order as to computation of interest. It was alleged in said petition “That petitioners have made the following payments on account of inheritance taxes due the State of California, in accordance with receipts on file in the office of the Clerk of this court and proceeding, to which