Ernest Kingdom v. Estate of Kingdom

BRAY, J. Two proceedings brought by appellants were - consolidated for trial on stipulated facts and additional documentary evidence. One was an action against the estate of Sara Maud Kingdon and Berry D. Brown, as executor thereof. The other was objections filed in that estate to the first and final accounting of the executor. From the judgment in the first proceeding in favor of respondents, and from the order in the second proceeding overruling objections to the said account, appellants appeal.

Question Presented

In view of the confusion between statements made in appellants’ brief and the -issue- raised by the pleadings and considered by the trial court, it is difficult to determine the exact contention of appellants. As nearly as we can judge, [589]it is (other than the fact that appellants want the Sara Kingdon estate to pay them a total sum of $13,760.78) : Where there was a partnership of husband and wife, is the estate of the surviving partner (the wife) entitled to apply in payment of federal excess profits taxes joint income tax and surtax credits of the partners, or is the estate required to pay to the other partner’s estate one-half of that credit?*

Facts

The United Service Company, owned by Frank and Sara, became indebted to the United States Maritime Administration in the sum of $35,889.50 for excess profits taxes for 1944 and 1945. The administration’s invoice charged the company with the total tax liability. In its credit memoranda it named the company as debtor but in showing the charges and debits it showed one-half the charge as against Frank and one-half as against Sara. Likewise a total credit of $27,521.56 for income tax and surtax overpaid was shown as one-half ($13,760.78) in favor of Frank and a similar sum in favor of Sara. However, it is clear from the record that both the charge and the credit were jointly in Sara and Frank as owners of the company, † Frank died. The probate of his estate was commenced August 31, 1947. No reference was made in the probate of his estate to this tax liability or credit. The court in that estate ordered the executors (Sara was one) to continue the operation of the company and found that it was the partnership of Sara and Frank. In February, 1948, the partnership business was sold for $10,000, one-half of which the court ordered paid to Sara as her share of the partnership. In the decree of distribution (March 11, 1949) the court found that the company had been operated at a net loss of $6,043.01; that Sara as partner was entitled to