In Re Estate of Monfort , 193 Minn. 594 ( 1935 )

I concur in the result reached in the companion Rand case,193 Minn. 599, 259 N.W. 556, for therein it was stipulated and found by the court that all the stock involved was in the state of decedent's residence except certain shares which were deposited for safekeeping purposes in a vault in Minneapolis and were not pledged or otherwise made use of in Minnesota. None of the stock had a taxable situs in Minnesota.

I respectfully submit that the applicant in the instant (Monfort) case should have shown that the shares of stock had not been used in Minnesota in such a manner as to become an integral part of a local business, so as to subject them to an inheritance tax under the rule stated in First Nat. Bank v. Maine, 284 U.S. 312, 52 S.Ct. 174, 76 L. ed. 313, 77 A.L.R. 1401; In re Estate of Kennedy, 186 Minn. 160, 242 N.W. 697.

As stated in the opinion, certain facts were stipulated. Those facts, as far as here important, were that Monfort died a resident of the state of New York, and that shares of stock of a Minnesota corporation were a part of his estate. It was not stipulated, nor did it appear, where those shares of stock were kept, whether in New York or in Minnesota. If in New York, they were of course not taxable; if in Minnesota they would be subject to taxation if used in a manner as first above indicated. The attorney general in his objections, return, and answer among other things claimed an entire lack of proof that the stock had not been so used in Minnesota as to acquire a taxable situs; an entire absence of any evidence as to where the shares of stock were kept or as to how used. The lack of such proof was asserted and made an issue at the trial. The stipulation, after reciting the facts as stated above, set forth the claims of the applicant and those of the state. As much attention should be given to one set of claims as to the other. The applicant claimed that the tax was erroneously paid; the state that it did not appear that it was erroneously paid for the reason that the applicant had failed to prove that the shares of stock did not have a taxable situs here. The court without making a finding or a conclusion as to the situs, as was done in the Rand case, concluded that the tax was erroneously paid, thus adopting without any proof the claim of the applicant (not a stipulated fact). The majority opinion rejects the claim of the state because not within the stipulated facts, but gives credence to and adopts a claim of applicant not within the stipulated facts.

The attorney general brought this as a test case, there being numerous others of a like nature pending involving an amount in the neighborhood of $60,000. In fairness and justice to the state I think the case should be remanded to the trial court for the purpose of giving the applicant an opportunity to show, if he can, that none of the property had been so used in Minnesota as to acquire a situs for inheritance taxation purposes.