Rogers v. Flournoy

This is an appeal by plaintiff (executrix and widow of the deceased) from the trial court’s order affirming the report of the inheritance tax appraiser and denying plaintiff’s petition for a refund of gift tax paid.

Facts

On March 30, 1963, David Carl Rogers, now deceased, was seriously injured in an accident caused by the negligence of another. Rogers thereafter commenced an action in tort to recover damages for personal injuries suffered. Prior to the time the action was brought to trial, Rogers and the defendant shipping corporations entered into a compromise settlement on June 1, 1964. On the same date, Rogers, by his guardian ad litem and wife, Florence Rogers, executed a general release discharging the defendants from all liability. Pursuant to the court order authorizing compromise, Rogers received $265,667 in full settlement of all claims.

Rogers died on March 31, 1969, leaving all of his estate to his wife, Florence, who was also named executrix of the will. The State Controller determined that a gift tax should be paid on $113,500 of the proceeds from the settlement on the theory that this sum was the decedent’s separate property under section 163.5 of the…