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                                 May 20, 1959

        Honorable Robert S. Calvert    Opinion No. ww-626
        Comptroller of Public Accounts
        Capitol Station                Re: Classlflcatlon for
        Austin, Texas                       Inheritance tax
                                            purposes of alleged
        Dear Mr. Calvert:                   adopted child.
                  You have requested that we advise you as to
        whether Marian Jean Dooley Lee (hereafter referred to as
        Marlan) should be classified for inheritance tax purposes
        under the provision of Article 7118--Class A, Vernon's
        Civil Statutes, for a "legally adopted child. . .of the
        decedent" or whether she should be classified under
        Article 7122--Class E, V.C.S., which provides the appro-
        priate class for all.persons not specifically covered by
        special classification provisions.
                  On July 5, 1917, the New York Foundling Home
        placed Marlan who was then two and one-half years old in
        the home of Leslie B. Dooley and his wife Katherine Marie
        Dooley (hereafter referred to as DecedentI. Marlan re-
        msined with the Dooleys until the time of her marriage.
                   Prior to 1936, the Dooleys made no attempt to
        adopt tiarianbut held her out to be an adopted daughter and
        so considered her. 'On December 2, 1936, Mr. Dooley and the
        ~Decedent executed a deed of adoption which was duly acknowl-
        edged and recorded and which stated that they by said ln-
        strument adopted Marlan *a child of parents unknown to us,
        now twenty years of age (and who has continually resided
        with us since July 5, 1917) as our legal heir, hereby can-
        ferrlng on said Marlan Jean Dooley all the rights and privi-
        leges, both in law and equity, appertaining to this act of
        adoption for all purposes retroactive and to be effectual
        from the 5th day of July, 1917." The Dooleys were advised
        by their attorney that upon filing of the deed of adoption
        In the Deed Records of Dallas County, Texas, Marlan had been
        legally adopted by,them.
                  The Decedent died testate March 14, 1956. Under
        the terms of her will she devised certain properties to
        Marlan. Throughout the will Marlan was referred to as her
        "foster daughter."
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    Honorable Robert S. Calvert, Page 2 (Opinion No. ~~-626)


              We will first consider whether under the above
    recited facts, Marlan was the "legally adopted child" of
    the Decedent.
              From the time the first adoption st8tute was en-
    acted In Texas In 18501 until the Act of 1931 repealed
    all adoption laws then in effect, adoption was accomplished
    by the means of a written instrument, In the nature of a
    deed, which was signed by the adopting person and authentl-
    cated or acknowledged as deeds are required to be. The
    deed was required to be filed in the office of the county
    clerk, such filing being essential to the execution of the
    Instrument and constituting the act of adoption. 1 Tex.
    ,Jur.Supp. 137, 138, Adoption, Sets. 15, 16. The Act of
    1931 repealed all adoption laws then In effect and substl-
    tuted as a complete method of adoption a z,adlcallydifferent
    procedure. 1 Tex.Jur.Supp. 134, 135, Adoption, Sec. 8.
    The new act and its later amendments make the act of adop-
    tion a judicial function. 1 Tex.Jur.Supp. 141, Adoption,
    Sec. 21.
              Various acts pertaining to the validation of
    adoptions have been passed by the Legislature. Acts 1934,
    43rd Leg., 2nd C.S., p. 93, oh. 39, !I1; Acts 1937, 45th
    2%. >    1324, ch. 490, B 2; Acts 1947, 50th Leg., p. 1016,
      . 431; 8 2; Aots 1951, 52nd Leg., p. 388, ch. 249, 8 4.
              However, these validation acts apply to adoption
    papers signed prior to August 21, 1931, and to adoption de-
    crees theretofc-e entered by the District Court In Texas
    based on proceedingswhich conformed to the adoption statutes
    "as thereafter or hereby amended." Since the purported
    adoption deed In the Instant case was executed at a time
    when the only method for accomplishing adoption was the ju-
    dicial method, the deed itself amounts to a nullity, and
    there Is nothing to validate. Therefore, at the date of the
    death of the Decedent, Marian was not her legally adopted
    child.
              Subsequent to the Decedent's death, Marlan instl-
    tuted suit in the 1Olst Judicial District Court of Dallas
    County, Texas* for a declaratory judgment naming a8 defen-
    dants her foster father and all the heirs of the Deaedent
    and next of kln of fir.Dooley. In this suit, she sued to


    1
        Pas. Dig. Art. 31.
    2
        Act6   1931,   42nd Leg., p. 300, ch. 177.
Honorable Robert S. Calvert, Page 3 (opinion No. ~~-626)


have herself declared the adopted child of Mr. Dooley~and
the Decedent. Judgment was rendered In this suit on February
20, 1959. In the judgment the court made certain Findings
of Fact and Conclusions of Law. Incorporated In the Findings
of Fact are the facts previously stated. The court also
found as a fact that Marian was "held out to be the adopted
daughter" of the Decedent and her husband and that the !'Deed
of Adoption was Intended to be merely a confirmation of
their previous act of equitable adoption. . .'
          The court.concluded as a matter of law that "By
such adoption procedure and by holding out to the world that
the said Marlan. . .was their adopted daughter, the said
Leslie B. Dooley and his said wife have equitably adopted
said Marlan. . .' (Emphasis supplied throughout) However,
the court further concluded that "The said Marian. I .ls In
le al effect the legally adopted child of Leslle~B. Dooley
&I~          wife      .and was the le all adopted child of
the~.saidKatherl&'M&ie    Dooley and-d&d   me-the
time of~the death of the said Katherine Marie Dooley."
          On the basis of Its Findings of Fact and Conclu-
sions of Law, the court decreed that certain questions con-
tained In Plalntlff~s Original Petition be answered In the
following way.
          Question (2) ". . .dld not Leslie B. Dooley and his
said wife in legal effect adopt Marlan Jean Dooley Lee by
their act of acceptingcustody of the said Marlan. . .in con-
sidering and treating her always as their adopted daughter,
and In holding out to the world that she was In fact their
adopted daughter?" Yes.
          Questions (3) and (4) pertained to the Dooley's
intention In executing the adoption deed and the effect of
such execution. The court concluded that In executing such
papers the parties Intended to confirm the previous act of
adoption and that such was the effect of said execution.
          In response to Question (5), the court concluded
that Dooley and his wife Intended to take Marlan into their
family and give her the rights, privileges and duties of a
child and heir and that said child "In legal effect" had "the
rights, privileges and duties of'a child and heir."
          In response to Questions (6) and (7), the judgment
affirms the fact that Marlan had been considered by all
heirs and next of kin "to be in legal effect the le all'
adopted dau ter of LesneT.16ooley    a-said      wand
                                                  w
that Mar&    consmered herself to be in legal effeot the
legally adopted daughter" of Dooley and his wife.
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        Honorable Robert S. Calvert, Page 4 (Opinion No. ~~-626)


                  In response to Question (lo), the court found that
        the attempted compliance with the adoption laws coupled with
        holding Marian out to the world as their adopted daughter
        was followed 'by reliance thereon and performance thereto"
        by Marian.
                  In response to Question (ll), the court stated
        that it would be Inequitable for Dooley and his wife and
        their privies to deny the adoption of Marian and her status
        as an adopted daughter.

    .             However, Question (12) reads as follows: "Is
        Marlan Jean Dooley~Lee --
                               In legal effect the legally adopted
        child of Leslie B. Dooley alflis       me?"    The court
        answered this question in the affirmative.
                  We will now consider whether this judgment effec-
        tuates Class A classification for Marlan. It Is evident
        from the foregoing summation of the judgment that certain
        portions thereof are inconsistent. The judgment might well
        be construed as a decree that Marlan was a child adopted by
        estoppel. On the other hand, the court's conclusion that
        Marian was the "legally" adopted child of Dooley and the De-
        cedent Is Inconsistent with a decree of adoption by estoppel.
        A decree of adoption by estorpel establishes the property
        rights of the child adopted by estoppel In so far as the
        adoptive parents and their privies are concerned.~ Such de-
        crees do not purport to change the status of a child adopted
        by estoppel. Since adoption was unsto       the common law,
        the status of an adopted child can only be created by com-
        pllamth      the controlling adoption statutes. 1 Tex.Jur.
        supp. 132, Adoption, Sec. 3. Thus If the,judgment decrees
        that Marlan was a child adopted by estoppel, she cannot be
        classified under the Class A provlslon for a "legally
        adopted child. . .of the decedent" In view of the per curlam
        opinion of the Supreme Court In Johnston v. Calvert,
        Tex. -,    305 S.W. 2d 778 (X57-).
                  The Court of Civil Appeals in Calvert v. Johnston,
        304 S.W. 2d 394 (1X7), held that the alleged adopted son
        had failed to prove an adoption by estoppel and that he was
        therefore properly classified for Inheritance tax purposes
        under Class E--Article 7122. Mr. Justice Hughes concurred
        solely on the ground that the alleged adopted child was not
        a "legally adopted child. . .of the decedent" within the
        meaning of Article 7118, Class A.
                  The Supreme Court refused the Application for Writ
        of Error with the notation, "no reversable error." We quote
        the Court's per curlam opinion which reads as follows:
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        Honorable Robert S. Calvert, Page 5 (Opinion No. ~626)


                          "We agree with the view expressed by
                     Mr. Justice Hughes 004 S.W. 2d 398 that
                     Grant Lindsey, Jr. was not a 'lega2 ly
                     adopted child' within the meaning of Artl-
                     cle 7118, Class A, Vernon's Ann. Tex. Stats.
                     See Wooster v. Iowa State Tax Commission,
                     230 Iowa 797, 298 N.W. 922, 141 A.L.R. 1298.”
                  However, If the effect of the judgment of the court
        Is to decree that Marlan had been legally adopted and had
        the status of a legally adopted child of the Decedent, is
        the State bound by this decree to place Marian within the
        Class A classification for a "legally adopted child. . .of
        the decedent" for Inheritance tax purposes?
                  As a general rule, a judgment determining personal
        status is conclusive in subsequent litigation involving.the
        same Issue. 50 C.J.S. 224, Judgments, Sec. 734. This Is so
        because If a proceeding Is designed primarily to determine
        status It Is ordinarily a proceeding In rem and conclusive as
        a judgment In rem upon every person Interested In or affected
        by the status thus adjudicated. 3 Freeman on Judgments (5th
        Ed., 1925) 3145, 3146, Sec. 1534. Howev?r, we quote.the fol-
        lowing excerpt from the above cited section of Freeman:
                     1,. . .l3utin order that such a proceeding shall be
                     one In rem It Is generally, If not always, neces-
                     sary that It should contemplate and be Intended to
                     create or effect a change In the legal status of
                     the person In question. It 1s not enough that sta-
                     tus be incldertally, even though necessarily, passed
                     upon In proceedings which are purely personal In
                     their nature or which are In rem as to some other
                     aspect of the status of such person. In other words,
                     an adjudication which creates or changes legal status
                     is In rem but one which finds or adjudicates the past
                     or present existence of a partlcular'status Is not
                     In that aspect a judgment In rem but must be treated
                     like any other judgment inter partes."
                      Since it Is evident that the judgment In the ln-
            stant case dld not purport to create or change Marlan's legal
            status but rather was an adjudication of her part and pres-
            ent status, it Is doubtful, to say the least, that It should
            be treated as a judgment In rem but rather It should be
            treated like any other judgment Inter partes with the result
            that the State, not being a party, would not be bound.
                      Even If this distinction were not recognized, there
            Is authority to the effect that "A judgment In rem, while
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         Honorable Robert S. Calvert, Page 6 (Opinion No. w-626)


         binding and conclusive on all private rights, does not con-
         clude the State, Its public agencies and mandatories, unless
         the law authorizing the proceedings contemplated such a re-
         sult, since the State without its consent, express or im-
         plied, Is not subject to suit." 3 Freeman on Judgments, 5th
         Ed., 1925, 3115, Sec. 1527; 1 Freeman on Judgments, 1088,
         1089, Sec. 506; 26 Tex. Jur. 209, Judgments, Sec. 551. It
         was-suggested ln Prairie Oil and-,GasCo. v..State,-214 S.W.
         363 (Tex.Clv.App. 1919) modified on other polnts'(Com.App.),
         231 S.W. 1088 (1921), that any strtute which would make a
         judgment rendered In a suit to which the State was not a party
         binding upon the State would be violative of the due process
         clause provisions of both the State and Federal constitutions.
                   At least two courts have held that the State In
         collecting Inheritance taxes is not bound by prior adjudl-
         cations to which It was not a party. In McDougald v. First
         Federal Trust Co., 199 P. 11 (Cal.Sup. 19:  9 the husr
         Eveyed'certaln   community property wlthout'the wife's con-
         sent. After the husband's death. the wife successfully sued
         to recover her community Interest:?!hin?under California law
         she obtained as the heir of the husband; therefore, the
         property In question was liable for an inheritance tax. At
         page 12 the court said:
                  "The right of the state of Callfo?nla to an lnherlt-
                  ante tax was not litigated In that proceeding, the
                  state was not a party thereto, and the judgment In
                  favor of the wife has no bearing upon the right of
                  the state of California ts recover an Inheritance
                  ,tax except as It shows tllatthe widow has success-
                  fully~maintained her right to succeed to the con-
                  munlty property awarded to her by the judgment."
                   In Hasbrouck v. Martin, 183 A. 735 (Perogative
         Court of N.J. 19361, the decedent had made certain bank de-
         posits and-the &r&ship   of the deposits was litigated after
         her death. In suing to collect the Inheritance taxes, the
         tax commissioner did not dispute the correctness of the judg-
         ment adjudicating title. At page 737 the court said:
                   "The State Is of coursesnot bound In this proceeding
                   by the result In the chancery suit to which It was
                   In nowlse a party. Cf. In re Dorrance's Estate,
                   115 N.J. Eq. 268, at page 272, 170 A. 601; affirmed
                   Dorrance .I.Martin, 176 A. ,902, 13 N.J. Misc. 168;
                   In re Fischer's Estate, 118 N.J. Eq. 599, at page
                   605, 180 A. 633; Freudenrloh v. Mayor, etc., Falr-
                   view, 114 N.J. Law, 290, 176 A. 162.
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          Honorable Robert S. Calvert, Page 7 (Opinion No. ~~-626)


                      "It would therefore have been open to the commis-
                      sioner in this tax proceeding to find, if the
                      evidence before him so indicated, that no valid
                      trusts had been created. He made no such finding,
                      however, and makes no such contention on this
                      appeal; he conced&s that valid trusts were created;
                      and the evidence in the record leads to the same
                      conclusion."
                    For the reasons stated In these opinions as well
          as those heretofore,given we are of the opinion that Marian
          cannot be given Class A classification as a "legally~adopted
          child" of the Decedent. You are therefore advised that she
          must be classified for inheritance tax purposes under Class E.
                                    SUMMARY
                         Where a foster daughter of the Deced~ent
                    was not adopted in accordance with the con-
                    trolling adoptio? statutes, a judgment rendered
                    subsequent to Decedent's death declaring said
                    foster child to be the legally adopted child of
                    the Decedent AndyDecedent's child adopted by
                    estoppel does not bind the State in classifying
                    the alleged adopted child for Inheritance tax
                    purposes. Sald~child cannot be classlf-ledunder
                    Article 7118, V.C.S., as a "legally adopted
                    child.   .of the decedent" but must be classi-
                    fied under Article 7122, V.C.S.
                                         Yours very truly,
                                          WILL WILSON
                                          Attorney General
          MMP:bct
          APPROVED:
          OPINION COMMITTEE:                  Assistant
          Geo. P. Blackburn, Chairman
          William E. Allen
          Henry G. Branwell
          Lawrence Jones
          Raymond V. Loftin, Jr.
          J. Mllton Richard,son
          REVIEWED FOR THE ATTORNEY GENERAL
          BJ :   W. V. Geppert
