.   ‘




                          E           ORNEY           GENERAL
                                    OP~EXAS




                                        May 20, 1959

        Honorable   Robert S. Calvert           Opinion   No. W-626
        Comptroller     of Public Accounts
        Capitol   Station                       Re:   Classification      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
        Marian) 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 Marian 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 Decedent).   Marian re-
        mained with the Dooleys until   the time of her marriage.

                      Prior to 1936, the Dooleys made no attempt tu
        adopt Marian but 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 in-
        strument adopted~ Marian "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, c,on-
        ferring    on said Marian 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 Dooley,s were advised
        by, their    attorney   that upon filing      of the deed of adoption
        in the Deed Records of Dallas County, Texas, Marian had been
        legally~ adopted by them.

                   The Deced~ent died testate     March 14, 1956.           Urder
        the terms of her will    she devised   certain    properties        to
        Marian.   Throughout  the  will  Marian   was  referred    to      as her
        "foster  daughter."
                                                                                 ,   .




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    st tute was en-
acted in Texas in 18501 until          the Act of 1931 5 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 authenti-
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 r.adically     different
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,
zi;d Leg., 2nd C.S., p. 93, ch. 39, B 1; Acts 1937, 45th
          1324, ch. 490, 8 2; Acts 1947, 50th Leg.,      p. 1016,
ch.‘&3t;  8 2; Acts 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 theretofore    entered   by the District     Court in Texas
based on proceedings   which conformed to the adoption        statutes
“as thereafter    or hereby amended.”      Since the purported
adoption   deed in the instant    case was executed      at a time      1
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’ 8 death, Marian insti-
tuted suit in the 1Olst Judicial   District  Court of Dallas
County, Texas, for a declaratory   judgment naming as defen-
dants her foster   father and all the heirs  of the Decedent
and next of kin of Mr. Dooley.    In this suit,   she sued to


1
    Pas.   Dig.    Art.   31.
2
    Acts   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 cqurt'.concluded       as a matter of law that "By
such adoption    procedure      and by, holding   out to the world that
the said Marian.       . . was their    adopted daughter,    the said
Leslie   B. Dooley and his said wife have equitabl              adopted
said Marian.    . .'      (Emphasis supplied    throug
                                                   'd    ou      However
the court further       concluded    that "The said Marian.      . .is i;
legal  effect   the legally      adopted child    of Leslie   B. Dooley,
andhis          wife,.     . .and was the legally      adopted child    of
the~~said Katherine      Marie Dooley and Leslie       B. Dooley at 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 Plaintiff's  Original Petition  be answered in the
following way.

             Question    (2) ", . .did not Leslie   B. Dooley and his
said wife in legal       effect  adopt Marian Jean Dooley, Lee bye
their    act of acceptingcustody       of the said Marian.  . .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 Marian 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 Marian had been considered        by all
heirs   and next of kin "to be in           effect  the le all
adopted daughter of Lesne7.a                        =d, wand
                                                           w
that Marian "consmered      herself  to be in legal    effect    the
legally   adopted daughter"    of Dooley and his-wife.
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
Marian Jean Dooley Lee
child  of Leslie B.
answered this question   in the affirmative.

               We will now consider        whether this judgment effec-
tuates     Class A classification         for Marian.      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 tnat Marian 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          b?? 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 unknown to the common law,
the status       of an adopted child        can only be created       by com-
pliamth            the controlling      adoption     statutes.     1 Tex.Jur.
supp. 132, Adoption,          Sec. 3. Thus if the judgment decrees
that Marian was a child           adopted by estoppel,         she cannot be
classified       under the Class A provision          for a "legally~
adopted child.         . .of the decedent"       in view of the per curiam
opinion      of the Supreme Court in Johnston v. Calvert,
Tex. -,          305 S.W. 2d 778 (1957).
             The Court     ofCivil   Appeals in Calvert      v. Johnston,
304 S.W. 2d 394 (1957),        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 curiam opinion  which reads as follows:
.   .




        Honorable        Robert   S. Calvert;   Page 5 (Opinion    No. ~~-626)



                           "We agree with the view expressed  by
                     Mr. Justice   Hughes DO4 S.W. 2d 398 that
                     Grant Llndsey~, Jr. was not a 'lega < ly
                     adopted child'   within the meaning of Arti-
                     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 Marian 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 purposes7

                    As a general   rule,  a judgment determining       personal
        status  is conclusive    in subsequent   litigation    involving    the
        same issue.    50 C.J.S. 224, Jud,gments, Set, 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. However, we quote the fol-
        lowing excerpt    from the above cited     section   of Freeman:

                            .But in 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 is not enough that sta-
                     tus be incidentally,       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 particular    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 in-
        stant case did not purport     to create    or change Marian's  legal
        status but rather was an adjudication        of her past 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
Honorable    Robert   S. Calvert,    Page 6 (Opinion     No. ~~-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     in Prairie    Oil and Gas Co. v. State,           214 S.W.
363 (Tex.Civ.App.       1919)   modified,other           points    (Com.App.),
231 S.W. 1088 (1921),        &at any statute       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
 collectina     inheritance   taxes is not bound by nrior        ad.iudi-
 cations    tz which it was not a party.          In Mcbokgald v.~"First
--Federal Trust Co., 199 P. 11 (Cal.Sup.           1921)  the husbdnd
 conveyedcertain        community property     without the wife's     con-
 sent..    After the husband's     death    the wife successfully~      sued
to recover      her community interest      l!hip"? 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 Califo?nia     to an inherit-
             ance 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     tJ recover   an inheritance
             tax except as it shows tnat the widow has success-
             fully  maintained   her right to succeed to the com-
             munity property    awarded to her by the judgment."

            In Hasbrouck v. Martin,    183 A. 735 (Perogative
Court of N.J. 1936), the decedent      had made certain     bank de-
posits  and the ownership   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 course..not    bound in this proceeding
             by the result   in the chancery    suit to which it was
             in nowise a party.     Cf.   In re Dorrance's   Estate,
             115 N.J. Eq. 268, at page 272, 170 A. 601; affirmed
             Dorrance v. Martin,    176 A. 902, 13 N.J. Misc. 168;
             In re Fischer's   Estate,  1.18N.J. Eq. 599, at page
             605, 180 A. 633; Freudenrich     v. Mayor, etc.,    Fair-
             view, 114 N.J. Law, 290, 176 ~~162.
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 concedes  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 Decedent
            was not adopted in accordance            with the con-
            trolling     adoption   statutes,     a judgment rendered
            subsequent     to Decedent's      death declaring     said
            foster    child to be the legally         adopted child     of
            the Decedent and Decedent's           child  adopted by
            estoppel     does not bind the State in classifying
            the alleged      adopted child     for inheritance      tax
            purposes.      Said child    cannot be classified        under
            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 (3. Braswell
Lawrence Jones
Raymond V. Loftin,   Jr.
J. Milton Richardson

REVIEWEDFOR THE ATTORNEYGENERAL

By:   W. V. Geppert
