The sole question presented by this appeal is whether or not the proceeds of the two annuity policies are included in the term "all insurance" as the term is used in section 91-4406, R.C.M. 1947. In the case of In re Fligman's Estate, 113 Mont. 505, 509, 129 P.2d 627, 629, this court considered the same question and decided it adversely to the appellant's position, stating, "There are well reasoned cases cited from other jurisdictions on either side of the question, but we think the case at bar must be determined by the construction of our own statutes. The question is new in this jurisdiction.
We find nothing in these sections to justify the claim that an annuity contract such as herein involved should be classified as life insurance either for the purpose of estate tax or otherwise. Respondent urges however that such has been the holding of other courts under statutes similar to ours, citing In re Fligman's Estate, 113 Mont. 505, 129 P.2d 627 and In re Estate of Hammerstrom, Mont., 326 P.2d 699. In these cases the majority of the Montana court held that annuity contracts should be classified as insurance under the Montana statute exempting proceeds of insurance to the extent of $50,000 from state inheritance tax.
(4) "There are well reasoned cases cited from other jurisdictions on either side of the question, but we think the case at bar must be determined by the construction of our own statutes." In re Fligman's Estate, 1942, 113 Mont. 505, at page 509, 129 P.2d 627, at page 629, quoted with approval in the recent case of In re Hammerstrom's Estate, Mont. 1958, 326 P.2d 699, at page 700; and (5) In the year 1921 this court found and held: "Upon examination of the decided cases in other states which have the same or similar statutory provisions, we find that their courts generally agree that counsel fees may be allowed only while the divorce action is pending."
¶ 28 Did the District Court err as a matter of law in ruling that annuity contracts are not insurance under Montana law? ¶ 29 The Heirs argue that pursuant to this Court's decision in In re Fligman's Estate (1942), 113 Mont. 505, 129 P.2d 627, wherein we held that annuity contracts are considered insurance for inheritance tax purposes, it follows that annuity contracts have to be considered insurance for all purposes. The District Court disagreed and, relying on various provisions of Title 33 of the Montana Code Annotated, determined that the annuity contract in this case "shall not be treated as insurance proceeds, but merely as other assets of the estate." ¶ 30 In Fligman, this Court held that the annuity contracts at issue were entitled to the same $50,000 exemption from inheritance tax afforded life insurance.
The amount of the proceeds from the annuity was $2,813.61. Because of what has heretofore been said, the $50,000 exemption did not extend to these proceeds since the total amount of insurance and annuity proceeds was $53,276.26 and thus the tax was paid on the amount. However, appellant would have this court reverse its holding in In re Fligman's Estate, 113 Mont. 505, 129 P.2d 627, wherein it was held that annuity proceeds were exempt under R.C.M. 1947, section 91-4406. That case was decided in 1942. Eight legislative sessions have been held since the decision, and the legislature has not seen fit to amend the statute.
The proceeds of these three supplementary contracts were omitted from the final report and petition to have inheritance tax determined and the state board of equalization objected. The answer of the administratrix asserted that the proceeds were insurance and therefore exempt under R.C.M. 1947, section 91-4406, as interpreted by In re Fligman's Estate, 113 Mont. 505, 129 P.2d 627. The trial court overruled the state's objections and issued its order determining tax, refusing to tax the proceeds from the endowment policies. From this order the state has appealed.