*1 365' grievances under held arbitrable agreement York of the New reversed an order and thus compel Appeals arbitra- Court of which had refused Carey raised tion. the contention now contraindicates by Westinghouse grievances are the instant agreement. arbitrable under the principle Lastly, Westinghouse contends applies preemption federal field the labor question disputes that, the arbitration these argu- grievances since the instant matters at least are ably jurisdiction state within the Board, jurisdiction court no This had act this matter. elearly Carey Carey. contention holds controlled though sought arbitrated even matters arguably jurisdiction, within exist- the Board’s remedy ence of such either Board does not bar action in the federal Labor courts 301 of the Section Management Act3 Relations the state courts. The possibility fact that there is a of a conflict between the determination of the arbitrator and that of Board disputes juris- in connection with such no barrier to compel diction in the state courts to arbitration under bargaining agreements. collective Westinghouse. Decree affirmed. Costs on Management Labor Relations Act of amended seq. et 29 U.S.O.
Belefski Estate.
Elward Estate. *2 C. Mus- J., 1963. Before November Argued Bell, Roberts, O’Brien Cohen, Eagen, Jones, manno, JJ.
Vincent X. General, Yalcowiez, Deputy Attorney him Walter E. General, with Alessandroni, Attorney for appellant. Commonwealth,
Albert N. with him Patríele Jr. Danoff, Toole, J. F. Joseph appellees. Gallagher, Opinion by Me. 1964: January 23, Justice Jones, These appeals present whether one issue: narrow Section 18 of the Public School Retirement Employes’ exempts pro- (Act),1 taxation ceeds of the Retirement un- established (Fund), der the when payable to the legal representative of a deceased contributor there- and, pass to those entitled thereafter, *3 to under the Wills Act or the Intestate Act.2 each
Although appeal arises in separate estate, a the factual background both in- estates is identical sofar as disposition of appeals both is concerned. Both Mary Belefski and Helen at their the times of Elward, respective public deaths, school teachers in active service and of members and Fund. contributors Each decedent had exercised an the option provided by Act and had designated a beneficiary receive the Fund benefits but such designated pre- had beneficiary deceased the decedent. On decedent’s Fund the death, benefits were paid decedent’s legal representative accordance with the provisions of the Act.
In each estate, Commonwealth included pro- ceeds received legal representative from the Fund among the assets of the decedent’s estate in ar- at the riving balance of such estate upon which in- appraised. heritance was In each an appeal estate, from taken the tax appraisal to the Orphans’ 1 July 1917, 18, 1043, §18, Act of P. L. amended, 24 P.S. §2140. April 24, 1947, 89, of seq; P. L. Wills 20 P.S. §180.1 et 24, April Act of P. L. seq. Intestate 20 P.S. §1.1 et that court decreed Luzerne and County Court of from exempt Fund were received from the Act. under taxation Section appealed. From both decrees the Commonwealth depends appeals of on these Determination the issue construction interpretation taxa- “Exceptions alia: inter provides, Act which an a person The right etc. garnishment, tion, al- or State employe’s annuity, annuity, benefit any to the return of contributions, lowance, person accruing any accrued cre- fund in the and the this act, 'State any are hereby ated under this act, n ormunicipal gar- sale, levy tax, process whatsoever, other nishment, attachment, specifi- as in this- act except and shall be unassignable, supplied). . . . .” (Emphasis otherwise cally provided, outset be noted that the Common- At the must had the designated beneficiary wealth concedes that, each instance survived decedent, desig- would have been to such not have been beneficiary subject nated would tax. The rationale of the Commonwealth desig- position this taking “right” arises under the beneficiary desig- nated pro- alone becomes entitled to the beneficiary nated and such become from the never Fund, ceeds subject of the decedent’s to the claims of part estate, *4 tax. and inheritance basic creditors the Apparently, the drawn Commonwealth (1) distinction is that is beneficiary designated and dece- where survives from the proceeds the Fund are paid dent, directly if no (2) whereas beneficiary, desig- such beneficiary designated if the predeceases nated or beneficiary the proceeds paid the to the legal representa- decedent, the decedent’s estate upon such and, tive payment, lose their .identity as proceeds funds. (a) The two-fold: Commonwealth’s contention is it that the nature of an inheritance tax is such meaning “really ordinary not a tax at all in the estate but rather a of the word, distributive share which inheritance the State for itself” and an retains property on tax is not “a tax on the ... decedent’s transferring on transaction of an excise it . . . but privilege (Tack’s Pa. of inheritance” 155) A. and, therefore, language tax is not a ex- “State tax” within emption exemption (b) clause of if such §18; even clause be construed to embrace an inheritance tax, from the Fund were decedent’s upon payment, estate such and; the estate became owner of the is the devolution of persons from the estate to those ei- entitled, ther under decedent’s will or the intestate which laws, purposes. is taxable for inheritance tax supra, upon Tack’s Estate, Common- — heavily- very wealth relies so narrow —-determined imposed by issue: whether “the tax of 1919 [the inheritance tax statute] is a tax the transfer of” Bridge certain Delaware River Joint Commission authority bonds issued under the of identical statutes Pennsylvania Jersey. enabling and New Both stat- provided, utes inter alia: “the bonds . . . issued their commission, transfer and the therefrom income (including profits thereof), made on sale shall, at all [Pennsylva- be free from times, taxation within Jersey]” nia and New and each bond contained a stating enabling clause “this statutes, Bond is point taxation.” The decisional in Tack’s Estate was that an inheritance tax a tax on the of these bonds within the mean- transfer ing clauses of the enabling statutes. rationale the Court was that an property is not a tax either on the of a decedent or on *5 suc- but on the right of property such transfer decedent, of the estate inheritance cession clause exemption of the not within hence, ra- holding With such statutes. enabling wording If the in full agreement. tionale we are succes- tax on the does not State received of inheritance sion to, of, an requires Tack’s Estate then clearly the Fund, received tax be on the inheritance Fund in the case at bar. reliance places further great The Commonwealth 2d 467, 43 Cal. 2d 275 P. Simpson, on Estate Court of California. Supreme decision of the a 4-3 under the word- point Simpson that, decisional County in the California clause ing employee where a county Retirement Employes’ Law, beneficiary his died his widow as having designated bene- to receive death benefits under the statute, re- as designated beneficiary, fits which widow, of an subject payment ceived In first- inapposite. tax. Simpson presently that a holding designated beneficiary place, statute must tax on pay received re- from the beneficiary position takes a Simpson tirement con- fund, directly taken by now trary Commonwealth, i.e., the proceeds under such received circumstances, are not designated beneficiary subject to inherit- In taxation. the second ance the California place, “exempt employed language statute taxation, municipal or district” county, whether whereas state, in our “exempt statute reads language from any In tax.”3 municipal as the fact, opinion State and explicitly Simpson clearly the Court indicates, significance great deemed fact the Cali- supplied. Emphasis *6 fornia had not legislature adopted the language in exempting clause York statute— New retirement “exempt from had state or any municipal tax” —which been construed by exempting the New York courts as retirement benefits taxation. in Court Simpson “a considered the word “any” word broad to in enough its enlarged comprehend, plural all state or limi- sense, municipal taxes without tation” and noted that the California “chose legislature not to include the exemption word in the Any’ a deletion a clause, consistent with an intent to effect different application.”4 In sup- this Simpson respect, ports the rather than the appellees’, Commonwealth’s, construction of the wording §18.
Critical determination of these appeals is exact language exemption clause of That §18. exempts from State or tax” “any municipal is the of a “right person” to certain named specifically benefits under the Act which benefits fall into six cate- Four of gories. the six categorized benefits receive specific definition in the Act while two of such cate- gorized benefits are not so defined.5 in mind Bearing the statutory definitions of the benefits in the first 4 that, following Simpson, It is to be noted the decision in legislature express California amended the retirement statute “to county employees’ rights em and funds as ‘any bracing Wyman’s Estate, In tax’ ”: Re Cal. 25 Wyman’s Rptr. 280, (October, 1962). construed, 282 also “any” Simpson, the word as “all”. as did Annuity” payments “Employes’ means An for derived life §1, (21), made a contributor under the from contributions Act: Annuity” payment A means “State for life derived §2081. 24 P.S. made the Commonwealth under from contributions the Act: §1, (20), “Retirement Allowance” §2081. 24 P.S. means the “State Annuity”: “Employes’ §1, Annuity” plus (22), §2081. P.S. right refers of contributions” withdraw “Return separated deductions if a contributor the accumulated other than for reasons death or service retirement: school 1450, 353, §7, R. September P. No. 24 P.S. §2125. of “right categories, four stated is obvious person” exempting clause such benefits a under the living “right” contributor to refers to the analysis of “right” presently An a not issue. Fund, light with connection construed §18, words, that the discloses other per- accruing any right “any accrued or benefit or benefit Act” mean and include son the. accruing right any well contributor as accrued or any beneficiary. In as to. other this benefit words, only also to contributor but accrues any person any. any beneficiary “person”, who i.e., guardian living (i.e., liv- a acts for contributor *7 person ing contributor) to a acts for deceased or who a beneficiary designated (i.e., fund contributor to the a contributor). legal representative or the of a deceased category “moneys in The sixth refers and limited to is right the fund under the and the thereto created Act,” right and fund and the therein such and the specifically thereto State likewise municipal tax. analysis wording Our of the of construed §18, light clearly of other indicates “person” “right” exempted whose is “any” (1) living a state tax is contributor categories (2) four of first either benefits, “person” acting living for a contributor or the designated beneficiary “legal representative”- or the of category deceased contributor under fifth of bene- (3) right “moneys and fits the-Fund created category under the under the sixth Act,” of benefits. Insofar as the benefits mentioned under the fifth ánd categories sixth case of concerned, a deceased clearly legislative it was contributor, intent taxation state succession to of by designated the Fund of either the ficiary bene- by who those either take, under the Wills Act or the distribution Intestate the ultimate laws, desig- such insofar as a proceeds. As a matter of fact, nated it- is the Commonwealth beneficiary concerned, self construes the an ex- language constitute §18 emption of succes- inheritance taxation on the right of sion to the by designated beneficiary such construction the Common- wealth has Com- long prevailed. position This adopt monwealth is if significant; even we were to position of the Commonwealth we do (which not) con- language is clear and “the explicit, §18 temporaneous construction of charged those [§18] with its execution and Common- application [the when it en- especially long wealth], prevailed, titled to great weight disregarded should not be except or overturned clear it- language the Act reasons, very strong cogent convincing self [cit- Loeb 400 Pa. 162 A. 2d ing 368, 373, cases]”: 410 Pa. 207; Pickering Estate, 190 A. 2d 638, 650, 651, 132. The Commonwealth would have the exempting depend upon desig- the survival of the language §18 nated a result not within beneficiary, clearly legis- contemplation. lative
The Commonwealth further even urges though it be language conceded ex- grants an from inheritance taxation emption even where there *8 no or the designated beneficiary either bene- designated predeceased has the contributor ficiary to the Fund of the Fund the are proceeds payable to the legal of the estate of the deceased representative contributor, from the Fund paid the are to proceeds “legal once the of the deceased contributor’s the representative” estate the time of such at ap- ceases to exemption, payment, to such proceeds whom those are ply distributed, of the medium must estate, the an inherit- through pay proceeds. Such on such tax contention ance renders unreasonable the legislative meaningless intent. 374 beneficiary, living the designated
In the
of a
absence
provides
to
are
that the
representative”
“legal
deceased
to
be
the
many
long
contributor’s
It
been
estate.
has
settled—
prior
years
passage
the
to
it is
of
Act—that while
the
representative”
duty
“legal
the
of
decedent
proper
appraisal is
make sure that an inheritance tax
duty
paid,
ac-
of
and that the
when
the
tax,
settled,
payment
upon
persons en-
those
tual
falls
upon the
titled to distribution of
and not
the estate
representative”:
“legal
161,
208 Pa.
Estate,
Brown’s
608;
A.
360;
A.
Oroxton’s
289 Pa.
Estate,
433,
supra.
legislature passed the
When
Estate,
Loeb
it can
assumed
Act and
amendments
be
thereto,
legislature
responsibility for
knew that
upon
payment
the actual
of inheritance taxes
representative”
“legal
upon those
of the estate but
If
entitled
distribution
the assets
the estate.
adopt
we
Commonwealth’s contention,
we
legislature
led
intended
be
to conclude that the
would
exempt
payment
of inheritance
on the
taxes
representative”
“legal
of the Fund
duty
pay
had no
not to
estate who
taxes but
persons
duty
those
whom did rest
payment
of inheritance taxes. Such a construction
exemption clause would be absurd
and cannot
legislative
only
intent. The
con-
sound
ascribed
legislature
is that
intended to
struction
given,
desig-
to whom the
those
whether a
persons
beneficiary or the
entitled under
de-
nated
orwill
the intestate
contributor’s
ceased
laws.
exemption upon
of a statute
Illustrative
impact
supra,
no
Tack’s
Schmuchli’s Es
Congress6
375
granted a
bonus members of the armed
who
services
payable
served World War
a bonus
to the veteran
I,
twenty years
after
date of the certificate, or,
prior
beneficiary,
veteran’s
to a named
death,
or,
surviving
beneficiary,
the absence of a
named
provided:
veteran’s estate. As
“No
amended,7
payable
sum
de-
under this Act to a veteran or his
pendents,
any beneficiary
or to his
or to
named
estate,
subject
. . .
taxa-
shall be
to . . . National or State
holding
. . . .” In
tion,
the value of such bonds
held
a deceased veteran at the time of his death was
subject
not
to inheritance taxation
Common-
noting
agree-
this
wealth,
that it was in full
Court,
principles
ment with the
enunciated
Tach’s Estate,
principle
application
stated: “That
no
here,
Congress
special
has endowed these bonds with
char-
particularly
acteristics which show a clear
since
intent,
the veteran
did
exercise his
redeem
during
bonds
his
lifetime,
estate was used as
through
pass
gratuity
mere conduit
which the
was to
(Emphasis supplied).
to the ultimate donees thereof.”
highly
Lastly,
significant
it is
legislature,
that the
description
in its
exempted,
taxes
stated
be extended to
state
“any”
generally
tax. The word
used in the sense
“every”
meaning
comprehen
of “all” or
and its
is most
sive:
399 Pa.
160
96,
A. 2d
100,
237;
Hoffmann
Falls B. L. A. v.
Beaver
&
Allemania Fire Insurance
A.
305 Pa.
Co.,
290, 295,
616; Glen Alden Coal Com
pany
City,
v. Scranton
282 Pa.
45, 48,
A. 307. Cf.:
v. Mutual B. H. A.
Benat
&
Supe
Association, 191 Pa.
rior Ct.
The “The read person” being right succeeding a limited six right person categories, (a) “The of a to” i.e., an em- (b) annuity, ploye’s annuity, (c) a State retire- a ment any a return of (d) (e) allowance, contributions, exempt.” the monies the Fund “are benefit, etc., (f) I model disagree. provision quoted is hardly cor- proper sentence but I conclude structure; rectly categories means three read, from tax, (1) etc.: levy, sale, right person.t.0 employe’s al- annuity, State annuity, .a lowance a return of benefit contribution; (2) .any accruing.to person under accrued provisions of the Retirement Act; (3) the Fund created under the Retirement Act. *11 conclusion on
My
point
this
sup
construction is
ported by
factors.
the verb
the above-
First,
several
quoted exemption provision is the plural “are” (i.e.,
“. . . are hereby exempt
ma
from.....”);
read as the
jority would have
the provision
it,
must contain the
singular verb “is”. Second, my conclusion
conso
is
nant
with traditional
clauses;
that
is,
itself
property
exempt
from
its
tax,
necessarily
etc.
transfer,
(subject here, however,
apparent
to. the
intent of the second
category
exemption to
free
inheritance tax the direct receipt of
spe
benefits
aby
cifically designated beneficiary).
See Tack’s 325 Pa.
claims of the decedent’s creditors? hold. would so apparently but the majority so, only In I believe was intended short, §18 it- held moneys from tax while rights from the for someone. Once the self Receipt privilege. no enjoy special they Fund, from inheritance tax, Fund itself is freed explicitly estate; specific persons received by whether In taxable. thereafter from the estate is receipt but here all of the Commonwealth’s light argument this beside true nature of the inheritance tax is about quite At this late date seems clear the point. inheritance; tax on the privilege it is a tax, it is included within the breadth of as such *12 other tax. as well Therefore, Retirement person or to a indi- right accruing the benefit he (be to receive estate) funds, vidual present like itself ones, cases of an employee the death privilege person inherit
tax. estate itself former- from the. take exempt. is not I in the Fund would Hence, hold ly in the estates here subject appraise- involved assets tax purposes must ment dissent.