23 N.W.2d 35 | N.D. | 1946
The question for determination on this appeal is whether the avails of certain life insurance policies constitute a part of the gross estate of the insured decedent, Norman D. Black, for the purpose of computing the estate tax pursuant to the provisions of the Estate Tax Act.
The facts are undisputed. Norman D. Black died testate on August 3, 1944. At the time of his death he held life insurance policies in various insurance companies, aggregating in amount more than $100,000. His wife, Cora P. Black, the respondent on this appeal, was named as beneficiary in these policies but he retained the right to change the beneficiary. The avails of the policies were duly paid to her. She was appointed and qualified as executrix of his will. Pursuant to the rules and regulations of the tax department of the State of North Dakota, she filed in the county court an "Application for Determination of Estate Tax and Return." In this application she set forth the facts with respect to the policies and that she had collected the avails thereof. She also set forth her protest and objection to the inclusion in said estate of these avails for the purpose of taxation. The county court, overruling this objection, held that the avails of the policies thus paid to her were for tax purposes to be considered a part of the estate, and that all of the same, in excess of $20,000, were subject to the estate tax. This holding was approved and confirmed by the tax commissioner. Mrs. Black appealed *449 from this holding to the district court, where it was reversed. Whereupon the tax commissioner perfected the instant appeal.
The Estate Tax Act, the statute here under consideration, was enacted as chapter 267, Session Laws 1927. It superseded Article 36 of Chapter 34 of the Political Code, 1925 Supplement, providing for the imposition of inheritance taxes. As amended it appears in the 1943 Revised Code as Chapter 57-37, §§ 57-3701 to 57-3732, both inclusive. Section 57-3701, supra (subsection 1, § 2 of the Act) provides, "A tax is hereby imposed upon the transfer of the net estate of every decedent, whether in trust or otherwise, under the conditions and subject to the exemptions and limitations in this chapter prescribed." Section 57-3702 (subsection 2, § 2 of the Act) provides that "The value of the gross estate of a resident decedent shall be determined by including the following property: (1) All real property within this state; (2) All tangible personal property except that which has an actual situs without this state; and (3) All intangible personal property wherever located." Succeeding sections enumerate other items to be included in determining the gross estate, but there is nowhere in the chapter any express provision that the avails of life insurance shall be so included. Section 57-3710 (subsection 8, § 2 of the Act, as amended) however, provides that "All proceeds from life insurance policies not in excess of twenty thousand dollars shall be exempt from taxation under the provisions of this chapter." Originally, § 57-3710 read "All proceeds from life insurance policies shall be exempt from taxation." See, subsection 8, § 2 of the Act. It was amended to its present form by chapter 251, Session Laws 1933.
The respondent Mrs. Black was designated as beneficiary in all of the policies here involved. Thus she took by contract and not by descent. Accordingly, the avails of the policies never became a part of the estate of the insured. And the fact that the insured had reserved the right to change the beneficiary made no difference in this regard. Nulsen v. Herndon,
Section 57-3710 is an exemption statute. It does not levy a tax: it presupposes a tax that has been levied and exempts from that tax. The appellant argues, however, the inference must be drawn from the words of § 57-3710 that the legislature intended the avails of life insurance policies, such as we are concerned with here, should be considered for purposes of taxation, a part of the estate of the insured decedent; that unless this is so the section is meaningless and futile. Appellant, however, overlooks or disregards the fact that the avails of a life insurance policy may be made a part of the estate of an insured either by contract or by will. See § 26-1018, Rev. Codes 1943; Jorgensen v. De Viney,
The appellant, in support of the construction given to the *451
Estate Tax Act by the county court, cites and relies upon the cases of United States Trust Co. v. Helvering,
Finally appellant urges that at all times since the enactment of the Estate Tax Act and its amendment in 1933, the officers of the state tax department and the county courts have given the construction to the act for which the appellant here contends and that this construction should be given great weight in determining the instant case. It is true the rule is that in construing a statute of doubtful meaning the court will give weight to the long-continued practical construction placed thereon by the officers charged with the duty of executing and applying the statute. State v. Equitable Life Assur. Soc.
The judgment of the district court was right and it must be and is affirmed.
CHRISTIANSON, Ch. J., and BURKE, MORRIS, and BURR, JJ., concur.