*1 MANDERINO, (concurring). Justice join I opinion Eagen. in the of Mr. Justice I should note, however, like to I am unable to discern ra- distinguishing tional basis for ap- between the standards plicable person acting to a in defense of a near relative applicable person coming and those to a defense one who Eagen is not near relative. As Mr. Justice noted, has because of recent legislation, the distinction is immaterial as to offenses committed after June applied The distinction not be should to offenses commit- ted before that date. The traditional basis for the dis- tinction was that “near relative” “a one” was loved persons Accepting while other were not. that human significantly conduct can be affected the love of an- other, may rationally does follow that one infer always persons that near relatives are loved and other Thus, are never loved. the distinction should be discard- ed. J., joins concurring opinion.
ROBERTS, this A .2d 577 MILLER, L. ESTATE of Jacob Deceased. Appeal of COMMONWEALTH Pennsylvania. Supreme Pennsylvania. Court of
Argued May 5, 1975. April
Decided *2 Atty. ap- Dopko, Dep. Gen., Harrisburg, Vincent J. *3 pellant. Laucks, Jr., Monroe, E. Kil-
Samuel S. Laucks Fred & appellee. gore, York, for O’BRIEN, JONES, J., EAGEN,
Before and ROB- C. ERTS, NIX, POMEROY and JJ.
OPINION JONES, Chief Justice. leaving 3, 1971,
Jacob L. on an Miller died November containing original will, thereto, codicils with various many “copy deletions. A fair” was interlineations and duly appeal probated no taken. will from which was auditing interpreted by judge to and its codicils were estate, trust, bequeath of the testator’s the residue death, and, at her the benefit of his widow for life 61% re- pass charities and the thereof to to certain named maining in trust for of such residue continue % respective four for their children, benefit of testator’s lives, also con- with remainder to their issue. will paid provision from the tains a that all death taxes be authority of the to the executors to residue state with prepay interests. such on future period paid
During administration the executors $121,477.21 Penn- the sum of and federal estate taxes in sylvania transfer inheritance taxes “on account” Thereafter, August 22, pur- $35,123.20. sum on 714(a) Pennsylvania Inheri- suant to Section amended, the exec- tance Estate as Tax Act Pennsylvania inheri- utors filed election to an res- tance taxes on the future interests in the 39% ultimately which, death, idue the widow’s would vest in in the testator’s descendants. ap- Commonwealth’s election,
Pursuant such praiser interests, of the date valued such remainder election, $457,415.16. This amount the sum of undisputed (1) $300,814.75 constituted or the value residuary existing present in trust the assets election; plus (2) previously fed- the date of the This eral estate inheritance taxes. liability $131,644.31. the estate’s created a tax It is contention error for the was Commonwealth Pennsyl- previously federal add back estate and liability taxes, inheritance that the estate’s vania solely by should be value determined reference residuary trust on date of election. 1. Section Inheritance and Tax Act amended, provides: *4 Date; interest; payment “Payment (9) months nine Death; contingencies from Decedent’s (a) Payment (9) Months Death. After Nine from Decedent’s death, (9) any time after nine months from At the decedent’s and vesting and to the of a future interest elect, interest, by fiduciary, any party enjoyment a a register, in- writing to have filed with the the value a future filing terest determined as of the date of of such election pay the thereon. shall become and to delinquent tax assessed Such tax (3) filing expiration at the of three from the months of the election.” 15, 373, VII, 2485-714, 1961, 714, § § Act of June P.L. Art. 72 P.S. 17,1971, 173, 15, § P.L. 1. as June No. by From valuation the Commonwealth the this protest Board; estate filed a to the Inheritance Tax by decision the Protest Board was rendered on Decem 21, 1973, sustaining ber valuation of Common wealth. The estate appealed Board’s decision Orphans’ County, Court Common Pleas of York Court Division, provided by Inheritance Section 1003 of the Tax P.L. 15, Act Act of June 1961, 1961, X, Art. 72 P.S. The court 1003, 2485-1003. § § opinion an able sustained the estate’s contention and appraiser’s modified the valuation, holding was that error appraiser for the Commonwealth’s to add back fixing federal estate taxes in the value remainder appraiser interests that it was also error for to add back the inheritance taxes unless a portion of those taxes was on account. 24 Fiduc. Rep. appeal This (1974). followed.3 here, Commonwealth as it did before contends Court of County, Common Pleas of in deter- York 15, 1961, X, 1001(1), § Pursuant of June Act P.L. Art. § 2485-1001(1). P.S. 31, 1970, II, July 202(3), Pursuant to Act Art. § 211.202(3). P.S. exceptions While no Orphans’ were taken to the Court’s decree by Commonwealth, excep- the Commonwealth’s failure to file Lehigh tions Dilliplaine does not v. constitute waiver under Valley, 457 Pa. (1974). A.2d 114 Rule Orphans’ this provides: Court’s Court Rules “Exceptions Exceptions time, place shall be filed be in at such shall form, copies disposition thereof made served and thereof prescribe.” rules shall local County adopted accordance with this 75.1. section Rule York provides: That Rule exceptions “No shall except un- be filed to orders or decrees entered right expressly less the As- conferred rule, sembly, by general specifically the ex- unless allowed decree, order or and all those to which decrees other than ceptions are so allowed shall be final.” right except Since no expressly since was conferred and lower parties court’s file specifically decree did not allow the exceptions, exceptions in the failure of file the Commonwealth to this case cannot under be deemed a now waiver issues consideration.
mining the value of remainder the aforesaid Pennsyl- inheritance federal estate and purposes, tax all includ- be vania inheritance theretofore must the tax- ed, e., back, i. added to increase total value residuary given able Estate remainder to Miller upon the cor- depends The trust. resolution of this issue Act interpretation Tax rect the Inheritance Estate and 2485- Act June 72 P.S. §§ applica- 714(a), amended, 2485-651. Act is as and This January dying to estates of ble decedents Tax Under Inheritance and paid in may the tax on a future interest as 713(a), any ways. First, three under Section' amended: any (9) the dece-
“At time within nine months after party representative any death, personal dent’s regis- may writing elect, by in interest filed with ter, a future interest determined to have the value pay tax as of the date decedent’s and thereon.” assessed
Second, pursuant may 506, the remaindermen pay the interest have valued and tax thereon as of enjoy- possession date the interest takes effect 714(a), fi- Third, ment. under Section following duciary, time decedent’s nine months of taking effect death and the future interest possession prepay the tax on enjoyment, elect to interest. prepay executors this case chose to residuary pursuant trust to Section conjunction amended.4 In 714, as with Sections amended, Section 506 of the Act sets forth the valuation date of a future interest as date it takes effect enjoyment or, if an election made after nine death, months then the of decedent’s 1, supra.
4. See footnote said Commonwealth is now con- election.5 *6 testing previ- the conclusion the of court below no ously paid and federal inheri- estate tax prior tance possessory tax assessed on the interests computing should be back when the of the added value interest remainder as of the election date.
The theory its bases in its Commonwealth add-back on Act, provides: brief Section 651 of the
“E. Future and Taxes —Deductible Interests —Cost expenses administration, All reasonable of incurred after prior on inter- assessment inheritance tax ests, paid support- and death all property out of taxes ing prior interests, such not be shall the included in appraisement in determining in- value future the of a ap- terest on the valuation shall This section date. ply when provisions the tax paid under of sec- the 714(a).” tions 15, VI,
Act of 651, June 1961, 373, P.L. P.S. Art. § § Thus, 2485-651. that on contends Commonwealth the date of valuation fail- remainder interest to prepaid ure add in to an im- amounted pro- of Section 506 the Inheritance and Tax Act of 1961 vides: date; “Valuation Except future interest act, provided expressly as otherwise in this the valua- tion of a property date in effect transfer interest take possession enjoyment expiration or one more life, years, period, interests for a for other term or limited possession shall enjoyment. be date such interest takes effect in upon computed shall be tax in- value provided, expressly Except terest when effect date. as otherwise such prior on the taking interest the tax possession enjoyment, computed be tax shall Except upon value at such date. other- provided, expressly wise when the the future interest tax taking to its effect and enjoyment, upon computed be shall of the interest in tax value specified applicable property section 714, preceding then value limited diminished estates, appropriate estate under sections as determined ** oí tills Article 373, V, § 2485-506. of June Art. P.S. P.L. Act proper deduction under 651. The court below agree. did not affirm. We statutory analyzing
In this issue must examine we predecessors present relevant case Act and our predecessor Tax Inheritance and Estate law. 521, as was the June longer applicable to 2302, which is no 72 P.S. § persons January dying on or after provided: imposed by shall at the rate of
“All taxes this act per prop- centum the clear value of the [fifteen] erty subject passing to . [collat- ascertaining clear value . . . . erals] *7 estates, only from such the to be allowed deductions of shall be debts gross values of such estates expenses of of administration decedent and estates, al- shall be such and no deduction whatsoever es- any paid on such for or of lowed on account any or to tates of the United States Government Territory.” other State governed the assessment inheri-
Section 3 of the Act upon future interest at tance the value of the right possession to the owner. time the accrues property, by there is a transfer “Where bequest . to the tax . . liable hereinbe- . bequest is to imposed, . . . fore . . . enjoy- possession actual to come into take effect expiration any more life-es- one or ment after period years, tax on estate shall tates or a thereon, begin to run payable, nor shall interest come ac- for same shall into person until the liable by the termination of possession of such estate tual years. The tax shall be assessed life or estates for right of upon at time the value of estate owner, the owner accrues to but coming pos- prior to his into pay time the tax on the assessed In such the tax shall be cases session. value of the payment estate at the time of the tax, deducting the value of the life-estate or es- ” years. tates for . . . Pickering Estate,
In
(1963),
Pa.
“The Commonwealth claimed a collateral inheritance apart tax on the remainder set for Anna’s children upon niece’s [testator’s and issue based children] value of their remainder interest testar date of tor’s death [December The executor on the 1955]. other hand contended that the tax should be based gifts remainder, taxable value of the in the computed February as of 9, 1959 instead testator’s specifically, death. More the Commonwealth contends in determining the value aforesaid remainder purposes, inheritance tax all Federal Estate taxes theretofore must be includ- *8 ed, e., i. back, added to increase the total value the given taxable remainder to Anna’s children and issue.” 641-42, 190 410 Pa. at A.2d at 133-34. valuing
In Estate, Pickering the remainder interest upon language Simpson’s Estate, Court relied 115, 2 332 (1938), Pa. A.2d 851 we stated: where provided “Section 3 of the act that ‘the . tax payable person per- shall . . . until the posses- sons liable for the same shall come into actual sion estate, of such the termination of the estates years, for life or and the tax shall be assessed 202 right time the
value of the estate at the party to the owner aforesaid.’ The entitled accrues however, given choice, subsequent is coming pay ‘to to his into tax at time possession, and, cases, the assessed in such tax shall be payment on the value of the estate at time deducting tax, life estate value ” years.’ or estates for Estate, 117, 2 also Carver 382 Pa. at A.2d at 852. See Estate, (1966); 222 A.2d Heberton’s Pa. per Pa. curiam, 351 (1944), Pa.D. & C. aff'd 564, 568, (1945). 41 A.2d supra,
Thus, concluded the Court Estate, prepaid 3 the value of that when the under Section payment the remainder is determined as of answering contention tax. Commonwealth’s im result in an that a method of valuation would Such previ permissible 2, unless deduction under Section back, ously paid estate taxes were added federal part opinion approval in Ober quoted Court with Fiduc.Rep. Estate, 719, 735, 10 20 Pa.D. & C.2d dorfer 358, 375 (1960): argument are concerned in this case we “The that n without merit.
with ‘deductions’ ... something attempts to the value Commonwealth add claim taxpayer does not being of the estáte taxed. a deduction.” 645, 190 A.2d at Pa. it error for that was
Accordingly, this Court held
where
previously
to add
Commonwealth
back
tax on
3 to
thé
taxpayer elected under Section
legislature repeatedly
interests. While
his remainder
never
enactment,
after its
the Act of 1919
amended
1961.6 On
any part
thereof until
changed
or3
applies in
predecessor
the statute which
The 1961
except
respects
in all
It is identical
case.
instant
*9
Department
contrary,
in
when
Revenue
sponsored
Bill H-1361 to amend
3 of the
House
Section
so
lan-
Estate Tax Act of 1919
Inheritance and
compel
urged by
guage
would
the construction
Com-
case,
Pickering Estate,
in
in
instant
monwealth
pass. Pickering Estate,
410 Pa. at
bill did
Thus,
analyzing
valuation under Section the current we legislature are also faced with clear from the a mandate predecessor, statutory that our construction of its prevail. Section The comment Act of is to 714(a) the Joint State Com Government Report mission on the Estate Tax Act Inheritance and 1961, as states: subsection, conjunction
“This with Section conformity existing permits with law insofar as prepayment interest, of tax on the value election determined as of 521, 3, made to the tax: Act of amended.” legislative language providing intent and for the val- pursuant payment
uation and
clearer;
as amended,
no
“could not be
refer-
ence
subject
whatsoever made therein to the
of deduct-
changed
one-year provision
amendments
in the 1961 Act
714(a).
nine
months
both Sections
proposed
1959,”
7. The
“Inheritance and
Tax
House
legislature,
Bill 1195 of the 1959
session of the
was
substantial
equivalent of the Inheritance and Estate Tax Act of 1961. How-
ever,
XI,
controversy
due
over
set
inclusion of Article
up
decedent,
entry
deposit
restrictions for
into the safe
of a
box
the bill was defeated.
*10
in de-
taxes
ing
‘adding
other
Federal
state]
or
back’
[or
at the time
termining
of the estate
‘value
taxable
” Pickering Estate, 410 Pa. at
payment
tax.’
holding
in
Thus,
Carver
our
643,
ry predecessor, 2 of the June Section clearly precluded of fed- the deduction The latter statute language Yet, valuation faced with clear eral taxes. positive an add direction that 3 and absent Section prop- necessary prepaid to arrive at a taxes was back Estate, estate, held in er we valuation of supra, language require that the Section did not Commonwealth’s As with construction. Sec- provides tion 651 no command that the Commonwealth’s required.8 construction is agree
We with the court the last sen below that tence of application Section 651 excludes from its 713(a), amended, because the valuation date Sec tion is the decedent’s death, which is before an estate’s assets can be reduced by payment of relé death taxes and deductions are when *11 supra. legis vant. Pickering Estate, light See In history lative law, and our the exclusion case 714(a), application amended, as from the of Sec 651, prohibit tion acts to the deduction of death taxes from the interest where the elec valuation the future tion to is dece filed nine months from a dent’s but been death taxes have before Baylis Estate, from the & estate’s assets. 36 Pa.D. Cf. 590, 15 Fiduc.Rep. (1965). C.2d 490 Furthermore, if there were reasonable doubt proper 1961, this case as to the construction of the Act amended, exists, legislature we think none has directed that all be in favor of doubts should resolved taxpayer against taxing strongly and most authori May 28, IV, 58, 46 ties. Act of Art. § 558; Mastrangelo Buckley, P.S. 433 250 A. v. Pa. § supra. (1969); Pickering Estate, 2d 447 argument presented by is final the Commonwealth interpretation Court’s of Section would result in non-uniform taxes violation VIII, of Article Constitu- non-uniformity results, tion. The the Commonwealth argues, figure because different tax will be obtained a today is in our 8. Our construction accord with observations Estate, 648-50, See Pa. A.2d at 139. also 190 651-2, Tax, Grossman, Pa. and Estate Inheritance Smith (1971). depending upon the estate. which election is chosen argument to without merit. We believe this “ equality ‘Uniformity of tax requires substantial is not taxation burden While omitted]. [citations uniformity perfect and ab- of exact science and matter rarely attained equality can ever be solute in taxation are imposition taxes which omitted], [citation operation or degree unequal in their a substantial property, or upon or effect similar kinds of business classification, prohibited upon persons in the same reasonable Moreover while [citations omitted]. practical justifiable a method classifications are where operation or computing will, in tax or formula of unreasonably unjust arbitrary produce effect, provision re- discriminatory results, the constitutional ” lating uniformity is omitted].’ [citations violated 48-9, A.2d Kane, Pa. Amidon v. (1971). legislature’s in future this case every interest, without
terests is uniform because imposed by the Inheri subject exception, to the tax 1961, as amended. Since tance Tax Act of and Estate op every subject valuation same future interest *12 equality and benefits. tions, of tax burdens insures Kalodner, Pa. Kelley 320 This is not like v. a case Co., 413 (1935), Saulsbury Bethlehem Steel 181 A. v. 598 supra, Kane, (1964), Amidon v. or Pa. 196 A.2d gave non-uni taxing either where, scheme because the both, found graduated we exemptions rate form or a constitutionally deficient. thus it was non-uniform and 1961, as Act of Estate Tax the Inheritance and Under subject to the same amended, every is future interest statutory scheme. appellant.
Decree affirmed. Costs MANDERINO, participate in the considera- J., did not tion or of this case. decision dissenting opinion. J., filed a
POMEROY, POMEROY, (dissenting). Justice valuation, appeal involves the This purposes, future interests which of inheritance tax of prepaid In- is under Section the inheritance tax of of June Tax heritance and Act Act VII, P.S. § Art. § of 2485-714(a) (Supp.1975) Act [hereinafter 1961]. whether, computing question for decision is The of federal interest, amount a future value of such paid out of taxes on death interests state of to in the be valuation corpus of estate included is majority of the Court answers future interest. I negative, did court below.1 question in the this disregards doing persuaded that in so am Court contrary legislative unequivocal answer as con- 1961, 72 of P.S. 2485- § tained respectfully I therefore dissent. of the transfer property date valuation normally the 1961 is date is subject Act, P.S. transferor’s death. Section of a fu- time of valuation 2485-501. The transfer however, normally interest, the date such interest ture enjoyment. tax takes effect in “The shall computed upon the value date.” of the interest personal Act, A 506 of 72 P.S. § 2485-506. interest, representative decedent, any party in prepay may, however, elect on a inter- If waiting est to fall in. Ibid. without for the an within nine election the tax months filed the decedent’s value the future interest on the death. Section value decedent’s aware, only case, I am far as other than the case As Trust, bar, has in which this been decided is Penn issue 25 Fidu- *13 Co., Trust, (C. ciary Rep. Venango 1975). P. In the in the Penn the same as did below court reached conclusion court today. instant does this case Court 2485-713(a) (Supp. 713(a) of the Act 72 P.S. is 1975). If the tax filed later than an election prior the decedent’s death and nine months after possession enjoy- vesting interest the future interest is its value on ment, of the future value 714(a) of the Act date of election. Section bar, 2485-714(a) (Supp.1975). the case 72 P.S. § pre- Miller the executors of the estate of Jacob chose in- pay portion tax on remainder inheritance years residuary after two terest trust almost subsist- death, while life estate was still testator’s but supra, ing. are Thus, provisions of Section applicable. expens- regard to the inclusion of administration
With interest, Section es and taxes in the valuation of a provides: supra, of the Act of expenses administration, incurred “All reasonable prior inter- on of the inheritance tax after assessment property support- ests, paid taxes out of and all death ing in the prior interests, such shall not .be included in- appraisement determining of a future the value ap- terest on This section shall date. valuation provisions ply paid of sec- is when the tax under 714(a).” tions
Although provision phrased sentence this first enough: awkwardly, meaning rather seems clear out interests taxes have been where (and property supporting there- those interests payable the future interest estate becomes valued, remainderman), the future interest when (and vests, by as diminished such adminis- also expenses following tration incurred assessment taxes). Thus federal estate and inheritance state already paid out, taxes, are not to be added back when valuing interest a future where the tax on that at the time interest vests in
209 sentence of the enjoyment.2 instruction This first by immediately the second is then countermanded section respect paid under Sections sentence with to taxes 713(a) made 714(a). is, an election is That where prepay tax on a future interest —whether as 713(a) as of date of death date under Section election at nine months from time after of such taxes under Section amounts death —the appraise- paid in the to be interests are included ment of the future interest. leading expressed
This view is in
with that
accord
Pennsylvania
text on
inheritance taxation:
prior practice
to the extent
651 conforms with
Ҥ
appraise-
in the
require
that
it does not
the inclusion
(at
into
it comes
ment of a
interest
the date
future
enjoyment) of
taxes and adminis-
death
corpus
expenses
paid
tration
theretofore
out
in effect
thereof.
.
.
.
are
Thus, death taxes
of tax on
made
circumstance
deductible
the limited
prepaid.
future
is not
interests which
applied
question
to be
“The
then arises as to
rule
prepaid
.
.
.
when future interest
tax is
under
§§
expressly states that
651
713 or 714.
...
§
situations,
provisions
inapplicable
in such
are
ap-
that
inescapable
conclusion therefore seems
praisement
upon
occasion of an
of a
interest
future
addi-
include the
election to
tax thereon is to
expenses
tion back of
administration
death
supporting such
property
theretofore
out of
Smith,
M.
Revised
interest.” R. Grossman &
Co.,
Estate,
1965) it
Baylis
(O.
D. & C.2d
C. Phila.
being appraised
was held
the value of the remainder
by the
following
the life
should be diminished
tenant
estate, although that
Estate Tax on the life
amount of
Federal
tenant.
of the life
tax had not
the time of the death
been
§of
were
“paid
sentence
Thus
words
out”
first
payable
reasonable
“paid
mean
This seems
read to
out
out.”
construction.
Estate Tax
651-2 at
Inheritance and
(1971).3
opinion effectively ignores
legislative
The Court’s
Instead,
direction
the second sentence
contrary
reached
relies
result
(1963),
Estate,
a case decided
Like the Act not de death taxes are that federal estate and state vides purposes. ductible for inheritance tax goes of 1961 2485-622.6 P.S. § however, predecessor, significantly further than provision, wholly was added.7 that Section new purpose reasonably be attributed most provision express the enactment of this section to make problems special of fu in the valuation involved expenses have been taxes and ture interests after *16 today Section “the of 5. concludes that exclusion The Court acts to application Section 651 as the of from of the prohibit valuation the deduction of death taxes from the nine prepay filed after is where the election to future interest may have months a decedent’s death but death from before Court, ante paid Opinion the of been at 583. Under this from the estate’s assets.” view, death and state estate whether federal entirely is interest taxes are dependent tion under the in the a future included valuation of valua- or after upon before the taxes are whether the law in with Although accord occurs. this construction Smith, 1919, Penn- Revised M. Act of R. & Grossman to an it sylvania arbitrary (1971), leads § Tax 651-1 Inheritance Estate 1922(1) § of See to avoided. result and therefore Act, 1922(1). § Statutory the 1 Pa.C.S. Construction 2485-601, 1961, which 6. 72 P.S. See Section 601 of the Act of of provides the the value part only from in deductions that “[t]he See property this Article.” forth in transferred shall be those set Estate, (1970). Lazar 734 also 437 Pa. 260 A.2d of Court, failure Opinion 7. refers the ante at H-1361, would legislature which pass in to Bill the have position 1951 House adopt the see the supra, to 3 of Act of amended Section the to I by am advanced the Commonwealth. unable legislative determination relevance in 1951 to a non-action in legislature enacting 1961. intent Section 651 the in 212 supporting preceding
from the
estate relative to the
inter
my
Furthermore,
in
to
est.
reference
view the
Section
714(a)
well
Section
the last
as
sentence
—as
—in
designed
change
then-existing
651 was
to
Pickering Estate,8
law reaffirmed
to assure
an
that
prepay
to
the tax on a future
at
election
some
interest
following
time after nine months
the date of death would
prior
not
in a
result
deduction for
taxes on
in
terest,
prior
whether or
interest
taxes had been
compulsion
time
There is no
election.
to
option
prepay
tax;
remainder
is an
available to
taxpayer
leave,9
which he
take or
there is
but
no in
legislature
exercising
by
that
dication
intended that
option
taxpay
death,
more than nine months after
enjoyed
er
that would not be
would
deductions
obtain
the time of death.
were
made as of
prepayment
proceedings
for
consistent
would remand
further
X
interpreted
with
above.
Although Pickering
Estate
was decided after enactment
upon
practice
Department
Court relied
by
of Revenue
between 1919 and
decisions
Estate,
Pennsylvania.
courts of
20 D. & C.2d
See
Oberdorfer
(O.
Co.,
Philadelphia
C.
1960),
opinion of
on
Chief
which
Pickering.
Justice
9. A factors influence a decision at a which is more than nine months after time but before Among the remainder be the falls in. would these taxpayer’s analysis of the current market situation relative estate, composing corpus supporting items and his esti- likely expected mate during behavior of the du- market ration of the interest.