217 P. 1073 | Cal. | 1923
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *593 A rehearing was granted in this matter in order that the appellants and the several amici curiae might give the court the benefit of oral argument upon the points urged in their respective petitions for rehearing. Upon such argument and submission of the cause the court adheres to its former conclusions as expressed in the opinion of Mr. Justice Richards, pro tem., which opinion, with the insertion of certain more recently cited authorities, reads as follows:
"This appeal is from an order of the superior court confirming the report of the inheritance tax appraiser with relation to the state inheritance tax to be fixed and paid from said estate. Under the provisions of the United States Revenue *594 Act of 1918, the executors of the estate were required to pay, and did pay, to the federal government, as and for the federal inheritance tax upon said estate, the sum of $128,730.08. The state inheritance tax appraiser in thereafter making his appraisement and report upon said estate refused and failed to deduct any part of this payment in arriving at the value of the estate subject to the state inheritance tax. The report thereon, as to the state tax due, was consequently $26,205.75 greater in amount than such tax would have aggregated had such deduction been made. The court, over the objection of the executors, confirmed said report as to this particular portion thereof and from its order so made and entered this appeal has been taken.
"The statutory authority upon which the inheritance tax appraiser relied in making his report to the effect above stated is to be found in subdivision 10 of section 2 of the Inheritance Tax Act of 1917 (Stats. 1917, p. 883), which provides as follows: 'In determining the market value of the property transferred, no deduction shall be made for any inheritance tax or estate tax paid to the government of the United States.' With respect to the interpretation to be placed upon this apparently plain and simple direction of the statute touching the subject with which it deals, the appellant herein, and also the various amici curiae who have presented briefs and arguments herein, make two main contentions. First, that the foregoing provision of the statute, when read in the light of legislative intent and purpose in the enactment of the Inheritance Tax Act of 1917, read as a whole, is not to be given the meaning and effect which its language apparently imports. Second, that if it is to be given such meaning and intent, it is for various reasons unconstitutional and void. As lending support to the first of these contentions, both the appellant and several amici curiae strongly rely upon certain language used by this court in the matter of theEstate of Kennedy,
" 'The provisions of our tax act clearly show that the tax imposed thereby is one solely upon the devisee, legatee, or *595 heir, and one upon him only as to such property as he actually takes on distribution as devisee, legatee, or heir. It would appear to be a most absurd and inequitable provision that imposed a tax on one for the privilege of succeeding as heir, devisee, or legatee to certain property of the decedent, where the very property to which he is so held to succeed is lawfully diverted by the probate court to other purposes and never can be distributed to him.'
"The foregoing language of this court was repeated and approved in Estate of Miller,
"In determining the scope and effect of the inheritance tax laws of this state as finally embodied in the Inheritance Tax Act of 1917, the most recent utterances of this court in interpreting and applying the same are, we think, conclusive upon the first branch of this discussion. In the Matter ofthe Estate of Bowditch,
" 'Of prime importance in all cases concerning the determination of the jurisdiction to impose an inheritance tax is the fundamental proposition that a tax of that character is a tax upon the right or privilege of succeeding to property. "The so-called right of inheritance and also the right of testamentary disposition are not inherent rights of the individual, nor are they safeguarded or secured infuturo by any provision of our constitution. They are both subject to legislative control and are creatures of legislative will. Consequently the legislature has the power to take away both rights and to make the state the successor to all property upon the death of the owner. The right and power to impose a succession tax rests on this principle." (Estate *596 of Potter,
"This declared theory and policy of the state of California with respect to this form of taxation removes from this case the necessity for much of the discussion of the questions involved herein, arising out of the conflicting views of the courts of other jurisdictions, due in part to the fact that in certain of these states there exists no express statutory direction that no deduction shall be made on account of the prior imposition of the federal tax, and due also in some measure to differences in the form and scope of the various statutes under review in these decisions. A very fair and full review and analysis of the laws of several of the leading states and of the most important state and federal cases construing their provisions upon this subject is to be found in the recent case of In re Fish's Estate,
"The second contention urged by appellant and his associates in the discussion of this appeal is that the provision of the act of 1917 first above quoted herein, if given this interpretation, is for various reasons unconstitutional and void. These reasons, briefly summarized, are that said provision is in violation of section 1 of the fourteenth amendment of the federal constitution, providing that no state shall deprive any person of life, liberty, or property without due process of law; and is also violative of section
" 'The right of inheritance, including the designation of heirs and the proportions which the several heirs shall receive, as well as the right of testamentary disposition, are entirely matters of statutory enactment, and within the control of the legislature. As it is only by virtue of the statute that the heir is entitled to receive any of his ancestor's estate, or that the ancestor can divert his estate from the heir, the same authority which confers this privilege may attach to it the condition that a portion of the estate so *598 received shall be contributed to the state, and the portion thus to be contributed is peculiarly with the legislative discretion.'
[4] "In this view of the provision of the statute under consideration it cannot be held violative: of the terms of the federal constitution, since the devisee or legatee of the estate affected by this provision does not become entitled to his portion of the property of the said estate until it has already been burdened with its inheritance tax and hence by no part of said scheme of taxation can he be held to have been deprived of property without due process of law. (UnitedStates v. Perkins,
" 'An inheritance tax in any of its customary forms is not a tax on the property of the decedent with respect to which it is levied, but is an excise imposed on the privilege of transmitting or receiving property upon the death of the owner, and consequently is not subject to any of the constitutional limitations upon taxes on property found in the state constitution.' (Citing cases.) See, also, In re Frick'sEstate, 277 Pa. St. 242 [121 A. 35, 39]; In reSanford's Estate,
[6] "As to the appellants' final contention that the provision of the statute under review constitutes an attempt to subject United States property to taxation and is therefore violative of section I of article XIII of the state constitution exempting such property from state taxation, we find it to *599
be without merit. The provision in question does not attempt to lay any burden upon that portion of the estate of the decedent which the federal government has already appropriated in the form of its inheritance tax, nor does it in any degree lessen said amount, its increase of the burden being laid solely upon those, whose interest in the estate has already been charged with such federal tax, by forbidding any deduction on account of such tax. (United States v. Perkins,
[7] In their petitions and briefs upon rehearing and upon oral argument thereon, appellants and amici curiae earnestly insisted that the act in question was discriminatory and therefore void, in that it required residuary legatees to pay a larger inheritance tax in proportion to the value of the estate to which they succeeded than was required of other legatees, even though they be all of the same degree of relationship to the testator. The answer to this contention is twofold, the first being that the act does have a uniform operation, since it applies alike to all residuary legatees, and the second being that any disparity between the net amounts received by different legatees by reason of the operation of the act must be deemed to be chargeable to the testator rather than to the law. [8] The testator is deemed to know the law, and therefore, when in making his will he names one as a specific legatee and another as a residuary legatee, he must be deemed to have intended thereby that the latter should be charged with the amounts required to be paid for the federal tax.
*600The order is affirmed.