“If after all my just debts are paid, and all of the foregoing gifts and bequests are paid and satisfied it should be found that there still remain a portion of my property that has not been disposed of, I desire that such undisposed of property shall be divided share and share alike between my son, Charles W. Sanford, my daughter-in-law, Daisy R. Sanford, and my sister, Martha H. Ayres.”
The case involves few, if any, disputed questions of ■ fact, and was submitted largely upon an agreed stаtement of facts, from which it appears that the net value of the estate in Iowa, subject to the collateral inheritance tax, was $814,428.56 (on which the tax, amounting to $4,281.43, was promptly paid by the executor), and of the real estate and
I. It is not claimed by counsel for appellants that real property situated outside of this state, as such, is subject to the payment of a succession tax in this jurisdiction, but that, by the terms of the will of Hetta A. Sanford, there was an equitable conversion of all of her real estate, and that, under the provisions of Section 1481-a, Supplement to the Code, 1913, the same became subject to the tax in this state. Section 1481-a is as follows:
“The estates of all deceased persons, whether they be
The doctrine of equitable conversion has been so often defined and discussed by the courts of this and the other states of the Union as to require little more than a restatement of the conditions under which same will arise, and to make application thereof to the facts of this case. The general rule was stated in Hanson v. Hanson,
“ ‘To work a conversion of real estate into personalty, there must be either (a) a positive direction to sell; (b) an absolute necessity to sell, in order to execute the will; or (c) such a blending of realty and personalty by the testator in his will as to clearly show that he intended to create a fund out of both real and personal estate, and to bequeath the same as money. In the first, the intention to convert is
The will in question did not contain positive directions to sell any of the real estate. The personal property amounted to only $35,654.69, of which amount approximately two thirds were required for the payment of debts and the expenses of administration; so that it was necessary for the executor to sell a large portion of the real estate, to pay the legacies provided by the will. It is contended by counsel for appellant fhat this necessity worked an equitable conversion of at least so mugh of the real estate of testator as was required for the payment of the legacies, amounting to $147,-800. Unless, however, an absolute, imperative necessity to sell the real estate, or some part thereof, in order to carry out the terms and provisions of the will, is shown, an equitable conversion did not result. If, on the other hand, such absolute, imperative necessity existed, then the intention of the testator to work an equitable conversion of the real estate will be implied. Hanson v. Hanson, supra; Beaver v. Ross,
Manifestly, the facts disclosed make it certain that testator must have intended an equitable conversion of at least a part of her real estate, which took place immediately upon her death, for the purpose of executing and carrying out the terms of her will. Beaver v. Ross, supra; In the Matter of the Estate of Bernhard, supra; Swisher v. Swisher, supra; Inghram v. Chandler, supra; Hanson v. Hanson, supra.
There was an equitable conversion, however, only to the extent that the sale of real estate was imperatively nеcessary to pay the pecuniary legacies and otherwise carry out the intention and purpose of the testator. Duffield v. Pike,
(1) It is not material that no part of the proceeds of the sale of the real estate situated in Nebraska has been transferred by the administrator to Iowa, in so far as it is necessary to use the same in the payment of legacies, as the succession or transfer of personal property of the decedent, wherever situated, is subject to the imposition of a tax at the domicile of such decedent. In re Estate of Weaver,
“They [inheritance taxes] are based on two principles: (1) An inheritance tax is not one on property, but one on the succession; (2) the right to take property by devise or descent is the creature of the law, and not a natural right, —a privilege; and, therefore, the authority which confers it may impose conditions upon it. From these principles it is deduced that the states may tax the privilege, discriminate between relatives, and between these and strangers, and grant exemptions; and are not precluded from this power by the provisions of the respective state constitutions, requiring uniformity and equality of taxation.”
And this is true whether the transfer takes place by will or descent. Appeal of Gallup,
■(2) What has already been said in effect disposes of appellee’s contention that the personal property in Nebraska cannot be taken into consideration in fixing the tax in this state, for the reason that a similar tax will be imposed and collected in Nebraska, resulting in double taxation. Whatever real merit may be claimed for counsel’s position, the courts uniformly hold that a tax may be imposed' by the state in which the property has its situs, and also in the state of the domicile. Each jurisdiction exercises its own separate and independent power of taxation, and there is no conflict. In re Estate of Weaver,
(3) Much reliance is placed by counsel for appellant upon the holding of the Pennsylvania court that, where there is an equitable conversion of real property, situated
Money used for the payment of specific legacies, although' derived from the sale of real property, the sale of which was imperatively necessary to carry out the provisions of the will, passes as personalty, and became such by equitable conversion, immediately upon the death of decedent, and therefore title in fee to the land converted did not pass to the legatees. The above statute is broad and comprehensive, and clearly includes all property
As already stated, all of the real property in Iowa and Nebraska, except a tract in Dickinson County, Iowa, was sold by the executor, and hence the residuary estate will be distributed in the form of money. All of the real property, whether passing to specific or residuary legatees situated in this state, is subject to the payment of the tax. The difficulty presented is to locate the residuary estate. As to this, clearly, there was not an equitable conversion. The title thereof passed to the legatees, subject to the payment of debts, expenses of administration, and specific bequests. The residuary estate comprises only that portion of the
The court, in Wieting v. Morrow, supra, dealt with a controversy involving the imposition and collection of the succession tax in Iowa upon the transfer of personal property therein, belonging to an estate having its primary administration in New York. The will gave the widow an undivided one third of the entire estate.. The executrix in New York conceded that the property liable to the payment of the tax and that exempt therefrom should be so marshaled and distributed that the property in Iowa would be applied pro rata to every provision of the will. On the other hand, the defendant contended that the assets of the estate should be so marshaled as to exempt no part of the property in Iowa from the tax. The court said:
“That the widow is entitled by the express provision's of the will to take an undivided one third of the property located in Iowa, as well as of that located in New York, seems to us very clear. Being entitled to take it, she takes it exempt from the tax under the statute. It is also clear that, if she is entitled to a life estate in any ‘rest and residue,’ she is entitled to take that also exempt from any tax. How the ‘rest and residue’ can be determined in such case is a more difficult question. But the concessions of the plaintiff relieve us from the necessity of determining what her utmost right might be. As already indicated, she concedes that, after appropriating one third of the Iowa property for herself, as widow, the remaining two thirds should be first charged pro rata with the payment of all debts and legacies, and that her life estate in Iowa property should be
The supreme court of Kansas, in State v. Davis,
“We think the spirit of the Kansas act is that, where property in this state owned by a nonresident at the time of his death has been subjected to an inheritance tax in the stаte of his residence, a similar tax ought not to be required here, except- in cases where, if the conditions were reversed, and á nonresident of this state had died, owning the same character of property in the other state, a payment there would be exacted. That spirit is éffectuated by considering that the exemption of the Kansas statute operates for the benefit of the estate of a resident of any other state, the law of which would not exact an inheritance tax with respect to similar property in that state, owned by a resident of Kansas at the time of his death, no matter how dissimilar the statutes may otherwise be. In other words, the exemption made by the laws of another state is to be regarded as like that of the Kansas statute, in any circumstances in which, if the conditions were reversed, it would have a like operation.”
The total net value of the estate in Nebraska, upon the basis of expenses and. deductions made in that state, is
. “The term ‘debts’ as used in this act shall include, in addition to debts owing by the decedent at the time of his death, the local or state taxes due from the estate in January of the year of his death, a reasonable sum for funeral expenses, court costs, the cost of appraisement made for the purpose of assessing the collateral inheritance tax, the statutory fees of executors, administrators, or trustees estimated upon the appraised value of the property, the amount paid by the executor or administrator for a bond, the attorney fee in a reasonable amount, to be approved by the court, for the ordinary probate proceedings in said estate and no other sum; but said debts shall not he deducted unless the same are approved and allowed by the court within eighteen months from the death of the decedent, as established claims against the estate, unless otherwise ordered by the judge or court of the proper county.”
The question whether inheritance taxes due other stales, upon the succession to property of-a decedent whose
On the contrary, the New York court, in In the Matter of the Estate of Bierstadt,