40 Colo. 508 | Colo. | 1907
delivered the opinion of the court:
Winfield S. Stratton departed this life at Colorado Springs on the 14th day of September, 1902. By his will he devised and bequeathed his entire estate to his executors in trust. The will was contested by I. Harry Stratton, son of the deceased. , In consideration of his withdrawing the contest and consenting to the probate of the will, the executors paid to him, in addition to a legacy of $50,000.00, the ■sum of $300,000.00. On July 27th, 1906, the county court of El Paso county found that the gross value of the estate of the deceased at the time of his death was $6,307,166.36. Deductions amounting to the sum of $931,890.69, on account of costs and expenses, and claims paid by the executors, including the sum of $350,000.00 paid_I. Harry Stratton, were allowed. Tentative deductions, amounting to the sum of $375,-275.67, were also allowed, and the court adjudged that the sum of $4,980,000.00 was subject to the payment of inheritance tax; This item was ascertained by deducting from the amount of the gross value the sums mentioned and the further sum of twenty thousand dollars, made up of two items of ten thousand dollars each, allowed by law as exemption to each of two legatees. The court fixed the amount of the inheritance tax at the sum of $284,062.33, together with, interest thereon at the rate of six per cent, per annum from September 14, 1902, the date of the testator’s death. Many errors and cross-errors were assigned, but all have been waived by stipulation of the parties, ■except the error assigned by the state, which relates to the deduction allowed by the court, from the amount fixed as the gross value of the estate, of the sum of three hundred thousand dollars, as part of the costs and expenses of administration, paid by the executors to I. Harry Stratton; and the cross-errors
By section 21 of the revenue act (Laws of 1902, page 49) it is provided that:
“All property * * # which shall pass by will or by the intestate laws of this state from any person who may die seized or possessed of the same * * * shall be and is subject to a tax at the rate hereinafter specified. # * * When the beneficial interests to any property or income therefrom shall pass to or for the use of any * * * child * '* * the rate of tax shall be two dollars on every hundred dollars of the clear market value of such property received by each person, and at and after the same rate for every less amount.
“Provided, that the sum of ten thousand dollars of any such estate shall not be subject to any such duty or taxes, and that only the amount in excess of ten thousand dollars shall be subject to the above duty or tax. ’ ’
The proviso has been construed by this court in the case People v. Koenig, 37 Colo. 283, and it is there held that the exemption of the statute refers to the separate estate received by each person, and not to the body of the estate of the decedent.
I. Harry Stratton, as an heir, in fact the sole heir, of W. S. Stratton, contested his father’s will. If he succeeded in defeating the will, the entire estate of his father would descend to him. To settle the contest he was paid the sum of three hundred and
By section 23 of the act referred to, it is provided, that:
“All taxes imposed by this act, unless otherwise herein provided for, shall be due and payable at the death of the decedent, and interest at the rate of six per cent, per annum shall be charged and collected thereon for such time as said taxes are not paid; provided, that if said tax is paid within six months from the accruing thereof, interest shall not be charged or collected thereon, but a discount of five per cent, shall be allowed and deducted from said tax, and in all cases where the executors, administrators or trustees do not pay such tax within one year from the death of the decedent, they shall be required to give a bond in the form and to the effect prescribed in section twenty-two of this act for the payment of said tax, together with interest.”
The contest over the probate of the will was not determined until six months and more after the
Counsel also contend that the interest imposed is a penalty, and the statute must therefore be strictly construed in favor of the party sought to be penalized. Also that the penalty cannot be enforced, because there was never an opportunity to pay the tax and thus avoid the penalty.
Whether we construe the statute strictly or liberally, we reach the same result. The act, in plain and unambiguous terms, says the tax “shall be due and payable at the death of the decedent, and interest
Section 5 of the same chapter of the New York Laws provides' that the penalty of ten per cent, shall not be charged where, in cases of necessary litigation or other unavoidable cause of delay, the estate cannot be settled at the end of eighteen months from the date of the decedent’s death, and in such cases only six per cent, shall be charged upon said tax, from the expiration of eighteen months until the cause of such delay is removed.
In New York and Pennsylvania, a time is fixed within which the taxes may be paid without the addition of interest. They provide that, after the time fixed, a certain rate of interest shall be paid. They also provide that, if unavoidable delay is occasioned in the settlement of the estate of a decedent, a lower rate of interest shall be charged. In both, provisions are made for a discount if payment is made before the time fixed for the settlement of the estate. In New York the rate is ten per cent, after eighteen months; in Pennsylvania, twelve per cent, after one year; in both states the rate is reduced to six per cent, where there is unavoidable delay in the settlement of estates. Our statute provides that the tax shall be due and payable at the death of the decedent.
Even if we disregard the legislative use of the terms “interest” and “penalty,” the interest fixed by the section under consideration cannot be regarded as a penalty, because it is no higher than the legal rate-. — Sparks v. Lowndes County, 98 Ga. 284.
Attention is directed to the proviso of the section, which declares that, if the tax is paid within six months no interest sháll be charged and that a discount of five per cent, shall be allowed. This, in our opinion, does not have the effect of rendering the in
The executors say that this statute imposes a hardship upon them and the trustees of the estate, because they could not pay the tax without becoming personally liable in the event of adverse decisions exhausting the funds in their hands, and that they could not determine until after the contest what rate should be paid. These are matters which should have appealed to the legislature, but the legislature, having before them the laws of other states containing more liberal provisions with respect to such matters, did not make provision for a. rebate of interest under such conditions, and this department, therefore, cannot grant relief.
Under the authority of the New York and Pennsylvania cases we have cited, holding that interest is properly chargeable and collectible, we hold that the county court properly charged interest upon the taxes from the date of the death of the testator, and that portion of the judgment is affirmed. The judgment is reversed as to that portion thereof which credits, on account of costs and expenses, the sum paid I. Harry Stratton; and the court is directed to render judgment in accordance with the views herein expressed.
Decision en banc. Mr. Justice Goddaed not participating.