Reish v. Commonwealth of Pennsylvania

106 Pa. 521 | Pa. | 1884

Mr. Justice Clark

delivered the opinion of the court,

John Reish, late a resident of Lewis township, Union county, died on the 15th of August 1878, intestate and unmarried, leaving to survive him no lineal and but one collateral heir, his brother Isaac Reish, the plaintiff in error. On the 10th of August, 1878, the said John Reish, whilst suffering with the disease of which he in a few days died, executed a deed in fee simple, for all his real estate, and by the same instrument transferred all his personal estate to Isaac Reish; who, at the same time, gave to his brother, a bond in the penal sum of five thousand dollars, containing the following condition, viz:

“ The condition of this obligation is such, that if the above bounden Isaac Reish, his heirs, executors, administrators, or any of them, shall and do well and truly pay or cause to be paid unto the above named John Reish, his executors, administrators, or assigns, the one half of the net income arising from the real estate held prior to this date by the said John Reish and Isaac Reish, as tenants in common; and one half of the net income, arising from the tract of land, conveyed by Hudson Mench, administrator of Reuben Mench, deceased, to the said Isaac Reish, containing eighty-four acres and thirty-four perclies; and the income of the bank stock and interest bearing obligations, of the said John Reish, this day assigned and transferrred to the said Isaac Reish; and shall allow to the said John Reish the free use, enjoyment, occupancy, and control of the premises, where he now lives, including the house and out-buildings, garden, yard and barn, and all the household goods and other personal property thereon, in the manner he has heretofore been accustomed to use and enjoy the same, without fraud or further delay, then this obligation to be void and of none effect; otherwise, to be and remain in full force and virtue.”

The real and personal property conveyed and transferred, having been regarded as subject to a charge for collateral inheritance tax, were afterwards, on the 26th of July, 1880, appraised, the total valuation being $17,229.60; and, on the 7th of January, 1882, the register filed, in the Common Pleas of Union county, his certificate and claim for $861.48, with interest, at the rate of 12 per cent., from the 15th of August, 1878.

The present controversy arises upon a scire facias, issued on this claim. The defendant below contends, that the decedent, at the time of his decease, was not seised or possessed of the property appraised, but that the same was and had been conveyed and transferred to him absolutely; that he is not liable, therefore, to the payment of collateral inheritance taxes thereon.

The Act of April 7th, 1826, section 1, provides, that, “ all estates, real, personal and mixed, of every kind whatsoever, passing from any person, who may die seised or possessed of such estate, being within this commonwealth, either by will or under the intestate laws thereof, or any part of such estate or estates, or interest therein, transferred by deed, grant, bargain oa1 sale, made, or intended to take effect, in posssession or enjoyment, after the death of the grantor or bargainor, to any person or persons, &c., other than to or for the use of father, &c., shall be and they are hereby made subject to a tax or duty,” &c., &c.

What was the effect of the writings made August 10th, 1878, so far as the charge for collateral inheritance tax is concerned? The deed and the bond were contemporaneous, the execution and delivery of both constituted a single transaction ; the deed was absolute, it contained no condition, it was without reservation ; but the bond, although in the form of a mere personal .obligation, was in effect, we think, as regards the collateral inheritance tax, a postponement of the time of enjoyment, a reservation of the income and profits of the property, during the lifetime of the grantor. All property is subject to the tax. which, in the language of the statute, is transferred by deed, &c., made or intended to take effect in possession, or enjoyment after the death of the grantor. The commonwealth’s right to collateral inheritance tax is, therefore, not defeated by a conveyance of the title, nor by possession taken under it, if the enjoyment is intended to take effect at the death of the grantor. The enjoyment of real estate is not the exact equivalent of possession, nor is it so used in this statute; in no case could the distinction be more clearly made, than in the case under consideration. Under his deed, Isaac Reish was the undoubted owner of the lands in fee, and of the personalty absolutely, and the title drew to it the right of possession; but by the express contemporaneous agreement of the parties, the ownership took effect in enjoyment at the death of the grantor. John Reish, was entitled to receive the same income and profits from the property, during his life, as if the transfer had not been made. One certainly cannot be considered, as in the actual enjoyment of an estate, who has no right to the profits or incomes arising or accruing therefrom.

It is true, the obligation of the bond was not inserted as a condition or reservation in the deed, it was in form a mere personal obligation; but this contention does not involve a technical question of title nor of lien, the whole matter depends upon the single fact, whether or not the transfer was made or intended to take effect, in enjoyment at the death of the grantor. The policy of the law will not permit the owner of an estate, to defeat the plain provisions of the collateral inheritance law, by any device which secures to him, for life, the income, profits, and enjoyment thereof; it must be by such a conveyance as parts with the possession, the title, and the enjoyment in the grantor’s life time.

It was not necessary, in order to create liability for the tax, that John Reish should have died seised or possessed of any interest in the land; this was a conveyance by deed; the words “seised or possessed” by the terms of the statute, apply to transfers by will, or under the intestate laws only. The vice of the argument, on part of the plaintiff in error, is in assuming that in order to charge an estate, transferred by deed, with an inheritance tax, the grantor must, at the time of his death, have some title or estate remaining, and that such title or estate only as the grantor actually owns, at death, is subject to the tax. Avery labored and ingenious argument is made to show that John Reish did not die seised or possessed of any estate, excepting the bond and the right it secured; that these only, should have been appraised. The learned counsel contend that “the part of such'estate or interest therein” transferred by the death of John Reish, and which then took effect in enjoyment and possession, and these only are subject to the tax. The letter as well as the spirit ancl meaning of the act, however, is clear. When an estate is transferred by deed to any other than those exempted from the operation of the statute, intended, however, to take effect in enjoyment at the death of the grantor, it is the value of the lands so transferred which is liable to the duty, not the value of the interest or part remaining.

He could not perhaps say, under the facts as they appear, that such transaction raised a trust in favor of the grantor, nor is it necessary, for the purposes of this case, that any trust relation should be found to exist; the fact that the transfer was intended to take effect in enjoyment at the death of the grantor, subjects the estate to a tax. If such ail intention is not expressed in the deed, it may otherwise appear; in this (¡ase it is shown by the bond, which was part and parcel of the transaction which involved the conveyance.

In Stinger v. Commonwealth, 2 Casey 422, the liability was said to depend upon the question, whether the decedent was the owner, at the time of his death; but there was no question there, as to the time when the deed was to take effect in enjoyment, it raised simply a question of delivery; if the delivery was a legal one, it exhibited an absolute sale, without reservation or postponement of enjoyment.

The jury have found that the conveyance was but a scheme to defeat the commonwealth, and to deprive her of the tax; but in the view we have taken of the ease, it is unimportant what may have been the intention of the parties in that respect, and we will not consider the effect of such a finding.

The judgment is affirmed.