13 Pa. 322 | Pa. | 1850
The opinion of the court was delivered by
Jacob Spangler, by his will, after giving certain items of real and personal property, directed the residue of his estate to be sold, and the balance ascertained by his executors’ accounts, to be disposed of as follows: “My wife, Catharine, shall have the interest of the dower fund, or third part of the whole, &c., which said interest shall be paid my said wife annually, during her natural life or widowhood, which said dower fund shall be vested out on good real estate, and the other two-thirds of all my real and personal estate shall be equally divided” among the testator’s children. It is further directed, that the principal sum invested for the use of the widow, is to be distributed among the children on the determination of the widowhood.
The question is, whether the sum so put at interest, for the widow’s use, is taxable for state and county purposes, and, if so, by whom the tax is payable.
The act of June 11, 1840, (P. L. 612,) inter alia, imposed taxes on moneys at interest, debts due, &c., and that of the 29th April, 1844, (D. D. 1020,) subjected to this burthen “all mortgages, moneys owing by solvent debtors, whether by promissory note, penal or single bill, bond or judgment; also, all articles of agreement and accounts bearing interest, owned or possessed by any person or persons whatsoever,” &e. It is scarce worth while to consider whether the fund here in question, is embraced within the system of taxation established by these and other statutes, but it may be observed, it is pretty obvious, from their context, that they look only to choses in action, and other property, the legal title to which is vested in the same persons, who receive and enjoy the proceeds and usance. They were, therefore, probably thought to be exclusive of a large class of cases created by deed or will, where the legal ownership of the principal sum or thing is vested in one set of persons, while the present beneficial interest or right of enjoyment is limited to others for a determinate period, a form of disposition very common with us, and comprehending large and increasing values. The burthen of taxation thus weighed unequally, for while the owners of a fund bearing interest, were compelled to contribute to relieve the public exigencies, sums of money equally productive of income, but which could not, in legal parlance, be called the property of the beneficiary, altogether escaped. Then came the act of 1846. By its first section it declares, amongst other things, that “ all annuities over $200 00,
Who then is to pay the tax? Not the trustee, with other money of the estate. This, indeed, is wholly out of his power, for by the express directions of the will, that money was distributed among the legatees at the same time when the one-third of the clear estate was secured for the widow, and it was actually so distributed. Nor could the executor retain any part of it for the purposes of payment, or compel the legatees to refund the requisite sums. Besides, it is not the testator’s estate that is taxed, but a capital invested for the benefit of a third person. The idea of a legislative intent to compel the recipients of other portions of testate property to pay the legal burdens laid on this, is too monstrous for serious entertainment; and a suggestion that the trustee is liable for their discharge, by an application of his proper funds, is not less so. ' Cases will frequently arise, where there is no other estate or fund within the power of a trustee than that invested. Is he then personally liable; and, should he be insolvent, are the public dues to remain unpaid, though the capital sum yield an annual interest ?
•Is the tax payable out of this sum? So to direct would impair it, both for the cestui que trust and the remainder men; and might, in process of time, entirely absorb it, in total defeat of all the interests dependant on it. That such a possibility could not have been contemplated by the testator is plain from the whole scope of his will. That such is not the necessary operation of the statute is, I think, also manifest. It taxes the fund, but does not expressly say who shall pay the assessment. Nor is this necessary, in my apprehension. Under all just systems of taxation, he who presently enjoys the subject ought to discharge the present impost. Where the law levying the impost employs no distinct language on the subject, the present beneficiary is liable by inevitable implication, if the law contains nothing repugnant to such liability. Where, from the phraseology of a statute, the effect sought is to saddle the burden on those who enjoy no immediate advantage, though prospective owners of the capital sum, which may never vest in enjoyment, the provision ought to be clear and explicit. All our tax laws, without exception, so far as I am informed, recognize the personal amenability of the immediate beneficiary; and I think it is particularly observable in the act of 1846. Under prior statutes, money invested for the use of one not the owner of the fund, would seem, as already intimated, not to be subject to taxation; and it is only made so, by the last act,
I have considered the case upon the admission, that, if taxable for state purposes, the subject of this controversy is also liable for county taxes. So much was decided in Savings Fund vs. Yard, 9 Barr, 359; Ins. Co. vs. County, id. 913; and Easton Bridge vs. Northumberland County, id. 415.
Judgment affirmed.