143 Mo. 287 | Mo. | 1898
This is an original proceeding in this court for a writ of certiorari to the judge of the
John C. Conley died in Boone county, Missouri, on the sixth day of December, 1896, leaving an estate consisting of realty in this and other States and of bonds, notes, certificates of stock, and other securities. His will, dated February 18,1896, was duly established and admitted to probate by the probate court of Boone county on the seventh of December, 1896. The said testator was never married. He made a bequest of $20,000 for charitable purposes and gave the remainder of his estate in different amounts to his collateral relatives. He'gave some special legacies of a certain amount and after the payment of various' special bequests the residue of the estate is given by his will to certain nephews and nieces named in the residuary clause. Letters testamentary were duly issued to the relators, who qualified as executors of the will on the fifteenth of December, 1896, and filed their inventory on the eleventh of January, 1897.
The probate court, on the thirtieth of August,
The constitutionality of the act of the General
No question is raised as to the power of this court by certiorari to supervise the proceedings in the probate courts, and if their action in levying said taxes is found to be in excess of their powers, to quash their proceedings, and we have no doubt of our power to do so.
At the risk of being deemed prolix we will insert so much of the acts as bear directly upon the questions raised. The act was passed in 1895, and amended by two acts passed in 1897. As amended it providés, among other things, as follows:
Sec. 1. That all property conveyed by will, or by the death of an intestate, to any person other than the father, mother, husband, wife or direct lineal descendant of the testator or intestate, except property conveyed for some educational, charitable or religious purpose exclusively, shall be subject to the payment
Sec. 2. That in addition to the fees now provided by law no corporation shall be organized under the laws of this State, and no foreign corporation shall do business in this State, unless the incorporators shall, upon filing the articles of association, pay to the State treasurer, in trust for the State of Missouri, to be disposed of as hereinafter provided in this act, the sum of twenty-five hundredths of a dollar for every thousand dollars of the capital stock of such corporation as a franchise fee; and a like franchise fee shall be paid in the same manner on every thousand dollars of the increase of the capital stock of any corporation.
Sec. 3. That every manufacturer of patent medicines shall annually pay a license tax of twenty-five dollars.
Sec. 4. That all moneys, which may hereafter escheat to the State shall be distributed in the manner provided by this act.
Sec. 5. That all taxes, fees or moneys received under this act by any county official shall be paid during the first week of the following month to the county treasurer, who shall credit three fourths to a fund hereby created to be known as “The State University Scholarship Fund,” and remit the remaining one fourth to the State treasurer: and from all money received directly by the State treasurer under this act, he shall monthly reserve one fourth and remit the remaining three fourths to all the county treasurers of the State, to be credited to “The State University Scholarship Fund” of such counties.
Sec. 6. That all moneys received by the State treasurer to be retained by him under this act shall be deposited in the State treasury to the credit of the “seminary fund” as provided by law.
Sections 8, 9 and 10 of the act are in the following words:
“Sec. 8., The inoome of the moneys in ‘The State University Scholarship Fund’ shall be collected annually, and one fourth of the same added to the principal, and the remaining three fourths shall be faithfully appropriated for establishing and maintaining free scholarships in the State university, the amounts and terms of which shall be fixed and changed from time to time, as may be' necessary, on the written order and resolution of the board of curators of the State university.
“Sec. 9. On the first week of August of each year, beginning with the first Monday after due notice thereof, as prescribed by the county court, in two newspapers of each county, representing different political parties where such newspapers exist, there shall be held at the courthouse in the county seat, an examination of all applicants qualified under the law to be students of the university. Such applicants shall be actual residents of the county, and such examinations shall be conducted by three examiners, one of whom shall first be appointed by written notice to the county clerk by the president of the board of curators of the university during the month of July, and one selected thereafter by the county court of another political faith, and the third selected by the agreement of the two so chosen, with power in the county court, or the presiding judge thereof in vacation, to fill all the vacancies in the position of examiner; and such examination shall be writ*313 ten, and shall meet the requirements for entrance in the academic department of the university. Provided, that the duties imposed on county courts or the judges thereof, by this section, shall be discharged in the city of St. Louis by the mayor;
“Sec. 10. Those applicants passing the best and most meritorious examinations, to the number of scholarships established in each respective county, shall be awarded such scholarships, and be entitled thereon to enter free of matriculation fees, any department, school or college of the university, and have paid to them in equal monthly instalments while attending the university, the sum provided by the scholarship so awarded, for defraying the expenses of such attendance. Provided, that no applicant shall be qualified to receive such scholarship unless such examiners shall be satisfied that the applicant is dependent upon his own exertions for his education, and financially unable to otherwise obtain the same.”
By comparison of the act thus revised and amended in 1897 with the original act of 1895, it will be seen that the progressive feature of the original act, to wit, the increase of seven and one half per cent on amounts of over $10,000, is repealed and specific provision is added for valuation of inheritances and enforcing the collection ,of the tax. Amendments are also made to sections 2 and 3 in matters not material in the present proceeding, while in section 5, the distribution of the funds collected by the State treasurer in trust under the provisions of the act is so regulated that it is made in the different counties on the basis of representation in the General Assembly.
Lying at the threshold of this discussion is the objection which goes to the very substance of this enactment. It is insisted that the tax provided in the act is not levied for a public purpose within the mean
We shall assume without further comment that if the act under review authorizes the levy of a tax, that tax must be for a public purpose, otherwise it is a direct violation of the Constitution of this State. .Does it authorize a tax? The learned counsel of the probate judges argues that it is not strictly a tax. He says: “Although called a tax it is not properly so, but a bonus or price exacted from the collateral kindred and strangers to the blood as the condition upon which they take the estate whose owner is dead.” But even if such a distinction can be maintained, the contention does not reach the vital point upon which the relators insist, namely, that by whatever name this burden, or excise, tax, bonus or exaction from the citizen, may be called, still it falls within the purview of the word “taxes” as used in the third section of article X of our Constitution. The word in that section is used in its generic sense as expounded by lexicographers, judges and lawyers long before its use in our organic law. In the sense that taxes can be levied only for a public purpose, that word includes every character and kind of tax, general or special. The power of the State to demand such a bonus is referable, and referable only, to the taxing power, so that whether this “collateral succession tax” as it is denominated by the legislature, be termed a tax or a bonus, an excise, a price imposed for the privilege of taking an estate by will or inheritance, it must be levied or exacted for a public purpose only under our Constitution, and under those limitations on the taxing power which exist in the very nature of our
That the State of Missouri for public purposes may assess and levy taxes upon the succession or devolution of property under our inheritance laws or statute of wills, subject only to the prohibitions of the Constitution of the State and the Constitution of the United States, we have no doubt whatever. The constitutionality of such a tax has been too long affirmed by the courts of last resort to admit of doubt, but we have not found nor have counsel pointed to any statute which has received the sanction of the courts, which levied such a tax for other than a plainly public purpose. Is the purpose for which the act in question authorizes this collateral succession tax a public one? Perhaps few branches of the law have been more carefully considered than that which this inquiry suggests.
In Curtis’s Adm’r v. Whipple, 24 Wis. 350, the legislature empowered the town of Jefferson to raise a sum by taxation to be paid to the treasurer of “The Jefferson Liberal Institute,” a private educational institution, but the Supreme Court held the act void, the tax being for a private purpose, and a like conclusion was reached in Jenkins v. Andover, 103 Mass. 94. This court in Deal v. Mississippi Co., 107 Mo. 464, held section 5697, Revised Statutes 1879, void because it gave a bounty to private individuals for growing forest trees upon their own lands. In each and all of these cases it was held that the fact that the public might be incidentally benefited by rebuilding a burnt city and by the establishment of manufactories and schools, would not sustain the tax. Every factory, every private school or academy, every industrial enterprise which furnishes opportunity for labor and the earning of wages benefits a community in one sense, but the indirect good which inures in this way furnishes no basis for taxation of other business to build up such occupations. Learned counsel for the respondents do not seriously controvert this general proposition, but meet it with the assertion that the State university is a State institution established and maintained for a public purpose. This is at once conceded by the relators because the people of Missouri in their sovereign capacity have recognized and declared in their organic law that “a general diffusion of knowledge and intelligence is essential to the preservation of the rights and liberties of the people,” and imposed upon the legislature the duty of establishing and maintaining “free public schools for
At this point, however, the real contention in this case arises. Relators insist that the fund sought to be accumulated by this tax is not a provision for the support of the university, but is a tax to raise a fund the proceeds of which must be paid to certain favored individuals to enable them to buy food and clothing for their own use while pursuing their studies at the university. The controversy must be determined by the act itself. By reference to the summary of its various sections as hereinbefore set out, it will be observed that three fourths of all the moneys raised by this tax was intended to create “the State university scholarship fund” of the several counties of this State to be kept as a permanent fund to be invested so as to bear inter-\ est. This interest is to be collected annually and one fourth of it added to the fund and the remaining three fourths to be appropriated for establishing and maintaining free scholarships in the university, the amounts and terms of which are to be fixed by the curators of the university. By sections 9 and 10 provision is made for
Deferring for the present any discussion of the proposition that one fourth of the tax may be sustained because it is directed to be paid into the State treasury for the benefit of the “seminary fund,” an admitted public use, we direct our attention to the arguments for and against the “free scholarship fund.” It is perfectly evident we think that no distinction can be maintained between the fund and its annual increment. It can not be true that this fund is a state or public fund under this act while the whole beneficial use and interest arising therefrom is private. Such a distinction is illogical and unsound. The fund is created for the sole purpose of producing the interest to be derived from it and it is incredible to believe that the legislature would have provided the tax. at all if it was n ot to obtain the interest to be used for the maintenance of the scholars. The fund and the interest are inseparable.
It is one thing to provide for the establishment and maintenance of a State university, and a system of free public schools, the State through its own officers, agencies and municipalities constructing and owning the buildings and apparatus and employing the teachers as public functionaries, responsible under her own laws for the discharge of their duties; and a wholly different thing to support private individuals who attend the university and public schools by public taxation. But it is said that nothing is more common than the endowment of free scholarships as a part of the endowment of a university. This may be true of the universities of Europe, and individual instances are to be found in this country, where some great benefactor of the race has out of his own bounty provided such scholarships, but these examples furnish no - guide to the free States of this Union, clearly not to the legislature of Missouri under its organic law. The act under consideration endows the scholar, not the university. It provides in unmistakable terms that a fund shall be raised by taxation and paid over to students attending the university for their support while so engaged. It is a pure and simple gift of public money by the State to private individuals for their own private use in plain violation of section 46, article IY of the Constitution, which prohibits the legislature from granting “public money to any individual, association of individuals, or other corporation whatsoever.” We hold that when the Constitution provided for the establishment and maintainance of the university, it conferred authority to support an institution belonging to the State, and this grant is not to be extended to the unlimited support of the pupils who may
It is only necessary to add that counsel for the curators do not. attempt to maintain this tax on the theory that the young men and women who would obtain these scholarships are paupers in the meaning of the law. Even without this admission, it is perfectly apparent that the act by its terms does not confine this pension to the children of poor persons who may in a legal sense be denominated paupers. The class of ambitious young men and women who could avail themselves of the benefits of this act would resent such a designation and scorn this proffered aid if. to obtain it they must first be classed as paupers. It is perfectly clear that the tax is not levied upon any such principle. If it were, it would collide with another fundamental principle. It would be class legislation. Says Judge Cooley in his work on taxation, page 121:
Our conclusion is that this tax is levied for a purely private purpose, and for that reason it is in contravention of the Constitution of Missouri.
This tax is assailed in another vital point. Relators assert it is void for want of uniformity. John C. Conley, one of the testators, died on the sixth day of December, 1895. His will was probated February 18, 1896. Susan E. Spears, the other testator, died June 10, 1896. It is essential that we determine whether the act of 1895 or that of 1897 governs. Is the tax to be levied under the act of 1895, if valid, or the act of 1897, which was enacted long after the death of both of these testators? There is nothing in the act of 1897 which gives it a retrospective operation, and if there was, it would be in direct conflict with the Constitution of Missouri, which prohibits retrospective legislation.. We think it must be plain that the act of' 1895, adopted prior to the death of these testators, if valid, must control and not the act of 1897, enacted after their deaths. This, we take it, is the usual construction. By the terms of each the devolution of the-property and the right- of the State to tax accrues immediately upon the death of the testators. In re Seaman’s Estate, 41 N. E. Rep. 401; In re Embury’s Estate,,
Looking to the act of April 1, 1895 (Laws of Mo. 1895, p. 278), for authority for this tax, we are met with the objection that this tax is also void because the said act is in violation of section 3 of article X of the Constitution of Missouri and of the fourteenth amendment to the Constitution of the United States, and section 4 of article X of the Constitution of Missouri.
Of these in their inverse order. As already remarked no doubt longer exists that it is competent for the legislature to levy a tax upon the succession of estates. It is quite universally held that such a tax is not a tax upon property in the ordinary sense, but is in the nature of an excise, or bonus, exacted by the State upon the privilege or right to inherit or succeed to an estate. It is not necessary at this time to enter upon an examination of the extent of this right on the part of the State, nor to approve or disapprove the extreme views expressed by some of the courts. While conceding the right to tax, our duty now is to ascertain if we can, what was the purpose of the legislature in enacting this law. A primary and safe rule of interpretation of a statute is to endeavor to gather the legislative intent from the words they used. Gardner v. Collins, 2 Pet. (U. S.) 93; Brewer v. Blougher, 14 Pet. 178. The General Assembly has declared that it intended to levy a “collateral succession tax” and we all agree that by whatever name this exaction may be called it is referable to the taxing power of the State. The controlling question is, upon what did it authorize that tax to be levied, upon the property or estate of the deceased person, or upon the right or privilege of his beneficiaries to receive his estate by inheritance or devise ? If upon the latter, it is settled by the great
A “succession tax,” as, the words indicate and the history of such taxes clearly establishes, is an excise or duty upon the right of a person or corporation to receive property by devise or inheritance from another under the regulation of the State. Wherever properly laid, this is its distinguishing feature in contradistinction from a property tax. The language of these two-acts of 1895 and 1897 is very much involved, and more-
Section la requires the tax to be levied upon the appraised value of the whole estate left by the deceased. The tax is at once levied upon that estate, and the personal representatives of the deceased, not the devisees and legatees, are required to pay the tax. How such a tax differs from general taxes upon the property of the deceased under our system we are not able to state. The mere calling of such a tax a succession tax does' not make it different from an ordinary tax upon property when the effect and operation are identical with an ordinary property tax. This tax is collectible out of all property devised by will or descending to any person other than the father, mother, husband, wife or direct lineal descendant, whether the estate of the ancestor, devisor or grantor is solvent or insolvent. If insolvent there is nothing to which the heir or devisee or legatee can succeed,.and yet upon the theory of a succession an onerous tax is added to the charges.against an estate and payable in advance of other claims. The language of the Supreme Court of Wisconsin in State ex rel. v. Mann, 76 Wis. 478, seems exceedingly appropriate upon this point: “A succession tax would necessarily be imposed upo n the respective parties thus succeeding to such residue. But the tax in question is not upon such succession but upon the whole estate at its appraised valuation, regardless of whether it is solvent or insolvent. In case of an insolvent estate, nothing would be left after the payment of debts for transmission, and in most estates there are likely to be sufficient debts to
We think the language of this act, whatever conjecture we may indulge as to the intention of its author, imposes a tax directly upon the property of the decedent, and not upon those who may succeed to his estate, and it must be conceded that if it is a property tax it is unconstitutional because it subjects this estate to an additional property tax to that levied upon all other like property in the State for the same year, and is not levied in proportion to its value.
But in no event can the act of 1895, which governs these two cases be upheld, because the tax authorized by it is not “uniform upon the same class of subjects within the territorial limits of the authority levying the tax.” Section 3, article X, Constitution of Missouri. The class of subjects to be taxed under this act is the succession or inheritance of property by collateral kindred or devisees other than those named in the statute as exempt from its imposition. It is not necessary to determine what would or would not be proper classification under this act in all cases, but it
It is significant that in New York, Maine, Maryland, Virginia, Pennsylvania and Massachusetts, in which inheritance taxes are sustained, the statutes only authorize a uniform rate .of taxation. The constitutional guarantee of uniformity upon the same class of subjects would avail but little if the legislature can arbitrarily vary the classes as' often as the amount of property devised or transmitted by inheritance shall differ. If such a rule obtain, the classes will be innumerable, and the Constitution a dead letter. Where the amount of property received is made the basis of the tax, uniformity can only be attained by levying the same per cent upon the property of each beneficiary under the will or by inheritance. While the legislature might perhaps distribute the collaterals according to the different degrees of kinship to the decedent or testator or grantor, and levy a different rate upon the different degrees, yet when it ignores all such natural classification and.makes the amount of
Other grave objections are made to the act, one challenging its title as containing two distinct subjects; another that the various subject-matters found in the body of the act are not indicated at all in the title. These objections have been presented with the greatest ability and have been duly considered, but inasmuch as the propositions already decided go to the very substance of the act we deem it unnecessary to pass upon the point as to the title of the act. To respond to the very thorough discussion of the point by counsel would extend this opinion unnecessarily to toó great length.
The act of 1895 must be held void, and it follows that’the probate courts of Boone county and of the
