161 N.C. 246 | N.C. | 1912
Lead Opinion
after stating the case: The statute of this State imposing a tax on inheritances, Laws 1911, eh. 46, secs. 6 to 21, inclusive, seems to be an exact reproduction of that of 1907, the law which prevailed at the time of the death of the testatrix. Should there be a difference which has escaped us, the law of 1907 will control as to the rate and amount of the tax, and the present statute as to the methods of appraisement and collection. Assuming that' the statutes are the same, and referring to that portion of the present law more directly relevant, section 6 of the act provides in part as follows:
*254 “From and after the passage of tbis act, all real and personal property of whatever kind and nature 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 while a resident of this State, whether the person or persons dying seized thereof be domiciled within or out of the State, or if the decedent was not a resident of this State at the time of his death, such property or any part thereof within this State, or any interest therein or income therefrom which shall be transferred by deed, grant, sale, or gift, made in contemplation of the death of the grantor, bargainor, donor, or assignor, or intended to take effect in possession or enjoyment after such death, to any person or persons or to bodies corporate or politic, in trust or otherwise, or by reason whereof any person or body corporate or politic shall become beneficially entitled in possession or expectancy to any property or the income thereof, shall be and hereby is made subject to a tax .for the benefit of the State, as follows, that is to say: Where the whole amount of the property, real or personal, which shall pass from a decedent to an heir at law, distributee, devisee, or legatee, by will, by the intestate laws of this State, or by deed, grant, sale, or gift made in contemplation of death, shall exceed in value the sum of $2,000, as determined by the appraisal hereinafter provided for, the tax upon the excess shall be as follows:
“First. Where the person or persons entitled to any beneficial interest in such property shall be the lineal issue of lineal ancestor, brother or sister of the person who died possessed of such property aforesaid, or where the person to whom such property shall be devised or bequeathed stood in the relation of child to the person who died possessed of such property aforesaid, at the rate of 15 cents for each and every hundred dollars of the clear value of such interest in such property; and this clause shall apply to all cases where the taxes have not been paid by the executor or administrator or other representative of the deceased person. The clerk of the Superior Court shall determine whether any person to whom property is so devised or bequeathed stands in the relation of child to the decedent.”
Sections 7 and 8 provide that any legatees, etc., charged with a tax shall only be relieved .by payment, and the same shall draw interest after two years from the death of the decedent. Section 9 requires that the executors shall deduct the tax, at the rate prescribed, before payment,, where the legacy, etc., is piayable in money, and, in other cases, he must require payinent of the tax at the appraised value, before he can be compelled to deliver the legacy, and, if the bequest be of a specific legacy or article, he may sell the same or so much thereof as may be necessary, applying the proceeds in the due administration of the estate, after paying the amount of the tax to the proper officer, etc.
By section 11, if the legacy is charged upon realty, the heir or devisee, before paying same to the legatee, shall deduct therefrom the amount of the tax and pay same to the executor, and such tax shall remain a charge on said real estate until it is paid; the section closing with the proviso that all taxes imposed by the act shall be a lien on the personal property of the estate on which the tax is imposed or upon the proceeds arising from the sale of such property from the time.the tax is due, and shall continue a lien until the same is receipted for by the proper officer of the State.
The act further contains provision for the appraisement of the property where same is required; constitutes the clerks of Superior Court the agents of the State for the collection of the tax, and authorizes suit to collect the same, either at the instance of such agent or of the solicitor of the district, a provision under which the present action is instituted, and, in certain instances, authorizes collection of the tax under the usual method of distress by the sheriff or tax collector.
From a consideration of these provisions of the statute and authoritative decisions interpreting and applying laws of similar import, we regard it as established ‘that the law is constitutional when viewed as an excise or privilege tax on the transmission of property, and not as a tax on the property itself (In re Morris Estate, 138 N. C., 259); that while the tax may be made a personal charge in the case of vested interests, it is also payable out of the estate, or rather the portion of it subject to the duty, and that-, for the purpose of estimating the amount of the tax, the property must be valued at the time of the death of the testator or intestate, and that it is assessable and qiayable at that time or as soon thereafter as the proper and orderly administration of the estate permits, and in any event within two years of such death whenever it is practicable to appraise the property by any of the recognized methods and ascertain the amount of the tax due. That, where it is not practicable to ascertain the amount of the tax, by reason of contingencies affecting the value of the estate subject to the same, or causing changes in the succession to holders subject to different rates, or where it is sought to make a contingent legatee subject to a
In our view, the positions as stated will be found in accord with the better considered cases construing statutes similar to or bearing nearer resemblance to our own. In re Morris, supra; Attorney-General v. Pierce, 59 N. C., 240; Knowlton v. Moore, 178 U. S., 41; In re Davis Estate, 167 N. Y., 227; In re Vanderbilt Estate, 172 N. Y., 69; Frank Ayers v. Chicago and C. Trust Co., 187 Ill., 42; Minot v. Winthrop, 162 Mass., 113; Dow v. Abbott, 179 Mass., 238; S. v. Pabst, 139 Wis., 561; Nunnemacher v. State, 129 Wis., 190; 27 A. and E., “Succession Taxes,” p. 337 et seq.; 37 Cyc., p. 1574.
Applying these- principles to the facts presented: in reference to the legacy to the Rev. Richard W. Hogue, this is a pecuniary legacy in the sum of $3,500, in trust to pay him the income for life, then to his wife for life, and on their, death the principal is payable per stirpes to his surviving children and grandchildren, etc. Here the fund is entire, and if required, the value of the life interest of the legatee could be readily ascertained. Inasmuch, however, as the life tenant and the remaindermen are all strangers to the decedent and all the interests are sub
As to the share bequeathed in trust to pay the interest to Emily Bridgers for life, with remainder to the lineal issue of the decedent: Here the legacy is entire, the rate is the same, all being subject to % of 1 per cent. The $2,000 exemption will-be deducted and the tax at the proper rate will be paid to the clerk as aforesaid or as the court, by order, may direct. And the same ruling disposes of the share bequeathed to the daughter Mary, and a like 'disposition will be made of the share bequeathed to the son George, with remainder over to lineal issue, etc.
As to the share bequeathed in trust for Annie, the widow of E. E. Bridgers, and for Bettie, the widow of Preston L., the said E. E. Bridgers and Preston L. Bridgers being sons of the testatrix, the income was directed to be paid to them for life or widowhood, and if -this was subject to a different rate from the other legatees sharing in these portions the payment of the tax would have to be postponed, because an estate for “life or widowhood” is incapable of present valuation, and there would be no practicable way of determining the amount of the life estate on which the higher or differing ■ rate should be paid. Don Passos Inheritance Tax Law, sec. 53.
In our view, however, these legatees, should each be considered and dealt with as one standing in the relation of child to the decedent under clause 1, see. 6, of the statute. This clause imposes a tax of % of 1 per cent on legacies to the lineal issue or lineal ancestor of decedent or to his brother or sister or to “one who stood in relation of child to such decedent,” this in case of question to be determined in the first instance by the clerk of the Superior Court. This provision, in our opinion, refers and was intended to refer to the case of widows or widowers, and other cases could be suggested to the decision of the
The entire record and statute shows that the testatrix should pay these taxes, which are all now due, out of the funds subject to the duty, and is responsible for such payment and is clothed with the right to sell and dispose of such portion of each share as may be necessary for the purpose; and under the extensive powers of conversion and sale conferred on the trustee by the terms of the will, it has the right to sell and dispose of any portion of each fund that it may deem best in order to obtain the money for such purpose, and the receipt of the State officer shall be a valid voucher in a proper accounting and settlement of the trust estate.
For the reasons stated, the judgment of the Superior Court will be reversed, and this will be ^certified, to the end that the five shares into which the residuum is divided shall be valued as if at the death of the testatrix, the exemption of $2,000 deducted from each share and a tax of % of 1 per cent on the residue be paid into court, with costs of proceedings. That the tax on the legacy of the Rev. R. P. Hogue be also paid, first deducting the exemption, at the rate of 5 per cent, as directed by the statute.
Reversed.
Concurrence Opinion
concurs, except in one particular. Tbe statute provides: “Where tbe whole amount of tbe property, real and personal, which shall pass from the decedent to an heir at law, etc., shall exceed in value the sum of $2,000 , . . the tax upon the excess shall be as follows:” This contemplates that estates under that amount shall be exempt, and that the “excess” above that amount in all estates shall be taxed. The law intends equality in matters of taxation.
The expression, “shall pass from a decedent to an heir at law,” etc., does not mean to give as many exemptions as there are shares, but simply that the estate to the extent of $2,000 shall be exempt, on a' parity with estates of not more than that value. The word “decedent” is necessarily in the singular, and the word “heir at law,” etc., has no reference to the number of such, for the tax is upon the succession and not upon the property after it reaches the hands of the heir at law, devisee, etc. The latter word, therefore, must be treated as a generic term, and embraces the plui’al. This is required by the evident purport of the statute; and also by the provision of the law, Re-visal, 2831 (1), which requires that in the construction of statutes “Every word importing the singular number only shall extend to and be applied to several persons or things as well as to one person or thing.” To hold otherwise is to give the estate of a decedent who divides his property into 20 shares an exemption of $40,000, whereas if he were to die intestate or should devise his property to one person there would be an exemption of only $2,000. It will give to estates not over $2,000 an exemption of that sum, while it might give to larger estates many times that exemption. Bearing in mind that the whole purport of the law is to tax the estate of the decedent, or rather the transference thereof to the devisees and heirs at law, it is the logical meaning of the statute to give only one exemption, and not to consider the amount of the exemption as being multiplied by the number of the devisees or heirs at law and distributees. It is one fund that is being taxed, and there is only one exemption contemplated by the statute.
The very first provision is that if the "whole amount of the property, real and personal . . . shall exceed $2,000 . . .
Dissenting Opinion
dissenting in part: I cannot agree that what is called the exemption of $2,000 extends to all the legatees who take after the life estate has expired. In my opinion, that is not in accordance with the words or meaning of the statute. Where its language is clear, there is, of course, no room for construction, but we merely execute the intention1 thus clearly expressed. The statute is worded in the singular number and provides that the property inherited by an “heir at law or dis-tributee,” or given by will to “a devisee or legatee,” and “exceeding in value the sum of $2,000,” shall be subject to a tax upon the excess, according to the rule prescribed. This can mean but one thing, which is, that each heir, distributee, dev-isee, or legatee shall not be taxed at all unless his shai*e, whether in land or personalty, and whether inherited or given by will, shall exceed in value $2,000. Take this case as an illustration: We hold, as I understand, that the property, the income of which is given to Miss Emily Bridgers, is to be taxed upon its full value, subject only to an exemption of $2,000, although the .testator has specifically willed it to the ulterior takers as dev-isees or legatees, depending upon the nature of the property. If this is the correct interpretation, then when we come to a case of intestacy, we can deduct the amount of only one exemption from the entire value, for the heirs and distributees will take precisely as the devisees and legatees take in this case, that is, as a class. Again: If we adopt this construction, the law will give an exemption of $2,000 to a devisee or legatee who takes directly under the will of the testator, and deny it to one who takes mediately, that is, with the intervention of another interest, from him, when the former will, of course, be the more valuable estate. Those who get the most and get it at once are each exempt to the amount of $2,000, while the others, who are postponed in the enjoyment of their legacies until the expiration of a life interest, can have only one exemption for all — they
The Revisal, see. 2831 (1), does not apply. It is also expressly subject to the following qualification, “unless the context clearly shows the contrary,” and this contextual meaning here is very clear.
