19 S.W.2d 732 | Mo. | 1929
Lead Opinion
This proceeding was begun in the Probate Court of Lewis County to assess an inheritance tax against property belonging to the estate of Carrie Pool Baldwin, deceased.
Carrie Pool Baldwin died testate in Quincy, Illinois, October 4, 1926. Her will was probated in Illinois. At the time of her death she was a resident of Illinois, as was her son Thomas A. Baldwin, sole devisee and executor of the will.
Letters of administration with will annexed were issued on her estate October 22, 1926, to Harry Carstarphan, of Hannibal, Missouri, and the will admitted to probate in Lewis County, Missouri. The Judge of the Probate Court of Lewis County appointed appraisers to fix the value of decedent's property in Missouri, subject to inheritance tax. The executor, Mr. Baldwin, filed a motion in that court asking the court to order the administrator to turn over to him all the personal and intangible property in the estate of decedent in Missouri. The motion was overruled. *211
The appraisers proceeded to appraise the property, made report to Mr. Carstarphan, the Missouri administrator, and Thomas A. Baldwin, executor, filed exceptions to that report. Exceptions were overruled and inheritance tax assessed against certain property belonging to the estate. The administrator appealed from the ruling of the probate court to the circuit court, where, September 5, 1927, judgment was rendered by that court setting aside that part of the appraiser's report assessing inheritance tax against the intangible property of the estate, and from that judgment the State appealed to this court.
The total property listed by the appraiser consisted of certain real estate situated in Lewis County, Missouri, valued at $55,380, and certain personal property amounting to more than eighty-five thousand dollars; a total of $141,278.09. After deductions and exemptions the total estate listed for taxation in Missouri amounted to $121,358.80. Of this the real estate, valued as above, was held by the trial court to be properly listed and assessed for inheritance transfer tax, but held that the personal property listed, amounting to more than $65,000, was not subject to taxation.
The personal property which the circuit court held was not taxable included $15,937.51, deposited with the Southeast Missouri Trust Company at Cape Girardeau, Missouri; $1078.24 deposited in Advance Exchange Bank at Advance, Missouri; two Liberty Bonds of one thousand dollars each. The remainder consisted of about thirty promissory notes due the deceased, signed by various parties, all of which, it is stated, were secured by mortgages on real estate in Missouri with the exception of five notes unsecured, three of them for small amounts. There was no evidence as to why these deposits, notes and bonds were in Missouri, nor how they came into the possession of the Missouri administrator. It is not questioned that he was rightfully appointed administrator in this State and lawfully came into possession of the said evidence of debt. The only showing that they were in fact in Missouri was the motion filed by Thomas A. Baldwin, executor, to have the property turned over to him.
On trial in the circuit court the attorney for the executor introduced in evidence a list of the property, consisting of exactly the same cash in bank, bonds and notes, listed by the executor in Missouri, as listed in the State of Illinois, and made subject to inheritance tax in that State.
I. As to the money deposited in the bank, the relation of debtor and creditor exists between the bank and the depositor. The money *212 is in fact the property of the bank, and it owes the amount of its deposit to its depositor. As to the notes, the simple relation of debtor and creditor exists. TheDebtor and Government bonds likewise are debts which theCreditor. government owes to the bondholder. All these different kinds of property may be considered as of one class for the purposes of this case.
In recent cases we have held for the purpose of property tax that the situs of a credit is the domicile of the creditor, citing Railroad Co. v. Pennsylvania, 15 Wall, 300, where it was held that debts have no locality separate from theSitus: parties to whom they are due, and to tax them elsewhereExcise. might be unconstitutional as impairing the obligation of contract. [State ex rel. v. Gehner,
It we could apply the same rule to an inheritance tax we might have less difficulty in disposing of this case. The inheritance tax statute, Article XXI. Chapter 1. Revised Statutes 1919, provides an entirely independent method of ascertaining the property subject to inheritance tax from that applicable for general tax. The definition of the term "property" in the last Section, 589, of that Article, makes inapplicable any definition relating to general property tax. An inheritance tax is not a property tax, but an excise tax, or a tax upon succession. [In re Zook's Estate, 296 S.W. l.c. 780, and cases cited.]
II. Section 558, Revised Statutes 1919, imposes a transfer or inheritance tax in the following cases:
"When the transfer is by will or by the intestate laws of this state from any person dying possessed of theProperty Within property while a resident of this state. WhenJurisdiction the transfer is by will, or intestate law ofof State. property within the state or within the jurisdiction of the state and decedent was a non-resident of the state at the time of his death."
We are concerned only with the second sentence, which applies to non-residents whose property at the time of death is within the State or within the jurisdiction of the State. There is no difficulty in ascertaining when property is within the State. According to the doctrine mobilia personam sequuntur, which we have held to prevail for purpose of general taxation in cases above cited, it might be said that the property in question here was not within the State, although it might be within thejurisdiction of the State. There was no claim at the time the executor filed his motion to have the property transferred to him, that the money in bank and the evidences *213 of debts were in this State only temporarily. The decedent, Carrie Pool Baldwin, had large possessions in this State including the real estate mentioned; the only personal property listed upon which an inheritance tax was levied in Illinois was the very property listed here. These notes, bonds and cash were all in the possession of the administrator in Missouri. For what purpose they are in Missouri is not shown. We cannot assume that they were in the State of Missouri for the purpose of escaping taxation in the State of Illinois. It is a reasonable inference that the cash and notes in such large quantities in Missouri, when none of it was held in Illinois, was retained in this State for the purpose of investment. They may have established a business situs in this State, in which case it would be subject to a general tax as well as the inheritance tax.
III. Was the property under consideration here within the jurisdiction of the State? The notes were in this State in the custody of the Missouri administrator. The debts were secured by mortgage on Missouri real estate except a few of the notes which with the bonds were also in the custody of the administrator; the money was in banks in Missouri.
Some of the adjudications on the subject are important:
In New York, in the Matter of Whiting,
The ruling in the Whiting case was affirmed by the Court of Appeals. The principle announced in the quotation would lead to inequitable results and make possible double taxation. New York later amended its statute. And it was held in In Re Colt's Estate, 211 N.Y.S. 541, l.c. 543, that money of a non-resident lent to a firm doing business in New York was not subject to a transfer tax in New York.
In the State of Iowa that rule formerly prevailed, but a different rule is announced in later cases. It was held in Chaffin v. Johnson,
In Hoyt v. Keegan,
In State v. Jones,
The Supreme Court of Colorado, In Re Waldron's Estate,
The Federal Supreme Court, in Blackstone v. Miller,
In Kinney v. Treasurer,
Blackmoor and Bancroft on Inheritance Tax, pages 157-158, cites cases where a distinction is made between the property of a non-resident placed in the hands of an agent within the state for management and control, and where that condition does not apply, and Section 219 (p. 180) in regard to mortgage liens, states the rule that: "The succession may be taxable either at the home of the mortgagee, or in the jurisdiction where the land lies, although the *215 note and mortgage are actually in the possession of the mortgagee at his domicile."
The late cases cited above are samples of the prevailing doctrine in other states. But there are cases where it is held that a transfer tax cannot be imposed on promissory notes and other debts of a non-resident. Chambers v. Mumford,
The same ruling in Pennsylvania. In Re Helena,
The rule in Michigan is that a debt secured by mortgage in that state, payable to a non-resident, is subject to the inheritance tax (Bradley v. Merriam Estate, 9 L.R.A. (N.S.) 1104), and in that case the notes and mortgages were in the possession of the decedent at the time of his death.
We find no authority denying the right to impose the tax under a statute containing a clause similar to our "within thejurisdiction of the State," where the evidence of the debt and the debtor are in the State imposing it, and the creditor is a non-resident. In this case the notes secured by mortgages were on land in this State, an asset in the estate of the decedent, protected by the laws of this State. The creditor or his devisee or legatee must have recourse to the courts and laws of this State to protect his rights in a debt to secure its payment. That is equally true of the money in bank. That is likewise true of the bonds and the unsecured notes which were physically present in the State where the debtor resides. All this property was inventoried by the administrator in Missouri. It was properly and lawfully in his custody, which indicates that it was not intransitu, nor temporarily within the State. All of it was properly within the jurisdiction of a probate court in this State, and therefore "within the jurisdiction of the State" in the terms of the statute. Such evidences of debt could not remain in this State without being in the custody of some person or corporation who had authority over it as an agent of the owner, otherwise it *216 would not have been here so as to be accessible to the administrator. It possibly acquired a business situs in this State. Whether it did or not it was within the jurisdiction of the State and property subject to the transfer tax. It would have been a proper subject of inquiry by the trial court to determine how and why and under what conditions these evidences of debt were in this State, but whatever the determination of that question the property was legally within the jurisdiction of the Probate Court of Lewis County in this State and subject to the tax.
That Illinois taxed it does not affect the right of Missouri to tax it, as shown in several of the cases cited. ThatDouble such double taxation is inequitable and should beTaxation. remedied by statute does not affect the legal right to impose the tax. We are obliged to declare the law as the lawmakers have enacted it.
Two principal cases in this State are cited. In Re Zook's Estate,
The judgment is reversed and the cause remanded with directions to the trial court to proceed in accordance with this opinion.Frank, Blair and Gantt, JJ., concur; Walker, J., concurs in a separate opinion; Atwood, J., not sitting; Ragland, J., dissents.
Concurrence Opinion
I concur in the result reached in the leading opinion, but deem it not inappropriate to state the facts as I read the record, and my reasoning and conclusion as to why the judgment of the circuit court should be reversed and remanded.
This is a suit to subject to the payment of an inheritance tax certain intangible personal property belonging to the estate of Carrie Pool Baldwin, who died testate at her home in Quincy. Adams County, Illinois, October 4, 1926. Her son and sole legate, Thomas A. Baldwin, was, under the terms of her will, the executor of her estate. Ancillary letters of administration with the will amexed, upon her property in this State, were issued in Lewis County, Missouri, to Harry Carstarphen on the 22nd day of October, 1926. Her estate consisted of real and personal property in the states of Illinois and Missouri. Aside from her real property in Missouri, not involved in this controversy, her personal property therein consisted of cash, United States Government bonds and promissory notes of individuals and corporations, of the aggregate face value of $58,898.09. This property had been deposited by her at various times in lock boxes and safe-deposit vaults in different banks in this State. *217
The notice required by Sections 568, Revised Statutes 1919, of the inheritance tax law, in regard to property in this State belonging to a non-resident decedent owner, was given to the State Treasurer. On December 16, 1926, the Probate Court of Lewis County, Missouri, appointed an appraiser to appraise the property above mentioned belonging to the non-resident decedent, Carrie Pool Baldwin, for the purpose of determining the amount of the inheritance tax due thereon. This appraisement was made and upon the report of the same being filed in the probate court that court approved the report and assessed an inheritance tax upon all of the property of the non-resident decedent listed in said report as located in this State. Upon the filing of said report the domiciliary and the ancillary administrators filed in said court exceptions to the report of the appraiser, contending that the intangible personal property of the non-resident decedent located in this State, to-wit, the cash, bonds, notes, etc., was not taxable in this State on account of the nature of said property and the non-residence of the testator. The court overruled these exceptions and the administrators appealed to the Circuit Court of Lewis County, Missouri. Upon the case being heard in that court on the exceptions filed in the probate court, the ruling of the probate court was reversed, and it was held that all that portion of the appraiser's report which appraised the intangible personal property of the non-resident decedent was void. An appeal from said judgment was thereupon perfected to this court.
The section of the Missouri Inheritance Tax Law (Sec. 558, R.S. 1919), so far as the same has reference to the matter at issue, is in effect as follows: "A tax shall be and is hereby imposed upon the transfer of any property, real, personal or mixed or any interest therein or income therefrom, in trust or otherwise, to persons, institutions, associations or corporations . . . When the transfer is by will, or intestate law of property within the state or within the jurisdiction of the state and the decedent was a non-resident of the state at the time of his death. When the transfer is made by a resident or by a non-resident when such non-resident's property is within this state, or within its jurisdiction, by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor, or donor, or intending to take effect in possession or enjoyment at or after such death."
I. The intangible character of the personalty involved in this controversy is conceded by the respondent. The question demanding solution is the liability of this property toIntangible taxation under the inheritance law of this State.Personalty. The theory adopted here and elsewhere, as a basis for the imposing of what is designated as a tax of this character, is that it *218
is an excise or impost levied on the transfer of the property from dead hands to living ones. [Knowlton v. Moore,
Although the value of the property is used to determine the amount of the tax, this is the only respect in which it bears a resemblance to property taxation. It may well be said, therefore, that it is not a tax on property, but upon the right of its transmission or succession. [State ex rel. McClintock v. Guinotte,
II. The comprehensive language of Section 558, Revised Statutes 1919, is such as to include within the power of the State any property, real, personal or mixed, or any interest therein or income therefrom, in trust or otherwise, when theBreadth of property is within the State or within itsStatute. jurisdiction at the time of the death of the owner, whether the latter was at the time a resident or a non-resident of the State.
The provisions of the statute being ample to authorize the imposition of this tax, it remains to be determined whether from the nature of the property or from constitutional or other considerations, the statute may be held to apply in cases as at bar.
It may be stated generally that all property, tangible or intangible, no matter where located and whether it has ever been within the State or not is subject to an inheritance tax in the state of the domicile of the decedent. We so held in In re Est. Zook-Hibbard v. Thompson,
III. The facts at bar present a case the converse of those in In re Zook's Estate, supra. In the latter the question submitted was the authority of this State to levy an inheritance tax on intangible property on deposit in banks in another state than that of the decedent owner, who resided at the timeThe General of his death in this State. In the instant case itLaw. is sought to impose the tax on intangible property, located in this State, the decedent owner of which had her domicile in another state at the time of her death.
The validity, therefore, under the Constitutions, State and Federal, of the statute authorizing the imposition of an inheritance tax under the facts in the case at bar, is of moment in the determination of this case.
In Blackstone v. Miller,
In State ex rel. Graf v. Probate Court.
In Chaffin v. Johnson,
In State ex rel. Collector v. Bunce,
In Re Gibbes,
Although the items belonging to the estate of the non-resident which were held subject to the tax in Re Daly,
IV. Many of the objections here made to the constitutionality of the statute under review were ruled upon adversely to the objectors by this court in State ex rel. McClintock v. Guinotte,
V. The strong trend of authority in the courts of last resort in the different states is in harmony with the ruling in the Blackstone case, supra, to the effect that inheritance taxes not being taxes on property but on the privilege of the transmission or succession of the same, a state may measure suchBlackstone taxes by the value of the property, although it mayv. Miller. not tax the same directly.
It is a misconception of the rulings of the Supreme Court of the United States to contend that cases subsequent to the Blackstone case overrule the latter. In an interesting and exhaustive review of these cases (relied upon by the respondent) by Mr. Harry W. Kroeger in Vol. XIV, p. 99, St. Louis Law Review, it is clearly shown that they do not overrule the doctrine of the Blackstone case. It will be found upon an analysis of the cases referred to in the respondent's brief that the facts involved therein were different from those in that case; and that whatever may have been said in criticism of the latter was in passing, and was not decisive of the issues therein submitted.
VI. The ruling in the Zook case, supra, by our own Supreme Court, that intangible property located in another state and owned by one who at the time of his demise was a resident of this State, was taxable at the domicile of the owner, does not militate against the correctness of the conclusion thatZook the privilege of taxing the transfer or inheritance ofCase. such property could only be levied at such domicile. Although subject to the tax in *222
Missouri, it might also be liable to a similar tax in the state where it was located. This conclusion is but the converse of the rule established by several authorities that the power of the domiciliary state to exact a tax on the transmission of intangibles is not defeated by the imposition of a like tax by another state. [In Re Hodges,
Our statute is sufficiently broad to authorize the exaction of an inheritance tax in respect of all property within the jurisdiction of the State regardless of the domicile of the owner. Under a statute not dissimilar in its material features from that at bar, the case of Re Hartman,
In Re Sandford,
In Nuckolls v. Comm.,
VII. Further concerning the contention as to the invalidity of the inheritance tax statute on the ground that it is in violation of the Fourteenth Amendment of the Federal Constitution, while not specifically referred to in the case of State ex rel. McClintock v. Guinotte,
The case of Frick v. Pennsylvania,
The discussion of the power to tax by Chief Justice MARSHALL, in McCullough v. Maryland, 4 Wheat. 316, has reference to property taxation, as is evident from its context and notOther to a tax laid upon a privilege or a right to receiveCases. property by an heir or legatee.
A clear line of demarcation is made in the Frick case between the rules governing the taxation, under inheritance or succession laws, of tangible and intangible personalty. The following paragraphs from the opinion in that case will demonstrate the correctness of that interpretation:
"Counsel for the State cite and rely on Blackstone v. Miller,
So far as relevant to the matter at issue, Blodgett v. Silberman,
The question involved in State ex rel. Auto. Ins. Co. v. Gehner,
For the reasons stated, so much of the judgment of the circuit court in this case should be reversed as holds that the intangible personalty in this State belonging to the estate of Carrie Pool Baldwin is not subject to the payment of an inheritance tax; and the court should be directed to enter up a judgment in conformity with this opinion.