State v. Handlin

Decision Date10 July 1911
PartiesSTATE v. HANDLIN
CourtArkansas Supreme Court

Appeal from Sebastian Circuit Court; Daniel Hon, Judge; reversed.

Judgment reversed and case remanded.

Hal. L Norwood, Attorney General, and George Vaughan, for appellant.

The act of 1907 does not impose a tax on property. 160 Mo. 190; 60 S.W. 1093. The act will be construed as though it had been originally adopted in the amended form. 36 Ill. 161; 15 Ct Cl. 453. Each part of a section should be construed in connection with every other part. 95 Tenn. 22; 64 S.W. 927; 75 Miss. 275; 71 Vt. 493; 45 A. 1051; 161 Ill. 223. The act will not be so construed as to lead to absurd consequences. 100 Ga. 305; 28 S.E. 43; Lewis' Suth. Stat. Const. 926. Every intendment should be made to favor its constitutionality. 25 Ark. 101; 66 Ark. 466; 69 Ark. 378; 75 Ark. 120; Cooley, Const. Lim. 253; 8 W.Va. 612; 15 Mich. 322; 30 Id. 309; 160 Mo. 190; 60 S.W. 1093. The act should be liberally construed. 97 Minn. 11; Id. 532; 186 N.Y. 471; 53 Ark. 49; 48 Ark. 370.

H. C Mechem, for appellees.

The act is unconstitutional because it lays no tax upon estates exceeding $ 50,000.00. 113 Wis. 205; 53 O. St. 314; 171 N.Y. 48; 191 Pa. 1; 170 U.S. 283; 167 Ill. 217; 93 Ark. 612; 70 Ark. 26.

KIRBY J. Mr. Justice HART dissenting.

OPINION

KIRBY, J.

This proceeding was begun in the probate court below by the Attorney General against the executors of the estate of Sparks, who died in July, 1907, for the collection of the inheritance tax claimed to be due out of the property of said estate before distribution thereof. The relief was denied by the courts below upon the ground, in their opinion, that the act of 1907, under which the proceeding was had, was unconstitutional and void.

The only question presented by this appeal is the validity of the act of the Legislature, approved May 17, 1907, amending the Inheritance Tax Law, §§ 242, 243, of Kirby's Digest. The constitutionality of the act is challenged, it being claimed that it makes an arbitrary classification of estates and exempts from taxation estates of the third class exceeding $ 50,000 in value. The sections as amended read as follows:

"Section 242: All property within the jurisdiction of this State and any interest therein, whether belonging to inhabitants of this State or not, and whether tangible or intangible, which shall pass by will or by the intestate laws of this State, or by deed, grant, sale or gift made or intended to take effect in possession after the death of the grantor, to any person or corporation in trust or otherwise, shall be subject to a tax at the rate hereinafter specified. When the property or any interest therein shall pass to a grandfather, grandmother, father, mother, husband, wife, lineal descendant, brother, sister, or any child thereof, any adopted child or any lineal descendant thereof, in every such case the rate of tax shall be one dollar on every hundred dollars of the clear market value of such property received; provided, that any estate which may be valued at a less sum than $ 20,000 shall not be subject to any such tax, the excess over such sum only being taxable. When the property or any interest

therein shall pass to any uncle, aunt, niece, nephew, or to any lineal descendant of the same, in every such case the rate of tax shall be two dollars on every one hundred dollars of the clear market value of such property in excess of the sum of five thousand dollars. In all other cases the rate shall be as follows: On each and every hundred dollars of the clear market value of all property and at the same rate for any less amount; on all estates of ten thousand dollars and less, three dollars; on all estates of over ten thousand dollars and not exceeding twenty thousand dollars, four dollars; on all estates of over twenty thousand dollars and not exceeding fifty thousand dollars, five dollars; provided, that an estate of not exceeding two thousand dollars in value shall not be subject to tax.

"Section 243: When any person shall bequeath or devise any property to or for the use of grandfather, grandmother, father, mother, husband, wife, lineal descendant, brother, sister, or any child thereof, any adopted child or any heir of an adopted child or any lineal descendant thereof, during life or for a term of years, and the remainder to another, the value of the prior estate shall, within sixty days after the death of the testator, be appraised in the manner hereinafter provided, and shall be taxable as provided in the preceding section, and the remainder of the estate shall likewise be taxable as therein provided, which tax shall be payable within one year from the death of said testator, and, together with any interest that may accrue on the same, shall be and remain a lien on said property until paid to the State."

The effect of the amendment of said section 242, Kirby's Digest, was to substitute the section, as amended and re-enacted, for the old section and repeal it, or, as said in Edland v. State, 91 Ark. 243, 120 S.W. 994, "to so change the former act as to make it read in the same manner it would have read, and to give it the same effect it would have had, if it had been originally enacted as amended." Article 5, sec. 32, Constitution.

The section as amended provides that "all property within the jurisdiction of the State and any interest therein, etc. * * * shall be subject to the tax at the rate hereinafter specified," the latter part of it fixing a tax on property passing to strangers upon a progressive or rising scale, as follows:

"On each and every $ 100.00 of the clear market value of all property, and at the same rate for any less amount:

On all estates of $ 10,000 and less

$ 3.00

On all estates of over $ 10,000, not exceeding $ 20,000

4.00

On all estates over $ 20,000 and not exceeding $ 50,000

5.00

Provided, that an estate of not exceeding $ 2,000 in value shall not be subject to taxation."

The contention is that it was the intention of the Legislature to exempt estates of the last class exceeding $ 50,000 in value from taxation. The legislative intent is to be derived from a fair and reasonable construction of the act, having in mind the thing desired to be accomplished or the evil to be remedied, consistent with the limitations upon its power in the Constitution. In testing its validity, the courts must resolve all doubts in its favor and uphold it, unless it is clearly an abuse of the legislative power. Ex parte Byles, 93 Ark. 612, 126 S.W. 94.

All doubts as to the constitutionality of the statute are resolved in favor of the statute, and when one construction will make a statute void for conflict with the Constitution, and another will render it valid, the latter will be adopted, though the former at first is the more natural interpretation of the language. Waterman v. Hawkins, 75 Ark. 120, 86 S.W. 844.

The Constitution provides that all property subject to taxation shall be taxed according to its value, making...

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