Succession of Wiener

• Decision Date: 21 June 1943
• Docket Number: 37089.
• Citation: 14 So.2d 475,203 La. 649
• Court: Louisiana Supreme Court
• Parties: Succession of WIENER.

14 So.2d 475

203 La. 649

Succession of WIENER.

No. 37089.

Supreme Court of Louisiana

June 21, 1943

Rehearing Denied July 13, 1943.

Eugene Stanley, Atty. Gen., and Harry V. Booth and L. L. Lockard, both of Shreveport, for the Tax Collector.

Jacques L. Wiener and Herold, Cousin & Herold, all of Shreveport for appellees.

Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key, J. Louis Monarch, and Willard H. Pedrick, Sp. Assts. to the Atty. Gen (Herbert W. Christenberry, U. S. Atty., of New Orleans, and Leverrier Cooley, Jr., Asst. U. S. Atty., of Slidell, of counsel), for the United States as amicus curiae.

FOURNET Justice.

Samuel G William B., and Jacques L. Wiener, the universal legatees and heirs of the late Sam Wiener, Jr., proceeding under Act No. 127 of the Extra Session of 1921, as amended by Act No. 44 of 1922, ruled the sheriff and ex-officio tax collector for the parish of Caddo to fix the amount of inheritance tax due the state of Louisiana on the property bequeathed to them by their father under the terms of his will, being the undivided half interest in the property acquired during the community of acquets and gains that existed between him and their mother, who survives the decedent and owns the other undivided half of the estate.

Answering this rule, the tax collector averred the heirs owed 'an inheritance tax on the entire community estate rather than upon the one-half interest in the community inherited by them,' for in Section 402(b)(2) of the Revenue Act of 1942, 26 U.S.C.A. Int.Rev.Code � 811(e)(2), Congress has included the entire community in which a decedent had an interest at the time of his death in his taxable estate and the Louisiana Legislature, in Section 2 of Act No. 119 of 1932, provided that the estate tax to be levied in this state shall be at least 80% of the estate tax payable to the United States. (Italics ours.)

The plaintiffs in the rule then interposed a plea challenging the constitutionality of this act of Congress, as being in contravention of Section 8 of Article I of the Constitution of the United States and of the 5th amendment thereto.

The district judge, after the case was tried on an agreed statement of facts, sustained the plea of unconstitutionality on both counts, decreeing the inheritance tax due the state of Louisiana by the plaintiffs in the rule to be $8,224.09, based on the property bequeathed them by their father, that is, on his half of the community property.

The tax collector appealed from this judgment, and the United States, filing a brief Amicus Curiae through the office of its Attorney General, joined the appellant in upholding the constitutionality of Section 402(b)(2) of the Revenue Act of 1942, in the event this court concludes, contrary to the government's contention, the constitutionality thereof must be passed on.

There is no controversy between the parties with respect to the facts of the case. Sam Wiener, Jr., died in the city of Shreveport, Louisiana, on December 10, 1942, leaving a last will and testament under which his entire estate was bequeathed to his three children, the plaintiffs in this rule. All of the property and assets standing in the name of the decedent at the time of his death were acquired by and belonged to the community that had existed between him and his surviving widow, Florence Loeb, to whom he was married on February 12, 1907, the appraised value of which, after deduction and payment of debts, succession charges, and taxes is $608,272.46. It is agreed between the plaintiffs in the rule and the respondent tax collector that if the tax is to be computed on the property received by the heirs as the legatees of their father, that is, on $304,136.23, his half of the community property, the amount of the inheritance tax due the state is $8,224.09, but that if it is to be computed on the entire community, as the tax collector contends, the inheritance tax due by them is $14,330.90.

In the year 1932, he Louisiana legislature, to obtain the benefit of the provision contained in Section 301(b) of the Revenue Act of 1926, 26 U.S.C.A. Int.Rev.Acts, page 226, making it mandatory that a credit of 80% be allowed against the inheritance tax due the federal government for inheritance, estate, and succession taxes paid the states with respect to property included in the gross estate, adopted its Act No. 119 providing: 'Whenever the aggregate amount of all inheritance, succession, legacy and estate taxes actually paid to the several states of the United States in respect to any property owned by such decedent shall be less than eighty per cent (80%) of the estate tax payable to the United States under the provisions of the said Federal Revenue Act of 1926, but not otherwise, the difference between said amount and said eighty per cent (80%) shall be paid to the State of Louisiana.'

Under the express provisions of Act No. 127 of the Extra Session of 1921, as amended by Act No. 44 of 1922, the heirs or legatees of a deceased person are required to have the inheritance tax fixed within six months after the death of the party in whose estate they are benefiting, a fee equivalent to 1% per month being charged if such payment is made after the six months period, increased to 2% per month after 12 months. They cannot be placed in possession of the property so inherited until such tax has been paid.

Now, because of the Congressional adoption of Section 402(b)(2) of the Revenue Act, amending Section 811(e) of the Internal Revenue Code of 1939, 26 U.S.C.A. Int.Rev.Code � 811(e), the tax collector of Caddo parish is contending inheritance and estate taxes in this state, under Act No. 119 of 1932, must be computed on the basis established in that section, that is, that the value of the gross estate of the decedent to be taxed must be determined by including therein 'the value at the time of his death of all property,' such gross estate where community interests are involved consisting of 'the extent of the interest therein held as community property by the decedent and surviving spouse under the law of any State * * * except such part thereof as may be shown to have been received as compensation for personal services actually rendered by the surviving spouse or derived originally from such compensation or from separate property of the surviving spouse. In no case shall such interest included in the gross estate of the decedent be less than the value of such part of the community property as was subject to the decedent's power of testamentary disposition.' Section 402(b)(2) of the Revenue Act of 1942; 26 U.S.C.A. Int.Rev.Code � 811(e)(2).

Under the express provisions of the Louisiana Revised Civil Code, 'Every marriage contracted in this State, superinduces of right partnership or community of acquets or gains' (Article 2399), and 'This partnership or community consists of the profits of all the effects of which the husband has the administration and enjoyment, either of right or in fact, of the produce of the reciprocal industry and labor of both husband and wife, and of the estate which they may acquire during the marriage, either by donations made jointly to them both, or by purchase, or in any other similar way, even although the purchase be only in the name of one of the two and not of both, because in that case the period of time when the purchase is made is alone attended to, and not the person who made the purchase.' Article 2402. (Italics ours.)

That this community is a partnership in which the husband and wife own equal shares, their title thereto vesting at the very instance such property is acquired, is well settled in this state (Dixon v. Dixon's Ex'rs, 4 La. 188, 23 Am.Dec. 478; Theall v. Theall, 7 La. 226, 26 Am.Dec. 501; Succession of Marsal, 118 La. 212, 42 So. 778; Succession of May, 120 La. 692, 45 So. 551; Beck v. Natalie Oil Co., 143 La. 153, 154, 78 So. 430; Ramsey v. Beck, 151 La. 190, 91 So. 674; Phillips v. Phillips, 160 La. 813, 107 So. 584; Pfaff v. Bender, D.C., 38 F.2d 642; and Bender v. Pfaff, 282 U.S. 127, 51 S.Ct. 64, 75 L.Ed. 252) and the federal government, in levying inheritance or estate taxes, has consistently recognized that the law of the state is determinative of the interest left by the decedent. Liebman v. Fontenot, D.C., 275 F. 688; Warburton v. White, 176 U.S. 484, 20 S.Ct. 404, 44 L.Ed. 555; Arnett v. Reade, 220 U.S. 311, 31 S.Ct. 425, 55 L.Ed. 477, 36 L.R.A.,N.S., 1040; and 32 Op.Atty.Gen. 435.

It is our opinion, therefore, that the construction sought to be placed on Act No. 119 of 1932 by the tax collector--that is, that in arriving at the amount of inheritance taxes due by the plaintiffs in this rule on the property bequeathed to them by their father, there must be included in his gross estate not only the half interest in the community owned by him and willed to them, but also the half of the community belonging to their mother, who survives--would render it violative of the due process guaranteed by the 14th amendment to the Constitution of the United States, since such interpretation would result in the imposition of a tax upon those succeeding to the estate of a decedent measured in part by the property comprising the estate of another, to which the estate of the decedent is in no way related.

In the case of Hoeper v. Tax Commission, 284 U.S. 206, 52 S.Ct. 120, 122 76 L.Ed. 248, 78 A.L.R. 346, the Supreme Court of the United States, in reversing a decision of the highest court in Wisconsin maintaining the validity of a statute of that state requiring the husband and wife to file joint income tax returns and levying a tax on a graduated scale on the combined total of the two incomes, pointed out that the question presented was whether a state has the power to measure the...