Ritcher v. Commonwealth
| Decision Date | 19 March 1918 |
| Parties | RITCHER v. COMMONWEALTH. [a1] |
| Court | Kentucky Court of Appeals |
Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.
Action by the Commonwealth of Kentucky against Mamie L. Ritcher. Judgment for the Commonwealth, and defendant appeals. Reversed, with directions to dismiss the proceeding.
Bingham Sloss, Tabb & Mann, of Louisville (T. W. Spindle, of Louisville, of counsel), for appellant.
M. J Holt, of Louisville, for the Commonwealth.
This case presents questions of law arising under the inheritance tax statute, and comes up in this way: Edward B. Schieman died testate in Jefferson county, Ky. on April 10, 1910. He was childless, and by his will devised to his wife all of his personal estate and two-thirds of his real estate, and to his sister, the appellant, Mamie L. Ritcher, one-third of his real estate. His will was probated on April 18, 1910, and on that day the widow, who was nominated as executrix qualified. The widow and Mamie L. Ritcher could not agree on a division of the real estate, and the widow brought suit in the county court to have it divided. In this proceeding commissioners were appointed and filed their report, dividing the estate between the widow and Mamie L. Ritcher, on September 26, 1910, and their report was confirmed on October 3, 1910, and on October 7, 1910, a deed was executed pursuant to the report of the commissioners to Mamie L. Ritcher conveying to her the estate allotted, and she took possession. More than 5 years after the death of the decedent, Schieman, and more than 5 years after the real estate devised to Mamie L. Ritcher had been set aside to her by commissioners and conveyed to her by proper deed and possession of it surrendered to her, to wit, on April 6 1916, the commonwealth, by a revenue agent, filed this suit seeking to recover from Mamie L. Ritcher an inheritance tax on the real estate devised to her as above stated, with penalties and interest thereon. The lower court gave judgment against Mamie L. Ritcher in favor of the commonwealth for the amount of tax sought to be recovered, and the interest and penalties thereon, and she prosecutes this appeal.
It being conceded that the estate devised to Mamie L. Ritcher was subject to the inheritance tax, a question in the case is, When did the statute of limitation, which was pleaded and relied on as a defense to the action, begin to run, and what statute applies? This question, although not so material in the decision of the case for reasons that will later appear, should, we think, be disposed of.
It is provided, in part, in section 2515 of the Kentucky Statutes, that:
"An action upon a liability created by statute, when no other time is fixed by the statute creating the liability, * * * shall be commenced within five years next after the cause of action accrued."
And further provided in section 2523 of the Kentucky Statutes that:
"The limitations prescribed in this chapter shall apply to actions brought by or in the name of the commonwealth, in the same manner as to actions by private persons. * * *"
We therefore think there can be no doubt that an action in the name of the commonwealth to recover an inheritance tax is an action on a liability created by statute, and so it must be brought within 5 years after the cause of action accrued. Commonwealth v. Nute, 115 Ky. 239, 72 S.W. 1090, 24 Ky. Law Rep. 2138; Louisville & Jeffersonville Ferry v. Commonwealth, 108 Ky. 717, 57 S.W. 624, 626, 22 Ky. Law Rep. 446, 480; Chicago, St. L. & N. O. Ry. Co. v. Commonwealth, 115 Ky. 278, 72 S.W. 1119, 24 Ky. Law Rep. 2124.
Now when does the statute begin to run against a suit brought by the commonwealth to recover the tax; or, putting it in another way, when is the tax collectable by legal process, because the statute begins to run when the cause of action accrues? The solution of this question depends on the proper construction of the applicable parts of the inheritance tax law found in sections 4281a-4281t of the Kentucky Statutes. The statute, in section 4281a, after describing what estate shall be subject to the tax, and the amount thereof, provides that:
"All administrators, executors and trustees shall be liable for any and all taxes until the same shall have been paid as hereinafter directed."
Section 4281d reads:
Section 4281e reads:
"The penalty of ten per centum per annum imposed by section 4 [4281d] hereof, for the nonpayment of said tax, shall not be charged in case where, by reason of claims made upon the estate, necessary litigation, or other unavoidable cause of delay, the estate of any decedent, or a part thereof, cannot be settled at the end of eighteen months from the death of the decedent; and in such case only six per centum per annum shall be charged upon the said tax from the expiration of said eighteen months until the cause of such delay is removed."
In section 4281f it is provided that:
"Any administrator, executor or trustee having in charge or trust any legacy or property for distribution subject to the said tax, shall deduct the tax therefrom, or if the legacy or property be not money, he shall collect the tax thereon upon the fair cash value thereof, from the legatee or person entitled to such property, and he shall not deliver, or be compelled to deliver, any specific legacy or property subject to tax to any person until he shall have collected the tax thereon."
The remainder of this section makes further provision as to the duties of an executor, administrator, or trustee having in charge or trust any legacy or property.
Section 4281g gives executors, administrators, and trustees power to sell so much of the property of the decedent as will enable them to pay the tax in the same manner as they may sell such property for the payment of debts due by the estate. Section 4281h provides that whenever an executor, administrator, or trustee retains or has in his hands inheritance taxes, he shall pay the same to the sheriff or collector of the county within 30 days thereafter.
In section 4281k it is provided that when the value of any devise subject to the payment of an inheritance tax is uncertain, the county court upon the application of any interested party, or upon his own motion, shall appoint an appraiser to fix the value and make a report thereof to the court, whereupon the court shall assess and fix the value and the amount of tax thereon. In section 4281n it is provided that if it appears to the judge of the county court that any tax accruing under the provisions of this chapter has not been paid according to law, the clerk of his court shall issue a summons against the persons having an interest in the property liable to the tax to show cause why it should not be paid. The section then provides for hearing and judgment. In section 4281 o it is provided that:
"Whenever the sheriff or collector of any county shall have reason to believe that any tax is due and unpaid under the provisions of this chapter, after the failure or refusal of the person interested in the property liable to said tax to pay the same, he shall notify the county attorney of the proper county, in writing, of such failure to pay such tax, and the county attorney so notified, if he has probable cause to believe a tax is due and unpaid, shall prosecute the proceedings in the county court, as provided in section 14 [4281n] of this chapter, for the enforcement and collection of such tax."
It will be observed that section 4281d provides that:
"All taxes imposed by this chapter, unless otherwise herein provided for, shall be due and payable at the death of the decedent."
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