State ex rel. Schwartz v. Ferris

Decision Date27 June 1895
Citation41 N.E. 579,53 Ohio St. 314
PartiesSTATE ex rel. SCHWARTZ, Prosecuting Attorney, v. FERRIS, Probate Judge.
CourtOhio Supreme Court

Error to circuit court, Hamilton county.

This case was commenced in the circuit court of Hamilton county in the name of the state on relation of John C. Schwartz prosecuting attorney, against Howard Ferris, judge of the probate court of said county, in mandamus in the nature of procedendo, to compel the judge of said court to proceed and perform his official duties under the act of April 20, 1894 entitled ‘ An act to impose a direct inheritance tax’ (91 Ohio Laws, 166), as applicable to the estate of George K. Duckworth, who was a resident of said county and died on the 8th day of May, 1894, leaving an estate of over $50,000. The petition says that letters of administration have been granted to the widow, Lucy B. Duckworth; that the prosecuting attorney has made proper application to said probate judge for the appointment of appraisers to appraise the property of said estate for the purpose of having said direct inheritance tax assessed; that said probate judge refused, and still refuses, to make such appointment, on the ground that said statute is unconstitutional. To this petition the probate judge filed a demurrer, which was sustained by the circuit court, on the ground that the statute is unconstitutional, and to which plaintiff excepted. Judgment was thereupon rendered in favor of defendant below. A petition in error was then filed in this court to reverse the judgment of the circuit court. Affirmed.

Statute imposing inheritance tax exempting right to succeed to estates not exceeding $20,000 held void. Act April 20, 1894, 91 Ohio Laws, p. 166.

Syllabus by the Court

1. Funds raised by the taxation of franchises, rights, and privileges may be applied to purposes of general revenue, or any other purpose authorized by statute.

2. A law of a general nature, which is in full force in every part of the state, complies with section 26 of article 2 of the constitution, requiring laws of a general nature to have a uniform operation throughout the state.

3. The act of April 20, 1894, entitled ‘ An act to impose a direct inheritance tax’ (91 Ohio Laws, 166), by its exemption from taxation of the right to receive or succeed to estates not exceeding $20,000 in value, and taxing the whole right of receiving or succeeding to estates which exceed that sum in value, and in taxing at a higher rate per centum the right to receive or succeed to estates of larger value than to estates of smaller value, is in conflict with section 2 of the bill of rights of the constitution of this state, which declares that: ‘ All political power is inherent in the people. Government is instituted for their equal protection and benefit; ’ and the whole act is therefore unconstitutional and void.

4. The first section of the fourteenth amendment to the constitution of the United States, which provides that no state shall ‘ deny to any person within its jurisdiction the equal protection of the laws,’ is not, as to the question in this case, broader than the second section of our bill of rights.

John C. Schwartz, Thos. H. Darby, and J. K. Richards, for plaintiff in error.

Thomas McDougall, Alfred C. Cassett, Paxton, Warrington & Boutet, Edward S. Rawson, W. F. Ampt, and Boynton & Horr, for defendant in error.

BURKET, J.

This case has been argued with marked ability on both sides, and the arguments have greatly aided the court in reaching its final conclusions. We have carefully examined and considered all the cases cited by counsel, and many others, and shall state rather the conclusions reached than lengthy arguments in support thereof.

The first section of the statute in question is as follows Section 1. Be it enacted by the general assembly of the state of Ohio, that 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, including annuities, 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 or enjoyment after the death of the grantor, to the use of the father, mother, husband, wife, brother, sister, niece, nephew, lineal descendant, adopted child, or person recognized as an adopted child and made a legal heir under the provisions of section 4182 of the Revised Statutes of Ohio, or the lineal descendant thereof, the lineal descendant of any adopted child, the wife or widow of a son, the husband of a daughter of decedent, or of any one in trust for such person or persons, shall be liable to a tax as follows, to wit: When the value of the entire property of such decedent exceeds the sum of twenty thousand dollars and does not exceed the sum of fifty thousand dollars, one per cent.; when it exceeds fifty thousand dollars and does not exceed one hundred thousand dollars, one and one-half per cent; when it exceeds one hundred thousand dollars and does not exceed two hundred thousand dollars, two per cent.; when it exceeds two hundred thousand dollars and does not exceed three hundred thousand dollars, three per cent; when it exceeds three hundred thousand dollars and does not exceed five hundred thousand dollars, three and one-half per cent; when it exceeds five hundred thousand dollars and does not exceed one million dollars, four per cent.; and when it exceeds one million dollars, five per cent.; seventy-five per cent. of such tax to be for the use of the state, and twenty-five per cent. for the use of the county wherein the same is collected; and all administrators, executors and trustees shall be liable for all such taxes, with lawful interest, as hereinafter provided, until the same shall have been paid as hereinafter directed. Such taxes shall become due and payable immediately upon the death of the decedent, and shall at once become a lien upon said property.’ It is this first section that is claimed to be unconstitutional, and which was so held by the circuit court.

In view of the authorities cited, it must be conceded that the general assembly has the power to pass an inheritance tax for purposes of general revenue, unless prohibited by the constitution of our state. Properly understood, it is not the right to transmit, but the right and privilege to receive, that is taxed. The right to dispose of property during the lifetime of the owner cannot be separated from the property itself, and therefore to tax the right of disposal by contract in the lifetime of the owner, even though to take effect at his death, is to tax the property itself. But the right to dispose of the property by will or descent, taking effect after the death of the owner, is not so closely connected with the right of property, and it is not so clear that such right may not be taxed. But when the right to receive the property is considered, it is clear that the right is distinct and separate from the property itself, and the state may tax this right to receive property, and this is so whether the property is disposed of by the owner during his lifetime or at his death. This right to receive property is under the control of the legislature, and it has the power to regulate and lay such burdens thereon as it may see fit, within the provisions of the constitution. To regulate by taxation or otherwise the privilege or right to receive property, is not in conflict with the first section of the bill of rights, which recognizes the inalienable right of acquiring, possessing, and protecting property. Were it otherwise, all our laws as to wills, descent, distribution, and conveyances would be unconstitutional.

It is urged, however, that the statute in question does not tax the right or privilege of receiving property, but taxes the property itself. It must be conceded that the language used in the statute is upon its face clearly a taxation of the property itself, and not of the right to acquire property. And for myself, I think this is the true construction of the act. Others of the court, however, think that when the operation and effect of the statute are considered, it may be regarded as taxing the right or privilege, rather than the property. Certain it is that the only thing that can be constitutionally taxed is the right or privilege of succession, and a statute having such taxation in view should express its purpose in words applicable to such subject-matter of taxation.

It is conceded by all parties that, if this statute imposes a tax on property, it is unconstitutional. As a majority of the court are of opinion that it is not a tax on property, but upon the right to receive property, the statute must, as to this point, be sustained.

It is also contended that this tax is a tax on property, because it is made a lien upon the real estate received; and cases are cited sustaining this view. In re Bittinger's Estate, 129 Pa. St. 344, 18 A. 132. The statute in that case provides as follows: ‘ The tax on real estate shall remain a lien on the real estate on which the same is charged until paid’ (Act Pa. May 6, 1887; P. L. 79); while the statute in this state provides simply that the inheritance tax ‘ shall at once become a lien upon said property.’ But, aside from the difference in the words of the statute, there is no force in the contention. If the legislature has the power to assess a tax upon the right to receive and succeed to property, it clearly has the right to make such tax a lien upon the property received by the use of such right; and the making of such lien does not change the tax from a tax upon the right to receive to a tax upon the property received under the right.

Next it is urged that, if the statute...

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  • State ex rel. Schwartz v. Ferris
    • United States
    • Ohio Supreme Court
    • June 27, 1895
    ...53 Ohio St. 31441 N.E. 579STATE ex rel. SCHWARTZ, Prosecuting Attorney,v.FERRIS, Probate Judge.Supreme Court of Ohio.June 27, Error to circuit court, Hamilton county. This case was commenced in the circuit court of Hamilton county, in the name of the state on relation of John C. Schwartz, p......

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