Bliven's Estate, Matter of, No. 2--57194

• Court: United States State Supreme Court of Iowa
• Writing for the Court: Heard by MOORE; RAWLINGS
• Citation: 236 N.W.2d 366
• Parties: In the Matter of the ESTATE of Amy C. BLIVEN, Deceased.
• Docket Number: No. 2--57194
• Decision Date: 17 December 1975

Page 366

236 N.W.2d 366 In the Matter of the ESTATE of Amy C. BLIVEN, Deceased. No. 2--57194. Supreme Court of Iowa. Dec. 17, 1975.

Page 368

Richard C. Turner, Atty. Gen., George W. Murray, Special Asst. Atty. Gen. and Gerald A. Kuehn, Asst. Atty. Gen., for appellant.

Iver Christofferson, David R. Mason and Wallace Reed, Cedar Falls, for appellees.

Ahlers, Cooney, Dorweiler, Allbee, Haynie & Smith, Des Moines, for Drake University, amicus curiae.

Heard by MOORE, C.J., and RAWLINGS, LeGRAND, REES and McCORMICK, JJ.

RAWLINGS, Justice.

Petition by executor of the Amy C. Bliven estate (intestate) for declaratory judgment (Section 633.11, The Code 1971) resulted in final adjudication by trial court holding funds passing to charitable institutions pursuant to settlement agreement in avoidance of a will contest are exempt from Iowa inheritance tax under § 450.4(2). Iowa Department of Revenue (Department) appeals. We reverse.

In November 1969, Marjorie Besh, current executor, was appointed decedent's guardian and conservator. About Christmas of the same year Besh entered decedent's bedroom and discovered the latter had torn up an instrument identified as her last will and testament. A copy of the destroyed document was obtained from which it appeared, except for a few modest bequests to some friends and relatives, decedent's estate was bequeathed to two lawfully recognized out-of-state charitable institutions.

August 29, 1971, Amy C. Bliven died leaving three heirs at law. They contended the aforesaid will had been effectively revoked, consequently decedent had died intestate. The charities claimed decedent did not possess mental capacity to revoke her will. In avoidance of litigation the heirs and charities stipulated (1) the will had been revoked; (2) decedent died intestate; (3) all legal claims and administration costs be paid by the executor; and (4) remainder of the estate be thus distributed:

Rispah Yockey--25%

Carol Ann Nelson--12 1/2%

Donald Robert Yockey--12 1/2%

Maine Children's Home for Little Wanderers--25%

Pine Tree Society for Crippled Children and Adults, Inc.--25%

In approving the plan thus agreed upon trial court held decedent died intestate and this holding is not disputed.

Thereupon the executor filed a final inheritance tax return showing, in part, distribution to the charities as exempt from inheritance tax. Executor maintained assets going to the charities in accord with the settlement agreement 'passed in any manner' within the terms of Code § 450.4(2), quoted Infra, thus exempt from such taxation.

Department contended: (1) the exemption provided by § 450.4(2) was not applicable since transfer to the charities was not one which would have been taxable in the first instance under § 450.3, even without

Page 369

the exemption statute, because such transfer was not by will or under statutes of inheritance and (2) title to property passing under the terms of a settlement agreement does not bypass those who would have taken under the statutes of intestate succession.

As above noted, the executor then petitioned for declaratory judgment, thereby seeking an adjudication to the effect the portion of estate assets devolving to the above named charities be held exempt from any inheritance tax. Department resisted upon the basis above set forth.

After attendant hearing trial court held, in essence, decedent died intestate and the portion of her estate going to the charities pursuant to the above noted agreement 'passed in any manner' so it came within the purview of Code § 450.4(2), being therefore exempt from inheritance tax.

Incidentally, Drake University Law School has favored us with a brief, amicus curiae, in support of trial court's holding.

The question here posed may be thus stated: Where heirs at law and charitable organizations enter into a court approved will contest avoidance agreement for distribution of an intestate's estate to such heirs and charities in designated proportions, is the share accordingly conveyed to the charities exempt from inheritance tax?

I. The issue presented does not involve a matter for fact determination but rather one of statutory interpretation and application. Our review is de novo. We are not bound by trial court's determination of law. See Estate of Dieleman v. Department of Revenue, 222 N.W.2d 459, 460 (Iowa 1974); 2A Sutherland, Statutory Construction, § 45.04 (Sands 4th ed. 1973).

II. In approaching the problem at hand, reference must be had to certain basic principles of statutory interpretation.

Without question, the involved controversy demonstrates existent ambiguity in the terms and application of Code § 450.4(2). See 2A Sutherland, Statutory Construction, § 45.02 (Sands 4th ed. 1973).

Mindful thereof, we first note Northern Natural Gas Company v. Forst, 205 N.W.2d 692, 695 (Iowa 1973). This court there held a manifest legislative intent will prevail over literal import of words used. It is also essential we examine both the language used and purpose for which the legislation was enacted. In seeking the meaning of a law the entire act should be considered and each section construed with the act as a whole and all parts thereof construed together. The subject matter, reason, consequence and spirit of an enactment must be considered, as well as words used. Additionally, a statute should be accorded a sensible, practical, workable and logical construction.

In the same vein, numerous statutes pertaining to the same subject must be considered, so the concept of Pari materia comes into play. See State v. Bartz, 224 N.W.2d 632, 635 (Iowa 1974); Goergen v. State Tax Commission, 165 N.W.2d 782, 785--786 (Iowa 1969); 2A Sutherland, Statutory Construction, §§ 51.02--51.03 (Sands 4th ed. 1973).

Furthermore, all relevant legislative enactments must be harmonized, each with the other, so as to give meaning to all if...