Blodgett v. New Britain Trust Co.

• Decision Date: 02 March 1929
• Parties: BLODGETT, TAX COM'R, v. NEW BRITAIN TRUST CO.
• Court: Connecticut Supreme Court

145 A. 56

108 Conn. 715

BLODGETT, TAX COM'R, v. NEW BRITAIN TRUST CO.

Supreme Court of Errors of Connecticut.

March 2, 1929

Appeal from Superior Court, Hartford County; Arthur F. Ells, Judge.

Proceeding by William H. Blodgett, Tax Commissioner, against the New Britain Trust Company, executor of the estate of Benjamin A Hawley, deceased. A judgment of the probate court that a certain life estate given by testator's will was not subject to the inheritance tax was reversed by the superior court, and defendant appeals. No error.

Liability for succession tax on life interest accrued on testator's death, and was not affected by life beneficiary's death before computation of tax. Pub.Acts 1923, c. 190, § 11.

Donald Gaffney, of New Britain, for appellant.

Farwell Knapp, Inheritance Tax Atty., and Benjamin W. Alling both of Hartford, for appellee.

Argued before WHEELER, C.J., and MALTBIE, HAINES, HINMAN, and BANKS JJ.

HAINES, J.

The will of Benjamin A. Hawley, of New Britain, was executed April 21, 1927, and his death occurred May 10, 1927. The will was duly probated in the court of probate for the district of Berlin. By the terms of the will a trust fund of $50,000 was created, with the defendant trust company as trustee, the income of this fund to be paid to the testator's brother, Amos P. Hawley, of New York, during the term of his life, with remainder over. On or about March 24, 1928, the executor filed a statement under oath, for the purpose of the computation of the inheritance or succession tax, and therein the age of Amos P. Hawley was given as 56, and an explanatory note stated that he died February 19, 1928. On or about April 13, 1928, the tax commissioner made and filed with the court of probate a computation of the succession tax claimed by the state of Connecticut to be due from the estate. In making this computation the commissioner determined the value of the life estate of Amos P. Hawley by the actuaries' combined experience tables on the expectancy of life of Amos P. Hawley, as of the date of the death of the testator. Upon hearing before the court of probate thereafter had, the defendant objected to the ascertainment of the tax by the actuaries' combined experience tables, as used by the commissioner, and claimed that no succession tax should be assessed against the $50,000 held for the benefit of Amos P. Hawley, because his death had occurred prior to the computation. On April 28, 1928, the court of probate adjudged that, as at that date there was no life estate belonging to Amos P. Hawley, because of his death prior thereto, the computation made by the commissioner, based upon the experience tables, was erroneous, and that no tax could be assessed upon the life estate of Amos P. Hawley. Upon the appeal the superior court, reversing the decree of the court of probate, held that the method of computation employed by the commissioner was the correct and only method provided by the statute law of this state, and the total amount of the succession tax due from the estate to the state of Connecticut was fixed accordingly at $4,025.45 as originally computed by the commissioner.

The present appeal from the decision of the superior court raises a single controlling question, viz. whether the tax must be assessed as of the date of the death of the testator and by the use of the experience tables, or whether there could be no tax because of the death of Amos P. Hawley before the actual computation was made. The defendant executor contends that, as there was no life estate in fact at the time of computation, there was nothing upon which a succession tax could be based, since no tax could be assessed against an estate which did not exist, and where there was no beneficial succession. It was further claimed that there is no statute in this state providing for the ascertainment of a succession tax upon a life estate, where the life tenant dies before the tax is computed and decreed by the court of probate.

Upon the facts of this case, there are persuasive considerations of equity in these claims, but they are based upon the assumption that the date of the computation governs the question, rather than the date of the death of the testator. It is true we have in this state no statute providing in terms for a situation of this kind. Legislation of this character may be found in some states, as in Massachusetts, where it is provided: " The value of an annuity or a life interest in any such property, or any interest therein less than an absolute interest, shall be determined by the ‘ American Experience Tables' at four per cent. compound interest; but when an annuity or a life interest is terminated by the death of the annuitant or life tenant, and the tax upon such interest is not due and has not been paid in advance, the value of said interest for the purposes of taxation under this chapter shall be the amount of the annuity or income actually paid or payable to the annuitant or life tenant during the period for which he was entitled to the annuity or was in possession of the life estate." Massachusetts Cumulative Statutes of 1927, c. 65, § 13; St. 1924, c. 300, § 1. Very similar provisions are made in the statutes of Ohio. Gen. Code Ohio, § 5342--4 (112 Ohio Laws, p. 190).

The relevant portions of the statute in force in Connecticut at the date of the death of the testator read as follows: " If any interest in property, less than an estate in fee shall pass by will or otherwise as set forth in sections 1 and 3 of this act to one or more beneficiaries with remainder to others, the several interests of such beneficiaries shall be subject to such tax. The value of such interest shall be determined by the actuaries' combined experience tables at four per cent....