Brown v. Daly's Estate

• Decision Date: 30 October 1915
• Docket Number: 29641
• Citation: 154 N.W. 602,172 Iowa 379
• Parties: W. C. BROWN, State Treasurer, Appellee, v. ESTATE OF HANORA DALY (and three other cases), Appellant
• Court: Iowa Supreme Court

154 N.W. 602

172 Iowa 379

W. C. BROWN, State Treasurer, Appellee, v. ESTATE OF HANORA DALY (and three other cases), Appellant

No. 29641

Supreme Court of Iowa, Des Moines

October 30, 1915

Appeal from Allamakee District Court.--HON. A. N. HOBSON, Judge.

ACTION by the state treasurer against the administrator of the estate of Hanora Daly to recover a collateral inheritance tax in excess of 5% upon the shares of certain alien beneficiaries. It is averred that such alien beneficiaries consist of a brother of the deceased and certain nephews and nieces. Plaintiff obtained a judgment as prayed in the district court. The defendant has appealed.

Reversed.

William S. Hart, H. E. Taylor, Dayton & Dayton, D. J. Murphy, and J P. Conway, for appellant.

Calvin S. Stilwell, County Attorney, and George Cosson, Attorney General, for appellee.

EVANS J. DEEMER, C. J., LADD, WEAVER, GAYNOR, PRESTON and SALINGER JJ., concur.

OPINION

EVANS, J.

If our statute relating to a succession tax upon collateral inheritance can be applied according to its terms, then it is conceded that the judgment below should be affirmed. It appears, however, that the collateral heirs involved in this case are subjects of Great Britain and that, in ascertaining their rights, reference must be had to the terms of the treaty existing between the United States and Great Britain. Articles 1, 2, and 5 of such treaty are as follows:

"Article 1. Where, on the death of any person holding real property (or property not personal) within the territories of one of the contracting parties, such real property would, by the laws of the land, pass to a citizen or subject of the other, were he not disqualified by the laws of the country where such real property is situated, such citizen or subject shall be allowed a term of three years in which to sell the same, this term to be reasonably prolonged if circumstances render it necessary, and to withdraw the proceeds thereof, without restraint or interference, and exempt from any succession, probate or administrative duties or charges other than those which may be imposed in like cases upon the citizens or subjects of the country from which such proceeds may be drawn.

"Article 2. The citizens or subjects of each of the contracting parties shall have full power to dispose of their personal property within the territories of the other, by testament, donation, or otherwise; and their heirs, legatees, and donees, being citizens or subjects of the other contracting party, whether resident or non-resident, shall succeed to their said personal property, and may take possession thereof either by themselves or by others acting for them, and dispose of the same at their pleasure, paying such duties only as the citizens or subjects of the country where the property lies shall be liable to pay in like cases.

"Article 5. In all that concerns the right of disposing of every kind of property, real or personal, citizens or subjects of each of the high contracting parties shall in the dominions of the other enjoy the rights which are or may be accorded to the citizens or subjects of the most favored nation."

The estate in question includes both real and personal property. The decedent was a citizen and subject of the United States, whereas her heirs are citizens and subjects of Great Britain. We had occasion to construe Article 1, as pertaining to the descent of real property, in the case of McKeown v. Brown, 167 Iowa 489, 149 N.W. 593. Likewise, we construed Article 2, as pertaining to the succession to personal property, in Moynihan's Estate, 172 Iowa 571, 151 N.W. 504.

Appellee recognizes that adherence to the cited cases would require a reversal of the judgment below. He urges, therefore, that these particular cases should be overruled. In the Moynihan case, a petition for a rehearing is pending, and the argument presented in support of the petition is presented also here, in support of the judgment below. We will give our first consideration to this branch of the case. Broadly speaking, the claim is that Article 2 of the treaty with Great Britain has no application to a case where the decedent was a citizen and a subject of the United States, but only to those cases where the decedent was a citizen and a subject of Great Britain. This claim rests upon the language of the first clause of such Article 2. On the other hand, it is contended for the appellant that (1) Article 2, in its entirety, clearly applies to citizens and subjects of Great Britain who shall succeed, by testament or otherwise, to any personal property within the territories of the United States; and (2), if the particular article will not bear such construction according to its terms, then, under the "most favored nation" clause (Article 5), such construction must be applied to Article 2, because of treaty provisions with other nations.

We will give our first consideration to this question. The parties have brought into the record many of our treaty provisions with other nations, now in force. Many of them have been set forth by the appellee, for the purpose of differentiating between them and Article 2 of the British treaty. We quote the following from other treaties:

Article 10 of the treaty with Germany:

"In all successions to inheritances, citizens of each of the contracting parties shall pay in the country of the other such duties only as they would be liable to pay if they were...