Brown v. State

• Decision Date: 13 June 1929
• Docket Number: 29227
• Citation: 19 S.W.2d 12,323 Mo. 138
• Parties: Inez Hereford Brown, George A. Radford, Albert M. Keller and Mercantile Trust Company, Executors under Will of Paul Brown, v. State of Missouri; Charles W. Holtcamp, Judge of Probate Court; Henry A. Baker, Appraiser; Stratton Shartel, Attorney-General; Larry Brunk, State Treasurer, and Albert L. Schweitzer, Prosecuting Attorney, Appellants
• Court: Missouri Supreme Court

19 S.W.2d 12

323 Mo. 138

Inez Hereford Brown, George A. Radford, Albert M. Keller and Mercantile Trust Company, Executors under Will of Paul Brown, v. State of Missouri; Charles W. Holtcamp, Judge of Probate Court; Henry A. Baker, Appraiser; Stratton Shartel, Attorney-General; Larry Brunk, State Treasurer, and Albert L. Schweitzer, Prosecuting Attorney, Appellants

No. 29227

Supreme Court of Missouri

June 13, 1929

Appeal from Circuit Court of City of St. Louis; Hon. George E Mix, Judge.

Reversed.

Stratton Shartel, Attorney-General, and Claud E. Curtis Assistant Attorney-General, for appellants.

Forest P. Tralles for respondents.

(1) The purpose and the sole function of the Act of 1927 was to impose a tax. (2) Taxation of property beyond the jurisdiction of the State is a denial of due process. Union Refrigerator Transit Co. v. Kentucky, 199 U.S 194; Frick v. Pennsylvania, 268 U.S. 473; Blodgett v. Silberman, 277 U.S. 1. (3) The rule cannot be tricked or evaded by using all the property as a measure for the local tax. Frick v. Pennsylvania, 268 U.S. 494. (4) Under the foregoing principle, Missouri's tax, levied by the Act of 1927, is void. There is no room for separation of items. (5) The Act of 1927 is further void in imposing an excise tax that is not uniform in its operation. State v. Inv. Co., 264 S.W. 703; St. Charles v. Schulte, 264 S.W. 635. (6) The act undertakes to tax the widow's statutory rights, which are her property. Such an attempted tax is a denial, under Missouri law, of due process, and the amount of such tax is not separable. In re Rogers Estate, 250 S.W. 576. (7) The act violates Sec. 33, Art. IV, of the Missouri Constitution. Buford v. State, 111 So. 850; Stewart v. State, 100 Ala. 1; Bay Shell Road v. O'Donnell, 87 Ala. 376; Geer v. Ouray County, 97 F. 435; People v. Friederich, 185 P. 657; State v. Armstrong, 243 P. 333. (8) The act violates Sections 28 and 34 of the Missouri Constitution. Southard v. Short, 8 S.W.2d 903.

OPINION

Atwood, J.

This is an appeal from a judgment of the Circuit Court of the City of St. Louis holding unconstitutional and void an act of the General Assembly of Missouri, approved April 7, 1927, appearing in the Laws of Missouri of 1927 at page 100, and purporting to amend Article 21, Chapter 1, Revised Statutes 1919, entitled "Inheritance Tax," as amended by an act of the Fifty-first General Assembly, 1921, by providing for an additional tax. The proceeding was instituted by the executors under the will of Paul Brown, deceased, on authority of Section 583, Revised Statutes 1919, to quiet title to property thereby devised and bequeathed against the lien or claim of lien of said additional tax, and to determine that said property is not subject to any such tax lien. Ancillary to the grounds of unconstitutionality and invalidity alleged and sustained below injunctive relief was sought and obtained preventing the persons charged with the imposition and collection of said additional tax, who there appeared as defendants, from proceeding therewith. The same defendants, or their successors in office, now appear as appellants herein.

Plaintiffs went to trial on their amended petition which alleged that the deceased was survived by a widow, children and grandchildren, and various other persons related and unrelated, to whom he made numerous bequests, in addition to bequests made for charitable purposes; that the value of his estate "is in excess of twelve million dollars, and consists of real property in the State of Missouri and in other states, cash, securities of domestic and foreign corporations, and other tangible and intangible personal property in St. Louis, Missouri, and in other states;" that testator devised and bequeathed to his wife, Inez Hereford Brown, the same interest to which she was entitled under the laws of Missouri; that by Act of April 12, 1917, as subsequently amended, the State of Missouri imposed a transfer or inheritance tax on certain interests acquired by inheritance, and that said law as amended was at the time of the death of testator and now is in full force and effect; that by Act of the Congress of the United States of America, approved February 26, 1926, and entitled "An Act to reduce and equalize taxation, to provide revenue, and for other purposes," the Federal Government imposed an estate tax on the property of decedents, varying in percentage according to the net value of the estate; that under said Federal revenue act a credit is allowed against the Federal estate tax due to any amount lawfully assessed and paid to any state as an estate inheritance, legacy or succession tax, said credit and deduction, however, being limited to eighty per cent of the amount due the Federal Government under said Federal estate tax; that after said Federal estate tax of 1926 became effective the State of Missouri, by act of its General Assembly approved April 7, 1927, sought to impose an additional tax on the assets of Missouri estates equal to the difference between the inheritance or transfer taxes then exacted and eighty per cent of said Federal estate tax; and that defendants are about to impose and collect from plaintiffs taxes in excess of one million dollars under the provisions of said Act of April 7, 1927. The petition then alleged grounds of unconstitutionality and invalidity, imminent danger of irreparable injury, lack of adequate remedy at law, and prayed that the act be held unconstitutional and void, and that plaintiffs have injunctive relief.

Defendants answered admitting the allegations of the petition except those alleging unconstitutionality and invalidity of said Act of April 7, 1927, which allegations were specifically denied, and the act was alleged to be constitutional and valid.

The act in question, omitting title and emergency clause, appears on pages 100, 101, Laws 1927, as follows:

"Be it enacted by the General Assembly of the State of Missouri, as follows:

"Section 1. Amending Article 21, Chapter 1, Revised Statutes, 1919, by Adding Two New Sections. -- That article 21, chapter 1, of the Revised Statutes of Missouri, 1919, entitled 'Inheritance Tax' as amended by an act of the 51st General Assembly, 1921, found on pages 26, 27 and 28 of the Laws of Missouri, 1921, first extra session, entitled An Act to repeal sections 560 and 561, article 21, chapter 1, Revised Statutes of Missouri, 1919, and to enact in lieu thereof two new sections to be known as sections 560 and 561,' approved August 15, 1921, be and the same is hereby amended by adding two new sections thereto to be known as sections 560a and 560b, and to read as follows:

"Sec. 560a. Additional Tax Shall be Imposed Upon Value of Net Estate of Decedent -- When. -- In the event that the total of the inheritance taxes imposed upon the several interests and property comprising the estate of the deceased, by Revised Statutes of Missouri, 1919, section 560, less exemptions allowed by Revised Statutes of Missouri, 1919, section 561, as said sections are amended by an act of the 51st General Assembly, 1921, found on pages 26, 27 and 28 of the Laws of Missouri, 1921, first extra session, entitled 'An Act to repeal sections 560 and 561, article 21, chapter 1, Revised Statutes of Missouri, 1919, and to enact in lieu thereof two new sections, to be known as sections 560 and 561,' approved August 15, 1921, shall not equal eighty per centum of the amount of the tax imposed upon the value of the net estate of said decedent, under Title III of the act of Congress, approved February 26, 1926, entitled 'An act to reduce and equalize taxation, to provide revenue, and for other purposes,' and cited as the revenue act of 1926, whenever the Federal estate tax is determined an additional tax shall then be imposed upon the value of the net estate of said decedent as of the date of such determination equal to the difference between the total of the tax imposed under said section 560 as amended and eighty per centum of the tax imposed by Title III of said act of Congress.

"Sec. 560b. Tax Imposed Shall be Paid Out of Assets of Estate. -- The tax which may be imposed by virtue of section 560a shall be paid by the executor or the administrator out of the assets of the estate, bear the same rate of interest and be subject to the same penalties as the taxes imposed under the act of Congress hereinbefore mentioned, and the payment thereof may be enforced out of said net estate as an entirety in the manner provided, with respect to the taxes imposed under said section 560."

The alleged grounds of unconstitutionality and invalidity are ten. We shall now quote and consider them in the order pleaded.

"ONE: Said act attempts for the first time to levy an estate tax in Missouri not by independent enactment, but by seeking to amend an existing statute levying an entirely different kind of tax, to-wit: an inheritance tax, and such purpose is not sufficiently disclosed by the title."

The constitutional question, if any is sought to be raised by this objection, has not been pointed out with the certainty enjoined in George v. Railroad, 249 Mo. l. c. 199, but we assume the intended import to be that the act is violative of Section 28, Article IV, of the Missouri Constitution. This section provides that "no bill . . . shall contain more than one subject, which shall be clearly expressed in its title." The title to the act in question is as follows:

"AN ACT to amend article 21, chapter 1 of the Revised Statutes of Missouri, 1919, entitled 'Inheritance Tax' as amended by an act of the 51st General Assembly, 1921, found on pages 26, 27 and 28 of the laws of Missouri, 1921, first extra session, entitled 'An act to repeal sections 560 and 561 article 21, chapter 1, Revised Statutes of Missouri, 1919, and...