Bryant v. Green
| Decision Date | 20 November 1931 |
| Docket Number | No. 29695.,29695. |
| Citation | 44 S.W.2d 7 |
| Parties | HUGHES BRYANT, Administrator C.T.A. of Estate of HARRIET M. BRYANT, Appellant, v. MOULTON GREEN. |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. — Hon. Willard P. Hall, Judge.
AFFIRMED.
Bruce Barnett for appellant.
(1) It appearing that all of the real estate of which Harriet M. Bryant died seized was by her will devised to trustees for the benefit of one class of beneficiaries and all her personalty was by said will bequeathed to another class of beneficiaries, her five children, the Federal estate taxes should have been so apportioned between the trustee and the administrator as to cast the burden thereof upon those to whom the property passed at the death of said decedent in proportion to the values of the property received by them respectively; as so apportioned, plaintiff was entitled to judgment for $16,656.32, whereas judgment was erroneously rendered in defendant's favor as against the plaintiff for $118,329.19, upon the theory that the burden of such taxes falls upon those who would receive such part of the personal estate as should be remaining after the discharge of all demands against the estate, treating the estate and inheritance taxes as being of the same character as debts of the decedent and costs of administration. Hampton's Administrators v. Hampton, 188 Ky. 199, 221 S.W. 496, 10 L.R.A. 515. (2) The estate and inheritance taxes, unlike the ordinary character of tax, constitutes a limitation upon the extent to which property may be devised, bequeathed or inherited, and is in the nature of a pro tanto escheat, leveled alike and without discrimination as against the passing of title to real estate and to personal property, and the theory of the decree herein that the entire tax should operate as against those inheriting the personal property of the decedent, so far as the personal estate is sufficient for such purpose, is offensive to and inconsistent with the spirit, purpose, intent and character of the tax, and manifestly unjust. State ex rel. McClintock v. Guinotte.
Lathrop, Crane, Reynolds, Sawyer & Mersereau, John H. Lathrop and Henry W. Fox for respondent.
(1) Real estate owned by a Missouri decedent was not subject to the Federal estate tax under the Revenue Act of 1918. Consequently the appellant's theory that the real property constituting the trust should bear a proportionate part of the Federal estate tax is now without any basis whatever. Revenue Act of 1918; 40 Statutes at Large 1057, 1097-1098; Crooks, Collector of Internal Revenue, v. Harrelson, 28 Fed. (2d) 510, 35 Fed. (2d) 416; Crooks, Collector of Internal Revenue, v. Harrelson, 51 Sup. Ct. Rep. 49. (2) Aside from the decision in the Harrelson case the real estate held in trust should not be required to make any further payment on account of the Federal estate tax, but the trust fund should be reimbursed by a recovery from the administrator of the amount of the personal property remaining in his hands after the payment of all debts, charges, lawful commissions and expenses of administration. (a) The testatrix intended that her real estate should remain intact as a trust estate and should not be exhausted or used for the purpose of paying any part of a Federal estate tax as long as there was personal property in the hands of the administrator. (b) Aside from the decision in the Harrelson case, the Act of Congress and decisions thereunder place the burden of Federal estate tax upon property in hands of administrator before its distribution. As there is and will be personal property in the hands of the administrator when the estate is ready for distribution and as no real estate ever came into hands of administrator for distribution, the trustee is entitled to a recovery against him to the extent of the personal property so remaining not in excess of $118,329.19, the amount heretofore advanced to the administrator by the trustee or his predecessors in trust. New York Trust Co. v. Eisner, 256 U.S. 345; Plunkett v. Old Colony Trust Co. (Mass.), 124 N.E. 265; In re Hamlin, 124 N.E. 4; Brown v. State, 19 S.W. (2d) 16; Revenue Act of 1918, 40 Statutes at Large 1057, 1097-1098; Bemis v. Converse, 140 N.E. 686; Pratt v. Dean, 140 N.E. 924; Taylor v. Jones, 136 N.E. 382; In re Oakes, 162 N.E. 79; Jordan's Administratrix v. Richmond Home for Ladies, 56 S.E. 730; Rhode Island Hospital v. Hail (R.I.), 129 Atl. 835; Cooch's Executor v. Cooch's Administrator (Del.), 5 Houston 540, 1 Am. St. 161; Secs. 225, 238, 142, R.S. 1929; Young Men's Christian Assn. v. Davis, 264 U.S. 47; Crooks, Collector of Internal Revenue, v. Harrelson, 51 Sup. Ct. Rep. 49. (3) In any event, the amount of the administrator's commissions must come out of the personalty. Crooks v. Harrelson, 51 Sup. Ct. Rep. 49; Elstroth v. Young, 94 Mo. App. 351; Farrar v. Dean, 24 Mo. 18; Ritchey v. Withers, 72 Mo. 556; State v. Doud, 216 Mo. App. 480. (4) Under the Missouri Inheritance Tax Law (Laws 1917, p. 114) each beneficiary pays the tax levied on what each beneficiary receives. Brown v. State, 19 S.W. (2d) 16; Laws 1917, pp. 118, 122.
Suit by the administrator of the estate of Harriet M. Bryant deceased, to recover $16,994.61 from the trustee of real estate in trust under the provisions of the will of said Harriet M. Bryant. The plaintiff administrator and defendant trustee seek recovery under identical facts. Both filed a motion for judgment on the pleadings. Plaintiff administrator's motion was overruled and his bill dismissed. Defendant trustee's motion was sustained and judgment was rendered in his favor, as prayed for in the cross-petition. Plaintiff administrator appealed. The pertinent facts set forth in the pleadings follow:
Harriet M. Bryant died testate, seized of personal property and real estate. She appointed an executor, and upon his declining to act, plaintiff was appointed administrator with the will annexed. She bequeathed the personal property in equal shares to a son and four daughters, and devised the real estate to a trustee or trustees in trust, until a time named, with directions as to management and control of the property and with directions as to disposition of the net income. She also disposed of the real estate and undistributed income on the termination of the trust.
In due course a Federal estate tax of $106,630.32 was levied against the estate of decedent. Of this, 97.25 per cent was levied against the real estate, and 2.75 per cent was levied against the personal property.
Likewise, a Missouri inheritance tax of $19,578.08 was levied against the estate of decedent. Of this, 97.157 per cent was levied against the real estate and 2.843 per cent was levied against the personal property.
"The personal estate being inadequate for the payment of said taxes, the plaintiff administrator called upon the trustees, the predecessors in trust of the defendant trustee, for money with which to discharge said taxes, thereby to save their real estate from sale therefor by a proceeding in the probate court." Responding to said demand, the trustees paid to the administrator for said purpose sums of money aggregating $118,329.19. Thereafter the administrator paid both the Federal estate tax and the State inheritance tax.
On the trial plaintiff administrator contended, and he here contends, that defendant trustee should pay 97.25 per cent of the Federal estate tax, and that he as administrator should pay 2.75 per cent of said tax. On the trial he also contended and he here contends that defendant trustee should pay 97.157 per cent of the State inheritance tax and that he as administrator should pay 2.843 per cent of said tax. If it is proper to so apportion the payment of said taxes, the defendant trustee is indebted to plaintiff administrator in the sum of $16,994.61.
On the other hand, defendant trustee contended, and he here contends, that the real estate should not be subjected to the payment of said tax until the net personal estate has been exhausted for that purpose. There being a net personal estate in excess of $20,000, the defendant trustee filed a cross-petition praying for judgment against plaintiff administrator for a sum not exceeding $118,329.19, the amount paid by the predecessors of defendant trustee to plaintiff administrator on said taxes.
As stated, the chancellor found in favor of defendant trustee on the cross-petition. That part of the decree follows:
"It is...
To continue reading
Request your trial
-
Carpenter v. Carpenter
...according to the testator's apparent intent. The third and last Missouri decision cited by appellant on this issue is Bryant v. Green, 328 Mo. 1226, 44 S.W.2d 7, decided in 1931. That case was decided upon the theory that, since real estate in Missouri is not subject to administration expen......
- Bryant v. Green
-
In re Claus' Estate
...payment of debts were not subject to be diverted to the payment of the ordinary costs and expenses of administration. Bryant v. Green, 328 Mo. 1226, 1231, 44 S.W.2d 7, 8; Ritchey v. Withers, 72 Mo. 556; Elstroth v. Young, 94 Mo.App. 351, 68 S.W. 100; In re Motier's Estate, 7 Mo.App. This up......