Commonwealth v. Carter

• Citation: 102 S.E. 58
• Court: Virginia Supreme Court
• Decision Date: 22 January 1920
• Parties: COMMONWEALTH et al. v. CARTER et al.

102 S.E. 58

COMMONWEALTH et al.

v.CARTER et al.

Supreme Court of Appeals of Virginia.

Jan. 22, 1920.

[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Estate.]

Sims, J., dissenting.

Appeal from Circuit Court, Clarke County.

Suit by Agnes Mayo Carter, executrix of Thomas Nelson Carter, deceased, and another, against the Commonwealth of Virginia, in which the Auditor of Public Accounts intervened. From the decree therein, defendants appeal. Affirmed.

The Attorney General and E. Warren Wall, of Richmond, for appellants.

W. Brydon Tennant and R. W. Carrington, both of Richmond, for appellees.

PRENTIS, J. Agnes Mayo Carter, executrix, widow of Thomas Nelson Carter, deceased, and Isabella Burwell Carter, his daughter, the sole beneficiaries under his will, instituted their suit in equity in the circuit court of Clarke county on June 5, 1918, complaining of the assessment of inheritance taxes under section 44 of the Tax Bill, as amended March 22, 1916 (Acts 1916, p. 812). The auditor of public accounts was not made a party to the suit, but promptly appeared by counsel, upon his own motion was made a party defendant, and filed his demurrer and answer to the bill. The court overruled the demurrer, held the statute constitutional, but enjoined the amended or supplemental assessment, which had been made by the clerk of the court under instructions from the au-ditor, holding that the proper construction of the statute is that, instead of being determined by the value of the entire estate of the decedent, the tax thereby imposed should be computed upon each distributive share thereof, after deducting the exemption allowed, and enjoined the enforcement of the larger and later assessment. The commonwealth assigns as error— 1. The overruling of the demurrer and refusing to dismiss the bill.

(a) It is claimed that the demurrer should have been sustained, upon the ground that the complainants had an adequate remedy at law—citing Commonwealth v. Tredegar Co., 122 Va. 506, 95 S. E. 279. If this be true, of course, the court erred, for the act of February 24, 1916 (Acts 1916, p. 89), provides that:

"No suit for the purpose of restraining the assessment or collection of any tax, state or local, shall be maintained in any court of this Commonwealth, except when the party has no adequate remedy at law."

Before the enactment of that statute, the taxpayer, who felt aggrieved by assessment of his property for taxation, at his election, could either institute his suit iniquity to enjoin the collection of the tax, or proceed by motion under Code, §§ 567 to 573, inclusive (Code 1919, § 2385 et seq.). This jurisdiction has been so long firmly established in this state that it no longer admits of question. Wytheville v. Johnson, 108 Va. 590, 62 S. E. 328, 18 L. R. A. (N. S.) 960, 128 Am. St. Rep. 981; Tiller v. Excelsior Coal Corp., 110 Va. 153, 65 S. E. 507. So that the question here arising as to this point is whether or not those sections provide a remedy for the illegal assessment of an inheritance tax. The reading thereof is sufficient to show that they afford no such remedy. They refer in terms to taxes on land or other property, and the assessments thereof made by the commissioners of the revenue. It is true that in Posey v. Commonwealth, 123 Va. 551, 96 S. E. 771, this statutory remedy for the correction of an assessment of an inheritance tax alleged to be erroneous was invoked in the trial court and here by counsel of ability. The point, however, was either waived or unnoticed, and that ease is not authority for the proposition which the commonwealth here contends for, because the question was neither raised nor considered.

[21 (b) It is claimed that the circuit court of Clarke county had no jurisdiction to entertain this suit, because the auditor of public accounts was a necessary party thereto, and it is true that Code 1919, § 6049, requires a suit in which the auditor is a necessary party defendant to be brought in the city of Richmond, and that section 6051 provides for the transfer to the circuit court of the city of Richmond of any such action or suit which is brought in any other court of the state.

If the auditor had not appeared or had objected to the bill on this ground, or had

made a motion for the transfer of the case to the circuit court of the city of Richmond, it would certainly have been the duty of the court under this statute to transfer the case. Johnson v. Hampton Institute, 105 Va. 319, 54 S. E. 31. No such motion, however, was made in the circuit court, and the auditor voluntarily answered the bill, and the record shows that the case was docketed and heard there upon the merits by consent Although, as stated, it would have been the duty of the trial court to change the venue, had the proper motion been made, such a question cannot be raised for the first time in this court after such a waiver in the trial court

2. The appellees assign cross-error under rule 8 (71 S. E. viii).

(a) It is claimed that the inheritance tax law of 1916 is void as in violation of section 52 of the Constitution, which provides that no law shall embrace more than one object, which shall be expressed in its title.

This question has been so frequently considered by this court that it is not considered necessary to review the authorities. We think it sufficient to say in this case that the title of the act recites that it amends section 44 of the general tax bill, entitled "An act to raise revenue for the support of the government, " etc. This and other sections of that general act have been frequently amended by reference to its original title, with the number of the amended section only. Section 44 had been previously amended, and the title of that amendment referred specifically to taxes on collateral inheritances. When this amendment of 1916 was made, the title not only referred to section 44 of the general tax bill, but omitted the word "collateral" from its title, and plainly stated that the amendment was "in relation to tax upon inheritances." The general purpose of the act being to raise revenue, and the title of this amendment of 1916 showing that it was to raise revenue upon inheritances, clearly indicates the changed purpose of the Legislature to impose taxes upon direct as well as upon collateral inheritances, and the act does not violate section 52 of the Constitution

(b) It is also contended that the act violates both the federal and the state Constitutions, in that it deprives the appellees of their property without due process of law.

The case of Heth v. City of Radford, 96 Va. 272, 31 S. E. 8, is cited. That case determines that assessments of property under the charter of the city of Radford were invalid, because there was no provision either in the charter or general law whereby such assessments could be corrected, and there is a general statement of trie law governing the question. The cases of Norfolk v. Young, 97 Va. 728, 34 S. E. 886, 47 L. R. A. 574, and Violett v. Alexandria, 92 Va. 561, 23 S. E. 909, 31 L. R. A. 382, 53 Am. St Rep. 825, are both cases of local assessments for street Improvements, and the same strict rules do not prevail in tax cases as in proceedings to take private property by condemnation for public use.

This act (paragraph F) authorizes the collection of inheritance taxes in certain contingencies by motion in court, and in Winona, etc., Land Co. v. Minnesota, 159 U. S. 526, 16 Sup. Ct. 83, 40 L. Ed. 251, where the statute under consideration authorized the collection of the tax by suit in court, and the contention was made that this did not provide due process of law, this is said (159 U. S. at page 537, 16 Sup. Ct. 87, 40 L. Ed. 251):

"Questions of this kind have been repeatedly before this court, and the rule in respect thereto often declared. That rule is that a law authorizing the imposition of a tax or assessment upon property according to its value does not infringe that provision of the Fourteenth Amendment to the Constitution which declares that no state shall deprive any person of property without due process of law, if the owner has an opportunity to question the validity or the amount of it, either before that amount is determined or in subsequent proceedings for its collection. McMillen v. Anderson, 95 17. S. 37, 24 L. Ed. 335; Davidson v. New Orleans, 96 U. S. 97, 24 L. Ed. 616; Hagar v. Reclamation Dist. No. 108, 111 U. S. 701, 4 Sup. Ct. 663, 28 L. Ed. 569; Spencer v. Merchant, 125 U. S. 345, 8 Sup. Ct. 921, 31 L. Ed. 763; Talmer v. McMahon, 133 TJ. S. 660. 10 Sup. Ct. 324, 33 L. Ed. 772; Lent v. Tillson, 140 U. S. 316, 11 Sup. Ct. 825, 35 L. Ed. 419; Pittsburg, C, C. & St. L. R. Co. v. Backus, 154 U. S. 421, 14 Sup. Ct. 1114, 38 L. Ed. 1031."

Since that case was decided, the same doctrine has been approved in Weyerhaueser v. Minn., 176 TJ. S. 550, 20 Sup. Ct. 485, 44 L. Ed. 583; Security Tr. Co. v. Lexington, 203 U. S. 323, 27 Sup. Ct 87, 51 L. Ed. 204; Powers v. Richmond, 122 Va. 328, 94 S. E. 803, affirmed by Supreme Court of the United States without an opinion on December 9, 1919, 251 U. S. 539, 40 Sup. Ct. 118, 64 L. Ed.—.

The decisions are so numerous and the underlying reasons therefor have been so frequently announced by the courts, that it is not deemed necessary to multiply authorities. The general doctrine is succinctly and clearly stated by that great master, Judge Cooley, thus:

"In order to bring taxation imposed by a state, or under its authority, within the scope of the provision of the Fourteenth Amendment, which prohibits the deprivation of property without due process of law, the case should be so clearly and palpably an illegal encroachment upon private rights as to leave no doubt that such taxation by its necessary operatin is really spoliation under the power to tax." 1 Cooley on Taxation (3d Ed.) p. 55.

The nature of inheritance taxes is almost everywhere conceded (and this appears to be ignored in Ferry v. Campbell, ...