Curry v. Spencer
| Decision Date | 01 June 1882 |
| Citation | 61 N.H. 625 |
| Parties | Curry v. Spencer & A. |
| Court | New Hampshire Supreme Court |
Chapter 64, Gen. Laws, in relation to the taxation of legacies and successions, not being within the constitutional powers of the legislature, is void and inoperative.
BILL IN EQUITY, in which the plaintiff, as executrix of one Tebbetts prays the advice and instruction of the court as to what, if any, tax the estate of the deceased is liable to pay, under Gen. Laws, c. 64, which provides that "All estates settled in the probate courts of this state, and all transfers of property from the dead to the living, by gift bequest, or devise, and every succession made under the laws of this state regulating the distribution of intestate estates, exclusive of the just indebtedness of each and all of said estates, shall pay one per cent. on the value of said estates, to be deducted from each gift, bequest, or distributive share, by the administrator or executor, so that each gift, bequest, or distributive share shall pay its proportional rate: Provided, that all legacies or property passing by will or by the laws of this state to husband or wife, children or grandchildren of the person who died possessed as aforesaid, shall be exempt from tax or duty."
The only question intended to be raised is that of the constitutionality of this provision.
C. C Rogers and J. Minot, for the plaintiff. I. The statute in question is an act of taxation. That such was the design of it appears from the report of the tax commissioners by whom it was originated. (Report, p. 29, &c.) The statutes themselves so designate it (G. L., c. 64, p. 163), and the practical operation and effect of it are merely for revenue. It was not designed for any other purpose, and therefore it cannot be sustained on the principle and reasons on which the various other special provisions in our statutes, relative to taxation in particular cases, are maintained. Though those involve the raising of revenue, yet it is really incidental and with reference to a different and main object,---the promotion and protection of the public good and morals as for instance, the exemption of certain property from taxation for the encouragement of manufactures; the taxation of deposits in savings-banks, to encourage economy and saving; the various license laws, to protect public morality, &c. From the nature of the subject-matter of the statute in question, it cannot have any even indirect effect or influence for any other purpose than revenue. The application of it is made entirely dependent on an event which is beyond the control of legislation and human effort---death.
II. It is unequal and unjust, and therefore is unconstitutional and void. State v. U. S. & C. Express Co., 60 N.H. 219. It is unequal, because it relates to a particular class of property, estates by inheritance, and does not embrace all classes of property; and even with regard to the particular class referred to it makes discriminations, exempting inheritances by the wife or issue, and including only those by the collaterals. It does not impose the tax provided by it in place of any other tax on the same property, but it leaves that property still subject to all other taxation in common with other property, thus in effect making double taxation. The
rule established by our state constitution and bill of rights on this point cannot be weakened or qualified by any argument from convenience or expediency. State v. U. S. & C. Express Co., above cited. Therefore the reasons assigned for this statute by the tax commissioners are insufficient to sustain it. The inequality and injustice of its provisions will appear on the examination of the reasons assigned by the tax commissioners for the law. Report of Tax Commissioners 30.
If it were true that the property included in this act escapes taxation under the general law, yet that would be the fault of the administration of the law, and not a sufficient reason why the general law should be allowed to remain and this additional burden be imposed; and most certainly no reason why this particular class of property should be singled out for that purpose.
It might be reasonable that the expense of administering the probate law should be borne by the business transacted in that office, but it would be unreasonable and unjust to impose the burden of administering that branch of the public business upon the estates there adjudicated, without applying the same principle to other departments of the public administration; and especially when, as by this law, the probate business is left to bear its proportion towards supporting the other branches of the government. But the inequality does not stop here. It does not impose the burden of the probate court upon the business there done, but it singles out a particular and comparatively small portion of that business which it subjects to such burden, and exempts from that burden another particular portion of the same kind of business, that is, inheritances by wife and children.
The real motive and reason for this legislation were not with any reference to justice or constitutional right, but simply because the property taxed could bear the burden; and the parties interested might willingly submit to the wrong, considering that the property on which it is imposed, and from which it is to be paid, came to them as a windfall from a distant relative, and without effort or exertion of their own.
The defendants, pro se.
Tappan, Attorney-General, for the state. If it had not been for some recent decisions in this state, notably that in the express company cases, no one, I apprehend, would have thought of questioning a mode of taxation which has obtained in most civilized countries since the time of Augustus, and which Gibbon says "was the most fruitful, as well as the most comprehensive," of any imposed by that emperor. Gibbon's Decline and Fall, c. 6.
Taxes on legacies and successions have been imposed in Holland, France, and Great Britain, and have been considered as eminently just and equitable. The same is true in this country, and such
taxes have been laid in many states; and whenever they have been questioned they have been sustained and upheld as proper, just, and constitutional, even in states with similar constitutional provisions as to "equal" and "proportional" taxation to those which are found in the constitution of New Hampshire. The whole subject of the propriety and constitutional validity of such taxes has been elaborately considered in the following cases, to which I respectfully refer the court: Williams's Case, 3 Bland 259; Eyre v. Jacob, 14 Grat. 424; Fox v. Commonwealth, 16 Grat. 1; Tyson v. State, 28 Md. 577.
As the counsel for the defendants seem to rely wholly upon the opinion in the express cases (I have not seen their brief), I suppose it is claimed that this tax is "disproportional," "unequal," and imposes upon each of these defendants a burden beyond their "just share." I am aware that a great deal is said in the express cases in regard to a person's paying more than "his share" of the public taxes, and it is undoubtedly true that any system of taxation which compels a man to pay any more than "his share" is unequal and vicious. But, in a case of this kind, what is "his share"? That it is merely his "proportional" share based solely on his property and estate, is, as it seems to me, mere assumption. The party receiving a legacy or succession has an extra and additional civil right which requires additional legal machinery to make it secure. It costs the state something to furnish a tribunal to uphold, protect, and transmit that right. It is a right which all others in the state do not enjoy with him; and "his share," therefore, of the public burden would be his "proportional" tax based on his poll and estate in common with that of other citizens, and his extra percentage, tax, or duty, whatever it may be termed, which the legislature, in its broad discretion, has the power and right to impose to help pay for the extra and additional right which he enjoys under the law. It comes clearly within the "protective power," and it does not seem to me that a tax-payer would be justified in resisting such a tax as this by force of arms, on the ground that he was paying more than "his share."
If this tax cannot be upheld, then it must be that the court intends to exclude all other modes of raising revenue, except the "proportional" tax on polls and estate. But I do not understand that the court has gone to that length.
In Virginia it has been held that "the act of March 2, 1854, which imposes a tax upon collateral inheritances, is constitutional, notwithstanding a provision in the constitution that taxes shall be equal and uniform." Eyre v. Jacob, 14 Grat. 422. In that case it was contended that this tax on collateral inheritances was a tax on property.
But the court says,---" It cannot be regarded in a proper legal sense as a tax on property. The property tax which the framers of the constitution were contemplating in the 22d section [or to
apply it to the case at bar, and substitute for s. 22 Virginia Constitution, Art. 5, Part 2, Constitution of N. H.] was the ordinary, annually recurring tax for the support of the government, laid upon all property whatsoever. They had no reference to casual subjects of taxation, occurring irregularly and occasionally, which, though connected with property, were yet readily to be distinguished in their essential character and features.... But the argument is, that the tax is a certain per centum of the value of the estate, and the property pays it: it is therefore a tax on the property. But this is by no means a necessary logical conclusion. The intention of the legislature was plainly to...
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