DeWitt's Estate, In re
| Decision Date | 03 December 1979 |
| Docket Number | No. WD30753,WD30753 |
| Citation | 591 S.W.2d 273 |
| Parties | In re ESTATE of J. Roger DeWITT. Mary M. De WITT, Executor, Appellant, v. STATE of Missouri, Respondent. |
| Court | Missouri Court of Appeals |
Rufus Burrus, W. Raleigh Gough, Independence, for appellant.
John Ashcroft, Atty. Gen., Richard L. Wieler, Asst. Atty. Gen., Jefferson City, for respondent.
Before DIXON, P. J., and TURNAGE and KENNEDY, JJ.
This appeal involves the assessment of inheritance tax.
The Circuit Court of Cole County affirmed the order of the Probate Court which approved the Report of the Inheritance Tax Appraiser in the estate of J. Roger DeWitt and assessed a total tax of $22,756.07. The appraiser had determined that the entire marital trust, as set up in decedent's will, should be subject to inheritance tax against the widow because of her right to receive the income from the trust for life, along with a general power of appointment to dispose of the assets of the trust on her death by will. In addition, the appraiser assumed, for purposes of assessment of inheritance tax, that the residuary estate set up in the decedent's will was not sufficient to pay various bequests. This affected the amount of his assessments by elimination of a charitable bequest. Exceptions were filed by the Executrix who claimed that the tax assessment should only amount to $16,028.34.
Both the appellant, Executrix Mary DeWitt, and the respondent, State of Missouri, agree that the issues raised herein require the construction of the provisions of Chapter 145 of the Revised Statutes of Missouri, specifically: §§ 145.010; 145.020; 145.030; and 145.200 RSMo 1978. For that reason, the instant appeal was filed in the Supreme Court of Missouri pursuant to Article V, § 3 of the Constitution of Missouri placing exclusive appellate jurisdiction in that court where construction of revenue laws is involved. However, this cause was transferred by order of the Supreme Court to the Court of Appeals, Western District, on February 16, 1979.
The threshold issue to be determined by this court is whether this case is one which requires the construction of revenue laws so as to invoke the exclusive appellate jurisdiction of the Supreme Court, or whether it is a question of application of those statutes to the facts thus vesting jurisdiction of the issues in this court.
J. Roger DeWitt was a resident of Jackson County who died on November 20, 1968. His will divided his estate into two trusts, a "marital trust" and a "residuary trust." Under the "marital trust," his widow, Mary M. DeWitt (the executrix) was given a life estate beneficial interest in that proportion of his entire estate which, with other provisions for his wife by will or otherwise, would constitute one-half of his entire estate for federal estate tax purposes. In addition, the will provided that upon his wife's death, the trustee should pay over and distribute the principal of the trust, with all undistributed net income "to or for the benefit of such person or persons or corporation or corporations, or the estate of my wife, in such amounts or proportions, and in such lawful interests or estates, whether absolute or in trust, as my said wife may appoint by her last will and testament."
The will further provided that, if for any reason such power of appointment is not effectively exercised by his wife, then such estate shall be added to his "residuary" estate and distributed according to Article V of his will.
As to the "residuary" trust, the will provides in Article V that all the income from that trust be paid to his wife as long as she lives; upon her death all such income be paid to his brother, Robert A. DeWitt, for his life; and upon the death of his brother, the principal and all undistributed income be paid and distributed to numerous charitable institutions and individuals, including the "Ruby E. Simmons Trust" and the "DeWitt Family Trust;" and a bequest to a "Cemetery Maintenance Fund," the income from which was to be used for flowers on the graves of the DeWitt and Mercer families.
Article XI of the Will provides for invasions of principal to be made first from the "marital trust" estate or, if that is not sufficient, out of the "residuary trust" estate. The power to invade is limited to sums in the discretion of the trustee for the wife's care, comfort, and maintenance considering her previous standard of living.
The inheritance tax report listed total assets of $1,764,040.62, deductions of $332,859.04, and a net estate of $1,431,181.58. Of this amount, the sum of $1,005,946.76 was assessed as the value of the widow's interest and after allowing exemptions, a tax of $5,900.57 was assessed against the net amount thereof. This amount of her taxable interest was arrived at by adding the full amount of the "marital trust" estate to the appraised value of the widow's life estate in the "residuary trust" estate, and adding thereto the value of the club membership in the amount of $600.00.
The report further found that the "residuary trust" estate would not be sufficient to pay all the bequests enumerated under Article V of the Will, hence, instead of receiving the amounts named in the Will, each of these beneficiaries would receive an "abated amount," approximately 64% Of the amounts named in the Will. On the basis of this finding, the report found that there would be nothing left for the ultimate residuary bequest to the City of Independence for a community building to be known as "DeWitt Memorial Hall."
It has long been the rule in Missouri that the first duty of a court of appeals is to determine whether or not it has jurisdiction, even if its jurisdiction has not been challenged. Kansas City v. Howe, 416 S.W.2d 683, 686 (Mo.App.1967), and In Re Estate of Youngblood, 447 S.W.2d 824, 826 (Mo.App.1969). It is also the rule that a transfer ordered from the Supreme Court to the Court of Appeals is not an adjudication, and the Court of Appeals is not precluded from reexamining the issue of jurisdiction and retransferring the case back to the Supreme Court if it determines that a substantial question of constitutional construction is presented. Schmidt v. Morival Farms, 240 S.W.2d 952, 955 (Mo.1951); Collector of Revenue for City of St. Louis v. Parcels of Land Encumbered With Delinquent Tax Liens, 566 S.W.2d 475, 476 (Mo.1978).
The court in Ewing v. City of Springfield, 449 S.W.2d 681, 684 (Mo.App.1970) defined the task of "construction" as including a determination of the "meaning and proper effect" 1 of the United States and Missouri Constitutions when it determined that the alleged constitutional issue presented was really nothing more than a contention that the zoning law in question had been incorrectly applied. Other writers have elaborated on this principle:
" 'Construction' may be technically distinguished from 'interpretation' but in practice the courts use these terms interchangeably. To the courts, ' " 'the term (construction) signifies determining the meaning and proper effect of language by a consideration of the subject-matter and attendant circumstances in connection with the words employed.' " ' Therefore, the process of construction includes but does not end with the interpretation of the express language of a provision, since the court looks to the accompanying circumstances as well as the express language. This subtle distinction has been made in dicta but has never been the basis for a transfer to the court of appeals.
The courts have attempted to distinguish an Application from a Construction of the constitution; when the conclusion is reached that only the former is involved, the supreme court has no jurisdiction. 'Construction' may be defined as the ascertainment of the meaning attached by the drafters to the provision, while 'application' is the determination whether the facts of a case are within the scope of this meaning. However, it is not always easy to distinguish between the ascertainment of the drafters' intent and the application of the constitutional provision. " (Footnotes omitted). 1964 Wash.U.L.Q. 425, 442-43.
The problems concerning revenue law jurisdiction revolve around two basic propositions articulated in State ex rel. Attorney General v. Adkins, 221 Mo. 112, 118-19, 119 S.W. 1091, 1093 (1909), Transf'd from 119 Mo.App. 396, 100 S.W. 661 (1906):
"(1) (T)hat the revenue (law) must be directly and primarily concerned, not merely indirectly or as an incident; . . . (2) where the question in the case is merely one relating to the general practice in circuit courts or before justices of the peace, although the case may pertain to the collection of taxes, yet . . . the revenue laws are not involved in a constitutional sense."
Adkins also provides insight into which laws have been characterized as revenue laws:
"(I)t makes no difference where the law is to be found, whether under the title of 'revenue' or any other title, so long as it relates to the subject-matter of revenue . . . the term 'revenue law' covers and includes laws relating to the disbursement of the revenue and its preservation, as well as provisions relating to assessment, levy, and collection of it . . .." Id. at 118 and 119 S.W. at 1093.
Estate of Osterloh v. Carpenter, 337 S.W.2d 942 (Mo.1960) involved the question of whether securities, purchased by the decedent within two years prior to her death and issued jointly in her name and the names of her sister, niece and nephews, were subject to taxation as being a transfer made in contemplation of death pursuant to § 145.020, subd. 1(3) RSMo 1949. The court determined that it had jurisdiction of the appeal because a construction of the revenue laws of Missouri was involved.
Osterloh provides not only precedent for categorizing § 145.020 as a revenue law but also provides an example for the two other considerations expressed in Adkins, supra: whether the revenue law is directly involved in the resolution...
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