Downes v. Safe Deposit & Trust Co. of Baltimore
| Decision Date | 21 March 1929 |
| Docket Number | 19. |
| Citation | 145 A. 350,157 Md. 87 |
| Parties | DOWNES, CITY REGISTER OF WILLS, ON BEHALF OF STATE, v. SAFE DEPOSIT & TRUST CO. OF BALTIMORE. |
| Court | Maryland Court of Appeals |
Appeal from Baltimore City Court; Robert F. Stanton, Judge.
Suit by Edwin R. Downes, Register of Wills of Baltimore City, on behalf of the State, against the Safe Deposit & Trust Company of Baltimore, trustee. Judgment for defendant, and the State appeals. Affirmed.
Argued before BOND, C.J., and URNER, ADKINS, OFFUTT, DIGGES, PARKE and SLOAN, JJ.
Willis R. Jones, Asst. Atty. Gen. (Thomas H. Robinson, Atty. Gen and J. Hubner Rice, Asst. Atty. Gen., on the brief), for appellant.
Raymond S. Williams and Roger B. Williams, both of Baltimore (Hershey, Donaldson, Williams & Stanley, of Baltimore, on the briefs), for appellee.
Mrs Bridget Curran, a citizen and resident of Baltimore city, by deed of trust dated July 11, 1919, properly recorded conveyed the property therein described, consisting of real and personal property, to the Safe Deposit & Trust Company of Baltimore, in trust to pay the net income to her for life, and after her death to convey the corpus to her son, Frank P. Curran, and his wife, Barbara Curran, as tenants by the entireties absolutely and free from trust. The deed further provided that the grantor, Bridget Curran, "shall have the right at any time during her life, by deed executed and acknowledged as deeds of conveyance of real estate are or may be required by law to be executed and acknowledged, * * * to withdraw from this trust from time to time any portion of the corpus or principal of the property held in trust hereunder, but not more in value than Five Thousand Dollars in any one year, whereupon it shall become the duty of Safe Deposit and Trust Company of Baltimore, trustee, to deliver and transfer to said Bridget Curran, to be held by her, her heirs, executors, administrators and assigns, absolutely, free and clear of any trust, so much of said corpus or principal as may be specified in such deed of withdrawal and authorized to be withdrawn by the provisions of this deed." In said deed it was also provided that the trustee should have full power and authority to change the investments of the property or securities, and for that purpose to make sale of any of the property or interest therein held by it as such trustee, without any obligation on the part of the purchaser to see to the application of the purchase money, and should have power to sell all or any part of the securities or property for the purpose of more convenient division among or transfer to the parties who from time to time might become entitled to a transfer or delivery thereof according to the terms of the deed.
At the time of the execution of the deed in 1919, Mrs. Bridget Curran was 89 years of age, and she died October 31, 1927, at the age of 97, without having withdrawn any part of the corpus of the trust estate. At the time of her death, her son, Frank P. Curran, was 58 years of age, and his wife, Barbara Curran, was 54 years of age. At this time the property held by the trustee consisted of real and personal property of the value of $66,024.46; this appraisement and valuation having been made by two appraisers appointed by the orphans' court of Baltimore city. The trustee made inquiry of the register of wills of Baltimore city whether there was any collateral inheritance tax due the state of Maryland upon the interest of Mrs. Barbara Curran, the daughter-in-law of Mrs. Bridget Curran. The register of wills referred that inquiry to the Attorney General, who rendered an opinion holding that the interest of Barbara Curran was subject to a collateral inheritance tax. The trustee insisted that by a proper construction of the law no such tax was due on the interest of Barbara Curran; whereupon, after said appraisement, the orphans' court passed an order that the value of the interest of Barbara Curran, as a tenant by the entireties with her husband in said property, was one-half thereof, to wit, the sum of $33,012.23, upon which a tax of 5 per cent., amounting to $1,650.61, was payable to the register of wills for the use of the state. Payment of this tax was demanded of the trustee, and refused. The matter was subsequently submitted to the Baltimore city court on a case stated, and tried before the court; the verdict and judgment being for the defendant, the state has appealed.
The two questions presented by this appeal for our decision are: First, whether the method employed by Bridget Curran in disposing of her property is within the purview of section 124 of article 81 of the Code, making it subject to a collateral inheritance tax; and, second, whether the interest which passed to Barbara Curran, as one of the tenants by the entireties, is subject to taxation, and, if so, upon what valuation? The lower court answered both of these questions in the negative. The contention of the appellee is that the property of Bridget Curran in the hands of the trustee, passing to her son and daughter-in-law as tenants by the entireties, is not taxable under section 124 of article 81, because the grantor, Bridget Curran, did not die seized and possessed thereof; and that, even if she did die seized and possessed of the property, the statute has no application to property passing to tenants by the entireties where one of such tenants is a lineal descendant of the grantor, and as such exempted by the statute. If either of these contentions is sound, the judgment would have to be affirmed. We only find it necessary to consider the first, for the reason that we are of the opinion that this estate held by the trustee is not subject to the tax claimed, without regard to whether a tenant by the entirety who is a collateral would be subject to the tax.
Section 124 of article 81 of the Code, in effect, provides that all estates of every kind passing from any person who may die seized and possessed thereof, being in this state, or any part of such estate or estates, or interest therein, transferred by deed made or intended to take effect in possession after the death of the grantor, to any person or persons, bodies corporate, in trust or otherwise, other than to or for the use of the father, mother, husband, wife, children, and lineal descendants of the grantor, shall be subject to a tax of 5 per cent. This section does not mean that every estate conveyed by deed, the beneficial use of which is to take effect in possession after the death of the grantor, is subject to the tax, but only such estates of which the grantor died seized and possessed. This is the plain language of the statute, and we must give effect to all of its provisions, especially when the statute under construction is one which imposes a tax. The Legislature has declared what estates shall be subject to the collateral inheritance tax. They have not declared that all estates are so subject, but only certain estates which the Legislature itself defines. The estates upon which the beneficiary is required to pay a tax must have certain characteristics, all of which must be found to exist before the tax is applicable. The Legislature has declared that property situate in this state, of which the grantor, donor, or devisor is seized and possessed at the time of his death, which by any instrument is transferred directly or through the intervention of a trustee by deed, gift, or will, so that a collateral, as defined in the statute, is to take possession thereof at any time after the death of the grantor or devisor, is liable to the tax. In other words, the property must be such as is to take effect in possession after the death of the grantor; it must be property located within the state; and it must be property of which the grantor died seized and possessed.
In State v. Fusting, 134 Md. 349, 106 A. 690, the one point considered by the court was whether or...
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