English's Estate v. Crenshaw

• Decision Date: 11 May 1908
• Citation: 110 S.W. 210,120 Tenn. 531
• Parties: ENGLISH'S ESTATE v. CRENSHAW, Clerk.
• Court: Tennessee Supreme Court

110 S.W. 210

120 Tenn. 531

ENGLISH'S ESTATE v. CRENSHAW, Clerk.

Supreme Court of Tennessee.

May 11, 1908

Appeal from Circuit Court, Shelby County; J. P. Young, Judge.

Action by Thomas B. Crenshaw, clerk of the county court of Shelby county, against Mary J. English, administratrix with the will annexed of the estate of C. B. English, deceased. From a judgment for plaintiff, defendant appeals. Reversed and rendered.

W. B Glisson and T. K. Riddick, for appellant.

Atty Gen. Cates, G. P. Smith, and W. B. Eldridge, for appellee.

McALISTER J.

This suit was brought by the county court clerk of Shelby county against Mary J. English, administratrix cum testamento annexo of the estate of C. B. English, deceased, for the purpose of recovering an inheritance tax alleged to be due the state. The case was submitted to the Honorable J. P. Young, of the circuit court, on the following stipulation of agreed facts:

"C B. English, a citizen of Shelby county, Tenn., died January 26, 1904. He was childless, but left as his widow Mary J. English, the administratrix cum testamento annexo. His heirs at law were Annie E. Ricks, a sister, and the children of his deceased brother, T. C. English.

"C. B. English left a will by which all his property, real, personal, and mixed, was left to his widow (Mary J. English) to the exclusion of his heirs at law (Annie E. Ricks, a sister, and the children of T. C. English, deceased).

"The heirs at law then instituted a contest of the will, and upon trial before a jury the will was set aside.

"An appeal was then taken to the Supreme Court by the proponent, and the case was reversed and remanded for a new trial.

"The case then came on for trial, and after the jury was selected, impaneled, and sworn, but before the trial was proceeded with, the following compromise was offered by the administratrix, Mary J. English, and accepted by the heirs at law of C. B. English:

"Mrs. English proposed that if defendants, Mrs. Ricks and the heirs of T. C. English, would withdraw their contest, that she (Mrs. English) would deed to Mrs. Ricks one-fourth in value of all the lands belonging to C. B. English at his death and to the heirs of T. C. English one-fourth of the value of said land; the land to be divided by appraisers or commissioners. The land has not yet been divided; but it is agreed that the case may proceed as if it had been divided, and Mrs. Ricks and the heirs of T. C. English now had a deed to their respective one-fourth. It is also agreed that all rents and profit accruing from the land of C. B. English since his death should be equally divided between Mrs. Mary J. English and Mrs. Ricks and the heirs of T. C. English as follows:

"One-half of Mrs. Mary J. English, and one-fourth to Mrs. Annie E. Ricks, and one-fourth to the heirs of T. C. English.

"Thereupon the contest of the will was withdrawn and the jury found in favor of the will, upon which verdict the judgment of the circuit court was duly entered. The entry recites that by consent of parties it is further adjudged that proponent pay the costs, for which execution might issue.

"The value of the estate going to Mrs. Annie E. Ricks was fixed by appraisers at $12,600. The value of the estate going to the heirs of T. C. English was fixed at the same figures, viz., $12,600."

The question propounded to the circuit judge for decision was: Is the state entitled to collect a collateral inheritance tax, either from Annie Ricks, the sister, or from the heirs of T. C. English, the nephews and nieces of C. B. English, or from both? The circuit judge was of opinion that Mrs. Annie Ricks, the sister of C. B. English, deceased, and the children of T. C. English, not belonging to the exempted classes, were liable for the succession taxes on the sum of $25,000, the value of the property deeded to them by Mrs. English, and that the state was entitled to recover thereon the sum of $1,642.25, the amount of said tax, with interest and attorney's fees, against the property in the hands of the administratrix. The defendants below appealed from the judgment of the circuit court, and insist that neither Mrs.

English, as the widow of the devisee or administratrix cum testamento annexo, nor the grantees of Mrs. English, under the terms of the compromise were liable for any inheritance or succession tax.

Chapter 174, p. 347, of the Acts of 1893, provides for: "A tax upon all estates, real, personal and mixed, situated in the state, whether the person dying seised lived in the state or not, passing either by will or inheritance or by any deed, grant, bargain, gift or sale made in contemplation of death or to take effect in possession or enjoyment after the death of the grantor to any person or body corporate or politic in trust or otherwise, when the property thus passing goes to any other than the father, mother, husband, wife, children and lineal decendants."

By another act passed at the same session of the General Assembly, being section 7, c. 89, p. 146, of the Acts of 1893, the exemption was extended to brothers, sisters, the wife or widow of a son, and husband of a daughter, and any legally adopted child. In construing these acts it was said by this court in State v. Alston, 94 Tenn. 681, 30 S.W. 751, 28 L. R. A. 178:

"The Legislature has constitutional power to impose a privilege tax upon the right of succession, whether by will, inheritance, or otherwise, to the estates of deceased persons. It must be borne in mind that the tax is not upon the property, but the right or privilege of acquiring it by succession. It is a condition upon which the person may take the estate of a deceased relative by inheritance, or testator by his will. It is a retention by the state of a part of a deceased person's property which the state may take to meet its necessities, and which in certain cases it may take in toto, as in cases of escheated property. It is not a tax upon the right of alienation, but on the privilege of receiving by inheritance or will or otherwise, at the death of a former owner."

The reasoning of the circuit judge by which he reached his conclusion is thus stated in the following paragraph of his written opinion filed with the record:

"The court therefore holds that under the will of C. B. English the whole estate, in the absence of contest, would have passed to the widow who was exempt from the operation of the law. But contest having been made by the heirs at law, who were not so exempt, and a compromise and division of the property having been agreed upon, only one-half of it passed to the exempted widow under the compromise, and the other half passed to the heirs at law under the statute of descent and distribution; the will being null and void as to that half."

Again he stated:

"The widow is exempt from this tax as to all the estate devised by will from the testator. The collateral heirs are not exempt, but liable on whatever property they receive under the laws of descent and distribution."

Again his honor stated:

"It is clear that the property received by the heirs at law under the compromise did not pass to the widow under the will."

We think the crucial inquiry in the case is presented in these excerpts from the opinion of the circuit court. Is the tax sought to be collected, under the circumstances presented on this record, within the contemplation of the Legislature and the intendment of the act. It is axiomatic and fundamental that exemptions from taxation must positively appear, and that no implication will arise that any species of property or subject of taxation was intended to be excluded if it comes within the fair purview of the act. But, while this is true, statutes imposing taxes are not extended by a construction or intendment to subjects lying outside of the domain of the statute.

In Memphis v. Bing, 94 Tenn. 644, 30 S.W. 745, this court held:

"It is a general rule that in the interpretation of all statutes levying taxes or duties upon subjects or citizens not to extend their provisions by implication beyond the clear import of the language used, or to enlarge their operation, so as to embrace matters not specifically pointed out, although standing upon a close analogy. In every case, therefore, of doubt, such statutes are construed most strongly against the government and in favor of the citizen or subject, because burdens are not to be imposed beyond what the statutes expressly and clearly import."

In Eidman v. Martinez, 184 U.S. 583, 22 S.Ct. 517, 46 L.Ed. 697, it is said:

"It is an old and familiar rule of the English courts, applicable to all forms of taxation, and particularly special taxes, that the sovereign is bound to express its intention to tax in clear and unambiguous language, and that a liberal construction be given to words of exception confining the operation of duty, though the rule regarding exemptions from general laws imposing taxes may be different.

"We have ourselves had repeated occasion to hold that the customs revenue laws should be liberally interpreted in favor of the importer, and that the intent of Congress to impose or increase a tax upon imports should be expressed in clear and unambiguous language."

In 27 Ency. of Law (2d Ed.) p. 340, it is said:

"The succession tax is a special tax, and the rule is that special tax laws are to be construed strictly against the government and favorable to the taxpayer, so that the citizen cannot be subjected to special burdens without clear warrant of law."

In Re Kerr's Estate, 159 Pa. 512, 28 A. 354, the Supreme Court of that state, in dealing with the Pennsylvania succession tax law, which is almost identical with the Tennessee statute on the same subject, said:

"Collateral inheritance taxes can only

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