Executors v. State

• Citation: 72 Ohio St. 448,74 N.E. 650
• Decision Date: 23 May 1905
• Docket Number: 9293
• Parties: Executors Of Eury v. The State.
• Court: United States State Supreme Court of Ohio

74 N.E. 650

72 Ohio St. 448

Executors Of Eury v. The State.

No. 9293

Supreme Court of Ohio

May 23, 1905

Inheritance tax act - of April 25, 1904 - Went into effect May 1, 1904 - Is not retroactive.

The act passed and approved April 25, 1904 (97 O. L., 398), entitled "An act to impose a tax upon the right to succeed to, or inherit, property," is not retroactive, and applies only to such rights arising on a death occurring on or subsequently to that day.

The State of Ohio and the executors, S. A. Hostetter and David W Smith, of the last will and testament of David Eury deceased, submitted an agreed case to the court of common pleas of Darke county. The question to be determined was whether that part of the estate of the decedent unadministered when the inheritance tax law, passed April 25 1904 (97 O. L., 398), took effect was subject to the tax.

David Eury, a resident of that county, died in 1884, testate. The plaintiffs in error were duly appointed executors and still are acting as such. By his will he gave and devised to his executors in trust all of his real and personal estate not otherwise specifically disposed of to be by them held to and for the uses and purposes and trusts therein set forth. His wife was to have the use of the real estate and interest on the personal estate, and at the decease of his wife his executors were directed to convey the undivided one-half of said real estate to the then surviving children of Andrew Kershner, deceased, "and to the issue of such of his children as may then be dead as the parent would have if living in fee simple in equal rights, and in like manner and time to convey to Sarah Elizabeth Richards for life and after her death to her children in fee simple" the other undivided half, and "if any of her children then be dead and left issue, then be living they have the share their parent would be entitled if living." And "after the death of my wife, out of the monies in my executors' hands arising from my estate, I direct my said executors to pay the following specific legacies, viz.: To each of the children of Delila Johnson, or afterwards Delila Lime, the sum of six hundred dollars ($600). If any of her five children should have died before this and left children, they to have the share their parent would have been entitled to if living. To Lidia Margaret Miller, daughter of Sarah E Bertram, three hundred dollars ($300); and to Sarah E. Bertram twelve hundred dollars ($1,200); and to David W. Smith fifteen hundred dollars ($1,500); and to each of the living children, and to the issue of any that may be dead, of my brothers, Jesse Eury and Noah Eury, fifteen hundred dollars ($1,500); and on final settlement of my estate all the rest and residue thereof to be divided and distributed and paid to my heirs-at-law in the same proportion that the same would have been paid to them if I had died without a will. All of the former legacies and specific and residuary to be paid after the death of my wife."

The widow died in July, 1904, and the value of several of the legacies in the hands of the executors is more than the amount exempt from the tax.

The court found that the real estate specifically devised was not subject to the tax, but, with that exception, that the real and personal estate in the hands of the executors for distribution was subject to the tax, and it ordered and adjudged that the executors pay the tax on each such legacy and distributive share in excess of three thousand dollars.

The executors prosecuted error in the circuit court. The State filed a cross-petition in error, assigning error in the judgment that the real estate specifically devised was not subject to the tax.

The circuit court affirmed and error is prosecuted in this court.

Messrs. Anderson, Bowman & Anderson, attorneys for plaintiffs in error, cited and commented upon the following authorities:

State ex rel. v. Guilbert, Aud., 70 Ohio St. 229; Dallinger v. Rapello, 14 F. 33; Sewall v. Jones, 9 Pick., 412; Green v. Holway, 101 Mass. 243; 27 Am. & Eng. Ency. Law (2 ed.), 341; In re Lambard, Appellant, 88 Me. 587; Howe v. Howe, 179 Mass. 546; Hospital v. People, 198 Ill. 495; Garfield v. Bemis, 2 All. (Mass.), 445; Folsom v. United States, 21 F. 37; sec. 28, art. 2, Const. of Ohio; Linton v. Laycock, 33 Ohio St. 128; Doe v. Considine, 4 O. F. D., 94; 6 Wall., 458; Tindall v. Tindall, 167 Mo. 225; Letchworth's Appeal, 30 Pa. St., 175; Heilman v. Heilman, 129 Ind. 59; Harris v. Carpenter, 109 Ind. 540; 4 Kent's Commentaries (4 ed.), 203; 2 Jarman on Wills (5 ed.), 153; Mc- Arthur v. Scott, 5 O. F. D., 357; 113 U.S. 340; Ducker v. Burnham, 146 Ill. 9; Reed's Appeal, 118 Pa. St., 215; In re Young, 145 N.Y. 539; Richey v. Johnson, 30 Ohio St. 288; Loder v. Hatfield, 71 N.Y. 100; 24 Am. & Eng. Ency. Law, 394; Rand v. Butler, 48 Conn. 293; Garner v. Lawson, 3 East, 278; Bolton v. Bank, 50 Ohio St. 290; People v. McCormick, 208 Ill. 437; Sayles v. Best, 140 N.Y. 368; Byrne v. France, 131 Mo. 639; Smith v. Bell, 6 Pet., 68; 24 Am. & Eng. Ency. Law (2 ed.), 436; Carstensen's Estate, 196 Pa. 325; Seller v. Reed, 88 Va. 377; State ex rel. v. Ferris, 53 Ohio St. 314; Magoun v. Bank, 170 U.S. 283; Minot v. Winthrop, 162 Mass. 113; State v. Alston, 94 Tenn. 680; In re Wilmerding, 117 Cal. 284; State v. Dalrymple, 70 Md. 294; United States v. Perkins, 163 U.S. 628; Cooley on Taxation, 292; Rairden v. Holden, Admr., 15 Ohio St. 207; Commissioner v. Rosche Bros., 50 Ohio St. 103; Sturges v. Carter, 5 O. F. D., 428; 114 U.S. 511.

Mr. H. L. Yount, prosecuting attorney, and Mr. A. C. Robeson, attorneys for defendant in error, cited and commented upon the following authorities:

Linton v. Laycock, 33 Ohio St. 128; Knowlton v. Moore, 178 U.S. 41; State v. Guilbert, Aud., 70 Ohio St. 229; In re Bushnell Estate, 50 O. L. B., 87; State ex rel. Gelsthorpe v. Furnell, 39 L.R.A. 170 (20 Mont. 299); Ferry v. Campbell, 110 Ia. 290; Herriott v. Potter, 115 Ia. 648; Gilbertson v. Ballard, 101 N.W. 108; Carpenter, Exr. v. Commonwealth, 17 How., 456; Orr v. Gilman, 183 U.S. 278; In re McPherson, 104 N.Y. 306; Wallace v. Myers, 38 F. 184; State v. Ferris, 53 Ohio St. 314; Plumber v. Coler, 178 U.S. 115; Commonwealth's Appeal, 127 Pa. 435; In re Short, 16 Pa. 63; Jackson v. Tailor, 88 N. Y. S., 1104; In re Estate of Prife, 136 N.Y. 347; People v. McCormick, 208 Ill. 437; In re Line, 155 Pa. 378; Bailey v. Drane, 96 Tenn. 16; In re Sloane, 154 N.Y. 109; In re Davis, 149 N.Y. 539; Jenney et al. v. Gray, 5 Ohio St. 48; Quigley v. Graham, 18 Ohio St. 42; Gilpin v. Williams, 25 Ohio St. 283; Kent v. Bentley, 6 Circ. Dec., 457; 10 C. C. R., 132; Caruthers v. Tarvin, 8 Dec. Re., 344; 7 W. L. B., 127; In re Delano, 176 N.Y. 492; In re Will of Vassar, 127 N.Y. 1; 97 O. L., 398.

SUMMERS J.

The act to be construed was passed and approved April 25, 1904. It is entitled "An act to impose a tax upon the right to succeed to, or inherit, property" (97 O. L., 398). The act provides that the right to succeed to or inherit property which shall pass by will or by the inheritance laws of this state, or by deed, grant, sale or gift made or intended to take effect in possession or enjoyment after the death of the grantor, to the use of certain persons, or to any one in trust for such persons, shall be taxed as follows, to-wit: "Upon the value of the property exceeding three thousand dollars, succeeded to or inherited by any person, two per centum on such excess; such tax to be borne by the person so succeeding to or inheriting the same in the manner herein provided."

It is contended for the State that the interest passing by the will did not vest until after this act took effect, that until after the death of the widow neither the persons who would take nor the value of the interests could be ascertained, that the succession is not complete until the property is distributed, and that the succession is subject to the tax in force at the time of distribution.

The contention on the part of the executors is, that the interests vested at the death of the testator prior to the time that the act took effect, that the act is not retroactive and therefore does not apply to rights that vested prior to the time it took effect.

Man's dominion over his property ceases at his death, wherefore in all civilized countries the state provides how he may devolve it to others at his death and what shall become of it when he dies intestate.

The right so given either to devolve or to succeed to property is subject to the power of the state to tax, and generally is taxed. To use a homely simile it may be likened to the taking of toll from the grist that is sent to the mill, and aside from considerations of convenience...