Farnsworth v. Iowa State Tax Commission

• Decision Date: 12 January 1965
• Docket Number: No. 51548,51548
• Parties: Thelma FARNSWORTH, Appellee, v. IOWA STATE TAX COMMISSION, Appellant.
• Court: Iowa Supreme Court

Page 477

132 N.W.2d 477

257 Iowa 280

Thelma FARNSWORTH, Appellee, v. IOWA STATE TAX COMMISSION, Appellant.

No. 51548.

Supreme Court of Iowa.

Jan. 12, 1965.

Evan L. Hultman, Atty. Gen. of Iowa, George W. Murray, Sp. Asst. Atty. Gen., and Jerry L. Jones, Asst. Atty. Gen., for appellant.

O'Donohoe & O'Connor, New Hamption, for appellee.

THOMPSON, Justice.

Is it the law that 'once a daughter-in-law, always a daughter-in-law?' May an individual have as many mothers-in-law as the exigencies of death or divorce permit him marriages? These are the substantial questions to be answered in the case at bar.

The plaintiff was formerly married to John Wilbur Keeling, a son of Elizabeth G. Probert. He died on April 21, 1952, leaving the plaintiff as his widow. There was no issue of this marriage. On March 23, 1953, the plaintiff remarried. Elizabeth G. Probert died testate on January 8, 1962. Her estate included assets of $19,879.85 held in joint tenancy with the plaintiff. The defendant Iowa State Tax Commission, hereafter referred to as the commission, undertook to tax this property by virtue of section 450.3(5) of the inheritance tax statutes. It is not contended it was not taxable, but controversy arises over whether the tax should be assessed at the rate of five per cent fixed by section 450.10(2), or at ten per cent as provided in section 450.10(3). Five per cent is the amount fixed when the property passes to certain named classes of persons, including 'daughter-in-law.' All other classes not included in section 450.10(2), supra are taxed at ten per cent of the appraised value, under section 450.10(3). The point which must be determined is whether the plaintiff, under the facts stated above, was a daughter-in-law at the time of the death of the decedent, within the meaning of the inheritance statutes. The trial court held that she was, and entered its judgment that the defendant remit one-half of the ten per cent inheritance tax it had collected, with interest. So we have this appeal.

I. If the meaning of a taxing statute is uncertain, it must be construed strictly against the taxing authorities. Associated General Contractors of Iowa v. State Tax Commission, 255 Iowa 673, 123 N.W.2d 922, 924, and cases cited. On the other hand, when the question arises as to whether property is entitled to exemptions, the construction is strictly against the taxpayer. Doubts are construed against the exemption. Clarion Ready Mixed Concrete Company v. Iowa State Tax Commission, 252 Iowa 500, 508, 107 N.W.2d 553, 558. These principles are well settled. In the instant case, we are dealing with a claim of right to tax rather than an exemption. Our pertinent statutes deal with the imposition of a tax. Dennis v. Commissioner of Corporations and Taxation, 340 Mass. 629, 165 N.E.2d 893, 895, 81 A.L.R.2d 1226.

II. Keeping in mind the rule of construction set forth in the foregoing division we turn to the determining question in the case. Was the plaintiff still a daughter-in-law of Elizabeth G. Probert at the time of the latter's death; or had her status as such been ended, either by the death of her husband who was the son of the testatrix, or by her remarriage? In fact the defendant rests its case upon the remarriage. So we must determine whether the relation of mother-in-law and daughter-in-law, once assumed, is permanent, or is terminated by some change in circumstances thereafter occurring.

The question of relations by affinity and their duration has been much before the courts. Some courts have made the distinction that if there is surviving issue of the marriage, the relation by affinity endures; but if there is none, it ends with the death of the party upon whom it depends, or upon a divorce. So various relations by affinity have been considered; questions of stepfather or stepmother, of stepchildren, of the meaning of the terms 'widow', 'husband of a daughter', 'wife of a son', 'relatives', and other words used in statutes have been considered and decided in many cases. Likewise, the particular settings in which the questions have arisen are various: incest cases, jury selecting cases, insurance cases involving mutual or fraternal companies where the beneficiaries are limited by statute to those holding certain relationships to the insured, and cases dealing with tax matters such as the one before us have been before the courts of many jurisdictions and have been variously decided. We refer those who wish a thorough analysis and discussion of these authorities to In re Bordeaux' Estate, 37 Wash.2d 561, 225 P.2d 433, 26 A.L.R.2d 249. In that case two stepchildren were involved and the question was as to the classification for inheritance tax purposes which they must pay upon the death of the stepmother from whom the stepchildren received property. The stepchildren were ten and five years of age when their father married the stepmother. This marriage continued for 34 years, when the father died. The stepmother died some years later, leaving property by her will to her stepsons. The only issue of the marriage of the father and stepmother was one child who died in infancy, and of course long before the deaths of the parents.

The Washington Supreme Court exhaustively analyzed the origin of the doctrine of relation by affinity, and the several theories of its termination. It concluded that the death of the father did not terminate the relationship between the stepsons and the stepmother. Significantly, it said: 'Thus the cases continued to make the broad general statement that affinity was terminated by the death of one of the parties to the marriage which had created it. In practice, however, the principle was only invoked in the jury and incest cases which had given rise to it. So applied, the doctrine did little harm, and, in fact, in most cases, undoubtedly...