Foster v. Farrand

• Decision Date: 26 January 1925
• Docket Number: No. 2014.,2014.
• Citation: 128 A. 683
• Parties: FOSTER v. FARRAND, State Treasurer.
• Court: New Hampshire Supreme Court

128 A. 683

FOSTER

v. FARRAND, State Treasurer.

No. 2014.

Supreme Court of New Hampshire. Merrimack.

Jan. 26, 1925.

Transferred from Superior Court, Merrimack County; Sawyer, Judge.

Proceeding by William A. Foster, Executor, against George E. Farrand, State Treasurer, questioning assessment of inheritance tax. On appeal from probate court affirming assessment, to superior court, questions were transferred without ruling. Appeal sustained.

Appeal from the assessment of an inheritance tax under Laws 1923, c. 62. Facts agreed: Henry A. Emerson died in 1924, testate. His will was executed in 1914, and codicils thereto in 1916 and 1920. The will gives various legacies to a nephew and nieces, and others to those more remotely related to the testator and to persons not related to him.

The state treasurer deducted the whole federal estate tax from the residue of the estate, and then assessed a tax at the rates prescribed by the act referred to. Upon appeal to the probate court the assessment was affirmed, and upon appeal therefrom to the superior court, Sawyer, J., transferred the following questions without ruling:

(1) Whether Laws 1923, c. 62, is unconstitutional.

(2) If it is, did it repeal Laws 1915, c. 106.

(3) Should the federal estate tax have been prorated among the several legatees.

Foster & Lake and W. A. Foster, all of Concord, for plaintiff.

Joseph S. Matthews, Asst. Atty. Gen., for defendant.

PEASLEE, C. J. The Legislature of 1923 enacted, in substance, that all property passing by will or inheritance to a spouse, ancestor, or descendent should be subject to a tax of 2 per cent., that passing to near collateral relatives to a tax of 6 per cent., and when passing to others to a tax of 10 per cent. Laws 1923, c. 62. Acting under this statute, the state treasurer assessed taxes at each of the higher rates. The executor's appeal to the probate court, and from thence to the superior court, presents the question of the constitutionality of the statute under which the tax was laid.

In Williams v. State, 82 N. H.——, 125 A. 661, the question of the constitutional limitations upon the power of the Legislature to impose inheritance taxes received exhaustive consideration. It was then held that those, limitations preclude any variation in the rate of the tax, that such was the import of the original decision passing upon the constitutional amendment of 1903 (Thompson v. Kidder, 74 N. H. 89, 65 A. 392, 12 Ann. Cas. 948), and that the advice given in response to a request from the House of Representatives in 1911 (Opinion of the Justices, 76 N. H. 599, 79 A. 490), to the effect that the rate might be varied as to those standing in different relations to; the decedent, was unsound.

The statute involved here differs from that under consideration in Williams v. State, supra, in that the tax rate under the former statute was determined in part by the amount of property passing, while here it depends entirely upon relationship of the taker of the property to the decedent. It is urged that this difference between the two statutes is of such a character that the act of 1923 may be sustained without in any way impairing the authority of the decision that the act of 1919 (Laws 1919, c. 37) was invalid. It is true that the precise question here involved—classification by relationship —was not the only ground for the adjudication in the former case. But it is equally true that the decision is put upon both grounds. "The question raised is as to the validity of classification by the value of the property passing and according to relationship to the decedent" 82 N. H.——, 125 A. 663. The reasoning upon which that decision rests forbids classification of any kind, save that making property taxable or nontaxable. Because that decision was founded upon this proposition, it was deemed...