Goergen v. State Tax Commission

• Decision Date: 11 March 1969
• Docket Number: No. 53344,53344
• Citation: 165 N.W.2d 782
• Parties: Paul GOERGEN, Executor of the Estate of Paul Diederich, Deceased, Appellant, v. STATE TAX COMMISSION, State of Iowa, and Department of Revenue, W. H. Forst, Director of Revenue, as Successor to the State Tax Commission, Appellee.
• Court: Iowa Supreme Court

Page 782

165 N.W.2d 782

Paul GOERGEN, Executor of the Estate of Paul Diederich, Deceased, Appellant, v. STATE TAX COMMISSION, State of Iowa, and Department of Revenue, W. H. Forst, Director of Revenue, as Successor to the State Tax Commission, Appellee.

No. 53344.

Supreme Court of Iowa.

March 11, 1969.

Burton E. Parriott, Remsen, for appellant.

Richard C. Turner, Atty. Gen., George W. Murray, Sp. Asst. Atty. Gen., and Harry M. Griger, Asst. Atty. Gen., for appellee.

LARSON, Justice.

The sole issue presented by this appeal is whether a bequest to a charitable institution as set out in section 450.4(2) for a purpose set forth in section 450.4(4) of the 1966 Code is subject to Iowa inheritance taxes on amounts in excess of five hundred dollars.

The plaintiff appellant is the executor of the estate of Paul Diederich, deceased, and the defendant appellee is the State Tax Commission, now the Department of Revenue. The benedictine Sisters of Clyde, Missouri, intervenor, is a qualified religious institution. This action for declaratory relief, brought by the executor, asked the court to determine whether bequests under a will made to the Benedictine Sisters of Clyde, Missouri, and to St. Martins College of Olympia, Washington, are subject to the inheritance taxes pursuant to section 450.4(4) of the Code. The trial court held they were and denied appellant's motion for a new trial. He appeals. We affirm.

This matter was submitted on agreed facts as set out in a stipulation filed therein. It appears a real controversy existed involving more than $9,000. The pertinent portion of decedent's will provides:

'Paragraph 12. I will and devise and bequeath all the rest, residue and remainder of my estate, both real and personal, in three equal shares, as follows, to-wit:

'One share to Benedictine Sisters of Clyde, Missouri, for the purpose of masses to be read for the peaceful repose of my soul, one-half of such for high masses and one-half for low masses.

'One share to St. Martins College of Olympia, Washington, for the purpose of masses to be read for the peaceful repose of the souls of my deceased parents, my brothers and sisters and nieces and nephews, both living and dead, one-half for high masses and one-half for low masses.

'One share to the Society for the Propagation of the Faith, 336 5th Ave., New York 12, New York.'

Appellant contends these bequests made to religious institutions fall exclusively within the provisions of section 450.4(2), and appellee contends the first two bequests fall within the provisions of section 450.4(4) limiting the exemption when a bequest is made for the performance of a religious service or services.

The language of section 450.4 is plain and unambiguous. It provides in part:

'The tax imposed by this chapter (inheritance tax) shall not be collected: * * *

'2. When the property passes in any manner to societies, institutions or associations incorporated or organized under the laws of this state for charitable, educational, or religious purposes, and which are not operated for pecuniary profit, * * *; provided, however, that this exemption shall also include property passing to any society, institution or association incorporated or organized under the laws of any other state for charitable, educational or religious purposes, and which are not operated for pecuniary profit * * *.

'4. Bequests for the care and maintenance of the cemetery or burial lot of the decedent or his family, and bequests not to exceed five hundred dollars in any estate of a decedent for the performance of a religious service or services by some person regularly ordained, authorized, or licensed by some religious society to perform such service, which service or services are to be performed for or in behalf of the testator or some person named in his last will. * * *'

The problem involves statutory intepretation. We first observe that subsection 2 appears to be a general provision and subsection 4 appears to be a specific provision granting the privilege of limited exemption from inheritance taxation in case of bequests 'for the performance of a religious service' on behalf of the persons designated in the bequest. The exemption is predicated upon purpose. It makes no difference whether the bequest is made to persons, societies, institutions or associations, whether the recipients of the funds are within or without the state, or whether the recipients are or are not authorized themselves to perform the religious service designated as the purpose.

I. This matter of first impression in Iowa raises a question of whether subsections 2 and 4 of section 450.4 are in conflict or should be read together. Did the legislature intend to limit the tax exemption allowed in subsection 2 when the bequest is made for a specific purpose covered in subsection 4?

Appellant contends there is no conflict between these subsections and argues subection 2 covers all property passing in any manner to societies, institutions or associations incorporated or organized under the laws of the state for any charitable, educational or religious purpose when not operated for profit, and that subsection 4 refers only to the performance of a religious service or services by some person regularly ordained, authorized or licensed to perform such service. He concedes the rule that, if a general statute is amended by a specific statute, or if a general statute, standing alone, would include the same matter as a special statute and thus conflict with it, the specific statute will prevail. He maintains the various provisions of an act or statute should be read so that all provisions may have their due and conjoint effect without repugnancy or inconsistency so as to render the statute a consistent and harmonious whole. It is his position here that, although two constructions of section 450.4 are possible, one of which creates a conflict and the other a harmonious provision, the latter should be adopted.

Appellant also relies upon the proposition that all statutes should be construed, if possible, by giving the provisions a fair and reasonable interpretation. He argues all laws are presumed to be consistent with each other in the absence of a showing to the contrary, that a construction which creates an inconsistency should be avoided when a reasonable interpretation can be adopted which will not do violence to the plain words of the act and will carry out the intent of the legislature.

Appellee does not find fault with these propositions, nor do we. Appellee does disagree with appellant's application of them here. It maintains that subsections 2 and 4 are not in conflict and that, when considered together, they are clear and consistent. It further contents, if they are considered inconsistent, the specific provisions in subsection 4 must control, that to construe these subsections as appellant asks would not conform with the clear legislative intent but would render the provision in subsection 4 meaningless, superfluous, and nonworkable.

The trial court in its ruling on the motion for a new trial and to enlarge findings concluded: 'The bequests to the Benedictine Sisters of Clyde, Missouri, whose proper corporate name is Benedictine Convent of Perpetual Adoration, and to St. Martin's College of Olympia, Washington would be entirely exempt from imposition of inheritance taxes under Section 450.4(2) of the Code of Iowa, 1966, if such bequests did not contain the direction, 'for the purpose of masses to be read for the peaceful repose of my soul * * *' and 'for the purpose of masses to be read for the peaceful repose of my deceased parents, my brothers and sisters and nieces and nephews, both living and dead * * *. " It held the restricted purpose in the will placed the bequest within the exemption provisions of section 450.4(4). We agree.

II. It is a settled rule of statutory construction that in determining the meaning of a statute all provisions thereof and the Act of which it is a part must be considered. Horner v. State Board of Eng. Examiners, 253 Iowa 1, 8, 110 N.W.2d 371, 374; Consolidated Freightways Corp. of Delaware v. Nicholas, 258 Iowa 115, 121, 137 N.W.2d 900, 905; City of Nevada v. Slemmons, 244 Iowa 1068, 1071, 59 N.W.2d 793, 794, 43 A.L.R.2d 693, 696.

In the interpretation of a statute the legislature will be presumed to have inserted every part thereof for a purpose, and to have intended that every part of the statute should be carried into effect. 50 Am.Jur., Statutes, § 358; 82 C.J.S. Statutes § 316(b); Hartz v. Truckenmiller, 228 Iowa 819, 824, 293 N.W. 568, 571. Also see Rohlf v. Kasemeier, 140 Iowa 182, 186, 118 N.W. 276, 277, 23 L.R.A.,N.S., 1284.

A cardinal principle of statutory construction is that the legislative Intent is to be gleaned from the whole statute or statutes relating to the matter, and not from any particular part, with due consideration for the object to be attained. City of Nevada v. Slemmons, supra; State of Iowa for use of Estherville v. Hanson, 210 Iowa 773, 231 N.W. 428; Davelaar v. Marion County, 224 Iowa 669, 277 N.W. 744.

It is often stated that in the construction of statutes courts start with the assumption that the legislature intended to enact an effective law and, if reasonably possible to do so without doing violence to the spirit and language of the Act, interpret the statute or the provisions thereof to give it efficient operation, and not to explain away or render meaningless or inoperative any provision thereof. 50 Am.Jur., Statutes, § 357. We said in Board of Directors of Menlo Consolidated School Dist. v. Blakesley, 240 Iowa 910, 918, 36 N.W.2d 751, 755; '* * * we should endeavor to construe our statutes so no part will be rendered superfluous * * *' and did construe two statutes so as to give effect to every provision thereof.

To say that all bequests to religious institutions are totally exempt from the Iowa inheritance tax, notwithstanding that such bequests are...