Henson v. Monday

• Decision Date: 23 October 1920
• Citation: 224 S.W. 1043
• Parties: HENSON, County Court Clerk, v. MONDAY et al.
• Court: Tennessee Supreme Court

224 S.W. 1043

HENSON, County Court Clerk, v. MONDAY et al.

Supreme Court of Tennessee.

October 23, 1920.

Appeal from Circuit Court, Knox County; Von A. Huffaker, Judge.

Suit by Jessie L. Henson, County Court Clerk, against W. E. Monday and others. Demurrer of defendants sustained, and complainant appeals. Suit dismissed.

Roy A. Johnson and R. A. Brown, of Knoxville, for appellant.

Webb & Baker and Johnson & Cox, all of Knoxville, for appellees.

GREEN, J.

This suit was brought against the personal representatives of Benjamin Rush Strong and the legatees and devisees under his will to recover the collateral inheritance tax exacted by Thompson's Shannon's Code, § 724 et seq.

A demurrer was interposed, which the county judge sustained, and on appeal this action was affirmed by the circuit judge, and the complainant has appealed to this court. It appeared from the petition filed below that the will of Mr. Strong was being contested. The greater portion of his property was by the will given to the University of Tennessee and the city of Knoxville, the Knox County Industrial School, and several of the counties of East Tennessee. There were in addition smaller bequests to individuals. The point was made by the demurrer that the defendants named above were state agencies, and that the bequests to such agencies were not subject to the inheritance tax. If the will was found invalid, the estate would pass to collateral kindred, and would be liable for the said tax. It was therefore said that, until the will contest was decided, it could not be determined what inheritance tax would accrue to the estate, and who would be liable for it, and that this suit was premature.

On the contrary, it was insisted for the complainant that the bequests to the defendants named above were subject to the inheritance tax, even though these defendants were state agencies, and that the inheritance tax was accordingly due and payable at the time the suit was brought, under Shelton v. Campbell, 109 Tenn. 690, 72 S. W. 112.

The question, therefore, for determination is whether legacies or devises to the state and its arms or agencies may be diminished by the inheritance tax levied in our statutes. It has been held in some jurisdictions that such legacies and devises are thus onerated under statutes similar to ours. In re Merriam, 141 N. Y. 479, 36 N. E. 505, affirmed by the Supreme Court of the United States, United States v. Perkins, 163 U. S. 625, 16 Sup. Ct. 1073, 41 L. Ed. 287; 37 Cyc. 1572, and cases cited.

It is everywhere conceded that the inheritance tax is not a tax laid on property, but is a privilege tax. In the cases just above referred to it is held that the tax is laid on the privilege of transferring or disposing of property by the deceased. Therefore, even though a bequest be to the United States government, it was held liable to the New York inheritance tax, because that tax was assessed on the testator's privilege of disposition, and not on the government's right to receive.

We cannot, however, reach this result under the authorities in Tennessee. Our inheritance tax has been repeatedly declared by this court not to be a tax on the right of disposition, but a tax on the privilege of receiving property by inheritance or will.

"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." State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178.

Similar expressions appear in English v. Crenshaw, 120 Tenn. 531, 110 S. W. 210, 17 L. R. A....