Hill v. Treasurer & Receiver General

• Decision Date: 01 June 1917
• Citation: 116 N.E. 509,227 Mass. 331
• Parties: HILL et al. v. TREASURER AND RECEIVER GENERAL.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

227 Mass. 331

116 N.E. 509

HILL et al.

v.TREASURER AND RECEIVER GENERAL.

Supreme Judicial Court of Massachusetts, Norfolk.

June 1, 1917.

Appeal from Supreme Judicial Court, Norfolk County.

Petition in probate court for abatement of a legacy tax by Donald M. Hill and others, executors, against the Treasurer and Receiver General. The probate court held that the tax was payable, and upon appeal to the Supreme Judicial Court the decree was reversed by a single justice, whereupon Treasurer and Receiver General appealed. Decree of single justice reversed, and decree of judge of probate affirmed.

Henry C. Attwill, Atty. Gen., and Wm. Harold Hitchcock, Asst. Atty. Gen., for appellant.

Blodgett, Jones, Burnham & Bingham, of Boston (Donald M. Hill and C. L. Favinger, both of Boston, of counsel), for appellees.

LORING, J.

Before their marriage Mr. and Mrs. Hill entered into a contract by which he agreed that in consideration of the contemplated marriage she should ‘have out of his property and estate at the time of his death if she shall then be his widow, the sum of two hundred and fifty thousand ($250,000) dollars for her own property outright with interest from the date of his death, as a debt against his estate,’ and she agreed to accept the same in discharge of all her rights in or to his property real and personal. By a will made afterwards Mr. Hill first affirmed that agreement and then made this provision:

‘It is my wish that said sum of two hundred and fifty thousand dollars ($250,000) shall be paid unto her within six months of the date of my decease, and when such payment is made, instead of taking cash my said wife may, if she so elects, choose and take from and out of my estate, bonds, stocks or other evidences of value to said amount of two hundred and fifty thousand dollars ($250,000), and said executors are ordered and directed to transfer and deliver the same unto her.’

After Mr. Hill's death ‘the executors made up a list of certain securities, the property of the estate, which they desired to turn over to Mrs. Hill in payment of the amount due her under the agreement; [that] Mrs. Hill looked over this list and also over a list of other securities held by the executors and agreed to accept the securities suggested by the executors in payment of the amount due her.’ Later these securities were transferred to her and she gave a receipt ‘acknowledging full payment of the amount thus due her.’ The tax commissioner imposed an inheritance tax upon the property thus transferred to Mrs. Hill. This petition was brought for the abatement of that tax. The probate court made a decree dismissing the petition. From that an appeal was taken to this court. That decree was reversed by a single justice of this court and from that decree the appeal was taken which is now before us.

The petitioners have based an argument on the particular provisionsof R. L. c. 153, § 26. Their contention is that the validity of the antenuptial agreement between Mr. and Mrs. Hill depends upon that statute. But the validity of an antenuptial agreement depends upon the rules of the common law (Miller v. Goodwin, 8 Gray, 542, 543;Sullings v. Richmond, 5 Allen, 187, 190, 81 Am. Dec. 742), and not upon that statute (Jenkins v. Holt, 109 Mass. 261). For that reason this argument need not be considered.

No question arises in this case under the clause in St. 1909, pt. 4, c. 490, § 1 (as amended by St. 1912, c. 678, § 1), as to property passing ‘by deed, grant or gift.’ The antenuptial contract between Mr. and Mrs. Hill was made April 6, 1906, and by the provisions of the original act (St. 1907, c. 563, § 1, now St. 1909, c. 490, pt. 4, § 1) it is provided that that clause does not apply where the deed, grant or gift was made prior to the date when the original act went into effect. That date was September 1, 1907.

It is plain that the assets of a testator or intestate used in paying his debts are not subject to an inheritance tax. See McCurdy v. McCurdy, 197 Mass. 248, 252, 83 N. E. 881,16 L. R. A. (N. S.) 329,14 Ann. Cas. 859.

We are of opinion that by force of the antenuptial agreement Mrs. Hill became a creditor of the estate. That agreement was in terms that she should receive from his estate the sum of $250,000 ‘as a debt against his estate.’ If Mrs. Hill had asked for and received from the executors of her husband's will $250,000 in cash, no inheritance tax could have been imposed upon the sum so paid. For a decision to that effect see Matter of Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 App. Div. 530,82 N. Y. Supp. 390, on opinion below.

But under...