In re Costello's Estate

• Citation: 92 S.W.2d 723,338 Mo. 673
• Decision Date: 18 March 1936
• Docket Number: 34116
• Parties: In the Matter of the Estate of James Costello v. Francis R. King and Henrietta Robison, Appellants
• Court: United States State Supreme Court of Missouri

92 S.W.2d 723

338 Mo. 673

In the Matter of the Estate of James Costello v. Francis R. King and Henrietta Robison, Appellants

No. 34116

Supreme Court of Missouri

March 18, 1936

Rehearing Overruled March 18, 1936.

Words 'any person,' within Mo.St.Ann. § 570, p. 349 mean a person or persons lawfully entitled to possession and enjoyment; word 'enjoyment' does not mean personal enjoyment, but control.

Appeal from Clay Circuit Court; Hon. Harris Moore, Judge.

Affirmed.

H G. Leedy for appellants.

(1) Under the express provisions of Section 570, Revised Statutes 1929, which governs the liability of the James Costello estate and the beneficiaries of such estate for inheritance taxes, a tax cannot be imposed on the interest of Katie F. Robison in such estate. Sec. 570, R. S. 1929; In re Kinsella's Estate, 293 Mo. 545, 239 S.W. 818. (2) Inheritance tax statutes must be strictly construed against the taxing authority and in favor of the citizen, and such rule of construction must be applied to Section 570, Revised Statutes 1929, if any doubt as to its meaning exists. Sec. 570, R. S. 1929; In re Rogers' Estate, 250 S.W. 576; In re Cupples' Estate, 199 S.W. 556, 272 Mo. 465; United States v. Field, 255 U.S. 257, 41 S.Ct. 256, 65 L.Ed. 617; Gould v. Gould, 245 U.S. 151, 38 S.Ct. 53, 62 L.Ed. 211; 61 C. J. 1626; In the Matter of Cooley, 186 N.W. 220, 78 N.E. 939, 10 L. R. A. (N. S.) 1010; Bank of Commerce & Trust Co. v. McLemore, 35 S.W.2d 31; Rodenbaugh v. United States, 25 F.2d 13. (3) The administrative provisions of the law relating to the time for the payment of the tax are not irreconcilable with the provisions of the law imposing the tax. Secs. 578, 584, R. S. 1929; State ex rel. St. L. Pub. Serv. Co. v. Pub. Serv. Comm., 34 S.W.2d 486; State v. Freeland, 318 Mo. 560, 300 S.W. 675.

Roy McKittrick, Attorney General, John W. Hoffman, Jr., and Charles M. Howell, Jr., Assistant Attorneys General, for respondent.

(1) The right to take property by devise or descent is the creature of the law and not a natural right. Magoun v. Ill. Trust & Savs. Bank, 170 U.S. 283, 42 L.Ed. 1037; Knowlton v. Moore, 178 U.S. 41, 44 L.Ed. 969; State ex rel. McClintock v. Guinotte, 275 Mo. 298; Kidder, State Inheritance Tax & Taxability of Trusts, p. 6. (2) The interest of Katie F. Robison in the Estate of James Costello, deceased, is subject to the inheritance tax as imposed by the laws of the State of Missouri. Gleason & Otis, Inheritance Taxation (4 Ed.), p. 267; In re Hazard's Estate, 177 N.Y.S. 369; In re Penfold's Estate, 216 N.Y. 163, 110 N.E. 497; In re Milliken's Estate, 55 A. 853; In re Rohan-Chabot's Estate, 60 N.E. 598; In re Rothchild's Estate, 283 P. 599; In re Kinsella's Estate, 293 Mo. 545, 239 S.W. 818; Kidder, State Inheritance Tax & Taxability of Trusts, pp. 195, 196; May v. Heiner, 281 U.S. 238; Commissioner v. Northern Trust Co., 283 U.S. 72; In re Ramsdill's Estate, 83 N.E. 584; Star Square Auto Supply Co. v. Gerk, 30 S.W.2d 447; In the Matter of White, 208 N.Y. 64, 101 N.E. 793; Commonwealth v. Paynter, 2 S.W.2d 664; Laws 1931, p. 130, sec. 570; Sec. 570, R. S. 1929.

Gantt, J. All concur, except Leedy, J., not sitting.

OPINION

GANTT

Appeal from the judgment of the circuit court sustaining an inheritance tax against distributive shares of the estate of James Costello, deceased. Appellants state the facts as follows:

"James Costello, a resident of Clay County, Missouri, died on December 27, 1933, leaving a last will and testament under which his two sisters, Miss Nellie Costello and Mrs. Katie F Robison, were made equal residuary legatees.

"In September, 1934, and before any distribution had been made to her from her brother's estate, Mrs. Robison died. She left a last will and testament, under which her two daughters, Mrs. Francis R. King and Miss Henrietta Robison, the appellants here, were named sole legatees. They were also appointed executrices of her estate.

"On December 17, 1934, Soper J. Taul, who had theretofore been appointed as appraiser to assess the State Inheritance Tax upon the interests of the beneficiaries of the James Costello estate, filed his report in the Probate Court of Clay County, Missouri, in which he found the distributive shares of the two sisters of James Costello, and the tax owing on such shares, respectively, to be as follows:

Name

Shares

Less Exemptions

Tax

Miss Nellie Costello

$ 137,620.07

$ 12,314.41

Mrs. Katie F. Robison

137,620.07

12,314.41

"On December 17, 1934, exceptions were filed to the appraiser's report by Francis R. King and Henrietta Robison, as executrices of the estate of Katie F. Robison, deceased, and also in their individual capacities, as sole heirs and legatees of her estate, in which they asserted that the interest of Katie F. Robison in the Costello estate was not subject to an inheritance tax under the laws of Missouri for the reason that at the time of her death she had not come into the possession or enjoyment of any of the property, interest therein, or income therefrom, which under the last will and testament of James Costello was devised to her. The exceptions so filed were thereafter overruled by the Probate Court, and a judgment was entered by that court approving the report of the inheritance tax appraiser."

Appellants contend that under the act an inheritance tax can be imposed only when the beneficiary actually comes into the possession and enjoyment of the property, and further contend that as Katie F. Robison died before she came into the possession and enjoyment of the property willed to her by James Costello, the tax cannot be imposed upon her share of his estate.

The section directly involved is Section 570, Revised Statutes 1929, which follows:

"A tax shall be and is hereby imposed upon the transfer of any property, real, personal or mixed, or any interest therein or income therefrom, in trust or otherwise, to persons, institutions, associations, or corporations, not hereinafter exempted, in the following cases: When the transfer is by will or by the intestate laws of this state from any person dying possessed of the property while a resident of the state. When the transfer is by will or intestate law of property within the state or within the jurisdiction of the state and decedent was a nonresident of the state at the time of his death. When the transfer is made by a resident or by a nonresident when such nonresident's property is within this state or within its jurisdiction, by deed, grant, bargain, sale or gift made in contemplation of the death of grantor, vendor or donor, or intending to take effect in possession or enjoyment at or after such death. Every transfer by deed, grant, bargain, sale or gift made within two years prior to the death of grantor, vendor or donor, of a material part of his estate or in the nature of a final disposition or distribution thereof without an adequate valuable consideration shall be construed to have been made in contemplation of death within the meaning of this section. [When the transfer is made by a resident or by a nonresident when such nonresident's property is within this state or within its jurisdiction, in trust or otherwise, and the transferor has retained for his life or any period not ending before his death, (1) the possession or enjoyment of or the income from the property, or (2) the right to designate the persons who shall possess or enjoy the property or income therefrom, except in case of a bona fide sale for an adequate and full consideration in money or money's worth.] Such tax shall be imposed when any person, association, institution or corporation actually comes into the possession and enjoyment of the property, interest therein, or income therefrom, whether the transfer thereof is made before or after the passage of this law: Provided, that property which is actually vested in such persons or corporations before this law takes effect shall not be subject to the tax." (Italics ours.)

Appellants are confronted with In re Kinsella's Estate, 293 Mo. 545, 239 S.W. 818, as ruling contrary to the above contention. After the decision in the Kinsella case, the Section 570 was amended, by the insertion of that part in brackets. [Laws 1931, p. 130.] Before said insertion the italicized part of the section immediately followed the provision with reference to property conveyed by deed, grant, sale or gift.

Appellants challenge the ruling in said case that the italicized part of the above section refers to the preceding sentence with reference to property transferred by deed, grant, sale or gift, and does not refer to the other methods of transfer mentioned in the first part of the section.

In the case of In re Rosing's Estate, 337 Mo. 544, 85 S.W.2d 496, we disapproved said ruling in the Kinsella case and ruled that the italicized part of Section 570 had reference to all the methods of transfer, including transfers by will, mentioned in the section.

In the Kinsella case it also was contended that the tax could not be imposed for the reason that the italicized part of said section conflicted with that part of Section 597, Revised Statutes 1929, which provides that "When the property is transferred in trust or otherwise, and the rights . . . of the transferees are wholly dependable upon contingencies . a tax shall be imposed upon said transfer . . . and such tax so imposed shall be due and payable forthwith by the executor . . . out of the property transferred." In said case we construed the word "forthwith" to mean immediately, and sustained the contention. We now disapprove said ruling. Generally "forthwith" means within a reasonable time under the circumstances. [3 Words & Phrases, p. 2916; 2 Words & Phrases, (2d Series), p. 622; 3 Words & Phrases (3d Series), p. 750.]...