In re Estate of Anderson

• Decision Date: 29 June 1914
• Docket Number: 29248
• Citation: 147 N.W. 1098,166 Iowa 617
• Parties: IN THE MATTER OF THE ESTATE OF ANNA MARGRETHE ANDERSON, Deceased. WHELMINA ELIZABETH PETERSON, ET AL, Legatees and Appellants. THE UNITED STATES, Intervener and Appellant. C. L. HANSON, Administrator and Appellee. THE STATE OF IOWA, EX REL, the State Treasurer, Claimant and Appellee
• Court: Iowa Supreme Court

147 N.W. 1098

166 Iowa 617

IN THE MATTER OF THE ESTATE OF ANNA MARGRETHE ANDERSON, Deceased. WHELMINA ELIZABETH PETERSON, ET AL, Legatees and Appellants. THE UNITED STATES, Intervener and Appellant. C. L. HANSON, Administrator and Appellee. THE STATE OF IOWA, EX REL, the State Treasurer, Claimant and Appellee

No. 29248

Supreme Court of Iowa, Des Moines

June 29, 1914

Appeal from Mitchell District Court.--HON. J. F. CLYDE, Judge.

ANNA Margrethe Anderson died testate September 16, 1909. Her will was probated, and H. S. Houg appointed executor. The latter dying, C. L. Hanson was appointed administrator with the will annexed. On November 22, 1911, he filed his final report disclosing that after paying debts, costs of administration and specific legacies, there remained of the proceeds of the personal property in his hands $ 1,652.97 and of the realty which the will directed to be converted into cash, $ 900. A collateral inheritance tax with interest amounting to $ 513.96 was paid to the treasurer of the state leaving $ 2,074.24 to be distributed under the residuary clause of the will per stripes to the children of a deceased brother and two sisters, all residents of the Kingdom of Denmark. The legatees objected to the final report on the ground that no greater inheritance tax might be exacted than were they citizens of the state of Iowa; and the United States, by way of petition of intervention, raised the same objection averring that the legatees were citizens and subjects of the Kingdom of Denmark. The state of Iowa and its treasurer demurred to this petition, and the demurrer was sustained. The objections of the legatees also were overruled and the final report approved. The United States and the legatees appeal.

Affirmed.

Bastrup & O'Neill, for appellants Peterson and others.

A. Van Wagenen, for the United States. A. E. Brown, for the State.

A. A. Kugler, for appellee Hanson.

LADD, C. J. DEEMER, WEAVER, GAYNOR, and WITHROW, JJ., concur.

OPINION

LADD, C. J.

The decedent at the time of her death was a resident and citizen of Iowa. Being childless, she left the bulk of her estate to the children of a deceased brother and two sisters, all of whom were then residents of Denmark and subjects of that kingdom. In his final report the administrator with the will annexed credited himself with $ 513.96 paid the treasurer of the state as inheritance tax, being 20 per cent. of the portion of the estate to be distributed to the above legatees, in pursuance of section 1467 of the Code Supp. 1907 as amended. This statute reads:

All property within the jurisdiction of this state, and any interest therein, whether belonging to the inhabitants of this state or not, and whether tangible or intangible, which shall pass by will or by the statutes of inheritance of this or any other state, or by deed, grant, sale or gift made or intended to take effect in possession or in enjoyment after the death of the grantor or donor, to any person in trust or otherwise, other than to or for the use of the father, mother, husband, wife, lineal descendant, adopted child, the lineal descendant of an adopted child of a decedent, stepchild, or the lineal descendant of a stepchild of a decedent, or to or for charitable, educational or religious societies or institutions, including hospitals, public libraries and public art galleries kept open to the free use of the public not less than three days of each week, within this state, shall be subject to a tax of five per centum of its value, above the sum of one thousand dollars, after the payment of all debts, for the use of the state; and all administrators, executors and trustees and any such grantee under a conveyance, and any such donee under a gift made during the grantor's or donor's life, shall be respectively liable for all such taxes to be paid by them, respectively, except as herein otherwise provided, with lawful interest as hereinafter set forth, until the same shall have been paid. The tax aforesaid shall be and remain a lien on such estate from the death of decedent until paid. Whenever property, or any interest therein, shall pass to the heirs, devisees, or other beneficiaries, as contemplated in the foregoing provisions, who are aliens, non-residents of the United States, the same shall be subject to a tax of twenty per centum of its true value, except where such foreign beneficiaries are brothers or sisters of the decedent owner, when the rate of tax to be assessed and collected therefrom shall be ten per centum of the value of the property or interest so passing.

The objection of the legatees as well as the government of the United States is that, though payment by the administrator was in accordance with the above statute, the exaction of more than 5 per cent. was in violation of the treaty rights of the legatees. The treaty in question was concluded April 26, 1826 (8 Stat. 340) and renewed in 1857 (11 Stat. 719). Its main concern was with commerce and navigation. In the first article, the high contracting parties stipulated not to grant any particular "favor to other nations in respect of commerce and navigation, which shall not immediately become common to the other party, who shall enjoy the same freely, if the concession were freely made, or on allowing the same compensation, if the concession were conditional." Article 2 permits the citizens of each to visit the coasts and reside and trade in the other. Articles 3 and 4 relate to the carriage in the vessels of the respective parties and the imposition of duties. Article 5 has been abrogated and 6 excludes the application of the treaty from certain colonies. Article 7 reads:

The United States and his Danish majesty mutually agree, that no higher or other duties, charges, or taxes of any kind, shall be levied in the territories or dominions of either party, upon any personal property, money, or effects, of their respective citizens or subjects, on the removal of the same from their territories or dominions reciprocally, either upon the inheritance of such property, money, or effects or otherwise, than are or shall be payable in each state, upon the same, when removed by a citizen or subject of such states respectively.

The articles following relate to the designation of consuls and vice consuls the privileges and rights they are to enjoy, their exemptions, the term of the treaty, and its ratification. It is plain from this recital that the favored nation clause, being limited to commerce and navigation, cannot be permitted to expand the terms of the seventh article, and that the context is of no aid in the interpretation of that article. Of course, the statute must yield to the terms of this article if in conflict therewith. Opel v. Shoup, 100 Iowa 407, 69 N.W. 560; Doehrel v. Hillmer, 102 Iowa 169, 71 N.W. 204.

Treaties are to be "liberally construed, so as to carry out the apparent intention of the parties to secure equality and reciprocity between them. As they are contracts between independent nations, in their construction words are to be taken in their ordinary meaning, as understood in the public law of nations, and not in any artificial or special sense impressed upon them by local law, unless such restricted sense is clearly intended. And it has been held by this court that where a treaty admits of two constructions, one restrictive of rights that may be claimed under it and the other favorable to them, the latter is to be preferred." Geofroy v. Riggs, 133...