In re Estate of Zook

• Citation: 296 S.W. 778,317 Mo. 986
• Decision Date: 30 July 1927
• Docket Number: 25807
• Parties: In re Estate of Charles D. Zook: Mary Zook Hibbard, Administratrix, Appellant, v. L. D. Thompson, State Auditor
• Court: United States State Supreme Court of Missouri

296 S.W. 778

317 Mo. 986

In re Estate of Charles D. Zook: Mary Zook Hibbard, Administratrix, Appellant, v. L. D. Thompson, State Auditor

No. 25807

Supreme Court of Missouri

July 30, 1927

Appeal from Holt Circuit Court; Hon. Guy B. Parks, Judge.

Affirmed.

Frank Petree for appellant.

All laws providing for inheritance tax are construed strictly. Such taxation must be imposed in clear and unambiguous terms. A doubt as to the taxability of a particular fund should be resolved in favor of the citizen. In re Cupples Estate, 272 Mo. 465; In re Rogers Estate, 250 S.W. 577; 37 Cyc. 1556. The law under which it is claimed that the transfer of the property in question is taxable reads: "A tax shall be and is hereby imposed upon the transfer of any property . . . 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 this State." Sec. 558, R. S. 1919. The decedent died intestate and consequently his property was not transferred by will. The sole question is: Is the stock in a foreign corporation, organized under the laws of Nebraska and located and doing business in Nebraska, belonging to a resident of Missouri at his death, "transferred by the intestate laws of this State?" The situs of the property is not in Missouri, although the domicile of the owner was Missouri. State ex rel. Taylor v. St. Louis Co. Ct., 47 Mo. 600; Leavell v. Blades, 237 Mo 695; State ex rel. v. Lesser, 237 Mo. 310; State ex rel. v. Bunce, 187 Mo.App. 614; Richardson v. Busch, 198 Mo. 174; Troll v. Third Nat. Bank, 278 Mo. 74-84. The situs of stock in a corporation is where the corporation is located, regardless of the residence of the owner. Richardson v. Busch, 198 Mo. 174; Troll v. Third Nat. Bank, 278 Mo. 74. The old rule expressed in the maxim mobilia sequuntur personam has in modern times yielded more and more to the lex situs, the law of the place where the property is kept and used. Our administration laws have no effect outside the State or on property situate outside the State. Partnership Estate of Henry Ames & Co., 52 Mo. 293; Emmons v. Gordon, 140 Mo. 490; Richardson v. Busch, 198 Mo. 174; Frick v. Pennsylvania, 45 S.Ct. 603; Lewis's Sutherland Statutory Const. (2 Ed.) secs. 13, 14; State ex rel. v. Lesser, 237 Mo. 310; Leavell v. Blades, 237 Mo. 702. The converse of that proposition, that the laws of other states have no effect in Missouri or on the devolution of property situate in Missouri, has been decided many times. McCarty v. Hall, 13 Mo. 480; Naylor's Admr. v. Moffett, 29 Mo. 129; Troll v. Third Nat. Bank, 278 Mo. 74; Frick v. Pennsylvania, 45 S.Ct. 603. Our courts have made no distinction between tangible and intangible property, but the doctrines that the situs of property is the place where it is actually situated and does not follow the residence of the owner, and that the laws of Missouri have no force or effect on property situate outside the State, are applied to both tangible or intangible property without any distinction. Richardson v. Busch, 198 Mo. 175; State ex rel. Taylor v. County Court, 47 Mo. 594; Leavell v. Blades, 237 Mo. 695; State ex rel. v. Lesser, 237 Mo. 310; Partnership Estate of Henry Ames & Co., 52 Mo. 290; McCarty v. Hall, 13 Mo. 483; Troll v. Third Nat. Bank, 278 Mo. 74. The transfer of stock in a corporation is governed by the law of the State creating it, and not by the law of a foreign State. Masury v. Arkansas Nat. Bank, 87 F. 381; Black v. Zacharie, 3 Howe, 483; Lowell on Stocks, 50; Hammond v. Hastings, 134 U.S. 401; Green v. Van Buskirk, 7 Wall, 140. The words, "and shall include all personal property within or without the State," contained in Sec. 589, R. S. 1919, are necessarily limited by the provisions of Section 558, and no property "within or without the State" is subject to the tax unless included in some provisions of Section 558. In re Joyslin's Estate, 56 A. 281. Under the common law the succession of personal property was determined by the law of the domicile. Wyatt, Admr. v. White, 192 Mo.App. 551-557. It is provided by the Statutes of Missouri that property situate in Missouri belonging to a non-resident decedent shall descend according to the law of the domicile of the deceased owner. Sec. 253, R. S. 1919. But that statute applies only to property within the State over which our laws have exclusive jurisdiction and control. It doesn't purport to direct the devolution of property outside the State over which our courts or laws have no control. In re Joyslin's Estate, 56 A. 28; Frick v. Pennsylvania, 45 S.Ct. 603.

North T. Gentry, Attorney-General, Stratton Shartel, Special Assistant Attorney-General, for respondent.

(1) The statute expressly provides that an inheritance tax shall be imposed upon the transfer of any intangible personal property, when said transfer is by the intestate laws of Missouri from any person dying possessed of property while a resident of this State. Sec. 558, R. S. 1919. The word "property" as used in this law, shall include all personal property within or without the State. Sec. 589, R. S. 1919. Corporate stock is intangible personal property. 14 C. J. 381, 387; Foster v. Potter, 37 Mo. 529; Words & Phrases, "Stock;" Childs' Personal Property, p. 56. (2) The transfer or inheritance tax of this State is not a property tax in any sense, but is simply a burden upon the devolution of property from the dead to the living. Our transfer tax law is not a part of the taxation laws of this State, but a part of those laws pertaining to the disposition of property when the owner's right thereto has been foreclosed by death. It is a tax upon the transfer, succession or devolution of property. McClintock v. Guinotte, 275 Mo. 313; In re Bernero Estate, 271 Mo. 544; State v. Schwitzler, 143 Mo. 316; In re Dillingham, 238 P. 370; 26 R. C. L. 196. The State has unlimited power over the devolution of property, and could therefore take all the property left by a decedent, if it saw fit. McClintock v. Guinotte, 275 Mo. 313; 26 R. C. L. 198. The transfer contemplated in our statute takes place at the moment of death, and does not pertain to the practical administration of the estate. Gleason & Otis on Inheritance Taxation (3 Ed.) 27. (3) The chief object of an ancillary or domiciliary administration is to collect and preserve local assets for the benefit of local creditors. Administration is not necessary for succession or distribution. Distribution, when made by the ancillary representative, must be in accordance with the laws of the domicile. In re Sanford, 188 Iowa 839; 23 C. J. 996 to 1002; 24 C. J. 1112, 1126, 1128; Bell v. Bank, 188 Mo.App. 387; Richardson v. Cole, 160 Mo. 379; Childs' Personal Property, 386, 387; Stephens v. Larwill, 110 Mo.App. 159; Sec. 1311, Neb. Compiled Statutes, 1922; Minkler v. Woodruff, 12 Neb. 270; 11 R. C. L. 542, 547 and 548, sec. 12; Cotterell v. Coen, 246 Ill. 413; In re Lawrence's Will, 93 Vt. 424; In re Howard's Estate, 80 Vt. 489. Personal property passes and descends by force of the laws of the State in which the decedent was domiciled. 18 Cyc. 1224; 12 C. J. 476; 5 R. C. L. 929; 14 Cyc. 189; 24 C. J. 1128; 18 C. J. 810; Childs' Personal Property, 387; Minkler v. Woodruff, 12 Neb. 270; Wyatt v. White, 192 Mo.App. 557; Locke v. McPherson, 163 Mo. 500; Spraddling v. Pipkin, 15 Mo. 84; Matter of James, 144 N.Y. 12; Frothingham v. Shaw, 175 Mass. 59; Whitney v. Dodge, 105 Cal. 192; Ennis v. Smith, 14 How. (55 U.S.) 400; Sec. 253, R. S. 1919. (4) For the purposes of the Missouri inheritance tax law, intangible personal property, wherever situated, has a legal situs at the domicile or residence of the decedent, and the State has the power to impose the tax upon the succession or transfer thereof, where the decedent was a resident of the State, although the property was never actually in the State. Bullen v. Wisconsin, 240 U.S. 625; Blackstone v. Miller, 188 U.S. 189; Frick v. Pennsylvania, 268 U.S. 473; R. I. Hospital Trust Co. v. Doughton, 46 S.Ct. 256; In re Swift, 137 N.Y. 77; In re Merriam, 141 N.Y. 479; In re Morgan, 159 N.Y.S. 105; Dammert v. Osborn, 141 N.Y. 564; Frothingham v. Shaw, 175 Mass. 59; People v. Kellogg, 268 Ill. 489; People v. Griffith, 245 Ill. 532; Oakman v. Small, 282 Ill. 360; People v. Union Trust Co., 255 Ill. 168; In re Hodges, 170 Cal. 492; 26 R. C. L. 210; Blakemore & Bancroft on Inheritance Taxation, secs. 207 and 209; Gleason & Otis on Inheritance Taxation (3 Ed.) 22, 23 and 24; Gallups Appeal, 76 Conn. 617; Bridgeport Trust Company's Appeal, 77 Conn. 657; In re Sanford, 188 Iowa 833; State v. Probate Court, 124 Minn. 508; Dalrymple's Est., 215 Pa. 367; In re Sherwood's Estate, 122 Wash. 648.

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

OPINION

ATWOOD

This case originated in a judgment of the Probate Court of Holt County, Missouri, assessing an inheritance tax against the estate of Charles D. Zook, deceased. On appeal to the circuit court the cause was submitted upon the following agreed statement of facts:

"The decedent, Charles D. Zook, died intestate on the 22nd day of November, 1922, a resident of Holt County, Missouri. At the time of his death he owned a large estate situate in Holt County, and also owned stock in the Byrne-Hammer Dry Goods Company, a corporation, organized under the laws of Nebraska and located and doing business in the city of Omaha, of the par value of $ 179,000. The certificates of stock were not in the State of Missouri at the time of his death, but were in a safety deposit box rented and kept by him in the city of Omaha.

"In due time after the death of deceased, Mina Wright, of Oregon, Missouri, was appointed by the Probate Court of Holt County, to appraise the said estate for the...