In re Estate of Kinsella

• Citation: 239 S.W. 818,293 Mo. 545
• Parties: IN RE ESTATE OF WILLIAM J. KINSELLA; STATE TREASURER v. MERCANTILE TRUST COMPANY and NELLIE H. KINSELLA, Trustees, Appellants
• Decision Date: 08 April 1922
• Court: United States State Supreme Court of Missouri

239 S.W. 818

293 Mo. 545

IN RE ESTATE OF WILLIAM J. KINSELLA; STATE TREASURER v. MERCANTILE TRUST COMPANY and NELLIE H. KINSELLA, Trustees, Appellants

Supreme Court of Missouri, First Division

April 8, 1922

Appeal from St. Louis City Circuit Court. -- Hon. George H. Shields Judge.

Affirmed.

Robert A. Roessel for appellant.

(1) The Inheritance Tax Law of 1917 is a law levying a tax on the transfer by will or inheritance of property from one person to another person, association, institution or corporation. Preamble, Act of 1917, Laws 1917, p. 114; Sec. 1, Act of 1917, Laws 1917, p. 114. (a) As such a tax it shall be imposed when such person, institution, association or corporation actually comes into possession and enjoyment of the property. Sec. 1, Act of 1917, Laws 1917, p. 114. (b) In the event the tax should be assessed and presently collected as is sought to be done, no provision is made for a refund in the event the estate should go to a party assessable at a lower rate. Section 25 of Act of 1917, Laws 1917, p. 114 provides that in such an event refund should be made as provided in Section 12, but Section 12 provides for refund of any excess tax, provided "that all applications for the refund of said tax shall be made within two years from the date of said payment." Many years might elapse after the payment of said tax before amount of refund could be determined. (c) Sec. 5, Act 1917, Laws 1917, p. 114, provides that the remaindermen may give bond to pay the tax. In the instant case there is no one in esse capable of giving said bond. (d) Where there is a conflict between sections of the act that construction must be given which is most favorable to the taxpayer. Ullman v. People, 236 Ill. 528; In re Steward, 131 N.Y. 274; People v. Koenig, 37 Colo. 285; Knowlton v. Moore, 44 L.Ed. 984; Eidman v. Martinez, 184 U.S. 578; State v. Davis, 88 Kan. 849; 37 Cyc. 1556; Blakemore & Bancroft, Inherit. Tax, p. 32; Estate of Clark, 270 Mo. 362. (2) Inheritance tax laws, such as the Missouri law, are imposed upon the right to receive rather than on the right to transmit property, and so constitute a legacy or succession tax rather than probate duties or estate taxes. 26 R. C. L. p. 196; People v. Koenig, 37 Colo. 283; Kochsperger v. Drake, 167 Ill. 122; Billings v. People, 189 Ill. 472; People v. McCormick, 208 Ill. 437; Oakman v. Small, 282 Ill. 360; State v. Cline, 91 Kan. 416; Booth v. Comm., 130 Ky. 88; State v. Hamlin, 86 Me. 495; Hospital Assn. v. Mealy, 121 Md. 280; Gelsthorpe v. Furnell, 20 Mont. 299; Matter of Sherman, 166 N.Y.S. 19; In re Barber, 173 N.Y.S. 276; In re Burnham, 183 N.Y.S. 539; In re Roosevelt, 143 N.Y. 120; In re Hoffman, 143 N.Y. 327; In re Panfold, 216 N.Y. 171; Stole v. Ferris, 53 Ohio St. 314; State v. Alston, 94 Tenn. 674; State ex rel. v. Switzler, 143 Mo. 328; State ex rel. v. Henderson, 160 Mo. 215; Maguire v. University, 271 Mo. 363; In re Bernero, 271 Mo. 544. (3) Inheritance or transfer taxes are duties imposed by the State on the right of the citizen to succeed to property by will or inheritance; they are a tax or duty on the transfer of or the succession to property. It therefore follows that there must be a person in esse to receive. In other words, the estate must be vested, otherwise it is purely a property tax and as such offends Art. X, secs. 3, 4, and 8, and Art. II, sec. 30, Constitution of Missouri, and the Fourteenth Amendment of the Constitution of the United States. Billings v. People, 189 Ill. 472; People v. McCormick, 208 Ill. 437; Estate of Kingman, 220 Ill. 563; In re Roosevelt, 143 N.Y. 120; In re Plum, 37 Misc. (N. Y.) 466; In re Curtis, 142 N.Y. 219; In re Hoffman, 143 N.Y. 327; Matter of Howe, 86 A.D. 286, 276 N.Y. 570; Vanderbilt v. Eidman, 196 U.S. 496; State ex rel. v. Switzler, 143 Mo. 287; State ex rel. v. Henderson, 160 Mo. 190; Maguire v. University, 271 Mo. 359; In re Bernero, 271 Mo. 529; State ex rel. v. Guinotte, 204 S.W. 806; Knowlton v. Moore, 44 L.Ed. 969.

Jesse W. Barrett, Attorney-General, and Stratton Shartel, Special Assistant Attorney-General, for respondent.

(1) (a) The Inheritance Tax Law of 1917 contains certain sections applicable to the taxation of transfers of all future contingent estates. All such transfers are taxed immediately. Sec. 23, Laws 1917, p. 123; Sec. 580, R. S. 1919; Sec. 24, Laws 1917, p. 124; Sec. 581, R. S. 1919; Sec. 25, Laws 1917, p. 125; Sec. 582, R. S. 1919. (b) Missouri borrowed its Inheritance Tax Law from Illinois. Illinois had borrowed its Inheritance Tax Law from New York. Sec. 25, Illinois Laws 1909, sec. 388B; Hurd's 1919, R. S. Ill. 1984; Sec. 230, p. 5999, 5 Cummins & Gilbert's Consl. Law of N. Y. (c) When the statute of another state is adopted by the Missouri Legislature, the construction placed upon that statute by the highest courts of the other state should be very persuasive upon the courts of this State in construing such statute. Skrainka v. Allen, 76 Mo. 389; Snyder v. Railroad, 86 Mo. 618; Knight v. Rawlings, 205 Mo. 433; State ex rel. v. Miles, 210 Mo. 145; People v. Trust Co., 225 Ill. 168; People v. Lowenstein, 284 Ill. l. c. 131. (2) The Legislature has absolute power over property where death has foreclosed the owner's right thereto. Inheritance taxes are not referable to the taxing power of the State. State ex rel. v. Guinotte, 275 Mo. 314; Matter of White, 208 N.Y. 67; Matter of Swift, 137 N.Y. 84; Magown v. Trust & Sav. Bank, 170 U.S. 288; United States v. Perkins, 163 U.S. 628. (3) The said tax has been correctly and legally assessed against said transfer in remainder to the "unknown heirs," or, in other words, to the five per cent class. Sec. 23, Laws 1917, p. 123; Sec. 580, R. S. 1919; Sec. 25, Laws 1917, p. 124; Sec. 582, R. S. 1919; Matter of Parker, 226 N.Y. 262; Matter of Zborowski, 213 N.Y. 113; Matter of Vanderbilt, 172 N.Y. 73; People v. Lowenstein, 284 Ill. 131; In re Hutton's Estate, 162 N.Y.S. 972; In re Steinwender's Estate, 163 N.Y.S. 309; Matter of Ogdon, 103 Misc. (N. Y.) 534; Matter of Terry, 218 N.Y. 223; People v. Byrd, 253 Ill. 223; Matter of Wright, 165 A.D. 332, 214 N.Y. 714; Gleason & Otis, Inheritance Taxation (2 Ed.) p. 267. (4) Section 25 is constitutional and does not impose a tax upon property. People v. Starring, 274 Ill. 293; People v. Lowenstein, 284 Ill. 131; Matter of Vanderbilt, 172 N.Y. 73; Matter of Keeney, 194 N.Y. 285; In re Hutton's Esstate, 162 N.Y.S. 972; Matter of White, 208 N.Y. 67; Matter of Zborowski, 213 N.Y. 116; Matter of Brez, 172 N.Y. 610; Security Trust Co. v. Edwards, 90 N.Y. 581; Matter of Parker, 226 N.Y. 266; Maguire v. University, 271 Mo. 368.

OPINION

GRAVES, J.

This is a contest over the assessment of inheritance taxes as against devisees in the will of Wm. J. Kinsella, deceased. Kinsella died in 1918, and the provisions of our inheritance tax law of 1917 apply. The interests of the devisees under a given clause of the will were appraised, and the tax determined by the probate court, upon a report made by Edwin W. Lee, duly appointed for that purpose, by the Probate Court of the City of St. Louis, which court was administering upon the estate of deceased, Wm. J. Kinsella.

Exceptions were filed, as provided by law, and these being overruled, an appeal was taken to the circuit court, which court disposed of the case by the following memoranda or order:

"I think that under the case of McClintock v. Guinotte, 275 Mo. 298, 204 S.W. 806, the constitutional questions and the property tax questions are decided against appellant, and that the Illinois and New York decisions cited settle the other questions against appellant. The exceptions of appellant are overruled and the appeal dismissed.

"G. H. S."

"7-19-20."

From this order and judgment, the present appeal was taken to this court. There were some seven exceptions in the probate court, as well as in the circuit court, but in this court appellants abandoned all but two of that number. These pertain to the tax imposed upon devisees under a trust estate created by the will. That portion of the will, which alone is applicable to the two contentions being made upon this appeal, reads:

"Item Eleven: I give and bequeath unto the Mercantile Trust Company, a corporation of the City of St. Louis, Missouri and unto Nellie H. Kinsella, my wife, the sum of one hundred thousand dollars in cash, or its equivalent in securities, at their market value, in trust however, for the following uses and purposes, that is to say:

"(2) I direct my trustee to pay over quarterly, on the first day of January, April, July and October, of each year, the net revenue and income derived from said trust fund, unto my wife, Nellie H. Kinsella, who shall expend the said net revenue so paid her, for the comfort, support and maintenance of my daughter, Ella Marie Kinsella, as she, my said wife, shall deem proper.

"(3) The trust hereby created shall continue during the natural life of my daughter, Ella Marie Kinsella, and if she predecease my wife, then and in that event, the whole of the trust fund and all accumulations thereto, shall be paid over, delivered and conveyed, absolutely, unto my wife, Nellie H. Kinsella.

"(4) But in the event that my wife, Nellie H. Kinsella shall predecease my daughter, then this trust shall continue with the Mercantile Trust Company as sole trustee, and the net revenue and income derived from said trust fund shall be paid by the Mercantile Trust Company, as trustee, unto my said daughter, so long as she shall live.

"(5) If my wife predecease my said daughter, then upon my said daughter's death, said trust fund and all accumulations thereto, shall be paid over, delivered and conveyed, equally unto my daughter's children, if there be any, or unto their descendants, but if there be no...