In re Henry's Estate, 26331.

• Decision Date: 25 March 1937
• Docket Number: 26331.
• Citation: 66 P.2d 350,189 Wash. 510
• Court: Washington Supreme Court
• Parties: In re HENRY'S ESTATE. v. PEMBERTON et al. DIOCESE OF OLYMPIA, Inc.,

66 P.2d 350

189 Wash. 510

In re HENRY'S ESTATE.

DIOCESE OF OLYMPIA, Inc., v. PEMBERTON et al.

No. 26331.

Supreme Court of Washington, En Banc.

March 25, 1937

Appeal from Superior Court, King County; Roger J. Meakim, Judge.

Proceedings on the estate of Sophia E. Henry, deceased, in which the Diocese of Olympia, Inc., filed petition against William H Pemberton, supervisor of inheritance tax and escheat division, and others to restrain payment and collection of inheritance tax. From a judgment dismissing the petition on demurrer, the petitioner appeals.

Affirmed.

Hyland, Elvidge & Alvord and Almon Ray Smith, all of Seattle (Monroe Watt, of Seattle, of counsel), for appellant.

William H. Pemberton and Charles Snyder, both of Olympia, for respondents.

MAIN Justice.

The Diocese of Olympia, Inc., filed a petition in the estate of Sophia E. Henry during the period of probation, in which it was sought to restrain the executors of Mrs. Henry's estate from paying, and the supervisor of inheritance tax and escheat division of the state from collecting, an inheritance tax.

Mrs Henry died testate in Seattle, this state, May 9, 1935, being at the time of her death a resident of this state. By the terms of her will, the National Bank of Commerce and H. Allen Kurtzman were named executors, and, upon the admission of the will to probate, they qualified as such.

Prior to her death, Mrs. Henry entered into a certain trust agreement, dated November 18, 1932, and supplemented this by a later agreement, dated December 12, 1934. The will provided that any and all inheritance taxes and estate taxes, which might be levied against or charged to any legatee or devisee, should be paid out of the estate by the executors, and that the bequests and devises should not be reduced by reason of the taxes. After making a number of specific bequests, the testatrix devised the rest, residue, and remainder of the estate to the National Bank of Commerce, of Seattle, as trustee under the above-mentioned trust agreements. The effect of the provision requiring the executors to pay the taxes would be to reduce the amount to the residuary legatees. To the petition, a demurrer was interposed and sustained. The petitioner refused to plead further, and elected to stand upon the petition. A judgment was entered dismissing the petition, from which the appeal is taken. Anything that happened with reference to the matter after the demurrer had been sustained and the petition dismissed is of no consequence, as there was not at that time anything Before the court.

Two questions are presented, which will be considered in the inverse order from that in which they appear in the appellant's brief. The first question for determination is whether Rem.Rev.Stat. § 11202, being a portion of the revenue act of 1935, is unconstitutional, for the reason that it violates the Fourteenth Amendment to the Federal Constitution, and especially that portion thereof which says that no state shall make or enforce any law which shall deny to any person within this jurisdiction the equal protection of the laws.

Rem.Rev.Stat. § 11202, as amended by section 106, c. 180, Laws 1935 (page 770), provides:

'Sec. 2. An inheritance tax shall be imposed on all estates subject to this act and other inheritance tax acts of the State of Washington, at the following rates:

'Class A. Any devise, bequest, legacy, gift or beneficial interest to any property or income therefrom which shall pass to or for the use or benefit of any grandfather, grandmother, father, mother, husband, wife, child or stepchild, or any lineal descendant of the deceased is hereby denominated as class A. On any amount passing to class A in excess of $10,000 up to and including $25,000, 1%; on any amount in excess of $25,000 up to and including $50,000, 2%; on any amount in excess of $50,000 up to and including $100,000, 4%; on any amount in excess of $100,000 up to and including $200,000, 7%; on any amount in excess of $200,000 up to and including $500,000, 9%; on any amount in excess of $500,000, 10%;

'Class B. Any devise, bequest, legacy, gift, or beneficial interest to any property or income therefrom which shall pass to or for the use or benefit of any sister or brother is denominated class B. On any amount passing to class B in excess of $1,000 up to and including $5,000, 3%; on any amount in excess of $5,000 up to and including $10,000, 4%; on any amount in excess of $10,000 up to and including $30,000, 7%; on any amount in excess of $30,000 up to and including $50,000, 10%; on any amount in excess of $50,000 up to and including $100,000, 15%; on any amount in excess of $100,000, 20%;

'Class C. Any inheritance, devise, bequest, legacy, gift or beneficial interest to any property or income therefrom which shall pass to or for the use or benefit of any person or body politic or corporate other than mentioned in class A and class B herein, is hereby denominated class C.

'On any amount passing to class C up to and including $10,000, 10%; on any amount in excess of $10,000 up to and including $25,000, 15%; on any amount in excess of $25,000 up to and including $50,000, 20%; on any amount above $50,000, 25%.

'The taxes imposed and the exemption with respect to each class of beneficiaries shall be apportioned between the beneficiaries in such class in proportion to the amount receivable by such beneficiary.'

It will be observed that the first sentence of the section provides that an inheritance tax shall be imposed on 'all estates' subject to this act and other inheritance tax laws of the state of Washington. After making provision for three classes, the section concluded with the declaration that the taxes imposed and the exemption with respect to each class of beneficiaries shall be apportioned between the beneficiaries in each class in proportion to the amount receivable by each beneficiary.

Class A provides that any devise, bequest, legacy, gift, or beneficial interest to any property or income therefrom which shall pass to or for the use or benefit of any grandfather, grandmother, father, mother, husband, wife, child, or stepchild, or any lineal descendent shall be denominated class A. In this class, there is exempt from the tax $10,000, and then as the sums advance, the rate goes up. The same is true of class B, except that, there, the exemptions are less and the rates are higher. When we reach class C, there are no exemptions, and the rate is further advanced. The petitioner, and appellant in this case, falls under class C.

The contention appears to be that there is a discrimination because, if a father dies, leaving $10,000 and one son, there would be no tax, but, if another father dies, leaving an estate of $25,000 and three sons, each of whom get one-third of the estate, in such a case there would be a tax levied upon the $5,000 portion which each son received, above the exemption.

Prior to ...