In re McMahon's Estate

• Decision Date: 05 February 1946
• Docket Number: 46770.
• Citation: In re McMahon's Estate, 21 N.W.2d 581, 237 Iowa 236 (Iowa 1946)
• Parties: In re McMAHON'S ESTATE.
• Court: Iowa Supreme Court

21 N.W.2d 581

237 Iowa 236

In re McMAHON'S ESTATE.

No. 46770.

Supreme Court of Iowa

February 5, 1946

Jordan & Jordan, of Cedar Rapids, for appellants.

Robert Brooke, of West Liberty, for executor, appellee.

WENNERSTRUM, Justice.

Certain devisees of the estate of John Q. McMahon, deceased, to whom had been specifically devised real estate in South Dakota made an application in the estate proceeding wherein the court was asked to enter an order directing the executor to pay the taxes due on the devised property at the time of decedent's death.It is claimed that these taxes should be paid out of the personalty of the estate by reason of the fact that in the first paragraph of the decedent's will the executor was directed to pay the debts of the estate.The executor filed a resistance and an amendment thereto wherein he denied any liability for the payment of the taxes on the South Dakota property.On submission of the application to the trial court upon an agreed statement of facts it held that there was no liability on the part of the executor to pay the taxes due on the real estate in South Dakota from the personal estate of the decedent because the collection of taxes in that state is a proceeding in rem and is not a claim against the decedent or his estate.

The will of John Q. McMahon, now deceased, is in part as follows:

'First: I desire and direct that all of my debts, if any there be, and my funeral expenses and expenses of my last sickness be paid by the executor hereinafter named as soon as that can be legally and conveniently done.

'Second I give and bequeath to my sister, Mary E. McMahon, if she survives me, all of my property for and during her lifetime she to have the income therefrom during her lifetime * * *

'Third: I give, devise and bequeath to Clarence Bemis, my deceased wife's nephew and to Thelma Bemis, his wife, and Harry Bemis, Lot Eight and Nine (8 & 9) in Block Nine (9) Belvidere, South Dakota, in equal shares and also lots Nine Ten, Eleven and Twelve (9, 10, 11 & 12) in Block Eleven (11) in Belvidere, South Dakota, share and share alike, after the decease of Mary E. McMahon.'

The trial court has summarized the question that is presented to us on this appeal in his written conclusions of law wherein he states: 'It appears to me that the sole question is: 'Are taxes levied by a foreign state against real estate in that state owned by a nonresident, such a claim as may be enforced against his personal estate?'

I.It is stated in 51 Am.Jur. 831, section 945'Taxation', that '* * * A tax upon property, at least upon real property, is ordinarily considered to be a charge upon the property, and not a personal obligation of the person whose property is assessed for the tax, in absence of a statutory declaration to that effect. * * *'

In 51 Am.Jur. 41, section 8, it is also stated:

'* * *, it is generally considered that taxes are not 'debts,' in the ordinary meaning of that word.A tax duly assessed or levied is not a debt within the meaning of the contract clause of the Federal Constitution; nor are taxes debts within the constitutional provision against imprisonment for debt.A tax is not a debt within the meaning of provisions allowing deductions in the determination of the amount of tax.

'A tax does not establish the relation of debtor and creditor between the taxpayer and the state or municipality; it does not bear interest when past due, unless the statute so provides; it is not liable to setoff; and it is not enforceable by a personal action against the taxpayer, absent statutory authority.A tax differs materially and essentially from a debt.The one is founded on contract; the other is not. * * *'

In 61 Corpus Juris 219, section 200, it is stated: 'Nonresident incurs no personal liability for taxes on his property.'

In 61 Corpus Juris 221, 222, section 205, it is also stated: 'The state has full power to levy taxes on land within its border, although it belongs to a nonresident.It should be observed, however, that in this case the land only should be assessed and the land only is liable for the payment of the tax, there being no personal liability on the nonresident owner. * * *'

The authorities in Iowa are to the effect that a tax is not a debt.Plymouth County v. Moore, 114 Iowa 700, 701, 87 N.W. 662;Grunewald v. City of Cedar Rapids, 118 Iowa 222, 226, 91 N.W. 1059;Bailies v. City of Des Moines, 127 Iowa 124, 126, 127, 102 N.W. 813;Lucas v. Purdy, 142 Iowa 359, 367, 120 N.W. 1063, 24 L.R.A.,N.S. 1294, 19 Ann.Cas. 974;In re Estate of Dalton, 183 Iowa 1013, 1015, 168 N.W. 332.This is also the holding in Helvering v. Johnson County Realty Co., 8 Cir., 128 F.2d 716, 717, a case involving Iowa property.

The South Dakota Supreme Court also has held that taxes are not a debt.That court in the case of Brule County v. King, 11 S.D. 294, 77 N.W. 107, 108, said: '* * * This court held in Iowa Land Co. v. Douglas County, 8 S.D. 491, 67 N.W. 52, that taxes are not debts, within the ordinary meaning of that term; and that decision has been affirmed in the recent case of Danforth v. McCook Co., 11 S.D. 258, 76 N.W. 940, 74 Am.St.Rep. 808.Taxes not being debts, no action can be sustained to recover them, in the absence of statutory authority therefor, express or implied. * * *'

It was also stated in Hanson County v. Gray, 12 S.D. 124, 80 N.W. 175, 76 Am.St.Rep. 591, as follows: '* * * There may be decisions which announce a different doctrine, but the overwhelming weight of authority sustains the view that a tax is not a 'debt,' in the ordinary sense of that word; that, when the statute prescribes no special manner for its collection, it may be collected by an action at law, but, when an adequate method is provided by statute, an action for its collection cannot be maintained. * * *'

A further South Dakota authority which discloses that that state has a statutory provision for the collection of taxes is found in the case of Iowa Land Co. v. Douglas County, supra, where it is stated [8 S.D. 491, 67 N.W. 56]: '* * * A tax is not a 'debt,' in the ordinary sense in which that term is used, but is a charge or burden imposed upon property for the benefit of the...