In re Remme's Estate

• Decision Date: 01 June 1917
• Docket Number: No. 19084.,19084.
• Parties: In re REMME'S ESTATE. MAGUIRE et al. v. UNIVERSITY OF MISSOURI.
• Court: Missouri Supreme Court

196 S.W. 737

271 Mo. 359

In re REMME'S ESTATE MAGUIRE et al. v. UNIVERSITY OF MISSOURI.

No. 19084.

Supreme Court of Missouri, Division No. 1.

June 1, 1917.

Motion for Rehearing Denied July 2, 1917.

Appeal from St. Louis Circuit Court; Kent K. Koerner, Judge.

Proceedings in the matter of the estate of Charles T. Remme, deceased, wherein James H. Maguire and others appeal adversely to the University of Missouri from a judgment of the circuit court affirming the judgment of the probate court overruling a motion to set aside an assessment of inheritance taxes. Affirmed.

Marion C. Early, of St. Louis, for appellants. Orville M. Barnett, of Columbia, and Ernest A. Green, of St. Louis, for respondent.

BOND, J.

I. The controversy in this case is over the construction to be given to certain clauses in the will of Charles T. Remme, who died on August 25, 1911. Said clauses are as follows:

"Fifth. After the payment of my debts and after the payment of the above mentioned incumbrances, if any, and of the foregoing legacies, I hereby give, devise and bequeath to James H. Maguire, of the city of St. Louis, state of Missouri, to him in trust, all the rest, residue and remainder of my estate, of every nature and kind, and wherever situated, to him said James H. Maguire, in trust, for the following uses and purposes herein declared and set forth and none other, that is to say:

"In trust that he, the said James H. Maguire, in trust shall hold, manage, use and control, rent, lease, sell and convey, invest and reinvest my entire estate so held in trust as to the said trustee shall seem best, wise and prudent, and with the full authority and power vested in said trustee, to do any and all things that to him may seem best to further the objects of the trust estate herein created.

"Said trustee shall hold, use, manage and control my residuary estate given and devised to him in trust, by this will, for the benefit, use and enjoyment of my beloved wife, Maud M. Remme, for and during her natural life, and shall pay and turn over to her, the said Maud M. Remme, for her maintenance, support, benefit, use and enjoyment, the entire interest, rents, dividends and income of every nature of and from my said residuary estate given and devised in trust as aforesaid. Said payments shall begin immediately upon my death and shall be made at regular periods, from time to time, in installments, and, if possible, on the first day of each month, for and during the natural life of her, the said Maud M. Remme.

"Should said trustee sell any of the real estate held by him in trust under the provisions of this will, then I direct that he shall immediately thereupon reinvest or put out in some profitable manner and from [form] the entire proceeds of and from any such sale or sales.

"Sixth. Upon the death of the said Maud M. Remme the trust thereby created shall cease and all property of every kind, character and description then on hand belonging to said trust, and all evidences thereof, and including, also, all money held from the interest, rents and income and not theretofore paid over to the said Maud M. Remme, shall be paid and turned over to Frank Cummings, Edward Cummings and Stella Cummings, of the city of St. Louis and state of Missouri, children of my sister, Kate Cummings, or to their heirs at law per stirpes, share and share alike, absolutely and forever."

The will was duly probated, and during the administration of the estate the collector of the revenue of the city of St. Louis applied to the probate court for the appointment of an appraiser to examine and fix the amount of collateral inheritance tax which should be assessed against the estate. The appointment and appraisal were duly made, and the court, after examination of the report submitted and filed, found the cash value of the shares of the three remaindermen to be $22,911.45, and the tax, if paid at once, to be $1,145.56, or in the event bond was given, found the cash value to be $50,025, and the tax to be $2,501.25. A motion was then filed to set aside this assessment, and upon the motion being overruled the legatees appealed to the circuit court, which affirmed the judgment of the probate court and sustained the validity of the assessment of the tax, and the case comes here on appeal from this judgment by the legatees, their contention being that section 314, on which this proceeding is based, does not apply to future estates created by will; that no assessments can be made as to future estates created by will; that no assessments can be made as to future estates until they come into possession; that there can be no lien until assessment of the tax against ascertained parties; that whatever lien there may ultimately be for this tax attaches to the trust funds in the hands of the trustee in the shape it has at the life tenant's death; that the trustee can convey a title free of lien.

II. The wisdom and policy of inheritance taxation have been illustrated for more than 2,000 years. It first took root in the Roman law in the form of a 5 per cent. tax on certain collaterals at the suggestion of Augustus Cæsar (1 Gibbons' Decline and Fall Roman Empire [Milman's Ed.] pp. 191, 192), and has spread over Europe and the United States of America (Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969; Snyder v. Bettman, 190 U. S. 249, 23 Sup. Ct. 803, 47 L. Ed. 1035; State v. Henderson, 160 Mo. 190, 60 S. W. 1093; Knox v. Emerson, 123 Tenn. loc. cit. 417, 131 S. W. 972; State ex rel. v. Bazille, 97 Minn. loc. cit. 14, 106 N. W. 93, 6 L. R. A. [N. S.] 732, 7 Ann. Cas. 1056; State v. Pabst 139 Wis. 561, 121 N. W. 351; Vanderbilt v. Eidman, 196 U. S. 480, 25 Sup. Ct. 331, 49 L. Ed. 563; United States v. Fidelity Trust Co., 222 U. S. 158, 32 Sup. Ct. 59, 56 L. Ed. 137; People v. Byrd, 253 Ill. 223, 97 N. E. 293; State v. Probate Court, 112 Minn. 279, 128 N. W. 18; Wingirt v. State, 129 Md. 28, 98 Atl. 224; Stengel v. Edwards [N. J.] 98 Atl. 424; Estate of Vanderbilt, 172 N. Y. 69, 64 N. E. 782; Bell v. Bank, 188 Mo. App. loc. cit. 389, 174 S. W. 196; Ross, Inheritance Taxation, p. 17, § 9). The constitutional principle upon which this excise or duty rests is that it is not a tax upon property, but only on the transmission of property either by operation of law or wills or gifts, to take effect upon death. Ross, Inheritance Taxation, p. 25, § 19.

Under the terms of the sixth clause of the will of Charles Remme, the residue of his estate in the hands of the trustee after the expiration of the express life estate created in his wife was devised in fee to Frank Cummings, Edward Cummings, and Stella Cummings, nephews and niece of the testator, or their heirs at law per stirpes. This language created vested remainders in the three persons named and a contingent remainder in the heirs of such of them as might die before the expiration of the life estate. Estate of Kingman, 220 Ill. 563, 77 N. E. 135, 5 Ann. Cas. 234. These remainders attached to whatever form and quality the estate had assumed during the trusteeship and the exercise thereunder of the power of the trustee to sell and reinvest. They did not attach to specific property which went into the hands of the trustee at the death of the testator; for other clauses of the will gave the trustee full power to change the form of the trust estate by selling the real estate and reinvesting it in other property. These terms of the will dispose of the argument of the learned counsel for appellant that the application of section 314 of the Revised Statutes, providing that the property, subject to the tax thereon laid, should be affected with a lien from the time of the death of the testator, would disable the trustee from exercising the power to sell given him in the instrument of trust. No such consequence can logically follow from the language of the statute; for the statute did not intend to fix a lien except upon the definite property existing when the future limitation over should vest in the remaindermen. Full effect is given to the statute if its terms are held applicable in all cases where the property subject to remainder exists in an immutable form. So in this case, if the trustee had not been given power to sell the land, the lien would have attached upon the death of the testator, but, since that power was given to the trustee, the purpose of the statute and its fair legal intendment are that the lien shall not attach until the property in trust has assumed its final form at the closure of the trust.

Neither is there any merit in...