In re Speed's Estate

• Decision Date: 23 June 1905
• Parties: In re SPEED'S ESTATE.
• Court: Illinois Supreme Court

216 Ill. 23

74 N.E. 809

In re SPEED'S ESTATE.

Supreme Court of Illinois.

June 23, 1905.

Appeal from Cook County Court; O. N. Carter, Judge.

Proceedings for the assessment of transfer taxes against the estate of Fannie Speed, deceased. From a judgment assessing a tax against the Board of Education of the Kentucky Annual Conference of the Methodist Episcopal Church, it appeals. Affirmed.

Charles H. Aldrich and Henry S. McAuley (Lawrence Maxwell, Jr., of counsel), for appellant.

William H. Stead, Atty. Gen. (Merritt W. Pinckney and E. M. Ashcraft, of counsel), for appellee.

BOGGS, J.

Fannie Speed, deceased, late a citizen and resident of the state of Kentucky, by her last will and testament devised certain real estate in the city of Chicago to the Board of Education of the Kentucky Annual Conference of the Methodist Episcopal Church, a corporation organized under and existing by virtue of the laws of the state of Kentucky, with power to form an educational fund, to be styled the ‘Centenary Educational Fund,’ for the promotion of literature, education, art, morality, and religion within the bounds of said conference, to be held and used exclusively for educational and religious purposes in the state of Kentucky, and it was stipulated that said corporation is not permitted to make dividends or distribution of profits or assets among its members or stockholders, and that said corporation does not have or maintain an office in the state of Illinois or engage in educational or religious work therein, The county court of Cook county ruled that under the provisions of ‘An act to tax gifts, legacies and inheritances in certain cases, and to provide for the collection of the same,’ approved June 15, 1895, and the act amendatory thereof approved May 10, 1901. said board of education was liable to pay the sum of $6,280.50 as a succession or inheritance tax on the right to take the property under said devise. This appeal questions the correctness of that ruling.

The amendatory act of 1901 was adopted for the purpose of relieving certain bequests, devises, or gifts from the operation of the original act of 1895. The amendatory act reads as follows: ‘When the beneficial interests of any property or income therefrom shall pass to or for the use of any hospital, religious, educational, bible, missionary, tract, scientific, benevolent or charitable purpose, or to any trustee, bishop or minister of any church or religious denomination, held and used exclusively for the religious, educational or charitable uses and purposes of such church or religious denomination, institution or corporation, by grant, gift, bequest, or otherwise, the same shall not be subject to any such duty or tax, but this provision shall not apply to any corporation which has the right to make dividends or distribute profits or assets among its members.’ Hurd's Rev. St. 1901, p. 1512, c. 120, § 366.

There is nothing in this amendatory act to indicate that it was the legislative intent that it provisions should apply to corporations created under the laws the laws of a sister state. It is a universally accepted rule of construction that an act of the General Assembly of a state granting powers, privileges, or immunities to corporations must be held to apply only to corporations created under the authority of that state over which such state has the power of visitation and control, unless the intent that the act shall apply to other than domestic corporations is plainly expressed in the terms of the act. Dos Passos on Inheritance Tax Law (2d Ed.) § 36; People v. Western Seaman's Friend Society, 87 Ill. 246;Balleis' Estate (N. Y.) 38 N. E. 1007;Humphreys v. State (Ohio) 70 N. E. 957,65 L. R. A. 776.

The appellant board contends that the amendatory act of 1901, if construed as having operation only to exempt corporations organized under the laws of the state of Illinois, is inconsistent with the principles of taxation established by sections 1 and 2 of article 9 of the Constitution of the state of Illinois. Section 1 of article 9 of the Constitution of 1870 has reference only to general taxation, and, it is conceded, in no manner restricts the power of the General Assembly to lay a tax upon the right to succeed to the title to property within the state by inheritance from a deceased owner of such property, or by devises and bequests to be found in a will of such deceased owner. It is, however, contended that said section 1 establishes the principle that all taxation shall be uniform as to the class upon which it operates; that section 2 of article 9 limits the power of the General Assembly, when enacting statutes providing for the taxation of other objects or subjects than such as are referred to in section 1, to the extent of requiring that the principles of taxation established by said section 1 shall be observed, viz., that any tax so imposed shall be uniform as to the class upon which it operates. The argument further is: ‘Uniformity of taxation, as extending to persons or property in the same class, implies,’ necessarily, uniformity of exemption as to these same persons or peorperty. Lack of uniformity in the latter respect would be destructive of the former.' And it is urged in the same behalf that, under the construction given to the amendatory section of the inheritance law, property devoted to educational, religious, or charitable purposes is to be subjected to the inheritance or succession tax if the corporation selected to administer the trust is one organized under as to these same persons or property. Lack and that property devoted to the same purposes shall be relieved of the tax if committed to the administration of a corporation created under the laws of the state of Illinois.

Inheritance or succession taxes are not laid on the property inherited or taken by devise or bequest, but on the right to inherit or to take such property. The right to take property in pursuance of the statute of descent or of the statute pertaining to wills is property, but only for the reason that the lawmaking body of the state has seen fit to create the right to so take by inheritance or by devise or bequest. No person or corporation can inherit property, or can take by devise or bequest, except when authorized so to do by an act of the Legislature. Such right may at any time be abrogated prospectively at the will...