Kelsey v. Taft

• Decision Date: 17 November 1953
• Docket Number: No. 2607,2607
• Citation: 72 Wyo. 210,263 P.2d 135
• Parties: KELSEY, v. TAFT, Inheritance Tax Com'r.
• Court: Wyoming Supreme Court

Page 135

263 P.2d 135

72 Wyo. 210

KELSEY, v. TAFT, Inheritance Tax Com'r.

No. 2607.

Supreme Court of Wyoming.

Nov. 17, 1953.

Howard B. Black, Atty. Gen., Paul T. Liamos, Jr., Deputy Atty. Gen., James L. Hettinger, Asst. Atty. Gen., for appellant.

R. B. Bowman, L. A. Bowman, of Bowman & Bowman, Lovell, for respondent.

Before BLUME, C. J., and RINER, J., and PARKER, D. J.

PARKER, District Judge.

This cause arises by reason of a difference of opinion between the Inheritance Tax Commissioner and a taxpayer regarding the right of the State of Wyoming, under the authority of Sections 6-2102 and 6-2103, Wyoming Compiled Statutes 1945, to collect inheritance taxes on property which was transferred by deceased to another person, without adequate consideration and in contemplation of death, within a period of six months prior to his death.

Jay Kelsey, as Executor of the estate of Jess Sullivan, Deceased, appealed from a decision of the Inheritance Tax Commissioner, which held such property to be subject to the Wyoming inheritance tax. The facts in the case upon which the District Court rendered Judgment were stipulated by counsel as follows:

'1. That Jess Sullivan, whose estate is now pending in the District Court of Big Horn County, Wyoming, died on October 17, 1950.

'2. That said deceased, prior to his death, conveyed two pieces of property which are mentioned in paragraph 4 of Plaintiff's petition, without adequate consideration and in contemplation of death, one deed to D. Jay Kelsey and D. Jay Kelsey, Jr., dated September 24, 1950, recorded in Book 98 at Page 256, Big Horn County, Wyoming--40 acres, on December 18, 1950, and one deed to Pearl Kelsey dated September 24, 1950, recorded in Book 98, Page 254, Big Horn County, Wyoming--634.41 acres, on December 18, 1950.

'3. That the appraised value of said real estate for inheritance tax purposes is the sum of $5,950.00.

'4. That plaintiff has appealed from a decision of the Inheritance Tax Commissioner which included the sum of $5,950.00 as the taxable value of the above mentioned real estate.

'5. It is further stipulated and agreed, that either party may produce such testimony and evidence before the Court as may be desired to supplement the above stipulated facts.'

No evidence being presented, the lower court, following the filing of the stipulation of facts and submission of argument by counsel, entered Judgment in favor of the Commissioner, with a finding that the property was subject to a tax in the amount of $600.10, less any discount provided by law. The Executor of the estate thereafter filed a motion asking for a new trial, which motion, upon hearing, was duly granted. At the new trial, the District Court reversed its former ruling and decided against the Inheritance Tax Commissioner, finding specifically that:

'* * * there is no provision in the Statutes of the State of Wyoming, levying Inheritance Tax upon real property conveyed by deed during the life of the Grantor without adequate consideration and in contemplation of death; * * *.'

From such ruling the state has here appealed and the question presented to this Court concerns the propriety of an inheritance tax upon real estate conveyed by a deceased person in contemplation of death and without consideration.

The primary requisite which must be met by any complaining litigant, if he is to prevail, is a clear showing to the Court of the basic authority justifying his position and warranting the questioned activities. In the instant case, since taxation is the issue, we must first inquire regarding the power of a state or an agency thereof to tax. It is elementary that taxation is a legislative function and that taxes may be impressed, levied, assessed and collected only under the statutory authority and in the manner provided by law. The power of the taxing officials exists only by virtue of the statutes empowering them to act and can be exercised only within the express authority conferred. See 51 Am.Jur., 'Taxation', § 44, p. 74. Even were this not the general law, the provisions of the Wyoming Constitution, Article 15, Section 13, establishes a rule which is probably controlling and, in any event, provides an essential background for our analysis:

'No tax shall be levied, except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same, to which only it shall be applied.'

No question was raised by counsel regarding the meaning of the word 'levied' as used in the constitutional provision as compared to the words 'shall be subject * * * to a tax' and 'imposed', the terminology employed in the inheritance tax statutes, Chapter 6, Article 21, Wyoming Compiled Statutes, 1945. We presume, however, that the verbs used by the legislature in Chapter 6, Article 21, W.C.S., 1945, authorizing or making the tax effective are substantially synonymous with the word 'levied' appearing in the Constitution.

The statutes in issue in this cause, Sections 6-2102 and 6-2103, W.C.S.1945, must be interpreted in the light of the general law and all constitutional provisions, both of which, as above noted, prohibit taxes not specifically provided by statute. Section 6-2102 is rather prolix and involved, but, as this court has previously pointed out in In re Young's Estate, 33 Wyo. 317, 321, 239 P. 286, 287, the salient portions thereof are easily isolated:

"All property within the jurisdiction of the State of Wyoming * * * which shall pass by will, or by laws regulating intestate succession * * * shall be subject as to the estate passing to each of the following beneficiaries, to a tax at the percentage rates fixed by the following table."

(The word 'following' preceding 'beneficiaries' was left out of the present law, but the meaning is the same.)

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