Memphis Trust Co. v. Speed

• Decision Date: 05 July 1905
• Citation: 88 S.W. 321,114 Tenn. 677
• Parties: MEMPHIS TRUST CO. v. SPEED, County Court Clerk.
• Court: Tennessee Supreme Court

88 S.W. 321

114 Tenn. 677

MEMPHIS TRUST CO. v. SPEED, County Court Clerk.

Supreme Court of Tennessee.

July 5, 1905

Appeal from Circuit Court, Shelby County; J. P. Young, Judge.

Proceedings for the assessment of a collateral inheritance tax against the estate of Bem Price, deceased. From an order assessing the tax in favor of R. A. Speed, clerk, the Memphis Trust Company, executor, appeals. Affirmed.

McALISTER J.

The question presented for determination upon this record is whether $20,000 of stock in the Bank of Commerce is subject to a collateral inheritance tax. It appears that Bem Price died domiciled in the state of Mississippi, and left an estate in Tennessee appraised at the value of $34,000. The deceased left a last will and testament, of which the Memphis Trust Company was duly appointed executor by the chancery court of Mississippi, and ancillary letters testamentary have been granted to it by the probate court of Shelby county Tenn. It is averred that such ancillary letters testamentary were only granted to said trust company for the purpose of enabling it to collect and secure possession of certain assets, and also to enable it to pay off and discharge certain debts which were due and owing in the state of Tennessee. The will provides as follows: "I give and bequeath and devise to my beloved wife, Mary D. Price, my home place consisting of 105 acres, more or less with all improvements thereon situated in the town of Oxford Mississippi, and on the west side of North Street in said town. I also give to my wife all of the household furniture in said house, my carriage and horses and such of my milk cows as she may desire for her private use. I also give and devise to my wife, Mary D. Price, the tract of land containing forty acres more or less and situated on the north side of the town cemetery in Oxford, Mississippi. I further give, bequeath and devise to my wife, Mary D. Price, one half of all the residue of my estate whether real or personal or mixed and wherever located and I request and desire her to entrust to the Memphis Trust Company that portion of my estate given to her, except," etc.

The trust company, in its answer, states that in the division of the estate of the late Bem Price his stock in the National Bank of Commerce embraced in the appraisement was selected by and set apart to Mrs. Mary D. Price, widow of testator, as a part and portion of one-half of his estate to which she was entitled under the terms of his will. Defendant further avers that Mary D. Price had the right to select and insist upon the shares of stock in the National Bank of Commerce as a part and portion of her one-half interest in the estate of her deceased husband, and that this respondent, as executor had no right to object to her selection of said stock provided only it was taken at a fair valuation, which was actually done.

Respondent therefore avers that, inasmuch as the shares of stock in the National Bank of Commerce were never held in any way by the collateral relatives of testator, it is not responsible or liable for any collateral inheritance tax thereon. Respondent further stated that said stock in the National Bank of Commerce was set apart for said Mary D. Price in kind, and so transferred to her.

Respondent further avers that at the time of the death of Bem Price, he was indebted to the National Bank of Commerce, which is a Tennessee corporation, in the sum of $7,539, and also owed to said National Bank of Commerce an additional sum of $5,000, thus making a total indebtedness of said Bem Price in the state of Tennessee of the sum of $12,539.

Respondent further avers that it is its duty to set off and charge against the value of stock in the Memphis Trust Company the indebtedness of said Bem Price due to Tennessee creditors, inasmuch as this stock constitutes a fund peculiarly and especially liable therefor. Respondent therefore avers that after the allotment to Mrs. Mary D. Price, widow of testator, of the stock in the National Bank of Commerce, which she selected in kind, as she had a right to do, and after charging against the stock in the Memphis Trust Company the amount of the indebtedness due to the estate of Bem Price, no personal assets or assets of any kind remain in the state of Tennessee subject to a collateral inheritance tax or other tax of any kind. It appears from the record that Gilmer P. Smith was appointed by R. A. Speed, county court clerk, to appraise the estate of Bem Price, deceased, situated in Shelby county, Tenn., which was or might be liable to taxation under the collateral inheritance tax law. The appraiser found that at the time of testator's death he was the owner of 100 shares of stock, par value, of the Memphis Trust Company, and also owned 100 shares of stock in the National Bank of Commerce, also at par value. The value of all this stock was assessed by the appraiser at $34,000. The appraiser was asked the following question: "Question 4. In answer to question 2 you say that the Tennessee property of this estate amounted to $34,000, and in answer to question 3 you say you only appraised for taxation $17,000, or rather you only found $17,000 subject to taxation. Explain why you only found this amount subject to taxation, and not the whole $34,000. Ans. The $34,000 referred to in question 2 was the total valuation of the Tennessee property belonging to this estate, and by the terms of the will of Bem Price one-half of this property went to his wife, namely $17,000. Under the collateral inheritance tax law any property left to or inherited by the wife of the deceased from the deceased's estate is not subject to collateral inheritance tax. Now, by the will of Bem Price, one-half his property went to his wife, and he did not designate any particular parts of the property to go to her, and as he gave no election of the kind she was to have, I assume she, of course, took one-half of this $34,000 worth in Tennessee property; consequently only the half left to collaterals was subject to taxation, and I therefore only appraised half for taxation, and so reported."

The circuit judge, who heard the cause without the intervention of a jury, found that Bem Price, resident of the state of Mississippi, died, leaving an estate in Tennessee, which, from report of appraiser, appeared to be of value of $34,000, "and it appearing that under the will of said Bem Price one-half of his entire estate (exclusive of specific bequests and legacies to his wife) was devised and bequeathed to his wife, Mary D. Price, and the other one-half to said collateral relatives and strangers in blood mentioned in said will, it is therefore adjudged by the court that said estate pay a collateral inheritance tax of 5 per cent. on one-half of the valuation of said estate, or $17,000, amounting to the sum of $850, together with fee of $127.50 to W. B. Eldridge, attorney for R. A. Speed, together with the costs of this cause." The court declined to allow exemption of $12,739 on the debts due by the estate of Bem Price in the state of Tennessee, though the court recites the fact that such debts existed and were Tennessee debts. The court further found that the setting apart to Mary D. Price, wife of testator, of the stock in the Bank of Commerce, did not exempt said stock, or any part thereof, from liability for the collateral inheritance tax. The Memphis Trust Company, as executor, appealed from this decree, and has assigned the following errors: (1) The court erred in estimating the stock in the National Bank of Commerce which had been set apart to Mrs. Mary D. Price, widow of testator, as a basis upon which collateral inheritance tax, or any part thereof, could be assessed. (2) The court erred in refusing to consider the indebtedness of $12,539, due by Bem Price to Tennessee creditors, in estimating the collateral inheritance tax due on his estate or any part thereof.

In support of the first assignment of error counsel for the Memphis Trust Company propounds the proposition that there can be no claim for collateral inheritance tax upon the stock in the Bank of Commerce, because that has been selected by and has become the property of, the widow, and under the provision of the collateral inheritance tax law of 18...