Montague v. South Carolina Tax Commission
| Decision Date | 02 June 1958 |
| Docket Number | No. 17432,17432 |
| Parties | L. D. MONTAGUE, Administrator of the Estate of Marie D. Montague, Deceased, Appellant, v. SOUTH CAROLINA TAX COMMISSION, Respondent. |
| Court | South Carolina Supreme Court |
Boyd, Bruton & Lumpkin, Columbia, for appellant.
James M. Windham, Asst. Atty. Gen., for respondent.
B. L. Montague, late a resident of Sumter County, South Carolina, died testate on August 18, 1955, leaving of force and effect his last Will and Testament, which was validly executed and duly admitted to probate in the Probate Court for Sumter County, South Carolina.
The testator, by Item I of his said Will, provided for the payment of his just debts. By Item II of said Will, specific devises and bequests are made to the testator's wife, Mrs. Marie D. Montague. This Item gave to the surviving wife the residence of the testator, together with all of the furniture, furnishings and household goods therein contained, and an automobile. She was likewise given another house and lot located adjacent to the residence property. All of this property was devised to the wife in fee simple.
By Item III of said Will, 'All the rest, residue and remainder of my property of whatever kind and description and wheresoever situated, I give, devise and bequeath the same unto my Trustees hereinafter named, IN TRUST, to, for and upon the following uses, trusts and limitations,' that is, (a) To take charge of, manage and conserve testator's property, (b) To invest and reinvest any funds of the estate, (c) To sell any of testator's property upon the conditions stated in said Will, (d) To collect income and profits from said estate and property, and to use such income to pay the costs and expenses incident to the management and control of said property, pay any taxes levied or assessed against the same, and to pay for any necessary improvements or repairs incident to the conservation and preservation of any real estate owned by the testator. It is then provided that the Trustees are to use the remaining income for the comfort, support and maintenance of Marie D. Montague, the wife of the testator. It is provided that in the event the net income is insufficient to properly and suitably support and maintain the said Marie D. Montague, or in the event of any illness or other emergency which may arise, then the Trustees are empowered to make the necessary expenditures for any such purpose from and out of the corpus or principal of the estate.
By Item IV of said Will, it was provided that the income given under Item III for the use and benefit of the wife of the testator, inclusive of any payments of corpus or principal which may be needed as above provided, shall continue for and during the term of her natural life, 'together with the further power to my said wife, Marie D. Montague, and with full authority on her part to dispose of the said property by her Last Will and Testament.'
Item V of the said Will of B. L. Montague provides that in the event his wife, Marie D. Montague, failed to exercise the power of appointment conferred upon her under Item IV of said Will, or should there remain at the time of her death any property of said estate which may be otherwise undisposed of, then, and in either event, the testator devised and bequeathed such to his three children in equal shares and proportions. This Item then provided as follows:
The net amount of the testator's residuary estate was approximately $658,000.00, consisting of miscellaneous securites, cash, real estate and other property, and of this net residuary estate $321,000.00 was in capital stock of B. L. Montague Company, Inc.
Marie D. Montague died intestate October 19, 1956, leaving a net estate of approximately $84,000.00. She was survived by the three children mentioned in Item V of the Will of B. L. Montague. Since Marie D. Montague died intestate, it follows that she did not exercise the power of appointment and the authority to dispose of the property of her husband as is provided in Item IV of his said Will.
The South Carolina Tax Commission, the respondent herein, assessed an inheritance tax against her net estate plus the entire residuary estate of her husband, B. L. Montague, on the ground that Marie D. Montague possessed a general testamentary power of appointment over said property, and having failed to exercise the said power, the same was taxable under Section 65-461 and 462 of the 1952 Code of Laws of South Carolina.
L. D. Montague, as Administrator of the Estate of Marie D. Montague, deceased, the appellant, herein, seeks a review of the order of the South Carolina Tax Commission assessing an inheritance tax of $27,151.62 against the estate of Marie D. Montague. The tax, as so assessed, was paid under protest, and this appeal was taken pursuant to Section 65-510 of the 1952 Code of Laws of South Carolina. The appeal presents two questions for determination. (1) Did Marie D. Montague have a testamentary power of disposition over the stock of B. L. Montague in B. L. Montague Company, Inc.? (2) Is property subject to inheritance tax in the estate of the donee with testamentary power of disposition, when such donee dies intestate, thus failing to exercise the power?
It is the contention of the appellant that the language quoted from the last part of Item V of the Will of the testator takes the stock out of the power of appointment and directs that it be distributed equally to his three children. The respondent contends that under a proper construction of said Will, Marie D. Montague, the wife of the testator, was given and had a testamentary power of appointment not only with respect to the other properties of B. L. Montague, but also with respect to the stock owned in B. L. Montague Company, Inc. This controversy, of necessity, brings up the question of the proper interpretation of the Will of the testator. It must be construed in order to determine whether or not Marie D. Montague had a testamentary power of appointment with respect to the corporate stock owned by the testator.
In Rikard v. Miller, 231 S.C. 98, 97 S.E.2d 257, 259, we said:
In the case of Rogers v. Rogers, 221 S.C. 360, 70 S.E.2d 637, 640 this Court said:
'It is elementary that the cardinal rule of construction is to ascertain and effectuate the intention of the testator, unless that intention contravenes some well-settled rule of law or public policy. While there are certain rules of construction to be followed in seeking such intention, they are subservient to the paramount consideration of determining what he meant by the terms used in his will. Peoples National Bank v. Harrison, 198 S.C. 457, 18 S.E.2d 1. The same underlying principle was stated by Chief Justice Marshall in Smith v. Bell, 6 Pet. 68, 8 L.Ed. 322, as follows: 'The first and great rule in the exposition of wills (to which all other rules must bend) is that the intention of the testator expressed in his will shall prevail, provided it be consistent with the rules of law'.'
In the case of Lemmon v. Wilson, 204 S.C. 50, 28 S.E.2d 792, 800, this Court announced the following rule:
'An interpretation that fits into the whole scheme or plan of the will is most apt to be the correct interpretation of the intent of the testator. In Quick v. Owens, 198 S.C. 29, 15 S.E.2d 837, 137 A.L.R. 201, quoting from the syllabus, we find: 'In construing a clause in a will the court was required to consider all the words contained in it, also its relation to other portions of the will, in order to ascertain if possible the testator's real intention."
We approach the construction of this Will by undertaking to ascertain the intention of the testator without reference to any rules of construction. It is apparent from Items II and III of said Will that the primary concern of the testator was the comfort, support and maintenance of his wife, Marie D. Montague. To this end he gave her, in Item II of said Will, a residence, together with all the furniture, furnishings and household goods therein contained, and an automobile. He likewise gave her another house and lot adjoining or adjacent to the residence property. This devise was in fee simple. By Item III of the Will he gave to named Trustees 'All the rest, residue and remainder of my property of whatever kind and description and wheresoever situated.' The net income from this property after the payment of the costs and expenses of management, payment of taxes, and the payment for necessary improvements and repairs, was given for the comfort, support and maintenance of his wife, with the right to the Trustee to encroach upon the corpus or principal of the estate for such purpose. We cannot but conclude that after making the specific devises contained in Item II of said Will, that all other property of every kind and description and wheresoever situated, was bequeathed and devised in Item III, which included the stock owned by the testator in B. L. Montague Company, Inc. The language used is all embracing and all inclusive and there can be no doubt of the testator's intent. He likewise, in Item IV, gave to his wife not only all of the income from the...
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Bliss v. Johnson
...in theory but in fact and supplied the statutory basis for the imposition of the inheritance tax.' See also Montague v. South Carolina Tax Commission, 233 S.C. 110, 103 S.E.2d 769. Although Sec. 3466 does not specifically provide that property under a power of appointment, whether exercised......