Montague v. State

• Decision Date: 02 July 1880
• Citation: 54 Md. 481
• Parties: CHARLES P. MONTAGUE, Executor of ELIZA C. MONTAGUE v. THE STATE OF MARYLAND.
• Court: Maryland Court of Appeals

54 Md. 481

CHARLES P. MONTAGUE, Executor of ELIZA C. MONTAGUE v. THE STATE OF MARYLAND.

Court of Appeals of Maryland

July 2, 1880

APPEAL from the Court of Common Pleas.

The case is stated in the opinion of the Court.

The cause was argued before BARTOL, C.J., MILLER, ALVEY and IRVING, J.

Charles E. Phelps, for the appellant.

Charles J. M. Gwinn, Attorney-General, for the appellee.

MILLER J., delivered the opinion of the Court.

In this case suit was brought by the State on the 3rd of December 1879, against Charles P. Montague, executor of Eliza C Montague. The declaration contained the common counts, and the general issue was pleaded. All errors in pleading were waived, and the case was tried on an agreed statement of facts. By this it was agreed that by the will of Mrs. Montague admitted to probate in October, 1877, the defendant, her husband, was made executor and residuary legatee; that by his first account as executor which was passed by the Orphans' Court on the 22nd of September, 1879, it appears he had collected and received into his possession as executor, moneys of the decedent to such an amount that after paying therefrom funeral expenses, debts, legacies and cost of administration, there remained in his hands on that day a balance of $68,713.63 in cash, which balance he was allowed by the Court to account for and retain as residuary legatee, and he has so accordingly retained the same; that this suit is brought against the defendant in his individual capacity, though described as executor, to recover the sum of $1717.84 claimed by the State as a collateral inheritance tax of two and one-half per cent. upon the above residuary legacy from the testatrix to her husband; that a pro forma judgment for this sum shall be entered for the State in order to bring the case to the April Term of the Court of Appeals; that all errors in pleading be waived, and the Court allowed to draw such inferences of fact as a jury might from the above statement. The pro forma judgment was accordingly entered on the 19th of January, 1880, and the defendant appealed. On the 14th of April, 1880, pending the appeal and before it came on for hearing, the Governor approved the Act of 1880, ch. 444, which materially affects the decision of the case, for it is well settled that this Court must decide and dispose of the case according to the law as it exists at the time of final judgment, and not as it existed at the time of the appeal. United States vs. Schooner Peggy, 1 Cranch, 104; State vs. Norwood, 12 Md., 195; Keller vs. The State, 12 Md., 322; Smith vs. The State, 45 Md., 49.

Sub-section 113 of the third section of the Act of 1874, ch. 483, which imposes the collateral inheritance tax contained a clause exempting from the operation of the tax, all estates real and personal which pass "to, or for the use of the father, mother, wife, children and lineal descendants of the grantor, bargainor, devisor, donor or intestate." In this exemption "husbands" are not mentioned, but the first section of the Act of 1880 repeals, and re-enacts this sub-section 113 so as to include them, and by this repeal and re-enactment the exemption is extended to all estates real and personal which pass "to, or for the use of the father, mother, husband, wife, children, and lineal descendants of the grantor, bargainor, devisor donor, or intestate." This is the only change the first section of the new Act makes in the original sub-section. The second section of the new statute provides "that this Act shall take effect immediately after its passage, and shall apply to all cases of collateral inheritance tax heretofore claimed of, but not actually paid by, the husband of any decedent." It is plain therefore that the decision of the present case depends upon the validity and construction of the last clause of this second section.

1st. As to its construction. Upon this the Attorney-General has made a very able and ingenious argument. Treating the clause as creating an exemption from taxation, he contends that the rule of strict construction universally applied in such cases must be adopted; that so construed, its application must be confined to cases where the tax upon real estate that has passed to the husband from the wife, has been claimed of the former. The reasoning upon which this conclusion is based is substantially as follows: That by sub-sections 113, 114, 115 and 116, of the original Act of 1874, the executor or administrator is bound to pay to the State this tax on the personal estate subject to it, before handing over any part of such personal property to the person to whom it passes from the decedent, and it is made his duty to make such payment within thirteen months from the date of his letters under penalty of forfeiture of his commissions; that this obligation, though arising from his relation as executor or administrator of the estate, becomes when it attaches, his personal debt to the State, which he can discharge only by payment; but in regard to real estate the case is different, for by sub-sections 124 and 125, the tax is made a lien on the real estate passing to the collateral heir or devisee from the date of the death of the decedent, and the duty only is imposed on the executor or administrator of collecting the tax from such devisee or collateral heir; and the latter is the person whom the law regards as the actual debtor, the "person liable to pay said tax." From these premises it is argued that the State never had the right to make claim upon the appellant as the husband of the decedent for any collateral inheritance tax on personal property passing to him from her; that the State had a right to make such claim only upon him as her executor, and this claim became his certain and fixed debt thirteen months after the date of his letters; that the law assumes that he retained as executor the tax which he was bound to pay, and denies to the Orphans' Court the power to enable him to treat it as part of the money passing to him as residuary legatee; that the tax upon real estate passing to the husband of a decedent is a charge upon such husband, but the tax upon personal estate so passing never was a charge upon the husband, but upon the executor or administrator having custody of that part of the corpus of the estate; that the clause in question does not profess to release an executor from his statutory liability for the payment of this tax upon personal property which may have passed to the husband of a decedent of whose estate he may be executor or administrator, and if therefore the clause would not have released a stranger from the paymont of this tax on the personal estate of the decedent, if such stranger had been her executor or administrator, it cannot be interpreted as releasing the appellant who is such executor because he was also the husband of the decedent; hence the Court must confine the operation of the clause to cases of taxes upon real estate to which in strictness it is alone applicable.

But in answer to this argument it must be observed, in the first place, that the rule of strict interpretation referred to never has been, and never can be, carried to such an extent as to justify or authorize the Courts to disregard and set aside the intent of the Legislature manifested by the clear and unambiguous terms of a statute. In the next place this is not, strictly speaking, a clause exempting property from taxation, but a release, or abandonment of all claims for certain taxes that have already accrued, and have been demanded from but not paid by the tax-payer. The Legislature has seen fit, by this Act, to declare that hereafter the collateral inheritance tax shall not be imposed where property may pass by will or...