Noble v. Fleming's Estate, 1093

• Citation: 121 Vt. 57,147 A.2d 889
• Decision Date: 06 January 1959
• Docket Number: No. 1093,1093
• Parties: Austin B. NOBLE, Commissioner of Texes, v. John P. FLEMING'S ESTATE, Margaret M. Fleming, Adm'x.
• Court: United States State Supreme Court of Vermont

Page 889

147 A.2d 889

121 Vt. 57

Austin B. NOBLE, Commissioner of Texes, v. John P. FLEMING'S ESTATE, Margaret M. Fleming, Adm'x.

No. 1093.

Supreme Court of Vermont.

Jan. 6, 1959.

Frederick M. Reed, Atty. Gen., Stephen B. Richardson, Deputy Atty. Gen., for plaintiff.

Before CLEARY, C. J., and ADAMS, HULBURD, HOLDEN and SHANGRAW, JJ.

ADAMS, Justice.

This is an appeal direct to this Court on exceptions by the Commissioner of Taxes from a decree of distribution of the Probate Court for the District of Rutland in the estate of John P. Fleming. The question involved is the failure of that court to include in its decree of distribution a collateral inheritance tax, as provided by V.S. 47, § 1062, claimed by the Commissioner of Taxes, imposed and due the state in accordance with the provisions of V.S. 47, § 1053 as amended.

The facts are not in dispute. John P. Fleming died intestate leaving no widow and as his only heirs and next of kin a sister and niece, the latter being the daughter of a predeceased brother of the decedent. The estate was administered in the Probate Court for the District of Rutland, in which district the deceased was a resident. The account of the administratrix showed assets in cash for distribution of $2,507.91. By decree of distribution, the court decreed the sum of $1,253.95 to the sister and $1,253.95 to the niece. It did not include and incorporate in the decree, as the Commissioner of Taxes claimed it should have done, the imposition of an inheritance tax against the share of the niece, Mary Margaret Morin.

The only question presented is whether or not, by the provisions of V.S. 47, § 1053 as amended, the child of a predeceased brother of a deceased person, i. e., a niece in the instant case, is liable to pay to the state a collateral inheritance tax based upon the value in money of her distributive share of the estate.

V.S. 47, § 1062, which is a part of chapter 49, provides in part, 'upon the final settlement of the account of an administrator, executor or trustee, the probate court shall make the amount of the taxes imposed by the provisions of this chapter a part of the final decree of distribution, * * *.'

V.S. 47, § 1053 as amended by No. 28 of the Acts of 1949, by No. 259 of the Acts of 1955 and by No. 75, § 1 of the Acts of 1957, so far as material here provides, '1053, Collateral Inheritances, Exceptions. Except as otherwise hereinafter provided, a person who receives in trust or otherwise a legacy or distributive share * * * shall pay to the state a tax of twelve per cent of the value in money of such legacy or distributive share. Those receiving such legacy or distributive share who are exempt from the payment of such tax are as follows:

I. Father, mother, husband, wife, brother, sister, lineal descendant, stepchild, child legally adopted during his minority by a decedent during his life, child of a stepchild or of such adopted child, wife or widow of a son, or husband of a daughter of a decedent.'

The change in the law by the amendment in § 1 of No. 75 of the Acts of 1957 was to add by inserting in paragraph I of the exemption part of § 1053 the words, 'brother, sister,.' By § 2 of the same act the same words were added to and included with the specified persons to whom a direct inheritance tax applied, which is § 1054.

In the interpretation of statutes, the fundamental rule is to ascertain and give effect to the intention of the Legislature. The whole and every part of the enactment must be given attention as well as other statutes in pari materia. It is a fundamental and well settled rule of construction, that the true meaning of the Legislature is to be ascertained not from a literal sense of the words used, but from a consideration of the whole and every part of the statute, the subject matter, the effect and consequences and the reason and spirit of the law. Gould v. Towslee, 117 Vt. 452, 459, 94 A.2d 416, and cases cited.

In this connection it is well to note, before the addition of brother and sister to the persons entitled to an exemption of any collateral inheritance tax as specified in that section of the statute and then adding them at the same time to the section applying to the direct inheritance tax, thus making them liable for a direct inheritance tax, that by previous amendments to the same sections the rate of tax on both collateral and direct inheritances had been substantially increased and also the initial or first bracket exemption on direct inheritances had been increased. The tax on collateral inheritances is a flat rate tax with no graduated exemptions and is double the tax rate in the highest bracket in the direct inheritance section of the statute. For a history of the law in this jurisdiction pertaining to the taxation of inheritances prior to the revision of 1947 see Lovejoy v. Morrison, 116 Vt. 453, 456-457, 78 A.2d 679.

The taxes on collateral and direct inheritances and taxes on transfers are not taxes on the property, but upon the right of succession to the property merely, Lovejoy v. Morrison, supra, 116 Vt. at page 457, 78 A.2d at page 681, and cases cited. To express it in other words, it is a tax upon the right to receive property and not a tax upon the property itself, or as was said in the case of In re Hickok's Estate, 78 Vt. 259, 264, 62 A. 724, 726, 'It is now universally conceded that taxes of this character are not taxes upon property, but taxes upon the transmission of property.'

We are here dealing with a statute providing for exemption from taxation. Such statutes are to be strictly construed and no claim for exemption can be sustained unless within the express letter or necessary scope of the exemption clause. First National Bank of Boston v. Harvey, 111 Vt. 281, 290-291, 16 A.2d 184, and cases cited; Lovejoy v. Morrison, supra, 116 Vt. at page 458, 78 A.2d at page 682.

With these rules of construction in mind, it is plain and we hold that only those persons that are specifically and expressly designated in ...