Norris v. Durfey

• Decision Date: 24 February 1915
• Docket Number: (No. 250.)
• Citation: 84 S.E. 687,168 N.C. 321
• Court: North Carolina Supreme Court
• Parties: NORRIS. v. DURFEY.

84 S.E. 687

168 N.C. 321

NORRIS.

v.DURFEY.

(No. 250.)

Supreme Court of North Carolina.

Feb. 24, 1915.

Walker and Hoke, JJ., dissenting.

Appeal from Superior Court, Wake County; Whedbee, Judge.

Action by the State, on the relation of H. E. Norris, Solicitor, against Cary K. Durfey. Judgment for defendant, and plaintiff appeals. Reversed.

This is a civil action to recover the inheritance tax imposed by law upon the estate of Florence P. Tucker, who died leaving a last will and testament, in the city of Raleigh, on the 11th of December, 1909. Her estate consisted of both real and personal property. The most of her estate was bequeathed to her executors in trust for her children, the legatees under the will. It is admitted that the real estate exceeds in value the sum of $250,000, and that the personal estate exceeds in value the sum of $450,000. The case was heard upon the facts agreed, and the court adjudged that under the law the real estate, of which Mrs. Tucker was seised and possessed at the time of her death, was not subject to the inheritance tax.

H. E. Norris and Manning & Kitchin, all of Raleigh, for appellant.

Pace & Boushall, of Raleigh, for appellee.

BROWN, J. The only question presented is whether or not the inheritance tax section of the revenue law of 1909 imposes a tax upon real estate. Public Laws of 1909, pp. 656, 657. The first inheritance tax law of 1903 imposes no tax upon real estate, but upon personal property only. The constitutionality of that act, as well as many points growing out of it, were passed on by this court in Re Morris' Estate, 138 N. C. 260, 50 S. E. 682. The succeeding acts of 1905 (chapter 588), 1907 (chapter 256), and 1909 are exactly alike and read as follows:

"From and after the passage of this act, all real and personal property of whatever kind and nature which shall pass by will or by the intestate laws of this state * * * shall be and hereby is made subject to a tax for the benefit of the state, as follows, that is to say: Where the whole amount of said legacy or distributive share of personal property shall exceed in value $2,000, * * * the tax shall be, " etc.

It is contended that the Legislature, in using the words comprising the last two lines above quoted, whilst manifesting an intention to subject landed property to the inheritance tax, failed to do so, and levied the tax only upon legacies or distributive shares of personal property exceeding in value $2,000.

It is elementary law in the construction of all statutes, applicable alike to revenue laws and all other species of legislation, that the statute should be given liberal and reasonable interpretation with a view to effectuate the intention of the Legislature. In re Matter of Stewart, 131 N. Y. 274, 30 N. E. 184, 14 L. R. A. 836; Ross on Inheritance Taxation, § 35.

Mr. Ross says that:

"It is gratifying to note that, whatever the courts may have said on this question, they have in fact generally given inheritance tax statutes liberal construction in favor of the government by subjecting to taxation every transfer of property that could be reasonably brought within the purview of the law." 27 A. & E. p. 340.

The Court of Appeals of New York has said:

"It was undoubtedly the intent of the Legislature that the statutes under consideration should be liberally construed, to the end of taxing the transfer of all property which fairly and reasonably could be regarded as subject to the same, and this court has unequivocally placed itself upon record in favor of construing the statute in the light of such intent." Estate of Gordon, 186 N. Y. 471, 79 N. E. 722, 10 L. R. A. (N. S.) 1089.

It does not require any argument to prove that it was the manifest purpose of the General Assembly to tax real estate, as well as personal property. Every word in the statute is pregnant with meaning and indicates with unerring certainty that such was the intention of the lawmakers.

The contention that there are no operative words in the statute, which in effect levies tax upon real estate, cannot be sustained.

The very language of the act is, as hereinbefore quoted, that:

"From and after its passage all real and personal property of whatever kind, etc., shall be and hereby is made subject to a tax for the benefit of the state."

Then the act goes on to levy the tax, prescribe the degrees of consanguinity, when and how it shall be levied and collected.

The language relied upon by the defendant, namely, "where the whole amount of said legacy or distributive share of personal property shall exceed in value $2,000, etc., " is nothing more or less than exemption of that much of the estate from taxation, and those words do not in any way destroy the force and effect of the statute in its declared purpose to levy the same tax upon land. This section was in the personal property act of 1903 (chapter 247), and its validity was passed on and the act construed in Re Morris' Estate, supra.

The language of the act is not a mere declaration of intention or a recital of a purpose to tax real estate, but it is the enactment itself, by actual imposition of the tax, namely, "shall be and hereby is made...