Nunnemacher v. State

• Decision Date: 16 July 1906
• Parties: NUNNEMACHER v. STATE.
• Court: Wisconsin Supreme Court

129 Wis. 190

108 N.W. 627

NUNNEMACHER

v.STATE.

Supreme Court of Wisconsin.

June 21, 1906.

Concurring Opinion, June 22, 1906.

Dissenting Opinions, June 25 and July 16, 1906.

Action by Herman Nunnemacher, as trustee, against the state of Wisconsin. Heard on demurrer to the complaint. Complaint dismissed.

Cassoday, C. J., and Dodge, J., dissenting.Ryan, Ogden & Bottum (Charles Quarles and Alfred L. Cary, of counsel), for plaintiff.

L. M. Sturdevant, Atty. Gen., and R. M. Bashford, Special Counsel, for the State.

WINSLOW, J.

This is an action commenced in this court under the provisions of section 3200, Rev. St. 1898, to recover from the state the amount of an inheritance tax paid under protest pursuant to an order of the county court of Waukesha county. The complaint is based upon the ground that chapter 44, p. 65, of the Laws of 1903, under which the tax was levied and paid, is unconstitutional. The Attorney General interposed a general demurrer to the complaint, and thus the question of the constitutionality of the law is squarely presented.

A previous law attempting to tax inheritances and bequests (chapter 355, p. 668, Laws 1899), was before this court in the case of Black v. State, 113 Wis. 205, 89 N. W. 522, 90 Am. St. Rep. 853, and was there held unconstitutional, for the reason that it provided for unlawful discrimination, in that a beneficiary receiving a legacy or inheritance from an estate under $10,000 paid no tax, while a beneficiary standing in exactly the same relation to the decedent and receiving a legacy or inheritance of the same amount from an estate exceeding $10,000 was obliged to pay a tax. In that case it was not contended that an inheritance or succession tax could not lawfully be levied in this state. In fact, the validity of such legislation, as a general proposition, was conceded; but the contention was that the law in question made unlawful discriminations and hence was void. From this concession it resulted that this court assumed, rather than decided, in that case that an inheritance tax law making no unlawful discrimination between heirs or beneficiaries could be passed in this state which would be constitutional. It was doubtless in response to the suggestions of the opinion in that case that chapter 44, p. 65, of the Laws of 1903, which is now attacked, was passed. Section 1 of the last-named law provides in substance that a tax shall be imposed upon any transfer of property or interest in property, real, personal, or mixed, to any person, association, or corporation (except corporations organized solely for religious, charitable, or educational purposes), when made by will or by operation of the intestate laws, or by transfer made by the grantor or by another person under a power of appointment in contemplation of death, to take effect at or after the death of the grantor, which tax shall be based upon the clear market value of such property at the rates thereinafter prescribed, and only upon the excess over the exemptions thereinafter granted. Section 2 provides that when the property or interest transferred exceeds the exemption and does not exceed $25,000 the tax shall be (1) 1 per cent. of the clear value where the person entitled to such property shall be the husband, wife, lineal issue, lineal ancestor of the decedent, or lawfully adopted or mutually recognized child of the decedent, or a descendant of such child; (2) 1 1/2 per cent. in case of the brother or sister of the decedent, or a descendant of such brother or sister, or the wife or widow of a son, or the husband of a daughter, of the decedent; (3) 3 per cent. in case of the brother or sister of the father or mother of the decedent, or a descendent of such brother or sister; (4) 4 per cent. in case of the brother or sister of the grandfather or grandmother of the decedent, or a descendant of such brother or sister; (5) 5 per cent. in case of a beneficiary in any other degree of collateral consanguinity, or a stranger in blood, or a body politic or corporate. These rates are termed the primary rates. Section 3 provides that when the value of the property exceeds $25,000 the rates of tax upon the excess shall be as follows: (1) Upon the excess over $25,000 up to $50,000, 1 1/2 times the primary rates; (2) from $50,000 to $100,000, 2 times; (3) from $100,000 to $500,000, 2 1/2 times; (4) upon all in excess of $500,000, 3 times the primary rates. Section 4 provides for exemptions as follows: (1) All property transferred to domestic corporations organized solely for religious, charitable, or educational purposes and used exclusively for such purposes; (2) property of the value of $10,000 transferred to the widow, and property of the value of $2,000 transferred to each of the other persons named in the first division of section 2; (3) property of the value of $500 transferred to each of the persons named in the second division of section 2; (4) property of the value of $250 transferred to each of the persons named in the third division of section 2; (5) property of the value of $150 transferred to each of the persons named in the fourth division of section 2; and (6) property of the value of $100 transferred to each of the persons or corporations named in the fifth division of section 2. The remaining sections contain full provisions for the administration of the law and the collection of the tax, which are not necessary to be stated here.

The constitutionality of this law, and of any similar law, is now attacked upon the following general grounds: First, that the right to take property by inheritance or by will is a natural right protected by the Constitution, which cannot be wholly taken away or substantially impaired by the Legislature; second, that the Constitution of this state limits the power of taxation to property only, and that this tax is an excise levied upon a right or privilege, and hence unconstitutional; third, that even if the Legislature has power, under the Constitution, to levy such a tax, this law violates the constitutional requirement that the rule of taxation shall be uniform.

1. With the first of these propositions we agree. We are fully aware that the contrary proposition has been stated by the great majority of the courts of this country, including the Supreme Court of the United States. The unanimity with which it is stated is perhaps only equaled by the paucity of reasoning by which it is supported. In its simplest form it is thus stated: “The right to take property by devise or descent is the creature of the law and not a natural right.” Magoun v. Bank, 170 U. S. 283, 18 Sup. Ct. 594, 42 L. Ed. 1037. In Eyre v. Jacob, 14 Grat. (Va.) 422, 73 Am. Dec. 367, it is stated more sweepingly thus: “It [the Legislature] may tomorrow, if it pleases, absolutely repeal the statute of wills, and that of descents and distributions, and declare that, upon the death of a party, his property shall be applied to the payment of his debts and the residue appropriated to public uses.” But it has been reserved for the Supreme Court of North Carolina to sweep away all natural property rights in a few terse sentences, which may well be quoted: “Property itself, as well as the succession to it, is the creature of positive law. The Legislature declares what objects in nature may be held as property; it provides by what forms and on what conditions it may be transmitted from one person to another; it confines the right of inheriting to certain persons whom it defines heirs; and on the failure of such it takes the property to the state as an escheat. The right to give or take property is not one of those natural and inalienable rights which are supposed to precede all government and which no government can rightfully impair.” Pullen v. Commissioners, 66 N. C. 361. In this declaration the court of North Carolina seems to have easily reached the logical goal toward which the other cases only tend, namely, the denial of all natural rights of property. It comes perilously near the doctrine that might makes right,

“The simple plan

That they should take who have the power,

And they should keep who can.”

The fallacy of the idea that the government creates or withholds property rights at will is very apparent. Under our system the government is the creature of the people, the product of a social compact. The people, in full possession of liberty and property, come together and create a government to protect themselves, their liberty, and their property. The government which they create becomes their agent; the officers their servants. Under the theory of the North Carolina court these agents, in turn, create property rights and confer them upon their creators, who possessed these rights long before. The people create an agency to protect their existing rights which assumes to confer or withhold these same rights. But the question is chiefly historical. From the historical standpoint the idea that all rights of property and rights to transmit the same by inheritance or will have their origin in the positive enactments of law by an established government cannot stand the test. Governments have, indeed, from the earliest times, regulated the exercise of these rights, prescribed ways and forms for their exercise, and protected them by positive law; and so they do now. From this universal exercise of the right of regulation the idea of governmental right to create and destroy may have arisen, but it seems more likely to have arisen from failure to keep in mind the radical difference between our republican theory of the origin of government and the European medieval theory. Our theory is that the people, in full possession of inalienable rights, form the government to protect those rights. The medieval idea was that the government was sent down from above, and that from it rights and privileges were allowed to flow in gracious streams to the people, who otherwise would not possess them.

That there are inherent...