People v. Koenig

• Decision Date: 07 May 1906
• Citation: 85 P. 1129,37 Colo. 283
• Parties: PEOPLE v. KOENIG et al.
• Court: Colorado Supreme Court

85 P. 1129

37 Colo. 283

PEOPLE v. KOENIG et al.

Supreme Court of Colorado, En Banc.

May 7, 1906

Error to Weld County Court; Chas. E. Southard, Judge.

Proceedings by the people against Emma Koenig, administratrix, and others, for the imposition of inheritance taxes. There was a judgment of the county court in favor of defendants, and the people bring error. Affirmed.

N.C. Miller, Atty. Gen., and W. R. Ramsay, Asst Atty. Gen., for the people.

Charles F. Tew, for defendants in error.

Jas. W McCreery, amicus curiae.

CAMPBELL J.

The application of an exemption clause in a section of our inheritance or succession tax law is the only question for determination. Omitting parts not material to the present discussion, the section reads: 'All property * * * which shall pass by will or by the intestate laws of this state from any person * * * to any person or persons * * * shall be and is, subject to a tax at the rate hereinafter specified * * * and all heirs, legatees, and devisees, administrators executors and trustees shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed. When the beneficial interests to any property or income therefrom shall pass to or for the use of any father, mother, husband, etc. * * * in every such case the rate of tax shall be two dollars on every hundred dollars of the clear market value of such property received by each person. * * * Provided, that the sum of ten thousand dollars of any such estate shall not be subject to any such duty or taxes, and that only the amount in excess of ten thousand dollars shall be subject to the above duty or tax.' A succession or inheritance tax, excise or duty is a special, not a general, tax. Whatever may be the rule of construction as to the ordinary recurring annual tax laid directly upon property and based upon a precedent valuation, it is the general doctrine that a succession tax is construed strictly against the government and in favor of the taxpayer. In Matter of McPherson, 104 N.Y. 306, 317, 10 N.E. 685, 58 Am.Rep. 502, a succession tax was held to be a special tax. In Matter of Harbeck, 161 N.Y. 211, 55 N.E. 850, Parker, C.J., said that in a succession tax where the question is involved in doubt, the doubt should be resolved in favor of the taxpayer and against the taxing power. In Eidman v. Martinez, 184 U.S. 578, 22 S.Ct. 515, 46 L.Ed. 697, the court, speaking by Mr. Justice Brown, said: 'It is an old and familiar rule of the English courts, applicable to all forms of taxation, and particularly special taxes, that the sovereign is bound to express its intention to tax in clear and unambiguous language, and that a liberal construction be given to words of exception confining the operation of duty, * * * though the rule regarding exemptions from general laws imposing taxes may be different.' See, also, 27 Eng. & Am. Enc. Law (2d Ed.) 340 et seq. Let us, then, examine this statute in the light of this rule, which seems to be recognized by all the authorities.

From the foregoing summary of the section, it is apparent that thereby the tax or duty imposed is upon the receipt of some beneficial interest in property which passes by will or under the intestate laws of the state. Each heir, devisee, or legatee must pay in proportion to the amount which he actually receives. While all heirs, devisees, and legatees, etc., are liable for such taxes, certainly each beneficiary can be held only for the tax on what he receives, and not on the whole estate, unless he receives the same. The term 'such estate' to which the exemption applies, presupposes that that estate or property has been described or mentioned in some previous part of the section or statute. The word 'property,' but not 'estate,' is earlier employed several times in the same section. Naturally, 'such estate' in the proviso relates to the next antecedent similar expression. Observing this usual rule of construction, the term 'such estate,' we think, refers to 'such property received by each person,' because that is the first preceding similar term found in the same sentence, and in the same grammatical connection. As the tax is laid upon the receipt of 'such property by each person,' naturally the exemption should, and we hold does, apply to the separate distributive shares and legacies, and not to the aggregate value of the property of the decedent. 'Property' and 'estate' are often used synonymously, and are so used in this section. Our statute in the main is copied from the Illinois law, and the language quoted is an exact reproduction of the corresponding section therein. The Illinois statute, however, contains, in addition, the following clause: 'And the tax is to be levied in above cases only upon the excess of twenty thousand dollars received by each person.' The addition of this clause to our statute would not change its present obvious meaning. Its presence in the Illinois law merely serves to remove all doubt as to whether the exemption clause applies to the whole estate or to the separate distributive shares. The entire framework of the two sections, as enacted in Illinois and in Colorado, is in harmony with the general intent to make the exemption or limitation apply to the separate estates actually received.

We have been able to find and our attention has been called to no statute which, in all respects, is identical in language with ours, but the conclusion which we have reached is abundantly sustained by four cases, which we now proceed to consider, and in only one case, where the statute is materially different, do we find any ruling apparently to the contrary. In Howell's Estate, 147 Pa. 164, 23 A. 403, it was held that, under the Pennsylvania statute, the liability to the tax is to be ascertained not by the amount of the individual legacy, but by the aggregate value of the decedent's estate. The statute, however, reads: 'All estates * * * of every kind * * * passing from any person * * * either by will, or under the intestate laws of this state, * * * other than to or for the use of father, mother, * * * shall be and they are hereby made subject to a tax of $5 on every hundred dollars of the clear value of such estate or estates.' The word 'estates' in the limitation clause was held to refer to the estates of decedents, and not to the separate legacies or devises carved out of such estates. There is no language in this act, like that in ours, in which it is specifically said that the rate of tax is upon the market value of the property received by each person. Other provisions in the Pennsylvania statute, as will be seen from an examination of the opinion in the case, fortify the construction there adopted.

A statute more nearly like ours is the collateral inheritance tax act of 1885 of New York, which was before the Court of Appeals in Matter of Cager, 111 N.Y. 343, 18 N.E. 866. The statute reads: 'After be passage of this act all property which shall pass by will * * * to any person * * * other than the father,' or other excepted persons 'shall be subject to a tax of $5 of every...