Sage's Ex'rs v. Commonwealth

• Decision Date: 27 October 1922
• Citation: 196 Ky. 257,244 S.W. 779
• Parties: SAGE'S EX'RS v. COMMONWEALTH.
• Court: Kentucky Court of Appeals

244 S.W. 779

196 Ky. 257

SAGE'S EX'RS v. COMMONWEALTH.

Court of Appeals of Kentucky.

October 27, 1922

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Action by the Commonwealth of Kentucky against Margaret Olivia Sage's executors. Judgment for plaintiff and defendants appeal. Reversed and remanded.

Trabue Doolan, Helm & Helm, of Louisville, and Blewett Lee, of New York City, for appellants.

Chas I. Dawson, Atty. Gen., and J. Matt Chilton and J. S. Luscher both of Louisville, for the Commonwealth.

Helen Bruce, of Louisville, amicus curiæ.

CLARKE J.

Mrs Margaret Olivia Sage, the widow of Russell Sage, died testate on November 4, 1918, a resident of New York City. By her will, after making certain bequests to her relatives, she gave the residue of her large estate to various hospitals, educational institutions, churches, and charitable organizations, none of which is located, or required to expend the money left it within this state.

By this action, the commonwealth sought to collect an inheritance tax upon the interests devised to these nonresident benevolent institutions in 3,500 shares of stock in the Southern Pacific Company, a Kentucky corporation, under the Kentucky Inheritance Tax Law, section 4281a1 et seq., Kentucky Statutes, and from the judgment so ordering, the executors of Mrs. Sage have prosecuted this appeal.

The Southern Pacific stock was appraised at $343,371, and no question is made as to the correctness of that appraisement, nor as to the liability of individual devisees to be taxed upon the interests they take under the will in this stock; but it is insisted by the executors that by subsection 4 of section 4281a1 supra, the interests in this stock which passed to the non-resident organizations, including churches, are exempt from the tax, and that the court erred in holding them liable therefor.

The principal question for decision then, is whether or not the Legislature intended, by subsection 4 of the act which imposes the tax, to exempt from such tax nonresident institutions of the character mentioned. That section, in so far as involved, reads:

"Property of any amount bequeathed or transferred to any municipal corporation within this state for public purposes, to institutions of purely public charity, to institutions of education not used or employed for gain by any person or corporation and the income of which is devoted solely to the cause of education, to public libraries, or to any person or persons, society, corporation, institution or association in trust for any of the purposes above mentioned, shall be exempt from such tax."

Approaching the construction of this language employed by the Legislature to express its intention, we are confronted with various approved rules of statutory construction, which counsel from either side insist are applicable and controlling, but to which we hardly think it is necessary to refer, since in our judgment the language employed expresses the legislative intention too plainly to require the employment of any rules of construction. Neither do we consider the construction which the courts of other states have placed upon their inheritance tax laws of controlling weight, or even of assistance here, because none of those statutes employs the same or similar language to that employed in our statute.

The cardinal rule of statutory construction always is to ascertain the legislative intent, and when that intent is clearly expressed there is neither occasion nor justification for resorting to the rules that have been adopted, and are of value only to ascertain the intention when not clearly expressed.

The authorities are unanimous, however, in holding that exemptions from the common burden of taxation are not favored, and presumably were not intended, if not plainly expressed, and that this same presumption also obtains with reference to an exemption from an inheritance tax as to nonresidence at least, regardless of whether an inheritance tax ought ordinarily to be classed as a special or an ordinary tax.

In the many authorities cited by the learned counsel who have briefed this case, there is no dissent from these general principles, and we feel sure none can be found. We do not think that it is necessary, therefore, either to cite or discuss the many cases referred to in the briefs, or to decide whether an inheritance tax is a special or an ordinary tax, or to do more than simply state that under all of the authorities cited by both sides the claimed exemption should not be allowed, unless such an intention upon the part of the Legislature is plainly expressed, and that we have approached the construction of the language of this statute with that presumption in mind.

It will be noticed that the exemption is to property bequeathed or transferred to five classes, described as follows: (1) Any municipal corporation within this state for public purposes (2) institutions of purely public charity; (3) institutions of education, not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education; (4) public libraries; (5) any person or persons, society,...