State ex rel. Peterson v. Dunlap

• Decision Date: 03 April 1916
• Citation: 156 P. 1141,28 Idaho 784
• Parties: STATE ex rel. JOSEPH H. PETERSON, Attorney General, Plaintiff, v. R. H. DUNLAP, Probate Judge of Ada County, MARY W. HARRIMAN, Widow and Executrix of the Will of the Late E. H. HARRIMAN, and the OREGON SHORT LINE RAILROAD COMPANY, Defendants
• Court: Idaho Supreme Court

156 P. 1141

28 Idaho 784

STATE ex rel. JOSEPH H. PETERSON, Attorney General, Plaintiff, v. R. H. DUNLAP, Probate Judge of Ada County, MARY W. HARRIMAN, Widow and Executrix of the Will of the Late E. H. HARRIMAN, and the OREGON SHORT LINE RAILROAD COMPANY, Defendants

Supreme Court of Idaho

April 3, 1916

INHERITANCE TAX - PROBATE COURTS - JURISDICTION-CONSTITUTIONAL LAW-SITUS OF PERSONAL PROPERTY-CORPORATE SHARES.

1. Where there is want of jurisdiction of the subject matter, a judgment is void, and consent of the parties cannot impart validity to it.

2. The jurisdiction of the probate court is limited and defined by sec. 21, art. 5, of the constitution to matters of probate settlement of estates of deceased persons, and appointment of guardians; also, jurisdiction to hear and determine civil cases wherein the debt or damage claimed does not exceed the sum of $500, exclusive of interest, and concurrent jurisdiction with justices of the peace in criminal cases.

3. It was not the intention of the legislature to attempt to provide for the appointment of an appraiser under the circumstances disclosed by this application, but it authorized such appointment, by the probate court, only in cases where proceedings to probate an estate are pending, or where the decedent has left an estate subject to probate in Idaho.

4. Since no proceeding is pending to probate the estate of the late E. H. Harriman, and since he does not appear to have left an estate in Idaho subject to settlement under our laws and since the proceeding commenced in the probate court does not involve the appointment of a guardian, nor in any particular come within the prescribed limits of the jurisdiction of the probate court as defined by sec. 21, art 5, of the constitution, that court is without jurisdiction to entertain such proceeding or to enter the judgment desired by plaintiff.

5. Sec 1873, Rev. Codes, so far as it applies to the facts presented here, limits the right to collect transfer tax upon inheritance to cases where property shall pass by will or by the intestate laws of this state, from any person who may die seised or possessed of the same while a resident of Idaho, or if such decedent was a nonresident at the time of his death, which property, or some part thereof shall be within this state.

6. The words "property which shall pass by will" are limited by the words "or the intestate laws of this state," and the tax is not payable because the owner of the property died testate if it would not be payable had he died intestate. The right to collect the tax, in either event, is dependent upon the jurisdiction of the state over the transfer.

7. While the situs of property is a controlling factor when the right to collect a property tax is under consideration, it must be remembered that an inheritance or succession tax is not a tax upon property, but is a bonus in the nature of an excise or duty exacted by the state for the privilege granted by its laws of inheriting or succeeding to property on the death of the owner, and that in considering whether or not such a bonus is due, the location of the property is material only when it invests the state with jurisdiction to control the right to make the transfer by inheritance or succession.

8. Shares of stock in a corporation are personal property and descend according to the laws of the state which was the domicile of the owner at the time of his death, and the certificates of shares of corporate stock, which constitute evidence of ownership, are transferred according to the laws of the state wherein the corporation was organized.

[As to avoidance of judgment where court acted without having jurisdiction, see note in 29 Am.St. 78]

APPLICATION for writ of review. Judgment for defendants.

Writ quashed and the proceeding dismissed. Costs awarded to the defendants.

J. H. Peterson, Atty. Genl., T. C. Coffin, E. G. Davis and Herbert Wing, Assts., for Plaintiff.

"The tax is not upon the property in the ordinary sense of the term, but upon the right to dispose of it, and it is not until it has yielded its contribution to the state that it becomes the property of the legatee." (United States v. Perkins, 163 U.S. 628, 16 S.Ct. 1073, 41 L.Ed. 287; Mager v. Grima, 8 How. 490-493, 12 L.Ed. 1168; State v. Dalrymple, 70 Md. 294, 17 A. 82, 3 L. R. A. 372; Greves v. Shaw, 173 Mass. 205, 53 N.E. 372; Dixon v. Russell, 79 N.J.L. 490, 76 A. 982; In re Stixrud's Estate, 58 Wash. 339, Ann. Cas. 1912A, 856, 109 P. 343, 33 L. R. A., N. S., 632; In re Plummer, 30 Misc. 19, 62 N.Y.S. 1024; Plummer v. Coler, 178 U.S. 115, 20 S.Ct. 829, 44 L.Ed. 998; State ex rel. Garth v. Switzler, 143 Mo. 287, 65 Am. St. 653, 45 S.W. 245, 40 L. R. A. 280; Pullen v. Wake County Commrs., 66 N.C. 361; Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39 L. R. A. 170; Succession of Westfeldt, 122 La. 836, 48 So. 281.)

The inheritance tax laws have no relation to the general revenue laws, and constitutional provisions applicable to the levying of the latter cannot be construed as a limitation of the power to levy the former. (People v. Griffith, 245 Ill. 532, 92 N.E. 313; In re House Bill No. 122, 23 Colo. 492, 48 P. 535; Union Trust Co. v. Wayne Probate Judge, 125 Mich. 487, 84 N.W. 1101; In re Knoedler's Estate, 140 N.Y. 377, 35 N.E. 601; Nunnemacher v. State, 129 Wis. 190, 108 N.W. 627, 9 Ann. Cas. 711, 9 L. R. A., N. S., 121; State v. Ferris, 53 Ohio St. 314, 41 N.E. 579, 30 L. R. A. 218; State v. Hamlin, 86 Me. 495, 41 Am. St. 569, 30 A. 76, 25 L. R. A. 632.)

A review of the authorities shows no ground for believing that the tax we are seeking to collect would be construed by the supreme court of the United States as in violation of the federal constitution. (In re Blackstone's Estate, 171 N.Y. 682, 64 N.E. 1118; Blackstone v. Miller, 188 U.S. 189, 23 S.Ct. 277, 47 L.Ed. 439; State ex rel. Fath v. Henderson, 160 Mo. 190, 60 S.W. 1093; Thompson v. Kidder, 74 N.H. 89, 65 A. 392, 12 Ann. Cas. 948; In re Fox's Estate, 154 Mich. 5, 117 N.W. 558; Beals v. State, 139 Wis. 544, 121 N.W. 347; Walker v. People, 192 Ill. 106, 61 N.E. 489; State v. Guilbert, 70 Ohio St. 229, 71 N.E. 636, 1 Ann. Cas. 25; Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39 L. R. A. 170; In re Campbell's Estate, 143 Cal. 623, 77 P. 674; Campbell v. California, 200 U.S. 87, 26 S.Ct. 182, 50 L.Ed. 382; Keeney v. Comptroller, 222 U.S. 525, 32 S.Ct. 105, 56 L.Ed. 299, 38 L. R. A., N. S., 1139.)

The fact that two states, dealing each with its own law of succession, both of which must be invoked to secure rights, have taxed the rights which they respectively confer, gives no cause for complaint on constitutional grounds. (In re Hartman's Estate, 70 N.J. Eq. 664, 62 A. 560; In re Stanton's Estate, 142 Mich. 491, 105 N.W. 1122; Frothingham v. Shaw, 175 Mass. 59, 78 Am. St. 475, 55 N.E. 623; Mann v. Carter, 74 N.H. 345, 68 A. 130, 15 L. R. A., N. S., 150; People v. Union Trust Co., 255 Ill. 168, Ann. Cas. 1913D, 514, 99 N.E. 377, L. R. A. 1915D, 450; People v. Palmer's Estate, 25 Colo. App. 450, 139 P. 554; State v. Probate Court of Ramsey County, 124 Minn. 508, Ann. Cas. 1915B, 861, 145 N.W. 390, 50 L. R. A., N. S., 262.)

Where a legislature has attempted to tax property or an interest in property, under its power to impose transfer, inheritance or succession taxes, the only question which arises in a particular case is as to whether the property or the interest in property is within the jurisdiction of the state. The situs, for purposes of taxation, of an interest in property is the same as that of the property in which the interest exists. (Nielson v. Russell, 76 N.J.L. 27, 69 A. 476; Mann v. Carter, 74 N.H. 345, 68 A. 130, 15 L. R. A., N. S., 150; Gardiner v. Carter, 74 N.H. 507, 69 A. 939; In re Delano's Estate, 74 N.J. Eq. 365, 69 A. 482; People v. Griffith, 245 Ill. 532, 92 N.E. 313; In re Bronson's Estate, 150 N.Y. 1, 55 Am. St. 632, 44 N.E. 707, 34 L. R. A. 238; In re Palmer's Estate, 183 N.Y. 238, 76 N.E. 16; In re Clinch, 99 A.D. 298, 90 N.Y.S. 923; Appeal of Gallup, 76 Conn. 617, 57 A. 699; Kingsbury v. Chapin, 196 Mass. 533, 82 N.E. 700, 13 Ann. Cas. 738; Metropolitan Life Ins. Co. v. New Orleans, 205 U.S. 395, 27 S.Ct. 499, 51 L.Ed. 853.)

Interests in property substantially similar in all respects to the interest owned by the late E. H. Harriman, at the time of his death, in the property of the Oregon Short Line Railroad Company in Idaho, have been made the subject of transfer, inheritance or succession taxes in other states, and the laws imposing such taxes have been upheld by their courts of last resort. (In re Willmer's Estate, 153 A.D. 804, 138 N.Y.S. 649; Greves v. Shaw, 173 Mass. 205, 53 N.E. 372; Callahan v. Woodbridge, 171 Mass. 595, 51 N.E. 176; Trappan v. Merchants' Nat. Bank, 19 Wall. 490, 22 L.Ed. 189; First Nat. Bank v. Smith, 65 Ill. 44, 45; South Nashville St. R. Co. v. Morrow, 87 Tenn. 406, 11 S.W. 348, 2 L. R. A. 853; Peabody v. Treasurer, etc., 215 Mass. 129, 102 N.E. 435; In re Cushing's Estate, 40 Misc. 505, 82 N.Y.S. 795; In re Rogers' Estate, 149 Mich. 305, 119 Am. St. 677, 112 N.W. 931, 11 L. R. A., N. S., 1134; In re Jones' Estate, 172 N.Y. 575, 65 N.E. 570, 60 L. R. A. 476.)

The interpretation which we seek to place upon the words of our statute is clearly authorized by the decisions of courts construing statutes substantially similar to our own. ( In re Culver's Estate, 145 Iowa 1, 123 N.W. 743 25 L. R. A., N. S., 384; In re Enston, 19 Abb. N.C. (N. Y.) 227; In re Stanton's Estate, 142 Mich. 491, 105 N.W. 1122; Kingsbury v. Chapin, 196 Mass. 533, 82 N.E. 700, 13 Ann. Cas. 738; Hooper v. Shaw, 176 Mass. 190, 57 N.E. 361.) A shareholder in a corporation is an owner of an "interest in such property" within the meaning of this term as...