State ex rel. Walker v. Jones

• Decision Date: 23 November 1927
• Docket Number: No. 6175.,6175.
• Parties: STATE ex rel. WALKER et al. v. JONES.
• Court: Montana Supreme Court

80 Mont. 574

STATE ex rel.
WALKER et al.
v.
JONES.

No. 6175.

Supreme Court of Montana.

Nov. 23, 1927.

Appeal from District Court, Cascade County; W. H. Meigs, Judge.

Action by the State of Montana, on the relation of J. W. Walker and others, against Homer H. Jones, executor of the estate of Ebenezer G. Ranney, deceased. Judgment for defendant, and plaintiffs appeal. Reversed.

L. A. Foot, Atty. Gen., and A. H. Augstman, Asst. Atty. Gen., for appellants.

Cooper, Stephenson & Hoover and S. B. Chase, Jr., all of Great Falls, for respondent.

CALLAWAY, C. J.

This is an appeal by the state from a judgment entered in favor of the defendant in a controversy submitted to the district court of Cascade county on an agreed statement of facts, under section 9872, R. C. 1921.

The facts are that Ebenezer G. Ranney died testate at his domicile in New York, in May, 1925, and pursuant to the provisions of his will letters testamentary were issued to the defendant. As the decedent owned land in Cascade and other counties of this state, ancillary letters were issued to the defendant by the district court of Cascade county.

Among decedent's assets were promissory notes payable to his order, executed by residents of Montana and secured by mortgages upon real estate in Montana, duly recorded. Some of the notes were made payable in New York, others in Montana. The notes and mortgages were, at the time of the death of decedent, and ever since their delivery by the makers have been, located at the residence of the decedent in New York. These were not included in the probate proceedings in Cascade county.

The state contends that the notes and mortgages are subject to an inheritance, or succession, tax; the defendant contends that they are not. The trial court rendered judgment for defendant, and the state has appealed.

The question for determination has not hitherto been presented to this court. Montana has had an inheritance tax law in some form or other for 30 years. The present law was adopted from Wisconsin in 1921.

Section 1 of the 1921 act (Session Laws, Ex. Sess. 1921, c. 14, p. 772, being section 10377, R. C. 1921, re-enacted Session Laws 1923, c. 65, p. 140, re-enacted Session Laws 1925, c. 150, p. 265, re-enacted Session Laws 1927, c. 105, p. 353) provides in part:

“A tax shall be and is hereby imposed upon any transfer of property, real, personal or mixed, or any interest therein, or income therefrom in trust or otherwise, to any person, association or corporation, * * * in the following cases, except as hereinafter provided: (1) * * * When the transfer is by will or by intestate laws of this state from any person dying possessed of the property while a resident of the state. (2) * * * When a transfer is by will or intestate law, of property within the state or within its jurisdiction and the decedent was a nonresident of the state at the time of his death.”

Subdivision 3 of section 12, as amended by section 3 of the 1925 act (Session Laws 1925, p. 271), applicable to this case, provides that any personal representative, trustee, heir, devisee, or legatee of a nonresident decedent leaving no estate requiring administration in this state, desiring to transfer any stocks, bonds, mortgages, or other securities, or other personal property in this state, or within the jurisdiction of this state, may make application to the state board of equalization “for the determination whether there is any tax due upon account of the transfer thereof, and the amount of any such tax,” and shall furnish the board certain information, the character of which is prescribed. “From the information so furnished them and such other information as they may be able to obtain with reference thereto,” the board shall ascertain and determine the amount of the tax. The next subdivision provides that if the personal representative, trustee, heir, devisee, or legatee of such “nonresident decedent” has not complied with the provisions of subdivision 3, “upon such matter being called to its attention,” the board shall proceed to obtain information and assess the tax on its own initiative.

Terms are defined in section 22 of the 1923 act (Session Laws, p. 164), as follows:

“The words ‘estate’ and ‘property’ as used in this act shall be taken to mean the real and personal property or interest therein passing or transferred to individual legatees, devisees, heirs, next of kin, grantees, donees, or vendees, and not as the property or interest therein of the decedent, grantor, donor, or vendor, and shall include all personal property within or without the state. The word ‘transfer’ as used in this act shall be taken to include the passing of property or any interest therein, in possession or enjoyment, present or future, by inheritance, descent, devise, succession, bequest, grant, deed, bargain, sale, gift, or appointment in the manner herein prescribed to each individual or corporation. The word ‘decedent’ as used in this act shall include the testator, intestate, grantor, bargainer, vendor, or donor. ‘Intangible’ or ‘intangible property’ when used in this act without other qualifications, shall be taken to include all moneys, stocks, bonds, notes, securities and credits of all kinds, secured or unsecured. * * *”

A study of the foregoing provisions, with others not necessary to be considered in this opinion, leaves no doubt that the Legislature intended to exercise the utmost taxing power of the state in the imposition of excise, or succession, taxes. Tyler v. Dane County (D. C.) 289 F. 843;Hoyt v. Keegan, 183 Iowa, 592, 167 N. W. 521;State ex rel. Graff v. Probate Court, 128 Minn. 371, 150 N. W. 1094, L. R. A. 1916A, 901;Peabody v. Treasurer and Receiver General, 215 Mass. 129, 102 N. E. 435. In other words, the Legislature intended to levy an inheritance tax, except as it has provided otherwise, “on the succession or devolution of all real and personal property of every kind and description within the jurisdiction of the state, and upon any interest therein, whether owned by a resident or nonresident at the time of his death.” Rhode Island Hospital Trust Co. v. Doughton, 187 N. C. 263, 121 S. E. 741; State ex rel. Graff v. Probate Court, supra.

That the lawmaking power of this state intended to impose a succession tax upon mortgages owned by a nonresident decedent is put beyond question by the express language of the statute. Subdivision 3, § 12, supra. If the state has the power to impose the tax and has...