State v. Alston

• Decision Date: 20 April 1895
• Citation: 30 S.W. 750,94 Tenn. 674
• Parties: STATE v. ALSTON et al.
• Court: Tennessee Supreme Court

30 S.W. 750

94 Tenn. 674

STATE v. ALSTON et al.

Supreme Court of Tennessee.

April 20, 1895

Appeal from circuit court, Lauderdale county; Thos. J. Flippin Judge.

Proceeding by the state of Tennessee against Mary F. Alston and others to collect an inheritance and succession tax. From the decree entered, all parties appeal. Modified.

John P Gause, for the State.

W. G and W. E. Lynn, for defendants.

WILKES J.

This cause involves the constitutionality, and to some extent the construction, of chapter 174 and section 7 of chapter 89 of the Acts of 1893; the former being an act to provide for a collateral inheritance and succession tax, and the latter a section of the general revenue law passed at that session. The court below held the acts to be constitutional; that the interests passing under the will of John J. Alston to his widow and to his brother, Volney S. Alston, were not subject to such tax, but that other devises and legacies were subject thereto, as will be more fully explained hereafter. Both the state and the parties held liable appealed, but the state has assigned no errors.

The facts, as agreed upon, are substantially as follows: Dr. John J. Alston died in Lauderdale county in June, 1894. He left a will which was duly probated, and his widow, Mary Frances Alston, is his executrix. He owned the personal property and real estate referred to in his will. This will gives to his widow certain notes on Jones and others; some mill machinery a life interest in tracts of 235 acres, 120 acres, 50 acres, and 5 acres of land; all cash on hand or deposit; the rents of a storehouse in Henning, Tenn., during life; the dividends and profits on his $3,000 of stock in a Ripley bank for life; and possibly some other property. To his niece Mrs. Lee A. Crutcher and her husband, W. C. Crutcher, he gave two tracts of land during life, one containing 240 and the other 12 1/2 acres, with remainder to their children. He also gave to his niece and her husband certain live stock. To Mrs. McCowan and Mrs. Griggs, two nieces, he gave a remainder interest in the tracts of 120 acres and 50 acres, in which a life estate was given to the widow, providing that the widow might give them possession before her death, if she chose to do so. The 235-acre tract and the 5-acre tract of land given to the widow for life are directed to be sold at her death, and the proceeds to be divided, one-half to the testator's brother, Volney S. Alston, and the other half to two nephews, William and James Dyer.

The decree of the court below is substantially that the property given to the widow, Mary F., and the brother, Volney, S., is not subject to the succession or inheritance tax provided by such acts, but that such of it as was given to William and James Dyer was subject to such tax; but nothing was decreed as to the property given to Lee A. Crutcher and her husband.

It is stated by counsel representing the defendants that there is a clerical mistake in the decree, in that the liabilities of the property given to William and James Dyer are adjudicated, when it was intended to adjudicate the rights of Mrs. Lee A. Crutcher and her husband, and it is agreed that it may be treated as corrected. William and James Dyer are not parties to the agreed case in the court below, nor in this court; but Mr. and Mrs. Crutcher are parties in both courts, and their counsel in this court appears for them, and waives the error, and submits the question as to their liability. Considering the record as thus corrected, we proceed to examine the questions presented.

It is manifest that, by the express terms of the acts referred to, none of the property of the testator passing under his will to his widow is subject to the tax therein provided; and we proceed to examine as to the liability of the property, personal and real, given by the will to Lee A. Crutcher and her husband, W. C. Crutcher.

The first section of chapter 174, Acts 1893, provides for a tax upon all estates, real, personal, and mixed, situate in the state, whether the person dying seised live in the state or not, passing either by will or inheritance, or by any deed, grant, bargain, gift, or sale made in contemplation of death, or to take effect, in possession or enjoyment, after the death of the grantor, to any person or body, corporate or politic, in trust or otherwise, when the property thus passing goes to any other than the father, mother, husband, wife, children, and lineal descendants: provided, that no estate valued at less than $250 shall be subject to said duty or tax, and that the term "children" shall not be construed to apply to adopted children. This act was intended to put into operation a general system of succession or inheritance taxation, and to repeal all laws in conflict with it. It was approved April 10, 1893, and fixes the rate of taxation at $5 on the $100 of value of the property passing. On the same day, but whether prior or subsequent in point of time does not appear, the general revenue act was passed for that session, being chapter 89, and in the seventh section of the latter act a similar tax is provided and assessed. This section differs from chapter 174 in that it exempts property passing to the same parties mentioned in chapter 174, and in addition the following persons: Brothers, sisters, the wife or widow of a son, and husband of a daughter, and any legally adopted child; but no mention is made of exemption of estates of less than $250 in value. No error is assigned nor point made as to this variance; and as the question of the effect of the variance is in no way presented, and as to the parties before us cannot arise directly, we express no opinion as to this variance and its effect, if any.

It is contended that the acts are unconstitutional because they attempt to restrain and restrict the devolution of property by will or inheritance by placing a tax upon such devolution; and, again, because the act is partial, in that the tax is imposed if the property is given to certain persons, but not if given to others; and, again, that the tax is not equal and uniform, because small estates, of less than $250 in value, are exempt from its operation, while those of that amount or over are subject to its provisions.

In considering these grave questions, a short history of succession and inheritance taxes may not be inappropriate. Such taxes were recognized by the Roman law. 1 Gibbons, Decline and Fall of the Roman Empire, pp. 163, 164. They were adopted in England in 1780, and have been much extended since that date. Dowell, Hist. Tax'n, p. 148; Act 20, Geo. III., c. 28; 45 Geo. III., c. 28; 16 & 17 Vict., c. 51; Green v. Croft, 2 H. Bl. 30; Hill v. Atkinson, 2 Mer. 45. Such taxes are now in force generally in the countries of Europe. Review of Reviews, Feb. 1893. In the United States they were enacted in Pennsylvania in 1826; Maryland, 1844; Delaware, 1869; West Virginia, 1887; and still more recently in Connecticut, New Jersey, Ohio, Maine Massachusetts, in 1891; Tennessee, in 1891 (chapter 25, now repealed by chapter 174, Acts 1893). They were adopted in North Carolina in 1846, but repealed in 1883; were enacted in Virginia in 1844, repealed in 1885, re-enacted in 1863, and repealed in 1884. In New Hampshire, Wisconsin, Minnesota, and Vermont, such laws have been passed, but held unconstitutional on various grounds.

Upon general principles, the right to tax the succession or inheritance of property is founded on a reasonable basis since the right of any person to succeed to property of a deceased person, whether by will or inheritance, is a creature of statute law, and the manner in which it shall pass by no means a natural right. 2 Bl. Comm. p. 10; 2 Kent, Comm. (12th Ed.) 325; Dos Passos Collat. Inheritance Tax, 20; Brettum v. Fox, 100 Mass. 234; Mager v. Guina, 8 How. 490; Wallace v. Myers, 38 F. 184; Peters v. City of Lynchburgh, 76 Va. 927; state v. Dalrymple, 70 Md. 294, 17 A. 82; Pullen v. Wake Co., 66 N.C. 361; Strode v. Com., 52 Pa. St. 181; In re Swift, 137 N.Y. 77, 32 N.E. 1096; Curry v. Spencer, 61 N.H. 624. This idea is recognized almost universally by statutes which provide the manner in which property shall descend in the absence of any will of deceased, and in statutes which regulate the passage of property by will. As the right to succeed depends upon the law of the state, it follows that the state may regulate that right as public necessity or policy may dictate, and may subject it to such burdens and reasonable conditions as may best subserve the purposes of the state. It must be borne in mind that the tax is not upon the property, but the right or privilege of acquiring it by succession. It is a condition upon which the person may take the estate of a deceased relative by inheritance, or testator by his will. It is a retention by the state of a part of a deceased person's property, which the state may take to meet its necessities, and which, in certain cases, it may take in toto, as in cases of escheated property. It is not a tax upon the right of alienation but on the privilege of receiving by inheritance or will, or otherwise, at the death of a former owner. Strode v. Com., 52 Pa. St. 181...