State v. Eldodt
Citation | 267 P. 55,33 N.M. 347 |
Decision Date | 19 April 1928 |
Docket Number | No. 3278.,3278. |
Parties | STATEv.ELDODT et al. |
Court | New Mexico Supreme Court |
OPINION TEXT STARTS HERE
Syllabus by the Court.
By Laws 1921, c. 179, § 17, testamentary gifts, both gifts in contemplation of death and transfers to take effect upon death, are subject to the tax therein imposed, additional to the tax upon inheritances.
Taxation of testamentary gifts at higher rates than inheritances not unconstitutional, as arbitrary classification, so long as a reasonable basis of classification is discernible.
The purpose to discourage testamentary gifts, as means of evasion of taxation, is a reasonable basis of classifying them for higher taxation.
Of possible interpretations of a statute, one of which will render it unconstitutional and the other of which will not, the latter will be adopted.
Appeal from District Court, Rio Arriba County; Holloman, Judge.
Action by the State against Rhoda S. Eldodt and another to recover taxes. From a judgment for defendants, the State appeals. Reversed and remanded, with direction.
By Laws 1921, c. 179, § 17, testamentary gifts, both gifts in contemplation of death and transfers to take effect upon death, are subject to the tax therein imposed, additional to the tax upon inheritances.
J. Frank Curns and J. W. Chapman, both of Santa Fé, for the State.
E. R. Wright, of Santa Fé, for appellees.
Within one year prior to his decease, and in contemplation of death, as admitted by demurrer, Samuel Eldodt conveyed his property to his wife and son. The conveyance having been reported to the state tax commission, it assessed upon the value of the property so conveyed, after allowing exemptions, one per cent., said to be a tax against the estate, and an additional one and one-half per cent., said to be a tax against the grantees. The latter was paid, but the former refused. Thereupon the state sued. Upon demurrer, the trial court held that, in law, the defendants were liable only for the one per cent. levied against the estate, and that, as the grantees had more than satisfied it, the state had no cause of action. This appeal is by the state from the judgment following such ruling.
[1] The only question is the proper construction of Laws of 1921, c. 179. Sections 2 and 17 thereof read as follows:
For convenience, we have included in parentheses that part of section 17 which brings the particular transaction within the succession tax laws.
Said chapter 179 repealed Laws 1919, c. 122, the earlier and original act upon the subject generally. Section 2 of chapter 179 is similar in purpose to section 3 of chapter 122, and holds the same relative position in the law. That part of section 17, supra, outside the parentheses, is section 17, c. 122, without substantial change. That part of the section within the parentheses is new matter, added in 1921.
Counsel seem to agree that the original section 17 imposed two distinct taxes upon transfers to take effect upon death, which the Legislature chose to designate as “testamentary gifts.” While the section is not free from obscurity, we do not see how any other conclusion can be reached as to its meaning.
Manifestly, one of the purposes of revising the law was to tax transfers made in contemplation of death other than bona fide sales for full consideration. What tax is imposed in such cases?
The Legislature had before it, as the basis of its work, Laws 1919, c. 122. It preserved its general arrangement and many of its provisions. The existing system taxed ordinary inheritances at certain rates. This in section 3 ( ). It taxed conveyances taking effect upon death, called “testamentary gifts,” at the same rates applied to inheritances, and, in addition, taxed the grantees at different rates. To this system it was proposed to add taxation of gifts in contemplation of death.
Such being the problem, the question would naturally arise as to where the new matter could be best and most conveniently inserted. If, as appellees contend, it was intended, for taxation purposes, to classify gifts in contemplation of death with inheritances, and to impose the same tax upon them, and no more, the new matter could easily and would naturally have been inserted in section 2. If, as appellees no doubt thought when they paid the one and one-half per cent. tax, it was intended to give them a classification of their own, with a tax different from the tax on inheritances, and different from the tax on other testamentary gifts, it could easily, and would naturally, have been made an independent section. If, as the state contends, it was intended to add such conveyances to the classification of testamentary gifts, and to subject them to the taxes already prescribed for testamentary gifts, it would naturally have been, as it was, included in section 17.
The insertion of the provision in question in section 17, and the classification or definition of transfers in contemplation of death as “testamentary gifts,” point with considerable force to an intent to tax such transfers as other testamentary gifts are taxed. Counsel for the state urge that there is no good reason for distinguishing as to rate of taxation between the two kinds of testamentary gifts; that it is necessary that both kinds should be taxed in order to prevent evasion of the tax upon inheritances; that, in experience, both methods of transfer have been employed in attempting such evasion; and that the taxes are made higher in such cases to discourage, by penalizing, such conveyances. This is not an unreasonable view.
Though the provision appears in the act where we should expect to find it, if the state's contention is correct, we are still confronted with a number of objections pointed out by appellees. If the Legislature intended to subject gifts in contemplation of death to the same tax as conveyances to take effect upon death, the simple and natural thing would have been merely to enlarge the already existing definition of testamentary gifts to include the former. This the Legislature failed to do. The provision for the taxation of gifts in contemplation of death was tacked on, rather than merged with, the existing section 17. It reads like a separate section. It is pointed out that there is no general language in the section imposing a tax upon all testamentary gifts. It is contended that testamentary gifts in contemplation of death are required to be listed and inventoried as part of the estate; while testamentary gifts to take effect upon death need not be so listed. It is urged that the language within the parentheses is appropriate to impose a tax upon the gift only, while the language outside the parentheses imposes both a tax upon the gift and a further tax upon the right to receive the gift. It is pointed out that the language within the parentheses does not in terms subject the testamentary gifts in contemplation of death to both or all of the taxes imposed in section 17, but merely subjects them “to the tax imposed herein.”
These imperfections in...
To continue reading
Request your trial-
In re Santillanes, 4760.
...intent unless it clearly appears to be in conflict with the Constitution. Asplund v. Alarid, 29 N.M. 129, 219 P. 786; State v. Eldodt, 33 N.M. 347, 267 P. 55; State v. Sargent, 24 N.M. 333, 171 P. 790. [4] From the earliest times, children have been regarded as the wards of chancery. The Cr......
-
Hutcheson v. Atherton
...palpably arbitrary.” Davy v. McNeill, 31 N.M. 7, 240 P. 482, 486. See, also, Codlin v. Kohlhousen, 9 N.M. 565, 58 P. 499; State v. Eldodt, 33 N.M. 347, 267 P. 55; and Ex parte Ashton, 231 Ala. 497, 165 So. 773, 104 A.L.R. 54. [4][5] Viewing the statute, then, in the light of the presumption......
-
Carlson's Estate, In re
...objection to embodying in the same statute provisions with reference to any inheritance tax, and also an estate tax. State v. Eldodt, 33 N.M. 347, 267 P. 55; Stebbins v. Riley, 268 U.S. 137, 45 S.Ct. 424, 69 L.Ed. 884, 44 A.L.R. 1454.' See, also, In re Lloyd's Estate, 53 Wash.2d 196, 332 P.......
-
In re Henry's Estate, 26331.
... ... Henry's ... estate from paying, and the supervisor of inheritance tax and ... escheat division of the state from collecting, an inheritance ... tax ... Mrs ... Henry died testate in Seattle, this state, May 9, 1935, being ... same statute provisions with reference to any inheritance ... tax, and also an estate tax. State v. Eldodt, 33 ... N.M. 347, 267 P. 55; Stebbins v. Riley, 268 U.S ... 137, 45 S.Ct. 424, 69 L.Ed. 884, 44 A.L.R. 1454 ... We now ... ...