State v. Estate of Baldwin
| Decision Date | 29 June 1929 |
| Docket Number | No. 28664.,28664. |
| Parties | THE STATE, Appellant, v. ESTATE OF CARRIE POOL BALDWIN. |
| Court | Missouri Supreme Court |
Appeal from Lewis Circuit Court. — Hon. James A. Cooley, Judge.
REVERSED AND REMANDED (with directions).
Stratton Shartel, Attorney-General, Claud E. Curtis, Special Assistant Attorney-General, and Walter M. Hilbert, Prosecuting Attorney of Lewis County, for appellant.
(1) The Inheritance Tax Law provides for the taxation of the transfer of any property, real, personal, or mixed, or any interest therein or income therefrom, in trust or otherwise, to persons, institutions, associations, or corporations, not hereinafter exempted, in the following cases: When the transfer is by will or by the intestate laws of this State from any person dying possessed of the property while a resident of this State. When the transfer is by will, or intestate law of property within the State, or within the jurisdiction of the State and decedent was a non-resident of the State at the time of his death. Sec. 558, R.S. 1919. (a) Missouri borrowed its Inheritance Tax Law from the State of Illinois. Illinois had taken its law from the State of New York. Laws of Illinois 1919, p. 757, sec. 388B; Hurd's 1919 R.S. of Illinois, p. 1984; Sec. 230, p. 5999, vol. 5. Cumming and Gilbert's Consl. Law of New York. (b) When the statute of another state is adopted by the Missouri Legislature the construction placed upon that statute by the highest courts of that other state, should be persuasive upon the courts of this State in construing such statute. Skrainka v. Allen, 76 Mo. 389; Snyder v. Railroad, 86 Mo. 618; Knight v. Rawlings, 205 Mo. 433; State ex rel. v. Miles, 210 Mo. 145; People v. Trust Company, 255 Ill. 168; People v. Lowenstein, 284 Ill. 131. (2) Bonds, cash on deposit, and notes held by a non-resident, and located in Missouri at the time of the death of such non-resident, are taxable in Missouri, for the purpose of inheritance tax. State ex rel. v. Bunce, 187 Mo. App. 607; Alvany v. Powell, 55 N.C. 51; State v. Dalrymple, 70 Md. 294; Re Page, 149 La. 623, 89 So. 876; Re Popp, 146 La. 463, 83 So. 765; Carr v. Edwards, 84 N.J.L. 667; Matter of Houdayer, 150 N.Y. 37; Matter of Whiting, 150 N.Y. 27; Matter of Morgan, 150 N.Y. 35; In re Stanton's Estate, 142 Mich. 491; State ex rel. Graff v. Probate Court, 128 Minn. 371; Callahan v. Woodbridge, 171 Mass. 595; 46 L.R.A. (N.S.) 1167, note; Blackstone v. Miller, 188 U.S. 189; Kinney v. State, 207 Mass. 368; Chaffin v. Johnson, 204 N.W. (Iowa) 424; Helser v. State, 128 Md. 228; Frick v. Pennsylvania, 268 U.S. 492.
Harry Carstarphen and John F. Garner for respondents.
(1) The statute construed in the light of the law does not seek to include intangible personal property of a non-resident decedent. Debts are property at the domicle of decedent, though there may be written evidence of the existence thereof. Sec. 588, R.S. 1919; Blodgett v. Silberman, 48 U.S. Sup. Ct. Rep. 410; State Tax on Foreign Held Bonds, 15 Wall. 300, 21 L. Ed. 179; Rhode Island Hospital Tr. Co. v. Doughton, 270 U.S. 69. Inheritance tax statutes are to be construed most strictly against the State. In re Rogers' Estate, 250 S.W. 576; In re Zook's Estate, 296 S.W. 778. Statutes are to be construed to harmonize with the Constitution. Washington Township Road District v. Robbins, 262 S.W. 46; Stack v. Baking Co., 283 Mo. 396, 223 S.W. 89; Weisberg v. Boatmen's Bank, 280 Mo. 199, 217 S.W. 85. (2) The State may not tax intangible personal property owned by a non-resident. Sec. 2, Art. 4, U.S. Constitution; Fourteenth Amendment, U.S. Constitution; Sec. 30, Art. 2, Constitution of Missouri; St. Louis v. Galt, 179 Mo. 8; State v. Julow, 129 Mo. 163; McCullough v. Maryland, 4 Wheat. 316; Frick v. Pennsylvania, 268 U.S. 473; Wachovia Bank & Trust Co. v. Doughton, 272 U.S. 567. Debts are intangible property notwithstanding evidenced by paper writings, as bonds and promissory notes, and the same is true of bank deposits. Blodgett v. Silberman, 43 U.S. Sup. Ct. Rep. 410; State Tax on Foreign Held Bonds, 15 Wall. 300, 21 L. Ed. 179; Rhode Island Hospital Tr. Co. v. Doughton, 270 U.S. 69; Buck v. Beach, 206 U.S. 392; State ex rel. American Auto Ins. Co. v. Gehner, 8 S.W. (2d) 1057; State ex rel. Hickman v. Lewis, 256 Mo. 98; Horigan Realty Co. v. First Natl. Bank, 273 S.W. 772; Williams v. Peoples Bank, 257 S.W. 192; American Bank v. Peoples Bank, 255 S.W. 943; Utley v. Hill, 155 Mo. 232; Vandagrift v. Masonic Home, 242 Mo. 138. Privileges and immunities may not be denied citizens of the several states or of the United States. British-American Portland Cement Co. v. Gas Co., 255 Mo. 1; International Text-Book Co. v. Pigg, 217 U.S. 91. It is a violation of the Fourteenth Amendment for two different states to tax the devolution of the same property. Property may be taxed at its situs. Frick v. Pennsylvania, 268 U.S. 473; People v. Forman, 322 Ill. 232. The situs of intangible property is at the domicile of the decedent. Blodgett v. Silberman, 48 U.S. Sup. Ct. Rep. 410; State Tax on Foreign Held Bonds, 15 Wall. 300, 21 L. Ed. 179; Rhode Island Hospital Tr. Co. v. Doughton, 270 U.S. 69; Wachovia Bank & Trust Co. v. Doughton, 272 U.S. 567; In re Zook's Estate, 296 S.W. 778; People v. Forman, 322 Ill. 223.
This proceeding was begun in the Probate Court of Lewis County to assess an inheritance tax against property belonging to the estate of Carrie Pool Baldwin, deceased.
Carrie Pool Baldwin died testate in Quincy, Illinois, October 4, 1926. Her will was probated in Illinois. At the time of her death she was a resident of Illinois, as was her son Thomas A. Baldwin, sole devisee and executor of the will.
Letters of administration with will annexed were issued on her estate October 22, 1926, to Harry Carstarphan, of Hannibal, Missouri, and the will admitted to probate in Lewis County, Missouri. The Judge of the Probate Court of Lewis County appointed appraisers to fix the value of decedent's property in Missouri, subject to inheritance tax. The executor, Mr. Baldwin, filed a motion in that court asking the court to order the administrator to turn over to him all the personal and intangible property in the estate of decedent in Missouri. The motion was overruled.
The appraisers proceeded to appraise the property, made report to Mr. Carstarphan, the Missouri administrator, and Thomas A. Baldwin, executor, filed exceptions to that report. Exceptions were overruled and inheritance tax assessed against certain property belonging to the estate. The administrator appealed from the ruling of the probate court to the circuit court, where, September 5, 1927, judgment was rendered by that court setting aside that part of the appraiser's report assessing inheritance tax against the intangible property of the estate, and from that judgment the State appealed to this court.
The total property listed by the appraiser consisted of certain real estate situated in Lewis County, Missouri, valued at $55,380, and certain personal property amounting to more than eighty-five thousand dollars; a total of $141,278.09. After deductions and exemptions the total estate listed for taxation in Missouri amounted to $121,358.80. Of this the real estate, valued as above, was held by the trial court to be properly listed and assessed for inheritance transfer tax, but held that the personal property listed, amounting to more than $65,000, was not subject to taxation.
The personal property which the circuit court held was not taxable included $15,937.51, deposited with the Southeast Missouri Trust Company at Cape Girardeau, Missouri; $1078.24 deposited in Advance Exchange Bank at Advance, Missouri; two Liberty Bonds of one thousand dollars each. The remainder consisted of about thirty promissory notes due the deceased, signed by various parties, all of which, it is stated, were secured by mortgages on real estate in Missouri with the exception of five notes unsecured, three of them for small amounts. There was no evidence as to why these deposits, notes and bonds were in Missouri, nor how they came into the possession of the Missouri administrator. It is not questioned that he was rightfully appointed administrator in this State and lawfully came into possession of the said evidence of debt. The only showing that they were in fact in Missouri was the motion filed by Thomas A. Baldwin, executor, to have the property turned over to him.
On trial in the circuit court the attorney for the executor introduced in evidence a list of the property, consisting of exactly the same cash in bank, bonds and notes, listed by the executor in Missouri, as listed in the State of Illinois, and made subject to inheritance tax in that State.
I. As to the money deposited in the bank, the relation of debtor and creditor exists between the bank and the depositor. The money is in fact the property of the bank, and it owes the amount of its deposit to its depositor. As to the notes, the simple relation of debtor and creditor exists. The Debtor and Government bonds likewise are debts which the Creditor. government owes to the bondholder. All these different kinds of property may be considered as of one class for the purposes of this case.
In recent cases we have held for the purpose of property tax that the situs of a credit is the domicile of the creditor, citing Railroad Co. v. Pennsylvania, 15 Wall, 300, where it was held that debts have no locality separate from the Situs: parties to whom they are due, and to tax them elsewhere Excise. might be unconstitutional as impairing the obligation of contract. [.]
It we could apply the same rule to an inheritance tax we might have less difficulty in disposing of this case. The inheritance tax statute, Article XXI. Chapter 1. Revised Statutes 1919,...
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