State v. Mollier

• Decision Date: 06 November 1915
• Docket Number: 19,552
• Citation: 152 P. 771,96 Kan. 514
• Parties: THE STATE OF KANSAS, Appellee, v. MARY MOLLIER, as an Individual and as Executrix, etc., Appellant
• Court: Kansas Supreme Court

152 P. 771

96 Kan. 514

THE STATE OF KANSAS, Appellee, v. MARY MOLLIER, as an Individual and as Executrix, etc., Appellant

No. 19,552

Supreme Court of Kansas

November 6, 1915

Decided July, 1915.

Appeal from Cloud district court; JOHN C. HOGIN, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. INHERITANCE TAX--Property Transmitted by Will Subject to Inheritance Tax. Section 1 of chapter 248 of the Laws of 1909 (Gen. Stat. 1909, § 9265), imposed a succession tax upon the right to take property by will or by the intestacy laws or by transfer made in contemplation of death. The provision in section 1 exempting from the operation of the act the case of a "bona fide purchase for full consideration in money or money's worth" was intended to apply solely to transfers by deed or grant made in contemplation of death, and has no application to the transmission of property by will.

2. SAME--Property Involved Passed by Will--Not by Contract. A will was executed in 1901 bequeathing all the property of the testator to his niece, in pursuance of a contract entered into between them many years before, by which she agreed to live with and care for him as long as he lived. When he died, in 1911, the contract had been fully performed. Held, that the property passed by the will and not by the contract, and is liable to the succession tax imposed by the inheritance tax law of 1909.

3. INHERITANCE TAX LAW--Not in Conflict with Federal Constitution. Whatever right accrued to the defendant under the contract in this case was acquired subject to the power of the legislature to regulate the devolution of property by will, and the act of 1909, imposing an inheritance tax upon property passing by will, is not, as applied to the property which passed to the defendant, in conflict with the provision of the federal constitution designed to protect the obligation of contracts.

Park B. Pulsifer, and Charles L. Hunt, both of Concordia, for the appellant.

S. M. Brewster, attorney-general, John L. Hunt, assistant attorney-general, and M. V. B. Van De Mark, county attorney, for the appellee.

Porter, J. Dawson, J.

OPINION

PORTER, J.

This action was brought by the state to recover a tax upon a legacy and involves the construction of the inheritance-tax law.

The defendant is the sole beneficiary under the will of Louis Mollier, deceased, and is sued in her individual capacity and as executrix of the estate. The court sustained a demurrer to her answer. She elected to stand upon the answer and appeals from a judgment rendered in favor of the state. The defendant is the niece of Louis Mollier, deceased. In his lifetime he was a Catholic priest and for several years was in charge of a parish in Cloud county. More than twenty years before his death he made an agreement with defendant that if she would make her home with him, act as his housekeeper, and look after his welfare as long as he lived, he would make a will and bequeath to her all his property. She fully performed the contract on her part and continued to live with him and care for him until his death, which occurred February 10, 1911. In 1901 he made his will and in recognition of the contract named her as his beneficiary. It was duly probated, and she was appointed executrix.

The inheritance-tax law (Laws 1909, ch. 248, Gen. Stat. 1909, §§ 9265-9291) was repealed by chapter 330 of the Laws of 1913. In 1915 it was reenacted with numerous changes. (Laws 1915, ch. 357.) The first section of the original act reads the same as section 1 of the act of 1915, and imposed an inheritance or succession tax upon all property "which shall pass by will or by the laws regulating intestate succession, or by deed, grant or gift made in contemplation of death, or made or intended to take effect in possession or enjoyment after the death of the grantor, to any person, absolutely or in trust--except in case of a bona fide purchase for full consideration in money or money's worth."

The defendant claims that she acquired the property not by will but by a contract which had been fully executed by her at the time the will took effect; that the will was merely the means agreed upon by which to convey to her the legal title to property which had already become hers when Louis Mollier died. She claims also that her case falls within the exception mentioned in the statute for the reason that she acquired the property by a bona fide purchase for full consideration in money's worth. She relies upon decisions of this court holding that where the execution of a will is part of a contract to make a will, the contract will be enforced by the courts in favor of a person who has acted upon it. (Schoonover v. Schoonover, 86 Kan. 487, 121 P. 485; Holland v. Holland, 89 Kan. 730, 132 P. 989; Smith v. Cameron, 92 Kan. 652, 141 P. 596.)

The doctrine of these cases is stated in the following excerpt from the opinion in the Schoonover case, supra:

"Where one has rendered personal services to another under an oral agreement for compensation by the devise of real estate, the contract may be enforced irrespective of the question of possession, where the services are of such a character that their money value can not be satisfactorily estimated." (p. 489.)

Another case upon which defendant places considerable reliance is Nelson v. Schoonover, 89 Kan. 779, 132 P. 1183, where the court in an opinion denying a rehearing held that the land was not subject to the inheritance tax. Land was purchased and paid for by the husband, who took the title in his wife's name under an agreement that she would make a will in his favor. She died without making such will, and the court decreed specific performance in favor of the husband. The point was raised in a petition for rehearing that the executor was entitled to hold the property for the purpose of paying the inheritance tax. In the opinion denying a rehearing it was said:

"It is suggested that an effort may be made to charge the land, to which the plaintiff is held to be entitled, with an inheritance tax, and that if such an effort should be successful payment would have to be made through the executor. The plaintiff does not derive title to the property by descent or will, but by contract. Under the findings of the trial court, which have been sustained upon appeal, the property was in a sense his before his wife's death. At all events he had paid for it, and was not chargeable with an inheritance tax. (37 Cyc. 1565.)" (p. 784.)

In the case just cited no will was executed and so the property did not fall within the letter of the statute imposing an inheritance tax. The defendant insists, however, that had Louis Mollier failed to make the will she would have been entitled to a decree for specific performance, or, in other words, a decree declaring the property to be hers by virtue of the contract; and that the fact that he complied with the contract and executed the will ought not to make her situation less favorable than if he had failed to do so and she had been compelled to obtain relief through a suit in equity. It is urged that her title vested when the contract was made, subject only to being defeated by her nonperformance, possession and enjoyment being only postponed during the life of Louis Mollier; that the execution of the will was not required to vest her title, for the reason that in equity the property was hers at his death with or without a will, and that the courts, if no will had been made, would have decreed her the legal title.

The contract between Louis Mollier and the defendant was made many years before the inheritance-tax law was enacted, and the will, executed in pursuance of the contract, was made in 1901, eight years before the law was passed; and it is urged by defendant that the evident spirit and purpose of the statute was to levy a tribute upon gratuitous transfers, the legislature being careful to protect the rights of legatees and devisees who, like the defendant, acquired the right to property "by bona fide purchase for full consideration in money or money's worth," notwithstanding the fact that literally speaking the legal title "passed by will." Finally, the defendant contends that if the provisions of the inheritance-tax law are held to operate upon a right accrued and vested prior to its enactment, the law is in conflict with those provisions of the federal constitution designed to protect the obligations of contracts. We have stated at some length the contentions of the defendant because of the importance of the question involved.

The state, on the other hand, claims that the legislative purpose is clearly expressed in the statute: to impose a tax first, in the case of all legacies which pass by will or the intestacy laws; second, upon all transfers by deed, grant or gift, made in contemplation of death, except in the case of bona fide purchase for full consideration in money or money's worth"; and that the exception has no application to property which passes by will or intestacy, the quoted clause referring solely to transfers by deed, grant or gift. In this connection it is urged that it is not possible to purchase property to be conveyed by will or by intestacy laws; that while a binding promise may be made that a will shall be executed in a person's favor, or that no will shall be made so that property will pass by the intestacy laws, such a promise creates only contract relations, which the courts will enforce by granting equitable relief after the death of the promisor; but that the contract does not constitute a transfer of property, because that continues to belong to the promisor until his death. In Schoonover v. Schoonover, 86 Kan. 487, 121 P. 485, we held...