Succession of Westfeldt

• Decision Date: 18 January 1909
• Docket Number: 17,187
• Citation: 48 So. 281,122 La. 836
• Court: Louisiana Supreme Court
• Parties: Succession of WESTFELDT

48 So. 281

122 La. 836

Succession of WESTFELDT

No. 17,187

Supreme Court of Louisiana

January 18, 1909

Appeal from Civil District Court, Parish of Orleans; Thomas C. W Ellis, Judge.

Motion in the matter of the Succession of Patrick M. Westfeldt deceased, by his widow, praying that Thomas Connell, clerk of the civil district court, ex officio collector of the inheritance tax, show cause why he should not receive a certain sum in full settlement of the inheritance tax due from the estate of Patrick M. Westfeldt, deceased. From the judgment fixing the amount of the tax, Connell appeals. Amended, and, as amended, affirmed.

Mark Mayo Boatner, for appellant.

McCloskey & Benedict, for appellee.

OPINION

NICHOLLS C.J.

Statement of the Case.

Patrick M. Westfeldt, a resident of New Orleans, was survived by a widow and three children.

His will bequeathed a third of his property to his widow, and to his children the residuum in equal portions. His estate situated in the state of Louisiana consisted of the following:

Stocks valued at

$ 26,585

Bonds valued at

9,810

Interest in real estate valued at

2,200

Household furniture

670

Cash

4,921

Total value

$ 44,186

The deceased left also a large quantity of real estate situated in North Carolina.

Of property left in Louisiana the legacy amounts to $ 14,728.66, and the share of each of the children to $ 9,819.23. Including their interest in the North Carolina real estate, the children inherit more than $ 10,000 each.

Among the assets of the succession in Louisiana is an undivided interest appraised at $ 500 in a parcel of real estate, in respect to which it was admitted:

"That the inscriptions in the tax collector's office, the city treasurer's office, and the office of the recorder of mortgages for the state tax of 1878 and the city tax of 1883 (thereon) were canceled under a judgment dated October 7 1881, on a rule taken in the matter of the Succession of E. Charles, former owner of the said property, * * * and that the grounds on which the said judgment was prayed for were that the assessments of the said property for said years were insufficient, that the same were in the name of a person deceased, that the description therein was not sufficient to identify the property, and that the said taxes were prescribed."

On the 6th of March, 1908, a motion was made in the matter of said succession by Mrs. Westfeldt, widow in community of P. M. Westfeldt, and as the natural tutrix of her minor child Jane McC. Westfeldt, and by Louisa B. Ogden, dative tutrix of Patrick M. Westfeldt and Lula Westfeldt, children of P. M. Westfeldt by a former marriage, in which the movers suggesting to the court that the estate of the deceased consisted of the following assets (describing the assets as hereinbefore given), valued at $ 44,186; that under the will one-third goes to the widow as legatee, to wit, $ 14,728, leaving a balance to the three minor heirs of $ 29,458, or the share of each heir $ 9,819.23, less than the minimum amount assessable for inheritance tax under the statute; and suggesting further that the stock in the Hibernia Bank & Trust Company, amounting to $ 6,330, is exempt, and the real estate, amounting to $ 2,200 is also exempt, making a total of $ 28,580, of which said widow as legatee received one-third, or $ 2,860, which is to be deducted from her share of said estate, $ 14,728, thus leaving a balance of $ 11,868, on which alone an inheritance tax of 5 per cent. is due, to wit, $ 593.40; prayed that Thomas Connell, clerk of the civil district court, ex officio tax collector of the inheritance tax, be ordered to show cause why he should not receive, in full settlement and satisfaction of the inheritance tax due by the estate of Patrick M. Westfeldt, the said sum of $ 593.40.

The court ordered a rule on Thomas Connell to issue as prayed for. On the trial of the rule, the district court rendered judgment fixing the sum of $ 618.40 as the inheritance tax due by the succession, its heirs, instead of $ 575.40.

The judge assigned the following reasons for his judgment:

"I find that property inventoried at $ 500, being a lot of ground bounded by [giving the description of the lot], escaped taxation for the state tax of 1878 and the city tax of 1883 (i.e., the taxes for those years have not been paid).

"(1) This, it seems to me, makes the succession liable for the inheritance tax of 5 per cent. on the value of the property as inventoried, viz., $ 500, or a tax of $ 25.

"Escaping taxation because of informalities in assessment when the duty of the owner was to have it assessed is not 'paying a just proportion of the general taxation.'

"(2) Careful consideration has convinced me that the land of the succession situated in the state of North Carolina is not subject to the inheritance tax levied by the state of Louisiana.

"It is true the title of the heirs of the deceased under the inheritance law, or by the terms of his will, to the North Carolina lands, is fixed by the law of this state; but that title, quoad the land situated in North Carolina, may be subject to such regulations as the law of that state has ordained or may ordain, and the land itself is subject to taxation, by that state, alone. It may or may not be the subject of an inheritance tax, when the widow and heirs of the deceased go there with the Louisiana evidence of their title to claim and control it.

"The courts of this state can have no power of administration over said lands. It would seem that it must be the subject of an ancillary administration or other probate proceeding in the court of North Carolina having jurisdiction over its situs.

"On the consideration of well-settled law, and others easily suggested, it seems to me that the value of that land cannot figure in arriving at the total of this Louisiana succession, on which the inheritance tax is to be calculated.

"If the property in North Carolina was personal property, the Louisiana inheritance tax might attach to it under the rule, 'Mobilia personam sequuntur,' but as it is land, subject to taxation, and to administration and general domestic regulation exclusively by the law and jurisdiction of its situs, I think it is beyond the power of this state (Louisiana) to deal with it as the basis for the imposition and collection of an inheritance tax."

The clerk of the civil district court, as ex officio tax collector of inheritance taxes, has appealed.

Opinion.

Act 109, p. 173, of 1906, is entitled:

"An act to carry into effect articles 235 and 236 of the Constitution and to levy taxes solely for the support of the public schools and all inheritances, legacies and other donations mortis causa, to provide exemption therefrom, to prescribe the manner of collecting the same, to fix the fees of attorneys and commissions of tax collectors and to repeal all conflicting laws."

Articles 235 and 236 of the Constitution of 1898 which it was the purpose of that act to "carry into effect" were as follows:

"Art. 235. The Legislature shall have power to levy solely for the support of the public schools, a tax upon all inheritances, legacies, and donations; provided no direct inheritance, or donation to an ascendant or descendant, below ten thousand dollars, in amount of value shall be so taxed, provided further, that no such tax shall exceed three per cent for direct inheritances and donations to ascendants or descendants and ten per cent for collateral inheritances provided bequests to educational, religious or charitable institutions shall be exempt from the tax.

"Art. 236. The tax provided for in the preceding article shall not be enforced when the property donated or inherited shall have borne its just proportion of taxes prior to the time of such donation or inheritance."

The first section of Act No. 109 of 1906 declares that:

"There is now and shall hereafter be levied solely for the support of the public schools on all inheritances, legacies and other donations mortis causa, to or in favor of the direct descendants or ascendants of the decedent, a tax of two per centum, and on all such inheritances or dispositions to or in favor of the collateral relatives of the deceased or strangers, a tax of five per centum on the amount of the actual cash value thereof, at the time of the death of the decedent."

Section 2 provides that said tax shall not be imposed in the following cases:

(a) On any inheritance, legacy, or other donation mortis causa to or in favor of any ascendant or descendant of the decedent below $ 10,000 in amount or value.

(b) On any legacy or other donation mortis causa to or in favor of an educational, religious, or charitable institution.

(c) When the property inherited, bequeathed, or donated shall have borne its just proportion of taxes prior to the time of such donation or inheritance.

The syllabus of appellees' brief is as follows:

"The overwhelming weight of authority is that the inheritance tax is a special tax, and, being such, must be construed strictly against the government, and favorably to the taxpayer, so that citizens cannot be subjected to special burdens without clear warrant of law. 27 Am. & Eng. Ency. of Law, 340; Succession of Swift, 137 N.Y. 77, 32 N.E. 1096, 18 L.R. A. 709; State ex rel. Foot v. Bazille, 97 Minn. 11, 106 N.W. 93, 6 L.R.A. (N.S.) 732 (subdivision 6).

"There is nothing in the dicta laid down in the Successions of Levy, Kohn, or Pritchard which militates against this rule.

"(2) Real estate situated in states other than Louisiana cannot be taken into consideration for any purpose in either the assessment or calculation of an inheritance tax imposed by a Louisiana statute. See Swift Case, quoted above (also 18 L.R.A. 709); Am. & Eng. Ency. of Law, 347; ...