Textor v. Textor

• Decision Date: 19 February 1936
• Docket Number: 6.
• Parties: TEXTOR ET AL. v. TEXTOR.
• Court: Maryland Court of Appeals

183 A. 247

170 Md. 128

TEXTOR ET AL. v. TEXTOR.

No. 6.

Court of Appeals of Maryland

February 19, 1936

Appeal from Circuit Court No. 2 of Baltimore City; J. Frank Supplee Jr., Judge.

Suit between Catherine Textor and another, trustee, and Catherine Textor. From an adverse decree, Catherine Textor and another trustee, appeal.

Affirmed.

Argued before BOND, C.J., and URNER, OFFUTT, PARKE, SLOAN, MITCHELL SHEHAN, and JOHNSON, JJ.

Frederick J. Singley, of Baltimore (James P. Walsh, of Baltimore, on the brief), for appellant General German Aged People's Home.

Ward B Coe, of Baltimore (Henry D. Harlan, of Baltimore, on the brief), for appellee Johns Hopkins Hospital.

PARKE Judge.

Anton Textor died testate on May 25, 1909. He created a testamentary trust for the benefit of life tenants with remainder over to children of two of the life tenants, and in default of such remaindermen "to pay to the directors of the General German Aged People's Home of Baltimore City such a sum of money which, if invested at six per cent. will support and maintain twelve beds, six for aged males and six for aged females, said funds to be known as the Anton Textor Memorial Fund.

"The residue of estate remaining in the hands of the trustees after the above mentioned provisions shall have been complied with, my said trustees are directed to pay to the Trustees of the Johns Hopkins Hospital to be applied to the treatment of deserving destitute children and to the treatment of destitute tuberculosis patients to be treated either at the Johns Hopkins Hospital or at such place or places as said Hospital authorities may designate." The trust fund was in excess of $300,000. The life tenants died without there being living any of their issue to take, and thereupon the trust terminated and the legacy to the home and the gift of the residue of the estate to the hospital both absolutely vested. These two bodies corporate have agreed that the sum of $164,250 is a sum of money which, if invested at 6 per cent., will support and maintain the twelve beds contemplated by the provisions of the testator's will. On an accounting taken of the trust funds, the auditor distributed to the home the sum of $172,894.73, which is the aggregate of the agreed sum of $164,250 and the collateral inheritance tax ($8,644.73) of 5 per centum on the sum of $172,894.73. The rest of the trust fund was $155,343.08, and on this the collateral inheritance tax was $7,767.16, which reduced the value of the remainder of the corpus of the trust passing to the hospital to the net sum of $147,575.92.

The auditor's account, therefore, allowed to the home the net sum of $164,250 as its legacy, and to this end increased the amount of the gross legacy to $172,894.73 so that a deduction of the collateral inheritance tax of 5 per centum on this gross amount would assure to the home a legacy of $164,250. In other words, by the method pursued, the home paid no collateral inheritance tax, but the estate, at the expense of the hospital, paid the tax. The hospital objected to this shift of the tax from the legatee to the estate on the ground that the legatee must pay its own collateral inheritance tax, because the testator had not otherwise provided. The hospital's exception to the account on this ground was sustained, and the home has brought this appeal.

There is no question that the testator, if he had so desired, could have provided that the collateral inheritance tax on the gift to the home should be paid out of the residuary estate. The collateral inheritance tax is, however, fundamentally a succession or legacy tax on the gift, inheritance, or distributive share and, so, is not a tax upon the estate of the donor, testator, or intestate. The statute contemplates the payment or enforcement of the tax against the donee, heir, devisee, distributee, or other donative taker. Code, art. 81, §§ 124-145, 1929 Supp. art. 81, §§ 105, 130; Bagby on Executors and Admrs. §§ 87, 65; Helser v. State, 128 Md. 228, 232, 233, 97 A. 539; Wingert v. State, 129 Md. 28, 30, 31, 98 A. 224; Safe Deposit & Trust Co. v. State, 143 Md. 644-649, 123 A. 50, 32 A.L.R. 847; Good Samaritan Hospital v. Dugan, 146 Md. 374, 382, 383, 126 A. 85; Downes v. Safe Deposit & Trust Co., 164 Md. 293, 297-299, 164 A. 874, 86 A.L.R. 1024; Lilly v. State, 156 Md. 94, 100, 101, 143 A. 661; Dryden v. Balto. Trust Co., 157 Md. 559, 146 A. 752; Matter of Gihon's Estate, 169 N.Y. 443, 62 N.E. 561. So, if the testator direct that the collateral inheritance tax on a gift be paid out of his estate, he thereby increases his gift to the extent of the tax. Compare Re Anderson (Sask.) 1928, 4 Dom.L.R. 51, 53; In re Irwin's Estate, 196 Cal. 366, 237 P. 1074; In re Levalley's Estate, 191 Wis. 356, 210 N.W. 941; Farrer v. St. Catherine's College, L.R. 16 Eq.Cas. 19, 20, 25; In re Turnbull, Skipper v. Wade, L.R. (1905) 1 Ch. 726. It follows that, in the absence of an explicit provision that the tax be paid out of the estate, none will be implied, unless that intention certainly appears from the terms of instrument making the donation. Smith v. State, 134 Md. 473, 477, 480, 107 A. 255; Loring v. Gardner, 221 Mass. 571, 109 N.E. 635; In re Lea's Estate, 194 Pa. 524, 45 A. 337; In re Trainer, 248 N.Y. 171, 161 N.E. 459; Londesborough v. Somerville, 19 Beav. 295, 52 Eng.Repr. 363; Sherman v. Moore, 89 Conn. 190, 93 A. 241.

There is neither language nor provision in the will which gives color to the contention that the collateral inheritance tax was to be paid out of the residue of the estate. The first six bequests of the will were to be paid upon the testator's death to as many different persons, who were all in the class of collaterals with respect to the testator but there is no direction that the collateral inheritance tax on the legacies was to be borne by the estate of the testator. With reference to the legacy to the home, there is neither language nor circumstance from which the inference may be drawn that, after the payment of the legacy to the home, the...