Wells Fargo Bank v. Kirkwood

SCHAUER, J., Dissenting.

The statute which, by its express terms, should govern this case is section 13805 of the Revenue and Taxation Code. That section declares that “Property equal in amount to the clear market value of one-half of the decedent’s separate property shall, if transferred to the spouse of the deceased, he exempt from the tax imposed by this part ...” (Italics added.) I find nothing unclear in the language chosen by the Legislature.

The computations of the executor are obedient to the statute. But the Controller, with the approval of a majority of this court, in effect amends the statute by changing the base of the exemption from the “clear market value of one-half of the decedent’s separate property” to one-half of the value of such portion of the decedent’s separate property as may *359remain after the federal estate tax shall have been deducted from the value of the estate.

This act, if regarded as legislative, obviously is in derogation of section 1 of article III of the California Constitution. If justification is sought on the theory that it is “judicial construction” it is equally indefensible, for the construction brings a result contrary to the interest of the taxpayer in violation of the oft reiterated principle that tax statutes are to be strictly construed in favor of the taxpayer and against the state. (County of Los Angeles v. Jones (1939), 13 Cal. 2d 554, 561 [2] [90 P.2d 802], and authorities there cited; Whitmore v. Brown (1929), 207 Cal. 473, 483 [279 P. 447].)

The suggestion of the majority that the executor’s theory could work adversely to the taxpayer in a totally different situation is not persuasive; it ignores the specificity of the situation which is before the court and assumes that in the different situation as well as in this one the court will construe the applicable statutes in favor of the state and against the taxpayer. I would follow the contrary rule and give to the taxpayer the benefit of the doubt in any case wherein the legislative language was uncertain enough to admit of construction.

It follows that the order from which the executor appeals should be reversed.

MeComb, J., concurred.

Appellant’s petition for a rehearing was denied June 17, 1958. Schauer, J., and Me Comb, J., were of the opinion that the petition should be granted.