(After stating the foregoing facts.)
I. The judgment of the court refusing the injunction is excepted to upon the ground, among others, that the court erred in refusing to hold the act of the General Assembly referred to. in the statement of facts, generally called the inheritance-tax act, violative of paragraph 2 of section 1 of article 7 of the constitution of the State of Georgia (Civil Code, § 6552), which paragraph provides that the levy of taxes on property for any one year by the General Assembly for all purposes, except to provide for repelling invasion, suppressing insurrection, or defending the State in time of war, shall not exceed 5 mills on each dollar of the value of the property taxable in the State; it appearing from the facts contained in the statement agreed upon by the parties that the estate of J. H. Martin had paid all ad valorem taxes due to the State of Georgia for the years 1913 and 1914. . The objection, that the tax against the collection of which injunction is sought is an additional tax imposed upon property after there has been paid upon it the full tax to the constitutional limit of 5 mills, is without merit. This is not a tax upon property. It is rather in the nature of a tax upon a privilege — upon the right to receive property transmitted to one by devise or inheritance, or by deed, grant, or gift intended to take effect in possession or enjoyment after the death of the grantor or donor. The point raised by this attack upon the constitutionality of the act is without novelty, and requires no discussion. It has been fully discussed and settled by courts of other jurisdictions, and with the reasoning of those courts tending to a conclusion which sustains the act we are satisfied. In Boss on Inheritance Taxation, 20-22, the writer says: “The constitutionality of the
2. Another ground of exception to the judgment is that the court erred in refusing to hold the inheritance-tax act generally, and section 11 of the act particularly, violative of the due-process-of-law clause of the State and Federal constitutions, as contained in paragraph 3, section 1, article 1 of the constitution of the State of Georgia, and article 5 of article 8 of the constitution of the United States (Civil Code, §§ 6359, 6688). "We do not think this constitutional objection is valid, in view of the provisions of the act and the particular section thereof referred to. Section 11 of the inheritance-tax act reads as follows: “That the ordinary of the county, having jurisdiction of the administration of the estate of the decedent, shall, on application of any interested party or upon his own motion, and whenever occasion may require, appoint three disinterested persons as appraisers to fix the value of property subject to said tax; that the appraisers, being first sworn, shall give notice to all persons known to have a claim in the property appraised, including the executor, administrator, or trustee, and the tax-collector of the county, of the time and place when they will appraise the same, such notice being given by advertisement in some newspaper having general circulation in the county which has jurisdiction of the administration of the estate, that at such
3.. Another exception to the judgment of the court below is based upon the contention that the court erred in finding that the ordinary correctly calculated the amount of inheritance tax due upon the life-estate of Mrs. A. S. Martin, and the amount due upon the remainder estate of Elouise- W. Martin, the daughter of the testator; the tax found to be due by Mrs. Martin, the life-tenant, being the sum of $47.63, whereas the plaintiff insists that the sum due is only $11.01; and the tax found to be due upon the remainder estate being $71.94, whereas petitioner claims that the correct sum is $58.55.
Without attempting to make any calculation of the amount of taxes due upon the life-estate and the remainder estate under the provisions of the inheritance-tax act, we are of the opinion that the amounts found to be due are erroneous; the calculations as to the
Conceding that under these terms of the will the amount which the remainderman will receive is, as claimed by the plaintiff, uncertain and contingent, and that it is impossible to determine just what the remainder estate would consist of, or what the value of it would be upon the termination of the life-estate, we do not think that the estate was for that reason exempt from the inheritance tax; but we do agree with the contention that the tax should have been imposed only on the excess of the value of the remainder estate and of the life-estate above $5,000; in. other words, that where there is a life-estate and a remainder interest created, as in the present case, the amount of $5,000 should be deducted from each of the two estates, and not merely the single sum of $5,000 from the entire estate left by the decedent. The courts of other jurisdictions have not been uniform in construing provisions in their inheritance-tax laws similar to that contained in the part of subsection 1 quoted above; but we think that the reasoning of those courts giving to such provision in the inheritance-tax laws the construction which we are placing upon it is the sounder. The purpose of the act, or that part of it now immediately under consideration, was to impose a tax upon every transfer of property taxable under the act, or any beneficial interest therein, to any person falling within the classes enumerated therein, where it was of a value that exceeded the amount of $5,000; or, in other words, that $5,000 was to be deducted from the amount of the value of the property transferred and taxable under the act, and that the tax should be at the rate of one per cent, on the amount in excess of $5,000. Now, since under this will the estate of the decedent was carved into two estates, the life-estate and the remainder estate, the transfer taxable under the act, so far as relates to the life-tenant, was the value of the life-estate in excess of $5,000; and the same is true as to the remainder estate. The court, therefore,
And where, as in the present case, the right of disposition of the entire estate is given to the tenant for life, so that she may consume and dispose of a part or all of the estate left by the decedent, and it can not be determined how much of it will be consumed or whether any of it will be consumed, then we are of the opinion that for the purposes of taxation under this act, in determining the value of the remainder estate, it should be found that the entire estate will pass to the remainder and that none of it will be consumed or disposed of by the life-tenant. This will work no hardship or inequality on the remainderman, because she will be benefited by the failure of the life-tenant to consume or dispose of any part of the corpus of the estate. Any other ruling would enable the testator, however large and valuable the estate which he might transfer by will, to defeat the purposes of tax measures of this character by introducing the element of uncertainty into the value of the estates which he might create in the property devised.
Judgment reversed.