Hinds v. Wilcox

PIGOTT, J.

1 concur in the foregoing opinion, as well as in the result announced.

The judgment ought to be affirmed for .a reason not stated in the opinion. Testator, Wilcox, died in 1896, while the act imposing a tax upon the privilege of taking by succession or will was not passed until 1897. At the time of his decease, every sane person over 18 years of age might dispose of all his estate by will, to take effect at his death. The State thus granted to the testator the privilege of devising property, and to the beneficiaries named in the will the privilege of receiving it. This privilege was not incumbered or charged with the burden of a tax at the time it was exercised. Before testator’s death, the devisees had a mere privilege, which was revocable by law, but when the will took effect the mere pre-existing privilege was merged into a right. Then it was, if ever, that the right to take vested and became property. (Brenham v. Story, 39 Cal. 179; Black on Constitutional Law, 129; Cooley on Constitutional Limitations (6th Ed.) p. 139; Beach on Modern Equity Jurisprudence, Sec. 1015; Croswell on Executors and Administrators, Sec. 171; Westervelt v. Gregg, 12 N. Y. 202, 62 Amer. Dec. 160; Ervine’s Appeal, 16 Pa. St. 256, 55 Am. Dec. 499; Clarke v. McCreary, 12 Smedes & M. 317; Rock Hill College v. Jones, 47 Md. 1; Secs. 1794, 1851, Civil Code.) Vested rights must, of necessity, be protected from legislative interference, irrespective of constitutional checks and guards. (Andrews v. Russell, 7 Blackf. 474; Town v. Pace, 25 Grat. 1.) Section 1 of the Four teenth Amendment to the Federal Constitution, and Sections 3 and 27 of Article III of the Constitution of Montana, imply, if, indeed, they do not express, a. prohibition against the power of the Legislature to enact a law whose effect would be the impairment of a vested right. (Westervelt v. Gregg, supra; Jones v. Robbins, 8 Gray, 329; Bank v. Okely, 1 Wheat. 235; *12Cooley on Constitutional Limitations, 354; Osborn v. Nicholson., 13 Wall. 654; Farrington v. Tennessee, 95 U. S. 679; Dash v. Van Kleeck, 7 Johns. 477.) Taxes on successions and the privilege of taking under, wills are laid in diminution of a new capital, which now comes to the hands of persons on the death of the former owner. (Cooley on Taxation (2d Ed.) p. 30.) When the courts affirm the tax to be upon the privilege, they are speaking, not of successions in being or wills in effect before the act imposing the tax was passed, but of the revocable permission granted to succeed or take thereafter.

The power to tax includes the power to destroy. If the Legislature has power to levy a tax of 1 per cent, or 5 per cent, on a vested right, it has authority likewise to destroy the right by imposing a tax equal to the value of the property passing to the heirs or devisees. It is not a question of degree, but of power. The concession that the Legislative Assembly has power to subject to a tax the exercise of a vested and accrued right involves the further logical concession that it may, in the guise of taxation, impose a burden which will deprive the right of any value. Authority which permits a person to be deprived of his property by indirection is as much within the meaning and spirit of the constitutional limitation as where it attempts to do the same thing directly. (Merrill v. Sherburne, 1 N. H. 199, 8 Am. Dec. 52; In re Handley’s Estate, 15 Utah, 212, 49 Pac. 829.)

The act, in terms, applies to all estates not distributed on March 4, 1897, and, it would seem, imposes the lien as of the day of the testator’s death. Hence lands and chattels owned by a testator who died a score of years ago, and whose devisees did not secure a formal order of distribution, are now burdened with the tax created in 1897, but taking effect as a lien as of the year 1877; and such is the necessary operation of this act, as interpreted in Gelsthorpe v. Furnell, 20 Mont. 299, 51 Pac. 267, even though the devisees have long ago conveyed the land with full covenants of warranty. Many other examples might be given of cases in which the act would effectually impair the rights vested prior to 1897 in devisees and heirs and their vendees.

*13The foregoing is a mere outline of the reasons which impel me to the conclusion that the act, as applied to estates remaining undistributed when it took effect, disturbs and lessens the vested rights of heirs, devisees and legatees, thereby depriving them of property without due process of law, in violation of constitutional prohibitions, federal and state.

I am of the opinion, also, that the act is repugnant co the Fourteenth Amendment to the National Constitution, in that it denies to persons within the jurisdiction of Montana the equal protection of the laws. The act exempts from taxation estates under $500 in value in certain cases, and under $7,500 in others. An estate valued at $7,499.99 is exempted, but one of greater value is taxed, not only upon the excess above $7,500, but also upon the $7,499.99. For example, A.’s estate nets $7,499.99 in personal property passing to his widow; this is wholly exempt. B.’s estate nets $7,500, and his widow is also the sole beneficiary; this entire amount is taxed. "The widow of B. pays $75 for the privilege of receiving $7,500, whereas the widow of A. receives but one cent less and pays nothing. Does the act deny to B.’s widow the protection it extends to A.’s! I think it does. In these United States, government is instituted for the equal protection and benefit of the people. Laws must likewise be for their equal protection and benefit. This principle finds expression in the first section of the Fourteenth Amendment te the Constitution of the United States, and its effect upon the powers of the states to impose taxes is considered in Santa Clara Co. v. Southern Pac. Ry. Co., 9 Sawy. 165, 18 Fed. 385; Railroad Tax Case, 8 Sawy. 238, 13 Fed. 722, and Gulf Railroad Co. v. Ellis, 165 U. S. 150, 17 Sup. Ct. 255. The Supreme Court of Ohio, in State ex rel. Schwartz v. Ferris, 53 Ohio St. 314, 30 L. R. A. 218, 41 N. E. 579, had occasion to consider the precise question presented by the act of 1897, and held it obnoxious to the objection which I have just indicated. For these reasons I believe that Gelsthorpe v. Furnell, supra, was wrongly decided, and avail myself of the-present opportunity to record my disapproval.