Waite v. United States

REEVES, District Judge.

Tbe two suits here considered involve tbe same principle, and in effect- tbe same subject-matter. A portion of tbe tax sued for was paid to Hon. George F. Crutehley, former collector of internal revenue. Mr. Crutehley is now deceased. Under tbe statute, tbe suit may be prosecuted against tbe United States.

Upon tbe death of Alfred H. Rogers, tbe federal inheritance tax was levied upon bis estate, and payment was required. In computing such tax, tbe portion of tbe estate claimed by tbe widow of tbe decedent was included. This suit, therefore, involves a determination as to whether that part claimed by tbe widow should have been taxed.

Tbe widow claimed and took a child’s part in lieu of dower, wbieb she bad a right to do under tbe statutes of Missouri, where tbe estate is situated.

Tbe Revenue Act of 191-8 provides, among other things (section 401), “that * * * a tax * * * is hereby imposed upon tbe transfer of tbe net estate of every decedent dying after tbe passage of *150this act.” 40 Stat. 1096. In attempting to define what constituted “the net estate,” the Congress provided as follows:

“Section 402. That the value of the gross estate of the decedent shall be determined by ineluding the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated. * * *
“(b) To the extent of any interest therein of the surviving spouse, existing at the time of the decedent’s death as dower, curte-sy, or by virtue of a statute creating an estate in lieu of dower or curtesy.”

40 Stat. 1097.

Whether the foregoing congressional act would have the effect to impose the tax upon the widow’s interest is the question presented for determination.

1. The tax imposed was not intended as a direct tax. New York Trust Co. v. Eisner, 256 U. S. 345, 41 S. Ct. 506, 65 L. Ed. 963, 16 A. L. R. 660. If it should have the effect of a direct tax, it would impinge upon article 1, §§ 2 and 9, of the Constitution, which require that “representatives and direct taxes shall be apportioned among the several states * * * according to their respective numbers,” and “no capitation or other direct tax shall be laid, unless in proportion to the census or enumeration hereinbefore directed to be'taken.”

2. It will be observed that the tax in question is “imposed upon the transfer of the net estate of every decedent.” If, therefore, the interest of the widow was not transferred upon the death of the husband, it would not be subject to the tax. Moreover, in determining that question, this court will be controlled by the statutes and rules of decisions of the state of Missouri, where the property is located. Lederer v. Pearce (C. C. A.) 266 F. 497; Randolph v. Craig (D. C.) 267 F. 993; Wardell v. Blum (C. C. A.) 276 F. 226.

Adverting to the decisions of Missouri: The question now before the court was answered by the Supreme Court of Missouri, in Re Rogers’ Estate, 250 S. W. 576, where the same estate was involved. The court held that the wife’s interest, whether dower or an “estate in lieu of dower,” by election, does not pass to her by will nor by intestate laws but “it is hers, will or no will,” and that “the widow’s interest in her husband’s estate inheres by virtue of the marriage relation. * * * It is a right which she has in her husband’s property by virtue of the marriage relation, a right of which he cannot divest her.”

Plaintiffs’ several petitions state causes of action, and, in view of the admissions of fact in the pleadings, stipulations, and arguments of the parties, the demurrers should not only be overruled, but plaintiffs are clearly entitled to judgment in accordance with the prayers of their petitions. If it be desired by the parties, entries may be prepared accordingly.