CHAPTER VIII.

§ 32.

CONSTRUCTION OF STATUTES.

Strict Construction.-Executive Practice.

§ 33. Effect of Amendment.

§ 34. Construction of Statute Copied from Another Jurisdiction.

Sec. 32. Strict Construction.-Executive Practice.

The inheritance tax is to be strictly construed in favor of the taxpayer, who has a right to claim that he shall be clearly brought within its terms before being subjected to it, as it is a special burden or tax. Even words of exception confining the operation of the tax should receive a liberal construction, while any particular exemption from it should be construed in favor of the state.3

The construction adopted by executive officers in administering an inheritance tax is immaterial unless the true construction of the law is doubtful.4

1 In re Enston, 113 N. Y. 174, 178, 21 N. E. 87, 3 L. R. A. 464, 22 N. Y. St. 569, reversing 46 Hun 506, 19 Abb. N. Cas. 227, 10 N. Y. St. 380, 5 Dem. Surr. 93, 8 N. Y. St. 781. In re Vassar, 127 N. Y. 1, 12, 27 N. E. 394, reversing 58 Hun 378, 12 N. Y. Suppl. 203. In re Stewart, 131 N. Y. 274, 282, 30 N. E. 184, 14 L. R. A. 836. Eidman v. Martinez, 184 U. S. 578, 583, 22 Sup. Ct. 515, 46 L. Ed. 697.

The Rule of Reasonable Construction. The rule of strict construction ordinarily applied to the operation and effect of statutes on taxation and to proceedings thereunder does not apply to inheritance taxes. The statute must be given a fair and reasonable construction. State v. Bazille, 97 Minn. 11, 106 N. W. 93, 6 L. R. A. N. S. 732.

2"It is an old and familiar rule of the English courts, applicable to all forms of taxation, and particularly special taxes, that the sovereign is bound to express its intention to tax in clear and unambiguous language, and that a liberal construction be given to words of exception confining the operation of duty, . . . though the rule regarding exemptions from general laws imposing taxes may be different." Per Brown, J., in Eidman v. Martinez, 184 U. S. 578, 583, 22 Sup. Ct. 515, 46 L. Ed. 697, where the court quotes as sustaining its doctrine In re Howell's Estate, 147 Pa. St. 164, 23 A. 403, In re Cager, 111 N. Y. 343, 18 N. E. 866, Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969. In re Hickock, 78 Vt. 259, 62 A. 724. Where a particular subject is within the scope of the law and an exemption from taxation is claimed on the ground that the legislature has not provided proper machinery for accomplishing the legislative purpose in a particular instance a liberal rather than a strict construc

tion should be applied, and if by fair and reasonable construction of its provisions the purpose of the statute can be carried out, that interpretation ought to be given to effectuate the legislative intent. In re Stewart, 131 N. Y. 274, 282, 30 N. E. 184, 14 L. R. A. 836, affirming.

Attorney Geneneral v. Barney, 211 Mass., 95 N. E. 750.

See further, post, s. 241, as to construction of exemptions.

Sec. 33. Effect of Amendment.

The fact that a statute was amended by extending it over a certain subject or situation is some evidence that prior thereto it did not include such property.

The fact that the New York statute of 1887, c. 713, amended the New York statute of 1885, c. 483, s. 1, so as to subject to its operation the property within the state of a non-resident decedent, furnishes some evidence that prior thereto the proper construction of the section did not include such property within its operation. In re Enston, 113 N. Y. 174, 183, 21 N. E. 87, 3 L. R. A. 464, 22 N. Y. St. 569, reversing 46 Hun 506, 19 Abb. N. Cas. 227, 10 N. Y. St. 380, 5 Dem. Surr. 93, 8 N. Y. St. 781.

Sec. 34.

Construction of Statute Copied from another

Jurisdiction.

The general rule applies to inheritance laws that where a statute is adopted from another state it will be presumed that the legislature intended it to receive the construction given by the courts of that state if it had been previously construed, unless in conflict with the spirit and policy of the laws of the second state.

People v. Griffith, 245 Ill. 532, 92 N. E. 313. Black v. State, 113 Wis. 205, 211, 89 N. W. 522, 90 Am. St. Rep. 853. State v. Bullen, 143 Wis. 512, 520, 128 N. W. 109. Statutes copied from another jurisdiction, see ante, s. 16.

§ 40. Validity of Appropriation to Special Fund.

§ 41. Assigning to Probate Courts the Duty of Collection.

§ 42. Omission of Provisions for Collection.

§ 43. Proceedings to Test Validity.

§ 44. Who may Attack Validity.

Sec. 35. Certainty.

The inheritance tax acts may be void for uncertainty.

State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472, semble.

It was pointed out that N. Y. St. 1885, c. 483, contains many imperfections and that there would be great embarrassment and difficulty in executing the act in the cases of contingent remainders and expectant estates. But the court holds that this is no reason for condemning the entire act. In re McPherson, 104 N. Y. 306, 324, 10 N. E. 685, 58 Am. Rep. 502.

Sec. 36. Laws Upheld and Avoided.

The inheritance taxes in this country have usually been upheld,1 but have been held unconstitutional under state constitutions in the cases cited.2

1See, for example, Appeal of Hopkins, 77 Conn. 644, 60 A. 657. Minot v. Winthrop, 162 Mass. 113, 115, 25 L. R. A. 259. Crocker v. Shaw, 174 Mass. 266. State v. Probate Court, 112 Minn. 279, 128 N. W. 18, 19. In re Kimberly, 27 N. Y. App. Div. 470, 50 N. Y. Suppl. 586.

Chambe v. Judge, 100 Mich. 112. State v. Gorman, 40 Minn. 232. Drew v. Tifft, 79 Minn. 175. State v. Bazille, 87 Minn. 500. State v. Harvey, 90 Minn. 180. State v. Switzler, 143 Mo. 316. Curry v. Spencer, 61 N. H. 624, 60 Am. St. Rep. 337. State v. Ferris, 53 Ohio St. 314. In re Cope, 191 Pa. St. 1, 70 Am. St. Rep. 749, 45 L. R. A. 316. State v. Mann, 76 Wis. 469. Black v. State, 113 Wis. 205.

The supreme court remarks that Curry v. Spencer is an extreme decision put on the basis of the rigid uniformity of the constitution of the state. In State v. Mann and State v. Gorman, the distinction between a tax on successions and one on property was not necessary to be observed. State v. Gorman, however,

may be claimed as deciding that a tax based on the value of the estates is contrary to the rule of equality; also that exemptions are. State v. Ferris and State v. Switzler do not oppose the principles upon which inheritance taxes are sustained, but only decide that the statutes passed on were repugnant to equality and uniformity of taxation as prescribed by the state constitutions. They are authority against the Illinois statute. Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 291, 18 Sup. Ct. 594, 42 L. Ed. 1037.

Sec. 37. Statutes Void in Part Only.

The unconstitutional portion of an inheritance statute may well be so separated from the balance that the act may be void only in part, but one rate of taxation cannot be valid so far as allowed by law and void as to the excess.2

1 Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N. purpose void.

597,

The suggestion that the New York statute is unconstitutional as providing a different rate of taxation for different classes of relatives even if tenable could not render the statute void in entirety. In re Keeney, 194 N. Y. 281, 286, 87 N. E. 428, affirming 128 N. Y. App. Div. 893.

Void in Part. Where the Ohio statute of 1906 provided for the repeal of the Ohio inheritance law "except as to estates in which the inventory has already been filed at the date of the passage of this act," and where this exception was void, the court holds that the whole act need not be declared unconstitutional as the title of the act does not leave room for even suspicion that the exception was an inducement to the repeal; and the two objects of the act may well be taken separately. Friend v. Levy, 76 Ohio St. 26, 50, 80 N. E. 1036.

The unconstitutionality of the clause in the Cal. St. 1897, c. 83, exempting certain resident relatives from tax, does not render the entire provision for exemption void. It is evident that the legislature intended the exemption to apply to resident relatives and the intention of the legislature not to exempt nonresidents of the same degree of relationship fails and therefore residents and non-residents are both exempted as provided by the original intention. In re Stanford's Estate, 54 P. 259, reversed on another point in 126 Cal. 112, 58 P. 462, 45 L. R. A. 788.

"Where the Minnesota act of 1902 provided for a tax of ten per cent, while the constitution only allowed five per cent to be levied, the claim was made that the greater includes the less and that a ten per cent tax included a five per cent tax and that therefore the statute might be upheld as imposing a tax valid to the extent of five per cent. The court, however, finds that the rate of taxation and the whole thereof ordained by the legislature is absolutely void and the statute is in legal effect one in which the rate of taxation as to collateral heirs and other parties is left blank. Such being the case the court has no more power to fill by construction the blank in he statute by reading into it a rate of taxation which will be within the limitation of the constitution than it has to decree an inheritance tax in advance of any legislation on the subject. It was urged that the tax as to lineal heirs is within the constitutional limitation and is separate and distinct from the tax as to the collateral heirs and that there

fore the statute might be sustained as to lineals. The court replies to this claim that any such statute would be unconstitutional, as all must be taxed or none, quoting Drew v. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446. State v. Harvey, 90 Minn. 180, 95 N. W. 764.

Sec. 38. Confiscatory Legislation.

The supreme court has suggested the possibility of avoiding a confiscatory tax on broad grounds, but no statute has yet been held void merely for that reason.

Knowlton v. Moore, 178 U. S. 41, 109, 20 S. Ct. 747, 44 L. Ed. 969.

Cf. State v. Mann, 76 Wis. 469, 474, 45 N. W. 526, 46 N. W. 51, where the court reniarks that the tax if regarded as a probate fee may be so large as to shock the good sense of everybody.

As to confiscatory rates see further, post, s. 70.

Sec. 39. Public Purpose.

An inheritance tax may be void as not for a public purpose. The Missouri statute of 1895, for example, levied an inheritance tax for the purpose of an endowment for the state university and further to be paid to students "while attending the university for defraying the expenses of such attendance" in what was known as the state university scholarship fund. It was argued that this was no different from providing free tuition at the state university. But the court says that it is one thing to provide for the establishment and maintenance of a system of public education and a wholly different thing to support private individuals who attend a university and public schools by public taxation; and the court concludes that the tax is levied for a purely private purpose and for that reason is in contravention of the constitution of Missouri.1

The Wisconsin constitution provides that "the legislature shall impose a tax on all civil suits commenced or prosecuted in the municipal inferior or circuit courts, which shall constitute a fund to be applied toward the payment of the salary of the judges.' Wis. St. 1889, c. 176, cannot be sustained under this section, as the fund thereby raised is not restricted to the payment of the salary of judges.2

The Michigan statute of 1893 was held totally void on account of its failure to follow the constitutional requirement that all specific state taxes shall be applied in paying certain debts,3 while the act of 1899 was only void in so far as it directed the appli