Case Title: DEPT. OF STATE REVENUE, INHERITANCE TAX DIV. v. Estate of Callaway

Citation: 110 N.E.2d 903, 232 Ind. 1

Docket Number: 28,862

State: indiana

Court: Indiana Supreme Court

Date: 1953-03-16T00:00:00Z

Document:
232 Ind. 1 (1953)
110 N.E.2d 903
DEPARTMENT OF STATE REVENUE, INHERITANCE TAX DIVISION
v.
ESTATE OF CALLAWAY, DECEASED ET AL.
No. 28,862.

Supreme Court of Indiana.
Filed March 16, 1953.
*2 J. Emmett McManamon, Attorney General, John J. McShane, Lloyd C. Hutchinson, Joseph E. Nowak, and Robert F. Wallace, Deputy Attorneys General, for appellant.
Nolin & McConnell, of Fowler, and Dunbar & Dunbar, of Indianapolis, for appellee.
*3 JASPER, J.
This is an appeal from a judgment sustaining a demurrer to an amended petition for reappraisement and redetermination of inheritance and transfer taxes. The amended petition was filed pursuant to § 6-2412, Burns' 1933, Acts 1931, Chapter 75, Section 12, Page 192.
The record reveals that the Estate of Ernest L. Callaway, Deceased, was opened and that an inventory and appraisement of personal property was filed, after which the Executrix filed an inheritance tax schedule, which was referred by the court to the Assessor. The Assessor filed his report, which was heard, and an order determining inheritance tax was entered by the court showing a total tax of $543.52. Approximately three months thereafter, the Executrix filed her petition to vacate the order determining the tax, showing that an error had been made, and that the amount of the tax due was $740.31. Approximately nine months thereafter, appellant filed its petition for reappraisement and redetermination of inheritance and transfer taxes, which was later amended, to which petitions appellee filed her demurrer. The demurrer to the amended petition was sustained by the trial court. Appellant refused to plead further and judgment was entered for appellee.
Appellant's sole assignment of error is as follows:
Appellee's memorandum to the demurrer asserts that the finding and determination of the valuation of the assets and tax due is a judicial act, not ministerial, *4 and is a question of law and not of fact; further, that the decision of the court making the determination is a judgment; and therefore § 6-2412, Burns' 1933, is unconstitutional in that it violates Articles 3 and 7 of the Constitution of Indiana and the Fourteenth Amendment to the Constitution of the United States. Section 6-2412, Burns' 1933, provides as follows:
Appellant first asserts that every presumption must be indulged in favor of the constitutionality of the act, *5 and that if there is a doubt as to its constitutionality, then the act must be held constitutional. State ex rel. v. Billheimer (1912), 178 Ind. 83, 96 N.E. 801; Groves v. Board of Commissioners (1936), 209 Ind. 371, 199 N.E. 137. With this we are in accord, and we therefore approach the question of the constitutionality of § 6-2412, Burns' 1933, with the presumption in favor of the validity of the legislative act. If the act can be sustained upon any reasonable basis, it must not be overthrown. If there is doubt concerning the question of the unconstitutionality of the act, that doubt must be resolved in favor of its validity. Richmond Baking Co. v. Dept. of Treasury (1939), 215 Ind. 110, 115, 18 N.E.2d 778, 781.
The presumption of validity can be further fortified by acquiescence through approximately the last twenty years, during which neither the people, the courts, nor the Legislature changed the section here in question. Harrell v. Sullivan (1942), 220 Ind. 108, 127, 40 N.E.2d 115, 41 N.E.2d 354, 140 A.L.R. 455.
In 11 Am. Jur., Constitutional Law, § 83, p. 705, it is stated:
The presumption above referred to prevails where there are two possible interpretations of a statute, by one of which it would be unconstitutional and by the other of which it would be valid. Miles v. Dept. of Treasury (1935), 209 Ind. 172, 199 N.E. *6 372. However, it is equally true that usage and practical interpretation of a statute cannot control the interpretation of the constitutionality unless the language of the statute is obscure and doubtful. Further, if a statute is not ambiguous or uncertain in its meaning, then it is not open to construction, but we must take the statute as it is enacted. State v. Martin (1923), 193 Ind. 120, 122, 139 N.E. 282.
Section 6-2412, Burns' 1933, is not ambiguous or uncertain in its meaning, and it therefore leaves no room for construction.
Appellant asserts that the determination of the value of assets and the amount of inheritance tax is solely an administrative act, and is not judicial. With this we cannot agree. Section 6-2406, Burns' 1933, provides as follows:
Section 6-2410, Burns' 1933, provides as follows:
*7 The last-cited section further provides for notice to all interested parties and those whose residence or post-office address is unknown; and further provides for the appointment of a special guardian for incompetents and minors. It is to be noted that the statute provides for notice to all interested parties, including appellant, and that the notice is to state the time and place for hearing in the matter of such report. At the hearing, the court hears testimony, considers the inventory, appraisement, and report, and hears all parties desiring to be heard. In the order determining the value of the estate and the amount of tax, the court finds and determines the clear market value of the property, and further finds and determines the portions and amounts of the property of the decedent transferred, the name and relationship of the persons beneficially entitled to receive the same, and the rate and amount of tax for which they are liable; and, by statute, the tax becomes a lien upon the property transferred, and makes the person to whom the property is so transferred, and the administrator, executor, or trustee, personally liable for the payment of such tax. Section 6-2430, Burns' 1933 (Supp.).
The hearing and determination of the cash value of the assets and the determination of the tax are adversary proceedings, and therefore are judicial acts of the court. In re Estate of Seidensticker (1944), 75 Ohio App. 73, 60 N.E.2d 74.
Section 6-2407, Burns' 1933 (Supp.), provides, among other things, that the probate court, after hearing, may enter a "decree" finding that no tax is payable by the estate. This decree is subject to rehearing. There can be no question but what this is a judicial act.
In Crittenberger v. State, etc., Trust Co. (1916), 63 Ind. App. 151, 114 N.E. 225, it was held that an appeal *8 from a judgment of a probate court on rehearing and redetermination of inheritance tax may be taken under § 6-2001, Burns' 1933.
In the case of Indiana Dept. of State Rev. v. Bandelier (1952), 122 Ind. App. 200, 104 N.E.2d 133, an appeal was taken from a judgment sustaining a demurrer to a petition for rehearing of the determination of the value and tax assessed in an estate. The court recognized the right to appeal from such a judgment. If the determination of the value of an estate and the amount of the tax was a ministerial act, then no appeal would lie, since appeals may be taken only from judgments and interlocutory orders. Stout v. Stout, Admr. (1918), 68 Ind. App. 278, 114 N.E. 473, 115 N.E. 594; Greathouse v. McKinney (1942), 220 Ind. 462, 44 N.E.2d 344.
Appellant cites numerous cases to the effect that the levy of a tax, together with its administration, enforcement, and collection, is a function of the executive branch of the government, and therefore the determination of the value of assets in an estate and the determination of the tax is administrative. However, all the cases cited by appellant deal with the levy of real estate taxes and not with inheritance taxes. Therefore the cases cited by appellant are not in point. The determination of the value of the assets in an estate subject to inheritance tax and the determination of the tax are special statutory proceedings to impose a tax on the right to accede to property rather than a tax on the property itself. Crittenberger v. State, etc., Trust Co. (1916), 63 Ind. App. 151, 114 N.E. 225, supra.
A "judgment or decree" has been defined as the final determination of the rights of a party in an action; and an "order", generally, is a direction of the court preliminary and incidental to final determination. The distinction *9 between an order and a judgment is one of finality, and the question is whether the order is a final determination of the rights of a party.[1]In re Kennedy's Estate (1935), 281 N.Y.S. 278, 156 Misc. 166. In McMillan, Admr., v. Plymouth, etc., Power Co. (1919), 70 Ind. App. 336, 341, 123 N.E. 446, 448, the court said:
The order determining inheritance tax by a probate court is a special proceedings, judicial in character and with all the attributes of a judgment. In re Estate of Wampler (1950), 60 Ohio Law Abstract, 593, 600, 103 N.E.2d 303, 308. We therefore hold that the judicial determination of the value of the estate and the tax is a judgment, subject to review under the provision for rehearing, § 6-2411, Burns' 1933, and subject to appeal under § 6-2001, Burns' 1933.
Section 6-2412, Burns' 1933, provides that, upon filing of the petition, the court shall appoint a competent person to reappraise the estate, and after the filing of the report of the appraiser, the same proceedings shall be followed as in the original determination of the tax. Section 6-2412 gives only the appellant the right to petition for a reappraisal and redetermination of the tax within the one or two year period. It leaves no discretion with the probate court, but, by the filing of the petition by the Indiana Department of State Revenue, Inheritance Tax Division, State of Indiana, the original determination is set aside.
The Legislature, in attempting to permit the mandatory setting aside of the judgment of the probate court, *10 in § 6-2412, Burns' 1933, violated Article 3, Section 1, of the Constitution of Indiana, which provides as follows:
And Article 7, Section 1, of the Constitution of Indiana, which provides as follows:
By so doing it infringed upon the judicial department of government. Heath v. Fennig (1942), 219 Ind. 629, 40 N.E.2d 329; State ex rel. Kostas v. Johnson (1946), 224 Ind. 540, 69 N.E.2d 592.
Section 12, Chapter 75, of the Acts of 1931 (§ 6-2412, Burns' 1933), is unconstitutional.
After considering all of the contentions of appellant, we find no reversible error.
Judgment affirmed.
NOTE.  Reported in 110 N.E.2d 903.
[1]  See 30 Words and Phrases, Perm. Ed., Order, Page 117.