OFFICE OF THE ATTORNEY GENERAL OFTEXAS
AUSTIN

### 2n:

Xonornble G%or&oIi. Sheppard, Page 2

cam under the gr07ialonrr of the new law end be taxable .I

:.:.:.:l:.:::/:j >::::. You+ letter olaarly states the feats sna queatlon

in We ease. under me faoto stntaa weamme thet the 

### transrers psaaed ml1 1e.W title to .t!io tranafereea ea or the tlf;oo of suoh traWil6rs. 'Taa~WGtibl the3 ia *ethar or not silch transfers are subieot to the Texes Xnhorltauoe Tax even though mde prior to t?re t%x!G;snt ta t5o Texcla Xnherltenoe Tar Statute in ~questlcu u~lc~ ello~.'s the tnxstlon of such trensfors. The deoeased died subseqxmt to the efrectlve date of ouch nc?eadize.?t. Article 7ll7 of the Serlaea clvll Seatut& (15anded by ii~useDill S33, seotion 1, Acts of the 46th Le&latuxe; 1%??8,reads as Pollomw

*All ~rop2rty uithin the @risdictlon 0r this StAto, rtml or ?cxs:nal, coryorate or lnoor;orate, and

### ezyin:erost tfizrein,

inoluding property pnssieg under a ~enerel 

### pawer 0r appolntzmt ezercloaa by the decodout by will, in<rluain.~ the procseds 0fiif5 t?suranoe to the extent of tho szm.mt receivable by the exeoutor or adziolatrator es inaurartoe uuder poliolea t&on-out by the 

### deooeent uym hiss ownllfo, ani%to t?mextent nf the exoeaa 

### over ??Or?iy

niOU8eAd rI0~l~s(~~~,o~) Or th5 5ZOUAt rowivable by all other benefiaiarics es insurance under policies taken out by the deoelient upm his owhlire, whet3er belon!$ng to ishabitsnts of tkls Stnte or to persons a& em %ot lahebltants,+~ei;zmdltws of rchother suoh poporty Is locatod~.within or withut thl6 Stata, w~11ohshall pass absoltitoly or in trust br will or bj the lswiof Cesoont or Uetribution of t:h.l.sor any other St&s, or by dead, :';rent, sale, or ..;ift nado or lntondad to t&e effect in possession or 

### enjoptmtafter the death ol~the crentor or donor, still, won pnssing to or ior the use of anf person, cor?orntlon; or acaociation, be mbjeot to e tex for the bemflt 0-rtkc Ststefs General ir.evenue WIG, in accordance 171ththe follmiinz olaasiflcntiou. &jr trnnstcr mdo by R :rfmtor, wmdor, or timor, '%ilet;lzr by deed, Q-ant, G3lQ) or ,;lr't, s>ell, tzlla23 s;ioi7a to the contmry, be desr;cd to k;uvebeen mde in

### 2

IioiorrorabloCoorgo 8. Bhoppard, Fa&e3

ocntoqlatlcn of death and subjoot to 

### the 6~ tax as her&n is made wlthln two frovlded, if suoh transfer 2) years grlor to tho death of the era&x, vendor, or donor, Of a aatorlal part of hfo 

### l state, or if tho $ransfer zado within nuch period is in tho nature or a tlnal distribution OSgro?orty andwithout adequate vclunblo OonslderatlOu. ,Auts m;,p; C. s., p. 631 Aotr 1929 41st La. ‘ 19.999,

### 46thice., 109 oh. 50 ( 11 ke
lí ii:B. #ooo.I i.* Vader the facts submlttod tho transfer8 in quoatioa 

### worosade within two peers prior to the death of the grantor andwere s&is without adequate valuable aoaalderatlon. Prlot to the mendzzent by tho Legislature .ln 1939, such transfers were not tazablo.

-Xowhoro in tho wording of tho amsndzeht lo tiero any languarjo to evidenoe an intention of the Legislature that tho amendaent should ogerate retroaotlvoly so as to tax trausferr that were fully ccnsumatod prior to the effea

### tlvo dato of said mendkkt. Khlibewohave no Texas dsolslcns on thla question, the great weight of authority throughout tho United States ie to the effsat that such an act irgoslni; a tax upon transfer8 whlck fully vest title in the transferees la not retroactlvo unless the sjmolrio laaguago of the etatute so z&err tho same*

The Suiuproiso

Court of ‘&ntAa in the.oase OSStats ~8. Diatrlct Court of 0th Sualolal 3lstrlot in and for Choutoau County, 96 ?ao. (Zd) 036, deolded Xoveabor 29, 1939, was 

### leoedwith a similar situation. The facts In that~ease 6loolooo that tho 

### deceased mda uortzln 

### trtmsrem by deed th 1934. In 1935 

### theKmtmn statute was a-landed so that instead of.lt providing thet “every tram

### ior bg deed, grant, barsaln, sale 

### or gi:t mid0 within t%o f-. ears prior to tho death of $Santor

. . . andwltnout 0. rti

### r ocnslderatlon in mney or m.ineya thall unless shown to tho contrary be deesed to heve boon inadoin cante~~lation Ofdeath,* it was cl4cuqsd to reed: 

### *everytransfor by Ceed

. . . mdo within three ymro prior tz the death of the 

### fmntor

. . .n The Ceceasod died in 1936 which was subaeWent t3 the amen&ant of 

### thestatute in 1925. Thooourt held thrrt the two year psrlod applied and thnt the law piOrEcnorsblo 

### George 8. Shopgard, Pago 4



### to tho aan&aont in 1935was agpllaable 

### to the trsnstor8 

### inquestion.Thecourtototedaafollowor

*It is elszsntary that lt would have been oonpotant fez the L~glelaturo to have s&o tkio rtatuto retroeatlvo ii it sawfit ta do so.* 

### Wkors is nothing in Chqtor 186 tc 

### aur&ast that tha Legislature lntonded that 

### itshc~uld ap plytodeeds theretofore 3848. 

### Itisa ci;onersl rule t&at statutes ars lnto.tiod to operate ?ro

### spootlvoly

onlyunlessothemlooorprsesly ststod 

### oroloarlyend aoceeserllf 

### Ijrplled an$thoprommptlon la amlnst 

### rotro3epop.t4vo operation.” The Su row Court ot Caliiornia in the oa4o of 

### Huntvse Vlaht, E

62 Pac. $39, wa8 eonfronted with a 

### sitilar situation 

### andin that case 

### thetransrors in question wore aade in 1905. The CalLfornla statute WRU anended ln 19ll SOas to tax auah transrors. Theadeooased died in 1913. 

### Theocurt ooaoluded thfit the transrors,woro not taxablo and stntod a4 r0im8r

.Z;t is tho 

### vestingin intaralt that 4cnstitutos the sucoesslon, and the QU.eDtiOli 0r llability to ‘suah a tax zust 

### bedaterulnod 

### byt&e law fn 

### rote0 at that tiise.

. . . *ft .is litwiatorlal so rar aa the question wo have disoussod is acrmerned, that 

### itis alleged that the trsnsfor WRSinfida‘la con*t43zplatfon 0r his doath and without valuable cmsideratic&l The

### estate convoybd iully vasted at the tlcze of tho delivery of tho deed in escrcw, entirely regardless or the Ilotives. oft the pantor for tho oonvoyanco, and vAt::out rsgard to uhsthar the tranafar was Hithcut vaLuetAo ccnsldoratlan, and bbcre waathen no law lza?oslmj a tax on agy such tramfor.*

The Eugraim Cmrt 0r cta.ir0mia rearrir236 thin hlo of law fn 0onstruZng a alzilar ra0t sltur3icn in the can0 or In FMi&ix’s S&ate, ,100 Pea. 135. The oourt Prtntod

‘8 r0110wt38Eonorable 

### GeorgeH. iSheppard,

')Aaafrerdy atatcd, uhy Ed* 1913. The E48d agprra GOiuwe tieen fully delivered and effeatlre at the tirnc it beam data. The taxability of tke trtmefsr mat thorofore be detsrslneb by t!:a law in sfrect at t3at 

## tiae. **ihat**7. ZiOhL, 174 Cal. 239 l62 ?e0. 639, L. R. A., 191e* %lt xotate of &oa, 178 O&@.609, 169 

### Pm%.362. 738lati inZorceat thatti=;c

W&Sthe act of 1911. stats. 1911, Q* 7x3.

. . .* '. 

### TheSLuerub ofmflwesanMuncsdbythssupieme Court of Louislena i;r the 

### easeof Gucosssion of #illiaSa, lE9 80. 601. The oourt state6 emfollmtea

Wtatutoe levylog taxea on doaatione or transfers ma&sln contenplatl,on of death es@ never ao5strueG aa applytr?g to treneaotlolle that 

## wereooapletad 

### beiorsthe lawwas enaetbd. It we8 so clr?cidcd idShmb V. iioglo, 256 ‘ j. S. 629, 42 s. Ct. 391, 68 L. 233.747, 26 A. L. El. 1454, with rtzifersnce to ths Act or 

### Congmxi of Segtere

### her8, 1918 (39 Stat. 7771, the 

### Cirstostato tax act. Ahd

### ithas since bexa hold t!xxt.to s.ive ~~03 a statute the retroecti-re effect of taxing tranafero 2mde prericua tc t&3 encotxunt of the law %ould ezmunt 

### to oonfiaaetion Md be vloLative of ths '-‘aurtesEth kmd%zit of the Ccnetii&ton of the United St&&. Xiohols v. Coolidge, 874 U. a. 531 47 52 A. L. R, 143It a. ct. 710, 71 LLix. 11&S, Blodzett v. Golden. 275 I?, 5. UC,-83 8. Ct. 35, 72-L. ZdC.353; Uitor=leyir i. Anderson
, 313 u. 3. 4.39, 43 8. ct. 253, 72 L. xd. 64s

. . . .*
A skll&r qaeatio?z -#as decidad by ths Suu_?Etior Court of Dplmare in the 

### cnneofDrownVD.?er?sylvenia Co~::pany

for Insurance on Liven 2nd ;'trantin; kmuitiea, 126Atl. 719. In thet cm0 an attaqt was zfzde tc tnz cortaiz tmnafore w:~iok had be9.z zdo ti i3ld bowwe 3uoh tnlItofers went mde t,:xcl?Ae b.van amnckont tc t% S&mare law affactl.va 

### Lhrc3E4, 1917, oti ths deceased did not aa until Aoril f7, 1317. The oourt ccncltied t&at ths law 13 off&t at t!m the of t!m tramfer o.jctrollcd nnd that ouoh tramfere *ore r.ot taxabko. The court etrted a8 rOuoweI&aorabls George il. .%e?gard, ?ege 6

*The plelntltf 

### aratesthnt the statute In question was intended to bo retroactive bemuse it osntalna these wordeI ‘Auy tronafer

. L

. wltkln two year8 prior to his Ge+th wltkout full ooneiderntion in Eonby or :~oney*o worth aLcU, unlase ahma to the oontrary, 50 domed to bste been nade Lacortezqlatloa or death wltliiz tke mt3aalnGof thla 0Snptor.f Inss:ach es th0 lew ?r0~id08 th3t ~i:te 23=ice12 c0a33:aiti02 0r death shall be subjeot to t>o tax, and :‘urt!mr provides ii-&t $.fta =ade r:ithin two yanre prior to the dent5 OS the dzior &-ml1 tc deeze6 to heve beon zmde in contaqlatloa of dmth, It is lnslstod t&s gi:t ln the grosont case is liable to the taxi It ia r&t clai.zed t!m-e Ir, ey .othor lan.gaaga in the stlitrute that indicates an lntemttioa t&t It si;ould .pe retroactlve.W ” The transfers, therefore, could cot be tslrfbie’unless the taxfw aot ia retroaotlve, undwe have held it ia not.* Ths a.838rule 

### of 18%~ XQSennoumod by the 3upme Court of Pennaylv~ia in the cm3 cf In Z&i“Yeanl$ton’s Betate, ,192.Atl. 39. ‘i!hOOOtU?t6t8t8d 88 tolloua:

-The 

### sot.

of 191s iqosea a tax u-3 

### 'the right of siiccemolon or the ;?rivlle;o of rsoelvIn3 st dmth 

### thexroparty possessed by s decedent.' Dolar\‘s 

### Sian te, 279 ie. m2, 5”&, 124 Ac.178, 173,. 46 A. L. R. 653; ‘XlrQatrick~s 3state, 275 Pa., 271, 273, 110 A. 269. It 5ca been 

### repeatedly held t!mt tXio act oizly agpllcs to tramlore occurring eftor lta enactment awl 

### not
to those prior tfiareto. . . .- The Sii;i?arereCourt of W~~7lvanIa also eomider eC4 prohlei2 aiA.lfir ta t&it w:ic:; c.:nrrxta ~5 In tti6 cam. in the cese of 

### Inlit3 Oliver’s i’st*!te, 117 ktl. 31, Ia tati cas3 tho tmncfero in 1;motim ttbk $Eoe in 1913. OnJune 20, 1919, the XA3msylvrinin lnri me czm.deG 80 2s to tnx such trcmfors. holC that tSe tmsfers were zot temblo aad ateto& UB The Goceo30d CleC Qly, 1019, Em cmrt
**Pc1l0w31**,* ‘

.

..:+::l:i::i

:: <ii::‘

. : :, *The dooreo nut be atiixued. The sot provides t .Vhat e tax shall be, and is hereby, hposed u>on the traasfer 02'any grogerty, real or personal, or or any intorast tkwoin or income therafroa, in tru-lt or othawlcls

. . . by doed, grant, btm~in, sale, 

### orcirt, nnde in oantuzphtfoa of the bath of tha Srantor, vendor, or donor, or lnteaded to take erfeat in poseessfon~ of enJopent ot 

### or etter 5mh death.* %3ither thcae 

### words,norany 0th~ -pats of the sot, ahowM intontfm to L-~OXI the tax on my *twnsfort wbich,:wea fully aeaoi5- 

### plished

prior to its pw35w3b; aad heaoe t5e deora io 

### correot,forthe rqoeon stnteC by t&a court belovr in ita oglnion, unless there 1s oamet..ing Irr.the atatute ahlch oor~~els a dif

### Parent~onolualon.~ The Court of h peals City BankFnners Wuat E in I&MYork in the oase of rmpmy 98. KerrYork Central railway ~aoiigfuiy, 170 If. iL 4539, considerad Q5ir;ilar problm pat oourt in a;1opinion written by Chief Justlco cardozo held that au fnhoritanco tar statute ~45 sot retroaotlvs and stated ae foUowsl

Whatever lorrunity etisted when the tmnefor becajlo iaMoctive, extitinuod to exist that+ artsr, untouckeU in its intizrfty by 03ythiq that the LeiJlelature could do.* The Sunrese Court of Iwa in the case ol ImA vs. !3rown 166 H. ii.' 99, aanaunoed the 9-e rule of law and stctoE 06 followsr

. . In 

### theatme before ue the ri$.~:a of phd.ntifh ant! the Litteors with remeet to thle Froroperty\iO‘iOrl.~td and 1~a6elrrovoimble, 

### orcept by iSmlA1 omrmit, on the iitto whentt?a pag"r5, wera oxocuted 

### nnd~lal~titf ncqdred po~sesslon thereundar, md if we r;qv a::suzo thnt It was cozigetent for the otnto to thereafter smot or mend a statAx to izs205e a ter upon such :rol?afers 0rHonorable door88 IL She?>ard, Page 3

title, tbs retroopeotive obarnotcr 

## dffeot of such en:~tzent zu3t oloarly 

### a;qeor, and in 

### thecbsonce of myth.&; siiowin.; auo!: intent the court5 will zlve 

### itproopctlv4 e:Ssot oolp. There io nothing in tLls eztndze4t indicetAnG eny le.~olativo intent to dve it retrosp3otlvvs sgplioatfon, and It ,CKtlOVis that WM if xtswore. to ao;Latxua it ne 

### bslq othtsrtiiee ap9llcable 

### tosuch a trmeior as is here 

### b4inzccnsidered, it would zot Zovarn tho re

### 5ultof thi.8 ap3al." The adclrdrule ol law w~8smouaced by .the Sugrenre court or Errors or Connecticut ln tho ease of BlodFett vs* Fnion.end i%w&von muet Cozpaq?# 110 Ml. $05. %ie .aourt stated t&e iaeuo and conoluded 4s followst

*Th4 quoootlon first to be ooneibwid in lo&xl 8equezse.U shsther the taxlhg statute appliczbls to the tnmt fund is the aot of 1913, w!aiohw~e in Sores wheenthe deed end the aeouritles 

### woredellvored tothetrcstee or the statute of 1315, whloh ceze into effect after. the ostablisbkent ot .tiie trust, but before tSe settlor'a death.

. . . 

### *Onthe other bend, en irrevoaeble grant of a ra-&indsr Laterset i3 a preeent trauafer of it to th5 rez4lnd4rzan, and, eincs a succcaelon ton is a tax on the tmzsSer, aod ;lot on tie property, the question whether 4ny pa.rt1oula.r tramfor 13 or ie :iot texeble should 1o;icelly depend on *theterzs of tha statute in force at the tine when the tram%-r ttiee place.Whether the Lel;islature f&kit. acnstltuti0dxg lay a rm~oassi~,-. c trrr u3oa 4 trm.3for 

### ofarezalaCorintsreet whlcil had .alroady verjtod 13 ri,-ft before t'\e statute wc5 pcssed, ia a suestioz ~;hicL NOnoed not Llscuos my further than to observb t&t tha ln:.ent to lay 8retroootira tnz o*u$it to be mhifanted by Very slain and exnlicit words, and fkt 30 find no ox?ressl2n of til2t !1125nt in t&o ?xt of 1915. 

### Oiir ccnoluslo3 t221t,@a a?3licahle tnxlri,: stntute la that whloS.was in forca vii03 the irrevocable trust dood ws CellvaroC e;recC with the 

### Ceclalms in other jurisdictions.

. . ,'*

## 23

??htle thare are awa casts wzSol1tezd t3 indiaate 

### ~onzrarp

tother*ule

ofMa ariounoed

prevlouoly in thie opln.lon, &apreviously stated, it la tho overw!iaki~ viei;ht of authority that aa to trsnsfere w!tic!4 take ;laco end vest title 13 the trmar’ereos @or t.3the ezar,d::ont of t&i tax rtatuto wUch t&m&a such trfcdorb the S!IES are 

### nottnxcble tdt3r such a2enaimnt aesgite the fc0t th-t th0 ae06s.9oa 

## am eubsoquent to tke ammdmntr No8rQ of the oplnim that tkio is the uorrect x-tile of law to be a??lied in t.U.8 case and t!!et the trannfere in quastlon are zot taxable *under the azon&:or;t to the Inheritsace Tar Stati%te by the 40th teg1*1aturo in 1939.

FIRSTASSISTANT ATTORNEY

GENERAL

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