Case Name: In re Estate of Whitfield Sanford. Charles W. Sanford et al., Executors, appellants, v. Saunders County, appellee
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1911-12-14
Citations: 90 Neb. 410
Docket Number: No. 16,458
Parties: In re Estate of Whitfield Sanford. Charles W. Sanford et al., Executors, appellants, v. Saunders County, appellee.
Judges: Reese, C. J., being disqualified, took no part in the decision. .
Reporter: Nebraska Reports
Volume: 90
Pages: 410–432

Head Matter:
In re Estate of Whitfield Sanford. Charles W. Sanford et al., Executors, appellants, v. Saunders County, appellee.
Filed December 14, 1911.
No. 16,458.
1. Taxation: Power oe Legislature: Inheritances. “The enumeration of subjects of taxation in section 1, art. IX of the constitution, is not exclusive. The legislature has power to provide for taxation upon inheritances.” State v. Yinsorihaler, 74 Neb. 675.
2. --: Inheritance Tax. The widow of a testator who takes real estate devised to her by his will in lieu of dower is not in a position to require the taxing authorities to exempt so much of such real estate as equals the value of her dower interest from the payment of an inheritance tax.
3. -:--. By the provisions of chapter 13, Ann. St. 1909, the personal property of a decedent is primarily liable for the pay- meat of claims against bis estate; and those to whom he has devised his real estate cannot avoid paying an inheritance tax thereon by agreeing to satisfy a claim of one of them against the estate out of such real estate.
4. -: -. Real estate devised by will passes to the devisee at the death of .the testator, and its status under the law taxing inheritances is fixed at that time. An agreement between devisees to satisfy a claim against the estate in favor of one of them by a conveyance of a portion of such real estate to the claimant will not exempt it from liability for an inheritance tax.
5. -: -: Interest. By the provisions of section 11203, Ann. St. 1909, an inheritance tax bears interest from the death of the decedent, unless it is ascertained and paid within six months thereafter; and where his devisees have neglected to take any steps to ascertain or pay the same for more than two years after his death, they are not in a position to contest the payment of interest thereon.
Appeal from the district court for Saunders county: George E. Corcoran, Judge.
Affirmed.
S. A. Reese, for appellants.
Jesse M. Galloway and Joseph F. Berggren, contra.

Opinion:
Barnes, J.
Whitfield Sanford, a resident of Cass county, Iowa, departed this life in the month of August, 1905, leaving him surviving Hetta A. Sanford, his widow, and Charles W. Sanford, his son, who were his only heirs at law. By his will the Tbulk of his property was left to said widow and son, who were therein named as executors. Probate of the will was had in Cass county, Iowa, and the executors duly qualified and proceeded to administer the estate. At the time of the death of the testator he was the owner of a large amount of real estate and personal property situated in the state of Nebraska. The executors took no steps to ascertain the amount .of the inheritance tax which the state was entitled to receive upon that portion of the estate, and about two years after the death of the testator the county attorney of Saunders county, Nebraska, filed an application in the county court of said, county for the appointment of apl>raisers to ascertain the value of said estate, so that the amount of the inheritance tax due thereon might be determined and collected. The county judge of Saunders county thereupon appointed appraisers, as provided by law, who qualified and made appraisements in the counties of Saunders, York, Butler, Lancaster, Seward, and Franklin, in which counties the real estate, which passed by the provisions of the will above mentioned, was situated. The value of said real estate was found to be $182,320, while the personal property was appraised at the sum of $40,657.85. On the request of the executors, the county court deducted the value of the personal property from the total value of said estate, and held that the same was not subject to an inheritance tax because its situs was in Oass county, Iowa, where the testator resided at the time of his death. There was also deducted from the value of the real estate the amount of $20,000, being the sum of $10,000 to each of the devisees under the will which was exempt from the levy of an inheritance tax under the laws of this state. After the above reductions were made there remained the sum of $162,320, which was held by the county court to be subject to and liable for an inheritance tax under the provisions of sections 11201-11220, Ann. St. 1909, known as the "inheritance tax law," and the amount of such inheritance tax was fixed at the sum of $1,623.20, upon which interest was charged from the date of the death of the testator, amounting to $333.30. The executors were ordered to pay said sum to the county treasurers of the aforesaid counties in proportion to the appraisements made therein, and to file receipts for such payments. It appears that on or about the 17th day of January, 1908, the executors paid into court the stun of $1,044.44, which they claimed was sufficient to discharge the inheritance tax for which the estate was liable, and appealed from the order of the county court. They thereafter filed their petition in the district court for Saunders county, setting forth the facts above stated, and assigned four distinct grounds therein for the reversal of the order of the county court.
It was first alleged that there is no valid law in the state of Nebraska requiring the payment of an inheritance tax. The second allegation was, in substance, that Hetta A. Sanford as the widow of the testator was entitled to dower in the lands devised by his will, and that her dower interest was not subject to the levy of ah inheritance tax. It was further alleged that Charles W. Sanford, the son of the testator, had a claim against the estate of his father amounting to $35,524.95 for services rendered as clerk during the last 11 years of his father's life, and that it had been agreed between the executors that the claim should be fully paid by transferring to said Charles W. Sanford from the said estate certain real estate situated within the state of Nebraska in excess of the amount of property which said Charles W. Sanford should have received under the provisions of his father's will, and that therefore that sum was not subject to the. inheritance tax imposed by the county court, and that it should be deducted from the appraised value of said real estate situated in Nebraska. And, finally, it Avas alleged that the computation of interest from the date of the death of the testator was void, and was made without authority of law.
To this petition, and each of the four grounds mentioned therein, the county attorney of Saunders county demurred, for the reason that the petition failed to state facts sufficient to constitute a defense to the order of the county court finding the amount and directing the payment of the inheritance tax above mentioned. Upon a hearing in the district court, the demurrer was sustained and the order of the county court was affirmed, and from that judgment the devisees, who are the executors above mentioned, have brought the case to this court by appeal.
The contention that the law requiring the payment of an inheritance tax is void, was settled by the decision in State v. Vinsonhaler, 74 Neb. 675, where the law was upheld; and as the appellants seem to have abandoned that assignment, it will receive no further consideration.
The first question to be determined by us is the claim that appellants should have been allowed to deduct from the gross value of the real estate situated. within this state the amount of the widow's dower. On this question there seems to be some conflict in the authorities. The courts of New York and Pennsylvania, in construing the inheritance tax laws of those states, have held that tiie dower interest of the widow is not taxable. In re Weiler's Estate, 122 N. Y. Supp. 608; Commonwealth's Appeal, 34 Pa. St. 204. In Estate of Kennedy, 157 Cal. 517, 108 Pac. 280, the supreme court of California held that the homestead and statutory allowances pending the settlement of the estate of the deceased were exempt from the succession taxes.
The supreme court of Illinois, however, construing the provisions of its inheritance tax law, of which our own is almost a literal copy, held in Billings v. People, 189 Ill. 472, 59 L. R. A. 807, that dower was subject to the payment of the inheritance tax. That was a case where the widow renounced the provisions of the will of her deceased husband and took dower. On appeal to the supreme court of the United States the judgment of the state court was affirmed. Billings v. Illinois, 188 U. S. 97.
As we view the record, we are not required to determine that question, for it appears in the instant case that the widow did not renounce the will, but took her share of the real estate under and according to its provisions. By that course she brought herself squarely within section 11201, Ann. St. 1909, which reads, in part, as follows: "All property, real, personal and mixed, which shall pass by will or by the intestate laws of this state from any person who may die seized or possessed of the same while a resident of this state, or, if decedent was not a resident of this state at the time of his death, which property or any part thereof shall be within this state, or any interest therein or income therefrom, which shall be transferred by deed, grant, sale or gift made in contemplation of the death of the grantor, or bargainor, or intended to take effect, in possession or enjoyment, after such death, to any person or persons or to any body politic or corporate in trust or otherwise, or by reason thereof any person or body corporate shall become beneficially entitled in possession or expectation to any property or income thereof, shall be and is subject to a tax, at the rate hereinafter specified, to be paid to the treasurer of the proper county for the use of the state, and all heirs, legatees and devisees, administrators, executors and trustees shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed." We are therefore of opinion that the widow, by taking under the will, instead of asserting her right to dower, is not in a position to claim the exemption for which she now contends.
Appellants also strenuously insist that they should have been allowed to deduct the claim of Charles W. Sanford for $35,524.95 against his father's estate from the gross value of the real estate as returned by the appraisers before estimating the amount of the inheritance tax. There seems to be two good and sufficient reasons for denying this relief. It appears that at the time of his death the testator was the owner of more than $40,000 worth of personal property in this state, which, under the provisions of chapter 13, Ann. St. 1909, was primarily liable for the payment of this claim. The district court held that appellants were entitled to withdraw this property from taxation because of their claim that its situs was in the state of Iowa where the testator resided at the time of his death; but by so doing, they will not be permitted to make their claim payable out of the veal estate, and thus, to that extent, escape the payment of the inheritance tax. The other reason for a denial of this claim is that at the time of the death of the testator the real estate situated in this state, the value of which is now sought to be taxed, passed by the terms of the will to the appellants. Its status, so far as the inheritance tax law was concerned, was at that time fixed and determined, and no agreement which the devisees, as executors, should thereafter make between themselves in regard to the satisfaction of this claim could in any way affect the right of the state to ascertain and collect its inheritance tax. The district court was therefore right in its determination of this question.
Finally, it is contended that the taxing authorities were not entitled to interest on the amount of the inheritance tax from and after the death of the testator, and before such amount was ascertained. It is urged as a reason for this contention that it was not possible at that time to ascertain the value of the estate, and that interest should only be computed after such value was in fact ascertained. This contention is in direct conflict with section 11203, Ann. St. 1911, which provides: "All taxes imposed by this act, unless otherwise herein provided for, shall be due and payable at the death of the decedent, and interest at the rate of seven per cent, per annum shall be charged and collected therefrom for such time as such taxes are not paid; provided, that if said tax is paid Avithin six months from the accruing thereof, interest shall not be charged or collected thereon, and in all cases where the executors and administrators or trustees do not pay such tax within one year from the death of the decedent they shall be required to give a bond, in the form and to the effect prescribed in section two of this act, for the payment of said tax together with interest." It cannot be successfully contended that the appellants could not have ascertained the value of the taxable estate within six months after the testator's death. By so doing, and by the payment of the tax Avithin that time, they could have avoided the payment of any interest Avhatsoever. It appears from their peti tion that they took no steps to that end, and that by their delay they compelled the county attorney of Saunders county to institute proceedings, as late as two years after the death of the testator, to ascertain and collect the amount of the inheritance tax. Therefore, they are in no position to claim exemption from the payment of interest, as provided by the section of the statute above quoted.
A careful examination of the record satisfies us that the judgment of the district court was right, and it is therefore
Affirmed.
Reese, C. J., being disqualified, took no part in the decision. .