Court Opinion

ID: 9707079
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:01:46.720146+00
Date Added: 2024-06-11T18:22:27.896263
License: Public Domain

Marbury, J.,
delivered the majority opinion of the Court. Barnes, J., dissents. Dissenting opinion at p. 279, infra.
This is an appeal from an order of the Circuit Court for Montgomery County, Judge Anderson presiding, in which the court affirmed the upholding by the Maryland Tax Court of a twenty-five per cent penalty for delayed administration assessed by the register of wills for Montgomery County.
The undisputed facts are as follows: Malcolm S. McConihe, Sr., a resident of the District of Columbia, died on July 1, 1961, leaving a last will and testament. At the time of his death, he was seized and possessed of valuable real property in Montgomery County, Maryland. On or about August 3, 1961, letters testamentary on his estate were granted to appellants, Malcolm S. McConihe, Jr. and F. Moran McConihe, in the District of Columbia. Thereafter, in order to clear title to the real estate located in Montgomery County, ancillary letters testamentary on the estate were granted to appellants by the Orphans’ Court of Montgomery County on November 15, 1961. No inventory of the real property in Montgomery County was filed with the Orphans’ Court of Montgomery County within ninety days after decedent’s death. On July 5, 1962, appraisers appointed by the Orphans’ Court of Montgomery County re*274turned an inventory of the decedent’s real estate located in that county. Pursuant to an order of the court, the real estate was reappraised, and the inventory based on the reappraisal was returned on October 26, 1962. In June 1963, the register of wills for Montgomery County computed the inheritance tax on the real estate at $7,926.38, and pursuant to Code (1957), Article 81, Section 170, assessed a twenty-five per cent penalty for delayed administration in the amount of $1,981.59. Appellants paid the tax and penalty on July 8, 1963, and filed a claim with the register of wills on September 10, 1963, for a refund of the amount of penalty.
This claim for refund was rejected and an appeal to the Maryland Tax Court was filed. That court entered an order affirming the action of the register of wills for Montgomery County and denying the claim of appellants for a refund.
In affirming the decision of the Tax Court, the Circuit Court held that Section 170 of Article 81 was to be construed in the light of other sections bearing on the same or related subject matter and that when no administration or inventory was filed within a ninety day period from the death of the decedent, any real estate which passed subject to the inheritance tax was subject to a twenty-five per cent penalty, assessable against the person or persons who became liable for the payment of such tax.
The applicable statutes involved are Code (1957), Article 81, Sections 167, 169, and 170.1 Section 167 authorized the orphans’ court of the county where said real estate was located to issue summonses for parties entitled to administration who failed to administer within ninety days after the death of a decedent, and to appoint appraisers on the application of any one interested in real estate where no administration had been taken. Section 169 provided for the filing of an inventory within ninety days after the death of the person and imposed the duty upon the person receiving such an interest or estate in property to file an inventory where there was no formal ad*275ministration subject to the jurisdiction of any court. Upon the filing of an inventory the orphans’ court had to appoint at least two appraisers to value the property in question for the purpose of ascertaining the amount of tax which was due, and the tax so determined at once became payable to the register of wills. Under Section 170, whenever any property passed subject to the inheritance tax and there was no formal administration and no inventory was filed as required by Section 169, the register of wills had the duty to apply for the appointment of at least two appraisers to value any real property for the purpose of determining the amount of tax due and payable at once to the register of wills. In addition, the persons liable for the payment of the tax were also liable for the payment of an additional sum equal to twenty-five per cent of the tax as a penalty for delaying the administration.
In ascertaining the intention of the legislature, all parts of a statute are to be read together to find the intention as to any one part, and all parts are to be reconciled and harmonized if possible. See Comptroller v. Atlas Industries, 234 Md. 77, 198 A. 2d 86. Tax statutes should be construed in favor of the citizen and against the state where there is doubt as to their scope, Fair Lanes v. Comptroller, 239 Md. 157, 210 A. 2d 821; Comptroller v. Rockhill Inc., 205 Md. 226, 107 A. 2d 93, and their provisions must not be extended to cases not plainly within the language of the statute. Pair Lanes v. Comptroller, supra. However, these rules do not require that the statute imposing a tax be construed so as to defeat the clear intention and purpose of the legislature. Diamond Match Co. v. State Tax Comm., 175 Md. 234, 200 Atl. 365.
Each section of the statute involved dealt with the enforcement of requiring the report of taxable assets and the payment of inheritance tax thereon. Section 167 controlled the situation where there was no administration. Section 169 controlled where there was no inventory filed in the orphans’ court in the county in which the real estate was located. Where there was no formal administration of an estate subject to the jurisdiction of any court of this state and no inventory was filed, under Section 170 the twenty-five per cent penalty had to be *276imposed. Reading the three sections together, where there was no administration taken within ninety days after the death of the decedent which was subject to the jurisdiction of any court of this state and where no inventory was filed in the appropriate orphans’ court within ninety days after decedent’s death, the persons liable for the inheritance tax were liable for the penalty imposed by Section 170. See State v. Cadwalader, Exec., 227 Md. 21, 25, 174 A. 2d 786, where it was said: “Section 170, supra, covers situations where no inventory is filed and no formal administration of an estate occurs.”
With two exceptions, this construction of Sections 167, 169, 170, and their predecessors has been the one observed throughout a series of opinions of the Attorney General. Though not binding on this Court, these opinions are entitled to careful consideration as they serve as important guides to those charged with the administration of the law. State v. Cadwalader, Exec., supra.
In 49 Opinions of the Attorney General 439 (1964) there is a review of the imposition of the twenty-five per cent penalty on a recipient of property subject to inheritance tax as provided for by Article 81, Section 170. Preliminarily, the opinion points out that the imposition of the penalty provided for in Section 170 is wholly dependent upon the nonperformance of the duties imposed by Section 169. Whether the duties have been performed must be determined within ninety days after the death of the decedent. Once a Maryland administration has been opened within ninety days of death, the recipient of property passing without the necessity of administration is not touched by the requirement of Section 169. The opinion takes the view that
“nothing short of a Maryland administration of the decedent’s estate within 90 days will render Section 169 inoperative. Thus, a foreign administration of part of the decedent’s estate, is not, in our opinion, sufficient to excuse reporting required by Section 169 since the foreign personal representative is not subject to the reporting requirements of Sections 155 and 171 of Article 81, supra. 32 Opinions of the Attorney Gen*277eral 431 (1947); 30 Opinions of the Attorney General 205 (1945). Likewise, the existence of an estate of the decedent subject to administration does not relieve the recipient of taxable property of his duty to report under Section 169 if a formal administration has not been instituted within 90 days of death. Later opening of a formal administration will not retroactively cure a default under Section 169. 36 Opinions of the Attorney General 316 (1951).”
The opinion also stated that no monetary sanctions are provided by the law against a personal representative who fails to administer promptly, short of the risk that the orphans’ court having jurisdiction over the decedent’s estate may, after notice, relieve him of the privilege of administering the estate.
We do not find persuasive the two exceptions to the otherwise consistent construction. In the earliest of the two, 25 O.A.G. 638 (1940), it was held that no penalty was due where the decedent died testate in 1931, but no administration was taken out until 1940 when the executor named in the will applied for letters. Without explanation the opinion states:
“We do not think that any penalty is due. Section 134 [§ 170 Code (1957)] of Article 81 provides for a penalty of twenty-five per cent of the amount of the tax, but that section, particularly when read in conjunction with section 133 [§ 169 Code (1957)] to which it refers, clearly does not apply to estates administered in the Orphans’ Court.”
In the latest, 40 O.A.G. 542 (1955), where a surviving joint tenant failed to inventory the interest “passing” to her by virtue of the first joint tenant’s death, which occurred four years before the death of the surviving joint tenant, and the heirs of the deceased surviving joint tenant failed to file an inventory of the property, the penalty was held applicable to both events. However, citing only 25 O.A.G. 638, as authority and mentioning no time limit for administration, the opinion states that if the estate was formally administered, under the terms of the statute, no penalty was due. These two opinions are against *278the construction of the sections here involved which has been followed by a number of attorneys general and which is the most reasonable.
Appellants contended that the penalty was not applicable as there was a “formal administration subject to the jurisdiction of any court * * *”—that court being in the District of Columbia. As pointed out in 40 O.A.G., supra, a foreign administration of part of the decedent’s estate is not sufficient to excuse reporting required by Section 169. For the purposes of these sections there is no “formal administration subject to the jurisdiction of any court” when administration has not in fact been granted by any court of this state. 36 O.A.G. 316, 317 (1951); 32 O.A.G. 431, 433 (1947); 28 O.A.G. 241, 242-243 (1943). Also, a later opening of a formal administration in Maryland would not retroactively cure a default under Section 169. 49 O.A.G. 439; 36 O.A.G. 316.
Appellants also argued that unless the register of wills applies for the appointment of the appraisers prior to the filing of a petition for administration, the tax can not be assessed. As stated in State v. Cadwalader, Exec., supra, the register of wills is not required to keep himself apprised of every death within or without his jurisdiction. Therefore it would not be necessary to apply for appraisers until after he became aware of a death which might cause inheritance taxes and the penalty for late administration to become due and of the fact that there was no formal administration and no inventory had been filed. Once this occurs,
“it shall be and become the duty of the register of wills * * * to apply for the appointment of at least two appraisers to value any such estate * * *, for the purpose of determining the amount of tax due * * *, and in addition thereto the persons liable for the payment of said tax shall be and become liable by way of a penalty for the payment of an additional sum equal to 25% of the amount of tax so determined to be due * * A” (Emphasis added.)
In this case the register of wills did not apply for the appointment of appraisers, but the appraisers were appointed at *279the instigation of appellants by the filing of the petition for ancillary administration. The appellants argued that no penalty could legally be assessed, because no appraisal was effected by the register of wills. Under Section 170 the penalty was imposed because there was no administration and no inventory was filed within ninety days after the death of the decedent. Once the two conditions occurred the penalty automatically became due. The secondary part of Section 170 established the procedure whereby the amount of the penalty was determined. The appellants became liable for the tax and the penalty for late administration ninety days after the death of decedent, and what was left was to determine the amount of that liability. Appellants made no argument that they were prejudiced by the failure of the register of wills to apply for appraisers, nor did they complain that the value of the estate upon which the tax and penalty were based was unfairly determined. They can not now contend that because the register of wills failed to comply with a procedural step in determining the amount of tax due, but which failure did not prejudice the determination, the penalty can not be assessed. We conclude that the court below was correct in holding that the penalty was properly assessed.

Order affirmed. Appellants to pay the costs.

. Section 170 was amended, Laws of Maryland 1965, Ch. 790, so as to remove the penalty for the payment of an additional sum equal to 25% of the tax due.