Court Opinion

ID: 3987545
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:43:40.897397+00
Date Added: 2024-06-11T13:52:25.908478
License: Public Domain

Plaintiffs and defendants have each made separate statements of the facts. Nellie R. Mayers died June 11, 1939. Her estate is being probated in the Probate Division of the Third Judicial District Court in and for Salt Lake County. Alton R. Mayers is one of the executors and one of the heirs. As to these facts there is full agreement.
The petition for warrant or order to show cause does not state facts sufficient to invoke the jurisdiction of the district court to justify the issuance of the warrant or order to show cause. It reads:
"I. The State Tax Commission alleges that it is a body politic, created by virtue of the Constitution and laws of the State of Utah, and is charged with the duty, among other things, of administering the provisions of Chapter 12, Title 80, Revised Statutes of Utah, 1933, as amended, otherwise known as the Inheritance Tax Law, and of investigating the taxability of transfers of property thereunder. *Page 295 
"II. That under the provisions of Section 80-5-46, the State Tax Commission is given the power, among other things, to subpoena witnesses to appear and give testimony and to produce records, books, papers and documents relating to any matter which the Tax Commission shall have authority to investigate or determine.
"III. That Nellie R. Mayers died June 11, 1939, and at the time of her death and for many years prior thereto was a resident of Salt Lake County, Utah; that the State Tax Commission is now attempting to investigate the inheritance tax liability of the Estate of Nellie R. Mayers, deceased, insofar as the property located at 41-43 Broadway, Salt Lake City in concerned. That in connection with its investigation the State Tax Commission caused to be issued on the 8th day of January, 1940, a subpoena to Alton R. Mayers, in the form and substance hereto attached and marked Exhibit `A' and by reference made a part hereof. That said subpoena was duly served upon Alton R. Mayers on the 10th day of January, 1940, commanding him to appear before the State Tax Commission on the 15th day of January, 1940, at 10:00 o'clock A.M. and bring with him the records, books, papers and documents therein set forth; that notwithstanding the premises, said Alton R. Mayers has wholly neglected, failed and refused to so appear."
Paragraph III above quoted contains no allegation that may be considered as a basis that any matter or issue is pending before the State Tax Commission but indicated merely that it desires to investigate inheritance tax liability.
Without now discussing the question of authority involved in the statute relating to issuance of subpoenas by the Tax Commission, let us examine the law as to the procedure in matters relating to the levy and collection of an inheritance tax.
A number of the sections of Chapter 12 of Title 80, Revised Statutes of Utah, 1933, are of similar import to some of the sections in the Probate Code in Title 102, Revised Statutes of Utah, 1933. (See Sections 102-7-1 and 5; 102-9-19; 102-11-18 and 19 and 102-12-10.)
Under paragraph I apparently the Commission claims to be charged with the duty of administering "Chapter 12, Title 80, Revised Statutes of Utah 1933, as amended." Let *Page 296 
us determine whether the State Tax Commission is charged with the duty of administering Chapter 12, supra, or whether that is a matter exclusively in the jurisdiction of the Probate Division of the District Court. Unless otherwise indicated, the sections of the statutes referred to are Revised Statutes of Utah, 1933.
Section 80-12-1 defines "executor" as follows:
"The term `executor' for the purposes of this chapter means the executor or administrator or testamentary trustee of a decedent's estate, or, if there is no executor, administrator or trustee appointed, qualified and acting within this state, then any person in actual or constructive possession of any property of the decedent."
"Executors" are officers of the Probate Division of the District Court. In this chapter, as in the Probate Code, the procedure for securing a complete inventory and appraisement of the property of decedent's estates and all the proceedings relating to inheritance taxes are based upon the fact that someone died possessed of an estate.
Section 80-12-2, as amended, fixes the per cent of levy upon the specified net amounts of estates. This is fixed and determined as a matter of law and is used only as a multiplier in ascertaining the amount of the tax by using the respective percentages fixed by law and applying them to the bases determined by the court when the amount of the estate has been determined by appraisement by appraisers appointed by the court.
Section 80-12-3 provides a procedure for the determination of the gross amount of an estate. The values therein referred to are determined by ascertaining by the court the value at the time of death of all property within the jurisdiction of this state which shall pass to another by testamentary disposition, or the law of inheritance or succession, or by conveyance made in contemplation of death, or intended to take effect in possession or enjoyment at or after death. The values referred to in this section are not the values used when considering the subject of inheritance *Page 297 
tax or determining the property or amount to be taxed, but when the net estate has been ascertained this value as indicated inLarson v. MacMiller, 56 Utah 84, 189 P. 579, may then be used as a measure of the tax imposed.
Sections 80-12-4, 5 and 6 relate to transfers of property in contemplation of death, transfers by right of survivorship and transfers to executors in lieu of compensation.
Section 80-12-7 provides that in determining the amount of tax to be paid the debts of the estate shall first be deducted and the remainder shall be the net estate. This is the amount as determined by the court the percentage of which is used as the other measure or amount to determine the tax provided by Section 80-12-2.
Section 80-12-8 defines "debts" and Section 80-12-9 relates to the determination of the taxable value of foreign estates having property within this state, and the court of this state having ancillary jurisdiction of the property of estates having property within this state. The executor is required to make a statement in affidavit form as to property within this state, as to its value, with indebtedness statements, so the proportionate value subject to tax, if any may be determined. In this section the first reference to the State Tax Commission in Chapter 12 is made and this relates to the approved and allowed claims by the court with this clause relating to the the Tax Commission "or unless allowed by the state tax commission" in case of foreign estates where the property taxable within this state consists of "personal property only."
Section 80-12-9 has a similar provision which provides:
"that in all * * * cases where the property within this state consists of personal property only, the statements hereinbefore [in this section relating to foreign estates] provided for shall also be filed with the state tax commission."
Section 80-12-10 provides the details the "executor" is required to report to the court upon his appointment and qualification. *Page 298 
Section 80-12-11 provides:
"At the time of filing the inventory of the estate as provided in section 102-7-1, each executor shall make and return to the clerk, under oath, a full and detailed report as provided in the next preceding section, any will to the contrary notwithstanding, and upon his failure to do so, the clerk shall forthwith report his delinquency to the district court, if in session, or to a judge thereof, if in vacation, for such order as may be necessary to enforce an observance of this section."
Section 80-12-12 requires the executor to include property transferred within three years prior to the death of the decedent, and reads:
"When property, either real or personal, has been transferred within three years prior to the death of the decedent, it shall be the duty of each executor to make and file an inventory of the same. In case of failure to make such report within the statutory period, a penalty of ten per cent shall be added to the tax."
Section 80-12-13 provides:
"If it appears from the inventory or report filed that the real estate listed therein, or any part of it, is subject to tax hereunder, it shall be the duty of the executor to cause notice of the lien to be entered upon the lien book in the office of the clerk of the court in each county where each tract of such real estate is situated, but no conveyance of such real estate or of any interest therein which is subject to such tax, before or after such entry, shall discharge the real estate so conveyed from such lien."
Herein is where the provisions of Section 80-12-27 come into use in event of failure by the "executor" to pay the inheritance tax fixed by the court and enforce a lien against the property wherever located within the state.
Section 80-12-14 provides:
"When property of a decedent is transferred in contemplation of death or intended to take effect in possession or enjoyment at or after his death, or passes to a survivor or survivors by right of survivorship, and no proceedings in probate are instituted,the state tax commission may apply to the court for theappointment of an administrator for the collection of the taxherein provided for. The *Page 299 
compensation of such administrator shall be fixed, and any reasonable attorneys' fee expended by him allowed, by the court." (Italics added.)
Section 80-12-15 provides for the appointment in each county by the district court annually of three competent residents of the county to act as appraisers of property sought to be charged with an inheritance tax. Such appraisers are not to act in the appraisement of estates as provided for by section 102-7-2, which section relates to appraisement of estates in the ordinary course of probate of estates not subject to the inheritance tax law, or if their findings show the amount of the estate to be such that an inheritance tax may be due then the appraisers provided for in Section 80-12-15 act.
Section 80-12-17 provides:
"When it appears from the inventory of an estate that there is property which may be subject to the tax, the clerk shall forthwith issue a commission to the appraisers, who shall fix a time and place for appraisement."
Section 80-12-18 provides for prompt appraisement and the section following, 80-12-19, again refers to the State Tax Commission as follows:
"It is the duty of all appraisers appointed under the provisions of this chapter to forthwith give notice to the statetax commission and other persons known to be interested in theproperty to be appraised of the time and place at which they will appraise such property, which time shall not be less than ten days from the date of such notice. The notice shall be served in the same manner as summons in civil actions, and if not practicable to so serve the notice, they shall apply to the court or a judge in vacation for an order as to notice, and upon such service of notice and the making of such appraisement, the notice, return thereon and appraisement shall be filed with the clerk, and a copy of such appraisement shall be filed by the clerk with the state tax commission." (Italics added.)
Section 80-12-20 opens the door full width to permit the State Tax Commission or any one interested to present *Page 300 
to the court any matter affecting the inclusion, exclusion of property or fairness of the appraisement to the court for determination of the value to be placed upon property for inheritance tax purposes. It is therein provided:
"The state tax commission or any person interested in the estate appraised may, within thirty days after an appraisement is filed, file objections to the appraisement. The hearingthereon shall be deemed an action in equity. If upon such hearing the court finds the amount at which the property is appraised is at its value on the market in the ordinary course of trade at time of death, and that the appraisement was fairly and in good faith made, it shall approve such appraisement, but if it finds that the appraisement was made at a greater or less sum than the value of the property in the ordinary course of trade at time of death, or that the same was not fairly or in good faith made, it shall set aside the appraisement appoint new appraisers, and so proceed until a fair and just appraisement of the property is made." (Italics added.)
When this is done the value of the estate for inheritance tax purposes is determined. If any exceptions have been taken the Tax Commission or anyone interested may appeal to the Supreme Court upon the question of the appraisement made and approved by the District Court. If no objections are filed the appraisement made and approved by the District Court shall stand. Section 80-12-21. Then sections 80-12-22 and 80-12-25 provided for tax lien and method for satisfying or clearing same.
Section 80-12-26 is an interesting one in that it provides for a collection of the tax by a sale of such of the property of the estate as may be necessary to clear the estate of tax claims. It provides:
"Property liable for the payment of the tax herein provided for may be sold in probate proceedings in the same manner as real estate is sold for the payment of the debts of a decedent; and to collect any such tax the state tax commission mayforeclose the lien given to secure the payment thereof."
Again the State Tax Commission may become a party in a court proceeding for the collection of an inheritance tax under 80-12-17. *Page 301 
When the amount of the inheritance tax has been determined, if necessary, and the liens attached if the property is not sold in the probate proceedings, (Sections 80-12-24, 25 and 26) or paid by the executor, then the State Tax Commission as ex officio collector of such taxes may institute proceedings for the collection of such taxes. By the provisions of Section 80-12-28,
"the state tax commission may demand from executors such informattion as may be necessary to verify the correctness of the amount of the tax and interest, and when demanded they shall supply certified copies of such parts of their reports as may be demanded."
What is here referred to as "such information" is clearly information that has been furnished to the court because the following sentence of the same section provides:
"Upon refusal [of executors] to comply with such demand of the state tax commission, it is the duty of the clerk of the courtto comply with such demand, and the expenses of making such copies and transcripts shall be charged against the estate, as are other costs in probate."
It is then finally provided that no final settlement of the account of any executor shall be accepted or allowed unless it is shown, and the court shall find, that all taxes imposed by the provisions of chapter 12 have been paid and the receipt of the state treasurer for such tax shall be the proper voucher for payment. What seems to be a complete refutation of the allegations of the petition or complaint of the State Tax Commission that it is charged with the duty, among other things, of administering the provisions of chapter 12 of Title 80, as amended, is found in the provisions of section 80-12-35. There are provided specific duties of clerks of district courts in aid of collection of inheritance taxes with details as to the bookkeeping with reference thereto; the maintenance of a lien book and other duties imposed upon the clerk (section 80-12-36 to 42). Section 80-12-27 authorizes the State Tax Commission to represent the state in all matters pertaining to the collection of such *Page 302 
taxes as ex officio collector of taxes when such taxes have been determined to be due.
"Any person having knowledge of property liable to such [inheritance] tax, against which no proceeding for enforcingcollection thereof is pending, shall report the same to the state tax commission, and it shall be its duty to investigate the case, and if it has reason to believe the information to be true, it shall forthwith institute proceedings for the collection of the same." Section 80-12-37.
I think any reading of Chapter 12 of Title 80 referred to makes it clear the fixing of the amount and bringing into the taxable field any property subject to inheritance tax is vested in the district court. Certain specific steps may be taken by the Tax Commission in court proceedings pending where there may be questions as to whether certain property was not included and questions may be raised as to the fairness or equitable determination of the amount of tax then the State Tax Commission is authorized to appear as a party to the proceeding and if dissatisfied with the determination of the appraisers or any change thereof as determined from the evidence by the court then the State Tax Commission has a right of appeal.
Paragraph II of the petition or complaint alleges that under the provisions of Section 80-5-46 (subsection 16) the State Tax Commission is given power
"to subpoena witnesses to appear and give testimony and to produce records, books, papers and documents relating to anymatter which the tax commission shall have authority toinvestigate or determine."
The petition underscores "any matter." We underscore "which the tax commission shall have authority to investigate or determine." If the other part of the sentence were not there and the implication suggested from the emphasis on "any matter" the question may arise, Are there any limits to the subject matter or persons beyond which the investigatory powers of the commission were not extended? If, however, the position herein taken, that the State Tax Commission has not been vested either by Constitution or *Page 303 
statute with power to levy, assess, or determine the rate of tax, nor the amount or value of the estate subject to the inheritance tax, the first of which is fixed by statute and the second is determined by the court, what then is "any matter" the State Tax Commission "shall have authority to investigate or determine," with respect to inheritance tax determinations or investigations? There are two matters and two only for final determination: what is subject to the inheritance tax and what is not?
It is true that the State Tax Commission is given constitutional authority to administer and supervise the tax laws of the state and statutory authority
"to examine all records, books, paper and documents relating to the valuation of property of any corporation or individual, and to subpoena witnesses to appear and give testimony * * * relatingto any matter which the tax commission shall have authority toinvestigate."
Inheritance tax determinations are not within the authority. The sentence following the one just quoted then says:
"The tax commission or any party may in any investigation cause depositions of witnesses to be taken as in civilactions."
A definite procedure is provided.
It does not appear that any proceeding or issue is pending before the State Tax Commission. On the contrary it appears that no issue as to the value of an estate or the rate or amount thereof nor the amount of inheritance tax may be made an issue before the State Tax Commission or brought before it for determination by the State Tax Commission or otherwise.
Before any court or tribunal
"The pendency of some action or proceeding is necessary in order to warrant the issuance of subpoenas for witnesses, which in order to be valid, must be issued for the purpose of compeling production *Page 304 
of testimony or other evidence having materiality to some matter which is lawfully under investigation therein." 70 C.J. 45, sec. 25.
In the case of Chambers v. Oehler et al., 107 Iowa 155,77 N.W. 853, 854, a justice of the peace had issued a subpoena upon an affidavit, the justice of the peace being his own clerk. The evidence disclosed there was no action pending in the justices' court at the time the subpoena was issued. The Supreme Court of Iowa said:
"We take it that the pendency of some proceeding in court is necessary in order to warrant the issuance of process for witnesses. There being no case pending in this instance, the justice had no authority to issue a subpoena for a witness."
In so far as anything appears in the record or the petition for the requirement of Alton R. Mayers to appear before the State Tax Commission, it may as well have alleged the State Tax Commission desires to investigate the flow of the Colorado river or how long it will be before the sedimentary deposits will fill the reservoir of Boulder Dam.
The statutes quoted provide a definite and clear method of securing a complete list of all property of a decedent and for determining the amount or value thereof for inheritance tax purposes. When the value has been ascertained and it has been determined whether the estate is subject to inheritance tax, the determination of the amount of the tax as determined under the provisions of section 80-12-2 is automatically levied.
There is no allegation in the petition of the State Tax Commission to the District Court that "the state tax commission * * * within thirty days after an appraisement is filed, filed objections to the appraisement" as required by Section 80-12-20. There is no allegation that an application for a hearing has been made to the court upon any matter relating to the property at "41-43 Broadway, Salt Lake City" nor whether such property is included in or excluded from the inventory, nor whether it should be. There is no allegation that the value of the property, if included, was erroneous, nor that any tax upon it is or may *Page 305 
be imposed or become due. There is no allegation that if an inventory and appraisement has been filed the State Tax Commission overlooked or upon the ground of excusable neglect or mistake failed to file objections in time.
There is no allegation that Alton R. Mayers is or is not the "executor" of the estate of Nellie R. Mayers, deceased, or that he is "in actual or constructive possession of any property of the decedent" or claims any interest in the property described or has information concerning it, or that any issue is pending before the State Tax Commission or elsewhere. Mere investigatory power without some issue presented does not any more authorize an administrative body to use a subpoena power than it does a court. Courts would not issue a subpoena without an action or an issue pending, and compensation paid, tendered or waived. Sec. 28-5-8, R.S.U. 1933 included in Chapter 5, Title 28. A subpoena is an instrument of process putting one under penalty for refusal to obey when properly served to testify as to a pending issue. Without an issue pending the use of process is tyranny. If such procedure or allegations may invoke the judicial power of a court of justice in the imposition of a contempt, the question may arise as to how far we are removed from the procedures of the "Inquisition" or how far we are removed from unlawful searches and seizures under such service. See 12 Am. Jur. 390.
This proceeding is based upon the assumption that the State Tax Commission has power to issue subpoenas. That the statute has authorized the State Tax Commission to issue subpoenas is clear from the statute. The purpose and the occasion for such issuance is not suggested. There are limitations. There must be some issue of fact for determination within the powers of the board to investigate and determine before such power may be used. The use of compulsion for the purpose of securing information against a witness or another must be based upon some proceeding before a tribunal where issues are presented for determination. The cases in support of this proposition are numerous. *Page 306 
Unnecessary clashes between what the citizen in good conscience believes to be his rights and governmental agencies should be avoided. Fundamentally there is a strong presumption against interfering with the personal liberty of a citizen and good cause should exist before he is commanded, even upon compensation for his required time to put aside his own affairs to respond wherein no apparent duty calls. The written line kills but the spirit gives life, — "for the letter killeth but the spirit giveth life."
Prohibition is the proper remedy, in fact the only adequate remedy. No issue was pending before the Tax Commission. It had no authority to require petitioner to appear without an issue pending. The court has no authority to require petitioner to furnish information the Tax Commission has no authority to determine; or in the alternative to surrender himself for contempt. The proceedings were void from the beginning. The complaint or petition fails to state facts sufficient to warrant any action on the part of the court. The facts as revealed by the record and the petition show affirmatively that the court was in error to entertain the petition at all. See Atwood v. Cox,88 Utah 437, 55 P.2d 377.
The writ should be made permanent.