Court Opinion

ID: 6382303
Source: CourtListenerOpinion
Date Created: 2022-06-25 00:02:16.17466+00
Date Added: 2024-06-11T15:50:24.079637
License: Public Domain

Ladner, J.,
dissenting. — I dissent for the reasons set forth in my adjudication and for the following reasons not there discussed.
The apportionment statute of July 2, 1937, P. L. 2762, 20 PS §844, excepts from its operation cases “where a testator otherwise directs in his will”. The majority opinion concedes, as it must in view of our *20decision in Jeffery’s Estate, 32 D. & C. 5, affirmed in 333 Pa. 15, that this means “the testamentary direction” required by the statute to prevent apportionment may be implied. But the opinion adds: “Equivocal language, susceptible of more than one interpretation, will not suffice to prevent the application of the legislative mandate”. To that I do not agree, for it is in direct conflict with Jeffery’s Estate, supra, where it was held that the phrase “to pay out of said trust fund all costs, charges and expenses of said trust estate and of the management thereof”, etc., operated to charge the Federal estate taxes on the trust. Surely the words “charges and expenses” there used are words of equivocal import, but nevertheless were held to be reasonably susceptible of the interpretation which this court put upon them.
The language of the Act of 1937, viz, “except in a case where a testator otherwise directs in his will”, is not novel in our statutory decedents’ estates law. Similar language is found in our Wills Act of June 7, 1917, P. L. 403, in at least three places; section 15(a) and 15(6) (relating to lapses), and section 18 (relating to devises of mortgaged lands). There is no case where this language has ever been interpreted to mean that the direction must be of the kind the majority opinion asserts. On the contrary, in Hill’s Estate, 87 Pa. Superior Ct. 173, interpreting section 18, which reads: “Unless the testator shall otherwise direct by his will, the devisee of real estate which is subject to mortgage shall take subject thereto, and shall not be entitled to exoneration out of the other estate of the testator, real or personal . . .”; it is ruled that it is not essential that the will should contain an express provision that the lands specifically devised shall not be taken subject to the payment of the mortgage debt; it is sufficient if the will, taken as a whole, clearly implies that such debt is to be paid out of other property.
*21This will makes it reasonably clear that the testator did not want his residuary legatees to be subjected to the Federal estate tax. The time-honored maxim ex-pressio unius est exclusio alterius, frequently invoked in construction of wills (see Ritter’s Estate, 10 Pa. Superior Ct. 352, 357, Levy’s Estate, 1 Dist. R. 217, 219 (Penrose, J.), and Pepper’s Estate, 21 W. N. C. 271, 275), applies. The testator here expressly directs that the pecuniary bequests are to be subject to the Pennsylvania State inheritance tax. Does he not thereby imply that they should be subject to no other tax? This implication is strengthened by the settled law that the State inheritance tax is imposed upon legacies unless exempted therefrom by express language or necessary implication: Brown’s Estate, 208 Pa. 161, 164. When in the face of that settled rule the testator makes pecuniary legacies expressly subject to the State inheritance tax, he thereby necessarily indicates that they are to be subject to that tax, and no other. The express mention of the one tax implies the exclusion of the others. This is precisely the principle of Beilstein et al. v. Beilstein, 194 Pa. 152, where it was held that a devise over in case a daughter should die without leaving a family was an implied devise to her family if she should leave one; see also Bosworth’s Estate, 35 D. & C. 588, affirmed in 337 Pa. 265.
The testator here left a $2,000,000 estate. Of this he gave $235,000 in pecuniary legacies, and bequeathed the residue of approximately $1,750,000 (after the life tenant’s death) to charities. If the apportionment act is applied, it would serve to reduce each of the pecuniary legacies by as much as 40 percent for the benefit of the residue. I cannot believe that the testator ever intended such a result, or that the apportionment statute, enacted a year after the date of the will, which enjoins an equitable apportionment, was ever meant to be used for such a purpose. It overturns the settled principle of our law that pe*22cuniary legatees have a preferred or priority status over residuary legatees and they must be paid first in full and do not abate with residuary legatees.
While the foregoing construction of the will makes it unnecessary here to determine whether the apportionment act applies as between the general and residuary legatees taking under the same will, since the majority opinion has gone into that question I feel impelled to discuss it also. The Statutory Construction Act of May 28,1937, P. L. 1019, sec. 51, requires us in construing statutes to consider “among other matters— (1) the occasion and necessity for the law; ... (3) the mischief to be remedied; (4) the object to be attained; (5) the former law, if any, including other laws upon the same or similar subjects; (6) the consequences of a particular interpretation”.
The occasion, necessity, and mischief sought to be remedied by the Apportionment Act of 1937 is gleaned from the decisions which led to its enactment and are well known. The Federal estate tax is imposed upon all interests in property passing from a decedent whether by instruments of trust inter vivos, gifts in contemplation of death, insurance trusts, joint tenancy ‘or entirety survivorship, or otherwise — all together being considered for Federal'tax purposes as comprising one taxable subject. But the Revenue Act of February 26, 1926, 44 Stat. at L. 9, sec. 305, as amended, makes the executor primarily responsible for the payment of the whole Federal estate tax. The Government also has the power to collect the whole tax out of the most convenient or available fund and in such case reimbursement is provided for by the Federal act. In practice, however, it is usually the executor who is called upon to pay out of the decedent’s estate passing under a will. Such payment was held properly chargeable to the residuary estate: Newton’s Estate, 74 Pa. Superior Ct. 361. The Federal act provided for no reimbursement to the executor so that where the *23greater part of the decedent’s property passed by instruments other than his will the residuary estate was often depleted. This was the inequity that called for relief. Examples of the resultant injustices, never contemplated by the testators in question, are to be found in Ely’s Estate, 28 D. & C. 663, and Uber’s Estate, 29 D. & C. 341. In these cases the evident intent of a testator in his will to leave the bulk of his estate to his widow or children was defeated, not by the few specific or pecuniary legacies in the will, but by the Federal Government requiring the executor to pay the whole estate tax, including the transfers made entirely outside the will, depleting the residuary estate with no right to reimbursement. It was to correct this type of injustice that the Act of 1937 was passed and not to change the rule consistently observed in this State for over 100 years, viz, that the specific and pecuniary legatees have a priority status as compared with the residuary legatees. Indeed, it was Judge Bok in Ely’s Estate, supra, who urged this legislation in his adjudication and called attention to the New York statute on the subject.
In ruling that the Apportionment Act of 1937 operates so as to require apportionment between the general and residuary legatees of a will the majority opinion says that it so decides because the act was copied from New York, and that the report of the New York Commission which drafted that law sought to obtain relief for the residuary legatees not only from portions of the Federal tax arising from inter vivos trusts or other transfers, but also from the share of the tax based on all legacies under the will. I do not so read the quoted portion of that commission’s report. The object sought is not set forth by the phrase the majority opinion italicized, that is merely explanatory. It is the last sentence of the quotation which reads, “Thus the residuary legatees have been compelled to pay the entire estate tax, including the tax as*24sessed on testamentary transfers and those taking effect at death” (italics supplied), that states the object sought.
The majority of the court also feel bound to follow the New York cases cited as supporting their views. These cases in two instances are surrogate’s decisions and none of them by a court of last resort. In Miller’s Trust, 313 Pa. 18, 23, it is held that we are not bound to follow constructions of other State courts of statutes copied by our legislature unless the constructions be that of a court of last resort, and' not even then if contrary to the course of development of our own law. It is also settled that courts of adopting States are not bound to accept constructions placed on a statute in cases decided after the adoption of the statute: 59 C. J. Í071, §629.
Of the three New York cases cited, only one of them —In re Murdoch, 142 Misc. 186 (1931) — was decided before our Act of 1937. In that case the surrogate, in a meagerly reported opinion, without setting forth reasons, construes the Apportionment Act of New York as entitling pecuniary legatees to an apportionment of the discount allowed by State law upon the payment of New York State taxes. The other two cases were decided in the years 1938 and 1939, respectively, after our statute of 1937 was enacted. Both assert, rather than decide, the extended application of the apportionment statute contended for in the majority opinion.
I would restrict the application of the statute to the situations which gave rise to it and not impute to the legislature an intention to change by indirection a well-known principle that has had public approbation for over a century and which the two learned commissions that revised the decedents’ estate laws during that time left undisturbed.