Trippet v. State

This action was brought by the executor of the will of Jacob Gruendike, deceased, pursuant to the provisions of the act, approved March 20, 1905, (Stats. 1905, p. 374,) authorizing the bringing of an action against the state by the personal representatives of a decedent for the purpose of having it determined that any property belonging to such decedent’s estate is not subject to any lien for taxes under the act of 1893, and the acts amendatory thereof, imposing a tax on collateral inheritances. (Stats. 1893, p. 193.)

Prom the allegations of the complaint it appears that Jacob Gruendike, a resident of San Diego County, died testate on April 8, 1905, leaving estate in said county and elsewhere of the value of between three hundred thousand and four hundred thousand dollars. On April 28, 1905, the superior court of San Diego County duly admitted the decedent’s will to probate and appointed the plaintiff executor. By the will, which is set out in full in the complaint, the residue, comprising nearly the whole of the estate, is given to the-testator’s living brothers, sisters, nephews, and nieces, and the children of deceased nephews and nieces. There are some forty beneficiaries, each of whom, with two or three exceptions, takes under the will an interest of the value of from seven thousand to ten thousand dollars. The defendant claims that all of the interests devised and bequeathed by the will are subject to a tax under the act of March 23, 1893, entitled “An act to establish a tax on collateral inheritances,” etc., and its various amendments, while the plaintiff claims, and prays a decree accordingly, that all of the provisions of this act have been repealed by an act approved March 20, 1905, (Stats. 1905, p. 341,) and that by such repeal the state has lost any right which it may have had under the earlier act to collect a tax. (There are two acts approved, March 20, 1905, the one allowing the institution of such an action as

It is alleged that prior to the repeal of the act of 1893, no proceedings had been taken for the appraisement under said act of any of the interests devised or bequeathed by the Gruendike will. The complaint further asserts a right arising under the federal constitution by alleging that the act of 1893 has been construed by this court as vesting “a five-percent interest in the state at the death of the decedent regardless as to whether or not there has been any appraisement and notice to the parties in interest, and before the ascertainment of the amount of the inheritance, devise or bequest, ’ ’ and that the act, as so construed, deprives persons of property without due process of law.

A general demurrer to the complaint having been sustained, and plaintiff declining to amend, judgment was entered for defendant. The appeal is from this judgment.

By its terms, the act of March 20, 1905, which, it is claimed, repealed the act of 1893, went into effect on July 1, 1905. Gruendike’s death occurred on April 8, 1905, when the old law was still in force. Passing, for the moment, the constitutional point suggested above, the substantial, and indeed the only, question is, What was the effect of the act of 1905 on estates of persons dying before it went into effect, where no steps had been taken to collect the tax imposed by the law in force at the date of the death?

The act of March 23, 1893, was the first enactment in this state on the subject of inheritance taxes. It provided in section 1 that all property passing by will, or by the intestate laws of this, state, or by an instrument made in contemplation of death, except to the use of the father, mother, wife, lawful issue, brother, sister, the wife or widow of a son, the husband of a daughter, the adopted child, or any lineal descendant of the decedent, or any corporations or institutions exempted from taxation, should be subject to a tax of five dollars on every hundred dollars of the market value of such property. Section 4 provided that all taxes imposed by the act should be “due and payable at the death of the decedent,” and that interest from the' date of such death should be collected in certain events. Other sections of the act provided for the appraisement of interests subject to the tax, for the duties

The legislature of 1905, instead of amending the old act, undertook to pass a new law covering the whole subject. By this law the old plan of a flat tax of five per cent is abandoned, and a sliding scale, ranging from one to fifteen per cent of the interest passing, is adopted, the rates varying according to the remoteness of kinship and the amount of the inheritance or gift. The system of exemptions is also materially changed, no heirs or relatives of the deceased being absolutely exempt under the new law, while under all the prior enactments there was no tax on gifts to or inheritances by the father, mother, husband, wife, lawful issue, wife, or widow of a son, husband of a daughter, adopted child, or legitimate lineal descendant of the decedent. In other respects the new law re-enacted substantially the provisions of the old with regard to the appraisement of interests subject to the tax, time and manner of payment, penalties and interest, duties of officers, and all machinery connected with the ascertainment and collection of the tax. Section 27 of the new act reads as follows: “An act entitled ‘An act to establish a tax on collateral inheritances, bequests and devises, to provide for its collection, and to direct the disposition, of the proceeds, ’ approved March 23, 1893, and all amendments thereto, and all acts and parts of acts in conflict with this act are hereby expressly repealed. ’ ’ There is in the later act no clause expressly saving or preserving rights accrued under the old.

The argument of the appellant is that by the repeal of a law all inchoate rights existing under that law are ended, and that the right'of the state to the tax in this case was inchoate, no steps for its appraisement and collection having been taken before the alleged repealing statute went into effect. The doctrine relied on, which is well established, is

In that case the decedent had died in June, 1893. Under the act of March 23, 1893, then in force, there was no exemption of legacies or devises to nephews, nieces, or educational institutions. Pending an appeal from an order directing the executrix to pay taxes on certain legacies to decedent’s nephews and nieces resident in the state and to the trustees of the Leland Stanford Junior University, the legislature, in 1897, passed an act amending the act of March 23, 1893, by adding such nephews and nieces and educational institutions to the classes of beneficiaries exempted from the tax under section 1 of the act, and providing specifically that the additional exemption should apply to the estates of per

It was also held that the amending act of 1897 was in conflict with certain provisions of the state constitution regarding special legislation. It is urged on behalf of appellant that the present case is distinguishable from the Stanford case, in that the act of 1905 was an absolute repeal and not a mere amendment, and that here (as is claimed) no question of special legislation arises. But we are unable to find any valid ground of discrimination. We have quoted at some length from the opinion in the Stanford case in order to show that the act of 1897 was held invalid upon the grounds,—1. That under the law of 1893 an interest amounting to five per cent of certain specified inheritances, devises, or bequests, vested in the state upon the death of the decedent; and 2. That where such interest had once vested in the state, it was beyond the power of the legislature to make a gratuitous surrender of the interest to the beneficiary. These propositions, if sound, are as applicable to this as to the Stanford ease. If the surrender, without consideration, of a right vested in the state be a gift or donation, within the meaning of section 31 of article IV of the constitution, such surrender must be as obnoxious to the constitutional provision when sought to be accomplished by means of a repeal of the law creating the right as by any other method. Nor can .it be said that what was laid down in the Stanford case as to the “gift or donation” clause was dictum. While the holding of the invalidity of the amending act of 1897 might have been placed solely on the ground of “special legislation,” it was not. The enactment was held to violate two provisions of the constitution, and the ruling as to one was as necessary to the decision as the ruling regarding the other.

The various counsel who have filed briefs on behalf of appellant argue, with much force and ability, that the court was in error in holding, in the Stanford case, that the law

' There remains to be considered the point that the act of 1893, as construed by this court, deprives plaintiff of property “without due process of law,” contrary to the provisions of article XIV of the amendments to the constitution of the United States. The proposition, as stated by appellant, is that “in ad valorem tax matters, the due process provision of the federal constitution requires that the state must provide a means of ascertaining the amount of the tax, and for notice and appraisement. Until these things are done, the state has no power to take private property. ’ ’ But if this principle be applicable to a tax like the one under consideration, the law of 1893 did provide a means of ascertaining the amount of the tax and for notice and appraisement. Section 11 provides that when the value of an interest subject to the payment of the tax is uncertain, the court shall appoint an appraiser, whose duty it shall be to make an appraisement after having given notice to all persons known to have or claim an interest in the property, of the time and place at which he will appraise such property. The tax is to be fixed by the court from the report made to it by such appraiser. (Stats. 1895, p. 34.) The beneficiary under the will, or the heir, is in no way deprived of the benefit of these provisions because the statute enacts or the court holds that the state’s right to the tax vests on the decedent’s death. The right, although vested, is still, as to actual collection, subject to the appraisement provided for. There is no legal inconsistency in the idea of a right being vested, although the possession may be postponed or contingent upon the performance of certain acts. An apt example is to be found in the right of the heir himself. It is the settled law of this state that upon the death of an owner of property, intestate, his estate at once descends to and vests in his heirs, subject to the possession of the administrator for all purposes of administration. (Civ. Code, sec. 1384; Bates v. Howard, 105 Cal. 173 , [ 38 Pac. 715 ]; Brenham v. Story,

For the purposes of the present case, it is not necessary to express an opinion regarding appellant’s further point that, assuming the act of 1893 to have given to the state a vested interest which could not be surrendered, the act of 1905 repealed all provisions for notice and appraisement as to estates of persons dying before July 1, 1905, and left a bare right in the state without any constitutional means of enforcing it. The plaintiff comes into court seeking, as against the state, a determination that it has no right to any tax. The state is not here seeking any affirmative relief against the plaintiff. The judgment merely denies plaintiff the decree sought by him declaring that the defendant has no right to any tax. Since, as we have seen, the defendant has a vested right to such tax, an adjudication that the estate is free from any claim for such tax would be manifestly improper. Whether or not there remains a legal method of collecting the tax will be a question for decision when the state seeks to enforce its right. This is substantially an action to quiet title. (Sec. 2 of act of March 20, 1905, Stats. 1905, p. 375.) If there be a valid claim against such property, the plaintiff cannot, in this equitable proceeding, quiet his title against such claim, even though the same may be unenforceable by legal proceedings, without paying the claim. The case is analogous to that of a mortgagor who seeks to quiet his title against a mortgagee whose right to foreclosure is barred by lapse of time. It has been repeatedly held that he cannot do this without paying the amount due on the mortgage. (Booth v. Hoskins, 75 Cal.

The judgment is affirmed.

Shaw, J., Henshaw, J., Lorigan, J., Angellotti, J., and Beatty, C. J., concurred.