C. C. Rogers and J. Minot, for the plaintiff. I. The statute in question
is an act of taxation. That such was the design of it appears from the report of
the tax commissioners by whom it was originated. (Report, p. 29,c.) The statutes
themselves so designate it (G. L., c. 64, p. 163), and the practical operation and
effect of it are merely for revenue. It was not designed for any other purpose,
and therefore it cannot be sustained on the principle and reasons on which the various
other special provisions in our statutes, relative to taxation in particular cases,
are maintained. Though those involve the raising of revenue, yet it is really incidental,
and with reference to a different and main object, — the promotion and protection
of the public good and morals as, for instance, the exemption of certain property
from taxation for the encouragement of manufactures; the taxation of deposits in
savings-banks, to encourage economy and saving; the various license laws, to protect
public morality, c. From the nature of the subject-matter of the statute in question,
it cannot have any even indirect effect or influence for any other purpose than
revenue. The application of it is made entirely dependent on an event which is beyond
the control of legislation and human effort — death.
II. It is unequal and unjust, and therefore is unconstitutional and void. State
v. U.S. C. Express Co., 60 N.H. 219 . It is unequal, because it relates to a particular
class of property, estates by inheritance, and does not embrace all classes of property;
and even with regard to the particular class referred to it makes discriminations,
exempting inheritances by the wife or issue, and including only those by the collaterals.
It does not impose the tax provided by it in place of any other tax on the same
property, but it leaves that property still subject to all other taxation in common
with other property, thus in effect making double taxation. The
rule established by our state constitution and bill of rights on this point cannot
be weakened or qualified by any argument from convenience or expediency. State v.
U.S. C. Express Co., above cited. Therefore the reasons assigned for this statute
by the tax commissioners are insufficient to sustain it. The inequality and injustice
of its provisions will appear on the examination of the reasons assigned by the
tax commissioners for the law. Report of Tax Commissioners 30.
If it were true that the property included in this act escapes taxation under the
general law, yet that would be the fault of the administration of the law, and not
a sufficient reason why the general law should be allowed to remain and this additional
burden be imposed; and most certainly no reason why this particular class of property
should be singled out for that purpose.
It might be reasonable that the expense of administering the probate law should
be borne by the business transacted in that office, but it would be unreasonable
and unjust to impose the burden of administering that branch of the public business
upon the estates there adjudicated, without applying the same principle to other
departments of the public administration; and especially when, as by this law, the
probate business is left to bear its proportion towards supporting the other branches
of the government. But the inequality does not stop here. It does not impose the
burden of the probate court upon the business there done, but it singles out a particular
and comparatively small portion of that business which it subjects to such burden,
and exempts from that burden another particular portion of the same kind of business,
that is, inheritances by wife and children.
The real motive and reason for this legislation were not with any reference to justice
or constitutional right, but simply because the property taxed could bear the burden;
and the parties interested might willingly submit to the wrong, considering that
the property on which it is imposed, and from which it is to be paid, came to them
as a windfall from a distant relative, and without effort or exertion of their own.
The defendants, pro se.
Tappan, Attorney-General, for the state. If it had not been for some recent decisions
in this state, notably that in the express company cases, no one, I apprehend, would
have thought of questioning a mode of taxation which has obtained in most civilized
countries since the time of Augustus, and which Gibbon says "was the most fruitful,
as well as the most comprehensive," of any imposed by that emperor. Gibbon's Decline
and Fall, c. 6.
Taxes on legacies and successions have been imposed in Holland, France, and Great
Britain, and have been considered as eminently just and equitable. The same is true
in this country, and such
taxes have been laid in many states; and whenever they have been questioned they
have been sustained and upheld as proper, just, and constitutional, even in states
with similar constitutional provisions as to "equal" and "proportional" taxation
to those which are found in the constitution of New Hampshire. The whole subject
of the propriety and constitutional validity of such taxes has been elaborately
considered in the following cases, to which I respectfully refer the court: Williams's
Case, 3 Bland 259; Eyre v. Jacob, 14 Grat. 424; Fox v. Commonwealth, 16 Grat. 1;
Tyson v. State, 28 Md. 577 .
As the counsel for the defendants seem to rely wholly upon the opinion in the express
cases (I have not seen their brief), I suppose it is claimed that this tax is "disproportional"
"unequal," and imposes upon each of these defendants a burden beyond their "just
share." I am aware that a great deal is said in the express cases in regard to a
person's paying more than "his share" of the public taxes, and it is undoubtedly
true that any system of taxation which compels a man to pay any more than "his share"
is unequal and vicious. But, in a case of this kind, what is "his share"? That it
is merely his "proportional" share based solely on his property and estate, is,
as it seems to me, mere assumption. The party receiving a legacy or succession has
an extra and additional civil right which requires additional legal machinery to
make it secure. It costs the state something to furnish a tribunal to uphold, protect,
and transmit that right. It is a right which all others in the state do not enjoy
with him; and "his share," therefore, of the public burden would be his "proportional"
tax based on his poll and estate in common with that of other citizens, and his
extra percentage, tax, or duty, whatever it may be termed, which the legislature,
in its broad discretion, has the power and right to impose to help pay for the extra
and additional right which he enjoys under the law. It comes clearly within the
"protective power," and it does not seem to me that a tax-payer would be justified
in resisting such a tax as this by force of arms, on the ground that he was paying
more than "his share."
If this tax cannot be upheld, then it must be that the court intends to exclude
all other modes of raising revenue, except the "proportional" tax on polls and estate.
But I do not understand that the court has gone to that length.
In Virginia it has been held that "the act of March 2, 1854, which imposes a tax
upon collateral inheritances, is constitutional, notwithstanding a provision in
the constitution that taxes shall be equal and uniform." Eyre v. Jacob 14 Grat.
422. In that case it was contended that this tax on collateral inheritances was
a tax on property.
But the court says, — "It cannot be regarded in a proper legal sense as a
tax on property. The property tax which the framers of the constitution were contemplating
in the 22d section [or to
apply it to the case at bar, and substitute for s. 22, Virginia Constitution, Art.
5, Part 2, Constitution of N.H.] was the ordinary, annually recurring tax for the
support of the government, laid upon all property whatsoever. They had no reference
to casual subjects of taxation, occurring irregularly and occasionally, which, though
connected with property, were yet readily to be distinguished in their essential
character and features. . . . But the argument is, that the tax is a certain per
centum of the value of the estate, and the property pays it: it is therefore a tax
on the property. But this is by no means a necessary logical conclusion. The intention
of the legislature was plainly to tax the transmission of property by devise or
descent to collateral kindred. It requires that a party thus taking the benefit
of a civil right, secured to him under the law, should pay a certain premium for
its enjoyment and, as it was thought just and reasonable that the amount of the
premium should bear a certain proportion to the value of the subject enjoyed, it
is fixed at a certain per centum upon the value of the whole estate transmitted.
And of this, surely, there can be no just complaints; on the contrary, it would
have been unequal and unjust to require that a party receiving an inconsiderable
property should pay as high a premium as one who takes a large and valuable estate.
It is perfectly in accordance with the principles of natural justice and the spirit
of the constitution, that the tax on such a subject should be regulated in strict
proportion to the value of the benefit which it receives. . . . That the general
assembly of Virginia, in the absence of a constitutional prohibition, does possess
the power to tax a civil right or privilege like this, is beyond question. This
is fully embraced within its general and comprehensive power upon the subject to
which allusion has already been made. But it may be deduced from the very nature
of the subject itself. The right to take property by devise or descent is the creature
of the law, and secured and protected by its authority. The legislature might, if
it saw fit, restrict the succession to the decedent's estate, either by devise
or descent, to a particular class of his kindred, say to his lineal descendants;
it might impose terms and conditions upon which collateral relations may be permitted
to take it, or it may repeal the statute of wills, or that of descents and distributions,
and decree that upon the death of a party his property shall be applied to the payment
of his debts, and the residue appropriated to public uses. Possessing this sweeping
power over the whole subject, it is difficult to see upon what ground the right
to appropriate a modicum of the estate, call it a tax or what you will, as the condition
upon which those who take the estate shall be permitted to enjoy it, can be successfully
questioned." Eyre v. Jacob, 14 Grat. 428-431.
It seems to me that the reasoning of the court in this case applies with great force
to the case under consideration. It will be seen from what has been said that the
tax in question differs from
all other taxes declared by the court of New Hampshire to be unconstitutional, and
in this, also, that it is avowedly and in terms of the act imposed to pay the expenses
incurred by the state for the benefit of the identical property which is taxed.
The title of the act is, "An act to defray the costs of probate courts." Almost
the entire business of the probate courts relates to legacies and successions, and
it was deemed just and equitable that the individuals benefited thereby should help
pay the burden thereof. It is right, and it would seem to be in accordance with
the terms of the constitution that they should bear their shares of this specific
burden.
In fact, the tax in question does not nearly pay the salaries of the probate court.
It appears by the report of the state treasurer for 1881 that the salaries amounted
to $8,483.03; the tax, $5,492.36. Report of 1880: Salaries amounted to $8,148.80;
the tax, $2,449.97. This is called a tax, and in several places in the act it is
called a duty; but, as has been frequently said by the court of this state, words
and names are not to be so much considered as the intent of the legislature; and
the intent of this statute was to defray the expenses of the probate court by levying
a per cent. on the business transacted by it, in the same way as many other offices
are supported by fees paid by citizens. Of this nature are the jury fees, and other
fees paid to the different courts of the state, the fees paid for the recording
of deeds, of fence-viewers, railroad commissioners, bank commissioners, commissioners
on insolvent estates, etc.
If this act, in order to defray the expenses of the probate court, had imposed a
fee of one dollar for the entry of each petition, and three dollars for letters
of administration, etc., I do not believe that the court would have entertained
a doubt of the constitutionality of such fees. But the principle of this act is
the same, and, indeed, this act is more equitable and just; for, instead of imposing
an arbitrary fee or duty, without reference to the benefit received, it apportions
the fee or duty to the amount of the legacy, so that the legatee, or person receiving,
pays just "his share" and no more.
Expenses of the probate court are paid in most of the states, I think, by fees,
to wit, in Maine, Vermont, Connecticut, and many others; and in New Hampshire, while
it was a colony, and at the time when the constitution of this state was created,
and for years afterwards, until July, 1826, the judges and registers of probate
were paid by fees in the same way. If the framers of our constitution had considered
such a mode of supporting probate courts unconstitutional, they would hardly have
permitted the wrong to exist throughout their entire generation; and if the law,
as it then existed, and as it exists now in other states, were on our statute book
today, would the court declare it unconstitutional? I think not. But if there is
any substantial difference in principle between the two methods of defraying the
expenses of the probate courts, I confess I am unable to see it.
From the reasons that have been given, I think this tax is clearly distinguishable
from the tax on express companies. It is not an untried experiment. It is not a
novel mode of taxation, but one that has been resorted to by both state and national
governments. A tax on legacies and successions was levied during the late war, and
was continued for some years afterwards, yielding a large amount of revenue. Massachusetts
paid yearly from this tax about three hundred thousand dollars; New Hampshire a
large sum, the exact amount of which I have not ascertained. It is a tax the burden
of which is not seriously felt, and one that bears as lightly as that of any that
can be devised. No one who receives a godsend in the shape of a legacy, or succeeds
to an inheritance such as this act contemplates, can reasonably object to the comparatively
small amount he is required to contribute from it to pay the expenses to which the
state is subjected to enable him to enjoy it.