Estate of Johnson (1903) · DecisionDepot

Estate of Johnson

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Jul 10, 1903 No. S.F. Nos. 3018, 3019.Published

Before: Beatty, Henshaw

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Holding. The court held that a state statute granting a tax exemption to resident nephews and nieces is not unconstitutional; rather, the federal Constitution automatically extends that same immunity to citizens of sister states, while leaving the tax applicable to aliens and citizens of territories.

Issues

Whether a state statute granting tax exemptions to resident nephews and nieces violates the federal Constitution.
Whether a court should strike down an entire tax exemption statute or extend the exemption to non-resident citizens when a state law discriminates based on residency.

Disposition. reversed

Synopsis

The facts are stated in the opinion of the court.

I. I. Brown, John H. Durst, and Garoutte & Goodwin, for Appellants.

Opinion — Henshaw

HENSHAW, J.

There are two appeals, the one taken hy resident nephews and nieces, the other by non-resident nephews and nieces, citizens of sister states. Both are from the order of the court holding their respective distributive portions of the estate of the deceased liable for the payment of the collateral inheritance tax under the law as it stood in 1897. (Stats. 1897, p. 77.) So much of section 1 of that act as is necessary to this consideration is as follows: “After the passage of this act, all property which shall pass by will, . . . other than to the use of his or her father, mother, husband, wife, lawful issue, brother, sister,

and nieces or nepheivs when

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a resident of this state,

. . . shall be and is subject to a tax of five dollars on every one hundred dollars of the market value of such property, . . . for the use of the state; . . . provided, that an estate which may be valued at a less sum than five hundred dollars shall not be subject to such duty or tax.” The original act of 1893 (Stats. 1893, p. 193) is identical with the section as amended in 1897, saving- for the italicized words above quoted, which are added by the amendment. 1 In the

Estate of Mahoney,

133 Cal. 180,

this amendatory clause was held to be in violation of the provisions of section 2 of article IV of the constitution of the United States, as well as of section 1978 of the Revised Statutes of the United States. It was concluded that the amendment was void and should be stricken from the act, leaving the inheritances of all nephews and nieces liable for the tax as they were under the original act of 1893. Upon this present appeal we are asked to give further consideration to the question, and have done so, with the result that we have reached the conclusion that an erroneous construction was given to the law in the Mahoney case, and that an erroneous principle of constitutional interpretation was there announced.

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143 U. S. 339, “But exercise of the power to declare the statute unconstitutional and void is the ultimate and supreme function of courts. It is legitimate only in the last resort, and as a necessity in the. determination of a real, earnest, and vital controversy between individuals.” Still further, as hereinafter will be shown, the decision in the Mahoney case rested upon illegal assumptions of both appellants and respondent, and was .therefore invited error. The appellants’ first contention was, as expressed by the commissioner in the opinion in the Mahoney ease, “That legacies to nephews and nieces are exempt from the collateral inheritance tax, whether they reside in this state or not.' ’ This contention was a claim that section 2 of article IY of the constitution of the United States secured not merely to citizens of other states the immunities and privileges granted by a state to its own citizens, but secured the same to aliens, to residents of territories, and to citizens of the United States who are not citizens of any state, none of which classes comes under the protecting shield of the constitution. The appellants’ second contention in the Mahoney case was, that the court should strike out from the amendment the clause “when a resident of the state,” upon the assumption that because it favored citizens of the state it was violative of the constitution of the United States, and therefore void. This assumption was admitted by respondents and accepted in the opinion, respondents contending merely that the clause “when a resident of the state” was inseparable from the amendment, and the court must strike out the whole amendatory clause,— namely, “and nephews and nieces when a resident of the state,”—and the opinion adopted the latter view, which was perfectly sound, upon the assumption that the exemption of resident nephews and nieces was in and of itself unconstitutional. But that such privilege or benefit conferred by a state upon its own citizens, as expressed by this law, was not unconstitutional, we think is demonstrable upon principle as well as upon all adjudications.

Dissent — Beatty

BEATTY, C. J., dissenting.

I dissent. The Mahoney case (133 Cal. 180

), which is overruled by the present decision, was, in my opinion, correctly decided. It may be that the reasoning of the opinion in the former case was somewhat inconclusive, but I think the reasoning of the present opinion is quite as unsatisfactory. My own view of the case may be very briefly stated. There was a law—the act of 1893—of undoubted validity which imposed an inheritance tax upon the distributive shares of all nieces and nephews. That law could not be repealed by an unconstitutional act; and if the act of 1897 is unconstitutional, as held in the Mahoney case, the law of 1893 is still in force. Was the act of 1897 unconstitutional? I do not hold that it was unconstitutional because in conflict with the constitution of the United States; for I concede that where a state, by a law free from any conflict with its own constitution, confers a right or immunity upon its own citizens, the sole effect of the constitution of the United States is to make the citizens of other states equal participants in the same right or immunity. But if an act is in conflict with the state constitution, it confers no right or im

[541]

munity upon the citizens of the state, and there is nothing for the constitution of the United States to operate upon. This, in my opinion, is the proposition which has been overlooked in the present case, as it was in the Mahoney case. To my mind, the act of 1897 is plainly in conflict with the constitution of California. Before its adoption the inheritances or legacies of all nephews and nieces, residents and non-residents alike, were subject to a uniform tax. The intention of the legislature in the amendatory act to leave the tax resting upon non-resident nephews and nieces is just as clearly manifest as their intention to relieve resident nephews and nieces. The legislature intended, in other words, to pass a special law based upon a classification justified by no natural, intrinsic, or constitutional distinction between those assigned to the different classes, contrary to the prohibition of our constitution. (Const., art. I, sec. 2; art. IV, sec. 25.)

With respect to the right of inheritance, there is no natural or intrinsic difference between residents and non-residents who are all citizens of the United States. There may be— indeed, I think there is— an intrinsic and substantive difference between alien and citizen—a difference recognized as a ground of discriminating legislation by the general consensus of all nations. But as between citizens of the United States there is no intrinsic difference as respects the right of inheritance, and there is no difference established or recognized by our state constitution. If" this is so, the principle declared in

Pasadena

Stimson,

91 Cal. 251-252, and reaffirmed in numerous subsequent cases, invalidates the act of 1897, and leaves the act of 1893 in full operation, as was held in the Mahoney case.

In the opinion of the court it is said that the result of holding the act of 1897 unconstitutional “is the judicial creation and imposition of a burden,—a tax,—in forthright violation of the intention of the legislature,” etc., and the case of

Sprague

Thompson,

118 U. S. 90, is cited in support of this proposition. The distinction between that case and this is to my mind very plain. The law of Georgia, there considered, was the first law on the subject. Before its enactment there had been no law imposing pilotage charges upon any one refusing the services of a pilot, and the first law by which

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the legislature of Georgia attempted to impose such charges upon citizens of other states exempted by express provision the citizens of Georgia, South Carolina, and Florida. Counsel attempting to uphold the law were of course obliged to concede that the discrimination attempted could not be enforced, but they contended that the exemption should be struck from the law as invalid, and thus leave it undiscriminating. The supreme court very properly said, this is something we cannot do, because the legislature of Georgia has never imposed, or manifested any intention to impose, this burden upon its own citizens, and the courts cannot do so without usurping .legislative functions. This was correctly and justly said; for though a court does not exceed its functions in preventing discrimination by declaring void a discriminating statute, it would be usurping legislative power if it attempted to prevent discrimination by extending to a whole class the provisions of a statute which in terms excludes a portion of the class.

In this case, to declare the act of 1897 wholly void, would not be to add anything to a statute for the purpose of keeping it alive. We should only be doing what we continually do in invalidating unconstitutional legislation. And if the effect of invalidating an amendatory act is to leave in its original form the act which the legislature attempted to amend, this is not to legislate; it is only to say, as we so often say, the legislature has failed to pass a valid act.

The judgment of the superior court should be affirmed.

AI Brief

Synopsis

Opinion — Henshaw

HENSHAW, J.

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Dissent — Beatty

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