CARTER, J. I dissent.
The majority opinion holds that the Legislature did not intend by the 1955 amendment to section 901 of the Probate Code (increasing the fees of administrators, which became effective after decedent’s death, but was in effect to fix the executor’s fees in the estate; see Estate of Johnston, ante, p. 265 [303 P.2d 1]) to make such amendment applicable in computing the inheritance tax on estates of persons who died before its effective date; that such an application of the amendment would be a gift of public money in violation of the Constitution (Cal. Const., art. IV, § 31) in that under the prior law only the old allowances for executor’s fees could be deducted from the value of the estate in computing inheritance taxes.
There is no gift of public money contrary to the Constitution when we consider the applicable law. This court held in Estate of Johnston, ante, pp. 265, 270, 271 [303 P.2d 1], that the 1955 amendment to section 901 of the Probate Code applied to persons who had died before its effective date but where the administrator’s fees had not yet been fixed. We there said: “We are of the opinion that the commissions of the executor and his attorney should be the amount of the statutory commissions in effect at the time of the settlement of the account and making of the order allowing compensation, to wit, in the instant case in accordance with the provisions of section 901 of the Probate Code as amended and effective September 7,1955. . . . ‘On the other hand [quoting from Estate of Spires, 126 Cal.App. 174, 177 (14 P.2d 340)], the right of the executor to a defined rate or standard of compensation is not vested as of the date of the decedent’s death, nor even as of the date when he qualified as executor, but such right first accrues at the time when by appropriate [299]order the amount of compensation payable to him is determined and allowed. And since the right of an executor to compensation for extraordinary services is not established or vested until allowed by the court in the exercise of its discretion, it follows as a direct consequence that the law in force at the time when the order is made constitutes the only law by which the power of the court is to be governed.’ (Italics added.)
“The weight of authority in the United States is to the effect that the law in force at the time of the settlement of the account, and not at the date of death, governs the amount of compensation allowed executors, administrators and their attorneys.” In addition the same has been said: “The matter of allowance of compensation to the personal representative ... is generally made in and by the settlement of the final account. But the representative is not entitled to compensation until an allowance therefor has been made by the court, even where compensation is provided for by the will.” (21 Cal.Jur.2d, Executors and Administrators, § 892.) And further with reference to time of valuation for computing fees: “Though the inventory value is prima facie evidence of the value of the property, it is not conclusive. That is, if the value as shown by the inventory is not satisfactory to all parties concerned, it should be left open to inquiry. In such event, a reappraisement and evidence of market value may be given effect. It follows that where property is distributed in kind, or where the representative is charged with the appraised value of property taken from the estate under mortgage foreclosure and applied to payment of the debt against the estate, the valuation in the inventory, in the absence of objection or circumstances tending to induce suspicion that the appraised value is not fair and reasonable, is the basis of estimating the representative’s commissions.” (21 Cal.Jur.2d, Executors and Administrators, § 888.) Therefore, under section 901 the administrator’s fees were properly computed on the basis of the law in effect at the time the order therefor was made rather than at the date of death. That was the law when the inheritance tax laws were adopted and still is. That law provided that the rates or amount of fees was determined as of such date rather than at the date of death. We must look therefore at the inheritance tax law. It provides that the “ordinary expenses of administration in the estate . . . are deductible from the appraised value of property”; included in such expenses are “The ordinary [300]commissions allowed executors . . . under Section 901 of the Probate Code, computed on the value of the . . . estate as of the date of . . . death.” (Emphasis added.) (Rev. & Tax. Code, § 13988.) That is to say, the fees deductible for the computation of the tax are those allowed by section 901. Along with section- 901 goes its construction when it is amended as to the applicability of the amendment to estates of persons already dead as above pointed out. In other words the inheritance tax law incorporates section 901 as creating a deductible item in computing the tax and that section when amended after a death still applies as seen from the foregoing authorities. The inheritance tax law (Rev. & Tax. Code, supra, § 13988) must be read as providing that administrator’s fees may be deducted to the extent authorized by section 901 as properly construed and applied including the effect of amendments. So reading, the effect of section 901 on the inheritance tax law, it must follow that the law now is and always has been that the deductible fees are those applicable under section 901 at the time the fees are claimed and allowed. Hence there can be no gift of public money because the law (inheritance tax law) has always authorized a deduction based on the rate effective when the order for fees is made. As is said in Estate of Slack, 86 Cal.App.2d 49, 54 [194 P.2d 61] : “ [It is] the intent of the Legislature that the deductions [from the value of the estate in inheritance tax computations] to be allowed are only those which have been paid or in which the liability has been attached so that they are actually due.”
The majority opinion holds that because the fee deduction for inheritance tax purposes (§901) must be on the value of the estate at the time of death, the rates must be those effective at that time. That does not follow because the fees are not computed on the value of the estate at death. They are computed upon the amount of the estate accounted for. The key words are “on” and “value.” It has nothing to do with the amount of the deduction allowed, that is, from the standpoint of rates to be applied. It has only to do with the base to which the rates-percentages are to be applied. It is to be computed “on” the value at death which means nothing more than a mathematical computation using the value at that time. It says nothing about the rates to be applied in determining the fees, that is, those existing after death when the estate is accounted for and the fees are based upon the amount so accounted for.
It necessarily follows that the ascertainment of the amount [301]of the taxes cannot be determined until the expenses of administration are known sometime during the estate proceedings even though the taxes are due on death under the inheritance tax law.* The determination of that amount depends on the deductions allowed and that in turn depends on the law in effect when the deductions are allowed. Allen v. Franchise Tax Board, 39 Cal.2d 109 [245 P.2d 297], is analogous. There it was held that an amendment to the income tax law which authorized the apportionment of a lump sum income over the years in which it was earned instead of allocating it all to one year, was applicable to income thus earned in prior years; that there was no gift of public money. It is there said (at p. 114): “It cannot be denied that the result is to reach all of the income received by the affected taxpayers and, as in the case of other taxpayers, at the rates applicable in the years in which it was earned. No income is freed from tax liability. Taxpayers in the situation of the plaintiff are in effect merely given the same opportunity as all other taxpayers to return their income for taxation in the year in which it was earned. The Legislature has said that the tax produced at the rate so applicable is all that the state is entitled to and that the taxpayers affected by the change should be treated as are taxpayers who return compensation in the year in which it was earned. . . .
“There can be no constitutional objection to the result which affects only the tax base as distinguished from a tax rate change where, as in this case, the provision was enacted prior to the time the tax should become due and payable. The provision was enacted and became effective prior to the time when the state’s right to receive or collect the tax accrued. There is therefore no relinquishment of a vested state right.” Similarly in the instant case only the tax base, not the rate, is changed by the 1955 amendment of section 901. The amount of the tax is not known and it is not collectible until the expenses of administration are known including the authorized deductions such as administrator’s fees.
The inheritance tax law must be examined realistically. Its basic theory is “ ‘. . . that the inheritance tax is imposed upon the net clear value of what the transferee receives, and that to ascertain this the value of what he does not receive, in contemplation of law, must be deducted from the value [302]of what the decedent left. ’ ” (Estate of Knapp, 37 Cal.2d 827, 831 [236 P.2d 372].) And: “While the tax imposed by the act is not a tax on property as such, but a tax upon one for the privilege of succeeding to property, the amount of the tax as to any beneficiary is to be determined according to the value of the ‘net succession,’-that is, the value of such property as remains for him after the satisfaction of such charges and burdens as may lawfully be satisfied- in due course of administration. It is only such property that can be properly said to actually pass to the beneficiary.” (Emphasis added; Estate of Hite, 159 Cal. 392, 394 [113 P. 1072, Ann.Cas. 1912C 1014, 32 L.R.A.N.S. 1165] ; see also Estate of Miller, 184 Cal. 674 [195 P. 413,16 A.L.R. 694].) This fundamental basis will be thwarted if, as held by the majority, the estate must pay the increased executor’s fees (Estate of Johnston, supra, ante, p. 265) but the beneficiary must pay taxes on that which he does not receive. Indeed, there is no recipient of the claimed gift of public money as the beneficiary does not get the extra compensation because it is paid to the executor who, under the law as properly interpreted, is entitled to it (Estate of Johnston, supra); it is not a gift to him.
Such cases as Estate of Martin, 153 Cal. 225 [94 P. 1053], Estate of Stanford, 126 Cal. 112 [54 P. 259, 58 P. 462, 45 L.R.A. 788], Trippet v. State, 149 Cal. 521 [86 P. 1084, 8 L.R.A.N.S. 1210], and Estate of Potter, 188 Cal. 55 [204 P. 826], are not controlling for they involved an attempt to relieve an estate from a tax after death. Here, as seen, the only question is the method of arriving at the tax or the basis for the computation of the tax. Since this court has held that the fees allowable to executors, administrators and their attorneys must be determined according to the law in effect at the date of the allowance of such fees, and the inheritance tax law makes such fees deductible items in computing the tax, it must follow that any such fees so allowed are deductible items in computing inheritance taxes. The application of this rule may have the effect of increasing the amount of the inheritance tax as well as reducing it. For example, an estate consisting largely of securities which enjoyed a high price listing at time of death, but suffered severe deflation in price due to economic depression during the administration of the estate, so that the amount accounted for is far less than the value at the time of death, the fees allowable might be considerably less even though the rate may have been increased [303]since the date of death. In such a case the value for inheritance tax purposes would be the higher value at the date of death while the fees would be computed on the lesser amount accounted for. In other words, the basis for computing the fees is not the same as the one used for computing the tax, hence the applicable law need not be the same.
I would therefore reverse the order.
They are not delinquent until two years after they become due and payable. (Eev. & Tax. Code, § 14103.)