Stovall v. Dept. of Revenue

Montana Supreme Court

Stovall v. Dept. of Revenue

DecidedOctober 10, 1974

Docket12751

StatusPublished

This text of Stovall v. Dept. of Revenue (Stovall v. Dept. of Revenue) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Stovall v. Dept. of Revenue, (Mo. 1974).

Pincite

Opinion

No. 12751

I N THE SUPREME COURT O THE STATE OF M N A A F OTN

MARGARET STOVALL ,

P l a i n t i f f and Respondent,

DEPARTMENT O REVENUE O T E STATE F F H O M N A A formerly t h e STATE BOARD F O T N , O EQUALIZATION of t h e STATE OF M N A A F O T N ,

Defendants and A p p e l l a n t s .

Appeal from: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Honorable C. B. Sande, Judge p r e s i d i n g .

Counsel of Record:

For A p p e l l a n t s :

Terence B. Cosgrove argued, Helena, Montana

For Respondent:

J a c k B u r n e t t argued, B i l l i n g s , Montana

Submitted: September 1 6 , 1974

Decided : OCT 10 194 Mr. Chief J u s t i c e James T . H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court . T h i s i s a n a p p e a l from an o r d e r o f t h e d i s t r i c t c o u r t

of Yellowstone County r e q u i r i n g t h e Department of Revenue of t h e

S t a t e of Montana t o r e f u n d t o t h e p l a i n t i f f c e r t a i n i n h e r i t a n c e

t a x e s p a i d upon t h e e s t a t e of h e r husband.

The s o l e i s s u e i s a l e g a l q u e s t i o n : Must a widow who

r e n o u n c e s t h e p r o v i s i o n s o f h e r h u s b a n d ' s w i l l and e x e r c i s e s h e r

s t a t u t o r y r i g h t o f dower pay any Montana i n h e r i t a n c e t a x on t h e

property she receives?

The f a c t s l e a d i n g up t o t h i s a p p e a l w e r e a g r e e d upon by

t h e p a r t i e s and i n e s s e n c e a r e a s f o l l o w s : R e s p o n d e n t ' s husband,

O r v i l l e R . S t o v a l l , a Montana r e s i d e n t , d i e d t e s t a t e on November

1 4 , 1963, and h i s w i l l was p r o b a t e d i n t h e d i s t r i c t c o u r t of

Yellowstone County. Respondent t i m e l y e l e c t e d t o renounce t h e

p r o v i s i o n s of t h e w i l l and t o t a k e t h e b e n e f i t s p r o v i d e d by s e c t i o n

22-107, R.C.M. 1947. Respondent p a i d a n e t Montana i n h e r i t a n c e

t a x of $3,463.45. T h i s t a x was based on a r e p o r t e d d i s t r i b u t i v e

s h a r e i n t h e amount of $91,595.74, of which $46,356.69 r e p r e s e n t e d

t h e dower p r o p e r t y r e s p o n d e n t r e c e i v e d p u r s u a n t t o s e c t i o n 22-107,

X.C.M. 1947. The p a r t i e s s t i p u l a t e d t h a t r e s p o n d e n t i s e n t i t l e d

t o a r e f u n d of $3,050.39 ( t h e p o r t i o n of t h e t a x p a i d a l l o c a b l e

t o t h e dower p r o p e r t y ) i f i t i s d e t e r m i n e d t h a t dower p r o p e r t y i s

n o t s u b j e c t t o t h e Montana i n h e r i t a n c e t a x .

The i n h e r i t a n c e t a x s t a t u t e i s s e c t i o n 91-4401, R.C.M.

1947, which i n p e r t i n e n t p a r t p r o v i d e s :

"Taxes on transfer--when and how imposed. A t a x s h a l l be and i s hereby imposed upon any t r a n s f e r of p r o p e r t y * * *

"(1)By a r e s i d e n t of s t a t e . When t h e t r a n s f e r i s by w i l l o r by i n t e s t a t e l a w s of t h i s s t a t e from any p e r s o n d y i n g p o s s e s s e d o f t h e p r o p e r t y while a r e s i d e n t of t h i s s t a t e . " (Emphasis added)

The c o n s t r u c t i o n t o be p l a c e d upon " i n t e s t a t e laws" i s

t h e h e a r t of t h e c o n t r o v e r s y between t h e p a r t i e s t o t h i s c a s e . A p p e l l a n t t a k e s t h e p o s i t i o n t h a t s i n c e a widow's r i g h t of dower

i s e x e r c i s a b l e o n l y a t t h e t i m e of h e r h u s b a n d ' s d e a t h , it i s a t r a n s a c t i o n w i t h i n t h e meaning o f " i n t e s t a t e laws". Respond- e n t , on t h e o t h e r hand, c o n t e n d s t h a t s i n c e dower i n t e r e s t s

a r i s e a t m a r r i a g e , a widow d o e s n o t t a k e dower p r o p e r t y a s t h e

h e i r of h e r husband b u t a s one i n d e p e n d e n t l y e n t i t l e d t o i t on

a c c o u n t of a n i n c h o a t e r i g h t becoming a b s o l u t e by o p e r a t i o n o f

law.

Other j u r i s d i c t i o n s d i s a g r e e on t h i s p o i n t . See, e.g., 4 2 Am.Jur.2d 366, I n h e r i t a n c e , E t c . , Taxes, S 158. Representa-

t i v e of t h e c a s e s h o l d i n g dower s u b j e c t t o a n i n h e r i t a n c e t a x i s

B i l l i n g s v . P e o p l e , 189 I l l . 472, 59 N.E. 798, 800, a f f ' d 188 U.S.

97, 47 L.Ed. 400, 23 S.Ct. 272. That c o u r t , a t 59 N.E. 800, t o o k

t h e view t h a t t h e t a x i n g s t a t u t e ( c o v e r i n g p r o p e r t y p a s s i n g by w i l l o r " t h e i n t e s t a t e laws of t h i s s t a t e " ) was v e r y comprehensive

and w a s d e s i g n e d t o embrace a l l p r o p e r t y p a s s i n g from p e r s o n s

upon t h e i r d e a t h , e x c e p t p r o p e r t y o t h e r w i s e exempt:

"There a r e no laws o f t h i s s t a t e which a r e s p e c - i f i c a l l y designated a s ' i n t e s t a t e laws,' * * * we have no d o u b t t h e laws r e f e r r e d t o a r e t h o s e l a w s of t h e s t a t e which govern t h e d e v o l u t i o n o f e s - t a t e s of p e r s o n s d y i n g i n t e s t a t e , and i n c l u d e a l l a p p l i c a b l e r u l e s o f common law i n f o r c e i n t h i s s t a t e . * * * A s a g e n e r a l r u l e , t h e p r o p e r t y of p e r s o n s d y i n g p a s s e s i n two ways, - - t h a t i s , by w i l l , o r by d e s c e n t i n t h e modes p r o v i d e d by law; and when i t d o e s n o t p a s s by w i l l it g e n e r a l l y p a s s e s by law, - - t h a t i s , by t h e l a w g o v e r n i n g t h e d i s p o s i t i o n of p r o p e r t y of p e r s o n s d y i n g intestate."

T y p i c a l of t h e l i n e o f a u t h o r i t y h o l d i n g dower n o t s u b j e c t t o a n i n h e r i t a n c e t a x i s E s t a t e of B u l l e n , 47 Utah 96, 1 5 1 P . 533. The q u e s t i o n posed i n B u l l e n was whether dower i n t e r e s t s p a s s e d by t h e " s t a t u t e s of i n h e r i t a n c e " . The c o u r t answered a t p. 535: "What t h e w i f e r e c e i v e s (under t h e s t a t u t e ) * * * s h e r e c e i v e s , n o t a s a n h e i r o f h e r hus- band, b u t i n h e r own r i g h t , something which b e l o n g s t o h e r a b s o l u t e l y , and o f which s h e c o u l d n o t have been d e p r i v e d by w i l l o r by any o t h e r v o l u n t a r y a c t of h e r husband w i t h o u t h e r c o n s e n t . Under t h a t s e c t i o n , s h e i s n o t an h e i r w i t h i n t h e meaning of o u r i n t e s t a t e o r s u c c e s s i o n s t a t u t e s . " While both of these arguments have their merits, we shall follow Billings as being the better reasoned approach to the prob- lem before us. Notwithstanding Bullen's view of what are "intestate laws" insofar as the substantive rules of property law are con- cerned, we think our Legislature had more than that in mind when it inserted that term in the inheritance tax statute. That is, the Legislature thought of dower as a "law governing the disposi- tion of property of persons dying intestate". Billings v. People, supra. Moreover, Bullen and the cases in agreement with it in our opinion fail to sufficiently take into account the state's ability to tax. We have no quarrel with the proposition that a husband cannot deprive his wife of either her inchoate or vested dower without her consent. But it does not necessarily follow that the state is similarly strapped.

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