Goddard v. Goddard , 9 R.I. 293 ( 1869 )

It seems but reasonable that the specific legatees under a will should severally pay the duties required in respect of their respective legacies, rather than that those duties should be paid out of the residue. Otherwise, if it should happen that the duties were in excess of the residue, the residuary legatee would lose all benefit of the testator's bounty.

The law prescribes a rate of taxation varying according as the legatees are related to the testator more or less nearly within certain degrees, — the rate beyond those degrees being the same for relatives and strangers. This variation was obviously designed with a view to favor near relatives, and to make the law conform to the natural feeling that a more distant relation or a stranger in blood being a legatee, can better bear the hardship of such a tax than the legatees who are more nearly related to the testator — his children, perhaps, orphaned by his death. But if the entire tax is to be paid out of the residue, then the distant relative or the stranger may suffer no more from the tax than the testator's children or other near relations. Indeed, if, as might very likely happen, the specific legatees are the more remotely or not at all related, and a child or children are the residuary legatees, then, if the executor should pay the tax out of the residue, the child or children bear the entire burden, and those who are the more distantly, or not at all related, escape, to the manifest frustration of the principle upon which we suppose the tax to have been graduated. We think, unless the language of the law requires it, we ought not to adopt a construction which may lead to such results.

The statute, approved July 1, 1862, (12 U.S. Stat. at Large, Ch. 119, § 112,) provided for receipts to be given by the collector or deputy collector, upon payment of the duty or tax, which shall be sufficient evidence to entitle the person who paid such duty or tax, as having taken the burden or trust of administering the estate, "to be allowed for such payment by the person or persons entitled to the beneficial interest in respect of which such tax or duty was paid." The statute of 1862 was superseded by a statute approved June 30, 1864, (being the statute under which the duty in question is claimed to have been paid,) in which the provision above quoted is omitted. An amendatory statute, approved July 13, 1866, provides that any tax paid under the provisions of the statute of 1864, relating to this subject, "shall be deducted from the particular legacy or distributive share on account of which the same is charged."

The defendant finds in the omission from the statute of 1864, of the words above quoted from the statute of 1862, and in the amendment of 1866, grounds for an argument, that under the statute of 1864, as it existed prior to the amendment of 1866, the legacy duties were a charge upon the estate at large, and payable out of the residue. But we think the omission and the amendment permit no sufficient warrant for such a construction. The omitted provision relates to the credit to be given to the receipt of the collector or deputy collector as evidence in the settlement of the estate, and only incidentally, as it were, indicates that the duties are chargeable to the persons entitled to the beneficial interest in respect of which they were paid, — significantly differing, in this respect, from the amendatory provision of the statute of 1866. We see no reason for supposing that the language referred to was omitted from the statute of 1864, in any other view than because it was supposed to be superfluous or undesirable for the purpose for which it was originally introduced. We think that under the statute of 1864, notwithstanding the omission, the duties paid in respect of any particular legacies are, as between the executor and the legatees, in the settlement of the estate, to be deducted from the legacies in respect of which they have been paid, or charged to the legatees, respectively, who are entitled to such legacies; and that the amendment of 1866, was simply declaratory, being designed to obviate any doubt or question in regard to the construction.

In our opinion, therefore, it makes no difference, whether the plaintiffs paid the duty under the statute of 1864, as it now is, or as it was before its amendment, for in either case they should look, not to the residue, but to the legacy, in respect of which the duty was paid, or to the legatee entitled to the same, for reimbursement.

The defendant's counsel, in his brief, makes the point — not pressed in the oral argument — that the legacy, being a bequest of specific property, is exempt from duty. We think this view is not tenable. It is true, the executor, having paid the duty, might find it difficult to deduct the same out of such a legacy; but if — what is very unlikely to happen — the legatee should refuse to reimburse him, as a condition of getting the legacy, the law would doubtless afford an adequate remedy.

In so far as the will of the testator furnishes any indication of his intention upon this subject, we find nothing to make us believe that his intention will be defeated by making the legacies, except that which is expressly exempt, respectively chargeable with the duties paid on account of them; but rather the contrary.

The defendant agrees that judgment shall be entered for the plaintiffs in case the taxes are lawfully chargeable upon his legacy. We therefore need not inquire, whether, independently of any agreement, the plaintiffs would maintain this action, or would be obliged to look for reimbursement to the property itself. If the language of this opinion is open to any inference in that regard, we wish to say that we reserve our opinion on that point until it is made.

Agreeably to the agreement under which the case is submitted, we enter,

Judgment for the plaintiffs.