Summary
In Tax Commission v. Glass, 119 Ohio St. 389, 164 N.E. 425 (1928), the Court stated that the legatees under a will need not accept the property left to them when they were unwilling to comply with the conditions for acceptance enunciated in the will.
Summary of this case from Krakoff v. United StatesOpinion
No. 21173
Decided November 21, 1928.
Inheritance tax — Property devised upon conditions which devisee rejects by renouncing devise — Succession tax cannot be levied thereon — Section 5332, General Code.
Where property is devised upon conditions which the devisee rejects by renouncing the devise, there is no "passing of the property in possession or enjoyment, present or future," and Section 5332, General Code, does not authorize the levying of a succession tax thereon.
ERROR to the Court of Appeals of Greene county.
This action originated in the probate court of Greene county. Under the terms of the will of L.D. Glass, duly probated in that court, his widow, Lucy M. Glass, took a life estate in the real estate of the testator, and, subject to such life estate, the testator devised to W.B. Leach and his wife, Alverda Leach, the fee-simple title to said real estate, upon the condition, in substance, that they provide the said Lucy M. Glass with a suitable home, with the necessaries and comforts of life so long as she lived, and pay her funeral expenses and doctor bills, with a condition as follows:
"That said W.B. Leach and wife, Alvaretta Leach, shall provide for my said wife, after my death, and myself, in case my wife shall predecease me, a suitable home, with the necessaries and comforts of life, * * * and pay our funeral expenses, doctor bills, out of said personal estate and property, that shall remain, and they shall then have and I do hereby bequeath to them, all of our household goods and personal property, of every kind, including also any moneys that we or my said wife shall have at the time of her death, to them, their heirs and assigns forever. It being understood and is hereby provided, that my said wife shall have and control during her life-time, all money or personal property of which I may die seized or possessed, to do with as she may wish and desire; but whatever may remain after her death, shall then be the property of said W.B. Leach and Alvaretta Leach."
W.B. Leach and Alverda Leach filed in said probate court a written renunciation of said devise in their favor, and thereby announced their rejection thereof and refusal to accept the legacy. Upon the determination of the inheritance tax due from said estate the probate court found that W.B. Leach and Alverda Leach were chargeable with such inheritance tax on said legacy. After the probate court had overruled exceptions to such finding and determination, the matter was duly appealed to the court of common pleas, which court found that no inheritance tax was assessable against said legatees, W.B. Leach and Alverda Leach; whereupon the Tax Commission of Ohio prosecuted error to the Court of Appeals. That court affirmed the judgment of the court of common pleas, and thereafter, upon motion, the record was ordered certified to this court for review.
Mr. J. Carl Marshall, prosecuting attorney, and Mr. W.H. Middleton, Jr., for plaintiff in error.
Mr. W.A. Paxson and Mr. W.S. Paxson, for defendants in error.
Only one question of law is presented by the record in this case, and that may be stated clearly and concisely as follows: Does Section 5332, General Code, authorize the levying of a succession tax where property is devised upon certain conditions, which the devisee rejects by renouncing the devise? This question is readily determined from a consideration of the provisions of the Ohio statute referred to and the application of the terms therein employed to the situation presented by the record.
This section provides that "a tax is hereby levied upon the succession to any property passing, in trust or otherwise, to or for the use of a person, institution or corporation, in the following cases * * *." The Legislature, at the time of the enactment of this provision, defined the term "succession" in Section 5331, General Code, as follows:
"2. 'Succession' means the passing of property in possession or enjoyment, present or future."
We need only apply that definition to the situation here presented. The testator by the terms of his will placed before W.B. Leach and Alverda Leach an option under which they might take the property therein described, by consenting to and complying with certain conditions therein set forth. These conditions they evidently deemed burdensome and objectionable, and the proposal therefore met with their disfavor. Being unwilling to pay the price stipulated, they refused to accept the property. Their refusal was announced in the form of a renunciation duly filed in the probate court. Under the circumstances, as a matter of course, they could not succeed to the property, and there is no "passing of property in possession or enjoyment, present or future." The mere offer set forth in the will, which they refused to accept, cannot effectuate a passing of the property. Under the terms of the will itself it could not pass to the beneficiaries named. The inheritance or succesion tax cannot be assessed upon the theory that there was a passing of the property, when, at most, there was only an option to take the property upon attached conditions which were promptly rejected, thereby making it impossible for any beneficial interest whatever to pass to the persons named in the will. The will contained no residuary clause, and therefore the property in question must be regarded as intestate property and pass as such. The quit-claim deeds executed to the widow by said devisees do not alter the situation, so far as the succession tax is concerned. That evidently was done only for the purpose of relieving the property of a possible cloud.
We are not called upon to consider any question that might arise in a situation where there was collusion and fraud, for concededly there is nothing of that kind in this case. Our view is supported by the recent decision of the Supreme Court of Illinois in People v. Flanagin, 331 Ill. 203, 162 N.E. 848.
The judgment of the Court of Appeals is affirmed.
Judgment affirmed.
MARSHALL, C.J., ALLEN, KINKADE and ROBINSON, JJ., concur.