Opinion
(Filed 5 December, 1917.)
1. Taxation — Statutes — Interpretation — Inheritance Tax.
Laws imposing an inheritance tax are liberally construed to effectuate the intention of the Legislature, and the exemptions to be allowed rest in its power and discretion.
2. Same — Dower.
The right to dower in the husband's lands rests upon statute, and does not grow out of the contractual relations of the marriage, and, being in the nature of property which passes "by the intestate laws of this State," is subject to taxation, under chapter 201, section 6, Laws 1913, providing an exemption of $10,000; and the inheritance-tax law of 1911 (chapter 46, section 6) completely exempting such tax, is repealed by this later statute. The origin, history, and nature of the widow's right of dower discussed by CLARK, C. J.
3. Same — Widow's Dissent.
Where a widow dissents from her husband's will and claims her dower right in his lands, she takes such interest "as if he had died intestate" (Revisal, sec. 2081), and it is subject to the inheritance tax. Chapter 201, sec. 6, Laws 1913.
Attorney-General, Assistant Attorney General, R. H. Sykes, and George W. Wilson for plaintiffs.
Pharr Bell for defendants.
ALLEN, J., concurring: WALKER, J., dissenting; HOKE, J., concurring in dissenting opinion of WALKER, J.
APPEAL by plaintiffs from Cline, J., at June Term, 1917, (680) of MECKLENBURG.
Peter Marshall Brown died in May, 1913. His widow, Daisybel P. Brown, dissented from her husband's will and was allotted for her dower lands valued at $65,850, besides $2,000 cash as her year's allowance. She was married to Peter Marshall Brown in 1905 and was 34 years old at the time of his death. The present value of her dower, based on the tables of expectancy, is $56,222.78. The inheritance tax on all the other property of the said P. M. Brown, deceased, including the remainder after the dower, has been paid by the executors, but no tax has been paid on said $56,222.78, nor on the $2,000 year's allowance, and this action is to recover the 1 per cent inheritance tax on said sums, less $10,000 exemption allowed to the widow by the statute.
By consent, the court found the facts as above stated, and directed a nonsuit. From this judgment the State appealed.
The case presents the single question, whether the dower and year's allowance which, under our statute, accrue to a widow upon her husband's death intestate, or upon dissent to his will, are subject to the inheritance tax, under section 6, chapter 201, Laws 1913. That section reads as follows: "From and after the passage of this act, all real and personal property, of whatever kind and nature, which shall pass by will or by the intestate laws of this State from any person who may die seized or possessed of the same while a resident of this state . . . shall be, and hereby is, (681) made subject to a tax for the benefit of the State, as follows" (here follows the details).
Whether an inheritance tax shall be laid or not, and the rate thereof, and the exemptions allowed, are matters which rest in the power and discretion of the law-making department. "Laws imposing the inheritance tax must be liberally construed to effectuate the intention of the Legislature." Norris v. Durfey, 168 N.C. 321. This statute allows an exemption from the inheritance tax in favor of adult children of $2,000; in favor of minor children, $5,000; and in favor of the widow, $10,000. Prior to this act, it would seem that the widow's dower was exempt from taxation. The insertion in this statute of the following: "Provided, a widow shall be entitled to an exemption of $10,000, and each child under 21 years of age to an exemption of $5,000," is a clearly expressed intention that all above $10,000 of the property which passes to the widow, whether by will or on intestacy, shall be subject to the inheritance tax. The intent of the Legislature is as clear as its power. No property of which the husband was seized and possessed can pass to the widow except by will or under the intestate laws of the State.
The suggestion that dower is vested in the widow by virtue of the contract of marriage, and passes by such contract, and not by law, cannot be sustained. The authorities may be said to be uniform against this position. In 9 R.C.L., p. 563, it is said, under the head of "Dower," sec. 5: "Positive Law, Not Contract, as Basis. — In our law, the right to dower is not regarded as springing from contract, although the contract of marriage is a prerequisite to its existence, but from the positive terms of the common law or statute law. Its existence and incidents are therefore determined by the law of the State in which the real estate lies — not by that of the place of the marriage or the domicile of the parties, and likewise by the law existing when the estate becomes consummate by the husband's death, instead of by that in force at the time of the marriage or at the time of the acquisition of the real estate by the husband. The constitutional questions raised by changes of law made while rights of dower are inchoate are discussed elsewhere." The reference, "elsewhere," is to section 8, which states that "It is also the rule that the wife's expectation of dower — that is, her inchoate right of dower — even after the husband has become seized of particular real estate, is not a vested right, within the protection of the constitutional provision," citing numerous authorities.
In 14 Cyc, 882, it is said: "Dower is inchoate after seizin of the husband and during coverture, and consummate after the death of the husband." On page 885 it is said: "Although there is early authority to the contrary, it must now be regarded as settled that dower is not the result of any contract between husband and wife, either express or implied. But it is an institution of the State, (682) founded upon public policy and made by positive law an incident of the marriage relation." On page 925 it is said: "An inchoate right of dower is not an estate, nor is it an interest in real estate."
In Norwood v. Morrow, 20 N.C. 578, Ruffin, C. J., says: "There is no contract between husband and wife for curtesy or dower. The interest one gets in the property of the other, the law gives for the encouragement of matrimony. It is certain that such as her estate (dower) is, the law makes it without any act of her husband and against his will." To same purport, Rose v. Rose, 63 N.C. 391. That dower is not a part of the contract of marriage, but is an estate arising and passing by operation of law, is well settled, both in this country and in England. In 2 Scribner on Dower, 2, the result of the English authorities is thus given: "It will be observed that this estate arises solely by operation of law, and not by force of any contract, express or implied, between the parties; it is the silent effect of the relation entered into by them, not as in itself incidental to the relation or as implied by the marriage contract, but merely as that contract calls into operation the positive institutions of the municipal law."
Blackstone and Littleton speak of five species of dower, which had been gradually evolved from the variant customs as to dower prevailing in different parts of England, but these from time to time have been dropped or abolished, except what is known as "dower by the common law," which is defined as "one-third part of all the lands and tenements of which the husband was seized in fee simple or fee tail at any time during the coverture, and of which any issue which she might have had might by possibility have been heir, to be held by the wife for the term of her natural life." This was abolished in this State in 1784 and was not restored till 1868. It is not so generally known that it was abolished, and more completely in England, in 1834, and has remained so. The only dower there existent for the last eighty-three years has been dower in one-third of the real estate of which the husband died seized and possessed, subject, however, to the right of the husband by will to bar even this.
In fact, dower at common law has not only been thus abolished in England, but it exists unchanged by statute hardly anywhere. 14 Cyc. 883, says: "In many of the United States, dower, exactly or substantially as it existed at common law, has been recognized as in force or adopted by judicial declaration or by express constitution or statutory provisions, while in others it has been very materially changed by statute. In other States, dower has been abolished altogether and a different right or interest substituted, as, for example, a certain portion of the husband's real property in fee simple, or a certain portion of community property, or both."
Common-law dower was not only abolished in this State in 1784, and remained so till 1868, but there are many cases (683) in which it can be defeated, which would not be the case if it was based upon an implied contract between husband and wife. It may be defeated by divorce or by felonious slaying of the husband by the wife (Revisal 2109); by elopement or abandonment (Revisal 2110); by dissent of widow (Revisal 3081). The dower of an insane wife may be conveyed by the husband alone (Revisal 959); and dower may be defeated by mortgage of the husband alone, when for part of purchase money. Revisal 958 and 3085. It must be seen that while dower is a provision for the widow, by virtue of the statute, out of the property left at her husband's death, it is not a vested right, nor an estate in land, nor is it in any sense based upon an implied contract arising out of the marriage. It is purely statutory, like the laws of devolution of all property upon death, such property being disposed of by the law as to dower, or descent, or by will, according to the statute in force at the time of death of the owner. As has been repeatedly said by this and other courts, when a man dies he has no natural or inherent right to dispose of the property that he leaves behind him. The law-making body as to wills and as to descent, whether to children or widow by way of dower, controls. In Sutton v. Askew, 66 N.C. 172, it was held that the Legislature could increase the inchoate right of dower by restoring the common-law right of dower, which gave her dower in all the lands of which the husband was seized and possessed during coverture, but that the Legislature could not thus restrict his power of alienation of lands which he had acquired prior to the passage of the act. There were two dissenting opinions, and the authorities elsewhere are in accord with that view. The majority opinion rested not upon the vested right of the wife, but an assumed vested right of the husband in the jus disponendi, which an extension of the dower right would impair, and because it might deprive creditors of their rights. The majority of the Court evidently did not approve the legislative policy of restoring common-law dower. They criticise it as a violation of the husband's rights of property, and say that theretofore there had been but few questions as to dower rights, and none as to inchoate dower rights, but that the act of 1868-'69 "involves the subject in much uncertainty and will breed much litigation." Judges Dick and Rodman, in their dissenting opinion, say, correctly: "The history of the common law shows that dower was always regarded as a municipal institution and was not the result of a contract."
Dower, as known to the common law, was purely an English regulation, which has been abolished there since 1834, and was abolished here for nearly a hundred years. Dower is now hardly the same in any two jurisdictions. In Biblical times, "dowry," as when Shechem solicited Jacob for his daughter, Dinah, in marriage, "Ask (684) me never so much dowry and I will give it" (Gen. 24:12), bore no resemblance to the "dower" of the common law, but was a gift, made by the suitor to the father or other near relatives of the intended bride. A similar custom prevailed among the Greeks, but Aristotle states that it had come to be looked upon as a relic of barbarism in their ancestors, as it was virtually a purchase of their wives. Neither is it like the dower, called "dos," of the Roman law for the "dot," still in France), which was the marriage portion which the wife brought to her husband, in land or money. I Scribner on Dower, 2, 3. It may be noted that the French "dot," (pronounced "doe") with its attraction to foreign suitors of American heiresses, is the origin of the slang word, "dough," for property.
The Chief Justice, Glanville, in the first English law book, about 1175, said that if no dower was announced at the church door, the wife took one-third; subject, however, to the disposal of the husband, by deed or will, later; for, said he, "Since the wife herself is in a legal sense under the absolute power of her husband, it is not singular if the dower as well as the woman herself should be considered fully at the disposal of the husband, who may give away or alienate the dower in his lifetime." He adds that, if the promise at the church door is of more than a third, though the husband does not alienate it, the wife cannot take more, but if he promises less, she gets only that. The second English law book, by Bracton, about a century later, repeats this, and gives as the reason because the woman was no vested interest in the dower before it is assigned, and "because she cannot gainsay her husband."
Law books in those days came about a century apart and were in manuscript, for it was some centuries yet before printing was invented. Indeed, Littleton, in his work on "Tenures," doubts if the first work named was written by Chief Justiciar Glanville, because he was not "in orders," and attributes it to Glanville's nephew Hubert Walter (who was a bishop and later Archbishop of Canterbury and Chief Justiciar), for in those days very few could read or write, except those who were in orders, and there were no lawyers till more than a hundred years after Glanville's time. Consequently, most of the judges were bishops or priests, with a few laymen.
Dower, in fact and in law, is neither a vested right in the wife, nor is the husband or wife beyond the power of the Legislature to change it at will. It is simply the provision which the law makes for the support of the widow out of the husband's estate after his death, and is controlled, like all the other laws of descent and distribution, by the statute in force at the time of his death.
Dower, therefore, being a provision out of the husband's estate which is allotted to her for her support in case of intestacy, or when she dissents from the provision made for her in her husband's will, is necessarily "property which passes by will or by the (685) intestate laws of this State." Revisal 3081.
In this case, if the widow had been content with the provision made for her in her husband's will, it would have been subject to the inheritance tax. It is none the less so because dissatisfied with the amount thereof she dissented, and under proceedings provided by law she has received a larger sum in lieu thereof. Whether she took it by will or under dissent, which gave her the same share "as if he had died intestate," it is property which passed to her from her husband "by will or by the intestate laws of the State." The Legislature has seen fit to tax it in either event, subject to an exemption of $10,000. It cannot be that if she took by will it was taxable, but if dissenting she took an allotment of the same amount which she would have received if he "had died intestate" that the property is exempt from taxation.
Revisal 3081, provides that upon a dissent, "The widow shall have the same rights and estate in the real and personal property of the husband as if he had died intestate." There are numerous decisions that the words, "dying intestate," is not limited to the ordinary meaning of one dying without making a will, but includes death of a person without effectually disposing of the property. In re Cameron, 62 N.Y.S. 187, and many other cases.
The identical question here presented was passed upon in a very able opinion ( Billings v. People, 189 Ill. 472; S. c., 59 L.R.A. 807), which holds: "The words, `intestate laws,' in a statute imposing a transfer tax upon property passing by the intestate laws of the State, refer to the laws which govern the devolution of estates of persons dying intestate, including applicable rules of the common law which are in force, so that the tax will be applicable to a widow's dower interest and her award under the administration laws." It was again presented in the same State in a recent case (1910) in the settlement of the estate of Marshal Field [ People v. Field, 248 Ill. 147; 33 L.R.A. (N.S.) 230], where it was held: "A sum provided by antenuptial agreement to be paid the wife in case of her surviving the husband, in lieu of all claims and rights which she might otherwise have upon her husband's estate as his widow, is subject to succession tax." The Billings case, supra, was taken on writ of error to the United States Supreme Court ( 188 U.S. 97) and was affirmed, the Court holding: "Inheritance-tax laws are based upon the power of a State over testate and intestate dispositions of property to limit and create estates and to impose conditions upon their transfer or devolution. This Court has already decided in regard to this law that such power could be exercised by distinguishing between the lineal and collateral relatives of a testator. Whether the amount of tax depends upon him who immediately receives, or upon him (686) who ultimately receives, makes no difference with the power of the State." In short, the Court sustained the legislative power to tax inheritances, whether testate or intestate, and at different rates, on the passage of the inheritance to different classes of devisees or distributees, including in that case the widow. To same purport, In re Morris, 138 N.C. 260, a very interesting and learned opinion by Mr. Justice Brown. In S. v. Scales, 172 N.C. 915, Allen, J., says: "Our inheritance-tax laws show an advancing tendency to include all property and to decrease exemptions, and should be liberally construed, to the end that all property coming within their provisions may fairly and reasonably be taxed." Walker, J., says, In re Inheritance Tax, 172 N.C. 170, that "The obvious intent of the State is to tax every interest passing by will to persons not exempt"; and though that case held that an annuity bequeathed to a widow was exempt from taxation, it was because of the language of the act of 1909, which did not extend to the taxation of widows. This has now been changed, as we have seen by the act of 1913, which, after taxing all property of every kind of a decedent passing by will or by law to another, exempts as to the widow $10,000 only.
The inheritance-tax law of 1911 (chapter 46, section 6) contains this exemption: "Provided, that all legacies and property passing by will or by laws of this State to a husband or wife of the person died possessed as aforesaid . . . shall be exempt from tax or tax duty." In 1913 the Legislature changed this by substituting for it a tax on all property of a decedent of every kind, whether passing by will or intestacy, "Provided, the widow shall be entitled to the exemption of $10,000." The whole subject of inheritance taxation has been discussed in the admirable opinion by Brown, J., In re Morris, 138 N.C. 259, where he says: "The statute must be given a liberal construction to effectuate the intention of the Legislature"; and to the same effect, Norris v. Durfey, 168 N.C. 321, and S. v. Scales, 172 N.C. 915, in which Allen, J., gives a valuable synopsis and history of the inheritance-tax law in this State.
The legislature necessarily intended to tax the widow's share of the estate of the deceased, because, after taxing all property of every kind, it gives among the exemptions one of $10,000 to widows. It would be manifestly unjust to tax them if they take under the will, but to exempt them entirely if they take contrary to the will by dissenting.
The taxing power is the life of the State. The existence of all governments depends upon its exercise, and all property and all rights of devolution or transfer of property are liable to be taxed at the will of the lawmaking body, and subject to change by it, except where there is a prohibition in that respect in the State Constitution, and there is nothing in the Constitution of North Carolina which forbids the Legislature to tax the transfer of the property of the decedent, whether it goes by will or in case of intestacy, (687) or upon dissent of the widow she receives her share under proceedings at law for its allotment in such cases, "as in cases of intestacy." Revisal 3081.
Reversed.