Safe Deposit & Trust Co. v. State

Urner, J., delivered the opinion of the Court. The personal estate of Samuel R. Vickers, a resident of Baltimore City, who died intestate on May 12th, 1922, was distributable among; his collateral next of kin. The amount of the estate for distribution, after the payment of debts, commissions and expenses, was $189,214.57. This included $5,006.09 of income accrued and collected during the period of administration.

The question presented is whether the collateral inheritance tax, for which the law of Maryland provides, is chargeable as to tbe whole of tbe estate for distribution, or whether the income which it included should be disregarded for the purposes of the tax. In view of the terms of the statute, and of previous decisions of this Court on the subject, we can have no doubt as to the correctness of the lower court’s decision that the tax applies to the entire estate passing to the distributees. After tbe general Code provision (article 81, section 120), that ¡all estates passing to collaterals from persons “who may die seized and possessed thereof,” in this State, shall he subject to a tax of five per cent, of their clear value, it is directed, by section 121, that: “Every executor or administrator, to whom administration may be granted, before he pays any legacy, or distributes the shares of any estate liable to the tax imposed by the preceding section, shall pay to the Register of Wills of the proper county, or city, five per centum of every hundred dollars he may hold for distribution among the distributees or legatees,” It is provided by section 122 that: “When any species of property other than money or real estate shall be subject to said tax, the tax shall be paid on the ⁶⁴⁶ appraised value thereof as filed in the office of the register of wills of the proper county or city.” This Court has said that the payment of the collateral inheritance tax is “one of the conditions upon which strangers and collateral kindred may acquire a decedent’s property which is subject to the dominion of our laws.” The tax was said to be “on the transmission of the property.” It “is not a tax upon the property itself, but is merely the price exacted by the State for the privilege accorded in permitting property SO' situated to be transmitted by will or by descent or distribution.” State v. Dalrymple, 70 Md. 299 ; Fisher v. State, 106 Md. 120 . In order that the theory and purpose of the tax, as thus defined, may be given full effect, it seems clear that the tax should be computed on the basis of the whole amount of the estate passing to the collateral recipients.

This is distinctly required by the provision quoted that the tax to be paid by the executor or administrator shall be five per cent, “of every hundred dollars he may hold for distribution,” and the general intent of the law that the tax shall apply to the amount of the estate distributed ha® been definitely recognized by this Court in the two cases we have cited. In the Dalrymple case the personal estate in Maryland passing under the will of a California testator had an appraised value of $27,337.87 when it was received by the administrators. c. t. a. in this State. It was reduced to $21,-449.21 by the payment of costs and expenses, but by “accretions from dividends and interest” it had increased to $27,-320.77 when it was ready for delivery to the residuary legatee named in the will, who was not so related to the testator as to he exempted from the effect of the collateral inheritance tax. After holding that the words “being in this State,” as used in the statute, had reference to' the location of the decedent’s property, and not to his domicile, and that the estate in question, being actually in Maryland, was. subject to the tax, although the testator was a non-resident, the Court, speaking ⁶⁴⁷ through Judg n McSh berry, said that the amount of the tax would “depend upon the ¡sum in the hands of the appellees (administrators) payable to the legatee.” In the Fisher case there was a will by which a trust of the residuary estate of the testator was created for the benefit of bis widow during her life, with remainder to such persons as she by her will might appoint.

The value of the trust estate, as transferred to the trustees in course of administration, was $2-31,395.44, including real property valued at $43,000. When the widow’s life interest expired, about eight years later, the estate had increased in value to $734,439.36. By her will the widow executed tlie power of appointment conferred upon her by the will of her husband. In reference to the application of the collateral inheritance tax law', it was contended that the tax could be charged only with respect to¡ the value of