State v. Safe Dep. T. Co. of Balto.

Stockbridge, J., delivered the opinion of the Court. While a number of legal propositions were argued at the hearing of this case, and set forth with full particularity upon the briefs which have been filed, the important consideration grows .out of the proper construction to be given to two of our own statutes, and the determination of the case ultimately rests upon such consideration, so no reference will be made to the several subsidiary considerations although they, and each of them, have been carefully analyzed. James Barrera Rivera executed a will on the 28th August, 1902; he died on the 9th November of that year, and his will was proved in the Orphans’ Court eight days after his death. By the terms of the instrument the bulk of his estate was given in trust for the benefit of his wife during her life, and thereafter to some nieces and a nephew.

Mrs. Rivera survived him, and died on the 30th January, 1916,'and upon her death the nephew and nieces became entitled to the possession of the property. ■ At the time when Mr. Rivera made his will, and at the time of his death, there was imposed by statute a collateral inheritance tax of 2%%, which tax by the Act of 1908, Chapter 695, was increased to 5%, and the question now presented is whether the estate of Mr. Rivera, which under the terms of his will passed on the death of his wife to cob lateral remaindermen, is properly to be taxed at the rate of 2i/2% of 5%. ²⁵³ Tlie question was raised by the state by objections to an auditor's account. The exceptions were overruled by the Circuit Court of Paltimore City, and from snch ruling the State took this appeal. The issue is, therefore, did the rate of taxation upon the interest of the remaindermen become fixed at the time of the death of Mr. Rivera, or was it open to he determined by the date of the death of the life tenant, Mrs. Rivera, at such rate as might, he in force when that event occurred ( The rule of construction applicable in such cases was laid down in U. S. v. Heth, 3 Cranch, 433 , as follows: “Words in a statute ought not to have a retroactive operation, unless they are so clear, strong and imperative that no other meaning can he annexed to them, or unless the intention of the Legislature can not otherwise he satisfied.” And in Chew Heong v. U. S., 112 U. S. 559 , Me. Justice IIakuaiV, after quoting the foregoing language, said: “Such is the settled doctrine of this country.” The same rule has been followed and applied in numerous cases, both Federal and State, a portion of which is set out in 10 Rose’s Notes, p. 926, and see also Merchants Bank of Danville v. Ballou, 44 L. R. A. 306, and Jeavons v. Pittman, 126 Md. 650 .

There have been many .decisions as to the applicability of succession and collateral inheritance taxing statutes, enacted between the time of the death of a testator and the passing into possession of remainder interests created by the will, and it has been practically uniformly held that while a change of the statute with regard to the mode of procedure for the ascertainment of the value of the estate, or for the collection of a tax, was valid and applicable, that it was inapplicable to affect the substantive rights of an interested party; those became fixed and certain as of the time of the death of the testator. In so far as such statutes operate to affect the rights of the parties they are to he given a prospective interpretation only. The rule is generally equally applicable ²⁵⁴ •whether the remainder he a vested or contingent one. Lacey v. State Treasurer, 132 N. W. 843 ; Commonwealth v. Wellford, 76 S. E. 917 ; Hunt v. Wicht, 162 Pac. 639 ; Carter