1. Statutes — Interpretation — Inheritance Tax — "Relation of Child."
The inheritance tax law, imposing a higher rate of taxation and allowing no exemption as to those whose beneficial interest in the property is not derived as the lineal issue or lineal ancestor or husband or wife of the person who died possessed of such property, etc., by making the
express provision that the lower rate and exemptions would also apply "where the person to whom such property shall be devised or bequeathed stood in the relation of child" to such person, extends the lower rate and exemptions to persons who are shown to have been regarded by the testator or ancestor as if they were his children, or lived in his family or associated with him as such, in mutual recognition of the assumed relationship, and without restriction to cases of formal adoption.
2. Same — Jurisdiction — Clerks of Courts — Courts.
The inheritance tax law, by providing that the "clerk of the Superior Court shall determine whether any person to whom property is so devised or bequeathed stands in the relation of child to the decedent," refers and was intended to refer the question of such relationship to the courts; primarily to the sound legal discretion of the clerk, as a mixed question of law and fact.
HOKE, J., after stating the case:
The law imposing a tax on inheritances, sec. 6, subsec. 1, provides, among other things: First. Where the person or persons entitled to any beneficial interest in such property shall be the lineal issue or lineal ancestor or husband or wife of the person who died possessed of such property aforesaid, or where the person to whom such property shall be devised or bequeathed stood in the relation of child to the person who died possessed of such property aforesaid, at the rate of $1 for each and every $100 of the clear value of such interest in such property; and this clause shall apply to all cases where the taxes have not been paid by the executor or administrator or other representative of the deceased person. The clerk of the Superior Court shall determine whether any person to whom property is so devised or bequeathed stands in the relation of child to the decedent," and allows an exemption of $2,000 each on persons coming within the class described.
On persons taking beneficial interest in property by devise, inheritance, etc., and not coming within this description, a higher tax is imposed, and no exemption allowed. Referring to the language of the statute, it is clear that the words used, "or where the person to whom such property shall be devised or bequeathed stood in the relation of child to the person who died possessed of such property," are in addition to lineal issue or ancestors, these last being expressly named, and that they are not restricted to persons formally adopted as children, for this could have been readily specified and expressed. The words, therefore, are more inclusive and, in our opinion, on perusal of the entire provision, including "and the clerk of the Superior Court shall determine whether any person to whom property is so devised or bequeathed stands in the relation of child to the decedent," the law referred and intended to refer the question to the courts: Primarily to the sound, legal discretion of the clerk, as a mixed question of law and fact, and that the words extend to and include all meritorious cases where the parties had assumed and continued to live in the relationship of parent and child or where they lived in mutual recognition of such relationship. This was held to be the correct construction of the statute in the recent case of State v. Bridgers, 161 N.C. 247, where the words in question were held to "include and apply to daughters-in-law who were in every way deserving and were treated and recognized as children by the testatrix." Speaking to the question in that case, the Court said: "In our view, however, these legatees should each be considered and dealt with as one standing in the relation of child to the decedent under clause 1, (357) sec. 6, of the statute. This clause imposes a tax of 3/4 of 1 per cent on legacies to the lineal issue or lineal ancestor of decedent or to his brother or sister or to `one who stood in relation of child to such decedent,' this, in case of question, to be determined in the first instance by the clerk of the Superior Court. This provision, in our opinion, refers and was intended to refer to the case of widows or widowers, and other cases could be suggested to the decision of the courts and to relieve them, when legatees, from the higher rate imposed on strangers to the blood of the decedent in all cases where they were deserving of this favor. From a perusal of the will, showing the tenderest concern for these legatees, and from their known deserving, these daughters-in-law should be considered as standing in the relation of children and only be subject to the lighter tax imposed on the lineal issue of deceased." And the position has been recognized as sound in principle in other jurisdictions. Ross on Inheritance Taxation, sec. 138; 37 Cyc., pp. 1571-72.
The interpretation adopted is required by the general and inclusive nature of the descriptive words, "one who stood in the relation of child to decedent," and is more insistent in view of the additional clause, "and the clerk shall determine whether any person to whom property is bequeathed stands in the relation of child."
On the facts, as established, we are of opinion that the petitioner stood in the relationship of child to the decedent, within the meaning of the law, and this will be certified, that judgment may be so entered and the taxes assessed and exemption allowed accordingly.
Reversed.
Cited: Trust Co. v. Doughton, 187 N.C. 267; In re Davis, 190 N.C. 361; Waddell v. Doughton, 194 N.C. 539.