C. C. Crabbe, Atty. Gen., and V. H. Gibbs, I der the provisions of this chapter, without inof Columbus, for defendant in error.

ing under the fifth and sixth items of the tingency, the rate that will make the highwill, a temporary order should be entered est return to the state by way of inheritance tax must be the one adopted, and such taxat the highest rate, which, on the happening of any of the contingencies or conditions pro-ject to the refunder provided for in section es shall be due and payable forthwith, subvided for in the will, would be possible under the provisions of the Inheritance Tax 5343, General Code, such rate in the present Act, leaving final assessment and determina-instance being as provided in paragraph 2 of section 5335, and paragraph 3 of section 5334, General Code, to wit, 5 per cent.

tingency or condition has happened or been complied with. A solution of the problem depends on the construction given section 5343, General Code, which provides as fol- tax should be postponed to the time of hap

(147 N.E.)

dition must exist that "the actual market value cannot be ascertained at the time of such death." This construction of section 5336 was adopted by the court in Tax Commission v. Oswald, Ex'x, 109 Ohio St. 36, 53, 141 N. E. 678.

which, on the happening of any of the said contingencies or conditions, would be possible under, the provisions of this article, and such tax so imposed shall be due and payable forthwith by the executors or trustees out of the property transferred." Section 25, par. 398, c. 120, Illinois Revised Statutes, 1923.

Now, in the present instance, the actual market value of the succession under considThe construction placed upon this section eration can be and has been accurately de- of the Illinois statute in People v. Starring, termined, to wit, $60,941.66. Therefore there 274 Ill. 289, 113 N. E. 627, resulted in a tax can be no application of the principle set levied at the highest rate possible in case the forth in section 5336 providing for a post-event or contingency occurred immediately. ponement of the payment of this tax, and we The following cases give construction to secmust therefore reach the conclusion that section 25 of the Illinois Code involving situation 5343, General Code, controls in the premises. The conclusion that we have reached herein is sustained by the case In re Zborowski, 213 N. Y. 109, 107 N. E. 44, a case not dissimilar from the case at bar; also by the case of In re Estate of Parker, 226 N. Y. 260, 123 N. E. 366. These cases involved the construction of section 230 of the Inheritance Tax Law of New York, which, upon comparison with section 5343, General Code of Ohio, will be found to be practically the same in effect, if not in words. It provides:

"When property is transferred in trust or otherwise, and the rights, interest or estates of the transferees are dependent upon contingencies or conditions whereby they may be wholly or in part created, defeated, extended or abridged, a tax shall be imposed upon said transfer at the highest rate which, on the happening of any of the said contingencies or conditions, would be possible under the provisions of this article, and such tax so imposed shall be due and payable forthwith by the executors or trustees out of the property transferred." Section 230, c. 61, Cahill's Consolidated Laws of N. Y. 1923.

See, also, In re Estate of Hutton, 176 App. Div. 217, 162 N. Y. S. 972; Id., 220 N. Y. 770, 116 N. E. 1053; In re Estate of Seligmann, 219 N. Y. 656, 114 N. E. 853.

This court has heretofore recognized the fact that:

"The provisions of our Inheritance Tax Act in reference to the payment of an inheritance tax are substantially the same as the provisions of the Inheritance Tax Act of New York, and our Inheritance Tax Act probably was modeled after the New York act." Wellman v. Cleveland Trust Co., 107 Ohio St. 267, at page 276, 140 N. E. 104, 106.

tions similar to those arising under the will in the case at bar: People v. Byrd, 253 Ill. 223, 97 N. E. 293; People v. Freese, 267 Ill. 164, 107 N. E. 857; People v. Donohue, 276 Ill. 88, 114 N. E. 513; People v. Lowenstein, 284 Ill. 126, 119 N. E. 917; People v. Camp, 286 Ill. 511, 122 N. E. 43; People v. Gerlaugh, 302 Ill. 131, 134 N. E. 175.

All inheritance taxes are the result of

statutory enactment, and it is the claim of the plaintiffs in error that both the Illinois

and New York taxes are "transfer" and not "succession" taxes, hence that the decisions in those states are not applicable. Marked line of demarcation may be noted between the right to transmit and the right to receive an estate. The federal estate tax is a tax on the right to transmit. Such a tax is imposed on the entire estate, without regard to the beneficiaries. It is an excise tax on the right of a decedent to pass his estate to his heirs or devisees or legatees. Sometimes this is called a tax on the right to transfer.

There has also been confusion in the use of the words "transfer" and "succession."

The Ohio statute (paragraph 2 of section 5331) defines "succession" as meaning "the passing of property in possession or enjoyment, present or future."

The New York act (second sentence of section 243 of chapter 61 of Cahill's Consolidated Laws of N. Y. 1923) defines "transfer" as follows:

"The word 'transfer' as used in this article shall be taken to include the passing of property or any interest therein in the possession or enjoyment, present or future, by inheritance, descent, devise, bequest, grant, deed, bargain, sale or gift, in the manner herein prescribed."

The Illinois Inheritance Tax Act (section

The inheritance tax laws of Illinois are also in much the same phraseology as those 423 of chapter 120 of Cahill's Illinois Revised of Ohio; for instance, section 25 of the Illi-Statutes 1923) reads as follows:

nois Uniform Tax Act is almost in the same

words as section 5343, General Code of Ohio,

the Illinois section reading as follows:

"When property is transferred or limited in trust or otherwise, and the rights, interest or estates of the transferees or beneficiaries are dependent upon contingencies or conditions whereby they may be wholly or in part created, defeated, extended or abridged, a tax shall be imposed upon said transfer at the highest rate

income therefrom, shall pass to or for the use "When property, or any interest therein or

of any person, institution or corporation by the death of another, by deed, instrument or memoranda, such passing shall be deemed a transfer within the meaning of this act, and taxable at the same rates, and be appraised in the same manner and subjected to the same duties and liabilities as any other form of transfer provided in this act."

place to seek the remedy is in the Legislature and not in the courts. Judicial interpretation must be based upon legislative enactment, as the same is found in the statute books.

Is not the conclusion irresistible that the, allow. If its provisions seem harsh, the same process or act of the "passing of property" from a decedent to his heir or beneficiary, which we in Ohio call a succession, is labeled transfer in New York and Illinois? Reference may be made to the Illinois statute, and the decisions of the Supreme Court of that state construing the same, by reason of the close resemblance between the Ohio statute and that of Illinois.

In People v. Schaefer, Exr., 266 Ill. 334, 107 N. E. 617, the Supreme Court said:

"An inheritance tax is not a tax upon the property itself, but upon the right to succeed to the property, and only the beneficial interest passing from the decedent to the heir or legatee and vesting at the time of the death is taxable."

This is in accord with the decisions of this court in State ex rel. v. Ferris, 53 Ohio St. 314, wherein the court says, on page 325, 41 N. E. 579, 580 (30 L. R. A. 218):

"Properly understood, it is not the right to transmit, but the right and privilege to receive, that is taxed."

See also Hagerty v. State ex rel., 55 Ohio St. 613, 45 N. E. 1046, and State ex rel. v. Guilbert, Aud., 70 Ohio St. 229, 71 N. E. 636,

1 Ann. Cas. 25.

Later New York cases also proceed upon the theory that the tax is not assessed upon the right to transmit, but upon the right to receive. In re White's Estate, 208 N. Y. 64, 101 N. E. 793, 46 L. R. A. (N. S.) 714, Ann. Cas. 1914D, 75.

We cannot concede the distinction, whether the basic idea be called "transfer tax" or "succession tax," for the succession tax is, after all, not a tax imposed on property, but is a privilege tax on the right of taking property from another, whether by will or devolution, as a matter of law. In re Morris' Estate, 138 N. C. 259, 50 S. E. 682, states the proposition as follows:

An excellent collection of the statutes of the various states, and a discussion of the adjudications thereon, will be found in 30 A. L. R. 482, but, after all, the construction given must depend upon the phraseology of

the statutes of the state under consideration. We are, however, unwilling to recognize the distinction between a "transfer tax" and a "succession tax," as claimed by the plaintiffs in error.

The remaining question is whether section 5344, General Code, prevents the levying of this tax at the present time, as provided for in section 5343, General Code. Section 5344 provides as follows:

"Estates in expectancy which are contingent or defeasible, and in which proceedings for the determination of the taxes have not been taken, or have been held in abeyance, shall be appraised at their full undiminished value, when the persons entitled thereto shall come into the beneficial enjoyment or possession thereof, without diminution for or on account of any valuation theretofore made of the particular estates for the purpose of this subdivision of this chapter, upon which such estates in expectancy may have been limited. An estate for life or for years which can be divested by the act or omission of the legatee, or devisee, shall be appraised and taxed as if there were no possibility of any such divesting."

The construction placed upon this section by the court of common pleas, as we infer from plaintiffs in error's brief, seems to have been that section 5344 applies to estates not now vested, but which may vest in the future upon the happening of a designated event, and that section 5343 deals with estates that have already vested, but are subject to be delivered either in whole or in part upon the happening of a future event.

Whether section 5343 relates to the succession (1) of estates, the right to which is vested, but whose possession and enjoyment are created by the happening of a future contin

"The tax is variously called an inheritance tax, a legacy tax, a transfer tax, and a succession duty. It is defined as follows: 'A burden imposed by government upon all gifts, legacies, inheritances and successions, whether of real or personal property, or both, or any interest therein, passing to certain persons (other than those specially excepted) by will, by in-gency or condition; or (2) to estates or intestate law, or by deed or instrument made inter vivos intended to take effect at or after the death of the grantor.'"

terests now vested, but whose possession and enjoyment may be defeated by a future contingency or condition, is not before us in this case for decision, but we are of opinion that So, by whatever name this tax is called, section 5343 does relate to estates or interthe principle of this privilege is the same, ests in which there is no present fixed right, and it is the result of legislative act. The but in which such may be created by the hapfrank purpose of the inheritance tax lawpening of a future uncertain contingency or seems to be to secure for the state the high-condition, and this is the species of estate est rate of taxation that any given succession created in the brothers and sisters by the is justly susceptible of in the legislative will in the case at bar.

mind, and to secure the same to the state Now, section 5344 is only intended to apat the earliest moment, subject to such re-ply to two classes of cases: First, contingent funders as the Legislature has seen fit to or defeasible estates in expectancy, in which

(147 N.E.)

no proceeding for the determination of a tax has been filed; and, second, contingent or defeasible estates in expectancy, in which the determination of the tax has been held in abeyance. This section should, therefore, as to the second feature, be construed in connection with section 5336, where the taxation of estates has been held in abeyance, as provided therein, to wit

its judgment in that behalf is therefore affirmed.

Judgment affirmed.

MARSHALL, P. J., and JONES, MATTHIAS, ALLEN, KINKADE, and ROBINSON, JJ., concur.

"not vested at the death of the decedent, by RALSTON STEEL CAR CO. v. RALSTON. reason of which the actual market value thereof cannot be ascertained at the time of such death."

All that section 5344 does is to prescribe the method of appraisement to be used when the assessment of tax is being made at the time the successors receive the estates, and it has no application to contingent estates which must be taxed at the highest rate, which, on the happening of any future contingency, would be possible, such estates being those the succession to which depends upon a contingency or condition whereby they may be "created, defeated, extended abridged," as provided in section 5343. In re Estate of Seligmann, 219 N. Y. 656, 114 N. E. 853.

or

It is argued on behalf of the plaintiffs in error, as a further reason that the Legislature did not intend that contingent interests of the character of the brothers and sisters should be taxed, that there is no provision in the statute for a refunder when the contingency does not happen, but the provision for the refunder relates to "the happening of any contingency whereby the said property passes so that such ultimate succession would be exempt from taxation or taxable at a rate less than that so imposed and paid. Section 5343, General Code.

Now this tax is paid by the estate upon this succession, and if Wilbur F. Kingseed reaches the age of 25, and comes into the full enjoyment of his property, then of course testator's brothers and sisters have no estate, and Wilbur F. Kingseed is entitled to the refunder if the tax has been paid at a higher rate than it should have been. In this event the brothers and sisters have paid no tax, and they have not shared in the estate. Upon the other hand, if the contingency happens by which they come into their estate, then there has been paid no more than is legally due; in other words, this succession tax is paid by the estate and is not paid by the brothers and sisters.

In conclusion, we find that the Court of Appeals in assessing the succession tax herein at the rate enumerated in paragraph 2, section 5335, General Code, under a temporary order as provided in section 5343, General Code, reached the right conclusion, and

(No. 18815.)

(Supreme Court of Ohio. March 24, 1925. Rehearing Denied May, 12, 1925.)

(Syllabus by the Court.)

1. Descent and distribution 9-Leasehold for 99 years, renewable forever, becomes freehold estate and subject to law of descent as estate in fee.

Where the owner of real estate leases the same to another and to his heirs and assigns for a term of 99 years, renewable forever, the estate created by such instrument becomes a freehold estate in real property and becomes subject to the laws of descent as au estate in fee.

2. Dower 12(1)-Leasehold estate in land for 99 years, renewable forever, is subject to dower.

Such an estate is subject to dower, under the provisions of section 8606, General Code. 3. Dower 95-Executors and administrators 400-Value of widow's dower payable to her in money out of proceeds of sale of leasehold; reasonable value of dower in leasehold is one-third of proceeds computed in accordance with expectancy of life.

Where such interest in real estate is subjected to sale by an administrator in a proceeding to sell real estate to pay debts of the decedent, the value of a widow's dower is properly payable to her in money out of the proceeds of such sale, and the reasonable value of such dower is the present value of one-third of the proceeds of such sale computed in accordance with her expectancy of life under the mortality tables.

Action between Annie M. Ralston and the Ralston Steel Car Company. Judgment of probate court, awarding dower interest in the leasehold, was reversed on appeal to court of common pleas, and judgment denying claim rendered, which, on error to Court of Appeals, was reversed, and judgment rendered for widow, and the Car Company brings error. Affirmed.-[By Editorial Staff.]

Joseph S. Ralston, a resident of Franklin County, Ohio, was in his lifetime, and at the time of his death, the lessee of certain real estate in the city of Columbus, under an instrument sometimes called a permanent lease, sometimes a perpetual lease, the ten

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 147 N.E.-33