       .     .




                          EATJI-BRNEY               GENERAL
                                  OF TEXAS
                                  AUSTIN   11. .rJcuAs
PRICE  DANIEL
ATTORNEYGENERAL
                                  February 12, 1949.

       Hon. Robert 2. Calvert                      Opinion Ho. V-769.
       Co troller   of Public Acoounts
       has$ in, Texas                              ROI Bxistonce ana re-
                                                       lease of lnherltanoo
                                                       tax lien w&r ‘sub-
                                                       mitted facto.
       Dear Sir8
                  You have requested the opinion of the Attor-'
       ,ney General as to questions raised by &.. Jack W. Frost,
       Independent Executor of the Estate of tied W. Frost,
       deceased.   The Saets Sormi   the basis of the &CIOU-~~
       torte questions are stated 7 n his letter whloh you have
       attached to your request together with a oopy of a War-
       ranty Deed from the Estate of L. J. Hart, deoeased, to
       Frecl W. Frost; said Warranty Deed Is dated February 10,
       1939 and signed by Katherine Hart Edson, Independent
       Executrix of the Dstate of L. J. Dart.
                        We quote from Mr. Jack W. Frost’s      letter:
                       “Prior to his death, L. J. liert~ouned
                 a part of Lots Nos. 4 and 3 in Blook Ilo. 1,
                 new City Blook 401, within the oorporate
                 limits of the City of San Antonio. . . .
                         “Mr. HaFt died on July 8, 1938, teatate;,:
                 . . .                   .
                       “His will gives ~a11 hla property of
                 whatever kind an8 oharaoter to his daughter
                 Katharine Hart Edson, and appolnte ho* III-
                 depentinti BxecutrZxm:
                       ”
                         . . .
                         “Theinvent0 in       t+e Estate of L. J.
                 &art    was ,filed on‘3uly   3, ,193P. . . . Amon6
               ,. .   Hon.   Robert   S. Calvert,   Page 2 (V-769)
     i .

                             others,    it lists   the property in question
                             at a value of $7,000.00;       and the total val-
                             ue of all property is listed       as $625,241.35.
                             fi’hhelist of claims filed,     a part of the in-
                             ventory, lists      two notes to Fred W. Frost,
‘C
                             one for $21,205.54 and one for $4,170.90.
           ,


                                    “Subsequently,  . . . the County Judge
                                   . entered his order whfch was approved
                             iy’the   State Comptroller,  fixing the inher-
                             ltanoe tax on thie Estate.      This order . .
                                 shows an appraised market value of $32,-
                             999.20, a statutory    exemption of $25,000.00
                             anti a net taxable value of $7,999.20.     The
                             tsx Slxed Is $79.99. . . . It Will be ae-
                             eumed, that it has not been paid.
                                    “Under’date of February 10, 1959,
                             Katherine Rart Edson conve ed oertain prop-
                             erties    IA the City of San in tonlo to Fred
                             W. Frost, among whioh te en undivided one-
                             half interest    in a part of Lots ~4 and 5 in
                             said new’city Block 401 particularly        de-
                             aorlbed In said Deed. $he Deed reoltes
                              ‘Ten Dollars and other valuable oonsldera-
                             tion’ paid by Fred W. Frost andthe aanoel-
                             lation and delivery     to said E&ate by Fred
                             W. Frost of a note for $16,000.00,       exeouted
                             by L. J. Rart. . . . My files      indioate that
                             the interest    on this note was delinquent
                             and that the former note to which referenoe
                             is made in the inventory was probably made
                             for delinquent Interest.     The conveyance was
                             obviously made in oanoellatlon      of one of
                             the items of indebtedness as listed       in the
                             inventory ltnd list of olaims.
                                    ,I
                                      . . .
                                   “I have maae the Inheritanoe Tax Re-
                             turnsin   the Estate of Fred W. Frost and
                             have paid the full amount of the fnherit-
                             anoe tax due, . , . The unaivided one-half
                             aterest   in the lots mentioned above wa8
                             Listed in the inventory and in the Inherit-
                             &not) Tax Return.
 .%A.       Robert   8. Calvert,   Page 3 ,(V-769)


                  "I have sold this undivided one-half
            interest  to Mr, Terre11 Bartlett, . '. . and
            his attorney has made a requirement that
            the appsrent inheritance  tax lien against
            the Estate of L. J. Hart, deceased, be re-
            leased.
             Mr. Frost then states   that he Is OS the opin-
 ~lon 'that the Executor of the L. J. Hart Estate has the
  right to transfer   and convey this property in settle-
  ment of debts of the Estate and that, therefore,    any ap-
  parent lien should be released by the Comptroller.      IS
  this were not so, no Estate, regardless    of siee, whio$
  had more debts than cash on hand, ooul'd ever be sold.
                 Article 7133, V. 0. S., provides            for a lien‘
 ,,pl;gti        the payment OS inheritance taxes            and reads aa

                  "A llen~shall.  exist on all property
            subjeat to taxation under tNs law to se-
            &me the payment of all taxes, penalties
            and costs provided for in this chapter.
            All persons acquiring any portlon of said
            property shall be oharged 'with notiae of
            the existeiioe  of all Waoh unpald,texee,
            penalties   and Qosts, and of the lien Be-
            curing their payment, whioh may be en-
            forced In’any suit brought for the oollsg-,
            tion of said taxes, penalt$.ep &Ad oosts.
               Article  7l31, V. 0. s., presorIbes.the   method
    o? Slxlng the tax, provides that notiae of the deter-
   mination of the amount of the tax shall be given to the
    executor,  administrator   or ~truetee, and %o the person
    to whom or Sor whosa uee’the property paeses, and Sur-
 ‘,thee* provides that     said tax ehall be a lien USIA sy3h
   property from thq death of the deoedent until paid.
               AI-Mole 7l34,       v.   0. 9 .,   provides   for Soreolo-
     sure of said lien."';,
               Inhelritanoe taxes beinS “privilege   taxes”
     levied upon the rlghh of suoosssion  to propert
     decedent, State ‘0.    et.123 T. 568, 72 !f. (2d ;;S:
,~
 i
Ron. Robert S. Cal.vert,    PRge 4 (V-769)


a Sortlori  some benefloial  interest  of the deoedent must
be sucoeeded to before any tax can aoorue.     lfevertheleslr,
the lien provided by Article    7133 Is not epeclfloally
limited to the property which is eventually



            The Supreme .Court of WRShiAgtoA hae held that
the state’s   lien for payment OS lnherltano,e taxe8 wa#
not lost on realty sold by an eXeOUtOr     to pay tku e+
pensRes OS administration  and'ala   a against the brtatr.
IA e Kearreas~s Estate, 61 Pao.     26) 998.   Thm Wamhlng~
ton statute la similar In maxg reepeots to our statute,
poviaing in part ae sollow8r
           "All property . . . whloh ahall pas8
     by will . . . shall be subjeot to a tax am
     provided . . . after payment of all debts
     ;u&y    the deoedent at the time of hla
                  The inh6wltanoe tax ahall be
     and reiain’a  lien on suah estate flrom the
     death of the decedent until paid.
The Washington etatute had be A oonstrued (as has our
rtatute,   State v* Hou& eupra 9 as being a tU
Eight a? suooessl.on rather than en estate tax,
  orbin's  Estate, 107 Wash, 424, 181 Pao. 910;
was contentlea that since the tex was only upon proper-
ty pass1     to benefioiaries,     the lien of the tax w&s
likewise Y! imlted.    The oourt ~8.8 of the’ opinion that
this oonoluslon was prealuaed by the reasbnl             iA In
            d’s Estate, 122 Wash; 648, 211 P. ?I     7 4, wgoh
                          estate tti was not a aeauotlble
expense beoause the statute did not speaiflcally           make
it so.    This result,   said the court, was based on the
power of the Legislature       to declare,   for purposes of
the tax, what shall be deemed to have been reoeived by
those ruooeedlng to the property,         and to require the
loooessor   to pay a tax on that part whioh was never re-
celved but was devoted to other uses.           The oourt said:
          "liow if the Legislature  may require,
     am a oondltiOn to the Bucaesslon,   that
     the beneficiaries  .pay a tax on that por-
 Ron. Robert   S. Calvert,   Page 5 (V-769)


        tion of the estate which does not pass
        but is consumed by chargeable expense, it
        may, upon the same consideration,    provide
        that; notwithstanding   the allowance of
        certain deductible   expenses in the oompu-
        tation of the tex, the amount of the taX
        when ascertained   shal$ be a lien on the
        whole of the estate.           .~
   The oourYthen wadded that there.was n0 question in view
., of the plain language of the 8tdXte   above quoted that
   the Legislature  had declared the lien to eXi8t upon the
   whole of the eatate.
              In Walker v. Mann, 143 S.W. (26) 152, error
 refueed.    the Court of Civil Ampeals for the Third Su-
 preme J6dicial    District   of Te&s held that the amount
 paid a8 Federal Estate taxes vaa not an authorized de-
 duatlon in determining the amount of inheritance        taxes
 due under our statute.      Thus in this etate we have a
 similar predicate     end the reasoning of the Supreme
  Court of Washington is applicable     here.  The Leglsla-
 ture   having required 8s a condition    to succession   that
  the tsx may have to be paid on a portion of property
 never received,     the question is whether, upon the same
 ,oonsideration,   it hR.8 seen fit t0 seoure the receipt
 of this'amount by a lien upon such property.         We are
 of the opinion that it has done so.
             Artiole   7133 provides that the lien ehall ex-
  Irt 'gn all property subject to tex&tl.on under this I.&w
           The property subject to taxation "under the law"
 is; iy the terms of Article       7117, V. C. S., "All proper-
 ty within the jurisdlotion       of *hi8 State . . . and any
 intereat   thereln"including      property paaeing under a
 general power of appointment exeroised by thCdecedent
 by will,   including    the prooeeds of life ti8UranCe to the
 extent,   eta.,   . . . which shall pa88 abeolutely      OF in
 trust by vill,     or by the Iaws of descent and distribu-
 tion . . . iir by deed, grant, sale or gift made or in-
 tended-'to take ef,feot in possession      and,,enjoyment after
 the death of the grantor or donor . . .
             Whenever property   is-transferred   by shy of
  these enumerated methods the tax      18 imposed even though     a
                      Page 6 (V-769)
&a. Robert S. CalveePt,


the property is oth&wise dispoeed of a8 Vhbre Bdolk-
tested will is probated b virtue of oompraniee we-
mat, Crew v. M&q 162 %.W (26) 117 Wx’oz’      rMU8ed
antIeven vhere the hevisewai made put&ant to a oan-'
 reot with the deoedenk, Chenuard v. De8mond, 169 R.V.
 26) 788.
             The property here involved paI98ed by tthr till
of L. J. Hart to his daughter, was eubjeot to tan um&aF
the‘~plain terms of Artiole    7117, and therefore  tba lien
lttaohed thqeto.       Artiole 7131 deolaree that &la liena
al&all exist    from the death of the deoedent until pa&
This being the mandate of the statute,      only payment aan
l%tingui8h the lien, and you are without authority to
iaeue the release sought.


                   The State's   lien to seoure payment Of
            iiiherltauce   taxes attached to the property
            pas8ing by will at the aeath of the testa-
            tor and persisted      despite aonve anoe by OS-
            eputor to satisfy claim8 agef.m     t the errtate.
            Only payment can extinguish the lien, sn8
            $E gCg:troller      has no authority to release
                         Articles    7117, 7131, 7133,
            v. 0. s.' In Re Kennedy's Estate, 61 P.
            998.
                                           Yours very truly,
                                      A!rTOrn~ c#mRRALOF TIYIAS



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