decided: May 25, 1972.
Appeal from decree of Court of Common Pleas, Orphans' Court Division, of Delaware County, No. 228 of 1956, in the matter of the estate of William C. Purdy, deceased.
Vincent X. Yakowicz, Deputy Attorney General, with him J. Shane Creamer, Attorney General, for Commonwealth, appellant.
Edwin B. Barnett, with him Joseph P. Mullen, for appellee.
Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Chief Justice Jones.
[ 447 Pa. Page 440]
William C. Purdy died testate on October 5, 1954, leaving a life estate to his widow with an unlimited power of consumption and the remainder, if any, to his nephew. As of February 24, 1956, the executors of William C. Purdy's estate overpaid the inheritance tax by the amount of $4,824.30. After the death of the life tenant, the executors of William C. Purdy's estate claimed as a credit on the inheritance tax not only this overpayment but also the legal interest on the overpayment, to wit, $3,200.85. While crediting the overpayment, the Commonwealth disallowed the interest claim and the estate filed a protest with the Department of Revenue. The protest was denied and an appeal was taken to the Orphans' Court Division of the Court of Common Pleas of Delaware County. That court held that the Commonwealth was liable for interest on the overpayment and this appeal followed.
Initially, it is argued that our order of April 19, 1971, permitting the Commonwealth's appeal
[ 447 Pa. Page 442]
Del. 1964): "[I]f an inheritance tax is not paid when due, the Commonwealth imposes a penalty equivalent to interest charges. Justice and equity require that where there has been a prepayment of part, but less than all, of the tax due at some future date, the taxpayer should be entitled at the time of final assessment to credit not only for the dollar amount of the prepayment, but also interest thereon." (Emphasis added)
Initially, it should be noted that we are not bound by Willcox Estate. Moreover, the appellee ignores an operative fact: the Commonwealth did not solicit such overpayment. Lastly, the appellee ignores the wellsettled rule that a sovereign state is not liable for interest in any case except where, expressly or by reasonable construction of a contract or statute, it has placed itself in a position of liability. See, Marianelli v. General State Authority, 354 Pa. 515, 516, 47 A.2d 657 (1946); Pennsylvania Turnpike Comm. v. Smith, 350 Pa. 355, 362, 39 A.2d 139, 143 (1944); Culver v. Commonwealth, 348 Pa. 472, 474, 35 A.2d 64, 65 (1944); Philadelphia v. Commonwealth, 276 Pa. 12, 14, 119 Atl. 723 (1923). See, generally, Annot., 88 A.L.R. 2d 823 (1963). Accordingly, we are of the opinion that the decree of the court below was clearly erroneous.
Decree reversed. Costs to be equally divided.