Blackstone v. Miller, 188 U.S. 189 (1903)

’ in U. 8. 48, 53; Clason v. City, 46 La. Ann. 1, 5; p. 190Bluefield Banana Co. x. Board of Assessors, 49 La. Ann. 43; New Orlea/ns v. Stempel, 175 U. S. 309, 314 ; Liverpool, L. (è G. Ins. Co. v. Board of Assessors, 51 La. Ann. 1028 ; CornjAm National D'Escompte de Paris v. Board of Assessors, 52 La. Ann. 1319, 1329. There is a distinction between trust companies and ordinary banks. People v. Binghamton Trust 6b., 139 N. Y. 185,189 ; United States Trust Co.x. Brady, 20 Barbour, 119 ; Jenkins v. Neff, 163 N. Y. 320, 330 ; 186 U. S. 230, 234; Mercantile National Bank v. New York, 121 IT. S. 138,159.

1. The established principles of taxation prohibit the taxation of intangible property owned by non-residents. McCulloch v. Maryland, 4 Wheat. 316, 429 ; Railroad Co. v. Jackson, 7 Wall. 262, 267, 268 ; State Tax on Foreign-held Bonds Case, 15 Wall. 300,319 ; Sa/oings Society v. Multnomah Co., 169 U. 8. 421 ; New Orleans v. Stempel, 175 U. S. 309 ; Bristol v. Washington County, 177 U. S. 133 ; In re Jefferson, 35 Minnesota, 215 ; City and County of San Francisco v. Mackey, 22 Fed. Rep. 602, 608 ; Walker v. Jack, 60 IT. S. App. 124, 128 ; DeVignier v. New Orleans, 4 Woods, 206, 207 ; Yost v. Lake Erie Transportation Co., 112 Fed. Rep. 746; Kirtland v. Hotchkiss,^ Connecticut, 426, 438, affirmed 100 LL S. 491 ; Balk v. Karris, 124 N. C. 467 ; Scripps v. Board of Review, 183 Illinois, 278, Haywood v. Board of Review, 189 Illinois, 235; Matzenlaugh v. People, 194 Illinois, 108 ; Street Railroad Co. v. Morrow, 8 Tennessee, 438 ; Village of Howell v. Gordon, 127 Michigan, 517; In habitan ts ofEllsworth v. Brown, 53 Maine, 519 ; Catlin v. K , 21 Vermont, 152; Flanders v. Cross, 10Cushing,510; Stated-Ross, 3 Zabriskie (N. J.), 517 ; Hopki/ns v. Baker, 78 Marylan , 363, 370 ; Mayor, etc., of Mobile v. Baldwin, Wl Alabama, 6 , City Council of Augusta v. Dunbar, Georgia, 387 ; Johnson^- De Bary-Baya Merchants Line, 37 Florida, 499, 519 ; Stalfi v-Smith, 68 Mississippi, 79 ; Insurance Co. v. Board of sioners, 51 La. Ann. 1028; Court v. O’Connor, 65 Texas, 5 Prairie Cattle Co. v. Williamson, 5 Oklahoma, 488 ; Wort W ton v. Sebastian, 25 Ohio St. 1, 8 ; Buck v. Miller, 147 In ’ 586 ; City of Louisville v. Shirley, 80 Kentucky, 71 ; Ku son v. Board of Commissioners, 67 Iowa, 183 ; Finch v-Co., 19 Nebraska, 50 ; Sanford v. Town of Spencer, 62 1800 p. 191sin, 230; In re Jefferson, 35 Minnesota, 215, 220; Commissioners of Arapahoe County v. Cutter, 3 Colorado, 349 ; Holla/nd v. Commissioners, 15 Montana, 460; Johnson v. Oregon City,^ Oregon, 327; Walla Walla v. Moore, 16 Washington, 339; Estate of Fair, 128 California, 607 ; Barnes v. Woodbury, 17 Nevada, 383; Tax Law of New York of 1896, §2, subd. 5; Cooley on Taxation (2d ed.), pp. 21, 22; Borer on Interstate Law, p. 281; Judson on Taxation (1903), § 397, p. 507.

• t 231; Matter of Button, 3 App. Div. 208 ; Callahan v. ^odbr^ge, 171 Massachusetts, 595 iected \ decisions where money in bank has been sub-case if a transler tax are distinguishable from the present decision ^()U(^ayeri 1^0 N. Y. 37. The authority for the guished °Th 6 ^0Urt °1 Appeals in this case cited and distinat was a bank deposit although deposited in a trust p. 192company. In this case the deposit was not virtually money and could not be converted into money on demand. Substitutes for money are not to be deemed money for taxation unless they are exact equivalents. Hubbard v. N. Y. & H. R. R., 14 Abb. Pr. 275 ; United States v. Wilson, 106 U. S. 620; then citing and distinguishing Hatter of Romaine, 127 N. Y. 80; Matter of Morey on, N. Y. Law Journal, July 3,1891; Matter of Simoni, N. Y. Law Journal, January 20, 1896; Estate of Spears, 6 Ohio Decisions, 598; Matter of Burr, 16 Misc. N. Y. 89 ; balances held not to be cash in Matter of Bentley, 31 Misc. N. Y. 656 ; Matter of Horn, N. Y. Law Journal, October 31, 1902.

III. A construction of the statute which permits dou e taxation should be avoided. 2 Cook on Corp. § 567; see v. Whitworth, 117 IT. S. 129; People ex rel. Savings M v. Colema/n, 135 N. Y. 231; People ex rel. Hoyt v. 6^^' sioners 23 N. Y. 224; Matter of Dingham, 66 App. Eiv. J 3 N. Y. Revised Statutes, Birdseye’s 3d ed. p. 3526, subd. , People ex rel. Darrow v. Coleman, 119 N. Y. 137; Matter0 p. 193Euston, 113 N. Y. 182, dissenting opinion, Haight, J., in Matter of Romaine, 127 N. Y. 80, 91; Cooley’s Const. Lim., p. 227; Detroit Citizens’ Street Ry. Co. v. Common Council, 125 Michigan, 673.

, V" tyncibwrg, 78 V irginia, 366; State v. Dalrymple, ary and, 294; State v. Hamlin, 86 Maine, 495 ; State v. 2R1 Tennessee, 674; In re Wilmerding, 117 California, »1; GvUthorpe v. Furnell, 20 Montana, 299. onl r hl ,DS a ^ax uPon the power of transmission can tra^ e lml)ose(l by the sovereignty creating the power, and the linn’SmiS»’’011 i* 1 case was effected solely by the law of IIinson 1 a f{man Martinez, 184 U. S. 592; Kintzing v. Hutch-ffove ’ ed ^aS ^9’ There are seven examples of different rnmentai impositions under the head of “ death duties ” vol . clxxxvi ii —13 p. 194in Great Britain. Four of these, Probate Duty, Legacy Duty, Succession Duty, Estate Duty, were reviewed in Knowlton v. Moore, 178 U. S. 41, as to the nature of these duties, citing Hanson’s Death Duties, 4th ed. 1, 2, 19, 20, 40, 63; Norman’s Digest of the Death Duties, 2d ed. 1,184, 513 ; Dicey’s Conflict of Laws, Moore’s American Notes, 1897, 785-789; Laidlay v. The Lord Advocate, L. R. 15 App. Cas. 468, 483; Wallace v. The Attorney General, L. R. 1 Ch. App. 1; Attorney General v. Campbell, L. R. 5 H. L. 524, 529.

The highest court of New York has thus interprete statute now under consideration as providing that where a resident dies leaving a deposit in a bank or trust company w the State of New York, a transfer by will or intestate aw p. 197such deposit is a transfer of money—“ of property within the State,” and as such is governed by the provision of section 220 of the tax law.

P perty of the decedent within the State of New York. p. 198Downes v. Phoenix Bank of Charlestown, 6 Hill, 297; Payne v. Ga/rdi/ner, 29 N. Y. 146; Howell v. Adams, 68 N. Y. 321; Hunger v. Alba/ny City National Bank, 85 N. Y. 587; Boughton v. Flint, 74 N. Y. 482; Smiley v. Fry, 100 N. Y. 265; Dickinson v. Bank, 152 Massachusetts, 49, 55; Girard Bank v. Penn Township Bank, 39 Pa. St. 92, 98,99; United States v. Wardwell, 172 U. S. 48, 54, 55 ; Parker, Tax Collector, v. Strauss <& Co., 49 La. Ann. 1173.

The rule is established by a uniform line of authorities that an executor or administrator appointed in one State cannot as such sue, or be sued, in his representative capacity in another. Hopper v. Hopper, 125 N. Y. 402; Lawrence v. LawrenceJ Barb. Ch. 74; Hatter of Webb, 11 Hun, 124; Fla/ndrow Hammond, 13 App. Div. 325; Johnson v. Wallis, 112 N. 230 ; Petersen v. Chemical Bank, 32 N. Y. 22,40. Similar ru es in other States. Greves v. Shaw, 173 Massachusetts, 2 «> S. C, 53 N. E. Rep. 372 ; Judy v. Kelley, 11 Illinois, 211; Garvey v. Da/rnaU, 134 Illinois, 367 ; S. C., 25 N. E. Rep- R ’ Johnson v. Powers, 139 IT. S. 156 ; Stacy v. Thrasher, 6 44, 58 ; Noonan v. Bradley, 9 Wall. 394; Vaughan v. rup, 15 Pet. 1; Aspden n . Nixon, 4 How. 467; Reyno * Stockton, 140 U. S. 254, 272; Lawrence v. Nelson, ‘ 222; Overby v. Gordan, 177 U. S. 222; Wyman v. ’ 109 U. S. 654, 656 ; Chicago, Rock Island &c. Ry- v. Stui , p. 199174 U. S. 714. Succession tax has some of the characteristics of a duty on the administration of the estate of the deceased persons. Minot v. Winthrop, 162 Massachusetts, 113; Frothingham v. Shaw, 175 Massachusetts, 59, 61.

V. The tax is not rendered unconstitutional because there I p. 201a possibility that the decedent’s estate may be subjected to double taxation.

'• 657; Pacific Express Co. v. Seibert, 142 U. S. 339; p. 202Merchants' Bank v. Pennsylvania, 167 U. S. 461; Davidson V. New Orleans, 96 IT. S. 97,105 ; Orr n . Gilman, 183 U. S. 278; Carpenter v. Pennsylvania, 17 How. 456. It does not deprive the plaintiff in error of her property without due process of law. Da/vidson v. New Orleans, 96 IT. S. 97, 104; Hagar n . Reclamation District, 111 U. S. 701, 710; Spencer v. Merchant, 125 U. S. 345; Palmer v. McMahon, 133 IT. S. 660, 669; Lent v. Tillson, 140 IT. S. 316, 327; Pittsburg dec. R. R. Co. v. Backus, 154 IT. S. 421; Fallbrook Irrigation District v. Bradley, 164 IT. S. 168 ; Merchants' Bank v. Pennsylvania, 167 IT. S. 467.

The deposit in question represented the proceeds of railroa stock sold to a syndicate and handed to the Trust Company, which, by arrangement with the testator, held the proceed subject to his order, paying interest in the meantime. iive days’ notice of withdrawal was required, and if a draft was made upon the company, it gave its check upon one of its ban p. 203of deposit. The fund had been held in this way from March 31, 1899, until the testator’s death on May 26,1900. It is probable, of course, that he did not intend to leave the fund there forever and that he was looking out for investments, but he had not found them when he died. The tax is levied under a statute imposing a tax “ upon the transfer of any property, real or personal. ... 2. When the transfer is by will or intestate law, of property within the State, and the decedent was a non-resident of the State at the time of his death.” Laws of 1896, c. 908, § 220, amended, Laws of 1897, c. 284 ; 3 Birdseye’s Stat. 3d ed. 1901, p. 3592. The whole succession has been taxed in Illinois, the New York deposit being included in the appraisal of the estate. It is objected to the New York tax that the property was not within the State, and that the courts of New 1 ork had no jurisdiction ; that if the property was within the State it was only transitorily there, Hays v. Pacific Mail Steamship Co., 17 How. 596, 599, 600, that the tax impaius the obligation of contracts, that it denies full faith and credit to the judgment taxing the inheritance in Illinois, that it deprives t e executrix and legatees of privileges and immunities of citizens of the State of New York, and that it is contrary to the Fourteenth Amendment.

No doubt this power on the part of two States to tax on p. 205ferent and more or less inconsistent principles, leads to some hardship. It may be regretted, also, that one and the same State should be seen taxing on the one hand according to the fact of power, and on the other, at the same time, according to the fiction that, in successions after death, mobilia sequuntur personam and domicil governs the whole. But these inconsistencies infringe no rule of constitutional law. Coe v. Errol, 116 U. S. 517, 524; Knowlton v. Moore, 178 IT. S. 41.

If the transfer of the deposit necessarily depends upon and involves the law of New York for its exercise, or, in other words, ' 1 e^rans^er is subject to the power of the State of New York, en ew York may subject the transfer to a tax. United 1 j ^er^n8^ 163 U. S. 625, .628, 629 ; McCulloch v. Maryan } Wheat. 316, 429. But it is plain that the transfer does epen upon the law of New York, not because of any theoretics speculation concerning the whereabouts of the debt, but bedebf6 ° T Prac^ca^ fact of its power over the person of the reo- °d Th6 Pr^nc^P^e bas been recognized by this court with ant^ PL 8arn^sbments of a domestic debtor of an absent defendU S 71 Clock Island Pacific Ry. Co. v. Sturm, 174 th« See Wyman v- Halstead, 109 U. S. 654. What gives Di 6 1 va^dity ? Nothing but the fact that the law of the w ere the debtor is will make him pay. It does not p. 206matter that the law would not need to be invoked in the particular case. Most of us do not commit crimes, yet we nevertheless are subject to the criminal law, and it affords one of the motives for our conduct. So again, what enables any other than the very creditor in proper person to collect the debt? The law of the same place.. To test it, suppose that New York should turn back the current of legislation and extend to debts the rule still applied to slander that actio personalis moritur cum persona, and should provide that all debts hereafter contracted in New York and payable there should be extinguished by the death of either party. Leaving constitutional considerations on one side, it is plain that the right of the foreign creditor would be gone.

In the case at bar the law imposing the tax was in force fore the deposit was made, and did not impair the obligabono^ the contract, if a tax otherwise lawful ever can be said to aV^ that effect. Pinney v. Melson, 183 U. S. 144, 147. The a p. 207that two States, dealing each with its own law of succession, both of which the plaintiff in error has to invoke for her rights, have taxed the right which they respectively confer, gives no cause for complaint on constitutional grounds. Coe v. Errol, 116 U. S. 517, 524; Knowlton v. Moore, 178 U. S. 53. The universal succession is taxed in one State, the singular succession is taxed in another. The plaintiff has to make out her right under both in order to get the money. See Adams v. Batchelder, 173 Massachusetts, 258. The same considerations answer the argument that due faith and credit are not given to the judgment in Illinois. The tax does not deprive the plaintiff in error of any of the privileges and immunities of the citizens of New York. It is no such deprivation that if she had lived in New York the tax on the transfer of the deposit would have been part of the tax on the inheritance as a whole. See Mager v. Grima, 8 How. 490; Brown V. Houston, 114 U. S. 622, 635; Wallace v. Myers, 38 Fed. Rep. 184. It does not violate the Fourteenth Amendment. See Magoun v. Illinois Trust <& Savings Bank, 170 IT. S. 283. Matters of state procedure and the correctness of the New York decree or judgment, apart from specific constitutional objections, are not open ere. As we have said, the question whether the property was to be regarded as in transitu, if material, must be regarded as