ciple that death is the generating source from which the particular taxing power takes its being, and that it is the power to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested.' But these definitions were intended only to distinguish the tax from one on property, and it was not intended to be decided that the tax must attach at the instant of the death of a testator or intestate. In other words, we defined the nature of the tax; we did not prescribe the time of its imposition. To have done the latter would have been to prescribe a rule of succession of estates, and usurp a power we did not and do not possess. There is nothing, therefore, in those cases which restrains the power of the state as to the time of the imposition of the tax. It may select the moment of death, or it may exercise its power during any of the time it holds the property from the legatee. 'It is not,' we said in the Perkins case," 'until it has yielded its contribution to the state that it becomes the property of the legatee.'" This decision was rendered of the statute of Louisiana, and under the law of that state the legacies in question passed to the legatees upon the death of the testator.

§ 38. Law Governing Estates in Remainder.-The question as to what law, in point of time, governs the imposition of inheritance taxes on estates in remainder has frequently been before the New York courts for determination. It has been decided in that state, and in some others, that estates in remainder are taxable as of the time of the death of the donor, notwithstanding the actual possession or enjoyment by the beneficiary is postponed until the expiration of the life estate and may perhaps fail entirely; and if there

21 United States v. Perkins, 163 U. S. 625, 41 L. Ed. 287, 16 Sup. Ct. Rep. 1073.

is no statute imposing a tax at the time of such death, the transfer is immune from taxation.22

"It is now well settled," to quote from the supreme court of New York, "that the tax is upon the transfer of the property, upon the right of succession, not upon the property itself; that 'transfer' means the passing of property, or of any interest therein, in possession or enjoyment, present or future, without regard to whether the actual possession and enjoyment follows immediately or comes at some future time; that where a vested, though defeasible, interest in remainder passes under a will to the remainderman on the testator's death, though the possession does not pass until the death of the life tenant, the transfer or succession is referred to the time of the death of the testator, and if that occurred prior to the enactment of the act taxing transfers of property, the remainder is not taxable.'' 28

24

Referring to this question the supreme court of Iowa, in a recent decision, uses this language: "It has been held without any apparent conflict in the authorities that an interest in property created by will or deed in the nature of a remainder becomes a vested interest from the time the will or deed takes effect,

22 Commonwealth v. Stoll, 132 Ky. 234, 114 S. W. 279, 116 S. W. 687; Miller v. McLaughlin, 141 Mich. 425, 104 N. W. 777; Estate of Pell, 171 N. Y. 48, 89 Am. St. Rep. 791, 57 L. R. A. 540, 63 N. E. 789; Estate of Langdon, 11 App. Div. 220, 43 N. Y. Supp. 419, affirmed in 153 N. Y. 6, 46 N. E. 1034; Estate of Craig, 97 App. Div. 289, 89 N. Y. Supp. 971, affirmed in 181 N. Y. 551, 74 N. E. 1116; Estate of Backhouse, 110 App. Div. 737, 96 N. Y. Supp. 466, 185 N. Y. 544, 77 N. E. 1181; Estate of Haggerty, 128 App. Div. 479, 112 N. Y. Supp. 1017, affirmed in 194 N. Y. 550, 87 N. E. 1120.

23 Estate of Hitchins, 43 Misc. Rep. 485, 89 N. Y. 472 (affirmed in 101 App. Div. 612, 92 N. Y. Supp. 1128, 181 N. Y. 553, 74 N. E. 1118), citing Matter of Seaman, 147 N Y. 69, 41 N. E. 401; Matter of Stewart, 131 N. Y. 274, 14 L. R. A. 836, 30 N. E. 184; Matter of Curtis, 142 N. Y. 219, 36 N. E. 887; Matter of Langdon, 153 N. Y. 6, 46 N. E. 1034. 24 Lacey v. State Treasurer (Iowa), 132 N. W. 843.

and that a subsequent collateral inheritance tax statute has no application to it. Thus, where a will creates a remainder subject to a life estate, with an added power given to the life tenant to dispose of the property if he shall elect to do so, the interest of the remainderman is vested as against a subsequent inheritance tax statute, although it may not be possible to determine until the end of the life estate, and after the taking effect of the statute, what portion, if any, of the property will be left for enjoyment by the remainderman: Estate of Langdon; Estate of Lansing; Winn v. Schenck.25 Even though the remainder is so far conditional that it may have to be opened up to let in after-born children, and, on the other hand, may be devested by death without issue of the person named, nevertheless it constitutes a vested interest, not subject to a subsequent collateral inheritance tax statute, passed before the termination of the life estate: Estate of Seaman.” 26

§ 39. Law Governing Remainders-Constitutional Questions. This statement accurately reflects the law as interpreted by the courts of New York. In fact, it has been decided in that state that a statute providing for an inheritance tax on remainders and reversions which have already vested, upon their coming into actual enjoyment or possession, is unconstitutional because it diminishes the value of vested estates, impairs the obligation of a contract, and takes private property for public use without compensation.27 The soundness of this doctrine is not entirely free from

25 Estate of Langdon, 153 N. Y. 6, 46 N. E. 1034; Estate of Lansing, 182 N. Y. 238, 74 N. E. 882; Winn v. Schenck, 33 Ky. Law Rep. 615, 110 S. W. 827.

26 Estate of Seaman, 147 N. Y. 69, 41 N. E. 401.

27 Matter of Pell, 171 N. Y. 48, 89 Am. St. Rep. 791, 57 L. R. A. 540, 63 N. E. 789.

doubt. The privilege of succession is not fully exercised until the remainderman comes into the possession or enjoyment of the property, and until the happening of that event it is not unreasonable to hold that the power of the legislature to impose a tax exists.28

This view finds support in a recent Massachusetts decision." In that state three changes were made in the statute imposing an inheritance tax on estates to take effect after the expiration of an estate for life or a term of years. The time for the payment of the tax was extended some years; the liability for its payment was put directly on the beneficiary of the decedent instead of upon the administrator; and the tax was to be assessed upon the value of the property at the time when the right of possession accrued to the beneficiary, and was to be paid by him upon coming into possession. The statute applied to the estates of persons deceased before its enactment, and its constitutionality was for that reason questioned, especially in that the time for determining the value of the property for the purpose of fixing the remaindermen's tax was postponed, so that in the particular case before the court such value had increased and the tax was made more burdensome.

This change, said the court, "aimed to do more exact justice both to the commonwealth and to taxable beneficiaries in remainder, by taxing them upon the real value of what they should receive rather than upon a value fixed by estimation which must be determined sometimes many years before their receipt of the property, and which could but rarely accord exactly with the real value of what afterward should

28 As supporting this view, see Succession of Stauffer, 119 La. 66, 43 South. 928; Gelsthorpe v. Furnell, 20 Mont. 299, 39 L. R. A. 170, 51 Pac. 267; Cahen v. Brewster, 203 U. S. 543, 8 Ann. Cas. 215, 51 L. Ed. 213, 27 Sup. Ct. Rep. 174.

29 Attorney General v. Stone, 209 Mass. 186, 95 N. E. 395.

come to them, which might sometimes so far exceed that real value as to subject them to an onerous and disproportionate burden, and in other cases might be materially less than that value, and so afford them a partial exemption, all of which might result in such an unjust discrimination as was condemned in Succession of Pritchard.30 The statute substituted a valuation by the same uniform standard, the real value when the property came to the beneficiary, for an uncertain valuation to be made in advance of that time. . . . . Such an alteration, designed and adapted to bring about uniformity of taxation by assessing the inheritance of each individual according to its value when he receives it, is not of itself beyond the power of the legislature in such a case as is now presented."

"This is an excise tax," continues the court, “imposed not only upon the right of the owner of property to transmit it after his death, but also upon the privilege of his beneficiaries to succeed to the property thus dealt with. The privilege is not fully exercised until the property shall have come into the possession of the beneficiary. Until the full exercise of such privilege and while as yet no tax has been assessed and paid thereon, we see no reason why, by a general rule applicable to all such cases, any pending liability to taxation may not be regulated so as to subject it to a just and uniform method of assessment, even though some change may thereby be made from the method previously adopted. This involves no infringement or impairment of vested rights; it causes no unjust discrimination by substituting a just and equal assessment based upon actual values for the necessarily uncertain and unequal determination by the opinions of appraisers, however expert, of future and contingent values. It does not deny to the re80 Succession of Pritchard, 118 La. 883, 43 South. 537.