position; and my views then expressed have since received the approval of the court of appeals. I fully

*

*

concur in the views expressed in the able brief of the counsel to the corporation as to the impropriety of taxing bequests of this character, but relief must be sought from the lawmaking power."

§ 29. Legatee's or Owner's Domicile as to Personal Property and Its Situs.

Under this, one of the most important branches of the collateral tax law, questions that are beset with difficulty constantly arise. As the majority of these questions do not, however, strictly involve constitutional or jurisdictional points, their discussion and treatment, with one or two exceptions, has been deemed more appropriate under the general topic of "Domicile and Situs," discussed in another chapter; 135 and it remains here merely to consider the propositions of law which have been determined with respect to such questions of domicile and situs arising under the vari ous constitutional provisions, federal and state.

These adjudications seem to have resolved themselves. into several propositions:

"136

(1) Under the maxim "Mobilia sequuntur personam," it seems to be generally conceded that the state of the decedent's domicile has the power of imposing a succession, legacy, or inheritance tax upon the personal property of such decedent, whether situate there, or in a foreign country (and perhaps upon the real estate in a foreign state), and whether bequeathed to resident or alien legatees.137

Citing In re Merriam's Estate, supra.

135 See chapter 4, § 47.

136 Upon this maxim, see 5 Political Science Quarterly (Dec., 1890) 646; note to Commonwealth's Appeal (Small's Estate) 32 Am. Law Reg. 365, 151 Pa. St. 1, and 25 Atl. 23.

137 Chapter 4, § 47; Tyson v. State, 28 Md. 577; Mager v. Grima, 8

And a state can rightfully tax as the property of a resident the registered public debt of another state, although the debtor state may have exempted it from taxation, or actually taxed it.13

There can be no doubt that the legislature has the power to impose the tax, not only where it affects citizens of the state, but also where nonresidents or aliens claim by inheritance or by will property located there. Every state in the Union, in the absence of a constitutional prohibition, has the authority to regulate by law the devolution and distribution of an intestate's property situated within the jurisdiction of that state, and personal property situated elsewhere, but owned by a resident, and to prescribe who shall take, and who shall not be capable of taking it.139

(2) It has been held, under the law of Maryland, that tangible personal property, i. e. bonds and securities, that are situate in the taxing state, are liable to the succession and legacy tax, although the decedent was not domiciled there, but died in another state, of which he was a citizen and where his will was probated, and in which his collateral legatees resided, and left neither debts nor collateral legatees in such taxing state.1

140

The same power exists in parliament, but the intention

How. 490; Eyre v. Jacob, 14 Grat. 422; State v. Dalrymple, 70 Md. 294, 17 Atl. 82; In re Short's Estate, 16 Pa. St. 63; Com. v. Smith, 5 Pa. St. 143; In re Alexander's Estate, 3 Pa. Law J. 87; U. S. v. Hunnewell, 13 Fed. 617; In re Ewing's Estate, 1 Cromp. & J. 151158; Bittinger's Estate (Appeal of Commonwealth) 129 Pa. St. 338, 18 Atl. 132; In re Swift, 137 N. Y. 77, 32 N. E. 1096.

138 Bonaparte v. Tax Court, 104 U. S. 595.

139 State v. Dalrymple, and cases, supra. See, also, Commonwealth's Appeal (Small's Estate) 151 Pa. St. 1, 25 Atl. 23, and note to same case, 32 Am. Law Reg. 365.

140 State v. Dalrymple, supra. Such would also now seem to be the law of New York as to both foreign testates and intestates, where there is property within the state. In re Will of Enston, 113

to tax the personal property of such nonresidents must be clearly expressed.141

Under this doctrine they are exempted under the legacy act, and, to some extent, taxed under the succession act.

Where a nonresident is owner of tangible property within the state, and the state imposes a tax upon it, the tax is not a charge against the owner personally, but must be enforced against the property itself. The state has no ju

N. Y. 183, 21 N. E. 87; In re Vinot's Estate (Surr.) 7 N. Y. Supp. 517; In re Clark's Estate (Surr.) 9 N. Y. Supp. 444; In re Romaine, 127 N. Y. 80, 27 N. E. 759. This case has attracted general attention. See 58 Hun, 109, 11 N. Y. Supp. 313; 43 Alb. Law J. 513; 48 Leg. Int. (Phila.) 265. With regard to the liability of nonresident decedents to pay tax upon personal property, i. e., stocks and bonds of foreign corporations, in New York, the ruling in Re Romainę, supra, has been modified and distinguished, under the act of 1887 (chapter 713), by a recent decision in the court of appeals in Re James, 144 N. Y. 6, 38 N. E. 961, holding that such stocks were not property in a legal sense within the state, and that the legal situs of that species of personal property is where the corporation exists, or where the shareholder has his domicile. Gray, J., said, "The reading of the act does not authorize us to construe it as an effort to tax that over which there was no jurisdiction, and it would be highly improper to impute to the legislature such an intention." The question as to whether such property is taxable under the act of 1892, c. 399, has not been determined. The language of this act is more compre hensive in its scope, and would seem to overcome the objection taken in Re James, supra. See Laws 1892, c. 399, § 22. The court adopted the rule of general tax laws prevailing in New York on this subject, but as we have shown elsewhere (chapter 4, § 47, subd. b) this rule of domicile is a mere fiction of law,-has no application to a tax like the inheritance tax. See In re James, supra; In re Phipps, 143 N. Y. 641, 37 N. E. 823, affirming 77 Hun, 325, 28 N. Y. Supp. 330. Yet, in Re Swift, 137 N. Y. 77, 32 N. E. 1096, the same court held that the question of taxation is one of fact, and cannot turn on theories or fictions.

141 Per Cranworth, Lord Chancellor; Wallace v. Attorney General, 1 Ch. App. 1. See chapter 4, § 47, subd. a.

risdiction to assess such a tax against the owner person. ally.142

(3) That as to real estate situate beyond the jurisdiction of the state, where the owner was domiciled at the time of his death, it is beyond the constitutional power of such state to tax the same by any direct tax.143

Accordingly, it has been held that the statute of Pennsylvania, passed in 1887,144 which attempted to impose a tax, and to make it a lien upon real estate situate in the state of Maryland, was, so far as the real estate was concerned, a direct tax thereon, and beyond the jurisdiction of the state, and the statute was held, pro tanto, unconstitutional.145 The court conceded, however, that the state might impose a succession tax upon such foreign real estate, where it belonged to a citizen, but not a direct tax.

(4) But in Pennsylvania, where real estate belonging to the citizen of the taxing state, and situate in a foreign country or state, and thus beyond the jurisdiction of the owner's domicile, be directed by will to be converted into personalty, the tax may be imposed, as there is then an equitable conversion, and the tax is in reality only imposed upon the proceeds of the real estate.146

142 Cooley, Tax'n (2d Ed.) 21, citing People v. Supervisors of Chenango Co., 11 N. Y. 563. See Hilton v. Fenda, 86 N. Y. 339.

143 Appeal of Commonwealth (Bittinger's Estate) supra, distinguishing Com. y. Smith, 5 Pa. St. 142. See, also, Kintzing v. Hutchinson, 34 Leg. Int. 365, Fed. Cas. No. 7,834, and cases cited supra (section 15).

144 Laws Pa. 1887, p. 79, Appendix, III.

145 Appeal of Commonwealth (Bittinger's Estate) supra.

146 Miller v. Com. (1886) 111 Pa. St. 321, 2 Atl. 492; In re Williamson's Estate (1893) 153 Pa. St. 508, 26 Atl. 246, Mitchell, J., dissenting; In re Hale's Estate, 161 Pa. St. 181, 28 Atl. 1071; In re Howard, 5 Dem. Sur. 483, and cases cited chapter 4, where the subject of equitable conversion is considered. See, also, supra, section 15. Contra, In re Swift, 137 N. Y. 77, 32 N. E. 1096.

§ 30. Exemptions-When Constitutional.

In the absence of constitutional prohibitions, reasonable and fair exemptions under these statutes may be and are made, both as to persons in the direct or collateral line, and as to the value of the property passing, sought to be taxed. The provision of the federal constitution,147 that no state shall deny to any person within its jurisdiction the equal protection of its laws,148 was not intended to prevent a state from adjusting its system of taxation in all proper and reasonable ways.

It may, if it choose, exempt certain classes of property from any taxation at all, such as churches, libraries, and the property of charitable institutions. It may impose different specific taxes upon different trades and professions, and may vary the rates of excise upon different products. It may tax real and personal estate in a different manner. It may tax visible property only, and not tax securities for payment of money. It may allow deductions for indebtedness, or not allow them.149

So it has been held in New York that the legislature is not controlled as to the extent of taxation of property within the state, and, in imposing a special tax upon all persons within a certain class, there is no violation of fundamental

147 14th amendment.

148 Yet, in State v. Ferris (April, 1895) 9 Ohio Cir. Ct. R. 298, 300, affirmed as State ex rel. v. Ferris, 23 Wkly. Law Bul. (Ohio) July 1, 1895, 349, 352 (opinion will be published in N. E. Rep. as soon as handed down), the circuit court of Ohio declared the direct inheritance tax of that state invalid, as violating the clause of the 14th amendment to the United States constitution, providing that no state "shall deny to any person within its jurisdiction the equal protection of the law." The cases in the United States supreme court referred to in the text show that this provision has no relation to these laws. Supra, section 12.

140 Bell's Gap R. Co. v. Fennsylvania, 134 U. S. 237, 10 Sup. Ct.. 533; In re Sherwell's Estate, 125 N. Y. 379, 26 N. E. 464.