In re Application to Compel Payment by the Executors & Legatees of & Under the Last Will & Testament of McPherson

Citation10 N.E. 685,104 N.Y. 306
PartiesIn re Application to Compel Payment by the Executors and Legatees of and under the Last Will and Testament of MCPHERSON, Deceased, of the Tax Imposed by Chapter 483 of the Laws of 1885.
Decision Date01 February 1887
CourtNew York Court of Appeals

OPINION TEXT STARTS HERE

Leonard G. Hun, Eugene Burlingame, John F. Montignani, and Robert G. Scherer, for appellants.

Hugh Reilly, (Mark Cohn, of counsel,) for respondents.

EARL, J.

Mary McPherson died in the city of Albany, on the sixth day of February, 1886, leaving a will, which was admitted to probate by the surrogate of Albany county. In her will she bequeathed legacies to various persons who were in no way related to her, and, upon the petition of the district attorney of that county, the surrogate ordered the executors named in the will to pay the succession tax imposed by chapter 483 of the Laws of 1885. The executors and several of the legatees appealed from the decision of the surrogate to the general term, and from affirmance there to this court. The claim on the part of the appellants is that the act of 1885 is, for various reasons, unconstitutional and void; that the tax was not, therefore, lawfully imposed; and that its collection and payment cannot be rightfully enforced.

The first section of the act provides that, ‘after the passage of the act, all property which shall pass by will, or by the intestate laws of this state, from any person who may die seized or possessed of the same while being a resident of the state, or which property shall be within this state, or any part of such property, or any interest therein, or income therefrom, transferred by deed, grant, sale, or gift, made or intended to take effect in possession or enjoyment after the death of the grantor or bargainor, to any person or persons, or to a body politic or corporate, in trust or otherwise, or by reason whereof any person or body politic or corporate shall become beneficially entitled, in possession or expectancy, to any property, or the income thereof, other than to or for the use of father, mother, husband, wife, children, brother, and sister, and lineal descendants born in lawful wedlock, and the wife or widow of a son and the husband of a daughter, and the societies, corporations, and institutions now exempted by law from taxation, shall be and is subject to a tax of $5 on every $100 of the clear market value of such property, and at and after the same rate for any less amount, to be paid to the treasurer of the proper county, and in the city and county of New York to the comptroller thereof, for the use of the state; and all administrators, executors, and trustees shall be liable for any and all such taxes until the same shall have been paid, as hereinafter directed.’

We entertain no doubt that such a tax can be constitutionally imposed. The power of the legislature over the subject of taxation, except as limited by constitutional restrictions, is unbounded. It is for that body, in the exercise of its discretion, to select the objects of taxation. It may impose all the taxes upon lands, or all upon personal property, or all upon houses or upon incomes. It may raise revenue by capitation taxes, by special taxes upon carriages, horses, servants, dogs, franchises, and upon every species of property, and upon all kinds of business and trades. People v. Mayor of Brooklyn, 4 N. Y. 419;Stuart v. Palmer, 74 N. Y. 183;People v. Equitable Trust Co., 96 N. Y. 387;Portland Bank v. Apthorp, 12 Mass. 252; Cooley, Tax'n, 7. Taxes upon legacies and inheritanceshave been approved generally by writers upon political economy and systems of taxation, and no tax can be less burdensome, and interfere less with the productive and industrial agencies of society. Such taxes were imposed in Rome 2,000 years ago, and are now imposed in England and several of the continental countries of Europe, and in the states of Pennsylvania, Maryland, and Virginia, and perhaps other states of this country, ( Williams' Case, 3 Bland, Ch. 186, 259; Eyre v. Jacob, 14 Grat. 422;) and in 1864 (13 U. S. St. at Large, 287) a tax was imposed by the federal government upon successions to real estate. The acts imposing such taxes have frequently come before the courts, and have uniformly been upheld. Carpenter v. Com., 17 How. 456;Scholey v. Rew, 23 Wall. 331;Clopp v. Mason, 94 U. S. 589;Wright v. Blakeslee, 101 U. S. 174;Mason v. Sargent, 104 U. S. 689;In re Short's Estate, 16 Pa. St. 63; Stinger v. Com., 26 Pa. St. 422; Com. v. Freedley, 21 Pa. St. 33; Strode v. Com., 52 Pa. St. 181; Miller v. Com., 27 Grat. 110;Tyson v. State, 28 Md. 578;State v. Dorsey, 6 Gill, 388;Williams' Case, 3 Bland, Ch. 186. The case of State v. Dorsey was a curious one, possible under a state of society long since passed in this country. There the bequest of freedom to a slave was held to be a legacy within the meaning and operation of the Maryland act imposing taxes upon legacies, and the executor was compelled to pay it.

It is not very important to determine in this case whether the act of 1885 is to be regarded as imposing a tax upon property, or upon the succession or devolution of property by will or intestacy. In either case it is a special tax. In the one case it is a tax upon the particular class of property, and in the other case a tax upon the succession or devolution of property, or the right to receive property in the cases mentioned in the statute. Whether it be one or the other, it is free from constitutional objection. It has never been questioned that the legislature can impose a tax upon all sales of property, upon all incomes, upon all acquisitions of property, upon all business, and upon all transfers. Taxes of a similar character were quite extensively imposed by the acts of congress passed during the late civil war. If this be regarded as a tax upon property, then it is free from constitutional objection if it be equally imposed and properly apportioned upon all the property of the class to which it belongs. A tax imposed for the general welfare upon a particular house, or the houses of a particular neighborhood, would be amenable to constitutional objection; but, if imposed upon all the houses in the state, then it is a tax imposed upon all property of that class, and is amenable to no objection.

It is also objected that this tax is not constitutionally imposed because there is no compliance in the act with section 20 of article 3 of the constitution of this state, which provides that ‘every law which imposes, continues, or revives a tax shall distinctly state the tax, and the object to which it is to be applied, and it shall not be sufficient to refer to any other law to fix such tax or object.’ Section 1 of this act requires that this tax shall be paid ‘for the use of the state,’ and that is the only designation of the object to which the tax is to be applied. If we were obliged to hold that this constitutional provision is applicable to this case, we should have difficulty to determine that the object of the tax is sufficiently stated. It has been held that the object is sufficiently stated if the act imposing a tax provides that it shall be paid to the credit of the general fund. People v. Supervisors Orange Co., 17 N. Y. 239;People v. Home Ins. Co., 92 N. Y. 335. The decision which first announced this doctrine greatly impaired the value of the constitutional provision, because, when the tax has once been paid into the general fund, it may be appropriated by the legislature to any of the innumerable objects, ordinary and extraordinary, for which the state may need money; and thus any information given to members of the legislature or to tax-payers by such a statement of the object of the tax is more illusory than real. But it must be assumed that the constitutional provision still has some value, and it should not be entirely nullified by judicial construction, as it would be if we should hold that this act sufficiently states the object of the tax within the meaning of the constitution.

But we are of opinion that this section of the constitution is not applicable to this case. In terms it applies to every tax which the legislature can impose, and is not confined to a property tax. It is not, even by its terms, confined to a general tax embracing the whole state; but the language, literally construed, is broad enough to embrace every local tax imposed for local purposes. As stated above, taxes may be imposed upon a great variety ofobjects. They may be direct or indirect, special or general, and they may be imposed, in the shape of excise and licenses, upon hawkers, peddlers, auctioneers, insurance agents, liquor dealers, and others. All the contributions for the support of the government, enforced from individuals in the various ways mentioned, are, properly speaking, taxes. Notwithstanding the general language of the section referred to, we do not think it was intended to apply to every tax which the legislature could impose, and so it has been held.

The object of the constitutional provision was to convey information to the members of the legislature and to the people, and it should have a practical construction, with a view to accomplish its purpose so far as attainable, and to carry out the policy which we may assume dictated it. The tax imposed by this act is a permanent one. It is always uncertain upon whom it will fall, and how much revenue it will produce.

It would have been impossible for the legislature, perhaps years in advance, to specify the particular objects to which the tax should be applied, and we are of opinion that this section of the constitution was intended to apply to the annually recurring taxes known at the time of the adoption of the constitution, and imposed generally upon the entire property of the state. The legislature would know definitely the objects for which such taxes were imposed, and could anticipate with some certainty the amount which they would produce; and in...

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