Rhode Island Hospital Trust Co v. Doughton

Citation70 L.Ed. 475,46 S.Ct. 256,43 A. L. R. 1374,270 U.S. 69
Decision Date01 March 1926
Docket NumberNo. 106,106
PartiesRHODE ISLAND HOSPITAL TRUST CO. v. DOUGHTON, Commissioner of Revenue of North Carolina
CourtUnited States Supreme Court

Messrs. John M. Robinson, of Charlotte, N. C., and W. R. Tillinghast and James C. Collins, both of Providence, R. I., for plaintiff in error.

[Argument of Counsel from pages 70-72 intentionally omitted] Mr. D. G. Brummitt, of Oxford, N. C., for defendant in error.

[Argument of Counsel from pages 73-77 intentionally omitted] Mr. Chief Justice TAFT delivered the opinion of the Court.

This is a writ of error to the Supreme Court of North Carolina in a consolidation of two causes, the first being an appeal to a superior court of the state by the plaintiff in error, the Rhode Island Hospital Trust Company, executor of George Briggs, from an inheritance tax assessment on the decedent's estate made by the commissioner of revenue of North Carolina, and the second being an action at law by the executor to recover the taxes paid by it on the assessment under protest. The superior court held that the inheritance taxes imposed by the commissioner of revenue of the state were lawful and that the executor was not entitled to recover them back as illegally collected. The Supreme Court of North Carolina affirmed this judgment. 121 S. E. 741, 187 N. C. 263.

The assignment of error of the executor is based on the invalidity under the Fourteenth Amendment of that part of the Revenue Act of 1919 of North Carolina (Public Laws, c. 90, § 6, subsec. 7), which provides:

'Sec. 6. From and after the passage of this act all real and personal property of whatever kind and nature 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 a resident of this state, whether the person or persons dying seized thereof be domiciled within or out of the state (or if the decedent was not a resident of this state at the time of his death, such property or any part thereof within this state), or any interest therein or income therefrom which shall be transferred by deed, grant sale, or gift, made in contemplation of the death of the grantor, bargainor, donor, or assignor, or intended to take effect in possession or enjoyment after such death, to any person or persons or to bodies corporate or politic, in trust or otherwise, or by reason whereof any person or body corporate or politic shall become beneficially entitled in possession or expectancy to any property or the income thereof, shall be and hereby is made subject to a tax for the benefit of the state. * * *

'Seventh. The words 'such property or any part thereof or interest therein within this state' shall include in its meaning bonds and shares of stock in any incorporated company, incorporated in any other state or country, when such incorporated company is the owner of property in this state, and if 50 per cent. or more of its property is located in this state, and when bonds or shares of stock in any such company not incorporated in this state, and owning property in this state, are transferred by inheritance, the valuation upon which the tax shall be computed shall be the proportion of the total value of such bonds or shares which the property owned by such company in this state bears to the total property owned by such company, and the exemptions allowed shall be the proportion of exemptions allowed by this act, as related to the total value of the property of the decedent.'

The seventh subsection further provides:

'Any incorporated company not incorporated in this state and owning property in this state which shall transfer on its books the bonds or shares of stock of any decedent holder of shares of stock in such company exceeding in par value $500, before the inheritance tax, if any, has been paid, shall become liable for the payment of the said tax, and any property held by such company in this state shall be subject to execution to satisfy same. A receipt or waiver signed by the state tax commission of North Carolina shall be full protection for any such company in the transfer of any such stock or bonds.'

George Briggs was a resident of the state of Rhode Island, and domiciled therein at the time of his death. He never resided in North Carolina. He died testate October 29, 1919, leaving a large estate. The plaintiff, Rhode Island Hospital Trust Company, was appointed executor of Briggs' will, and qualified as such before the municipal court of the city of Providence, R. I. Among other personal property passing to the executor under the will were shares of stock in the R. J. Reynolds Tobacco Company, which with declared dividends unpaid were valued at $115,634.50. The R. J. Reynolds Tobacco Company, hereinafter for brevity called the Tobacco Company, is a corporation created under the laws of the state of New Jersey. Section 1181 of the Consolidated Statutes of North Carolina provides that every foreign corporation, before being permitted to do business in North Carolina, shall file in the office of the secretary of state a copy of its charter, a statement of the amount of its capital stock, the amount actually issued, the principal office in North Carolina, the name of the agent in charge of the office, the character of the business which it transacts, and the name and post office addresses of its officers and directors. It is required to pay, for the use of the state, 29 cents for every $1,000 of its authorized capital stock, but in no case less than $25, nor more than $250. It may withdraw from the state upon paying a fee of $5, and filing in the office of the secretary of state a statement of its wish to do so. In August, 1906, the Tobacco Company filed its application under the statute and complied with the requirements, and a certificate granting authority to it to do business in the state was issued. Two-thirds in value of its entire property is in North Carolina. Since 1906, it has regularly paid the license and franchise tax required, and is still doing business in the state.

Briggs' certificates of stock in the Tobacco Company, passing under his will to his executor, were, none of them in the state of North Carolina at the time of his death, and never had been while they were owned by him. The commissioner of revenue of the state assessed an inheritance tax upon $77,089.67, 66 2/3 per cent. of the total value of Briggs' stock, amounting to $2,658.85. The plaintiff, as executor, applied to the office of the company in New Jersey to have this stock transferred to it as executor, in compliance with the will of Briggs. The company refused to do so, on the ground that under the law of North Carolina, already set forth, it would, by such transfer before the executor paid the transfer tax, subject itself to a penalty which could be exacted out of its property in that state. Thereupon the executor paid the tax under protest, and brought suit to recover it back.

The question here presented is whether North Carolina can validly impose a transfer or inheritance tax upon shares of stock owned by a nonresident in a business corporation of New Jersey, because the corporation does business and has two-thirds of its property within the limits of North Carolina. We think that the law of North Carolina, by which this is attempted, is invalid. It goes without saying that a state may not tax property which is not within its territorial jurisdiction. State Tax on Foreign Held Bonds, 15 Wall. 300, 21 L. Ed. 179; Louisville Ferry Co. v. Kentucky, 23 S. Ct. 463, 188 U. S. 385, 47 L. Ed. 513; Delaware Railroad v. Pennsylvania, 25 S. Ct. 669, 198 U. S. 341, 49 L. Ed. 1077; Union Transit Co. v. Kentucky, 26 S. Ct. 36, 199 U. S. 194, 50 L. Ed. 150, 4 Ann. Cas. 493; Metropolitan Life Insurance Co. v. New York, 27 S. Ct. 499, 205 U. S. 395, 399, 51 L. Ed. 853; United States v. Bennett, 34 S. Ct. 433, 232 U. S. 299, 306, 58 L. Ed. 612; International Paper Co. v. Massachusetts, 38 S. Ct. 292, 246 U. S....

To continue reading

Request your trial
106 cases
  • Commonwealth v. Stewart
    • United States
    • Pennsylvania Supreme Court
    • 25 Marzo 1940
    ...cases on the ground that the taxes were transfer and not property taxes, but as was said in Rhode Island Hospital Trust Co. v. Doughton, 270 U.S. 69, 80, 81, 46 S.Ct. 256, 258, 70 L.Ed. 475, 43 A.L.R. 1374: "The tax here is not upon property, but upon the right of succession to property; bu......
  • Miller Bros Co v. State of Maryland
    • United States
    • U.S. Supreme Court
    • 5 Abril 1954
    ...Portland Cement Co. v. Massachusetts, 268 U.S. 203, 217—218, 45 S.Ct. 477, 480, 481, 69 L.Ed. 916; Rhode Island Hospital Trust Co. v. Doughton, 270 U.S. 69, 46 S.Ct. 256, 70 L.Ed. 475; Hans Ress' Sons, Inc., v. North Carolina ex rel. Maxwell, 283 U.S. 123, 51 S.Ct. 385, 75 L.Ed. 879; Connec......
  • State Tax Commission of Utah v. Aldrich
    • United States
    • U.S. Supreme Court
    • 27 Abril 1942
    ...of Pennsylvania, 268 U.S. 473, 497, 45 S.Ct. 603, 69 L.Ed. 1058, 42 A.L.R. 316; Rhode Island Hospital Trust Co. v. Doughton, 270 U.S. 69, 81, 46 S.Ct. 256, 258, 70 L.Ed. 475, 43 A.L.R. 1374. As stated by Chief Justice Marshall in McCulloch v. Maryland, 4 Wheat. 316, 429, 4 L.Ed. 579, the po......
  • Walker v. United States, 10415.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • 30 Marzo 1936
    ... ... 418, 75 L.Ed. 1049; Heiner v. Colonial Trust Co., 275 U.S. 232, 235, 48 S.Ct. 65, 72 L.Ed. 256; Provost ... Johnson, 271 U.S. 1, 6, 46 S.Ct. 415, 70 L.Ed. 795; Rhode Island Trust Co. v. Doughton, 270 U.S. 69, 80, 46 S.Ct ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT