Blodgett v. Silberman Silberman v. Blodgett

• Decision Date: 16 April 1928
• Docket Number: Nos. 190,191,s. 190
• Citation: 72 L.Ed. 749,48 S.Ct. 410,277 U.S. 1
• Parties: BLODGETT, Tax Com'r of State of Connecticut, v. SILBERMAN et al. SILBERMAN et al. v. BLODGETT, Tax Com'r of State of Connecticut
• Court: U.S. Supreme Court

277 U.S. 1

48 S.Ct. 410

72 L.Ed. 749

BLODGETT, Tax Com'r of State of Connecticut,

v SILBERMAN et al.

SILBERMAN et al.

v. BLODGETT, Tax Com'r of State of Connecticut.

Nos. 190, 191.

Argued March 12, 13, 1928.

Decided April 16, 1928.

Messrs. Charles E. Hughes, of New York City, and Farwell Knapp and Lucius F. Robinson, both of Hartford, Conn., for Blodgett.

Messrs. Abraham L. Gutman and Kenneth Dayton, both of New York City, for Silberman.

[Argument of Counsel from page 2 intentionally omitted] Mr. Seth T. Cole, of Albany, N. Y., for Tax Commissioner of New York and Commissioner of Corporations and Taxation of Massachusetts, as amici curiae by special leave of Court.

Mr. Chief Justice TAFT delivered the opinion of the Court.

These two cases, which are really one, grow out of the operation of a transfer tax by the state of Connecticut. They are brought to this Court, one by certiorari and one by writ of error. The questions presented are whether the tax on the transfer of certain parts of the large estate of Robert B. Hirsch was in violation of the due process clause of the Fourteenth Amendment to the Federal Constitution, in that they were tangible property in New York and not in Connecticut. Hirsch died September 23, 1924, domiciled at Stamford, Conn., leaving a will with two codicils executed in accordance with the laws of both New York and Connecticut. The plaintiffs are the surviving executors of the will. Hirsch left real estate, chattels, cattle, horses and poultry in Connecticut, and also a debt due from a resident of Connecticut and a certificate of stock in a Connecticut corporation, as to all of which there is no dispute about the tax that was imposed. The great bulk of his estate, however, consisted of (1) a large interest, as general partner, appraised at $1,687,245.34, in the partnership of William Openhym & Sons, doing business in New York, and organized under the Limited Partnership Act of that State; (2) certificates of stock in New York, New Jersey and Canada corporations, appraised at $277,864.25; (3) bonds and Treasury certificates of indebtedness of the United States, appraised at $615,121.17; (4) a small savings bank account in New York; (5) a life insurance policy in the Mutual Life Insurance Company of New York payable to the estate; and (6) a small amount of bank bills and coin in a deposit box in New York. All the bonds and certificates of stock at the time of the decedent's death, and for a long time prior thereto, had been physically placed and kept in safe deposit boxes in New York City and were never in Connecticut. The partnership assets consisted of real estate in New York and also in Connecticut, merchandise, chattels, credits, and other personal property. The testator bequeathed the larger part of his estate to charitable and educational corporations organized under the laws of New York and existing in that state. The executors offered the will and codicils for probate in New York. They were admitted to probate in the Surrogate's Court in the county of New York, and thereafter the executors proceeded in the settlement of the estate in New York. They have paid from the funds of the estate legacies provided in the will and codicils amounting to $299,297.45. They have also paid the debts, the federal estate tax and the New York transfer or inheritance tax, which amounted to $19,166.04. The transfer report in that court exempted the legacies bequeathed to charitable and educational institutions in accord with New York law. The executors have paid to the trustees named in the will and codicils the amount therein mentioned for the benefit of certain persons named. The executors sold the stocks standing in the name of the decedent and made transfer of the same to the purchaser, and the Mutual Life Insurance Company paid to the executors the proceeds of the policy. The National City Bank of New York paid to the executors the amount of a small deposit account therein to the credit of the decedent at the time of his death.

On January 8, 1925, the executors presented to the court of probate, for the Stamford district of Connecticut, an exemplified copy of the will and codicils from the record of the proceedings in the Surrogate's Court in New York, and on January 15, 1925, that court received the will and codicils, and accepted a bond for the executors and issued to them letters testamentary, made an order limiting the time for the presentation of claims, directed the filing of an inventory of all the property, including choses in action of the estate of the decedent, and appointed appraisers who made and filed the inventory of all the foregoing items of property belonging to the decedent at the time of his death.

On September 1, 1925, the executors filed in the probate court for the Stamford district, and with the tax commissioner for Connecticut, a statement under oath covering the property of the estate and the claimed deductions therefrom, all this for the purpose of determining the succession tax, if any, due the state of Connecticut. The tax commissioner thereafter, filed a copy of his computation of the tax with the probate court, to which the executors made objection, but that court, on December 4, 1925, made its order and decree approving the computation of $188,780.58, and directed the executors to pay this amount to the state treasurer.

From this order the plaintiff executors took an appeal to the superior court of Fairfield county, and then by stipulation of the parties the case was reserved for the advice and direction of the Supreme Court of Errors as to what judgment, decree or decision should be made or rendered thereon by the superior court.

The chief questions considered by the Supreme Court of Errors were, first, whether the interest of the decedent in the partnership of Openhym & Sons was subject to a transfer tax in Connecticut, and, second, whether the bonds of the United States and certificates of its indebted- ness were to be deemed tangible property in New York and beyond the taxing jurisdiction of the state of Connecticut. There were other questions of taxable jurisdiction over other items of the estate, but we shall consider these two first.

The Supreme Court of Errors held, first, that the interest of the decedent in the partnership was a chose in action and intangible, and the transfer thereof was subject to the tax imposed by the law of the decedent's domicile; second, that the bonds and certificates of the United States were tangible property having a situs in New York, and were not within the taxable jurisdiction of Connecticut, but were to be regarded as in the same class of tangibles as the paintings, works of art and furniture considered in the case of Frick v. Pennsylvania, 268 U. S. 473, 45 S. Ct. 603, 69 L. Ed. 1058, 42 A. L. R. 316, In that case, Pennsylvania, the state of Mr. Frick's domicile, sought to impose a transfer or succession tax on the paintings and other tangible personalty, which had always been in New York City, and it was held that they had an actual situs in New York, and that, under the Fourteenth Amendment, Pennsylvania could impose no transfer or succession tax in respect of them. Applying what it conceived to be the principle of that case to the bonds of the United States and certificates of its indebtedness in this, the Supreme Court of Errors held that their transfer could not be taxed in Connecticut.

The superior court, following the advice of the Supreme Court of Errors (Silberman, Appeal of (Conn.) 134 A. 778), entered a judgment giving full effect to it. That is the final judgment in the case, and it is the judgment now to be reviewed.

In No. 191 a writ of error was allowed by the Chief Justice of the Supreme Court of Errors and the presiding judge of the superior court in the state of Connecticut under section 237(a) of the Judicial Code, Act of February 13, 1925 (chapter 229, 43 Stat. 936, 937 (28 USCA § 344)), to the final and consolidated judgment of the superior court of Con- necticut as the highest court of the state in which a decision in the suit could be had, because there was drawn in question therein the validity of chapter 190 of the Public Acts of 1923 of Connecticut, on the ground of its being repugnant to the Constitution of the United States, and especially to the Fourteenth Amendment thereof, in that the statute as construed and applied by the superior court levied a succession tax on the transfer and succession of property and choses in action of the decedent which were within the jurisdiction of New York and not within the jurisdiction of Connecticut, the decedent's domicile.

In No. 190, the state tax commissioner applied for a writ of certiorari to the same consolidated judgment, and sought a reversal of that judgment in so far as it denied to the state of Connecticut, because of the Fourteenth Amendment to the Federal Constitution, the power and right created by its statute (chapter 190 of the Public Acts of 1923), to tax the transfer of the United States bonds and certificates of indebtedness and of $287.50 in bank notes and coin, all in a safe deposit box in the city and state of New York, as not within the taxing jurisdiction of Connecticut.

Had the Supreme Court of Errors put its ruling against the validity of part of the tax on the construction of the state Constitution or statute, we could not review that ruling, because it would have involved only a question of state law, but, so far as the ruling was put on the ground that the state could not impose the tax consistently with the due process of law clause of the Fourteenth Amendment, a federal question is presented which we may consider, and, when we have determined the federal questions, the cause will go back to the state court for further proceedings not inconsistent with our views on such federal questions. The Connecticut Succession and Transfer Act (chapter 190 of the Public Acts of 1923) says in its section 1:

'All...