Eidman v. Baldwin

• Decision Date: 18 June 1913
• Docket Number: 254.
• Parties: EIDMAN v. BALDWIN.
• Court: U.S. Court of Appeals — Second Circuit

206 F. 428

EIDMAN v. BALDWIN.

No. 254.

United States Court of Appeals, Second Circuit.

June 18, 1913

The relevant portions of the War Revenue Act are printed in the footnote. ^[1]

The inheritance taxes which were paid by the defendant in error as executor of John Daniell and to recover which this action was brought against the collector of internal revenue were assessed against certain leasehold interests-- Sailors' Snug Harbor leases-- belonging in his lifetime to said John Daniell and constituting a part of the residuary estate which passed under his will to his sons.

A. S Pratt, Asst. U.S. Atty., of New York City, for plaintiff in error.

F. S Fisher, of New York City (William H. Wadhams, of New York City, of counsel), for defendant in error.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

NOYES Circuit Judge.

The question in this case is whether the leasehold interests came within the phrase 'legacies or distributive shares arising from personal property' in the provision of the War Revenue Act already quoted. And as we think that the words 'legacies * * * arising from personal property' meant only that the property passing should be personal, the question may be narrowed to this: Were these leaseholds personal property within the act? ^[2]

The War Revenue Act did not define the term 'personal property' which it employed. It used, however, a term well known in the common law and which, in the absence of a statutory definition must be defined according to the common law. While there is no national common or customary law still in interpreting acts of Congress as well as state statutes resort must be had for the definition of terms to the system from which our judicial ideas and legal definitions were derived. As said by the Supreme Court in Keck v. United States, 172 U.S. 434, 19 Sup.Ct. 254, 43 L.Ed. 505, in interpreting the terms of a federal statute:

'That term had a well understood import at common law, and in the absence of a particularized definition of its significance in the statute creating it, resort must be had to the common law for the purpose of arriving at the meaning of a word.'

Now it is elementary that at common law personal property included leasehold interests in land. Such interests were estates less than the freehold and passed to the executor. Consequently a statute taxing personal property passing by legacy, taxes leaseholds so passing and the taxes in question were properly collected unless there be something in the origin and history of this statute which may be said to read into it a statutory definition contrary to the common law.

The War Revenue Act of 1898 was undoubtedly modeled upon the act of 1864 (Knowlton v. Moore, 178 U.S. 41, 20 Sup.Ct. 747, 44 L.Ed. 969) and if we could find in the latter statute a definition of the term 'personal property' or a definition of the term 'real estate' which would by exclusion define it, it would go a long way toward convincing us that a particularized definition of the term should be adopted. But the act of 1864 (Act June 30, 1864, c. 173, Sec. 126, 13 Stat. 287) merely defines real estate as follows:

'The term 'real estate' shall include all lands, tenements, and hereditaments, corporeal and incorporeal.'

This however, is merely the bringing together of two common law phrases which are substantially co-extensive. If leaseholds are not 'real estate' they are not 'lands, tenements or hereditaments.' And it is unquestionable that at common...