In re Stixrud's Estate

Decision Date14 May 1910
Citation58 Wash. 339,109 P. 343
CourtWashington Supreme Court
PartiesIn re STIXRUD'S ESTATE.

Appeal from Superior Court, Thurston County; John R. Mitchell Judge.

In the matter of the estate of Peder G. Stixrud, deceased. From an order directing payment of an inheritance tax, Johan E Stixrud and another appeal. Reversed, with instructions.

S. S Langland and Bausman & Kelleher, for appellants.

J. E. Frost and T. D. Rockwell, for respondent.

PARKER J.

Peder G. Stixrud, a naturalized citizen of the United States and a resident of this state, died at Olympia in January, 1908. He left a will by which he devised all of his property both real and personal to his brother and sister, Johan E. Stixrud and Petronella Stixrud, who were then residents and citizens of Norway. In February, 1908, letters of administration with the will annexed were granted upon the estate of Peder G. Stixrud, and upon the settlement of the estate it was determined by the superior court for Thurston county that the portion of the estate passing to the devisees under the will, after payment of debts and expenses of administration, was subject to an inheritance tax of 25 per cent. An order was entered accordingly, directing payment of such inheritance tax computed at this rate. From this order the devisees Johan E. Stixrud and Petronella Stixrud, have appealed.

The law fixing the amount of the inheritance tax upon property passing by will or inheritance is section 2, Laws 1907, [58 Wash. 341] p. 500, and, so far as necessary for us to notice, is as follows: 'The inheritance tax shall be and is to be levied on all estates subject to the operation of this act on all sums above the first $10,000.00, where the same shall pass to or for the use of the father, mother, husband, wife, lineal descendant, adopted child, or the lineal descendant of an adopted child, one (1) per centum. On all sums not exceeding the first fifty thousand dollars, of three per centum, where such estate passes to collateral heirs to and including the third degree of relationship; * * * Provided, that on all sums passing to or for the benefit of collateral relatives or strangers of the blood, who are aliens not residing in the United States, a tax of twenty-five per centum shall be levied and collected.' Appellants being collateral heirs of the deceased within the third degree of relationship, it is plain that the inheritance tax upon the property they take under this will would only be 3 per cent., since the amount thereof is less than $50,000, unless the rate of the tax is controlled by the proviso fixing the rate at 25 per cent., where property passes to collateral relatives, who are aliens not residing in the United States.

Learned counsel for appellants contend that the property left to them by their deceased brother is liable to pay an inheritance tax of only 3 per cent., the same as if they were not aliens residing out of the United States at the time of their brother's death, by virtue of article 6 of the Treaty of Amity and Commerce of 1783 as revived by article 17 of the Treaty of Commerce of Navigation of 1827, still existing between Norway and Sweden and the United States, which provides: 'The subjects of the contracting parties in the respective states may freely dispose of their goods and effects by testament, donation or otherwise, in favor of such persons as they think proper, and their heirs in whatever place they shall reside, shall receive the succession even ab intestato either in person or by their attorney without having occasion to take out letters of naturalization. These inheritances as well as the capitals and effects which the subjects of the two parties in changing their dwelling, shall be desirous of removing from the place of their abode, shall be exempt from all duty called 'droit de detraction' on the part of the government of the two states respectively. But it is at the same time agreed, that nothing contained in this article shall in any manner derogate from the ordinances published, in Sweden against immigration, or which may hereafter be published, which shall remain in full force and vigor. The United States on their part, or any of them shall be at liberty to make respecting this matter, such laws as they think proper.' See 7 F. St. Ann. pp. 828, 835. By the second clause of article 6 of the Constitution of the United States it is declared: 'This Constitution, and the laws of the United States which shall be made in pursuance thereof, and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any state to the contrary notwithstanding.' It has become the settled law of this country that, when a law of a state comes in conflict with the provisions of a treaty entered into by the United States with a foreign country relating to a subject-matter within the treaty-making power, such law must give way and its application to the subject-matter covered by the treaty held in abeyance during the existence of the treaty. In Hauenstein v. Lynham, 100 U.S. 483, 490, 25 L.Ed. 628, Justice Swayne, speaking for the court, said: 'It must always be borne in mind that the Constitution, laws, and treaties of the United States are as much a part of the law of every state as its own local laws and Constitution. This is a fundamental principle in our system of complex national polity. See, also, Shanks v. Dupont, 3 Pet. 242 ; Foster & Elam v. Neilson, 2 Pet. 253 ; The Cherokee Tobacco, 11 Wall. 616 ; Mr. Pinkney's Speech, 3 Elliot's Constitutional Debates, 231; People, etc., v. Gerke & Clark, 5 Cal. 381.' It is equally well settled that the matter of removing the disability of aliens in order that they may have the same rights as citizens to acquire and hold property in the states of the Union is a proper subject of treaty regulation. Justice Field in speaking for the Supreme Court of the United States in De Geofroy v. Riggs, 133 U.S. 258, 266, 10 S.Ct. 295, 296, 33 L.Ed. 642, said: 'That the treaty power of the United States extends to all proper subjects of negotiation between our government and the governments of other nations is clear. It is also clear that the protection which should be afforded to the citizens of one country owning property in another, and the manner in which that property may be transferred, devised, or inherited, are fitting subjects for such negotiation and of regulation by mutual stipulations between the two countries.' The state courts at the present day have uniformly given their assent to this doctrine. Blythe v. Hinckley, 127 Cal. 431, 59 P. 787; Dockstader v. Kershaw, 4 Pennewill (Del.) 398, 55 A. 341; Wunderle v. Wunderle, 144 Ill. 40, 33 N.E. 195, 19 L. R. A. 84; Opel v. Shoup, 100 Iowa, 407, 69 N.W. 560, 37 L. R. A. 583; Yeaker's Heirs v. Yeaker's Heirs, 4 Metc. (Ky.) 33, 81 Am. Dec. 530; Baker v. Shy, 9 Heisk. (Tenn.) 85; Succession of Rabasse, 47 La. Ann. 1453, 17 So. 867, 49 Am. St. Rep. 433; Kull v. Kull, 37 Hun (N. Y.) 476.

These firmly established principles are not denied by learned counsel for the state, but they contend that there is nothing in this treaty to prevent a sovereign state of the Union from collecting an inheritance tax from alien heirs or devisees of a citizen of the United States upon property in the United States; that this article was adopted for the protection of the citizens of Sweden and Norway residing in the United States and citizens of the United States residing in Sweden and Norway; that it does not seem possible that our government would think it necessary to make a treaty with a foreign country for the protection and benefit of a citizen's property at home, he being protected and subject only to the laws of his country. These contentions are apparently based on the theory that the paramount consideration in the interpretation of this treaty is the right of the deceased to dispose of his property by testament or have it pass by descent to his heirs, rather than the right of his heirs to receive the succession. In other words, the argument seems to be that the treaty is designed to protect the rights of the deceased, rather than those who take from him; and hence, can have no application to the property of a deceased citizen passing to a citizen of the other country. Of course, one country would not be interested in the succession of property merely between citizens of the other; but it would be interested in the succession of property passing from a citizen of one country to citizens of the other, and clearly the power to dispose of property by testament by a citizen of the country where he resides and where his property is situated would affect the right of his devisee a citizen of the other country to receive such property. Under the same circumstances would each country be interested in the right of its citizens to inherit from citizens of the other. The principal authority relied upon by learned counsel in support of this argument is the case of Fredrickson et al. v. State of Louisiana, 23 How. 445, 16 L.Ed. 577. That case was brought into the Supreme Court of the United States from the Supreme Court of Louisiana by writ of error. There was involved a 10 per cent. inheritance tax levied by the state upon so much of the property of a deceased naturalized citizen of the United States residing at the time of his death in Louisiana as passed by his will to residents and subjects of the Kingdom of Wurtemberg. The statute under which the state claimed the tax, the treaty provisions relied upon by the legatees to avoid the tax, and the court's views touching their rights will be best understood by the following quotation from the...

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