Isabella Blackstone v. Nathan Miller

Decision Date26 January 1903
Docket NumberNo. 423,423
Citation23 S.Ct. 277,188 U.S. 189,47 L.Ed. 439
PartiesISABELLA F. BLACKSTONE, Individually and as Executrix of the Last Will and Testament of Timothy B. Blackstone, Deceased, Piff. in Err. , v. NATHAN L. MILLER, Comptroller of the State of New York, and Edward M. Grout, Comptroller of the City of New York
CourtU.S. Supreme Court

Messrs. Edward W. Sheldon and Robert Wilkinson for plaintiff in error.

[Argument of Counsel from pages 189-195 intentionally omitted] Messrs. Louis Marshall and Julius Offenbach for defendants in error.

[Argument of Counsel from pages 195-202 intentionally omitted]

Page 202

Mr. Justice Holmes delivered the opinion of the court:

This is a writ of error to the surrogate's court of the county of New York. It is brought to review a decree of the court, sustained by the appellate division of the supreme court (69 App. Div. 127, 74 N. Y. Supp. 508), and by the court of appeals (171 N. Y. 682, 64 N. E. 1118), levying a tax on the transfer by will of certain property of Timothy B. Blackstone, the testator, who died domiciled in Illinois. The property consisted of a debt of $10,692.24, due to the deceased by a firm, and of the net sum of $4,843,456.72, held on a deposit account by the United States Trust Company of New York. The objection was taken seasonably upon the record that the transfer of this property could not be taxed in New York consistently with the Constitution of the United States.

The deposit in question represented the proceeds of railroad stock sold to a syndicate and handed to the trust company, which, by arrangement with the testator, held the proceeds subject to his order, paying interest in the meantime. Five days' notice of withdrawal was required, and if a draft was made upon the company it gave its check upon one of its banks

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of deposit. The fund had been held in this way from March 31, 1899, until the testator's death on May 26, 1900. It is probable, of course, that he did not intend to leave the fund there forever, and that he was looking out for investments, but he had not found them when he died. The tax is levied under a statute imposing a tax 'upon the transfer of any property, real or personal. . . . 2. When the transfer is by will or intestate law, of property within the state, and the decedent was a nonresident of the state at the time of his death.' Laws 1896, chap. 908, § 220, amended, Laws 1897, chap. 284, 3 Rev. Stat. Codes & Gen. Laws, 3d ed. 1901, p. 3592. The whole succession has been taxed in Illinois, the New York deposit being included in the appraisal of the estate. It is objected to the New York tax that the property was not within the state, and that the courts of New York had no jurisdiction; that if the property was within the state it was only transitorily there (Hays v. Pacific Mail S. S. Co. 17 How. 596, 599, 600, 15 L. ed. 254, 255), that the tax impairs the obligation of contracts, that it denies full faith and credit to the judgment taxing the inheritance in Illinois, that it deprives the executrix and legatees of privileges and immunities of citizens of the state of New York, and that it is contrary to the 14th Amendment.

In view of the state decisions it must be assumed that the New York statute is intended to reach the transfer of this proprerty if it can be reached. New Orleans v. Stempel, 175 U. S. 309, 316, 44 L. ed. 174, 20 Sup. Ct. Rep. 110; Morley v. Lake Shore & M. S. R. Co. 146 U. S. 162, 166, 36 L. ed. 925, 928, 13 Sup. Ct. Rep. 54. We also must take it to have been found that the property was not in transitu in such a sense as to withdraw it from the power of the state, if otherwise the right to tax the transfer belonged to the state. The property was delayed within the jurisdiction of New York an indefinite time, which had lasted for more than a year, so that this finding at least was justified. Kelley v. Rhoads, 188 U. S. 1, ante, p. 259, 23 Sup. Ct. Rep. 259. Both parties agree with the plain words of the law that the tax is a tax upon the transfer, not upon the deposit, and we need spend no time upon that. Therefore the naked question is whether the state has a right to tax the transfer of such deposit by will.

Page 204

The answer is somewhat obscured by the superficial fact that New York, like most other states, recognizes the law of the domicil as the law determining the right of universal succession. The domicil, naturally, must control a succession of that kind. Universal succession is the artificial continuance of the person of a deceased by an executor, heir, or the like, so far as succession to rights and obligations is concerned. It is a fiction, the historical origin of which is familiar to scholars, and it is this fiction that gives whatever meaning it has to the saying mobilia sequuntur personam. But being a fiction it is not allowed to obscure the facts, when the facts become important. To a considerable, although more or less varying, extent the succession determined by the law of the domicil is recognized in other jurisdictions. But it hardly needs illustration to show that the recognition is limited by the policy of the local law. Ancillary administrators pay the local debts before turning over the residue to be distributed, or distributing it themselves, according to the rules of the domicil. The title of the principal administrator, or of a foreign assignee in bankruptcy,—another type of universal succession,—is admitted in but a limited way or not at all. See Crapo v. Kelly, 16 Wall. 610, 21 L. ed. 430; Chipman v. Manufacturers' Nat. Bank, 156 Mass. 147-149, 30 N. E. 610.

To come closer to the point, no one doubts that succession to a tangible chattel may be taxed wherever the property is found, and none the less that the law of the situs accepts its rules of succession from the law of the domicil, or that by the law of the domicil the chattel is part of a universitas and is taken into account again in the succession tax there. Eidman v. Martinez, 184 U. S. 578, 586, 587, 592, 46 L. ed. 697, 702, 704 22 Sup. Ct. Rep. 515. See Mager v. Grima, 8 How. 490, 493, 12 L. ed. 1168; coe v. Errol, 116 U. S. 517, 524, 29 L. ed. 715, 717, 6 Sup. Ct. Rep. 475; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 22, 35 L. ed. 613, 616, 3 Inters. Com. Rep. 595, 11 Sup. Ct. Rep. 876; Magoun v. Illinois Trust & Sav. Bank, 170 U. S. 283, 42 L. ed. 1037, 18 Sup. Ct. Rep. 594; New Orleans v. Stempel, 175 U. S. 309, 44 L. ed. 174, 20 Sup. Ct. Rep. 110; Bristol v. Washington County, 177 U. S. 133, 44 L. ed. 701, 20 Sup. Ct. Rep. 585; and for state decisions, Re Romaine, 127 N. Y. 80, 12 L. R. A. 401, 27 N. E. 759; Callahan v. Woodbridge, 171 Mass. 595, 51 N. E. 176; Greves v. Shaw, 173 Mass. 205, 53 N. E. 372; Allen v. National State Bank, 92 Md. 509, 52 L. R. A. 760. 48 Atl. 78.

No doubt this power on the part of two states to tax on dif-

Page 205

ferent and more or less inconsistent principles leads some hardship. It may be regretted, also, that one and the same state should be seen taxing on the one hand according to the fact of power, and on the other, at the same time, according to the fiction that, in successions after death, Mobilia sequuntur personam and domicil governs the whole. But these inconsistencies infringe no rule of constitutional law. Coe v. Errol, 116 U. S. 517, 524, 29 L. ed. 715, 717, 6 Sup. Ct. Rep. 475; Knowlton v. Moore, 178 U. S. 41, 44 L. ed. 969, 20 Sup. Ct. Rep. 747.

The question, then, is narrowed to whether a distinction is to be taken between tangible chattels and the deposit in this case. There is no doubt that courts in New York and elsewhere have been loath to recognize a distinction for taxing purposes between what commonly is called money in the bank and actual coin in the pocket. The practical similarity more or less has obliterated the legal difference. Re Houdayer, 150 N. Y. 37, 34 L. R. A. 235, 44 N. E. 718; New Orleans v. Stempel, 175 U. S. 309, 316, 44 L. ed. 174, 178, 20 Sup. Ct. Rep. 110; City Nat. Bank v. Charles Baker Co. 180 Mass. 40, 42, 61 N. E. 223. In view of these cases and the decision in the present case, which followed them, a not very successful attempt was made to show that by reason of the facts which we have mentioned, and others, the deposit here was unlike an ordinary deposit in a bank. We shall not stop to discuss this aspect of the case, because we prefer to decide it upon a broader view.

If the transfer of the deposit necessarily depends upon and involves the law of New York for its exercise, or, in other words, if the transfer is subject to the power of the state of New York, then New York may subject the transfer to a tax. United States v. Perkins, 163 U. S. 625, 628, 629, 41 L. ed. 287, 288, 16 Sup. Ct. Rep. 1073; McCulloch v. Maryland, 4 Wheat. 316, 429, 4 L. ed. 579, 607. But it is plain that the transfer does depend upon the law of New York, not because of...

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