Kinney v. Stevens

• Decision Date: 04 January 1911
• Citation: 93 N.E. 586,207 Mass. 368
• Parties: KINNEY v. STEVENS, Treasurer.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

207 Mass. 368

93 N.E. 586

KINNEY v. STEVENS, Treasurer.

Supreme Judicial Court of Massachusetts, Middlesex.

January 4, 1911

Jan. 4 1911.

COUNSEL

Dana Malone, Atty. Gen., and Fred T. Field, Asst. Atty. Gen., for appellant.

Frank Gaylord Cook, for appellees Rugg and others.

OPINION

KNOWLTON C.J.

This is a petition brought by the executor of a foreign will for instructions as to whether certain promissory notes secured by mortgages upon real estate in Massachusetts, and one note secured by an assignment of an interest in a real estate trust, all belonging to the testator at the time of his death, are subject to a succession tax under the laws of this commonwealth. The notes were all in his possession at his domicile in New Hampshire.

St 1907, c. 563, § 1, as amended by St. 1909, c. 268, and by St. 1909, c. 527, § 1, under which the respondent claims the tax, includes 'all property within the jurisdiction of the commonwealth, corporal and incorporeal, and any interest therein, whether belonging to the inhabitants of the commonwealth or not,' and makes it subject to a tax upon the succession, if it passes by will or the laws regulating intestate succession, with certain exceptions which we need not consider. This language indicates an intention on the part of the Legislature to tax all property that it has the power to tax. The statute is as broad as the jurisdiction of the commonwealth. The question before us is whether these securities are property within the jurisdiction of the commonwealth, in reference to taxation upon the succession.

Under the laws of Massachusetts a mortgagee takes, not merely a lien upon the land as security, but he holds the legal title to it, subject to a right of redemption in the mortgagor. The interest of the mortgagee is made subject to taxation by our statutes, and the property taxable to the mortgagor is diminished by a deduction of the value of the interest held by the mortgagee. St. 1909, c. 490, pt. 1, §§ 16, 18, 45; Sullivan v. Boston, 198 Mass. 119-124, 84 N.E. 443. While, for general purposes, the interest of the mortgagee is treated as personal property, it has a local situs, and carries with it an ownership of the land until it is redeemed by the payment of the debt in performance of the condition. The debt, which is the obligation of the debtor to pay, and the land, which is the security for the payment of the debt, are individual parts of a single valuable property in the mortgagee, which may be made available in different ways. The debt belongs with the mortgage, and it must coexist to give the mortgage validity. For that purpose it has a situs within the jurisdiction of the state where the land lies. It was held in McCurdy v. McCurdy, 197 Mass. 248, 83 N.E. 881, 16 L. R. A. (N. S.) 329, that the tax upon the succession to real estate in this commonwealth, which belonged to a decedent in another state and was subject to a mortgage, was to be assessed only upon the value of the property above the mortgage. This was upon the ground that what passed upon the death of the mortgagor was only the value of his interest, which was the value of the real estate less the amount of the debt that was a charge upon it. This was equivalent to holding that, upon the death of the mortgagee, his interest in the real estate, to the amount of his debt, would pass in succession to his representatives.

The same doctrine has been held in states where the mortgagee has only a lien upon real estate. It is the law of the Supreme Court of the United States. Savings and Loan Society v. Multnomah County, 169 U.S. 421, 18 S.Ct. 392, 42 L.Ed. 803; Bristol v. Washington County, 177 U.S 133, 20 S.Ct. 585, 44 L.Ed. 701. It is also established by well-reasoned opinions of courts in several states. Allen v. National State Bank, 92 Md. 509, 48 A. 78, 52 L. R. A. 760, 84 Am. St. Rep. 517; In re Merriam's Estate, 147 Mich. 630, 111 N.W. 196, 9 L. R. A. (N. S.) 1104, 118 Am. St. Rep. 561; In re Rogers' Estate, 149 Mich. 305, 112...