Mann v. State

• Decision Date: 05 November 1907
• Citation: 68 A. 130,74 N.H. 345
• Parties: MANN v. STATE TREASURER.
• Court: New Hampshire Supreme Court

68 A. 130

74 N.H. 345

MANN

v. STATE TREASURER.

Supreme Court of New Hampshire. Hillsborough.

Nov. 5, 1907.

Exceptions from Superior Court, Hillsborough County.

Proceedings by Bushrod W. Mann, executor of Susan H. Mann, deceased, for the assessment of a collateral inheritance tax imposed by Laws 1905, p. 432, c. 40. There was a judgment of the superior court sustaining the appeal of the State Treasurer from a decree of the probate judge adjudging that certain property was not subject to the tax, and the executor excepts. Exception overruled, and appeal sustained.

George B. French, for plaintiff. Edwin G. Eastman, Atty. Gen., and Joseph S. Matthews, for defendant

WALKER, J. The plaintiff is the executor, under an appointment from the probate court of Hillsborough county, of Susan H. Mann, who died June 5, 1905, and who was at that time a resident of Nashua, in this state. A considerable part of her estate consisted of deposits in savings banks located in Massachusetts. The plaintiff was also appointed ancillary executor of her estate in that state. April 6, 1906, he applied to the probate court of Hillsborough county to determine the question whether the deposits are subject to the collateral inheritance tax provided by the laws of this state. The judge of probate decreed that they were not subject to that tax, and the defendant appealed. The superior court sustained the appeal, and the plaintiff excepted. The laws of Massachusetts, if material, are made a part of the case.

In the recent case of Thompson v. Kidder, 74 N. H. 89, 65 Atl. 392, it was decided that the statute imposing a tax upon collateral legacies and successions (Laws 1905, p. 432, c. 40) is not in conflict with the Constitution as amended in 1903. The main point of that decision was that the Constitution was amended for the purpose of authorizing the Legislature to impose an inheritance tax upon the estates of deceased persons, under certain conditions, and that that purpose must be given an effect, though it introduces into the fundamental law ideas of disproportion in the raising of the public revenue antagonistic to those previously entertained on the subject of general taxation. No jurisdictional question was raised in that case. The deceased was domiciled in this state, and his entire estate, so far as appeared, was located and had its situs here. In the present case, while the deceased had her domicile here at the time of her death, a part of her estate consisted of deposits in savings institutions in another state, and it is insisted that the money so deposited is not subject to our inheritance tax law. The Legislature of 1905 passed an act entitled, "An act imposing a tax on collateral legacies and successions," the first section of which is as follows: "All property within the jurisdiction of the state, real or personal, and any interest therein, whether belonging to inhabitants of the state or not, which shall pass by will, or by the laws regulating intestate succession, or by deed, grant, sale, or gift, made or intended to take effect in possession or enjoyment after the death of the grantor, to any person, absolutely or in trust, except to or for the use of the father, mother, husband, wife, lineal descendant, brother, sister, adopted child, the lineal descendant of any adopted child, the wife or widow of a son, or the husband of a daughter, of a decedent, or to or for the use of charitable, educational, or religious societies or institutions in this state the property of which is by law exempt from taxation, or to a city or town in this state for public purposes, shall be subject to a tax of five per cent. of its value, for the use of the state; and administrators, executors, and trustees, and any such grantees under a conveyance made during the grantor's life, shall be liable for such taxes, with interest, until the same have been paid." Laws 1905, p. 432, c. 40, § 1. The primary question presented is whether the Legislature intended by the language used to subject money deposited in a foreign savings bank to the duty, impost, or tax, when, upon the death of the depositor domiciled in this state, it passes to parties not within the exceptions enumerated. Whatever ambiguity there may be in the language of the Legislature in relation to this question, disappears upon a consideration of the material circumstances under which the statute was passed. The section quoted is almost a literal copy of section 1, c. 15, of the Revised Laws of Massachusetts (Mass. Laws 1891, p. 1028, c. 425, § 1), while the other sections of the act are substantially the same as the corresponding sections of the Massachusetts act. This coincidence is persuasive evidence of a practical re-enactment here of the foreign statute, and an adoption of the construction which the highest court of that state had given to it. Parsons v. Parsons, 67 N. H. 419, 420, 29 Atl. 999; Commonwealth v. Hartnett, 3 Gray (Mass.) 450; End. Stat. § 371. The Legislature is ordinarily presumed to have had in mind, when adopting the statutory language of another state, existing decisions of that state defining the extent and purpose of the statute, and to have used the identical language in the sense thus indicated. Frothingham v. Shaw, 175 Mass. 59, 55 N. E. 623, 78 Am. St. Rep. 475, was decided in 1899, six years before the enactment of our statute, and it was there held, upon a construction of the statute, that deposits in a foreign savings bank, belonging to the estate of a decedent resident in Massachusetts were "property within the jurisdiction of the commonwealth," within the meaning of Laws 1891, p. 1028, c. 425, § 1, and that the succession took place by virtue of the laws of the commonwealth. See, also, Callahan v. Woodbridge, 171 Mass. 595, 51 N. E. 176; Greves v. Shaw, 173 Mass. 205, 53 N. E. 372. That this construction was adopted by the Legislature when the act of 1905 was passed is therefore reasonably certain, unless there are countervailing considerations peculiar to the jurisprudence of this state which preclude the inference that the Legislature entertained that intention, or unless such an intention is so manifestly opposed to the recognized principles of judicial construction, as announced in our decisions, as to support the conclusion that the foreign decision was not discovered; or, if discovered, that it was not recognized as a correct exposition of the legislative purpose.

To hold that the decedent's deposits in another state, or her right to them, constituted property in this state, within the meaning of the act, is not only not in conflict with any decision of this court, but is supported by the weight of authority elsewhere. She was not a mere creditor of the institutions in which her money was deposited. If the legal title to the money she deposited passed to the bank receiving it (Berry v. Windham, 59 N. H. 288, 290, 47 Am. Rep. 202; Robinson v. Dover, 59 N. H. 521), she stood "in the same relation to the assets of the bank as stockholders to banks of discount." Cogswell v. Bank, 59 N. H. 43, 44. "The depositors are stockholders, and not creditors." Francestown Savings Bank Case, 63 N. H. 138, 142; Hall v. Paris, 59 N. H. 71; Bank Comm'rs v. Banking Co., 74 N. H. 292, 67 Atl. 583. And in Lewis v. Lynn Institution for Savings, 148 Mass. 235, 244, 19 N. E. 367, 1 L. R. A. 785, 12 Am. St Rep. 535, it is said that "to the depositors themselves the undertaking of the corporation is that it will receive and combine the deposits, and manage and use them to the best practicable advantage, according to the judgment of the trustees, and give to the depositors in just proportion among themselves the benefit of the result of such management. There is no absolute promise to repay to any depositor the full amount of his deposit at all events. Such a promise to one depositor would imply that in case of loss he should be repaid out of the deposits of others. But the promise or undertaking of the corporation is the same to all. There is no promise to pay one at the expense of others. The promise is, in effect, to pay each depositor in full, with his dividends, provided the assets are sufficient; and, if they are not sufficient, then to pay each one his proportionate share." It is thus apparent that the testatrix had a direct interest in the property, as well as in the management, of the banks in which she deposited her money, and that her position was in many respects analogous to that of a stockholder in a business corporation. She was, in fact, one of the owners of the property in the possession of the incorporated partnerships. If she had formed a partnership with two persons for the purpose of buying and selling real estate, and each of the partners had put in an equal amount of money, the property of the partnership purchased with money so invested would belong to the partners in equal shares, subject to the equitable rights of third parties; but her proprietary right to the property would not disappear if the partners became incorporated and carried on the business under a corporate name. The technical change in the form of ownership and management would not diminish her substantial rights as a beneficial owner of the property. Accordingly it is held that a stockholder's right is personal property, which has its situs for purposes of general taxation where the owner has his domicile. Helliwell, Stock & Stockh. § 11. And this principle is recognized and enforced in statutes relating to the taxation of stock in foreign corporations. "Personal property liable to taxation is * * * (3) stock in corporations located out of the state, owned by persons living in the state, except where either the stock or the property represented by it is taxed in the towns or states where the corporations are located." Pub. St. 1901, c. 55, § 7; Smith v. Exeter, 37 N. H. 556; Kimball v. Milford, 54 N. H. 406. Since corporate stock in a foreign corporation owned by a resident here...