Mrs Camille Cahen v. John Brewster

• Decision Date: 24 December 1906
• Docket Number: No. 91,91
• Citation: 27 S.Ct. 174,51 L.Ed. 310,203 U.S. 543,8 Ann. Cas. 215
• Parties: MRS. CAMILLE CAHEN, Mrs. Julie Kahn, Eva Cahen, et al., Plffs. in Err., v. JOHN BREWSTER, Tax Collector for the Second District of the City of New Orleans, State of Louisiana, and Andrew H. Wilson, President School Board of the City of New Orleans, State of Louisiana
• Court: U.S. Supreme Court

203 U.S. 543

27 S.Ct. 174

51 L.Ed. 310

MRS. CAMILLE CAHEN, Mrs. Julie Kahn, Eva Cahen, et al., Plffs. in Err.,

v JOHN BREWSTER, Tax Collector for the Second District of the City of New Orleans, State of Louisiana, and Andrew H. Wilson, President School Board of the City of New Orleans, State of Louisiana.

No. 91

Argued November 9, 1906.

Decided December 24, 1906.

Messrs. Charles Rosen and Gustave Lemle for plaintiffs in error.

[Argument of Counsel from pages 544-546 intentionally omitted] Mr. F. C. Zacharie for defendants in error.

[Argument of Counsel from Page 546 intentionally omitted]

Mr. Justice McKenna delivered the opinion of the court:

The case involves the validity, under the Constitution of the United States, of a burden imposed under the inheritance tax law of the state of Louisiana, passed June 28, 1904.

Mathias Levy, a resident of New Orleans, died in that city May 26, 1904. He was unmarried and left no ascendants, and was, therefore, without forced heirs. He left a last will and testament of the date of December 23, 1903, in which he named executors and made sundry particular bequests to charitable institutions. He bequeathed the balance of his estate, in equal shares, to his two nieces, Camille Cahen and Julie Kahn, constituting them thereby his universal legatees and instituted heirs.

The will was duly probated in the civil district court for the parish of Orleans, May 30, 1904. An inventory of his estate was taken June 9, 1904, and a supplementary inventory August 3, 1904. The inventories showed the total appraised value of the estate to be $64,676.05. Of this amount, after deducting the debts and charges of the estate and particular legacies, there was left, as the portion going to the universal legatees, $42,927.94.

The final accounting and tableau of distribution was filed August 3, 1904, and approved and homologated by judgment August 16, and the funds ordered to be distributed.

October 16 a motion was made for a rule on the executors to show cause why they should not pay over the legacies as ordered. In answer to which the executors replied that they were willing to do so, but that it was announced to them by the president of the school board of the parish that he intended to claim in behalf of said board a tax under the inheritance tax law of the state on the funds in their hands 'and the shares coming to said movers.' The executors also alleged the unconstitutionality of the tax and prayed that the school board of the parish, through its president, Andrew H. Wilson, be made a party to the proceedings. Wilson appeared and averred that the taxes were due the state, and not to the school board, and were collectible by the state tax collector, and 'that this suit and the matters at issue herein should be litigated contradictorily with the state tax collector for the district in which the deceased resided when he departed this life.'

The tax collector appeared. The agents and attorneys in fact of the legatees answered the demand of the school board to be paid the tax that $10,000 of the estate was in United States bonds, and not subject to taxation by the state, and averred that an inheritance tax was not due 'to said board for the reason that said act has no application to the property under this succession or the legacies due to said movers in the motion aforesaid; that to give it such application would be to make said act retroactive and devest the vested rights of the said movers in said rule, which would be in violation of the Constitution of this state, and especially article 166 thereof, and in violation of the Constitution of the United States of America, and especially § 9 of article 1, and the 5th and 14th Amendments thereof, and in violation of the laws of the state and of the land; that it would be a deprivation of property without due process of law and a denial of the equal protection of the laws, in violation of the 5th and 14th Amendments of the Constitution of the United States of America.'

Judgment was rendered in favor of the tax collector, condemning the executors to pay the tax, less the amount of United States bonds, and less the charitable and religious bequests. The judgment was affirmed by the supreme court of the state.

The law imposes a tax of 3 per cent 'on direct inheritances and donations to ascendants or descendants,' and 10 per cent upon donations or inheritances to collaterals or strangers. It is provided that the tax is 'to be collected on all successions not finally closed and administered upon, and all successions hereafter opened.'¹ It will be observed that when Levy died, May 26, 1904, and when the will was probated, May 30, 1904, there was no inheritance tax in Louisiana. The act in controversy was passed June 28, 1904.

In support of the attack made upon the law, it is contended that an inheritance tax is not a tax on property, but on the right or privilege of inheriting, and that the right in the case at bar had been exercised at the moment of the testator's death under the then-existing law, and 'to pass a law exacting such a tax and make it retroactive so as to devest a right previously acquired under then-existing laws is a deprivation of property already acquired, without due process of law, prohibited by the 14th Amendment of the Constitution of the United States.'

To sustain their propositions the plaintiffs in error cite certain articles of the Louisiana Civil Code.¹ And it is urged as indubitable that, under the law of Louisiana, a succession is acquired by the legal heir immediately after the death of the deceased, and, by the express terms of the Code, this rule applies to testamentary heirs, to instituted heirs, and universal legatees. In other words, that the acquisition of the succession by plaintiffs in error was at the very moment of Levy's death, and, therefore, necessarily before the act imposing inheritance taxes was passed. To sustain their view plaintiffs in error cite a number of cases decided prior to the decision of the case at bar, and the case of Tulane University v. Board of Assessors, 115 La. 1026, 40 So. 445, decided since the decision in the case at bar. Having established, as it is contended, that by operation of law the property is transmitted immediately from the testator to the heirs, it is also contended that from the very definition of an inheritance tax none could be imposed on plaintiffs in error as legatees of Levy.

For definitions of an inheritance tax plaintiffs in error adduce United States v. Perkins, 163 U. S. 625, 41 L. ed. 287, 16 Sup. Ct. Rep. 1073; Magoun v. Illinois Trust & Sav. Bank, 170 U. S. 283, 42 L. ed. 1037, 18 Sup. Ct. Rep. 594; Knowlton v. Moore, 178 U. S. 41, 44 L. ed. 969, 20 Sup. Ct. Rep. 747. The tax was defined in the Perkins Case to be 'not a tax upon the property itself, but upon its transmission by will or descent;' and in the Magoun Case, 'not one on property, but one on the succession.' In Knowlton v. Moore it was said that such taxes 'rest in their essence upon the principle that death is...