Orcutt's Appeal

• Decision Date: 02 May 1881
• Citation: 97 Pa. 179
• Parties: Orcutt's Appeal.
• Court: Pennsylvania Supreme Court

97 Pa. 179

Orcutt's Appeal.

Supreme Court of Pennsylvania.

February 8, 1881.

May 2, 1881.

February 8th 1881.

Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY, STERRETT, and GREEN, JJ.

Appeal from the Orphans' Court of Philadelphia county: Of July Term 1880, No. 97.

Joseph B. Townsend, for the appellant.—The question whether the personal estate, and choses in action in this state, of a decedent, who was at his death domiciled and resident in another state are liable to the collateral inheritance tax imposed by the laws of Pennsylvania, has long been doubted by the bar. Under the Act of April 7th 1826, Purd. Dig. 214, which first imposed collateral inheritance tax (and its supplement of April 22d 1846, Purd. Dig. 215, which increased the rate from two and one-half to five per cent.) the property taxable "being within this Commonwealth" was only such as may be left for distribution among legatees or volunteers after payment of debts and expenses of administration: Commonwealth's Appeal, 10 Casey 204. How is it possible to ascertain, in this case, what will be left, until after the executrix in New Jersey shall administer this ancillary fund with the rest of the estate? The New Jersey court can alone ascertain the balance for distribution among legatees.

The Act of March 11th 1850, sect. 3, Purd. Dig. 216, declares that the words "being within this Commonwealth," in the Act of 1826, shall be so construed as to relate to all persons who have been at the time of their decease, or may now be domiciled within this Commonwealth, as well as to estates.

The Act of April 10th 1849, sect. 4, Purd. Dig. 215, does in terms provide for the imposition of the tax on real or personal estate within this Commonwealth, belonging to non-residents at the time of their death. This act is entitled "An Act to create a sinking fund and to provide for the gradual and certain extinguishment of the debt of the Commonwealth," Pamph. L. 571.

This Act of 1849, was, I assert, absolutely repealed by the Act of April 22d 1858, Pamph. L. 470, entitled "An Act to establish a sinking fund for the payment of the public debt," the eighth section of which provides, "that the Sinking-Fund Act of 1849, and all laws inconsistent herewith, are hereby repealed." But sects. 11, 13 and 14 of the Act of April 10th 1849, have been reprinted in all the subsequent editions of Purdon's Digest with the following foot note by Mr. Brightly: "This is a portion of the Act of 1849, `to create a sinking fund;' but the ninth section of the Act 22d April 1858, has expressly repealed `the Sinking-Fund Act of 1849.' These sections, however, are retained in the digest, because it is impossible to suppose that the legislature intended, by this general repealing clause, to abrogate them; if the Act of 1858 has that effect, it was unadvisedly passed, and will, no doubt, be corrected. It is an instance of careless legislation which cannot be too severely reprobated."

If there is any force in legislative language, the repeal of the 11th, 13th and 14th sections of the Sinking Fund Act of 1849 was just as surely effected as the repeal of its other sections. Unless Mr. Brightly's notion, that the legislature did not comprehend what they were doing, is to have the force of a re-enactment of these sections, they do stand absolutely repealed.

It was settled in Short's Estate, 4 Harris 63, decided in 1851, after the Act of 1849 was passed, and before it was repealed, that the personalty of a citizen of Pennsylvania, whether derived from within the state or from any other state or county, was liable to the tax. This position has never been questioned. The legacy duty under the English statutes is applied in exactly the same way: In re Ewin, 1 C. & J. 157; Att'y-Gen. v. Napier, 6 Exch. 217, 220.

If the rule thus settled, both here and in England, be unquestioned, on what principle of justice or right ought the personalty of citizens of other states found here to be taxed? The only two cases which give any color of judicial authority for the imposition of the tax in a case like the present are Alexander's Estate, 4 Penna. Law Jour. 448, decided by Judge KING in 1845, and Commonwealth v. Smith, 5 Barr 142. In the former Judge KING held, in analogy to what were then the decisions of the English courts under their legacy-duty acts, that the personalty of a non-resident decedent was liable to this tax. But the English cases which he relied on have been overruled in England, and the contrary rule established there: Thomson v. Advocate-General, 13 Simons 153; Att'y-Gen. v. Napier, supra; 3 Williams on Executors (6th Am. ed.) 1745.

In Commonwealth v. Smith, 5 Barr 142, decided in 1847, the decedent, though he died in France, where he had resided some years prior to his death, called himself in his will "of the city of Philadelphia." The case, though mainly argued on the other ground, might well have been decided on the ground that the decedent was still a citizen of Pennsylvania. The dictum in the opinion of BURNSIDE, J., that domicile had nothing to do with the question, does not touch the reason of the decision.

Analogous decisions in the United States Courts are in our favor: Railroad Co. v. State of Pennsylvania, 15 Wall. 300; Murray v. City of Charleston, 6 Otto 433; Kintzing v. Hutchinson, 7 W. N. C. 226; Allen v. Philadelphia Sav. Fund, Id. 231. See also McKeen v. Northampton County, 13 Wright 519; Hilliard on Taxation 132.

There being no creditors or claimants in Pennsylvania, the case is not within the ruling of Dent's Appeal, 10 Harris 515, and kindred cases. If the rule adopted by the court below shall prevail, there will be double taxation in all cases where the state of which the decedent was a resident has a law imposing a collateral inheritance tax.

The Commonwealth was not represented by counsel.

Mr. Justice STERRETT delivered the opinion of the court, May 2d 1881.

The fund for distribution, $22,029.02, as shown by the account of the ancillary administrator, is the net proceeds of United States ten-forty bonds, which belonged to Wesley Grindle, a citizen of the state of New Jersey, and domiciled therein at the time of his decease in June 1879. The bonds deposited by the decedent with the Fidelity Insurance, Trust and Safe Deposit Company of Philadelphia for safe keeping, had been called for redemption, and being over due, were payable on presentation at the United States Treasury. By his last will and testament the decedent gave a legacy of $2000 to his mother, and bequeathed the entire residue of his estate, in equal proportions, to his brothers and sisters, all of whom reside in the states of New Jersey and New York. The will was probated in New Jersey, and in December 1879 letters testamentary were duly granted by the surrogate to appellant, the executrix therein named. The Fidelity Company, claiming that for its protection ancillary letters should be taken out in this state, declined to deliver the bond to the executrix. Letters of administration were accordingly granted by the register of wills in Philadelphia to the accountant, who collected the bonds and filed an account showing the above balance of cash on hand. The administration under these letters was purely ancillary to that of the executrix in New Jersey, and inasmuch as there appear to be no creditors, legatees or distributees in this state, the fund, after deducting all proper charges, must be...