Stebbins v. Riley, No. 227

CourtUnited States Supreme Court
Writing for the CourtSTONE
Citation268 U.S. 137,45 S.Ct. 424,69 L.Ed. 884
Decision Date13 April 1925
Docket NumberNo. 227
PartiesSTEBBINS et al. v. RILEY, State Controller

268 U.S. 137
45 S.Ct. 424
69 L.Ed. 884
STEBBINS et al.

v.

RILEY, State Controller.

No. 227.
Argued March 9, 1925.
Decided April 13, 1925.

Page 138

Mr. Carey Van Fleet, of San Francisco, Cal., for plaintiffs in error.

Mr. R. W. Smith, of Sacramento, Cal., for defendant in error.

Mr. Justice STONE delivered the opinion of the Court.

This case is here on a writ of error to the Supreme Court of California to review the determination of that court upholding the constitutionality of the Inheritance Tax Act of the state of California enacted in 1917 (St. 1917, p. 880), particularly subdivision 10 of section 2 of the act, which prescribes the

Page 139

method of determining the market value of the property transferred, for the purpose of fixing the amount of the tax. Subdivision 10 of section 2 reads as follows:

'In determining the market value of the property transferred, no deduction shall be made for any inheritance tax or estate tax paid to the government of the United States.'

The decedent left a gross estate exceeding $1,800,000, on which the federal estate tax amounted to the sum of $128,730.08. In fixing the amount of inheritance tax due to the state of California upon the residuary legacies, the state tax appraiser, acting pursuant to the provisions of subdivision 10 of section 2, did not deduct the amount of federal estate tax. In consequence the total amount of state tax assessed upon the residuary estate was $37,699.30 greater than it would have been, had the federal estate tax been deducted from the residuum of the estate before fixing the amount of the state tax. The superior court of San Francisco county, having jurisdiction in the premises, confirmed the tax, and the Supreme Court of California, on writ of error, held that the tax was in accordance with the laws and the Constitution of California, and was not a denial of due process or equal protection of the laws under the Fourteenth Amendment of the Constitution of the United States. Stebbins v. Riley, 191 Cal. 591, 217 P. 1073.

It is urged here that the California Inheritance Tax Act of 1917 is a succession tax; that the provision of the taxing law requiring that there shall be no deduction of the federal tax in fixing the fair value of the legacy on which the state tax is levied is an arbitrary discrimination, bearing no relation either to the persons succeeding to the decedent's estate or to the amount which the taxpayer taxes by succession; and that it is accordingly a taking of property without due process of law, and because of the inequalities in the amount of the tax resulting

Page 140

from the application of the taxing statute to successions there is a denial of the equal protection of the laws. On the other hand, it is urged that the so-called 'right' of acquiring property by devise or descent is not a property right, but a mere privilege, the creature of state law, and the authority which confers it may impose conditions upon its exercise; that in consequence the state may tax the privilege, discriminating not only between the status of those who inherit and the amounts which they thus acquire, but discriminating likewise between inheritances or legacies of like amount which are transmitted from estates of varying size, if the discrimination is based upon or bears some reasonable relation to the size of the whole estate transmitted on the death of the decedent. In presenting this aspect of the case, it was argued by the appellant on the one hand that there was a natural right to inheritance entitled to the protection of the due process clause of the Fourteenth Amendment, and by the appellee on the other that the legislative authority could deny wholly the privilege of inheritance, and consequently could place unlimited burdens upon it.

There is much in judicial opinion to suggest that a state may impose any condition it chooses on the privilege of taking property by will or descent, or, indeed, that it may abolish that privilege altogether, and for this reason that a state is untrammeled in its power to tax the privilege. See Mager v. Grima, 8 How. 490, 12 L. Ed. 1168, United States v. Perkins, 163 U. S. 625, 16 S. Ct. 1073, 41 L. Ed. 287; Knowlton v. Moore, 178 U. S. 41, at page 55, 20 S. Ct. 747, 44 L. Ed. 969; Campbell v. California, 200 U. S. 87, at page 94, 26 S. Ct. 182, 50 L. Ed. 382.

But we do not find it necessary to discuss the issue thus raised, for it has been repeatedly held by this court that the power of testamentary disposition and the privilege of inheritance are subject to state taxation and state regulation and that regulatory taxing provisions, even though they produce inequalities in taxation, do not effect an unconstitutional taking of property, unless as

Page 141

was said in Dane v. Jackson, 256 U. S. 589, 599, 41 S. Ct. 566, 568 (65 L. Ed. 1107) the taxing statute 'results in such flagrant and palpable inequality between the burden imposed and the benefit received, as to amount to the arbitrary taking of property without compensation—'to spoliation under the guise of exerting the power of taxing," citing Bell's Gap R. Co. v. Pennsylvania, 137 U. S. 232, 237, 10 S. Ct. 533, 33 L. Ed. 892; Henderson Bridge Co. v. Henderson City, 173 U. S. 592, 615, 19 S. Ct. 553, 43 L. Ed. 823; Wagner v. Baltimore, 239 U. S. 207, 220, 36 S. Ct. 66, 60 L. Ed. 230.

The subject-matter of an inheritance taxing statute may be either the transmission or the exercise of the legal power of transmission of property by will or descent (United States v. Perkins, 163 U. S. 625, 629, 16 S. Ct. 1073, 41 L. Ed. 287; Plummer v. Coler, 178 U. S. 115, 125, 20 S. Ct. 829, ...

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143 practice notes
  • Gallagher's Will, In re, No. 5532
    • United States
    • New Mexico Supreme Court of New Mexico
    • March 28, 1953
    ...therefore an estate tax. Simco v. Shirk, 146 Tex. 259, 206 S.W.2d 221. See Brown v. State, 323 Mo. 138, 19 S.W.2d 12; Stebbins v. Riley, 268 U.S. 137, 45 S.Ct. 424, 69 L.Ed. Under the New Mexico statute, since the interest of the surviving wife is includible in determining the federal estat......
  • State ex rel. Knox v. Gulf, M. & N.R. Co., 25044
    • United States
    • Mississippi Supreme Court
    • June 1, 1925
    ...493, L. R. A. 1917D, 414, Ann. Cas, 1917B, 713; Tyee Realty Co. v. Anderson, 240 U.S. 115, 36 S.Ct. 281, 60 L.Ed. 554; Stebbins v. Riley, 268 U.S. 137, 45 S.Ct. 424, 69 L.Ed. 884; Alderman v. Wells, 85 S.C. 507, 67 S.E. 781, 27 L. R. A. (N. S.) 864, 21 Ann. Cas. 193; 4 Cooley on Taxation (4......
  • State ex rel. Transport Mfg. Co. v. Bates, No. 41456.
    • United States
    • United States State Supreme Court of Missouri
    • November 14, 1949
    ...ex rel. McClung v. Becker, 288 Mo. 607, 233 S.W. 54; Brashear Freight Lines v. Public Service Comm., 23 Fed. Supp. 865; Stebbins v. Riley, 268 U.S. 137, 69 L. Ed. 884, 45 S. Ct. 424; State v. Peterson, 159 Minn. 269, 198 N.W. 1011, 114 A.L.R. 855; Sec. 5728, R.S. 1939; Cape Girardeau v. Gro......
  • Walker v. United States, No. 10415.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • March 30, 1936
    ...L.Ed. 475, 43 A.L.R. 1374; Frick v. Pennsylvania, 268 U.S. 473, 492, 500, 45 S.Ct. 603, 69 L.Ed. 1058, 42 A.L.R. 316; Stebbins v. Riley, 268 U. S. 137, 140, 45 S.Ct. 424, 69 L.Ed. 884, 44 A.L.R. 1454; Edwards v. Slocum, 264 U.S. 61, 62, 44 S.Ct. 293, 68 L.Ed. 564; Y. M. C. A. v. Davis, 264 ......
  • Request a trial to view additional results
143 cases
  • Gallagher's Will, In re, No. 5532
    • United States
    • New Mexico Supreme Court of New Mexico
    • March 28, 1953
    ...therefore an estate tax. Simco v. Shirk, 146 Tex. 259, 206 S.W.2d 221. See Brown v. State, 323 Mo. 138, 19 S.W.2d 12; Stebbins v. Riley, 268 U.S. 137, 45 S.Ct. 424, 69 L.Ed. Under the New Mexico statute, since the interest of the surviving wife is includible in determining the federal estat......
  • State ex rel. Knox v. Gulf, M. & N.R. Co., 25044
    • United States
    • Mississippi Supreme Court
    • June 1, 1925
    ...493, L. R. A. 1917D, 414, Ann. Cas, 1917B, 713; Tyee Realty Co. v. Anderson, 240 U.S. 115, 36 S.Ct. 281, 60 L.Ed. 554; Stebbins v. Riley, 268 U.S. 137, 45 S.Ct. 424, 69 L.Ed. 884; Alderman v. Wells, 85 S.C. 507, 67 S.E. 781, 27 L. R. A. (N. S.) 864, 21 Ann. Cas. 193; 4 Cooley on Taxation (4......
  • State ex rel. Transport Mfg. Co. v. Bates, No. 41456.
    • United States
    • United States State Supreme Court of Missouri
    • November 14, 1949
    ...ex rel. McClung v. Becker, 288 Mo. 607, 233 S.W. 54; Brashear Freight Lines v. Public Service Comm., 23 Fed. Supp. 865; Stebbins v. Riley, 268 U.S. 137, 69 L. Ed. 884, 45 S. Ct. 424; State v. Peterson, 159 Minn. 269, 198 N.W. 1011, 114 A.L.R. 855; Sec. 5728, R.S. 1939; Cape Girardeau v. Gro......
  • Walker v. United States, No. 10415.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • March 30, 1936
    ...L.Ed. 475, 43 A.L.R. 1374; Frick v. Pennsylvania, 268 U.S. 473, 492, 500, 45 S.Ct. 603, 69 L.Ed. 1058, 42 A.L.R. 316; Stebbins v. Riley, 268 U. S. 137, 140, 45 S.Ct. 424, 69 L.Ed. 884, 44 A.L.R. 1454; Edwards v. Slocum, 264 U.S. 61, 62, 44 S.Ct. 293, 68 L.Ed. 564; Y. M. C. A. v. Davis, 264 ......
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