Walker v. Mansfield

• Decision Date: 16 September 1915
• Citation: 221 Mass. 600,109 N.E. 647
• Parties: WALKER v. MANSFIELD, Treasurer, etc.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

221 Mass. 600

109 N.E. 647

WALKER

v.MANSFIELD, Treasurer, etc.

Supreme Judicial Court of Massachusetts, Berkshire.

Sept. 16, 1915.

Report from Supreme Judicial Court, Berkshire County.

Petition by Joseph R. Walker, administratrix c. t. a. of the estate of Anna Eliza Barnard, against Frederick W. Mansfield, Treasurer and Receiver General, to determine the liability of the estate for a succession tax. A decree for the administratrix was rendered by the probate court, from which an appeal was taken. On report from Supreme Judicial Court. Affirmed.

Phillips Ketchum and Edwin Merrick Dodd, Jr., both of Boston, for petitioner.

Henry C. Attwill, Atty. Gen., and Wm. Harold Hitchcock and Arthur E. Seagrave, Asst. Attys. Gen., for respondent.

RUGG, C. J.

This is a petition brought by the administrator with the will annexed of the estate of Anna Eliza Barnard, late of Sheffield in this commonwealth, to determine the liability of that estate to the commonwealth for a succession tax in respect of certain property held in trust by the Mercantile Trust & Deposit Company of Baltimore, a corporation having its usual place of business in Baltimore in the state of Maryland. James McHenry Boyd, first husband of the testatrix, died in 1849. By his last will duly allowed by the court of appropriate jurisdiction in Maryland, the state of his domicile, he left the residue of his estate to Maryland trustees, in trust, to pay the income to the testatrix during her life and upon her death to pay the principal to her heirs or to such persons as she might by will designate. The testatrix died in 1911, leaving as her heirs at law three children of a subsequent marriage. Her will disposed of certain real estate in Sheffield and personal property and gave the residue, including the trust fund here in question, to the Mercantile Trust & Deposit Company of Baltimore upon certain trusts. The corpus of the Boyd trust fund at the time of the death of the testatrix and since was personal property in the hands of the Mercantile Trust & Deposit Company and held in possession continuously outside this commonwealth and within the state of Maryland. The validity of the testamentary disposition by Mrs. Barnard of the fund in the hands of the Trust Company is challenged, but that point in the view we take of the case is not of decisive consequence upon the issue here depending.

The question to be decided is whether such personal property is under these circumstances subject to the succession tax imposed by our statutes.¹ The tax thus imposed is strictly an excise and not a property tax. The privilege of passing the title to property is the commodity upon which the excise is laid. Minot v. Winthrop, 162 Mass. 113, 38 N. E. 512,26 L. R. A. 259.

It is an implied condition of all statutes relating to taxation that they have no extraterritorial effect. They can apply in the nature of things only to property within the jurisdiction of the sovereign state enacting the legislation, either actually through physical location or constructively through control over the person of one essentially connected therewith. The test stated in Clark v. Treasurer and Receiver General, 218 Mass. 292, 105 N. E. 1055, and that decision do not control the case at bar. In the instant case the property was actually in the state of Maryland. Its title was vested in the trustee resident there. Both its physical and constructive situs is in the state of Maryland. Massachusetts has no control either of the property or its owner. An excise tax may be upheld upon succession to property where a direct property tax might not be sustained. But in such cases it can stand as a lawful exercise of the taxing power only when some necessary incident of the transfer of title depends for its efficacy upon the law of the state levying the tax. Under our own Constitution the ‘commodity’ which may be taxed in the absence of corporeal jurisdiction over the property itself is the privilege of passing title under the sanction and protection of our law. Attorney General v. Barney, 211 Mass. 134, 97 N. E. 750,39 L. R. A. (N. S.) 1024;Bliss v. Bliss, 221 Mass. 201, 109 N. E. 148;Keeney v. New York, 222 U. S. 525, 537, 32 Sup. Ct. 105, 56 L. Ed. 299,38 L. R. A. (N. S.) 1139;Wheeler v. New York, 233 U. S. 434, 34 Sup. Ct. 607, 58 L. Ed. 1030. The antithesis of this proposition is that where the property is not physically within the jurisdiction of the taxing power and its complete succession may be accomplished without invoking any privilege or sanction conferred by its laws, then there is nothing to which taxation can attach. If the property in Maryland had belonged to Mrs. Barnard, it would have been subject to the tax. Frothingham v. Shaw, 175 Mass. 59, 55 N. E. 623,78 Am. St. Rep. 475. But it did not belong to her. She had no title to it. She simply had the power of disposition if she chose to exercise it. This power does not constitute it her property. Emmons v. Shaw, 171 Mass. 410, 50 N. E. 1033. The power is a deputation of the donee to act for the donor in disposing of the donor's property. Personal property over which one has the power of appointment is not the property of the donee, but of the donor of the power. The property in the case at bar was not that of Mrs. Barnard, but of her first husband who established the trust and created the power. Her own estate is ample to pay all debts, so there is no room for the application of Clapp v. Ingraham, 126 Mass. 200. If she has exercised the power, the instrument whereby that has been brought about takes effect not as a disposition of her own property but as an appointment of property of her first husband under the...