Eidman v. Baldwin

206 F. 428 | 2d Cir. | 1913

NOYES, Circuit Judge.

[1] The question in this case, is whether the leasehold interests .came within the phrase “legacies or distributive shares arising from personal property” in the provision of the War Revenue Act already quoted. And as we think that the words “legacies * * * • arising from personal property” meant only that the property passing should be personal, the question .may be narrowed to this: Were these leaseholds personal property within the act?²

[2] The War Revenue Act did not define the term “personal property” which it employed. It used, however, a term well known in the common law and which, in the absence of a statutory definition must be defined according to the common law. While there is no national common or customary law, still in interpreting acts of Congress as well:as state statutes resort must be had for the definition of terms to the system from which our judicial ideas and legal definitions were derived. As said by the Supreme Court in Keck v. United States, 172 U. S. 434, 19 Sup. Ct. 254, 43 E. Ed. 505, in interpreting the terms of a-federal statute:

“That term had'a well understood import at common law, and in the absence ;o£ a particularized definition of its significance in the statute creating it, resort must be had to the common law for the purpose of arriving at the meaning of a word.”

[3] Now it is elementary that at common law personal property included leasehold interests in land. Such interests were estates less than the freehold and passed to the executor. Consequently a statute taxing personal property passing by legacy,* taxes leaseholds so passing and the taxes in question were properly collected unless there be something in the origin and history of this statute which may be said to read into it a statutory definition contrary to the common law.

- [4] The War Revenue Act of 1898 was undoubtedly modeled upon the act of 1864 (Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969) and if we could find in the latter statute a definition of the term “personal- property” or a definition of the term “real estate” .which would by exclusion define it, it would go a long way toward convincing- us that a particularized definition of the term should be adopted. But the act of 1864 (Act June 30, 1864, c. 173, § 126, 13 Stat. 287) merely defines real estate as follows:

"The term ‘real estate’ shall include all lands, tenements, and heredita-ments, corporeal and incorporeal.”

This, however, is merely the bringing together of two common law phrases which are substantially co-extensive. If leaseholds are not “real estate” they are not “lands, tenements or hereditaments.” And it is unquestionable that at common law they were neither. No light, then, is thrown upon the subject by the act of 1864 standing by itself. It is insisted, however, that a step further back should be made and that as the act of 1864 was to some extent taken from the earlier English Succession Duty Act and as that act does contain specific definitions resort should be had to them. And it is true that the English statute does define the term “real property” as including leaseholds and the term “personal property” as excluding them. But the difficulty is that while the act of 1864- undoubtedly borrowed some provisions from the English statute, it did not adopt or refer to these definitions. And it would only have been by adopting or referring to them that a statutory definition classifying leaseholds otherwise than at common law could have been brought into the act of 1864 and through it into the act of 1898. We find nothing in the origin or history of the statute to warrant us in holding that the term “personal property” — a technical term — does not include all that the language of the law places within it.

[5] The argument'that Congress must have used the term “personal property” according, to the common acceptation of its meaning and not technically, involves an assumption that there is a common acceptation as excluding leaseholds. This there is no foundation for making. So far as we can see Congress chose to employ in a statute without definition a well known common law phrase and there is no reason for avoiding, or right to avoid, the consequences.

The judgment of the District Court is reversed.

2 We are unable to adopt the conclusion of the trial judge that special significance should be attached to the words “arising from” as importing that the ultimate source of a legacy must be found in personal property. If that which constitutes the legacy or distributive share is personal property, we think that it comes within the act notwithstanding that such property may in. a sense be said to grow out of real estate.