208 P. 282 | Cal. | 1922
The administratrix with the will annexed of the estate of Charlotte Bowditch, deceased, and certain legatees and devisees under said will, appeal from an order decreeing, among other things, that an inheritance or succession tax be paid on account of the purported transfer under said will of certain personal property valued at *378 $299,260.66. The uncontradicted material facts pertinent to the point presented on the appeal are these:
J. Ingersoll Bowditch, who died in the year 1889, was a resident of the state of Massachusetts, where his will was admitted to probate and his estate distributed. By his will the property here involved was bequeathed to certain trustees in trust, to pay the net income derived therefrom to Charlotte Bowditch during her life and, upon her death, to convey thecorpus and remainder of said property "to such person or persons, and in such way or manner as such child [Charlotte Bowditch] shall direct in and by . . . her last will, if any." In accordance with this testamentary direction, the trustees under the will of J. Ingersoll Bowditch paid the income from the property to Charlotte Bowditch during her lifetime, and, upon her death, transferred the property to certain persons named in her will, accepting the latter instrument as a proper exercise of the power of appointment created in her favor by the will of J. Ingersoll Bowditch. At all times herein mentioned all of said trustees were residents of the state of Massachusetts and it is stipulated that the property itself always remained physically within that state. Charlotte Bowditch, however, was a resident of the county of Santa Barbara, state of California, continuously from the date of the execution of her will, August 7, 1912, to the day of her death, September 3, 1919.
The order from which the present appeal is taken decrees that the transfers of the said trust property to the persons named in the will of Charlotte Bowditch are taxable under subdivision 6 of section 2 of the California Inheritance Act of 1917 (Stats. 1917, p. 880), which provides, in part, that "Whenever any person, trustee or corporation shall exercise a power of appointment derived from any disposition of property made either before or after the passage of this Act, such appointment, when made, shall be deemed a transfer taxable under the provisions of this Act, in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power, and had been bequeathed or devised by such donee by will." It is appellants' contention that the transfers in question are not taxable by the state of California. *379
Of prime importance in all cases concerning the determination of the jurisdiction to impose an inheritance tax is the fundamental proposition that a tax of that character is a tax upon the right or privilege of succeeding to property. "The so-called right of inheritance and also the right of testamentary disposition are not inherent rights of the individual, nor are they safeguarded or secured in futuro by any provision of our constitution. They are both subject to legislative control and are creatures of legislative will. Consequently the legislature has the power to take away both rights and to make the state the successor to all property upon the death of the owner. The right and power to impose a succession tax rests on this principle." (Estate of Potter,
[1] Applying this jurisdictional test to the present case, we are confronted with the fact that, by the will of a resident of Massachusetts, probated in Massachusetts, trustees, also residents of Massachusetts, were authorized to convey certain personal property situated in Massachusetts as directed by the will of Charlotte Bowditch, who died a resident of California. The ultimate question, therefore, is whether the will of Charlotte Bowditch, in so far as the exercise of this power ofappointment is concerned, is governed by the laws of California.
The law in this respect is stated in Estate of Clark,
Even if the will were accepted in Massachusetts as a valid exercise of the power of appointment because executed in accordance with the laws of California, that result would follow solely because of and under the laws of Massachusetts. It would be entirely competent for the state of Massachusetts to authorize a transfer of the property in accordance with an appointment in a will invalid under the laws of California. (Sewall v. Wilmer,
The precise question presented in this case has not frequently arisen and the cases which have decided the point are somewhat in conflict. However, the view above expressed is apparently in accord with the weight of authority. A case almost identical with the present case in its facts, and arising under an inheritance tax law in every material respect the same as ours, is Walker v. Treasurer, supra. In that case a resident of Maryland left personal property to trustees in Maryland by a will probated in that state. The will directed the trustees to pay the income to the wife of the testator during her life and, upon her death, to pay the principal to persons designated by her will. The donee of the power, who was domiciled in the state of Massachusetts at the time of her death, exercised the power of appointment in a will admitted to probate in Massachusetts. The supreme judicial court of Massachusetts held that the transfer was not subject to an inheritance tax imposed by the state of Massachusetts, for the reason that both the physical and constructive situs of the property was in the state of Maryland and no necessary incident of the transfer depended for its efficacy upon the laws of Massachusetts.
For similar reasons we hold that the transfer of the property under the power of appointment exercised by Charlotte Bowditch in her will is not subject to an inheritance tax in this state.
The order appealed from is vacated, with instructions to the court below to enter an order in accordance with the foregoing opinion.
Shaw, C. J., Myers, J., pro tem., Waste, J., Richards, J.,pro tem., Sloane, J., and Lawlor, J., concurred. *382