58 Wash. 339 | Wash. | 1910
Peder G. Stixrud, a naturalized citizen of the United States and a resident of this state, died at Olympia in January, 1908. He left a will by which he devised all of his property both real and personal to his brother and sister, Johan E. Stixrud and Petronella Stixrud, who were then residents and citizens of Norway. In February, 1908, letters of administration with the will annexed were granted upon the estate of Peder G. Stixrud, and upon the settlement of the estate it was determined by the superior court for Thurston county that the portion of the estate passing to the devisees under the will, after payment of debts and expenses of administration, was subject to an inheritance tax of twenty-five per cent. An order was entered accordingly, directing payment of such inheritance tax computed at this rate. From this order the devisees, Johan E. Stixrud and Petronella Stixrud, have appealed.
The law fixing the amount of the inheritance tax upon property passing by will or inheritance is § £, Laws 1907,
“The inheritance tax shall be and is to be levied on all estates subject to the operation of this chapter on all sums above the first ten thousand dollars, where the same shall, pass to or for the use of the father, mother, husband, wife, lineal descendant, adopted child, or the lineal descendant of an adopted child, one (1) per centum. On all sums not exceeding the first fifty thousand dollars, of three per centum, where such estate passes to collateral heirs to and including the third degree of relationship, . . . Provided, that on all sums passing to or for the benefit of collateral relatives or strangers of the blood, who are aliens not residing in the United States, a tax of twenty-five per centum shall be jevied and collected.”
Appellants being collateral heirs of the deceased within the third degree of relationship, it is plain that the inheritance tax upon the property they take under this will would only be three per cent, since the amount thereof is less than $50,000, unless the rate of the tax is controlled by the proviso fixing the rate at 25 per cent where property passes to collateral relatives who are aliens not residing in the United States.
Learned counsel for appellants contend that the property left to them by their deceased brother is liable to pay an inheritance tax of only three per cent, the same as if they were not aliens residing out of the United States at the time of their brother’s death, by virtue of article 6 of the Treaty of Amity and Commerce of 1783 as revived by article 17 of the Treaty of Commerce of Navigation of 1827, still existing between Norway and Sweden and the United States, which provides:
“The subjects of the contracting parties in the respective states may freely dispose of their goods and effects either by testament, donation or otherwise, in favor of such persons as they think proper; and their heirs in whatever place they shall reside, shall receive the succession even ab mtestato either in person or by their attorney without having occasion*342 to take out letters of naturalization. These inheritances as well as the capitals and effects which the subjects of the two parties in changing their dwelling, shall be desirous of removing from the place of their abode, shall be exempt from all duty called ‘droit de detraction’ on the part of the government of the two states respectively. But it is at the same time agreed, that nothing contained in this article shall in any manner derogate from the ordinances published, in Sweden against immigration, or which may hereafter be published, which shall remain in full force and vigor. The United States on their part, or any of them shall be at liberty to make respecting this matter, such laws as they think proper.” 7 Fed. Stats. Ann., pp. 828, 835.
By the second clause of article 6 of the constitution of the United States it is declared:
“This constitution, and the laws of the United States which shall be made in pursuance thereof, and all treaties made, or which shall be made, under the. authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.”
It has become the settled law of this country that when a law of a state comes in conflict with the provisions of a treaty, entered into by the United States with a foreign country relating to a subject-matter within the treaty-making power, such law must give way, and its application to the subject-matter covered by the treaty held in abeyance during the existence of the treaty. In Hauenstein v. Lynham, 100 U. S. 483, 490, Justice Swayne, speaking for the court, said:
“It must always be borne in mind that the constitution, laws, and treaties of the United States are as much a part of the law of every state as its own local laws and constitution. This is a fundamental principle in our system of complex national polity. See, also, Shanks v. Dupont, 3 Pet. 242; Foster & Elam v. Neilson, 2 id. 253; The Cherokee Tobacco, 11 Wall. 616; Mr. Pinkney’s Speech, 3 Elliot’s Constitu*343 tional Debates, 231; The People, etc. v. Gerke & Clark, 5 Cal. 381.”
It is equally well settled that the matter of removing the disability of aliens, in order that they may have the same rights as citizens to acquire and hold property in the states of the Union, is a proper subject of treaty- regulation. Justice Field, in speaking for the supreme court of the United States in Geofroy v. Riggs, 133 U. S. 258, 266, said:
“That the treaty power of the United States extends to all proper subjects of negotiation between our government and the governments of other nations, is clear. It is also clear that the protection which should be afforded to the citizens of one country owning property in another, and the manner in which that property may be transferred, devised or inherited, are fitting subjects for such negotiation and of regulation by mutual stipulations between the two countries.”
The state courts, at the present day, have uniformly given their assent to this doctrine. Blythe v. Hinckley, 127 Cal. 431, 59 Pac. 787; Dockstader v. Kershaw, 4 Penn. (Del.) 398; Wunderle v. Wunderle, 144 Ill. 40, 33 N. E. 195, 19 L. R. A. 84; Opel v. Shoup, 100 Iowa 407, 69 N. W. 560, 37 L. R. A. 583; Yeaker's Heirs v. Yeaker’s Heirs, 4 Met. (Ky.) 33, 81 Am. Dec. 530; Baker v. Shy, 9 Heisk (Tenn.) 85; Succession of Rabasse, 47 La. Ann. 1452, 17 South. 867, 49 Am. St. 433; Kull v. Kull, 37 Hun 476.
These firmly established principles are not denied by learned counsel for the state, but they contend that there is nothing in this treaty to prevent a sovereign state of the Union from collecting an inheritance tax from alien heirs or devisees of a citizen of the United States, upon property in the United States; that this article was adopted for the protection of the citizens of Sweden and Norway residing in the United States and citizens of the United States residing in Sweden and Norway; that it does not seem possible
The principle authority relied upon by learned counsel in support of this argument is the case of Frederickson v. Louisiana, 23 How. 445. That case was brought into the supreme court of the United States from the supreme court of Louisiana by writ of error. There was involved a ten per cent inheritance tax levied by the state upon so much of the property of a deceased naturalized citizen of the United States, residing at the time of his death in Louisiana, as passed by his will to residents and subjects of the Kingdom of Wurtemberg. The statute under which the state claimed the tax, the treaty provisions relied upon by the legatees to avoid the tax, and the court’s views touching their rights,
“By a statute of Louisiana, it is provided that ‘each and every person, not being domiciliated in this state, and not being a citizen of any other state or territory in the Union, who shall be entitled, whether as heirs, legatee, or donee, to the whole or any part of the succession of a person deceased, whether such person shall have died in this state, or elsewhere, shall pay a tax of ten per cent on all sums, or on the value of all property which he may have actually received from said succession, or so much thereof as .is situated in this state, after deducting all debts due by the succession.’ The claim of the state of Louisiana was resisted in the District Court, on the ground that it is contrary to the provisions of the third article of the convention between the United States of America and his Majesty the King of Wurtemberg, of the 10th April, 1844. That article is, that ‘The citizens or subjects of each of the contracting parties shall have power to dispose of their personal property within the states of the other, by testament, donation, or otherwise; and their heirs, legatees, and donees, being citizens or subjects of the other contracting party, shall succeed to their said personal property, • and may take possession thereof, either by themselves or by others acting for them, and dispose of the same at their pleasure, paying such duties only as the inhabitants of the country where the said property lies shall be liable to pay in like cases.’ This court, in Mager v. Grima, 8 How. S. C. R., 490, decided that the act of the legislature of Louisiana was nothing more than the exercise of the power which every state or sovereignty possesses of regulating the manner and terms upon which property, real and personal, within its dominion, may be transmitted by last will and testament, or by inheritance, and of prescribing who shall and who shall not be capable of taking it. The case before the district court in Louisiana concerned the distribution of the succession of a citizen of that state, and of property situated there. The act of the legislature under review does not make any discrimination between citizens of the state and aliens in the same circumstances. A citizen of Louisiana domiciliated abroad is subject to this tax. The State v. Poydras, 9 La. Ann. R., 165; therefore, if this article of the treaty comprised the succession of a citizen of*346 Louisiana, the complaint of the foreign legatees would not be justified. They are subject to ‘only such duties as are exacted from citizens of Louisiana under the same circumstances.’ But we concur with the supreme court of Louisiana in the opinion that the treaty does not regulate the testamentary dispositions of citizens or subjects of the. contracting powers, in reference to property within the country of their origin or citizenship. The cause of the treaty was,' that the citizens and subjects of each of the contracting powers were or might be subject to onerous taxes upon property possessed by them within the states of the other, by reason of their alienage, and its purpose was to enable such persons to dispose of their property, paying such duties only as the inhabitants of the country where the property' lies pay under like conditions. The case of a citizen or subject of the respective countries residing at home, and disposing of property there in favor of a citizen or subject of the other, was not in the contemplation of the contracting powers, and is not embraced in this article of the treaty.”
There are two important particulars in which that case differs from the one before us. First, the treaty there involved provided that, “The citizens or subjects of each of the contracting parties shall have power to dispose of their personal property within the states of the other by testament,” etc., while the treaty here involved provides that “The subjects of the contracting parties in the respective states may freely dispose of their goods and effects by testament,” etc. Second, the statute of Louisiana, there involved, did not make any discrimination between the citizens of the state and aliens in the same circumstances. A citizen of Louisiana domiciled abroad was subject to the tax. The statute here involved imposes a tax of twenty-five per cent on property passing to collateral relatives who are aliens not residing in the United States, and at the same time imposes a tax of only three per cent on property passing to citizens under the same circumstances; thus clearly discriminating between citizens residing abroad and aliens residing abroad. The persons who may freely dispose of their goods and
Turning now to the right of appellants to receive the succession, if, indeed, such right can be considered in this case apart from the right of the deceased to give “by testament,” we find the express terms of the treaty not only guaranteeing to them the right to receive, but guaranteeing to them in so many words, the right to receive “In whatever place they shall reside.” And then, apparently for the purpose of removing all possible doubt as to the effect of their want of citizenship in the country in which the property may be situated, upon their right to receive, the treaty further expressly provides that they shall receive “without having any occasion to take out letters of naturalization.” Thus indicating an intention to give them the same right to receive as if they were citizens.
In the case of Schultze v. Schultze, 144 Ill. 290, 33 N. E. 201, 36 Am. St. 432, 19 L. R. A. 90, the court had under consideration article 7 of the treaty of 1827 between the United States and Bremen, providing as follows:
“The citizens of each of the contracting parties shall have power to dispose of their personal goods, within the jurisdiction of the other, by sale, donation, testament, or otherwise; and their representatives, being citizens of the other party, shall succeed to their said personal goods, whether by testament or ab intestato, and they may take possession thereof, either by themselves or others acting for them, and*348 dispose of the same at-their will, paying such dues only as the inhabitants of the country, wherein said goods are, shall be subject to pay in like cases; and if, in the case of real estate, the said heirs would be prevented from entering into the possession of the inheritance on account of their character of aliens, there shall be granted to them the term of three years to dispose of the same, as they think proper, and to withdraw the proceeds without molestation and exempt from all duties of detraction on the part of the governments of the respective states.”
Referring to the right of alien heirs and representatives of citizens of the United States under this treaty provision, Justice Magruder, speaking for the court, said:
“The second clause can be construed to mean, that the representatives or heirs of American citizens being citizens of. Bremen shall succeed to personal goods. It follows that, by the terms of the third clause, the heirs of American citizens who are citizens of Bremen shall have the prescribed term of three years to dispose of real estate, etc. The appellees are, therefore, entitled, under said article 7 of the treaty, to the privilege of selling the interests in the land in controversy, which they would have inherited from the deceased George Ludwig Schultze under the laws of Illinois but for their alienage, and of removing such proceeds of sale, providing they do so within three years.”
It seems to us that the terms of that treaty. are not as clear in securing rights to alien heirs of citizens of the United States as the treaty involved in the case before us; yet, the liberal rule of construction applicable to treaty rights induced the court in that case to regard the United States citizenship of the deceased as having no effect upon the rights of his alien representatives to succeed to property left by him in this country. The following authorities, involving aliens taking by will or inheritance from citizens of the United States, may be cited as lending additional support to this view, though the right to take does not appear to have been challenged upon the ground of the citizenship of the deceased. Jost v. Jost, 1 Mackey (D. C.) 487; Geofroy v.
In the case last cited, the court held that subjects and residents of Sweden, who were heirs of a citizen of the United States residing in Illinois at the time of his death, inherited property of the deceased situated in Illinois, by virtue of the terms of the same treaty which is here involved. We are lead to conclude that the rights of appellants here claimed are in no way affected by the mere fact that their deceased brother was, at the time of his death, a citizen of the United States, and that the property claimed is in the state of Washington.
We are next confronted with the question, Does this charge of twenty-five per cent as an inheritance tax upon the property passing, to appellants under this will impair the rights guaranteed to thém by the terms of this treaty? A tax of this nature is not a tax upon property, but is a charge upon the right or privilege of receiving it. The nature of this tax and the legal basis for its support is well stated by Justice Brown, speaking for the supreme court of the United States in United States v. Perkins, 163 U. S. 625, 628, as follows:
“Though the general consent of the most enlightened nations has, from the earliest historical period, recognized a natural right in children to inherit the property of their parents, we know of no legal principle to prevent the legislature from taking away or limiting the right of testamentary disposition or imposing such conditions upon its exercise as it may deem conducive to public good.
“In this view, the so called inheritance tax of the State of New York is in reality a limitation upon the power of a testator to bequeath his property to whom he pleases; a declaration that, in the exercise of that power, he shall contribute a certain percentage to the public use; in other words, that the right to dispose of his property by will shall remain, but subject to a condition that the state has a right to impose. Certainly, if it be true that the right of testamentary disposition is purély statutory, the state has a right to require a contribution to. the public treasury before the bequest shall take effect. Thus the tax is not upon*350 the property, in the ordinary sense of the term, but upoh the right to dispose of it, and it is not until it has yielded its •contribution to the state that it becomes the property of the legatee. This was the view taken of a similar tax by the Court of Appeals of Maryland in State v. Dalrymple, 70 Maryland, 294, 299, in which the court observed: ‘Possessing, then, the plenary power indicated, it necessarily follows that the state in allowing property ... to be disposed of by will, and in designating who shall take such property where there is no will, may prescribe such conditions, not in conflict with or forbidden by the organic law, as the legislature may deem expedient. These conditions, subject to the limitation named, are, consequently, wholly within the discretion of the General Assembly. The act we are now considering plainly intended to require that a person taking the benefit of a civil right secured to him under our laws should pay a certain premium for its enjoyment. In other words, one of the conditions upon which strangers and collateral kindred may acquire a decedent’s property, which is subject to the dominion of our laws, is, that there shall be paid out of such property a tax of two and a half per cent into the treasury of the state. This, therefore, is not a tax upon the property itself, but is merely the price exacted by the state for the privilege accorded in permitting property so situated to be transferred by will or by descent or distribution.’ ”
This view of the nature of an inheritance tax has been recognized by this court in State v. Clark, 30 Wash. 439, 71 Pac. 20, where at page 445, it was said by Chief Justice Reavis: “It is an impost or excise on the right to pass the estate and the privilege of the devisee to take.” Plumber v. Coler, 178 U. S. 115, 125; State v. Hamlin, 86 Me. 495, 30 Atl. 76, 41 Am. St. 569, 25 L. R. A. 632; State ex rel. Gelsthorpe v. Furnell, 20 Mont. 299, 51 Pac. 267, 39 L. R. A. 170; In re Macky’s Estate, 46 Colo. 79, 102 Pac. 1075, 23 L. R. A. (N. S.) 1207.
It is upon this theory that such a tax is held not to be in violation of the usual constitutional provisions requiring uniformity of taxation upon property. It is, therefore, apparent that the levy of a tax of this nature has the direct •effect of impairing the right or privilege of receiving prop
It may be conceded that there is no limit to the taxing power of the sovereign, and that the right or privilege of succession to property upon the death of its owner may be given or withheld by the state at its pleasure. Indeed, the concluding words of article 6 of this treaty, probably with unnecessary caution, reserves to the United States and each of them the “liberty to make, respecting the matter, such laws as they think proper.” But surely this power cannot be rightfully exercised in such manner as to destroy the very rights the treaty was plainly designed to secure. It, of course, cannot be seriously contended that citizens of Sweden and Norway are, by the terms of this treaty, accorded any greater rights in their succession to property than the general laws of the states of the Union may accord to citizens of the United States. The laws of the several states would undoubtedly control those rights even though no reservation to that effect was in the treaty. To whatever extent the right or privilege of a citizen of the United States to take property by testament or inheritance is impaired by our own laws, whether such laws relate to taxation or succession, to that extent will the rights of the citizens of Norway and Sweden be impaired without violating the terms or spirit of this treaty.
The language of the treaty giving the citizens of the contracting parties the right to dispose of their goods and
“It is a general principle of construction with respect to treaties that they shall be liberally construed, so as to caiu'y out the apparent intention of the parties to secure equality and reciprocity between them. As they are contracts between independent nations, in their construction words are to be taken in their ordinary meaning, as understood in the public law of nations, and not in any artificial or special sense impressed upon them by local law, unless such restricted sense is clearly intended. And it has been held by this court that where a treaty admits of two constructions, one restrictive of rights that may be claimed under it and the other favorable to them, the latter is to be preferred. Hauenstein v. Lynham, 100 U. S. 483, 487.”
See, also, 28 Am. & Eng. Ency. Law (2d ed.), 490; Devlin, Treaty Power, §§ 116, 125.
It has been noticed that the deceased left by his will to these appellants both real and personal property. The use of the words “goods and effects” only, to designate the property the treaty is applicable to, might give rise to argument as to whether or not these words include real property. In the case of Adams v. Akerlund, supra, these words in this same treaty were under consideration, where it was contended that real property was not included by them. The court, however, in a very able and exhaustive opinion,
We have made particular reference to the language of the treaty relating to the rights of those who may receive. It will be noticed that they are described therein by the word “heirs.” This word, of course, has its technical common law meaning, restricting it to’ those who take by inheritance only; while in the civil law it applies to all persons who' are called to the succession, whether by the act of the party or by operation of law. 1 Bouvier’s Law Dictionary (Rawle’s Rev.), 941. There does not appear to be any reason for here attributing to it the technical meaning of either of these systems of law in preference to the other, since it is here used by countries in one of which the common law prevails, and in the other of which the civil law prevails. 1 Bouvier’s Law Dictionary (Rawle’s Rev.), 330, 370. We are of the opinion that the words, “their heirs . •. . shall receive the succession,” refers to the right of succession of those who receive by testament as well as those who receive by operation of law, in view of the other provision of the article, and that the effect of the word “heirs” should not be measured by any technical rules. Geofroy v. Riggs, supra; 21 Cyc. 420; In re White’s Estate, 42 Wash. 360, 84 Pac. 831. We notice this matter of the meaning of the word “heirs” because of the particular provisions of the treaty defining the rights of those so designated.
The contention of learned counsel for appellants that this inheritance tax is unconstitutional in so far as it imposes upon aliens not residing in the United States a greater tax than upon citizens, in view of certain provisions of our state
We conclude that the order of the superior court should be reversed, with instructions to fix the amount of the inheritance tax at a rate not inconsistent with the views herein expressed. It is so ordered.