196 Mass. 533 | Mass. | 1907
This bill is brought by the executors of the will of Julia B. Thayer, late of Keene in the State of New Hampshire, for instructions in regard to the payment of succession taxes claimed in behalf of this Commonwealth. A part of the property left by the testatrix was stock in railroad corporatians, incorporated in this State, and owning and operating railroads therein which extend beyond the boundaries of the State into other States in which also the companies are incorporated. The corporations referred to are the Worcester, Nashua and Rochester Railroad Company, the Norwich and Worcester Railroad Company, the -Fitchburg Railroad Company, the Boston and Albany Railroad Company, the Providence and Worcester Railroad Company, the New York, New Haven, and Hartford Railroad Company and the Old Colony Railroad Company. The material averments in regard to each of these corporations are substantially the same, so far as they relate to the question in dispute, namely, that they are engaged in the transportation of passengers and freight between the different States, and in interstate commerce and commerce with foreign nations, and are incorporated under the laws of one or more States besides Massachusetts, and own franchises granted by these States, and property, real and personal, tangible and intangible, located in Massachusetts and in one or more of these other States. Although all the statutes of the different States touching the subject were made a part of the evidence, we have been referred to no differences in them, nor to any of their provisions except those stated generally in the bill. We infer from the pleadings, the agreed facts and the arguments that each of these companies is incorporated in each of the States into which its road runs; that in each case the name is the same in each State, and there is recognition by each State of the fact that the corporation is connected with the corporation of the same name in the other State, in such a way that the two, deriving their authority from two different sources, are parts of one general organization engaged
It is contended by the petitioners that, with any other construction, the statute, in its application to a case like this, woulcl be unconstitutional, and they refer to the cases in which it is decided that, in assessing a property tax upon a corporation, the property owned by it in another State and the franchise conferred by another State cannot be included in fixing its value. The
Without deciding that the Legislature could not constitutionally include in the value of the stock for the purpose of fixing this tax all property of the corporation wherever situated, we are of opinion that its value for this purpose was intended to be limited by the value of the franchise and property which it specially represents within this Commonwealth. In a sense, the stock in each State may be said to represent all the property of the corporation in different States. But the principal reasons for a local act of incorporation in each State relate only to the property in that State. As a domestic corporation, in a strict sense, it is confined to the State which gives it its charter, and when there is also a similar act of incorporation in another State where it has property and does business in the same way, the rights, privileges and obligations which belong peculiarly to domestic corporations should be only those which are recognized in the State where the franchise is granted. So far as the jurisdiction of a State to impose taxation depends upon the ownership of property, it is limited to that which is within the State. In a case like the present, where corporate power is exercised under two franchises of the same kind, granted by two adjacent States, and where the ownership is represented by a single issue of stock, recognized alike by both States, we think that, for jurisdictional purposes and determining values in imposing taxes, the stock in each State should be held to represent only the property within that State. This view is strengthened by the express provisions to that effect in our recent legislation in .regard to the taxation
The remaining question is whether the executors, by using the stock in Massachusetts corporations for the payment of debts and legacies, to the exemption of the property in New Hampshire, could relieve it from liability to a tax upon succession imposed by our law. We are of opinion that they could not. It was decided in Hooper v. Bradford, 178 Mass. 95, that taxes under this statute are to be assessed on the value of the testator’s property at the time of his death. The rights of all parties, including the rights of the Commonwealth to its tax, vest at the death of the testator. It is true that the interest of a legatee is subject to an accounting; but it is an interest in the existing fund, and it is analogous to that of a cestui que trust. The executors cannot, by independent action in attempting to marshal assets according to their personal wishes, enlarge or diminish the rights of legatees, or of the Commonwealth. The property in Massachusetts is subject to the jurisdiction of our courts, and the executors must use and appropriate it according to law. Greves v. Shaw, 173 Mass, 205, 209. Callahan v. Woodbridge, 171 Mass. 595. The debts, the legacies in Massachusetts exempt from taxation and the expenses of administration are chargeable upon the general assets, as well those in New Hampshire as those in Massachusetts, and only a proportional part of the property in Massachusetts should be used in paying them. The balance is subject to the payment of a tax under the statute. The decision of the Probate Court upon this part of the case was correct.
Decree affirmed.