164 P. 387 | Cal. | 1917
Albert Lilienthal, a nonresident of this state and a resident of the state of New York, died intestate in the city and state of New York. At the time of his death he was the owner of 1,386 shares of the capital stock of the Lilienthal Company, a California corporation, having its principal place of business in the city and county of San Francisco. The certificates representing his ownership in the capital stock of the corporation were, at the time of the decedent's death, in the city of New York. This property was distributed in probate proceedings by the courts of the state of New York, and these shares were distributed to the respondents upon this appeal, who are, respectively, one the widow, the other the son of the deceased. The inheritance tax imposed through the succession of ownership of this stock under the laws of the state of New York was duly paid. No probate proceedings upon the estate of the deceased have been had in the state of California. The inheritance tax law of 1905 (Stats. 1905, page 341) is the California law which was in force at the time of the death of the decedent. The treasurer of the city and county of San Francisco, appellant herein, filed a petition as contemplated by the law looking to the exaction of a tax upon this personal property under our law. The respondents herein answered, hearing was had, and the court gave judgment against the treasurer's contention. From that judgment this appeal is taken.
Section 1 of the act of 1905 is the section defining the property for whose transfer by act or by operation of law a tax is imposed. The construction of this section gives rise to the principal controversy between these parties. The section, in so far as it is here necessary to quote it, provides as follows: "All property which shall pass, by will or by the intestate laws of this state, from any person who may die seized or possessed of the same while a resident of this state, or if such decedent was not a resident of this state at the time of death, which property, or any part thereof, shall be within *700 this state . . . shall be and is subject to a tax hereinafter provided for. . . ." Respondents' interpretation of this language, which was adopted by the trial court, is that the state has imposed this tax only on "all property which shall pass, by will or by the intestate laws of this state"; that in the succeeding part of the sentence, grammatically and by necessary construction (since this tax proceeding is admittedly one in invitum) the words "which property" have direct reference to and in their meaning are limited by the opening words of the act; that, consequently, the state has declared its intention to tax only property which shall pass by will or by the intestate laws of this state, which property, if the property of a resident, shall be taxed wherever situated, but which property, if the property of a nonresident, shall not be taxed unless situated in this state. As the property here under consideration is unquestionably personal property, and as it did not pass to these respondents either by will or by the intestate laws of this state (propositions which may not be controverted), it is not subject to the tax here sought to be imposed. Such is respondents' position.
Indisputably, if respondents' construction of the section is sound, the conclusion drawn from that construction is unanswerable. But with that construction we cannot agree. It may be at once conceded that the language lacks the clearness which should be found in every law, and especially in a law imposing the burden of a tax. But it is taken bodily from the statute of New York, and had been construed by the highest court of that state before its adoption into the law of this state, and the meaning given to it was, in effect, that the grammatical construction of the sentence was faulty and that it meant to impose a tax, first, upon all property passing by will or by the intestate laws of this state, and, second, upon all property of a nonresident, which, regardless of its mode of transfer or succession shall be within the state. Such is not only the interpretation of the highest court of New York, but is likewise the interpretation of the highest court of Illinois under its statute identical in this respect with our own. (People v. Griffith,
We are thus brought to the second and subordinate question, namely: Is the property, within the meaning of our inheritance tax law, within the state? The familiar maxim, mobiliasequuntur personam, is one, it may not be questioned, which the state in its taxing laws may modify or reverse. In the case of the statute under consideration it is declared that all the property of a nonresident within the state shall be subject to the tax. It has (section 28) defined property very broadly to include real and personal property and interests therein.
Our next consideration is whether this ownership by the deceased of a portion of the capital stock of a California corporation, which ownership was evidenced by printed and written certificates, which certificates in turn were in the state of New York, is of property within this state. Of this our own decisions as well as those of other jurisdictions remove all doubt. The proposition is thus stated in 37 Cyc. 1562, subdivision b: "Shares of stock in a domestic corporation are subject to the tax at the domicile of the corporation on their transfer by will or under the intestate laws, although the decedent was a nonresident and this without regard to the place where the certificate may be kept." To the same effect are our own cases of Murphy v. Crouse,
It is finally contended that under the full faith and credit clause of the constitution of the United States the decree of distribution in the probate court of New York precludes the right of the state to tax this property, and in support thereof is cited Tilt v. Kelsey,
The judgment appealed from is therefore reversed.
Lorigan, J., and Melvin, J., concurred.
Hearing in Bank denied. *703
