These cases make it necessary for us to determine the constitutionality of St. 1891, c. 425. The objections urged against this statute are that the right of succession to property on the death of the owner is a necessary incident of property which is protected by the Constitution of Massachusetts ; that a tax upon such succession is in effect a tax upon the property, and is subject to the limitations put upon a tax upon estates by the Constitution ; that if such a tax is not a tax upon property, but an excise upon the right of succession, this right cannot be considered as “ goods, wares, merchandise, and commodities,” within the meaning of these words in the Constitution ; and that even if the right can be considered as a commodity, the tax imposed by the statute is unreasonable, because the statute is unequal in its operation, and makes arbitrary distinctions between those persons and estates which are and those which are not subject to its provisions. The Attorney General concedes that the tax imposed by the statute is invalid if it is a tax on property or estates. He contends that the tax is an excise ; that the succession to property on the death of the owner is a privilege created by law, and a commodity within the meaning of the Constitution, and that as an excise the tax is reasonable.
St. 1891, c. 425, purports to be a statute imposing a tax, and ■we think it apparent that the Legislature, in passing it, intended to act under the power grantеd to the General Court by the Constitution, to impose and levy taxes. The Constitution, c. 1, § 1, art. 4, gives to the General Court full power “ to impose and levy proportional and reasonable assessments, rates, and taxes upon all the inhabitants of and persons resident and estates lying within the said Commonwealth; and also to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise, and commodities whatsoever, brought into, produced, manufactured, or being within the same; to be
In the Constitutional Convention the committee appointed to prepare a Declaration оf Rights and a Frame of a Constitution reported a draft of a Constitution which gave to the General Court in the matter of taxation only the authority “ to impose and levy proportional and reasonable assessments, rates, and taxes upon the persons of all the inhabitants of and residents within the said Commonwealth, and upon all estates within the same, to be issued and disposed of bj*- warrant,” etc. This was in effect the same as in the Province Charter. This draft also contained the following provision: “ And that public assessments may be made with equality, there shall be a valuation of estates within the Common wealth taken anew once in every ten years at the least.” Journal of Convention, 1779-80, p. 197, c. 2, § 1, art. 3, of the draft. In the Convention the рaragraphs above quoted were referred to committees, who reported them in the form in which .they stand in the Constitution. Ibid, pp. 61-63. Under the Province Charter the General Court had laid imposts and excises in addition to taxes and assessments upon the persons and estates of the inhabitants, but it is evident that the framers of the Constitution intended that the authority to do this should be express. But neither in the Province nor in England had there been a tax on legacies and inheritances at the time when the-Constitution was adopted, although it was a form of taxation which had been used on the Continent of Europe. See The Inheritance Tax, by Max West, Vol. 4, No. 2, of the Studies in History, Economics, and Public Law of Colum
The descent or devolution of property on the death of the owner in England and in this country has always been regulated by law. We have no occasion in these cases to consider whether the Legislature has the power to make the Commonwealth the universal legatee or successor of all the property of all its inhabitants when they die, for the purposes not only of paying the public charges, but also of distributing the property according to its will among the living inhabitants, or for the purpose of abolishing private property altogether. We assume that under the Constitution this cannot be done, either directly or indirectly; that the Legislature cаnnot so far restrict the right to transmit property by will or by descent as to amount to an appropriation of property generally; that it cannot impose a tax which shall be equivalent, or almost equivalent, to the value of the property, and cannot so limit the persons who can take as heirs, devisees, distributees, or legatees that the great mass of all the property of the inhabitants must become vested in the Commonwealth by escheat. The State can take property by taxation only for the public service, and we assume that its right to take property, if any exists, by regulating the distribution of it on the death of the owner, is limited in the same manner, and that this right must be exercised in a reasonable way.
Under our system of law the right to make a will or testament, and the right to transmit or take property by descent, are now mainly, if not wholly, regulated by statute. In Mager v. Grima,
If, under the power to regulate the devolution of property on the death of the owner, the Legislature cannot take away altogether the inheritable quality of property, yet such regulations as are thought reasonable concerning the persons who may take or transmit real or personal property by will or inheritance have been made in every civilized state. Taxes on legacies and inheritances, or on succession in any form to property on the death of the owner, have generally been considered, not as taxes upon property, but as excises upon the privilege of taking or transmitting property in this way. The decision in Curry v. Spencer, 61 N. H. 624, that a statute imposing such a tax is in violation of the Constitution of New Hampshire, goes on the ground that the tax is not proportional, and so cannot be supported as a tax upon property under the Constitution of that State, which it seems authorizes only taxes and assessments upon polls and property. See State v. United States & Canada Express Co. 60 N. H. 219.
The Constitution of the United States, by Art. 1, § 8, provides as follows: “ The Congress shall have power to lay and collеct taxes, duties, imposts, and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States.” Direct taxes must be apportioned among the several States according to the respective numbers of their inhabitants, to be determined as provided by the second section of the same article. In Scholey v. Rew,
It is contended that the authority given in our Constitution to the General Court is not to levy duties and excises generally, but only to levy duties and excises “ upon any produce, goods, wares, merchandise, and commodities whatsoever, brought into, produced, manufactured, or being within the” Commonwealth. The excises to which the inhabitаnts of the Province of Massachusetts Bay were accustomed were taxes in the nature of license fees for carrying on certain kinds of business, taxes on the sale of goods, wares, and merchandise, such as intoxicating liquors, tea, coffee, and chocolate, china ware, etc., and stamp taxes on legal papers. The words “ produce, goods, wares, merchandise . . . brought into, produced, manufactured, or being ” within the Commonwealth, are words of definite meaning, but the words “ and commodities whatsoever ” are of less certain signification. In the general sense a commodity is something of convenience, advantage, benefit, or profit, and in a special sense a commodity is something prоduced for use, and an article of trade or commerce. It has been decided that the word “ commodities ” in our Constitution is not used in this special sense, and that it means more than “ produce, goods, wares, merchandise.” In Portland Bank v. Apthorp,
In Attorney General v. Bay State Mining Co., ubi supra, the court say: “ It is not merely the creation of corporate functiоns and privileges, or the conferring of rights and franchises by the Legislature, which entitles the State to tax the possessor of such privileges and rights. The exercise of powers or privileges, and even of occupations without especial powers or privileges, may be equally subjected to such taxation, under the constitutional authority to impose and levy reasonable
In Commonwealth v. Lancaster Savings Bank, ubi supra, the court say: “ A duty or excise may thus be exacted not merely upon certain articles produced or brought into the State, but also upon any commodities whatsoever. ‘ Commodity ’ is a general term, and includes the privilege and convenience of transacting a particular business; and, upon persons carrying on such business, it has never been questioned that the Legislature may levy an excise, or provide that a license must be obtained in order to transact it.”
In Gleason v. McKay,
When the Constitution of Massachusetts was adopted, Massachusetts was in many respects an independent State, and the Legislature could lay duties and imposts on imported goods, wares, and merchandise as well as excises on domestic goods, wares, merchandise, and commodities, and taxes and assessments upon the persons and estates of the inhabitants. The Constitution of the United States took from the States the right to law “ imposts or duties on imports or exports,” but it did not affect the other powers of taxation possessed by the States unless they interfered with the powers granted to the United States. The language of the Constitution of Massachusetts is general, and may well be held to authorize the laying of excises upon all such gainful employments and privileges as are created or may be regulated by law, and commonly have been considered legitimate subjects of taxation in other States and countries. We are 'of opinion that the privilege of transmitting or receiving by will or descent property on the death of the owner, is a commodity within the meaning of this word in the Constitution, and that an excise may be laid upon it. Although St. 1891, c. 425, in form imposes a tax upon the property which passes in the manner described in the first section, yet the tax plainly is not meant to be a substitute for the annual tax upon estates, or to be an additional tax of that nature; the statute can only take effect by regarding the tax as an excise, and the statute should be so construed as to take effect, if such a construction reasonably can be given to it. We see no difficulty in doing this, and are of opinion that the statute was intended to impose a tax in the nature of an excise.
The only other condition expressed in the Constitution is that duties and excises must be reasonable. In Connecticut Ins. Co. v. Commonwealth,
The tax imposed by the statute we are considering is said to be unequal, because it is not imposed upon all estates and upon all heirs, devisees, legatees, and distributees. To make a distinction between collаteral kindred or strangers in blood and kindred in the direct line in reference to the assessment of such a tax, either by exempting the kindred in the direct line or by imposing on collaterals and strangers a higher rate of taxation, has the sanction of nearly all States which have levied taxes of this kind. It has a sanction in reason, for the moral claim of collaterals and strangers is less than that of kindred in the direct line, and the privilege is therefore greater. The tax imposed by this statute is uniformly imposed upon all estates and all persons within the description contained in it, and the tax is not plainly and grossly oppressive in amount.
It is also contended that the tax is unreasonable on account of the exemption containеd in the proviso of the first section of the statute, “ that no estate shall be subject to the provisions of this act unless the value of the same, after the payment of all debts, shall exceed the sum of ten thousand dollars.” In all, or nearly all, systems of taxation there are some exemptions ; but the objection here is that estates whose value, after payment of all debts, shall not exceed ten thousand dollars are exempt, without regard to the value of the property received by the devisees, legatees, heirs, or distributees. It is argued that the excise, if upon the privilege of taking property by will or
The result is, in the opinion of a majority of the court, that in Williams v. Bowditch the judgment rendered for the defendant must be affirmed; and that in West v. Phillips, as no other objection has been taken to the decree of the Probate Court, the decree must be affirmed.
In Minot v. Winthrop there are several remaining questions. The first article of the will of Mrs. Winthrop is as follows; “ First, I leave to my husband, Robert C. Winthrop, the sum of ten thousand dollars, to be given after his decease to his daughter, Elisa C. Winthrop,” etc. Elisa C. Winthrop is not a daughter of the testatrix. This is a bequest of the kind contemplated by § 2 of St. 1891, c. 425, which provides that, “ when any person bequeaths or devises any property to or for
By the sixth article of the will, an annuity of five hundred dollars is to be given to the cousin of the testatrix, Mrs. Julia C. Irving. The statute contemplates, we think, that the tax should be paid out of the annuity as soon as the annuity becomes payable, and at the time when payments on account of the annuity are made. See §§ 1,17. The effect of this construction may be that the first payment or payments on account of the annuity will be exhausted by the tax. Other methods of collecting the tax might have been adopted, such as collecting the tax on each payment and deducting it from such payment, and then the tax would be collected proportionately to the amounts paid so long as the annuity was payable, but the method found in the statute is one, we think, which the Legislature could adopt.
By the thirteenth article of the will the testatrix gave to the Congregational Church and to the St. John’s Episcopal Church in Canandaigua in the State of New York one thousand dollars each. It is said in аrgument that the property of these religious societies is exempt from taxation by the statutes of the State of New York. See N. Y. St. 1890, c. 553, § 1. The contention of the Attorney General is that the exemption of “ charitable, educational, or religious societies or institutions, the property of which is exempt by law from taxation,” found in the first section of St. 1891, c. 425, is confined to societies the property of which is exempt from taxation by the laws of this Commonwealth. We think that this is the true construction. See In re Prime,
No objection has been made by any one to the clause of the decree of the Probate Court which declares that “ no tax is now payable in respect of the legacies given to Antoinette Granger, Isaphine P. Granger, John Winthrop, Robert C. Winthrop, Jr., and Isabella C. Winthrop.”
I am unable to concur in the opinion of the majority of the court. It proceeds upon the grounds that “ the privilege of transmitting and receiving by will or descent property on the death of the owner is a commodity, within the meaning of this word in the Constitution,” and that the tax imposed is a reasonable one. I differ with my brethren on both grounds.
The meaning of the word “ commodity ” was first defined in Portland Bank v. Apthorp,
In all the subsequent cases where an excise tax has been held to be constitutional, the decision has been put upon the ground that the tax was upon the franchise of the corporation, namely, upon its privilege of doing business. Commonwealth v. People’s Five Cents Savings Bank,
In Commonwealth v. Lancaster Savings Bank,
It will be noticed in the case last cited that the tax was on the average amount of deposits during the six months prior to a certain day. During some of these months it had received deposits, but, as it was not doing business on the day named, it was held not to be liable to the tax.
In Gleason v. McKay,
The case last cited seems to me not distinguishable from the case at bar. I am also unable to see, if the privilege of transmitting and receiving by will or descent property on the death of the owner is to be considered a commodity, why the privilege of holding property cannot be considered a commodity, and why all taxes cannot be levied as excise taxes, and the burden of supporting the government be imposed upon one class in the community, without regard to proportion or equality, and thus the intent of the Constitution be entirely disregarded.
• I fail also to see how the tax sought to be levied by the statute before us, if it is an excise tax, can be regarded as “ reasonable.” This word has always been held to include among its requirements equality. Thus in Portland Bank v. Apthorp,
So far as I am aware, no excise tax heretofore passed in this Commonwealth has contained any exemptions. Assuming that reasonable exemptions may be allowed, it seems to me that the Legislature in the statute now before us hаs so far exceeded its powers that the exemptions should be considered so unreason
Without dwelling upon the exemption of direct heirs, and of charitable, educational, or religious societies, which appears to me reasonable, if any exemptions are to be allowed, it seems to me that the proviso at the end of the first section is entirely um reasonable. This provides that no estate shall be subject to the provisions of this act unless the value of the same, after the payment of all debts, shall exceed the sum of ten thousand dol lors.” The effect of this is to throw a burdensome tax of five per cent, equal to a year’s income, upon a class of estates small in comparison with the large number of estates yearly administered upon in this Commonwealth.
In other States of this country, whose constitutions allow an excise tax of this nature, there is no exemption in some, while in others the exemptions run from $250 to $500, and'in none does it exceed $1,000. See Dos Passos on Collateral Inheritance Taxes, 45 et seq.
There is also another objection to which I see no answer. If this tax is to be considered constitutional on the ground that it is a tax upon the privilege of taking by devise or succession, there is clearly on the face of the act no equality. Suppose A. and B. die seised of separate estates, the respective values of which, after payment of debts, are ten and over ten thousand dollars. A. bequeaths a legacy to C. of five thousand dollars, and B. bequeaths a legacy to D. of the same amount. C. and D. each enjoy the same privilege; yet C. pays no tax, while D. pays a tax of $250. Can this be said to be equal, or even reasonable ? The necessary effect of the tax is to produce inequality; and, in my judgment, it is as much the duty of the court to declare the statute to be in violation of the Constitution as if it imposed a tax upon property and were disproportionate, as was done in Cheshire v. County Commissioners,
Notes
The testatrix gave the income of all her personal estate remaining after a compliance with the preceding provisions of her will to her husband for