*1 TERM, 1913. Argument for Plaintiffs Error. Ü. S. on exactly terms, sort of the same property the same which denial of is to make a discrimination amounts law. protection equal Chief Mr. Justice Justice Van Devanter in this concur dissent. v. SOHMER,
WHEELER COMPTROLLER OF THE
STATE OF NEW YORK. TO THE COURT OF YORK ERROR SURROGATES’ NEW COUNTY,
STATE OF NEW YORK. 6, Argued April No. 45. November 1913. Decided provision Statute, New York imposing Inheritance Tax property belonging transfer tax on within the State to a non-resident death, at the time process of his is not under the unconstitutional due promissory clause of the applied Fourtеenth Amendment as notes the makers of non-residents of State. Beach, 392, distinguished. Y.N. affirmed. The facts, which involve a State to tax promissory notes located in neither although the. owner nor the maker are residents thereof, are stated in opinion.
Mr. Charles P. Howland plaintiffs for in error: The taxation of the full value of the debts represented by these promissory deprived *2 of only evidences debt and not Promissory notes are situs, therefore, Their is not the debts themselves. аt of debts is the residence debts; of the the situs situs Buck to the relation. v. parties of one or the other of the Wall. Way, U. Pelham 15 196. Beach, 392; 206 S. v. debt and the As to the distinction between a evidence Halstead, 109 654; v. establishing it, Wyman see S. 171, Bouwens, 191; 4 M. & W. Hunter Attorney General v. Iowa, Hanson’s Death Duties Supervisors, 376; 33 v. (4th ed.), p. 239. as
A debt a warehouse representative note of a property, but is the of receipt representative personal goods of taxed the value recеipt cannot Selliger them. way represents theory some Kentucky, 200. 213 U. S. v. inheritance taxation which warrant special factors the estates of non- belonging choses in action
upon of the debtor person over the resident decedents —control obligation of the enforcement or over the means of —do (semble).' U. S. 189 188 Miller, here. Blackstone v. exist of State the owner’s In in action the the case choses of N. Y. Swift, 137 77, Matter while tax, domicile levies one a tax levies “not because domicile the State the debtor’s concerning the whereabouts speculation any theoretical fact power of the of its debt, practical because but other because words, the debtor” —in. person over the means for the by providing grants practical privilege Miller, 189; Blackstone v. collection debt. N. Y. Houdayer, 150 37. Matter of no decedent had control this case the State In That the debtors. control was persons of over 407; Beach, 392, 206 U. debtors, States 174 Sturm, I. P. U. S. R. & Chicago, R’y TERM, 436 1913.
Argument for Plaintiffs Error. 233.U. S. the universal nor the control neither succession over granted of enforcement was could the means be regu- former lated had no tax. of bonds The situs determine the situs of appears but bonds symbolize, the debts always have been distinguished from sharply promissory notes in that re- gard. purposes
For peculiar certain bonds have a recognition law, purposes taxation, the common annual or inheritance, often as having dependent treated a situs upon physical Bronson, whereabouts. Matter N. Y. Matter Y. 1; Fearing, 340; N. State Tax on Bonds, Held Foreign Wall.
But rule does not embrace notes. Buck promissory Beach, *3 This distinction between bonds and promissory notes has a basis. v. Selliger historical Kentucky, 204.
A promissory note
be
may
of
larceny.
People
Y.
Ogdensburgh,
v.
48 N.
390, 397; Buck v. Beach,
At
law
common
a promissory note was not within (cid:127)law of larceny, Regina Watts,
6 Cox, C. C. 304, but
stock,
of
wаrehouse
policies
certificates
of in-
receipts
surance are
unquestionably
subjects
larceny (Penal
of
Law
York,
88),
of
New
e.
although none of them is
the property whose situs determines the power of annual
or of inheritance taxation. Matter
James,
Taxation upon protection as a correlative, and when protection no is either practically or theoretically possible, tаxation shoúld not be laid: the broad basis for the rules taxation. limiting Union Transit Co. v. U. Matter Kentucky, 199 S. 194; Y. Bronson, 1; 150 N. of on Cooley (3d p. Taxation ed.),
WHEELER v. NEW YORK. Opinion S. of the Court. In this domicile may tax, case State testator’s (Public arid indeed does so Laws Connecticut, 1903, 63), c. succession. protects because the universal may tax, States of the debtors because protect by affording respective the debts to their courts. recourse Matter Daly, App. (N. Y.) C., 182 Y. 373; Div. N. 524; Clinch, Matter Y. 300. 180 N.
But York projected nothing. New has If such taxation is allowed, triple many case of kinds choses action is a bill possible; domiciliary exchange States of multiplicate, issued obligor owner and of the would able to primary each one the mul- tax, also to be at tiplicate happened found owner’s death. Law Stout for in error.
Mr. William defendant judgment Me. Justice Holmes delivered court. executor, an petition by proceeding began
This appointment for the an ancillary letters, under actitig amount, any, if transfer to determine the appraiser testator, C. Charles tax due the estate of the deceased from York of New was not a resident Tiffany. Tiffany York deposit box left in a New time of his death but safe a resident of Pottinger, notes made four promissory land Illinois Chicago mortgages Chicago, secured *4 Railway of the Southern trustees, notes promissory held appraiser Virginia Company, corporation. New York laws under the thеse notes taxable imposing 220 of an earlier law amending c. § § law, of or intestate by will “when the transfer is a tax was a non- the the decedent within The Sur- time of of the State at the his death.” resident TERM, Opinion of the Court. 233 ü. S. rogate confirmed the his appraiser’s report, and order was by Appellate affirmed Division and the Court of Appeals. App. Div. 327. N. Y. Ex- 550. The deprives ecutors contend that the tax them their prop- erty process without due of law.
In it this if support position that argued bonds were' simply presence because of their within jurisdiction it was due to survival primitive notions that identified the obligations parchment or paper upon which they written, were that bills had and notes a different history, and that there was no for ground extending conceptions of the infancy of the race to them. It was out pointed that the power to tax simple depends upon power contracts over the person of one of the parties and does attach to documentary evidence of such contracts that may to be happen the jurisdiction. Cases were cited in which 'this court has pronounced bills and only
WHEELER
NEW YORK.
439
Opinion of the Court.
S.U.
value of the contract because
happened
a tax on the
port
York
But
strong
testator’s New
box.
to
found
be
notes,
they
bills
be
may
that
and
whatever
plain
identification
very
come
to
with
contract
called,
near
paper
An indorsement
carries
they embody.
that
An
the endorsee.-
indorsement
in blank
the contract
to
from
to hand so that
has
the debt
hand
passes
whoever
n It is true that in some
there
the debt.
cases
has
paper
recovery
producing
surrendering
a
without
and
be
may
upon
so
there be
a bond modem
may
but
paper,
gives
tradition
It is not
alone
primitive
times.
but a
hold
modi-
bonds,
of,
to
tradition laid
peculiarities
to
and
understanding
fied
the convenience
adapted
understanding
men. The
business
same convenience and
as no
would doubt in the case
notes,
to bills and
one
apply
do not differ from others.
notes,
technically
bank
from
extraordinary
It
be an
deduction
the Four-
would
adopt
of a State to
deny
Amendment to
the power
teenth
views of
men
usages and
business
statute
that it
them their
with-
ground
depriving
cutting
The’necessity
of law.
caution
process
out due
Four-
strength
of taxation on the
power
down
to.
has
adverted
Louisville
Amendment often
been
teenth
Asphalt Pаving Co.,
Co. v. Barber
&
R. R.
Nashville
we
by authority,
we
bound
Unless
are
434.
S.
it,
with
so far as we now are concerned
statute,
think the
power
pass.
of the State
within
plainly
implied again
been asserted or
authority,
it has
toAs
had the
deal
States
again
situs. “It is
settled
footing
on the
well
paper
negotiable
bonds are in such concrete
municipal
that bank
subject
taxation where
are
they
form that
tangible
.
.
owner;
.
of the domicil
found, irrespective
...
we
nature
the same
mortgages
*6
Comptoir
d’Escompte,
National
Assessors
U. S. 388,
403,
Metropolitan
Insurance Co. v. New
404.
Orleans,
Life
is
402. This
the established
law unless
it has
overthrown
decision in Buck
been
v. Beach,
S.
No such effect
be attributed
should
that
to.
case. The
in
Ohio
Buck’s hands that were held not to
*7
it is said to be established law
cited and
Other cases
in
the decision Buck v.
overthrown
it
been
unless
has
meeting
judg-
from
I refrain
Beach,
said, was whether, under the statute as interpreted by the Suрreme Court the properties were and, if taxation, subject, so whether any rights secured by the Federal Constitution were thereby infringed. The it sustained, but will be negotiable observed that was not all or paper assessed at dealt with as an entity from separate represented. what The notes which represented the true, credits taxed were, in New Or- leans, agent but of the possession Stempel. Not they, but the rights which were the evidence were taxed. declaratiоn,. The broad therefore, that negotiable paper had tangibility to be itself taxable entity not called for. The true value applica- case its tion to at bar can the case be estimated when we consider the other cases.
In Bristol v. Washington County,
McKenna, average fair of designed by the law the em- capital the in the In other ployed words, business.” the investments in the State the of legality were taxed aiid tax situs, locality determined the notes which the notes represented them, being New York at the home company. insurance
It which situs the debt determined legal- ity of in all of the taxation the cases and united them expressed under In- principle Metropolitan Life Orleans, regards surance Co. v. New that the law place origin home, as its negotiable paper true which it will paid, return to be and its temporary absence can be left They out of account. do not suрport the broad proposition negotiable that to can paper be ascribed such entity as so to a tangibility make taxable object itself in jurisdiction than that of other the obligation it represents. This generality broad is necessary to sus- tain present if it case can regarded direct tax on property, Illinois, York; not New is the situs of the debts of which the notes evidence, taxed are the the mortgages which secure them.
That broad proposition wаs asserted in Buck v. Beach rejected. The notes origin involved had their in Ohio and represented investments in that State. Their owner died, and one of the two of his trustees will resided in In- diana. The notes were kept the custody of the latter except time .assessment taxes that State they were sent to Ohio and after lapse of a days few returned to him. They were taxed in Indiana. The tax was sustained Supreme Court but declared invalid by this court.
The proposition presentеd for decision was stated thus by Mr. Justice Peckham for the court: “The sole question then for this court is whether the presence mere notes in Indiana taxing constituted the [the debts State] the notes were the written evidence, property v. NEW YORK-
WHEELER McKenna, J., concurring. of that so within the debts jurisdiction *10 400). The (p. prior could be therein taxed” cases were are in and said: “There no cases considered, was ah as the before us has court where assessment such one have had a case where neither the been involved. We not nor resident or in party present assessed the debtor was no the where the tax was where business imposed, the or agent was done therein owner notes his relating the in the any way to the evidenced notes assessed capital for taxation. to the doctrine that mere cannot assent We presence debt, notes, such as these under evidences stated, presence amounts to the alreаdy the circumstances 406). And the State” it was property (p. within cases, specifically were pointed out that prior It doctrine. reviewed, rejected no to gave support debts, specialty not certain state overlooked that banking circulating notes institu- municipal bonds and been, property treated as where tions, have sometimes from domicile though found removed were 15 Wall. Foreign-held Bonds, on and State Tax owner, were held not to be *11 probated in Connecticut, where the deceased was a resi dent, but ancillary, letters administration were issued plaintiffs in error Surrogates’ Court, County of New York, State of York, New taxed notes were part of property disposed of his will. It appears, therefore, that the is in the property control of the courts of New York. In other words, the laws of New York are invoked, accomplish its transfer and it to the dis positions of the will and make effectual purposes оf the testator. Blackstone v. Miller, supra.
I am dealing of taxation under our deci- If sions. be injustice there in its exercise by measuring the tax by the value of the represented credits by the notes, n itis an injustice which this court cannot redress. Pitney
I am authorized to say that Mr. Justice con- curs in this opinion.
Mr. Justice Lamar, dissenting. I concur in Mr. Justice McKenna’s analysis of Buck v. Beach and the other cases, but am of opinion that the principle decided, there as applies well to inheritance and
NADAL v. MAY.
Argument
for Plaintiff Error.
that,
direct taxes and
there-
as to
*12
when the Civil
the date
Rico, and determination
Porto
opinion.
stated in the
effect,
into
of 1902 went
Code
F.Mr.
L. Cornwell
Pettingill, with whom
K.
Mr. N. B.
plaintiff
error:
brief,
meaning will.
determining
There was error
was not
interpreter
of the official
conclu-
The translation
based thereon
the construction
erroneous..
sive
jn the
and exclusion of
admission
evi-
error
There
the executors beneficiaries of the estate of their property without due
process of law, and
inwas
contravention of the Fourteenth
Amendment.
Jurisdiction of a State
purposes
transfer
in-
YORK.
NEW
WHEELER
Argument for Plaintiffs in Error.
233 Ú.
is limited to
within the
heritance
has been
phrase
recognized.
in the senses which
Orleans,
Ins. Co. v. New
Notes
evidences of the simple that contracts they express, Pelham v. Way, 15 Wyman Wall. 196; Halstead, 109 U. 654, 656, and the precise was thought issue to be disposed byof Beach, discuss case, We shall but for enough say is that moment for рurposes argument we assume that notes stand as mere evidences common law. But we are bound given construction to the New York statutes by the New York courts, and the question whether a that we statute must as purport- read ing to give to bills and notes within the same for standing as bonds purposes taxation, goes beyond the constitutional State. Again the pur- poses argument we may assume that there limits this kind power; presence that of a deed would not warrant a measured value the real estate conveyed, had even a memorandum of a required contract statute frauds would not sup-
Notes that if found not declare may awhy no reason see taxation,” New shall limits its TERM, 1913. Opinion of the Court. ü. 309, 322, 175 U. S. Bristol Stempel, Orleans v. County, Washington State Board
be tax-
able in Indiana were moved backward and forward be-
and Indiana with the
tween Ohio
intent
avoid taxation
in
was ascertained etc., and its amount receivable,” held of all the notes of the face value the sum computing assessment. at the time company lay taxing law was said of the purpose do busi- those who equally upon taxation burden comment, it said after And, the State. ness the measure clear that “Thus 399): (p.
Promissory cited. 324, was rule. circumstances of however, that is, It asserted taxation, fugitives from that were the notes case showed stay and that their Ohio, alternately from Indiana and obligations Ohio in was in evasion of Indiana But the bad prolonged.” transit, although “a not made a ground notes was possessor motive deny impulse a retributive If the court felt decision. it was suppressed. in Indiana sanctuary the notes sending the notes the motive court declared the attempt consequence of no Indiana was jurisdiction did not confer Ohio escape proper (p. 402). to tax them on Indiana Beach nor we to overrule required But are in order to sustain yield any particular make OCTOBER TERM, 1913. Lamar, J., dissenting. 233 U. S. the ease It, tax in effect, bar. reserved from its principle inheritance or taxing succession acts by rejecting as not in point cases which involved them. We said, upon “The foundation which such acts rest is different from that which exists where assessment is levied upon property. The succession inheritance tax is not a tax property, as has been held frequently by this court, Knowlton v. Moore, U. S. 41, and Blackstone v. Miller, and therefore the decisions arising under such inheritance tax cases not in point” (p. 408). under is of review that kind. In other words, it is not a tax on property, but a tax upon the transfer by the will of the plaintiffs testator of error as provided the laws of the State. The will was
taxes transfer be re- case should fore, judgment present versed. I that say am authorized to Chief Justice in' dissent. concur Mr. Devanter Justice Van v. MAY. NADAL states to the district court united ERROR PORTO RICO. 1913; reargu- 12, docket for December Restored to Submitted No. 130. Reargued April April January 1914; 6, 7, 20, 26, 1914. Decided ment 1902, go into March did effect Porto Rico of The Civil Code of n prior Ortega Lara, thеreto July 1, 1902, until necessary. conveyance by her husband was not assent wife’s to the date when a of the local courts as this court and Decisions of existing changes prior law making went material code of law not be may a rule of which should well become into effect conflicting by subsequent decisions. disturbed unwilling rule, to. overrule local tribunals court, general This Ry. Friday, Fe Central upon purely local concern. Santa matters of S. 694. Rep. affirmed. P. R. Fed. land validity of title involve the facts,