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THE INHERITANCE TAX LAW

CONTAINING

ALL AMERICAN DECISIONS AND
EXISTING STATUTES

ARTHUR W. BLAKEMORE

OF THE BOSTON BAR

Author of "Massachusetts Court Rules Annotated;" of "Wills" in the
Cyclopaedia of Law and Procedure, etc., etc.

AND

HUGH BANCROFT

Formerly District Attorney, Northern District of Massachusetts, author
of "Inheritance Taxes for Investors"

BOSTON

THE BOSTON BOOK COMPANY

1912

,^0^

^\^

The Riverdale Press, Brooktine, Mass., U.S.A.

PREFACE,

The subject of inheritance taxes is a branch of the law
which is daily growing in importance, and it is so woven
into the texture of our taxing systems that the principles
now in force bid fair to be permanent. The legislation
of 1911, with a few notable exceptions, was productive
of no great changes, and we believe that the statutes and
decisions in most of the states have so crystallized the
law that an authoritative statement at this time is not
out of place. The lapse of over fifteen years since the
publication of the last general work on Inheritance Taxes
seems to furnish ample reason for a new book at the pres-
ent time, as during that period the statutes in all the states
have substantially changed and most of them have been
in force long enough to receive final construction by the
courts.

It has been the authors' aim to make this book of prac-
tical importance to the banker and investor as well as to
the lawyer, and with this in mind we have printed in the
second part of this book all existing statutes, collated
with judicial interpretation of those statutes.

To make clear the application of the early -decisions
without extended research, we have also printed all the
earlier statutes referred to in reported cases. We have
also prepared tables for ready use by investors, showing
the law in each state at a glance and containing a list of
the corporations whose stocks are listed on the stock
exchanges, with the place of incorporation of each, which
we believe should prove of incalculable value to the in-
vestor who desires so to place his funds as to insure his
family against exorbitant or double taxation.

IV PREFACE.

We have analyzed with great care all reported opinions
and have quoted at length in the second part of the volume
instructive discussions on disputed points by our leading
courts. In short, we hope and believe that the investor
and lawyer will find everything in this work which he
may care to know about inheritance taxes in any State.
. The inheritance tax of reasonable provisions has so
many features to commend it that we believe it will prove
a permanent feature of our tax systems, although we
appreciate it is regarded by many as only fittingly de-
scribed in the words of Macbeth : —

"The time has been

That, when the brains were out, the man would die,
And there an end; but now they rise again,
With twenty mortal murders on their crowns,
And push us from our stools."

Arthur W. Blakemore.
Hugh Bancroft.

Jan. 1, 1912.

TABLE OF CONTENTS.

Chapter. Page,

I. Definitions 1

II. Nature of Tax 4

III. The Inheritance Tax in Political Economy 9

IV. History 13

V. What Law Governs — Place 17

VI. What Law Governs — Time 20

VII. Power to Impose 22

VIII. Construction of Statutes 32

IX. Validity in General 34

X. Various Constitutional Limitations 40

XI. Uniformity and Equality 45

XII. Classification by Residence 49

XIII. Classification by Relationship 53

XIV. Classification by Amount — Progressive Rates 57

XV. Notice 66

XVI. Retroactive Legislation 69

XVII. Repeal or Amendment 79

XVIII. Transfers Other than by Will 85

XIX. Transfers in Contemplation of Death 99

XX. Consideration 110

XXI. Powers 116

XXII. Methods of Avoiding Tax 123

XXIII. Title of Decedent 130

XXIV. Real Estate 132

XXV. Personal Property 135

XXVI. Pledge or Collateral 143

XXVII. Double Taxation 146

XXVIII. Estates of Non-resident Decedents 151

XXIX. Property beyond the Jurisdiction 167

XXX. Situs of Choses in Action 172

XXXI. Beneficial Interests Taxed 183

XXXII. Exemptions in General . 193

XXXIII. Exemptions for Governmental Purposes 211

XXXIV. Exemptions for Religious or Charitable Purposes 216

XXXV. Rates 224

XXXVI. Interest and Penalties 227

XXXVII. When Tax Accrues 231

XXXVIII. Persons Liable 235

XXXIX. Inventory 247

XL. Appraisal 248

TABLE OF CONTENTS.

Chapter.

XLI.

XLII.

XLIII.

XLIV.

XLV.

XLVI.

Page.

Debts and Expenses 265

Assessment of Tax 279

Collection of Tax 289

Lien 294

Payment 297

Refunding to Taxpayer 298

STATUTES ANNOTATED 303

TABLES 1281

THE INHERITANCE TAX LAW.

CHAPTER I.

DEFINITIONS.

§ 1. Death Duty.

§ 2. Inheritance Tax.

§ 3. Legacy Tax.

§ 4. Succession Tax.

§ 5. Legacy and Succession Tax Distinguished.

§ 6. Residence, Domicile, etc.

Sec. 1. Death Duty.

A death duty^ is an exaction by the state to be collected from
the property left by a deceased person while in its custody, pre-
scribed upon the occasion of his death, and the consequent devo-
lution of his property by force of its laws.^

^ Death Duties. The comprehensive English term for a variety of specific
duties levied under acts of Parliament on the estates of deceased persons. In-
cluded under the term are (1) probate duties, (2) account duties, (3) legacy
duties, (4) succession duties, and (5) estate duties. — International Encyclopedia.

^Appeal oj Hopkins, 77 Conn. 644, 649, 60 A. 657.

Sec. 2. Inheritance Tax.

The fact that a statute is called an inheritance tax is of much
significance. No term sufficiently comprehensive could be more
aptly employed to embrace a tax upon the right to acquire interests
in both real and personal property passing by will or by inheritance,
whether lineal or collateral, than the term "inheritance tax." By
this term the legislature intended to express the specific nature
of the tax and that it should operate upon interests to which a
person succeeded upon death. ^

The word "inheritance" is no doubt properly confined to property
passing by descent or by operation of law. But by popular use
this word has become applicable to cases of testacy and is broad

» e ci • "•• •

; ^1 s";:.""'/!: : : :\ * Inheritance tax law. I§§ 3-5.

enough to sustain a provision imposing a tax on the right of suc-
session by will.^

i/n re Macky, 45 Colo. 316, 102 P. 1075. See In re Morris, 138 N. C. 259,
50 S. E. 682.

Un re White, 42 Wash. 360, 84 P. 831.

Under the Tennessee Statute of 1909, c. 479, sec. 20, providing for the taxa-
tion of "inheritances," it was claimed that the word "inheritances" is to be
limited to cases of intestacy. The court observes that if this was so the statute
might be void, as class legislation; and that the revenue statutes should receive
a "fair construction to effect the end for which they were intended." The
court notes that the civil law definition of the word "inheritances" is "the
succession to all rights of the deceased"; and is of two kinds, by will and by the
operation of law. The court concludes that it is inconceivable that the legis-
lature intended by the term inheritance to confine this tax to those taking as
heirs or next of kin. Knox v. Emerson^ 123 Tenn. 409, 131 S. W. 972.

See "Smith's Wealth of Nations," Book 5, c. 2.

Sec. 3. Legacy Tax.

A tax upon an interest in personal property on the death of
another is a legacy tax.

In re Macky, 45 Colo. 316, 102 P. 1075.

Sec. 4. Succession Tax.

The term "succession tax" is of the broadest significance. A
tax upon an interest in real estate could be aptly termed a succession
tax.

In re Macky, 45 Colo. 316, 102 P. 1075.

Sec. 5. Legacy and Succession Tax Distinguished.

A legacy duty should be distinguished from a succession tax,
as the former taxes a specific inheritance or bequest, while the
latter taxes a transfer of property in general.

The New Jersey statute of 1894 differs from the New York act of 1892, which
assumes to tax the transfer of property within the jurisdiction, and the New
Jersey statute of 1894 does not undertake to tax all transfers of property within
the jurisdiction, but only taxes an inheritance, distribution, bequest, or devise.
In this respect the New Jersey statute differs also from the Maryland statute
construed in State v. Dalrymple, 70 Md. 594, 17 A. 82, 3 L. R. A. 372. For the
same reason the question is different from what it is in Massachusetts, as in
Greves v. Shaw, 173 Mass. 205, 53 N. E. 372. In short, the New Jersey statute
imposes a legacy duty and not a transfer or succession tax, as was decided in
reference to the English statute in Thompson v. Advocate General, 12 CI. & F. 1.
Neilson v. Russell, 76 N. J. L. 655, 71 A. 286, reversing 76 N. J. L. 27, 69 A. 476.

§6.] DEFINITIONS. 3

Sec. 6. Residence, Domicile, etc.

The terms residence, abode, domicile, and kindred terms differ
somewhat in meaning, but when used in statutes similar to the
Illinois inheritance statute have frequently been held to be
synonymous.

In re Moir, 207 111. 180, 69 N. E. 905, 99 Am. St. Rep. 205.

CHAPTER II.

NATURE OF TAX.

§ 7. An Excise Tax.

§ 8. A Revenue Act.

§ 9. Not a Property Tax.

§ 10. Right to Receive Rather than Right to Transmit is Taxed.

§ 11. Not a Penalty or Forfeiture.

§ 12. Privilege Taxed as a Commodity.

Sec. 7. An Excise Tax.

Inheritance taxes are commonly and properly called excise
taxes.

Booth V. Commonwealth, 130 Ky. 88, 113 S. W. 61, citing State v. Switzler, 143
Mo. 287, 45 S. W. 245. Minot v. Winthrop, 162 Mass. 113, 122, 26 L. R. A. 259,
Kingsbury v. Chapin, 196 Mass. 533, 537, 82 N. E. 700. In re Touhy, 35
Mont. 431, 90 P. 170, 172. Scholey v. Rew, 90 U. S. (23 Wall.) 331. KnowUon
V. Moore, 178 U. S. 41, 81, 20 S. Ct. 747, 44 L. Ed. 969.

The tax laid by the United States statute of 1864 is not a direct tax but instead
of that is plainly an excise tax authorized by the United States Constitution, sec. 8,
art. 1. The succession or devolution of real estate is the subject-matter of the tax
or duty. "Successor is employed in the act as the correlative to predecessor, and
the succession or devolution of the real estate is the subject-matter of the tax or
duty, or, in other words, it is the right to become the successor of real estate upon
the death of the predecessor, whether the devolution or disposition of the same
is eflfected by will, deed, or laws of descent, from a grantor, testator, ancestor, or
other person from whom the interest of the successor has been or shall be derived;
nor is the question affected in the least by the fact that the tax or duty is made a
lien upon the land, as the lien is merely an appropriate regulation to secure the
collection of the exaction." Per Clifford, J., in Scholey v. Rew, 90 U. S. (23 Wall.)
331, 347.

See further, post, s. 28, as to derivation of power to lay tax.

Sec. 8. A Revenue Act.

Inheritance taxes have been properly denominated revenue
taxation.
Succession of Givanovich, 50 La. Ann. 625.

Sec. 9. Not a Property Tax.

The courts have held, with few exceptions,^ that an inheritance tax
is a legacy duty,* or a tax on the succession, and is not a tax on the

§ 9.] NATURE OF TAX. 5

property itself,^ even in those states which hold the right to
inherit to be a natural property right.'* This result is reached,
although the amount of the tax may be measured by the value of
the property,^ although it is made a lien on property,® or although
the statute on its face levies a tax on property.^

^State V. Switzler, 143 Mo. 287, 330, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St.
Rep. 653. In re Cope, 191 Pa. St. 1, 20, 43 A. 79, 29 Pittsb. Leg. J. N. S. 379,
45 L. R. A. 316, 71 Am. St. Rep. 749, 44 Wkly. Notes Cas. 89. (The direct inherit-
ance act of 1897.)

Wis. St. 1889, c. 176, is not a tax upon a succession but upon the whole estate
at its appraised valuation regardless of whether it is solvent or insolvent. In the
case of an insolvent estate nothing would be left after the payment of debts for
transmission, and in most estates there are likely to be sufficient debts to reduce
the amount of such transmission far below the amount of such valuation. Besides,
the amount of such tax is graduated by the amount of such appraisal and is to be
paid by the executors at the time of filing the appraisal, notwithstanding they
may only be interested as such officials and never succeed to any of such estate.
Manifestly the burden imposed is not a succession tax but a tax upon the whole
estate regardless of whether it is solvent or insolvent. State v. Mann, 76 Wis. 469,
478, 45 N. W. 526, 46 N. W. 51.

^Neilson v. Russell, 76 N. J. L. 655, 71 A. 286, reversing 76 N. J. L. 27, 69
A. 476.

^ State V. Handlin (Ark. 1911), 139 S. W. 1112. In re Magnes, 32 Colo. 527,
77 P. 853. In re Macky , 45 Colo. 316, 102 P. 1075. National Safe Dep. Co. v. Sneed,
250 111. 584, 95 N. E. 973. McGhee v. State, 105 Iowa 9, 74 N. W. 695. Wieting v.
Morrow (Iowa, 1911), 132 N. W. 193. Booth v. Comm, 130 Ky. 88, 113 S. W. 61.
Leavell v. Arnold, 131 Ky. 426, 115 S. W. 232. Union Trust Co. v. Durfee, 125
Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N. 597. State v. Bazille, 97 Minn. 11,
106 N. W. 93, 6 L. R. A. N. S. 732. State v. Henderson, 160 Mo. 190, 217,
60 S. W. 1093. Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39 L. R. A. 170.
Eastwood V. Russell (N. J. 1911), 81 A. 108. In re Swift, 137 N. Y. 77, 88, 32
N. E. 1096, 18 L. R. A. 709, 64 Hun 639, 16 N. Y. Suppl. 193, 19 N. Y. Suppl. 292.
In re Davis, 149 N. Y. 539, 547, 44 N. E. 185, affirming 91 Hun 53. In
re Pell, 171 N. Y. 48, 56, 63 N. E. 789, 57 L. R. A. 540, 89 Am, St. Rep. 791,
reversing 60 N. Y. App. Div. 286, 70 N. Y. Suppl. 196. In re Vanderbilt,
172 N. Y. 69, 73, 64 N. E. 782, modifying 68 N. Y. App. Div. 27, 74 N. Y. Suppl.
450. See In re McPherson, 104 N. Y. 306, 317, 10 N. E. 685, 58 Am. Rep. 502,
where the court refuses to decide the question. In re Morris, 138 N. C. 259, 50
S. E. 682. State v. Ferris, 53 Ohio St. 314, 326, 41 N. E. 579, 30 L. R. A. 218.
In re McKennan, 25 S. D. 369, 126 N. W. 611, 130 N. W. 33. Eyre v. Jacob, 14
Gratt. (Va.) 422, 430, 73 Am. Dec. 367. Schoolfield v. Lynchburg, 78 Va. 366, 372.
In re Howard, 80 Vt. 489, 495, 68 A. 513. Black v. State, 113 Wis. 205, 217, 89 N.
W. 522, 90 Am. St. Rep. 853. State v. Bullen, 143 Wis. 512, 518, 128 N. W. 109.
Scholey v. Rew, 90 U. S. (23 Wall.) 331,349. See Stellwayen v. Durfee, 130 Mich.
166, 173, 89 N. W. 728.

It is not a tax upon the property or money bequeathed, but a diminution of the
amount that otherwise would pass under the will, and hence what the legatee
really receives is not taxed at all. It is that which is left after the tax has been

6 INHERITANCE TAX LAW. [§9.

taken off. It is only imposed once and that is before the legacy has reached the
legatee, and before it has become his property. In re Finnen, 193 Pa. St. 72, 46
A. 269 (the collateral inheritance tax of 1887). "It is a reduction by the state
of a part of a deceased person's property which the state may take to meet its
necessities and which, in certain cases, it may take in toto, as in the cases of es-
cheated property." Per Wilkes, J., in State v. Alston, 94 Tenn. 674, 30 S. W. 750,
28 L. R. A. 178.

The exemption in La. Const. 1898 from the operation of the inheritance tax
of property which had borne its just share of taxation arose from a misapprehen-
sion of the inheritance tax, which is not a tax proper, but a bonus or premium
exacted by the sovereign on the transmission of an estate, the amount being meas-
ured by the value of the property. In its very nature it is a privilege or fran-
chise tax and is not affected by the nature and character of the property
transmitted. Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

That the right to acquh*e property inter vivos is a natural right and the tax
on it is a tax on property was suggested and not considered as the case pending
was one of intestacy in Eastwood v. Russell (N. J. 1911), 81 A. 108.

* It was claimed that because the court held in the Nunnemacher case, 129 Wis.
190, 108 N. W. 627, 9 L. R. A. N. S. 121, that the right to inherit a devised prop-
erty was a natural right, therefore it was a property right; and hence an inherit-
ance tax must logically be held to be a tax upon a property right and subject to
the provision that it must be absolutely uniform. The court says that the con-
clusion does not follow; that taxes frequently are levied upon transactions or
occupations which are matters of natural right; and that these matters are mere
privilege taxes. Beats v. State, 139 Wis. 544, 556, 121 N. W. 347.

^Succession of Kohn, 115 La. Ann. 71, 38 S. 898. Kingsbury v. Chapin, 196
Mass. 533, 537, 82 N. E, 700. State Street Trust Co. v. Stevens, 209 Mass. 373,
95 N. E. 851. Pullen v. Commissioners, 66 N. C. 361.

"In nearly all inheritance tax laws the statutes provide for the appraising of
property to be inherited, but the object of such valuation is not to tax the prop-
erty itself, it is to arrive at a measure of price by which the privilege of inheriting
can be valued." Per Hunt, J., in Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39
L. R. A. 170.

While referring to the property devised or inherited it does so only to secure
uniformity among the beneficiaries receiving the property, the object being to
tax each in proportion to his or her interest received and for that privilege. State
V. Henderson, 160 Mo. 190, 215, 60 S. W. 1093.

It is insisted that as the tax is a certain per cent of the value of the estate and
the property pays it, it is therefore a tax on the property itself. But the court
relying on Eyre v. Jacobs, 14 Gratt. 422, remarks that this is by no means a neces-
sary logical conclusion, that "the intention of the legislature was plainly to tax
the transmission of property by devise or descent to collateral kindred and to
require that a party then taking the benefit of a civil right accrued to him under the
law should pay a certain premium for its enjoyment; and as it was thought just and
reasonable that the amount of the premium should bearacertain proportion to the
value of the subject enjoyed it is fixed at a certain per centum upon the value of
the whole estate transmitted." Booth v. Commonwealth, 130 Ky. 88, 113S. W.61.

''State V. Ferris, 53 Ohio St. 314, 326, 41 N. E. 579, 30 L. R. A. 218, distinguish-
ing E^tote ofBittinger, 129 Pa. St. 344. As to lien, see post, s. 406 et seq.

§ 10.] NATURE OF TAX. 7

"The lien is merely an appropriate regulation to secure the collection of the
exaction." Per Clifford, J., in Scholey v. Rew, 90 U. S. (23 Wall.) 331, 347, 23
L. R. A. 99. Contra, In re Bittinger, 129 Pa. St. 338.

■'Gelsthorpe v.Furnell, 20 Mont. 299, 51 P. 267, 269, 39 L. R. A. 170. The court
relies upon State v. Hamlin, 86 Me. 495, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A.
632, and on State v. Ferris, 53 Ohio St. 314, 41 N. E. 579, where the statutes also
on their face were upon the "property," and although it provides that administra-
tors, executors and trustees shall be liable for all such taxes. Humphreys v. State,
70 Ohio St. 67, 84, 101 Am. St. 888, 70 N. E. 957, 65 L. R. A. 776, affirming 13
Low. D. 168, 1 C. C. N. S. 1, 14 Cur. D. 238.

Sec. 10. Right to Receive rather than Right to Transmit
is Taxed.

It is the better view that the inheritance tax is laid on the right
or privilege of receiving property rather than on that of trans-
mitting,^ although it has been held also a tax on the right of trans-
mission,^ or on the transmission itself,^ and the question will
depend on the language of the particular statute."*

1 In re Kennedy, 157 Cal. 517, 108 P. 280. In re Macky, 45 Colo. 316, 102
P. 1075. In re Speed, 216 111. 23, 27, 74 N. E. 809, 108 Am. St. Rep. 189; affirmed
203 U. S. 553, State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472. Pullen v.
Commissioners, 66 N. C. 361. State v. Ferris, 53 Ohio St. 314, 325, 41 N. E.
579, 30 L. R. A. 218. Humphreys v. State, 70 Ohio St. 67, 84, 101 Am. St.
888, 70 N. E. 957, 65 L. R. A. 776, affirming 13 Low. D. 168, C. C. N. S. 1; 14
Cir. D. 238. Eury v. State, 72 Ohio St. 448, 74 N. E. 650. State v. Alston,
94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178. Knox v. Emerson, 123 Tenn. 409,
131 S. W. 972. In re Joyslin, 76 Vt. 88, 56 A. 281. Black v. State, 113 Wis.
205, 217, 89 N. W. 522, 90 Am. St. Rep. 853. State v. Bullen, 143 Wis. 512, 518,
128 N. W. 109.

The most exact rule is that which regards the inheritance tax as upon the right
to receive property rather than the right to dispose of it. "Properly under-
stood, it is not the right to transmit, but the right and privilege to receive, that
is taxed. The right to dispose of property during the lifetime of the owner
cannot be separated from the property itself, and therefore to tax the right of
disposal by contract in the lifetime of the owner, even though it take effect at
his death, is to tax the property itself. But the right to dispose of the property
by will or descent, taking effect after the death of the owner, is not so closely
connected with the right of property, and it is not clear that such right may not
be taxed. But, when the right to receive the property is considered, it is clear
that the right is distinct and separate from the propeity itself, and the state
may tax this right to receive property; and this is so whether the property is
disposed of by the owner during his lifetime, or at his death. This right to
receive property is under the control of the legislature, and it has the power
to regulate and lay such burdens thereon as it may see fit, within the provisions
of the constitution. To regulate by taxation or otherwise the privilege or right
to receive property is not in conflict with the first section of the bill of rights,
which recognizes the inalienable right of acquiring, possessing, and protecting

8 INHERITANCE TAX LAW. [§§11-12.

property. Were it otherwise, all our laws as to wills, descent, distribution, and
conveyances would be unconstitutional," Per Burkett, J., in State v. Ferris,
53 Ohio St. 314, 41 N. E. 579, approved in Gelsthorpe v. Furnell, 20 Mont. 299,
51 P. 267, 39 L. R. A. 170.

^State Street Trust Co. v. Stevens, 209 Mass. 373, 95 N. E. 851. "This is an
excise tax, imposed, not only upon the right of the owner of property to transmit
it after his deach, but also upon the privilege of his beneficiaries to succeed to the
property thus dealt with," Att. Gen. v. Stone, 209 Mass. 186, 95 N. E. 395.

3/w re McKennan, 25 S. Dak. 369, 126 N. W. 611, 614, reversed on rehearing,
130 N. W. 33.

The court after considering ancient and modern death duties concludes as
follows: "Although different modes of assessing such duties prevail, and although
they have different accidental names, such as probate duties, stamp duties,
taxes on the transaction, or the act of passing of an estate or a succession, legacy
taxes, estate taxes or privilege taxes, nevertheless tax laws of this nature in all
countries rest in their essence upon the principle that death is the generating
source from which the particular taxing power takes its being and that it is the
power to transmit, or the transmission from the dead to the living, on which
such taxes are more immediately rested." Knowlton v. Moore, 178 U. S. 41,
56, 20 S. Ct. 747, 44 L. Ed. 969.

* Minot V. Winthrop, 162 Mass. 113.

Sec. 11. Not a Penalty or Forfeiture.

The tax is in the nature of an assessment and is not a penalty,*
or a forfeiture. 2

^Strode v. Conn., 52 Pa. St. 181.

^Arnaud v. Arnaud, 3 La. Ann. 337. Carpenter v. Pennsylvania, 17 How. (U. S.)
456, 462.

Sec. 12. Privilege Taxed as a "Commodity.''

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 Massachusetts constitution, and an
excise may be laid upon it.

Minot V. Winthrop, 162 Mass. 113, 122 (Lathrop, J., dissenting), 26 L. R. A.
259.

CHAPTER III,

THE INHERITANCE TAX IN POLITICAL
ECONOMY.

§ 13. Economically Sound.

§ 14. Arguments in Favor of and Against Tax.

Sec. 13. Economically Sound.

Firmly entrenched in a long and honorable history, with the
endorsement of the leading economists of ancient and modern times,
and approved by the present practice of most civilized govern-
ments, he would be indeed brave who should attempt to attack
the theory or validity of any sane inheritance tax from an economic
standpoint.

See In re Morris, 138 N. C. 259, 50 S. E. 682.

A very learned discussion of the economic theory of the inheritance taxes
may be found in the monograph on the inheritance tax by Max West, pubUshed
in 1908, on pages 189, et seq. Mr. West notes that the inheritance tax has
received the approbation of political economists from a very early day down
to recent times. It was advocated by Pliny the younger, and by Adam Smith
(Wealth of Nations, bk, V, chap. II, pt. II), although Smith pointed out the
inequality of the taxes caused by the fact that the frequency of transference was
not always equal in property of equal value. Mr. West notes the objection of
Ricardo (Principles of Political Economy and Taxation, chap. VIII), whose views
were criticised by McCulloch. Jeremy Bentham was a stror^g advocate of the
inheritance tax. John Stuart Mill (Principles of Political Economy, bk. V,
chap. XI, s. 3), advocated not only progressive inheritance taxes but the
abolition of collateral inheritance and a limitation of the amount which any one
should be allowed to take either by inheritance or bequest. Mr. West, on
pages 195 and 196, cites many political writers on inheritance taxes.

From an economic standpoint no tax has more to commend it and none
is easier to defend As has been well said: "This method of increasing the
public revenue is wise, simple, and effective — wise because it does not touch
private property during the life of the owner and thus places no burden upon
business activity; simple because the tax is easily ascertained and collected
while estates are being administered in the probate court; effective because
by the application of progressive rates, it adds no burden to the poor, but permits
those who have much to contribute to the government somewhat in proportion
to their ability to pay. It invades no natural rights. It violates no maxim of
the law. It overleaps no constitutional barriers. It is neither revolutionary
nor socialistic, but is, on the contrary, a measure of practical wisdom and social

10 INHERITANCE TAX LAW. [§ 14.

justice, and has been truly styled an 'institution of democracy.' " Another
desirable feature of the inheritance tax is the fact that it cannot be shifted.
(Report of Minnesota Tax Commission, 1910.)

How often Property becomes Subject to Tax. In the learned treatise
on the inheritance tax by Max West, pages 228, et seq., he points out that the
length of a generation is from thirty-three to thirty-six years and that one thirty-
third to one thirty-sixth of the private wealth of a country will change hands
annually by inheritance, bequest, or gifts causa mortis, aside from the exemptions.
It has been calculated that in Massachusetts one-ninth of the tax will be elimi-
nated by an exemption of five thousand dollars or one-fifth by an exemption
of ten thousand dollars, and that at least one-fiftieth of the private wealth of a
state should annually become subject to inheritance taxes, even if the ten thou-
sand dollar exemption applied to all estate in New York and Massachusetts.

Sec. 14. Arguments in Favor of and Against the Tax.

The most common arguments against the tax are that it bears
on those least able to afford it, and that it is harsh and unequal
in one form or another.^

No defense can well be made of confiscation, as practiced in
Oklahoma and in the New York act of 1910, or of the double
taxation which most of our statutes impose on non-residents, but
to a fair, reasonable law with liberal exemptions there can be no
objection.

There is much to be said in favor of the tax. It is certain and
economical in collection, it bears usually on the wealthy, who are
best able to pay it, and as it never takes what the taxpayer has,
but only what he is to get, it is ideal from the standpoint of the
French tax commissioner who remarked, "The science of taxation
consists in plucking the most feathers with the least squawking. "^

1 Mr. West, on pages 209 et seq., considers the objections to the inheritance
tax as follows: —

First. That it is a tax on capital and hence tends to diminish the national wealth.

Second. Its inequality on account of a varying frequency of transfers result-
ing from death.

Third. That to levy a property tax and inheritance tax on the same property
in the same year constitutes double taxation.

Fourth. That the tax is a tax upon widows and orphans.

Fifth. That the tax will discourage industry and thrift and drive away capital.

Sixth. That the tax will be evaded by gifts inter vivos.

Seventh. That the tax is confiscation, extortion, and a dangerous step towards
communism.

2 Advantages. On pages 213 et seq., Mr. West considers the practical advan-
tages of the inheritance tax as follows: —

It is certain, the cost of collection is not high, and as to the time of payment,
it is the most convenient of all direct taxes. It leaves little opportunity for

§ 14.] IN POLITICAL ECONOMY. 11

fraud. The receipts do not come in all at the same time, but are distributed
through the entire year. The returns are remarkably constant from year to
year. It is elastic, as an increase in the rate of tax cannot diminish the death
rate and the tax itself cannot be shifted.

"Ability or faculty to pay has come to be the test in determining the just-
ness of taxation." State v. Baaille, 97 Minn. 11, 16, 106 N. W. 93, 6 L. R. A.
(N. S.) 732.

The arguments that the recipient of the larger amount is able to pay a
larger rate of tax and that it is against public policy to allow large estates to
be held together after the death of the owners, are discussed in In re McKennan,
25 S. D. 369, 126 N. W. 611, 618 (reversed on rehearing), 130 N. W. 33.

Arguments Classified. Mr. West classifies the arguments in favor of the
inheritance tax, on pages 199 / seq., as follows: —

1. The Extension-of-Escheat Argument — that no good reason exists for
intestate inheritance between distant relatives.

2. The Diffusion-of- Wealth Argument — that large estates should not be
allowed to remain in one family.

3. The Partnership Argument — that the state is a silent partner in the
business of each citizen and when the partnership is dissolved by death the
silent partner is entitled to a share of the capital.

4. The Value-of -Service Argument — that the inheritance tax is a payment
for the particular services connected with the institutions of inheritance and
bequest and that these are not natural rights, but privileges conferred by positive
law.

6. The Cost-of-Service Argument considers the expense of governmental
action rather than its value to the heir and would make the tax defray the
expense of the probate courts, and other expenses connected with the inheritance.

6. The Back-Taxes Argument, to the effect that inheritance taxes are in
place of taxes which have been evaded by property owners during their lives.

7. The Lump-Sum Argument considers the tax as a property tax or a capital-
ized income tax and paid once in a generation instead of once a year.

8. The Accidental-Income Argument — that inheritance is a sudden acquisi-
tion of property without effort on the part of the heir, an accretion of wealth,
which manifestly increases his ability to pay taxes.

9. The Co-heirship of the State in which the state and the local political
units are regarded as co-heirs with individuals.

The tax is regarded in number 1 and 2 as a limitation of inheritance
in numbers 3, 4 and 5 as a fee; and in numbers 6, 7 and 8 as a tax.

Strongest Argument for the Tax. "One of the strongest arguments in favor
of the inheritance tax arises from the recognized right and duty of the state
to regulate inheritance to such an extent as the public welfare may require.
The right of bequest and inheritance is a natural right only to the extent that
it is socially useful; that it furnishes an incentive to the creation of wealth or
furthers its preservation and judicious management. Although we uphold
devise and descent as the best known method of securing this end, yet we must
admit that it is open to very serious objection and very often fails completely.
While the man who acquires wealth by that act gives evidence of his ability
to manage it properly, it is by no means so certain that his heirs will possess
that qualification. It is most fitting, therefore, that the state in apportioning

12 INHERITANCE TAX LAW. [§14.

the burden of taxation should take cognizance of this condition and obtain a
portion of its revenue from estates at the time of their transfer to hands that
have given no evidence of ability to manage them economically. Such a tax,
if the rate be moderate, can only further the true social function of devise and
descent, i.e., the furtherance of the creation and the judicious management of
wealth. The tax is an incentive rather than a hindrance to the creation of wealth
and insures that after its transfer at death a certain portion at least will serve
a socially useful purpose."

(Address by Dr. Robert H . Whitten, in 1901 , before the National Tax Conference.)

CHAPTER IV.

HISTORY.

§ 15. Early History.

1 16. State Statutes Copied from other States.

§ 17. The Present Situation.

§ 18. History of Federal Legislation.

Sec. 15. Early History.

Inheritance taxes have been imposed since very early times,*
the earhest mention of them being in Egypt.^ The tax is no new
invention of the legislative power for the purpose of putting
money in the public coffers. Gibbon, the historian, traces its
origin to the Emperor Augustus, and says it was suggested by him
to the senate as a means of supporting the Roman army; that it
was imposed at the rate of five per cent, upon all legacies or inherit-
ances above a certain value, but that it was not collected from the
nearest relatives upon the father's side; and that the tax was
most fruitful as well as most comprehensive.^ It was called
''vicessima hereditatum et legatorum.'* This method of taxation
has been long resorted to in European countries, and was
introduced into Great Britain by Lord North and adopted in
1780. Of the states of the American Union, Pennsylvania was
the first to adopt it, in 1826, since which date it has been adopted
as a means of governmental support by a great many other states."*
Such taxes were recognized by the Roman law.^ They were
adopted in England in 1780, and have been much extended since
that date.^ Such taxes are now in force generally in the countries
of Europe.^ In the United States they were enacted in Pennsyl-
vania in 1826; Maryland, 1844; Delaware, 1869; West Virginia,
1887, and still more recently in Connecticut, New Jersey, Ohio,
Maine, Massachusetts, 1891; Tennessee in 1891, chapter 25, now
repealed by chapter 174, acts 1893. They were adopted in North
Carolina in 1846, but repealed in 1883, were enacted in Virginia
in 1884, repealed in 1885, re-enacted in 1863, and repealed in
1884.8

The practice has long been resorted to in European countries
and was introduced in England in the last century, and was en-

14 INHERITANCE TAX LAW. [§ 16.

larged from time to time till 1853, when it was extended to all
successions to real property, chattels real, and a vast variety of
personal property and rights.^

^Appeal of Nettleton, 76 Conn. 235, 241, 56 A. 565. State v. Bazille, 97 Minn.
11, 16, 106 N. W. 93, 6 L. R. A. (N. S.) 732. Knowlton v. Moore, 178 U. S.
41, 48, 49, 20 S. Ct. 747, 44 L. Ed. 969.

2 The early history of the inheritance tax is traced by Max West in his
learned monograph on the inheritance tax, pages 11 e^ seq. Mr. West states that
the earliest known inheritance tax was imposed in Egypt in the seventh century
before Christ; that the Romans copied the idea from the Egyptians; that it
was imposed in Rome by the Emperor Augustus in the year 6 A.D., and pre-
vailed for about two hundred and fifty years. Under the feudal system the
inheritance tax, as Mr. West observes, was represented by the relief and heriot.
Mr. West suggests that the relief and heriot are probably feudal in their origin
and are not copied from the Roman tax.

Inheritance taxes during the seventh century were imposed in Germany and
the Netherlands and in Italy before the close of the fourteenth century and
at various times since.

n Gibbon's Rome, 133; Encyc. Brit. (8th Am. Ed.) 65, tit. "Taxation."

4 In re Morris, 138 N. C. 259, 50 S. E. 682.

^ Gibbon's Decline and Fall of the Roman Empire, vol. 1, pp. 163-4.

«Doweirs History of Taxation in England, 148; Acts 20 George III, c. 28;
45 George III, c. 28; 16 and 17 Vict., c. 51; Green v. Croft, 2 H. Bl. 30; Hill
V. Atkinson, 2 Merivale 45.

' "Review of Reviews," February, 1893.

8 Per Wilkes, J., in State v, Alston, 94 Tenn. 674, 30, S. W. 750, 751, 28 L. R. A.
178, quoted with approval in Magoun v. Illinois Trust & Savings Bank, 170 U. S.
283, 287, 18 Sup. Ct. 594, 42 L. Ed. 1037.

^ State V. Hamlin, 86 Me. 495, 498, 30 A. 76, 41 A. St. Rep. 569, 25 L. R. A.
632.

Sec. 16. State Statutes Copied from Other States.

The early New York act has been followed very closely in
Illinois,^ Maine,2 Michigan,^ and Wisconsin,* and with some changes
in New Jersey.^

The Maine statute has been the model for legislation in Ken-
tucky^ and Ohio, which also follows the Virginia act.^ The Ten-
nessee statute is copied after Pennsylvania,^ and the New Hampshire
act after Massachusetts,^ and the Utah act after lowa.^^

1 People V. Griffith, 245 111. 532, 92 N. E. 313. See statement in In re Inherit-
ance Tax, 23 Colo. 492, 493, 48 P. 535.

^State V. Hamlin, 86 Me. 495, 500, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A.
632.

^Stellwagen v. Durfee, 130 Mich. 166, 89 N. W. 728, 8 Detroit Leg. N. 1204.
Miller v. McLaughlin, 141 Mich. 425, 104 N. W. 777, 12 Detroit Leg. N. 501.
In re Stanton, 142 Mich. 491, 105 N. W. 1122, 12 Detroit Leg. N. 829.

§§17-18.] HISTORY. 15

* Wis. St. 899, c. 355, is in all essential respects a literal copy of the New York
law, N. Y. St. 1892, c. 399, with the important exceptions that in the New York
law all transfers to collateral kindred and strangers of the value of five hundred
dollars or over are taxed, while in the Wisconsin law such transfers are not
taxed unless they equal or exceed ten thousand dollars; and in New York the
tax is imposed upon transfers of both real and personal property, while in Wis-
consin it is confined to personal property alone. Black v. State, 113 Wis. 205,
211, 89 N. W. 522, 90 Am. St. Rep. 853.

6 Neilson v. Russell, 76 N. J. L. 655, 71 A. 286, 287, reversing 76 N. J. L. 27,
69 A. 476.

^Booth v. Commonwealth, 130 Ky. 88, 113 S. W. 61.

''Dyer v. Hagerty, 5 Ohio Cir. Dec. 701, 12 Ohio Cir. Ct. 606.

*Tenn, St. 1893, c. 174, is almost identical in terms with the Pennsylvania
statute. English v. Crenshaw, 120 Tenn. 531, 110 S. W. 210.

^Mann v. Carter, 74 N. H. 345, 347.

^'> Dixon v. Rickets, 26 U. 215, 72 P. 47.

Sec. 17. The Present Situation.

Most civilized countries are today employing the inheritance
tax as a source of revenue,^ and it is in force in the United States
in all but a few states.^

*Now Employed in Nearly All Enlightened Countries. Under different
names the tax is now employed in nearly every civilized country, and is most
highly developed in the Australasian states, where democratic ideas have taken
the deepest root. It exists in Great Britain, France, Germany, Switzerland, the
Netherlands, Belgium, Sweden, Norway, Denmark, Austria-Hungary, Italy,
and nearly all of the other European countries. It is part of the revenue system
of every state in the union except Alabama, Florida, Georgia, Indiana, Kansas,
Mississippi, Nevada, Rhode Island, and South Carolina. In the Australasian
colonies succession duties are among the chief source of revenue; and in some
cases heavy progressive taxes have been imposed, not from fiscal considerations
alone, but also for the purpose of breaking up large estates. The rates are
progressive in all of the colonies, rising to ten per cent in Victoria, New South
Wales, South Australia, and Western Australia, to thirteen per cent in New
Zealand, and to twenty per cent in Queensland. It is stated upon the best
authority that the institution of private property has not weakened, nor capital
driven from the colonies, by these progressive taxes. They have given very
general satisfaction and in almost every instance the rates have been increased
after the tax has been in operation for a time. The graduation according to
relationship is much less elaborate than in European countries; usually not
more than two or three classes of relatives are distinguished. Report of Minne-
sota Tax Commission, 1910.

2 See tables, post, p. 1285.

Sec. 18. History of Federal Legislation.

Congress imposed a legacy tax in 1797 by the act of July 6,
1797, c. 11, 1 Stat. 527, which act was repealed June 30, 1802,

16 INHERITANCE TAX LAW. [§ 18.

2 Stat. 148, c. 17. In this statute, as in the English legacy duty
statute of 1780, the mode of collection provided was by stamp
duties laid on the receipts evidencing the payment of the legacies
or distributive shares in personal property, and the amount was,
like the English legacy tax, charged upon the legacies and not upon
the residue of the personal estate.

A legacy tax was again enacted by the statute of 1862, 12 Stat.
433, 485, sections 111 and 112 of chapter 119, and repealed in 1870.
This statute, like the act of 1797, was a tax imposed on legacies
or distributive shares of personal property, but contained a new
form of death duty. By section 194 a probate duty, proportioned
to the amount of the estate and to be paid by way of stamps, was
levied, and repealed in 1872. The result of the act of 1862 was to
cause the death duties imposed by congress to greatly resemble
those then existing in England; that is, first, a legacy tax, charge-
able against each legacy or distributive share, and a probate duty
chargeable against the mass of the estate. Thus it came to pass
that the system of death duties prevailing in England and that
adopted by congress were substantially identical, and of a three-
fold nature, that is, a probate duty charged upon the whole estate,
a legacy duty charged upon each legacy or distributive share of
personalty, and a succession duty charged against each interest in
real property. The fact that the framers had in mind the English
law was conclusively demonstrated by section 127, wherein the
succession or real estate inheritance tax was defined in substantially
similar terms to that contained in the English succession duty
act. The parallel was observed by the court in Sholey v. Rew,
23 Wall. 331, 349.^

The tax was again enacted as a war measure in 1898 and repealed
in 1902.2

^Knowlton v. Moore, 178 U. S. 41, 50, 20 S. Ct. 747, 44 L. Ed. 969.
2 See post, p. 1264 et seq.

CHAPTER V.

WHAT LAW GOVERNS. — PLACE.

§ 19. Law of Domicile of Decedent. — Change of Domicile.

§ 20. Power of Appointment.

i 21. Extraterritorial Effect of Judgment as to Domicile.

Sec. 19. Law of Domicile of Decedent. — Change of
Domicile.

Inheritance taxes may not apply to the estates of non-residents,^
unless such estate^ are specifically included. ^ The law of the
domicile of the decedent governs the rate of tax and the persons
liable.^

Where the grantor, after making a deed in trust to assign the
property in accordance with her will, moved from Pennsylvania,
where the trustee resided, to New York, where she died, the court
holds that the change in the domicile of the grantor did not affect
the right of the state to collect the tax, that the statute grasped
the estate when one citizen created the trust with the features
described and made this the domicile or situs of the estate. As
the grantor could not take the property out of its jurisdiction by
any act of hers, so she could not make it follow her or affect it
with any incidents of the new domicile when she removed."*

1 United States v. Morris, 27 Fed. 341. United States v. Hunnewell, 13 Fed. 617»
aliens.

The question whether the statute of 1898, section 29, imposes a legacy tax
upon the estates of persons who are not domiciled in the United States at the
time of death, is not free from doubt, and the attorney general declines to give
any opinion upon it. 23 Opinions of the Attorney General, 221 (September 7,
1900).

"In England the question of probate duty depends upon the situs of the property
and not the domicile of the owner. Attorney General v. Hope, 1 Cromp., Mes.
& Ros., 530. It was for some time held that the legacy duty imposed by 36
Geo. Ill, ch. 52, and 48 Geo. Ill, ch. 149, depended upon the same consideration.
Attorney General v. Cockerell, 1 Price, 560. But these cases were overruled in
Thompson v. Advocate General, 12 Clark & Fin. 1; and the principle was settled
that the law of the domicile of the owner of personal property determines its
liability to legacy duty. The same rule was adopted in respect to the succession
duty under 16 and 17 Vic, ch. 51. Wallace v. Attorney General, L. R. 1 Ch.
App. c. 1. In the case last referred to, Lord Chancellor Cranworth said,

18 INHERITANCE TAX LAW. [§19.

'Parliament has, no doubt, the power of taxing the succession of foreigners to
their personal property in this country; but I can hardly think we ought to
presume such an intention unless it is clearly stated.' Thus whilst the power
of Parliament to impose the tax without reference at all to the subject of domicile
is distinctly recognized, it was held that the language of the acts did not furnish
any indication of an intention to exercise that power, and that, therefore, the
law of the domicile of the owner fixed the liability of his property to pay these
taxes. In our opinion, for the reasons we have given, the Maryland statute
cannot be so construed." Per McSherry, J., in State v. Dalrymple, 70 Md. 294,
304, 17 A. 82, 3 L. R. A. 372. See further, post, Chapter XXVIII.

'^Most states now tax the property in the state of non-residents. See tables,
post, p. 1285.

' The testator while a citizen of France married, and under French law his
wife was entitled to one-half of his property on his death; but the court holds
that where he afterwards becomes a citizen of New York and owns property
there one-half his property is not exempt from taxation on the ground that it
belongs to his wife. In re Majot, 135 N, Y. App. Div. 409, 119 N. Y. Suppl.
888. See post, s. 288.

The intestate died a citizen of Kentucky having personal property in Ten-
nessee. Under the laws of Kentucky his mother was the sole distributee, while
under the laws of Tennessee his brother would take one-half of the estate. Under
Tenn. St. 1893, c. 174, s. 1, this property is not subject to tax, as it is settled
that if one dies domiciled in a foreign state leaving personal property in this
state the laws of the domicile of the deceased will determine who are entitled to
the surplus after the payment of debts. Fidelity & Deposit Co. v. Crenshaw,
120 Tenn. 531, 110 S. W. 1017.

Conversion. A note in 19 Harvard Law Review, pp. 20i, 202, discusses
conversion and suggests that the question as to whether a conversion has taken
place must be determined by the law of the state where the land is situate, since
that state alone has dominion over the property. But if it is determined that
there is a conversion succession will occur by the law of the decedent's domicile
as in the case of other personalty.

Findings as to Domicile. The court upholds a finding as to domicile in
Pittsfield, where it appears that it was the only place where the testator ever
voted or paid a personal tax, and that he continued to return there to his home
with a friend to the very time of his death, and died there, that he declared
that to be his home, and made it a point to return there and vote at the presi-
dential elections when his business interests would permit. In re Dalrymple,
215 Pa. St. 367, 371, 64 A. 554.

Under the Illinois inheritance tax a man is a resident of Illinois who has lived
in Illinois for some years and who has declared his intention of moving out of
the state as soon as his business is settled. He was taken ill and went to the
house of a daughter in another state, where he died. The facts show that he
went to his daughter's house for a temporary purpose only. In re Moir, 207
111. 180, 69 N. E. 905, 99 Am. St. Rep. 205. As to disputed domicile see further,
post, s. 192.

< Commonwealth v. Kuhn, 2 Pa. Co. Ct. 248.

§§ 20-21.1 WHAT LAW GOVERNS. — PLACE. 19

Sec. 20. Power of Appointment.

Where a testator died in 1870 a resident of New York, leaving a
will under which he gave his daughter a life estate with a power
of appointment, and the daughter died in 1908, being a resident
of the state of Rhode Island, leaving a will by which she exercised
the power, no tax can be imposed under New York law, as the life
tenant in making her will exercised a privilege granted by the laws
of her own state, and not by those of the state of New York.

In re Fearing, 200 N. Y. 340, 93 N. E. 956, affirming 123 N. Y. Suppl. 396.
As to powers, see further, post, s. 139 et seq.

Sec. 21. Extraterritorial Effect of Judgment as to Domicile.

The decision of one state as to domicile is binding on courts in
other states.

Where a will was probated by the probate court of New Jersey which found
that the deceased was a resident of New Jersey, this decree is entitled to full
faith and credit under the federal constitution in another state and is a bar
in the courts of another state against an attempt in the latter state to enforce
a claim for the inheritance tax on the ground that the testator was domiciled
there at the time of his death. Tili v. Kelsey, 207 U. S. 43, 52 L. Ed. 95, revers-
ing 182 N. Y. 557. See, however. In re Hartman, 70 N. J. Eq. 664, 62 A. 560;
In re Cummings, 142 N. Y. App. Div. 377, 127 N. Y. Suppl. 109, reversing 63
Misc. 621, 118 N. Y. Suppl. 684. See also, post, s. 192.

The action of the court of the domicile as to distribution of asseto may be
binding on the court of the jurisdiction where the assets are, on the question of
marshaling assets. In re Clark, 37 Wash. 671, 80 P. 267.

CHAPTER VI.

WHAT LAW GOVERNS. — TIME.

§ 22. Law at Death of Decedent.

§ 23. Effect of Unconstitutional Statute.

§ 24. Property in Hands of Trustee.

§ 25. Gifts Causa Mortis.

§ 26. Deed Inter Vivos.

Sec. 22. Law at Death of Decedent.

The substantive rights of the state and the taxpayer in an
inheritance tax depend on the law in force at the death of the
decedent,^ even under a will executed before the passage of the
statute in force at his death, ^ and not on the time the remainder
falls in,^ but the procedure governing its collection will depend on
the law in force at the date when the proceedings began .^

^In re Stanford's Estate, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. Trippet v-
State, 149 Cal. 521, 86 P. 1084, 8 L. R. A. (N. S.) 1210. In re Woodard's Estate,
153 Cal. 39, 94 P. 242. Crocker v. Shaw, 174 Mass. 266, 54 N. E. 549. State
V. Switzler, 143 Mo. 287, 330, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep.
653. In re Fayerweather, 143 N. Y. 114, 38 N. E. 278, right to interest. In re
Davis, 149 N. Y. 539, 545, 44 N. E. 185, affirming 91 Hun 53. In re Sloane, 154
N. Y. 109, 47 N. E. 978, 19 N. Y. App. Div. 411, 46 N. Y. Suppl. 264. In re
Milne, 76 Hun 328, 27 N. Y. Suppl. 727, penalties and interest. In re Sterling,
9 Misc. Rep. 224, 30 N. Y. Suppl. 385.

N. Y. St. 1885, c. 483, which was approved June 10, 1885, did not take effect
until twenty days after its passage, and therefore no tax could be levied on the
estate of a testatrix who died June 16, 1885. In re Howe, 112 N. Y. 100, 19
N. E. 513, 2 L. R. A. 825, affirming 48 Hun 235. (Law governing action for
refunding, post, s. 414).

2/» re Seaman, 147 N. Y. 69, 77, 41 N. E. 401, reversing 87 Hun 619.

3 Where the testator died in 1828, leaving a life tenant who died in 1864, the
whole estate passed in 1828, and the tax on the remainder interest is payable
at the rate under the statute in force in 1828 of two and one-half per cent and
not under the higher rate in force on the death of the life tenant. Common-
wealth V. Eckhert, 53 Pa. St. (3 P. F. Smith) 102.

*/« re Sloane, 154 N. Y. 109,47 N. E. 978, 19 N. Y. App. Div. 411, 46 N. Y.
Suppl. 2«4. In re Davis, 149 N. Y. 539, 545, 44 N. E. 185, affirming 91 Hun 53.
See further, Proceedings for collection, post, s. 395 et seq.

§§ 23-26.1 WHAT LAW GOVERNS. — TIME. 21

Sec. 23. Effect of Unconstitutional Statute.

Where an unconstitutional statute was nominally in force at
the date of a certain transfer, and after the transfer was made a
valid law was passed, the transfer is subject to no tax whatever.
The act was void from the beginning and its nominal existence
in no way affected the validity of the transactions.^ So an un-
constitutional amendment has no effect on the original act.^

^State V. Probate Court, Washington County, 102 Minn. 268, 285, 113 N. W. 888.
^Eastwood V. Russell (N. J 1911), 81 A. 108.

Sec. 24. Property in Hands of Trustee.

A trustee who at the time of the passage of the inheritance tax
act held personal property upon a trust under a will to be distrib-
uted on a future date is not "a person possessed" of such property.
Personal estate passing under the intestate laws passes from the
intestate himself and never from the administrator.

McClain v. Pennsylvania Co. for Insurance and Annuities, 108 Fed. 618, 47 C.
C. A. 529.

Trustee's Commissions. Where the testator died March 27, 1845, the court
holds that the commissions of the trustees were subject to a tax of ten per cent
in favor of the state imposed by the act of \844, c. 187, which went into effect
June 2, 1845. Williams v. Mosher, 6 Gill (Md.) 339.

Sec. 25. Gifts Causa Mortis.

Gifts causa mortis are governed by the law in effect at the death
of the donor.

In re Seaman, 147 N. Y. 69, 77, 41 N. E. 401, reversing 87 Hun 619 (under
N. Y. St. 1892, providing for the imposition of a tax when any person becomes
beneficially entitled by any such transfer "whether made before or after the
passage of this act"). See also, post, s. 99.

Sec. 26. Deed Inter Vivos.

A deed inter vivos is governed by the law of the date of the
transfer.

Minn. St. 1905, c. 288, has no application to property which was actually
sold and disposed of before the date of its enactment. State v. Probate Court,
Washington County, 102 Minn. 268, 285, 113 N. W. 888. But see also Crocker v.
Shaw, 174 Mass. 266, 54 N. E. 549, reported fully under post, s. 141, n. 3. See
further, post, s. 99.

CHAPTER VII.

POWER TO IMPOSE.

§ 27. State Legislatures.

§ 28. Derived from Taxing Power or from Power to Regulate Descent.

§ 29. Power of State to Regulate or Prohibit Devolution on Death.

§ 30. Power of Congress.

§ 31. Power of Municipalities.

Sec. 27. State Legislatures.

The legislature has implied inherent power to levy an inheritance
tax although no such power is expressly granted by the constitution.

Booth V. Commonwealth, 130 Ky. 88, 113 S. W. 61. State v. Dalrymple, 70 Md-
294, 17 A. 82, 3 L. R. A. 372. State v. Switzler, 143 Mo. 287, 316, 45 S. W. 245.
40 L. R. A. 280, 65 Am. St. Rep. 653. Matter of McPherson, 104 N. Y. 306.
Pullen V. Commissioners (1872), 66 N. C. 361. In re Morris, 138 N. C. 259,
50 S. E. 682. State v. Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218.
Eury V. State, 72 Ohio St. 448, 74 N. E. 650. Schoolfield v. Lynchburg, 78 Va.
366, 372. Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 287. Snyder
V. Bettman, 190 U. S. 249, 252.

The inheritance tax is in effect an assertion of sovereignty in the estate of
deceased persons. Kochersperger v. Drake, 167 111. 122, 47 N. E. 321, 41 L. R. A.
446, affirmed in Magoun v. Illinois Trust, etc., 170 U. S. 283, 18 Sup. Ct. 594.

It was urged that the state constitution grants to the legislature special and
delegated powers, and legislative enactments to be valid must come within
such grant of powers. But the court finds that the legislature in the absence
of constitutional prohibition has the power to impose conditions by way of a
tax upon legacies and successions. State v. Clark, 30 Wash. 439, 71 P. 20.

It is claimed that as the constitution did not expressly give a right to levy
an inheritance tax the legislature had not that authority. But the court relies
on Nebraska decisions to the effect that the constitution was not a grant but a
restriction on legislative power and that the legislature may legislate upon any
subject not prohibited by the constitution. The court concludes, following
State V. Lancaster, 4 Neb. 537, that the enumeration in the constitution of certain

§28.1 POWER TO IMPOSE. 23

subjects for taxation did not preclude the legislature from imposing other taxes
where there was no prohibition. State v. Vinsonhaler, 74 Neb. 675, 105 N. W.
472, 474.

"Some form of death duty has been used as a mode of taxation from ancient
times. When the constitution of the United States was adopted, death duties
had been in use in England, as well as elsewhere, and were an established mode
of taxation known to the people, who, in the exercise of the sovereignty vested
in them, enacted that fundamental law. The imposition of death duties must
therefore have been included in the broad power of taxation granted to the
legislature by the constitution. This is true of the constitution of our state."
Appeal of Nettleton, 76 Conn. 235, 241, 56 A. 565.

The only case which questions the correctness of the doctrine that the
imposition of an inheritance tax is authorized under our governmental system
when not expressly forbidden by the state constitution is Nunnemacher v. State.
There the court sustains the theory of an inheritance tax not on the power to
prohibit succession but upon the power to reasonably regulate by tax. The court
finds that the state constitution expressly recognizes the fact that the state may
have other sources of income aside from the direct tax upon property and that the
section as to taxation is simply intended as a regulation covering the levying of
a direct tax upon property if such a tax be necessary. Nunnemacher v. State,
129 Wis. 190, 223, 108 N. W. 627, 9 L. R. A. N. S. 121.

Sec. 28. Derived from Taxing Power or from Power to
Regulate Descent.

Inheritance taxes may be based on the power to regulate de-
scent,^ or on the power to tax.^ The imposition of a succession
tax does not change the law of descent, but the laying of the tax
merely casts upon the devolution of property a burden that was
not borne before.^

» People V. Griffith, 245 111. 532, 92 N. E. 313. "The right to impose such in-
heritance tax is based upon the power of the state in its sovereign capacity to
regulate and control the transmission of property by inheritance. Although
designated as a tax, it is not such a tax upon property as is contemplated by the
state constitution. It is rather a contribution which the state levies for itself
as a condition upon which the title to property shall pass upon the death of its
owner." In re Inheritance Tax, 23 Colo. 492, 493, 48 P. 535.

An inheritance tax law "is nothing more than an exercise of the power which
every state and sovereignty possesses, of regulating the manner and term upon
which property real or personal within its dominion may be transmitted by last
will and testament or by inheritance." Per Torrey, C. J., in Mager v. Grima,
8 How. 492, 493.

"The power to tax inheritances does not arise solely from the power to regulate
the descent of property, but from the general authority to impose taxes upon all
property within the jurisdiction of the taxing power. It has usually happened
that the power has been exercised by the same government which regulates the
succession to the property taxed; but '■his power is not destroyed by the dual
character of our government, or by the fact that under our constitution the

24 INHERITANCE TAX LAW. l§29.

devolution of property is determined by the laws of the several states." It was
claimed that the authority to lay a succession tax arose solely from the power
to regulate the descent of property. But the court replies that this proposition
proves too much, that a denial of the right to regulate succession goes to the
whole power of the government to impose a succession tax. Snyder v. Bettman,
190 U. S. 249, 252.

^ State V. Switzler, 143 Mo. 287, 315, 45 S. W. 245, 40 L. R. A. 280, 65 Am.
St. Rep. 653. In re McKennan, 25 S. D. 369, 126 N. W. 611, 614, citing Knowl-
ton V. Moore, 178 U. S. 41, 20 S. Ct. 747 (reversed 130 N. W. 33). Mager v.Grima,
9 How. 490.

The court suggests that Knowlton v. Moore, 178 U. S. 41, 20 S. Ct. 747, virtu-
ally overruled the Magoun case, 170 U. S. 283, 18 S. Ct. 594, and laid down
the rule that the fact that the state has a right to control the transmission of
property by devise or succession has nothing whatever to do with the power of
the state to tax transmission of property. In re McKennan, 25 S. D. 369, 126
N. W. 611, 619 (reversed 130 N. W. 33). As to the nature of the tax see further,
ante, s. 7 et seq.

3 In re Magnes, 32 Colo. 527, 77 P. 853.

Sec. 29. Power of State to Regulate or Prohibit Devolution
on Death.

The state is commonly held to have plenary power to regulate
descent, to tax it, or even to prohibit it altogether,^ as the right
of succession on death is the creature of law and not a natural
right.^ This doctrine has the best historical foundation and has
been ably set forth in the following language, which has been
repeatedly quoted with approval : —

"The right to take property by devise or descent is the creature
of the law and secured and protected by its authority. The legis-
lature might, if it saw proper, restrict the succession to a decedent's
estate, either by devise or descent to a particular class of his kin-
dred, say to his lineal descendants and ascendants; it might impose
terms and conditions upon which collateral relations may be per-
mitted to take it; or it may tomorrow, if it pleases, absolutely repeal
the statute of wills and that of descents and distributions and de-
clare that, upon the death of a party, his property shall be applied
to the payment of his debts, and the residue appropriated to public
uses. Possessing this sweeping power over the whole subject, it
is difficult to see upon what ground its right to appropriate a
modicum of the estate, call it a tax or what you will, as the condition
upon which those who take the estate shall be permitted to enjoy
it, can be successfully questioned."*

A more recent statement of this doctrine by our highest tribunal
is as follows: "While the laws of all civilized states recognize in

§ 29.] POWER TO IMPOSE. 25

every citizen the absolute right to his own earnings, and to the
enjoyment of his own property, and the increase thereof, during
his life, except so far as the state may require him to contribute
his share for public expenses, the right to dispose of his property
by will has always been considered purely a creature of statute
and within legislative control. 'By the common law, as it stood
in the reign of Henry II, a man's goods were to be divided into three
equal parts, of which one went to his heirs or lineal descendants,
another to his wife, and a third was at his own disposal; or if he
died without a wife, he might then dispose of one moiety, and the
other went to his children; and so, e converso, if he had no children,
the wife was entitled to one moiety, and he might bequeath the other,
but if he died without either wife or issue, the whole was at his own
disposal.* 2 Bl. Com. 492. Prior to the statute of wills, enacted
in the reign of Henry VIII, the right to a testamentary disposition
of the property did not extend to real estate at all, and as to personal
estate, was limited as above stated. Although these restrictions
have long since been abolished in England, and never existed in this
country, except in Louisiana, the right of a widow to her dower and to
a share in the personal estate is ordinarily secured to her by statute.

"By the Code Napoleon, gifts of property, whether by acts inter
vivos or by will, must not exceed one-half the estate if the testator
leave but one child ; one-third if he leaves to children ; one-fourth
if he leaves three or more. If he have no children, but leaves
ancestors, both in the paternal and maternal line, he may give away
but one-half of his property, and but three-fourths if he have an-
cestors in but one line. By the law of Italy, one-half a testator's
property must be distributed equally among all his children; the
other half he may leave to his eldest son or to whomsoever he
pleases. Similar restrictions upon the power of disposition by will
are found in the codes of other continental countries, as well as in
the state of Louisiana. Though the general consent of the most
enlightened nations,: has, from the earliest historical period, recog-
nized 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."*

The following language is also enlightening : —

"The right of inheritance including the designation of heirs and
the proportions which the several heirs shall receive, as well as the

26 INHERITANCE TAX LAW. [§29.

right of testamentary disposition, are entirely matters of statu-
tory enactment, and within the control of the legislature. As
it is only by virtue of the statute that the heir is entitled to receive
any of his ancestor's estate, or that the ancestor can divert his
estate from the heir, the same authority which confers this
privilege may attach to it the condition that a portion of the
estate so received shall be contributed to the state, and the portion
thus to be contributed is peculiarly within the legislative dis-
cretion."^

On the other hand a few courts have laid down the proposition
that while a state may regulate or alter laws of succession on
death, it cannot entirely abolish the right of succession by inheri-
tance or bequest.^

The Massachusetts court has said : —

"The descent or devolution of property on the death of the owner
in England and in this country has always been regulated by law."

"The legislature cannot so far restrict the right to transmit
property by will or by descent as to amount to an appropriation
of property generally, ... 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."^

The last word on the subject has been uttered by the supreme
court of Wisconsin which, speaking of the prevailing doctrine,
remarks that the unanimity with which the proposition is stated
is only equaled by the paucity of reasoning by which it is supported,
and says that the declaration of the court of North Carolina seems
to have reached the logical goal toward which the other cases only
tend, namely, the denial of all natural rights of property. It
comes perilously near the doctrine that might makes right.

The court quotes from Mr. Justice Brown, United States v. Per-
kins, 163 U. S. 625, 16 Sup. Ct. 1073, where he says: —

"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."

§29.] POWER TO IMPOSE. 27

The court notices the difference between our theory of govern-
ment that political rights flow from the people and the medieval
theory that political rights flow from the crown, and remarks that
this difference makes the European cases of no value in this country.
The court remarks after discussion: —

"So clear does it seem to us from the historical point of view
that the right to take property by inheritance or will has existed
in some form among civilized nations from the time when the memory
of man runneth not to the contrary, and so conclusive seems the
argument that these rights are a part of the inherent rights which
governments, under our conception, are established to conserve,
that we feel entirely justified in rejecting the dictum so frequently
asserted by such a vast array of courts that these rights are purely
statutory and may be wholly taken away by the legislature.

"It is true that these rights are subject to reasonable regulation
by the legislature; lines of descent may be prescribed, the persons
who can take as heirs or devisees may be limited, collateral rela-
tives may doubtless be included or cut off, the manner of the
execution of wills may be prescribed, and there may be much room
for legislative action in determining how much property shall be
exempted entirely from the power to will so that dependents may
not be entirely cut off. These are all matters within the field of
regulation. The fact that these powers exist and have been uni-
versally exercised affords no ground for claiming that the legis-
lature may abolish both inheritances and wills, turn every
fee-simple title into a mere estate for life, and thus in effect
confiscate the property of the people once every generation."^

We venture to suggest that the attitude of the majority of our
courts is more historical than sensible, that no court in this country
has ever actually upheld the state in appropriating all the property
of a decedent for taxation, and we doubt if any court ever will
approve of such an outrage in time of peace.

Such proceedings may have historical sanction, but are utterly
out of tone with the modern theory of the sanctity of private
property.

We are of opinion that when, for example, the confiscatory
law of Oklahoma is tested in a flagrant case, no line of dicta, however
respectable, will prevent our courts from doing justice as between
the state and its citizens. Our supreme court has intimated the
possibility of such an attitude.®

* In re Inheritance Tax, 23 Colo. 492, 48 P. 535.

28 INHERITANCE TAX LAW. [§29.

« In re Magnes, 32 Colo. 527, 77 P. 853. Kochersperger v. Drake, 167 111. 122,
47 N. E. 321, 41 L. R. A. 446. In re Speed, 216 111. 23, 27, 74 N. E. 809, 108
Am. St. Rep. 189, affirmed 203 U. S. 553, 27 S. Ct. 171, 51 L. Ed. 314. Booth
V. Commonwealth, 130 Ky. 88, 113 S. W. 61. Curry v. Spencer, 61 N. H. 624,
60 Am. St. Rep. 337. In re Howard, 5 Dem. Surr. (N. Y.) 483. Pullen v.
Commissioners, 66 N. C. 361. In re Morris, 138 N. C. 259, 50 S. E. 682. State
V. Allston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178. In re Joyslin, 76 Vt.
88, 564, 281. State v. Clark, 30 Wash. 439, 71 P. 20.

The rule stated. "The constitution guarantees to the citizen the right of
acquiring, possessing and protecting property, Article 1, section 1, which in-
cludes also the right of disposal. But the guaranty ceases to operate at the
death of the possessor. There is no provision of our constitution, or that of
the United States, which secures the right to any one to control or dispose of
his property after his death, nor the right to any one, whether kindred or not,
to take it by inheritance. Descent is a creature of statute, and not a natural
right. 2 Blackstone's Com., pp. 10, 11, 12, 13; Strode v. Com., supra. At
common law, prior to the statute of distribution in England, 22 and 23 Car. 11,
descent of personal property could hardly be recognized, and even after the
statute requiring administration to be granted, the administrator, after the
payment of the debts and funeral expenses of the deceased, was entitled to
retain to himself the residue of his effects, the court holding that there was
no power to compel a distribution. 2 Bl. Com. 515; Edwards v. Freeman, 2 P. Wms.
442. Per Strout, J., inState v. Hamlin, 86 Me. 495, 504, 30 A. 76, 25 L. R. A. 632.

Blackstone. "The most universal and effectual way of abandoning property,
is by the death of the occupant; when, both the actual possession and intention
of keeping possession ceasing, the property which is founded upon such possession
and intention ought also to cease of course. For, naturally speaking, the instant
a man ceases to be, he ceases to have any dominion; else, if he had a right to
dispose of his acquisitions one moment beyond his life, he would also have a
right to direct their disposal for a million of ages after him; which would be
highly absurd and inconvenient. All property must therefore cease upon
death, considering men as absolute individuals, and unconnected with civil
society: for, then, by the principles before established, the next immediate
occupant would acquire a right in all that the deceased possessed. But as,
under civilized governments, which are calculated for the peace of mankind,
such a constitution would be productive of endless disturbances, the universal
law of almost every nation (which is a kind of secondary law of nature) has
either given the dying person a power of continuing his property, by disposing
of his possessions by will; or, in case he neglects to dispose of it, or is not per-
mitted to make any disposition at all, the municipal law of the country then
steps in, and declares who shall be the successor, representative, or heir of the
deceased ; that is, who alone shall have a right to enter upon this vacant posses-
sion, in order to avoid that confusion which its becoming again common would
occasion. And further, in case no testament be permitted by the law, or none
be made, and no heir can be found so qualified as the law requires, still, to pre-
vent the robust title of occupancy from again taking place, the doctrine of
escheats is adopted in almost every country; whereby the sovereign, of the
state, and those who claim under his authority, are the ultimate heirs, and
succeed to those inheritances to which no other title can be formed.

§30.] POWER TO IMPOSE. 29

"The right of inheritance, or descent to the children and relations of the de-
ceased, seems to have been allowed much earlier than the right of devising by
testament. We are apt to conceive at first view that it has nature on its side;
yet we often mistake for nature what we find established by long and inveterate
custom. It is certainly a wise and effectual, but clearly a political, establish-
ment; since the permanent right of property, vested in the ancestor himself,
was no natural, but merely a civil, right.

"With us in England, till modern times, a man could only dispose of one-third
of his movables from his wife and children; and, in general, no will was per-
mitted of lands till the reign of Henry the Eighth; and then only of a certain
portion : for it was not till after the restoration that the power of devising real
property became so universal as at present.

"Wills, therefore, and testaments, rights of inheritance and successions, are all
of them creatures of the civil or municipal laws, and accordingly are in all respects
regulated by them; every distinct country having different ceremonies and
requisites to make a testament completely valid: neither does anything vary
more than the right of inheritance under different national establishments."
Vol. 2, Blackstone's Commentaries 10.

3 Per Lee, J., in Eyre v. Jacob. 14 Gratt. (Va.) 422, 430, 73 Am. Dec. 367.

* P^r Brown, J., in United States v. Perkins, 163 U. S. 625, 627, quoted with ap-
proval in Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 290.

^Per Harrison, J., in In re Wilmerding's Estate, 117 Cal. 281, 284, 49 P. 181.

6 Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627.

The court intimates no favorable opinion upon the proposition laid down by
the Virginia court in Eyre v. Jacob, 14 Gratt. 430. Black v. State, 113 Wis. 205
216. 89 N. W. 522, 90 Am. St. Rep. 853.

' Per Field C. J., in Minot v. Winthrop, 162 Mass. 113, 117, 26 L. R. A. 259.

The same court had earlier said: "The power to dispose of property by will is
neither a natural nor a constitutional right, but depends wholly upon statute,
and may be conferred taken away or limited and regulated in whole or in part,
by the legislature." Bretton v. Fox, 100 Mass. 234 (applied to widow's share in
her husband's estate).

A note in 8 Harvard Law Review, p. 226, criticises adversely the attitude of
the court in Minot v. Winthrop, 162 Mass. 113, 38 N. E. 512, 26 L. R. A. 259,
to the effect that the state has no authority to take away altogether the in-
heritable quality of property. The editor suggests that this statement is a
dictum and that the only necessary incident of private property is that there be
a succession of some kind on the death of the owner. Who shall succeed is
quite a different question. It has been answered differently at different times
and places.

8 Nunnemacher v. State, 129 Wis. 190, 202, 108 N. W. 627, 9 L. R. A. N. S. 121.

9 Knowlton v. Moore, 178 U. S. 41, 109, 20 S. Ct. 747, 44 L. Ed. 969.

Sec. 30. Power of Congress.

The federal congress has power to lay an inheritance tax notwith-
standing the devolution of property is solely in the jurisdiction of
the state.*

30 INHERITANCE TAX LAW. [§31.

When this question finally came squarely before the supreme
court, it was claimed that as the transmission of property by death
is exclusively subject to the regulating authority of the several states,
therefore the levy by congress of a tax on inheritances of any
kind is beyond the power of congress and is interference by the
national government with a matter which falls alone within the
reach of state legislation. The court states, however, that trans-
mission of property is a usual subject of taxation and that the
taxing power of congress extends to all usual objects of taxation
subject to the limitations in the constitution.

The court points out that it is a fallacy to assume that the tax on
the transmission or receipt of property occasioned by death is
imposed on the exclusive power of the state to regulate the devo-
lution of property upon death. The subject of taxation is the
transmission or receipt, not the right existing to regulate.

The court points out that under the American constitutional
system both the national and the state governments moving in
their respective orbits have a common authority to tax many and
diverse objects, but this does not cause the exercise of its lawful
attributes by one to be a curtailment of the powers of government
of the other .2

1 KnowUon v. Moore, 178 U. S. 41, 59, 60, 20 S. Ct. 747, 44 L. Ed. 969.

It was suggested in the argument of Frederickson v. Louisiana that the gov-
ernment of the United States is incompetent to regulate testamentary dispo-
sitions or laws of inheritance of foreigners in reference to property within the
states. The court observes that the question is one of great magnitude and
declines to consider it in that case. Frederickson v. State, 23 How. (U. S.) 445.
The court had also held that inheritance taxes are not direct taxes, but excises
or duties, and as such within the authority of congress to lay and collect without
apportionment among the states. Scholey v. Rew, 23 Wall. 331.

2 KnowUon v. Moore, 178 U. S. 41, 60. 20 S. Ct. 747, 44 L. Ed. 969.

Sec. 31. Power of Municipalities.

Municipalities have no authority to levy an inheritance tax
unless expressly conferred.

The collateral inheritance tax is not in a proper legal sense a tax upon property,
but is a premium demanded for the privilege of transmitting an estate and the
imposition of such a tax is a power inherent in the legislature in the absence of
express constitutional prohibition. The legislature has the power to confer on
municipal corporations the right to levy an inheritance tax, but such power
cannot be inferred from the legislative authority unless such appears to be the
clear legislative intent. Schoolfield v. Lynchburg, 78 Va. 366, 372.

§31.] POWER TO IMPOSE. 31

The authority to towns under the Virginia Code of 1904, section 1043, to
levy taxes allows the tax to be levied "upon any property therein, and upon such
other subject as may at that time be assessed with state taxes against persons
residing therein." The town charter provides that the council "may raise
taxes annually by assessments in said town on all subjects taxable by the state."

The court holds, however, that the section of the code and the town charter
apply only to the ordinary annually recurring tax on property and other subjects
of taxation, and not to sporadic subjects which, though connected with the
transmission and enjoyment of property, are casual in their nature and not
recurrent. The court notes further that a collateral inheritance tax is not in
any proper sense a tax on property. Wytheville v. Johnson, 108 Va. 589, 62 S. E.
328, 18 L. R. A. N. S. 960.

CHAPTER VIII,

CONSTRUCTION OF STATUTES.

§ 32. Strict Construction. — Executive Practice.

§ 33. Effect of Amendment.

§ 34. Construction of Statute Copied from Another Jurisdiction.

Sec. 32. Strict Construction. — Executive Practice.

The inheritance tax is to be strictly construed in favor of the
taxpayer, who has a right to claim that he shall be clearly brought
within its terms before being subjected to it, as it is a special burden
or tax.i Even words of exception confining the operation of the
tax should receive a liberal construction ,2 while any particular ex-
emption from it should be construed in favor of the state. ^

The construction adopted by executive officers in administering
an inheritance tax is immaterial unless the true construction of
the law is doubtful.*

i/« re Enston, 113 N. Y. 174, 178, 21 N. E. 87, 3 L. R. A. 464, 22 N. Y. St.
569, reversing 46 Hun 506, 19 Abb. N. Cas. 227, 10 N. Y. St. 380, 5 Dem. Surr.
93, 8 N. Y. St. 781. In re Vassar, 127 N. Y. 1, 12, 27 N. E. 394, reversing 58
Hun 378, 12 N. Y. Suppl. 203. In re Stewart, 131 N. Y. 274, 282, 30 N. E.
184, 14 L. R. A. 836. Eidman v. Martinez, 184 U. S. 578, 583, 22 Sup. Ct. 515,
46 L. Ed. 697.

The Rule of Reasonable Construction. The rule of strict construction
ordinarily applied to the operation and effect of statutes on taxation and to pro-
ceedings thereunder does not apply to inheritance taxes. The statute must be
given a fair and reasonable construction. State v. Bazille, 97 Minn. 11, 106
N. W. 93, 6 L. R. A. N. S. 732.

2"It is an old and familiar rule of the English courts, applicable to all forms
of taxation, and particularly special taxes, that the sovereign is bound to express
its intention to tax in clear and unambiguous language, and that a liberal con-
struction be given to words of exception confining the operation of duty, . . .
though the rule regarding eocemptions from general laws imposing taxes may
be different." Per Brown, J., xnEidman v. Martinez, 184 U. S. 578, 583, 22 Sup.
Ct. 515, 46 L. Ed. 697, where the court quotes as sustaining its doctrine In re
Howell's Estate, 147 Pa. St. 164, 23 A. 403, In re Cager, 111 N. Y. 343, 18 N. E.
866, Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969.

'in re Hickock, 78 Vt. 259, 62 A. 724. Where a particular subject is within
the scope of the law and an exemption from taxation is claimed on the ground
that the legislature has not provided proper machinery for accomplishing the
legislative purpose in a particular instance a liberal rather than a strict construe-

U 33-34.] CONSTRUCTION OF STATUTES. 33

tion should be applied, and if by fair and reasonable construction of its provisions
the purpose of the statute can be carried out, that interpretation ought to be
given to effectuate the legislative intent. In re Stewart, 131 N. Y. 274, 282,
30 N. E. 184, 14 L. R. A. 836, affirming.

* Attorney Geneneral v. Barney, 211 Mass. — , 95 N. E. 750.

See further, post, s. 241, as to construction of exemptions.

Sec. 33. Effect of Amendment.

The fact that a statute was amended by extending it over a
certain subject or situation is some evidence that prior thereto it
did not include such property.

The fact that the New York statute of 1887, c. 713, amended the New York
statute of 1885, c. 483, s. 1, so as to subject to its operation the property within
the state of a non-resident decedent, furnishes some evidence that prior thereto
the proper construction of the section did not include such property within its
operation. In re Enston, 113 N. Y. 174, 183, 21 N. E. 87, 3 L. R. A. 464, 22
N. Y. St. 569, reversing 46 Hun 506, 19 Abb. N. Cas. 227, 10 N. Y. St. 380,
5 Dem. Surr. 93, 8 N. Y. St. 781.

Sec. 34. Construction of Statute Copied from another
Jurisdiction.

The general rule applies to inheritance laws that where a statute
is adopted from another state it will be presumed that the legis-
lature intended it to receive the construction given by the courts
of that state if it had been previously construed, unless in conflict
with the spirit and policy of the laws of the second state.

People v. Griffith, 245 111. 532, 92 N. E. 313. Black v. State, 113 Wis. 205,
211, 89 N. W. 522, 90 Am. St. Rep. 853. State v. Bullen, 143 Wis. 512, 520,
128 N. W. 109. Statutes copied from another jurisdiction, see ante, s. 16.

CHAPTER IX.

VALIDITY IN GENERAL.

§ 35. Certainty.

§ 36. Laws Upheld and Avoided.

§ 37. Statutes Void in Part Only.

§ 38. Confiscatory Legislation.

§39. Public Purpose.

§ 40. Validity of Appropriation to Special Fund.

§ 41. Assigning to Probate Courts the Duty of Collection.

§ 42. Omission of Provisions for Collection.

§ 43. Proceedings to Test Validity.

§ 44. Who may Attack Validity.

Sec. 35. Certainty.

The inheritance tax acts may be void for uncertainty.

State V. Vinsonhaler, 74 Neb. 675, 105 N. W. 472, semhle.

It was pointed out that N. Y. St. 1885, c. 483, contains many imperfections and
that there would be great embarrassment and difficulty in executing the act
in the cases of contingent remainders and expectant estates. But the court
holds that this is no reason for condemning the entire act. In re McPherson,
104 N. Y. 306, 324, 10 N. E. 685, 58 Am. Rep. 502.

Sec. 36. Laws Upheld and Avoided.

The inheritance taxes in this country have usually been upheld,^
but have been held unconstitutional under state constitutions in
the cases cited.^

*See, for example, Appeal of Hopkins, 77 Conn. 644, 60 A. 657. Minot v. Win-
throp, 162 Mass. 113, 115, 25 L. R. A. 259. Crocker v. Shaw, 174 Mass. 266.
State V. Probate Court, 112 Minn. 279, 128 N. W. 18, 19. In re Kimberly, 27
N. Y. App. Div. 470, 50 N. Y. Suppl. 586.

-Chambe v. Judge, 100 Mich. 112. State v. Gorman, 40 Minn. 232. Drew v.
Tifft, 79 Minn. 175. State v.Bazille, 87 Minn. 500. State v. Harvey, 90 Minn. 180.
State V. Switzler, 143 Mo. 316. Curry v. Spencer, 61 N. H. 624, 60 Am. St. Rep.
337. State v. Ferris, 53 Ohio St. 314. In re Cope, 191 Pa. St. 1, 70 Am. St.
Rep. 749, 45 L. R. A. 316. State v. Mann, 76 Wis. 469. Black v. State, 113 Wis.
205.

The supreme court remarks that Curry v. Spencer is an extreme decision put
on the basis of the rigid uniformity of the constitution of the state. In State v.
Mann and State v. Gorman, the distinction between a tax on successions and
one on property was not necessary to be observed. State v. Gorman, however,

§37.] VALIDITY IN GENERAL. 35

may be claimed as deciding that a tax based on the value of the estates is con-
trary to the rule of equality; also that exemptions are. State v. Ferris and
State V. Switzler do not oppose the principles upon which inheritance taxes are
sustained, but only decide that the statutes passed on were repugnant to equality
and uniformity of taxation as prescribed by the state constitutions. They are
authority against the Illinois statute. Magoun v. Illinois Trust &• Savings Bank,
170 U. S. 283, 291, 18 Sup. Ct. 594, 42 L. Ed. 1037.

Sec. 37. Statutes Void in Part Only.

The unconstitutional portion of an inheritance statute may
well be so separated from the balance that the act may be void
only in part,^ but one rate of taxation cannot be valid so far as
allowed by law and void as to the excess.^

1 Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N.
597, purpose void.

The suggestion that the New York statute is unconstitutional as providing a
different rate of taxation for different classes of relatives even if tenable could
not render the statute void in entirety. In re Keeney, 194 N. Y. 281, 286, 87
N. E. 428, affirming 128 N. Y. App. Div. 893.

Void in Part. Where the Ohio statute of 1906 provided for the repeal of the
Ohio inheritance law "except as to estates in which the inventory has already
been filed at the date of the passage of this act," and where this exception was
void, the court holds that the whole act need not be declared unconstitutional
as the title of the act does not leave room for even suspicion that the exception
was an inducement to the repeal; and the two objects of the act may well be
taken separately. Friend v. Levy, 76 Ohio St. 26, 50, 80 N. E. 1036.

The unconstitutionality of the clause in the Cal. St. 1897, c. 83, exempting
certain resident relatives from tax, does not render the entire provision for exemp-
tion void. It is evident that the legislature intended the exemption to apply
to resident relatives and the intention of the legislature not to exempt non-
residents of the same degree of relationship fails and therefore residents and
non-residents are both exempted as provided by the original intention. In re
Stanford's Estate, 54 P. 259, reversed on another point in 126 Cal. 112, 58 P.
462, 45 L. R. A. 788.

2 Where the Minnesota act of 1902 provided for a tax of ten per cent, while
the constitution only allowed five per cent to be levied, the claim was made that
the greater includes the less and that a ten per cent tax included a five per cent
tax and that therefore the statute might be upheld as imposing a tax valid
to the extent of five per cent. The court, however, finds that the rate of taxa-
tion and the whole thereof ordained by the legislature is absolutely void and
the statute is in legal effect one in which the rate of taxation as to collateral
heirs and other parties is left blank. Such being the case the court has no more
power to fill by construction the blank in he statute by reading into it a rate
of taxation which will be within the limitation of the constitution than it has
to decree an inheritance tax in advance of any legislation on the subject. It
was urged that the tax as to lineal heirs is within the constitutional limitation
and is separate and distinct from the tax as to the collateral heirs and that there-

36 INHERITANCE TAX LAW. l§§3&-39.

fore the statute might be sustained as to lineals. The court replies to this claim
that any such statute would be unconstitutional, as all must be taxed or none,
quoting Drew v. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St.
Rep. 446. State v. Harvey, 90 Minn. 180, 95 N. W. 764.

Sec. 38. Confiscatory Legislation.

The supreme court has suggested the possibility of avoiding a
confiscatory tax on broad grounds, but no statute has yet been
held void merely for that reason.

Knowlton v. Moore, 178 U. S. 41, 109, 20 S. Ct. 747, 44 L. Ed. 969.

Cf. State V. Mann, 76 Wis. 469, 474, 45 N. W. 526, 46 N. W. 51, where the
court remarks that the tax if regarded as a probate fee may be so large as to
shock the good sense of everybody.

As to confiscatory rates see further, post, s. 70.

Sec. 39. Public Purpose.

An inheritance tax may be void as not for a public purpose.
The Missouri statute of 1895, for example, levied an inheritance
tax for the purpose of an endowment for the state university and
further to be paid to students "while attending the university for
defraying the expenses of such attendance" in what was known
as the state university scholarship fund. It was argued that
this was no different from providing free tuition at the state
imiversity. But the court says that it is one thing to provide for
the establishment and maintenance of a system of public educa-
tion and a wholly different thing to support private individuals
who attend a university and public schools by public taxation;
and the court concludes that the tax is levied for a purely private
purpose and for that reason is in contravention of the constitution
of Missouri.^

The Wisconsin constitution provides that "the legislature shall
impose a tax on all civil suits commenced or prosecuted in the
municipal inferior or circuit courts, which shall constitute a fund
to be applied toward the payment of the salary of the judges."
Wis. St. 1889, c. 176, cannot be sustained under this section, as
the fund thereby raised is not restricted to the payment of the
salary of judges.^

The Michigan statute of 1893 was held totally void on account
of its failure to follow the constitutional requirement that all
specific state taxes shall be applied in paying certain debts,*
while the act of 1899 was only void in so far as it directed the appli-

§40.] VALIDITY IN GENERAL. 37

cation of the proceeds.* The fact that the object is a public purpose
will not aid an unconstitutional statute.^

^State V. Switzler, 143 Mo. 287, 326, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St.
Rep. 653; followed in Simmons Medicine Co. v. Ziegenhein, 145 Mo. 368, 47 S. W.
10.

^State V. Mann, 76 Wis. 469, 477, 45 N. W. 526, 46 N. W. 51.

^Chambe v. Durfee, 100 Mich. 112, 58 N. W. 661.

* Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg.
N. 597.

^As the New Hampshire act of 1878 is unconstitutional, the fact that its object
was "to defray the cost of probate courts" is not entitled to any weight because
the constitutional rule of equality cannot be limited or qualified by any con-
sideration of expediency or convenience. The purpose of the act cannot change
its character in this respect. Curry v. Spencer, 61 N. H. 624, 631, 60 Am. St.
Rep. 337.

Sec. 40. Validity of Appropriation to Special Fund.

The Missouri constitution provides that all revenue in money
received by the state shall go into the treasury and that all appro-
priations shall be made in the order set forth in the section. It
was argued that this means that all revenue shall go into one
common general fund unfettered and unpledged and that these
words prohibit the creation of any special fund in the treasury
to be supplied out of revenue provided by the general assembly;
and that therefore the Missouri act of 1899, which provided that
the receipts from the inheritance tax should be accredited to the
"State Seminary moneys," was rendered void. The court replies
that the constitution itself provides elsewhere for special funds
and holds that the constitution simply requires the general
assembly to proceed in the order designated in passing its appro-
priation bills. In prescribing the order for the passage of the
appropriation bill there was no intention to create special liens
upon the money in the treasury or give any priority of payment
to one appropriation over another.

It was contended that the act of 1899, which provides that
the receipts from the inheritance tax law shall be appropriated to
the state university, is itself an appropriation of the money, as
every dollar raised thereby is instantly and perpetually appropri-
ated to the maintenance of the university. The court replies
that the statute itself forbids expenditure save in pursuance of
regular appropriat ons of the general assembly.

State V. Henderson, 160 Mo. 190, 211, 213, 60 S. W. 1093.

38 INHERITANCE TAX LAW. [§§41-43.

Sec. 41. Assigning to Probate Courts the Duty of Appraisal
and Collection.

It is proper to assign to the probate courts the duty of collect-
ing the tax. Such duties are necessarily incident to the settle-
ment of the estates and may be properly performed by the judge
of probate.^

It was claimed that Wisconsin statute of 1903, c. 44, is uncon-
stitutional because it commits the appraisal of property and the
fixing of the amount of the tax to the county court, and these are
claimed to be administrative and not judicial duties. The court
replies that this is not so, that the court simply determines in
a judicial way certain facts necessary to be ascertained to deter-
mine how much the tax fixed by the law amounts to in a given
case. These duties are judicial in their character and very properly
entrusted to the county court in which the estate is being
administered. 2

1 Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg.
N. 597, quoting State v. Gloucester Circuit Judge, 50 N. J. L. 585, 611, 15 A. 272,
1 L. R. A. 86. See further, post, s. 325, 377.

2 Nunnemacher v. State, 129 Wis. 190, 223, 108 N. W. 627, 9 L. R. A. N. S. 121.

Sec. 42. Omission of Provisions for Collection.

An omission from the act of any machinery to collect the taxes
due under it does not render it invalid.^ Where the act clearly
creates a liability on the part of recipients of inherited estates to
pay the amount of any tax to the county treasurer for the use of
the state, there is no reason why the county treasurer might not
maintain an ordinary action based upon the liability that thus is
created to pay, against the beneficiaries to recover the tax for the
use of the state.^

1 Neilson v. Russell (N. J. 1908) 76 N. J. L. 27, 42, 69 A. 476, 482, reversed on
another ground in 76 N. J. L. 655, 71 A. 286. See further, post, s. 396.

^ In re McKennan, (S. D.,) 130 N. W. 33, reversing judgment on rehearing in
25 S. D. 369, 126 N. W. 611.

Sec. 43. Proceedings to Test Validity.

Proceedings to test the validity of inheritance tax statutes
depend on local practice, and are commonly brought up by pro-
hibition^ or by certiorari, ^ or quo warranto^ or possibly by injunction,*
or mandamus may be brought against the court to compel it to
assess the tax.^

§44.1 VALIDITY IN GENERAL. 39

^Chamhe v. Durfee, 100 Mich. 112, 58 N. W. 661. Union Trust Co. v. Durfee,
125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N. 597.

"^State V. Henderson, 160 Mo. 190, 60 S. W. 1093. State v. District Court, 41
Mont. 357, 109 P. 438.

^State V. Guilbert, 70 Ohio St. 229, 225, 71 N. E. 636.

*Eyre v. Jacob, 14 Gratt. (Va.) 422, 73 Am. Dec. 367, where the propriety of
injunction was not questioned.

^State V. Bazille, 97 Minn. 11, 106 H. W. 93, 6 L. R. A. N. S. 732.

Sec. 44. Who May Attack Validity.

Only those can attack the validity of an inheritance tax who
would be benefited by its invalidity. So grantees in a deed sub-
ject to the lowest rate of taxation have no valid cause of complaint
as to the constitutionality of the transfer tax because other grantees
are subjected to a higher rate. That objection, if tenable, could be
taken only by the grantees taxed at the higher rate.^

The contention that the California statute of 1905, c. 314, is
unconstitutional as discriminating between the citizens of the
state and those of other states will not be considered where it
does not appear by the pleadings to which class the appellant
belongs.'*

Where the devisee of real estate is an alien, and has received the
value of the real estate in partition proceedings, he is estopped to
deny liability for the succession tax on the ground that the devise
to him as an alien was void.^

1 In re Keeney, 194 N. Y. 281, 286, 87 N. E. 428, affirming 128 N. Y. App.
Div. 893.

2 In re Damon, 10 Cal. App. 542, 102 P. 684.
^Scholey v. Rew, 90 U. S. (23 Wall.) 331, 23 L. R. A. 99.

CHAPTER X.

VARIOUS CONSTITUTIONAL LIMITATIONS.

§ 45. The State Constitutions.

§ 45a. Impairment of Contract.

§ 46. Constitutional Limitation in Rate.

§47. Justice to be Free.

§ 48. Poll Tax Prohibited.

§ 49. Void as in Addition to Annual Property Tax.

§ 50. Must Cover both Realty and Personalty.

§ 51. Local or Special Laws.

§ 52. Title to be Expressed.

§ 53. Revenue Legislation to Originate in House of Representatives.

Sec. 45. The State Constitutions.

While most states require equality and uniformity in taxation/
inheritance taxes are specifically referred to in only five states.^

^As to equality and uniformity, see Chapter XL For the clauses in the state
constitutions bearing on inheritance taxes, see the second part of this book.

2 Alabama, Louisiana, Minnesota, New Hampshire, Oklahoma. See also the
proposed constitutions of Arizona and Indiana. See In re Fox, 154 Mich. 5,
117 N. W. 558. 15 Detroit Leg. N. 674. See also Drew v. Tifft, 79 Minn. 175,
81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446.

Sec. 45a. Impairment of Contract.

. No collateral inheritance tax has yet been held to impair any
contract right under any circumstances. The subject was adverted
to in the supreme court in a decision holding that where the law
imposing a tax on deposits was in force before the deposit was
made by a non-resident in the state of New York, it did not im-
pair the obligation of the contract, if a tax otherwise lawful ever
can be said to have that effect.^ The New York statute of 1885
did not create any contract right that a person dying while that
statute was in force might dispose of his estate without any further
tax except as then in existence. Therefore the statute of 1897
could tax powers of appointment which were not taxable under
the statute of 1885.2

In an Iowa case the decedent before the passage of any inherit-
ance law entered into an agreement for the disposition of certain

§§46-48.1 CONSTITUTIONAL LIMITATIONS. 41

property on his death, which occurred after the law went into
effect. The court considered the suggestion that as the contract
was made before the passage of the collateral inheritance law this
law cannot apply, for the reason that it impairs the obligations of
a contract and deprives the collateral heirs of their property with-
out due process of law. The court answers this suggestion show-
ing that until the death of the devisee it was entirely unsettled
as to who would get the property at the time of his death, as it
depended on the survival of the collateral heirs. The time of
possession and enjoyment was postponed until the death of the
devisee and the estate of the original testator was still undis-
tributed. It was therefore entirely competent for the legis-
lature to impose a tax upon the right to receive in possession and
enjoyment although the right was given by a contract.^

^Blackstone v. Miller, 188 U. S. 189, 23 S. Ct. 277, 47 L. Ed. 439, affirming
171 N. Y. 682, 69 N. Y. App. Div. 127, quoting Pinney v. Nelson, 183 U. S
144, 147.

Un re Vanderbilt, 163 N. Y. 597, 57 N. E. 1127, 50 N. Y. App. Div. 246
63 N. Y. Suppl. 1079.

^Lacy V. State Treasurer, (Iowa, 1909,) 121 N. W. 179.

Sec. 46. Constitutional Limitation in Rate.

The tax may be void as at a rate prohibited by the constitution.
State V. Harvey, 90 Minn. 180, 95 N. W. 764.

Sec. 47. Justice to be Free.

Inheritance taxes in the form of heavy probate duties have been
found invalid under constitutional provisions that justice must
be obtained freely and without purchase.

State V. Gorman, 40 Minn. 232, 41 N. W. 948.

The Wisconsin statute of 1889, c. 176, purports to close the door of the county
court against administrators and the estate unless they first advance and pay
the amount exacted. This looks very much like purchasing the privilege of go-
ing into the county court for the settlement of the estate, but the court finds it
unnecessary to determine that question. State v. Mann, 76 Wis. 469, 480, 45
N. W. 526, 46 N. W. 51.

Sec. 48. Poll Tax Prohibited.

An inheritance tax is not void under a constitution providing
that "the levying of taxes by poll is grievous and oppressive and
ought to be prohibited."

Tyson v. SUite, 28 Md. 577.

42 INHERITANCE TAX LAW. [§§49-52.

Sec. 49, Void as in Addition to Annual Property Tax.

In two states succession taxes cannot be sustained as property
taxes, as they would be void as an additional tax beside the regular
annual property tax and as such prohibited by the constitution.^
Louisiana is the only state limiting the legislature by forbidding
the imposition of an inheritance tax on property which has already
borne its just proportion of taxes.^

^ State V. Switder, 143 Mo. 287, 330, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St.
Rep. 653. State v. Mann, 76 Wis. 469, 478, 45 N. W. 526, 46 N. W. 51.

^Succession of Stauffer, 119 La. Ann 66, 43 S. 928, holding that this provision
does not apply to taxes due and unpaid before the enactment of the constitution.
To the same effect see Succession of Westfeldt, 122 La. Ann. 836, 48 S. 281. Other
cases construing this clause are Succession of Pritchard, 118 La. Ann. 883, 43 S.
637; Succession of Fell, 119 La. Ann. 1037, 44 S. 879.

Sec. 50. Must Cover both Realty and Personalty.

Under the Minnesota constitution an inheritance tax is void
unless it applies to real as well as personal property,^ but no such
limitation is imposed by the federal constitution.^

1 Drew V. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep.
446. State v. Bazille, 87 Minn. 500, 92 N. W. 415, 94 Am. St. Rep. 718.
^Beers v. Glynn, 211 U. S. 477, 483, 29 S. Ct. 186, 53 L. Ed. 290.

Sec. 51. Local or Special Laws.

Inheritance taxes are subject to constitutional restrictions against
local or special laws.

In re Stanford's Estate, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. In re
Magnes, 32 Colo. 527, 77 P. 853.

Wis. St. 1889, c. 176, is unconstitutional, as it provides for the imposition of
a tax on certain estates only in counties having more than a certain population
and the tax in question really applies only to one county and is further limited
to a certain class of estates in that county. State v. Mann, 76 Wis. 469, 45 N.
W. 526, 46 N. W. 51.

The Maryland statute of 1880, chapter 444, was not void on the ground that
it was a release of taxes and that the constitution provides that the general
assembly shall not pass any local or special laws of that character, as the release
of debts or obligations to the state is a public general law not forbidden by the
constitution. Montague v. State, 54 Md. 481.

Sec. 52. Title to be Expressed.

Inheritance taxes are commonly subject to constitutional pro-
visions requiring the title to express the subject clearly,^ although

§62.] CONSTITUTIONAL LIMITATIONS. 43

the rule is otherwise in New York,^ These clauses in constitu-
tions require the title to cover the form of transfer,* and the
property,* and the persons taxed ,^ and to point out new provisions
in an amending act.® A requirement that the title shall dis-
tinctly state the object of the tax to which only it shall be applied
has been held to clearly refer to the ordinary property tax which,
at the time it is levied, can be levied with knowledge as to the
probable amount of revenue that will be derived therefrom and
can thus be well rendered to meet the uses to which the same
shall be applied 7

^Colo. St. 1902, c. 3, called "an act in relation to public revenue," is not void
as being too general in title, in view of the financial history of the state. In re
Magnes, 32 Colo. 527, 77 P. 853.

The title of La. St. 1904, c. 45, is as follows: "To carry into effect articles
235 and 236 of the constitution of 1898 relative to inheritance taxes." The
court holds that the title sufficiently suggests the object of the act and is there-
fore not void under La. Const, a. 31. Succession of Levy, 115 La. 378, 39 S. 37,
affirmed in Cahen v. Brewster, 203 U. S. 552, 27 S. Ct. 174.

Objections to the title of Mo. St. 1895, were not considered by the court,
which found the act void on other grounds. State v. SwUzler, 143 Mo. 287, 331,
45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.

2 The provision of the constitution as to title did not apply to the inheritance
tax, as it has no reference to special taxes which may be collected in a variety of
ways under general laws. In re McPherson, 104 N. Y. 306, 319, 10 N. E. 685,
58 Am. Rep. 602.

3 "Inheritances" covers succession by will. In re White, 42 Wash. 360, 84
P. 831.

*The New Jersey acts of 1892 and 1893 are void as to realty, as the title does
not mention real estate, which defect was avoided in the act of 1894. Grossman
v. Hancock, 58 N. J. L. 139, 32 AtL 689; Von Riper v. Heffenheimer,17N.].L.].
49; In re Dobermiller, 17 N. J. L. J. 378.

^ Where the title only mentions collateral inheritances the act is void so far
as direct inheritances are concerned. Illegitimate children are clearly not
collateral heirs, and therefore the act is void as to them. Wirringer v. Morgan,
12 Cal. App. 26, 106 P. 425.

Reference to other Statutes and to Mortality Tables. Mich. Const, a.
14, s. 14, provides that every tax law shall distinctly state the tax and the object
to which it is to be applied; that it shall not be sufficient to refer to any other
law to fix such a tax or object. Mich. St. 1899, c. 188, provides that the tax shall
be imposed upon persons or corporations not exempt by law and the court holds
that this is not in violation of the constitution. The court says that the tax is
clearly defined and no other law referred to either to fix the tax or its object.
It is imposed upon everybody who is not exempt. So the reference in s. 11 to
mortality tables to ascertain the value of future interests does not change the
rule of taxation or modify it, but only prescribes a rule of estimating the values
and is valid within the constitution. Union Trust Co. v. Durfee, 125 Mich. 487,
84 N. W. 1101, 7 Detroit Leg. N. 697.

44 INHERITANCE TAX LAW. [8 53.

•N. J. St. 1906 is entitled "An act to amend an act entitled 'An act to tax
intestates and estates, gifts, legacies, devises and collateral inheritance in certain
cases.' " The act of 1906 intended to substitute a tax on the transfer of
property which is the subject of a legacy for a tax on the legacy itself. This
purpose was not expressed in the title and the statute is therefore void as
applied to New Jersey stocks belonging to a non-resident. Dixon v. Russell^
79 N. J. L. 490, 76 A. 982, reversing 78 N. J. L. 296, 73 A. 51.

The Pennsylvania statute of 1887, P. L. 79, is entitled "An act to provide for
the better collection of collateral inheritance taxes." The court does not pass on
whether this is a suflficient title as to cover new taxes imposed by the statute,
but intimates that it is not. In re Bittinger, 129 Pa. St. 338, 18 A. 132. See
also Appeal of Commonwealth, 127 Pa. St. 435, 440, 17 A. 1004.

Un re McKennan, 25 S. D. 369, 126 N. W. 611, 130 N. W. 33, citing with
approval Matter of McPherson, 104 N. Y. 315, 10 N. E. 685.

Sec. 53. Revenue Legislation to Originate in House of
Representatives.

The Louisiana act of 1894 was attacked as being in conflict
with Art. 35 of the constitution, which requires that all bills for
raising a revenue and appropriating money shall originate in the
house of representatives. The statute did originate in the
senate and it was denied that the act was one raising revenues or
appropriating money. It was claimed that the statute is a legal
limitation upon the right of inheritance; that it simply fixes as
a necessary condition for the existence of a capacity to receive by
succession the payment of a certain sum. The court holds that
the statute does not make the payment of the tax a condition prece-
dent to a right of inheritance, but that the law permits a foreigner
to inherit and, having so inherited, charges him with the payment of
the tax, and that as such the legislation is revenue legislation
and unconstitutional.

Succession of Sala, 50 La. Ann. 1009, 24 S. 674.

CHAPTER XI.

UNIFORMITY AND EQUALITY.

§ 54. Requirement of Uniformity not Applicable to Inheritance

Taxes.
§ 55. Meaning of "Equality" Molded to New Conditions.
§ 56. Authority to Levy Inheritance Taxes Makes Uniformity

Unnecessary.
§ 57. Uniformity within Specified Classes.
§ 58. Proportional Tax Required.
§59. Geographical Uniormity.

Sec. 54. Requirement of Uniformity not Applicable to
Inheritance Taxes.

It is often said that constitutional requirements of uniformity
and equality apply only to property taxes and not to an inheritance
tax,^ and do not prohibit an inheritance tax which by its nature
cannot be uniform in the same sense as a property tax,^ but there
is some authority to the contrary in Minnesota.^

^ Booth V. Commonwealth, 130 Ky. 88, 113 S. W. 61. Tyson v. State, 1868, 28
Md. 577. Nunnemacher v. State, 129 Wis. 190, 204-220, 108 N. W. 627, 9
L. R. A. N. S. 121. Beals v. State, 139 Wis. 544, 552, 121 N. W. 347.

In an earlier decision the court does not decide whether an inheritance tax is
subject to the constitutional provision that the rule of taxation shall be uniform.
"Considering the clause without undue refinement of reasoning, it is difficult
to see why it does not apply to an inheritance or succession tax. It is true such
a tax is called an excise in the decisions. An excise is a duty levied on articles
of sale or manufacture, upon licenses to pursue certain trades or deal in certain
commodities, upon official privileges, etc. Cooley, Taxation (2d ed.), 4. But
when such duty is levied upon a trade, occupation or privilege as a means of
producing revenue alone, and not in exercise of the police power, it is, to all
intents and purposes, an exercise of the taxing power, and no good reason is per-
ceived why such taxation is not included within the taxation referred to in the
constitution in the clause quoted. The argument against this position is that
the words immediately following this clause, namely, 'and taxes shall be levied
upon such property as the legislature shall prescribe,' indicate that it is a taxa-
tion of property alone which the section covers," Per Winslow, J., in Black v.
State, 113 Wis. 205, 218, 89 N. W. 522, 90 Am. St. Rep. 853.

46 INHERITANCE TAX LAW. [§§ 55-57.

Inheritance taxes were upheld as not violating the requirement of uni-
formity in Dixon v. Ricketts, 26 Utah 215, 72 P. 947. State v. Alston, 94 Tenn.
674, 30 S. W. 750.

^Thompson v. Kidder, 74 N. H. 89, 96, 65 A. 392.

^ State V. Gorman, 40 Minn. 232, 41 N. W. 948.

The amendment of 1894 to the Minnesota constitution, a. 9, s. 1, was in-
corporated into the existing constitution and the section in question must be
construed precisely as if the proviso had been a part of the original section; hence
the mandate of equality qualifies the provisions of the amendment and applies
to the whole section. The court therefore holds that the requirements of
equality in taxation applies to inheritance taxes exactly as it does to taxes on
property except as expressly provided in the last clause of the section. Drew
v. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 625, 79 Am. St. Rep. 446.

See, however, State v. Bazille, 97 Minn. 11, 106 N. W. 93, 6 L. R. A. (N. S.)
732.

Sec. 55. Meaning of "Equality" Molded to New Con-
ditions.

The requirement of equality has been molded from time to
time in view of the prevalent economic theories and changing
conditions of government.

State V. Bazille, 97 Minn. 11, 16, 106 N. W. 93, 6 L. R. A. (N. S.) 732.

Sec. 56. Authority to Levy Inheritance Tax Makes Uni-
formity Unnecessary.

Direct constitutional authority to levy an inheritance tax in-
cludes authority to levy one which is not uniform.

The intention and effect of the amendment of 1903 to the constitution of New
Hampshire was to provide in addition to taxation as theretofore defined a different
method of meeting public charges by an inheritance tax. As an inheritance tax
is necessarily disproportional and is unequal in its lack of proportion, and it is
impossible to lay a proportional tax upon property upon the occasion of death,
it cannot have been understood that such impossibility would defeat the express
power to lay such a tax, but it must follow that the express authority to impose
such a tax is an authority to disregard the general rule of proportion so far as
is necessary to exercise the power. For instance, poll taxes are recognized
by the constitution, but they are not proportional, they are constitutional acts
recognized by the constitution and have never been understood to have been
rendered unconstitutional by lack of proportion or inability to pay. Thompson
V. Kidder, 74 N. H. 89, 96, 65 A. 392.

Sec. 57. Uniformity within Specified Classes.

Uniformity means only uniformity within the class and does
not prohibit proper classification with different rates for each.^
"If a burden in the nature of taxation is laid upon the right [of
descent], the constitutional principle that taxes must be uniform

§58.1 UNIFORMITY AND EQUALITY. 47

as to the classes upon which they operate must be observed.
Subject to this restriction the legislature may lay taxes upon the
right of one class of persons and corporations to succeed to prop-
erty of deceased persons, and exempt the right of other classes of
persons or corporations from such taxation. "^

1 Nunnemacher v. State, 129 Wis. 190, 221, 108 N. W. 627, 9 L. R. A. N. S. 121.

The constitutionality of inheritance taxes are based on two principles: "1.
An inheritance tax is not one on property, but one on the succession. 2. The
right to take property by devise or descent is the creature of the law, and not a
natural right — a privilege, and therefore the authority which confers it may
impose conditions upon it. From these principles it is deduced that the states
may tax the privilege, discriminate between relatives, and between these and
strangers, and grant exemptions, and are not precluded from this power by the
provisions of the respective state constitutions requiring uniformity and equality
of taxation." Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 287,
18 Sup. Ct. 594, 42 L. Ed. 1037. "Equality" as applied to the progressive tax,
see post, s. 64.

2 Per Boggs, J., In re Speed, 216 111. 23, 27, 74 N. E. 809,' 108 Am. St. Rep.
189, affirmed 203 U. S. 553, 27 S. Ct. 171, 51 L. Ed. 314

Sec. 58. Proportional Tax Required.

The requirement of proportional taxation is not intended to
apply to inheritance taxes.

Tyson v. State, 28 Md. 577. Eyre v. Jacob, 14 Gratt. (Va.) 422, 433, 73 Am.
Dec. 357.

A requirement in the Maryland constitution that every person shall con-
tribute proportionally for the support of the government did not forbid an
inheritance tax. While this article provided for a uniform mode of taxation
on property it was not the purpose of the friends of the constitution to prohibit
any other species of taxation but to leave the legislature power to impose such
other taxes as the necessities of the government might require. Tyson v. State,
28 Md. 577.

The Vermont constitution provides that every member of society is bound to
contribute "his proportion" towards the expense of the protection which the
state affords him, and it is claimed that this excludes all methods of taxation
that are not uniform, equal and proportionate. And it was claimed that the
collateral inheritance tax lacked uniformity. The court holds, however, that
the question is what constitutes equality of apportionment within the meaning
of this provision, and in doing this the basis of the act in question must be con-
sidered, that the statute is not a tax upon property but a tax upon the trans-
mission of property, which is not a natural right, but a privilege accorded
by the state. And the court decides that the constitutional requirement of pro-
portional contributions was not intended to restrict the state to methods of
taxation that operate equally upon all its inhabitants, regardless of the variety
and measure of the advantages derived from its protection and regulation. A
member of the body politic has from the state not only the protection of his
property, but the privilege of taking property by descent and by will. It seems

48 INHERITANCE TAX LAW. [§59.

clear that privileges of this character as well as property are to be considered
in determining the just proportion of the individual. In re Hickok, 78 Vt.
259, 62 A. 724.

The opposite view was expressed in a discredited New Hampshire case-
"Immunity from disproportional taxation being expressly reserved in our bill
of rights, and the power of proportional taxation only being granted the legis-
lature by the constitution, we are unaware of any ground upon which the statute
under consideration [Gen. Laws, c. 64] can be upheld; for if it is to be regarded
as a tax on property, it is open to the objection of unequal and double taxation,
and if it is to be regarded as a tax on a civil right or privilege, it is discriminat-
ing and disproportional. See State v. United States & Can. Express Co., 60 N. H.
219." Per Blodgett, J., in Curry v. Spencer, 61 N. H. 624, 631, 60 Am. St.
Rep. 337. Curry v. Spencer, 61 N. H. 624, is explained in Minot v. Winthrop,
162 Mass. 113, 118, as going on the ground that the tax in that case is not propor-
tional and so cannot be supported as a tax on property under the constitution
of that state which authorizes only taxes and assessments on polls and property."

In Missouri the act of 1895 was found void as a property tax not levied in pro-
portion to the value of the property as the constitution required. State v,
Switzler, 143 Mo. 287, 330, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.

Sec. 59. Geographical Uniformity.

Constitutional requirements of uniformity mean merely that
general tax laws shall be in full force th roughout the taxing district.

State v. Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218. Knowlton v
Moore, 178 U. S. 41, 108, 20 S. Ct. 747, 44 L. Ed. 969. (U. S. Const., art. 1,
s. 8.)

"An excise tax which operates uniformly throughout the state and bears equally
upon all persons standing in the same category does not deprive any of equal
protection of the laws." Per Spear, C. J., in State v. Guilbert, 70 Ohio St. 229,
255, 71 N. E. 636.

The Wisconsin tax was declared unconstitutional primarily because it applied
only to one county, in State v. Mann, 76 Wis. 469, 45 N. W. 526.

"I do not perceive wherein the inequality and want of uniformity complained
of can be said to consist. ... The tax is equal and uniform throughout the
state as far as it is susceptible of the application of the rule. It is the same
everywhere upon the succession to estates of equal value of whatever subjects
they may consist." Per Lee, J., in Eyre v. Jacob, 1858, 14 Gratt. 422.

CHAPTER XII.

CLASSIFICATION BY RESIDENCE.

§ 60. Corporations.

§61. Individuals. — Aliens. — Effect of Treaties.

Sec. 60. Corporations.

Exempting domestic and not foreign corporations from tax is
a valid classification.

An exemption of foreign charitable corporations is not obnoxious to the
provisions of the fourteenth amendment to the federal constitution, s. 1, "that
no state shall deny to any person within its jurisdiction the equal protection
of the laws," as it is settled that a corporation is not a citizen within the meaning
of this clause of the federal constitution. Furthermore, the legislature has the
right in laying taxes to classify corporations as has been done in this state in
recent years, and can classify resident corporations in one class and foreign
corporations in another. Humphreys v. State, 70 Ohio St. 67, 87, 101 Am. St.
888, 70 N. E. 907, 65 L. R. A. 776, affirming 13 Low. D. 168, 1 C. C. N. S. 1,
14 Cir. D. 238.

The Illinois inheritance statute of 1895 as amended in 1901 exempted from
the inheritance tax certain charitable corporations organized under the law of
Illinois and did not exempt similar corporations organized under the laws of
other states. The court holds that this distinction is not contrary to the four-
teenth amendment to the federal constitution; that if a state exempt property
bequeathed for charitable and educational purposes from taxation it is not
unreasonable or arbitrary to require the charity to be exercised or education to
be bestowed within her borders and for her people whether exercised through
persons or corporations. Board of Education v. Illinois, 203 U. S. 553, 563, 27
S. Ct. 171,51L. Ed. 314.

To the effect that exemptions apply only to domestic charitable corporations,
see post, s. 257.

Sec. 61. Individuals. — Aliens.— Effect of Treaties.

State statutes discriminating against alien beneficiaries have
been often held void as in conflict with particular United States
treaties,^ and they are also ineffective so far as they attempt to
extend to residents of the state privileges not accorded to residents
of other states,^ but otherwise they are valid. ^ A lucid explanation
of the doctrine was given by our supreme court in an early case
upholding the validity of the Louisiana statute, which levied a tax

50 INHERITANCE TAX LAW. [§61

on legacies when the legatee was neither a citizen of the United
States, nor domiciled in the state, the court saying : —

"Now the law in question is nothing more than an exercise of
the power which every state and sovereignty possesses, of regulat-
ing the manner and term upon which property real or 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 cap-
able of taking it. Every state or nation may unquestionably refuse
to allow an alien to take either real or personal property, situated
within its limits, either as heir or legatee, and may, if it thinks
proper, direct that property so descending or bequeathed shall
belong to the state. In many of the states of this union at this
day, real property devised to an alien is liable to escheat. And
if a state may deny the privilege altogether, it follows that, when
it grants it, it may annex to the grant any conditions which it
supposes to be required by its interests or policy. This has been
done by Louisiana. The right to take is given to the alien, subject
to a deduction of ten per cent for the use of the state.

*Tn some of the states laws have been passed at different times
imposing a tax, similar to the one now in question, upon its own
citizens as well as foreigners; and the constitutionality of these
laws has never been questioned. And if a state may impose it
upon its own citizens, it will hardly be contended that aliens are
entitled to exemption ; and that their property in our own country
is not liable to the same burdens that may lawfully be imposed
upon that of our own citizens.

"We can see no objection to such a tax, whether imposed on
citizens and aliens alike, or upon the latter exclusively. It cer-
tainly has no concern with commerce, or with imports or exports.
It has been suggested, indeed, in the argument, that as the legatee
resided abroad, it would be necessary to transmit to her the pro-
ceeds of the portion of the estate to which she was entitled, and
that the law was therefore a tax on exports. But if that argument
was sound, no property would be liable to be taxed in a state, when
the owner intended to convert it into money and send it abroad."'*

The tax on an estate of one who died before a treaty became
effective cannot be affected by it.^

^ Adams v. Akerlund, 168 111. 632, 48 N. E. 454. (Swedish treaty of 1783.)
Succession of Dufour, 10 La. Ann. 391. (French treaty of 1853.) Succession of
Crusius, 19 La. Ann. 369. (Bavarian treaty of 1845.) Succession of Rixner,
48 La. Ann. 552. 19 S. 597, 32 L. R. A. 177. (Italian treaty of 1871.) Succes-

§61.1 CLASSIFICATION BY RESIDENCE. 51

sion of Rabasse, 49 La. Ann. 1405, 22 So. 767, 772. (French treaty of 1853.)
State V. Circe, Man. Unreported Cases (La.) 412. (French treaty of 1853.)
In re Stixrud, 58 Wash. 339, 109 P. 343, 348. (Treaty of 1827 with Norway and
Sweden.) See post, s. 305.

"Goods and effects" include real estate. The treaty between Norway
and Sweden and the United States of 1827, uses the words "goods and effects"
to designate the property the treaty is appHcable to, but the court holds that
these words include real estate, following Adams y. Akerlund, 168 111. 632, 48
N. E. 454, and University v. Miller, 14 N. C. 207. In re Stixrud, 58 Wash.
339, 109 P. 343, 349.

Heirs. The treaty of 1827, between the United States and Norway and
Sweden, provided for the succession by "heirs," and the court notes that this
word has a technical common law meaning restricting it to those who take by
inheritance only; while by the civil law it applies to all persons who are called
to the succession whether by act of the party or by operation of law. As the
word is used in this treaty by countries in one of which the common law pre-
vails and the other of which the civil law prevails, 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, and hence the word "heirs" includes
those who receive by will as well as those who receive by operation of law. In re
Stixrud, 58 Wash. 339, 109 P. 343, 349.

The New York statute of 1887 is not a "detraction tax," but a succes-
sion tax, and is therefore not included within the terms of the treaty of 1844
between the Kingdom of Wurtemberg and the United States. In re Stroebel,
5 N. Y. App. Div. 621, 39 N. Y. Suppl. 169.

2 7w re Stanford's Estate (Cal. 1898), 54 Pac. 259, reversed on another point
in 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. State v. Hamlin, 86 Me. 495, 507,
30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632 semble.

The California statute as amended by the statute of 1897 exempting nephews
and nieces when resident of the state is not void under the United States con"
stitution. On the contrary the effect of the United States constitution, section
2, article 4. is to extend the exemption there given to citizens of other states,
as the effect of the federal constitution is to measure the exemption by the
exemption given to citizens of California. In re Johnson, 139 Cal. 532, 537.
The court notes the case of In re Mahoney, 133 Cal. 180, 65 P. 389, 85 Am.
St. Rep. 155, and says that the question was raised there by aliens and that
therefore no constitutional question was involved and the decision in the Ma-
honey case was a dictum which the court refuses to follow.

^State v. Poydras, 9 La. Ann. 165, 167. Succession of Schaffer, 13 La. Ann.
113. State v. Martin, 2 La. Ann. 667. Succession of George, 4 La. Ann. 223.
Succession of Pehan, 5 La. Ann. 304. See In re Strixrud, 58 Wash. 339, 109
P. 343, where the question is not decided. See Iowa St. 1911, post, p. 458 et seq.

The Louisiana statute provided that every person not domiciled in the
state and not being a citizen of the United States shall pay an inheritance tax
of ten per cent. A treaty between the United States and the King of Wurtem-
berg, dated April 10, 1844, provided that citizens of each country should have a
right to take as heirs, paying such duties only as the inhabitants of the countr\'
where the property lies. The court holds that this statute does not make any
discrimination between citizens of the state and aliens in the same circumstances

52 INHERITANCE TAX LAW. [§61.

as a citizen oi Louisiana domiciled abroad is subject to the tax. Furthermore,
the case oi 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 contemplation of the treaty. So the tax should be collected on the estate of
a citizen of Louisiana leaving property to a citizen of Wurtemberg. Frederick- .
son V. State, 23 How. (U. S.) 445.

It was contended that the act of 1842 must be construed according to its
own terms and that the discrepancy between its language excepting those who
are not citizens of any state in the union and the La. St. 1850 which excepts
only those who are not citizens of any other state or territory means that heirs
who are citizens of the United States and heirs who are domiciled in Louisiana
are exempt from taxes. The court, however, by reference to the French version
of the statute and the original exemplification finds that the word "other" has
been inadvertently omitted in the English text and from this view of the statute
the court concludes that the tax attaches not only to property falling to alien
heirs who are non-residents, but al*o to property falling to citizens of Louisiana
residing abroad. The only exceptions to non-resident heirs are citizens of any
other state or territory of the United States than the state of Louisiana. This
exemption was probably intended to satisfy the second section of the fourth
article of the constitution of the United States. The object of the law was not
only to increase the revenues of the state, but to discourage absenteeism. State
V. Poydras, 9 La. Ann. 165.

"Personal Goods." "Inhabitants." The treaty of 1795 between the
United States and Spain provides that the citizens and subjects of each party
shall have power to dispose of their "personal goods" within the jurisdiction of
the other, and their representatives being subjects of the other party shall succeed
to their said personal goods and dispose of the same at their will, paying such
dues only as the inhabitants of the country wherein the goods are shall be subject
to pay in like cases. The court finds that the words "personal goods" include
movable property only and not real estate or immovable property. The word
"inhabitants" was intended to have as broad a signification as would be needed
to insure to the citizens of each country full protection which it was intended to
secure. The general assembly did not have in view the imposition of a succession
tax upon the citizens of Louisiana living away from the state. The treaty would
have no effect if the act was extended to Spanish heirs or legatees living in their
own country. La. St. 1894 was not, however, aimed at any portion of the people
of Louisiana and therefore Spanish heirs and legatees have the same rights that
they do to exemption. Succession of Sala, 50 La. Ann. 1009, 24 S. 674.

*Per Taney, C. J., in Mager v. Grima, 8 How. 490. To the same effect see
Arnaud v. Arnatid, 3 La. 336.

^Succession of Prevost, 12 La. Ann. 577. This judgment was affirmed in
Prevost v. Greneaux, 19 How. 1.

CHAPTER XIII.

CLASSIFICATION BY RELATIONSHIP.

§ 62. In General.

§ 63. Transfers where Life Estate is Reserved to Grantor.

Sec. 62. In General.

It is well settled that classification for purposes of the inheritance
tax by degrees of relationship to the testator is valid and does
not violate constitutional requirements of equality or uniformity.^
So confining the tax to collaterals and strangers,^ discrimination
among collaterals,^ or taxing lineals at a higher rate than collaterals,
in generally upheld.*

The classification need not follow the lines of inheritance. There
is no necessary connection between inheritance and taxation, and
in making laws relating to these two subjects the legislature is not
required to consider them together. In determining the mode
in which the estate of an intestate shall be distributed, the legis-
lature did not in any respect impair its right to distribute the
burden of taxation or to determine the classes by which that
burden shall be borne.^

Distinction among Life Tenancies based on Relationship of Re-
maindermen. The lUinois statute of 1895 provided that a life estate
should be taxable when the remainder was to lineal descendants and
not taxable where the remainder was to collateral descendants or
strangers. It was claimed that this was void as unreasonable classifi-
cation; that life tenants constitute but a single class, as the incidents
of such an estate are the same irrespective of the ultimate vesting
of the remainder. The court holds, however, that this was entirely
within the discretion of the state legislature; that the power of
the state to impose conditions upon the transfer or devolution of
estates is complete where no discrimination is exercised in the
creation of a class. "Crossing the lines of the classes created by
the statute discriminations may be exhibited, but within the
classes there is equality." This is not an arbitrary or warranted
discrimination between life tenants. A life estate with the fee
descending in lineal life might well be more desirable than a life

54 INHERITANCE TAX LAW. [§62.

estate with remainder to collateral heirs or strangers to the blood.
The exemption may be regarded as a concession to beneficiaries
of the first class while the last of their line to hold and enjoy the
property.^

1 Kochersperger v. Drake, 167 111. 122, 47 N. E. 321, 41 L. R. A. 446. Booth
V. Commonwealth, 130 Ky. 88, 113 S. W. 61. In re Fox, 154 Mich. 5, 13. State
V. Switzler, 143 Mo. 287, 333, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep.
653. In re Patterson, 130 N. Y. Suppl. 970, 127 N. Y. Suppl. 284. In re Opinion
of Justices, (N. H. 1911), 79 A. 490. Nunnemacher v. State, 129 Wis. 190, 221,
108 N. W. 627, 9 L. R.A. (N. S.) 121. State v. Clark, 30 Wash. 439, 71 P. 20;
. Magoun v. Illinois Trust &f Savings Bank, 170 U. S. 283, 287, 42 L. Ed. 1037,
18 U. S. Sup. Ct. 594.

A distinction between direct descendants and collateral kindred
and strangers has abundant reason upon which to sustain it, for the moral
claim of collaterals and strangers is less than of kindred in direct line and the
privilege is therefore greater. Tenn. St. 1893, c. 89, s. 7, is not unconstitutional
because it discriminates between direct descendants and collateral kindred and
strangers. State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178. As
to persons liable to tax see further, post, s. 303 et seq.

^State V. Hamlin, 86 Me. 495, 502, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A.
632. Minot v. Winthrop, 162 Mass. 113, 123, 26 L. R. A. 259. State v. Hender-
son, 160 Mo. 190, 216, 60 S. W. 1093. Hagerty v. State, 55 Ohio St. 613, 45 N. E.
1046, affirming 5 Ohio Cir. Dec. 701, 12 Ohio Cir. Ct. 606, relying upon State
V. Ferris, 53 Ohio St. 314. Eyre v. Jacob, 14 Gratt. (Va.) 422, 431, 73 Am. Dec.
367.

New Hampshire. The New Hampshire constitution requires that an
inheritance tax must be proportional and constitute only the just share of those
upon whom it is imposed. It cannot lawfully make discriminations and cast a
burden upon one class of beneficiaries and exempt all other classes from its
operation; and it cannot, therefore, for purposes of taxation, exempt legacies
and successions to lineal descendants and include only those to collaterals and
others than those specified. "Such a tax is founded upon pure inequality, and
is simply extortion in the name of taxation; and it can therefore never be
sustained in this jurisdiction so long as equality and justice continue to be the
basis of constitutional taxation." Per Blodgett, J., in Curry v. Spencer, 61
N. H. 624, 632, 60 Am. St. Rep. 337.

This decision is now generally discredited and is no longer law, even in New
Hampshire, where a constitutional amendment subsequently gave the legislature
authority to levy an inheritance tax. Under this amendment the act of 1905
was held constitutional. The court distinguishes Curry v. Spencer, 61 N. H.
624, as the right then in question was the right to the privileges of the probate
court for the purposes of administration; and if one estate was entitled to be
there settled without payment of fee, all were. The right under the act of 1905,
however, is a right to the passing of property, and the court says that there
are good reasons why the passing of property to near relatives or the gift of it
to charitable purposes or directly to the public should not be subject to an
exaction by the state. Reasonable exemptions of property have not been
considered to effect the validity of the tax upon other property, and the exemp-

§63.] CLASSIFICATION BY RELATIONSHIP. 55

tions in this statute do not render the assessment unreasonable. Thompson v
Kidder, 74 N. H. 89, 97, 65 A. 392.

3/« re Wilmerding's Estate, 117 Cal. 281, 49 P. 181. (Upholding distinction
between the surviving brothers and sisters of the testator and the children of
deceased brothers and sisters.) "The discrimination is based upon, and justi-
fied by, the fact that there are degrees in collateral kinship."

Hagerty v. State, 55 Ohio St. 613, 45 N. E. 1046, affirming 12 C. C. R. 606,
5 Ohio Cir. Dec. 701.

The fourteenth amendment to the federal constitution does not render invalid
the California statute of 1893 as amended in 1899, because it subjected to an
inheritance tax brothers and sisters of a decedent and did not subject to such
burden such strangers to the blood as the wife or widow of a son or the husband
of a daughter. The court says that the discretion of the state in this matter
can only be affected by the fourteenth amendment when the discretion is so obviously
arbitrary and unreasonable as to be beyond the pale of governmental authority.

The court holds it is not arbitrary to put in one class for the purpose of inherit-
ance all blood relatives to a designated degree except brothers and sisters and
to place all other and more remote relatives including brothers and sisters in a
second class along with strangers to the blood. Campbell v. California, 200
U. S. 87, 95, 26 S. Ct. 182, 50 L. Ed. 382.

Exempting stepchildren from the collateral inheritance tax together with
other lineal descendants is not void as improper classification. The court remarks
that it has nothing to do with the wisdom of legislation. Commonwealth v.
Randall, 225 Pa. St. 197, 73 A. 1109.

* "There is a natural reason for taxing the privilege of the latter [collaterals]
of receiving the property at a higher rate than that of the former [lineals], and
the amendment of 1894 to the Minnesota constitution authorizes such gradua-
tion of the tax. Drew v. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525,
79 Am. St. Rep. 446.

^In re Wilmerding's Estate, 117 Cal. 281, 49 P. 181.

^Billings V. People, 188 U. S. 97, 104, 23 S. Ct. 272, 47 L. Ed. 400, affirming
189 111. 472, 482, 59 L. R. A. 807.

A tax on lineals imposed only on the value of property transferred in excess of
five thousand dollars where all transfers of five thousand dollars and less to
lineals are exempt from the act, while the tax on collaterals is upon the entire
transfer of property if its value exceeds five thousand dollars, is a clear inequality
and discrimination between collateral and lineal descendants which renders the
statute unconstitutional. State v. Bazille, 87 Minn. 500, 92 N. W. 415, 94 Am.
St. Rep. 718.

If the Michigan act is a property tax it is void as violating the provisions
of the constitution requiring uniformity, as it provides for a different rate for
direct descendants from that on collaterals. Chambe v. Durfee, 100 Mich. 112,
58N. W.661.

Sec. 63. Transfers where Life Estate is Reserved to Grantor.

It is a good classification to single out for taxation transfers
where the life estate is reserved to the grantor, leaving all other
transfers exempt.

56 INHERITANCE TAX LAW. [§63-

"We think that there are sufficient reasons to support the classifi-
cation made by the statute; at least that the classification cannot
be said to be devoid of reasonable ground on which to rest. In-
heritance tax laws have been very generally adopted throughout
the states of the union. A substantial part of the revenue neces-
sary to support their governments is now derived from that source.
A not wholly unnatural desire exists among owners of property
to avoid the imposition of inheritance taxes upon the estates they
may leave, so that such estates may pass to the objects of their
bounty unimpaired. It is a matter of common knowledge that
for this purpose trusts or other conveyances are made whereby
the grantor reserves to himself the beneficial enjoyment of his
estate during life. Were it not for the provision of the statute
which is challenged, it is clear that in many cases the estate on the
death of the grantor would pass free from tax to the same persons
who would take it had the grantor made a will or died intestate.
It is true that an ingenious mind may devise other means of avoid-
ing an inheritance tax — but the one commonly used is a transfer
with reservation of a life estate. We think this fact justified
the legislature in singling out this class of transfers as subject to a
special tax."

Per Cullen, C. J., in In re Keeney, 194 N. Y. 281, 286, 87 N. E. 428, affirm-
ing 128 N. Y. App. Div. 893. Taxation based on relationship of remaindermen,
see antet s. 62.

CHAPTER XIV.

CLASSIFICATION BY AMOUNT — PROGRES-
SIVE RATES.

§ 64. Validity in General.

§ 65, From the Aspect of Political Economy.

§ 66. Increased Rate Applied to Excess Only.

§ 67. Tax Proportioned to Amount Received.

S 68. Classification by Amount of Whole Estate.

§ 69. The Pennsylvania Doctrine.

§ 70. Confiscatory Rates.

Sec. 64. Validity in General.

A graduated progressive tax is valid, ^ and constitutes equal
protection of the laws,^ and is not invalid even under a constitu-
tion providing that taxes shall be in proportion to the value of the
property.^ Our own supreme court has said of it: "The review
which we have made exhibits the fact that taxes imposed with
reference to the ability of the person upon whom the burden is
placed to bear the same have been levied from the foundation of
the government. So, also, some authoritative thinkers, and a
number of economic writers, contend that a progressive tax is
more just and equal than a proportional one. In the absence of
constitutional limitation, the question whether it is or is not is
legislative and not judicial. The grave consequences which, it is
asserted, must arise in the future if the right to levy a progressive
tax be recognized, involves in its ultimate aspect the mere asser-
tion that free and representative government is a failure, and that
the grossest abuses of power are foreshadowed unless the courts
usurp a purely legislative function."^

1 Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg.
N. 597, following with some reluctance Magoun v. Savings Bank, 170 U. S. 301,
18 Sup. Ct. 601.

In re McKennan, (S. D. 1911), 130 N. W. 33, reversing judgment on
rehearing, 25 S. D. 369, 126 N. W. 611. Nunnemacher v. State, 129 Wis. 190, 222,
108 N. W. 627, 9 L. R. A. N. S. 121. Knowlton v. Moore, 178 U. S. 41, 20 Sup.
Ct. 747, 44 L. Ed. 969.

In New Hampshire. On the question whether in view of the constitution
as it was construed and understood prior to 1903, it was intended by the amend-

58 INHERITANCE TAX LAW. [§64.

ment then made to authorize a progressive tax, the court is divided in opinion
and therefore declines to express any opinion whatever. In re Opinion of
Justices (N. H. 1911), 79 A. 490.

There is no difference in principle between an exemption given to
direct inheritances and a progressive tax. The same inequality exists in
the one case as in the other; and if there is unjust discrimination in the one
case there is also in the other. The diflFerence is one of degree and not of prin-
ciple. In re Fox, 154 Mich. 5, 11.

Authority to classify persons and property for the purpose of taxation is
well settled and graded or progressive taxation is intimately associated with
that of classification and perhaps amounts substantially to the same thing. State
v. Bazille, 97 Minn. 11, 106 N. W. 93, 6 L. R. A. N. S. 732. State v. Vance,
97 Minn. 532, 106 N. W. 98.

The following cases have been cited to show that an unequal graduated
rate is unconstitutional: Black v. State, 113 Wis. 205; State v. Ferris, 53 Ohio St.
314; Drew v. Tifft, 79 Minn. 187; State v. Bazille, 87 Minn. 503.

In a recent case, State v. Bazille, 97 Minn. 11, the court has explained and
somewhat modified its former holdings. The same may be said of the Wis-
consin and Ohio courts in their recent utterances. Nunnemacher v. State, 129
Wis. 190. State v. Guilbert, 70 Ohio St. 229. See In re Fox, 154 Mich. 5, 12.

The Mo. St. 1895 is void as contravening Mo. Const, a. 10, s. 3, as it is
not "uniform upon the same class of subjects within the territorial limits of
the authority levying the tax" within the Mo. Const, a. 10, s. 3. It is clear
that where the amount of property received is made the basis of the tax, uni-
formity is only attainable by levying the same per cent upon all property belong-
ing to persons bearing the same relation to the decedent. State v. Switzler, 143
Mo. 287, 332, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653, relying on State
V. Ferris, 53 Ohio St. 314, 30 L. R. A. 218.

2 Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627, 9 L. R. A. (N. S.) 121.
Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 18 Sup. Ct. 594.

History and Principles. "It is insisted that the proviso authorizing the
inheritance tax must be construed in connection with the equality mandate,
and that, properly construed, the tax, although it may be graded or progressive,
must, as respects graded or progressive features, be made as nearly equal as
may be, and that the statute does not conform to this requirement. Counsel
contend that this construction is sustained by the Drew case. In this we do
not concur.

"The history of taxation, in harmony with all human affairs, is one of evolu-
tion. Its progress from the earliest times to the present day is one of constant
development, in keeping with the advancing intelligence of man, unrolling step
by step, with changing economic and social conditions, tardily, however, new
methods and means of subjecting untaxed property to the tax rolls. Originally
public revenue was raised by voluntary contributions from the citizens; later,
in response to appeals and solicitations of the rulers; and finally, when volun-
tary contributions ceased, as at the present day, by compulsory assessments,
enforced by the operation of law. With this latter method came the demand,
born of injustice and oppression, for uniformity and equality, and provisions
securing it have long been a part of the fundamental law of all democratic forms
of government. Formerly tangible property only was taxed. Ability or faculty

§ 64.] CLASSIFICATION BY AMOUNT. 59

to pay has come to be the test in determining the justness of taxation. It is
'not only the basis of taxation, but the goal toward which society is steadily work-
ing. It lies instinctively and unconsciously at the bottom of all of our en-
deavors at reform.' [Seligman, Tax. 72.]

"The equity and fairness of this theory, in its broadest sense, when we reflect
upon the vast fortunes accumulated as the result of especially advantageous
opportunities and facilities, not possessed by people in general, is apparent
and obvious. It works no injustice or harm to those thus fortunately situated,
does not injuriously affect productive or industrial agencies, and relieves in a
measure those with lesser opportunities, and those to whom taxation is always
an extreme burden. This theory does not, however, harmonize well with a
strict application of the fundamental mandate of equality, as applied more
particularly to the proportional system of taxation in force in this and other
states. We mean by 'proportional system' a tax at a fixed and uniform rate,
in proportion to the amount of taxable property, based upon a cash valuation,
and legislatures and courts have been not a little embarrassed in attempts to
apply it.

"But an examination of the books discloses that the equality mandate has
been expanded and made to yield, from time to time, to new and advancing
social and economic conditions. The general principle is retained, but is applied
with less rigor and strictness. In our own state it has been enlarged, extended,
and departed from by the people. As it originally stood, our constitution in
this respect prevented the assessment of property for local improvements, and
it was amended by expressly excepting such assessments from the equality rule.
Bidwell v. Coleman, 11 Minn. 45 (78); Sperry v. Flygare, 80 Minn. 325, 83 N. W.
177, 49 L. R. A. 757, 81 Am. St. Rep. 162. The equality mandate applies as a
general rule to taxes upon property only, and is generally held by the courts of
this country to have no application to inheritance taxation, because a tax
of that nature is not one upon property but upon the right of succession or
inheritance (27 Am. & Eng. Enc. (2d Ed.) 338), though in this state it was
held to apply to inheritance taxes in Drew v. Tifft, supra, and also to a similar
statute in State v. Gorman, 40 Minn. 232, 234, 41 N. W. 948, 2 L. R. A. 701,
precisely as in other taxation, except as otherwise provided by the amendment
under consideration." Per Brown, J., in State v. Bazille, 97 Minn. 11, 16, 106
N. W. 93, 6 L. R. A. N. S. 732.

The Contrary View. While the legislature might perhaps distribute the
collaterals according to the different degrees of kinship to the decedent, and
levy a different rate upon the different degrees, yet when it ignores all such
natural classification and makes the amount of money received by each the
test of classification, it runs counter to another principle that is wellnigh univer-
sally accepted, that a uniform rate of taxation secures equality of burden. To
levy a different rate simply because the amount of each man's holding is different
would produce favoritism and destroy that principle of equality before the law
which is the boast of free government. If it be urged that the one receiving the
larger bounty enjoys the greater privilege.stil! the principle of uniformity answers
that the value of his right to receive is in direct proportion to the value of the
property to which he succeeds, and must, if taxation is to be uniform, be taxed
in that proportion or according to one uniform rate. State v. Switder, 143 Mo.
287, 333, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.

60 INHERITANCE TAX LAW. [§§ 60-66.

'A tax which affects the property within a specific class is uniform as to that
class and there is no provision of the constitution which precludes a tax on that
particular class. No want of uniformity with one living who owns property
can be urged as a reason why the statute makes an inconsistent rule. No per-
son inherits or can take by devise except by statute and the state having power
to regulate this question may create classes and provide for uniformity with
reference to classes which were before unknown. Kochersperger v. Drake,
167 111. 122, 47 N. E. 321, 41 L. R. A. 446.

*Per White, J., in Knowlton v. Moore, 178 U. S. 41, 109, 20 S. Ct. 747, 44 L.
Ed. 949.

Sec. 65. From the Aspect of Political Economy.

The progressive tax, charging a higher percentage on large estates
than on small ones, has the best of economic endorsement.

A learned discussion of progressive rates is contained in the monograph by
Max West on the Inheritance Tax, at pages 221 et seq. Mr. West points out
that the progressive tax was supported by John Stuart Mill. He remarks on
the dangers to general business and society of inexperienced young men in-
heriting their fathers' fortunes; and states that there is no reason why the
right of inheritance should be unlimited; that a progressive tax can be justified
as a compensation for the inequality of taxes which fall more heavily on the
poor than on the rich; that if the inheritance tax be regarded as a payment
of back taxes the justice of progression is especially evident, because large
fortunes undoubtedly escape taxation during the owner's life to a greater extent
than small ones. Progressive taxes may also be explained on the simple prin-
ciple that the tax paying ability increases more rapidly than wealth, or that
the sacrifice involved in paying a proportional tax is less for the wealthy than
for the poor. Mr. West points out that the most effective argument against
the progressive tax is the political argument that it is a step towards socialism.

Sec. 66. Increased Rate Applied to Excess Only.

A distinction has been attempted between cases where the in-
creased rate is on the whole legacy and where it is applied only
to the excess over the portion taxed at the primary rate,^ but
this view has not prevailed. ^

^ State V. Ferris, 53 O. St. 314. Cf. s. 291.

There are two methods of progression provided for in the statutes of the
several states: one found in South Dakota wherein the higher rate in the case
of transmission of a greater devise or bequest is levied upon the whole valae of
the property transmitted; the other, like that found in the Wisconsin statute,
where the increased rate applies only to the excess in value of property trans-
mitted over the amount subject to the next lower rate. The court remarks
that if any difference is to be made in the rate of taxation between a large legacy
and a small legacy on the theory that the increased ability to pay is greater in
the case of the large beneficiary than of the smaller, that it cannot be said that
the increased ability to pay of a devisee receiving $20,000 over that of one

§ 67.] CLASSIFICATION BY AMOUNT. 61

receiving $10,000 comes from the receipt of his first $10,000. The increased
ability to pay does come solely from the receipt of the second $10,000. "It is
ridiculous to say that a man who receives a devise or legacy of a thousand and
one dollars is as well able to pay a tax of $594.06 as is a man who receives ten
thousand dollars to pay $396. We have never discovered any method of making
one dollar pay $198.06."

If the progressive tax is based on the theory that it is against public policy
to allow large estates to be held together by transmission after the death of the
owners, which is the theory that seems the more reasonable to the court, the
court replies that "if one person receives $20,000 and another $10,000 it was
no greater privilege for the first to receive his first $10,000 than for the second.
The increased privilege is all found in receiving of the extra $10^000, and it is
the exercise of this extra privilege, the transmission of the extra $10,000, that
should receive the extra burden of taxation." In re McKennan, 25 S. D. 369, 126
N. W. 611, 618, reversed, however, on rehearing, 130 N. W. 33.

2 Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 18 Sup. Ct. 594, 42
L. Ed. 1037.

The progressive tax under South Dakota statute of 1905, where the increased
rate applies to the whole legacy in a large estate, is valid. The court holds that
this is logically, legally and constitutionally in the same category as classification,
based on the net increased amount of a higher, over a lower, class. In re Mc-
Kennan, (S. D. 1911,) 130 N. W. 33, reversing judgment on rehearing, 25 S.
D. 369, 126 N. W. 611.

As to the progressive feature of the act, there are four classes created and
there is equality between the members of each class. It was pointed out that
the tax is not in proportion to the amount, but varies with the amount arbitrarily
fixed, and hence that one who is given a legacy of $10,001 by the deduction of
the tax receives $99.04 less than one who is given a legacy of $10,000. But the
court holds that this is not contrary to the rule of equality of the fourteenth
amendment and that rule does not require, as we have seen, exact equality of
taxation. It only requires that the law imposing it shall operate on all alike
under the same circumstances. The tax is not on money; it is on the right to
inherit, and hence a condition of inheritance; and it may be graded according
to the value of that inheritance. The condition is not arbitrary because it is
determined by that value; it is not unequal in operation because it does not
levy the same percentage on every dollar; does not fail to treat all "alike under
like circumstances and conditions, both in the privilege incurred and the liabili-
ties imposed." Per McKenna, J., in Magoun v. Illinois Trust & Savings Bank,
170 U. S. 283, 298, 300, 18 Sup. Ct. 694, 42 L. Ed. 1037.

Sec. 67. Tax Proportioned to Amount Received.

The fact that the tax is fixed at a certain percentage of the
property passing to the beneficiary does not invalidate it^ or
deprive it of the requisites of equality and uniformity,^ as the
legislature has a right to classify the privilege taxed according to
the value of the property received.^

1 Union Trust Co, v. Dur^ee, 125 Mich. 487, 493, 84 N. W. 1101, 7 Detroit
Leg. N. 597.

62 INHERITANCE TAX LAW. [§§68-69.

^Booth V. Commonwealth, 130 Ky. 88, 113 S. W. 61.

"Such right is derived from and regulated by municipal law; it arises from the
relation of the individual to the state, and is not an inherent or constitutional
right. It follows that in assessing a tax upon such right or privilege, the state
may lawfully measure or fix the ainount of the tax by referring to the value of
the property passing, and is not precluded from this power by the provision of
the constitution requiring uniformity and equality of taxation." State v.
Guilbert, 70 Ohio St. 229, 255, 71 N. E. 636.

^State V. Vinsonhaler, 74 Neb. 675, 105 N. W. 472, 474. Eyre v. Jacob, 14
Gratt. (Va.) 422, 73 Am. Dec. 367.

Sec. 68. Classification by Amount of Whole Estate.

Classification by the amount of the estate of the decedent is
probably valid,^ although this has been held, with some reason,
void as grossly unequal.^

1 See Minof v. Winthrop, 162 Mass. 113, 124, 38 N. E. 512. Cf. also, as to
exemptions, s. 243; rates, s. 289.

^ State V. Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218.

The court admits the validity of a progressive rate, but remarks as
follows: "But while classification is proper, there must always be uniformity
within the class. If persons under the same circumstances and conditions are
treated differently, there is arbitrary discrimination, and not classification.

"It is claimed that such is the effect of the present law, and we can see no
escape from the conclusion. People in the same class are subject to different rules,
some being exempt and some being taxed. This results from the peculiar pro-
visions of sec. 19 of the law, which defines 'estate' and 'proi>erty' as construed
by the New York courts before we borrowed the law. As already pointed out,
under this provision the $10,000 limitation or exemption is based on the size of
the whole property devised or granted, and not upon the amount received by each
individual legatee or grantee. Thus it results that one collateral relative, receiv-
ing a legacy of $2,000 from one testator, whose estate amounts to but $9,500,
pays no tax, while another collateral relative in the same degree, receiving a legacy
of $2,000 from another testator whose estate amounts to $10,500, is obliged to
pay a tax. Here is unlawful discrimination, pure and simple. No rational dis-
tinction or difference can be dr<wn between the two legatees simply because the
estates from which their legacies come are of slightly different size. They are
both within the same class, surrounded by the same conditions, and receiving
the same benefits. One pays a tax, and the other does not. This is not the
equal protection of the laws." Per Winslow, J., in Black v. State, 113 Wis. 205,
218, 89 N. W. 522, 90 Am. St. Rep. 853.

Sec. 69. The Pennsylvania Doctrine.

Under the Pennsylvania doctrine that the inheritance tax is a
property tax, a progressive rate is void. The Pennsylvania Con-
stitution, article 9, s. 1, declares: "All taxes shall be uniform upon
the same class of subjects within the territorial limits of theauthority

§ 70.] CLASSIFICATION BY AMOUNT. 63

levying the tax." The language of section 1, as to what the rule
of uniformity shall embrace, is as broad and comprehensive as it
could possible have been made. The words "all taxes" must
necessarily be construed to include property tax, inheritance tax,
succession tax, and all other kinds of tax, the subjects of which
are susceptible of just and proper classification. By necessary
implication, the first clause of that section recognizes the authority
of the legislature to justly and fairly, but never arbitrarily, classify
those subjects of taxation with the view of effecting relative
equality of burdens. A pretended classification that is based
solely on a difference in quantity of precisely the same kind of
property is necessarily unjust, arbitrary and illegal. For example,
a division of personal property into three classes, with the view of
imposing a different tax rate on each — class 1, consisting of per-
sonal property exceeding in value the sum of one hundred thou-
sand dollars, class 2, consisting of personal property exceeding
in value twenty thousand dollars and not exceeding one hundred
thousand dollars, and class 3, consisting of personal property not
exceeding in value twenty thousand dollars — would be so mani-
festly arbitrary and illegal that no one would attempt to justify it.

In re Cope, 191 Pa. St. 1, 21, 43 A. 79, 45 L. R. A. 316, 71 Am. St. Rep.
749.

Sec. 70. Confiscatory Rates.

We conceive that a progressive tax which amounts to confisca-
tion is void on fundamental principles, and that the Oklahoma
statute, as applied to a large estate, for example, would receive
scant consideration from the court. The possibility of such a
result was considered by our supreme court in the following
language: "If a case should ever arise where an arbitrary and
confiscatory exaction is imposed bearing the guise of a progressive
or any other form of tax, it will be time enough to consider whether
the judicial power can afford a remedy by applying inherent and
fundamental principles for the protection of the individual, even
though there be no express authority in the constitution to do so.
That the law which we have construed affords no ground for the
contention that the tax imposed is arbitrary and confiscatory, is
obvious."! The South Dakota court remarks: "It must be conceded
that, if the legislature can fix rates of taxation, it can increase such
rates, and upon grounds of public policy it might place a limit in
the value above which all transmissions would go to the state.

64 INHERITANCE TAX LAW. [§70.

Our highest court has also said recently: "When logic and the
policy of a state conflict with a fiction due to historical tradition,
the fiction must give way." '

It is true that the opposite doctrine has been frequently laid
down under the guise of the theory that a right of succession on
death is a creature of law and not a natural right. This has been
expressed by our supreme court 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." ^

1 Per White, J., in Knowlton v. Moore, 178 U. S. 41, 109, 20 S. Ct. 747, 44 L
Ed. 969.

2 Per Whiting, P. J., In re McKennan, 25 S. D. 369, 126 N. W. 611, 618, reversed
on rehearing, 130 N. W. 33.

INHERITANCE TAXES MAY EAT UP AN ENTIRE ESTATE
AND POSSIBLY BANKRUPT THE EXECUTOR.

[From the New York Commercial, July 1, 1911.]
There has just been instituted here in New York by one Bunyan Lucas of
Shawnee, Okla., a suit at law to break the will of John W. Hunt, a rich New
Yorker, who died in Dallas, Texas, last December, leaving an estate said to be
valued at $1,000,000; he was a half-brother of Lucas and to the latter he be-
queathed $1,000 and a farm in Oklahoma; something over $100,000 was devised
to other relatives and friends; and the will directs that the residue of the estate
shall be used to establish a charitable or benevolent institution in Georgia as a
memorial to the testator; the will was executed in Asbury Park, N. J., and was
recently admitted to probate in Florida; Lucas alleges that the probating of the
will was unlawful and that a residuary bequest of this sort is invalid in New York
state. The case bids fair to open up some highly interesting questions of law,
inasmuch as six different states are directly or indirectly interested in it; and
if the properties involved, whether personal or real estate, are scattered about
in different states, the possibilities in the way of inheritance taxes almost run
away with the imagination. Suppose, for instance, this residuary estate of
$1,000,000 consists of stocks and bonds of Oklahoma corporations and that the
will stands. Oklahoma taxes such securities owned by non-residents when
passing by inheritance, and the corporations themselves are responsible for the
tax if they transfer title to them before the tax is paid; the first $100 is exempt;
from $100 to $600 the tax is five per cent; on any excess above $600 the tax
is progressive — one-tenth of one per cent increase on five per cent for every
1100; and where the excess is over $95,600 the inheritance tax is 100 per cent!
Now suppose the executor of this Hunt will sends the Oklahoma stocks and
bonds out there for transfer from the testator to himself so that he may convert

§ 70.] CLASSIFICATION BY AMOUNT. 65

them into cash with which to endow the Georgia memorial institution — the
state of Oklahoma sets its mathematician at work with a table of Napier's
logarithms, and in due season he reports that the state's share of that $1,000,000
Linder the inheritance tax law is $975,965! As the corporations would not
transfer the securities until this amount was paid, the executor would have to
raise it somehow and pay it over to the state; then, with the securities registered
n his own name, he could sell them and if they brought par value, after the
^975,965 had been deducted, he would have just $24,035 left for establishing the
Georgia memorial. That would be quite bad enough — but up would step
:he sovereign state of New York and demand $209,872.50 of this executor with
jnly $24,035 in his pocket as its tax share of the property of a dead New Yorker;
ind it could hold him personally responsible for the payment of the tax in full.
[t will thus be seen that inheritance taxes can more than eat up an entire estate
— under certain circumstances they might bankrupt an inheritor and an executor

DOth.

^Per Holmes, J., in Blackstone v. Miller, 188 U. S. 189, 23 S. Ct. 277, 47 L.
Ed. 439.

^See ante, s. 29.

^Per Brown, J., in United States v. Perkins, 163 U. S. 625, 628, affirming
In re Merriam,141 N. Y. 479, 36 N. E. 505, in which the court cites the following
:ases: Matter oj Swift, 137 N. Y. 77; Matter of Hoffman, 143 N. Y. 327; School-
^eld V. Lynchburg, 78 Va. 366; Strode v. Commonwealth, 52 Pa. St. 181; State v.
Dalrymple, 70 Md. 294, 299.

CHAPTER XV.

NOTICE.

§ 71. Notice to Parties.

§ 72. Notice to Collecting Officers Unnecessary.

Sec. 71. Notice to Parties.

It is the prevailing view that parties taxed must have some
notice of the proceedings/ and a right of appeal from the appraisal
is insufficient ,2 although it has been held that notice is unnecessary
on the ground that the tax does not take property of the legatee
but merely imposes a condition upon its acquisition.^ It is enough
that the probate court has power to hear and determine all questions
in relation to such tax that may arise, subject to appeal as in
other cases,* and it is not fatal that the law vests a tax in the
state at once on the death of the decedent, provided notice is given
of the proceedings for collection.^ Notice by registered mail to non-
residents may be sufficient.® A defect in the statute consisting
of want of notice may be cured by an amendment providing for
notice without re-enacting the whole statute.''

*N. Y. St. 1885, c. 483, was attacked on the ground that no proper notice
was given to the taxpayer. The court construes section 13 of the act liberally
as requiring the surrogate to give notice to all persons interested, and it is further
provided that immediately after he has assessed a tax the surrogate shall "give
notice by mail to all parties." The section further provides a right of appeal
and upon such appeal there is another opportunity to be heard. There is still
further opportunity to be heard under section 16 of the act, which provides for
the service of a citation on an order to show cause why the tax should not be paid.
It is clear that the person thus cited may allege any reason whatever which
shows that he ought not to pay it. He may answer that he has not had an
opportunity to be heard at the appraisal and that therefore the tax as to him
is void. He may show any error affecting the validity of the tax, or that he
has never received and never will receive the inheritance nor legacy, and it
would undoubtedly be a justification for refusing co pay that he absolutely
renounced and refused to accept or receive the inheritance or legacy. If the
surrogate should err in his decision there would be the right of appeal to the
supreme court.

The court concludes that in all these ways there is sufficient provision for notice
and hearing for all parties interested. In re McPherson, 104 N. Y. 306, 323,

§72.] NOTICE. 67

10 N. E. 685, 58 Am. Rep. 502, followed in State v. District Court, 41 Mont.
357, 109 P. 438, 442. See further, post, s. 331.

2The court notices the claim that the tax is against the estate alone and
remarks that the claim is not against the estate alone, but as a rule the adminis-
trator has nothing to do with the real estate. The section giving the district
court jurisdiction to hear and determine questions relating to the tax does not
afford such hearing as avoids the constitutional objection, as it does not give the
court authority to attack the valuation for the purposes of taxation. Ferry v.
Campbell, 110 Iowa 290, 81 N. W. 604, 50 L. R. A. 92. See In re McPherson,
104 N. Y. 321, 10 N. E. 685. Contra, Hostetter v. State, 26 Ohio Cir. Ct. 702.

Notice of the appointment of the appraiser and of a hearing on the appraisal
is unnecessary. A right of appeal, however, implies notice. In re Belcher, 211
Pa. St. 615, 619, 61 A. 252.

3 Union Trust Co. v. Durfee, 125 Mich. 487, 494, 84 N. W. 1101, 7 Detroit
Leg. N. 597.

* State V. Hamlin, 86 Me. 495, 507, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A.
632.

^Trippet v. State, 149 Cal. 521, 86 P. 1084, 8 L. R. A. (N. S.) 1210.

*Mont. Revised Code, s. 7738, gives sufficient notice to satisfy the constitu-
tion of the appraisal and assessment of the tax. The clause provides for notice
"by registered mail," and the provision lays upon the court the duty to fix the
time for the appraisement within such reasonable limits as will give every person
interested the opportunity to be present and have a hearing if he so desires. This
may be difficult, as where in the case at bar the testator died in Ireland where he
resided, but the task is no more difficult for the court in Montana than for an
Irish court. The statute further provides that after the tax has been assessed
the court shall immediately give notice by registered mail, and this is an additional
notice, which requires knowledge by the court of the names and whereabouts
of all interested persons, and this knowledge it is presumed the court will get.
State V. District Court, 41 Mont. 357, 109 P. 438, 442.

Terry v. Campbell, 110 Iowa 290, 81 N. W. 604, 50 L. R. A. 92.

Sec. 72. Notice to Collecting Officers Unnecessary.

There is no constitutional requirement that the collecting
officer be notified of the proceedings for assessment. The New
York court of appeals has remarked on this subject: "That the
doctrine of notice has any application in such proceedings to the
case of the comptroller, is a proposition which has neither support
in some requirement of the act, nor is justified by his relation to
the subject-matter. He is not a person who has any interest in the
property. He is an utter stranger to it. Contingently upon the
refusal or neglect to pay a tax due under the act, it may become
his duty to notify the district attorney to proceed to enforce
collection. The performance of that duty, however, involves the
idea of a failure of the surrogate to act at all, or of a neglect or
refusal to obey the decree of the surrogate's court. It doubt-

68 INHERITANCE TAX LAW. [§72.

less is very proper that the surrogate should cause the comptroller
to be notified of the proceedings for appraisement and assessment,
in order that a question which concerns the interests of the state
may be tried out in the fullest possible manner ; but nothing in the
law, or in the relations of the comptroller, makes notice to him a
prerequisite to a complete determination by the surrogate of the
questions presented in the proceedings. The doctrine of notice
is one which finds application when it is sought to tax the property
of the citizen. When he is to be assessed, it is essential that he
shall be given an opportunity to be heard, to establish a demand
against him. As matter of fact, in this proceeding it appears
that the comptroller was caused to be notified by the surrogate
before he passed upon the question of the liability of these legacies
to taxation; so that he had his opportunity to appear and be
heard, if he had chosen to avail himself of it. I can see no more
force in the argument as to an implied requirement of notice to
him, than if the argument was made in the case of the assess-
ment and taxation of property, under the general system of taxa-
tion in the state, that some state official should have notice and
the opportunity to be "heard."

Per Gray, J., in In re Wolfe, 137 N. Y. 205, 211, 33 N. E. 156, affirming 66
Hun 389, 29 Abb. N. Cas. 340, 21 N. Y. Suppl. 515, reversing 2 Connolly 600.
Notice was later required even of orders of exemption. In re Collins, 104 N. Y.
App. Div. 184, 93 N. Y. Suppl. 342.

CHAPTER XVI.

RETROACTIVE LEGISLATION.

§73. Statutes Construed as Prospective. — Powers.

§ 74. Statutes Applying Retroactively to Estates in Process of Ad-
ministration.

§ 75. Decisions of the Supreme Court.

§ 76. When Property is Distributed.

§ 77. Effect of Premature Distribution.

§ 78. After Title has Passed.

§ 79. Exemptions.

§ 80. Tax on Increase in Value.

§ 81. Location of Assets in State Insufficient Basis for Retroactive
Legislation.

§ 82. Constitution Inapplicable to Conditions Prior to its Enact-
ment.

§ 83. Effect of a Subsequent Treaty.

§ 84. Gift Inter Vivos.

§ 85. Remainder Interests Vested before Passage of Statute.

§ 86. Curative Act.

Sec. 73. Statutes Construed as Prospective. — Powers.

Inheritance taxes, like other laws, are prospective in operation
unless expressly made retroactive, and apply only to the estates
of decedents who have died since their enactment,^ although passed
before distribution, ^ and although the will is filed and probated
after the passage of the statute.' So an amendment to the inherit-
ance laws must be treated as prospective in the absence of language
indicating it is retrospective in character.*

To construe an inheritance tax as applying to estates where dis-
tribution had not been made when the statute was passed, although
the testator died before that time, would result in great inequality,
as the liability to taxation would in many instances be determined
by the fact whether proceedings for the settlement of the estate
were commenced before or after the act went into effect. It is
unnecessary to impute to the legislature a purpose to frame legis-
lation which would thus have the practical effect to disturb vested
rights and create a test of liability, thus depending upon accident
and chance.^

70 INHERITANCE TAX LAW. [§74.

A good example of the tendency to construe statutes prospectively
may be found in Pennsylvania, where the act of 1850 declared that
"the words 'being within this commonwealth' shall be so con-
strued as to relate to all persons who have been at the time of
their decease, or now may be, domiciled within this commonwealth,
as well as to estates ; and this is declared to be the true intent and
meaning of said act." The court holds, in a well considered opinion,
that this language should be applied prospectively to include the
estate of one who died after its passage.^

A tax on the execution of a power is valid although the power
was created before the passage of the statute.^

^Lacey v. Treasurer (Iowa, 1911), 132 N. W. 843. Gilbertson v. Ballard, 125
Iowa 420, 101 N. W. 108. Cf. 110 Iowa 290. Succession of Oyon, 6 Rob. (La.)
504. Succession of Deyraud, 9 Rob. (La.) 357, relying on Succession of Oyon,
9 Rob. (La.) 501. In re Lombard's Appeal, 88 Me. 587, 34 A. 530. Howe v.
Howe, 179 Mass. 546, 552, 55 L. R. A. 626. Tilford v. Dickinson, 79 N. J. L.
302, 79 Atl. 1119, reversing 1910 N. J. L., 75 Atl. 574. In re Brooks, 6
Dem. Surr. (N. Y.) 165, 20 N. Y. St. 149. In re Travis, 19 Misc. Rep. 393,
44 N. Y. Suppl. 349, 2 Gibbons 91. Eury v. State, 72 Ohio St. 448, 74 N. E.
650. Cahen v. Brewster, 203 U. S. 543, 550, 27 S. Ct. 174, 51 L. Ed. 310, affirm-
ing 115 La. 378, 39 S. 37.

2 Carter v. Whitcomb, 74 N. H. 482, 69 A. 779, 17 L. R. A. (N. S.) 733n.

3 In re Lombard's Appeal, 88 Me. 587, 34 A. 530.

4 Provident Hospital & Training Assn. v. People, 198 111. 495.

^ In re Collateral Inheritance Tax, 88 Me. 587, 34 A. 530. See, however,
Attorney General v. Stone, 209 Mass. 186, 95 N. E. 395.

6 In re Line, 155 Pa. St. 378, 380, 26 A. 728, 32 Wkly. Notes Cas. 376.

7 Orr v. Oilman, 183 U. S. 278, 288, 22 S. Ct. 213, 46 L. Ed. 196 (affirming In re
Dows, 167 N. Y. 227, 60 N. E. 439, 52 L. R. A. 433, 88 Am. St. Rep. 508).

[Retroactive statute of limitation, see post, s. 403.]

Sec. 74. Statute Applying Retroactively to Estates in the
Process of Administration.

It is competent for the state to impose a tax on inheritances
which are in gremio legis before distribution, by a statute passed
after the death of the decedent,^ which is not void as an ex posl
facto law.2 The tax may be imposed at any time from and includ-
ing the death of the testator to distribution.^ One reason given
is that a right to take a legacy may be subject to the laws for the
assessment and collection of a tax as a premium upon the right and
privilege to receive the inheritance, inasmuch as it is subject to
laws which authorize the taxation of the very property bequeathed.*

It has been held in certain cases that inheritance taxes cannot be
made retroactive.^

§74] RETROACTIVE LEGISLATION. 71

^Lacey v. State Treasurer (Iowa, 1911), 121 N. W. 179, 185 (McClain, J., dis-
senting). Succession of Oyon, 6 Rob. (La.) 504. Succession of Stauffer, 119 La.
Ann. 66, 43 S. 928. Stevens v. Bradford, 185 Mass. 439, 70 N. E. 425. Attorney
General v. Stone, 209 Mass. 186, 95 N. E. 395 (applying only to cases in which
tax remained unpaid). Hostetter v. State, 26 Ohio Cir. Ct. 702. In re Short,
16 Pa. St. (4 Harris) 63. Commonwealth v. Smith, 20 Pa. St. (8 Harris) 100
(increase of interest charged for non-payment). Attorney General v. Middleton,
3 Hurl. & N. 125.

La. St. 1904, c. 45, provided that the inheritance tax might be "collected on
all successions not finally closed and administered upon." It was argued that
the closing of the succession cannot affect the question as to when the rights
of the heirs vested and cannot be the cause for differentiation among the heirs,
and that such a classification is purely arbitrary and that, besides, such a classi-
fication rests on the theory that the tax is one on property, when in fact it is one
on the right of inheritance. But the court holds that the property bequeathed
was subject to the jurisdiction of the court until it had passed out of the suc-
cession of the testator, and it was not improper classification to make the tax
depend upon a fact without which it would have been invalid. "In other words,
those who are subject to be taxed cannot complain that they are denied the
equal protection of the laws because those who cannot legally be taxed are not
taxed." Cahen v. Brewster, 203 U. S. 543, 552, 27 S. Ct. 174, 51 L. Ed. 310,
affirming 115 La. 378, 39 S. 37.

When Estate not Finally Closed. La. St. 1906, c. 109, p. 173, provides that
the act shall affect all successions not finally closed or in which the final account
has not been filed; so where the decedent died January 11, 1906, the succession
was closed by a judgment February 7, 1906, recognizing the heirs ordering them
to be put into possession, and as this was done before the La. St. 1906 went into
effect, this succession was not affected by that statute but was governed by the
La. St. 1904. Succession of Pritchard, 118 La. Ann. 883, 43 S. 537.

2 Carpenter v. Pennsylvania, 17 How. 456.

^ The court remarks that there is nothing in the case of United States v. Perkins,
163 U. S. 625, Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, Knowl-
ton V. Moore, 178 U. S. 41, which restrains the power of the state as to the time
of the imposition of the tax. "It may select the moment of death, or it may
exercise its power during any of the time it holds the property from the legatee."
Where the testator died in May, 1904, before the statute went into effect, the
statute properly was made to impose the tax upon the estate. Cahen v. Brewster,
203 U. S. 543, 551, 27 S. Ct. 174, 51 L. Ed. 310, affirming 115 La. 378, 39 S. 37.

See Carpenter v. Commonwealth, 17 How. 456, 462.

^ Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 270, 39 L. R. A. 170. The
court relies upon In re McPherson, 104 N. Y. 306, 10 N. E. 685, 58 Am. Rep.
502.

^ Pullen V. Commissioners, 66 N. C. 361, 362. See In re Pell, 171 N. Y. 48,
60, 63 N. E. 789, 57 L. R. A. 540, 89 Am. St. Rep. 791, reversing 60 N. Y. App.
Div. 286, 70 N. Y. Suppl. 195.

A Pennsylvania intestate died leaving only collateral relatives and an illegiti-
mate son who was legitimatized by the legislature after the death of the intestate.
The estate descended and vested in the collateral heirs, and the state was entitled
to collect the collateral inheritance tax. The moment a man dies leaving heirs

72 INHERITANCE TAX LAW. [§75

lineal or collateral, his estate vests and is beyond the constitutional power of
the legislature. Galhraith v. Commonwealth, 14 Pa. St. (2 Harris) 258.

Sec. 75. Decisions of the Supreme Court.

The validity cannot be questioned of a tax imposed on personal
property in the hands of the executor or administrator before dis-
tribution. Our supreme court has affirmed this doctrine in an
early decision and again quite recently.

In Carpenter v. Commonwealth, 17 How., the court remarks at
page 462: It is true "that the rights of donees under a will are
vested at the death of the testator . , but until the period for
distribution arrives, the law of the decedent's domicile attaches to
the property, and all other jurisdictions refer to the place of the
domicile as that where the distribution should be made. . . . The
personal estate, so far as it has a determinate owner, belongs to
the executor. The rights of the donee are subordinate to the con-
ditions, formalities and administrative control prescribed by the
state in the interest of its public order, and are only irrevocably
established upon its abdication of this control, at the period of
distribution. If the state, during this period of administration and
control by its tribunals and their appointees, thinks fit to impose
a tax upon the property, there is no obstacle in the constitution
and laws of the United States to prevent it." ^

In a recent case it appeared that the Louisiana statute of 1904
became operative in New Orleans July 30, 1904, and the court holds
that it embraced all successions, those opened and not settled as
well as to be opened, and that it is not void as retroactive on that
ground. The court holds that the power to tax is without limit
in its force and in the extent of its search ; that the legatees acquire
no vested right in the property bequeathed which could enable
them to successfully defend their inheritance against the demand
of the state. It was property within the limits of the state which
the state could tax for the purposes mentioned until it passed
out of the succession of the testator. The court notes that it does
not appear just to tax all successions opened since the statute
went into effect and not yet closed, and not tax those that have
been opened and closed in that time. The court replies that
it would be utterly impracticable to tax successions that have
been closed, for the reason that there is no succession remaining.
The tax is not a tax upon the property itself but upon its trans-
mission. It is a tax upon the right to dispose of property and

§§76-78.] RETROACTIVE LEGISLATION. 73

**as long as the succession — the ideal or juridical person — re-
mains in the hands of executors, the legislative power may classify
it and subject it to a tax." ^

1 Per Campbell, J., in Carpenter v. Commonwealth, 17 How. 456, 462.
^Succession of Levy, 115 La. 378, 39 S. 37, affirmed Cahen v. Brewster, 203
U. S. 543, 552, 27 S. Ct. 174, 51 L. Ed. 310.

Sec. 76. When Property is Distributed.

No inheritance tax will be construed as affecting property
already distributed.

Where the testator died in 1903 and his property was in large part distributed
before the passage of La. St. 1904, the tax is not operative as to such property,
as the statutes should not be construed as retroactive or as impairing vested
rights. Succession of Stauffer, 119 La. Ann. 66, 43 S. 928.

Sec. 77. Effect of PrematureDistribution.

An unauthorized distribution will not deprive the state of
jurisdiction to tax. In an Iowa case the testator died in 1897,
after the passage of the collateral inheritance law, but before it
had been made valid and enforceable by amending the uncon-
stitutional provision as to filing appraisement. Before this amend-
atory act went into effect, the executors were appointed and
distributed the estate without any authority from the probate
court, and before the executors had filed proof of notice of their
appointment or an inventory, and before the expiration of the
time for filing claims. The probate court still had jurisdiction
of the estate and the payment could not affect the inheritance law
where no final accounting was made until after the amendatory
act went into effect.

Montgomery v. Gilhertson, 134 Iowa 291, 111 N. W. 964, 10 L. R. A. N. S. 986.

Sec. 78. After Title has Passed.

It has been decided in Iowa that a retroactive statute cannot
operate to affect the title to real estate which passes on death, ^ or
to bequests in personal property vesting before the act took effect.^

^ Where the testator died afrer the enactment of Iowa St. 1896, c. 28, and before
the amendment enacted by Iowa St. 1898, c. 37, and where the first statute was
void for lack of notice on appraisal, the court holds that the amendment although
retroactive in form cannot authorize a legal inheritance tax on real estate of
the testator. The court distinguishes the case of Ferry v. Campbell, 110 Iowa
290, 81 N. W. 604, 50 L. R. A. 92, as that case applied solely to personal property.
The court shows that title to personal property does not pass to the legatees or

74 INHERITANCE TAX LAW. [§§79-80.

distributees until actual distribution, while real estate passes at once on the death
of testator without any further action by the administrator. The amending
statute is not in the nature of a curative act, but purports only to aid in the
collection of a valid tax. If then the land was not subject to or liable for the pay-
ment of the tax the act has no application. At the death of the testator there
was no remedy by which a tax could be fixed or enforced. A tax that cannot
be enforced by any remedy is no tax at all. If a tax on succession, the amount
of which cannot be ascertained, may relate back one year, it may stretch back
over a period of twenty or any number of years and the citizens never know with
any degree of certainty what burdens are to be imposed. The court distinguishes
the case Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39 L. R. A. 170, as it appears
from that case that real estate in Montana is subject to the control of the court
and held in possession by the administrator until the order of distribution.
Herriott v. Potter, 115 Iowa 648, 89 N. W. 91. To the same effect see Lacey v.
Treasurer (Iowa, 1911), 132 N. W. 843.
^ Lacey v. State Treasurer (Iowa, 1911), 132 N. W. 843.

Sec. 79. Exemptions.

A retroactive extension of the exemptions from tax was affirmed
in Maryland but found void under the peculiar provisions of the
California statute. The Maryland statute declared that the
collateral inheritance tax shall not be imposed where property
may pass from a deceased v/ife to her surviving husband; and
that in all cases where such a tax has been "heretofore claimed
of but not actually paid by the husband of any decedent," such
claim shall be released or abandoned. The court says that this
is not exactly an exemption, but a release, and so does not fall
within the rule that exemptions are to be strictly construed. The
law is valid and the statute applied to a case which is pending
on appeal when the law was passed.^

On the other hand, a California statute extending the exemp-
tions of the existing law and providing that the exemptions shall
apply to all cases where taxes have not been paid under existing
law is void as in violation of the constitution, which provides that
the legislature shall not make any gift or donation of any public
money or thing of value. Under the statute the inheritance tax
became the property of the state on the death of the decedent. ^

^ Montague v. State, 54 Md. 481.

2 In re Stanford's Estate, 126 Cal. 1 12, 58 P. 462, 45 L. R. A. 788. See further, s. 88

Sec. 80. Tax on Increase in Value.

The Montana act of 1897 provided that a tax should be levied
and collected "upon the increase of all property arising between
the date of death and the date of the decree of distribution." The

§§81-82.] RETROACTIVE LEGISLATION. 75

argument was made that the words "increase of all property"
included only those estates the property of which is of such a char-
acter that it increases in kind, as, for instance, when it consists in
whole or in part of live stock, such as sheep, cattle, etc. But the
court holds that, following the common acceptance of the word
"increase," an increase means increase in value as well as increase
in kind. The court upholds the method pursued by the lower
court, which appointed an appraiser to ascertain the value of the
estate for the purpose of enabling it to fix the amount of inherit-
ance tax to be paid by the executor prior to the final distribution
among its devisees.
In re Tuohy, 35 Mont. 431, 90 P. 170. See further, post, s. 334.

Sec. 81. Location of Assets in State Insufficient.

The testator, a resident of New Jersey, died there March 19, 1882,
leaving personal property in New York state, and some of the
assets were not removed to New Jersey until after May 1, 1892,
when the New York statute of 1892, c. 399, became operative.
The court holds that the fact that the property was in New York
when the statute of 1892 went into effect does not make it subject
to tax, as this would render the statute retroactive. "If the right
of taxation because of decease does not exist at the time of death,
it never can be thereafter imposed upon the ground of such death."

In re Pettit, 171 N. Y. 654, 63 N. E. 1121, affirming 65 N. Y. App. Div. 30,
72 N. Y. Suppl. 469.

Sec. 82. Constitution Inapplicable to Conditions Prior
to Its Enactment.

The Louisiana constitution of 1898 provided that the inheritance
tax could not be enforced when the property in question shall have
borne its just proportion of taxes prior to that. These provisions
and the provisions of the Louisiana statutes carrying these articles
of the constitution into effect do not extend or reach back to condi-
tions anterior to the constitution itself, and where taxes due in
1878 and 1883 on certain lands had not been paid the collector
urged that it made no difference how far back in the past the failure
to pay taxes may have occurred nor who the owners of the lot
may have been at that time; but the court holds that taxes due
before the passage of the constitution do not affect the question
of inheritance tax.

Succession of Westfeldt, 122 La. Ann. 836, 48 S. 281.

76 INHERITANCE TAX LAW. [§§83-85-

Sec. 83. Effect of a Subsequent Treaty.

The validity of an inheritance tax levied under the laws of
Louisiana upon the estate of one who died in 1848 is not affected
by a treaty between the United States and France, ratified in
1853, providing that Frenchmen shall in no case be subject to taxes
on transfers, inheritances or others, different from those paid by
the citizens of the United States. The court holds that the tax
vested in the state at the death of testator, and that the property
vested in the petitioner at that time as heir, and that therefore
the treaty had no effect upon it.

Prevost V. Greneaux, 19 How. 1,

Sec. 84. Gifts Inter Vivos.

An inheritance tax is not retroactive to cover prior gifts inter
vivos made before the passage of the act.^ In a New York case the
deceased executed a trust deed in 1875 transferring all his property
to trustees in contemplation of his then pending marriage, by the
terms of which the net income of all the property was made pay-
able to the deceased for his life and at his death the principal was
to be paid to his widow and the issue of the marriage. The de-
ceased died in 1901. The marriage took place before 1885. The
right as a property right to take the gifts, when the time for
possession and enjoyment arrived, had fully accrued at the marriage
and the birth of the children, free from any existing tax; subse-
quent legislation imposing such a tax must be considered uncon-
stitutional. No reservation being made of the power of revocation,
it became operative and effective as a grant upon execution and
delivery, wholly irrespective of the time when possession was
to be given and the estate conveyed .^

1 In re Birdsall, 22 Misc. Rep. 180, 49 N. Y. Suppl. 450, 2 Gibbons 293.
2/w re Craig, 181 N. Y. 551, 74 N. E. 1116, affirming 97 N. Y. App. Div. 289,
89 N. Y. Supp. 971. See also, Lacey v. Treasurer (Iowa, 1911), 132 N. W. 843.

Sec. 85. Remainder Interests Vested before Passage of
Statute.

No tax accrues on a vested remainder where the testator dies
before the passage of the statute and the life tenant dies after-
wards,^ and so of a contingent interest ,2 or of a legacy to be paid
when the legatee reaches twenty-one,^ or of vested remainders
under a contract.*

§85.] RETROACTIVE LEGISLATION. 77

An attempt to lay such a tax in New York was held void so far
as the remainders had vested, the court remarking: **In the case
before us it is an undisputed fact that these remainders had vested
in 1863, and the only contingency leading to their divesting was
the death of a remainderman in the lifetime of the life tenant, in
which event the children of the one so dying would be substituted.
If these estates in remainder were vested prior to the enactment
of the Transfer Tax Act there could be in no legal sense a transfer
of the property at the time of possession and enjoyment. This
being so, to impose a tax based on the succession would be to
diminish the value of these vested estates, to impair the obligation
of a contract and take private property for public use without
compensation.^

1 Miller v. McLaughlin, 141 Mich. 425, 104 N. W. 777, 12 Detroit Leg. N. 601.
In re Forsyth, 10 Misc. Rep. 477, 32 N. Y. Suppl. 175. In re Travis, 19 Misc.
Rep. 393, 44 N. Y. Suppl. 349, 2 Gibbons 91. In re Meyer, 83 N. Y. App.
Div. 381, 82 N. Y. Suppl. 329. In re Hitchins, 43 Misc. 485, 89 N. Y. Suppl.
472 (vested through defeasible interest in remainder). In re Backhouse, 185
N. Y. 544, 77 N. E. 1181, affirming 110 N. Y. App. Div. 737. 96 N. Y. Suppl.
466. In re Langdon, 153 N. Y. 6, 46 N. E. 1034, 11 N. Y. App. Div. 220, 43
N. Y. Suppl. 419. Vanderbilt v. Eidman, 196 U. S. 480, 501, 25 S. Ct. 331, 49
L. Ed. 563. See, however, Cahen v. Brewster, 203 U. S. 543, 551, 27 S. Ct. 174.
51 L. Ed. 310, affirming 115 La. 378, 395, more fully reported, ante, s. 75.

Where the children of the testator took vested interests subject to
open and let in after-born children on the one hand, and on the other hand
subject to be defeated by death without issue, it is obvious that a right of suc-
cession to the estates in remainder passed at once on the death of the testator;
and where the testator died in 1876, these remainder interests were not subject
to the inheritance tax.

The court distinguishes In re Curtis, 142 N. Y. 219, on the ground that that
case did not decide as claimed that such remainder interests were taxable when
they became beneficial interests. It was claimed that the beneficial interests
did not pass until the termination of the life estates. And the court says that
in one sense that is true, but says that a necessary delay in appraisal as pro-
vided for by the statute of 1892 is a very different matter from the provision
that no beneficial right of succession passed at all until after the death of the
life tenants. To include such cases would give the statute a retrospective opera-
tion and subject to taxation rights of succession which accrued before the statute
came into existence. To say that no beneficial interest passed into hands where
it was taxable is very different from saying that no beneficial interest passed
at all. In re Seaman, 147 N. Y. 69, 41 N. E. 401, reversing 87 Hun 619.

^Eury v. State, 72 Ohio St. 448, 454, 74 N. E. 650.

^In re Cogswell, 4 Dem. Surr. (N. Y.) 248.
^Lacey v. Treasurer (Iowa, 1911), 132 N. W. 843.

^ Per Bartlett, J., in In re Pell, 171 N. Y. 48, 55, 63 N. E. 789, 57 L. R. A.
648, 89 Am. St. Rep. 791, reversing 60 N. Y. App. Div. 286, 70 N. Y. Suppl. 196.

78 INHERITANCE TAX LAW. [§86.

Sec. 86. Curative Act.

A curative act to heal a constitutional flaw in a statute may be
retrospective in its operation/ except possibly where it would operate
on real estate, the title to which has passed to the devisee.^

1 Although a judgment restraining the collection of an inheritance tax on the
ground that the statute was unconstitutional has been obtained, still the legis-
lature may thereupon cure the defect in the statute by a retroactive amendment
to it, and the supreme court may then reverse the judgment and permit the tax
to be collected. A judgment is not of itself a contract in a constitutional sense
so that its effect cannot be taken away by legislation. Ferry v. Campbell, 110
Iowa 290, 81 N. W. 604, 50 L. R. A. 92.

2 Herriott v. Potter, 115 Iowa 648, 89 N. W. 91.

^ CHAPTER XVII.

REPEAL OR AMENDMENT.

§ 87. What Law Governs.

§ 88. Amendment Extending Exemptions.

§ 89. Amendment without Repeal.

§ 90. Amendment does not Affect Validity of Tax already Imposed.

§ 91. Repealing Act a Continuation of Earlier Act.

§ 92. Under California Constitution Prohibiting Surrender of Pub-
lic Rights.

1 93. Implied Repeal by New Complete Act or Revenue Law.
§ 94. Repeal Prevents Subsequent Recovery of Taxes Due.

§ 95. Income Due after Repeal.

§ 96. Effect of Repeal after Appeal Taken.

§ 97. Saving Clause.

Sec. 87. What Law Governs.

The tax is governed by the statute in force at the death of the
testator, although this may be repealed^ or amended before the
imposition of the tax.^ An attempted amendment by an uncon-
stitutional statute does not affect the original act.^

^Quessart v. Canonge, 3 La. 560.

La. St. 1828, enacting a ten per cent tax, was repealed in 1830, but in the
meantime the testator had died and the tax was held properly charged upon the
estate. Whatever may be the effect of the repeal of a law in criminal matters,
it leaves all civil rights acquired under the law unaffected. A tax cannot be
assimilated to a forfeiture which presupposes an offence. Arnaud v. Arnaud,
3 La. 336.

2 Warrimer v. People, 6 Dem. Sum (N. Y.) 211. In re Moore, 90 Hun 162,
35 N. Y. Suppl. 782.

^Eastwood v. Russell (N. J. 1911), 81 A. 108.

Sec. 88. Amendment Extending Exemptions.

An amendment extending exemptions has no effect on an estate
of one dying before the passage of the amending act unless expressly
so provided.

Provident Hospital & Training Assn. v. People, 198 111. 495. Connell v.
Crosby, 210 111. 380, 71 N. E. 350. In re Ryan, 3 N. Y. Suppl. 136. In re
Thompson, 14 N. Y. St. Rep. 487. In re Arnett, 49 Hun 599, 18 N. Y. St.
576, 2 N. Y. Suppl. 428. In re Wolfe, 66 Hun 389, 29 Abb. N. Gas. 340, 21
N. Y. Suppl. 515, affirming 15 N. Y. Suppl. 539 (s. c. 137 N. Y. 205, 33 N. E.
156), where the assessment had been completed before the amendment.

80 INHERITANCE TAX LAW. [§§89-91.

The fact that the language in the statute of 1887 declares that the statute
of 1885 "is amended so as to read as follows" is immaterial, as is also the fact
that the statute of 1887 closes with the words "all acts and parts of acts incon-
sistent with the provisions of this act are hereby repealed." In re Miller, 110
N. Y. 216, 223, 18 N. E. 139, affirming 47 Hun. 394. See Kissam's Estate,
3 N. Y. Suppl. 135, 6 Dem. Surr. 171. Cf. In re Ryan, 3 N. Y. Suppl. 136. See
also In re Stanford's Estate, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. Mon-
tague V. State, 54 Md. 481. See ante, s. 79.

Sec. 89. Amendment without Repeal.

An amendment in the absence of repeal operates to render the
law continuous, with the result that a tax accrued under the former
law remains unaffected.

Succession of Pritchard, 118 La. Ann. 883, 43 S. 537. In re Prime, 136 N. Y.
347, 355, 32 N. E. 1091, 18 L. R. A. 713, affirming 64 Hun 50.

Sec. 90. Amendment does not AfEect Validity of Tax
Already Imposed.

An amendment will not of itself affect the validity of a tax
imposed under a prior act.

Provident Hospital &f Training Assn. v. People, 198 111. 495. In re Cager, 111
N. Y. 343, 347, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun 657.

Estate of Stanford, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788, is explained as
not holding that the law in question provides that the state shall succeed as
heir in certain classes of cases to five per cent of the property of the decedent.
The real meaning and effect of the decision is that the law establishes the suc-
cession tax in certain cases and that the right of the state to such tax vests
immediately upon the death of the ancestor or testator, and hence that the
repeal of the law does not affect the right of the state to the tax. In re Martin's
Estate, 153 Cal. 225, 94 P. 1053. In re Bowen's Estate (Cal. 1908), 94 P. 1055.

Sec. 91. Repealing Act a Continuation of Earlier Act.

So far as the later act is the same or similar to the earlier, the
later is to be construed a continuance of the other and all pro-
visions inconsistent are repealed.

In re Howard, 80 Vt. 489, 68 A. 513. See In re Jones, 54 Misc. 202, 105
N. Y. Suppl. 932.

Cal. St. 1905, c. 314, substantially enacted the provisions of the former law
respecting the payment and collection of succession taxes, and was done with
the knowledge of the existence of certain uncollected taxes and with the intent
to continue in force a mode and means for their collection. And the court has
the authority under this statute to order the executor to deduct from certain

§§92-94.] REPEAL OR AMENDMENT. 81

legacies the amount of the tax, especially in view of St. 1905, c. 85, to the effect
that the court must be satisfied that any inheritance tax has been paid before
any decree or distribution of an estate is made. In re Bowen's Estate (Cal.
1908), 94 P. 1055.

The provision of s. 8 of the act of 1893, that the estate shall not be distributed
until the administrator produces a receipt showing that a tax has been paid, is
also found in s. 11 of the repealing act of 1905. This provision is therefore
simply continued in force by the act of 1905, and therefore the estate of one
who died before the repealing act was passed cannot be distributed until the
tax is paid. After the repealing act went into effect the repealing act could
not renounce the vested right of the state to the inheritance tax. In re Lander,
6 Cal. App. 744, 93 P. 202.

Sec. 92. Under California Constitution Prohibiting Sur-
render of Public Rights.

The California constitution prohibiting any surrender of property
due the state prevents the operation of a repealing act upon it.

In re Stanford's Estate, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. In re Lander,
6 Cal. App. 744, 93 P. 202. In re Martin's Estate, 153 Cal. 225, 94 P. 1053. In re
Bowen's Estate (Cal. 1908), 94 P. 1055.

The right of the state to the inheritance tax under the law of 1893 is immedi-
ately upon the death of the decedent a vested right which cannot be surrendered
by a legislative act and no amendment or extension can take away this right.
So a tax due before the statute of 1905 was passed can be collected after it is
passed. Trippet v. State, 149 Cal. 521, 86 P. 1084, 8 L. R. A. (N. S.) 1210.

Sec. 93. Implied Repeal by New Complete Act or Revenue
Law.

A statute purporting to cover the whole subject of inheritance
taxes is a substitute and impliedly repeals the existing law.^ The
Tennessee inheritance law of 1893 was repealed by the general
revenue law passed later on the same day ,2 and revived by the
omission of inheritance taxes from the general revenue acts of 1895
and 1897.3

^Succession of Frigalo, 123 La. Ann. 71, 48 S. 652.

The court holds that the Virginia statute of 1856, imposing taxes, is a perfect
tax law imposing all taxes intended to be imposed for the support of the govern-
ment, but it omitted the tax on collateral inheritances for the purpose of dis-
continuing it, and therefore it repealed by implication the existing inheritance
law. Fox V. Commonwealth, 16 Gratt. (Va.) 1.

^Bailey v. Drane, 96 Tenn. (12 Pickle) 16, 33 S. W. 573.

^Zickler V. Union Bank &' Trust Co.. 104 Tenn. 277. 57 S. W. 341.

82 INHERITANCE TAX LAW. [§§95-97.

Sec. 94. Repeal Prevents Subsequent Recovery of Taxes Due.

No proceedings can be maintained after repeal in the absence
of a saving clause to collect a tax accrued before repeal.

Friend v. Levy, 76 Ohio St. 26, 51, 80 N. E. 1036.

The Maryland code, ss. 106, 107, was amended by Md. St. 1860, c. 163, pro-
viding that where the executor renounced his commission he shall not be taxed
thereon. Where the repealing section was enacted before the passage of the
executor's account, the executor, having renounced his commission, was not
liable to the state tax of ten per cent on such commissions. Owings v. State,
22 Md. 116.

Sec. 95. Income Due after Repeal.

Income to be received only after the repeal is not subject to tax.

Union Trust Co, of San Francisco v. Lynch, 148 Fed. 49, affirmed 164 Fed.
161, 90 C. C. A. 147, 214 U. S. 523, 29 S. Ct. 702, 53 L. Ed. 1067.

Sec. 96. Effect of Repeal after Appeal Taken.

Where a new law was passed in California in 1905, after a case
was taken to the supreme court at Washington repealing the
prior statutes without any clause saving the right of the state in
respect to charges already accrued to the state, the court was
asked to reverse the judgment of the California court on the ground
that the state no longer had any authority whatever to levy an
inheritance tax. The supreme court holds that it is its duty to
decide the federal question and to leave the local question to the
supreme court of California.

Campbell v. California, 200 U. S. 87, 26 S. Ct. 182, 50 L. Ed. 382.

Sec. 97. Saving Clause.

A saving clause is often inserted in a repeal, preserving all taxes
due under the repealed statute.^

The fact that under the United States statute of 1898 the tax
was not due and payable for a year after the death of the testator
does not free the estate from the tax where the testator died within
a year before the passage of the repealing act of 1902. The testa-
tor died March 15, 1902. An inheritance tax was paid January
17, 1905. The saving clause of section 8 of the act of 1902, that
all taxes or duties imposed prior to the taking effect of that act
shall be subject to the provisions of section 30 of the statute of
1898, operated to save a vested right to the immediate possession
or enjoyment of a legacy .^

§ 97.] REPEAL OR AMENDMENT. 83

A very peculiar result was reached in Vermont recently. The
testator died June 1, 1904, and Vermont statute 1904, c. 30, took
effect December 9, 1904. It was claimed that the estate was not
affected by the statute of 1904, but the court says that so far as
the provisions of the two acts are the same or similar, the later
act is to be construed as a continuance of the other, and all acts
or parts of acts inconsistent with the provisions of the later act
were repealed. But such repeal was not to affect the validity of
a tax accrued or accruing at the time of the enactment thereof,
and the court finds that since the law of 1896 did not include
debts due from non-residents, the tax here in controversy was not
accrued, nor was it accruing before the provisions of the new act,
including such debts, took effect, and therefore the estate was sub-
ject to the statute of 1904.^

Effect of Saving Clause on Remainders. — A saving clause in a
repeal saving all rights which had accrued will not save remain-
ders where the life tenant died after the repeal, as the words
include only cases where the legacy is actually demandable,* and
the same result is reached where the legacy is only payable on
the legatee reaching a certain age which accrues after the re-
peal ,5 or where the estate was not settled till after the repeal.^

Clause Saving only Estates where Inventory Already Filed. — A
provision that the statute be repealed, "except as to estates
in which the inventory has already been filed at the date of the
passage of this act," is unequal and therefore void within the
decision in State v. Ferris, 53 Ohio St. 314.^

^ Hertz V. Woodman, 218 U. S. 205, 224, 30 S. Ct. 621.

"If the repealer was without any saving clause, there could be no doubt that
the tax in question would be invalid, because such a repealer would abolish the
machinery by which the assessment could be laid, and such special taxes as
these can only be imposed by the machinery provided by the legislature." Hoyt
V. Hancock, 65 N. J. Eq. 688, 55 A. 1004. See, however, In re Jones, 54 Misc.
202, 105 N. Y. Suppl. 932, holding that assessment could be made under a law
repealed without a saving clause under the general statutory construction law.

^ Hertz v. Woodman, 218 U. S. 205, 30 S. Ct. 621.

Contra, McCoach v. Bamberger, 161 Fed. 90, affirming 142 Fed. 120, 73 C. C.
A. 610. Tilghman v. Eidman, 131 Fed. 651, affirmed in 203 U. S. 580, 27 S. Ct.
779, 51 L. ,R. A. 326. United States v. Marion Trust Co., 205 U. S. 539, 27 S. Ct.
794, 51 L. Ed. 119, affirming 142 Fed. 120, 73 C. C. A. 610, 135 Fed. 866, 127
Fed. 386. United States v. Marion Trust Co., 143 Fed. 301, 74 C. C. A. 539,
affirmed in 206 U. S. 566, 27 S. Ct. 794, 51 L. Ed. 1191. United States v. Stephen-
son, 212 U. S. 572.

'7w re Howard, 80 Vt. 489, 68 A. 513.

84 INHERITANCE TAX LAW. [§97.

^Clapp V. Mason, 94 U. S. 589, 24 L. Ed. 212, Fed. Cas. 9233. Mason v.
Sargent, 104 U. S. 689, 20 L. Ed. 894. United States v. Rankin, 3 McCrary 113,
8 Fed. 872. United States v. Hazard, 8 Fed. 380. United States v. Brice, 8 Fed.
381. See United States v. Townsend (1881), 14 Phila. (Pa.) 493, 8 Fed. 306.

5 United States v. New York Ins. &f Trust Co., 9 Ben. 413, Fed. Cas. 15, 873
Sturges V. United States, 117 U. S. 363.

8 United States v. Kelley, 28 Fed. 845.

' Fmn<i V. Levy, 76 Ohio St. 26, 49, 80 N. E. 1036.

CHAPTER XVIII.

TRANSFERS OTHER THAN BY WILL.

§ 98. Transfers Inter Vivos and Causa Mortis.

§ 99. What Law Governs Deed.

§ 100. Interests under Deed Dependent on Death.

§ 101. Deed Dependent on Will.

§ 102. Trust Deed.

§ 103. Trust Imposed by Extrinsic Evidence.

§ 104. Sale.

§ 105. Joint Deposit.

§ 106. Compromise of Interests under Will.

§ 107. Interest in Insurance or Beneficial Society.

§ 108. Curtesy or Dower, Statutory Rights of Surviving Spouse.

§ 109. Rights in Community Property.

§ 110. Homestead.

Sec. 98. Transfers Inter Vivos and Causa Mortis.

The inheritance tax acts commonly cover transfers inter vivos
made in contemplation of death, ^ and include gifts causa mortis,'^
but are not limited to gifts causa mortis.^

1 Under 111. St. 1895, p. 301, s. 1, a gift may be subject to tax if made in contem-
plation of the death of the donor although the transfers were absolute and were
accepted by the donees who entered into possession and ownership of the prop-
erty transferred and after the transfers the donor had no interest in property.
It was claimed that a gift causa mortis is a transfer of property made without
consideration in contemplation of death, and that the stipulation that the gift
was absolute prevents it from being a gift causa mortis. But the court finds that
as the gifts were made in contemplation of death they were gifts inter vivos made
in contemplation of death and within the designation of gifts causa mortis. Mer-
rifield v. People, 212 111. 400, 72 N. E. 446.

A deposit in a savings bank in trust for another is taxable so far as it represents
deposits made by the decedent out of his own funds, but not so far as ic was con-
tributed by a third party. In re Rosenberg, 114 N. Y. Suppl. 726.

Un re Edwards, 146 N. Y. 380, 41 N. E. 89, affirming 85 Hun 436, 66 N. Y.
St. Rep. 231, 32 N. Y. Suppl. 901.

[Interests under trusts, see post, s. 235.]

^In re Benton, 234 111. 366, 84 N. E. 1026. In re Birdsall, 22 Misc. Rep. 180,
49 N. Y. Suppl. 450, 462, 2 Gibbons 293. In re Palmer, 117 N. Y. App. Div.
360, 102 N. Y. Suppl. 236. In re Price, 62 Misc. 149, 116 N. Y. Suppl. 283.

86 INHERITANCE TAX LAW. [§§ 99-100.

Sec. 99. What Law Governs Deed.

A trust deed for the grantor for life with remainder over to
others constitutes a transfer to the remaindermen at the date of
the execution of the deed and is governed by the law in force at
that time.

In re Craig, 181 N. Y. 551, 74 N. E. 1116, affirming 97 N. Y. App. Div. 289,
89 N. Y. Suppl. 971.

The testator conveyed property in trust to assign the property as the grantor
might by last will appoint, and for want of such appointment to her heirs, reserv-
ing no right of revocation in the deed. The deed was signed in 1857 in Pennsyl-
vania and subsequently the grantor moved to New York, where she lived until her
death in 1885. The court holds that this is a deed intended to take effect after
the death of the grantor, within the meaning of the statute of 1826. Common-
wealth V. Kuhn, 2 Pa. Co. Ct. 248.

See further, ante, ss. 25, 26.

Sec. 100. Interests under Deed Dependent on Death.

A deed is not subject to tax unless it is dependent on the death
of the grantor and to take effect at his death. ^

It seems to be clear that w^here the statute taxes generally
transfers "on death," this subjects to taxation interests under a
deed where the interests depend upon and date from the death of
the grantor ,2 although the beneficiary may have possession and en-
joyment of the income before the death of the decedent.^ The
same result is reached, of course, where the interests depend on two
contemporaneous instruments construed together as one.^

^ Where a grantor made a deed of an undivided three-fourths interest of land
to a brother and two sisters, reserving a one-fourth interest to himself, and deliv-
ered it to a third person with instructions to record it and sell the land and divide
the proceeds equally among the grantees and himself, and he died before it was
recorded or the land sold, the deed is not one taking effect in possession or enjoy-
ment after the death of the grantor and is therefore not subject to the inheritance
tax. The statute relates plainly to estates granted in deeds or conveyances which
in some way make the estate granted dependent on the grantor's death; that is,
to interests in real estate the possession or enjoyment of which is postponed until
after the death of the grantor. The deed in question contained no reference to
the death of the grantor and there was nothing in the conveyance which indi-
cates that it was the grantor's purpose to postpone possession or enjoyment of
the interests granted until after his death. In re Bell, (Iowa, 1911,) 130 N. W.
798.

2/» re Line, 155 Pa. St. 378, 393, 26 A. 728, 32 Wkly. Notes Cas. 376. The
court quotes with approval DuBois's Appeal, 121 Pa. St. 386.

In re Maris, 14 Pa. Co. Ct. 171, 3 Pa. Dist. 33. (1893.)

The testator made his will December 1, 1881, bequeathing his estate to cer-
tain collateral relatives and for religious and charitable purposes. August 14,

§ 100.] TRANSFERS OTHER THAN BY WILL. 87

1882, he executed a deed, assigning all his property to trustees for their own use
and benefit during his life, and at his death to hold the same for the uses and pur-
poses of his will. The court holds that the property is subject to a collateral in-
heritance tax, as the deed was not to take effect in enjoyment until after the death
of the testator. Appeal of Seibert, 110 Pa. St. 329, 1 A. 346.

Where the decedent transferred her property to trustees in trust to collect
the income and apply the same to her use during her life and after her death to
divide and pay over the same and the proceeds among her three nieces, reserving
the power to modify the instrument, the court holds that it is not important to
determine whether the trust instrument was made in contemplation of death.
The real question is whether the remainders which the nieces took were intended
to "take effect in possession or enjoyment" at or after the death of the donor.
And the court holds that it is quite clear that these nieces did take by an instru-
ment intended to take effect at or after the death of the donor. In re Green, 153
N. Y. 223, 47 N. E. 292, reversing 7 N. Y. App. Div. 339.

3 Where a trustee gives the income of his estate to beneficiaries for life and the
principal to them at his death, it is as to the principal a transfer intended to take
effect at the death, and hence subject to the inheritance tax. In re Patterson,
127 N. Y. Suppl. 284.

In 1893 the decedent deposited certain sums of money with a trust company
under a trust agreement that the income was to be paid to a certain third party
and at the expiration of five years from the date of the agreement the decedent
might withdraw the whole trust fund by giving the company written notice of
an intention so to do six months before that time, and the company could pay
off the trust fund if it chose by giving him a like notice of its intention. If no no-
tice was given by either party, the trust fund was to remain during another term
of five years and the right of withdrawing or paying off the principal sum might
be exercised at intervals of five years from the date of the agreement. In case
of the death of the decedent before the termination of the trust, the trust fund was
to be payable to a certain third party. The decedent died before the trust fund
was terminated and the court holds that a tax is due on the transfer to the third
party. The court holds that this gift was intended to take effect in possession
or enjoyment after the death of the grantor, as the beneficiary could have no pos-
session or enjoyment of the principal until after his death; and the fact that she
had possession and enjoyment of the income in his lifetime makes no difference.
The income and principal stood each by itself and were as independent of each
other as if the income had been given to a third person. The property is subject
to a tax to be assessed as of a time thirty days after the expiration of the five
years referred to in the agreement and interest is to be paid upon the tax from that
time. New England Trust Co. v. Abbot, 205 Mass. 279, 91 N. E. 379.

*The decedent in 1893 transferred to his four daughters eleven shares of stock
in a certain company, and the daughters on the same day delivered to him an in-
strument reciting that he had transferred the stock on condition that he is to
receive all dividends during his life, and also on condition that he has the right
to vote upon the stock as though no transfer had been made. The agreement
further provided that it was not revocable, but to continue in full force until the
death of the decedent. The court holds that the two instruments being executed
at the same time must be construed together as a single instrument; that the
effect of these was to transfer to the daughters the remainder in stock after the

88 INHERITANCE TAX LAW. [§§ 101-104.

donor's death, reserving to the latter an estate for his life. The court, relying on
In re Green, 153 N. Y. 223, holds that this is a gift of remainder after the death
of the donor and is taxable as a transfer "intended to take effect in possession or
enjoyment at or after such death." In re Brandeth, 169 N. Y. 437, 62 N. E. 563,
58 L. R. A. 148, reversing 58 N. Y. App. Div. 575, 69 N. Y. Suppl. 142.

Sec. 101. Deed Dependent on Will.

Where the settlor in a voluntary trust deed reserves the right
to limit in his will the terms upon which the beneficiaries might
enjoy his bounty, and he does make a will, then devolution of the
property takes place under the will.

In re Douglass County, 84 Neb. 506, 121 N. W. 593.

Sec. 102. Trust Deed.

There is no tax where property is placed outright in trust for
another not dependent on death, but a deed in trust will create
taxable interests under the circumstances indicated in the follow-
ing sections.

Where a trust deed was executed, dated December 1, 1892, directing the trus-
tees to pay the net income to the guardian of a certain grandson until his majority
on December 3, 1895, when the principal shall be paid to him, this was not sub-
ject to the inheritance tax. In re Masury, 159 N. Y. 532, 53 N. E. 1127,
affirming 28 N. Y. App. Div. 580.

Sec. 103. Trust Imposed by Extrinsic Evidence.

Where a legatee took a legacy impressed with a trust imposed
by facts extrinsic to the will, for purposes exempt from taxation,
the legacy is still taxable, as the legatee takes under the will the legal
title and the equitable rights did not accrue under the will but
from extrinsic evidence alone.

In re Edson, 159 N. Y. 568, 54 N. E. 1092, affirming 38 N. Y. App. Div. 19,
56 N. Y. Suppl. 409.

Sec. 104. Sale.

The meaning of the word "sale" as used in the Ohio statute
includes only transactions which, though in form sales, are in fact
gifts. Since the act is within the legislative power granted and
not within the letter or spirit of any limitation, it is valid.

Hagerty v. State, 55 Ohio St. 613, 626, 45 N. E. 1046, affirming 12 C. C. R. 606.

§§ 105-106.1 TRANSFERS OTHER THAN BY WILL. 89

Sec. 105. Joint Deposit.

Where the husband and wife deposited money in a savings bank in
their joint names, with account payable to either or survivor, the
wife has an interest in the deposit to give her an equal right with
him to withdraw it during their joint lives and vests her with the
absolute title in case she survives him. The court holds that in
this case it was not the intention of either party to divest himself
of the control and use of this money so long as both lived, and
that the accounts were entered so that either could draw money
during their joint lives as a matter of convenience, and upon the
death of either the deposits would become the absolute property
of the survivor. The court holds that the husband did not sur-
render the absolute possession and dominion of the money in
question during his lifetime, and that, although there was no
intention on the part of the parties to evade the transfer tax law,
yet as the transfer had not become absolute until the death of the
depositor such parts of the different deposits as were not the
money of the wife when deposited are taxable.^

A joint deposit in a savings bank made up of sums which were
given by the decedent to his wife is not taxable. ^

1 In re Kline, 65 Misc. 446, 121 N. Y. Suppl. 1090.

Contra. The act of depositing money in the joint names of the husband and
wife indicates an intent to invest the title of the money in the survivor, and the
deposit being joint is in the nature of an agreement or contract between the
husband and wife, is not testamentary nor does it depend upon the intestacy or
testacy of the decedent. In this case there is no suggestion that the joint deposit
was made with intent to evade the transfer tax. The survivorship is a mere
incident. In re Stebbins, 52 Misc. 438, 103 N. Y. Suppl. 563. In re Graves,
52 Misc. 433, 103 N. Y. Suppl. 571. See National Safe Deposit Co. v. Stead,
250 111. 584, 95 N. E. 973, upholding law forbidding safety deposit companies
from delivering contents of box leased jointly on death of a lessee except on ten
day's notice to state officials. See also In re Wilkins' Estate, 129 N. Y. S. 600.

An irrevocable trust in the guise of a joint deposit was found in In re Pierce,
132 N. Y. App. Div. 465, 116 N. Y. Suppl. 816, reversing 60 Misc. 25, 112 N. Y.
Suppl. 594.

2/m re Rosenberg, 114 N. Y. Suppl. 726. See post, s. 158.

Sec. 106. Compromise of Interests under Will.

The question whether sums paid in compromise of litigation
are subject to tax may depend on the wording of the taxing statute
and usually resolves itself into a question whether the property
passes under the will or on death, or by virtue of the agreement.
There seems to be some confusion in the cases and considerable

90 INHERITANCE TAX LAW. [§106.

difference of opinion has developed, ranging from the Massachusetts
view that agreements among the parties cannot be considered
as affecting interests under the tax, to the Pennsylvania doctrine
that the man who actually receives the property should pay the
tax. The Massachusetts court in its most recent decision has
expressly refused to follow the Pennsylvania view.^ It would seem
that the Massachusetts doctrine is preferable both on principle and as
a practical matter of policy. The other view is an open inducement
to unscrupulous persons to make such collusive arrangement
as may save their pocketbooks at the expense of their conscience.

Payments made in good faith to heirs in settlement of contests
over the validity of a will should be included in reckoning the
inheritance tax,^ even though the will is disallowed by agreement,
and the balance, after paying certain sums to the legatees, is given
to the contestants,^ although such sums may not be taxed on the
ground that they are not interests under the will within the lan-
guage of the act.* So payments in adjustment of conflicting claims
to an estate under different wills are subject to tax.^

A testator made two wills and the heirs of the sole legatee in
the first will contested the second will, but compromised under an
agreement by which the will was to be probated and the estate was
to pass under the last will in default of a contest. In so passing
it became subject to the inheritance tax and moneys paid out by
those receiving it, whether in litigating the contest or in buying
their peace, ought not to be deducted from the estate in ascertain-
ing the value of the property subject to such tax.^ The court holds
that payments in adjustment of conflicting claims to an estate
by those asserting title thereto cannot be construed as debts nor
treated as expenses in its settlement. The entire estate including
the sums to be paid the contestant passed to the legatees of the
deceased upon his death, and payments in settlement are in law
by the legatees rather than an expense of the estate. The court
relies on In re Westurn, 152 N. Y. 93, 46 N. E. 315. The court
distinguishes the case of In re Hawley, 214 Pa. St. 525, as in that
case the daughters who took the property under the will and paid
over in compromise were direct descendants and therefore no
tax was due, while in this case the estate was acquired by the
heirs as they were collateral, was subject to the tax, and in paying
it out they were handling their own property. The court also
distinguishes In re Kerr, 159 Pa. St. 512, 28 A. 3 54, as there the
compromise was of a contest over the testator's title.^

§ 106.1 TRANSFERS OTHER THAN BY WILL. 91

The testator had made two wills and the second will was con-
tested and, under an agreement of compromise executed by the
parties, it was agreed that contestants were to "pay C. the legacy
given her under said [second] will." The court was evenly divided
on the question whether this payment was subject to the inherit-
ance tax. If the payment was made under the will it was subject
to the tax, and if the payment went under the agreement it was
not.^

But where the legatees who are all collateral relatives of the
testator made a compromise with a son whereby they paid him
a certain sum in settlement, and in consideration thereof he with-
drew his contest and the will was admitted to probate, the collateral
legatees are not liable to pay the collateral inheritance tax on
money paid to the son. The reason is that the amount paid the
son "was never received by them as legatees, and under the act
it is only so much of the estate which actually passes to them by
virtue of the will that is liable to the tax."^

A contest over the will was compromised by an agreement. The
contest against the will was withdrawn and the jury thereupon
found in favor of the will. The contest was made by the collateral
heirs and the compromise provided that the widow who was the
sole devisee should deed one-half of the property devised to the
collateral heirs, and this was done. The court holds that the col-
lateral heirs do not derive their title under the will but from the
deed of the widow; that they therefore do not take by inherit-
ance, will, deed, grant, gift or otherwise from the testator, and
hence, under the provisions of the Tennessee statute, no inheritance
or succession tax attaches to the property in transfer.

It may be that money paid to one who under no theory could
take, whether the decedent died testate or intestate, should not be
subject to tax. ^2

Money paid in compromise of a claim against the testator's title ^'
or to settle claims of creditors named as legatees, however, should
not be taxed, as it forms no part of the estate of the decedent.^*
A compromise may create interests to take effect in the future

92 INHERITANCE TAX LAW. [§ 106.

such that they may be subject to tax, although the statute came into
existence after the death of the original testator. ^^ A statutory
agreement of compromise of a will is not in Massachusetts a ''will"
within the terms of the inheritance act.^^

^Baxter v. Stevens, 209 Mass. 459, 95 N. E., 854.

2/m re Mark, 40 Misc. 507, 82 N. Y. Suppl. 803, such payments cannot be de-
ducted as expenses of administration. See Matter of Demers, 84 N. Y. S. 1109,
41 Misc. 470.

3/« re Rubincam (1881), 14 Phila. (Pa.) 306. The court suggests that if an
absolute sum had been fixed as the price of the consent of the contestant to the
compromise, which she might perhaps claim as a debt from the other parties i n
interest, she could not have been charged with a tax. Cf. In re Hawley, 214
Pa. St. 525, 63 A. 1021, noted post, n. 14.

*Page V. Rives, Fed Cas. 10,666, 1 Hughes 297, where the statute taxed
"a distributive share in an intestate's estate" and "a legacy."

5 Where a son contested a will of his father, and to settle his contest he was paid
a sum in excess of the legacy provided by the will, this sum is subject to taxation.
The money was paid to him by virtue of his heirship because he was the son of
the decedent. People v. Rice, 40 Colo. 508, 91 P. 33.

fi/w re Wells, 142 Iowa 255, 120 N. W. 713.

'/» re Wells, 142 Iowa 255, 120 N.W. 713. In re Pepper's Est., 159 Pa. St. 908,
28 A. 353. In re Stone's Est., 132 Iowa 136. In re Cook's Est., 187 N. Y. 253,
79 N. E. 991.

8/« re Wells, 142 Iowa 255, 120 N. W. 713.

9/» re Pepper, 159 Pa. St. 508, 28 A. 353, 4 Pa. Dist. R. 101.

10 English v. Crenshaw, 120 Tenn. 531 , 1 10 S. W. 210. The court relies upon In re
Kerr, 109 Pa. St. 512, 28 A. 354, and upon In re Hawley, 214 Pa. St. 525, 63 A.
1021, construing a Pennsylvania statute almost identical with that in Tennessee.

"The testator died in 1869 leaving a will devising property to a certain school,
and if the legislature should pass any act which will defeat the carrying out of
this legacy, then he bequeathed the fund to his illegitimate children. The ille-
gitimate children claimed that the clause creating the fund was illegal under Vir-
ginia statutes and that they were therefore entitled, and a settlement was made
with them for three hundred thousand dollars. The court holds that the es-
tate taken by the illegitimate children was an executory devise and was void for
remoteness; that as they were not entitled to any legacy, the three hundred
thousand dollars paid them was not paid as a legacy and was not liable to taxa-
tion; that it was not paid as a distributive share, as, being illegitimate children,
they would be entitled to no interest in the estate if he died intestate. Page v.
Rives, Fed. Cas. 10, 666, 1 Hughes 297.

12 People v. Rice, 40 Colo. 508, 91 P. 33.

I'The allowance or compromise of the claims of third persons simply reduces
the estate afterwards passing to volunteers with the same effect as if the reduction
had been caused by the payment of debts, or as if the payment or surrender had
been the result of a suit terminating in favor of the claimant. In re Kerr, 159
Pa. St. 512, 513, 28 A. 354, 2 Pa. Dist. R. 535.

" Where legatees claim that the writing was a valid will an d the provision for
their benefit was in discharge of an obligation and the heirs denied the validity

§ 106.] TRANSFERS OTHER THAN BY WILL. 93

of the writing as a will, because of the want of testamentary capacity, and a
settlement was made in which the employees were treated as creditors and allowed
a part of their demands, this was clearly a compromise of a doubtful right to avoid
litigation, by which the heirs parted with a portion of the estate for the purchase
of peace. The employees took nothing under the will and the money paid them
was not subject to tax unless the whole arrangement was collusive. The claim
of the commonwealth was not affected by the fact that the annuities provided
for the sisters of the decedent were secured to them without abatement.
The contest was as to the whole writing and not as to a part. If it
was invalid their claims as annuitants fail with the others. The will
was refused probate and the money paid to the legatees was not subject
to the collateral tax. So payment made to other legatees who had no
demand against the estate were also relieved from the tax. In re Hawley,
214 Pa. St. 525, 63 A. 1021.

1^ The testator died before 1892 and the Iowa inheritance law went into effect
in 1896. In 1892 the devisee of certain land entered into an agreement with the
collateral heirs by which the devisee was to have the use of the land for his life
and on his death that it should go over to the collateral heirs, this agreement
being made in consideration the collateral heirs would not contest the will. The
devisee died in 1906 and the court holds that the interest acquired by the collateral
heirs is subject to the tax, as the statute is very clear and applies to all cases where
wills, grants, deeds, etc., are made or intended to take effect in possession or en-
joyment after the death of the grantor or donor. Here even if the title passed
either mediately or immediately from testator, it did not take effect either in
possession or enjoyment until after the death of the devisee, the estate of the tes-
tator was subject to the control of the district court in virtue of the contract for
a long time after the collateral inheritance law went into effect, and by reason of
that fact the land was subject to the tax. The collateral heirs by making a con-
tract with the devisee surrendered their right to take immediate possession and
enjoyment of the property and if they now have title through the testator they
by their own acts delayed the determination of their rights until after the col-
lateral inheritance tax law went into effect. Whether the collateral heirs took
under the will of the testator or not it is very clear that the property did not pass
by will, deed, grant, etc., to take effect in possession or enjoyment immediately.
Possession and enjoyment were clearly postponed until the death of the devisee.
The payment of a tax can only be defeated by such a bona fide conveyance as
parts absolutely with the title, possession and enjoyment during the grantor's
lifetime.

The majority of the court finds, however, that the land which was not devised
directly to the devisee but which was covered by contract is not subject to the
tax, for the reason that it vested immediately upon the death of the testator in
the collateral heirs and cannot be made subject to a tax created by a subsequent
act of the legislature.

Deemer, J., who writes the majority opinion, dissents from this last conclusion,
believing that by the contract the vesting in possession and enjoyment was post-
poned until the death of the devisee and that until that event it was uncertain
who might take. Lacey v. State Treasurer, (Iowa, 1909,) 121 N. W. 179 (McClain
J., dissenting).

^'Baxter v. Stevens, 209 Mass. 459, 95 N. E. 854.

94 INHERITANCE TAX LAW. [§107.

The court cites and relies on In re Graves, 242 111. 212, In re Wells, 142 Iowa
255, In re Cook, 187 N. Y. 253, and declines to follow In re Pepper, 159 Pa. St.
508, In re Kerr, 159 Pa. St. 512.

Where there is a contest over a will, and under the Massachusetts statute the
contest is settled by a compromise agreement for distribution, and the will is
never probated, the compromise is for the purpose of the inheritance tax, the will
under which the property passed. McCoy v. Gilly 156 Fed. 985.

Sec. 107. Interest in Insurance or Beneficial Society.

Rights under beneficiary societies are not subject to tax and are
not considered as a conspiracy to evade the collateral inheritance
law, although the payments are dependent on death.^ In a New
York case the testator was a member of the New York produce
exchange, and was a subscriber to the gratuity fund of that body,
which under its by-laws belonged to beneficiaries provided for on
his death and was not liable to the payment of debts or legacies.
This money passed, not by virtue of will or of any administration,
but by the contract of the testator with the produce exchange.

The distinction between the two classes of policies, — the first
class where the contract is made for the benefit of the insured and
the proceeds pass to his personal representatives as part of his estate,
and the second class where the contract was made for the benefit
of others and the proceeds are transferred to them by the terms of
the contract, — was clearly laid down by the court.^

So a life insurance policy assigned to the wife of the decedent,'
or payable to the wife and assigned by her in trust, is not subject
to tax.^

A life insurance policy on the life of the decedent held by him
at the time of his death is property owned by him at his
death and so under that act subject to appraisal for the purposes
of taxation under the New York inheritance law. The argument
was made that it was only property liable to taxation under the
general tax law of the state which could be taxed under the act
relating to taxable transfers, and that inasmuch as life insurance
policies cannot be included in the valuation of the taxpayer's
property under the general law, they cannot be considered in
assessing the tax under the collateral inheritance law. But the
taxable transfer law has no reference or relation to the general law.
While the object of both is to raise revenue for the support of the
government, they have nothing else in common.^

Where a tax was levied on the right under an insurance contract
to certain commissions on renewal premiums, the claim was made

§ 108.] TRANSFERS OTHER THAN BY WILL. 95

that the inheritance tax could not be exacted because the value of
the inheritance was too uncertain, as the policies on renewal might
be suffered to lapse and hence that the premiums might never
be collected. The court holds that the certainty or uncer-
tainty of policies being renewed is a matter pertaining to
the insurance business, and that the actuary of the company
can no doubt make an estimate sufficiently close for all practical
purposes of the actual or present value of this claim against the
company.^

Un re Vogel, 1 Pa. Co. Ct. 352, 18 Wkly. Notes Cas. 242.

2/» re Fay, 25 Misc. Rep. 468, 55 N. Y. Suppl. 749.

3 Where two policies upon their face were payable to the estate of the decedent,
and at his death were found in his safe deposit vault, and attached to each policy
was an assignment of it in consideration of love and affection to his wife, the comp-
troller contends that under section 220 the tax is payable upon the transfer of
those policies, upon the theory that the transfer was first by death and second by
an assignment to take effect in possession or enjoyment at the death of the decedent.
The court holds that as against the state the deceased was not possessed of the
policies at the time of his death and that the widow did not obtain title to them
through his will or by the laws of the state of New York. This is an absolute
present assignment of the interests of the assignor in the policy, therefore no
transfer tax is assessable. In re Parsons, 117 N. Y. App. Div. 321, 102 N. Y.
Suppl. 168, affirming 51 Misc. 370, 101 N. Y. Suppl. 430.

* Where a life insurance policy was made payable to the wife of the decedent
and she joined with him in conveying it to a trust company in trust in contempla-
tion of death, though without giving up her rights in it, therefore this property
remained the property of the wife, and was not a part of the estate of the dece-
dent, and therefore was not subject to the inheritance tax. State v. Bullen, 143
Wis. 512, 523, 128 N. W. 109.

6 In re Knoedler, 140 N. Y. 377, 35 N. E. 601, affirming 68 Hun 150.

6 Succession of Fell, 119 La. Ann. 1037, 448, 879.

[See further, post, s. 218.1

Sec. 108. Curtesy or Dower, Statutory Rights of Surviving
Spouse.

Probably in most states dower or curtesy rights do not fall within
the class of interests under the intestate laws subject to tax,^
although when dower is released and the property so released
passes to taxable beneficiaries, the tax must be imposed on that
property .2

It is obvious that dower rights when exercised must be deducted
in fixing the valuation of other interests given under the will,^ and
no statutory rights can be allowed to things which would be exempt
if they did exist when such rights are not allowed by state law unless
they actually do exist. ^

96 INHERITANCE TAX LAW. [§ 108.

The exemption to the widow of certain articles enumerated under
the New York statute renders them not subject to the transfer
tax whether the decedent died testate or intestate. This property
is not to be included in estimating the value of the estate subject
to tax.^ So the value of a year's support for the widow under
the statute is not subject to tax in Tennessee.^

One taking a legacy in lieu of dower must pay the tax, as by
accepting the legacy she elects to take under the will/ but the value
of the wife's dower must be deducted from the property where a
legacy is given her not expressed to be in lieu of dower .^ In Illi-
nois, however, the contrary result is reached, as in that state such
rights are held to be intestate rights,^ although taken under an
ante-nuptial agreement in lieu of dower,^^ and there the surviving
spouse may lose his exemption by claiming curtesy or dower. ^^

1 Crenshaw v. Moore (Tenn. 1911), 137 S. W. 924. Comm. v. Powell, 51 Pa.
St. 438.

The fact that the widow took less than the law allowed her makes no
difference, as she still took her dower rights. The court must look at the true
character of the transaction, and in doing so cannot permit it to be submerged in
mere form. Appeal of Commonwealth, 34 Pa. St. (10 Casey) 204.

The widow's dower became vested as an inchoate estate upon her marriage
and consummate upon the death of her husband, independent of the will and not
by virtue thereof, and is therefore not subject to the transfer tax. In re Weiler,
122 N. Y. Suppl. 608.

Curtesy was found not taxable in the following cases. This estate is an ancient
one arising from the marriage relation and not by inheritance or from the wife's
estate and is not an incident to the wife's death and intestacy. In re Green, 68
Misc. 1, 124 N. Y. Suppl. 863, 129 N. Y. S. 54. In re Starbuck, 137 N. Y.
App. Div. 866, 122 N. Y. Suppl. 584, affirming 63 Misc. 156, 116 N. Y. Suppl. 1030.

2/« re Small, 151 Pa. St. 1, 16, 25 A. 23, 30 Wkly. Notes Cas. 521.

' "Obviously under sections 1 and 2 of the Inheritance Tax Law as construed
by this court in the cases heretofore cited, the legislature intended that a person
should be taxed only on the beneficial interest that he receives. The only bene-
ficial interest in the real estate that passed to the daughter in this case from her
father's estate was the value of this real estate less the value of the dower interest
of the mother. The county court decided rightly in deducting the cash value of
said dower when fixing the beneficial interest received by and taxed against the
daughter." Per Carter, J., in People v. Nelms, 241 111. 571, 89 N. E. 683.

The court distinguishes In re Kingman, 220 111. 563, 77 N. E. 135, as in that
case the estate was for years and not for life. People v. Nelms, 241 111. 571, 89
N. E. 683.

*In re Libolt, 102 N. Y. App. Div. 29, 92 N. Y. Suppl. 175.
^In re Page, 39 Misc. Rep. 220, 79 N. Y. Suppl. 382. In re Stuyvesant's
Estate, 72 Misc. 295, 13 N. Y. S. 197.

• Crenshaw v. Moore, (Tenn. 1911,) 137 S. W. 24.

§ 109.] TRANSFERS OTHER THAN BY WILL. 97

7 In re Riemann, 42 Misc. Rep. 648, 87 N. Y. Suppl. 731. In re De Graaf, 24
Misc. Rep. 147, 53 N. Y. Suppl. 591, 2 Gibbons 516.

8 Under the law the widow is not put to her election as between dower and the
provision by the will; and therefore the value of the wife's dower, since it is not
taxable, should be deducted from the gross value ot the lands devised to others
for the purposes of the inheritance tax. In re Shields, 68 Misc. 264, 124 N. Y.
Suppl. 1003. But where the widow fails to elect she is presumed to have elected
to take under the will. In re Stuyvesant's Estate, 72 Misc. 295, 131 N. Y. S. 197.

9 People v. Field, 248 111. 147, 93 N. E. 721, Billings v. People, 189 111. 472, 59 N.
E. 798, 59 L. R. A. 507.

Under the Illinois statute of 1895, page 303, section 1, "intestate laws" include
the widow's dower. It was contended that dower is of great antiquity and was
not created by statute but by the common law; but the court holds that the in-
stitution of dower is subject to full legislative control and may be changed or mod-
ified at any time. The court holds that the "intestate laws" referred to are those
laws of the state which cover the devolution of estates and of persons dying intes-
tate and include all applicable rules of the common law in force in this state and
they regulate and control the interest which the widow took in her husband's
property at his death. Billings v. People, 189 111. 472, 477, 59 L. R. A. 807.

" Where the testator signed an ante-nuptial agreement by which the wife took
a certain sum in lieu of her dower rights on his death, the court holds that this
sum taken under the agreement is not exempt from the inheritance tax. It being
in lieu of dower it is subject to tax as dower is. The amount received should not
be deducted in estimating the market value of the estate. People v. Field, 248
111. 147, 93 N. E. 721, referring to Billings v. People, 189 111. 472.

^^ 111. St. 1895, s. 2, exempting the life estate in any property devised or
bequeathed to the wife of the testator, does not apply when the wife renounces
the will and elects to take her statutory rights. Connell v. Crosby, 210 111. 380,
393, 71 N. E. 350.

Sec. 109. Rights in Community Property.

The inheritance tax on community property depends on whether
the survivor takes by inheritance or by virtue of the marriage
relation. The tax is levied in Calif ornia^ and not in Louisiana.^

It was claimed in one case that the surviving wife's share of the
property was acquired under the California constitution of 1849,
and that therefore the wife acquired a vested right in the com-
munity property, which was protected by the federal constitution.
The court finds, however, that the declaration in the constitution
of 1849, that "laws shall be passed more clearly defining the rights
of a wife in relation as well to her separate property as to that held
in common with her husband," amounts to no more than a mandate
to the legislature to define and prescribe the rights of the wife
in the property of the community. It was the design of the con-
stitution of 1849 to preserve so far as might be the rights to the
community property which wives had enjoyed. But even under

98 INHERITANCE TAX LAW. [§ 110.

the Spanish law the wife had no vested estate in the community
property, but it was a mere expectancy so long as the community
exists. The court finds, therefore, that the California inheritance
tax law is not in violation of the federal constitution, on the ground
that it takes away a vested interest.^

1 The inheritance tax statute was passed presumably in view of the California
decisions that the wife took her share of the community property upon the death
of her husband by succession as his heir. In re Mofifitt's Estate, 153 Cal. 359, 95
P. 653. In re Sim's Estate, 153 Cal. 365, 95 P. 655. People v. Lebus, Cal. 1908,
96 P. 1118.

^Succession of Marsal, 118 La. Ann. 212,42 S. 778 (usufruct in community prop-
erty is taken under marriage contract and not by inheritance). See Succession
of Baker, (La. 1911,) 55 So. 714.

8 In re Moffit, 153 Cal. 359, 95 P. 1025, affirming on rehearing 95 P. 653,
deciding the question as to the federal constitution, which was not considered in
the original opinion.

Sec. 110. Homestead.

Property set apart by the court as homestead in California is
not subject to tax,^ although the wife to whom the homestead is set
apart is also a devisee and legatee. ^

^The California statute of 1905, c. 314, section 1, provides that all property
which shall pass by will or by the intestate laws shall be subject to the inheritance
tax. It was claimed that this language included property set apart to the widow
as a homestead. The court finds, however, that where the power of setting apart
as a homestead is exercised by the probate court, the devisee and legatees take
no beneficial interest whatever. The probate court may even set apart as a home-
stead real property specifically devised by a will and thus defeat the devise. Where
it is so set apart as a homestead the title of the person to whom it is so set apart
is in no way derived by will, but comes solely from the homestead order. It is
clear, therefore, that what the widow takes under this order of the probate court
she does not take by will or by the intestate laws of the state. The language, "pass
by will or by the intestate laws of this state," means to pass by virtue and force
of the law of this state governing testate or intestate succession.

It was further claimed that the property of the testator passed to the devisees
and that subsequently by an order of the probate court the homestead was
carved out of it. The court says that the right to any tax imposed vested in the
state at the moment of death and could not be legally divested by any depart-
ment of the state, but that the right so vested to the tax imposed by the act ; and
when it is determined that the act imposed no tax as to property lawfully diverted
by the court in probate with the consequence that it could never be distributed to
the devisee, legatee or heir, it is apparent that no vested right to the state is
impaired. Therefore, the inheritance tax cannot be assessed on such property.
In re Kennedy, 157 Cal. 517, 108 P. 280.

2 In re Kennedy, 157 Cal. 517, 108 P. 280.

CHAPTER XIX.

TRANSFERS IN CONTEMPLATION OF DEATH.

§111. Definition.

§ 112. Intent to Evade Tax.

§ 113. Deed Made before Valid Statute Enacted.

§ 114. A Question of Fact.

§ 115. Burden on Heirs to Show Good Faith.

§ 116. Heirs of Grantee not Bound by his Statements.

§ 117. Will Contemporaneous with Deed.

§ 118. Illness or Impending Death.

§ 119. Life Estate Reserved to Grantor.

§ 120. Grantor Retaining Control.

§ 121. Grantor Retaining no Control.

§ 122. Power of Revocation.

§ 123. Where Decedent Transfers Property to Corporation and Retains

Life Interest in its Stock.

§ 124. Conveyance for Consideration where Possession is Postponed

till the Death of the Grantor.

§ 125. Where Property Burdensome to Grantor.

§ 126. Purpose to Reduce Estate to Affect Widow's Election as to

Dower.

§ 127. When Deed never Delivered.

§ 128. Where Deed never Recorded.

§ 129. Deed Executed before Statute Enacted.

§ 130. Liability of Executors.

Sec. 111. Definition.

The words "in contemplation of death" commonly used in the
inheritance statutes do not refer merely to that general expectation
of death which every mortal entertains,^ but to impending approach-
ing decease.^ The language is not confined to gifts causa mortis,^
and it has been said to be limited only to cases of evasion.* The
contemplation of death must be the impelling motive, without
which the conveyance would not be made, in order to subject a
transfer of property to the inheritance tax.^

* The words "in contemplation of death" do not refer to that general expecta-
tion which every mortal entertains, but rather the apprehension which arises
from some existing condition of body or some impending peril. In re Baker, 178
N. Y. 575, 70 N. E. 1094, affirming 83 N. Y. App. Div. 530, 38 Miss. 151, 77 N. Y.
Suppl. 170.

100 INHERITANCE TAX LAW. [§ 112.

« "A gift is made in contemplation of an event when it is made in the expecta-
tion of that event and having it in view, and the gift when the donor is looking
forward to his death as impending and in view of that event, is within the lan-
guage of the statute." Per Cartwright, J., in Rosenthal v. People, 211 111. 306,
71 N. E. 1121.

"The meaning of the words 'in contemplation of death,' as used in the statute,
must be inferred and ascertained from the context of the act and the object sought
to be accomplished by the law. It is manifest that they were intended to cover
transfers of parties who were prompted to make them by reason of the expectation
of death, and which, in view of that event, accomplish transfers of the property
of decedents in the nature of a testamentary disposition. It is therefore obvious
that they are not used as referring to that expectation of death generally enter-
tained by every person. The words are evidently intended to refer to an expecta-
tion of death which arises from such a bodily or mental condition as prompts
persons to dispose of their property and bestow it on those whom they regard as
entitled to their bounty. This accords with the general objects and purposes of
the law, namely, the imposition of a tax on the devolution of property involved
in the demise of the owner." . . . Per Siebecker, J., in State v. Pabst, 139 Wis.
561, 589, 121 N. W. 351.

3 "The claim that the words can include only gifts causa wof^w attributes to
them too restricted a meaning. A transfer valid as a gift inter vivos, if made under
circumstances which impress it with the distinguishing characteristics of being
prompted by an apprehension of impending death, occasioned by a bodily or
mental state which has a basis for the apprehension that death is imminent,
would be a transfer made in contemplation of death within the meaning of the
law." Per Siebecker, J., in State v. Pahst, 139 Wis. 561, 589, 121 N. W. 351.

^In re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming 49 N. Y. App. Div.
541, 549.

s People V. Burkhalter, 247 111. 600, 93 N. E. 379.

Sec. 112. Intent to Evade Tax.

The words "in contemplation of death" are intended to cover all
transfers made with the intention of evading the death duties,^
although intent to evade need not necessarily appear .^

1 In re Thorne, 162 N. Y. 238, 56 N. E. 625, 44 N. Y. App. Div. 8, 60 N. Y. Suppl.
419. In re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming 49 N. Y. App. Div.
541, 549. In re Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 N. Y. App,
Div. 530, 38 Wis. 151, 77 N. Y. Suppl. 170. In re Bullard, 76 N. Y. App. Div.
207, 78 N. Y. Suppl. 491, affirming 37 Misc. 663, 76 N. Y. Suppl. 309.

Where the decedent made an absolute deed of land and took a bond back from
the grantee to pay the income to the grantor for his life, this is a conveyance
in contemplation of death within the terms of the Pennsylvania inheritance tax
of 1826, especially where it was made during the last sickness of the grantor. "It
is true, the obligation of the bond was not inserted as a condition or reservation
in the deed; it was in form a mere personal obligation; but this contention does
not involve a technical question of title nor of lien; the whole matter depends
upon the single fact whether or not the transfer was made or intended to take
effect in enjoyment at the death of the grantor. The policy of the law will not

§§ 113-116.] TRANSFERS IN CONTEMPLATION OF DEATH. 101

permit the owner of an estate to defeat the plain provisions of the collateral in-
heritance law, by any devise which secures to him, for life, the income, profits,
and enjoyment thereof; it must be by such a conveyance as parts with the pos-
session, the title, and the enjoyment in the grantor's lifetime." Per Clark, J.,
in Reish v. Commonwealth, 106 Pa. St. 521, 526.

2 The tax is due in a case where the grantor suffered from spinal trouble with
a malignant growch and became rapidly worse, and where three days after the
making of the grant he made his will and died at the end of a month, although no
evidence appeared of his intent to defraud the state of his inheritance tax. No
such intention needs to appear. The statute includes all gifts made in contempla-
tion of death, and that language does not naturally nor necessarily involve a
fraudulent intent. Rosenthal v. People, 211 111. 306, 71 N. E. 1121.

Sec. 113. Deed Made before Valid Statute Enacted.

Where a transfer was made while an unconstitutional statute
was in force, and later before the death of the transferror the court
passed an act which was valid, the court says that it is possible
that the parties may have had the possibilities of an inheritance
tax in mind, but the law which the state was attempting to apply was
not then in force and the case therefore does not present the question
of the effect of a transfer of property with the intention and for
the purpose of avoiding the operation of an existing inheritance
tax law.

State V. Probate Court, Washington County, 102 Minn. 268, 286, 113 N. W. 888.
Whether tax retroactive as to gifts inter vivos, see ante, s. 84.

Sec. 114. A Question of Fact.

The question whether a deed is made in contemplation of death
is a question of fact on which the finding of the trial court is final.

People V. Kelley, 218 111. 509, 75 N. E. 1038. In re BuUard, 76 N. Y. App. Div.
207, 78 N. Y. Suppl. 491, affirming 37 Misc. 663, 76 N. Y. Suppl. 309. In re Thorne,
162 N. Y. 238, 56 N. E. 625, 44 N. Y. App. Div. 8, 60 N. Y. Suppl. 419.

Sec. 115. Burden on Heirs to Show Good Faith.

The heirs of the grantor are usually the only persons who can
show the nature of the conveyance, and a lack of evidence on this
question shows a lack of good faith.

In re Palmer, 17 N. Y. App. Div. 360, 102 N. Y. Suppl. 236.

Sec. 116. Heirs of Grantee not Bound by His Statements.

The heirs of the grantee are not bound by his statements as to
the interest of the grantor.

102 INHERITANCE TAX LAW. [§§117-118.

The testator died in 1893 giving his nephew a life interest in certain property
and providing that in default of a will the remainder of the estate should pass to
the heirs of the nephew. At the appraisal of the estate of the testator the nephew
stated that the testator at the cime of his death was the owner of certain real
estate although the fact was that the testator had previously executed and de-
livered to the nephew a deed of the property. The court holds that the heirs
of the nephew are not bound by his acts but have a right to rely upon the deed
rather than upon the will, and that therefore they cannot be assessed for an in-
heritance tax for the transfer of this real estate. In re Mather, 179 N. Y. 526,
71 N. E. 1134, affirming 90 N. Y. App. Div. 382, 85 N. Y. Suppl. 657, 84 N. Y.
Suppl. 1105, 41 Misc. 414.

Sec. 117. Will Contemporaneous with Deed.

The fact that the grantor makes his will within a short time of,^
or simultaneously with making the deed in question ,2 is significant
that it was made in contemplation of death.

^Rosenthal v. People, 211 111. 306, 71 N. E. 1121.

2 State V. Pahst, 139 Wis. 561, 593, 121 N. W. 351. See, however, In re Mahl-
stedt, 67 N. Y. App. Div. 176, 73 N. Y. Suppl. 818.

Sec. 118. Illness or Impending Death.

The fact that a conveyance is made by a decedent while ill, and
shortly before his death, is a strong circumstance showing that it
was made in contemplation of death. ^

On the question whether a deed was made in contemplation
of death, evidence was introduced as to the cause of his death, —
diabetes. The decedent's declaration three years before his death,
that in recognition of the valuable aid of his sons in building up
his estate he intended to dispose of part of his estate to them, was
put in as evidence. But the court remarks that it is significant
that he did not do so then or in the immediately succeeding years.
The court remarks that considering his condition, the execution of
the deed of gift and the will simultaneously indicates that he was
disposing of his property to those whom he regarded as natural
objects of his bounty rather than that he was transferring it to
them as compensation for worthy and valuable service rendered by
them. He knew his condition and was aware of the outcome to be
inferred from his symptoms. The deed of gift was made about six
months before his death and the court finds that the evidence
abundantly sustains the conclusion of the trial court that the deed
of gift was made in contemplation of death.

The death certificate of the decedent's attending physician was
proper evidence under Wisconsin statutes, where it was intro-

§ 119.] TRANSFERS IN CONTEMPLATION OF DEATH. 103

duced as evidence of its contents on the issue of whether the deed
made was made in contemplation of death.^

1 Jn re Palmer, 17 N. Y. App. Div. 360, 102 N. Y. Suppl. 236. Reish v. Common-
wealth, 106 Pa. St. 521, 526.

Where a woman seventy-nine years old was afflicted with consumption from
which she knew she could not recover and was very weak, and made a transfer
of property eight days before her death, the court finds that this was made in
contemplation of death under the New York statute. In re Birdsall, 22 Misc.
Rep. 180, 49 N. Y Suppl. 450, 2 Gibbons 293.

Where the decedent was suffering from a chronic disease and cen days before
his death he sends for his attorney, telling him that he desired to make such a
disposition of his property as would save his son the nuisance of a will contest,
and executes deeds by which he conveys all his real estate to his adopted son, this
transfer is subject to the inheritance tax. In re Price, 62 Misc. 149, 116 N. Y.
Suppl. 283. In this case the grantor suffered from spinal trouble, with a malig-
nant growth, and made his will three days after the deed and died at the end of
a month, and a tax was levied. Rosenthal v. People, 211 111. 306, 71 N. E. 1121.

2 State V. Pahst, 139 Wis. 561. 591. 121 N. W. 351.

Sec. 119. Life Estate Reserved to Grantor.

A deed reserving a Hfe estate in the grantor is commonly subject
to tax on the death of the grantor.^ The decedent in 1896 trans-
ferred a large amount of property to one Crispell on an oral agree-
ment that principal and income should belong to Crispell, and
that he could dispose of it at any time he chose, but that the dece-
dent was to have the income as long as he lived, although the
gift was to be absolute to Crispell. In 1897 the decedent made
another gift to Crispell on a written agreement that the decedent
was to have for life such part of the net income as he might wish,

Ewith power to the decedent to give his sister ten thousand dollars
jput of the security transferred. The court holds that under these
agreements the testator reserved a life interest to himself; that
although possession of the securities was given to the donee, this
■id not make him their absolute owner, and the donee during the
Honor's life held the securities in trust to pay the income to the
donor. The gift is therefore taxable under the transfer act of
1896 as a transfer to take effect after the death of the donor.^

Where one makes a deed in trust for the sole benefit of the ces-
tuis but reserves unto himself a certain income for life, the court
may divide the property and levy an inheritance tax on that por-
tion of it necessary to raise the income stipulated.^

Where a grantor by a trust deed conveys property to trustees
in trust to pay an annuity to his daughter for life, and the balance

104 INHERITANCE TAX LAW. [§ 120.

of the income to the grantor, and on his death to pay over the prin-
cipal as provided in the trust deed, this transfer to the remainder-
men on his death is intended to "take effect in possession or
enjoyment at or after the death" of the donor, and was therefore
subject to the inheritance tax under N. Y. St. 1892, c. 399, s. 1,
the trust deed being dated in September, 1892, and the testator
dying in 1898.''

1 In re Ogsbury, 71 N. Y. App. Div. 71, 39 N. Y. Suppl. 978. Appeal of Wright,
38 Pa. St. (2 Wright) 507. Reish v. Commonwealth, 106 Pa. St. 521, 526.

2 In re Cornell, 170 N. Y. 423, 63 N. E. 445, modifying 66 N. Y. App. Div. 162,
73 N. Y. Suppl. 32.

3 People V. Kelley, 218 111. 509, 75 N. E. 1038, following People v. Moir, 207
111. 180, 69 N. E. 905, 99 Am. St. Rep. 205.

4 In re Cruger, 166 N. Y. 602, 59 N. E. 1121, affirming 54 N. Y. App. Div. 405,
66 N. Y. Suppl. 636. See, however. United States v. Leverich, 9 Fed. 586, holding
that cestui did not "die possessed of" property.

Sec. 120. Grantor Retaining Control.

The fact that the grantor retains control of the property is a
very strong circumstance to show that the transaction is subject
to tax.i

In one case a grantor gave a trust transferring property described
in trust for his three sisters, reserving to himself certain powers;
namely, to direct the payment of the income to himself for life,
or to such other persons as he may designate in writing, to with-
draw the securities and secure others, to alter or amend the trust
and add property thereto and terminate the same at any time by a
written notice to a trustee.

The court holds that the donor has reserved during his life such
numerous and extensive powers over the property transferred
as to preclude the legitimate inference of an intention on his part
that they were to take effect in absolute possession or enjoyment
before his death. If a person intends in good faith to make an
absolute gift of his property during his life to others and thereby
make a provision for them which shall not be contingent upon
the event of his death, there is no prohibition in the act in that
respect. But in this case the trust deed did not constitute an abso-
lute gift of the grantor's property during his life.^

1 In re Ogsbury, 7 N. Y. App. Div. 71, 39 N. Y. Suppl. 978. (Where income for
use of grantor for life, and on his death as he may by will appoint.)

Where the decedent deposited money in savings banks in trust for his children,
these interests are identical with those passing by a will. The decedent reserved

§ 121.1 TRANSFERS IN CONTEMPLATION OF DEATH. 105

to himself all of the rights of ownership in the interests until his death, when he
is presumed to have intended that each trust shall come to an end and that the
funds shall revert to his estate if the beneficiaries do not survive him. In re
Barbey, 114 N. Y. Suppl. 725.

Where the decedent made deeds of his farms and t he deeds remained unrecorded
and in the possession of the grantor until his death; that the insurance continued
to be payable to the grantor and he made contracts with the tenants; that the
son continued to reside on the home farm and work it; that the farms continued to
be assessed to the grantor who paid the taxes; that the crops were mostly marketed
at the grantor's warehouse, and the accounts kept in his books, practically as
though he owned them; that all settlements with the tenants were made by the
grantor, is evidence sufficient to show that the transfer is within the statute as
intended to take effect only on death. In re Jones, 65 Misc. 121, 120 N. Y. Suppl.
862.

The fact that the cestuVs rights depend on his surviving the testator shows
that the transfer is in contemplation of death. In re Patterson's Estate, 130
N. Y. S. 970, affirming 127 N. Y. S. 284.

2 In re Bostwick, 160 N. Y. 489, 55 N. E. 208, affirming 38 N. Y. App. Div. 223,
56 N. Y. Suppl. 495.

Sec. 121. Grantor Retaining no Control.

The fact that the grantor reserves no control whatever over
the property transferred is a circumstance showing that the gift
is made in good faith. So a conveyance did not take effect in con-
templation of death where the grantor was not in immediate danger
of death at the time the deed was delivered, and the conveyance
was made as a provision for the grantor's two sons and the deed
was withheld from record by mutual arrangement between the
parties but was fully delivered to the trustee and possession of
the premises turned over to the trustees at the time of the delivery
of the trust deed. It is not the object of the Illinois statute to
prevent a parent from giving the whole or any portion of his prop-
erty to his children in his lifetime if he so desire.^

Where an old man, eighty-six years old, physically feeble but
mentally active, makes two gifts to his children, of securities of
large amounts, stating to them that his property is a burden to him,
that he intends to give it to them and shall divide a part of it at
the present time, and where the securities are actually delivered
and transferred to the donees, and the testator exercises no control
over them whatever, these gifts are not gifts in contemplation of
death within the meaning of the New York transfer statute.^

1 People v. Kelley, 218 111. 509, 75 N. E. 1038.

2 In re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming 49 N. Y. App. Div.
641.

106 INHERITANCE TAX LAW. [§§ 122-123-

A case close to the line appeared where the testator, at the age of eighty-three,
gave his daughter certificates of stock by transferring his certificates in writing
on the back and delivering them to the daughter; but the certificates were never
transferred on the books of the company and the testator continued to receive
the dividends and act as officer of the company in question. The court finds that
though the facts are open to doubt, still no fraud or bad faith appeared to the
surrogate and his decision on that matter is therefore final. In re Bullard, 76 N. Y.
App. Div. 207, 78 N. Y. Suppl. 491, affirming 37 Misc. 663, 76 N. Y. Suppl. 309.

Sec. 122. Power of Revocation.

That the grantor reserves a power of revocation is a sure indi-
cation that the deed was in contemplation of death.

Appeal of Wright, 38 Pa. St. (2 Wright) 507.

In re Line, 155 Pa. St. 378, 393, 26 A. 728, 32 Wkly. Notes Cas. 376.

Sec. 123. Where Decedent Transfers Property to Corpora-
tion and Retains Life Interest in its Stock.

A very ingenious Minnesota gentleman organized a corporation
and conveyed to it his property in return for the issue to him of most
of its capital stock. His wife and children all signed agreements by
which the transferror agreed to transfer to the wife and children,
certain shares of the stock on their agreement to lease the same
stock to the transferror for life, and on the agreement that the
wife transfer the stock which she was to receive to the children
who were to lease it to her for life on the same conditions. The
court holds that the absolute ownership of the stock was not in the
original transferror, but that the effect of these transactions was to
give him a life estate with an interest in reversion in the wife and
children. The court holds that a life estate in personal property,
although unknown at common law, may now be created, and that
the original transferror reserved no power of disposition of property,
and a will made after the transfers assuming to give the stock to
other persons would have been of no effect, and that therefore the
stock did not pass by inheritance.

State V. Probate Court, Washington County, 102 Minn. 268, 292, 113 N. W. 888.

Sec. 124. Conveyance for Consideration where Possession
is Postponed till the Death of the Grantor.

In a Pennsylvania case a will devised land to James and John,
two brothers, and provided that if James should not build on his
land he might sell it to his brother John at two thousand dollars

§ 125.] TRANSFERS IN CONTEMPALTION OF DEATH. 107

besides what he was to pay out of it. James sold to John his
share for thirty-five hundred dollars and John sold part of this for
fifteen hundred dollars. Later, at the request of John, James
released all claims under his father's will on condition that John
should convey all the land to James's children, they to take posses-
sion at John's death and give up an obligation for the two thousand
dollars payable after his death. John died unmarried and without
issue, and it was held that the share of the land which had belonged
to John originally is subject to the tax, but the portion of James is
not subject to tax. Substantially it was agreed that the children
of James should purchase back that share after John's death by
refunding to his estate what he had paid their father for it. Their
notes for two thousand dollars have gone into the inventory of the
present estate, which is of course to pay the tax. Part of the
consideration was that John should convey the entire estate to
his nephews and nieces. But it cannot be said that this share was
John's at the time of his death, or that it was within the spirit of
the proviso in the will. It is not found or pretended that the object
was to evade the tax, and the note given for the transfer excludes
such a pretension. Had James continued the owner under his
father's will, it would have passed to the children on his death and
there would have been no claim upon it by the state for the tax on
the estate of John.
Appeal of Waugh, 78 Pa. St. (28 P. F. Smith) 436.

Sec. 125. Where Property Burdensome to Grantor.

Gifts have been sustained made by aged persons or those in fail-
ing health on the ground that the care of property was a burden
to them.

In re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming 49 N. Y. App. Div. 541.
In re Mahlstedt, 67 N. Y. App. Div. 176, 73 N. Y. Suppl. 818. In re Groves, 52
Misc. 433, 103 N. Y. Suppl. 571.

The testator was the president and the owner of nearly all the stock in a cor-
poration, and it was his duty to sign all corporation notes, drafts, checks and other
papers, but this duty becoming burdensome during his illness and he having been
told by his physician that when he recovered he would have to take a long vaca-
tion, he expressed the desire that he might transfer his stock to his wife, so that
she could become a member of the company at once and transact the business in
his place. He did this, retaining only one share for himself so that he might con-
tinue to be a member of the company and have a right to vote at its meetings.

The court holds that this is not a transfer in contemplation of death although
the testator died within three weeks after the transfer. The testator had a natural
right to give this stock to his wife, and his wife took possession of it and voted upon

108 INHERITANCE TAX LAW. [§§ 126-129.

it and the circumstances under which it was transferred show that his death
was not in mind in making the transfer. The fact that he made a will on the same
day was not evidence of the contemplation of death except as a remote contin-
gency. There is a strong dissenting opinion on the ground that the testator had
been advised to put his worldly affairs in order and that he was too weak to sign
the assignment and was at the time desperately ill, and that positive evidence of
an intention to evade the statute should not be required. In re Mahlstedt, 67
N. Y. App. Div. 176, 73 N. Y. Suppl. 818.

Sec. 126. Purpose to Reduce Estate to Affect Widow's
Election as to Dower.

Where an old man suffering from an incurable disease makes
gifts of a large portion of his property to various relatives because
he is afraid that his wife will claim her statutory dower in his
property, which on her death would go to his stepson, and where
the object of the gifts to relatives is to avoid this result by reducing
the estate so that the wife by self-interest will desire to take under
his will and not her statutory interest, this gift is made "in con-
templation of death" within the language of the Illinois statute.
In re Benton, 234 111. 366, 84 N. E. 1026.

Sec. 127. Where Deed Never Delivered.

Where the testator had given a deed of the property in question
to the sister, which deed the court finds never was delivered until
after the death of the testator, the property remained the property
of the testator and subject to the inheritance tax.

Appeal of Davenport (Pa. 1888), 14 A. 346. See also In re Jones, 65 Misc. 121 ,
120 N. Y. S. 862.

See further, post, s. 164.

Sec. 128. Where Deed Never Recorded.

A tax may be imposed where the deed is never recorded and re-
mains in the possession of the grantor,^ but where the transaction
is for consideration no tax will be imposed, though the deed is
never placed on record.^

1 In re Jones, 65 Misc. 121, 120 N. Y. Suppl. 862.

2/w re McCormick, 15 Pa. Co. Ct. 621, 3 Pa. Dist. 838, 25 Pittsb. Leg. Int.
N. S. 91.

Sec. 129. Deed Executed before Statute Enacted.

A transfer before the statute was enacted cannot be in contempla-
tion of death within its meaning.

In re Hendricks, 3 N. Y. Suppl. 281, 1 Con. Surr. 301. In re Demers, 41 Misc.
Rep. 470, 84 N. Y. Suppl. 1109.

§130.] TRANSFERS IN CONTEMPLATION OF DEATH. 109

Sec. 130. Liability of Executors.

Where a decedent makes a deed in contemplation of death, his
executors should be made to pay the tax.

Appeal of Wright, 38 Pa. St. (2 Wright) 507. See In re McKennan, 25 South
Dakota 369, 126 N. W. 611, reversed on rehearing, 130 N. W. 33.
As to the liability of executors see further, post, s. 317.

CHAPTER XX.

CONSIDERATION.

§ 131. In General.

§ 132. Deed Made under Contract to Sell.

§ 133. Ante-Nuptial Contract.

§ 134. Transfer by Will for Consideration.

§ 135. Will under Contract to Leave by Will.

§ 136. Advancements.

§ 137. Services.

§ 138. Support.

Sec. 131. In General.

Transfers by deeds are commonly taxable only when made with-
out consideration.^ The consideration has been upheld where it
consists in an agreement to erect a monument,^ or to pay the trans-
ferror an annuity,^ or by a mother to surrender an illegitimate child,''
or an oral waiver of a previous written contract.^ So where a son
was in partnership with his father under a contract which pro-
vided in part that on the father's death his interest in the partner-
ship should belong to the son, this is not a transfer taxable under
the United States statute of 1898, as the son had vested rights
under the partnership agreement during the life of the testator.®

^In re Palmer, 17 N. Y. App. Div. 360, 102 N. Y. Suppl. 236. Blair v. Herold,
150 Fed. 199, 158 Fed. 804, 86 C. C. A. 64.

Where the decedent conveyed a farm to his nephew for a good consideration
and where the deed was never placed on record until after the grantor's death,
the transfer is not subject to an inheritance tax in the absence of evidence of intent
to convey. In re McCormick, 15 Pa. Co. Ct. 621, 3 Pa. Dist. 838, 25 Pittsb. Leg.
Int. N. S. 91.

2/w re Edgerton, 158 N. Y. 671, 52 N. E. 1124, affirming 35 N. Y. App. Div.
125, 54 N. Y. Suppl. 700.

3/« re Edgerton, 158 N. Y. 671, 52 N. E. 1124, affirming 35 N. Y. App. Div,
125, 54 N. Y. Suppl. 700.

4 In re Demers, 41 Misc. 470, 84 N. Y. Suppl. 1109.

'^Lamh v. Morrow, 140 Iowa 89, 117 N. W. 1118, 18 L. R. A. N. S. 226.

^ Blair v. Herold, 150 Fed. 199, affirmed in 86 C. C. A. 64, 158 Fed. 804.
[Bequest to creditor, see post, s. 236.]

§§132-134.1 CONSIDERATION. HI

Sec. 132. Deed Made under Contract to Sell.

At the time of the decedent's death she was under contract to
sell lands in another state and left a conveyance thereof which was
delivered on the day after her death in consideration of the price
named in the contract. As the land was not subject to tax
there is no tax on its proceeds.

In re Baker, 67 Misc. 360, 124 N. Y. Suppl. 827.

Sec. 133. Ante-Nuptial Contract.

An ante-nuptial agreement for settlement of property made in
good faith is not subject to tax,i even where the husband trans-
ferred certain stock to the wife, and the next day she transferred
the same stock back to him as trustee to apply to the mutual use
of the parties during their joint lives. This is not a gift to the wife
in contemplation of death. The court holds that the two agree-
ments are not contemporaneous.^

1 In re Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 N. Y. App. Div. 530,
38 Misc. 151, 77 N. Y. Suppl. 170.

2/n re Miller, 77 N. Y. App. Div. 473,78 N. Y. Suppl. 930, overruling 75 N.Y.
Suppl. 929.

Sec. 134. Transfer by Will for Consideration.

It seems to be immaterial for purposes of the inheritance tax
whether the transfer by will is a gratuity or is for consideration.

The will of Jay Gould recited that his son having conducted his business for
many years with great ability he had fixed the value of the son's services at five
million dollars; and evidence was introduced that this legacy was by agreement
in view of the son's services and was for compensation and no other purpose. The
court holds, however, that the New York statute does not limit the tax to prop-
erty "gratuitously given by will," but that the word "transfer" covers the gift
by will, whatever the method may be, whether to pay a debt, or to discharge a
moral obligation, or to benefit a relative for whom the testator entertained a
strong affection. In re Gould, 156 N. Y. 423, 428, 51 N. E. 287, modifying 19
N. Y. App. 352.

Under the Massachusetts statute of 1909, chapter 490, part IV, section 1, a
transfer for a consideration is not exempt from tax unless "the consideration,
whatever form it may assume, is not only valuable, but full, by covering the value
in money, or the equivalent in money of the property transferred. ... If ser-
vices rendered, or to be rendered, constitute the consideration . . . their value
may be inquired into and ascertained, and where in "money's worth" they equal
or exceed the fair value of the property at the death of the transferror, no tax can
be imposed. If they fall below such value, there i«5 no provision for a reduction,
leaving the excess only to be taxed as a gratuity.' Per Braley, J., in State Street
Trust Co. V. Stevens, 209 Mass. 373. 95 N. E. 851.

112 INHERITANCE TAX LAW. [§135.

Sec. 135. Will under Contract to Leave by Will.

Interests under a will made in pursuance of an ante-nuptial
contract to leave by will are subject to the inheritance tax where
the testator had during his life a discretion to use his own property,^
but not where the contract creates vested interests in the benefi-
ciaries, as then their rights accrue under the contract and not
under the will.^

^ The testator died in 1901 leaving a will, and the inheritance tax was compro-
mised by the executor. An action was brought relying on an ante-nuptial con-
tract with the testator to leave by will certain property, which agreement the
testator had failed to fulfill. The action ended by a judgment for the plaintiff,
and the court ordered the executors to turn over to the plaintiff the property cov-
ered by the contract. The court holds that this transfer is subject to the inherit-
ance tax, as it was not a contract to convey, but a contract to make a will. Had
the deceased performed his agreement and bequeathed the property the estate
would have been subject to the tax. It does not affect the question of the liability
of the estate to taxation that in consequence of the failure of the testator to carry
out his promise the beneficiary was obliged to resort to a court for relief. The
judgment of the court converts the devisees or heirs at law, as the case may re-
quire, into trustees for the beneficiary under the original agreement. Therefore
the devolution of the property has in fact taken place under the will and such dev--
olution is subject to the transfer tax. In re Kidd, 188 N. Y. 274, 279, 80 N. E.
924, reversing 115 N. Y. App. Div. 205, 100 N. Y. Suppl. 917.

A husband bought and paid for a house and lot which he had conveyed to
his wife on the understanding that she should make her will devising the prop-
erty to him in case she died before he died. Pursuant to this understanding she
made her will and died February 20, 1866, and the court holds that the inherit-
ance tax should be assessed on her estate. The legal title to the property and the
ownership were in her when she died. "The fact that the will was made on account
of an agreement to that effect by the wife when she took her title rendered it
none the less an instrument creating a beneficial interest in the husband on her
death, and that under the statute is the succession to be taxed." Ransom v.
United States, Fed. Cas. 11, 574.

The testator made an agreement to leave property by will in consideration of
care and support to be given him for the rest of his life and he made a will carrying
out the agreement. The court finds that this is not a "bona fide purchase for full
consideration for money or money's worth made ... to take effect . . . after
the death of the grantor." The court finds that the devisee took no title in her
lifetime, but that the words quoted applied only to a deed and not to a will. As
the will was made and allowed the devisee is bound by an effective performance
of the agreement and must take compensation under the will, and as an incident
of the transfer of the estate to her she must suffer the assessment of the tax. The
court suggests that for actual disbursements incurred in the service the devisee
may well be a creditor of the estate. In re Perry (Mass. Middlesex County Pro-
bate Court, July, 1911).

2 Where in 1899 the testator entered into an ante-nuptial contract in writing,
by the terms of which in consideration of his marriage he agreed to provide for

§§136-137.] CONSIDERATION. 113

her by his last will and testament in case she survived him, the court holds that
a provision under his will is in the nature of a debt and is therefore not subject
to taxation under the transfer tax law. In re Baker, 178 N. Y. 575, 70 N. E. 1094,
affirming 83 N. Y. App. Div. 530, 82 N. Y. Suppl. 390, 38 Misc. 151, 77 N. Y.
Suppl. 170.

The testator devised all his property to his mother and entered into a written
contract with her that in consideration of the devise she would leave by will one-
half of the property she received to A. B. The testator died leaving his mother
surviving and on her death she devised the property in accordance with her con-
tract. The inheritance tax act was passed after the making of the contract by
the mother and before her death, and the court holds that the property passing
to A. B. is not subject to the tax. The court says that reading the will and contract
together as they must be read, the mother took a life estate only with an obliga-
tion to leave by will to A. B. and that therefore A. B. really took under the will of
the testator and not under that of the mother. The court relies on Emmons v.
Shaw, 171 Mass. 410,50 N. E. 1033, and In re Lansing, 182 N. Y. 238, 74 N. E.
882, in both of which cases the exercise of a power to appoint by will was
referred to the original will and no tax is levied where the statute was passed
after the original will went into effect. Winn v. Schenck, 33 Ky. L. Rep. 615,
110 S. W. 827.

Sec. 136. Advancements.

Advancements are subject to the inheritance tax, as they are
not made on valuable consideration.

Sums lent in advance to the sons are not regarded as advancements, but they
are claims belonging to the estate, and hence they are subject to the inheritance
tax. In re Bartlett, 4 Misc. Rep. 380, 25 N. Y. Suppl. 990.

The United States statute of 1864 covers an advance made by a father to his
son, as it is a gift made without valuable or adequate consideration. The fact
that the son was named in his father's will does not give him any vested or con-
tingent estate but is a bare possibility not assignable and can therefore not be
made the basis for a consideration. United States v. Banks, 17 Fed. 322.

Long prior to the death of the testator he advanced to the beneficiaries on ac-
count of their legacy at different times sums which aggregated four thousand
dollars and took from them their bonds in corresponding amounts condi-
tioned for the payment during his life of an annuity or yearly sum equal to the
interest at six per cent on the advancements. The court holds that this was
really a device to evade the tax and its meaning that the testator should receive
a life income from his legacy and that full enjoyment of the principal should be
had by the legatee only after the testator's death. In re Conwell, 5 Pa. Co. Ct.
368, 22 Wkly. Notes Cas. 183.

Sec. 137. Services.

A deed for services may well be found to be made on adequate con-
sideration and therefore not subject to the tax,^ but the tax is due
where the grantor transferred by deed all his real and personal prop-

114 INHERITANCE TAX LAW. [§137

erty in consideration of the grantee's services rendered and to be
rendered, in trust, nevertheless, for the use and benefit of the grantor
during the term of his natural life, and at his death to become
the property of the grantee absolutely. There was a col-
lateral agreement to the effect that the grantor during his
life should have the right to use any portion of the properties
mentioned, and as the grantee never got full title, the tax
must be assessed .^

Where a legacy is stated to be for services, the legatee should
renounce his legacy and prove as a creditor, as otherwise he will
be taxed as a legatee.^

1 United States v. Hart, 4 Fed. 292.

The testator's wife died in 1897, leaving a daughter thirty-five years old,
who was a deaf mute. After the death of the mother a companion for the daughter
who had lived in the family married, and thereafter the testator entered into a
contract with another companion whereby in consideration of her continuing to
act as companion of and caring for the daughter as long as the daughter lived,
the testator undertook to convey and transfer to the daughter all the property
he possessed. The comrade faithfully performed her part of the contract until
1904, when the daughter died and the testator conveyed from time to time various
parts of his property to the companion. It appeared that the companion had
exclusive dominion over the property. The testator was seventy-four years old
when he made the agreement, but he was in good health though not strong. The
testator might well expect the daughter to outlive him; but he did not transfer
his property to his daughter or in trust for her. Instead he sold it in considera-
tion of a contract for her care, the performance of which began and was finished
in her lifetime. The motive for transferring the property was not his impending
death but his desire to provide for his daughter's future whether he lived or died.
The contemplation of death must be the impelling motive without which the
conveyance would not be made, in order to subject a transfer of property to the
inheritance tax. People v. Burkhalter, 247 111. 600, 93 N. E. 379.

The person claiming exemption for services must show that they equalled
in value the amount transferred. State Street Trust Co. v. Stevens, 209 Mass. 373,
95 N. E. 851.

^Inre Skinner, 45 Misc. 559,92 N. Y. Suppl.972 (s.c. 106 N. Y. App. Div. 217,
94 N. Y. Suppl. 144).

^The testator gave a legacy to a doctor in view of his care and services during
the testator's years of sickness "without asking any reward for services rendered,
as he knew my means were somewhat limited."

"By neglecting to present any account to the executor, or prove any claim
against the estate, and having accepted the gratuity which the deceased provided
for him in her will, it was the duty of the executor, on its payment to him, to de-
duct therefrom the tax which had been assessed by the surrogate. If he desired
to escape the payment of the tax, or was dissatisfied with the amount of the legacy,
he should have established his debt, if he had any, against the estate, and had it
paid by the executor in the usual manner, and let the legacy to him go into the
residuary assets.

S 138.] CONSIDERATION. 115

'The times have been

That, when the brains were out, the man would die,
And there an end; but now they rise again,
With twenty mortal murders on their crowns,
And push us from our stools. '

So, in the settlement of estates, the legal skeletons of stale claims and outlawed
demands stalk forth from their charnel houses and their graves, and seek to push
from their stools the guests whom the testator has invited to the feast." Per
Kennedy, S., in In re Doty, 7 Misc. Rep. 193, 56 N. Y. St. 626, 27 N. Y. Suppl.
653, 656.

Sec. 138. Support.

A deed made in good faith in consideration of the support of the
grantor,^ reserving the right to reside on the premises,^ is made on a
vaUd consideration and is not subject to the transfer tax. So where
the testator, in 1900, joined with his wife in making a deed of real
estate to the son of his adopted child in consideration of support
for himself and his wife for the rest of their lives, and the son
carried out the contract faithfully, and the testator died in 1906,
having by his will provided that certain expenses should be paid
out of the personal estate and not by the son as the contract
required, the court holds that the property so transferred is not
subject to the inheritance tax. The son took immediate posses-
sion of the land and continued to occupy the same down to the
date of trial. The son paid the taxes on the land, had full posses-
sion, and the testator never claimed ownership after the conveyance,
in fact expressly disclaimed any interest in the land, and many
times asserted that it belonged exclusively to the son. It was not
suggested that these arrangements were for the purpose of defeating
the inheritance tax.^

* In re Hulse, 15 N. Y. Suppl. 770 ("in consideration of a home for me at his
house during my life").

2 In re Hess, 187 N. Y. 554, 80 N. E. 1111, affirming 110 N. Y. App. Div. 476,
96 N. Y. Suppl. 990.

«Lcw& v. Morrmn, 140 Iowa 89, 117 N. W. 1118, 18 L. R. A. ( N. S.) 226.

CHAPTER XXI.

POWERS.

§ 139. In General.
§ 140. What Law Governs.

§ 141. When Power is Created before Passage of Statute.
§ 142. Immaterial Whether Power Created by Will or by Deed.
§ 143. Where Appointment is to Same Persons Named in Original
Instrument.

Sec. 139. In General.

Powers are usually treated in inheritance statutes as merely
designating interests under the will of the original decedent. A
tax on interests under a power created by will should be treated for
the purposes of the inheritance tax as though the interests arose
under the will itself.^ Therefore relationship must be reckoned
as from the original decedent and not from the donee of the power .^
Some statutes, however, notably New York, assess the tax on the
exercise of the power itself, and in such states the fund is treated
for taxing purposes as passing from the donee directly to the
beneficiary,^ and remainder interests under the power are taxable
only on the exercise of the power and not as a remainder under the
original will.^ Such a tax must be on the value of the property
transferred under the power .^ Where the donee of the power of
appointment in her will gave a direction to repay a loan hereto-
fore made to her out of the fund over which she exercised her
power, this is a transfer to the creditor, and was taxable under the
New York statute of 1897 .«

Where the testator gave property to his wife to be disposed of
as she might think proper without any remainder or trust being
created, this was an absolute estate to the wife, and therefore on
her death, without exercising her power, there was no reason for
levying a tax on the heirs of the original testator.^

The value of an estate subject to a power should be deducted in
reckoning the value of remainder interests. A will gave a certain
estate in trust to pay the income to the wife for life, the remainder
to the nephew; but the codicil gave the wife power to appoint the

§ 140.1 POWERS. 117

portion of the estate given to the nephew. The court holds that
from the interest of the nephew should be deducted the value of
the property over which the wife had the power of appointment.^

A statute imposing a tax on transfers from persons dying seized of
property does not cover an exercise of a power by will of a cestui.^

^Emmons v. Shaw, 171 Mass. 410, 413. In re Stewart, 131 N. Y. 274, 30 N. E.
184, 14 L. R. A. 836. In re Backhouse, 185 N. Y. 544, 77 N. E. 1181, affirming
110 N. Y. App. Div. 737, 96 N. Y. Suppl. 466. As to exemptions, see post, s. 254.

The collateral inheritance tax is assessed only on property which was the
absolute property of the testator and not on that of which she only held the
power of appointment. In re Lisle, 22 Pa. Super. Ct. 262 (1903).

2 Commonwealth v. Williams, 13 Pa. St. (1 Harris) 29.

Where, however, the power of appointment is exercised improperly, the estate
passes as the estate- of the donee to collaterals of the donee. Commonwealth v.
Sharpless, 2 Chest. Co. Rep. (Pa.) 246.

3 Minot V. Stevens, 207 Mass. 588, 93 N. E. 573, under St. 1909, c. 527, differing
from the former statute construed in Emmons v. Shaw, 171 Mass. 410. In re
Rogers, 172 N. Y. 617, 64 N. E. 1125, affirming 71 N. Y. App. Div. 461, 75
N. Y. Suppl. 835. In re Walworth, 61 N. Y. App. Div. 171, 72 N. Y. Suppl. 984
(holding that relationship must be reckoned from the donee of the power).

4 In re Howe, 176 N. Y. 570, 68 N. E. 1118, affirming 86 N. Y. App. Div. 286,
83 N. Y. Suppl. 825.

6 In re Tucker, 27 Misc. Rep. 616, 59 N. Y. Suppl. 699.

The testator died in December, 1887, leaving a life estate with a power of
appointment in the life tenant. The life tenant died in 1904 after exercising the
power, and the court holds that although all property was made subject to the
tax under the will of the original testator, still the exercise of the power of
appointment is taxable under the statute of 1897. The court holds that the
fact that the tax was erroneously assessed in 1888 on the whole interest instead
of merely on the life interest does not prevent the collection of the tax on the
exercise of the power of appointment. In re Buckingham, 106 N. Y. App. Div.
13, 94 N. Y. Suppl. 130.

6 In re Rogers, 172 N. Y. 617, 64 N. E. 1125, affirming 71 N. Y. App. Div.
461, 75 N. Y. Suppl. 835.

7 In re Lynn, 34 Misc. 681, 70 N. Y. Suppl. 730.

^ In re Field, 36 Misc. Rep. 279, 73 N. Y. Suppl. 512.
^Gallard v. Winans, 111 Md. 434, 472, 74 A. 626.

[Contingent remainder arising by appointment after death of testator taxable,
see post, s. 233, n. 2.]

Sec. 140. What Law Governs.

Under statutes taxing the power as created under the will of the
testator no tax is due where the power is created by the will of a
, non-resident,i although the donee is a resident.^ Under the New
York act making the exercise of the power the basis of the tax
no tax can be assessed in New York where the grantor resided, if the
donee of the power was a non-resident, except as to property located

118 INHERITANCE TAX LAW. [§ 141.

in New York,^ while the tax should be laid where the donee of the
power was a resident of the state, although the funds were actually
held by trustees outside the state.*

* What law governs exercise by non-resident of power under will of resident,
see ante, s. 20.

'^ Where a citizen of Maryland created a life estate with a power of appoint-
ment to a citizen of Pennsylvania, and the life tenant exercised the power by
will, the state was not entitled to an inheritance tax upon the exercise of the
power. The fund was in Maryland at the testator's death, the interest made by it
was received by the appointor to her own use during her lifetime and the appointee
asks no more than to be permitted to receive the principal from the executors
free from encumbrances or deduction as her successor. This is a plain case of a
foreign legacy received abroad, which is not taxable in Pennsylvania. Common-
wealth V. Duffield, 12 Pa. St. (2 Jones) 277, Brightly N. P. 469.

There is no transfer subject to tax in New York where all of the assets are
in the state of Maryland held by trustees residing in Maryland under a will of a
citizen of Maryland pursuant to the laws of that state, although the donee was
a resident of New York. In re Thomas, 39 Misc. Rep. 136, 78 N. Y. Suppl. 981.

' The jurisdiction of the state of New York is limited to the property situated
in this state at the time of the death of the donee of the power. In re Kissel,
65 Misc. 443, 121 N. Y. Suppl. 1088, affirmed in 142 N. Y. 934, 127 N. Y.
Suppl. 1127.

* The question is not where the property was located or whether it was real
estate or personal property but whether the beneficiary came into its possession
through the exercise of a privilege conferred by the state of New York. The
appointee under the power gets all of her rights by reason of the exercise of the
power and privilege granted by the state of New York. In re Hull, 186 N. Y.
586, 79 N. E. 1107, affirming 111 N. Y. App. Div. 322, 97 N. Y. Suppl. 701.

Sec. 141. When Power is Created before Passage of Statute.

Unless the exercise of the power is expressly made taxable,
no tax should be levied where the power is created before the
passage of the inheritance tax statute, though the donee dies after-
wards.^ A tax may, however, be valid when levied on the exercise
of a power created by the will of one who died before the passage
of the taxing act,^ or by a deed executed before its passage.^

"It is quite immaterial that there was no statute imposing a
succession tax of any kind in force when the power was created.
That transfer is not taxed, and the statute makes no effort to
reach it. It is the practical transfer through the exercise of the
power by will that is taxed and nothing else [under N. Y. St. 1897].
The right of the legislature to impose a tax on the privilege of
exercising a power by will is not affected by the fact that no such
tax was imposed when the power was created.""*

§141.1 POWERS. 119

However, the provision in the New York act of 1897, that the
failure or omission to exercise the power of appointment subjects
the property to a transfer tax in the same manner as if the donee
of the power had owned the property and devised it by will, is
ineffective, as where there is no transfer there can be no tax; and
a transfer made before the passage of the act relating to transfers
is not affected by it. If it be assumed that a remainder interest
in default of the execution of a power is contingent, nevertheless it is
acquired under the will of the testator and cannot be subject to
tax when the testator died before the imposition of a transfer tax.
It then became a property right in the remainderman, which was
just as sacred and just as immune from any legislative attack as
any other property right ; and where the power of appointment is
not exercised, no tax can be laid upon it.^

The Massachusetts court, on the contrary, holds that property
held subject to a power may be said by the legislature to be not
vested in anybody, and that when it vests in possession through
a proper disposition of it, which is dependent upon the will and
conduct of the donee, a succession tax may be imposed, whether
the succession is determined by action or refraining from action
on the part of the donee.®

Where a will left property to A. B. with power to dispose of it
absolutely by will or otherwise, and further provided that any part
of the property undisposed of at the death of A. B. should go to
the heirs of the testator, the provision over to the heirs was void
under Kentucky law, and hence the heirs took by descent from
A. B. and not under the will of the testator, and therefore the suc-
cession was subject to an inheritance tax, the statute of 1906 being
passed after the original testator died and before the death of
A. B.7

1 Hoyt V. Hancock, 65 N. J. Eq. 688, 55 A. 1004, relying upon In re Harbeck
161 N. Y. 211. The names of the appointees must be read into the original
instrument though designated by a later instrument. In re Harbeck, 161 N. Y.
211, 55 N. E. 850, reversing 43 N. Y. App. Div. 188, 59 N. Y.SuppI. 362. See,
however, Crocker v. Shaw, 174 Mass. 266.

2 Minot V. Stevens, 207 Mass. 588, 93 N. E. 573. In re Vanderbilt, 163 N. Y.
597, 57 N. E. 1127, affirming 50 N. Y. App. Div. 246, 63 N. Y. Suppl. 1079.
In re Dows, 167 N. Y. 227, 232, 60 N. E. 439, 52 L. R. A. 433, 88 Am. St. Rep.
508, affirming 60 N. Y. App. Div. 630 (affirmed sub nomine, Orr v. Gilman, 183
U. S. 278, 22 S. Ct. 213, 46 L. Ed. 1961). In re Rogers, 172 N. Y. 617, 64 N. E.
1125, affirming 71 N. Y. App. Div. 461, 75 N. Y. Suppl. 835. In re Potter, 51
N. Y. App. Div. 212, 64 N. Y. Suppl. 1013. In re Brooks, 65 N. Y. St. Rep.

120 INHERITANCE TAX LAW. [§ 141.

255, 32 N. Y. Suppl. 176, 1 Gibbons 188. In re Hull, 586, 79 N. E. 1107, affirm-
ing 111 N. Y. App. Div. 322, 97 N. Y. Suppl. 701.

The testator died in 1890, and his son died in 1899, leaving a will exercising
a power of appointment given him in the will of his father, and it was claimed
that the New York statute of 1897, section 220, subdivision 5, was in violation
of the fourteenth amendment, in violation of section 10 of article 1 of the United
States constitution. The court quotes at length from Carpenter v. Pennsylvania,
17 How. 456, where a retroactive state statute was held constitutional. The
court finds that the New York court of appeals held that it was the execution of
the power of appointment which subjected grantees under the statute to the
transfer tax. This conclusion is binding upon this court in so far as it involves
a construction of the will and of the statute. Even if the view of the New
York court was wrong, it was an error which the United States supreme court
has no power to review. Orr v. Gilman, 183 U. S. 278, 288, 22 S. Ct. 213, 46
L. Ed. 196 (affirming In re Dows, 167 N. Y. 227, 60 N. E. 439, 52 L. R. A. 433,
88 Am. St. Rep. 508).

The testator died in 1874, leaving a will giving his wife one-third of his property
for life, with remainder to his son and daughter, and vesting in his widow the
power to appoint remainders to such of his descendants as she might by will
direct. The son died in 1879, leaving property to his mother for life, remainder
to his sister, and the mother died in 1896, having exercised the power of appoint-
ment in favor of her daughter. The mother's will was admitted to probate
February 29, 1896, and the daughter died on that same day, and her will was
admitted to probate in January, 1898, the daughter being a residuary legatee
under the will of her mother. The court holds that the two estates in remainder
which vested absolutely in the daughter on the death of her mother under her
father's and brother's wills were taxable in passing to the residuary legatee of
the daughter. The court also held that the amount to which the daughter was
entitled as a residuary legatee under her mother's will was not taxable, it appear-
ing that there had been no settlement of the executor's accounts under the will,
and consequently, the amount of the residuary estate, if any there should be,
was unascertained. But the court holds that when the estate of the mother is
settled it will be the duty of the executor to see that the transfer tax is paid
before distributing the residue to the legal representative of the daughter.

As to the two estates in remainder under the wills respectively of the father
and brother of the daughter, the latter was vested with the title to the residue
on the death of each testator, but possession and enjoyment were postponed
until the falling in of the life estate, and when that event occurred the entire
estate, legal and equitable, vested instantly in the remainderman. The executor
of the daughter, under the circumstances, was liable to pay the transfer tax
before he could distribute the personal property in his hands, or to the possession
of which he was immediately entitled. In re Rohan-Chabot, 167 N. Y. 280, 283,
60 N. E. 598, affirming 44 N. Y. App. Div. 340.

^ Crocker v. Shaw, 174 Mass. 266 (although the statute contains no express
provision making it applicable whether the transfer was made before or after
the passage of the act).

A. by trust deed executed prior to the passage of Mass. St. 1891, c. 425, placed
property in trust for herself for life and on her death subject to appointment
under her will. She died in 1895 leaving a will and the court holds that interests

§§ 142-143. POWERS. 121

under her will are taxable. The court holds that the property passed by a deed
intended to take effect in possession or enjoyment after the death of the grantor.
It makes no difference that the donor of the power and the person executing it
are one and the same. Crocker v. Shaw, 174 Mass. 266.

The statute of 1897 does not attempt to impose a tax upon property but upon
the exercise of the power of appointment. The beneficiary is compelled to
resort to the will in order to establish his rights, for the deed alone would not
suffice. "The privilege of making a will is not a natural or inherent right, but
one which the state can grant or withhold in its discretion. If granted, it may
be upon such conditions and with such limitations as the legislature sees fit to
create. The payment of a sum in gross, or of an amount measured by the value
of the property affected, may be exacted, or the right may be limited to one or
more kinds of property and withdrawn as to all others. The legislature could
provide that no power of appointment should be exercised by will, or that it
should be exercised only upon the payment of a gross or ratable sum for the
privilege. It could exact this condition, independent of the date or origin of the
power. All this necessarily flows from the absolute control by the legislature of
the right to make a will." Quoting In re Vanderbilt, 163 N. Y. 597, and In re
Dows, 167 N. Y. 227. Per Vann, J., in In re Delano, 176 N. Y. 486, 491, 64
L. R. A. 279, 177 N. Y. 540, 69 N. E. 1122, reversing 82 N. Y. App. Div. 147,
81 N. Y. Suppl. 762 (affirmed suh nomine, Chanter v. Kelsey, 205 U. S. 466,
27 S. Ct. 550, 51 L. Ed. 882).

4/« re Delano, 176 N. Y. 486, 494, 64 L. R. A. 279, 177 N. Y. 540, 69 N .E.
1122, reversing 82 N. Y. App. Div. 147, 81 N. Y. Suppl. 762 (affirmed sub nomine,
Chanter v. Ketsey, 205 U. S. 466, 27 S. Ct. 550, 51 L. Ed. 882).

^In re Lansing, 182 N. Y. 238, 248, 74 N. E. 882, modifying 103 N. Y. App.
Div. 596. This decision is considered and upheld in a note in 19 Harvard Law
Review 121.

« Minot V. Stevens, 207 Mass. 588, 93 N. E. 573.

7 Commonweatth v. Stolt, 132 Ky. 234, 116 S. W. 687, withdrawing opinion, 114
S. W. 279.

Sec. 142. Immaterial whether Power Created by Will or by
Deed.

It is immaterial how the power is created, whether by will or by
deed, in considering the right to tax the exercise of the power.

In re Delano, 176 N. Y. 486, 493, 64 L. R. A. 279, 177 N. Y. 544, 69 N. E.
1122, reversing 82 N. Y. App. Div. 147, 81 N. Y. Suppl. 762 (affirmed suh
nomine. Chanter v. Ketsey, 205 U. S. 466, 27 S. Ct. 550, 51 L. Ed. 882).

Sec. 143. Where Appointment is to Same Persons Named in
Original Instrument.

Where the power is exercised by appointing to the same persons
as are named in the will in default of appointment, the beneficiaries
have a right to elect whether to take under the original will instead
of under the power. ^ An election to take under the original will

122 INHERITANCE TAX LAW. [§ 143.

rather than under the power need not be in any particular form,
and it is sufficient if it appears by opposition to the imposition of
a transfer tax.^ Where the will of the donee directs distribution
according to the provisions of the original will, this is a refusal or
renunciation of the power by the donee .^ Where the original will
is to such children as the donee may appoint, there is a necessity
for the exercise of the power, and the children appointed must
make their title through the donee ;^ but where the appointment
names a portion only of the beneficiaries named in the will, they
take under the will, as the appointment was an injury rather than
a benefit to them.^ The same result was reached where the power
was exercised to four of the beneficiaries named in the will.^

1 In re Lewis, 194 N. Y. 550, affirming 129 N. Y. App. Div. 905, reversing

60 Misc. 643, on authority of In re Lansing, 182 N. Y. 238, and In re Haggerty,
194 N. Y. 550, 87 N. E. 1120, affirming 128 N. Y. App. Div. 479, 112 N. Y.
Suppl. 1017. In re Spencer, 119 N. Y. App. Div. 883, 107 N. Y. Suppl. 543.

In an earlier case, however, the court says that as the power of appointment
was exercised by the life tenant and as it was only in case of a failure to exercise
the power that the remainder vested in the children of the donee, they derived
their title to the property through the exercise of the power of appointment
and not directly under the will of the testator. In re Lowndes, 60 Misc. 503,
113 N. Y. Suppl. 1114.

2 In re Chapman, 133 N. Y. App. Div. 337, 117 N. Y. Suppl. 679, affirming

61 Misc. 593, 115 N. Y. Suppl. 981.

^Inre Langdon, 153 N. Y. 6, 9, 46 N. E. 1034, affirming 11 N. Y. App. Div.
220, 43 N. Y. Suppl. 419. i

^In re Cooksey, 182 N. Y. 92, 98, 74 N. E. 880, affirming 100 N. Y. App. D v.
516, 91 N. Y. Suppl. 1091.

^ In re Ripley, 192 N. Y. 536, 84 N. E. 574, affirming 122 N. Y. App. Div.
419, 106 N. Y. Suppl. 844. See, however, In re Warren, 62 Misc. 444, 116 N. Y.
Suppl. 1034.

6 People V. Williams, 127 N. Y. Suppl. 749.

CHAPTER XXII.

METHODS OF AVOIDING TAX.

§ 144. Any Collusive Arrangement Illegal.

§ 145. No Duty to Point out Property to Tax Officials.

§ 146. Advancement.

§ 147. Assignments by Beneficiaries.

§ 148. Brokers Holding Stock in their own Name.

§ 149. Compromise of Interests under Will.

§ 150. Consideration.

§ 151. Transfers in Contemplation of Death.

§ 152. Creation of Corporation Leaving Life Estate in Decedents.

§ 153. Disclaimer by Beneficiary.

§ 154. Disclaimer by Executor.

§ 155. Executor Paying Legacy with his own Money.

§ 156. Homestead Set Ofif.

§ 157. Insurance or Beneficial Societies.

§ 158. Property Held Jointly.

§ 159. Marshaling Local Assets and Debts.

§ 160. Various Gifts to Same Person.

§ 161. Quick Transfer of Stock in Foreign Corporation.

§ 162. Premature Distribution after Taking Assets out of Jurisdiction.

Sec. 144. Any Collusive Arrangement Illegal.

"No mere device intended to evade the payment of tax due the
commonwealth can be effective. Courts look beyond the form of
any arrangement by which the commonwealth is deprived of a
tax to its substance to ascertain its real purpose. An agreement
to set aside a will and to make distribution in accordance with its
provisions will not relieve legacies passing to collaterals from tax.
Such an agreement is evidently collusive. But money paid in
good faith in compromise of threatened litigation is not subject
to tax. Pepper's Estate, 159 Pa. St. 508; Kerr's Estate, 159 Pa.
St. 512."

Per Fell, J., in In re Hawley, 214 Pa. St. 525, 527, 63 A. 1021.

Sec. 145. No Duty to Point out Property to Tax Officials.

Unless clearly set forth in the taxing statute the executor is under
no duty to aid the tax collectors in locating the property of the
estate^ outside the estate of a non-resident decendent.^

124 INHERITANCE TAX LAW. [§§ 146-148.

^ Under the statute of 1885, chapter 483, the administrator was under no duty
or obligation to voluntarily aid the appraiser in any manner whatever in making
the appraisal; and the court holds therefore that the administrator was not
guilty of any fraudulent acts in failing to apprise the appraiser of certain claims
belonging to the estate. In re Smith, 14 Misc. Rep. 169, 35 N, Y. Suppl. 701.

2 In re Bishop, 82 N. Y. App. Div. 112, 81 N. Y. S. 474.

[What inventory should contain, see post, ss. 323, 324.]

Sec. 146. Advancements.

Advancements as a means to avoid the inheritance tax are
considered above, in section 136.

Sec. 147. Assignments by Beneficiaries.

An assignment by a beneficiary to another can have no effect
on the inheritance tax.
See further, post, s. 224.

Sec. 148. Brokers Holding Stock in their own Name.

It is clear that the common practice of carrying stock: in the
name of stockbrokers will not of itself suffice to avoid taxation,
although it may in some cases render it a little more difficult for
the tax collectors to discover the property. The practice has the
advantage of giving the executors more freedom in a quick sale of
securities in those states which require payment of the tax before
transfer. Where the decedent does business in one state and re-
sides in another, this arrangement might enable the executors to
remove securities from the state where the decedent had his place
of business, when the actual location of the securities is made a
basis for taxation.

The futility of the practice was well explained in a New York
case where the decedent, a resident of Louisiana, had ordered the
purchase through her stockbrokers in New York of certain stock,
and the certificates were taken in the name of the brokers, but paid
for by her, and the stock was transferred on the books of the cor-
poration, which was a New York corporation, to the brokers,
who thereupon endorsed their name upon the blank transfer printed
upon the certificates, so that the same could be transferred to the
testatrix, and the certificates so endorsed were then delivered by
the brokers to the testatrix. The court holds that although she
did not have the legal title to the stock at the time of her death,
she did have an equitable title which at any time she could have
transferred into a legal title by simply presenting the certificates

§§ 149-152.] METHODS OF AVOIDING TAX. 125

to the officers of the corporation, and that this was an interest
in the property which passed by her will and which was taxable.
She was entitled at any time to become vested with the legal title,
and certainly this equitable title was something more than a mere
chose in action. It was in effect a property interest in the
domestic corporation.^

However, if an investor carries stock in a foreign corporation
in the name of a broker in his own state he practically may
avoid taxation at the hands of states which assume to tax stock of
their corporations owned by non-residents.

It has been suggested that stock might be placed in the hands
of brokers or others under a trust agreement, that notes be then
issued to the beneficiaries, thus rendering their claims debts to be
allowed like other debts.

i/» re Newcomb, 172 N. Y. 608, 64 N. E. 1123, affirming 71 N. Y. App. Div.
606, 76 N. Y. Suppl. 222.

Sec. 149. Compromise of Interests under Will.

A compromise may be so framed that no tax can be collected, in
some circumstances.

In re Hawley, 214 Pa. St. 525, 63 A. 1021. See further, ante, s. 106.

Sec. 150. Consideration.

The effect of the existence of consideration in avoiding the
inheritance tax is considered in a separate chapter (Chapter XX).

Sec. 151. Transfers in Contemplation of Death.

The most common attempt to evade the tax is by means of
transfers of one kind or another during the life of the decedent,
in contemplation of death, to the objects of his bounty, and such
transfers are so common that we require a separate chapter for their
consideration (Chapter XIX).

Sec. 152. Creation of Corporation Leaving Life Estate in
Decedent.

Where an owner of large property created a corporation to which
he conveyed all his property, and then had the corporation issue the
stock in such a way that he held a life estate only in it, the court
was precluded by the stipulation under which the case came before
it that there was no verbal or outside agreement not before the
court from considering the question whether the agreement was

126 INHERITANCE TAX LAW. [§153

made so that the heirs would not be required to pay an inheritance
tax, and the court holds that no inheritance tax is due.

State V. Probate Court, Washington County, 102 Minn. 268, 294, 113 N. W. 888.

Sec. 153. Disclaimer by Beneficiary.

In some cases a renunciation by the legatee may be effective
in avoiding the transfer tax. The most effective method for evad-
ing the collateral inheritance tax yet devised appears to have been
sanctioned by the court in In re Stone, 132 Iowa 136, 109 N. W. 465.
In this case the collateral legatees and others interested under the
will all united in renouncing the provisions of the will and agreeing
that the property might be distributed as in case of intestacy,
and the court holds that the parties have a right to do this and that
the result is that the state has no interest in the collection of any
collateral inheritance tax, as the property then passed entirely to
lineal descendants not subject to the tax. The question whether
the parties had any collateral agreement among themselves as to
the distribution, so that the collateral legatee really obtained some
benefit, was not suggested to the court, and the effect of any such
agreement was not involved in the decision.

In a New York case the legatees renounced the legacy, and the
property bequeathed therefore went to the residuary legatees.
The court therefore holds that the tax should be laid at the rate as
if the legacy had been originally given to the residuary legatees.
The tax is laid solely upon the transfer and not upon the property
transferred, nor upon the estate of the legatee. If the legatee
renounces a gift, refuses to receive it, no tax can be collected with
respect to him because there has been no transfer to him. His right
to renounce the privilege of accepting the donation is not denied
or forbidden by the statute, and on his effective renunciation the
title or ownership of the property remains in the estate to be dis-
posed of under the terms of the will, and the succession is taxable
in accordance with the nature of the ultimate devolution.^

Where it appeared that the beneficiaries under a residuary clause
conceded its invalidity as a perpetuity, and abandoned all claim to
the property to the heirs, who sold it and received the consideration
therefor, and that it did not pass under the will, the surrogate had
jurisdiction to find that the property did not pass under the will,
and that no tax was assessable against the residuary beneficiaries
named.2 In Pennsylvania, however, it has been held in the lower

154-156.1 METHODS OF AVOIDING TAX. 127

courts that as title to the property passed on the death of the dece-
dent, a subsequent renunciation cannot affect the liability of the
beneficiary to taxation.^

1 In re Wolfe, 179 N. Y. 599, 72 N. E. 1152, affirming 89 N. Y. App. Div. 349.
The court affirms and distinguishes In re Wolfe, 89 N. Y. App. Div. 349, 179
N. Y. 599, as there there was no transfer by will to the executors, and there-
fore no transfer tax could be imposed as the executors renounced the gift. In re
Cook, 187 N. Y. 253, 79 N. E. 991, reversing 114 N. Y. App. Div. 718, 99
N. Y. Suppl. 1049.

2 In re Ullman, 137 N. Y. 403, 33 N. E. 480.

3 In re Frank, 9 Pa. Co. Ct. 662. In re Small, 11 Pa. Co. Ct. 1.

Sec. 154. Disclaimer by Executor.

The surrogate has authority under the New York statute of
1892 to appoint an appraiser to appraise property adjudged to be
subject to the will of a deceased person in an action between the
heirs, although the executor had claimed that it was not a part of
the estate, as it had been given to a certain heir during the life of
the decedent.

In re Lansing, 31 Misc. Rep. 148, 64 N. Y. Suppl. 1125.

Sec. 155. Executor Paying Legacy with his own Money.

Where the executor contributes the legacy out of his own funds,
no tax is payable. Where one of the executors previous to the
death of the testator had so invested the testator's property that
it was worthless, and then on his death destroyed his will, one of
the legatees by threats of criminal prosecution obtained payment
of her legacy from the executor, at the same time assigning the
legacy and all her interest in the same to the executor. The legacy
was paid with the individual property of the executor. The
legacy was two thousand dollars, and the total assets of the estate
of the testator amounted to less than eight hundred dollars.
The court holds that no transfer tax can be levied on this
legacy, as the legatee never received any property from the estate
and has in fact assigned all her rights against the estate.

In re Weed, 10 Misc. Rep. 628, 32 N. Y. Suppl. 777.

Sec. 156. Homestead Set Oflf.

In some states the parties may avoid the tax by having property
set aside as homestead under local statutes. We have considered
this topic under s. 110.

128 INHERITANCE TAX LAW. [§§157-161

Sec. 157. Insurance or Beneficial Societies.

Investors are commonly safe in investing their money in life
insurance or beneficiary policies of various kinds, as we have en-
deavored to show under section 107.

Sec. 158. Property Held Jointly.

The effect of making deposits in the joint names of two or more
persons is considered elsewhere at section 105.

Some trust companies will not transfer stock held jointly on the
signature of the surviving owner.

The Indiana statute prohibiting a safe deposit company from
delivering the contents of a box leased by deceased jointly on death
of a lessee except on ten days' notice to state ofhcials, is valid. ^

Where the testator and his brother had been doing business
under an agreement dated 1877, reciting that the parties are
"jointly" interested in firm property, on the death of the intestate
the court on the evidence finds that the whole estate of the intestate
is subject to the inheritance tax.^

» National Safe Deposit Co. v. Stead, 250 111. 584, 95 N. E. 973.
2 In re Wormser, 28 Misc. 608, 59 N. Y. Suppl. 1088.

Sec. 159. Marshaling Local Assets and Debts.

The executors of estates with property in more than one state
should use great care in choosing the property they will use for
paying legacies and debts, for a proper marshaling of assets may
well make large differences in the taxes payable. We have treated
this subject fully under sections 204, 354.

Sec. 160. Various Gifts to Same Person.

Where in separate items of a will two or more legacies or devises
are given to the same person, it matters not whether the property
pass under one or more items of the will or whether the property
passing under more than one item be real or personal, the tax is
collectible on the aggregate of such property above the exemption.

In re Inheritance Tax, 7 Ohio N. P. 547, 5 Low. Dec. 555.

Sec. 161. Quick Transfer of Stock in Foreign Corporation.

In states which impose no penalty on foreign executors or admin-
istrators for failure to pay the tax, and prescribe no lien, there is
grave doubt as to the ability of the state to collect the tax from a

§162.] METHODS OF AVOIDING TAX. 129

non-resident executor or administrator, provided he can get the
stock transferred before the state takes any action. As a practical
matter the state authorities are not Hkely to know of the death of a
non-resident stockholder, and it would seem easy in these states to
have the stock quietly transferred. The authors see no reason, how-
ever, why even after the stock has been transferred the state officials
could not sue in the state of the domicile and recover the tax in an
ordinary action. The chances of their being advised of the death
of a non-resident decedent in time to take such action would seem
to be slight. For example, in Michigan, stock in Calumet & Hecla
and Osceola Mining Company can be transferred without any
reference to the state authorities.
[See further, post, s. 203.]

Sec. 162. Premature Distribution after Taking Assets out
of Jurisdiction.

A proceeding to fix the transfer tax under the statute of 1892
is not lost, as to personal property in New York belonging to a
foreign testator, by the fact that his property is all distributed
and the accounts of the executors closed under the laws of the
domicile. Having done that, and having taken out of New York
all the property of the decedent and distributed it, they cannot now
urge lack of jurisdiction to fix a tax in New York.

In re Hubbard, 21 Misc. Rep. 566, 48 N. Y. S. 869.

CHAPTER XXIII

TITLE OF DECEDENT.

§ 163. Before Possession Taken of Certificates of Stock.

§ 164. Deeds Signed and not Delivered.

§ 165. Property Already Brought by Legatee.

§ 166. Property Standing in Name of Another.

Sec. 163. Before Possession Taken of Certificates of Stock.

A gift in contemplation of death was made by a father to a
daughter, and she died within a few days of his death before the
certificates of stock had been actually transferred to her, and
before she had received any dividends. The stock passed under her
will as her property, and so passing is a transfer under the transfer
tax law of the state which must suffer a tax.

In re Borup, 28 Misc. Rep. 474, 59 N. Y. Suppl. 1097.

Sec. 164. Deeds Signed and not Delivered.

Where a testator signed certain deeds and other papers and
placed them in envelopes described as property of persons by
whom they were endorsed, and placed the envelopes in a box in a
bank, this property was still his for the purposes of the tax where
he received the income from it and treated it as his own during his
life.

In re Sharer, 36 Misc. Rep. 502, 73 N. Y. Suppl. 1057.
See further, post, ss. 127, 128.

Sec. 165. Property Already Bought by Legatee.

Property nominally included in the will which had been already
bought and paid for by the legatees is not subject to tax. It
seemed that the provisions in the will were due to the anxiety
of the testator that his sisters should not be disturbed in the
occupancy of the home he granted to them.

In re Morris (Orph. Ct.), 1 Pa. Dist. R. 818.

§166.] LIFE OF DECEDENT. 131

Sec. 166. Property Standing in Name of Another.

Where a large part of the estate in another state is invested in
the name of a nephew of the testator, this money is taxable under
the law of Pennsylvania.^

The state must show not only that the persons against whom
it claims are not of the exempted class, but that the estate out of
which the tax is alleged to be payable passed to those persons from
one who died seized or possessed of the same. Under the Pennsyl-
vania act actual seisin and actual possession is necessary, and a
person cannot be seised of an estate which is limited to take effect
only after his death. ^ So the exercise of a power by a cestui is not
taxable under such a statute.^

1 In re Miller, 182 Pa. St. 157, 162, 37 A. 1000, citing In re Williamson, 153 Pa-
St. 508, 26 A. 246, 32 Wkly. Notes Cas. 93.

Stock standing in name of stockbroker, see ante, s. 148; in joint names, see
ante, s. 158.

2 In re Swann, 12 Pa. Co. Ct. 135.

^Gallard v. Winans, 111 Md. 434, 472, 74 A. 626.

CHAPTER XXIV.

REAL ESTATE.

§ 167. Real Estate Subject to Mortgage.

§ 168. Share of Co-Tenant. — Liability for Improvements.

§ 169. Effect of Decree as to Title.

§ 170. Effect of Partition Proceedings.

§ 171. Delivery of Deed.

§ 172. Leasehold Interests.

Sec. 167. Real Estate Subject to Mortgage.

Where real estate is devised subject to mortgage, the interest
or equity of the testator in the real estate only is to be considered
as devised, and the executors have no right to deduct the amount
of the mortgages from the value of the personal estate in settling
the inheritance tax in New York.^

The testator at the date of his death owned equities in real
estate subject to mortgages and directed by his will that these
mortgages be paid out of his personal estate. The court holds
that the personal estate should be appraised as it was at the
testator's death, less debts and mortgages payable. The court
holds that the estate must be appraised in the condition in which
it was at the death of the testator .^

i/« re Sutton, 3 N. Y. App. Div. 208, 38 N. Y. Suppl. 277, affirming 15 Misc.
659, 38 N. Y. Suppl. 102. In re Kene, 8 Misc. Rep. 102, 29 N. Y. Suppl. 1078.
See, however, further, post^ s. 353.

2/« re Offerman, 25 N. Y. App. Div. 94, 48 N. Y. Suppl. 993, following In re
Sutton, 3 N. Y. App. Div. 208, 38 N. Y. Suppl. 277, and In re Livingston, 1
N. Y. App. Div. 568, 37 N. Y. Suppl. 463. In re De Graaf, 24 Misc. Rep. 147,
53 N. Y. Suppl. 591, 2 Gibbons 516. In re Livingston, 1 N. Y. App. Div. 568,
37 N. Y. Suppl. 463.

[Real estate of non-resident, see post, s. 197.]

Sec. 168. Share of Co-Tenant. — Liability for Improvements.

Where the decedent was a co-tenant of land on which other co-
tenants had made improvements, and where each co-tenant pre-
sumed and knew what the others were doing, and the improvements

§§ 169-171.1 REAL ESTATE. 133

were made under such conditions that on partition the co-tenants
would be entitled to allowance for the improvements, only the
balance of the interest of the decedent should be taxed, notwith-
standing the fact that no proceeding for contribution had been
commenced, and notwithstanding the fact that it might be
claimed that no contribution would ever be asked. Still this does
not justify the taxation of property that the decedent did not
own, which does not pass to the heirs at law as her property.
In re Wood, 123 N. Y. Suppl. 574.

Sec. 169. Effect of Decree as to Title.

A decree of a district court passing upon a title to land involved
in an agreement of compromise of a will is of no effect on the
question of inheritance tax, as the state' treasurer was not a party
to that suit and was in no way interested therein.

Lacey v. State Treasurer, (Iowa, 1909,) 121 N. W. 179.

Sec. 170. Effect of Partition Proceedings.

The succession tax is not a tax upon land. The fact that partition
proceedings were held under which the plaintiff's equitable interest
in certain real estate was satisfied by an assignment to him of
personal property, does not relieve him from the payment of a
succession tax on his share of the estate, for the obvious reason
that he received the full value of the real estate in other property
assigned to him belonging to the same estate.

Scholey v. Rew, 90 U. S. (23 Wall.) 331, 349, 23 L. R. A. 99. See further,
post, s. 186, n. 5.

Sec. 171. Delivery of Deed.

Where the beneficial owner of land for whom another is hold-
ing the legal title as bailee directs the holder of the legal title to
give the property to his son, and the holder of the title executes
a deed, which he gives to his son, telling him to give it to the
person named by the beneficial owner when he calls for it, — this
is a good delivery of the deed, and the land cannot be held for an
inheritance tax from the estate of the beneficial owner, especially
where the grantee under the deed had entered on the land and
made improvements on the property.

Stinger v. Commonwealth, 26 Pa. St. (2 Casey) 422, 428.

134 INHERITANCE TAX LAW. [§172.

Sec. 172. Leasehold Interests.

Leasehold interests under long leases made real estate by statute
should be treated as real estate.

Perpetual leases on real estate in Japan are real estate. In re Vivanti,
138 N. Y. App. Div. 281, 122 N. Y. Suppl. 954, reversing 63 Misc. 618, 118 N. Y.
Spupl. 680.

CHAPTER XXV.

PERSONAL PROPERTY.

§ 173. When Estate Insolvent.

§ 174. Charge on Future Rents.

§ 175. Claim against Estate of Another.

§ 176. Gift on Condition Legacies Paid.

§ 177. Fraudulent Conveyance.

§178. Good Will.

§ 179. Income after Death.

§ 180. Lessee's Interest.

§ 181. Stock in Joint Stock Association.

§ 182. Money for Investment.

§ 183. Loan to Partnership.

§ 184. Profits of Partnership.

§ 185. Seat in Stock Exchange.

§ 186. Conversion in General.

§ 187. Conversion in Pennsylvania.

§ 188. Manumission of Slave.

Sec. 173. When Estate Insolvent.

Where the estate is insolvent so that there is no inheritance or
legacy for the heirs, no inheritance tax can be collected.

The plaintiff brought suit to recover the amount of the internal revenue tax
he paid in 1872 to the United States collector, on the ground that he as lessee
of the real estate was obliged to pay the tax to avoid eviction and that the pay-
ment inured to the benefit of the succession. The court holds that as the
succession was insolvent there was no inheritance or legacy for the heirs and it
was not liable to an internal revenue tax, and therefore no recovery could be
had. Johnson v. Dunbar, 28 La. Ann. 271.

Sec. 174. Charge on Future Rents.

A legacy charged on the future rents and profits of land is still
subject to tax as personal property.

Where a devise is made to a lineal descendant with the direction to her to
pay two thousand dollars a year out of the rents and profits of the land
devised, the words of the Pennsylvania act of 1887 are sufficient to cover this
bequest although payable by the devisee of the land out of its future rent. In re
Lea, 194 Pa. St. 524, 45 A. 337.

136 INHERITANCE TAX LAW. [§§175-178.

Sec. 175. Claim against Estate of Another.

A claim against the estate of another is property subject to the
inheritance tax.

In re Huber, 86 N. Y. App. Div. 458, 83 N. Y. Suppl. 769. In re Rohan-
Chabot, 167 N. Y. 280, 284, 60 N. E. 598.
Appraisal of claims, see post, s. 340.

Sec. 176. Gift on Condition Legacies Paid.

Where an estate is given to a widow on condition she pay legacies
to collateral relatives, the gift to the collateral relatives is direct
and is subject to the inheritance tax.

Nieman's Estate, 131 Pa. St. 346, 351, 18 A. 900.

Sec. 177. Fraudulent Conveyance.

Where a partner in a firm invested the profits with the firm
and transferred this account to his wife to protect his wife from
his creditors, on the death of the wife a transfer tax should be
levied on the property.^

The executor claimed that certain property had been given to
one of the heirs under the will, and the heir also claimed the gift,
and the surrogate in a proceeding to assess the tax failed to assess
this property on the theory that it had been given to the heir.
Subsequently, in a contest between the heirs, it was determined
that this gift was fraudulent and void and the court then decided
that as it now appeared that the property was transferred by the
will of the testator and not by gift, it became taxable under the
statute.2

1 In re Anthony, 40 Misc. Rep. 497, 82 N. Y. Suppl. 789.

2 In re Lansing, 31 Misc. Rep. 148, 64 N. Y. Suppl. 1125.

Sec. 178. Good Will.

The good will of a firm is taxable under the transfer tax,^ and
so where a business was conducted and carried on by an adminis-
tratrix in the name of the decedent, the good will of the business
is an asset in her hands, and as such it is taxable.^

1 In re Dun, 40 Misc. Rep. 509, 82 N. Y. Suppl. 802, reversing 39 Misc. 616,
80 N. Y. Suppl. 657.

See further, post, s. 341.

2 In re Keahon, 60 Misc. 508, 113 N. Y. Suppl. 926.

§§ 179-181.] PERSONAL PROPERTY. 137

Sec. 179. Income after Death.

Income received after the testator's death is not included in the
appraisal. 1 The will directed that the income of the testator's
estate for the first year after his death should be added to the
principal, then both principal and interest applied indiscriminately
to the payment of expenses, debts and legacies. The result is
that the corpus of the estate has been preserved to the extent of
the first year's income, upon which sum no collateral inheritance
tax was paid. The court holds that the direction of the testator
resulted in allowing so much more of the principal to pass to the
collateral heirs, but that this direction does not increase the amount
liable to the tax.^

1 In re Miller, 5 Pa. Co. Ct. 522, 22 W. Notes Cas. 11. See ante, s. 334, n. 2.

The will bequeathed to the testator's partners his interest in the partnership
assets on condition that they pay ninety per cent of its appraised value to his
executors in fifteen equal annual instalments. It appeared that the probate
court made a finding that the inheritance tax should be fixed from time to
time as the money or property of the estate should come into the hands of the
executors and not at the present value of future payments to be made by
the partners. The supreme court finds this finding immaterial on the question
of the municipal tax. Port Huron v. Wright, 150 Mich. 279, 14 Detroit Leg.
N. 720, 114 N. W. 76.

« In re Williamson, 153 Pa. St. 508, 521, 26 A. 246, 32 W. Notes Cas. 93, 11 Pa.
Co. Ct. 235.

See further, post, s. 334.

Sec. 180. Lessee's Interest.

The interest of a lessee of real estate is personal property subject
to taxation under the New York act of 1896, although buildings
erected by the tenant may be assessed to him as land under the
tax law.

In re Althause, 168 N. Y. 670, 61 N. E. 1127, affirming 63 N. Y. App. Div.
252, 71 N. Y. Suppl. 445.

Sec. 181. Stock in Joint Stock Association.

Shares in a joint stock association are personal property although
its assets are principally real estate, and the real estate should be
considered in appraising the value of the stock even under an
inheritance tax that leaves real estate exempt.

The court discusses the difference between joint stock associations and cor-
porations and concludes that "the fact that a joint stock association is not in
legal contemplation a corporation, and not liable to taxation under acts seeking

138 INHERITANCE TAX L^W. [§§182-185.

to reach corporations, in no way militates against the position assumed by the
comptroller in this case. It is competent for private individuals to create a
joint stock association, issue shares of stock, and in that form dispose of property
by last will and testament. The associates by contract have created the same
situation as to shares of stock that a corporation secures by charter." Per
Bartlett, J., in In re Jones, 172 N. Y. 575, 65 N. E. 570, 60 L. R. A. 476, reversing
69 N. Y. App. Div. 237, 74 N. Y. Suppl. 702.

Sec. 182. Money for Investment.

The decedent, a non-resident, three days before his death sent
one hundred thousand dollars to New York city for the purpose of
purchasing stock in a foreign corporation, and he died before the
transaction was completed. The court holds that this money is
not subject to the New York transfer tax.

In re Leopold, 35 Misc. Rep. 369, 71 N. Y. Suppl. 1032.

Sec. 183. Loan to Partnership.

Where a partner makes a loan to a partnership, this money as
regards the rest of the world is capital and not a loan, therefore
subject to the transfer tax on the partner's death.

In re Probst, 40 Misc. Rep. 431, 82 N. Y. Suppl. 396.

Sec. 184. Profits of Partnership.

Profits permitted to remain on deposit with the partnership
should be included among the taxable assets.
In re Probst, 40 Misc. Rep. 431, 82 N. Y. Suppl. 396.

Sec. 185. Seat in Stock Exchange.

The court holds that a seat in the stock exchange is property
and subject to tax within the meaning of the N. Y. St. 1896,
c. 908, s. 242.1 A seat in the stock exchange is a privilege of value
subject to the inheritance tax.^

^"In determining the construction to be given to the broad and comprehensive
language of section 242, we must consider that the statute has a history plainly
indicating the trend of legislative action and that as to the transfer tax it is a
literal reproduction of the then existing law. First enacted in 1885 (Chap. 483)
the inheritance tax law was limited to property passing to collateral relatives.
It was subjected to repeated amendments, the effect of which in nearly every
instance was either to enlarge the class of persons subject to the tax or to extend
its application to some species of property which the courts had held not to fall
within its terms. The distinction between property justly subject to ordinary
taxation and that liable to the imposition of the transfer tax was early appre-
ciated. In Matter of Knoedler (140 N. Y.377), a policy of life insurance payable

I
I

§ 186.] PERSONAL PROPERTY. 139

to the estate of the deceased was held subject to the tax. In the opinion there
rendered Judge Maynard said: The argument is made that it is only property
which is liable to taxation under the General Tax Law of the state which can be
taxed under the act relating to taxable transfers, and that, inasmuch as life insur-
ance policies cannot be included in the valuation of a taxpayer's property under
the general law, they cannot be considered in assessing a tax upon the collateral
inheritance. The main premise upon which this proposition rests is manifestly
inadmissible. The taxable transfer law has no reference or relation to the
general law, ... it proceeds upon a new theory of the right of the government
to tax and establishes a new system of taxation. It takes the right of succession
to property and measures the tax in the method specifically prescribed. All
property having an appraisal value must be considered, whether it is such as
might be taxed under the general law or not. Many kinds of property might be
enumerated which are not assessable under the general law, but which are ap-
praisable under the collateral inheritance tax.' Such was the settled construc-
tion of the inheritance tax laws when the act of 1896 was passed. That act, as
already said, was a revision of the existing law, and an attempt to bring into a
single statute all existing legislation relative to taxation by the state. In Henavie
V. N. Y. C. & H. R. R. R. Co. (154 N. Y. 281) Judge Vann said: The rule in
the case of a revision of statutes is that where the law, as it previously stood,
was settled either by adjudication or by frequent application of the statute
without question, a mere change in the phraseology is not to be construed as a
change in the law, unless the purpose of the legislature to work a change is clear
and obvious.' Therefore, because section 242 prescribes that 'all property'
shall be subject to the transfer tax and because the revision of the statute should
not be held to work a change m the settled law unless the legislative intent to
that effect is clearly manifest, we are of opinion that the seat held by the testator
was subject to the tax imposed upon it." Per Cullen, J., in In re Hellman, 174
N. Y. 254, 257, 66 N. E. 809, 95 Am. St. Rep. 582, reversing 77 N. Y. App. Div.
355, 79 N. Y. Suppl. 201.
2/« re Curtis, 31 Misc. Rep. 83, 64 N. Y. Suppl. 574.

Sec. 186. Conversion in General.

It is the general rule in this country that the doctrine of equit-
able conversion cannot be invoked to affect the imposition of the
inheritance tax. So a direction to invest in real estate leaves the
gift one of personal property,^ and a mere power of sale,^ or even
an absolute direction to sell real estate, will not transform it to
personal property for the purposes of the tax.^ However, a direc-
tion to sell realty will make the interest personalty in the hands
of the estate of the beneficiary.'* So an interest in partition pro-
ceedings ^ and legacies to be paid from the proceeds of real estate,
which the will directed the executor to sell, are personalty.^

^ Where the will directed the remainder to be paid to a certain New York church
"ten thousand dollars towards the building of a new church," this bequest cannot
be treated as real estate, but is personal property, and by no rule of equitable

140 INHERITANCE TAX LAW. [§187.

conversion can it become real estate until it has been invested in real estate as
directed. It must therefore be treated as a legacy of money. Sherrill v. Christ
Church, 121 N. Y. 701, 702, 25 N. E. 50, reversing In re Van Kleeck, 55 Hun 472.

2 The doctrine of equitable conversion is not applicable to subject real estate
to taxation. In re Swift, 137 N. Y. 77, 88, 32 N. E. 1096, 18 L. R. A. 709, 64
Hun 639, 16 N. Y. Suppl. 193, 19 N. Y. Suppl. 292.

^Connell v. Crosby, 210 111. 380, 71 N. E. 350 (land in another state cannot be
taxed as personal property). McCurdy v. McCurdy, 197 Mass. 248, 83 N. E.
881. In re Curtis, 142 N. Y. 219. /wreDows, 167 N. Y. 227, 232, 60 N. E. 439,
52 L. R. A. 433, 88 Am. St. Rep. 508, affirming 60 N. Y. App. Div. 630 (affirmed
suh nomine, Orr v. Oilman, 183 U. S. 278, 22 S. Ct. 213, 46 L. Ed. 196. In re
Sutton, 3 N. Y. App. Div. 208, 38 N. Y. Suppl. 277, affirming 15 Misc. 659,
38 N. Y. Suppl. 102. In re Berry, 23 Misc. Rep. 230, 51 N. Y. Suppl. 1132,
2 Gibbons 346. Contra, In re Wheeler, 1 Misc. Rep. 450, 22 N. Y. Suppl. 1075.

*/« re Mills, 177 N. Y. 562, 69 N. E. 1127, affirming 86 N. Y. App. Div. 555,
84 N. Y. Suppl. 1 135. Under the New York statute of 1892, chapter 399, legacies
to lineal descendants out of the proceeds of testator's real estate are exempt as
real estate. In re Cobb, 14 Misc. Rep. 409, 71 N. Y. St. 506, 36 N. Y. Suppl.
448.

5/« re Stiger, 7 Misc. Rep. 268, 28 N. Y. Suppl. 163. See further, ante, s. 170.

« United States v. Watts, 1 Bond 580, Fed. Cas. 16, 653.

Sec. 187. The Pennsylvania Rule.

In Pennsylvania the rules of equitable conversion, through a
direction in the will to sell or invest in real estate, transform the
property for the purposes of the inheritance tax,^ and mere in-
sufficiency of personal property may work a conversion of the
real estate by implication.^ This doctrine results in subjecting to
the Pennsylvania tax real estate of a resident situated outside the
state,^ unless the proceeds are to be invested outside the state,^
and in exempting from tax real estate in Pennsylvania belonging
to a non-resident decedent.^ Even in Pennsylvania a conversion
will not take place through a mere power to sell,^ or where the
conversion of real estate is postponed.^

*/« re Handley, 181 Pa. St. 339, 37 A. 587, reversing judgment, 3 Lack. Leg.
N.9.

Lien. Where there is a conversion of land situated in Pennsylvania into
personal property the lien of the tax should be transferred from the land to the
fund which it produced. In re Brown, 5 Pa. Dist. R. 286.

^ Where the Pennsylvania testator gave his executors full power to sell real
estate if necessary for any purpose of his estate and it became necessary to sell
to pay legacies, and sale was made, the real estate situated in other states should
be charged with the collateral inheritance tax. The power to sell if necessary
to make distribution became under the manifest intent of the testator a direction
to sell. The pecuniary legacies are to be paid before the residue. The testator
intended them to be paid in cash. He must therefore have foreseen the necessity

§ 188.] PERSONAL PROPERTY. 141

for the sale of his real estate, where the pecuniary legacies aggregate very much
more than the amount of the personal estate. In re Vanuxem, 212 Pa. St. 315,
61 A. 876, 1 L. R. A. N. S. 400.

On the question of conversion of real estate where the trustees had a power
only to sell, the argument that it was necessary to sell the lands to pay debts is
not convincing where it did not appear that at the date of the will the decedent con-
ceived such a necessity to exist. That the real estate in other states is not now
of sufficient value to pay his debts, is by no means conclusive that he did not
regard it as sufficient for that purpose, when he executed his will; and that
therefore he intended that his Wisconsin lands should not be delivered to the bene-
ficiaries as real estate. Besides, he owned several mining locations in Canada
which he, like most men who invest in such property, regarded as of great value.
In re Dalrymple, 215 Pa. St. 367, 374, 64 A. 554.

Un re Dalrymple, 215 Pa. St. 367, 372, 64 A. 654. In re Williamson, 153 Pa.
St. 508, 521, 26 A. 246, 32 Wkly. Notes Cas. 93. Miller v. Commonwealth, 111
Pa. St. 321, 2 A. 492. Williamson's Estate, 153 Pa. St. 508.

What Law Governs. A note in 19 Harvard Law Review, pp. 201, 202, dis-
cusses conversion and suggests that the question as to whether a conversion has
taken place must be determined by the law of the state where the land is situate
since that state alone has dominion over the property. But if it is determined that
there is a conversion succession will occur by the law of the decedent's domicile
as in the case of other personalty.

*The will of a resident of Pennsylvania directed that real estate situated out-
side of Pennsylvania should be sold on the death of the wife who was made life
tenant and the proceeds invested in mortgages in the state where the land lay.
The direction to invest the proceeds out of the state prevents them from being
brought within the state of Pennsylvania and there distributed; and therefore
the fund never came within the jurisdiction of Pennsylvania and so is not subject
to an inheritance tax. In re Hale, 161 Pa. St. 181, 183, 28 A. 1071.

^In re Coleman, 159 Pa. St. 231, 232, 28 A. 137. In re Lamberton, 40 Pa.
Super. Ct. 548.

Where the testator domiciled in New York directed all his real estate to be
sold, this rendered the real estate personal property, and gave it a situs at the
place of his domicile; and therefore the fund realized from it was not subject
to an inheritance tax in Pennsylvania, although the testator appointed executors
in Pennsylvania as to all of his estate not situated in New York, and the Pennsyl-
vania executors improperly paid the collateral tax on the real estate situated
in Pennsylvania. In re Shoenberger, 221 Pa. St. 112, 118, 70 A. 579, 19 L. R. A.
N. S. 290.

«/w re Dalrymple, 215 Pa. St. 367, 374, 64 A. 554. Appeal of Drayton, 61 Pa.
St. (11 P. F. Smith) 172. In re Hale, 161 Pa. St. 181 (till death of life tenant).

^ In re Handley, 181 Pa. St. 339, 346, 37 A. 587, reversing judgment, 3 Lack.
Leg. N. 9.

Sec. 188. Manumission of Slave.

The manumission or bequest of freedom to a slave by the last
will and testament confers on such slave the identical rights which
would pass if the testator had bequeathed the same slave to

142 INHERITANCE TAX LAW. [§188.

another person, and therefore the bequest of freedom is a legacy
on which the executor is Hable to pay a tax on the appraised value
of the slave.^ The court bases its decision on the theory that a
large part of the personal property in the state consists of slaves,
which should pay their share of the taxes.^

^State V. Dorsey, 6 Gill (Md.) 388.
^Spencer v. Negro Dennis, 8 Gill (Md.) 314.

CHAPTER XXVI.

PLEDGE OR COLLATERAL.

§ 189. When Collateral Redeemed.
§ 190. Stock Pledged with Brokers.
§ 191. Stock Pledged by Non-Resident.

Sec. 189. When Collateral Redeemed.

Where a resident of New York had pledged stock as collateral
for a loan, and the executor paid the loan and redeemed the stock,
the title to the stock has teverted to the estate of the pledgor and
it is in a situation to be taxed as property of the estate.

In re Hurcomb, 36 Misc. Rep. 755, 74 N. Y. Suppl. 475.

Sec. 190. Stock Pledged with Brokers.

Where the stock was purchased by a stock broker for a cus-
tomer with her own money, and they held the stock as collateral
with other stock deposited with them, the court holds that the
customer was merely the pledgee of the stock, the brokers being
the owners of the property subject to a right to redeem upon pay-
ing the entire amount of the debt, and therefore the stock should
not be included in the transfer of the estate of the customer. A
subsequent sale of the stock by the brokers for the satisfaction of
their lien extinguishes whatever right or title the decedent had,
and demonstrated that instead of being the owner of the property
the estate was indebted in a large sum to the brokers.

In re Havemeyer, 32 Misc. Rep. 416, 66 N. Y. Suppl. 722.

Sec. 191. Stock Pledged by Non-Resident.

The testator was a non-resident of New York and had a specu-
lative stock account with brokers in the city of New York, and on the
day of his death owed them large sums of money on stocks and
bonds purchased by them for him with their own money. The
court holds that the deceased was under contract with the brokers
to apply certain pledged securities to the payment of the debt
and the executrix performed that contract. The executrix argued

144 INHERITANCE TAX LAW. [§ 191.

that having paid a portion of the debt with pledged non-taxable
securities, which are not under the transfer law tax considered
as "property" in this state, she has a right to treat such portion
of the debt as still existing for the purpose of offsetting against it
property otherwise taxable. But the court holds that the execu-
trix cannot argue that the balance of the debt, after applying
taxable property pledged which has actually been paid with non-
taxable securities pledged for that purpose, should be carried as a
debt to credit and offset against clearly .taxable property. And
while for the purposes of taxation non-taxable property is not to
be treated as taxable property, yet it was part of the estate of the
deceased which passed to the executrix, and she chose to cause its
sale and application to the debt of the deceased; and therefore
the balance of the taxable property in the state of New York con-
sisting of real estate and personal property is subject to the tax.^

The testator, a resident of Illinois, at his death was the owner of
bonds and stocks actually within the state of New York of corpora-
tions organized under the laws of New York state; and he also
owned other personal property in New York, the aggregate value
of all this property being about $774,000. At the time of his
death he was indebted to various persons in New York in the sum
of something over $800,000. That indebtedness was secured by a
pledge of bonds actually located with the state worth $20,000 and
partly by a pledge of stock of various corporations incorporated
under the laws of states other than the state of New York, the
market value of such stocks being in excess of the amount of the
whole indebtedness. The court holds that for the purposes of
taxation the testator's personal estate in New York amounted
to $744,000, from which should be deducted the expenses of ad-
ministration, executor's commissions and debts to the amount of
$58,000, that being the value of the bonds and of the stock of New
York corporations pledged as collateral security to the creditors
in the city of New York. It was claimed that inasmuch as the
decedent at the time of his death was indebted to local creditors
to an amount greater than the market value of the local assets,
there was no property of the decedent within the state of New York
subject to a transfer tax; and that all the local assets of the dece-
dent were primarily liable for the payment of the indebtedness to
local creditors to the entire extent of such property; and that
the local assets to the amount of $58,000 specifically pledged as
collateral security for the payment of the indebtedness to local

§ 191.] PLEDGE OR COLLATERAL. 145

creditors are liable to be entirely used for the purpose of such
payment.

Where the whole estate is within the state of New York and
the decedent is a resident of the state, undoubtedly debts are
to be deducted from the value of the property, but in this case the
indebtedness to the New York creditors is a general indebtedness
against the whole estate. Here domestic creditors have in their
hands legal title by a pledge and a right to resort for the payment
of their debts to securities belonging to a non-resident decedent
which are not taxable under the laws of this state; and therefore
the indebtedness due such creditors is not to be offset against the
value of the property of such decedent otherwise taxable under the
transfer law of the state.^

1 In re Burden, 47 Misc. 329, 95 N. Y. Suppl. 972.

2 In re Pullman, 46 N. Y. App. Div. 574, 62 N. Y. Suppl. 395.

CHAPTER XXVII.

DOUBLE TAXATION.

§ 192. Disputed Domicile.

§ 193. Double Taxation at Domicile of Owner and at Situs of Property.

§ 194. Reciprocal Provisions.

§ 195. Lapsed Legacy.

§ 196. The Louisiana Rule.

Sec. 192. Disputed Domicile.

Where the proper state court administers the estate of a decedent
as that of a resident, and its decree is by state law binding on all
claimants against the estate, a final decree by such a court after
payment of the tax is a bar to proceedings in the courts of another
state on the theory that the decedent resided there. ^ But where
the first decree does not purport to be binding on all claimants,
it is perfectly possible that the courts of two states may each decide
the decedent to be a resident of that state, in which case each state
will assess on the whole property on that basis. ^

1 Tilt V. Kelsey, 207 U. S. 43, 28 S. Ct. 1, 52 L. Ed. 95.

^ The fact that the California courts decided that a certain decedent was a
resident of California and administered his estate and assessed a tax on that
basis does not bar the New York courts. It is not res judicata as to them, as the
California decree was by California law binding only on "heirs, legatees or
devisees," and did not purport to adjudicate taxes. In re Cummings, 142 App.
Div. 377, 127 N. Y. Suppl. 109, reversing 63 Misc. 621, 118 N. Y. Suppl. 684.

Where there is a question whether a married woman is domiciled within the
state of New Jersey or of New York, the fact that the will was never probated
in New Jersey, but the probate was taken out in New York, does not deprive
the state of New Jersey of jurisdiction to levy an inheritance tax upon it. The
authority of the surrogate does not depend upon the probate of the will, which
speaks from the death of the testatrix. In re Hartman, 70 N. J. Eq. 664, 668,
62 A. 560.

Certain facts proving domicile are considered ante, s. 19, n. 3.

The extra-territorial effect of a judgment as to domicile is considered ante, s.21.

Sec. 193. Double Taxation at Domicile of Owner and at
Situs of Property.

Double taxation, both in the state where the property is situ-
ated and in the state of its owner's domicile, has been so often

§ 194.] DOUBLE TAXATION. 147

approved by our highest courts that its validity can no longer be
disputed,^ whether or not the tax was in force befo.e the property
was placed in the foreign jurisdiction .^

^ Frothinghatn v. Shaw, 175 Mass. 59, 61, 78 Am. St. Rep. 475. In re Stanton,
142 Mich. 491, 105 N. W. 1122, 12 Detroit Leg. N. 829. Mann v. Carter, 74 N. H.
345, 68 N. E. 130, relying on the following cases: Hartman Case, 70 N. J. Eq.
664, 667; Hopkins Appeal, 77 Conn. 644; Bridgeport Trust Co., 77 Conn. 657;
Matter of Swift, 137 N. Y. 77, 18 L. R. A. 709; Matter of Houdayer, 150 N. Y.
37, 34 L. R. A. 235, 55 Am. St. Rep. 642; State v. Dalrymple, 70 Md. 294,
3 L. R. A. 372; Eidman v. Martinez, 184 U. S. 578, 581. (But see In re Joyslin,
76 Vt. 88.) In re Lewis, 203 Pa. St. 211, 217, 52 A. 215. Blackstone v. Miller,
188 U. S. 189, 23 S. Ct. 277, 47 L. Ed. 439, affirming 171 N. Y. 682, 69 N. Y.
App. Div. 127 (not a deprivation of the privileges and immunities of a citizen
of another state or a violation of the fourteenth amendment).

"The question presented is not one of general equities, but of jurisdic-
tion. It has been held and logically tha the taxing authorities must be con-
trolled solely by the laws of the state, and not by proceedings in another and
distinct jurisdiction, to ascertain whether or not a certain tax should be levied
or collected. Payment in one state is not a defence when called upon to pay in
the other unless so provided by law. Mann v. State Treasurer, 74 N. H. 345,
68 A. 130, 15 L. R. A. N. S. 150. Blackstone v. Miller, 188 U. S. 189, 206, 207,
23 Sup. Ct. 277, 47 L. Ed. 439." Per Root, J., in In re Douglas County, 84 Neb.
506, 121 N. W. 593.

"The fact that two states, dealing each with its own law of succession, both
of which the plaintiff in error has to invoke for her rights, have taxed the right
which they respectively confer, gives no cause for complaint on constitutional
grounds. The universal succession is taxed in one state, the singular succession
is taxed in another. The plaintiff has to make out her right under both in order
to get the money." Per Holmes, J., in Blackstone v. Miller, 188 U. S. 189, 207,
23 S. Ct. 277, 47 L. Ed. 439, affirming 171 N. Y. 682, 69 N. Y. App. Div. 127.

Where the testator died living in New Hampshire and having savings bank
deposits in Massachusetts, these deposits are subject to tax in New Hampshire
although they were also subject to tax in Massachusetts. This is not double
taxation, as the two burdens are created by two different independent states for
wholly different local purposes. Mann v. Carter, 74 N. H. 345, 68 N. E. 130.

Double taxation should he avoided in construction when possible. In re Enston,
113 N. Y. 174, 182, 21 N. E. 87, 3 L. R. A. 464, 22 N. Y. St. 569, reversing
46 Hun 506, 19 Abb. N. Cas. 227, 10 N. Y. St. 380.

* The fact that the law imposing a tax was in force before the deposit was
made by a non-resident in New York does not seem to be relied upon by the
court. Blackstone v. Miller, 188 U. S. 189, 23 S. Ct. 277, 47 L. Ed. 439. affirm-
ing 171 N. Y. 682, 69 N. Y. App. Div. 127, relying upon Magoun v. Illinois
Trust &f Savings Bank, 170 U. S. 283.

Sec. 194. Reciprocal Provisions.

The following states have reciprocal provisions for the inherit-
ance tax paid in another state: West Virginia, statute of 1904,

148 INHERITANCE TAX LAW. [§195

chapter 6, sect. 6; Massachusetts statute 1907, chapter 563, sect.
3; Vermont Statute 1904, number 30, sect. 3. Connecticut
tried a reciprocal provision, statute of 1903, chapter 63, but
has now adopted a retaliatory arrangement, statute of 1907,
chapter 179.^

This has been construed in Vermont to cover only what is
actually paid to the foreign jurisdiction, after deducting the
discount there allowed, and not to include the tax actually
there assessed.^

^ "The amendment passed in 1903 removed the bar erected by the original
act, against the use of any of its provisions for imposing a transfer tax on per-
sonal property of non-residents. It proceeds to authorize such a transfer tax
and to prescribe the machinery for its collection, coupling this, however, with
instructions to the treasurer not to collect such transfer tax in any case where
the decedent resided in a state which does not collect transfer or succession taxes
from personal property therein 'belonging to the estates of Connecticut dece-
dents.' The amendment recognizes the justice of the scheme adopted in the
original act, and attempts its modification only so far as may be necessary to
add to the force of example the influences of reciprocity." Per Hammersley, J.,
in In re Gallup, 76 Conn. 617, 627, 57 A. 699.

2 In re Meadon, 81 Vt. 490, 70 A. 1064.

Sec. 195. Lapsed Legacy.

Double taxation was enforced rigidly in the following English
case: The father died leaving certain fees to his son; the son
died leaving issue which survived the father and devising the
property to trustees upon certain trusts.

The English wills act, section 33, provides that where property
is devised to the child of the testator who dies in the tes-
tator's lifetime leaving an issue which survives the testator,
such devise "shall not lapse but shall take effect as if the
death of such person had happened immediately after the
death of the testator."

The findings act provides that an estate duty shall be levied on
all property passing at a person's death, of which the deceased was
at the time of his death competent to dispose. The government
collected an inheritance tax from the father's estate and the court
further holds that the effect of the wills act was to pass the real
estate to the child in fee to devolve as part of his property, and
consequently that it was subject to a second inheritance tax from
his executors.

In re Scott (Eng.), 83 L. T. 613.

§ 196.] DOUBLE TAXATION. 149

Sec. 196. The Louisiana Rule.

The Louisiana constitution forbids an inheritance tax when
the property passing has borne its just proportion of taxes prior
to the death of the decedent. This exempts an interest in a part-
nership which has paid the usual taxes/ but not stock in a corpora-
tion which has paid the tax.^

The contract of an insurance agent with his company pro-
vided that in case of his death his representative should be entitled
to certain commissions on renewals. It was claimed that as the
premiums had been taxed, therefore the inheritance tax should
not be laid. The court holds, however, that the premiums do not
form the subject-matter of the inheritance, but are due to and are
paid to and belong to the company, and the heirs inherit simply
an incorporeal right whose only relation to the premiums is that
its amount is determined by a computation based on their net
amount, and the contract does not invest the heirs with the owner-
ship of the premiums Or any part thereof, but only with the right
to require of the insurance company payment of an amount of
money measured by the net amount of the premiums, and the
right thus inherited has never been assessed and has never borne
taxes .^

It was argued that the tax should not be collected on bonds
belonging to the estate, because in 1905 the decedent sold certain
real estate on which the taxes had been paid and with the proceeds
of the sale during the same year purchased bonds which she
owned at the time of her death in January, 1906. It is not con-
tended that any taxes have ever been paid on these bonds but it
is argued that as the decedent had paid all taxes assessed against
her real estate and with the proceeds of the sale purchased bonds,
the latter must be construed in the light of property which has borne
its just proportion of taxes. The court holds that there would be
weight in this contention if the constitution had exempted persons
who have paid all the taxes assessed against them, but as the law
excepts property inherited it cannot construe the article so as to
substitute persons for property. The question of the exemption
of property from the tax can only arise after the opening of the
succession by the death of the decedent, and the right of the heirs
and of the fisc must be determined by the state of facts then exist-
ing. That other property formerly owned by the decedent may
have borne its just proportion of taxes is a matter entirely foreign
to the inquiry.^

150 INHERITANCE TAX LAW. [§196.

^Succession of Stauffer, 119 La. Ann. 66, 43 S. 928.

2 The taxation of corporate capital stock, franchises and property is not a
taxation of the shares held by individual stockholders; and therefore these
taxes are not exempt from the operation of the inheritance tax law of 1904.
Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

^Succession of Fell, 119 La. Ann. 1037, 44 S. 879.

^Succession of Pritchard, 118 La. Ann. 883, 43 S. 537.

CHAPTER XXVIII.

ESTATES OF NON-RESIDENT DECEDENTS.

§ 197. Realty of Non-Resident. — Corporation Owning Property in

State.
§ 198. Personalty of Non-Resident.
§ 199. Jurisdiction Based Solely on the Situs of Personal Property

in the State.
§ 200. Domestic Stock Owned by Non-Resident.
§ 201. Non-Resident's Stock in Foreign Corporation.
§ 202. Where Beneficiary Alone is within the Jurisdiction.
§ 203. Removal of Property before Taxation.
§ 204. Marshaling Local Assets of Non-Resident.
§205. Federal Act of 1898. — AUens.
§ 206. Effect of Place of Execution of Will.

Sec. 197. Realty of Non-Resident. — Corporation Owning
Property in State.

The succession to real estate depending on the law of its situs,
real estate of a non-resident may well be subject to an inheritance
tax at its situs/ and not at the domicile of the decedent.^

Some states, as appears in our table at p. 1285, are claiming an
inheritance tax on stock of non-residents in corporations which
are not even organised under their laws, but own property within
the state. We know of no decisions supporting such a tax, and
believe that the general principles of corporate taxation forbid it.
It would seem to be involved in the reasoning of the court in a
recent New York case, which discusses the distinction between a
corporation and a joint stock association.^ Such a tax might
conceivably be justified under some such language as follows: —

"The attitude of a holder of shares of capital stock is quite
other than that of a holder of bonds towards the corporation
which issued them. While the bondholders are simply creditors,
whose concern with the corporation is limited to the fulfillment of
its particular obligation, the shareholders are persons who are
interested in the operation of the corporate property and fran-
chises, and their shares actually represent undivided interests in
the corporate enterprise. The corporation has the legal title to

152 INHERITANCE TAX LAW. [§197.

all the properties acquired and appurtenant, but it holds them
for the pecuniary benefit of those persons who hold the capital
stock. They appoint the persons to manage its affairs, they
have the right to share in surplus earnings, and, after dissolution,
they have the right to have the assets reduced to money and to
have them ratably distributed. Each share represents a distinct
interest in the whole of the corporate property."^

The same court has, however, recently distinctly denied the
validity of such a tax.^

^Appeal of Gallup, 76 Conn. 617, 57 A. 699. In re Vinot, 7 N. Y. Suppl. 517.
Callahan v. Woodbridge, 171 Mass. 595, 598. Thomson v. Lord Advocate, 12 Clark
& Finnelly 1. Contra, In re Stanton, 142 Mich. 491, 105 N. W. 1122, 12 Detroit
Leg. N. 829.

A note in 19 Harvard Law Review, p. 201, discusses the liability of foreign
real estate to the collateral inheritance tax. The editor points out that the
inheritance tax being a tax on a privilege in the case of personalty each state
allows the property within its jurisdiction to pass by the law of the state of the
decedent's domicile and therefore two states may each grant a privilege and
may each levy a tax. But in the case of realty title passes by the lex rei sitcB and
that state alone controls the privilege of succession.

^Lorillard v. People, 6 Dem. Surr. (N. Y.) 268. Commonwealth v. Coleman,
52 Pa. St. 468. In re Bittinger, 129 Pa. St. 338.

The heirs and legatees do not receive by inheritance under the laws of Louisiana
real estate in another state. The legislature must be supposed to have measured
the burden of the tax by the extent of the right and privilege which it has itself
conferred and not upon that which has been conferred by the laws of another
state. Succession of Westfeldt, 122 La. Ann. 836, 48 S. 281.

'/« re Jones, 172 N. Y. 575, 65 N. E. 570, 60 L. R. A. 476, reversing 69 N. Y.
App. Div. 237, 74 N. Y. Suppl. 702, reported more fully ante, s. 181.

^Per Gray, J., in In re Bronson, 150 N. Y. 1, 8, 44 N. E. 707, 34 L. R. A. 238,
55 Am. St. Rep. 632, modifying 1 N. Y. App. Div. 646, 37 N. Y. Suppl. 476.

Stock was called an "interest" in corporate property in In re Culver, 145 Iowa
1, 123 N. W. 743.

^"The assessment of the stockholder is computed upon the value of his inter-
est in the whole of the corporate property, as evidenced by the number of the
shares of stock which he holds. Their market value may, or may not, represent,
proportionately, the actual value of the corporate properties. Very often it
does not and the market value of the shares of capital stock may be quite dis-
proportionately influenced by considerations, or by circumstances, having little
reference to actual conditions. That value, whatever it may be in the market,
is the worth attached to an interest in the corporate assets and properties, re-
garded as a whole. A share, of capital stock represents the distinct interest
which its holder has in the .corporation, and his right to participate in the dis-
tribution of the neti earnings of the corporation, as a going concern, or in that
of its assets, upon a dissolution, and is proportionate to the number of shares which
he holds. They evidence the extent of his proprietary interest and their assess-
ment for taxation purposes must be upon that interest, regarded as an entity.

§ 198.] ESTATES OF NON-RESIDENT DECEDENTS. 153

and is unapportionable with reference to the situs of the corporate properties.
The tax, imposed by the state upon the transfer of such property, upon the
decease of its owner, is not upon the property which passes; it is upon the right
of succession to it. The transfer tax act operates upon that general right to
succeed to the interest of the deceased in the corporation, and it is inconceivable
that the value of the interest, upon which the tax is computed, is determinable by
the location of the corporate properties." Per Gray, J., in In re Palmer, 183
N. Y. 238, 241, 76 N. E. 16, affirming 102 N. Y. App. Div. 616, 92 N. Y. Suppl.
1137. (See further, post, s. 211.)
[Status of stock pledged by non-resident, see ante, s. 191.]
[Jurisdiction of probate courts over real estate of non-resident decedents,
see post, s. 388.]

[Ancillary administration in case of non-residents, see post, s. 389.]
[Exercise by non-resident of power under will of resident, see ante, s. 20.]
[Application of tax acts to estates of non-residents, see ante, s. 19.]

Sec. 198. Personalty of Non-Resident.

Personal property of a non-resident is subject to tax by the
state wliere the property is situated,^ except in Pennsylvania,
which holds that securities of a non-resident, though physically
within the state, are not subject to the inheritance tax.^ This
does not apply to tangible property within the state, which is
subject to tax even in Pennsylvania.^

1 Callahan v. Woodbridge, 171 Mass. 595, 597. Greves v. Shaw, 173 Mass. 205,
210. Frothingham v. Shaw, 175 Mass. 59, 78 Am. St. Rep. 475. Neilson v.
Russell, 76 N. J. L. 655, 71 A. 286, reversing 76 N. J. L. 27, 69 A. 476. Dixon v.
Russell, 79 N. J. L. 490, 76 A. 982, reversing 78 N. J. L. 296, 73 Atl. 51. Tilford
v. Dickinson, (N. J., 1911,) 79 Atl. 1119, reversing 79 N. J. L. 302, 75 Atl.
574. Alvany v. Powell, 2 Jones Eq. (N. C.) 51. In re Romaine, 127 N. Y.
80, 85, 27 N. E. 759, 12 L. R. A. 401, affirming 58 Hun 109 (the act of
1887 did not discriminate between testators and intestates). In re Lord, 186
N. Y. 549, 79 N. E. 1110, affirming 111 N. Y. App. Div. 152, 97 N. Y. Suppl. 553.
In re Vinot, 7 N. Y. Suppl. 517. Contra, Appeal of Gallup, 76 Conn. 617, 57 A.
699, construing phrase, "property within the jurisdiction of this state"; an
amendment, however, striking out the words "by the inheritance laws of this
state" and inserting instead "by inheritance" allows such taxation.

The state has a right to tax personal estate of non-residents which exists
in the state of New York. In re Romaine, 127 N. Y. 80, 86, 27 N. E. 759, 12
L. R. A. 401, affirming 58 Hun 109.

As to personal property within the state of New York belonging to non-
resident decedents, succession is under the law of a foreign state and ihat suc-
cession cannot be taxed by New York. In such case the right of the state to
impose a tax is based on its dominion over the property situated within its ter-
ritory. This is a property tax on such property. In re Embury, 154 N. Y. 746,
49 N. E. 1096, affirming 19 N. Y. App. Div. 214, 45 N. Y. Suppl. 881.
^ The legal right of the legislature to tax the succession to "property of a
non-resident owner rests upon the fact that the property is within the state

154 INHERITANCE TAX LAW. [§198.

and subject to its jurisdiction. This power is as large in reference to the property
of a non-resident decedent as in reference to that of the inhabitants of the com-
monwealth. It covers the property within the jurisdiction. A ground for its
exercise is that the property has the protection of our laws and that our laws are
invoked for the administration of it when a change of ownership is to be effected."
Per Knowlton, J., in Callahan v. Woodhridge, 171 Mass. 595, 597.

N. Y. St. 1885 imposed a tax only on the property of resident decedents.
In re Hall, 55 Hun 608, 8 N. Y. Suppl. 556, following In re Enston, 113 N. Y.
174, 21 N. E. 87.

**There are three plans which may be followed in subjecting the estate
of a deceased person to a succession tax : (1) A tax based upon the distribution
of the net proceeds of a decedent's property to the persons upon whom it devolves
by force of the laws of the taxing state. This plan includes in the estate subject
to the tax the net proceeds of a decedent's land situate in the taxing state, and in
case the decedent was domiciled in the taxing state, but not otherwise, of all his
personal property. (2) A tax based upon any transfer, actual or potential, of a
decedent's personal property situate at his death within the taxing state, whether
the net proceeds of that property pass to the decedent's beneficiaries by force
of the laws of the taxing state or not. Under this plan the tax is more nearly
akin to an ordinary transfer duty. (3) The inclusion in one act of a tax under
each of these plans. There would seem to be no constitutional objection to the
adoption of either plan. Blackstone v. Miller, 188 U. S. 189, 23 Sup. Ct. 277,
47 L. Ed. 439. Our succession tax is laid in pursuance of the first plan, and the
act is framed in view of the existing law of domicile in relation to this subject."
Appeal of Gallup, 76 Conn. 617, 621, 57 A. 699.

The English Rule. "We have no difficulty in distinguishing between this
and the English cases. In those cases the several acts of parliament imposing
probate, legacy and succession duties underwent construction. In England the
question of probate duty depends upon the situs of the property and not the
domicile of the owner. Attorney General v. Hope, 1 Cromp., Mes. & Ros. 530.
It was for some time held that the legacy duty imposed by 36 Geo. Ill, ch. 52,
and 48 Geo. Ill, ch. 149, depended upon the same consideration. Attorney
General v. Cockerill, 1 Price 165. But these cases were overruled in Thompson
V. Advocate General, 12 Clark & Finnelly 1, and the principle was settled that the
law of the domicile of the owner of personal property determines its liability to
legacy duty. The same rule was adopted in respect to the succession duty under
16 and 17 Vic, ch. 51. Wallace v. Attorney General, L. R., 1 Ch. App. C. 1. In the
case last referred to. Lord Chancellor Cranworth said, 'Parliament has, no
doubt, the power of taxing the succession of foreigners to their personal property
in this country; but I can hardly think we ought to presume such an intention
unless it is clearly stated.' Thus whilst the power of parliament to impose the
tax without reference at all to the subject of domicile is distinctly recognized,
it was held that the language of the acts did not furnish any indication of an
intention to exercise that power, and that therefore the law of the domicile
of the owner fixed the liability of his property to pay these taxes. In our opinion,
for the reasons we have given, the Maryland statute cannot be so construed."
Per McSherry, J., in State v. Dalrymple, 70 Md. 294, 304, 17 A. 82, 3 L. R. A.
372.

2 In re Schoenberger, 221 Pa. St. 112, 119, 70 A. 579, 19 L. R. A. (N. S.) 290.

§ 199.] ESTATES OF NON-RESIDENT DECEDENTS. 155

Property in Hands of Agent. Where the testator was not a resident of
Pennsylvania and died in 1898, leaving property in Pennsylvania which had for
a long while been in Pennsylvania in the hands of an agent for purposes of invest-
ment and reinvestment, this personal property is within the state of Pennsylvania,
and where by agreement of the parties the property was distributed by an
administrator appointed in Pennsylvania, the court holds that the Pennsylvania
tax should be levied. In re Lewis, 203 Pa. St. 211, 214, 52 A. 205. Singer v.
Guarantee Trust & Safe Deposit Co., 24 Pa. Super. Ct. 270.

In re Lewis, 203 Pa. St 211, was said not to be a convincing authority — one
which was decided upon its own peculiar facts, and is not to be stretched, in
In re Schoenberger, 221 Pa. St. 112, 119, 70 A. 579, 19 L. R. A. (N. S.) 290.

^Small's Appeal, 151 Pa. St. 1.

Sec. 199. Jurisdiction Based Solely on the Situs of Personal
Property in the State.

Jurisdiction for the purpose of the inheritance tax will not
arise usually simply on account of the location in the state of
intangible property,^ such as stock ^ and bonds,^ although this
result has been reached under some statutes which have been
construed as taxes on property.*

"The tendency of modern legislation in this country is to extend
the state's taxing power to all property within its jurisdiction, and
this is especially true as to inheritance taxes on the right of suc-
cession to all property, whether real or personal, tangible or in-
tangible, which passes, testate or intestate, from decedents to
other persons.

The ancient maxim that movables follow the domicile of the
person was an outgrowth of conditions which have long since
ceased to exist, and the rule has been greatly limited in certain
matters, such as taxation and the subjecting of personal property
of non-residents to the claims of local creditors."^ So the tax has
been imposed on personal property of non-residents left in the
state,^ such as bonds ^ and stock, which are often regarded as tangible
assets,^ deposits in banks ,^ or money left for investment with
stockbrokers,^^ or other securities kept in the state for safety. ^^
Even this doctrine may not apply to property casually brought into
the state for a temporary purpose.^^

1 In re Enston, 113 N. Y. 174, 178, 21 N. E. 87, 3 L. R. A. 464, 22 N. Y. St.
569, reversing 46 Hun 506, 19 Abb. N. Cas. 227, 10 N. Y. St. 380, 5 Dem. Surr.
93, 8 N. Y. St. 781. Thomson v. Advocate General, 12 Clark & Finnelly 1.

2 People V. Griffith, 245 111. 532, 543, 92 N. E. 313. In re Stanton, 142 Mich.
491, 494, 105 N. W. 1122, 12 Detroit Leg. N. 829.

Stock in foreign corporations belonging to a non-resident is not taxable in
New York simply because the certificates were in the state of New York at the

156 INHERITANCE TAX LAW

199.

date of the death of the testator. The stock of foreign corporations which
formed part of this estate were not property in the legal sense. The share certifi-
cates which the testator held represented interests which he possessed in the
corporations which issued them and the legal situs of that species of personal
property is where the corporation exists or where the shareholder has his domicile.
In re James, 144 N. Y. 6, 12, 38 N. E. 961, affirming 77 Hun 211, 27 N. Y.
Suppl. 288, 6 Misc. 206.

"The corporate stocks of the decedent were not, under the general laws of
this state, taxable here, although the share certificates may have been held
here by her agents. The certificates are in no general sense property. They
simply represent interests in the corporations, and the situs of the property
owned by a shareholder in a corporation is either where the corporation exists
or at the domicile of the shareholder; it can in no proper sense be said to be where
the certificates happen to be in the hands of an agent in a state where the cor-
poration has no existence and the owner no domicile. So, too, the bonds of
foreign corporations in the hands of the agents of the decedent here were not,
in a legal sense, property within this state, and they were not, under the general
laws or the policy of the state, taxable here. On the contrary, they were, by
the general policy of the state, exempted from taxation here. There is nothing in
the act of 1885 from which it can be inferred that the legislature meant so far
to depart from its general system and policy of taxation as to impose here a
succession tax upon property thus situated. It was dealing with taxation upon
the property of persons domiciled here, and used language sufficient to impose
taxation upon such property, but not upon property of non-residents which had
no situs in this state. It cannot be presumed that it was the intention of the
legislature to impose taxation upon all the property of any decedent found within
this state. Suppose a foreigner should come here with negotiable securities in
his possession for the purpose of buying property here, and soon after should
die here. Or suppose a merchant should come here from some other state with
negotiable drafts or securities in his possession and should die here shortly after
reaching this state; can it be supposed in either of such cases that it was the
legislative intent that before the property of the decedent could be taken out
of this state to the jurisdiction of his domicile it should be subjected to a tax to
enhance the revenues of the state? Then, again, if this act is to be so construed
as to reach personal estate of non-resident decedents, how is it to be administered ?
There are no means of ascertaining here how much of the estate will pass to
collateral relatives under a will or by intestacy. That can only be known after
the entire expenses of administration and the debts and liabi'ities of the deceased
have been ascertained and deducted at the place of his domicile. Suppose a non-
resident dies, leaving $1,000,000 in this state, and is largely indebted at the
place of his domicile, what his net estate will be after deducting debts and expenses
of administration can only be ascertained at his domicile, where his estate must
be finally administered, and adjusted, and there can be no way of adjusting the
estate here, as there is no machinery in the law here appropriate to such a pur-
pose; and thus it would be impractical to administer this statute." Per Andrews,
J., in In re Enston, 113 N. Y. 174, 181, 21 N. E. 87, 3 L. R. A. 464, 22 N. Y.
St. 569, reversing 46 Hun 506, 19 Abb. N. Cas. 227, 10 N. Y. St. 380, 5 Dem.
Surr. 93, 8 N. Y. St. 781.

§ 199.] ESTATES OF NON-RESIDENT DECEDENTS. 157

3 People V. Griffith, 245 111. 532, 543, 92 N. E. 313. In re Gibbes, 176 N. Y.
565, 68 N. E. 1117, affirming 84 N. Y. App. Div. 510, 83 N. Y. Suppl. 53, revers-
ing 83 N. Y. Suppl. 56.

Rights to Unsigned Bonds. The decedent died in 1905, a resident of
Alabama. He was a stockholder in a certain foreign consolidated coal company .
The decedent was the president of the consolidated company, which executed a
deed of trust to a New York trust company, conveying their property to secure
a bond issue. The decedent as president of the consolidated company com-
menced to sign these bonds in Alabama, but they were never all signed by him
before his death. The decedent was entitled to some of these bonds, but he
never received any certificate from the New York trust company or any one
else that he was entitled to them, although such a certificate was delivered to
his executrix after his death. The direction of the vice-president of the con-
solidated company to the New York trust company to deliver to the decedent
five hundred thousand of the bonds of the consolidated company, directing that
such bonds be deposited with the trust company for safe keeping in his name,
and the receipt therefor sent to the consolidated company at Alabama, cannot be
considered as a legal disposition of the bonds which belonged to the coal company,
so that they thereby became the property of the decedent. If the decedent
received these bonds it would be as president of the coal company. This right
to receive these bonds of the foreign corporation which were never executed and
which the decedent, a non-resident, was entitled to receive because he was a
stockholder of another foreign corporation, was not property within this state
and was not subject to taxation. In re Hillman, 116 N. Y. App. Div. 186, 101
N. Y. Suppl. 640.

* The statute is laid on the amount of the estate being within the common-
wealth and the domicile has nothing to do with the question, so the tax should
be collected where one domiciled in France bequeathed a legacy to a citizen of
France out of personal property situated in Pennsylvania. Commonwealth v.
Smith, 5 Pa. St. (5 Barr.) 142.

^ People v. Griffith, 245 111. 532, 92 N. E. 313.

6 People V. Griffith, 245 111. 532, 543, 92 N. E. 313. In re James, 144 N. Y.
6, 10, 38 N. E. 961, affirming 77 Hun 211, 27 N. Y. Suppl. 288, 6 Misc. 206,
In re Gibbes, 176 N. Y. 565, 68 N. E. 1117, affirming 84 N. Y. App. Div. 510.
83 N. Y. Suppl. 53, reversing 83 N. Y. Suppl. 56. Alvany v. Powell (1854),
55 N. C. 61 (explained in State v. Brinn, 57 N. C. 300). See In re Bronson, 150
N. Y. 1, 4, 44 N. E. 707, 34 L. R. A. 238, 55 Am. St. Rep. 632, modifying 1 N. Y.
App. Div. 546, 37 N. Y. Suppl. 476.

^ Callahan v. Woodbridge, 171 Mass. 595, 598. In re Whiting, 150 N. Y. 27,
29, 44 N. E. 715, 34 L. R. A. 232, 55 Am. St. Rep. 640,. modifying 2 N. Y. App.
Div. 590, 38 N. Y. Suppl. 131. In re Merriam, 141 N. Y. 479, 36 N. E. 505,
affirmed in United States v. Perkins, 163 U. S. 625, 16 Sup. Ct. 1073, 41 L. Ed. 287.

»/» re Merriam, 141 N. Y. 479, 485, affirmed in United States v. Perkins, 163
U. S. 625. In re Whiting, 150 N. Y. 27, 29, 44 N. E. 715, 34 L. R. A. 232, 55
Am. St. Rep. 640, modifying 2 N. Y. App. Div. 590, 38 N. Y. Suppl. 131. Com-
monwealth V. Smith, 5 Pa. St. 142. See, however, the New York act of 1911
defining tangible assets.

»/wre Romaine, 127 N. Y. 80, 88, 27 N. E. 759, 12 L. R. A. 401, affirming
58 Hun 109. The court remarks that "no one doubts that succession to a

158 INHERITANCE TAX LAW. [§200.

tangible chattel may be taxed wherever the property is found and none the less
that the law of the situs accepts its rules of succession from the law of the domicile,
or that by the law of the domicile the chattel is part of a universitas and is taken
into account again in the succession tax there." The court holds that there is
no distinction for the purposes of taxation between the power to tax chattels of
a non-resident within the state and his rights in a deposit in a trust company
within the state. Blackstone v. Miller, 188 U. S. 189, 204, 23 S. Ct. 277, 47 L.
Ed. 439, affirming 171 N. Y. 682, 69 N. Y. App. Div. 127. In re Myers Estate,
129 N. Y. Suppl. 194.

10 In re Daly, 100 N. Y. App. Div. 373, 91 N. Y. Suppl. 858, reversing 37 Misc.
724, 76 N. Y. Suppl. 507.

In Hands of Agent. The court does not determine whether a non-resident
creditor by placing intangible property in the hands of an agent within this
state for management and control for business purposes may fix its situs for
taxation. Gilbertson v. Oliver, 129 Iowa 568, 105 N. W. 1002, 4 L. R. A. N.S.953.

11 In re Tiffany's Estate, 128 N. Y. S. 106, 143 App. Div. 327, affirmed 95 N. E.
1140. "Where, however, the money of a non-resident is invested in this
state as it was by Mr. Romaine in the bond and mortgage in question, and in the
deposits made by him in the savings banks, or where the property of a non-
resident is habitually kept, even for safety, in this state, we think that the
statute applies both in the letter and spirit. Such property is within this state
in every reasonable sense, receives the protection of its laws and has every
advantage from government, for the support of which taxes are laid, that it
would have if it belonged to a resident." Per Vann, J., in In re Romaine, 127
N. Y. 80, 88, 27 N. E. 759, 12 L. R. A. 401, affirming 58 Hun 109. See In re
Tulane, 51 Hun 213, 4 N. Y. Suppl. 36 (securities deposited with safe deposit
company not taxable under the act of 1885).

12 In re Enston, 113 N. Y. 174, 181, 21 N. E. 87, 3 L. R. A. 464, 22 N. Y. St. 9.
In re Phipps, 143 N. Y. 641, 37 N. E. 823, affirming 77 Hun 325, 28 N. Y. Suppl. 330.

"We should hesitate before applying the statute to any property casually
brought into the state for a temporary purpose, as by a visitor or traveler. It
might well be held that such property, although literally 'within this state,'
was not here in the sense meant by the statute, on account of the transitory and
accidental character of its presence and the immediate custody of the owner."
(Citing Herron, Treasurer, v. Keeran, 59 Ind. 472, 476.) In re Romaine, 127
N. Y. 80, 88, 27 N. E. 759, 12 L. R. A. 401, affirming 58 Hun 109.

[Location of assets in state insufficient where decedent died before passage of
statute, see ante, s. 81. [

Sec. 200. Domestic Stock Owned by Non-Resident.

The tax is imposed commonly on a non-resident owner of stock
in a domestic corporation,^ or in national banks located in the
state ,2 or local state stock,* although the certificates are actually
outside the state,'* and although actually transferred in the foreign
jurisdiction before the tax is collected.^

1 People V. Griffith, 245 111. 532, 543, 92 N. E. 313. Greves v. Shaw, 173 Mass.
205. In re Douglas County, 84 Neb. 506, 121 N. W. 593 (stock held in trust for

§ 200.] ESTATES OF NON-RESIDENT DECEDENTS. 159

resident by non-resident trustee). In re Bushnell, 172 N. Y. 649, 65 N. E. 1115,
affirming 73 N. Y. App. Div. 325, 77 N. Y. Suppl. 4 (life tenant and remainder-
man). In re Palmer, 183 N. Y. 238, 240, 76 N. E. 16, affirming 102 N. Y. App.
Div. 616, 92 N. Y. Suppl. 1137. In re Leavitt, 4 N. Y. Suppl. 179.

Reason for Rule. Corporate shares must be regarded as property within the
broad meaning of that term, hence it cannot be said, if the property repre-
sented by a share of stock has its legal situs either where the corporation exists,
or at the holder's domicile, that the state is without jurisdiction over it for taxa-
tion purposes. Therefore, stock held by a non-resident in a New York corporation
is subject to tax under N. Y. St. 1892. In re Bronson, 150 N. Y, 1, 44 N. E.
707, 34 L. R. A. 238, 55 Am. St. Rep. 632, modifying 1 N. Y. App. Div. 546,
37 N. Y. Suppl. 476.

A share of stock in a corporation may be defined as a right which its
owner has in the management, profits and ultimate assets of the corporation.
The shares of stock represent interests in the earnings or the property of the
corporation and a certificate is not stock itself, but only a convenient repre-
sentation of it, though one may be a stockholder without having a certificate
issued to him. The court finds that the decedent owned an "interest" in the
property of the bank within the meaning of the inheritance statute and that
such interest is property within the jurisdiction of the state. In re Culver,
145 Iowa 1, 123 N. W. 743, citing, inter alia, Faxton v. McCosh, 12 Iowa 527.

The New Jersey Rule. A legacy in an English estate of stock in a New
Jersey corporation is not taxable by the New Jersey statute, even if the court
disregards the technical force of the words "inheritance, distribution, bequest
and devise," and looks at the tax as a succession tax. The tax cannot be sus-
tained as a property tax. The ground upon which it can be sustained is that
the rights of testamentary disposition and of succession are creatures of law,
and the court thinks that it follows logically that the only law which can impose
the terms is the law that creates the right. In this case it is the English law.
The title to the stock passed by virtue of the will to the executors from the
moment of the testator's death and the probate was operative only as the authen-
ticated evidence, not as the foundation of the executors' title. The English
executors were authorized without probate in this state to transfer the stock.

The court remarks that the New Jersey administration is ancillary only and
the provisions of the statute authorizing the executors to collect the tax from
the legatee or to take it from the legacy cannot be enforced; and after adminis-
tration here the balance of the estate would probably be transferred to the
English executors for distribution in accordance with the laws of the domicile of
the testator. Neilson v. Russell, 76 N. J. L. 655, 71 A. 286, reversing 76 N. J. L.
27, 69 A. 476. Astor v. State, 75 N. J. Eq. 303, 72 A. 78.

^Greves v. Shaw, 173 Mass. 205. In re Cushing, 40 Misc. Rep. 505, 82 N. Y.
Suppl. 795. See In re Culver, 145 Iowa 1, 123 N. W. 743.

National bank stock is taxable at the place where the bank is located irre-
spective of the domicile of the owner of the shares; but this decision is based on
the national banking act which expressly so provides. Tappan v. Bank, 86
U. S. (19 Wall.) 490, 22 L. Ed. 189.

3/» re Alexander (1845), 3 Clark 87 (county stock and Pennsylvania state
stock owned by an Englishman).
* Greves v. Shaw, 173 Mass. 205, 208.

160 INHERITANCE TAX LAW. [§§201-203.

6/m re Fitch, 160 N. Y. 87, 43 N. E. 701, affirming 39 N. Y. App. Div. 609.

The provisions of the statute are absolute and the statute assumes that the
property will be administered by an executor or administrator appointed in
Massachusetts. It could not be supposed that the question whether the tax
should be levied or not should depend on the ability or inability of the foreign
executor to obtain possession of it without a suit. Greve v. Shaw, 173 Mass.
205, 209.

Sec. 201. Non-Resident's Stock in Foreign Corporation.

Stocks in foreign corporations owned by a non-resident decedent
are not subject to transfer tax.

In re Bishop, 82 N. Y. App. Div. 112, 81 N. Y. Suppl. 474, reversing 40 Misc.
64, 81 N. Y. Suppl. 252. lfa//gr o/Jawe^, 144 N. Y. 6, 38 N. E. 961. See Matter
ofEnston, 113 N. Y. 174, 21 N. E. 87, 3 L. R. A. 464. Dunhamv. City Trust Co.,
115 N. Y. App. Div. 584, 101 N. Y. Suppl. 87 (although the transfer agent is a
New York corporation).

Sec. 202. Where Beneficiary Alone is within the Juris-
diction.

The mere fact that the beneficiaries are residents within the
jurisdiction is not enough on which to predicate jurisdiction to
assess the tax where neither the decedent nor the property are
situated within the state.

State V. Brim, 57 N. C. 300. State v. Brevard, 62 N. C. 141.

Where the testator died domiciled in Cuba, leaving legacies of property in
Cuba to residents of Pennsylvania, no inheritance tax in Pennsylvania can be
collected. In re Hood, 21 Pa. St. (9 Harris) 106. In re Bittinger, 129 Pa. St.
338, 345, 18 A. 132, (land outside state).

An inheritance tax is not upon the property itself but upon the right to
succeed to the property; the succession to the ownership of the property being
by permission of the state the state can impose conditions regarding such privi-
lege or commission. The courts therefore have upheld the imposition of the
inheritance tax whenever the state had jurisdiction of the beneficiary or the
subject matter regardless of the actual location of the personal property or
the domicile of the decedent. People v. Griffith, 245 111. 532, 92 N. E. 313.

Sec. 203. Removal of Property before Taxation.

In states which impose no penalty on foreign executors or
administrators for failure to pay the tax and prescribe no Hen, there
is grave doubt as to the ability of the state to collect the tax from
a non-resident executor or administrator provided he can get the
stock transferred before the state takes any action. As a practical
matter the state authorities are not likely to know of the death

§204.] ESTATES OF NON-RESIDENT DECEDENTS. 161

of a non-resident stockholder, and it would seem easy in these
states to have the stock quietly transferred. For example, in
Michigan, stock of Calumet & Hecla and losceola Mining Company
can be transferred without any reference to the state authorities.

While the New York statute of 1887 was in effect the testator, a non-
resident, died leaving deposits and stocks on deposit in New York. The execu-
tors promptly withdrew it and the court holds that the tax cannot subsequently
be collected under the laws of 1892, as there was then no property of the
estate in New York and the tax cannot be legally imposed unless the statute
in addition to creating a tax provided for an officer or tribunal who shall impose
it and assess the property on notice to the owner. In re Embury, 154 N. Y.
746, 49 N. E. 1096, affirming 19 N. Y. App. Div. 214, 45 N. Y. Suppl. 881.

See ante, ss. 161, 162.

Sec. 204. Marshaling Local Assets of Non-Resident.

The representative of a non-resident decedent may often avoid
a tax by paying local debts with local assets,^ unless the local debts
are secured by a pledge of other assets,^ or by using local assets to
pay beneficiaries who are not subject to tax under local law.^
But where the administrator of the foreign intestate elects to
appropriate all the assets situated within the state of New York
in payment of the distributive share of the intestate's brother,
the court holds that this action cannot prevent the imposition of
an inheritance tax in the state of New York. The court distin-
guishes the case of In re James, 144 N. Y. 6, as in that case the
property was appropriated to the specific legacies, and it was prop-
erty which was in Great Britain and never came within the juris-
diction of New York. The persons entitled to the legacies could
have compelled their payment out of the English fund without
resort to the New York courts. In the case at hand the situation
is radically different. Upon the intestate's death his estate passed
eo instanti to the persons who, by virtue of the intestate law, were
entitled thereto.

The New York statute involves a tax upon transfers based upon
the portion of the estate found within our jurisdiction, but this
is not a tax upon the specific property which passes. The right
of the state to the tax is therefore coincident with the devolution
of title or interest; and the right of the state to exact the tax, as
well as the obligation of the transferee to pay it, depend not upon a
formal, complete and immediate change of title or possession,
but upon the instant right to a beneficial share or interest subject
only to the due administration of the estate.

162 INHERITANCE TAX LAW. [§204.

"When a specific foreign legatee of a foreign testator can obtain
satisfaction of his legacy in a foreign jurisdiction, the executor
cannot be compelled to pay such a legacy out of the assets within
our jurisdiction. This is the necessary result of the practical
and obvious distinction between testacy and intestacy as applied to
this subject of taxation. If a specific legatee needs not the interven-
tion of our laws or courts to obtain what comes to him under a
foreign will through foreign assets in a foreign jurisdiction, our
laws cannot coerce an executor into paying his legacy out of funds
within our jurisdiction for the sole purpose of exacting a tax.
But in a case of intestacy the rule is essentially different, because
the distributee takes an undivided interest in the whole estate;
and if part of it happens to be within our jurisdiction, he
can only get his share of what is here under our laws and
through our courts. This is the theory upon which the nephews
and nieces of the intestate in the case at bar are clearly taxable
under our statute." *

The same result was reached in a case of testacy in a recent New
Jersey case.^ Where no such election is made, the local tax must
be estimated by treating the local assets as chargeable with a pro-
portionate share of taxable legacies in the proportion that local
property bears to the whole estate.^

Under the Massachusetts statute the court holds that the execu-
tors cannot use stock in Massachusetts corporations for the pay-
ment of debts or legacies to the exemption of the property in New
Hampshire and so relieve it from liability to a tax imposed by
Massachusetts law. The rights of all parties, including the rights
of the commonwealth to its tax, vest at the death of the testator.
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
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." ^

In a recent Washington case the testator was a resident of
Maine and died there, leaving property both in Maine and in
Washington. The Maine court ordered distribution of the estate
of the testator within the state of Maine to collateral heirs and

§204.] ESTATES OF NON-RESIDENT DECEDENTS. 163

strangers in full, and this was done, leaving the entire estate in
Washington to pass to lineals.

The Washington court holds that it must presume that the
authority of the Maine court was rightfully exercised and cannot
hold the executor here or other legatees responsible for the errors
of that court. The fact that the same persons acted as executors
in both states, and that the executors were beneficiaries under
the will, can make no difference.

The Washington court has no right or power to review the
judgment of the court of Maine. The executor in Washington
had no opportunity to collect the inheritance tax from the col-
lateral heirs and strangers to the blood, and this court will not
compel him to pay such tax out of his own funds or out of the
funds belonging to other heirs or legatees.^

^Memphis Trust Co. v. Speed, 114 Tenn. 677, 88 S. W.321.

The decedent was a resident of the state of Illinois, and was a member of the
partnership doing business in New York and in Chicago. The New York branch
was mainly occupied with manufacturing and the Chicago branch in selling,
and therefore the debts owing to the New York creditors exceeded the value of
the New York assets; but that the firm did not owe the persons from whom
it purchased the goods is immaterial, as it did owe for discounts and loans effected,
the proceeds of which were applied towards the purchase price of the property.
Therefore, as debts in New York exhausted the value of the property here no tax
could be imposed. In re King, 172 N. Y. 616, 64 N. E. 1122, affirming 71 N.
Y. App. Div. 581, 76 N. Y. Suppl. 220.

^ Where the whole estate is within the state of New York and the decedent
is a resident of the state, undoubtedly debts are to be deducted from the value of
the property, as the indebtedness to the New York creditors is a general indebted-
ness against the whole estate. But in this case domestic creditors have in their
hands legal title by a pledge and a right to resort for the payment of their debts
to securities belonging to a non-resident decedent which are not taxable under
the laws of this state; and therefore the indebtedness due such creditors is not
to be offset against the value of the property of such decedent otherwise taxable
under the transfer law of the state. In re Pullman, 46 N. Y. App. Div. 574,
62 N. Y. Suppl. 395. See further, ante, s. 191.

^In re James, 144 N. Y. 6, 11, 38 N. E. 961, affirming 77 Hun 211, 27 N. Y.
Suppl. 288, 6 Misc. 206. In re Whiting, 69 Misc. 526, 127 N. Y. Suppl. 960,
139 App. Div. 905, 124 N. Y. Suppl. 1134. See, however, the Act of 1911.

The decedent was a resident of New Jersey, leaving personal property in New
York and also in New Jersey. The executor paid taxable legacies out of the New
Jersey assets and distributed the New York assets among people of the one per
cent class who were not taxable at all, because the New York assets are less than
ten thousand dollars in amount. The court holds that it was the legal right of
the executor to elect to pay the taxable legacies out of the New Jersey assets
and to distribute the New York assets to persons who under our law are exempt
from any tax whatever. "It was his plain duty to exercise this right in the

164 INHERITANCE TAX LAW. [§204.

interests of parties claiming under the will as legatees; and he owed no duty
to the state of New York to do anything different. He had this right of election
until he had actually appropriated the New York assets to the payment of debts
and legacies. There was no warrant of law to justify the appraiser in assum-
ing that the taxable legacies would be paid pro rata out of both funds. The
natural inference was that the assets would be marshaled in such a way as to
require the smallest payment of tax, and, if the intent of the executor was material
to produce a different result, the burden of proving the fact rested upon the
state, and the executor should have been questioned upon the subject by the
appraiser before the report was made." Per Thomas, S., in In re McEwan, 51
Misc. 455, 101 N. Y. Suppl. 733.

The property of which an English testator died possessed in Great Britain
is largely in excess of the amount given by him in legacies and some portion of
these legacies has already been paid from the English estate, and the executor
has declared his determination of appropriating that part of the testator's prop-
erty to their payment so that the American estate shall constitute the residuary
estate disposed of by the will in favor of the testator's brothers. "This he may
rightly do and thus save the estate from the payment of the succession tax imposed
by our laws. The fact of such an appropriation will, of course, appear upon his
accounting. If the executor determines to pay the legacies from the English
estate, the American estate is thereby freed from the burden of the special tax,
the imposition of which depends upon the fact of a succession by the legatee to
some property which is within the state. If the American estate is appropriated
to persons who are within the excepted degrees of relationship to the testator,
the right to claim the tax from the executor is gone. It does not lie with the
officers of the state to say, in such a case, which part of the testator's property
shall be appropriated to the payment of the legacies. The law is not arbitrary
in its application. It is simply absolute in its requirements, when the precise
case arises which it was framed to meet; and where, as here, the case is not pre-
sented of an appropriation of any part of the American estate in payment of the
legacies to the foreign legatees, this special tax law cannot and should not apply.
To this view we are all the more disposed because to hold otherwise might be
to subject this estate to taxation both in Great Britain and in this state. Such a
result of a double taxation is one which the courts should incline to avoid, when-
ever it is possible, within reason, to do so." Per Gray, ]., in In re James, 144
N. Y. 6, 11, 38 N. E. 961, affirming 77 Hun 211, 27 N. Y. Suppl. 288, 6 Misc. 206.

Under the statute of 1908, chapter 310, the executors have no right to marshal
assets by electing to appropriate New York assets to the payment of legacies
exempt or taxable at the minimum rate, leaving the payment of legacies at a higher
rate from assets outside the state. The executor claimed that when he selected
the securities in New York to pay the two legacies in question such securities
became in effect as much "specifically bequeathed" as if named directly in th{
will. But the court holds that the will fixed the character of the legacies as
general legacies and that the act of the executor could not change this character.
In re Porter, 67 Misc. 19, 124 N. Y. Suppl. 676.

The testator died living in Missouri and owning stock in a Tennessee corpora-
tion and the will gave the testator's wife one-half of the residue. The widow
elected under this provision of the will to take the stock in the Tennessee cor-
poration and the court holds that the executor had a right upon the election

§205.] ESTATES OF NON-RESIDENT DECEDENTS. 165

of the widow to transfer to her the stock in the Tennessee corporation in payment
of her one-half interest, provided, of course, it was taken at a fair valuation as
compared with the balance of the residuary estate wherever situated. It was
argued that under this residuary clause which in terms did not confer any right
of election the wife had no right to make a selection of specific property left in
the residuary estate. The court relies upon the Matter of James, 144 N. Y.
6, 38 N. E. 961, where the whole matter was discussed. Memphis Trust Co. v.
Speed, 114 Tenn. 677, 88 S. W. 321.

^Per Werner, J., in In re Ramsdill,190 N. Y. 492, 496, 83 N. E. 584, reversing
119 N. Y. App. Div. 890.

5 Tilford V. Dickinson, 79 N. J. L. 302, 75 A. 574, reversed on another point in
(N. J. 1911,) 79 A. 1119.

^ In re McEwan, 51 Misc. Rep. 455, 101 N. Y. Suppl. 733. Wieting v. Morrow,
(Iowa, 1911,) 132 N. W. 193.

''Per Knowlton, C. J., in Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700.

8/« re Clark, 37 Wash. 671, 80 P. 267.

[See further, post, s. 354.]

Sec. 205. Federal Act of 1898. — Aliens.

Tlie federal act of 1898 does not apply to intangible personal
property of a non-resident alien who never had a domicile in the
United States and died abroad, such personal property being
within the United States and having passed to his son, also an
alien domiciled abroad, as sole legatee and next of kin of the
deceased, partly under a will executed abroad and partly under
the intestate laws of Spain. There is no question of the power
of the legislature to tax the personal property of non-residents,
but the question is of its intent to do so by the particular act in
question. As the property in this case did not pass under any
will executed in any state or territory of the United States,
or by the intestate laws of any such state or territory, the
case is not within the literal words of the act unless the word
"state" is used in a sense broad enough to include a foreign
state or territory.

The court finds that the English cases reach the conclusion that
under the general act imposing a duty upon legacies, the law of
the domicile of the testator controls. If he be domiciled abroad,
whether an alien or a British subject, his legacies are exempt
whether the property be in England at the time of his death or
be subsequently sent there by his executors for local administra-
tion and distribution.

The words in the act of 1898, confining the application of the
act to property passing "either by will or by the intestate laws of

166 INHERITANCE TAX LAW. [§206.

any state or territory," limits its effect to wills executed in
"any state or territory" under which property passes.

Eidman v. Martinez, 184 U. S. 578, 590, 22 S. Ct. 515, 46 L. Ed. 697, relying
upon United States v. Hunnewell, 13 Fed. 617. Moore v. Ruckgaber, 184 U. S.
593, 22 S. Ct. 521, 46 L. Ed. 705, affirming 104 Fed. 947, 31 Civ. Proc. 310
(although will was executed in this country).

Sec. 206. Effect of Place of Execution of Will.

Property situated in this country belonging to a non-resident
decedent is not subject to the federal inheritance tax of 1898,
although the will was executed in New York in 1890, during a
temporary sojourn there.

Moore v. Ruckgaber, 184 U. S. 593, 22 S. Ct. 521, 46 L. Ed. 705, affirming
104 Fed. 947, 31 Civ. Proc. 310. The court relies upon United States v. Hunne-
well, 13 Fed. Rep. 617.

CHAPTER XXIX.

PROPERTY BEYOND THE JURISDICTION.

§ 207. Foreign Personal Estate of Resident.

§ 208. Foreign Real Estate of Resident.

§ 209. Resident Owner of Stock in Foreign Corporation.

§ 210. Non-Resident Trustee Holding Property for Resident.

§ 211. Property in other States of Domestic Corporation.

§ 212. Corporations Chartered in more than one State.

Sec. 207. Foreign Personal Estate of Resident.

The liability of property to inheritance tax does not depend
upon its location, but upon whether the beneficiary came into its
possession through the exercise of a privilege conferred by the
state. ^ The succession to personal property of the decedent
wherever situated is taxable at the domicile of the decedent,^
although the foreign assets may have been distributed in the
foreign jurisdiction,* and although the state of the situs of the
property may have already imposed a tax on its transfer,'* but
not where the decedent's debts in the foreign jurisdiction exceeded
his property there.^ Rulings as to the situs of personal property
under the general tax law are not controlling on a construction of
the inheritance law, as the inheritance laws are not taxes in the
strict sense of the term.^

^People V. Griffith, 245 111. 532, 92 N. E. 313.

^Appeal ofGallup,7Q Conn. 617, 57 A. 699. Frothingham v. Shaw, 175 Mass. 59,
61, 78 Am. St. Rep. 475. In re Swift, 137 N. Y. 77, 88, 32 N. E. 1096, 18 L. R. A.
709, 64 Hun 639, 16 N. Y. Suppl. 193, 19 N. Y. Suppl. 292. Estate of Cornell,
170 N. Y. 423, 63 N. E. 445. State v.Bullen, 143 Wis. 512, 520, 128 N. W. 109.
Thomson v. Lord Advocate, 12 Clark 8c Finnelly 1. In re Joyslin, 76 Vt. 88, 56 A.
281, appears to be out of harmony with the New York and Massachusetts rule.

Tangible Assets. Under the Iowa code, s. 1467, where a resident of Iowa
died owning cattle outside the state, the estate was not required to pay an inherit-
ance tax on these cattle, on the ground that tangible property like this may have
a situs other than that of the domicile of the owner, and that there may be a dis-
tinction between tangible property such as horses and cattle and intangible
property such as debts and choses in action. Cattle belonging to the deceased
were not within the jurisdiction of the state unless it be constructively. The
fact that the cattle were sold about four months after the death of testator and
the proceeds brought within the state later does not affect the matter. The

168 INHERITANCE TAX LAW. [§§208-209.

death of the testator seems to fix the time when the property became subject
to the tax, and at the death of the testator the cattle were not in the state. When
this property passed to the collateral heirs it was clearly not subject to the tax.
If the property had been distributed in the state of Missouri there would be
no doubt that it would not have been subject to the tax imposed by our law,
and the bringing of the proceeds into this state for the purpose of distribution
would not make it subject to the tax. Weaver v. State, 110 Iowa 328, 81 N. W.
603. See the New York act of 1911.

^Appeal of Hopkins, 77 Conn. 644, 655, 60 A. 657. In re Dingman, 66 N. Y.
App. Div. 228, 72 N. Y. Suppl. 694. State v. Sullen, 143 Wis. 512, 523, 128
N. W. 109.

*Inre Hartman, 70 N. J. Eq. 664, 62 A. 560. As to double taxation, see further,
ante. Chapter XXVII.

^Commonwealth v. Coleman, 52 Pa. St. 468, 473.

6 People V. Griffith, 245 111. 532, 92 N. E. 313.

[Powers over assets out of state, see ante, s, 140.1

Sec. 208. Foreign Real Estate of Resident.

The jurisdiction of the domicile of the testator cannot impose
a tax on his foreign real estate/ although the devisor and devisee
are both residents of the state .^

^Connell v. Crosby, 210 111. 380, 71 N. E. 350. In re Swift, 137 N. Y. 77, 88
32 N. E. 1096, 18 L. R; A. 709, 64 Hun 639, 16 N. Y. Suppl. 193, 19 N. Y. Suppl.
292. Commonwealth v. Coleman, 52 Pa. St. 468, 473. In re Hale, 161 Pa. St.
181, 183, 28 A. 1071.

Reason of the Rule. A note in 19 Harvard Law Review, p. 201, discusses
the liability of foreign real estate to the collateral inheritance tax. The editor
points out that the inheritance tax being a tax on a privilege in the case of per-
sonalty each state allows the property within its jurisdiction to pass by the law
of the state of the decedent's domicile and therefore two states may each grant
a privilege and may each levy a tax. But in the case of realty title passes by
the lex rei sitcB and that state alone controls the privilege of succession.

2 All property of the citizen within the state may be taxed and all such property
outside the state as is drawn to or follows in law the domicile or person of the owner,
such as bonds and mortgages, etc., no matter where situated. But real estate is
not drawn to the person or domicile of the owner for taxation or any other purpose
and hence cannot be taxed outside of the jurisdiction where it is situated. The
taxation of property involves the reciprocal duty of protection on the part of the
state levying such tax. In re Bittinger, 129 Pa. St. 338, 345, 18 A. 132.

Sec. 209. Resident Owner of Stock in Foreign Corporation.

Stock in foreign corporations is almost universally taxable at the
jurisdiction of the owner's domicile,^ although the certificates
themselves may be out of the state .^

^Appeal of Gallup, 76 Conn. 617, 57 A. 699 (under the amendment of 1903).
Estate of Cornell, 170 N. Y. 423, 63 N. E. 445. State v. Bullen, 143 Wis. 512,

§§210-211.] PROPERTY BEYOND THE JURISDICTION. 169

128 N. W. 109. Contra, In re Thomas, 3 Misc. Rep. 388, 24 N. Y. Suppl. 713
under N. Y. St. 1885.
^Frothingham v. Shaw, 175 Mass. 59, 78 Am. St. Rep. 475.

Sec. 210. Non-Resident Trustee Holding Property for
Resident.

The fact that certain trust property passing under a deed of
trust was at the intestate's death in another state with the legal
title in the trustee does not affect the liability of the transfer to
taxation. The liability accrued at the time of the transfer, no
matter when imposed. The deceased was a resident of the state
at the time of the transfer, and the property was in the state and
the transfer was made in the state. The deed in question was
a deed in trust reserving a life estate to the grantor.

In re Keeney, 194 N. Y. 281, 287, 87 N. E. 428, affirming 128 N. Y. App.
Div. 893. See further, Frothingham v. Shaw, 175 Mass. 59, 78 Am. St. Rep. 475,
where the securities were in the hands of agents outside the state.

Sec. 211. Property in Other States of Domestic Corporation.

Where a corporation has but a single corporate existence under
the laws of one state, its shareholders have an interest for the
purposes of the succession tax in all the corporate property wherever
situated.^ So where a non-resident held stock in a New York
railroad corporation, it was claimed that the tax should be only
upon that proportion of its value which represents the proportion
of the capital and assets of the company employed within the
state of New York. Where it appeared that only sixty-four
per cent of the capital was invested in the state of New York, it is
argued that the appraisal of the value of the stock should have been
proportionately less. The court holds, however, that the market
value of the stock may or may not represent proportionately the
actual value of the corporate properties. "That value, whatever
it may be in the market, is the worth attached to an interest in the
corporate assets and properties regarded as a whole. A share of cap-
ital stock represents the distinct interest which its holder has in the
corporation, and his right to participate in the distribution of the
net earnings of the corporation. They evidence the extent of his
proprietary interest, and their assessment for taxation purposes
must be upon that interest, and must be regarded as an entity,
and is unapportionable with reference to the situs of the corporate
properties. The tax imposed by the state upon the transfer of

170 INHERITANCE TAX LAW. [§212.

such property, upon the decease of its owner, is not upon the
property which passes; it is upon the right of succession to it." ^

Un re Cooley, 186 N. Y. 220, 227, 78 N. E. 939, 10 L. R. A. N. S. 1010, reversing
on another point, 113 N. Y. App. Div. 388, 98 N. Y. Suppl. 1006.

A railroad company with a Massachusetts charter formed by the consolidation
of Massachusetts and New York corporations, and owning tracks in both states,
is a Massachusetts corporation so far as the Mass. St. 1891, c. 425, is concerned,
and stock in the company owned by a non-resident decedent is assessable under
that statute. Moody v. Shaw, 173 Mass. 375, 377.

2 In re Palmer, 183 N. Y. 238, 76 N. E. 16, affirming 102 N. Y. App. 616. See
further, ante, s. 197.

Sec. 212. Corporations Chartered in more than one State.

The courts of last resort of three states have decided that where
the same railroad corporation is incorporated in more than one
state, its stock for the purposes of the inheritance tax in each
state shall be appraised only at that proportional part of the
market value of its stock as the value of its franchises and property
situated within the state bears to the total value of its franchises
and property wherever situated. These decisions have been
rendered in the absence of specific statutory authority, proceeding
on broad lines of equity in the effort to avoid double taxation. ^
Various suggestions for estimating this value have been made;
among others, that an apportionment based upon trackage or
figures drawn from the books or balance sheets of the company
may doubtless be easily reached, which will be substantially correct,
and any inaccuracies of which, when reflected in a tax of one per
cent, will be inconsequential. ^

1 Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700. See further, post, s. 259.

The Boston and Maine Railroad is a domestic corporation in each of the
states in which it is incorporated; and while the estate of a deceased non-resi-
dent stockholder requires the aid of the probate laws of this state to effectuate a
transmission of the stockholders' right in the property of the local corporation,
their aid is not required to effectuate the transmission of his right to property
of the corporation in other states in which it is also chartered; and the value of
the property requiring the aid of our laws for its transmission must, in such case
at least, be taken as the measure of the tax called for by our statute. Gardiner v.
Carter, 74 N. H. 507, 510, 69 A. 939.

*'The Boston and Albany Railroad Company is a consolidation formed by
the merger of one or more New York corporations and one Massachusetts cor-
poration. The merger was authorized and the said consolidated corporation
duly and separately created and organized under the laws of each state. It
was, so to speak, incorporated in duplicate. There is but a single issue of capital
stock, representing all of the property of the consolidated and dual organization.

§212.] PROPERTY BEYOND THE JURISDICTION. 171

Of the track mileage about five-sixths is in Massachusetts and one-sixth in New
York. The principal offices, including the stock transfer office, are situated in
Boston and there also are regularly held the meetings of its stockholders and
directors. The deceased was a resident of the state of Connecticut and owned
four hundred and twenty-six shares of the capital stock, the value of which for
the purposes of the transfer tax was fixed at the full market value of $252.50
per share of the par value of $100.

"If the courts of New York hold that this stock is assessable at its full value
in New York, then the courts of Massachusetts should also hold that it is assess-
able for its full value in Massachusetts, which would lead to great injustice
as double taxation. Double taxation is one which the courts should avoid when-
ever it is possible within reason to do so. (Matter of James, 144 N. Y. 6, 11.)
It is never to be presumed. Sometimes tax laws have that efi^ect, but if they do
it is because the legislature has unmistakably so enacted. All presumptions are
against such an imposition. (Tennessee v. Whitworth, 117 U. S. 129.)

"I see nothing in the statute which prevents us from paying decent regard to
the principles of interstate comity and from adopting a policy which will enable
each state fairly to enforce its own laws without oppression to the subject. This
result will be attained by regarding the New York corporation as owning the
property situate in New York and the Massachusetts corporation as owning
that situate in Massachusetts, and each as owning a share of any property situate
outside of either state or moving to and fro between the two states, and assess-
ing decedent's stock upon that theory. That is the obvious basis for a valuation
if we are to leave any room for the Massachusetts corporation and for a taxation
by that state similar in principle to our own without double taxation." Per
Hiscock, J., in In re Cooley, 186 N. Y. 220, 228, 78 N. E. 939, 10 L. R. A. N. S.
1010, reversing 113 N. Y. App. Div. 388, 98 N. Y. Suppl. 1006.

Un re Cooley, 186 N. Y. 220, 232, 78 N. E. 939, 10 L. R. A. N. S. 1010, revers-
ing 113 N. Y. App. Div. 388. In re Thayer, 58 Misc. 117, 110 N. Y. Suppl.
751 (including branch lines).

"It may be difficult to ascertain the exact value of the plaintiff's right in the
property of the local corporation; but if the tax is assessed upon such a percent-
age of the value of the stock as the amount of trackage within the state bears
to the total trackage in the several states of its incorporation, the practical diffi-
culty may be obviated ; and it does not appear that the requirements of the statute
would not be met." Per Bingham, J., in Gardiner v. Carter, 74 N. H. 507, 510,
69 A. 939.

CHAPTER XXX,

SITUS OF GHOSES IN ACTION.

§ 213. In General.

§ 214. Bank Deposits.

§ 215. Bonds.

§ 216. Claim against Estate of Another.

§ 217. Contract to Sell Land.

§ 218. Insurance.

§ 219. Mortgages on Real Estate.

§ 220. Partnership Interests.

§ 221. Interest in Real Estate Trust Association.

Sec. 213. In General.

Choses in action have their situs for purposes of the inheritance
tax at the domicile of the creditor ^ and not at that of the debtor ,2
or where it has a place of business.^ The fact that in the inventory
the debtor is described as a banker who does business in New York
cannot vary the result, where no pass book or voucher was ever
delivered, and it does not appear that the decedent ever drew checks
upon the account or that it was to be repaid otherwise than upon
oral demand.^

The choses in action of a resident are taxable at his domicile
though physically out of the state. Promissory notes, bonds and
mortgages belonging to a resident of New York, which at the time
of the testator's death were in the hands of his agent in Michigan,
are taxable under the statute of 1885, chapter 483, as amended by
the statute of 1891, chapter 215,^ although the tax has been held
in some cases as dependent on the physical location of the
securities.^

^ Intangible choses inaction held by a non-resident in her possession at the date
of her death in New Hampshire, where she resided, are not taxable under the
Iowa collateral inheritance tax where the debtor was a resident of Iowa. The
court holds that the situs of the choses in action attaches to the owner, that any
debt has its situs at the residence of the creditor. The court remarks that
Bridges v. Griffin, 33 Ga. 113, is the only case it has been able to find which holds
that the residence of the debtor fixes the situs of the property. Gilbertson v.
Oliver, 129 Iowa 568, 105 N. W. 1002, 4 L. R. A. N. S. 953. See, however. In re
Joyslin, 76 Vt. 88, 56 A. 281. Rights in certain unsigned bonds, see ante, s,
199, n. 3.

§213.] SITUS OF CHOSES IN ACTION 173

^Citizens Bank v. Sharp, 53 Md. 521. Kintzing v. Hutchinson, Fed. Cas.
7834. Allen v. Philadelphia Sav. Fund Soc, Fed. Cas. No. 234.

The essential fact which alone permitted the imposition of an inheritance
tax at the domicile of the debtor in certain cases was the fact that the creditor
in each one of them was under the necessity of going to the domicile of his debtor
for protection and collection of his claim, and this appeared in Blackstone v.
Miller, 188 U. S. 189. In re Houdayer, 150 N. Y. 37. In re Clinch, 180 N. Y. 300.
In re Gordon, 186 N. Y. 471, 474, 79 N. E. 722, 10 L. R. A. N. S. 1089, affirming
114 N. Y. App. Div. 202, 99 N. Y. Suppl. 630.

The court notes the contention of the state treasurer that because debts owned
by a non-resident against a resident of Massachusetts can only be enforced by
the aid of Massachusetts' courts it ought to hold they are property within the
jurisdiction of the state; but the court does not decide this contention. Kinney
V. Stevens, 207 Mass. 368, 93 N. E. 586.

The contrary result has been reached in Vermont. The testator, a resident
of Vermont, died, leaving debts due to her from non-residents of Vermont; and
the court holds that these debts are not to be included in fixing the amount of
the estate subject to an inheritance tax under Vermont statute, 1896, c. 46.
The act applies to "all property within the jurisdiction of this state." The court
remarks that this must mean within its probate jurisdiction and that therefore
the debts were not within the jurisdiction, for immediately upon the death of the
creditor they became assets in the jurisdiction where the debtor resided. This
is well settled in Vermont. Furthermore, the statute applies only to property
which "passed by will or by the intestate laws of this state." And the court
remarks that this property did not pass by virtue of the Vermont law at all,
or that law had no force in the domicile of the debtors; it passed by force and virtue
of the law of those jurisdictions. The court remarks that it is aware that other
courts have reached an opposite conclusion and cites Frothingham v. Shaw, 175
Mass. 59, State v. Dalrymple, 70 Md. 294, 17 A. 82, 3 L. R. A. 372. In re Swift,
137 N. Y. 77, 64 Hun 639, 32 N. E. 1096, 18 L. R. A. 709, 19 N. Y. Suppl. 292.
In re Joyslin, 76 Vt. 88, 56 A. 281.

After the decision in In re Joyslin (76 Vt. 88, 56 A. 281) the legislature passed
Vermont statute of 1904, c. 30, which changed the phraseology of the earlier
act, which included only property which passed by will, or by the intestate
laws of the state, to include also property which shall pass by "the decree of the
court of this state." Where the record does not show that any administration
was had in the foreign jurisdiction and that the several sums due from foreign
debtors were collected by the administrator appointed in Vermont, and the pro-
ceeds brought here, where they formed a part of the assets which passed by the
final decree of the probate court, such assets are subject to tax.

It was argued that in Vermont statute 1904, c. 30, s. 81, the word "persons"
in the phrase "shall also apply to all persons who deceased prior to the enact-
ment thereof," had reference to those who received the property, not those from
whom it passes. But the court refused to follow this contention, as it would lead
to an absurd result. In view of the settled law that the inheritance tax is not
a tax on property, but on the transmission of property, it can make no difference
with the tax whether the legatee or distributee be alive or dead. In re Howard,
80 Vt. 489, 495, 68 A. 513.

3/» re Horn, 39 Misc. Rep. 133, 78 N. Y. Suppl. 979.

174 INHERITANCE TAX LAW. [§ 214

4 In re Bentley, 31 Misc. Rep. 651, 66 N. Y. Suppl. 95.

6 In re Corning, 3 Misc. Rep. 160, 51 N. Y. St. 265, 23 N. Y. Suppl. 285.

« See post, s. 199. In re Speers, 4 Ohio N. P. 238, 6 Low. D. 398.

The decedent, a resident of Connecticut, died owning certain promissory
notes which were in a safe deposit box in the city of New York. With two
exceptions the notes were made by non-residents of the state of New York and
payment of all of them was secured by property outside of the state. The court
holds that they are subject to taxation, relying upon In re Wall, 105 N. Y. App.
Div. 643, 94 N. Y. Suppl. 1166, and In re Whiting, 150 N. Y. 27, 44 N. E.715,
34 L. R. A. 232, 55 Am. St. Rep. 640. The court remarks that two of the notes
are made by residents of New York and says that it is possible that they should be
treated differently, but that it does not seem to the court that the residence of
the debtor can change the character of property or determine whether it is liable
to an inheritance tax. In re Tiffany, 143 N. Y. App. Div. 327, 128 N. Y. Suppl.
106.

Sec. 214. Bank Deposits.

A deposit in a bank in another state is taxable at the domicile
of the depositor.^ Deposits in banks may be also taxable at th^
place of deposit,^ irrespective of the physical location of the certifi-
cates of deposit themselves,^ and although the deposit was tem-
porary, for investment only.* Our supreme court has clearly
expressed the theory of such a tax in the following language, where
an Illinois decedent left funds in a New York trust company: —

"If the transfer of the deposit necessarily depends upon and
involves the law of New York for its exercise, or in other words,
if the transfer is subject to the power of the state of New York,
then New York may subject the transfer to a tax. . . . But it is
plain that the transfer does depend upon the law of New York,
not because of any theoretical speculation concerning the where-
abouts of the debt, but because of the practical fact of its power
over the person of the debtor." "What gives the debt validity?
Nothing but the fact that the law of the place where the debtor
is will make him pay. It does not matter that the law would not
need to be invoked in the particular case. Most of us do not com-
mit crimes, yet we nevertheless are subject to the criminal law,
and it affords one of the motives for our conduct. So again, what
enables any other than the very creditor in proper person to collect
the debt? The law of the same place. To test it, suppose that
New York should turn back the current of legislation and extend
to debts the rule still applied to slander, that actio personalis moritur
cum persona, and should provide that all debts hereafter con-

§214.] SITUS OF CHOSES IN ACTION. 175

tracted in New York and payable there should be extinguished by
the death of either party. Leaving constitutional considerations
on one side, it is plain that the right of the foreign creditor would be
gone. Power over the person of the debtor confers jurisdiction,
we repeat. And this being so, we perceive no better reason for
denying the right of New York to impose a succession tax on debts
owed by its citizens than upon tangible chattels found within the
state at the time of the death. The maxim, mohilia sequunter per-
sonam, has no more truth in the one case than in the other. When
logic and the policy of a state conflict with a fiction due to historical
tradition, the fiction must give way." ^

1 Mann v. Carter, 74 N. H. 345, 68 N. E. 130 (savings bank).

2 People V. Griffith, 245 111. 532, 543, 92 N. E. 313. In re Houdayer, 150 N. Y.
37. In re Burr, 16 Misc. Rep. 89, 74 N. Y. St. 490, 38 N. Y. Suppl. 811 (savings
bank deposit). In re Speers, 4 Ohio N. P. 238, 6 Low. D. 398. Contra, Gilbert-
son V. Oliver, 129 Iowa 568, 105 N. W. 1002, 4 L. R. A. N. S. 953.

Money deposited by a non-resident in a New York trust company is property
within the state subject to the inheritance tax, although mingled with the funds
of an estate he represented as trustee. "If he had deposited in specie, to be
returned in specie, there can be no doubt that the money would be property in
this state subject to taxation. But, instead, he did as business men generally
do, deposited his money in the usual way, knowing that, not the same, but the
equivalent, would be returned to him upon demand. While the relation of
debtor and creditor technically existed, practically he had his money in the bank
and. could come and get it when he wanted it. It was an investment in this state
subject to attachment by creditors. If not voluntarily repaid, he could compel
payment through the courts of this state. The depositary was a resident corpor-
ation, and the receiving and retaining of the money were corporate acts in this
state. Its repayment would be a corporate act in this state. Every right spring-
ing from the deposit was created by the laws of this state. Every act out of
which those rights arose was done in this state. In order to enforce those
rights, it was necessary for him to come into this state. Conceding that the
deposit was a debt, conceding that it was intangible, still it was property in this
state for all practical purposes, and in every reasonable sense within the meaning of
the transfer tax act.

176 INHERITANCE TAX LAW. [§215.

trol of our laws. It has a money value, because it is virtually money, or can be
converted into money upon demand. It is subject to a transfer tax, because the
passing, by gift or inheritance, of 'all property, or interest therein, whether
within or without this state, over which this state has any jurisdiction for the
purposes of taxation,' comes within the expressed intention of the legislature."
Per Vann, J., in In re Houdayer, 150 N. Y. 37, 40, 44 N. E. 718, 34 L. R. A. 235,
55 Am. St. Rep. 642, reversing 3 N. Y. App. Div. 474, 38 N. Y. Suppl. 323.
(All the justicesdid not agree with the reasoning given by Vann, J., but they were
"of the opinion that a deposit of money in a bank although technically a debt is
still money for all practical purposes and as such is taxable under the transfer
tax act.")

3 In re Hewitt, 181 N. Y. 547.

^ A deposit in a trust company by a non-resident in this state for nearly two
months before the date of the death of the testator is subject to tax notwith-
standing the contention that the deposit was here temporarily for the purpose
of investment only. In re Myers, 129 N. Y. Suppl. 194.

The testator was a resident of Montana and died November 12, 1900, owing
a debt against a resident of New York city. The testator had previously loaned
money to a resident of New York who gave a check during the last illness of the
testator to the testator's secretary in payment of the loan. The secretary de-
posited this in a New York bank in a special account to the credit of the testa-
tor. The court holds that this account is subject to the New York transfer
tax although it has also paid a tax in Montana. The court relies on the case of
Blackstone v. Miller, 188 U. S. 189, 23 S. Ct. 277, 47 L. Ed. 439. In re Daly,
182 N. Y. 524, 74 N. E. 1116, affirming 100 N. Y. App. Div. 373, 91 N. Y. Suppl. 858.

Where a deposit is made in a trust company where it remams fourteen months
while the owner is seeking new investment a finding is justified that the property
was not "in transitu" in such a sense as to withdraw it from the power of .the
state. Blackstone v. Miller, 188 U. S. 189, 203, 23 S. Ct. 277, 47 L. Ed. 439,
affirming 171 N. Y. 682, 69 N. Y. App. Div. 127.

^Per Holmes, J., in Blackstone v. Miller, \^^ U. S. 189, 23 S. Ct. 277,47 L. Ed.
439. In re Blackstone, 171 N. Y. 682, affirming 69 N. Y. App. Div. 127, 74 N. Y.
Suppl. 508, reversing 72 N. Y. Suppl. 59.

This language was quoted as controlling the court in In re Rogers, 149 Mich.
305, 112 N. W. 931, 11 L. R. A. N. S. 1134, 14 Detroit Leg. N. 444, 119 Am.
St. Rep. 677.

Sec. 215. Bonds.

Bonds have the same situs as the domicile of the owner. ^ So
bonds of domestic corporations held by non-residents are not
taxable 2 unless actually situated within the state at the death of
the testator.^

^Appeal ofOrcutt, 97 Pa. St. 179.

2/« re Bronson, 150 N. Y. 1. In re Whiting, 150 N. Y. 27. In re Morgan,
150 N. Y. 35. In re Del Busto, 6 Pa. Co. Ct. 289.

The bonds of a domestic corporation held outside the state by non-residents
do not represent "property within the state" in any conceivable sense. The

216.]

SITUS OF CHOSES IN ACTION.

177

property they represented consisted in the debt of their maker and that species
of property is a chose in action belonging to the owner and inseparable from his
personalty. In re Bronson, 150 N. Y. 1, 8, 44 N. E. 707, 34 L. R. A. 238, 55 Am.
St. Rep. 632, modifying 1 N. Y. App. Div. 546, 37 N. Y. Suppl. 476.

^People V. Griffith, 245 111. 532, 543, 92 N. E. 313.

A distinction has been made between tangible and intangible personal
property, holding that intangible property has no situs other than the owner's
domicile, and hence that bonds cannot be taxed in Pennsylvania simply because
they were kept there. In re Orcutt, 97 Pa. St. 179. Contra, In re Whiting,
150 N. Y. 27, 31, 44 N. E. 715, 34 L. R. A. 232, 55 Am. St. Rep. 640, modifying
2 N. Y. App. Div. 590, 38 N. Y. Suppl. 131. In re Schermerhorn, 50 Misc. 233,
100 N. Y. Suppl. 480.

Sec. 216. Claim against Estate of Another.

Where a non-resident legatee dies before the settlement of an
unsettled general bequest to him, a tax may be assessed by the
state of the original decedent, as a claim of this character is not
ttoo intangible for taxation in the state of the debtor estate.^ But
where the personal estate of a resident of New York consisted
entirely of her distributive share in the estate of a deceased sister
who resided in Ohio, but no part of this estate had come into the
possession of the testatrix prior to her death, but consisted of money
sent directly from the trustee of the estate of the deceased sister
I to the executor of the New York testator for the purposes of dis-
'tribution, that portion of the personal estate is not liable to
taxation in New York.^

So the mere fact that securities were in a state is no reason for
laying a tax on the estate of the legatee,^ but where the original
I decedent was also a resident of the same state, a tax may be laid
so far as the property passes to persons liable to tax in that state.*

^ The testator was a citizen of France and died before the payment to him of
his share in his father's estate, the father being a resident of New York and his

; will being admitted to probate in this state. Subsequently, distribution was had
and the executor of the son appointed in New York received certain securities
in satisfaction of his share of the father's estate. It was contended that at the

[time of the death of the son his interest in his father's estate was a mere chose in
iction, the situs of which was not this state but at the son's domicile in France,

Ithat hence that was not property within the state and subject to our inheritance

; laws. The court holds that it cannot concede that a claim due a non-resident from

[a resident of this state is not property within this state subject to the imposition
of the transfer tax. The court refuses to follow In re Phipps, 143 N. Y. 641,

1 77 Hun 325, and says that that case has been overruled in effect by In re Black-
stone, 171 N. Y. 682, affirmed in Blackstone v. Miller, 188 U. S. 189. Under

fthe doctrine of the Blackstone case the interest of the son in his father's estate

178 INHERITANCE TAX LAW. [§216.

was subject to the inheritance tax imposed by the laws of this state, as it was
a claim due a non-resident from a resident of this state. In re Clinch, 180 N. Y.
300, 73 N. E. 35, affirming 99 N. Y. App. Div. 298, 90 N. Y. Suppl. 923, 44 Misc.
190, 89 N. Y. Suppl. 802. The testator died in 1891 leaving the residue to a non-
resident. The residuary legatee died in 1892. The New York transfer tax authori-
ties fixed the amount of her estate subject to tax, including the residuary legacy to
the non-resident, and the tax was paid. The legacy to the non-resident was never
paid to him nor was it in a condition to be paid, as he died while the testator's
estate was unsettled. By his will he gave his estate to his widow. The court
notices the doctrine as to the situs of tangible personal property, but says that a
mere chose in action has never yet been given the attribute of tangibility and this
was all that the residuary legatee had at the time of his death. He had a right to
claim the amount of money which his share of the residuary estate would result in
and nothing more. He had no right in any particular piece of property or any par-
ticular sum of money. The court holds, therefore, that no tax should have been
laid upon this legacy, as the statute was intended to cover only tangible prop-
erty kept within this state by the decedent, and that property which is tran-
siently here, as upon the person or in the baggage of a man suddenly dying within
this state, was never intended to be covered by the provisions of the act. In re
Phipps, 143 N. Y. 641, 37 N. E. 823, affirming 77 Hun 325, 28 N. Y. Suppl. 330.

2 7w re Thomas, 3 Misc. Rep. 388, 24 N. Y. Suppl. 713. In In re Milliken,
206 Pa. St. 149, 55 A. 853, however, the tax was assessed under the law of the
domicile of the original legatee.

3 Where the husband and wife are both residents of New Jersey and the hus-
band dies leaving in a safe deposit box in New York certain securities, and cash
on deposit in a New York bank, and bequeathing by will all of his property to his
wife, before the will was admitted to probate the wife died, leaving a last will
and testament by which she left certain legacies. After the death of the wife
the will of her husband was admitted to probate by a New Jersey court and
subsequently her will was also admitted to probate by this court. Subsequently
the executor of the husband removed his securities to New Jersey and paid to the
executor of the wife various sums of money in payment of her legacy. The court
finds that although the property of the husband was actually in the state of New
York at his death, still the claim of the wife against this estate was never property
within the state of New York, as the right that the wife had in her husband's
estate was not a right to the particular personal property which he owned, but
a right to the balance of the proceeds of his property after the payment of debts
and expenses of administration. And that right at her death was solely a claim
against his executor and was not therefore property within the state of New
York at the death of the wife. In re Lord, 186 N. Y. 549, 79 N. E. 1110, affirm-
ing 111 N. Y. App. Div. 152, 97 N. Y. Suppl. 553.

Where the intestate who lived in Oklahoma died immediately after his sister
who lived in Pennsylvania and no administration was taken out in Oklahoma
but administration was taken out in Pennsylvania where the only known creditor
was, and where the fund was paid by the administrator of the sister directly
to the administrator of the intestate in Pennsylvania, the fund was never out
of the state and had a situs in Pennsylvania and not at the domicile of the decedent,
and is therefore subject to the Pennsylvania collateral inheritance tax. In re

§§217-218.] SITUS OF CHOSES IN ACTION. 179

Weaver (Orph. Ct.), 4 Pa. Dist. R. 260. (This decision is accounted for by the
Pennsylvania doctrine that the inheritance tax is a property tax. — Ed.)

* Where a resident of California died shortly after the death of his brother
who resided in Maryland and the estate of the Californian is entitled to certain
securities and other property from the estate of the resident of Maryland, this
property, so far as it went to collaterals, was subject to tax. The court in this
case did not need to consider and did not consider the question of the division of
the property as to whether the particular property in Maryland actually went to
a collateral or to a direct descendant, as in this case the will gave the whole of
the personal property to a collateral, so that the property in question was clearly
subject to the tax. State v. Dalrymple, 70 Md. 294, 17 A. 82, 3 L. R. A. 372.

Sec. 217. Contracts to Sell Land.

Contracts to sell land may be taxable where the land is.^ A
right to receive the purchase price under a contract to sell land,
however, is a debt, and taxable only at the home of the vendor.^

^ Where the testator was domiciled and resided in New York at her death and
owned certain land in Michigan and had made a contract to sell this land but
the title remained in the testator at her death, these land contracts were taxable
to the estate of the decedent as personal property under the inheritance tax law
of Mich. 1899, c. 188. In re Stanton, 142 Mich. 491, 105 N. W. 1122, 12 Detroit
Leg. N. 829.

2 Dodge County v. Burns, (Neb. 1911,) 131 N. W. 922.

Sec. 218. Insurance.

Interests under an insurance policy on the life of a non-resident
are not taxable at the domicile of the corporation which issues the
policy,^ where the corporation has property sufficient to pay the
policy in the state of the insured and has there appointed an attor-
ney to receive service, where the policy has always been kept within
the state of the insured, the insured dies there, executors were
appointed there and premiums were paid there.^ Taxes cannot be
based on the mere fact that the policies themselves are located
in the state,^ although issued by a local company.*

^In re Abbett, 29 Misc. Rep. 567, 61 N. Y. Suppl. 1067. See further, ante,
s. 107.

"In conclusion we might say that we are unable to contemplate with a confi-
dence born of great optimism the results which would follow from the adoption
and enforcement of the doctrine urged by appellant. If the contract in this case
is subject to the imposition of a transfer tax, then any contract of insurance
issued to a non-resident, passing to and held by his non-resident representatives
or assigns, and being administered and enforceable in a foreign jurisdiction,
whether in the state of Texas or California, or in some foreign country, would
afford the basis of taxation in this state, provided only the policy was issued by

180 INHERITANCE TAX LAW. l§ 219.

a New York corporation and access could be obtained by the tax collector to
its proceeds. No distance of domicile of the assured and his transferees or bene-
ficiaries, and no completeness of foreign jurisdiction over administration and
enforcement, and no lack of anticipation of such a result upon the part of the
assured, would be a bar to the attempted application of the taxing power. It
requires no great imaginative processes to picture the limits and the disapproval
and friction to which this theory would lead if logically carried to its full length.
It was undoubtedly the intent of the legislature that the statute under con-
sideration should be liberally construed to the end of taxing the transfer of all
property which fairly and reasonably could be regarded as subject to the same,
and this court has unequivocally placed itself upon record in favor of construing
the statute in the light of such intent. But the proposition now propounded, if
adopted, would lead far beyond any point which has thus far been reached, and
we do not believe that it would be wise or practicable to adopt it. We can
scarcely believe that the various states and countries which have so carefully
and positively protected their citizens holding policies of insurance issued by
foreign corporations from the burden and annoyance of being compelled to go
to distant forums for the purpose of enforcing their contracts, would permit
them to be subjected to a species of taxation based upon an assumed necessity
for resort to foreign courts which has thus been obviated. We believe that if
the policy being urged upon us were adopted, the great business of insurance now
being conducted by corporations chartered and under the protection of the
state of New York would be subjected to new and unexpected embarrassment."
Per Hiscock, J., in In re Gordon, 186 N. Y. 471, 483, 79 N. E. 722, 10 L. R. A.
N. S. 1089, affirming 114 N. Y. App. Div. 202, 99 N. Y. Suppl. 630.

2 The court holds that this is sufficient to distinguish the case from Blackstone v.
Miller, 188 U. S. 189. The court says that in all cases where the tax has been
imposed at the domicile of the debtor, the creditor has been forced of necessity
to go to that domicile for the collection of his tax, but as that fact did not appear in
this case it would be unreasonable to tax the proceeds of this policy in New York.
In re Gordon, 186 N. Y. 471, 474, 79 N. E. 722, 10 L. R. A. N. S. 1089, affirm-
ing 114 N. Y. App. Div. 202, 99 N. Y. Suppl. 630.

Un re Gibbs, 60 Misc. 645, 113 N. Y. Suppl. 939.

^ A policy of insurance cannot have of itself a situs. It is nothing more than
written evidence of a contract to pay a sum on conditions to be performed. In
re Horn, 39 Misc. Rep. 133, 78 N. Y. Suppl. 979.

Sec. 219. Mortgages on Real Estate.

A good example of the different grounds of taxation is found in
the case of mortgages or other liens on real estate where the Hen-
holder dies owning a mortgage or other lien on land in another juris-
diction. Here the succession may be taxable either at the home of
the mortgagee,^ or in the jurisdiction where the land lies,^ although
the note and mortgage is actually in the possession of the mort-
gagee at his domicile.^

§219.1 SITUS OF CHOSES IN ACTION. 181

It has even been contended by counsel that the state where the
note and mortgage are kept may tax their succession, although the
domicile of the mortgagee and situs of the land are elsewhere.'*

^Frothinghamv. Shaw, 175 Mass. 59, 78 Am. St. Rep. 475. {Callahan v. Wood-
bridge, 171 Mass. 595, is distinguished, as there testator's domicile was in New
York and it does not appear that the note and mortgage were in Massachusetts.)
In re Stanton (Orph. Ct.), 3 Pa. Dist. R. 371, 34 Wkly. Notes Cas. 391.

2 In re Merriam, 147 Mich. 630,9 L. R. A. N. S. 1104, 111 N. W. 196, 14 Detroit
Leg. N. 6, 118 Am. St. Rep. 561.

Mich. St. 1903, c. 195, amending s. 21 of the Mich. St. 1899, c. 188, by eHminat-
ing from s. 21 the words "over which this state has any jurisdiction for the
purposes of taxation," has no effect to narrow the provisions of the statute as
to the taxation of the personal property of non-residents. The court for that
reason follows In re Merriam, 147 Mich. 630, 111 N. W. 196, 9 L. R. A. N. S.
1104, 14 Detroit Leg. N. 6, cited under the earlier act. In re Rogers, 149 Mich.
305, 112 N. W. 931, 11 L. R. A. N. S. 1134, 14 Detroit Leg. N. 444, 119 Am. St.
Rep. 677. See Blackstone v. Miller, 188 U. S. 189.

Reason for Rule. Where the testator was a mortgagee of land in Michigan
and lived in New York the court remarks that he could not preserve his lien
without complying with the registry law of Michigan; that the debts secured
cannot be collected without the aid of the laws of Michigan; that the estate of
the testator cannot be properly administered or closed without ancillary letters
of administration obtained under the laws of Michigan; and therefore it is
subject to an inheritance tax in Michigan. In re Rogers, 149 Mich. 305, 112
N. W. 931, 11 L. R. A. N. S. 1134, 14 Detroit Leg. N. 444.

The New York Rule. Bonds owned by a non-resident secured by mortgages
on land in New York are not subject to tax in New York. In re Bronson, 150
N. Y. 1, 44 N. E. 707, 34 L. R. A. 238, 55 Am. St. Rep. 632. In re Fearing,
200 N. Y. 340, 93 N. E. 956, affirming 123 N. Y. Suppl. 396. In re Preston,
75 N. Y. App. Div. 250, 78 N. Y. Suppl. 91, affirming 37 Misc. 236, 75 N. Y.
Suppl. 251. See, however, In re Clark, 29 N. Y. St. 650, 9 N. Y. Suppl. 444,

Con. Surr. 183. See also Gilhertson v. Oliver, 129 Iowa 568, 4 L. R. A. N. S.
)53.

The Massachusetts Mortgage. The testator was a resident of New Hamp-
shire and the court holds that certain promissory notes belonging to him secured
by mortgage on real estate in Massachusetts are subject to tax in Massachu-
setts. The court notes that in Massachusetts the mortgagee takes not merely
a lien upon the land, but he holds the legal title subject to the right of redemp-
tion and that the interest of the mortgagee is subject to taxation under the
Massachusetts statute; that while for general purposes the interest of the
mortgagee is treated as personal property it has a local situs and carries with it
[ownership of the land until it is redeemed by the payment of the debt. The
[court holds, therefore, that these notes and mortgages are property within
[the jurisdiction of Massachusetts within the meaning of the Massachusetts
'statute of 1909, chapter 527, section one, although they were held by the testator
at his domicile in New Hampshire at the time of his death. Kinney v. Stevens,
207 Mass. 368, 93 N. E. 586.

182 INHERITANCE TAX LAW. [§§220-221.

3 In re Merriam, 147 Mich. 630, 9 L. R. A. N. S. 1104, 111 N. W. 196, 14 Detroit
Leg. N. 6, 118 Am. St. Rep. 561. The court distinguishes the ease at bar from
the Matter ofBronson, 150 N. Y. 1, wKich held that bonds and certificates of stock
in a New York corporation owned by and in possession of a non-resident, at
his domicile out of the state, at the time of his death, were not subject to taxa-
tion. In the case at bar there was a credit secured by a mortgage on the
lands in Michigan and the evidence of indebtedness, namely the mortgage was in
Michigan. The court refuses to follow Matter of Preston, 75 N. Y. App. Div. 250.

* Callahan v. Woodbridge, 171 Mass. 595, 599 51 N. E. 176 (where the court
did not pass on the question). Cases like Blackstone v. Miller, 188 U. S. 189, 23
S. Ct. 277, 47 L. Ed. 439, would seem to lend countenance to this view.

Sec. 220. Partnership Interests.

Under the Pennsylvania doctrine that the inheritance tax is a
tax on property, it is held that the interest of a non-resident partner
in a partnership doing business in Pennsylvania is subject to tax
there.

In re Small, 151 Pa. St. 1, 15, 25 A. 23, 30 Wkly. Notes Cas. 521. In re Small
11 Pa. Co. Ct. 1.

Sec. 221. Interest in Real Estate Trust Association.

A note of a real estate trust association may be such an equitable
interest in the real estate as to be taxable in the state where the
land lies.

Kinney v. Stevens, 207 Mass. 368, 371, 93 N. E. 586.

)

CHAPTER XXXI.

BENEFICIAL INTERESTS TAXED.

§ 222. All Interests Embraced Unless Specifically Exempted.

§223. "To any Person" May Include Several.

§ 224. Assignment by Legatee.

§ 225. Disclaimer.

§ 226. Intestacy.

§ 227. What is a Life Estate.

§ 228. What Life Estates Taxable.

§ 229. Principal or Income of Life Estates.

§ 230. Annuities.

§ 231. Remainders.

§ 232. Vested Remainders.

§ 233. Contingent Remainders.

§ 234. Defeasible or Unascertainable Interests.

§ 235. Interests under Trusts.

§ 236. Bequest to Creditor.

§ 237. Bequest to Debtor.

§ 238 . Direction to Fulfill Prior Obligation of Decedent.

Sec. 222. All Interests Embraced unless Specially Exempted.

The inheritance taxes usually embrace every kind of interest
in the estate of a decedent.

Att. Gen. v. Pierce, 59 N. C. 240.

The terms of the Pennsylvania statute of 1826 were comprehensive enough to
include every interest which could pass, whether in possession or remainder.
Commonwealth v. Smith, 20 Pa. St. (8 Harris) 100.

Sec. 223. "To any Person" may Include Several.

The words in the Iowa inheritance tax law of 1896 provide a tax
on property which shall pass "to any person." The phrase "to
any person" does net necessarily mean one person only, but will
include more than one when that is required to give the statute
the effect it was intended to have.

McGhee v. State, 105 Iowa 9, 74 N. W. 695.

Sec. 224. Assignment by Legatee.

An assignment by the beneficiary cannot affect the tax.
Harrison v. Johnston, 109 Tenn. 245, 70 S. W. 414, 417.

184 INHERITANCE TAX LAW. [§§225-227.

The succession tax cannot be fixed at the rate as in the case of a bequest to the
assignee but must be fixed at the rate as in the case of a bequest to the original
legatee, as the assignee did not take through the will. In re Cook, 187 N. Y. 253,
259, 79 N. E. 991, reversing 114 N. Y. App. Div. 718, 99 N. Y. Suppl. 1049.

Where collateral remaindermen assigned to a lineal life tenant the court was
divided on the question as to who should pay the collateral inheritance tax. The
majority is of opinion that the whole of it should be paid by the life tenant, on
the ground that the life tenant and remainder by virtue of these transfers became
vested in the same person, and there was a merger of the two estates into one
fee simple estate in her and that she is taxable upon the value of the remainder
which entered into the merger. Harrison v. Johnston, 109 Tenn. 245, 70 S. W.
414, 417.

Embezzlement by Executor. Where one of the executors previous to the
death of the testator had so invested the testator's property that it was worthless
and then on his death destroyed his will, one of the legatees by threats of criminal
prosecution obtained payment of her legacy from the executor, at the same time
assigning the legacy and all her interest in the same to the executor. The legacy
was paid with the individual property of the executor. The legacy was two
thousand dollars and the total assets of the estate of the testator amounted to
less than eight hundred dollars. The court holds that no transfer tax can be
levied on this legacy, as the legatee never received any property from the estate
and has in fact assigned all her rights against the estate. In re Weed, 10 Misc.
Rep. 628, 32 N. Y. Suppl. 777. See further, ante, s. 147.

Sec. 225. Disclaimer.

Disclaimer by the beneficiaries may prevent the imposition of a
tax on them.
In re Stone, 132 Iowa 136, 109 N. W. 455. See further, however, ante, s. 153.

Sec. 226. Intestacy.

Where property passes by intestacy the interests of the heirs
may be in part subject to tax and in part not.
Dow V. Abbott, 197 Mass. 283, 288, 84 N. E. 96.

Sec. 227. What is a Life Interest.

Life interests have been created by a bequest over of "that
may remain, "^ by a bequest of income during the Hfe of the benefi-
ciary, or so long as she shall remain unmarried,^ or until her mar-
riage or death unmarried,^ or where a fee was not created under
the rule in Shelley's case."*

1 In re Cager, 111 N. Y. 343, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun
657.

2 In re Wolf, 48 Ohio Wkly. L. Bui. 211.

3 In re Plum, 37 Misc. Rep. 466, 75 N. Y. Suppl. 940.

4 In re Belcher, 211 Pa. St. 615, 61 A. 252.

§§228-229.] BENEFICIAL INTERESTS TAXED. 185

Sec. 228. What Life Estates Taxable.

The life tenant is subject to tax as a legatee,^ except possibly
in case of a contingent life estate.^ Under the Illinois statute of
1895 the life estate is exempt only when the remainder following its
expiration is to the collateral heir or a stranger.^

■ ^ In re Wolf, 48 Ohio Wkly. L. Bui. 211. Fitzgerald v. Rhode Island Hospital
Trust Co., 24 R. I. 59, 52 Atl. 814 (under the federal statute of 1898). See In re
Cager, HI N. Y. 343, 19 N. Y. St 497, 18 N. E. 866, affirming 46 Hun 657.

Where a testator died in December, 1901, bequeathing certain property in
trust to pay the income to the son for life, the life estate of the son became vested
on the death of the testator and was therefore subject to the inheritance tax.
Westhus V. St. Louis Union Trust Co., 164 Fed. 795, 90 C. C. A. 441, 168 Fed.
617.

When the testator gives the beneficial use of his property for a limited time to
one person, after which the corpus oithe estate goes to another, it would not be
claimed that the right of each legatee is not subject to taxation. The fact that
both bequests are to the same individual should not change the result. To hold
otherwise would defeat the entire purpose of the statute, which can only be given
effect by insisting that when the amount actually paid exceeds the exemption a
tax based on that amount is then due. State v. Probate Court, 112 Minn. 279, 128
N. W. 18, 20.

2 Where a devise is made to two for life and to the survivor of them, the re-
mainder to the surviving children of M. and remainder in fee to the children of
A. and W. if the latter have issue, the life estates of the first takers are alone tax-
able since it is impossible to tell which of the children of M. will take the second
life estate; nor can it be known into what number of shares the estate in remainder
will be divided. In re Eldridge, 29 Misc. Rep. 734, 62 N. Y. Suppl. 1026.

3 Ayers v. Chicago Title & Trust Co., 187 111.42, 56, 58 N. E. 318.
[Appraisal of life estates, see post, ss. 343-345.]

Sec. 229. Principal or Income of Life Estates.

Taxes on life interests may be chargeable against the principal,^
or against the income,^ payable only as the income is paid.^ This
is so although the legacy was intended for the maintenance of the
life tenant who had and has no other means of support, and
although the tax was paid by the executor before he transferred
the fund to the trustee.^ The life tenant, although exempt from
taxation, has no redress where his income is reduced by the deduc-
tion of the tax from the principal.^

^Minot V. Winthrop, 162 Mass. 113, 125, 38 N. E. 512, 26 L. R. A. 259. In
re Bass, 57 Misc. 531, 109 N. Y. Suppl. 1084.

Where personal property was given to a life tenant the succession taxes as-
sessed against the net value of the property as a whole are chargeable to princi-
pal. Bishop V. Bishop, 81 Conn. 509, 71 A. 583.

186 INHERITANCE TAX LAW. [§230.

* State V. Probate Court, 100 Minn. 192, 196, 197, 110 N. W. 865. In re John-
son, 6 Dem. Surr. 146.

Succession duties under the United States inheritance tax of 1864 on life tenants
fall on the income of the fund even where the property is left by will in trust "to
receive and collect the income and after deducting all needful and proper costs,
charges and expenses, to pay the residue of said income" to the cestui for life.
The court holds that the costs, charges and expenses spoken of by the will, which
was drafted before the passage of the inheritance tax, are such as are incidental
to the management of the trust property, and the receipt, collection and disburse-
ment of the income cannot in any sense include the payment of the tax by law
imposed upon the life tenants and beneficial interests in the property. Sohier v.
Eldredge, 103 Mass. 345.

3 State v. Probate Court, 100 Minn. 192, 110 N. W. 865. State v. Probate Court,
112 Minn. 279, 128 N. W. 18, 20.

A recent Minnesota will provided that if a certain grandson, E. B., survived
the testator his estate should go to trustees for the grandson, the principal to be
paid the grandson in instalments if he should reach various ages; and if he failed
to reach the age designated the trustees should pay the balance in their hands
to certain persons and charitable institutions designated in the will. The pay-
ment of income is limited in any event to a given number of years; hence, the
legacy has none of the elements of a life estate, and the present value of the right
to receive the income for a limited number of years cannot be ascertained, for the
value depends upon the contingency of his living until the limitation expires.
It follows, therefore, that a tax on the income will accrue and become payable
as the time arrives for the payment to the beneficiary and that it is the duty of the
trustee to deduct the tax from the amount of any instalment of income to which
he becomes entitled and pay the amount thereof to the proper officer. State v.
Probate Court, 100 Minn. 192, 196, 197, 110 N. W. 865.

4 In re Christian, 2 Pa. Co. Ct. 91, 18 Wkly. Notes Cas. 88.

^ Mass. St. 1891, c. 425, s. 1, provides that the tax shall be deducted from the
principal sum and paid over to the treasurer. Where ten thousand dollars is
given in trust for a life tenant, who is exempt from taxation, and the tax diminishes
the principal below ten thousand dollars and reduces the income proportionately,
there is no warrant for taking any part of the principal of the trust fund or of the
estate generally to make up the loss of the life tenant. Minot v. Winthrop, 162
Mass. 113, 38 N. E. 512, 26 L. R. A. 259.

Sec. 230. Annuities.

Annuities are commonly subject to the inheritance tax,^ and
the tax may be collected out of the first payment though the tax
exhausts that payment;^ but where the amount of the annuity is
contingent, the tax should be paid on each payment as it is made.^

1 In re Hutchison, 105 N. Y. App. Div. 487, 94 N. Y. Suppl. 354.

The testator provided that the trustee under a trust created by him should
pay from the trust, including accumulations of income as well as the corpus, at the
rate of $14,000 per year to certain persons named; and the court holds that this
is a bequest of an annuity and is so taxable, and not as a bequest of income under

§ 231.] BENEFICIAL INTERESTS TAXED. 187

the statute of 1898, section 29. Peck v. Kinney, 128 Fed. 313, reversed 143 Fed.
76, 74 C. C. A. 270.

Annuity for Care. The direction by will that certain persons shall receive
$75 per month for caring for the brother of the testatrix is subject to a tax at the
rate of five per cent. In re Eaton, 55 Misc. 472, 106 N. Y. Suppl. 682.

Conditional Annuity. A bequest of an annuity to a church on the condition
of ringing the bell for one hour on a certain day annually, is subject to the col-
lateral inheritance tax. In re Gilpin, 14 Pa. Co. Ct. 122, 3 Pa. Dist. R. 711.

Annuity Ceasing on Testator's Death. Where the testator sells a promis-
sory note of doubtful value on condition the buyer would pay him interest as
long as the testator lives, this is not subject to the inheritance tax. In re Gar-
man, 3 Pa. Co. Ct. 550.

^Minot V. Winthrop, 162 Mass. 113, 126, 26 L. R. A. 259.

2 Where the will gives an annuity of three hundred dollars to be paid out
of the income or out of the principal if necessary, the inheritance tax should not
be assessed upon the whole sum, as the bequest is contingent upon the legatee
living long enough to exhaust it all. Therefore, the tax is to be assessed only
upon the annual payments as they fall due. In re Crompton, 10 Pa. Co. Ct. 443,
48 Leg. Int. 452, 29 Wkly. Notes Cas. 36.

Where the will directed the executors to purchase bonds of such an amount
that the interest would be sufficient to pay the wife eight thousand dollars a
year the court says that this is not an annuity the present value of which can
be fixed. Here the legacy grows out of the estate each quarter and on the failure
of sufficient interest part of the principal may be taken, but even that part ad-
heres to the estate, grows out of it and cannot be separated from it. The estate
is therefore a trust fund in the hands of the executors for the payment of the
quarterly instalments of her legacy. It is the case of trustee and beneficiary,
and not debtor and creditor. It is therefore clear that until received by the widow
each quarter the legacy remains merged in the estate as a part thereof, that the
taxes paid by the estate are all that can be lawfully exacted, and that she cannot
be taxed on any part of her legacy until after its receipt by her. Chisholm v.
Shields, 67 Ohio St. 374, 66 N. E. 93.

[Annuities, see further, post, ss. 306, 342.]

Sec. 231. Remainders.

Remainder interests are commonly subject to tax^ although not
expressly covered by the statute.^ The remainder interest is not
subject to a separate tax as an interest under the estate of the
|life tenant.* If a remainder vests as intestate estate it is taxable
only if it passes to a taxable heir.* Remainders whether vested or
contingent are "estates in expectation" within the Illinois statute.^

1 Ayers v. Chicago Title & Trust Co., 187 111. 42, 55, 58 N. E. 318 (remainder to
lineals). Billings v. People, 189 111. 472, 59 L. R. A. 807. State v. Probate Court,
100 Minn. 192, 198, 110 N. W. 865 (distribution only after paying tax). Appeal
of Commonwealth, 127 Pa. St. 435, 439, 17 A. 1094.

The New York decisions are not of value in construing the Illinois statute as
to the taxation of remainder interests. "One of the main differences between

188 INHERITANCE TAX LAW. [§§232-233.

the Illinois act and the New York act is that the former taxes all successions ex-
cepting life estates and terms for years mentioned in s. 2, while the latter taxes
only successions to collaterals or strangers in blood." In re Kingman, 220 111.
563, 77 N. E. 135. See further, post, ss. 346, 347, 383.

^Attorney General v. Pierce, 59 N. C. 240.

= /« re Whitney, 124 N. Y. Suppl. 909.

^Dow V. Ahhott, 197 Mass. 283, 286.

^Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E. 318.

Sec. 232. Vested Remainders.

Vested remainders are almost universally taxable.

In re Vinot, 7 N. Y. Suppl. 517. Title Guarantee & Trust Co. v. Ward, 164 Fed.
459. Chouteau v. Allen, 95 C. C. A. 582, 170 Fed. 412, relying upon Westhus v.
Union Trust Co,, 164 Fed. 795, 168 Fed. 617. In re Sherman, 30 Misc. Rep.
547, 63 N. Y. Supp. 957.

Sec. 233. Contingent Remainders.

Contingent remainders may be and are commonly subject to
taxation under state statutes,^ even when arising by appointment
after the death of the testator.^ Contingent interests under the
early New York statutes were not presently taxable until they
had vested,^ but were made taxable as of the death of the testator
by the act of 1899.* The federal tax of 1898 left them free of tax
entirely.^

^ State V. Pahst, 139 Wis. 661, 589, 121 N. W. 351.

Vested and Contingent Interests. The language in Ayers v. Chicago Title
& Trust Co., 187 111. 42, 58 N. E. 318, to the effect that whether or not the re-
mainders were vested or contingent was not material, is only dictum and the court
declines to follow it in People v. McCormick, 208 111. 437, 445, 70 N. E. 350, 64
L. R. A. 775.

See further, ss. 300, 335, 346, 383.

^Howe V. Howe, 179 Mass. 546, 551, 55 L. R. A. 626.

3/» re Lefever, 5 Dem. Surr. (N. Y.) 184. In re Clark, 1 Con. Surr. 431, 22
N. Y. St. 354, 5 N. Y. Suppl. 199. In re Clarke, 39 Misc. Rep. 73, 78 N. Y. Suppl.
869. In re Roosevelt, 143 N. Y. 120, 38 N. E. 281, 25 L. R. A. 695, affirming 27
N. Y. Suppl. 741, 76 Hun 257. In re Hoffman, 143 N. Y. 327, 38 N. E. 311,
modifying 76 Hun 399, 5 Misc. 439.

Where a remainder in a trust estate was given to such persons named as might
be living at the successive termination of each trust these remainders are not
liable to taxation until the termination of each trust, as it cannot until then be
determined whether the trust fund would pass to persons exempt from taxation
or to persons taxable. The court distinguishes the Matter of Stewart, 131 N. Y.
277, which case does decide that contingent interests although vesting in pos-
session at a future day may be at once valued and assessed. And the court says
that it may possibly be that where the only contingency of the future is upon
which of the several named persons or classes of persons, all of whom are liable

§ 234.] BENEFICIAL INTERESTS TAXED. 189

to taxation, the beneficial interest will ultimately devolve, the appraisal and
assessment need not be postponed. Yet where the contingency touches the
taxable character of the succession, where it is only in the chance of uncertain
events that the beneficial interests will finally alight where they will be taxable
at all, a delay until the contingency is solved is both just and necessary.

Where remainders in trust estates were left to such of certain persons named
as might survive the termination of the trust estates and one of these persons
named died before the termination of the trust estate, his estate was not subject
to taxation. He never took anything beneficial under the will and his estate
can take nothing. It was never intended by the law to tax a theory having no real
substance behind it. What passed was rather a theoretical possibility than a
tangible reality. In re Curtis, 142 N. Y. 219, 36 N. E. 887, affirming 73 Hun
185, 56 N. Y. St. 113, 25 N. Y. Suppl. 909.

4 In re Post, 85 N. Y. App. Div. 611, 82 N. Y. Suppl. 1079, affirming 40 N. Y.
Suppl. 1144, 64 N. Y. Suppl. 369. Matter of Vanderhilt, 172 N. Y. 69, 64 N. E.
782. Matter ofBrez, 172 N. Y. 609, 64 N. E. 958. In re Tracy, 179 N. Y. 501,
508, 72 N. E. 519, reversing 87 N. Y. App. Div. 215. In re Le Brun, 39 Misc.
Rep. 516, 80 N. Y. Suppl. 486. In re Burgess, 130 N. Y. Suppl. 686 (tax at
highest rate possible in view of possible contingencies). Contra, In re Howell, 34
Misc. Rep. 432, 69 N. Y. Suppl. 1016.

5 Vanderhilt v. Eidman, 196 U. S. 480, 501, 25 S. Ct. 331, 49 L. Ed. 563, 138
Fed. 1006, 70 C. C. A. 683, reversing 121 Fed. 590. Herold v. Shanley, 146 Fed.
20, 76 C. C. A. 478, affirming 141 Fed. 423 (after death or marriage of another).
Heberton v. McClain, 135 Fed. 226. Brown v. Kinney, 128 Fed. 310, reversed
137 Fed. 1018.

The Spanish War revenue statute of 1898 did not impose duties upon legacies
which were vested merely within the technical meaning of that term, but only
upon legacies which were vested in actual possession and enjoyment. Fidelity
Trust Co. v. United States, 45 Ct. CI. 362. (U. S. Ct. CI. 1910.)

Sec. 234. Defeasible or Unascertainable Interests.

Defeasible interests are subject to tax as soon as the interest of
the beneficiary can be determined,^ but the tax must be post-
poned where the interests are not presently ascertainable.^

^ State V. Probate Court, 112 Minn. 279, 128 N. W. 18, 20 (tax payable when
beneficiary takes possession). Where a will provides that beneficiaries may take
property and its income subject to annual payments to the widow unless she
exercise an option to take a portion of the estate in lieu thereof, and to similar
payments for the support of the child during minority, there is nothing in these
conditions which postpones their right to the property or income thereof from
the time of death. The law provides means of calculating the value of the inter-
est of the widow and the child and hence the fair market value of the remainder
of the estate and the other interests was ascertainable. State v. Pabst, 139 Wis.
661, 588, 121 N. W. 351.

2 When the basis of the tax, the rate and the exemption if any cannot be fixed,
the tax itself cannot be fixed. No other course is left open in the practical ad-
ministration of the statute than to postpone the assessing and collecting of the

190 INHERITANCE TAX LAW. [ § 235

tax upon such remote contingent interests as are incapable of valuation and as
to which the rate and the exemptions cannot be determined. People v. McCor-
mick, 208 111. 437, 70 N. E. 350, 64 L. R. A. 775.

Where the testator devised to her brother the use of her personal property with
the right to use as much of the principal as was necessary for his maintenance,
no transfer tax can be assessed upon the remainder, as it is impracticable to ap-
praise it until it is known what property will pass in remainder. In re Babcock,
81 N. Y. App. Div. 645, 81 N. Y. Suppl. 1117, affirming 37 Misc. Rep. 445, 75
N. Y. Suppl. 926.

See further, post, ss. 300, 335, 382, 383.

Sec. 235. Interests under Trusts.

Interests under a trust deed which has become absolute during
the grantor's Hfe are not taxable on his death.^ In considering
the taxation of interests in trust, the relationship to the testator
of the cestui and not of the trustee is the test ,2 although the tax
itself may be assessed against the trustee.^ Where the law pro-
vides that if the legacy or property be not in money it shall be
collected from the persons entitled, interests under a trust fund
must be collected from the cestuis themselves.*

1 In re Pierce, 132 N. Y. App. Div. 465, 116 N. Y. Suppl. 816, reversing 60
Mich. 25, 112 N. Y. Suppl. 594. See In re Ogsbury, 7 N. Y. App. Div. 71, 39
N. Y. Suppl. 978. See further, ante, s. 98.

2 Where a legacy is given to the husband of the daughter evidently as trustee
for the use of his children, it is not liable to a collateral inheritance tax. In re
Morris (Orph. Ct.), 1 Pa. Dist. R. 818.

Where an executor without authority purchases land in her own name the
property is impressed with a trust in favor of the remaindermen, and on her death
no inheritance tax should be levied, as the fact that she took title in her own name
did not make the property hers. In re Wheeler, 115 N. Y. App. Div. 616, 100
N. Y. Suppl. 1044.

3 Tyson v. State, 28 Md. 577.

A legacy to an executor individually under a contract with him to use the money
for another creates a valid trust within the exemptions of the statute and the
executor would therefore not be liable for the tax. In re Farley, 15 N. Y. St.
Rep. 727.

* Where a trust fund is left for the benefit of one person for life with remainder
to another, what is transferred to the life tenant and to the remaindermen is
simply a right to receive a certain sum of money and none of the property or es-
tate left by the testator. Each gets a right under the will from which there can
be no deduction. Collection of a tax on these interests must therefore be made
from the beneficiaries themselves. In re Hoyt, 37 Misc. Rep. 720, 76 N. Y. Suppl.
504, citing In re McMahon,28 Misc. Rep. 697, 60 N. Y. Suppl. 64. In re Clark,
1 Con. Surr. 431, 5 N. Y. Suppl. 199.

§§23fr-238.] BENEFICIAL INTERESTS TAXED. 191

Sec. 236. Bequest to Creditor.

A bequest to a creditor of the decedent is exempt from the
inheritance tax up to the amount of the debt.

In re Quin (1880), 13 Phila. (Pa.) 340.

Where a bequest is made to the foreman of the testator of four thousand dollars
on condition he should accept it in full of all claims, and it appeared that the
amount of the legatee's claim for services was in excess of the sum bequeathed,
the legacy is not a gift and is not subject to the inheritance tax. In re Underhill,
20 N. Y. Suppl. 134, 2 Con. Surr. 262.

The testator by his will gave to H. all money which might become due and pay-
able at his decease, on account of his membership in a certain masonic aid asso-
ciation. The testator had taken out this membership to secure an indebtedness
to H. The court holds that while H. may be entitled to receive money by virtue
of the will he does not get it as a gift but as payment of a debt, and the words
used accomplish no more than the usual general direction in wills to pay debts
and funeral expenses. In re Rogers, 10 N. Y. Suppl. 22, 2 Con. Surr. 198.

As to consideration, see ante, Chapter XX.

Sec. 237. Bequest to Debtor.

A bequest to a debtor of the testator is properly taxable.

In re Wood, 40 Misc. Rep, 155, 81 N. Y. Suppl. 511, holding that a bequest of
a debt is "property," Ky. St. 1906, c. 22, makes no exception in favor of
legatees who may be indebted to the estate. Leavell v. Arnold, 131 Ky. 426, 115
S. W. 232.

Where a bequest of the residue of an estate includes a note made by the resid-
uary legatee, the legatee must either accept the benefit provided by the will under
the condition of assuming with it the burden imposed by law, or he may reject
it. If he elects to reject the legacy the legacy would go as in case of intestacy.
In that event the next of kin could sue upon the note. The tax should properly
include the value of this note. In re Tuigg, 15 N. Y. Suppl. 548, 2 Con. Surr.
633, following Tyson's Appeal, 10 Pa. St. 220.

Where the testator was the holder of certain debenture bonds of a corporation
and bequeathed these bonds to the corporation, it was contended that no assess-
ment could be made upon this legacy, as such a gift only released to a debtor evi-
dences of his debt held by his creditor. The court replies, however, that the
debenture bonds in question were the property of the testator and that when
he bequeathed them to the corporation the property passed from him to it; that
it might cancel the bonds or it might properly transfer them to any one who might
be willing to pay their value and that the tax was properly imposed upon them.
In re Rothschild, 72 N, J. Eq. 425, 65 A. 1118, affirming 71 N. J. Eq. 210.

See further, post, s. 340.

Sec. 238. Direction to Fulfill Prior Obligation of Decedent.

A direction in a will as to the carrying out of an obligation of the
testator does not constitute a gift by will subject to taxation.

192 INHERITANCE TAX LAW. [§238.

A husband signed an agreement to pay an annuity through a trustee to the
wife, and by his will he created a trust in his executors to continue the annuity in
case she refused a gross sum allowed her in the will. The court holds that this
direction as to the trust in the will is not taxable, as it is no transfer and confers
no benefit upon the widow. It is simply a direction of the testator as to the man-
ner in which his estate shall be administered. In re Daniell, 40 Misc. Rep. 329,
81 N. Y. Suppl. 1033.

CHAPTER XXXII.

EXEMPTIONS IN GENERAL.

§239. Validity.

§ 240. Validity of Tax on Whole Estate which Exceeds the Exemption.

§ 241. Construction.

§ 242. No Implied Exemptions.

§ 243. Whether Based on Estates of Beneficiaries or of Decedents.

§244. Whether Calculated on Whole Estate or on Portion within

State.

§ 245. Real as well as Personal Property Considered.

§ 246. Amounts Reckoned without Deduction for Tax or Expenses.

§ 247. Amounts Reckoned with Discount for Delay in Payment.

§248. When Legacy Payable in Instalments.

§ 249. In Case of Progressive Rates.

§ 250. Effect of General Tax Exemptions.

§ 251. Of Persons Exempt under General Law.

§ 252. Testing Status of Corporation . — When Exempt by General Law.

§ 253. Exemption of Property Otherwise Taxed.

§ 254. Interests under Powers.

§ 255. Remainder may be Liable Although Prior Estate Exempt.

§256. "Persons" Includes Corporations.

§257. Foreign Corporations.

§ 258. Gift to Foreign Corporation for Domestic Use.

§ 259. Corporation Chartered in more than one State.

§ 260. Effect of Use Made of Funds.

§ 261. Special Exemptions.

Sec. 239. Validity.

Exemptions/ although Hberal in amount, have been almost
universally upheld as within the legislative power to classify the
subjects of taxation ,2 although the exemption is greater to one class
than to another,^ as there is as much authority to make exemptions
from this tax as from any other.^ The fact that the expense of
administering small estates is proportionally greater than large
ones has often been considered.^ Exemptions have been upset as
violating the rule of uniformity, however, under the peculiar
wording of certain constitutions.^

i/« re Wilmerding, 117 Cal. 281, 49 P. 181. Booth v. Commonwealth, 130 Ky.
88, 113 S. W. 61 ($500). Thompson v. Kidder, 74 N. H. 89, 97, 65 A. 392. State

194 INHERITANCE TAX LAW. [§239.

V. Guilbert, 70 Ohio St. 229, 255, 71 N. E. 636. State v. Alston, 94 Tenn. 674
($250). In re Hickok, 78 Vt. 259, 265, 62 A. 724 ($2,100). Magoun v. Illinois
Trust & Savings Bank, 170 U. S. 283, 287.

Reason for Rule. It was contended that the Ohio act was not uniform in that
it exempts from its operation all inheritances which do not exceed $3,000 in
value and imposes a burden on such as are above that sum. The court says:
"We think there are two answers to this objection. The person who inherits
six thousand dollars has three thousand exempt; the person who inherits three
thousand dollars has three thousand dollars exempt. They are on a perfect
equality in that regard. The same reasoning applies where it happens that
the smaller inheritance falls below three thousand dollars. As well might it
be urged that the law which exempts from execution homesteads of the heads
of families of one thousand dollars in value is invalid on the ground of inequality
of privilege because one debtor's homestead may not reach one thousand dollars
in value while that of another may. It is to be borne in mind that the act does
not create a classification of persons for the purpose of imposing a tax on that
class. It is not a tax on persons at all. If it is felt more by some than by others
this is owing merely to the fact of the difTering circumstances which surround
the different persons. No person, nor no set of persons, is selected arbitrarily
or otherwise for the imposition of burdens or for relieving of burdens." Further-
more, the court holds that as the tax is an excise tax and the authority to
impose the tax is conferred by the general grant of legislative power, the selection
of the subjects on which the tax will be imposed must be within the legislative
competency. To say that the mere fact of inclusion in the one case and exclu-
sion in the other constitutes a reason for holding the law invalid, is to say that
no excise tax can be lawfully levied upon any privilege until all privileges on
which it would be possible to lay such tax have been included within its terms.
If this proposition were established it is difficult to say why it would not invali-
date all the excise laws of the state, many of which have been subjected to
judicial scrutiny and have been sustained. State v. Guilbert, 70 Ohio St. 229, 250,
71 N. E. 636.

An exemption of the estates taken by inheritance valued at less than $500 is
constitutional. "As this tax is not upon property, but upon the right of suc-
cession, the constitutional provision that all property shall be taxed according
to its value is inapplicable. The right of the legislature to impose an excise
tax includes the right to select the subjects upon which it shall be imposed."
There is no constitutional requirement that it shall be imposed upon every
inheritance and the judgment of the legislature in that respect is not open to
review by the courts. It may have considered that the expense of valuation of
an estate less than $500 rendered the exemption wise. In re Wilmerding's
Estate, 117 Cal. 281, 49 P. 181.

•^Succession of Frigalo, 123 La. Ann. 71, 48 S. 652 ($10,000). Minotv. Win-
throp, 162 Mass. 113, 123, 26 L. R. A. 259 ($10,000). Gelsthorpe v. Furnell, 20
Mont. 299, 51 P. 267, 39 L. R. A. 170 ($7,500). Thompson v. Kidder, 74 N. H.
89, 97, 65 A. 392. Black v. State, 113 Wis. 205, 218, 89 N. W. 522, 90 Am. St.
Rep. 853 ($10,000). Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283,
18 Sup. Ct. 594, 42 L. Ed. 1037. See further, s. 62, n. 2.

A Legislative Function. Although it is true that the amount of the exemp-
tion is greater in the Illinois law than in any other, the right to exempt cannot

§ 240.] EXEMPTIONS IN GENERAL. 195

depend on that as that is a legislative and not a judicial function. Magoun v.
Illinois Trust & Savings Bank, 170 U. S. 283, 298, 300, 18 Sup. Ct. 594, 42 L.
Ed. 1037.

estate V. Clark, 30 Wash. 439, 71 P. 20, 23 ($10,000 to lineals). See, also,
cases cited under two preceding notes. Contra, Drew v. Tifft, 79 Minn. 175, 81
N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446 ($10,000 to lineals and $5,000
to collaterals void under the wording of the Minnesota constitution that the
tax is to be laid on inheritances above a fixed and specified sum).

4 Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N. 597.

^Minot v. Winthrop, 162 Mass. 113, 124, 26 L. R. A. 259 (Lathrop, J., dis-
senting). State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178.

^State V. Gorman, 40 Minn. 232, 41 N. W. 948, 2 L. R. A. 701. (Here the
statute purported to exact arbitrary probate fees, and the court regarded an
exemption of $2,000 as without justification under the equality requirements of
the state constitution.) Drew v. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A.
525, 79 Am. St. Rep. 446. ($10,000 to lineals and $5,000 to collaterals void
under the wording of the Minnesota constitution that the tax is to be laid on
inheritances above a fixed and specified sum.) State v. Ferris, 53 Ohio St. 314,
41 N. E. 579, 30 L. R. A. 218. In re Cope, 191 Pa. St. 1, 43 A. 79, 29 Pittsb.
Leg. J. N. S. 379, 45 L. R. A. 316, 71 Am. St. Rep. 749, 44 Wkly. Notes Cas. 89.
(This decision is based on the peculiar Pennsylvania theory that the inheritance
tax is a property tax and is not of assistance in other jurisdictions.)

[Retroactive law as affecting exemptions, see ante, ss. 79, 88.]

Sec. 240. Validity of Tax on Whole Estate which Exceeds the
Exemption.

The tax is commonly held vaHd, although imposed on the whole
inheritance, where it exceeds the exemption,^ although the contrary
result has been reached on the ground that the tax was not uniform
unless confined to the excess above the exemption .^

^ Appeal of Nettleton, 76 Conn. 235, 241, 56 A. 565 (holding exemption arbitrary
and unreasonable but valid). Gilbertson v. McAuley, 117 Iowa 522, 91 N. W. 788.
In re Fox, 154 Mich. 5. State v. District Court, 41 Mont. 357, 109 P. 438, 440.
In re Sherwell, 125 N. Y. 376, 26 N. E. 464, affirming 12 N. Y. Suppl. 200, re-
versing 11 N. Y. Suppl. 897. In re McKennan, 25 S. D. 369, 126 N. W. 611,
616, reversed on rehearing 130 N. W. 33. State v. Alston, 94 Tenn. 674, 30
S. W. 750, 28 L. R. A. 178.

2 Drew V. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep.
446. State v. Bazille, 87 Minn. 500, 92 N. W. 415, 94 Am. St. Rep. 718. State
V. Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218. SeeBeals v. State, 139
Wis. 544, 554, 121 N. W. 347. State v. Handlin, (Ark. 1911,) 139 S. W. 1112 (up-
holding law exempting portion of bequest above $50,000). See further, s. 62, n. 6.

Doctrine Stated. The right or privilege of receiving or succeeding to property
is valuable in proportion to the value of the property received. It cannot be
consistently said that the right to receive twenty thousand dollars is of no value,
and that the right to receive twenty thousand and one dollars is of the value
of two hundred dollars and one cent.

196 INHERITANCE TAX LAW. [§241.

Again, he who uses the right or privilege of receiving property of the value of
twenty thousand and one dollars and pays therefor a tax of two hundred
dollars and one cent, is not equally benefited for the tax paid as he who uses
the same right or privilege of receiving property of the value of twenty thousand
dollars without paying any tax whatever for the use of such right. State v.
Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218.

Sec. 241. Construction.

It is often said that exemptions should be strictly construed,'
especially against an exemption yielding absurd results,^ but we
believe the true rule is that, as the inheritance tax is a special tax,
the intention to impose it in any case must be clearly expressed
and words of exception should be liberally construed.^ Charitable
bequests, however, should be upheld and given effect whenever
possible, and the fact that the statute may exempt these bequests
from the payment of the inheritance tax is no reason for departing
from or modifying this ancient rule of construction favoring charit-
able gifts.* Exemptions should be given the same construction as
similar language in general tax laws.^ Exemptions, like other tax
laws, are prospectively construed.^

Un re Bull's Estate, 153 Cal. 715, 96 P. 366. State v. N. Y. Meeting of Friends,
61 N. J. Eq. 620, 48 A. 227. In re Vineland Historical and Antiquarian Society,
66 N. J. Eq. 291, 56 A. 1039. In re Stewart, 131 N. Y. 274, 281, 30 N. E. 184,
14 L. R. A. 836. In re Davis, 98 N. Y. App. Div. 546, 90 N. Y. Suppl. 244.
Barringer v. Cowan, 55 N. C. 436. In re Hickok, 78 Vt. 259, 62 A. 724. See
further, ante, s. 32.

* 'Exemption is a matter of grace on the part of the legislature and cannot
be claimed beyond the extent to which a law-making body has seen fit to allow
it." In re Timken's Estate, 158 Cal. 51, 109 P. 608.

2/» re Bull, 153 Cal. 715, 96 P. 366.

3/» re Mergentime, 195 N. Y. 572, 88 N. E. 1125, affirming 129 N. Y. App.
Div. 367, 113 N. Y. Suppl. 948. Matter of Enston, 113 N. Y. 174, 21 N. E. 87,
3 L. R. A. 464. Matter of Fayerweather, 143 N. Y. 114, 38 N. E. 278. Matter of
Harbeck, 161 N. Y. 211, 55 N. E. 850.

"It is an old familiar rule of the English courts, applicable to all forms
of taxation, and particularly special taxes, that the sovereign is bound to express
its intention to tax in clear and unambiguous language, and that a liberal con-
struction be given to words of exception confining the operation of duty, . . .
though the rule regarding exemptions from general laws imposing taxes may be
different." Per Brown, J., in Eidman v. Martinez, 184 U. S. 578, 583, 22 Sup.
Ct. 515, 46 L. Ed. 697, where the court quotes as sustaining its doctrine In re
Howell, 147 Pa. St. 164, 23 A. 403. In re Cager, 111 N. Y. 343, 18 N. E. 866.
KnowUon v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969.

^In re Graves, 242 111. 23, 89 N. E. 672, 34 A. S. R. 302.

§ 242.] EXEMPTIONS IN GENERAL. 197

Charity. The exemption clause in the Iowa inheritance statute is to be
liberally construed to permit the benevolent purpose of the exemption. Morrow
V. Smith, 145 Iowa 514, 124 N. W. 316. In reSpangler, 148 Iowa 333, 127 N. W. 625.

Un re Balleis, 144 N. Y. 132, 134, 38 N. E. 1007, affirming 78 Hun 275.

^Sherrill v. Christ Church, 121 N. Y. 701, 703, 25 N. E. 50, reversing In re
Van Kleeck, 55 Hun 472. Contra, Roman Catholic Church v. Niks, 86 Hun 221,
33 N. Y. Suppl. 243. See In re Vanderbilt, 68 N. Y. App. Div. 27, 74 N. Y.
Suppl. 450, citing In re Huntington, 168 N. Y. 399, 61 N. E. 643.

Sec. 242. No Implied Exemptions.

Where the law imposes the tax in general terms, only those plainly
exempt from it are excluded from its provisions.^ So it has been
held that a 'Vidow" of a son does not include a former wife of a
son who had married again ;2 that an exemption of nephews and
nieces does not cover grandnieces,^ or the nephews and nieces of the
husband or wife of the decedent.* So brothers-in-law and sisters-
in-law,^ or a step-sister,6 have been held liable to tax where not
specifically named as exempt, although half-brothers have been
held exempt.^

^A grandmother is liable to pay the tax, although the act is called a collateral
inheritance law, as she is not named as exempt. McDowell v. Addams, 45 Pa. St.
(9 Wright) 430. A husband claimed that a deduction should be made from the
estate of his wife of the exemptions enumerated in the New York statute of things
which he would have been entitled to had they existed, but as they did not exist
he was nevertheless entitled to receive their assumed cash value in lieu of them,
and that accordingly such value is no part of the estate to be transferred under the
will and subject to the tax. The court decides that no such exemption should be
allowed, as the tax law itself makes no provision for the deduction from the
taxable estate of the value of articles which would have been exempted for the
use of husband or wife had such articles existed, but which do not in fact exist.
In re Libolt, 102 N. Y. App. Div. 29, 92 N. Y. Suppl. 175.

"^Commonwealth v. Powell, 51 Pa. St. (1 P. F. Smith) 438.

^In re Bates, 7 Ohio N. P. 625, 5 Ohio S. & C. P. Dec. 547. In re Simon,
7 Ohio N. P. 667, 39 Wkly. L. Bui. 369.

*/« re Bates, 7 Ohio N. P. 625, 5 Ohio S. & C. P. Dec. 547. In re Wolf, 48
Ohio Wkly. L. Bui. 211.

^ In re Thomson, 48 Ohio Wkly. L. Bui. 212. Estate of McDermott, 48 Ohio Wkly.
L. Bui. 211.

Bequest Back to Family of Original Owner. Where the husband dies
leaving his property to his wife absolutely and on her death the property goes
back to the brothers and sisters of the deceased husband the inheritance tax is
to be collected, as it is a transfer of property to brothers-in-law and sisters-in-
law of the testator. In re Stephenson, 48 Ohio Wkly. L. Bui. 212. In re McDer-
mott, 48 Ohio Wkly. L. Bui. 211.

«/» re Thomson, 48 Ohio Wkly. L. Bui. 212.

Un re Ormsby, 7 Ohio N. P. 542, 5 Ohio S. & C. P. Dec. 553.

198 INHERITANCE TAX LAW. [§243.

Sec. 243. Whether Based on Estates of Beneficiaries or of
Decedents.

Exemptions of minimum amounts apply to the whole estate under
some statu tes,i which method of reckoning exemptions is valid .^
although exemptions may be graded according to the size of the
estates of each beneficiary.^

^McGhee v. State, 105 Iowa 9, 74 N. W. 695. Heriott v. Bacon, 110 Iowa 342, 81
N. W. 701. The court distinguishes State v. Hamlin, 86 Me. 495, 30 A. 76,
25 L. R. A. 632, 41 Am. St. Rep. 569n, as in that state other provisions of the
statute unequivocably indicate the opposite result. Callahan v. Woodhridge, 171
Mass. 595, 599, 51 N. E. 176. State v. District Court, 41 Mont. 357, 109 P.
438, 440. In re Hoffman, 143 N. Y. 327, 38 N. E. 311, modifying 76 Hun 399,
5 Misc. 439 (St. 1892). In re Corbett, 171 N. Y. 516, 64 N. E. 209, affirming
55 N. Y. App. Div. 124. In re Costello, 189 N. Y. 288, 292, 82 N. E. 139, modify-
ing 117 N. Y. App. Div. 807, 103 N. Y. Suppl. 6. In re Miller, 5 Dem. Surr.
(N. Y.) 132, 45 Hun 244. In re Taylor, 6 Misc. Rep. 277, 27 N. Y. Suppl. 232.
In re Flynn, 30 N. Y. Suppl. 388. In re Hall, 88 Hun 68, 68 N. Y. St. Rep.
538, 34 N. Y. Suppl. 616. In re Birdsall, 22 Misc. Rep. 180, 49 N. Y. Suppl.
450, 2 Gibbons 293, following In re Hoffman, 143 N. Y. 327, 38 N. E. 311. In re
De Graaf, 24 Misc. Rep. 147, 53 N. Y. Suppl. 591, 2 Gibbons 516. In re Curtis,
31 Misc. Rep. 83, 64 N. Y. Suppl. 574 (March, 1900). In re Rosendahl, 40
Misc. Rep. 542, 82 N. Y. Suppl. 992. (The court remarks that the cases of In re
Bliss, 6 N. Y. App. Div. 192, 39 N. Y. Suppl. 875, and In re Conklin, 39 Misc.
Rep. 771, 80 N. Y. Suppl. 1124, have been reversed in In re Corbett, 171 N. Y.
516, 64 N. E. 209, affirming 55 N. Y. App. Div. 124, 67 N. Y. Suppl. 46.) In re
Garland, 88 N. Y. App. Div. 386, 84 N. Y. Suppl. 630, reversing 40 Misc. 579,
■ 82 N. Y. Suppl. 989. In re McMurray, 96 N. Y. App. Div. 128, 89 N. Y. Suppl.
71. In re Mock, 113 N. Y. App. Div. 913, 100 N. Y. Suppl. 1130, reversing
49 Misc. 283, 99 N. Y. Suppl. 236, on the authority of In re Corbett, 171 N. Y.
516, 64 N. E. 209. In re Mason, 69 Misc. 280, 126 N. Y. Suppl. 998. Contra,
overruled, In re Skillman, 66 N. Y. St. Rep. 140, 10 Misc. Rep. 642, 32 N. Y.
Suppl. 780. In re Mixter (1891), 28 Wkly. Notes Cas. (Pa.) 182, 8 Lane. L.
Rev. 256. Commonwealth v. Boyle, 2 Del. Co. Rep. (Pa.) 335. In re Howell,
10 Pa. Co. Ct. 232. In re Mixter, 10 Pa. Co. Ct. 409. Dixon v. Ricketts, 26
Utah 215, 72 P. 947. Black v. State. 113 Wis. 205, 213, 89 N. W. 522, 90 Am.
St. Rep. 853. See further, ante, s. 68.

The New York statute of 1892 altered the pre-existing law and was followed
in the act of 1896. In re Costello, 189 N. Y. 288, 82 N. E. 139, modifying 117
N. Y. App. Div. 807, 103 N. Y. Suppl. 6.

^Minot V. Winthrop, 162 Mass. 113, 23, 124. State w. Alston, 94 Tenn. 674,
682. Stellwagen v. Durfee, 130 Mich. 166, 173, 89 N. W. 728, 8 Detroit Leg. N.
1204.

The fact that the burden of the tax falls on persons who are legatees in
estates exceeding $10,000, or more, under Conn. Gen. Sts. 1902, ss. 2367-2377,
is not material to its validity. The court notices the claim that this incidental
inequality in the operation of the tax is an arbitrary distinction, but the court
says that taxation is necessarily arbitrary; that the arbitrary selection essential

§ 244.] EXEMPTIONS IN GENERAL. 199

to taxation is controlled by the legislative and not by judicial discretion. The
Connecticut constitution did not require that the tax should be uniform or equal
and the fact that the stress of the tax may fall on some more than others does
not render it void. And this is due to the mere accident of changing circum-
stances. The law is simply and purely an imposition of an indirect tax or duty
and it is within the field where the legislature has absolute discretion. Appeal
of Nettleton, 76 Conn. 235, 241, 56 A. 565. Contra, State v. Ferris, 53 Ohio St.
314, 41 N. E. 579, 30 L. R. A. 218; 9 Ohio Cir. Ct. 298. Black v. State, 113 Wis.
205, 89 N. W. 522.

^In re Wilmerding's Estate, 117 Cal. 281, 49 P. 181. People v. Koenig, 37
Colo. 283, 85 P. 1129. Booth v. Commonwealth, 130 Ky. 88, 113 S. W. 61.
Succession of Abadie, 118 La. Ann. 708, 43 S. 306. State v. Hamlin, 86 Me. 495,
508, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632. Stellwagen v. Durfee, 130
Mich. 166, 89 N. W. 728, 8 Detroit Leg. N. 1204 Neilson v. Russell, 76 N. J. L.
655, 71 A. 286, reversing 76 N. J. L. 27, 69 A. 476. In re Cager, 111 N. Y.
343, 347, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun 657 (St. 1885, c.
483). In re Howe, 112 N. Y. 100, 19 N. E. 513,2 L. R. A. 825, affirming 48
Hun 235. In re Smith, 5 Dem. Surr. (N. Y.) 90. In re Hopkins, 6 Dem. Sum 1.
In re McCready, 6 Dem. Surr. 292. McVean v. Sheldon, 48 Hun 163. In re
Thomson, 48 Ohio Wkly. L. Bui. 212. Knowlton v. Moore, 178 U. S. 41, 69,
20 S. Ct. 747, 44 L. Ed. 969. Contra, and overruled, 22 Opinions of the Attorney
General, 298 (January 5, 1899).

The United States statute of 1898 imposes the duty on the particular
legacies or distributive shares and not on the whole personal estate. This appears
by the title which describes as subject to taxation "legacies and distributive
shares of personal property," and also appears by the opening words of section 29
describing the tax as being upon "any interest which may have been transferred
by," etc. The provisions for collection of the tax conjtained in section 30 of the
act confirm the construction that the passing of each legacy or distributive share
and not the entire personal estate forms the subject of the tax. Knowlton v.
Moore, 178 U. S. 41, 67, 20 S. Ct. 747, 44 L. Ed. 969.

The fact that the executor or administrator is required by the statute
to pay the tax does not make it a tax against the estate of testator or decedent.
"Where it is that the tax is upon the succession, it is computed, not on the
aggregate valuation of the whole estate of a decedent considered as a unit for
taxation, but on the value of the separate units into which it is divided." State
V. Switzler, 143 Mo. 287, 45 S. W. 245, quoted with approval in Booth v. Common-
wealth, 130 Ky. 88, 113 S. W. 61.

Sec. 244. Whether Calculated on Whole Estate or on Por-
tion within State.

Exemptions should in Massachusetts be calculated only on the
portion within the state of the estate of a non-resident, according
to a recent decision which reverses the practice of the taxing au-
thorities. The court holds in substance that, in determining the
question whether a legatee is exempt under Massachusetts law as
receiving less than one thousand dollars, only payments made from

200 INHERITANCE TAX LAW. [§245.

Massachusetts property are to be considered. So where anon-
resident dies leaving some property in Massachusetts, a legatee
who receives over $5,000 from the executor from the property out-
side the state and less than $1,000 from the Massachusetts prop-
erty is not taxable in Massachusetts under the act of 1909, which
deals only with property within the state.

Attorney General v. Barney, 211 Mass. 134, 97 N. E. 750.

The following assessment of an estate of a resident of Massachusetts who died
in October, 1911, illustrates the Connecticut practice: —

DESCRIPTION OF THE PROPERTY TAXED.
10 shares New York, New Haven & Hartford R. R. Co., 133 $1,330.00

Estate in Connecticut $1,330.00

Total estate of decedent 94,315.95

Lineal: —

Taxable bequests, gross $1,330.00

Exemption allowed resident estates of Connecticut passing entirely

to lineal beneficiaries is 10,000.00

Net exemption to which this estate is entitled is that proportion of
the above exemption which the estate in Connecticut bears to
the whole estate, 1330/94315, or 1.41 per cent 141.00

Taxable estate, net $1,189.00

Tax rate .01

$11.89

I find the amount of the Tax due the State of Connecticut, from the above
estate is eleven and 89/100 Dollars ($11.89), which is payable to the treasurer
of this state.

(Signed) WM. H. CORBIN,

Tax Commissioner.
Hartford, Conn., February 10, 1912.

Sec. 245. Real as well as Personal Property Considered.

The exemption under the New York statutes should be fixed by
the total amount of real and personal property combined, and
depends on the statutory definition of "property" in the act.

In re Fisher, 96 N. Y. App. Div. 133, 89 N. Y. Suppl. 102. In re Hallock, 42
Misc. Rep. 473, 87 N. Y. Suppl. 255.

§§246-249.] EXEMPTIONS IN GENERAL. 201

Sec. 246. Amounts Reckoned without Deduction for Tax
or Expenses.

The exemptions may be calculated on the amounts at the testa-
tor's death and not after deducting the inheritance tax ^ or expenses
of administration. 2

^The tax is payable upon the value of the legacy less the exemption, and the
amount of the tax is not to be deducted from the legacy and the tax computed
upon the balance. In re Hooper, 6 Low. D. 560, 4 Ohio N. P. 186 (decided in
1897).

2 Callahan v. Woodbridge, 171 Mass. 595, 599, 51 N E. 176 (under Mass. St.
1891, c. 425, s. 1, holding that expenses of administration are not to be con-
sidered in determining whether the value of the whole estate is above the exemp-
tion although for determining on what amount the tax is to be computed expenses
must be deducted.) See, however, post, Cb.pter XLI.

Sec. 247. Amounts Reckoned with Discount for Delay in
Payment.

In re Underhill, 20 N. Y. Suppl. 134, 2 Con. Surr. 262, following In re Peck,
9 N. Y. Suppl. 465, 24 Abb. N. Cas. 365, 2 Con. Surr. 201. Contra, In re Bird,
32 N. Y. St. 899, 11 N. Y. Suppl. 895, 2 Con. Surr. 376.

Sec. 248. When Legacy Payable in Instalments.

Where a will provides for the creation of a trust estate and the
payment of the principal to him in instalments as he reaches cer-
tain designated ages, there is but one legacy to him and but one
exemption. Where the exemption has already been deducted from
the first instalment of the residue of the estate, which has already
been paid to him, there can be no further exemption as to him.

State V. Probate Court, 100 Minn. 192, 197. 110 N. W. 865.
State V. Probate Court, 112 Minn. 279. 128 N. W. 18, 20.

Sec. 249. In Case of Progressive Rates.

Where a progressive rate exists the exemption should be deducted
from the first amount subject to the primary rate in each distributive
share rather than from the distributive share as a whole.

State V. Probate Court, 112 Minn. 279, 128 N. W. 18, 20. The entire amount of
each share whether exempt or not is considered for the purpose of fixing the rate

202 INHERITANCE TAX LAW. [§250.

of taxation. The exemption is to be deducted from the first amount subject to
tax and the tax fixed on that first amount less the exemptions. In re Timken's
Estate, 158 Cal. 51, 109 P. 608,

"If the statute exempted $20,000 (or any other sum) of every estate from
taxation," said this court, "it would, in our judgment, be equal and valid, even
in imposing a graded tax, as it does." State v. Ferris, 9 Ohio Cir. Ct. 298, which
language really explains the decision on appeal in State v. Ferris, 53 Ohio St. 314.

Sec. 250. Effect of General Tax Exemptions.

Neither general property exemptions from taxation ^ nor con-
stitutional limitations on exemptions ^ control inheritance taxes.

'^ Booth V. Commonwealth, 130 Ky. 88, 113 S. W. 61. Succession of Kohn, 115
La. Ann. 71, 38 S. 898. In re Stanton, 142 Mich. 491, 105 N. W. 1122, 12 Detroit
Leg. N. 829. In re Knoedler, 140 N. Y. 377, 35 N. E. 601, affirming 68 Hun 150.
Matter of Whiting, 150 N. Y. 27, 34 L. R. A. 232, 55 Am. St. Rep. 640. In re
Forrester, 58 Hun 611, 12 N. Y. Suppl. 774. In re Kucielski, 144 N. Y. App.
Div. 100, 128 N. Y. Suppl. 768. In re Finnen, 196 Pa. St. 72, 46 A. 269. Miller
V. Commonwealth, 27 Gratt. (Va.) 110, 118. See, however. In re Kimberly,
27 N. Y. App. Div. 470, 50 N. Y. Suppl. 586.

The tax imposed by N. Y. St. 1896, c. 908, is a tax on the right of succession
and not on property; and therefore it is immaterial that the trust fund passing
by will is invested in bonds of the state of New York or incorporated companies
liable to taxation on their own capital. In re Dows, 167 N. Y. 227, 230, 60 N. E.
439, 52 L. R. A. 433, 88 Am. St. Rep. 508, affirming 60 N. Y. App. Div. 630
(affirmed sub nomine, Orr v. Gilman, 183 U. S. 278, 22 S. Ct.213, 46 L. Ed. 196).

"There are three reasons for holding that the legislature intended the tax
to be measured by property which it is within the power of the state to tax,
and not by property which state policy has selected for purposes of general
taxation. One reason is that the statute is adopted, together with a judicial
interpretation of the language above quoted, from the state of New York.
Stellwagen v. Wayne Probate Judge, 130 Mich. 166. And, as interpreted by the
courts of New York, the design of the legislature to tax the transfer of everything
which it has the power to tax is found in the act. Matter of Whiting, 150 N. Y.
27, 34 L. R. A. 232, 55 Am. St. Rep. 640. Matter of Houdayer, 150 N. Y. 37,
55 Am. St. Rep. 642, 34 L. R. A. 235. Matter of Sherman, 153 N. Y. 1. Matter of
Hellman, 174 N. Y. 254, 95 Am. St. Rep. 582. See, also, Blackstone v. Miller,
188 U. S. 189; Plummer v. Coler, 178 U. S. 115. The second reason is that a
policy of general taxation, which recognizes, to some extent at least, the rule
of universal succession and the theory ot taxation of personal property, gener-
ally, at the domicile of the owner, is not logically controlling of the interpretation
of a statute imposing a tax upon a right of succession or upon a transfer of
property which can only be tangible and enforceable — be made effective — in
the jurisdiction, and by virtue of the laws and institutions, of the situs of the
property. A third reason is that, as a tax upon succession or transfer, uniformity
of operation and an equal measure of the tax to the property of residents and
non-residents can be, with no other construction, secured. There is property
situated within the state, belonging to non-residents, which the state does not
tax, generally {Village of Howell v. Gordon, 127 Mich. 517; Baars v. City of Grand

§251.] EXEMPTIONS IN GENERAL. 203

Rapids, 129 Mich. 672), though it might tax it (Catlin v. Hull, 21 Vt. 152;
New Orleans v. Stempel, 175 U. S. 309). Property of the same class owned by
residents is taxed, generally." Per Ostrander, J,, in In re Stanton, 142 Mich.
491, 105 N. W. 1122, 12 Detroit Leg. N. 829.

"It is very plainly shown in Plummer v. Coler, 178 U. S. 115, that property
which is not taxable as such may constitutionally be considered under a statute
in fixing the amount of an excise tax." Per Knowlton, C. J., in Kingsbury v.
Chapin, 196 Mass. 533, 537, 82 N. E. 700.

2 State V. Henderson, 160 Mo. 190, 217,60 S. W. 1093. State v. Gmlbert,70 Ohio
St. 229, 253, overruling on this point State v. Ferris, 53 Ohio St. 314, 41 N. E.
579, 30 L. R. A. 218. In re McKennan, S. D. 1911, 126 N. W. 611, 615, reversed
on other grounds on rehearing, 130 N. W. 33.

The Pennsylvania Rule. The Pennsylvania constitution expressly authorizes
the legislature to exempt from taxation four specified classes or kinds of property.
"This specific delegation of authority to exempt impliedly prohibits express exemp-
tion from taxation of any other property, but to place this matter beyond the
reach of doubt, it is expressly ordained in section 2, that 'all laws exempting
property from taxation other than the property above enumerated shall be void.'
These limitations on the power of the legislature mean something. They are
plainly intended to secure, as far as possible, uniformity and relative equality
of taxation, by prohibiting generally the exemption of a certain part of any
recognized class of property, and subjecting the residue to a tax that should
be borne uniformly by the entire class, and by guarding against any other device
that necessarily or intentionally infringes on the established rules of uniformity
and relative equality which, as we have seen, underlie every just system of
taxation. In any view that can reasonably be taken of these limitations, it must
be manifest to any reflecting mind that the act in question offends against them
by undertaking to wholly exempt from taxation the personal property of a
very large percentage of decedents' estates, and impose increased and unequal
burdens on the residue of the same class of property." Per Sterrett, C. J., in
In re Cope, 191 Pa. St. 1, 21, 43 A. 79, 29 Pittsb. Leg. J. N. S. 379, 45 L. R. A.
316, 71 Am. St. Rep. 749, 44 Wkly. Notes Cas. 89. (This decision is based on the
peculiar doctrine that the inheritance tax is a property tax.)

Sec. 251. Of Persons Exempt under General Law.

Exempting beneficiaries which are by law exempt from taxation
is confined to beneficiaries exempt under local law,^ but may include
societies exempt under general law as well as under a special exemp-
tion ,2 and has been held void under a constitution requiring a tax
on all inheritances above a fixed and certain sum.*

1 Minot v. Winthrop, 162 Mass. 113, 126, 26 L. R. A. 259. Catlin v. Trinity
College Trustees, 113 N. Y. 133, 142, 22 N. Y. St. 189, 20 N. E. 864, 3 L. R. A.
206, affirming 49 Hun 278, 17 N. Y. St. 707, 1 N. Y. Suppl. 808.

The United States is not exempt as a domestic corporation. In re Merriam,
141 N. Y. 479, 484, 36 N. E. 505, affirmed in United States v. Perkins, 163 U. S. 625.

2 In re Miller, 5 Dem. Surr. (N. Y.) 132, 45 Hun 244.

3 Drew V. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446.

204 INHERITANCE TAX LAW. [§252.

Sec. 252. Testing Status of Corporation. — When Exempt
by General Law.

The status of a corporation as subject to the inheritance tax
should be decided entirely by its charter and the law governing it,
and evidence to show what business it actually does is inadmissible
in New York.^ But in New Jersey it is not enough that it is
incorporated under an act for an exempt purpose, or avows itself
to be organized for that purpose. An institution claiming exemp-
tions must disclose the objects to which it is bound to devote its
property .2 Where a corporation is organized under a statute
which permits incorporation for various objects, some of which
would render it exempt from taxation, the obvious test of exemption
is not incorporation under an act permitting incorporation for
objects that would exempt, but incorporation for objects that
entitle to exemption. The corporation is not exempt unless it is
actually incorporated for objects which entitle it to be exempt.^

The exemption under the New York statute of 1885, of charitable
corporations which are exempt by law, is not confined to corporations
the property of which is completely exempt, but may apply to a cor-
poration which is exempt from taxation up to a certain valuation in
its property, as it is assumed that the corporation will not exceed its
corporate powers and take more property than is authorized.^

An exemption of charitable and religious societies, the property
of which is by law exempt, does not require that the exemption shall
only apply when the association holds all its property free from
yearly taxation. The sole test suggested by the statute is to as-
certain whether the legatee is a charitable, educational or religious
society whose property, when used exclusively in carrying out the
purposes of the association, is evempt from taxation. It is the
character of the institution and the purposes it was organized to
accomplish and its liability or non-liability to taxation for property
devoted to those purposes that determine whether it falls within
or without the exception provided in the inheritance tax law.^ Under
the same provision in Massachusetts it appeared that under the
Massachusetts statutes there was no general exemption from taxa-
tion of property given such societies, but certain property of reli-
gious associations, houses of worship and pews and furniture are
exempt from taxation. Under them the personal and real property
of a religious society is taxable even though the income is used to
support religious worship. The commonwealth contended that
the exemption clause in the inheritance tax statute should be con-

§253.] EXEMPTIONS IN GENERAL. 205

strued to provide that property passing to charitable, educational
or religious societies is to be exempt to the extent to which the
property of such societies or institutions is exempt by general laws.
But the court finds that the test should depend upon the question
whether the institution is one whose property is generally exempt
from taxation. In the case at bar the property was bequeathed
for a parsonage, and parsonages are not exempt from taxation. But
the court holds that this is an accident, that houses of religious
worship are the principal property held by religious societies, and
that therefore a devise to a religious society is a devise to a society
whose property is generally exempt from taxation and is not sub-
ject to an inheritance tax.® The New York court reached the op-
posite result, holding that exemption of any building used by a
church for public worship did not constitute a general exemption
of the church from taxation within the meaning of the collateral
inheritance act, and therefore the church is not exempt from taxa-
tion upon a legacy of "ten thousand dollars towards the building
of a new church."^

1 In re White, 118 N. Y. App. Div. 809, 103 N. Y. Suppl. 688.

2 In re Vineland Historical and Antiquarian Society, 66 N. J. Eq. 291, 56 A. 1039.
3/« re Rothschild, 72 N. J. Eq. 425, 65 A. 1118, affirming 71 N. J. Eq. 210
* In re Vassar, 127 N. Y. 1, 12, 27 N. E. 394, reversing 58 Hun 378, 12 N. Y.

Suppl. 203.

'Carter v. Whitcomb, 74 N. H. 482, 485, 69 A. 779.

^First Universalist Society v. Bradford, 185 Mass. 310, 70 N. E. 204.

'Sherrill v. Christ Church 121 N. Y. 701, 702, 25 N. E. 50, reversing In re Van
Kleeck, 55 Hun 472.

Sec. 253. Exemption of Property otherwise Taxed.

Under the Louisiana act the inheritance tax is not to be enforced
when the property donated or inherited shall have borne its just
proportion of taxes prior to the death of the decedent. The court
holds that "the values which are liable to the inheritance tax are
to be arrived at by deducting from the total value of the estate the
aggregate amount of the debts and special legacy, and then sub-
tracting from the remainder the value of the property shown to
have previously borne its just proportion of tax, this second remainder
to be divided in parts representing respectively the taxable inherit-
ances'* of the descendants.^

Where payment of the debts absorbed the whole amount of the
proceeds of the personal property and the balance due had to be
made from the proceeds of the realty exempt, as it had paid general

206 INHERITANCE TAX LAW. [§§ 254r-255.

tax to satisfy the legacies, the court holds that there can be no
question. The legacy from funds that are not proceeds of property
exempt owes a tax. But where there is an exemption, the fact of a
sale or other disposition made necessary to the discharge of the
legacy does not forfeit the exemption. The character of the prop-
erty was fixed at the date of the death of the testator and the
inheritance tax is due on a legacy not paid from the proceeds of
exempt property, but it is not due on a legacy necessarily paid from
the proceeds of exempt property under La. St. 1906, c. 109, p. 173.^
If the law-maker had intended to include property exempt from
taxation he would have said so. Non-taxable bonds cannot be
said to have borne their just proportion of taxation, as they are
exempt from such a burden. The law-maker evidently referred
to property subject to assessment and taxation on which taxes had
been paid prior to the time of the devolution of the inheritance.
Exemption from taxation is strictly construed and cannot be read
into a statute by inference or implication ; therefore state and mu-
nicipal bonds exempt from taxation are subject to the inheritance
tax. The court relies on Plummer v. Coler, 178 U. S. 115, 20 S. Ct.
829, 44 L. Ed. 998.^

^Succession of Abadie, 118 La. Ann. 708, 43 S. 306.
2 Succession of Becker, 118 La. Ann. 1056, 43 S. 701.
^Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

Sec. 254. Interests under Powers.

Under a statute taxing transfers under the exercise of a power
the exemption is reckoned on the transfer as passing from the donee
of the power.

In re Seaver, 63 N. Y. App. Div. 283, 71 N. Y. Suppl. 544. See further,
ante, s. 139 et seg.

Sec. 255. Remainder may be Liable though Prior Estate
Exempt.

A remainder to collateral kindred whose property or estates are
declared to be liable for taxes is subject to taxes although the prior
estate is exempt. Each recipient must stand upon his or her own
relationship to the person from whom the property comes without
reference to the liability or non-liability of the person taking the
property before or after him.

Bailey v. Drane, 96 Tenn. (12 Pickle) 16, 33 S. W. 573. See In re Cager, 111
N. Y. 343, 347, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun 657.

§§256-257.1 EXEMPTIONS IN GENERAL. 207

Sec. 256. **Persons" Includes Corporations.

The word "person" in an inheritance statute includes corporations.

The omission in the Virginia statute of 1867, c. 64, s. 3, of the words
"bodies politic and corporate" and of the words "to any other use than to and
for the use of the father," etc., cannot be taken as an indication of an intention
of the legislature to exempt corporations from this tax. If the word "person"
in the act embraces corporations, then these words were useless and unneces-
sary and were properly omitted, and the court finds that "person" here covers
corporations. Miller v. Commonwealth, 27 Gratt. (Va.) 110, 116.

Sec. 257. Foreign Corporations.

It is the general rule in this country that exemptions to charitable^
or religious 2 corporations are confined to domestic corporations,
although the foreign corporation may have a limited right to hold
property in the state.^ A bequest to Bowdoin College, a Maine
institution, is not exempt from the Massachusetts inheritance tax,
although Bowdoin College was a corporation created by Massa-
chusetts by the statute of 1794 before Maine was separated from
Massachusetts. The court holds that nevertheless after the separa-
tion it ceased to be an institution incorporated within the state of
Massachusetts within the meaning of the Massachusetts statute,
and therefore it is subject to tax.'^

1 People V. Western Seamen's Friend Society, 87 111. 246. In re Speed, 216 111.
23, 74 N. E. 809, 108 Am. St. Rep. 189, affirmed 203 U. S. 553, 27 S. Ct. 171, 51
L. Ed. 314. In re Crawford, 148 Iowa 60, 126 N. W. 774. Minot v. Winthrop,
162 Mass. 113, 26 L. R. A. 259. Alfred University v. Hancock, 69 N. J. Eq. 470,
46 A. 178. In re Rothschild, 72 N. J. Eq. 425, 65 A. 1118, affirming 71 N. J. Eq.
210. In re Gopsill (N. J. Prerog.), 77 A. 793. In re McCoskey, 1 N. Y. Suppl.
782, 22 Abb. N. Cas. 20, 6 Dem. Surr. 438. Catlin v. Trinity, 113 N. Y. 133, 3
L. R. A. 206n. In re Prime, 136 N. Y. 347, 362, 32 N. E. 1091, 18 L. R. A. 713,
affirming 64 Hun 50. Humphreys v. State, 70 Ohio St. 67, 101 Am. St. 888, 70
N. E. 907, 65 L. R. A. 776, affirming 13 Low. D. 168, 1 C. C. N. S. 1, 14 Cir. D.
238 (although the foreign charitable corporations have agencies in Ohio).

^ Minot V. Winthrop, 162 Mass. 113, 126, 21 L. R. A. 259. In re Balleis, 144
N. Y. 132, 38 N. E. 1007, affirming 78 Hun 275. In re Smith, 77 Hun 134, 28
N. Y. Suppl. 476. In re Taylor, 80 Hun 589, 30 N. Y. Suppl. 582. In re Fayer-
weather, 30 N. Y. Suppl. 273, 31 Abb. N. Cas. 287. See ante, s. 60.

2 The American Baptist Publication Society was empowered by the New York
statute to take and hold property in New York state, but the court holds that this
right alone does not relieve the respondent from taxation. In re Wolfe, 23 Misc.
Rep. 439, 52 N. Y. Suppl. 415, 2 Gibbons 446.

The fact that a foreign charitable corporation was given a limited privilege of
taking and holding real and personal property in New York did not relieve that
corporation from a tax on a legacy due it; that was an enabling statute merely.
The corporation remained a foreign corporation as before, but possessing in this

208 INHERITANCE TAX LAW. [§§258-260.

state a privilege granted by that statute. In re Prime, 136 N. Y. 347, 363, 32
N. E. 1091, 18 L. R. A. 713, affirming 64 Hun 50.

4 Batt V. Stevens, 209 Mass. 319. The court follows Rice v. Bradford, 180 Mass.
645.

Sec. 258. Gift to Foreign Corporation for Domestic Use.

Although a gift is made nominally to a charitable corporation
organized under the laws of another state, still where the gift is not
to or for the corporation itself, and where the corporation is given
no power or authority to take it out of the jurisdiction of the state
or to expend it for any other than the local purposes mentioned in
the will, it is exempt from the inheritance tax. The court distin-
guishes between a gift made generally to or for a charitable society
organized in another state and a gift made to aid the work of a
strictly local charity with which the foreign society may be asso-
ciated. The court regards it as a trust in which the existence of the
trustee is not material.

In re Crawford, 148 Iowa 60, 126 N. W. 774.

Sec 259. Corporation Chartered in More than one State.

A corporation incorporated in more than one state may for the
purpose of exemptions be treated as a domestic corporation in each
state.

Where one charitable corporation has only a single entity but is incorporated
in three states theoretically it must be said that there is a distinct entity in each
of three states, but the substance is the same in all. It has a single body possess-
ing the franchises and privileges of a domestic corporation in three states. To
say that the bequest is to a foreign corporation merely because the testatrix
named the place where its principal office is located as Boston, Massachusetts,
is to substitute form for substance. In re Lyon, 141 N. Y. App. Div. 34, 128 N. Y.
Suppl. 1004.

See further, ante, s. 212.

Sec. 260. Effect of Use Made of Funds.

The common rule is that an exemption to charitable corporations
includes any domestic corporation although the corporation had
a right to spend its money outside the state.^ The courts have
attempted in some cases to look beyond this rule and allow exemp-
tions only where it appeared that the domestic beneficiary was to
expend the funds received within the state.^ The New Jersey stat-
ute on the other hand refuses the exemption to certain institutions
which confine their activities within state lines. ^

§260.1 EXEMPTIONS IN GENERAL. 209

Under the New Hampshire statute of 1905, as amended in 1907,
if the gift is absolute it is the use made of the property or fund con-
stituting the gift that determines the exemption, but if it is in trust
it is the use made of the income or beneficial interest that governs,
for in such case it is that property or interest alone which comes into
the hands of the donee for use. And so where bonds are given to
churches as trustees, the question is not whether the bonds should
be exempt from tax, but whether their income in the hands of the
beneficiaries should be exempt.*

^Balch V. Shaw, 174 Mass. 144 (under the act of 1891).

2 The court holds that a legacy to trustees for the purpose of establishing a cer-
tain Latin school in a foreign country is not exempt from taxation under the stat-
ute of 1906, chapter 436. The fact that the will authorized the trustees to form
a corporation to administer the fund and that the trustees did form a Massachu-
setts corporation does not alter the case, as the fund vested in the trustees on the
death of the testator, and there was no requirement that a corporation should be
formed. The gift took effect absolutely in the trustees on the death of the
testator. Pierce v. Stevens, 205 Mass. 219, 91 N. E. 319. The court distinguishes
the case of Batch v. Shaw, 174 Mass. 144, where there was no gift to anyone until
the corporation was formed.

A legacy to the New Hampshire Baptist convention was not subject to the
inheritance tax. The convention is authorized by its charter to receive and hold
donations and use the same for "the purpose of promoting foreign and domestic
missions and the education of indigent and pious young men for the gospel minis-
try and any other religious charities which they may deem proper." The convention
had always confined its work to this state and purposes to ask the legislature to
amend its charter so as to prevent its use of funds outside the state. In view
of these facts it seems clear that the charity is of substantial benefit to the people
of New Hampshire and is therefore exempt from taxation. Carter v. Story,
(N. H. 1911,) 78 A. 1072.

The Home Missionary Society was not entitled to an exemption under the
New Hampshire statute of 1905, as it devoted substantially all its funds to the
support of charities outside of New Hampshire. The question was whether its
charity was of such a character and so administered as to be of any substantial
benefit or advantage to the pjeople of New Hampshire, and this was a question
of fact to be determined upon competent evidence. Carter v. Whitcomh, 74 N. H.
482, 491, 69 A. 779.

The Woman's Foreign Missionary Society, the principal object of which
is the "evangelization of heathen women," is not a public charity even though
there may be heathen women in New Hampshire, as it was found that none of the
funds of the society could be used within the state of New Hampshire. "The
expenditure of large sums of money for the enlightenment upon religious subjects
of the natives of the Antipodes evidently was not one of the objects the legislature
intended to encourage, when in 1895 the property of charitable associations 'de-
voted exclusively to the uses and purposes of public charity' was exempted from tax-
ation, or when in 1905 legacies to such associations 'in this state' were exempted
from the inheritance tax." Carter v. Whitcomh, 74 N. H. 482, 489, 69 A. 779.

210 INHERITANCE TAX LAW. [§261.

3 The New York Yearly Meeting of Friends is the general governing body
of the society of Friends and has primary control over the missionary purposes
and general benefactions of such minor bodies as act by its authority. Funds
are set apart for the work among the Indians and for the benefit of former slaves
in the south. It has missions in Mexico, North Carolina, Palestine and Japan
and China. Its membership is not confined to the state of New York. It has
meetings organized in Vermont and in Canada, and membership in these meetings
is not confined to state lines. The court holds that there is no difference between
the methods of these meetings and the methods of the boards of home and for-
eign missions of the various religious organizations. Therefore, the society of
Friends comes clearly within the statutory exemption. State v. N. Y. Meeting
of Friends, 61 N. J. Eq. 620, 48 A. 227.

The Union for Ministerial Education, whose purpose is to assist in educat-
ing for the ministry suitable men, is a religious institution; so the Baptist Edu-
cation Society, the object of which is to furnish the means for instruction to
young of personal piety, who have a call to the ministry; and the American
Baptist Home Missionary Society, whose object is to promote the preaching
of the gospel in North America, are all religious institutions. As the first two
are not limited to students of any particular locality, they are certainly not local
in their nature and the board of missions is clearly of a general purpose also.
Therefore, all three of these institutions are exempt from payment of the collateral
inheritance tax. In re Jones, (N. J. 1907,) 67 A. 1035, affirmed 70 A. 1101.

^Carter v. Eaton, 75 N. H. 560, 78 Atl. 643.

Sec. 261. Special Exemptions.

Special exemptions of individual bequests from inheritance
taxation have been sometimes passed in this country,^ and upheld
where uniformity of taxation is not required } A general inheritance
tax exemption may supersede special exemptions.^

1 Mass. St. 1908, p. 840. Pa. St. 1855, c. 47, specially exempts a certain legacy
to an orphan asylum from the payment of the inheritance tax. Pa. St. 1873,
c. 290. Va. St. 1897-98, c. 562.

^Commonwealth v. Henderson, 172 Pa. St. 135.

3/» re Huntington, 168 N. Y. 399, 408, 61 N. E. 643, affirming 62 N. Y. App.
Div. 96.

CHAPTER XXXIII.

EXEMPTIONS FOR GOVERNMENTAL PURPOSES.

§ 262. Federal Taxation of Bequest to State or Municipality.

§ 263. State Taxation of Bequest to United States.

§ 264. Government Bonds.

§ 265. Municipal Corporations or Public Institutions.

§ 266. To Town in another State.

§ 267. Funds in Hands of Court in Trust.

Sec. 262. Federal Taxation of Bequest to State or
Municipality.

The federal congress has the power to impose a succession tax
upon a bequest to a municipal corporation of a state for a cor-
porate and public purpose, and U. S. Stat. June 13, 1898, as
amended March 2, 1901, exercises this authority.^

As congress has the power to tax successions and the states have
the same power, and such power of the states extends to bequests
to the United States, it follows that congress has the same power
to tax the transrriission of property by legacy to states or their
municipalities and that the exercise of that power in neither case
conflicts with the proposition that neither the federal nor the
state government can tax the property or agencies of the other,
since the taxes imposed are not upon the property but upon the
right to succeed to property .^

^Snyder v. Bettman, 190 U. S. 249, 23 S. Ct. 803, 47 L. Ed. 1035, Fuller, White
and Peckham, JJ., dissenting.

^Snyder v. Bettman, 190 U. S. 249, 23 S. Ct. 803, 47 L. Ed. 1035.

Sec. 263. State Taxation of Bequest to United States.

The state can tax a bequest or devise to the United States.

In re Murphy, 4 Misc. Rep. 230, 25 N. Y. Suppl. 107. In re Cullum, 5 Misc.
Rep. 173, 25 N. Y. Suppl. 699.

A legacy to the United States is subject to the inheritance tax. "This tax,
in effect, limits the power of testamentary disposition, and legatees and devisees
take their bequests and devises subject to this tax imposed upon the succession
of property. This view eliminates from the case the point urged by the appel-
lant that to collect this tax would be in violation of the well-established rule that

212 INHERITANCE TAX LAW. [§264.

the state cannot tax the property of the United States. Assuming this legacy
vested in the United States at the moment of testator's death, yet in contem-
plation of law the tax was fixed on the succession at the same instant of time.
This is not a tax imposed by the state on the property of the United States, The
property that vests in the United States under this will is the net amount of its
legacy after the succession tax is paid." Per Bartlett, J., in In re Merriara,
141 N. Y. 479, 484, 36 N. E. 505.

N. Y. St. 1885, c. 483, as amended by St. 1891, c. 215, exempted from the
inheritance tax societies, corporations and institutions now exempted by law
from taxation, and the court holds that the United States is not a corporation
exempt by law from taxation. It is a settled doctrine of New York that exemp-
tion from taxation is granted only to domestic corporations and this doctrine is
applied to their inheritance tax law in the Matter of Prime, 136 N, Y. 347. The
legislature intended to allow an exemption only in favor of such corporations as
it had itself created and which might reasonably be supposed to be the special
objects of its solicitude and bounty. We think it was not intended to apply
the exemption to a purely political or governmental corporation like the United
States. United States v. Perkins, 163 U. S. 625, 16 Sup. Ct. 1073, 41 L. Ed.
287, affirming In re Merriam, 141 N. Y. 479, 36 N. E. 505.

Sec. 264. Government Bonds.

Under the prevailing theory that tjie inheritance tax is a burden
on the succession and not on the property the tax may be levied,
although the funds of the estate may be invested in government
bonds of various kinds. Thus United States bonds may be tax-
able under a state tax,^ or under the federal tax.^ State and
municipal bonds are also taxable under state law.^ Such taxation
does not constitute a breach of the obligation of the contract of
exemption in the bonds under the federal constitution.''

!/« re Howard, 5 Dem. Surr. (N. Y.) 483. In re Carver, 4 Misc. Rep. 592,
25 N. Y. Suppl. 991. In re Sherman, 153 N. Y. 1, 4, 46 N. E. 1032, affirming
15 N. Y. App. Div. 628. Strode v. Commonwealth, 52 Pa. St. 181. Clymer v.
Commonwealth, 52 Pa. St. 181, 186. Plummer v. Coler, 178 U. S, 115. Succession
of Levy, 115 La. 378, 39 S. 37, affirmed Cahen v. Brewster, 203 U. S. 552, 27 S.
Ct. 174, 51 L. Ed. 310, following the case of Plummer v. Cokr, 178 U. S. 115,
20 S. Ct. 829, 44 L. Ed. 998. Wallace v. Myers, 38 Fed. 184, 4 L. R. A. 171.

The court after an exhaustive review of the state and federal authorities con-
cludes as follows: "We think the conclusion, fairly to be drawn from the state
and federal cases, is, that the right to take property by will or descent is derived
from and regulated by municipal law; that, in assessing a tax upon such right
or privilege, the state may lawfully measure or fix the amount of the tax by
referring to the value of the property passing; and that the incidental fact
that such property is composed, in whole or in part, of federal securities, does
not invalidate the tax or the law under which it is imposed." The court dis-
cusses the question of the evils resulting from a state tax on the transfer of
United States securities and finds that those evils are insignificant. The court

. >• . .

5 264.] EXEMPTIONS FOR GOVERNMENTAL PURPOSES. 213

finds that the tax is not upon the United States but upon the right to transmit
the securities, and should be paid, as the charges of administration are paid out
of the securities. Plummer v. Coler, 178 U. S. 115, 138.

"The mistake of the learned counsel for the plaintiff in error consists, we
conceive, in treating this as a tax of the government bonds, when it is really a
tax upon a decedent's estate, dying without lineal heirs. And it does not help
the argument, that the bulk of the estate is made up of these bonds; for that
estate passed into the hands of the executor for administration, and is taxed
in his hands as an estate. The law takes every decedent's estate into custody,
and administers it for the benefit of creditors, legatees, devisees and heirs, and
delivers the residue that remains, after discharging all obligations, to the dis-
tributees entitled to receive it. One of the legal obligations to which every estate
that is to go to collateral kindred is subject, is this five per cent duty to the
commonwealth. And it is not until this work of administration is performed,
that the right of succession attaches. The distributees may, indeed, consent to
accept certain goods and chattels in specie without conversion, as is frequently
done in settlement of estates; but such arrangement in no case affects the theory
of the law, that the estate is first to be administered and then enjoyed. Now
this five per cent tax is one of the conditions of administration, and to deny the
right of the state to impose it, is to deny the right of the state to regulate the
administration of decedents' goods. If an estate consist wholly of federal bonds
and is indebted, conversion of them into money is necessary to pay the debts;
and nobody would doubt that the sum that remained after payment of debts
would be subject to a deduction of five per cent for the use of the state. But
suppose the federal bonds be used to pay the only indebtedness that exists, and
a residue of estate remains for distributees, is it not to pay the collateral inherit-
ance tax? Clearly it must, though it may be less than the aggregate of the bonds.
The act operates on the residue of the estate after paying debts and charges, and,
theoretically, that residue is always a balance in money. The administration
account always exhibits a balance in cash, not in specific goods, whether bonds
or horses; and though an heir may take bonds or horses as cash, the account
must show, and always does show, a cash balance. That is the fund taxed by
this law, and not the bonds or other chattels which may have produced the fund.
Therefore, neither the prohibitory clause of the Act of Congress of 1862, nor
any of the principles of decision against state authority to tax that which federal
authority has exempted from taxation, have any application here. The federal
government has not prohibited the states from prescribing rules of inheritance
and succession to estates of decedents, and it would be a grevious mistake of
legislative and judicial authority to apply it with such effect." Per Woodward,
C. J., in Strode v. Commonwealth, 52 Pa. St. 181 (2 P. F. Smith).

The New York statute of 1892 did not include government bonds as its
language confined it to property over which the state has jurisdiction for
purposes of taxation. In re Purdy, 24 Misc. Rep. 301, 53 N. Y. Suppl. 735 , 2
Gibbons 527. In re Coogan, 27 Misc. Rep. 563, 59 N. Y. Suppl. 111. In re
Sherman, 153 N. Y. 1, 5, 46 N. E. 1032, affirming 15 N. Y. App. Div. 628.

2 The exempting clauses in the statutes and on the face of the bonds do
not mean that a state or the United States may not tax inheritances and legacies,
regardless of the character of the property of which they are composed. "That
some of the holders of United States bonds may have paid franchise taxes to the

214 INHERITANCE TAX LAW. [§26

states, and others may have paid state or federal inheritance and legacy taxes,
has nothing to do with the contract between the United States and the bond-
holders. The United States will have complied with their contract when they
pay to the original holders of their bonds, or to their assigns, the interest when
due, in full, and the principal, when due, in full," Per Shiras, J., in Murdoch
V. Ward, 178 U. S. 139, 148, 20 S. Ct. 775, 44 L. Ed. 1009.

^Succession of Kohn, 115 La. Ann. 71, 38 S. 898. In re Dows, 167 N. Y. 227,
60 N. E. 439, 52 L. R. A. 433, 88 Am. St. Rep. 508, affirming 60 N. Y. App.
Div. 630 (affirmed suh nomine, Orr v. Gilman, 183 U. S. 278, 22 S. Ct. 213, 46
L. Ed. 196).

Wrr v. Gilman, 183 U. S. 278, 22 S. Ct. 213, 46 L. Ed. 196.

Sec. 265. Municipal Corporations or Public Institutions.

The tax may be imposed on gifts for public purposes. The
inheritance tax is not levied upon the fund but upon its trans-
mission, and hence the argument that it is against the policy of
the law to levy a tax upon a fund devised for a public school has
no bearing upon the case at bar, for the reason that this fund does
not become a fund devoted to the maintenance of a school until
the law relative to its transmission has been complied with. The
tax must be paid before the fund in question can become the prop-
erty of the school or be devoted to educational purposes,^ though
an exemption may be implied to gifts to public institutions ^ or
municipal corporations.^

"-Leavell v. Arnold, 131 Ky. 426, 115 S. W. 232.

2/m re Harris, 38 Ohio Wkly. L. Bui. 281 (Smithsonian Institute).

An implied exemption from taxation under Col. St. 1902, c. 3, should be
allowed to state institutions, as laying a tax upon them would in the end pro-
duce no net revenue. And bequests to a state and county for a hospital and to
the regent of the state university for an auditorium are not subject to the state
inheritance tax. In re Macky, 46 Colo. 79, 102 P. 1075.

3 Under N. Y. St. 1887, c, 713, s. 1, the exemption of "societies, corporations
and institutions now exempted by law from taxation," was not intended to apply
to bequests to municipal corporations. The property of municipal corporations
are never included in the terms of any law providing for the imposition of a tax,
not because it is exempt, but for the reason that in the nature of things it never
was and never can be taxable, as this would be a tax by the government upon
itself and utterly useless. Exemption implies that the person or corporation
to which it applies is or would otherwise be taxable. To include public property
which is not and in the nature of things cannot be taxable at all within the
terms of an exemption act, would be to do a vain and useless thing which cannot
be imputed to the legislature. There is no sound distinction between this case
and that of a bequest to the United States in which we held that the gift was
subject to the tax. In re Hamilton, 148 N. Y. 310, 314, 42 N. E. 717, affirming
90 Hun 608. See In re Thrall, 157 N. Y. 46, 51 N. E. 413, holding that as the

266-267.] EXEMPTIONS FOR GOVERNMENTAL PURPOSES. 215

property of a municipal corporation was exempt a bequest to a municipal cor-
)ration for a public library is exempt.

266. To Town in another State.

The testator made a bequest to a town in New Hampshire of
le residue of her property as a perpetual fund in trust, the income
be expended in aid of the worthy poor of American parentage
ddents of the town. The testator died November 23, 1908, and
le court holds that the Massachusetts statute of 1909, c. 527,
:tion 1, providing that the exemption of gifts to charitable pur-
)ses shall be an exemption of gifts to "charities to be carried out
ithin this commonwealth," and that the exemption of bequests
a "state or town for public purposes" shall be an exemption
"a city or town within this commonwealth for public purposes,"
Is merely declaratory of previous statutes. The court notes that
le charitable exemption has always been confined in Massachu-
Jtts to towns of Massachusetts and finds in the history of the
statutes which it discusses no reason to think that this policy had
ever been altered.

Davis V. Stevens, 208 Mass. 343, 94 N. E. 556.

Sec. 267. Fund in Hands of Court in Trust.

A bequest in trust for charitable purpose is not exempt simply
because it is in the hands of the court.

The court reverses the order of the surrogate to the effect that where a devise
in trust for the purpose of founding a home for the aged was made, the trust
to last during two lives only, the fund after the end of the trust was in the
hands of the supreme court and therefore exempt from taxation. The appel-
late division remarks that the fund is not a gift to the state and does not become
the property of the state; that the omission of the testator to supply a trustee
after the two lives is supplied by the legislative intervention, but that does not
alter the character of the gift, nor give any control over it for any purpose
beyond that outlined by the will. Knight v. Stevens, 72 N. Y. Suppl. 815, revers-
ing In re Graves, 70 N. Y. Suppl. 727.

CHAPTER XXXIV.

EXEMPTIONS FOR RELIGIOUS OR
CHARITABLE PURPOSES.

§ 268. Almshouse.

§ 269. Art Museum.

§ 270. Bishop.

§ 271. Charities.

§ 272. To County for Charitable Purposes.

§ 273. Churches and Dependent Societies.

§ 274. Prevention of Cruelty.

§ 275. Drinking Fountain and Monument to Horse.

§ 276. Educational. — University.

§ 277. Historical and Antiquarian Society,

§ 278. Homes.

§ 279. Hospital.

§ 280. **Institutions."

§ 281. Libraries.

§ 282. Masons.

§ 283. Missionary Societies.

§ 284. Temperance Societies.

§ 285. Women's Relief Corps.

§ 286. Young Men's Christian Association.

§ 287. Trust for Charity.

Sec. 268. Almshouse.

An almshouse may be any home which is absolutely free.

Institutions to be exempt as an almshouse must be absolutely free and all
benefits must be given gratuitously. In re Vanderbilt, 10 N. Y. Suppl. 239,
2 Con. Surr. 319.

An institution for the blind which does not receive pay from patients under
any circumstances is exempt as an almshouse. In re Underbill, 20 N. Y. Suppl.
134, 2 Con. Surr. 262.

Sec. 269. Art Museum.

An art museum may be subject to tax,^ or may be exempt as an
educational institution. ^

1/m re Vanderbilt, 10 N. Y. Suppl. 239, 2 Con. Surr. 319. In re Wolfe, 15
N. Y. Suppl. 539, 2 Con. Surr. 600, reversed, 137 N. Y. 205.

§§ 270-271.] RELIGIOUS OR CHARITABLE PURPOSES. 217

2/w re Mergentime, 195 N. Y. 572, 88 N. E. 1125, affirming 129 N. Y. App.
Div. 367, 113 N. Y. Suppl. 948.

Sec. 270. Bishop.

A New York exemption of property devised to a bishop covers a
bequest to an archbishop or cardinal archbishop in his official
capacity,^ or to a bishop who is at the death of the testator a non-
resident.2

^The clear intent and object of the law was to exempt the property held by
religious corporations whether held in the name of the corporation itself or in
the name of one of the religious heads of the church or denomination. In re
Kelly, 29 Misc. Rep. 169, 60 N. Y. Suppl. 1005.

2 The testator died in 1896 leaving a legacy "to Bishop William Taylor, or
his living successor, to be used in his African mission work." Bishop Taylor
died before the testator and his living successor was a resident of New Jersey.
It was argued that the bishop took this in his official capacity and that it was
therefore subject to taxation as a charitable gift to a non-resident. But the
court holds that the office of bishop is not a state office and that the bishop is
not a corporation sole. The state does not recognize the existence of any eccle-
siastical office the result of which is to give to the holders of it the right of per-
petual succession, or any other rights similar to those which are enjoyed by
corporations. The designation of a person as a bishop is a mere descriptio per-
sonce. Therefore this legacy is exempt from taxation under the statute of 1892
exempting from the tax legacies to "any person who is a bishop, or to any
religious corporation." In re Palmer, 158 N. Y. 669, 52 N. E. 1125, affirming
33 N. Y. App. Div. 307.

Sec. 271. Charities.

Charitable organizations are not exempt from the inheritance
tax unless specifically so designated,^ but have been usually spe-
cially named as exempt.^ The courts in determining whether or
not a gift is charitable will not look to the motives of the donor
but rather to the nature of the gift and the object which will be
attained by it.^

^Leavell v. Arnold, 131 Ky. 426, 115 S. W. 232. In re Jones, 50 Hun 603,
2 N. Y. Suppl. 671, 22 Abb. N. Cas. 50, 1 Con. Surr. 125. See In re Bates, 7
Ohio N. P. 625, 5 Ohio S. & C. P. Dec. 547. In re Simon, 7 Ohio N. P. 667,
39 Wkly. L. Bui. 369. A special exemption of the property of Cooper Union
is not sufficient to save it from taxation. In re Kucielski, 128 N. Y. Suppl. 768.

^Succession of Levy, 115 La. 378, 39 S. 37, affirmed Cahen v. Brewster, 203 U. S.
552, 27 S. Ct. 174, 51 L. Ed. 310.

The Craig Colony for Epileptics organized to treat a class of unfortunates is
charitable and therefore exempt from taxation, though its patients work on its
lands to grow food or to produce things sold by the state to purchase necessaries.
In re Moore, 66 Misc. 116, 122 N. Y, Suppl. 828, affirmed 128 N. Y. Suppl. 1135.

218 INHERITANCE TAX LAW. [§§272-273.

The New York Association for Improving the Condition of the Poor, which
is a pure charity making no charge whatever, is exempt from taxation. In re
Lenox, 9 N. Y. Suppl. 895.

The Church Charity Foundation on Long Island, all of whose property is
used for the maintenance of aged and indigent persons and orphans and other
children, is exempt from taxation in its personal property under the statute of
1895. In re Hunter, 11 N. Y. St. Rep. 704.

The Children's Aid Society is exempt. In re Huntington, 70 N. Y. Suppl.
853, modifying 70 N. Y. Suppl. 429.

3 In re Graves, 242 111. 23, 89 N. E. 672, 134 Am. St. R. 302.

Sec. 272. To County for Charitable Purposes.

A gift to public officers as trustees to carry out a charitable
purpose may be exempt as a charitable gift.

In re Spangler, 148 Iowa 333, 127 N. W. 625.

Sec. 273. Churches and Dependent Societies.

Churches,^ or bequests for the benefit of churches,^ or societies
connected with churches,^ are commonly exempt from taxation,
as are generally bequests for religious uses."*

^Congregational and Baptist churches are religious societies and public
charitable associations or societies within the meaning of the New Hampshire
law. Carter v. Eaton, 75 N. H. 560, 78 Atl. 643.

Grace Church is not exempt from taxation, as its benefits and privileges are
not free to all. In re Wolfe, 15 N. Y. Suppl. 539, 2 Con. Surr. 600, reversed
137, 205.

2 Where a legacy was made to a church of three thousand dollars, the income
of which was to be used for the benefit of the church, as the church holds the
principal fund as trustee and can only use the income, and since the income
can only be used for church purposes, it follows that the legacy is not subject
to the inheritance tax. Carter v. Story, (N. H. 1911,) 78 A. 1072, citing Carter
v. Eaton, 75 N. H. 560, 78 A. 643.

' In re Lyon, 128 N. Y. Suppl. 1004. The Church Foundation is exempt
under the statute of 1885. Church Charity Foundation v. People, 6 Dem. Surr.
(N. Y.) 154.

A gift to the American Bible Society is subject to the inheritance tax in force
in 1890. In re Lenox, 9 N. Y. Suppl. 895.

The American Baptist Publication Society, organized for the purpose of pro-
moting evangelical religion by means of the Bible, printing press, colportage,
Sunday schools and other appropriate ways, is not a "charitable" corporation,
as a person or corporation seeking to advance the cause of religion only cannot
be said to be engaged in a charitable work in the ordinary sense in which that
term is used. In re McCormick, 127 N. Y. Suppl. 493.

Societies connected with the Methodist church for religious, educational and
philanthropic purposes are charitable, and the fact that they may more directly

§§274-276.] RELIGIOUS OR CHARITABLE PURPOSES. 219

benefit their members than those who are not members does not deprive them
of their public character. They are therefore exempt from taxation. Carter
V. Whitcomb, 74 N. H. 482, 69 A. 779.

*The Young Men's Christian Association is not a reUgious corporation. In re
Fay, 37 Misc. 532, 76 N. Y. Suppl. 62. Young Men's Christian Association v.
New York, 113 N. Y. 187, 21 N. E. 86. See, however, Little v. Newburyport, 210
Mass. 414, 96 N. E. 1032.

Sec. 274. Prevention of Cruelty.

A society for the prevention of cruelty to children may be in-
cluded in societies organized for the enforcement of laws relating
to children,^ while a society for the prevention of cruelty to animals
is not a charitable corporation, as its work is confined to animals
and not to human beings.^

^In re Moses, 123 N. Y. Suppl. 443, modifying and affirming 60 Misc. 637,
113 N. Y. Suppl. 930.
Un re Keith, 5 N. Y. Suppl. 201, 1 Con. Sum 370.

Sec. 275. Drinking Fountain and Monument to Horse.

The court holds that a certain gift to the public authorities for
the erection of a drinking fountain or drinking basin for horses,
and in connection therewith a bronze statue of a certain horse
together with a record of his performances, is exempt from the
inheritance tax as a charitable gift.

In re Graves, 242 111. 23, 89 N. E. 672, 134 Am. St. R. 302 (as the court looks to
the nature of the gift and the object to be accomplished rather than the motives
of the donor).

Sec. 276. Educational. — University.

Gifts for educational purposes are commonly exempt.^ A library
may be properly classed as an educational institution.^ A university
may be found a charitable institution,^ but not a religious institu-
tion, even though it has a theological department as an adjunct
of its principal departments, which are purely secular.'*

^ In re Arnot, 130 N. Y. Suppl. 197, devise to corporation to be formed for art
class and reference library for public is exempt as "educational." The statute
of 1900, chapter 382, made a change in the law and under it a corporation or-
ganized exclusively for educational purposes is no longer exempt from the inherit-
ance tax. In re Crouse, 34 Misc. 670, 70 N. Y. Suppl. 731.

The Young Men's Christian Association was treated as "educational" in
In re Moses, 123 N. Y. Suppl. 443, 60 Misc. 637, 113 N. Y. Suppl. 930.

^ Essex V. Brooks, 164 Mass. 79, 83, 41 N. E. 119. In re Francis, 189 N. Y.
554, 82 N. E. 1126, affirming 121 N. Y. App. Div. 129, 105 N. Y. Suppl. 643.

220 INHERITANCE TAX LAW. [§277.

^Alfred University is a school of learning, having an academic, collegiate and
a theological department, which is a corporation and has no capital stock and
pays no dividends and is primarily supported by funds derived from public
and private charity together with tuition fees. Whatever is received is devoted
to the object of sustaining the institution and increasing its benefits to the
public by extending and improving its accommodations and diminishing its
expenses. A gift to such an institution is a bequest to a charitable institution,
and all gifts for the promotion of education are charitable in a legal sense where
the elements of private gain are wanting and where the scheme is in part sup-
ported by public or private contributions. Alfred University v. Hancock, 69
N. J. Eq. 470, 46 A. 178.

^If the theological department is to be regarded as religious, the two others
are purely secular. An institution of such blended secular and religious qualities
can in no sense be classed as a religious institution. Alfred University v. Han-
cock, 69 N. J. Eq. 470, 46 A. 178.

Sec. 277. Historical and Antiquarian Society.

The Vineland Historical and Antiquarian Society is not a charit-
able institution within the meaning of the language used in sec-
tion 1 of the New Jersey act of 1894. This society was organized
under the statute of 1875 to incorporate societies "for the promo-
tion of learning." Gifts for educational purposes are gifts to valid
charitable uses in New Jersey. But it is not enough to say that
the institution was incorporated under the act for the promotion
of learning or avows itself to be organized for the purpose of pro-
moting learning. An institution claiming exemption on the ground
of its educational character must disclose the objects to which it is
bound to devote its property. It must appear that the objects
disclosed have some educational value and that the benefits and
advantages of the Institution in respect to such objects are open
to the general public, or at least to such persons as may seek them.
The society in question, however, has for its object to collect and
preserve historical and current accounts of events and other matters
connected with the interests of Vineland ; and the court finds that
the society has failed to show that such a collection is of educa-
tional value. "Such a collection would not resemble a library, but
rather a museum." It also appeared that the legacy given to the
society was given without any limitation or condition and therefore
imposed no duty on the society except that which may be inferred
from the terms contained in the organization of the society as a
corporation. The mere fact, therefore, that the society now opens
its collection to the public would not bind the society to continue
to do so.

278-280.] RELIGIOUS OR CHARITABLE PURPOSES. 221

In re Vineland Historical and Antiquarian Society, 66 N. J. Eq. 291, 56 A.

lec. 278. Homes.
Homes ^ for children, ^ or for the aged, may be free of taxation '
[though an entrance fee is charged,'^ and inmates are required to
irn over all their property to the home on admission,^ but not if
ley charge board.®

* Under the statute of 1900, chapter 382, the property of the American Female
fuardian Society and the Home for the Friendless, and the New York Society
for the Relief of the Ruptured and Crippled, is not exempt from the transfer
tax. In re Huntington, 70 N. Y. Suppl. 853, modifying 70 N. Y. Suppl. 429.

2/« re Higgins, 55 Misc. 175, 106 N. Y. Suppl. 465.

The Wartburg Orphan Farm School is exempt from taxation under general
law in New York as a "house of industry" and is therefore exempt from the
collateral inheritance tax of 1887. In re Herr, 57 Hun 591, 10 N. Y. Suppl. 680,
affirming 55 Hun 167, 7 N. Y. Suppl. 852.

^In re Graves, 171 N. Y. 40, 63 N. E. 787, reversing 66 N. Y. App. Div. 267,
34 Misc. 677, 70 N. Y. Suppl. 727 (corporation to be organized).

*In re Vassar, 127 N. Y. 1, 14, 27 N. E. 394, reversing 58 Hun 378, 12 N. Y.
Suppl. 203.

^Carter v. Whitcomb, 74 N. H. 482, 488, 69 A. 779.

The Baptist Home Society of New York requires a payment of an admission
fee of a thousand dollars and that all those who enter shall make a will in its
favor; and it is therefore not an almshouse and so is not exempt under the New
York statute. In re Keech, 57 Hun 588, 11 N. Y. Suppl. 265.

«/n re Lenox, 9 N. Y. Suppl. 895.

Sec. 279. Hospitals.

Hospitals are commonly exempt.

In re Huntington, 70 N. Y. Suppl. 853, modifying 70 N. Y. Suppl. 429.
; Under the statute of 1905, chapter 368, section 221, a bequest to a corporation
rganized to carry on a general city hospital is exempt from taxation. In re
Higgins, 55 Misc. 175, 106 N. Y. Suppl. 465.

The St. John's Riverside Hospital is a charitable institution whose object is
the maintenance and support of a hospital for indigent patients and as such is
an almshouse and so exempt under New York law from the inheritance tax.
In re Curtis, 25 N. Y. St. 1028, 7 N. Y. Suppl. 207, 1 Con. Sum 471.

Contra, In re Howell, 34 Misc. Rep. 40, 69 N. Y. Suppl. 505, under St. 1900,
c. 382.

Sec. 280. ^^Institution.*'

A gift to a trust company in trust for "needy aged men and
women" is not exempt, as such a trust cannot by the broadest
latitude be called an "institution." Very likely the "institution"

222 INHERITANCE TAX LAW. [§§281-284.

need not be incorporated, but it is contemplated as an owner of
property, not as property.

Hooper v. Shaw, 176 Mass. 190, 57 N. E. 361.

Sec. 281. Libraries.

Public libraries may be exempt.

Essex V.Brooks, 164 Mass. 79, 83, 41 N. E. 119, as an educational or charitable
corporation. In re Higgins, 55 Misc. 175, 106 N. Y. Suppl. 465. See In re
Francis, 189 N. Y. 554, 82 N. E. 1126, affirming 121 N. Y. App. Div. 129, 105
N. Y. Suppl. 643, holding a library association to be educational.

The Young Men's Christian Association was treated under its charter
as a public library in In re Howell, 34 Misc. 40, 69 N. Y. Suppl. 505.

Under the New York statute of 1896 there was a material change in the
exemption law as to the property of public corporations. The statute renders
all property in the state taxable unless exempt from taxation by law, and in the
next section specifies property of a municipal corporation as exempt. Therefore
a bequest to a municipal corporation for a public library is exempt from the
transfer tax under the New York statute of 1896. In re Thrall, 157 N. Y. 46,
51 N. E. 411.

Sec. 282. Masons.

A masonic lodge, a part of the activities of which is engaged
in helping the families of members who become in want, is exempt
as a charitable institution.

Morrow v. Smith, 145 Iowa 514, 124 N. W. 316.

Sec. 283. Missionary Societies.

Both home^ and foreign ^ missionary societies have been denied
exemption where they expended their funds largely outside the
state, but have been exempt where their funds are expended in
the state.^

^Carter v. WhUcomb, 74 N. H. 482, 491, 69 A. 779. In re Board of Home
Missions, 11 N. Y. Suppl. 311. In re White, 118 N. Y. App. Div. 809, 103 N. Y.
Suppl. 688. In re Kavanagh, 6 N. Y. Suppl. 669.

^Carter v. WhUcomb, 74 N. H. 482, 489, 69 A. 779. In re Board of Foreign
Missions, 58 Hun 116, 33 N. Y. St. 789, 11 N. Y. Suppl. 310.

Un re Prall, 78 N. Y. App. Div. 301, 79 N. Y. Suppl. 971.

Sec. 284. Temperance Societies.

The Woman's Christian Temperance Union falls within the class
of benevolent educational charitable corporations intended to be
exempt.

§§285-287.] RELIGIOUS OR CHARITABLE PURPOSES. 223

In re Moore, 66 Misc. 116, 122 N. Y. Suppl. 828. In re Field, 71 Misc. 396,
130 N. Y. Suppl. 195.

Sec. 285. Woman's Relief Corps.

The Woman's Relief Corps is a public charity exempt from the
inheritance tax in New Hampshire although its benefits are bestowed
only upon those who have been soldiers, or upon their families, to
the exclusion of all others.

Carter v. Whitcomh, 74 N. H. 482, 489, 69 A. 779.

Sec. 286. Young Men's Christian Association.

The Young Men's Christian Association may be exempt as a
charitable or religious corporation,^ although it receives compensa-
tion from those able to pay ,2 or may be treated as educational,'
or as a public library.*

^Little V. Newburyport, 210 Mass. 414, 96 N. E. 1032.

Not Religious. The Brooklyn Young Men's Christian Association is not a
religious corporation, as it is not formed primarily for religious purposes and
has no distinct form of worship or method of discipline, and the mere fact it
has been formed for a good and worthy object in which incidentally there will
be some religious exercises involved, does not make it a religious corporation.
In re Fay, 37 Misc. Rep. 532, 76 N. Y. Suppl. 62. Young Men's Christian Asso-
ciation V. New York, 113 N. Y. 187, 21 N. E. 86. In re Vanderbilt, 10 N. Y.
Suppl. 239, 2 Con. Sum 319.

^Carter v. Whitcomh, 74 N. H. 482, 488, 69 A. 779 (also the woman's auxiliary).

^In re Moses, 123 N. Y. Suppl. 443, modifying and affirming 60 Misc. 637,
113 N. Y. Suppl. 930.

*/w re Howell, 34 Misc. Rep. 40, 69 N. Y. Suppl. 505.

Sec. 287. Trust for Charity.

Where the testator makes a direct bequest in absolute form
and where it appears that a valid parole trust was created enforce-
able in equity in favor of certain religious corporations which were
of a class exempt under the statute, the bequest itself is exempt
from taxation.^ However, a bequest to trustees for the purpose
of founding a "Home for the Aged" is not exempt from taxation,
as the exemptions in the statutes are confined to corporations or
institutions having a definite organization. ^

^In re Murphy, 4 Misc. Rep. 230, 25 N. Y. Suppl. 107.

2 Knight v. Stevens, 66 N. Y. App. Div. 267, 72 N. Y. Suppl. 815, reversing
In re Graves, 70 N. Y. Suppl. 727.

CHAPTER XXXV.

RATES.

§ 288. What Law Governs.

§ 289. Reckoned by Beneficial Interests rather than by Estate.

§ 290. Remainder or Contingent Interests.

§ 291. Computation of Progressive Rates.

§ 292. Primary and Secondary Rates as Applied to Income.

Sec. 288. What Law Governs.

The rate is fixed by the law in force at the death of the testator'
and may remain in force under general law notwithstanding the
failure of the legislature to fix the rate in its annual tax law.^

i/» re Stanford's Estate, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. Trippet v.
State, 149 Cal. 526, 86 P. 1084, 8 L. R. A. (N. S.) 1210. In re Woodard's Estate,
153 Cal. 39, 94 P. 242. See further, ante, s. 19.

^Eyre v. Jacob, 14 Gratt. (Va.) 422, 439, 73 Am. Dec. 367.

Sec. 289. Reckoned by Beneficial Interests rather than by
Estate.

The rate of tax is usually determined by the size of the beneficial
interest rather than of the estate.

In re Vanderbilt, 172 N. Y. 69, 73, 64 N. E. 782, modifying 68 N. Y. App.
Div. 27, 74 N. Y. Suppl. 450, under St. 1899, c. 76. Knowlton v. Moore, 178
U. S. 41, 71, 20 S. Ct. 747, 44 L. Ed. 969. Cf. also, s. 68.

The court points out the gross inequalities which would result from a
construction of the United States statute of 1898 that the rate of tax is deter-
mined by the size of the estate rather than the size of the legacy. The result
would be that two persons receiving the same legacy from estates of different
sizes would pay a different tax, and the court is bound to avoid a construction
which would occasion great inequality and injustice if possible. Knowlton v.
Moore, 178 U. S. 41, 76, 20 S. Ct. 747, 44 L. Ed. 969.

Sec. 290. Remainder or Contingent Interests.

The tax upon the life estate added to the estate in remainder
need not necessarily equal exactly the tax on the principal.^ The
rate in case of a contingent uncertain interest should be the lowest
possible.^

1 In re Christian, 2 Pa. Co. Ct. 91, 18 Wkly. Notes Cas. 88.
^ State V. Pabst, 139 Wis. 561, 589, 121 N. W. 351.

§ 291.1 RATES. 225

The court suggests to the legislature that N. Y. St. 1899, c. 76, providing
for the present appraisal and taxation of remainders at the highest possible
rate causes an inequality which is an injustice on life estates. The tax on the
remainders being paid out of the corpus of the estate diminishes the income of
the life tenant by the interest on the amount of the tax; and if it is desired
to make taxes on remainders payable immediately it would be fairer to the life
tenant to have the tax assessed at the lowest rate on any succession provided for
by the will. In case the remainder eventually vesting should prove taxable at a
higher rate then such increased tax should be payable at the time of its enjoyment.
The court remarks that its experience is that in the majority of cases the lowest
rate of tax usually proves the final rate, and where the state imposes in the first
instance a higher rate of tax it becomes obligated to repay the excess after a
lifetime at six per cent interest, while it could borrow money at half that rate.
In re Brez, 172 N. Y. 609, 611, 64 N. E. 958, reversing 69 N. Y. App. Div. 619.

Sec. 291. Computation of Progressive Rates.

In the case of a progressive tax primary rates may be levied on
the lowest sum named and the secondary rates on the excess only ^
above the exemption. ^

^The court holds that if the estate is over $25,000 the statute does not mean
that the first $25,000 is exempt but that the "primary rates" were to be com-
puted in all cases and that the tax is not merely upon the excess over $25,000.
In re Bull's Estate, 153 Cal. 715, 96 P. 366.

N. Y. St. 1896, s. 221, as amended by the statute of 1900, c. 706, provides for
a graduated tax, and it was claimed that the secondary rates are to be calcu-
lated upon so much of the transfer as exceed the amounts taxable at a lower
rate. The court considers that the words "property" and "interest" are by
their context confined to the interest which passed to the individuals. On a
grammatical construction of the statute in consideration of its language the court
holds that the words "Up to and including the sum of" relate to the excess over
the amount subject to the previous rate of taxation, and should be read as if
the words in question were "upon all amounts of legacy which shall be in excess of
said $25,000." The amounts of each class are reckoned beginning with the amount of
the next lower class and not by considering the amount of the whole estate in ques-
tion. In re Jourdan, 70 Misc. 159, 128 N. Y. Suppl. 728. See further, ante, s. 66.

"The tax must be computed in all cases upon the true value of the inheritance
above an exemption of ten thousand dollars; but when such valuation is less
than fifty thousand dollars the tax rate is one and one-half per cent thereof;
but when such valuation is fifty thousand dollars or over and less than one
hundred thousand dollars the rate is three per cent; when such valuation is
one hundred thousand dollars or over the rate is five per cent; and a tax on a
legacy of the total value of fifty-eight thousand dollars should be at the rate
of one and one-half per cent. It is clear from State v. Bazille, 97 Minn. 11, 106
N. W. 93, 6 L. R. A. N. S. 732, that it was the intention to hold in that case
that a tax was laid upon all inheritances less than fifty thousand dollars in value
above the exemption at the rate of only one and one-half per cent. State v.
Probate Court, 111 Minn. 297, 126 N. W. 1070.

[Validity of progressive rates, see ante, c. XIV.]

226 INHERITANCE TAX LAW. [§ 292.

Sec. 292. Primary and Secondary Rates as Applied to
Income.

Where payments of income are provided for by will the rate of
taxation will not be increased from the primary to the secondary
rate under the Minnesota act of 1905 until the value of the right
acquired by the life tenant exceeds, exclusive of the statutory
exemptions, fifty thousand dollars, and in like manner the rate can-
not be increased to five per cent until such value exclusive of the
exemption exceeds one hundred thousand dollars.

State V. Probate Court, 112 Minn. 279, 128 N. W. 18, 22.

CHAPTER XXXVI.

INTEREST AND PENALTIES.

§ 293. What Law Governs.

§294. In Absence of Express Provision. — Discount.

§ 295. From What Date Computed.

§ 296. Excuses for Delay.

§ 297. Pendency of Litigation.

§ 298. Liabilities of Executor or Administrator.

Sec. 293. What Law Governs.

Interest and penalties are governed by the law in force at the
testator's death. ^ Penalties for failure to pay a general tax do
not apply to the inheritance tax.^

Un re Milne, 76 Hun 328, 27 N. Y. Suppl. 727.

The decedent died in November, 1890, and contest arose over the probate of
the will which was decided in March, 1891. The question arose whether interest
on the amount of the tax due should be charged from the date of the death of
the decedent or from a date eighteen months subsequent thereto. N. Y. St.
1892, c. 399, s. 4, does not apply to this case, as when the decedent died the
law of 1887 applied, and under its provisions the executors would have a right
to ask that the interest charged against them for delayed payment of the tax
should be six per cent from the date of eighteen months after the death of the
decedent. The repealing act of 1892 altered this provision but at the same time
saved the right which in the meaning of the statute had either accrued or was
accruing at the time of its passage. This provision of the fifth section of the act
of 1887 may well be called a "right" within the meaning of the act of 1892.
It was something which gave to the parties the absolute right to have the interest
charged at a certain percentage and from a certain date, upon the fact appearing
which the statute provided for; and the saving feature of the repealing act of
the statute of 1892 applies to it. In re Fayerweather, 143 N. Y. 114, 38 N. E. 278.

^Wright V. Blakeslee, 101 U. S. 174, 178, 25 L. Ed. 1048, Fed. Cas. 18073, 13
Blat. 421, reversed.

Sec. 294. In Absence of Express Provision. — Discount.

Interest may not be chargeable unless expressly provided for.

Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

Discount. The proviso of Col. St. 1902, c. 3, s. 23, that if the tax is paid
within six months no interest shall be charged and that a discount of five per
cent shall be allowed does not have the effect of rendering the interest charged
a penalty but it is only the usual inducement held out to make those interested

228 INHERITANCE TAX LAW. [§§295-296.

in estates pay their taxes promptly and cannot be considered as fixing a time
when the tax becomes delinquent, after which a penalty is imposed for non-
payment. People V. Rice, 40 Colo. 508, 91 P. 33.

Sec. 295. From What Date Computed]

Interest and penalties may run from the period provided by law
for the settlement of the estate,^ or from the death of the testator
in case of a vested remainder ,2 but from the death of the life tenant
in case of a contingent remainder.^

i/w re Banks, 5 Pa. Co. Ct. 614.

Effect of Delay. Where the Massachusetts statute provides that the tax
shall be payable at the expiration of two years after the date of giving bond
with interest from that date, interest should be computed according to that rule,
although a part of the estate was given in remainder or the dispositions of the
will were modified by an agreement that was entered into. The whole estate
was liable to the tax and there was nothing to affect the time when it was pay-
able. Bradford v. Storey, 189 Mass. 104, 75 N. E. 256.

2Penn. St. 1850, P. L. 170, provided that taxes on remaindermen which were
payable before the passage of the statute at the death of the decedent might
be postponed until they come into actual possession, and relieved them from
the penalty, but not from the interest. Appeal of Commonwealth, 127 Pa. St.
435, 438, 17 A. 1004. See also Comm. v. Smith, 20 Pa. St. (8 Harris) 100.

Where the testator died in 1835, leaving a life estate and a vested remainder,
the remainder was then liable to a collateral inheritance tax upon its clear value,
after deducting all previous estates. After the acts of 1850 and 1855 the tax
could not be collected by the state until the actual enjoyment of the estate, but
it continued a lien and should now be appraised at its value in 1835, firsu de-
ducting the value of the life estate. Interest at the rate of six per cent is charge-
able upon the appraised value from 1835 to the vesting of the estate in possession
and must be paid by the persons now entitled to the estate. Appeal of James,
2 Del. Co. Rep. (Pa.) 164.

' Where a will left property to a life tenant and on her death to her children
who might be living at the time of her death, it was not certain until that time
whether the property would be subject to an inheritance or transfer tax, or
whether the remainderman would ever be entitled to the possession of the
property and thus become liable to be taxed. Until that time no tax accrued.
Therefore interest at six per cent should be charged only from the death of the
life tenant. In re Davis, 149 N. Y. 539, 548, 44 N. E. 185, affirming 91 Hun 53.
See, however, under N. Y. St. 1899, c. 76, ante, s. 290.

Sec. 296. Excuses for Delay.

The scarcity of funds to pay the tax,^ or ignorance of the law, will
not affect the running of interest, ^ although unavoidable delay'
or uncertainty as to liability may prevent the imposition of inter-
est or penalties.*

INTEREST AND PENALTIES. 229

'he court refused to enforce a penalty of eight per cent where
no proceedings had been taken to enforce the tax on account of
the general feeling that the law was unconstitutional. Under the
inheritance law a penalty of eight per cent is collectible in case of
non-payment within a year of the death of the testatrix; but the
court refused to impose the penalty on the ground that it was
unjust where there had been no effort made to enforce the law.
As the direct inheritance tax was declared unconstitutional it was
supposed that the collateral inheritance tax would meet the same fate.
When the collateral inheritance tax was finally declared valid the
court holds that the executors were not negligent in failing to pay
the tax before the decision of the court, and that there was no
basis for the imposition of a penalty.^

1 Under Tenn. St. 1893, c. 174, s. 3, the tax bears interest from the date when
it is payable, one year from the death of the decedent, notwithstanding the
pendency of litigation, the scarcity of funds and other causes. Shelton v. Camp-
hell, 109 Tenn. 690, 72 S. W. 112.

2/w re Piatt, 8 Misc. Rep. 144, 29 N. Y. Suppl. 396.

^"Unavoidable delay" may be a misnomer of the trustee named in the will
which was not discovered for some time. In re Banks, 5 Pa. Co. Ct. 614.

The burden of showing that such unavoidable cause of delay in settling
any estate exists is on the estate. People v. Prout, 53 Hun 541, 6 N. Y. Suppl.
457.

* Under Wisconsin statute the penalty of ten per cent should not be imposed
for a three years' delay when it was uncertain during that time whether or not
the transfer by a deed of gift was subject to taxation, as to the amount of stock
included in it, and the value of the stock transferred. State v. Pahst, 139 Wis.
561, 595, 121 N. W. 351.

Un re Bates, 7 Ohio N. P. 625, 5 Ohio S. & C. P. Dec. 547.

Sec. 297. Pendency of Litigation.

The pendency of litigation does not of itself postpone the begin-
ning of the running of interest,^ but may have this effect by statute ^
covering an "unavoidable cause of delay." ^

^People v. Rice, 40 Colo. 508, 91 P. 33. In re Stewart, 131 N. Y. 274, 285»
30 N. E. 184, 14 L. R. A. 836, under the act of 1885.

Under the Pennsylvania statutes it was the duty of the executors to estimate
the amount of personal estate involved in difficulties which could not be settled
and pay the collateral inheritance tax on the balance. For failure to do so they
are chargeable with interest at the rate of twelve per cent per annum from a
year after the death of the testator. Appeal of Commonwealth, 34 Pa. St. (10
Casey) 204.

The fact that proceedings are pending to test the validity of the will cannot
postpone the maturity of the tax when it appears that in either event, testacy

230 INHERITANCE TAX LAW. [§298.

or intestacy, the tax will be payable at the same rate as in the present case,
and interest is chargeable from one year after the testator's death, Shelton v.
Campbell, 109 Tenn. 690, 72 S. W. 112.

2 7« re Prout, 22 N. Y. St. Rep. 334, 3 N. Y. Suppl. 834 (penalty and not
interest). In re Bolton, 35 Misc. Rep. 688, 72 N. Y. Suppl. 430. In re Miller,
182 Pa. St. 157, 161, 37 A. 1000.

"Litigation'* as set forth in the statute of 1887 as the cause of delaying the
penalty for non-payment of the inheritance tax must be such that the amount
of tax due cannot be definitely ascertained until its determination as between
the estate and adverse parties. In re Small, 12 Pa. Co. Ct. 226,

Where Legatees Died and no Representative was Appointed. The
legatee should be relieved from the payment of interest at ten per cent for the
period covered by the contest of the wills of two heirs at law of the decedent,
pending which contest the estates of these heirs had no legal representative,
under N. Y. St. 1885, c. 483, s. 5. In re Prout, 3 N. Y. Suppl, 831.

' Litigation among distributees of an estate to determine their respective shares
is '*an unavoidable cause of delay at settling the estate." In re Moore, 90 Hun
162, 35 N. Y. Suppl. 782.

Sec. 298. Liabilities of Executor or Administrator.

The executor is personally liable for excess interest after the
time allowed by law to settle the estate.^ The penalty should be
charged to the administrator .^

^ The court holds that the executor is not bound to pay the tax until the expira-
tion of the year allowed him by law with which to settle the estate. He is en-
titled to know the amount payable for the payment of legacies after the debts
are paid and to have a reasonable time thereafter before he pays the tax and the
legacies. The court holds, therefore, that the executor should be allowed in his
account for the principal of the tax he has paid together with interest collected
thereon under the statute for one year; and that as he is bound to pay this
tax on the legacies at the expiration of the year he cannot be allowed any interest
he has paid thereon after that period. The executor is personally chargeable
with the whole penalty and is not entitled to be allowed in the accounting for
the excess interest or penalty. Wyckoff v. 0' Neil, 72 N. J. Eq. 880, 67 A. 32.

The executor should not be charged with five per cent interest upon the
amount of the transfer tax upon the estate upon the ground that he should have
had the tax assessed and paid within six months after the death of the testator,
where the testator died October 10, 1896, and probate was issued February 3,
1897, and the tax was assessed May 27, 1897, In re Sudds, 32 Misc. Rep. 182,
66 N, Y, Suppl, 231. .,-

2/w re Palmer, 2 Del. Co. Rep. (Pa.) 180. I

CHAPTER XXXVII.

WHEN TAX ACCRUES.

§ 299. At Death of Testator.

§ 300. On Future Interests.

§ 301. Merger of Remainder.

§ 302. Interest in Estate of Another.

Sec. 299. At Death of Testator.

Inheritance taxes almost universally accrue at the death of the
testator/ even in case of gifts causa mortis,'^ although the legacies
are payable only after a statutory period for settling the estate,'
which period may operate to postpone the payment of the
inheritance tax.^ Liability may, however, depend on demand for
the tax.^

^Estate of Sanford, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. In re Martin's
Estate, 153 Cal. 225, 94 P. 1053. In re Bowen's Estate, Cal. 1908, 94 P. 1055.
Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E. 318. In re Wells, 142
Iowa 255, 120 N. W. 713. Succession of Becker, 118 La. Ann. 1056, 43 S. 701.
Appeal of Mellon, 114 Pa. St. 564, 570, 8 A. 183. In re Williamson, 153 Pa.
St. 508, 521, 26 A. 246, 32 Wkly. Notes Cas. 93. In re Line, 155 Pa. St. 378,
385, 26 A. 728, 32 Wkly. Notes Cas. 376.

Reason for Rule. "Man's dominion over his property ceases at his death,
wherefore in all civilized countries the state provides how he may devolve it to
others at his death and what shall become of it when he dies intestate. The
right so given either to devolve or to succeed to property is subject to the power
of the state to tax, and generally is taxed. To use a homely simile it may be
likened to the taking of toll from the grist that is sent to the mill, arid aside from
considerations of convenience it is immaterial whether the whole toll be taken
as soon as the grist is received or proportionately as the flour is delivered. But
while the tax has been likened to the toll that is taken for the grinding of a grist,
it must not be overlooked that it is the right to devolve or to succeed to property
that is taxed, and that an additional exaction might be made as is done in some
states for the service in passing the property, sometimes, as in England, called
probate duties. So that the right of the state to and the liability of the suc-
cessor for the tax generally arises uppn the death of the owner of the property and
is not dependent upon the right of succession ripening into possession or enjoy-
ment, and the fact, if it be a fact, that the state may have, by measuring the
amount of the tax by the value of the property succeeded to, made it imprac-
ticable or difficult to collect the tax until the right has ripened into possession,
does not change the subject of the tax, but merely postpones its collection,"
Per Summers, J., in Eury v. State, 72 Ohio St. 448, 74 N. E. 650.

232 INHERITANCE TAX LAW. [§300.

Mere Postponement. Where a title to a certain farm vested in the devisee
and no estate for life or years intervened but he was to have the use of the farm
for ten years and at the expiration of ten years to have the farm in fee, and where
certain legacies with interest were to be paid to the legatees after the expiration
of ten years, the time of the payment of the legacies only was postponed; and
hence, neither the .devise nor the bequests come within section 3 of the Pennsyl-
vania statute of 1887, so as to postpone the payment of the collateral inheritance
tax. In re Dalrymple, 215 Pa. St. 367, 373, 64 A. 554. See State v. Probate
Court, 100 Minn. 192, 110 N. W. 865. State v. Probate Court, 101 Minn. 485, 112
N. W. 878.

The words *'on his settlement" referring to payment of tax do not refer to
a final settlement of the estate, but its settlement so far as the legatee or distribu-
tee is concerned, out of whose legacy or share the tax is to be retained, and the
tax on each should be paid as soon as this legacy itself was paid. Attorney
General v. Allen, 59 N. C. 144. The same construction was given to the federal
act of 1898 in Fidelity Trust Co. v. United States, 45 Ct. CI. 362.

2 In re Masury, 159 N. Y. 532, 53 N. E. 1127, affirming 28 N. Y. App. Div. 580.

3 May V. Slack, Fed. Cas. 9336.

4 Commonwealth v. Gaulbert, 134 Ky. 157, 119 S. W. 779.

^ United States v. Pennsylvania Co., 27 Fed. 539 (under the federal act of 1866.)

Sec. 300. On Future Interests.

Statutes usually postpone the tax on future interests until they
come into possession, as in case of remainders,^ or it may be left
for the remaindermen to elect not to pay until they come into pos-
session .^ So the tax may be levied when the beneficiaries come
into possession in case of contingent interests,^ annuities,^ or inter-
ests not immediately ascertainable.^

1 Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E. 318 (remainders to
collaterals, strangers and the body politic). Dow v. Abbott, 197 Mass. 283, 288.
Appeal of James, 2 Del. Co. Rep. (Pa.) 164 (by election of future beneficiaries
under St. 1850, c. 170). In re Wharton (1881), 14 Phila. (Pa.) 279. In re Von
Storch, 7 Pa. Dist. R. 204. In re Budd., 12 Pa. Co. Ct. 476 (provided security
given under St. 1887). Bailey v. Drane, 96 Tenn. (12 Pickle) 16, 33 S. W. 573.
In re Coxe, 181 Pa. St. 369, 37 A. 517. Hellman v. United States (15 Blatch.
131), Fed. Cas. 6341, affirming Fed. Cas. 15, 343. Clapp v. Mason, 94
U. S. 589. Vanderbilt v. Eidman, 196 U. S. 480, 25 S. Ct. 331, 49 L. Ed. 563.

Sections 29 and 30 of United States statute of 1898 do not impose any tax
upon a vested future interest before the period when possession or enjoyment
had attached. The practice under the act of 1898 was to tax only beneficial
interests where the right to possess or enjoy had accrued. It was thought that
the amendment of March 2, 1901, 31 Stat. 946, changed this situation. The
amendments which the tax officials decided made vested interests subject to
taxation were that the tax or duty should be due and payable within one year
after the death of the decedent, and that the executor, administrator or trustee
should make the return of the estate in his control within thirty days after taking
charge. The court holds, however, that these amendments did not justify

300.] WHEN TAX ACCRUES. 233

lis construction that Congress intended to cause death duties to become due
nthin one year as to legacies and distributive shares which were not capable
rf being immediately possessed or enjoyed, and were therefore not subject to
-ixation under the original act. Vanderbilt v. Eidman, 196 U. S. 480 498 25
Ct. 331, 49 L. Ed. 563.

•Where the remaindermen do not or cannot (as where they are uncertain)

ike an election not to pay the tax until they come into actual enjoyment as

rovided by the statute, the tax must be paid at once. Furthermore, where

lere is no provision for the remainder going to collateral relatives, a stranger

[o the blood or to a corporation, there is no one to make an election and the tax

p the remainder becomes due under the statute. Ayers v. Chicago Title & Trust

?., 187 111. 42, 58 N. E. 318.

'In re Wallace, 4 N. Y. Suppl. 465. In re Westcott, 11 Misc. Rep. 589, 33

[. Y. Suppl. 426, following In re Hoffman, 143 N. Y. 327, 38 N. E. 311. In re

lum, 37 Misc. Rep. 466, 75 N. Y. Suppl. 940. In re Hooper, 6 Low D. 560, 4

^hio N. P. 186. Bailey v. Drane, 96 Tenn. (12 Pickle) 16, 33 S. W. 573.

The New York act of 1899 made future interests presently taxable. In re

luber, 86 N. Y. App. Div. 458, 83 N. Y. Suppl. 769, where property is left in

rust on the death of the life tenant to a daughter for life and on her death to her

sue. Miller v. Tracy, 93 N. Y. App. Div. 27, 86 N. Y. Suppl. 1024, considering

le effect of the amendment of 1901. In re Runcie, 36 Misc. Rep. 607, 73 N. Y.

Juppl. 1120, where the remaindermen are known.

The tax under the act of 1899 is not required to be paid by the conditional

insferee, as it is to be paid out of the property transferred, so that whoever

ly ultimately take the property takes that which remains after the payment

the tax; it therefore contemplates defeasible transfers as well as absolute

insfers. In re Vanderbilt, 172 N. Y. 69, 72, 64 N. E. 782, modifying 68 N. Y.

Lpp. Div. 27, 74 N. Y. Suppl. 450. In re Brez, 172 N. Y. 609, 64 N. E. 958,

jversing 69 N. Y. App. Div. 619.

^Disston V. McClain, 147 Fed. 114, 77 C. C. A. 340, reversing 143 Fed. 191.

^In re Millward, 6 Misc. 425, 27 N. Y. Suppl. 286 (income of estate to widow

for life but in case of remarriage then use of one-half only). In re Simon, 7 Ohio

\. P. 667, 39 Wkly. L. Bui. 369 (remainders after life estate with power of using

)rincipal).

If the remaindermen are not ascertainable that is no reason why the

should be collected from the life tenant who is exempt. The only effect of

Buch condition would be that the tax would not be presently collectible at all,

ind the commonwealth would have to depend on its lien on the real estate, and its

^laim on the executors when they make distribution. In re Coxe, 181 Pa. St.

59, 378, 37 A. 517.

Where a future estate depends on such possibilities as the marriage or having
lildren of life tenants it is a mere possible interest which could not have a market
ilue; and the courts in order to enforce immediate collection of the tax cannot
change the tax from one on succession to one on property. No other course
is left open in the practical administration of the statute than to postpone the
assessing and collecting of tax upon such remote contingent interests as are
incapable of valuation and as to which the rate and the exceptions cannot be
determined. Billings v. People, 189 111. 472, 59 L. R. A. 807.

234 INHERITANCE TAX LAW. [§§301-302.

Life Estate in Remainder. Where a testator gives to his wife for life and
on her death the life estate to G., the estate to G. comes within the statutory
definition of a vested remainder, but it is very different from a case where the
will gives a life estate to A. and the remainder to B. and his heirs. At the pres-
ent time G. has no estate that she could sell to any one at any price and there-
fore the inheritance tax must be postponed until the death of the life tenant.
In re Westcott, 11 Misc. Rep. 589, 33 N. Y. Suppl. 426.

Sec. 301. Merger of Remainder.

Where the title to a succession has been accelerated by the
extinction of prior interests by agreement of parties,^ or by convey-
ance,^ the tax is payable upon the whole.

^Brune v. Smith, Fed. Cas. 2053.

2 Two remaindermen after a life interest to the wife of the testator conveyed
their interests to the wife, but the court holds that a conveyance by these two
parties does not withdraw the estate from the operation of the collateral inheritance
tax law and defeat its collection. It was claimed that by the conveyance the
estate of the wife became merged into a fee and that therefore there was nothing
left for the remainders. The only question remaining is whether in view of the
transfer made the period for the collection of the tax has been accelerated so
as to make it collectible at once and if so from whom shall it be collected and upon
what basis. The statute provides that the remainder is taxable only when
it comes into possession and beneficial enjoyment. The court concludes that when
the life tenant became the owner of the remainder interests in the property the
two estates thereby merged into one and the remainder vested in possession to
all intents and purposes and for all beneficial uses, and she might at once dispose
of the whole estate in fee. She became thus entitled to the possession as fee simple
owner of the estate and the beneficial use of it as a whole, and by virtue of these
transactions a tax upon the remainder interest became at once payable and upon
an assessment at its value at that time. The state as the effect of the trans-
actions between the parties became at once entitled to an inheritance tax upon
the full value of the remainder interest as fixed by the appraisement. Harrison v.
Johnston, 109 Tenn. 245, 70 S. W. 414, 417.

Sec. 302. Interest in Estate of Another.

The interest of the decedent in the estate of another is pres-
ently taxable although the net amount due thereunder is not yet
fixed. The right of the decedent to the net amount was irrevo-
cably fixed at his death, when he was in constructive possession
of the property.

In re Milliken, 206 Pa. St. 149, 55 A. 853. See In re Clinch, 180 N. Y. 300
73 N. E. 35, affirming 99 N. Y. App. Div. 298, 90 N. Y. Suppl. 923, 44 Misc. 190
89 N. Y. Suppl. 802.

CHAPTER XXXVI I L

PERSONS LIABLE.

§ 303. Under Direction of Will, or of Court.

304. Order of Probate Court as Protection.

305. Aliens. — Strangers.
[$ 306. Annuity.

|§307. Annuity to Executor.

f§308. Corporation to be Created.

[§309. As between Life Tenant and Remainderman.

§ 310. Where no Next of Kin are Known.

§311. Lineal Descendants.

[§312. Descendants of Collaterals.

f§313. Children of Deceased Beneficiary.

^§ 314. Stepchildren.

§315. Where Relative was Both Nephew and Stepson.

§316. Son- or Daughter-in-law.

§317. Executors or Beneficiaries.

§318. Payments of Tax Should Appear in Executor's Account.

§ 319. Adoption.

§320. Mutually Acknowledged Relation of Parent.

§321. Bastards. — Effect of Legitimization.

§322. Loss of Tax Paid Unnecessarily Falls on Residue.

Sec. 303. Under Direction of Will, or of Court.

Whether inheritance taxes are a charge against the estate or
are to be deducted from the several legacies is a question of the
testator's intention, as expressed in his will.^ The will may direct
the executors to pay all legacies out of the estate .^ but not unless
clear reference to the inheritance tax is made,^ and such direction
cannot affect the tax on the residue by causing the tax on prior
legacies to be deducted before its appraisal.^ A testator may direct
that the tax on a particular legacy shall be paid out of his estate;
nevertheless, in reality the tax is still paid out of the legacy, the
effect of the direction of the testator being merely to increase the
legacy by the amount of the tax.^ The provision in a will that
the collateral inheritance tax shall be paid out of the residue but not
out of the pecuniary legacies is not restricted to the legacies then
given, but includes legacies given in a subsequent codicil.*

236 INHERITANCE TAX LAW. , [§ 303

Where a decree of distribution orders a deduction only of "the
amount of the inheritance tax as required by law," and does not
fix the amount of such tax nor expressly adjudicate that any tax
should be deducted but leaves the matter dependent upon whether
or not the law requires any inheritance tax, the distributees are
entitled to the entire residue of the estate under that decree where
no inheritance tax could be collected.^

1 Kingsbury v. Bazeley, 75 N. H. 13, 70 A. 916.

2 To Individuals. Where the will directs the executors to pay taxes that may
become due upon any legacies "given by this will to individuals" this language
has no reference to legacies given to individuals in trust for establishing a charity.
Kingsbury v. Bazeley, 75 N. H. 13, 70 A. 916.

Money Includes Annuity. Where the will provides that all bequests of
"money" shall be paid without deduction for the inheritance tax, this included
an annuity payable by a devisee out of the rents of the land. As the annuity
is a bequest in money not subject to a deduction for the tax, the burden falls
on the residuary estate, even though the bequest was payable out of rents coming
from a particular source. In re Lea, 194 Pa. St. 524, 45 A. 337.

Charge of Tax Subsequently Enacted. Where the testator's will was drawn
in 1895, and she died in 1900 and directed the "collateral inheritance tax" to be
paid by the executor out of the corpus of the estate, this did not charge the
estate with the federal inheritance tax of 1898. There was a clear disposition
to charge the corpus of the estate with the collateral inheritance tax only, which
was at that time the only legacy tax in existence. In re Baker, 21 Pa. Super.
Ct. 536.

2 A will provided that the executors were authorized and empowered to pay
any or all of ihe legacies within one year after the decease of the testator "with-
out any rebate or deduction whatever." The will was executed in 1884, and
the court holds that this clause can hardly have been intended to apply to a
succession or legacy tax although it was reaffirmed by a codicil executed after
the passage of the statute. Apart from this the court holds that the words
used would not have the effect of entitling the legatee to the legacy free of tax
even if the will had been executed after the passage of the inheritance tax. The
tax is paid on account of the legatee and in legal effect is precisely the same as
if the legacy was to be paid over to the legatee intact and then the tax was to be
collected from him. Strictly speaking, therefore, the tax is not a "rebate or
deduction" from the legacy. The tax is not a tax upon the estate or legacy
devised or bequeathed, but is a tax imposed upon the legatee for the privilege
of succeeding to the property. It is merely for the convenience of the state to
ensure certainty of collection of the duties cast upon the executors of paying
the tax. Jackson v. Tailer, 41 Misc. Rep. 36, 83 N. Y. Suppl. 567.

A direction in a will that an annuitant "is to receive not less than
$1,500 a year" is not of itself enough to show an intention to place the burden
of the tax on the general estate and relieve the annuitant from the inheritance
tax. In re Holbrook, 3 Pa. Co. Ct. 265, 20 Wkly. Notes Gas. 69.

* In re Swift, 137 N. Y. 77, 87, 32 N. E. 1096, 18 L. R. A. 709, 64 Hun 639,
16 N. Y. Suppl. 193, 19 N. Y. Suppl. 292.

§§304-306.1 PERSONS LIABLE. 237

Un re Gihon, 169 N. Y. 443, 447, 612 N. E. 561, modifying 64 N. Y. App

iv. 504, 72 N. Y. Suppl. 1104.

*/w re Cummings, 12 Pa. Co. Ct. 45.

7 Wirringer v. Morgan, 12 Cal. App. 26, 106 P. 425.

[Validity of classification by relationship, see ante, s. 62.]

Sec. 304. Order of Probate Court as Protection.

A decree of distribution by the probate court ordering distribu-
tion without allowance for the inheritance tax is in general no
protection to the executor who acts under it,^ and neither is an
allowance by the court of accounts omitting provision for the tax.-

The court holds that where executors have paid a legacy in good
faith, relying upon a void order of the surrogate, they are per-
sonally liable. If the surrogate had no jurisdiction, then it is diffi-
cult to see how such decree could be a protection for anybody for
anything done in pursuance thereof.^

1 Att. Gen. v. Rafferty, 209 Mass. 321, 95 N. E. 747, the court assuming that
the decrees were properly entered and that the probate court had jurisdiction
and that the administrator acted in good faith. In re Hacket, 14 Misc. 282, 35
N. Y. Suppl. 1051.

^Att. Gen. v. Stone, 209 Mass. 186, 95 N. E. 395.

3/n re Wolfe, 21 N. Y. Suppl. 522, reversing 15 N. Y. Suppl. 539.

Sec. 305. Aliens. — Strangers.

The Louisiana tax upon foreign heirs was sustained as a regu-
lation of inheritance and the court says that as every stat e or
nation may refuse to allow an alien to take either real or personal
property, it follows that when it grants the privilege it may annex
to the grant any conditions which it supposes to be required by its
interests or policy.^ The term "strangers" in the tax act means
"all other persons" not included in a previous list of beneficiaries.
So it may include a widow under a statute naming only descend-
ants or collaterals.^

1 Scholey v. Rew, 23 Wall. 331. See ante, s. 61.

California and Louisiana formerly had a tax on foreign heirs alone, and Iowa
now discriminates heavily against non-resident aliens as collateral heirs or
legatees. A similar Washington statute was repealed in 1911.

^Succession of Baker, (La. 1911,) 55 So. 714.

Sec. 306. Annuity.

Where a residuary estate was given in trust to pay an annuity, the
court holds that the intention was that the annuitant should receive

238 ' INHERITANCE TAX LAW. [§§307-309.

the clear annual sum named in the annuity and therefore the tax
must fall upon the residue.

In re Bispham, 6 Pa. Co. Ct. 459. See further, ss. 303, n. 2, 342.

Sec. 307. Annuity to Executor.

The will provided that the executor and trustee should be paid
from his estate the sum of $1,500 annually, together with the
commissions allowed by law, as long as he should act as executor,
and the court holds under the New York statute of 1896, that
this annuity is subject to the transfer tax.

In re Huber, 86 N. Y. App. Div. 458, 83 N. Y. Suppl. 769.

Sec. 308. Corporation to be Created.

Where a non-resident left an interest in an estate to a corpora-
tion to be created, and no such corporation has ever been created,
no tax can be levied upon the gift, as no interest can pass to a body
corporate which has no existence.

In re Chesebrough, 34 Misc. Rep. 365, 69 N. Y. Suppl. 848. See, however.
In re Arnot, 130 N. Y. Suppl. 197, where devise to corporation to be created
was held exempt.

[Tax on institution, see ante, s. 280.]

Sec. 309. As between Life Tenant and Remainderman.

Each legatee of income should in Pennsylvania pay the tax from
his share unless otherwise expressly directed.^ lender the New
York statutes it is the duty of the executors and trustees to ascer-
tain the value of the respective life estates and estates in remainder,
and having done this they should compute the transfer tax and pay
the same out of the property transferred. The result is that the
life tenant loses during the continuance of his estate the interest
upon the corpus of the trust so paid out, and eventually the re-
mainderman receives his estate diminished by the amount of said
payment. The court is not concerned with the question of whether
this works out justice as between the life tenant and the remainder-
man. The legislative intention is clear that the transfer tax shall
be paid out of the corpus of the trust estate and not out of the
income. The court remarks that In re Vanderbilt, 172 N. Y. 69,
dealt only with the contingent remainder and is therefore not
strictly in point but that the principle announced therein is neces-
sarily involved in life estates created by trusts.^

310-313.] PERSONS LIABLE, 239

1 In re Brown, 208 Pa. St. 161, 57 A. 360. The direction in a will "after deduct-
ig any and all necessary expenses to divide the said net income in equal shares

long" certain persons results in deducting the inheritance taxes from the
ross income, after which the net income is to be divided in equal shares among
le life tenants. See ante, s. 229.

"In re Tracy, 179 N. Y. 501, 509, 72 N. E. 519, reversing 87 N. Y. App. Div.
{15.

\ec, 310. Where no Next of Kin are Known.

The decedent died in New York a native of Sweden, and inquiry
failed to disclose his family or next of kin. The court holds that
m his death his personal property vested in a public administrator,

rho was appointed, and his next of kin were entitled to the prop-
erty upon proving their relationship. No such person has appeared,
ind no such person has been found to be in existence. There is

le presumption, however, that he left next of kin, but there is no
>resumption that he left a widow or descendants. It is presumed,

lerefore, that the property vested in the next of kin of the deceased
ind is therefore taxable under section 220 of the New York tax
[aw, and as it does not appear that it is exempt under section 221
)f the tax law, the tax imposed by sub-division 6 of section 220
tpplies, and it is taxable at the rate of five per cent.

In re Lind, 132 N. Y. App. Div. 321, 117 N. Y. Suppl. 49.

Sec. 311. Lineal Descendants.

J5 In the New York statute of 1885 the words "lineal descendants"
are restricted to descendants of the testator and do not extend to
collateral heirs.

In re Smith, 5 Dem. Surr. (N. Y.) 90.

;ec. 312. Descendants of Collaterals.

Under the New York statute of 1885 descendants of brothers
and sisters are not intended to be exempt from the tax.
In re Miller, 5 Dem. Surr. (N. Y.) 132, 45 Hun 244.

Jec. 313. Children of Deceased Beneficiary.

Where the statute provides that where a devisee dies before the
testator his heirs inherit directly from the testator, then the prop-
ferty does not go to the children of the devisee as though he had
Isurvived the testator, and therefore the property passes directly
'from the decedent to the persons who are determined to be his

240 INHERITANCE TAX LAW. [§§ 314-316.

heirs by the appUcation of these rules construing the statute.
Therefore where a testator dies devising property to his mother,
who died before the testator, leaving as heirs a brother and sister
of decedent, the succession to these heirs is subject to a collateral
inheritance tax.

In re Hulett, 121 Iowa 423, 96 N. W. 952, relying on Suydam v. Voorhees, 58
N. J. Eq. 157, 43 A. 4.

Sec. 314. Stepchildren.

Legacies to stepsons may be taxable when not specifically
exempted.^ Two stepdaughters of the testatrix had always been
recognized and treated like her own children. But the fact that
the father is still living prevents them from being recognized as
children and given an exemption.^

1 In re Hooper, 6 Low. D. 560, 4 Ohio N. P. 186.
2/n re Stebbins, 52 Misc. 438, 103 N. Y. Suppl. 563.
[Exemption of stepchildren is valid, see ante, s. 62, n. 3.1

Sec. 315. Where Relative was Both Nephew and Stepson.

The will of one who died October 13, 1907, provided that her
property should go to "relatives of my full blood only who would be
entitled to receive my personal estate in case of my death un-
married and intestate." The contestant was the son of a deceased
sister of the testatrix. After the death of his mother his father
and the testatrix had intermarried and the question was whether
he took as a nephew or a stepson. The court holds that if he had
been included by name there would be no doubt that he would
be taxable as a stepchild. As a stepchild he could not take under
the statute and the will expressly provides that the property shall
go to the relatives of full blood only, and therefore the respondent
takes as a nephew as one of the class as though he took under the
statute of distribution. The court says the transfer to the respon-
dent was not made because of his relationship as a stepson but as a
nephew and for the purposes of this case he must be treated solely
as a nephew.

In re Linkletter, 134 N. Y. App. Div. 300, 118 N. Y. Suppl. 878.

Sec. 316. Son- or Daughter-in-Law.

A legacy to a son-in-law may be subject to the inheritance tax
on the ground that he is not a blood relation.^ The husband of a

§ 317.1 PERSONS LIABLE. 241

daughter may be treated as such although the daughter died before
the decedent,^ or even though the widower has married again
before the death of the testator,^ while the widow of a son may
include the widow of a deceased adopted son.^

1 King V. Kidman, 128 Fed. 815.

^In re McGarvey, 6 Dem. Sum 145.

3/» re Ray, 13 Misc. Rep. 480, 35 N. Y. Suopl. 481.

4 In re Duryea, 128 N. Y. App. Div. 205, 112 N. Y. Suppl. 611. Contra, In re
Fisch, 34 Misc. 146, 69 N. Y. Suppl. 493.

Sec. 317. Executors or Beneficiaries.

The inheritance tax may by statute be charged to the executors,^
or to the beneficiaries.^

^7» re Jones, 5 Dem. Surr. (N. Y.) 30 (liability enforced by refusal to allow
executor credit on his account). United States v. Allen, 9 Ben. 154, Fed. Cas.
14, 430 (U. S. St. 1862, ss. Ill and 112).

The executors are liable for a tax on a legacy to one of them. State v. Brevard,
62 N. C. 141.

Penalty. An executor who neglects to pay an award on a collateral inherit-
ance tax is personally liable for the penalty incurred. In re Allen, 9 Pa. Co. Ct.
328.

The direction to the administrator to pay the duty implies that it is to be
paid from the property or from the proceeds of the property of the decedent
not applied to the satisfaction of the debts and administration expenses. Appeal
of Hopkins, 77 Conn. 644, 60 A. 657.

[Liability of executors under transfer in contemplation of death, see ante, s. 130.1

"^Succession of Pargoud, 13 La. Ann. 367. Wilhelmi v. Wade, 65 Mo. 39. In re
Gihon, 169 N. Y. 443, 447, 62 N. E. 561, modifying 64 N. Y. App. Div. 504,
72 N. Y. Suppl. 1104. In re Thomson, 12 Phila. (Pa.) 36. (1878.) In re Lotz-
gesell, 62 Wash. 352, 113 Pac. 1105. United States v. Tappan, 10 Ben. 284,
Fed. Cas. 16, 431 (payable by successor himself and not by his trustee if he have
one). United States v. Trucks, 27 Fed. 541. United States v. Kelley, 27 Fed.
542 (suit against individual in possession). See United States v. Pennsylvania
Co., 27 Fed. 539. U. S. St. 1864 cancels that of 1862 and created no personal
liability on the part of the legatee.

U. S. St. 1862 (12 U. S. St. at Large, c. 119, s. 112) was superseded by U. S.
St. June 30, 1864, which omitted from the statute of 1862 the words "to be allowed
for such payment by the person or persons entitled to the beneficial interest in
respect of which such tax or duty was paid." The statute of 1866 provides that
any tax paid "shall be deducted from the particular legacy or distributive share
on account of which the same is charged." Under the statute of 1864, notwith-
standing the omission of the language above quoted, the duties paid in respect
of any particular legacies are as between the executors and the legatees in the
settlement of the estate to be deducted from the legacies in respect of which they
have been paid, or charged to the legatees respectively who are entitled to such
legacies, and the amendment of 1866 was simply declaratory to avoid any doubt.
Goddard v. Goddard, 9 R. I. 293, 297 (U. S. St. 1864).

242 INHERITANCE TAX LAW. [§§318-319.

Specific Legatee. The United States inheritance tax of 1864 should be
charged to a specific legatee and in case the executor finds it difficult to deduct
the same out of such a legacy the law would doubtless afford an adequate remedy.
Coddard v. Goddard, 9 R. I. 293, 298.

Sec. 318. Payments of Tax Should Appear in Executor's
Account.

It was suggested by the lower court that the amount of the in-
heritance tax paid did not enter into the executor's account, as
the amount of the tax on each legacy should be deducted from the
legacy itself in settlement with the legatee. The court of appeals
holds, however, that the executor should show in his account every
payment made by him as executor. The distribution of these
payments among the various legatees is a matter of subsequent
arrangement between him and them when he comes to pay the
legacies. In settling his account it would be better, doubtless, if
the accountant should distribute the sum total of the inheritance
taxes, showing just how much was chargeable against each legacy.
But the failure to so distribute is no reason for disallowing the
payment of the item in the account.

Wyckoff V. 0' Neil, 72 N. J. Eq. 880, 67 A. 32.

[Allowance of account no protection to executor who has failed to pay tax,
see ante, s. 304.]

Sec. 319. Adoption.

A mere adoption will not give the adopted child the exemptions
of legitimate issue, ^ though adoption with all the privileges of a son
might be sufficient. ^ Adoption proceedings are strictly construed,-^
but need not occur under domestic law.'' Adopted children may
be taxed as descendants,^ and the descendants of adopted children
treated as descendants of the adopting father.®

^Commonwealth v. Nancrede, 32 Pa. St. (8 Casey) 389 (adopted son a col-
lateral relacive). Kerr v. Goldsborough, 150 Fed. 289, 80 C. C. A. 157 (adopted
child not a lineal issue).

The word "children" does not cover adopted children. In re Miller, 110 N. Y.
216, 222, 18 N. E. 139, affirming 47 Hun 394.

Where a statute was passed decreeing that a certain child should be capable
of inheriting as if born in lawful wedlock and was not related to the adopting
parents, his estate was subject to a collateral inheritance tax. Tharp v. Com-
monwealth, 58 Pa. St. (8 P. F. Smith) 500, following Commonwealth v. Nancrede,
32 Pa. St. (8 Casey) 389. Comm. v. Stump, 3 P. F. Smith 132, is only a dictum.

Where a statute was passed authorizing one to adopt his illegitimate child
to make him his heir, the court holds that this is simply an act of adoption and

§ 320.] PERSONS LIABLE. 243

not an act of legitimation. "That a legacy given to an adopted child who stands
in the place of an heir would be subject to this tax is too plain for argument.
The reason is that he is not a lineal descendant born in lawful wedlock. He
has not the blood." Per curiam, in Commonwealth v. Ferguson, 137 Pa. St. 595,
601, 20 A. 870, 10 L. R. A. 210.

An act of the legislature declaring an illegitimate son to be the lawful heir and
adopted son of his father, is an act of adoption and not of legitimation and
does not exempt the estate passing from the father to such adopted son from
the collateral inheritance tax. In re Prinvince (Orph. Ct.), 4 Pa. Dist. R. 591.

2 A statute giving one "the rights, powers and privileges" of a son clearly
exempted him from the payment of a collateral inheritance tax, especially where
the statute further expressly provides that the adopted son shall be subject only
to such tax as would be payable if he were the son of the adopting father. Com-
monwealth V. Henderson, 172 Pa. St. 135, 33 A. 368, 37 Wkly. Notes Cas. 344.

3 Where certain adoption proceedings did not comply with the statute, it was
urged that the attempt to adopt should be considered equitably as though it
had been properly consummated. But the court replies that the proceeding for
the collection of an inheritance tax is not in equity and that one cannot be made
an heir of another by any such considerations. Lamb v. Morrow, 140 Iowa 89,
117 N. W. 1118, 18 L. R. A. N. S. 226.

'In re Butler, 58 Hun 400, 34 N. Y. St. 189, 12 N. Y. Suppl. 201 (under the
act of 1887).

^La. St. 1906 laid taxes on four classes of persons: ascendants, descendants,
collaterals and strangers. Adopted children are not related by blood, so that they
are neither ascendants nor collaterals. On the other hand, as they are legal
heirs of the estate they are not strangers. It follows, therefore, that they must be
persons who by law are given the status of descendants if subject to tax at all.
Succession of Frigalo, 123 La. Ann. 71, 48 S. 652.

^Cal. St. of 1893, c. 168, exempted from taxation any child legally adopted
and any lineal descendant of the decedent. The court holds that a child of an
adopted child is exempt under these provisions, as he takes by inheritance as
issue of the adopted father. Estate of Winchester, 140 Cal. 468, 74 P. 10.

The court holds that where the statute gives an adopted child the same legal
relation to the foster parent as to a child of his body and that the relation extends
to the heirs and next of kin of the child, the artificial relation was given
the same effect as the actual relation, and although the N. Y. St. 1896, c. 908,
s. 221, does not mention the heirs and next of kin of adopted children, still the
natural relation and the statutory relation are made one and the same as to the
devolution of property. In re Cook, 187 N. Y. 253, 261, 79 N. E. 991, reversing
114 N. Y. App. Div. 718, 99 N. Y. Suppl. 1049. See, however, post, s. 321, n. 7.

A "widow of a son" includes the widow of a deceased adopted son of the
testator. In re Duryea, 128 N. Y. App. Div. 205, 112 N. Y. Suppl. 611. Contra,
In re Fisch, 34 Misc. 146, 69 N. Y. Suppl. 493.

Sec. 320. Mutually Acknowledged Relation of Parent.

The exemption in the New York statute where the mutually
acknowledged relation of- a parent appeared, was construed as
applicable in the cases cited,^ and not in others.^ The statute

244 INHERITANCE TAX LAW. [§320.

may apply although no formal adoption ever took place ,^ and
although the beneficiary was an adult at the inception of the
relationship,* and it is not confined to illegitimate children,^ or to
persons of the blood of the decedent,^ although the exemption will
not include issue of the child .^ This was amended in 1905 by
restricting it to cases where the parents of the child were dead.^
Rights of exemption under the original act of 1887 were saved by
later statutes.^

1 In re Lane, 39 Misc. Rep. 522, 80 N. Y. Suppl. 381.

Where a legatee was an orphan and had lived in a family of the testator since
the age of six years, and was always treated like one of the family, she is one
to whom the testator stood in the mutually acknowledged relation of a parent,
although she was designated by the will as a "friend" and not a "daughter."
In re Wheeler, 1 Misc. Rep. 450, 22 N. Y. Suppl. 1075.

The mutually acknowledged relation of parent was found to exist where the
niece when twenty-two years old had gone to live with her aunt, was a member
of the family for twenty-eight years, and always addressed her as "Auntie";
and where during her residence there the niece married and with her husband
continued to live with her aunt, the testatrix, who supported the household.
In re Spencer, 4 N. Y. Suppl. 395, 1 Con. Surr. 208.

The fact that the beneficiaries were taken into their testator's family in their
infancy, were reared, educated and provided for as children, were called by
her name and adopted the same, and were treated as her children, and that
the testatrix spoke of and to them as her daughters and furnished them on
their marriage with their wedding and outfit as is customary, is sufficient to
bring them within the words of the statute. In re Nichol, 91 Hun 134, 36 N. Y.
Suppl. 538.

Stepdaughters of a testatrix who had lived with her for a long time and called
her "mother" were found to stand in the mutually acknowledged relation of
parent, while another stepdaughter who was married and did not live with her
did not come within that class, in In re Capron, 30 N. Y. St. 948, 10 N. Y. Suppl. 23.
"The appellant, from his earliest recollection, believed the testator to be his
father, recognized him as such, and knew no other, and the man took him to
his home as a child and treated him in all respects as a son. Their relations
were parental, and their entire conduct was a mutual acknowledgment of their
relation. The child was taken in helpless infancy, with no expectation of com-
pensation for services. He was treated as a son, and was obedient to his foster
father, and dependent upon him, and the statute requires no higher proof of
mutual acknowledgment. The word 'mutual' in this statute has no abstruse
signification. It means and requires 'reciprocity of action,' 'co-relation,'
and 'interdependence,' and finds its best illustration and application in the re-
lation existing between parents and children, which are always mutual." Per
Dykman, J., in In re Butler, 5S Hun 400, 34 N. Y. St. 189, 12 N. Y. Suppl. 201.
The court sustains the finding that a niece stood in the "mutually acknowledged
relationship of a parent" to her uncle where it appears that she had been in her
uncle's family for thirteen years and supported by him, although it also appears
that she did not call her uncle and aunt father and mother, nor did they call

§ 320.] PERSONS LIABLE. 245

her daughter. It was also objected that the uncle did not account to the niece
for the income received by him on her legacy under her grandfather's will. It
is urged that this shows that he assumed to set off the expense of her support
against such income. Where the niece had been thirteen years in the family of
her uncle, supported wholly at his expense before she had any property whatever,
it was natural that after the legacy had become payable to her the uncle should
think it wise to apply that income to give her greater educational advantages
than he felt himself able to afford. A father might have done the same, even
if we assume that without authority from some court it would have been un-
justified. In re Davis, 184 N. Y. 299, 77 N. E. 259, reversing 98 N. Y. App.
Div. 546, 90 N. Y. Suppl. 244.

A child legally adopted under the laws of Massachusetts, who is taken into
the testator's family at the age of two, is treated as a son and staid in the family
for eleven years, until the testator's death, is in the mutually acknowledged
relation of a parent. The court says that experience teaches us hat children
of three years recognize their parents and the court finds no difficulty in con-
cluding that the appellant recognized the testator as his father, and that the
testator recognized him as an adopted son for more than ten years. In re Butler,
58 Hun 400, 34 N. Y. St. 189, 12 N. Y. Suppl. 201.

2 Where a maiden aunt is in possession of a farm as a housekeeper as tenant
in common with her adult nephews, the acknowledged relation of parent was
not found in In re Sweetland, 20 N. Y. Suppl. 310.

The mere fact that a transferee is described in a will as "my niece and adopted
daughter" does not exempt her from the inheritance tax. Further evidence of
the mutually acknowledged relation of a parent must be given. In re Fisch,
34 Misc. 146, 69 N. Y. Suppl. 493.

Where an aunt, a wealthy woman, took care of her two infant nieces and
charged them out of their estate with all sorts of trivial expenses, the court finds
that the mutually acknowledged relation of a parent and child did not exist under
the statute of 1892, chapter 399. In re Birdsall, 22 Misc. Rep. 180, 49 N. Y.
Suppl. 450, 2 Gibbons 293.

The court holds that the mutually acknowledged relation of parent did not
exist where children lived with their uncle and aunt, and always referred to
them as uncle and aunt, and the latter referred to the former as niece and the
terms father, mother or daughter were never used. (The court relies upon In re
Davis, 98 N. Y. App. Div. 546, 90 N. Y. Suppl. 244.) In re Deutsch, 107 N. Y.
App. Div. 192, 95 N. Y. Suppl. 65.

The mere fact that the testator lived with his sister and her children as one
family, that the household expenses were met out of a common fund to which
each contributed, and that the sister died, and from that time one of the children
had charge of the household affairs and they continued to live together as one
family down to the death of the testator, and that the testator was very affec-
tionate with his nieces, is not enough to show the mutually acknowledged relation
of a parent, as the testator did not take them into his family and support and
educate and maintain them. In re Moulton, 1 1 Misc. Rep. 694, 33 N. Y. Suppl. 578.

3/w re Stilwell, 34 N. Y. Suppl. 1123. The court follows In re Butler, 58 Hun
400, 12 N. Y. Suppl. 201, and In re Spencer, 4 N. Y. Suppl. 395, and refuses to
follow In re Hunt, 33 N. Y. Suppl. 256.

"In re Beach, 154 N. Y. 242, 249.

246 INHERITANCE TAX LAW. [§§321-322.

6/» re Nichol, 91 Hun 134, 36 N. Y. Suppl. 538. In re Beach, 154 N. Y. 242,
249. Contra, In re Hunt, 86 Hun 232, 33 N. Y. Suppl. 256. See other cases
supra, note 1.

8/» re Beach, 154 N. Y. 242, 249.

Un re Moore, 90 Hun 162, 35 N. Y. Suppl. 782. In re Bird, 32 N. Y. St. 899,
11 N. Y. Suppl. 895, 2 Con. Surr. 376. Compare, however, as to issue of
adopted children, ante, s. 319, n. 6.

8/« re Wheeler, 115 N. Y. App. Div. 616, 100 N. Y. Suppl. 1044. In re Harder,
124 N. Y. App. Div. 77, 108 N. Y. Suppl. 154.

»/« re Thomas, 3 Misc. Rep. 388, 24 N. Y. Suppl. 713.

Sec. 321. Bastards. — Effect of Legitimization.

The words "lineal descendants born in lawful wedlock" might
under some circumstances be given wide meaning to cover natural
children.! An illegitimate child who has been legitimated may thus
become entitled to the exemptions of a legitimate child ,2 although
an act of legitimating passed after the death of the testator could
have no effect on the inheritance tax.^

1 In re Miller, 110 N. Y. 216, 222, 18 N. E. 139, affirming 47 Hun 394.

^Commonwealth v. Gilkerson, 18 Pa. Super. Ct. 516. Commonwealth y. Ferguson,
137 Pa. St. 595, 601, 20 A. 870, 10 L. R. A. 210, qmere.

Pa. St. 1901, P. L. 639, has the effect of legitimating an illegitimate child
as to its mother and conferring upon such child every right and privilege enjoyed
by a child born to wedded parents. Therefore an illegitimate child need not
pay a collateral inheritance tax on the property he takes as devisee of his mother.
Commonwealth v. Mackey, 222 Pa. St. 613, 72 A. 250. See, however, In re Wayne,
2 Pa. Co. Ct. 93, 18 Wkly. Notes Cas. 10.

^Comm. V. Stump, 53 Pa. St. 132.

Sec. 322. Loss of Tax Paid Unnecessarily Falls on Residue.

Where a collateral inheritance tax is improperly paid on land
in Pennsylvania which the testator directed to be sold, a percentage^
of the tax cannot be deducted from the last legacy to be paid as;
such legacy's proportion of the collateral inheritance tax paid
to the state, simply because the executors were appointed in
Pennsylvania and the legatee came by counsel before the court
and asked for payment in full, as happened in In re Lewis, 203 Pa.
St. 211. The residuary legatees having permitted the tax to be
paid they cannot now ask that a portion of it be deducted from this
legacy to their relief. They ought to have protected themselves
at the proper time.

In re Shoenberger, 221 Pa. St. 112, 114, 118, 70 A. 579, 19 L. R. A. N. S. 290.

*''^^

CHAPTER XXXIX.

INVENTORY.

§323. Necessity.

§ 324. Of Property Outside State.

323. Necessity.

The statutes usually compel the executor to file an inventory.
Such a statute confers no discretion upon the executors ^ and the
state has a right to an order that the executor's inventory be filed,
and a judgment rendered in the absence of the inventory should
be reversed even though it is claimed that the state obtained all
necessary information by its examination of witnesses.^ The fact
that the testator in his will directed his executors not to make any
returns of his property cannot be permitted to have the effect of
nullifying the statute.^

^See Hooper v. Bradford, 178 Mass. 95, 97, 59 N. E. 678.

2 Where a party makes a motion that an inventory be filed in a tax inheritance
case and the judge says that he will take the motion under advisement, but does
not either then nor afterward make an order for the inventory but hears the
case and enters final judgment without doing so, this amounts to a denial of
the motion. People v. Sholem, 244 111. 502, 91 N. E. 704.

Un re Morris, 138 N. C. 259, 50 S. E. 682.

Sec. 324. Of Property Outside State.

Under the Connecticut act of 1897 it was proper for the probate
court to order the administrator to file an inventory and appraisal,
including all the personal property wherever situated, although
the administrator could not be held liable upon his final account
for the value of personal property without the state of which it has
been impossible for him to procure possession.

Appeal of Bridgeport Trust Co., 77 Conn. 657, 60 A. 662.

CHAPTER XL.

APPRAISAL.

§ 325. By what Court.

§ 326. Effect of General Law.

§ 327. Appointment of Appraisers.

§ 328. Appointed in what County.

§ 329. When Appointed.

§ 330. Removal of Appraisers.

§331. Notice.

§ 332. Construction of Will.

§ 333. Each Interest Separately Appraised. — Residue.

§ 334. As of what Date.

§ 335. As of what Date Future Interests are Appraised.

§ 336. Reappraisal.

§ 337. Test of Value.

§ 338. Value Received by Beneficiary the Test.

§ 339. Rule in Absence of Specific Provision.

§ 340. Choses in Action. — Bequest to Debtor.

§ 341. Inactive Securities. — Good Will.

§342. Annuities.

§ 343. Life Estates.

§ 344. Statute Providing no Method for Ascertaining Value of Life

Estate.

§ 345. Death of Life Tenant before Appraisal.

§ 346. Remainders.

§ 347. Remainder after Remarriage.

§ 348. Power to Order Production of Papers.

§ 349. Appeal.

§350. Appraisal has no Effect on Liability.

Sec. 325. By what Court.

Where the statute contains no express direction as to who shall
compute the tax or the manner of computation, the duty is implied
in the court of probate. The tax should be computed by the
jurisdiction of the domicile notwithstanding ancillary probate may
be also necessary as to property existing outside of the domicile.^
A provision that the controller shall countersign receipts for taxes
gives him no authority to revise its amount.^

1 Appeal of Hopkins, 77 Conn. 644, 60 A. 657.

^Becker v. Nye, Cal. App. 1908, 96 P. 333. ,

§ §326-327.] APPRAISAL. 249

Sec. 326. EfiEect of General Law.

Where the sections of the inheritance tax law on appraisals are
vague they may be read in view of the general law.
Commonwealth v. Gaulbert, 134 Ky. 157, 119 S. W. 779.

Sec. 327. Appointment of Appraisers.

The appointment may be made upon petition of an interested
party/ as where it is the duty of the executor to apply for an ap-
praisal ,2 by a state officer ^ or by the court,* or without petition by
the court of its own motion,^ and before the existence of claims
against the estate has been ascertained.® The appointment
may be required by mandamus in a proper case.^ No notice of
the appointment is necessary unless the statute requires it.^

^ Dixon V. Russell, 79 N. J. L. 490, 76 A. 982, reversing 78 N. J. L. 296, 73
A. 51.

An application of the state comptroller upon a verified petition setting forth
every fact upon which the jurisdiction of the surrogate to act depended, made
upon the information and belief, is a proper application to force the surrogate,
to appoint appraisers. Kelsey v. Church, 112 N. Y. App. Div. 408, 98 N. Y.
Suppl. 535.

Not Judicial. The office of transfer tax appraiser is not judicial in character
within the civil service law. Weeks v. Kraft, 129 N. Y. Suppl. 690.

2 Frazer v. People, 3 N. Y. Suppl. 134, 6 Dem. Surr. 174.

3 N. Y. St. 1896, c. 368, a. 10, ss. 229 and 234, provide, for the appointment of
tax appraisers and tax assistants by the comptroller of the state. The court
holds that these sections invest the comptroller with absolute power of appoint-
ing and removing such official. The transfer tax assistant, however, is con-
nected with the administration of the surrogate's office and the statute therefore
plainly provides for the joint action of both officials in the selection and control
of this clerk. The surrogate's power, however, is limited to a recommendation,
and if the recommendation is not satisfactory the comptroller is not compelled
to accept it and make the appointment and the position remains vacant. Duell
V. Glynn, 191 N. Y. 357, 84 N. E. 282, affirming 122 N. Y. App. Div. 314, 56
Misc. 41, 106 N. Y. Suppl. 716.

^ The court refers to the fact that the practice as to appraisal throughout the
state has not been uniform, some judges taking the inventory and appraisement
as the basis, while others cause an appraisement to be made under the inherit-
ance tax law and still others resort to both methods. Cal. St. 1905, c. 314, s 5,
provides for the ascertainment of the value of life estates and future estates
by the appraiser to be appointed by the court, and the court of appeals expresses
the opinion that it would be better to appoint appraisers in all cases. Becker v.
Nye, Cal. App. 1908, 96 P. 333. See, however, In re Sondheim, 66 N. Y. Suppl.
726, under St 1900, c. 658, taking away the power of the surrogate to appoint
appraisers.

^ As the surrogate may of his own motion appoint an appraiser without peti-
tion his authority is not limited because the petition is presented by a competent

250 INHERITANCE TAX LAW. [§§ 32S-330.

person with allegations made upon information and belief. In re O'Donohue,
44 N. Y. App. Div. 186, 60 N. Y. Suppl. 690.

8/« re Westurn, 152 N. Y. 93, 102, 46 N. E. 315, reversing 8 N. Y. App.
Div. 59.

' Kelsey v. Church, 112 N. Y. App. Div. 408, 98 N. Y. Suppl. 535.

s/w re Belcher, 211 Pa. St. 615, 619, 61 A. 252.

Sec. 328. Appointed in what County.

Appraisers commonly must be appointed in the county where
the decedent resided at his death, ^ although appraisal may be had
where the larger part of his property is located. ^

^ Under the Pennsylvania statute of 1849, c. 369, s. 12, appraisers must be
appointed by the register of the county in which letters testamentary are issued;
and in that county all of the proceedings should be had to enforce the payment
of the tax assessed, and so real estate in another county may be assessed under
these proceedings. Stinger v. Commonwealth (2d), 26 Pa. St. (2 Casey) 429, 431.

Un re Dalrymple, 215 Pa. St. 367, 372, 64 A. 554.

Sec. 329. When Appointed.

Appraisal should be made promptly^ within the time allowed by
law.2

i/w re Kingman, 220 III. 563, 77 N. E. 135.

Where the real estate of the testator consisted almost entirely of partnership
property used in the prosecution of the lumbering and tannery business, and
where the actual value of such real estate is dependent largely upon the manner
in which it is controlled, it is impracticable to ascertain the value of such inter-
ests at present, but would seem to be a very proper case for postponing the
assessment and collection of the tax to which the same might be subject until
the parties entitled come into actual possession or enjoyment thereof. In re
Wheeler, 1 Misc. Rep. 450, 22 N. Y. Suppl. 1075.

^The inheritance tax section in regard to appraisal of property should be
read together with general law as to filing of an appraisal, and the court there-
fore finds that the appraisal required under the inheritance tax law with the
names of the distributees or devisees should be filed within ninety days after
qualification of the executor, and if the statement is not filed within this time
the county court may upon its own motion or upon motion of any party inter-
ested in the estate take such proceeding as may be necessary to compel a state-
ment to be filed, and after it has been filed to require if necessary that it shall
be made sufficiently full and specific to furnish such information as will enable
the county court to ascert.ain with reasonable certainty the character and value
of the estate and the beneficiaries thereof. Commonwealth v. Gaulbert, 134 Ky.
157, 119 S. W. 779.

Sec. 330. Removal of Appraisers.

Appraisers may be subject to removal like other officials. The
New York act of 1900, chapter 658, authorized the removal of a

.§§ 331-332.1

APPRAISAL.

251

[state transfer tax appraiser by the state comptroller without
hearing and although there were no charges of incompetency or
lisconduct against him.

People V. Glynn, 128 N. Y. App. Div. 257, 112 N. Y. Suppl. 695.

;ec. 331. Notice.

Statutes commonly require notice of appraisals to parties, or to
\the public officials,^ and where no notice was given remainder inter-

)ts, as they could not be ascertained at the time of the appraisal, it

lay not be binding either on the remaindermen when they come
jnto possession, or on the state,^ and appraisals made without such
lotice are defective.^ It may be sufficient that notice of the
ippraisal was given without notice of the order affirming it.'*

[otice of the appointment of the appraiser and of the time and
)lace of a hearing for the parties on appraisal and of the intended

ling of the appraisement is unnecessary unless the statute requires
It,^ although a right of appeal may imply notice.®

Un re Fulton, 30 Misc. Rep. 70, 62 N. Y. Suppl. 995. In re Bolton, 35 Misc.
^ep. 688, 72 N. Y. Suppl. 430. As to notice see ante, ss. 71, 72.

?In re Naylor, 189 N. Y. 556, 82 N. E. 1129, affirming 120 N. Y. App. Div.
f38, 105 N. Y. Suppl. 667.

^It appeared that no notice of the appraisement was given to an heir although

condition of affairs might arise in which she would be personally liable for
le tax and could be compelled to pay it as a person who "had received the
roperty transferred." The district attorney claimed that the tax must be
lid and if any part of it is shown to be illegal it might be refunded. But the
)urt holds that this would place an unjust burden upon the estate; that the
)roceeding is fatally defective and that therefore the tax assessed cannot be
)llected. The court set aside the report of the appraiser and allowed an appli-
ition to be made for a new appraisal. In re Winter, 21 Misc. Rep. 552, 48
Y. Suppl. 1097.

*/« re Miller, 110 N. Y. 216, 224, 18 N. E. 139, affirming 47 Hun 394.

8/» re Belcher, 211 Pa. St. 615, 619, 61 A. 252.

' In the appraisement the statute gives a right of appeal which necessarily
iplies notice, but there is no provision for a hearing except in the orphan's
)urt upon appeal; and hence an appeal within thirty days of the notice of the
ling of the appraisement was in time. In re Belcher, 211 Pa. St. 615, 619, 61

252.

Jc. 332. Construction of Will.

In proceedings for appraisal under the transfer tax act the will
lay be construed.

In re Peters, 69 N. Y. App. Div. 465, 74 N. Y. Suppl. 1028. That the tax
innot be assessed on proceedings to construe the will, see post, s. 378.

252 INHERITANCE TAX LAW. [§§ 333-334.

Sec. 333. Each Interest Separately Appraised. — Residue.

The appraisal should value each interest separately.^ It is the
duty of an appraiser under the New York statute of 1885 to fix
the value only of property of persons taking by succession from the
decedent, and the appraisers need not fix the value of the whole
estate of the testator. ^ The appraiser should show the value of
the estate received by each residuary legatee under the will, and
in doing so should deduct the gifts and legacies preceding the
residuary clause of the will.^

1 In re Burkhart, 25 Pa. Super. Ct. 514.

Where there is a life estate and remainder and the executors pay the tax on
the whole estate on the death of the testator, there is no requirement that the
values of the life estate and remainders respectively shall be appraised separately.
In re De Borbon, 211 Pa. St. 623, 61 A. 244.

^In re Jones, 5 Dem. Surr. (N. Y.) 30.

^Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E. 318.

Sec. 334. As of what Date.

It is the nearly universal rule that property must be appraised
as of the death of the testator.^ The appraisal will not include
income received after the testator's death ,2 and changes of value
after the death of the testator are immaterial on appraisal.^

^Hooper v. Bradford 178 Mass. 95, 59 N. E. 678. In re Vivanti, 138 N. Y.
App. Div. 281, 122 N. Y. Suppl. 954, reversing 63 Misc. 618, 118 N. Y. Suppl.
680 (good will).

The report of an appraiser is defective in not stating the value of the
property subject to tax on the date of the death of the testator. In re Earle, 74
N. Y. App. Div. 458, 77 N. Y. Suppl. 503, affirming 71 N. Y. Suppl. 1038.

As the inheritance tax is a tax upon succession and not upon property
the true test of value is the value of the estate at the time of the transfer of title
and not its value at the time of the transfer of possession. In re Davis, 149
N. Y. 539, 547, 44 N. E. 185, affirming 91 Hun 53.

[Income after death not included, see ante^ s. 179.]

2 Hooper v. Bradford, 178 Mass. 95, 59 N. E. 678. In re Vassar, 127 N. Y. 1,
827 N. E. 394, reversnig 58 Hun 378, 12 N. Y. Suppl. 203. See ante, s. 179.

3 In re Hartman, 70 N. J. Eq. 664, 668, 62 A. 560. In re Vassar, 127 N. Y. 1,
8, 27 N. E. 394, reversing 58 Hun 378, 12 N. Y. Suppl. 203. Comm. v. Smith, 20
Pa. St. (8 Harris) 100. Comm. v. Freedley, 21 Pa. St. (9 Harris) 33. See, how-
ever, post, s. 335, n. 2, 3.

A sale above the appraised value is not a reason for increasing the appraisal
as this should be treated as an increase in value after the death of the decedent.
In re Rice, 56 N. Y. App. Div. 253, 68 N. Y. Suppl. 1147, affirming 61 N. Y.
Suppl. 911. In re Bruce, 59 N. Y. Suppl. 1083.

§335.1 APPRAISAL. 253

Sec. 335. As of what Date Future Interests are Appraised.

Vested remainders are to be appraised on their value at the tes-
tator's death/ while the determination of the value of future uncer-
tain interests may be postponed till the happening of the event,^
when the appraisal may proceed on the basis of the full value of
the property at that time.^

Un re Kingman, 220 III. 563, 565, 77 N. E. 135. Howe v. Howe, 179 Mass. 546,
551, 55 L. R. A. 626. Dow v. Abbott, 197 Mass. 283, 288, 84 N. E. 96 (deducting
value of life interest). In re Meyer, 83 N. Y. App. Div. 381, 82 N. Y. Suppl.
329. In re Davis, 149 N. Y. 539, 547, 44 N. E. 185, affirming 91 Hun 53.

Under 111. St. 1895, p. 301, s. 2, "and the property so passing shall be appraised
immediately after the death," the words "after the death" referred to the death
of the testator and not to the death of the life tenant. Ayers v. Chicago Title
& Trust Co., 187 111. 42, 58 N. E. 318.

The present value of vested remainders is capable of ready computation by
the annuity tables, and they are therefore subject to present taxation. In re
Dows, 167 N. Y. 227, 233, 60 N. E. 439, 52 L. R. A. 433, 88 Am. St. Rep. 508,
affirming 60 N. Y. App. Div. 630 (affirmed sub nomine, Orr v. Gilman, 183 U. S.
278, 22 S. Ct. 213, 46 L. Ed. 196).

The will directed the executor to pay all the collateral inheritance taxes on all
the devises, bequests and legacies "as soon after my decease as the same can
conveniently be done." Under tKis provision the executor paid the tax on the
entire estate at its valuation at that time. Subsequently, the life tenant having
died, the state claimed the tax on the remainders on the ground that it was not
due until the remainders came into possession, and that the value of the estate
having increased in the meantime the tax is payable on its present value. The
court says that Pennsylvania statute 1887, P. L. 79, section 3, in the words
"shall not be payable" means only "shall not be demandable" by the state, as
the right of the remaindermen to pay sooner is expressly given in the proviso to
the same section; and that the tax having been paid on the value at the death
of the testator no further tax can be now collected. In re De Borbon, 211 Pa.
St. 623, 61 A. 244.

The Maryland Rule. Where a Maryland testator died leaving his property
in trust for the life tenant and on her death to be disposed of as she might by
will direct, and the life tenant did leave property by will, the inheritance tax
on her death should be reckoned on the value of the property at that time
although it had doubled in value while in the hands of the trustees. The court
holds that Md. code, a. 81, s. 117, provides that the tax is imposed upon the
clear value of all estates at the time of transfer or receipt by the collateral bene-
ficiary. Fisher v. State, 106 Md. 104, 66 A. 661. See, however, ante, s. 334, n. 3.

2 People V. McCormick, 208 111. 437, 70 N. E. 350, 64 L. R. A. 775. Howe v.
Howe, 179 Mass. 546, 550, 55 L. R. A. 626. In re Sloane, 154 N. Y. 109, 47 N. E.
978, 19 N. Y. App. Div. 411, 46 N. Y. Suppl. 264 (remainder on remarriage).
In re Willing, 11 Phila. 119. In re Kingman, 220 111. 563, 565, 77 N. E. 135.
See ante, ss. 233, 234.

Where the will left all the property to the wife for life and the remainder to
an infant, and where it appeared that the infant's estate could not be appraised

254 INHERITANCE TAX LAW. [§ 336.

at the present time, it is improper to appoint a special guardian for the infant.
In re Post, 5 N. Y. App. Div. 113, 38 N. Y. Suppl. 977.

Report and Security. Tenn. St. 1893, c. 189, s. 3, does not contemplate
that persons holding contingent interests shall make the report and give security
within the year from the death of the decedent. See Harrison v. Johnston,
109 Tenn. 245, 70 S. W. 414.

The Wisconsin statute was attacked on the ground that it attempted
to impose a tax on transfers limited to vest on contingencies which may never
happen, or to persons not in being or ascertainable, and making the tax due
and payable forthwith out of the property transferred, by compelling parties
to pay such tax on defeasible estates which they may never own and in con-
templating the payment of penalties before any opportunity is offered to pay
the tax. The court replies that the law does not operate to enforce the assess-
ment and payment of the tax on interests or estates not vested, or on those whose
value cannot be ascertained by reason of the uncertainties of contingencies.
Payment of the tax on such transfers is expressly postponed until the beneficiary
comes into the actual possession or enjoyment thereof. The claim that the pres-
ent owners of defeasible estates are compelled to pay the tax on the whole estate
is not well founded, for provision is made for reimbursing them should it happen
that such estates and interests should be abridged, defeated or diminished.
[Section 13, subdivision 31.] State v. Pabst, 139 Wis. 561, 587, 121 N. W. 351.

Change of Interest on Marriage. It is claimed that it was impossible to
ascertain the value of an estate given to one 'until she marries when she was to
have a different interest, as no one could say how long she would remain un-
married. The court, however, observes that when a particular individual claims
an exemption from burdens which the law imposes upon all alike and bases his
claim upon provisions of the statute which refer exclusively to the methods
to be employed, it is the duty of the court to construe these provisions so as if
possible to give effect to the statutory intent. That thenefore when the valua-
tion takes place it is to be made as of the date of the testator's death. The
court avoids the difficulty by deciding that the probate court should determine
what is the value of each instalment as it is actually paid to the beneficiary. From
the value of the first payments should be deducted the exemption of ten thousand
dollars and the tax computed upon the remainder. This avoids a possible result
that che custodians of the estate would be at liberty to transfer it to the benefi-
ciaries in instalments and in the meanwhile be unable to collect any tax whatever.
State V. Probate Court, 112 Minn. 279, 128 N. W. 18, 20. The court relies some-
what on In re Millward, 6 Misc. (N. Y.) 425, 27 N. Y. Suppl. 286.

3 In re Connoly, 38 Misc. Rep. 533, 77 N. Y. Suppl. 1113. In re Goelet, 78 N. Y.
Suppl. 47. See, however, ante, s. 334, n. 3.

Sec. 336. Reappraisal.

One appraisal exhausts the statutory authority for an appraisal,^
even where property has been omitted on the first appraisal,^
except for express statutory authority for a reappraisal,^ as where
property is omitted,'* or in case of fraud or error, ^ or in case of

§ 336.1 APPRAISAL. 255

future^ or unascertained interests/ or where the report of the
original appraiser is insufficient to enable the court to fix the tax.^

1 This assessment of the appraiser is final and it does not admit of opening
to take any additions to the clear value of property once assessed. That property
is vested in the heir or devisee and cannot be reassessed for the purpose either
of increasing or diminishing the value assessed by the appraiser. Commonwealth
V. Freedley, 21 Pa. St. (9 Harris) 33.

Un re Moneypenny, 181 Pa. St. 309, 37 A. 589

3 The district court may order a second appraisement of the property where
the state was not a party to the first appraisement and on showing error in
proceedings theretofore had to correct the error by means of a new appraisement.
McGhee v. State. 105 Iowa 9, 74 N. W. 695.

A motion may be made to remit the report of an appraiser back to the
appraisers before the court has acted upon it, for the introduction of additional
proof. In re Kelly, 29 Misc. Rep. 169, 60 N. Y. Suppl. 1005.

*In re Smith, 23 N. Y. Suppl. 762 (property withheld from the notice of the
appraiser).

The authoricy to a surrogate to appoint an appraiser "as often as occasion
may require" has for its object to collect the tax on the whole taxable estate;
and where all the assets have been appraised and the tax fixed to cover any
omission by additional or supplemental appraisals and when such omissions are
discovered upon the new appraisal, property of the decedent which had not
been appraised at the previous proceeding was properly included. But the
appraiser has no authority to increase the appraisal on property which was
included in the former appraisal, even though the executor had since the former
appraisal actually received for such property respective sums for which they
were valued in the new appraisal. The court treats this difference as an increase
in value subsequent to the date of the death of the decedent. In re Rice, 56
N. Y. App. Div. 253, 68 N. Y. Suppl. 1147, affirming 61 N. Y. Suppl. 911.

Where property was brought to the attention of the appraisers and
is not included in the appraisal a new appraisal under section 230 is not author-
ized on the ground that the property was omitted from the former appraisal.
In re Crerar, 56 N. Y. App. Div. 479, 67 N. Y. Suppl. 795, 9 N. Y. Ann. Cas. 101.

^The New York statute of 1896 provides for a reappraisal if an appraisal has
been fraudulently, coUusively or erroneously made. Where no appraisal is
made at all for the reason that both appraiser and surrogate took the view which
proved to be mistaken, that the bequest was not subject to tax, this is not within
the statute and therefore a reappraisal cannot be had under this section. In re
Niven, 29 Misc. Rep. 550, 61 N. Y. Suppl. 956. See Morgan v. Warner, 162 N. Y.
612, 57 N. E. 1118, affirming 45 N. Y. App. Div. 424. Remedy by reappraisal
in case of fraud is not exclusive, but compcroUer may appeal.

Sale above Price Fixed on Appraisal. Reappraisements will not be ordered
in the absence of evidence of mistake or fraud simply because at public auction
the property was sold for a price exceeding the appraisal. In re Bruce, 59 N. Y.
Suppl. 1083. In re Rice, 56 N. Y. App. Div. 253, 68 N. Y. Suppl. 1147, affirm-
ing 61 N. Y. Suppl. 911.

^ State v. District Court, 41 Mont. 357, 109 P. 438.

256 INHERITANCE TAX LAW. [§337.

N. J. St. 1893, c. 210, s. 4, provides that all taxes imposed by the act shall
be due at the death of the testator unless otherwise provided and it was claimed
that the necessary effect of this language was that the act does not provide
for the imposition of a tax which cannot be determined at the death of the
testator. But this contention fails to take account of the phrase in this fourth
section that the tax imposed by the act shall be due and payable at the death
of the testator unless otherwise provided It also fails to take account of the
provision of section 13, to the effect that m order to fix the value of property
subject to the tax, the surrogate or register of the prerogative court shall "appoint
an appraiser as often as and whenever the occasion may require." The court
relies on similar provisions in the New York statute as construed in In re Stewart,
131 N. Y. 274. Hoyt v. Hancock, 65 N. J. Eq. 688, 55 A. 1004.

^ Where the widow is given power to appropriate the residue to her own use
for life with the remainder over of the surplus, the amount of it and the tax
upon it can only be ascertained after her death. Appeal of Nieman, 131 Pa. St.
346, 351, 18 A. 900.

The testatrix died in 1891, and the appraisal was had then under the existing
law of the interests of the beneficiaries, but the tax on the interests of certain
contingent remainders was postponed, as it was not then known and could not
then be ascertained to whom the shares would ultimately pass. In 1902 the
legatee to whom the property was given when she became thirty years of age
reached that age and the application was made to fix the tax on her share. The
court holds that the language in the statute of 1901, chapter 173, "where the
taxation thereof has been held in abeyance," clearly makes the section apply
retroactively and that therefore the appraisal must take place not in accordance
with the valuation of 1891, but that a new appraisal was necessary. In re
Hosack, 39 Misc. Rep. 130, 78 N. Y. Suppl. 983.

Where an appraiser reports that remaindermen were indefinite and uncertain,
and that the tax could not then be determined and this report is confirmed in
1894, the court has no power to appoint another appraiser in 1898. The report
was the final determination of the subject. In re Lawrence, 96 N. Y. App. Div.
29, 88 N. Y. Suppl. 1028.

8 Denver v. Watson, (Colo. 1911,) 118 P. 979.

Sec. 337. Test of Value.

The appraisal should endeavor to fix the real market value of
the property rather than its assessed value, ^ and on this issue the
appraisers should consider the current market quotations under
ordinary conditions,^ without considering the effect on the market
of a forced sale of the holdings of the estate.^ They may consider
the net income,* together with other proper evidence,^ such as the
agreement of the owners,® and actual sales,^ and the opinion of the
executor, but not declarations of the testator.^ The appraisal of
an estate must be based on some definite evidence of the existence
as well as the value of the property.®

§ 337.] APPRAISAL. 257

' "Value," "appraised value" and "actual market value" means in
each case a fair market value and not the assessed value of the property fixed for
the purpose of ordinary taxation. McGhee v. State, 105 Iowa 9, 74 N. W. 695.

^ "The quotation of the stock exchange may be temporarily uncertain and
untrustworthy, if the sales thereon are suddenly affected for speculative pur-
poses, or by the forcing upon the market and to sale of large blocks of stock in
an extraordinary manner, with no explanation of such action, and where the
purpose of it is left to the conjecture of those dealing in the stocks; but such quota-
tions may be a fair and safe guide when they are taken for a reasonable period
of sales made in the usual and ordinary course of business." Per Magruder, J.,
in Walker v. People, 192 111. 106, 112, 61 N. E. 489.

Practice. There is an elaborate opinion as to the practice on appraisal under
the New York statute of 1887 in In re Astor, 20 Abb. N. Cas. 405, 6 Dem. Surr.
402, 14 N. Y. St. 478, 2 N. Y. Suppl. 630.

3 "Clear market value" does not mean the selling price of property at a forced
or involuntary sale so the appraisal may be made at the price at which small
blocks of stock held by the estate were sold at or about the date of the death of
the decedent, and the appraiser should not consider the fact that the estate held
large blocks of stock which if all forced on the market at the death of the decedent
would have depressed the market price of the stock. Walker v. People, 192 111.
106, 61 N. E. 489.

^In re Kaas, 5 Pa. Co. Ct. 583.

^Appraisers may use the quotations on public exchanges, private sales of such
property, testimony as to the actual value of the same and their own knowledge
of the subject matter. Walker v. People, 192 111. 106, 61 N. E 489.

^ The court holds that there was no authority for fixing the value of the good
will in a business at the amount of the decedent's share of the profits of the
business for the year immediately preceding. The amount fixed by the agree-
ment of the parties at the time must determine the value. What is to be deter-
mined is the value of the good will as of the time of the decedent's death. In re
Vivanti, 138 N. Y. App. Div. 281, 122 N. Y. Suppl. 954, reversing 63 Misc. 618,
118 N. Y. Suppl. 680.

^ It appeared that the devisee of real property had sold it for the best price
that she could obtain, and therefore the court holds it unjust to fix the price much
larger than that simply on account of the evidence of a real estate appraiser.
In re Arnold, 114 N. Y. App. Div. 244, 99 N. Y. Suppl. 740, 37 Civ. Proc. Rep.
177.

The average sales of stock for the three months first prior to the decedent's
death is a proper way to ascertain the value of the stock under the New York
statute of 1891, chap. 34, sec. 1. In re Crary, 31 Misc. Rep. 72, 64 N. Y. Suppl.
666. See also, Walker v. People, 192 111. 106, 61 N. E. 489.

« Morgan v. Warner, 162 N. Y. 612, 57 N. E. 1118, affirming 45 N. Y. App. Div.
424.

*The testimony of one hostile witness that ten years before the death of the
testator he was shown by the testator a box containing securities which the testa-
tor then stated amounted to $420,000, and that five years prior to the death of
*he testator the witness was taken to a safe deposit vault and shown a box of
securities which the testator stated were worth $700,000, which the witness did
not handle, estimate or count, is insufficient as a basis for inheritance tax pro-

258 INHERITANCE TAX LAW. [§§338-340.

ceedings. In addition to this, accounts with brokers and with a national bank
showing considerable amounts of money passing through the account are insuffi-
cient, especially where it appears that the testator was speculating in the stock
market. In re Kennedy, 113 N. Y. App. Div. 4, 99 N. Y. Suppl. 72.

Sec. 338. Value Received by Beneficiary the Test.

An appraisement should not be made on the basis of the entire
value of a decedent's property at the time of his death, but rather
on the value of the estate received by each person under the will,
in those states where the tax is imposed on the beneficiaries rather
than on the estate.

Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E. 318.

Sec. 339. Rule in the Absence of Specific Provision.

Where the statute makes no specific provision for a case exactly
like the one in question the values can be ascertained according
to the method pointed out for similar cases.

Dow V Abbott, 197 Mass. 283, 288, 84 N. E. 96.

Sec. 340. Choses in Action. — Bequest to Debtor.

Claims or other choses in action must be appraised at their
actual market value, which may be nothing where the debtor is
worthless and the testator bequeaths his debt to him.^ So a worth-
less claim should be entirely barred from consideration, ^ or it may
be excluded from immediate appraisal when subject to genuine
litigation.^ An honest, prudent compromise may determine its
value. Where an administrator makes an honest and prudent
compromise of a claim of the estate against another, the claim
will not be appraised at a greater value than the compromise.^

^ Where a testator held notes against cei^tain relatives and by his will the notes
and the amounts due thereon were given to the makers of the notes, and the direc-
tors were directed to cancel and surrender the notes to the makers without pay-
ment, the court holds that as the makers of the notes were insolvent it is
fair to appraise the legacy as valueless. It was claimed that notwithstanding t he
insolvency of the makers inasmuch as the notes were given as legacies to the
makers themselves they should be assessed &t their fair value. But the court
holds that under section 230 of the statute "fair market value" is the test. No
such exception of cases where promissory notes are given to their makers is
made by the statute. Morgan v. Warner, 162 N. Y. 612, 57 N. E. 1118, affirm-
ing 45 N. Y. App. Div. 424.

Where the estate has a claim against a beneficiary, but of a less amount than
the beneficiary is entitled to under the will, the claim should be appraised. In
re Smith, 14 Misc. Rep. 169, 35 N. Y. Suppl. 701. See further, ante, s. 340.

§341.] APPRAISAL. 259

2 In re Manning, 169 N. Y. 449,62 N. E. 565, affirming 59 N. Y. App. Div. 624.

3 In re Skinner, 106 N. Y. App. Div. 217, 94 N. Y. Suppl. 144, modifying 45
Misc. 559, 92 N. Y. Suppl. 972.

Where the administrator had brought suit on a note made payable to the
intestate which the maker of the note claimed had been paid and litigation
was still pending at the time of the appraisal, it was the duty of the surrogate
to exclude this claim from the valuation at the time, reserving it for future ap-
praisal in case the administrator succeeded in collecting it. In re Westurn, 152
N. Y. 93, 103, 46 N. E. 315, reversing 8 N. Y. App. Div. 59.

4 In re Thomas, 39 Misc. Rep. 223, 79 N. Y. Suppl. 571.

Sec. 341. Inactive Securities. — Good Will.

Where shares of stock are not Hsted upon the stock exchange
or sold in the open market, the only way to ascertain their value
is to consider the property they represent and its income/ or sales
of the stock though infrequent,^ or expert evidence.^ The court
approves the suggestion that the proper rule for ascertaining the
value of good will based on earnings would be to multiply the net
earnings by a certain number of years, depending on the nature of
the business, and where a net profit upon a comparatively small
capital was about $26,000 per annum, and it was not a business
that depended upon any special qualifications in the decedent,
the court estimates the value at about three times the annual net
profits.^

1 In re Jones, 172 N. Y. 575, 586, 65 N. E. 570, 60 L. R. A. 476, reversing 69
N. Y. App. Div. 237, 74 N. Y. Suppl. 702 (joint stock association).

Certain stock was valued at $1,150 per share and the county court valued it
at $1,408.45 per share, the face value being $1,000 per share. The law requires
that the tax should be assessed on the clear market value of the property. It
appeared that there had been no sales of the stock in the market, but that the
decedent had dealt with the stock on the basis of its book value, and the transfers
shown were apparently made in reliance on the book value. Evidence was intro-
duced showing the dividends declared and paid for a period of years before the
death of the testator, and the value of the corporation assets during that time.
In the deed of gift the decedent declared the book value of 2,840 shares of stock
to be four million dollars. The court finds that the facts regarding the busi-
ness of the corporation and its property furnish a basis for valuation, and are
sufficient to sustain the conclusion of the trial court. State v. Pabst, 139 Wis.
561, 594, 121 N. W. 351.

Patent Medicine Company. — Trade Secrets. Where stock had no market
value, as the corporation made porous plasters and medicines dependent on cer-
tain trade secrets, the earning power of the corporation is competent evidence
of its value and is to be considered in determining the valuation to be placed
upon the stock for the purposes of taxation. Where it is impossible for an
appraiser to ascertain the market value of the stock of a corporation by reason
|of the fact that there is none, the state does not thereby lose the tax upon the

260 INHERITANCE TAX LAW. [§342.

transfer. The ownership of secret receipts is not tangible and is to some extent
of uncertain and precarious value, dependent upon the good faith of those who
possess the secret. Still a large portion of their value lies in judicious advertising
and in the name under which they have sold, and therefore these secret receipts
are properly to be considered in estimating the value. In re Brandreth, 28
Misc. Rep. 468, 59 N. Y. Suppl. 1092.

2 In re Proctor, 41 Misc. Rep. 79, 83 N. Y. Suppl. 643.

Where a manufacturing company paid eight per cent dividends during the
first year of its incorporation its stock is not necessarily worth par in view of sales
during the year at fifty ($50) dollars a share. In re Smith, 71 N. Y. App. Div,
602, 76 N. Y. Suppl. 185.

3/w re Curtice, 111 N. Y. App. Div. 230, 97 N. Y. Suppl. 444, affirmed in
185 N. Y. 543, 77 N. E. 1184.

4 In re Keahon, 60 Misc. 508, 113 N. Y. Suppl. 926. See further, ante, s. 178.

Sec. 342. Annuities.

A definite annuity is properly valued at its worth at the testa-
tor's death, in tlie light of the legatee's probability of life at that
time.^ Where a testator directed his executors and trustees to
pay over to his sister such sums as with the income of her own
property should give her a net annual income of $10,000, the court
ruled that she was to be taxed on an annuity to the amount of the
difference between $10,000 and her net annual income at the death
of the testator. The objection was made that the sum bequeathed
was neither an annuity nor a life estate, as it was of an uncertain
amount and liable to fluctuate from year to year. The court
takes the position that it did not appear how great the fluctuations
might be and it might be treated as an annuity of $10,000 a year
subject to reduction, so that the value of the interest might be
treated as an annuity of $10,000 a year.^

1 Minot V. Winthrop, 162 Mass. 113, 126, 26 L. R. A. 259. In re Rothschild,
72 N. J. Eq. 425, 65 A. 1118, 71 N. J. Eq. 210, affirming 71 N. J. Eq. 210. See,
however, In re Hall, 36 Misc. 618, 73 N. Y. Suppl. 1124, where remainder interest
valued by deducting value of annuity actually enjoyed by annuitant who lived
longer than calculated by the annuity tables.

A tax on an annuity as covered in section 230 of the New York statute should
be ascertained by fixing the value under the insurance tables and then computing
the amount of the transfer tax thereon, which becomes payable forthwith out
of the fund set aside for creating the annuity. The method of returning to the
estate the tax so paid by the trustees is as follows: "Take for illustration an annui-
tant whose probable duration of life is ten years. The trustees would deduct from
each annual payment as made one- tenth of the tax and restore it to the residuary
estate." Where the death of the annuitant took place before the tax had been
restored to the estate entirely, any portion of a transfer tax not restored to the
estate by the process indicated at the time of the annuitant's death would be a

§ 343.] APPRAISAL. 261

loss which the estate must sustain. In re Tracy, 179 N. Y. 501, 509, 72 N. E.
519, reversing 87 N. Y. App. Div. 215.

The personal property was limited on the life of the testator's widow subject
to an annuity to be paid to his sister. It was claimed that from the life estate
should be deducted the actual amount of principal necessary to produce annuities
at the rate of five per cent per annum. The court, however, holds that the
proper method is to treat the present values of the annuities as specific legacies
bequeathed to the annuitants deducted from the residuary personal estate, on the
theory that the widow's life interest is limited on the remainder only. In effect
her interest is ascertained to be the present value of the life estate in the entire
fund less the present value of the annuities charged upon such fund. In re Maresi,
74 N. Y. App. Div. 76, 77 N. Y. Suppl. 76.

The testator, a resident of Louisiana, died in 1902, leaving certain property
in the state of New York. The will gave an annuity to two sisters and contained
the request that the executors should arrange for these annuities "through such
life insurance companies as the Mutual, New York Life, or Equitable Life, all
of New York." The executors purchased annuities from New York companies
with the New York assets of the testator. The court holds that as the will
contained a direction to purchase annuities from one of the insurance companies
mentioned in the will, the amount that was actually expended by the executors
for the purchase of these annuities should be deducted and not the estimated
value of the annuities as determined by the superintendent of insurance, and
therefore, the tax on the residuary bequest should be based on the amount actually
received and not to include property which has been paid out by the executor
for the benefit of others in pursuance of directions contained in the will. In re
Hutchison, 105 N. Y. App. Div. 487, 94 N. Y. Suppl. 354.

2 Howe V. Howe, 179 Mass 546, 554, 61 N. E. 225, 55 L. R. A. 626.

[As to annuities, see further, ante, ss. 230, 306.]

Sec. 343. Life Estates.

Life estates must be reckoned at their value at the death of the
testator,^ and are not dependent on the actual length of life of the
life tenant.^ This must usually be done by annuity tables. The
value of a life estate may be determined by actuaries' experience
tables,^ or like annuities.^

^Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E. 318. Dow v. Abbott
197 Mass. 283, 84 N. E. 96.

2 Howe V. Howe, 179 Mass. 546, 550, 61 N. E. 225, 55 L. R. A. 626.

^In re Wolf, 48 Ohio Wkly. L. Bui. 211.

*Life estates for the purposes of the tax are to be appraised at their cash
value in the same manner as annuities. This means such a sum that if invested
and put at interest it will with a proportionate part taken from the fund yearly
to make up the annuity, yield the required amount of it annually, the whole fund
being exhausted during the expectancy of life of the annuitant. Citing with
approval the Case of Handley, 3 L. L. N. 9. In re Von Storch, 7 Pa. Dist. R. 204.

[What life estates taxable, see ante, 228.]

262 INHERITANCE TAX LAW. [§§344-346.

Sec. 344. Statute Providing no Method for Ascertaining
Value of Life Estate.

The fact that the statute does not provide any method for
ascertaining the value of the life estate is not material; for the
court may in the absence of express direction adopt some practical
way for ascertaining its value — for example, by referring to life
and annuity tables.^ Valuation of a life estate under the New
York statute of 1885 should be made according to the rules of the
supreme court where no tables are specified in the statute.^

^ State V. Probate Court, 100 Minn. 192, 197, 110 N. W. 865.
2 In re Robertson, 5 Dem. Surr. (N. Y.) 92.

Sec. 345. Death of Life Tenant before AppraisaL

The fact that the life tenant may have died after the testator,
though before the appraisal, will not affect the tax upon his interest.

In re Jones, 28 Misc. Rep. 356, 59 N. Y. Suppl. 983. Contra, Kahn v. Herold
147 Fed. 575, affirmed in 86 C. C. A. 598, 159 Fed. 608, 163 Fed. 947. (Under
U. S. St. 1898.) See In re Hall, 36 Misc. 618, 73 N. Y. Suppl. 1124, where
annuitant lived longer than estimated the remainderman should be charged only
with what he actually got. Cf. cases cited, ante, s. 342, n. 1.

Sec. 346. Remainders.

Remainders should be valued by deducting from the whole estate
the value of the primary estate, ^ except where payment is postponed
till the remainder comes into possession, when the remainder
interest may be chargeable with the whole tax on the whole estate ^
at the time the remainderman goes into possession.^

1 Howe V. Howe, 179 Mass. 546, 551, 55 L. R. A. 626. Dow v. Abbott, 197 Mass.
283, 288, 84 N. E. 96. In re Lange, 25 Misc. Rep. 466, 55 N. Y. Suppl. 750.
Appeal of Commonwealth, 127 Pa. St. 435, 439, 17 A. 1094 (if remaindermen
elect to pay in anticipation on the death of the decedent).

Under 111. St. (Kurd's Sts. 1903, p. 1576) the only provision for deduction of
the primary estate in assessing the value of the remainder interest is in s. 2 and
that where the remainder goes to the collateral heirs, to a stranger to the blood,
or to a body politic or corporate, in which case the value of the preceding estate
is first to be deducted and the tax extended on the remainder only. In re King-
man, 220 111. 563, 77 N. E. 135.

The testator gave property in trust to pay the income to his wife for life. If
the income was insufficient to realize $5,500 a year they are directed to use the
principal to make up that amount. The widow died in 1900 and the appraiser,
on her death, appraised her interest according to the annuity tables as of the
death of the testator. The widow actually survived longer than the annuity
tables reckoned and the court holds that the valuation of the estate in remainder

§§347-348.] APPRAISAL. 263

should be made as of the death of the life tenant, as it would be unthinkable
that the remainderman might receive nothing whatever and still be assessed
with a tax. In re Hall, 36 Misc. Rep. 618, 73 N. Y. Suppl. 1124.

^Appeal of Commonwealth, 127 Pa. St. 435, 439, 17 A. 1094. Cooper v. Com-
monwealth, 5 Pa, Co. Ct. 271.

3 In re Connoly, 38 Misc. 533, 77 N. Y. Suppl. 1113. In re Goelet, 78 N. Y.
Suppl. 47.

[See further, ante, ss. 231-4.]

Sec. 347. Remainder after Remarriage.

To appraise an interest after the death or remarriage of the
widow, mortuary tables should not be used. While the probabiUty
of death may be estimated from these tables, there are no statistics
available from which the probability of remarriage may even be con-
jectured.^ Where a life estate is determinable upon the remarriage
of the life tenant, on the remarriage of the life tenant the appraiser
should deduct from the principal fund the value of the estate of
the widow during the term of her widowhood. ^

1 Herold v. Shanley, 146 Fed. 20, 76 C. C. A. 478, affirming 141 Fed. 423 (N.J.).

2 In re Sloane, 154 N. Y. 109, 114, 47 N. E. 978, 19 N. Y. App. Div. 411, 46
N. Y. Suppl. 264. As of what date interests on remarriage should be appraised
see ante, s. 335, n. 2.

Sec. 348. Power to Order Production of Papers.

The court may have by law authority to compel the parties to
furnish information to the appraisers,^ but not to force the cor-
porations in which he was a stockholder to do so.^

1 In re Maris, 14 Pa. Co. Ct. 171, 3 Pa. Dist. 83.

2 Wis. St. 1903, c. 44, ss. 12 and 15, does not give to the county court the
authority to order the corporation in which the decedent was a stockholder to
produce its private books, papers and documents for inspection to enable the
court to determine the value of the estate of the decedent and the amount of the
tax to which the same is liable. The court finds that such supposed entries and
statements made in the books, papers and documents of the corporation by its
officers or agents have no more probative force as evidence in court, in the con-
troversy between the executors and the state of Wisconsin, than oral declarations
to the same effect, made by the same officers and agents would have had. Such
entries and statements were obviously mere hearsay, made by third parties with-
out the sanction of an oath. There is nothing in the statute authorizing the county
court, whether acting as a judicial tribunal or as an appraiser, to compel a third
party to produce his private books, papers and documents; and certainly the
county court has no such power in the absence of statutory authority. A writ
of prohibition against the proceedings in the county court was granted. State v.
Carpenter, 129 Wis. 180, 108 N. W. 641, 8 L. R. A. N. S. 788.

264 INHERITANCE TAX LAW. [§§349-350.

Sec. 349. Appeal.!

Appraisal is usually subject to appeal by any party j'^ including the
state itself,^ even though the law may also provide a remedy by
reappraisal.'* A right of appeal necessarily implies notice of the
appraisal at some time.^

* See further, proceedings to vacate appraisal, post, s. 393. As to appeal from
assessment, see post s. 392.

2 Comm. V. Freedley, 21 Pa. St. (9 Harris) 33.

A failure to appraise can be corrected only by appeal and not by a proceeding
to set aside the appraisal. In re Smith, 14 Misc. 169, 35 N. Y. Suppl. 701.
^Becker v. Nye, 8 Cal. App. Cal. 129, 96 P. 333.

* Morgan v. Warner, 162 N. Y. 612, 57 N. E. 1118, affirming 45 N. Y. App.
Div. 428 (remedy by reappraisal in case of fraud is not exclusive but comptrollei
may appeal) .

'In re Belcher, 211 Pa. St. 615, 619, 61 A. 252.

Sec. 350. Appraisal has no Effect on Liability.

An appraisal has for its object simply to ascertain the value
of the estate and not to determine whether the estate is subject
to the tax. Where the estate is not subject to be assessed with the
tax the entire proceeding is a nullity. Therefore the appraisal,
although not appealed from, is not final on the question of the
liability to tax.

Stinger v. Commonwealth, 26 Pa. St. (2 Casey) 422, 426.

CHAPTER XLI.

DEBTS AND EXPENSES.

§ 351. Debts of Decedent.

§ 352. Partnership Debts.

§ 353. Debts Secured by Real Estate.

§ 354. Marshaling Assets to Pay Debts.

355. Taxes on Real Estate.

§ 356. Tax Paid Improperly.

i§ 357. Stranger Paying Taxes on Land.

|§ 358. Expenses of Administration.

[§ 359. Executor's Commissions Increased by Increase in Value of

Estate.

§ 360. Where Will Forbids Commissions to Executors or Trustees.

§ 361. Practice where Expenses of Settlement Unknown.

§ 362. Embezzlement by Executor.

§ 363. Expenses of Executors in Defending Will.

§ 364. Expenses of Heirs Setting Aside Will.

§ 365. Action to Construe Will.

§ 366. Expenses of Resisting Adverse Claim.

§ 367. Controversy among Distributees.

§ 368. Broker's Commissions.

§ 369. Trustee's Commissions.

§ 370. Subrogation of Creditors.

§ 371. Federal Inheritance Tax.

§372. Foreign Inheritance Taxes.

^§ 373. Funeral Expenses.

;§ 374. Cemetery Lot and Tomb.

375. Care of Cemetery Lots.

^§ 376. Masses.

351. Debts of Decedent.

The appraisal for purposes of the tax should consider the debts
the decedent/ and claims in litigation should be considered. ^

^Succession of Levy, 115 La. 378, 39 S. 37, affirmed Cahen v. Brewster, 203 U. S-
552, 27 S. Ct. 174, 51 L. Ed. 310. In re Westurn, 152 N. Y. 93, 100, 46 N. E.
315, reversing 8 N. Y. App. Div. 59 (under the act of 1892). In re Wormser, 36
Misc. Rep. 434, 73 N. Y. Suppl. 748. Appeal of Orcutt, 97 Pa. St. 179. In re
Line, 155 Pa. St. 378, 391, 26 A. 728, 32 Wkly. Notes Gas. 376. Shelton v.
Campbell, 109 Tenn. 690, 72 S. W. 112. Contra, In re Ludlow, 4 Misc. Rep. 594,
25 N. Y. Suppl. 989 (under the act of 1892). In re Millward, 6 Misc. Rep. 425,
27 N. Y. Suppl. 286. S^e Becker v. Nye, 8 Cal. App. Cal. 129, 96 P. 333, qucBre.

266 INHERITANCE TAX LAW. [§§ 352-353.

The surrogate may deduct from the value of the estate the amount of debts
owing by the decedent. In re Millward, 6 Misc. Rep. 425, 27 N. Y. Suppl. 286.

Real Estate. Where the land of the decedent passes to lineal descendants
for life and at their death to collateral heirs, although the real estate descends
intact to the collateral heirs, the tax must be assessed upon the valuation of the
real estate after deducting the debts owing by the decedent at the time of his
death. Appeal of Commonwealth, 127 Pa. St. 435, 440, 17 A. 1004.

Comtnunity Property. Where the deceased bequeathed to her husband
all her property which consisted entirely of her share of the community prop-
erty, the debts of the succession should be deducted in fixing the amount of the
tax on inheritances. Succession of May, 120 La. 692, 45 S. 551.

Disbursements which it is admitted were made by the executor for
debts must be allowed by the appraiser and it is error for him to reduce these
amounts arbitrarily. In re Dimon, 82 N. Y. App. Div. 107, 81 N. Y. Suppl. 428.

2 A claim in litigation should be referred to the appraiser to take evidence
and report what if any rebate or deduction from the tax imposed should be made
because of the claim. In re Morgan, 36 Misc. 753, 74 N. Y. Suppl. 478.

It was proper to withhold half the sum claimed by a claimant against the
estate from appraisal and taxation. But it is better practice that the order
determining the tax should contain an appropriate recital to the effect that the
determination of the taxability of the sum claimed is suspended until the disposi-
tion of litigation. In re Wormser, 28 Misc. 608, 59 N. Y. Suppl. 1088.

Sec. 352. Partnership Debts. ■

Partnership debts discharged with firm assets are not deducted
from the assets of the decedent for the purposes of the tax.
Memphis Trust Co. v. Speed, 114 Tenn. 677, 88 S. W. 321.

Sec. 353. Debts Secured by Real Estate.

Where real estate is subject to mortgage, only the equity of re-
demption above the mortgage should be appraised,^ even though the
tax is laid on real estate of a non-resident and it is claimed that the
doctrine of equitable conversion and exoneration should be applied
to relieve the land from the encumbrance of the mortgage, and
that the executors should bring the proceeds of the personal estate
from the domicile and apply it to payment of the debt so as to leave
the land free from encumbrance.^ So in appraising the residuary
personal property the principal of a bond not due, signed by the
decedent and secured by a mortgage upon his real estate, should
not be deducted before estimating the taxable value of the bequests.'
The opposite rule seems to prevail in Michigan and Pennsylvania.*

1 In re Sutton, 3 N. Y. App. Div. 208, 212, 149 N. Y. 618. In re Skinner,
106 N, Y. App. Div. 217, 94 N. Y. Suppl. 144. See, also, In re Strong, 17 N. J.
Law. J. 234.

§ 354.] DEBTS AND EXPENSES. 267

2 The court holds that the answer to this contention is that the rights and
obligations of all parties are to be determined as of the time of the death of the
decedent. Furthermore, the law of equitable conversion ought not to be in-
voked merely to subject to property taxation, especially when the question
is one of jurisdiction between different states. McCurdy v. McCurdy, 197 Mass.
248, 83 N. E. 881.

3 In re Maresi, 74 N. Y. App. Div. 76, 77 N. Y. Suppl. 76.

4 The court points out the distinction which exists between New York and Mich-
igan as to the law for the distribution of estates. It finds that it is the law in
Michigan that the net personal estate for distribution consists of the personal
property after the payment of debts and expenses, including the debts secured by
mortgage on real estate, while by the New York statute the heir or devisee
taking real estate is bound to satisfy and discharge any mortgage upon it out
of his own property. Hence in Michigan a debt secured by mortgage on real
estate should be deducted from the valuation of the personal property. In re
Fox, 159 Mich. 420, 124 N. W. 60, 16 Detroit Leg. N. 943 (McAlvay, J., dissent-
ing), reversing 154 Mich. 5, 117 N. W. 558, 15 Detroit Leg. N. 675.

Mich. St. 1903, c. 195, s. 17, prescribes the form of the order to be followed by
the probate judge, which indicates that debts secured by mortgage are to be
deducted from real property. This form was evidently copied from the New
York Statute but can hardly be held in and of itself to establish a rule for fixing
the amount of the inheritance tax where land of the testator is subject to mort-
gage. That is done by other provisions of the statute which render the form
inserted inapplicable. In re Fox, 159 Mich. 420, 124 N. W. 60, 16 Detroit Leg.
N. 943. See Handlers Estate, 181 Pa. St. 339.

Sec. 354. Marshaling Assets to Pay Debts.

In appraising the local assets of a non-resident decedent a per-
centage of the total indebtedness apportioned to the value of the
local assets as compared with the total assets should be deducted.
Where nine per cent of the total personal estate of a non-resident
was in the state of New York, it is proper for the New York surro-
gate's court to deduct nine per cent of the debts and expenses of
the estate and the balance is the net assets within the state of
New York.^ So the deduction to be made for debts owing to
non-resident creditors, mortuary expenses, commissions on property
without the state, and other administration expenses in respect to
such property, should be in proportion which the net New York
estate, after all deductions are made for debts owing to resident
creditors, New York commissions and New York administration
expenses, bears to the entire or gross estate wherever situated.^
The property of a non-resident located within the state is not sub-
ject to taxation when it appears that his indebtedness to creditors
who are residents of the state is in excess of the value of the testa-
tor's property within the state. The fact that to release the debts

268 INHERITANCE TAX LAW. [§355.

the executor brought money of the decedent from out of the state
and paid the debts so that the securities in the state could be trans-
mitted to be administered at the residence of the decedent, cannot
make any difference as to what actually was transferred upon
which the tax was imposed.^

Where the estate of the testator consisted of real and personal
property in Illinois and real estate outside the state and a large
indebtedness, the lower court held erroneously that in order to
ascertain the amount on which to compute the tax the value of
the personal property should be deducted from the total indebted-
ness of the estate and the remaining indebtedness should be appor-
tioned upon all the real estate both foreign and domestic, and that
the tax should be laid upon the amount so apportioned on the value
of the lands in Illinois. This resulted by indirection in laying a
tax on the foreign lands and was erroneous.'^

1 In re Ramsdill, 190 N. Y. 492, 493, 83 N. E. 584, reversing 119 N. Y. App. Div.
890. (The New York act of 1911 forbids marshaling assets.)

2 In re Porter, 67 Misc. 19, 124 N. Y. Suppl. 676.

3 In re Grosvenor, 124 N. Y. App. Div. 331, 108 N. Y. Suppl. 926.

4 Connell v. Crosby, 210 111. 380, 392, 71 N. E. 350.
See further, ante, s. 204.

Sec. 355. Taxes on Real Estate.

Taxes on real estate which are a lien and payable at the time of
the decedent's death should be deducted from the value of the
estate in order to ascertain its net value, in proceedings under
the inheritance tax.^ Where the testator died January 30, 1900,
the annual taxes for the year 1900 not assessed nor a lien, nor pay-
able at that time, under the New York statute should not be de-
ducted before the levying of the inheritance tax.^

1 In re Liss, 39 Misc. Rep. 123, 78 N. Y. Suppl. 969.

2 In re Maresi, 74 N. Y. App. Div. 76, 77 N. Y. Suppl. 76.

Where the testator died January 27, only a few days after certain real estate
he conveyed was assessed for the purpose of taxation, and upwards of two months
before the day when such assessment might have been reduced or corrected under
the charter of the city of New York, the court holds that at the time of the testa-
tor's death there was no existing debt, as the tax had not then been ascertained.
All that had been done up to that time was fixing the valuation, which, unless
corrected in the manner pointed out in the statute, constituted the basis upon
which the tax was thereafter to be assessed. It was not until after April 1st
following that the books for collection of taxes were closed. In re Freund, 143
N. Y. App. Div. 335, 128 N. Y. Suppl. 48, 95 N. E. 1129.

Where the testator died December 9, 1895, the tax levied and becoming a
lien on December 13, 1895, should be deducted from the valuation of the estate

§§ 35&-358.1 DEBTS AND EXPENSES. 269

for the purposes of the inheritance tax, as the assessment had been made before
that time and was binding upon him although the precise amount of the tax
had not been ascertained until the warrants were delivered to the collectors.
In re Brundage, 31 N. Y. App. Div. 348, 52 N. Y. Suppl. 362. See also In re Hoff-
man, 42 Misc. Rep. 90, 85 N. Y. Suppl. 1082.

Sec. 356. Tax Paid Improperly.

In re Marx, 117 N. Y. App. Div. 890, 103 N. Y. Suppl. 446, reversing 49 Misc.
280, 99 N. Y. Suppl. 334.

Sec. 357. Stranger Paying Taxes on Land.

Where a stranger paid taxes on land, these payments should not
be deducted from the valuation of the property transferred, as these
taxes were paid by that person not a party to the title and any
payments made by him are rather in the character of a loan than
of a payment which entitles him to a lien on the land.

In re Wood, 123 N. Y. Suppl. 574.

Sec. 358. Expenses of Administration.

The expenses of administration should be deducted,^ including
executor's commissions,^ but not a bequest in addition to
commissions.^

1 Callahan v. Woodbridge, 171 Mass. 595, 599, 51 N. E. 176. State v. Probate
Court, 101 Minn. 485, 487, 112 N. W. 878. In re Wormser, 36 Misc. 434, 73
N. Y. Suppl. 748. In re Line, 155 Pa. St. 378, 391, 26 A. 728, 32 Wkly. Notes
Cas. 376.

Expense of Audit. Where the appraisal is made by an auditor the collateral
heirs are properly chargeable with the expense of the audit resorted to as a
substitute for the appraisement directed by law, and which they should have
insisted on. In re Burkhart, 25 Pa. Super. Ct. 514.

Where the parties assent to the correctness of the estimate of expenses
the register has no discretion but to allow it unless there is ground for a sus-
picion of fraud. In re Cullen, 8 Pa. Co. St. 234.

^ Commissions of Foreign Executor. In appraising the New York prop-
erty of a resident of Pennsylvania, the appraiser should not deduct commissions
to executors which would be excessive under New York law in the absence of
evidence of the Pennsylvania law on this subject. In re Kennedy, 20 Misc. Rep.
531, 46 N. Y. Suppl. 906, 2 Gibbons 220.

270 INHERITANCE TAX LAW. [§§359-361.

3 A bequest in addition to commissions to an executor is not within the inten-
tion of section 3 of the statute of 1887, which provides for a case where a bequest
is made in lieu of commissions. In re Underhill, 20 N. Y. Suppl. 134, 2 Con.
Surr. 262.

Sec. 359. Executor's Commissions Increased by Increase in
Value of Estate.

Where the estate in the hands of the executor increases in value
so that the executor's commissions are increased, the increased
commissions should be deducted from the inheritance tax, although
the tax itself can be estimated only on the value of the property
at the death of the testator.

In re Van Pelt, 63 Misc. 616, 118 N. Y. Suppl. 655.

Sec. 360. Where Will Forbids Commissions to Executors or
Trustees.

Where a will provided that no compensation or commission as
such should be paid to any living executor or trustee for any ser-
vices as executor or trustee, it was obvious that the testator intended
that his estate should not be diminished by these ordinary expenses
of administration, and it is clearly obvious that the legacies given
to the executors were not given in lieu of commissions. The court
therefore finds nothing to authorize the deduction from the total
assessed value of the fees and commissions of executors and trustees.

In re Vanderbilt, 68 N. Y. App. Div. 27, 74 N. Y. Suppl. 450.

Sec. 361. Practice where Expenses of Settlement Unknown.

The expenses of settling an estate may often be estimated for
the purposes of the tax.

The court approves of the practice of estimating the unpaid debts and expenses
of administration in so far as the estate has not been administered at the time of
the appraisal, provided the report and order of the appraisers reserve the right
of those whose interests are assessed to a rebate in case it shall appear that the
debts or expenses have been estimated too low and the provision for a further
assessment, though perhaps this is not strictly necessary, if they are estimated
too high. In re Dimon, 82 N. Y. App. Div. 107, 81 N. Y. Suppl. 428.

Where the executor was doubtful whether seven thousand dollars would cover
the expense of final settlement of an estate, the court ordered the amount of
seven thousand dollars be retained by the executor for contingent expenses
which may be incurred in the final settlement and that interest at six per cent
be computed on five per cent of the balance from one year after the death of the
testator until the date of the decree. In re Miller, 182 Pa. St. 157, 162, 37 A.
1000. See Shelton v. Campbell, 109 Tenn. 690, 72 S. W. 112.

§§362-365.] DEBTS AND EXPENSES. 271

Sec. 362. Embezzlement by Executor.

Where the executor misappropriates the funds of the estate the
ensuing loss is not to be deducted in reckoning the value of the
estate for the purpose of the inheritance tax. All charges at
the death of the testator should be deducted, but the misappro-
priation by the executor happened after the death of the testa-
tor and should therefore not be deducted, as subsequent increase
or decrease in the value of .the estate is immaterial.

In re Kite, 159 Cal. 392, 113 Pac. 1072.

Sec. 363. Expenses of Executors in Defending Will.

Lawful expenditures and expenses made by the executors in
defending a will against the heirs at law should be deducted in
determining the amount on which to compute the inheritance tax.

Connell v. Crosby, 210 111. 380, 71 N. E. 350, distinguishing /» re Lines, 155 Pa.
St. 378, 26 A. 728, where the expenses of legatees assisting the trustees was not
deducted, and In re Westurn, 152 N. Y. 93, 46 N. E. 315, where the expenses of
heirs who had successfully contested the will were not allowed. In re Gihon,
169 N. Y. 443, 612 N. E. 561, modifying 64 N. Y. App. Div. 504, 72 N. Y. Suppl.
1104 (expenses of temporary administrator in will contest).

Where the will is contested the expenses for attorney's fees incurred by
the executor must be treated as expenses of administration. It is the duty of
the executor and clerk of the county court to make an estimate of such fees and
expenses and to tentatively allow for them, and thus approximate the amount
of the tax to be paid, and this amount should be paid subject to revision upon final
statement and settlement of account under section 11 of the act. Provision
is made for a refund where the executor may have paid too much t^x. Shelton v.
Campbell, 109 Tenn. 690, 72 S. W. 112.

Iec. 364. Heirs Contesting Will.
The expenses of heirs in successfully contesting the probate of
will are not to be allowed as expenses, as they are not claims
lasting against the decedent or his property.
In re Westurn, 152 N. Y. 93, 102, 46 N. E. 315, reversing 8 N. Y. App. Div. 59.

Sec. 365. Action to Construe Will.

The costs and expenses of an action to construe a will should
be deducted before the levying of the inheritance tax. This is a
proper administrative expenditure of funds.

In re Maresi, 74 N. Y. App. Div. 76, 77 N. Y. Suppl. 76, citing In re Gihon,
169 N. Y. 443, 62 N. E. 561.

[Will construed on appraisal, see ante, s. 332.]

272 INHERITANCE TAX LAW. [§§366-369.

Sec. 366. Expense of Resisting Adverse Claim.

The expenses of resisting a claim under an alleged contract under
which claimant alleged that he was entitled to the whole estate by
the decedent should be deducted from the value of the estate for
the purposes of the inheritance tax.

In re Sanford, 66 Misc. 395, 123 N. Y. Suppl. 284.

Sec. 367. Controversy among Distributees.

The expenses of a controversy among the distributees as to the
proper distribution of an estate does not diminish the fund for
inheritance taxation.

In re Sanford, 66 Misc. 395, 123 N. Y. Suppl. 284. In re Line, 155 Pa. St.
378, 391, 26 A. 728, 32 Wkly. Notes Cas. 376.

Sec. 368. Broker's Commissions.

The commissions of a broker on sale of real estate should be
paid as a necessary expense of administration.
In re Rothschild, 63 Misc. 615, 118 N. Y. Suppl. 654.

Sec. 369. Trustee's Commissions.

A will provided compensation for the trustee of five thousand
dollars a year for ten years, or fifty thousand dollars; and the
court holds that the compensation of the trustee, earned not in the
administration of the estate but in the management thereof, for
the benefit of the legatees or devisees, does not come properly
within the class or reason for exempting the administration ex-
penses. Such services have no reference to closing the estate
for the purpose of distribution to those entitled to it and are not
required or essential to the rights of the heirs or legatees. These
trusts, however, created for the benefit of those to whom the prop-
erty ultimately passes, are of voluntary creation and are intended
for the preservation of the estate.^ Under the New York act of
1896, the commissions allowed by law to trustees for life tenants
should be deducted from the valuation of the interest of the life
tenants. 2 Under the same statute the executors' commissions as
trustees should be deducted in assessing the transfer tax.^

1 State V. Probate Court, 101 Minn. 485, 487, 112 N. W. 878. The court relies
somewhat on In re Gihon, 169 N. Y. 443, 62 N. E. 561, and Silliman's Case,
79 N. Y. App. Div. 98, 80 N. Y. Suppl. 336.

§§370-371.] DEBTS AND EXPENSES. 273

2/w re Gihon, 169 N. Y. 443, 446, 612 N. E. 561, modifying 64 N. Y. App.
Div. 504, 72 N. Y. Suppl. 1104.

3 In re Silliman, 175 N. Y. 513, 67 N. E. 1090, affirming 79 N. Y. App. Div. 98,
80 N. Y. Suppl. 336, reversing 77 N. Y. Suppl. 267.

The estimated commissions of trustees to whom a fund is turned over
by the executor should not be deducted from the estate in estimating the value
for purposes of the inheritance tax. The commissions of trustees form no part
of the regular administration of the estate, but is an expense to be borne by the
trust and its beneficiaries and cannot be deducted to reduce the tax due to the
state. In re Becker, 26 Misc. Rep. 633, 57 N. Y. Suppl. 940. In re Silliman,
79 N. Y. App. Div. 98, 80 N. Y. Suppl. 336, reversing 77 N. Y. Suppl. 267, affirmed
175 N. Y. 513, 67 N. E. 1090.

Sec. 370. Subrogation of Creditors.

Where the administrator has paid from the personal estate the
transfer tax, a claim against those to whom the property descended
in equity must be subrogated to that claim for the benefit of the
creditors where they had the right to the application of such
personal property to the payment of their debts.

Hughes v. Golden, 44 Misc. 128, 89 N. Y. Suppl. 765.

Sec. 371. Federal Inheritance Tax.

The federal tax cannot be deducted before appraisal for the
state tax in New York.^ The court reasons that it is not true that
the federal taxes are payable primarily out of the estate; and the
court finds that the federal tax is of exactly the same nature as
the state tax and is a tax not on property but on succession. The
federal tax is on the legacy and not on account of the estate. The
fact that this may result in great hardship does not alter the rule
but results from the rate of taxation prescribed by the federal
statutes.2

In Massachusetts the federal tax was to be deducted under the
act of 1891, although that act contains no express exception.
The court proceeds on the theory that the words of the act most
naturally signify the property which the legatee actually would get
were it not for the state tax imposed, and that as a matter of justice
he should not be taxed for more.^ The Massachusetts rule would
seem to be the fairer and the New York rule the more accurate.

1 In re Irish, 28 Misc. Rep. 647, 60 N. Y. Suppl. 30. In re Curtis, 31 Misc.
Rep. 83, 64 N. Y. Suppl. 574. Contra, In re Vanderbilt, 68 N. Y. App. Div. 27,
74 N. Y. Suppl. 450,

The United States transfer tax should not be deducted from an estate before
the assessment of the state tax upon it. The percentage fixed by the state for

274 INHERITANCE TAX LAW. [§372.

its own use cannot be diminished even by the law of the United States. The
title and possession of property when transmitted upon the death of the owner
are by consent of the state, not the United States. Therefore, the percentage
fixed for its own use cannot be diminished by even subtracting the tax fixed by
the United States for war revenue. In re Becker, 26 Misc. Rep. 633, 57 N. Y.
Suppl. 940.

2/« re Gihon, 169 N. Y. 443, 62 N. E. 561, modifying 64 N. Y. App. Div. 504,
72 N. Y. Suppl. 1104, overruling 68 N. Y. Suppl. 381, 33 Misc. 206.

8 Hooper v. Shaw, 176 Mass. 190, 57 N. E. 361.

Sec. 372. Foreign Inheritance Taxes.

The question whether foreign legacy taxes paid are to be de-
ducted from the legacy or whether they are an expense of admin-
istration which should be paid out of the estate, leaving the legacy
payable in full, is a question of intention. Where a testator makes
no provision for the payment of such taxes from his estate, he
must have intended the actual benefit to be received by the subject
of his bounty to be as much less than a sum named in his will as he
is presumed to have known the state would take for itself in trans-
mitting property. In a gift of specific personal property located
in a foreign state the amount demanded by such state as the price
of transfer of title would naturally be a charge against the subject £
of the legacy, not because of the testator's presumed familiarity, ^
with the law of the jurisdiction, but because under that law he has
not the power to transfer by will the entire title.

In a gift of a pecuniary legacy of a certain amount, the apparent
intention is to benefit the legatee to the full amount named. If
such will is to be administered by the law of the jurisdiction impos-
ing no inh'eritance tax, or none upon the class to which the legatee
belongs, the purpose to transmit the full amount to such legatee
would seem secure. The conclusion that a less sum was intended^
because at the time of the testator's death some portion of his,
property happened to be within the jurisdiction authorizing a tax
upon such a transfer, seems strained and illogical. To hold that
the effect of the foreign law is to reduce the legacy given by the
will construed in accordance with the law of the testator's domicile
is to permit the foreign law to regulate the testamentary capacity
of a resident; as the foreign tax depends upon the jurisdiction
over the property and is not sustainable as a regulation of the
exercise of testamentary power by the citizen of another state, it
follows that the tax is merely a charge upon the particular property ^:
and not upon the pecuniary legacies given by the will. *^

§372.] DEBTS AND EXPENSES. 275

Kingsbury v. Bazeley, 75 N. H. 13, 70 A. 916.

The decedent was a resident of Pennsylvania owning stock in New York cor-
porations. The property in New York was in proportion to the entire estate as
two to five and the appraiser deducted that proportion of the total debts, funeral
and administrations expenses, from the taxable estate in this state; but he
refused to deduct this proportionate sum from the amount of the legacy tax ^aid
upon the entire estate in Pennsylvania. The court holds that the fact that the
Pennsylvania tax has been paid cannot be considered in assessing the New York
tax. In re Kennedy, 20 Misc. Rep. 531, 46 N. Y. Suppl. 906, 2 Gibbons 220.
See In re Swift, 137 N. Y. 77, 32 N. E. 1096, and Hooper v. Shaw, 176 Mass. 190,
57 N. E. 361, considering analogous questions.

The New Hampshire Rule. *'No ground can be found, in the absence of a
direction, either express or implied in the will, for a pro rata distribution among
all the pecuniary legacies of the sums paid as foreign death duties. On account
of some legacies a charge may be made in some states and not in others. A deduc-
tion from a legacy on account of a tax imposed on others in a particular juris-
diction would not be supported by any basis of reason. The only method which
could be followed would be the division of the legacies into as many classes as
were made by the laws of all the states in which property was found, and a divi-
sion of the sums paid pro rata among each class. This would plainly be an
administration of the estate according to laws which have no force here, and
which cannot, in the absence of legislative authority for such course, properly be
followed. The executors have in hand, if they are ready to settle, so much prop-
erty. The will, construed by the law of this state, directs how the distribution
shall be made. The fact that the executors have less than they would have
had, except for the demands of jurisdictions to which they were obliged to go
to get the property and bring it here for distribution, cannot alter the law of the
state or the terms of the will. In the absence of evidence from which a con-
trary direction can be implied from the will, the amount deducted by other
states before permitting the transfer of property within their limits to the executor
for distribution here is not property within this state for distribution. The
executors are chargeable only for what has come to their hands — the property
less the duties paid. If they charge themselves with the full value of the prop-
erty, a practical method of accounting would permit them to discharge themselves
by accounting for the foreign duties paid as expenses of administration.

"In the present case there are no facts showing an intention to charge the
pecuniary legacies with foreign duties for the benefit of the residuary legatees.
There is a class of cases, where the residuary bequest, by reason of the special
circumstances of the case, has been construed as a particular legacy, not liable
to fail, except ratably with the other legacies, on account of any unexpected defi-
ciency of the estate, or to be augmented by the unforeseen failure of the other
legacies. 2 Red. Wills 447. Dyose v. Dyose, 1 P. Wms. 305. There is nothing
in the present case tending to show that the residuary bequest was intended as
anything except the ordinary disposal of a residuum which might be left, while
the first part of the eighty-second clause establishes that the testatrix considered
the possibility that the residuary legatees would receive nothing. In the latter
part of the same clause the testatrix directs her executors to pay any and all
inheritance and succession taxes that may become due upon any legacies given
to individuals. This implies a recognition of the possibility of such taxes and,

276 INHERITANCE TAX LAW. [§§373-374.

as to legatees other than individuals, a purpose that the duties legally charge-
able upon such legacies should be borne by them; but as the foreign duties are
not due upon the legacies given by the will, but are a deduction from property
which may be used in carrying out the purpose of the will, the language is insuffi-
cient to require the court to administer the law of all the states in which property
may have been found and taxes paid." Per Parsons, C. J., in Kingsbury v.
Bazeley, 75 N. H. 13, 70 A. 916, 919.

See as to reciprocal provisions, ante, s. 194.

Sec. 373. Funeral Expenses.

Funeral expenses are to be deducted from the appraisal as an
expense of settling the estate.

In re Wormser, 36 Misc. 434, 73 N. Y. Suppl. 748.

Iowa Code, s. 1467a, provided that the term debts shall include a reasonable
sum for funeral expenses. The purpose of this section is that an estate whose
value is near the dividing line shall not be carried into the exempt class by ex-
traordinary charges under the guise of funeral expenses or by presentation of
stale or fictitious claims which are not allowed within fifteen months. Morrow v.
Durant, 140 Iowa 437, 118 N. W. 781, 23 L. R. A. (N. S.) 474n.

Sec. 374. Cemetery Lot and Tomb.

The Iowa statute allows as exempt a "reasonable" fund for the
expense of a tomb.

Where the residuary legatees concede the propriety and reason-
ableness of the fund for erecting a tomb to the testator, the state
in the absence of fraud or collusion cannot interfere nor has it a
right to try the question of the reasonableness of the expense except
for the purposes of determining the classification of an estate as
exempt or non-exempt from taxation. The question whether the
amount reserved by a will for the erection of a tomb is "reasonable"
is a question of mixed law and fact on which it is very important
that the will of the decedent expressly provided for this expendi-
ture, and this provision of the will raises the presumption of
reasonableness.

Morrow v. Durant, 140 Iowa 437, 118 N. W. 781 (where court from lack of
evidence refused to consider whether a provision of $2,000 for a tomb is
reasonable).

The Iowa inheritance tax law, s. 1467, provides that the property subject to
tax is that "which shall pass by will ... to any person," and s. 1467b extended
the previous section to apply to "property of every kind." The court, however,
finds that this latter section does not render property reserved by the will for a
tomb subject to tax. The court remarks that that interpretation would make the
statute unconstitutional, as it is only upheld on the theory that it is not a tax
upon the property itself but on the right to succession to property. Morrow v.
Durant, 140 Iowa 437, 118 N. W. 781, 23 L. R. A. (N. S.) 474n.

§§375-376.] DEBTS AND EXPENSES. 277

Sec. 375. Care of Cemetery Lots.

A legacy for care of the testator's cemetery lot is generally
held exempt as a part of the funeral expenses. '^ A bequest of a
sum in trust for keeping a burial lot in condition and repair is rea-
sonably a part of the funeral expenses, ^ but not where it is for the
care of lots for himself and relatives.^ Legacies to a church *
or to a cemetery association have been held not exempt as a part
of the funeral expenses.^

1 In re Vinot, 7 N. Y. Suppl. 517. In re Liss, 39 Misc. Rep. 123, 78 N. Y.
Suppl. 969.

2 In re Maverick, 135 N. Y. App. Div. 144, 119 N. Y. Suppl. 914.

The court distinguishes In re Gould, 156 N. Y. 423, 51 N. E. 287, In re McAvoy,
112 N. Y. App. Div. 377, 98 N. Y. Suppl. 437, as in the Gould case the testator
had made a large bequest to his son as a reward for faithful services and in the
McAvoy case the bequest was to pay for masses of others and the testator.

3 A legacy in trust the interest of which is to be devoted to the care of two
cemetery lots is subject to the inheritance tax. It was contended that this
bequest was to be considered as in the nature of funeral expenses, but the mani-
fest intention of the testator was to provide a fund the income of which should
be devoted to caring for the last resting place of all her relatives, and that this
involved caring for her grave was a mere incident of the general purpose. In re
Long, 22 Pa. Super. Ct. 370.

* Where a will gave to the church two thousand dollars and in consideration
of the bequest the testator desired that it shall keep in order in perpetuity his
family burial lot, the legacy is subject to the payment of the collateral inherit-
ance tax. This obligation does not exempt the legacy. The fact that the legacy
is not a pure gratuity is not material. The court follows In re Seibert, 18 Wkly.
Notes Cas. 276. In re Walter, 3 Pa. Co. Ct. 447.

^ A bequest to a cemetery association of a thousand dollars, the interest to be
used for perpetual care of the testator's lot, is not part of the funeral expenses.
The court holds there is a distinction between expenditures for a burial lot made
by an executor in his discretion and a bequest made by a decedent in his last
(vill to a certain beneficiary and for a certain specific purpose; and as cemetery
issociations are not specifically mentioned as being exempt the transfer is sub-
ject to tax. In re Fay, 62 Misc. 154, 116 N. Y. Suppl. 423.

Sec. 376. Masses.

A legacy for masses may be made directly to some religious
organization, in which case it will be treated as a bequest for re-
igious purposes,^ or it may be treated as a personal bequest to the
priest who is to say the masses. ^

1 In re Eppig, 62 Misc. 613, 118 N. Y. Suppl. 683.

The court holds that as the legacies are bequeathed directly to religious bodies,
md as provision for masses is merely collateral and incidental, they are therefore
ixempt under section 221. In re Didion, 54 Misc. 201, 105 N. Y. Suppl. 924.

278 INHERITANCE TAX LAW. [§376.

2 In re Brinkman, 38 Ohio Wkly. L. Bui. 304.

The court finds the bequest to be valid. That the beneficiary has designated
as a wish on the part of the testatrix to have a particular priest celebrate the
masses is equivalent to a direction and that therefore the bequest is subject to the
inheritance tax. In re Black, 24 N. Y. St. 341, 5 N. Y. Suppl. 452, 1 Con. Surr.
477.

The will bequeathed to a priest, or in the event of his death to his successors,
the sum of $800 to be used in saying eight hundred low masses, two hundred
for each of four different persons. The court holds that this bequest is not
specially exempted and is not a provision for funeral expenses, and that the low
mass in no sense is a part of the funeral service even so far as such masses were said
for the testator. In re McAvoy, 112 N. Y. App. Div. 377, 98 N. Y. Suppl. 437.

CHAPTER XLII.

ASSESSMENT OF TAX.

§377. Whether Assessment a Proper Function of Probate Court.

§378. Jurisdiction of Probate Courts Exclusive.

§379. Jurisdiction Affected by Right of Action by Beneficiary.

§ 380. In Equity on Distribution.

§381. Power to Fix Liabilities and Apportion Tax.

§ 382. When Assessment Postponed.

§ 383. Taxes Due in the Future.

§ 384. In what Proceedings Assessment is Proper.

§ 385. Order of Exemption.

§386. Oral Statement by Court.

§ 387. Implied Power to Hold Provision of Will Void.

§ 388. Jurisdiction of Probate Courts over Estates of Non-Resident

Decedents.

§389. Ancillary Administration in Case of Non-Resident.

§ 390. Evidence.

§391. Burden of Proof.

§ 392. Appeal.

§ 393. Power to Vacate Assessment.

§394. Proper Decree where Statute Misconstrued by Tax Officials.
[Notice of assessment, see ante, s. 71. J

Sec. 377. Whether Assessment a Proper Function of Pro-
bate Court.

The jurisdiction of the probate court to assess and collect the
tax has been unsuccessfully attacked as extra-judicial or beyond
the proper functions of a probate court.

In re Wolfe 137 N. Y. 205, 33 N. E. 156, reversing 2 Connolly 600.

The imposition and collection of this tax are simply incidents in the final
settlement and adjustment of estates, and therefore properly within the jurisdic-
tion of surrogate's courts. In re McPherson, 104 N. Y. 306, 324, 10 N. E. 685,
58 Am. Rep. 502.

The ascertainment of the amount of the inheritance tax is a judicial question
and being a necessary proceeding in the administration of the estate of deceased
persons may be properly committed to the probate court. State v. Probate Courts
112 Minn. 279, 128 N. W. 18, 21.

[What court should compute tax, see ante, s. 325.]

280 INHERITANCE TAX LAW. [§§378-380.

Sec. 378. Jurisdiction of Probate Courts Exclusive.

The special statutory authority to assess is commonly exclusive.

In re Wolfe, 137 N. Y. 205, 33 N. E. 156, reversing 2 Connolly 600.

The jurisdiction given to the surrogate to determine and assess the inherit-
ance tax is exclusive and cannot be exercised by the supreme court on a petition
to construe a will. V/eston v. Goodrich, 86 Hun 194, 33 N. Y. Suppl. 382.

As to collection in equity on distribution, see, however, Barret v. Continental
Realty Co., 130 Ky. 109, 114 S. W. 750, more fully reported, post s. 380.

Action of court of domicil on distribution is binding on another court as to
marshaling assets. In re Clark, 37 Wash. 671, 80 P. 267, reported more fully
ante, s. 204, n. 8.

Sec. 379. Jurisdiction Affected by Right of Action by
Beneficiary.

A statute giving the probate court jurisdiction of the settlement
of inheritance taxes does not give it exclusive jurisdiction, but the
legatee may sue the executor at law to recover his legacy.^ The
Michigan statute of 1903, providing that it is the duty of the
executor to collect the inheritance tax and that he shall not deliver
any property subject to tax to any person until the tax assessed
has been paid to him or to the county treasurer, does not prevent
the institution of an action in ejectment by the devisees. No
delivery of possession of real estate to the devisees was necessary.
Under the will they took title subject to the right of the executor
to take possession for the purposes of administration. The rights
of the state are of no concern to the descendants.^

^ Essex V. Brooks, 164 Mass. 79, 41 N. E. 119.

2 Weller v. Wheelock, 155 Mich. 698, 118 N. W. 609.

Sec. 380. In Equity on Distribution.

In a proceeding in equity to obtain distribution the court may
require payment of the tax before distribution although the pro-
bate court is given special authority over matters of taxation.

Ky. St. 1906, c. 22, ss. 13, 14, 15, confer jurisdiction on the county court
to determine questions arising in relation to the tax, but this jurisdiction is not
exclusive when the jurisdiction of the court of equity is invoked to distribute
an estate and the interest of each or any number of the heirs at law is subject
to the inheritance or other tax. The court at the instance of the official repre-
sentative of the commonwealth charged with the duty of collecting such tax
may require its payment out of the share or shares of those chargeable with the
tax before distributing the estate or funds among them, and thereby save both
the tax collector and the heirs the trouble and expense of a separate and inde-
pendent proceeding in the county court to compel the payment of the tax. The

;i.l ASSESSMENT OF TAX. 281

rcuit court, therefore, in requiring the payment of the tax before distribution
lid not exceed its jurisdiction. Barret v. Continental Realty Co., 130 Ky. 109,
14 S. W. 750.

jc. 381. Power to Fix Liabilities and Apportion Tax.

The probate court may be empowered to determine what pro-
)rtion of the tax shall be paid by each party interested,^ which
power may be implied in the probate courts by general authority

tver the tax.^
1 Connell v. Croshy, 210 111. 380, 71 N. E. 350. Tyson v. State, 28 Md. 577.
\ * The question as to the liability to pay a tax is a question affecting a devise,
gacy or inheritance under the act, for if the tax is paid the devise, legacy or
inheritance will be diminished by the payment. Callahan v. Woodbridge, 171

ass. 595, 51 N. E. 176.

A provision of the inheritance tax law giving the probate court jurisdiction
to hear and determine all questions relative to the inheritance tax, gives it
jurisdiction over a petition praying the court to determine whether such a tax

payable and to fix its amount. Bradford v. Storey, 189 Mass. 104, 75 N. E. 256.

"When we read all of the provisions of this act Lof 1885], it is perfectly appar-
ent that a special system of taxation was created for the benefit of the state,
with all the necessary machinery for its working; the control with respect to
which was vested in the surrogate's court, with a jurisdiction exclusive in its
nature. In the assessment of a tax upon property passing by will, or by the
intestate law, the responsibility is imposed by the law upon the surrogate. He
acts for the state and he is commanded to assess and fix the tax to which the
property is liable. To comply with the command in section 13 of the act, in
that respect, he must, necessarily, determine the question of liability to taxation,
inasmuch as if no such liability exists he is without jurisdiction in the matter.

hen the machinery of this sytem of taxation is set in motion, under section 13

the act, whether upon the application of interested parties, or upon his own
motion, the surrogate, by force of its provisions, is at once invested with the
office and the functions of an assessor for the state, whose duty it is to assess
for its use a tax, and in whom not only by virtue of the office, but by the further
provisions of section 15, inheres the authority, and upon whom rests the obli-
gation, to determine the question of whether the property of the decedent,
which passes to others, is subject or liable to taxation by the state. He must
decide whether the property is taxable, for that fact lies at the foundation of
his jurisdiction and is of the essence of his right to proceed with the assessment.
Not all the property of decedents may be subject to the tax imposed by the
first section, and what property shall be assessed for taxation is left, by the thir-
teenth section, for the surrogate to determine. To quote again the language,
he 'shall assess and fix the cash values of all the estates, etc., and the tax to
which the same is liable,' and this direction to assess involves the necessity,
as well as the power, to determine the question of liability, as much as it does
in the case of assessors of taxes in the general scheme of taxation.

I can see no difference between the principle upon which the surrogate acts
in proceeding to assess property for taxation under the act, and that upon which,

282 INHERITANCE TAX LAW. [§§382-S

in the general system of taxation in the state, tax assessors act in the assea
ment of persons or property for purposes of taxation. It is well settled, as to them^
that in their proceedings they must determine the question of liability to taxa-
tion as a fact, which gives them jurisdiction to assess. It is not only an im-
portant, but it is a conditional step in the proceeding for the assessment." Per
Gray, J., in In re Wolfe, 137 N. Y. 205, 211, 33 N. E. 156, reversing 2 Connolly
600.

Sec. 382. When Assessment Postponed.

Assessment may be properly postponed where litigation over
the probate of a will renders it impossible to say whether the
property will pass under the will, or as in case of intestacy,^ or
where it is impossible to tell the present value of the property ,2
or where the beneficial interests are unascertainable.^ A failure
to assess promptly is not in such cases an adjudication that no tax
is due.^

1 In re Westurn, 152 N. Y. 93, 99, 46 N. E. 315, reversing 8 N. Y. App. Div. 59.

2 Where the executors have confederate money in their hands which has
become valueless the tax upon this money cannot be determined until it is
decided whether the executors will be allowed for this loss on settlement with
legatees. If the legatees get good money the state must, of course, have a tax
from it. State v. Brevard, 62 N. C. 141.

3 In re Irwin, 36 Misc. 277, 73 N. Y. Suppl. 415.

The right of remaindermen to file a bond for the payment of the tax is not
taken up where it did not appear that any request to file such a bond had been
made in the lower court. In re Kingman, 220 111. 563, 77 N. E. 135. As to
unascertainable interests, see further, ss. 234, 335, 347.

4 In re Irwin, 36 Misc. Rep. 277, 73 N. Y Suppl. 415.

Sec. 383. Taxes Due in the Future.

The probate court in the absence of special provisions has no
jurisdiction to provide for the future payment of taxes or to
determine when or under what circumstances the rate of taxation
would increase. The question before the court is what tax has
accrued and the court should limit itself to that question.

State V. Probate Court, 112 Minn. 279, 128 N. W. 18, 21.

Sec. 384. In what Proceedings Assessment is Proper.

Assessment of the inheritance tax should only be made in the
special proceedings provided by law for that purpose.

In re Farley, 15 N. Y. St. Rep. 727 (not on motion by the executor). In re
Morris, 138 N. C. 259, 50 S. E. 682 (not on appeal from an order that executors
account).

§§ 38&-388.1 ASSESSMENT OF TAX. 283

Sec. 385. Order of Exemption.

Power to fix or order exemptions may be implied by power to
appraise and assess the tax.

In re Collins, 104 N. Y. App. Div. 184, 93 N. Y. Suppl. 342.

An administrator's petition for an order of exemption is insufficient to sup-
port such an order where it relates only to the personal property of the decedent
and contains no proof that he did not die seized of real estate liable to taxation
under the statute of 1903, chapter 41. Notice of the order should be given to
the state comptroller under section 231, requiring notice of an appraisal. In re
Collins, 104 N. Y. App. Div. 184, 93 N. Y. Suppl. 342.

In a Tennessee case the question of an exemption under the inheritance tax
law came up by a suit by the county court clerk against the administrator for
the purpose of recovering the tax in the circuit court. English v. Crenshaw,
120 Tenn. 531, 110 S. W. 210.

Sec. 386. Oral Statement by Court.

Where on an affidavit of the executor as to the assets the surrogate
expresses the opinion orally that the estate is not subject to tax,
but enters no order or judgment, the state is not barred from
subsequently asking for an appraisal.

In re Schmidt, 39 Misc. Rep. 77, 78 N. Y. Suppl. 879.

Sec. 387. Implied Power to Hold Provision of Will Void.

The power to assess the tax includes the power to hold void any
provision in the will and thus to decide that nothing passed under
it to the beneficiary named.

In re Ullman, 137 N. Y. 403, 33 N. E. 480.

Sec. 388. Jurisdiction of Probate Courts over Estates of
Non-Resident Decedents.

Probate courts may have jurisdiction to assess a tax on the
estates within their jurisdiction of non-resident decedents.

Callahan v. Woodbridge, 171 Mass. 595, 51 N. E. 176.

The question may be determined by an answer to the question. Had the
court power to issue letters? The court holds that this interest which the non-
resident testator had in a New York corporation must be held to be property
within the meaning of the word as used in the code giving the surrogate's court
jurisdiction over estates for purposes of administration. And hence, the surro-
gate's court has jurisdiction to impose the tax. In re Fitch, 160 N. Y. 87, 43
N. E. 701, affirming 39 N. Y. App. Div. 609.

Where the testator died domiciled in Ireland owning real estate in Montana,
it was claimed by the petitioners that the inheritance tax is imposed not
upon the property but upon the right or privilege to take, and that the court

284 INHERITANCE TAX LAW. [§§389-392.

must therefore have jurisdiction not only of the distribution but also of the dis-
tributees, in order to levy the tax; and that since neither of these essentials exists
there can be no lawful levy of the tax in this case. But the court says that the
delivery provided serves all the purposes of distribution and the power to direct
the delivery is tantamount to the power to order distribution directly to the
persons entitled to take. State v. District Court, 41 Mont. 357, 109 P. 438, 441.

Sec. 389. Ancillary Administration in Case of Non-Resident.

Before fixing the inheritance tax on the estate of a non-resident
it may be necessary to take out ancillary jurisdiction and file an
inventory.

Gardiner v. Carter, 74 N H. 507, 510, 69 A. 939.

Under the New York statute of 1892, the jurisdiction to assess a tax on a
non-resident depends on the appointment of an ancillary administrator. And
where the property of a non-resident is situated in two counties and an ancillary
administrator has been appointed in one county, there can be no appointment
in another county and the surrogate of the councy which first obtained jurisdic-
tion is the only surrogate who can assess the tax. In re Hathaway, 27 Misc.
Rep. 474, 59 N. Y. Suppl. 166.

Michigan is also requiring ancillary jurisdiction under an opinion of its attorney
general and the amendment of 1911, but mosc states do not require it. — Ed.

Sec. 390. Evidence.

In New York it has been held that the statute providing that
an interested person may not testify in his own behalf as to a
personal transaction between himself and the deceased party,
does not render the legatee incompetent to testify in a proceeding
to assess a transfer tax as to the conversations and relations with
the decedent/ or to show that the mutually acknowledged relation
of a parent existed .^

1 In re Bentley, 31 Misc. Rep. 651, 66 N. Y. Suppl. 95.

2 In re Brundage, 31 N. Y. App. Div. 348, 52 N. Y. Suppl. 362.
[Evidence proper on appraisal has been treated under appraisal, ante, ss. 337-

341.]

Sec. 391. Burden of Proof.

The state has the burden of proving that the transfer tax should |
be imposed.

In re Miller, 77 N. Y. App. Div. 473, 78 N. Y. Suppl. 930, overruling 75 N. Y.
Suppl. 929.

Sec. 392. Appeal.

Appeal from the assessment by the court of first instance is
commonly allowed to all parties interested,^ including the state.^

§392.1 ASSESSMENT OF TAX. 285

Appeal may be an exclusive remedy for cases of incorrect valua-
tion,^ while in some states the taxpayer may have a right of action
to recover taxes paid under protest although he has failed to
appeal,* or he may have a right to be heard as to his liability when
the court attempts to enforce its decree.^ The appeal may be
taken by filing notice of appeal,^ which must state the grounds of
appeal 7 and which may be filed within a certain time after notice
of the filing of the appraisal ^ to the court named in the statute.^

The New York statutes, curiously, provide an appeal from the
surrogate sitting as a taxing officer to the surrogate sitting as a
court, 1^ where the appeal can only be sustained on evidence of
error in the first appraisal. ^^ The record should print the will
of the decedent in New Jersey. ^^

1 People V. Sholem, 238 111. 203, 87 N. E. 390.

The executors are not interested and therefore cannot appeal from the
decision of the court in the question as to whether a tax is now due and payable
or payable in the future, as the tax is payable by the legatees and not by the
executors. In re Handley, 181 Pa. St. 339, 37 A. 587, reversing judgment,
3 Lack. Leg. N. 9.

2 People V. Sholem, 238 III. 203, 87 N. E. 390. In re Hull, 109 N. Y. App.
Div. 248, 95 N. Y. Suppl. 819. In re Blackstone, 171 N. Y. 682, affirming 69
N. Y. App. Div. 127 (comptroller of city of New York). Humphreys v. State,
70 Ohio St. 67, 101 Am. St. 888, 70 N. E. 907, 65 L. R. A. 776, affirming 13 Low.
D. 168, 1 C. C. N. S. 1, 14 Cir. D. 238.

In Illinois it would be unconstitutional to permit an appeal only by the
persons interested in the property of the estate and not by the state itself.
People V. Sholem, 238 111. 203, 87 N. E. 390.

3 In re Hacket, 14 Misc. Rep. 282, 35 N. Y. Suppl. 1051. See Cross v. Superior
Court, 2 Cal. App. 342, 83 P. 815.

^ Beats V. State, 139 Wis. 544, 552, 121 N. W. 347. As to refunding, see further,
chapter XLVI.

^ It was contended that the orphans' court had no jurisdiction to entertain the
question of liability because the parties interested were debarred from raising
that question by their failure to appeal from the surrogate's assessment within
the time limited by the terms of section 12. The court, however, construes
section 16 as empowering the orphans' court to determine whether the tax should
be paid and to enforce its decree, and holds that a party interested must be
deemed to be permitted to interpose any objection to such a decree. The court
distinguishes In re Wolfe, 137 N. Y. 205, construing section 15 of the New York
act, which is in substantially identical terms with section 13 of the New Jersey
statute, on the ground that the New York act in section 15 expressly confers
on the surrogate's court jurisdiction "to hear and determine all questions in
relation to the tax arising under the provisions" of the act. The New Jersey
statute, however, confers no such jurisdiction on the surrogate, but section 15
of the New Jersey act expressly confers that jurisdiction upon the ordinary or
orphans' court. In re Vineland Historical and Antiquarian Society, 66 N. J.
Eq. 291, 66 A. 1039.

286 INHERITANCE TAX LAW. [§392.

6 In re Seymour, 144 N. Y. App. Div. 151, 128 N. Y. Suppl. 775.

The admission of service of the notice of appeal by the attorney of the
state comptroller cannot be accepted as a waiver of default in appealing, for
the validity of the appeal depended, not upon service of notice thereof upon the
attorney, but upon timely filing of the notice in the surrogate's office. In re
Seymour, 144 N. Y. App. Div. 151, 128 N. Y. Suppl. 775.

' In re Stone, 56 Misc. 247, 107 N. Y. Suppl. 385.

The hearing must be hmited to the errors noticed in the appeal. In re
Davis, 149 N. Y. 539, 548, 44 N. E. 185, affirming 91 Hun 53.

An order fixing the transfer tax upon an estate is an entirety and the party
claiming to be aggrieved thereby in taking an appeal should present upon that
appeal every objection which he has to the order. It would lead to endless
delay and confusion if he was permitted to take a separate appeal for each
objection made to the order of the surrogate. The specification of one or more
objections is deemed equivalent that the appellant regards the decree in all
other respects correct. In re Cook, 194 N. Y. 400, 403, 87 N. E. 786, affirming
125 N. Y. App. Div. 114, 109 N. Y. Suppl. 417.

But where the time for appeal has gone by and subsequently a proceeding is
commenced by new heirs claiming the estate and attempting to revoke the
letters of administration already granted, the surrogate has jurisdiction under
the notice of appeal already given to consider the new question arising, and
is not excluded from doing so on the ground that it was not specified in the
notice of appeal. In re Westurn, 152 N. Y. 93, 104, 46 N. E. 315, reversing
8 N. Y. App. Div. 59.

8 In re Belcher, 211 Pa. St. 615, 619, 61 A. 252.

No extension of the time for appeal can be granted by the court. In
re Seymour, 144 N. Y. App. Div. 151, 128 N. Y. Suppl. 775.

9 People V. Sholem, 238 111. 203, 87 N. E. 390 (directly to the supreme court).
"The function of an appraiser is somewhat similar to a jury called by the

court in an equity case to aid its conscience. The whole matter is with the
surrogate and continues with him until final determination after appeal. The
purpose of the appeal from the surrogate to the surrogate is not simply to review
his former determination, but it is proper on the appeal to receive evidence that
a certain transfer was made in contemplation of death, and that the property
transfer should be included in the transfer tax. In re Thompson, 57 N. Y. App.
Div. 317, 9 N. Y. Ann. Cas. 290, 68 N. Y. Suppl. 18.

N. Y. St. 1896, ss. 231 and 232, provide for the action of the surrogate in a
dual capacity. By section 231 he may act as a taxing officer or appraiser, and
under section 232 any person dissatisfied with the appraisement or assessment may
appeal to the surrogate. It was insisted that this practice was anomalous and
unnecessary and that an appeal could be taken from the surrogate acting as
appraiser directly to the appellate division. The court remarks that it is some-
what unusual that a judicial officer should sit in review of his own decision as
an assessor, but finds that this practice is proper, as the surrogate is a mere taxing
officer or assessor when acting under section 231. In re Costello, 189 N. Y.
288, 82 N. E. 139, modifying 117 N. Y. App. Div. 807, 103 N. Y. Suppl. 6.

" In re Johnson, 37 Misc. Rep. 542, 75 N. Y. Suppl. 1046. In re Thompson,
57 N. Y. App. Div. 317, 9 N. Y. Ann. Cas. 290, 68 N. Y. Suppl. 18.

^''Astor V. Slate, 75 N. J. Eq. 303, 72 A. 78.

§393.] ASSESSMENT OF TAX. 287

Sec. 393. Power to Vacate Assessment.

In New York the power of the surrogate to reverse or modify
his own decree has been a fruitful source of litigation and of much
difference of opinion. Changes in the law enlarging the powers of
the surrogate have rendered obsolete some of the early decisions and
it seems to be settled now that the surrogate can vacate or modify
his decree,^ even after the expiration of the time for appeal ,2 but
only as the same power would be exercised by a court of record.^
The power was held properly exercised where the surrogate acted
under an unconstitutional statute,^ or beyond his jurisdiction,^
or in case of clerical errors,* or other manifest error," and not merely
as to questions of law,^ or disputed questions of fact.®

i/w re Warren, 62 Misc. 444, 116 N. Y. Suppl. 1034. In re Silliman, 175
N. Y. 513, 67 N. E. 1090, affirming 79 N. Y. App. Div. 98, 80 N. Y. Suppl. 336,
reversing 77 N. Y. Suppl. 267. Contra, In re Crerar, 56 N. Y. App. Div. 479,
67 N. Y. Suppl. 795, 9 Ann. Cas. 101. In re Von Post, 35 Misc. 367, 71 N. Y.
Suppl. 1039.

2 In re Mather, 41 Misc. Rep. 414, 84 N. Y. Suppl. 1105. In re Daly, 34 Misc.
Rep. 148, 69 N. Y. Suppl. 494. Contra, In re Schermerhorn, 38 N. Y. App.
Div. 350, 57 N. Y. Suppl. 26.

3/w re Barnum, 129 N. Y. App. Div. 418, 114 N. Y. Suppl. 33.

4 In re Scrimgeour, 175 N. Y. 507, 67 N. E. 1089, affirming 80 N. Y. App.
Div. 388, 80 N. Y. Suppl. 636, 78 N. Y. Suppl. 971 (after time for appeal had gone
by). See In re Backhouse, 185 N. Y. 544, 77 N. E. 1181, affirming 110 N. Y.
App. Div. 737, 96 N. Y. Suppl. 466.

6 In re Coogan, 27 Misc. Rep. 563, 59 N. Y. Suppl. 111. In re Backhouse, 185
N. Y. 544, 77 N. E. 1181, affirming 110 N. Y. App. Div. 737, 96 N. Y. Suppl.
466.

6 In re Campbell, 50 Misc. 485, 100 N. Y. Suppl. 637 (omission of debt). In re
Earle, 74 N. Y. App. Div. 458, 77 N. Y. Suppl. 503, affirming 71 N. Y. Suppl.
1038 (defective report).

' Morgan v. Cmoie, 49 N. Y. App. Div. 612, 63 N. Y. Suppl. 608, (where legatee
died before testator). In re Willet, 51 Misc. 176, 100 N. Y. Suppl. 850, affirmed
119 N. Y. App. Div. 119, 104 N. Y. Suppl. 850. In re Cameron, 181 N. Y. 560,
74 N. E. 1115, affirming 97 N. Y. App. Div. 436, 89 N. Y. Suppl. 977.

^ After the surrogate had determined the cash value of the estate subject to
tax, certain judgments on claims which the executor had denied were recovered.
The court holds that the power of the surrogate to correct errors is limited to
clerical errors or mistakes which do not involve questions of law. In re Con-
nelly, 38 Misc. Rep. 466, 77 N. Y. Suppl. 1032.

The surrogate's court has no authority to vacate its decree fixing the tax on
legacies simply on the ground that certain things were included and excluded
erroneously on the appraisal, as this is not a clerical error, but an error of law
within the section of the code. In re Wallace, 28 Misc. Rep. 603, 59 N. Y. Suppl.
1084.

288 INHERITANCE TAX LAW. [§394.

' Evidence of a sale of property after the appraisal lower than the appraised
valuation does not give the surrogate power to modify his decree of appraisal.
In re Lowry, 89 N. Y. App. Div. 226, 85 N. Y. Suppl. 924. See In re Fulton, 30
Misc. Rep. 70, 62 N. Y. Suppl. 995 (excessive valuation sufficient ground for
re-opening assessment).

Newly Discovered Debt. The surrogate has no power to modify an order
made within his jurisdiction and allow a partial refund simply because of a
newly discovered debt due by the estate after the time for appeal has expired.
In re Hamilton, 41 Misc. Rep. 268, 84 N. Y. Suppl. 44.

Sec. 394. Proper Decree where Statute Misconstrued by
Taxing Officials.

Where the court finds that an unsound interpretation of the
statute was adopted and enforced by the officers charged with
the administration of the law, the ends of justice require that the
interpretation of the statute should not be foreclosed by the decree
of the court although there is nothing in the record to enable the
court to say that the statute was by the collector mistakingly
construed. Therefore the proceedings were dismissed without
prejudice.

High V. Coyne, 178 U. S. Ill, 20 S. Ct. 747, 44 L. Ed. 997. FUelity Insurance
Co. V. McClain, 178 U. S. 113, 20 S. Ct. 774, 44 L. Ed. 998.

CHAPTER XLIII

COLLECTION OF TAX.

395. Collection a Proper Function of Probate Courts.

396. Absence of Special Machinery for Collection.
^8 397. Concurrent Jurisdiction to Recover.
Ji 398. Actions of Contract against Beneficiary.

399. Officers for Collection.

400. Fees of Collecting Officers.

401. When Proceedings Premature.

402. Limitations.
§403. Retroactive Statute as to Limitation.

404. Practice.
I§ 405. Tax Officials Joined in Litigation between Other Parties.
[Law of date when proceedings began governj? proceedings for collection, see
ante, s. 22.]
[Order of court on distribution no defence, see ante, s, 304.]

Sec. 395. Collection a Proper Function of Probate Courts.

The collection of inheritance taxes is a proper function of the
probate court.^

Safety Deposit Companies. — ^The Illinois act requiring safety de-
posit companies to give notice to state officials before delivering
deposits is not void as making them in effect trustees for the state
to assist it in collecting the tax, or as subjecting property to a
public use without compensation, or as subjecting property to
unreasonable searches and seizures.^

1 In re McPherson, 104 N. Y. 306, 324, 10 N. E. 685, 58 Am. Rep. 502. In re
Wolfe, 137 N. Y. 205, 33 N. E. 156, reversing 2 Connolly 600. State v. Probate
Court, 112 Minn. 279, 128 N. W. 18, 21. [Effect of repeal, see ante, s. 91.]

2 National Safe Deposit Co. v. Stead, 250 111. 584, 95 N. E. 973.

Sec. 396. Absence of Special IVlachinery for Collection.

The fact that the statute does not contain special provision for
the ascertainment and collection of the tax cannot defeat the
state's right to a recovery.^ Where a plaintiff seeks to obtain a
determination that the state has no right to any tax, the court
will not adjudicate whether there remains a legal method of col-
lecting the tax, as this is a matter which will be decided when
the state seeks to enforce its right.^

290 INHERITANCE TAX LAW. [§§397-399.

1 Fisher v. State, 106 Md. 104, 66 A. 681. See In re Astor, 20 Abb. N. Cas. 405
6 Dem. Surr. 402.

The court notices that no specific mode is designated for the collection of the
tax under the act of 1909, as the court says that the legislature properly assumed
that the collection had been covered elsewhere. The statute of 1893, c. 174,
embraced within itself a complete system of taxation; under section 15 the duty
and method of collecting the tax is provided, and this remedy is properly applied
under the statute of 1909. Knox v. Emerson, 123 Tenn. 409, 131 S. W. 972.

The fact that there is no established practice of the probate court in like cases
made and provided for the service of citations out of that court if it is a fact does
not make the law unconstitutional. If the executor does not perform his duties
then the method usual in such cases should doubtless prove efficacious. The
practice prescribed by statute to enforce collection seems clear enough. Union
Trust Co. V. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N. 597.

2 Trippet v. State, 149 Cal. 521, 530, 86 P. 1084, 8 L. R. A. (N. S.) 1210.
[Effect of absence of special provision for appraisal, see ss. 339, 344.]

Sec. 397. Concurrent Jurisdiction to Recover.

Jurisdiction in the probate court does not necessarily preclude
concurrent jurisdiction in other courts to recover the tax.

Fidelity & Deposit Co. v. Crenshaw, 120 Tenn. 606, 110 S. W. 1017.

The fact that the original suit for the settlement of an estate is still pending
in chancery court and the statute provides that the inheritance tax may be col-
lected in such cases in such situs does not prevent jurisdiction by the county court
under section 22 of the Tenn. St. 1893, c. 174. Harrison v. Johnston, 109 Tenn.
245, 70 S. W. 414.

Sec. 398. Actions of Contract against Beneficiary.

If an administrator or executor actually pays over money of his
decedent to a collateral distributee or legatee without retaining
therefrom a tax, it becomes to the extent of the tax money had
and received by him for the use of the state and an action may
be maintained against such distributee or legatee therefor.

Montague v. State, 54 Md. 481, 487.

La. St. 1855, s. 7, declares that every person not domiciled in Louisiana and not
being a citizen of any state or territory shall pay an inheritance tax of ten per
cent. This tax is not a debt of the succession, it is simply a debt of the heir who
happens to be domiciled in a foreign country, and therefore a suit to recover this
tax should be brought directly against the heirs who under the statute owe it
to the state. Succession of Pargoud, 13 La. Ann. 367.

Sec. 399. Officers for Collection.

The responsibility for collection of the tax was early imposed in
Pennsylvania on the register of wills, ^ or it may be the treasurer of
the county where the taxable property is situated,^ and a mere
revenue agent should not be joined as a party to the proceedings.*

§§400-402.] COLLECTION OF TAX. 291

1 Alleghany County v. Stengel, 213 Pa. St. 493, 63 A. 58.

The official bond of the register of wills does not bind him to turn over col-
lateral inheritance taxes collected, as under the statute of 1841, c. 99, imposing
collection of the inheritance taxes on the register, the legislature did not rely
on his general official bond as a security for the performance of this new duty,
but required a special bond for this purpose. Commonwealth v. Toms, 45 Pa. St.
(9 Wright) 408.

2 See San Diego v. Schwartz, 145 Cal. 49, 78 P. 231.

The words "proper county" evidently refer to the county of the surrogate
first properly acquiring jurisdiction, and the surrogate of a county retains such
jurisdiction throughout all proceedings even should there be real estate in every
county in the state. In re Keenan, 5 N. Y. Suppl 200, 1 Con. Surr. 226.

3 The fact that a revenue agent was joined with the county atcorney in a pro-
ceeding to collect an inheritance tax did not render the petition bad on demurrer
although a motion to strike the name of the revenue agent from the petition would
have been proper. Commonwealth v. Gaulbert, 134 Ky. 157, 119 S. W. 779.

Sec. 400. Fees of Collecting Officers.

In almost all the states the system prevails of paying the col-
lection officers a salary, with no fees in addition,^ but in Tennessee
compensation is on the percentage basis.^

^ San Diego v. Schwartz, 145 Cal. 49, 78 P. 231. Succession of Levy, 115 La.
378, 39 S. 37, affirmed Cahen v. Brewster, 203 U. S. 552, 27 S. Ct. 174, 51 L. Ed.
310. Banks v. State, 60 Md. 305 (register of wills).

^Shelton v. Campbell, 109 Tenn. 690, 72 S. W. 112 (state revenue agent en-
titled to a fee of five per cent as attorney for county clerk under the act of 1893).
Harrison v. Johnston, 109 Tenn. 245, 70 S. W. 414 (district attorney allowed no
fee under the act of 1893).

In a proceeding under the Tennessee statute of 1909, which is but a supplement
of the statute of 1893, the attorney of the county court clerk is entitled to a fee
to be paid by the taxpayer. Knox v. Emerson, 123 Tenn. 409, 131 S. W. 972.

Sec. 401. When Proceedings Premature.

Authority to commence proceedings after refusal to pay the
tax implies that no process to enforce the tax can be instituted
within the time allowed for payment, and any such proceeding is
premature.

Frazer v. People, 3 N. Y. Suppl. 134 6 Dem. Surr. 174 (no costs against the
taxpayer should be allowed).

Sec. 402. Limitations.

A general statute of limitations will not usually cover inherit-
ance taxes,^ but where the state fails to collect the collateral
inheritance tax for a period of twenty years from the death of the

292 INHERITANCE TAX LAW. [§403.

decedent, a presumption of payment arises as to bona fide pur-
chasers from those to whom the remainder in fee descended. ^ The
Massachusetts statute of 1891, providing that executors and
administrators shall be liable for the taxes until paid, plainly im-
ports that nothing except payment shall operate as a discharge or
bar the collection of the tax.^ The limitation may run only from
the death of the life tenant on remainder interests ^ in favor of
purchasers without notice,^ and may not affect the personal lia-
bility of executors.^ The Massachusetts act of 1891, which pro-
vides that taxes shall be due at the expiration of two years and
that the treasurer shall bring suit within six months after the
taxes are due and payable, does not operate to set a limit of two
years and six months on the right of recovery, but the provision
as to action is directory merely/

1 The Massachusetts Revised Laws, chapter 202, section 2, provide for six
years* limitation on actions of contract founded upon contracts or liabilities ex-
pressed or implied. The court holds that a petition under the inheritance statute
for the fixing of the inheritance tax is not included in this limitation, although
the limitation applies expressly to "actions brought by the commonwealth or
for its benefit." The court holds that a tax is not a debt in the ordinary sense
of the word and is not founded upon a contract expressed or implied, and the
collector cannot maintain an action to recover it except as authorized by statute.

The word "liabiHty" is, it is true, of large significance, but as used in the gen-
eral and special statutes of limitations refers plainly to liabilities of a contractual
nature and not to proceedings to collect the inheritance tax. Bradford v. Storey,
189 Mass. 104, 75 N. E. 256.

^Appeal of Mellon, 114 Pa. St. 564, 573, 8 A. 183, although no administration
taken out and matter never called to attention of register. See In re Stewart,
147 Pa. St. 383, 23 A. 599, presumed after 42 years that register did his duty.

3 Howe V. Howe, 179 Mass. 546, 549, 55 L. R. A. 626.

^Appeal of James, 2 Del. Co. Rep. (Pa.) 164. Appeal of Mellon, 114 Pa. St.
564, 570, 8 A. 183.

^Appeal of James, 2 Del. Co. Rep. (Pa.), 164.

• In re Cullen, 8 Pa. Super. Ct. 234.

' Howe V. Howe, 179 Mass. 546, 55 L. R. A. 626.

Sec. 403. Retroactive Statute as to Limitation.

A statute providing that the limitation should be no defence to
a proceeding to collect the tax is retroactive, and will be so con-
strued as to permit actions for collection already barred under
existing statute.

In re Moench, 39 Misc. Rep. 480, 80 N. Y. Suppl. 222. In re Strang, 117
N. Y. Div. App. 796, 102 N. Y. Suppl. 1062.

As to retroactive laws, see further, ante, s. 73 et seq.

§§404-405.1 COLLECTION OF TAX. 293

Sec. 404. Practice.

Proceedings may be commenced on notice to the district attorney^
and an affidavit of probable cause,^ and amendments to the com-
plaint may be allowed as in other matters.^

1 In re Vanderbilt, 10 N. Y. Suppl. 239, 2 Con. Surr. 319.

2 An affidavit which simply says that the comptroller notified the district
attorney and that the proceedings were commenced in good faith furnishes no
evidence as to the facts and circumstances from which the court may form an
opinion as to the existence of probable cause. In re McCarthy, 5 Misc. Rep.
276, 25 N. Y. Suppl. 987.

3 Where the treasurer in his original application claims a tax of three per cent
after the expiration of the period within which the right to sue for the tax is
limited the application may be amended by asking that the tax be computed at
different rates depending on the finding of the court as to the facts, as this amend-
ment does not set up a new or different cause of action but merely corrects the
statement in the original application as to the rate at which the tax should be
computed. Connell v. Crosby, 210 111. 380, 71 N. E. 350.

[Notice to parties, see ante, ss. 71, 72.]

Sec. 405. Tax Officials Joined in Litigation between Other
Parties.

The state comptroller in New York is not a necessary party to
an action for the specific performance of an ante-nuptial contract.^
Where an executor in Massachusetts was sued by a legatee for his
legacy, the executor had the state treasurer summoned in as a
party to settle the inheritance tax, and the treasurer withdrew his
objection to being brought in.^

1 In re Kidd, 115 N. Y. App. Div. 205, 100 N. Y. Suppl. 917, reversed on
another point in 188 N. Y. 274, 80 N. E. 924.

^ Essex V. Brooks, 164 Mass. 79, 41 N. E. 119.

Subrogation of Corporation Paying Taxes. — In those states where the
corporation becomes liable when it permits a transfer of stock without the pay-
ment of taxes, it would seem possible that a corporation would have a right of
action over against the estate liable for the tax, although no cases on this sub-
ject have yet been reported. An action of quasi-contract might possibly lie, or
recovery might be had on the ground of suppression of facts by the executors
on transfer. For cases somewhat analogous, see Dana v. Colby, 63 N. H. 169;
Ede Company v. Heywood, 153 Cal. 615.

CHAPTER XLIV.

LIEN.

§ 406. Real Estate.

§ 407. Lien on Whole Property where Life Tenancy and Remainder

Exists.

§ 408. Priority as against Mortgage.

§ 409. Effect of Partition.

§410. EflEect of Judicial Sale.

§ 411. No Personal Liability on Purchaser.

Sec. 406. Real Estate.

The lien on real estate may be confined to realty specifically^
devised, but is usually expressly provided otherwise by the statute.

Brown v. Lawrence Park Realty Co., 133 N. Y. App. Div. 753, 118 N. Y. Suppl.
132. (Direction in will to sell land to pay legacies avoids lien on land.)

Sec. 407. Lien on Whole Property where Life Tenancy and
Remainder Exists.

Where real estate was left to a life tenant with remainder to the
brothers and sisters who survived, with a contingent remainder
over, the court holds that the property is subject to a lien for the
payment of the whole tax, and that if there is no money forth-
coming to pay the whole tax, it is the duty of the executor to pay it. j
And the court directs the sale of so much of the whole of that
property as may be necessary to raise the fund to pay the whole
tax.

In re Wilcox, 118 N. Y. Suppl. 254.

Sec. 408. Priority as against Mortgage.

On the foreclosure of a mortgage where the mortgagor has died,
the lien of the transfer tax under the New York act of 1892, although
subordinate to the mortgage, still cannot be wiped out, as the
statutes give the mortgagee no right to make the state a party to
the foreclosure proceedings; and therefore the mortgagee cannot
tender a title which a purchaser is bound to take.

§§409-410.] LIEN. 295

Kitching v. Shear, 26 Misc. Rep. (N. Y.) 436, 57 N. Y. Suppl. 464.

"This lien, however, was not paramount to the lien of the mortgage, which
was in existence prior to the decease of the testatrix. So far as the mortgagee
is concerned, his rights could not well be impaired by subsequent devolutions
of the title and the creation of liens associated therewith. The tax in question
is not to be assimilated with the general taxes which are imposed by public au-
thority, and which attach to property affected thereby as a whole, and without
discrimination with respect to particular estates or interests therein. The right
of the state in such cases is always paramount. It is not concerned with the
particular estates or liens which affect the property, but, dealing with it as a
whole, imposes the tax, leaving it to the parties interested in the property to
secure, as between themselves, such an adjustment of the burden as the circum-
stances of the case may seem to require. But in the case of the transfer tax a
different condition exists. It is imposed upon the right of succession, and is
levied upon successors in respect to the shares to which they succeed. In re
Hoffman, 143 N. Y. 327, 331, 38 N. E. 311. In no sense, then, can the tax be
deemed to affect the interest of one who had a lien upon the property which was
paramount to the ownership of the testatrix, and therefore superior to any estate
or interest which the testatrix might assume to create in the property." Per
Beekman, J., in Kitching v. Shear, 26 Misc. Rep. 436, 57 N. Y. Suppl. 464.

Sec. 409. Effect of Partition.

Where the decedent owned an undivided third of an entire tract
of land, partition of his interest could not have the effect of appor-
tioning the Hen and fixing a part thereof exclusively on any one lot.

Appeal of Mellon, 114 Pa. St. 564, 574, 8 A. 183.

Sec. 410. Effect of Judicial Sale.

The lien for the tax should not prevent the saie of realty by the
court, as the lien may be transferred to the proceeds of the sale.^
In a Pennsylvania case the intestate died leaving real estate,
which was apportioned among his collateral heirs after his death.
Subsequently the share of one of the heirs was sold by judicial
sale to satisfy debts and liens against the heir; and the court
holds that the lien of the whole of the collateral inheritance tax
on the whole of the land was satisfied and discharged by this sale,
inasmuch as the money realized from the sale was more than suffi-
cient to have paid the tax lien, and should have been so applied.
The fact that the amount of the lien had not been ascertained to
have been fixed cannot affect the result.^

^ As the proceeds arising from the sale either are now in court or will be paid
into court and will in any event be subject to the order of the court, the objec-
tion is without merit. The Ijen of the state is against the property of the dece-
dent and will first be satisfied out of any personal estate left by him and if this

296 INHERITANCE TAX LAW. [§411

sum is not sufficient then the real estate may be subjected to the payment of
this claim of the state, and the trial court can make such order with the entire
estate under its control as is necessary to satisfy any claim of the state against
the estate for taxes, inheritance or otherwise. Mandel v. Fidelity Trust Co., 128
Ky. 239, 32 Ky. L. Rep. 1104, 107 S. W. 775.
^Appeal of Mellon, 114 Pa. St. 574, 8 A. 183.

Sec. 411. No Personal Liability on Purcliaser.

One who buys land subject to the lien of the inheritance tax
may incur no personal liability on account of the tax. The Hen
can be enforced against the land, but no personal judgment can
be rendered against him therefor.^

The court suggests that the statute should provide a lien on
property not extending to an innocent purchaser for value without
notice.^

1 Wilhelmi v. Wade, 65 Mo. 39 (under the United States act of 1864).

2 In re McKennan, 25 S. D. 369, 126 N. W. 611 (reversed on rehearing, 130
N. W. 33).

-I

CHAPTER XLV.

PAYMENT.

§ 412. Pecuniary Legacies.
§ 413. Form of Receipts.

[As to time of payment see further, ante, s. 299 et seq.]

Sec. 412. Pecuniary Legacies.

In the case of a money legacy the tax may be deducted from it
and the balance paid to the legatee.

In re Hoyt, 37 Misc. 720, 76 N. Y. Suppl. 504.

Sec. 413. Form of Receipts.

The receipts should not be so framed in California as to bind
the state or conclude its right to have the question reviewed on
appeal. The receipt should be only for so much money on account
of the tax.

Becker v. Nye, 8 Cal. App. 129, 96 P. 333.

CHAPTER XLVI.

REFUNDING TO TAXPAYER.

§ 414. What Law Governs.

§ 415. When.

§ 416. Proceedings.

§ 417. Interest.

§ 418. Defences. — Stoppel and Limitation.

Sec. 414. What Law Governs.

The right to obtain a refund of a tax is governed by the law
in effect at the time that the proceeding is commenced, and not by
the law in force at the death of the testator.

In re Coogan, 27 Misc. Rep. 563, 59 N. Y. Suppl. 111.

Sec. 415. When.

Taxes computed on a mistaken construction of law ^ or paid as a
temporary payment^ should be refunded. Money paid by executors
on a life estate, in ignorance of the fact that the life estate had
been terminated by death, may be recovered back by the executors
as paid under a mistake of fact. This is not a voluntary payment,
as to constitute a voluntary payment it must be made with full
knowledge of all the facts and circumstances.^ Where a benefi-
ciary under misconception of the law advanced the money to pay
more than was really chargeable to him, and where the property
is sold for the tax, he is subrogated to the rights of the state and
should be repaid what he has erroneously paid.*

1 Sherman v. United States, 178 U. S. 150, 152, 20 Sup. Ct. 779.

2 In re Skinner, 106 N. Y. App. Div. 217, 94 N. Y. Suppl. 144, modifying 92
N. Y. Suppl. 972.

3 Kahn v. Herold, 147 Fed. 575, affirmed in 86 C. C. A. 598, 159 Fed. 608,
163 Fed. 947 (under U. S. St. 1898).

4 In re Wilcox, 118 N. Y. Suppl. 254.

Sec. 416. Proceedings.

Refunding should be accomplished under proceedings expressly
provided by statute,^ only by an official authorized by law,^ or
as an incident of an order vacating a tax,^ and may be ordered

§ 417.] REFUNDING TO TAXPAYER. 299

even though no appeal from the imposition of the tax was taken.'*
The tax may be paid under protest and then action brought for
refunding,^ or refunding may be compelled by mandamus. Where
the New York statute of 1896, section 225, as amended by the
New York statute of 1897, chapter 284, provides that if the sur-
rogate modifies or reverses his order fixing the tax, the state comp-
troller shall by order direct and allow the refunding of the tax, a
mandamus is the proper proceeding to compel the state comptroller
to make the refund.®

1 In re Sherar, 25 Misc. 138, 54 N. Y. Suppl. 930, 2 Gibbons 28. Thacher v.
United States, 149 Fed. 902.

The act of 1887 provides a simple proceeding for the reimbursement of money
paid for an inheritance tax and was intended to be exclusive for this object, and
therefore the taxpayer has no rights under section 1323 of the code authorizing
the appellate court in reversing a judgment to make restitution of property lost
by judgment. In re Howard, 54 Hun 305, 7 N. Y. Suppl. 594. In re Hall,
54 Hun 637, 7 N. Y. Suppl. 595.

2 People V. Griffith, 245 111. 532, 543, 92 N. E. 313 (state and not county treas-
urer). See In re Park, 8 Misc. Rep. 550, 29 N. Y. Suppl. 1081 (surrogate may
order county treasurer to refund under the act of 1892).

^ The surrogate may refuse to insert in an order vacating an assessment a
direction to the state comptroller to refund the amount of the tax. Such an
order is entirely proper but is not essential, as the statute itself commands the
state comptroller to direct the treasurer of the county or the comptroller of the
city of New York to refund. In re Cameron, 181 N. Y. 560, 74 N. E. 1115,
affirming 97 N. Y. App. Div. 436, 89 N. Y. Suppl. 977.

* In re Sherar, 25 Misc. Rep. 138, 54 N. Y. Suppl. 930, 2 Gibbons, 28.

^ The tax was paid on demand under written protest giving the grounds for
refusal in Knowlton v. Moore, the case arising under the United States revenue
act, the testator being domiciled in New York state. On denial of a petition
for refunding action was brought in the U. S. circuit court. Knowlton v. Moore,
178 U. S. 41, 20 S. Ct. 747, 44 L. Ed. 969.

6 In re Coogan, 27 Misc. Rep. 563, 59 N. Y. Suppl. 111.

Sec. 417. Interest.

The refunding of a tax carries interest on the amount refunded,^
as in case of taxes paid under an unconstitutional statute.^

1 In re Wilcox, 118 N. Y. Suppl. 254. Contra, Wieting v. Morrow, (Iowa 1911,)
132 N. W. 193, denying the right to interest unless expressly ordered by statute.

Interest may be allowed in a suit to recover legacy taxes paid, as it is not in
form an action against the United States. Kinney v. Conant, 166 Fed. 720, 92
C. C. A. 410.

2 In re Wood, 91 N. Y. App. Div. 3, 86 N. Y. Suppl. 269.

"The tax in question was imposed and collected by the state under
color of a law that was absolutely void. It was a void tax and not

300

INHERITANCE TAX LAW.

[§418.

merely voidable for some irregularity or error, and had no support except an
unconstitutional statute. Such a law is simply void. It confers no rights,
imposes no duties, confers no power, and in legal contemplation is as inoperative,
for any purpose, as if it had never been passed." Per O'Brien, J. Therefore
the only question for the court is whether, the comptroller having received the
money without right and used it for the purposes of the state under a promise
to refund, it was properly charged by the court with interest. The court holds
that as the state has promised to refund the tax the obligation to refund
money received and retained without right implies and carries with it the right
to interest, although section 225 makes no mention of interest while section 256
relating to the repayment of illegal or excessive taxes expressly provides for the
payment of interest. In re O'Berry, 179 N. Y. 285, 287, 72 N. E. 109, affirming
91 N. Y. App. Div. 3.

Sec. 418. Defences. — Estoppel and Limitations.

One may be estopped from claiming a refund,^ or barred by
limitations,^ although a general statute of limitations may not be
a bar.^

^ Where a person was named as a life tenant in a will who really was the owner
of the property under a deed in his possession and he testifies that he is only a
life tenant and does not disclose his ownership under the deed and pays the tax
as life tenant, the surrogate court eight years later refuses to allow a refunding
of the tax. In re Mather, 41 Misc. Rep. 414, 84 N. Y. Suppl. 1105.

2 An illegal tax was paid in November, 1895, and the law then in force, the
statute of 1892, gave the taxpayer five years in which to apply for a refund of
any part of the transfer tax. This period had not expired when the statute of
1897, c. 284, went into effect, apparently providing for an unlimited period in
which to apply for a modification or reversal of the original order but requiring
the application for the refund to be made within one year after such modification
or reversal. N. Y. St. 1900, c. 382, limited the period within which both the
application for modification or reversal and for a refund must be made to two
years. The taxpayer applied to the surrogate in October, 1903, for an order
modifying the original order which fixed the transfer tax and the court holds that
under section 6, article 7, of the state constitution, which provides that "neither
the legislature, the canal board nor any person or persons acting In behalf of
the state shall audit, allow or pay any claim which, as between citizens of the
state, would be barred by lapse of time," it seems clear that the comptroller could
not have audited, allowed or paid this claim even if the two years limitation in
the statute of 1900 did not apply. While it is to be observed, moreover, that the
statute of 1900, with its two years limitation, is to be treated as purely prospective,
the same test must be applied to the act of 1897, in which event the respondent
is relegated to the statute of 1892 with its five years limitation which had elapsed
by more than three years before he sought relief. In re Hoople, 179 N. Y. 308,
313, 72 N. E. 229, reversing 93 N. Y. App. Div. 486, 87 N. Y. Suppl. 842.

3 In re Sherar, 25 Misc. Rep. 138, 54 N. Y. Suppl. 930, 2 Gibbons 28.

INHERITANCE TAX LAW.

STATUTES ANNOTATED,

STATUTES ANNOTATED.
ALABAMA.

^V In General.

Alabama had a collateral inheritance tax on personal property
only from 1848 to 1868. The constitution of 1901 forbids a direct
inheritance tax, and limits any collateral inheritance tax that may
be enacted to 2J/^ per cent. No inheritance tax law has been
enacted since the adoption of this constitution.

Constitutional Limitations.
Alabama Constitution, 1901, s. 219.

The legislature may levy a tax of not more than two and one-half per centum
of the value of all estates, real and personal, money, public and private securities
of every kind, in this state passing from any person who may die seized and
possessed thereof, or of any part of such estate, money or securities, or interest
therein transferred, by the intestate laws of this state or by will, deed, grant,
bargain, sale or gift, made or intended to take effect in possession after death
of the grantor, devisor or donor, to any person or persons, bodies politic or corpor-
ate, in trust or otherwise, other than to or for the use of the father, mother,
husband, wife, brothers, sisters, children or lineal descendants of the grantor-
devisor, donor or intestate.

List of Statutes.

1847-48. No. 1, s. 86.
1849-50. No. 1, s. 1.
1862. No. 1, ss. 2, 24.
1864. No. 63, 64.
1865-66. No. 1, ss. 2, 3.
1866-67. No. 260, ss. 2, 4.
Code of 1867. ss. 434, 436.
1868. No. 1.

The Early Statutes.

Ala. St. 1847-48, No. 1, s. 86, imposed a tax of two per cent on
all gifts by will of personal or real property to any person other than
the child, grandchild, brother or sister, children or wife of the
testator; and provided further that the executor should pay the
tax before distribution.

Ala. St. 1849-50, No. 1, s. 1, p. 7, imposed a tax of two dollars
on every • one hundred dollars of the amount of any legacy or

304 STATUTES ANNOTATED. [Ala. St-

bequest to any person other than to the child, adopted child,
grandchild, brother, sister, wife or husband, father or mother. The
statutes further imposed a tax of two dollars on every one hundred
dollars of the amount of property received by deed of gift to any
person or corporation other than to a child, adopted child, grand-
child, brother, sister, mother or father.

Ala. St. 1851-52, c. 1, of the revenue act contains no reference
to inheritance taxes.

Ala. St. 1853-54, No. 1, for the assessment of the revenue taxes
contains no reference to inheritance taxes.

Ala. St. 1855-56, Ala. St. 1857-58, Ala. St. 1859-60, contain
no revenue nor inheritance tax statute.

Ala. St. 1862, No. 1, s. 2, par. 26, provides a tax of five per cent
on every legacy on which letters testamentary have not been taken
out in Alabama received by any person other than the child,
adopted child, grandchild, brother, sister, father, mother, husband
or wife, and on all property given by deed or otherwise to any such
person.

Ala. St. 1862, No. 1, s. 24, provides a tax of five per cent on every
legacy on which letters testamentary are taken out in this state.

Ala. St. 1864, No. 63, provides an additional tax of fifty per cent
on all taxes now imposed and on all present subjects of taxation.

Ala. St. 1864, No. 64, s. 1, imposes an additional tax of thirty-
three and one-third per cent on all subjects of taxation embraced
in the revenue act of 1862.

Ala. St. 1865-66, No. 1, s. 2, par. 10, imposes a tax of three per
cent on every legacy where letters testamentary have not been
taken out in Alabama, received by any person other than the
child, adopted child, brother, sister, father, mother, husband or
wife, and on all property given by deed or otherwise to any such
person on the amount or value thereof.

Ala. St. 1865-66, No. 1, s. 3, par. 1, provides a tax of one
and one-half per cent on every legacy subject to assessment left by
any will on which letters testamentary are taken out in Alabama.

Ala. St. 1866-67, No. 260, s. 2, par. 9, provides a tax on every
legacy where letters testamentary have not been taken out in
Alabama, received by any person other than the child, adopted
child, grandchild, brother, sister, father, mother, husband, wife,
and on all property given by deed or otherwise to any such person,
on the amount or value thereof, to be assessed to the beneficiary,
guardian, trustee or legal representative at the rate of three per cent.

Ala. St.] ALABAMA. 305

Ala. St. 1866-67, No. 260, s. 4, par. 1, imposes a tax on every
legacy subject to assessment, unless letters testamentary are taken
out in Alabama, of one and one-half per cent.

Ala. Code, 1867, c. 3, a. 2, s. 434, par. 9, provides a tax on every
legacy where letters testamentary have not been taken out in
Alabama received by any person other than the child, adopted child,
grandchild, brother, sister, father, mother, husband or wife, and
on all property given by deed or otherwise to any such person, of
three per cent.

Ala. Code, 1867, s. 436, imposes a tax on every legacy subject to
assessment on which letters testamentary are taken out in Alabama,
of one-half of one per cent.

Ala. St. 1868, No. 1, p. 297, revenue law, omits any reference
to the inheritance tax.

ALASKA.

The Alaskan Organic law contains no reference to an inheritance
tax or uniformity of taxation. See Thorpe, American Charters,
Constitutions and Organic Laws, Vol. 1, pp. 235, et seq.

There is no inheritance tax at present in Alaska.

ARIZONA.

In General.

Arizona has no inheritance tax and has never had an inheritance
tax.

Proposed Constitution.
Constitution of 1911, a. 9.

S. 1. The power of taxation shall never be surrendered, suspended or con-
tracted away. All taxes shall be uniform upon the same class of property within
the territorial limits of the authority levying the tax and shall be levied and
collected for public purposes only.

S. 12. The law-making power shall hav^e authority to provide for the levy and
collection of license, franchise, gross revenue, excise income, collateral and direct
inheritance, legacy and succession taxes, also graduated income taxes, graduated
collateral and direct inheritance taxes, graduated legacy and succession taxes,
stamp, registration, production or other specific taxes.

306 STATUTES ANNOTATED. [Ark St.

ARKANSAS.

In General. '

Arkansas adopted a collateral inheritance tax in 1901 and ex-
tended the tax to direct inheritances in 1907. The attorney general
has ruled that the exemptions apply to the estate as a whole, not to
the individual shares.

We are advised by the attorney general's office that shares of
stock in an Arkansas corporation owned by a non-resident decedent
and passing to a non-resident beneficiary are subject to the inherit-
ance tax, as being property within the jurisdiction of the state of
Arkansas, on the ground that as the domicile of the corporation
is in Arkansas and its capital stock is taxable in Arkansas, any of
that stock owned by a decedent, whether a resident or a non-resident,
would be liable to a succession tax.

On the other hand, the tax commissioner of Connecticut is
officially informed that Arkansas does not tax shares of stock in
Arkansas corporations owned by non-resident decedents when
such shares of stock were physically out of the state on the date
of the death of the decedent, and for that reason has ruled that
the retaliative provision of the Connecticut law does not apply
to residents of Arkansas. The usual provision holding the corpora-
tions responsible for the collection of the tax is not found in the
Arkansas statutes, and it contains no specific reference to the
property of non-residents. The tax has been producing less than
$1,000 per year.

List of Statutes.

1901. Statutes of Arkansas, act 156, p. 295.
1903. " " " act 89, p. 153.

1907. " " " act 345, p. 832.

1909. '• " •' act 303, p. 904.

Kirby's digest of the statutes (1901), ss. 244 to 253.
" " '• " (1903), ss. 242, 243.

Constitutional Limitations.
Arkansas Constitution, 1874, a. 16, s. 5.

All property subject to taxation shall be taxed according to its value; that value
to be ascertained in such manner as the general assembly shall direct, making the

1901, c. 156.] ARKANSAS. 307

same equal and uniform throughout the state. No one species of property, from
which a tax may be collected, shall be taxed higher than another species of property
of equal value: Provided, the general assembly shall have power, from time to
time, to tax hawkers, pedlers, ferries, exhibitions and privileges in such manner
as may be deemed proper: Provided further, that the following property shall
be exempt from taxation: Public property used exclusively for public purposes,
churches used as such, cemeteries used exclusively as such, school buildings and
apparatus, libraries and grounds used exclusively for school purposes, and build-
ings and grounds and materials used exclusively for public charity.

STATUTES.

Ark. St. 1901, c. 156. Approved May 23, 1901.

Section 2 provides for the appraisal of estates in remainder to
collaterals within sixty days after the death of the testator, and
the payment of the tax within one year. Section 3 provides for a
tax on a gift to an executor or trustee above reasonable compensa-
tion for his services. Section 4 provides that taxes shall be paya-
ble one year from the death of testator with interest at nine per
cent from that time. The remaining sections provide for the
collection of the tax.

Ark. St. 1903, c. 89, approved March 20, 1903, amends Ark. St.
1901 by exempting from the tax the grandmother, grandfather,
brother and sister or any child thereof of the decedent.

Ark. St. 1907, c. 345, approved May 17, 1907, amended the
existing law by providing a tax of one per cent on lineals and
brother and sister with an exemption as follows: "Provided, that
any estate which may be valued at a less sum than $20,000 shall
not be subject to any such tax, the excess over such sum only being
taxable." The tax on collaterals except brother and sister is two
per cent on the value of property in excess of $5,000. In all other
cases the rate is three per cent on all estates of $10,000 or less;

308 STATUTES ANNOTATED. [Ark. St.

four per cent on estates of $10,000 to $20,000; five per cent on
estates of $20,000 to $50,000, "provided that an estate not exceed-
ing $2,000 in value shall not be subject to tax."

Ark. St. 1909, c. 303, was approved and went into force May 31,
1909, and provided an entirely new act throughout.

THE PRESENT ACT.

Ark. St. 1909, c. 303. Approved May 31, 1909.

An Act to impose a tax based upon the rights of succession
to gifts, legacies and inheritances in certain cases, and to provide for the
collection of such taxes.

Transfers Taxable.

S. 1. All property within the jurisdiction of this state, and any interest therein,
whether belonging to inhabitants of this state or not, or whether tangible or
intangible, which shall pass by will or by the intestate laws of this state, or by
deed, grant, sale or gift made or intended to take effect in possession after the
death of the grantor to any person or corporation in trust or otherwise, shall be
liable to tax for the use of the state at the rate hereinafter specified.

Liabilities. — Lien. — Limitations.

S. 2. All executors, administrators and other trustees, and all heirs or benefi-
ciaries taking under a will or by virtue of the intestate laws, and any such grantee
under a conveyance made during the life of the grantor, shall be liable for all
such taxes, with interest, until the same shall have been paid as herein provided.
And said tax shall be and continue a lien upon the property chargeable therewith
until paid to the state; provided, that all inheritance taxes shall be sued for
within five years after they are due and legally demandable, otherwise they shall
be presumed to be paid and cease to be a lien as against any purchasers of real
estate.

Rates.

S. 3. When the property or any interest therein shall pass to a grandfather,
grandmother, father, mother, husband, wife, lineal descendant, brother, sister, or
any adopted child, in every such case the rate of tax shall be one dollar on every
hundred dollars of the clear market value of such property received; provided,
that any estate which may be valued at a less sum than five thousand dollars
($5,000) shall not be subject to any tax, the excess over such sum only being taxed.

S. 4. When the property or any interest therein shall pass to any uncle, aunt,
niece, nephew, or any lineal descendant of the same, in every such case the rate
of tax shall be two dollars on every one hundred dollars of the clear market value
of such property received, in excess of the sum of $2,000.

S. 5. In all other cases the rate shall be as follows: On each and every one
hundred dollars of the clear market value of all property and at the same rate
for any less amount, on all estates of $10,000 and less, $3.00; on all estates of
over $10,000 and not exceeding $20,000, $4.00; on all estates of over $20,000
and not exceeding $50,000, $5.00; on all estates exceeding $50,000, $6.00; pro-
vided, that an estate of not exceeding $1,000 in value shall not be subject to tax.

1909, c. 303.] ARKANSAS. 309

Particular Estates and Remainders.

S. 6. When any person shall bequeath or devise any property tc or for the
use of grandfather, grandmother, father, mother, husband, wife, lineal descendant,
brother, sister, or any child thereof, an adopted child or any heir of an adopted
child, or any lineal descendant thereof, during life or for a term of years, and
remainder to another, the value of the prior estate shall within sixty days after
the death of the testator be appraised in the manner hereinafter provided and
shall be taxable as provided in the preceding sections; and the inheritance tax
on the remainder of the estate shall be held in abeyance until the beneficiary
shall come into possession of same, and shall thereupon likewise be taxable as
therein provided.
Gifts to Executors or Trustees.

S. 7. Whenever a decedent appoints one or more executors or trustees, and in
lieu of their allowance makes a devise or bequest of property to them which would
otherwise be liable to said tax, or appoints them his residuary legatees, and said
bequests, devises or residuary legacies exceed what would be a reasonable compensa-
tion for their services, such excess shall be liable to such tax, and the court of probate
having jurisdiction of their accounts shall fix the amount of such compensation.
When Tax Accrues. — Interest.

S. 8. All taxes imposed by this act shall be due and payable to the treasurer
of the state by the executors, administrators, trustees, heirs or beneficiaries, at
the death of the decedent, and if paid within twelve months no interest shall be
charged and collected thereon, but if not paid, interest at the rate of nine per cent
per annum shall be charged and collected from the time said tax became due.
Inventory.

S. 9. It shall be the duty of every administrator, executor or trustee having
in charge or trust any property subject to said tax to file in the probate court of
the county of the decedent's death, in addition to the inventory of personal
property now required, a true inventory of the real estate owned by the decedent
at the date of his death, and to collect the tax thereon from the devisee or person
entitled to said property; and he shall not deliver any specific legacy or property
subject to said tax to any person until he has collected the t^x thereon.
Tax to be Deducted.

S. 10. Whenever any legacies subject to said tax shall be charged upon or
payable out of any real estate, the heir or devisee, before paying the same, shall
deduct said tax therefrom and pay it to the executor, administrator or trustee,
and the same shall remain a charge upon said real estate until it is paid; and pay-
ment thereof shall be enforced by the executor, administrator or trustee in the
same manner as the payment of the legacy itself could be enforced. If any such
legacy be given in money to any person for a limited period, such administrator,
executor or trustee shall retain the tax on the whole amount; but if it be not
in money, he shall make an application to the court having jurisdiction of his
accounts to make an apportionment, if the case require it, of the sum to be paid
into his hands by such legatee on account of said tax and for such further order
as the case may require.
Appraisal.

S. 11. The value of such property as may be subject to said tax shall be its
actual value as found by the court of probate, after notice to all persons interested

310 STATUTES ANNOTATED. [Ark. St. 1909.

in the succession to said property served for the time and in the manner required
by law in proceedings for the assignment of dower. But the state treasurer, or
any person interested in the succession to said property may apply to the court
of probate having jurisdiction of the estate or to any circuit court having, juris-
diction, in case there is no administration, and on such application said court
shall appoint three disinterested persons, who, being first sworn, shall view
and appraise such property at its actual market value for the purpose of said tax,
and shall make return thereof to the court, which return may be accepted by the
said court, and if accepted shall be binding. And the fees of the appraiser shall
be such as are customary in the administration of estates. In the case of an
annuity or life estate the value thereof shall be determined by the tables of mor-
tality employed by insurance actuaries, and five per centum compound interest.
Jurisdiction of Probate Court.

S. 12. The court of probate having either principal or auxiliary jurisdiction
of the settlement of the estate of a decedent shall have jurisdiction to hear and
determine all questions in relation to said tax that may arise affecting any devise,
legacy or inheritance under this act, subject to appeal as in other cases, and the
state treasurer, through the attorney general, shall represent the interests of the
state in any such proceedings.
Tax to be Paid before Accounts Settled. — Vouchers.

S. 13. No final settlement of the account of any executor, administrator or
trustee shall be confirmed by any probate court unless it shall show, and the
court shall find, that all taxes imposed by the provisions of this act upon any prop-
erty or interest therein belonging to the estate to be settled by said account
shall have been paid, and the receipt of the treasurer of the state for such tax
shall be the proper voucher for such payment.
Proceedings for Collection.

S. 14. It shall be the duty of the attorney general to appear for and in behalf
of the state treasurer, and institute proceedings in the proper forum for the
enforcement of the provisions of this act, whenever, from information by the
state treasurer, or from any probate judge, or otherwise obtained, he shall have
reason to believe any of the taxes provided for herein have become past due.
And when requested in writing by any probate judge, he shall assist in the adjust-
ment and collection of any such taxes which shall have accrued under this act;
and whenever, in the judgment of the attorney general, it becomes necessary
and expedient he shall have the power to appoint attorneys to assist him in any
of the duties herein required of him, and the compensation of such attorneys
shall be two per cent of all amounts actually collected, except where there may be
litigation over past due taxes, in which event the compensation shall be five per
cent of all amounts actually recovered, said compensation to be deducted from
the amount of taxes so collected. Provided, that any attorney appointed here-
under shall be a resident of the Congressional district in which such action for
the collection of inheritance tax may be brought or in which the administration
of any estate liable therefor may be pending.
Repeal.

S. 15. That all laws and parts of laws in conflict herewith be and the same
are hereby repealed, and that this act take effect and be in force from and after
its passage.

Cal. St.] CALIFORNIA. 311

CALIFORNIA.

In General.

California adopted a collateral inheritance tax in 1893 following
the old New York law. In 1905 the graduated direct inheritance
law was passed, copying the Wisconsin statute except that the
exemptions are more liberal.

The statute of 1911 sharply increases existing progressive rates
and perfects the administrative features of the law. The exemp-
tions apply to each individual share, not to the estate as a whole.
The supreme court of California has decided that the tax is
on the excess over the exemption, not, as in many states, on the
entire inheritance if it exceeds the exemption.

We are advised by the controller's office that California taxes
stock of a California corporation owned by a non-resident. This
is the construction of the statute made by superior courts, but
the question lias not been passed upon by the supreme court.
Corporations and individuals delivering or transferring certificates
or assets of a non-resident estate are responsible for the tax. It
is not the practice to require a complete inventory of a non-resident's
estate.

Constitutional Limitations.

California Constitution, 1879, a. 13, s. 1.

S. 1. All property in the state, not exempt under the laws of the United
States, shall be taxed in proportion to its value, to be ascertained as provided by
law. The word "property" as used in this article and section, is hereby declared
to include moneys, credits, bonds, stocks, dues, franchises and all other matters
and things, real, personal and mixed, capable of private ownership; provided,
that growing crops, property used exclusively for public schools and such as may
belong to the United States, this state, or to any county or municipal corporation
within this state, shall be exempt from taxation. The legislature may provide,
except in case of credits secured by mortgage or trust deed, for a reduction from
credits of debts due bona fide residents of this state.

[California Constitution, 1879, was amended November 6, 1894, by including
in the exemptions free libraries and free museums and was amended November 6,
1900, by including buildings used for religious worship.]

312

STATUTES ANNOTATED.

[Cal. St.

It <(

c. 28, p. 33.

" "

c. 83, p. 77.

" "

c. 85, p. 101.

" "

c. 152, p. 55.

(( ((

c. 228, p. 268.

<< <(

c. 314, p. 341.

a a

c. 85, p. 83.

11 <<

c. 325, p. 374.

<( ((

c. 337, p. 557.

(( i(

c. 394 and 395.

California,

1903, p. 1356. (This is the Act of 1893, p. 193.)

California

(Henning), Vol. 5, p. 138. (This is the Statute of

List of Statutes.

1850-53. Compiled Laws of California (Garfield & Snyder), c. 127, a. 5.
1893. Statutes of California, c. 168, p. 193.
1895.
1897.
1899.
1903.
1903.
1905.
1905.
1905.
1909.
1911.

General Laws of Califoi
General Lav
1905, p. 341.)

The Alien Tax Statute of 1853.
GompUed Laws of California, 1853, c. 127, a. 5, ss. 1, 2, 3, p. 678.

S. 1. Each and every person not being a bona fide resident of this state and not
being a citizen of the United States, who shall be entitled, whether as heir, 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 otherwise, shall pay a tax of ten per
centum; and all other persons entitled as heir, legatee, or donee to succession prop-
erty two and one-half per centum on all sums, or the value of all property, which
he may actually receive from said succession, or so much thereof as is situated in
this state, after deducting debts due by said succession; when the said inheritance,
donation or legacy, consists of specific property and the same has not been sold,
the appraisement thereof in the inventory shall be considered as the value of the
property. The amount shall be paid to the treasurer of the county in which
such heir, legatee or donee may reside at the time of receipt of the inheritance,
donation or legacy, within thirty days from the receipt thereof, for state purposes;
and any person receiving such inheritance, donation or legacy, and neglecting
to pay the percentage herein provided within the said thirty days shall be liable
to pay double the amount of said percentage, with costs of suit.

[Sections 2 and 3 relate to the collection of the tax.]

THE COLLATERAL INHERITANCE ACT OF 1893.

Cal. St. 1893, c. 168. Approved March 23, 1893.

An Act to establish a tax on collateral inheritances, bequests

and devises, to provide for its collection and to direct the

disposition of the proceeds.

Title.— Void as to Illegitimate Children.

The title of the statute limits the act to collaterals, and illegiti-
mate children are clearly not collateral heirs and therefore the
act is void as to them. The act expressly exempts from the opera-

1893, c. 168.] CALIFORNIA. 313

tion of the tax any child or children adopted in conformity with
the laws of the state of California, and the court says that whether
or not illegitimate, children acknowledged in accordance with
California Civil Code, section 1387, are expressly excepted from the
tax; that they are not collateral heirs and any inheritance passing
to such child from its father is not a collateral inheritance. Wir-
ringer v. Morgan, 12 Cal. App. 26, 106 P. 425.

S. 1. After the passage of this act, 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 this state, or any interest therein or income therefrom which shall be
transferred by deed, grant, sale or gift, made in contemplation of the death of
the grantor or bargainor, or intended to take effect in possession or enjoyment
after such death, to any person or persons, or to any body politic or corporate,
in trust or otherwise, or by reason whereof any person or body politic or corporate
shall become beneficially entitled, in possession or expectancy, to any property,
or to the income thereof, other than to or for the use of his or her father, mother,
husband, wife, lawful issue, brother, sister, the wife or widow of a son, or the
husband of a daughter, or any child or children adopted as such in conformity
with the laws of the state of California, and any lineal descendant of such de-
cedent born in lawful wedlock, or the societies, corporations and institutions
now exempted by law from taxation, by reason whereof any such person or
corporation shall become beneficially entitled, in possession or expectancy, to
any such property, or to the income thereof, shall be and is subject to a tax of
five dollars on every hundred dollars of the market value of such property and at
a proportionate rate for any less amount, to be paid to the treasurer of the proper
county, as hereinafter defined, for the use of the state; and all administrators, exec-
utors and trustees shall be liable for any and all such taxesuntil the same shall have
been paid, as hereinafter directed ; provided, that an estate which may be valued at
a less sum than five hundred dollars shall not be subject to such duty or tax.

Validity.

This statute is not unconstitutional as depriving an heir of
property without due process of law contrary to the fourteenth
amendment of the federal constitution. It is claimed that this
amendment requires that the state must provide the means of
ascertaining the amount of the tax and for notice and appraisement
and that the state has no power to take private property until these
things are done. But the act did provide for notice. The court
holds that the fact that the inheritance tax law vests a tax in the
state at once on the death of the decedent is immaterial, as
the right though vested is still as to actual collection subject to the
appraisement provided by the statute. Trippet v. State, 149 Cal.
521, 86 P. 1084, 8 L. R. A. (N. S.) 1210.

314 STATUTES ANNOTATED. [Cal. St.

A distinction in the statute between the surviving brothers and
sisters of the testator and the children of deceased brothers and
sisters is vahd although the inheritance law of the state provides
that in case of intestacy the estate should in certain instances go
equally to the brothers and sisters of the decedent and to the
children of any deceased brother or sister by right of representation.
There is no necessary connection between inheritance and taxation
and in making laws relating to these two subjects the legislature
is not required to consider them together. In determining the
mode in which the estate of an intestate shall be distributed the
legislature did not in any respect impair its right to distribute
the burdens of taxation or to determine the classes by which that
burden shall be borne.

"The right of inheritance including the designation of heirs and
the proportions which the several heirs shall receive, as well as the
right of testamentary disposition, are entirely matters of statutory
enactment and within the control of the legislature. As it is only
by virtue of the statute that the heir is entitled to receive any of his
ancestor's estate, or that the ancestor can divert his estate from the
heir, the same authority which confers this privilege may attach
to it the condition that a portion of the estate so received shall be
contributed to the state and the portion thus to be contributed is
peculiarly within the legislative discretion." Per Harrison, J., in In
fg Wilmerding's Estate, 117 Cal. 281, 49 P. 181.

"Child Adopted." — "Lineal Descendant."

A child of an adopted child is exempt under these provisions, as
he takes by inheritance as issue of the adopted father. Estate of
Winchester, 140 Cal. 468, 74 P. 10.

Exemption of "Estates" of Less than $500.

The ''estates" exempted as under $500 are not the estates of the
decedents but estates taken by inheritance or devise. In re Wil-
merding's Estate, 117 Cal. 281, 49 P. 181.

An exemption under this statute of the estates taken by in-
heritance valued at less than $500 is constitutional. "As this tax
is not upon property, but upon the right of succession, the con-
stitutional provision that all property shall be taxed according
to its value is inapplicable. The right of the legislature to impose
an excise tax includes the right to select the subjects upon which
it shall be imposed." There is no constitutional requirement that it

1893, c. 168.] CALIFORNIA. 315

shall be imposed upon every inheritance and the judgment of the
legislature in that respect is not open to review by the courts. It
may have considered that the expense of valuation of an estate less
than $500 rendered the exemption wise. In re Wilmerding's
Estate, 117 Cal. 281, 49 P. 181.

S. 2. When any grant, gift, legacy or succession upon which a tax is imposed
by section one of this act shall be an estate, income or interest for a term of years
or for life, or determinable upon any future or contingent event, or shall be a
remainder, reversion or other expectancy, real or personal, the entire property
or fund by which such estate, income or interest is supported, or of which it is
a part, shall be appraised, immediately after the death of the decedent, at what
was the market value thereof at the time of the death of the decedent, in the
manner hereinafter provided; and the superior court in which the probate pro-
ceedings are pending shall thereupon assess and determine the value of the estate,
income, or interest subject to said tax, in the manner recorded in section thirteen
of this act, and the tax prescribed by this act shall be immediately due and payable
to the treasurer of the proper county and, together with the interest thereon, shall
be and remain a lien on said property until the same is paid; provided, that the
person or persons, or body politic or corporate, beneficially interested in the
property chargeable with said tax, may elect not to pay the same until they shall
come into the actual possession or enjoyment of such property, and in that case
such person or persons, or body politic or corporate, shall execute a bond to the
people of the state of California, in a penalty of twice the amount of the tax
arising upon personal estate, with such sureties as the said superior court may
approve, conditioned for the payment of said tax and interest thereon, at such
time or period as they or their representatives may come into the actual possession
or enjoyment of such property, which bond shall be filed in the office of the
county clerk of the proper county; provided further, that such person shall
make a full and verified return of such property to said court, and file the same in
the office of the county clerk within one year from the death of the decedent
and within that period enter into such security and renew the same every five years.

S. 3 provides a tax on gifts to executors or trustees in excess of a reasonable
compensation.

S. 4 provides that taxes imposed shall be due at the death of the decedent with
interest payable from eighteen months after that time at the rate of ten per cent,
and with a discount of five per cent on taxes paid within six months from the
death of the decedent; and that if the executors, administrators or trustees do
not pay such tax within eighteen months of the death of the decedent they shall
be required to give a bond for the payment of the tax and interest.

S. 5 provides that where it is impossible to settle an estate within eighteen
months, the interest charged shall be seven per cent and not ten per cent after that
time.

S. 6 provides that the administrator, executor or trustee shall collec.t the tax.

S. 7 gives the executor, administrator or trustee power to sell property to pay the
tax.

S. 8 covers payment and receipts for the tax.

S. 9 provides for a refund to the beneficiary where debts are proven against
the estate after distribution.

316 STATUTES ANNOTATED. [Cal. St.

S. 10 makes a corporation liable for transfer of stock standing in the name of
a foreign executor or administrator.

Ss. 11 and 12 provide for the appraisal of the property.
Ss. 13 and 14 cover the jurisdiction and duty of the court.

Moot Questions not Decided.

Where a plaintiff seeks to obtain a determination that the state
has no right to any tax the court will not adjudicate whether there
remains a legal method of collecting the. tax, as this is a matter
which will be decided when the state seeks to enforce its right.
Trippet v. State, 149 Cal. 521, 86 P. 1084, 8 L. R. A. (N. S.) 1210.

Appeal the Sole Remedy.

Appeal lies from the order of the superior court directing the
payment of an inheritance tax under the act of 1893 and therefore
the party aggrieved cannot maintain a writ of prohibition to enjoin
the court from making the order. Cross v. Superior Court (Cal.
1905), 83 P. 815.

Ss. 15-21 provide the duties of the treasurer and other state officers in rela-
tion to the collection of the tax.

Section 20, as to the fees of the treasurer for the collection of
inheritance taxes, has been so modified by the county government
acts of 1893 and 1897, that the provisions allowing the treasurer
to keep the money for his own purposes have been repealed.
The court finds, however, that section 20 was not wholly repealed
but was modified so that thereafter the fees returned were not
for the use of the treasurer as an individual. The money should
be paid over by the treasurer to the county, as it is legally in the
custody of the county until paid over to the state. The county
government acts were the statute of 1893, p. 507, and the statute
of 1897, p. 573. San Diego v. Schwartz, 145 Cal. 49.

S. 22 provides that the tax levied and collected under the act shall be paid
into the treasurer of the state for the uses of "the State School Fund."

The Amendment of 1895.

Cal. St. 1895, c. 28, p. 33, was approved and went into effect
March 9, 1895, and made verbal changes in Cal. St. 1893, c. 168, s. 2.
The act of 1895 also amended ss. 6, 11, 15, 17 and 18 of Cal. St.
1893, c. 168.

1S97, c. 83.] CALIFORNIA 317

The Act of 1897.

Cal. St. 1897, c. 83, p. 77, was approved and went into effect
March 9, 1897.

S. 1. Section one of an act entitled "An Act to establish a tax on collateral
inheritances, bequests and devises, to provide for its collection and to direct the
disposition of the proceeds," approved March twenty-third, eighteen hundred
and ninety-three, is hereby amended so as to read as follows: —

S. 1. After the passage of this act, 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 this state, or any interest therein or income therefrom, which shall be
transferred by deed, grant, sale or gift, made in contemplation of the death of the
grantor or bargainor, or intended to take effect in possession or enjoyment after
such death, to any person or persons, or to any body politic or corporate, in trust
or otherwise, or by reason whereof any person or body politic or corporate shall
become beneficially entitled, in possession or expectancy, to any property, or
to the income thereof, other than to or for the use of his or her father, mother,
husband, wife, lawful issue, brother, sister and niece or nephew when a resident
of this state, the wife or widow of a son, or the husband of a daughter, or any
child or children adopted as such in conformity with the laws of the state of
California, and any lineal descendant of such decedent born in lawful wedlock,
or the societies, corporations and institutions now exempted by law from taxation,
or to any public corporation, or to any society, corporation, institution or asso-
ciation of persons engaged in or devoted to any charitable, benevolent, educational,
public or other like work (pecuniary profit not being its object or purpose), or to
any person, society, corporation, institution or association of persons in trust
for or to be devoted to any charitable, benevolent, educational or public purpose,
by reason whereof any such person or corporation shall become beneficially en-
titled, in possession or expectancy, to any such property or to the income thereof,
shall be and is subject to a tax of five dollars on every hundred dollars of the
market value of such property and at a proportionate rate for any less amount
to be paid to the treasurer of the proper county, as hereinafter defined, for the use
of the state; and all administrators, executors and trustees shall be liable for any
and all such taxes until the same shall have been paid, as hereinafter directed;
provided, that an estate which may be valued at a less sum than five hundred
dollars shall not be subject to such duty or tax.

S. 2. The exemptions contained in this act shall apply to all property which
has passed, by will, succession or transfer, since the approval of the act of which
this act is amendatory, except in those cases where the tax has been paid to the
treasurer of the proper county.

Void as Retroactive.

The clauses which extend the exemptions of the existing law and
provide that the exemptions shall apply to all cases where taxes
have not been paid under existing law, are void as in violation of
the constitution which provides that the legislature shall not make

318 STATUTES ANNOTATED. [Cal. St.

any gift or donation of any public money or thing of value. Under
the act of 1893 the inheritance tax became the property of the state
on the death of the decedent. In re Stanford's Estate, 126 Cal. 112,
58 P. 462, 45 L. R. A. 788.

Void as a Local Law.

Section 2 may be void as in violation of the provision of the
California constitution that the legislature shall not pass local or
special laws releasing persons from their debts or obligations to the
state, as although this was neither a local nor a special law in form
still it is opposed to the intent of the constitution. In re Stanford's
Estate, 126 Cal. 112, 58 P. 462, 45 L. R. A. 788. -

Validity of Exemption to Resident Nieces and Nephews.

The California statute as amended by the statute of 1897,
exempting nephews and nieces when residents of the state is not
void under the United States constitution. On the contrary, the
effect of the United States constitution is to extend the exemption
there given to citizens of other states, as the effect of the federal
constitution is to measure the exemption by the exemption given
to citizens of California. The court notes the case of In re Maho-
ney, 133 Cal. 180, 65 P. 389, 85 Am. St. Rep. 155, and says that the
question was raised there by aliens and that therefore no con-
stitutional question was involved, and the decision in the Mahoney
case was a dictum which the court refuses to follow in In re
Johnson, 139 Cal. 532, 534, apparently overruling In re Stanford's
Estate, 54 P. 259, which was itself reversed on another point in
126 Cal. 112, 58 P. 462, 45 L. R. A. 788.

The Amendment of 1899.

Cal. St. 1899, c. 85, p. 101, became effective without the governor's
approval, March 14, 1899. It amended the statute of 1897 by omit-
ting from the exempt class a brother or sister of the decedent or
niece or nephew when non-resident of California. Otherwise sec-
tion 1 of Cal. St. 1897, c. 83, p. 77, is repeated in the act of 1899.

Section 2 of the act of 1897 is repeated verbatim by Cal. St. 1899.

Classification by Relationship Valid.

The California statute of 1893 as amended in 1899 was attacked
on the ground that it was in violation of the fourteenth amendment.

1899, c. 85.] CALIFORNIA. 319

It was argued that the fourteenth amendment compels the state
in levying inheritance taxes to conform to blood relationship.
The court holds, however, that the inheritance tax involves the
exercise of the legislative discretion and judgment with which the
fourteenth amendment did not interfere, and that it is not arbitrary
to put in one class for the purpose of inheritance all blood relatives
to a designated degree except brothers and sisters, and to place all
other and more remote relatives including brothers and sisters in a
second class along with strangers to the blood. Campbell v. Cali-
fornia, 200 U. S. 87, 95, 26 S. Ct. 182, 50 L. Ed. 382.

The Amendments of 1903.

Cal. St. 1903, c. 228, p. 268, was approved March 20, 1903. It
amended the act of 1899 as follows : —

It adds to the statute of 1899 an exemption after the provision
as to adopted children "or to any person to whom deceased for not
less than ten years prior to death, stood in the mutually acknowl-
edged relation of a parent"; and adds also to the same exemption
"any Hneal ancestor."

Section 2 is a copy of section 2 of Cal. St. 1899.

Cal. St. 1903, c. 52, p. 55, approved February 27, 1903, added
a new section numbered 203^, providing for the employment of
special attorneys for the collection of the tax.

THE INHERITANCE TAX ACT OF 1905.

Sts. of 1905, c. 314. Approved March 20, 1905.

An Act to establish a tax on gifts, legacies, inheritances, bequests*
DEVISES, SUCCESSIONS AND TRANSFERS, to provide for its collection, and to
direct the disposition of its proceeds; to provide for the enforcement of liens
created by this act and for suits to quiet title against claims of lien arising
hereunder; to repeal an act entitled "An Act to establish a tax on collateral
inheritances, bequests and devises, to provide for the collection and to direct
the disposition of its proceeds," approved March 23, 1893, and all amend-
ments thereto and all acts and parts of acts in conflict with this act.

Property Subject to Inheritance or Transfer Tax. — Lien on Property.

S. 1. 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 this state,
or any interest therein, or income therefrom, which shall be transferred by deed,
grant, sale, or gift, made in contemplation of the death of the grantor, vendor or
bargainor, or intended to take effect in possession or enjoyment after such death,
to any person or persons, or to any body politic or corporate, in trust or otherwise,

320 STATUTES ANNOTATED. [Cal. St.'

or by reason whereof any person or body politic or corporate shall become bene-
ficially entitled, in possession or expectancy, to any property, or to the income
thereof, shall be and is subject to a tax hereinafter provided for, to be paid to the
treasurer of the proper county, as hereinafter directed, for the use of the state;
and such tax shall be and remain a lien upon the property passed or transferred
until paid and the person to whom the property passes or is transferred and all
administrators, executors and trustees of every estate so transferred or passed
shall be liable for any and all such taxes until the same shall have been paid as
hereinafter directed. The tax so imposed shall be upon the market value of such
property at the rates hereinafter prescribed and only upon the excess over the
exemptions hereinafter granted.

Whenever any person or corporation shall exercise a power of appointment
derived from any disposition of property made either before or after the passage
of this act, such appointment when made shall be deemed a transfer taxable under
the provisions of this act in the same manner as though the property to which
such appointment relates belonged absolutely to the donee of such power and
had been bequeathed or devised by such donee by will ; and whenever any person
or corporation possessing such power of appointment so derived shall omit or
fail to exercise the same within the time provided therefor, in whole or n part,
a transfer taxable under the provisions of this act shall be deemed to take place
to the extent of such omissions or failure, in the same manner as though the
persons or corporations thereby becoming entitled to the possession or enjoyment
of the property to which such power related had succeeded thereto by a will of
the donee of the power failing to exercise such power ,^ taking effect at the time of
such omission or failure.

Nature of Tax.

The collateral inheritance tax is not a tax on property as such,
but one upon the right of succession — a tax for the privilege of
succeeding to property. In re Kennedy, 157 Cal. 517, 108
P. 280.

Whether Discriminating Against Non- Residents.

The contention that the California statute of 1905, c. 314, is
unconstitutional as discriminating between the citizens of the
state and those of other states, will not be considered where it does
not appear by the pleadings to which class the appellant belongs.
In re Damon, 10 Cal. App. 542, 102 P. 684.

**A11 Property Which Shall Pass by Will or by the Intestate
Laws."

Homestead. — It was claimed that this language included
property set apart to the widow as a homestead. The court
finds, however, that where the power of setting apart as a
homestead is exercised by the probate court, the devisee and

1905, c. 314.] CALIFORNIA. 321

legatees take no beneficial interest whatever. The probate court
may even set apart as a homestead real property specifically
devised by a will and thus defeat the devise. Where it is so set
apart as a homestead the title of the person to whom it is so set
apart is in no way derived by will, but comes solely from the home-
stead order.

It is clear, therefore, that what the widow takes under this order
of the probate court she does not take by wjU or by the intestate
laws of the state. The language "pass by will or by the intestate
laws of this state" means to pass by virtue and force of the law of
this state governing testate or intestate succession. It was
claimed that the property of the testator passed to the devisees
and that subsequently by an order of the probate court the
homestead was carved out of it.

The court replies that the right to any tax imposed vested
in the state at the moment of death and could not be legally
divested by any department of the state, but that the right so
vested to the tax imposed by the act; and when it is determined
that the act imposed no tax as to property lawfully diverted by
the court in probate with the consequence that it could never
be distributed to the devisee, legatee or heir, it is apparent that
no vested right of the state is impaired. Therefore, the inheritance
tax cannot be assessed on such property. The fact that the wife to
whom the homestead is set apart is also a devisee and legatee is of
no consequence in determining whether the right of the state to
the tax includes property set apart as homestead. In re Kennedy,
157 Cal. 517, 108 P. 280.

Community Property. — The surviving wife's share of com-
munity property is subject to the inheritance tax. The inheri-
tance tax statute was passed presumably in view of the California
decisions that the wife took her share of the community property
upon the death of her husband by succession as his heir. In re
Moffitt's Estate, 153 Cal. 359, 95 P. 653; In re Sim's Estate, 153
Cal. 365, 95 P. 655; People v. Lebus (Cal. 1908), 96 P. 1118.

It was claimed on the question of a tax on the surviving
wife's share of the property, that the property was acquired under
the California constitution of 1849 and that therefore the wife
acquired a vested right in the community property, which was
protected by the federal constitution.

The court finds, however, that the declaration in the constitution
of 1849, that "laws shall be passed more clearly defining the rights

322 STATUTES ANNOTATED. [Cal. St.

of a wife in relation as well to her separate property as to that held
in common with her husband" amounts to no more than a mandate to
the legislature to define and prescribe the rights of the wife in the
property of the community. It was the design of the constitution
of 1849 to preserve so far as might be the rights to the community
property which wives had enjoyed. But even under the Spanish
law the wife had no vested estate in the community property,
but it was a mere expectancy so long as the community existed.
The pourt finds, therefore, that the California inheritance tax
law is not in violation of the federal constitution on the ground
that it takes away a vested interest. In re Mofhtt, 153 Cal. 359, 95
P. 1025, affirming on rehearing 95 P. 653, deciding the question as
to the federal constitution, which was not considered in the original
opinion.

"Market Value."

QucBre, whether the homestead, family allowance, expenses of
administration and debts of decedent should be excluded from
the value of the estate. Becker v. Nye (Cal. 1908), 96 P. 333.

Where the executor misappropriates the funds of the estate
the ensuing loss is not to be deducted in reckoning the value of
the estate for the purpose of the inheritance tax under the California
statute of 1905, c. 314. The court observes that all charges at
the death of the testator should be deducted, but that the misap-
propriation by the executor happened after the death of the testa-
tor and should therefore not be deducted, as subsequent increase
or decrease in the value of the estate is immaterial. In re Hite,
159 Cal. (1911) 392, 113 P. 1072

Property not in Excess of $25,000 in Value. — Classification of Relation-
ship. — Primary Rates of Taxation.

S. 2. When the property or any beneficial interest therein so passed or trans-
ferred exceeds in value the exemption hereinafter specified and shall not exceed
in value twenty-five thousand dollars the tax hereby imposed shall be: —

(1) Where the person or persons entitled to any beneficial interest in such
property shall be the husband, wife, lineal issue, lineal ancestor of the decedent or
any child adopted as such in conformity with the laws of this state, or any child
to whom such decedent for not less than ten years prior to such transfer stood in
the mutually acknowledged relation of a parent, provided, however, such relation-
ship began at or before the child's fifteenth birthday, and was continuous for said
ten years thereafter, or any lineal issue of such adopted or mutually acknowledged
child, at the rate of one per centum of the clear value of such interest in such
property.

1905, c. 314.] CALIFORNIA. 323

(2) Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister or a descendant of a brother or sister of
the decedent, a wife or widow of a son, or the husband of a daughter of the de->
cedent, at the rate of one and one-half per centum of the clear value of such
interest in such property.

(3) Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the father or mother or a descendant of
a brother or sister of the father or mother of the decedent, at the rate of three per
centum of the clear value of such interest in such property.

(4) W^here the person or persons entitled to any beneficial interests in such
property shall be the brother or sister of the grandfather or grandmother or a
descendant of the brother or sister of the grandfather or grandmother of the
decedent, at the rate of four per centum of the clear value of such interest in such
property.

(5) Where the person or persons entitled to any beneficial interest in such
property shall be in any other degree of collateral consanguinity than is herein-
before stated, or shall be a stranger in blood to the decedent, or shall be a body
politic or corporate, at the rate of five per centum of the clear value of such
interest in such property.

Classification of Values in Excess of $25,000. — Rates of Taxation.

S. 3. The foregoing rates in section two are for convenience termed the
primary rates. When the market value of such property or interest exceeds
twenty-five thousand dollars, the rates of tax upon such excess shall be as fol-
lows: —

(1) Upon all in excess of $25,000 and up to $50,000, one and one half times the
primary rates.

(2) Upon all in excess of $50,000 and up to $100,000, two times the primary
rates.

(3) Upon all in excess of $100,000 and up to $500,000, two and one-half times
the primary rates.

(4) Upon all in excess of $500,000, three times the primary rates.

Exemptions.

S. 4. The following exemptions from the tax are hereby allowed: —

(1) All property transferred to societies, corporations and institutions now or
hereafter exempted by law from taxation or to any public corporation or to any
society, corporation, institution or association of persons engaged in or devoted
to any charitable, benevolent, educational, public, or other like work (pecuniary
profit not being its object or purpose), or to any person, society, corporation,
institution or association of persons in trust for or to be devoted to any charitable,
benevolent, educational or public purpose, by reason whereof any such person or
corporation shall become beneficially ent tied, in possession or expectancy, to
any such property or to the income thereof shall be exempt.

(2) Property of the clear value of ten thousand ($10,000.00) dollars transferred
to the widow or to a minor child of the decedent, and of four thousand ($4,000.00)
dollars transferred to each of the other persons described in the first subdivision of
section two shall be exempt.

324 STATUTES ANNOTATED. [Cal. St.

(3) Property of the clear value of two thousand ($2,000.00) dollars transferred
to each of the persons described in the second subdivision of section two shall be
exempt.

(4) Property of the clear value of one thousand five hundred ($1,500.00) dollars
transferred to each of the persons described in the third subdivision of section two
sha 1 be exempt.

(5) Property of the clear value of one thousand ($1,000.00) dollars transferred
to each of the persons described in the fourth subdivision of section two shall
be exempt.

(6) Property of the clear value of five hundred ($500.00) dollars transferred
to each of the persons and corporations described in the fifth subdivision of
section two shall be exempt.

"Exemption is a matter of grace on the part of the legislature
and cannot be claimed beyond the extent to which a law-making
body has seen fit to allow it." In re Timken's Estate, 158 Cal. 51,
109 P. 608.

Construction.

It was claimed that the rule of strict construction should apply
to an inheritance tax exemption, but the court holds that this
rule extends to exemptions as well as impositions and that a strict
construction should be indulged against a rule of exemption both
unequal and unjust. In re Bull's Estate, 153 Cal. 715, 96 P. 366.

Computing Tax and Exemptions.

The court holds that if the estate is over $25,000 the statute
does not mean that the first $25,000 is exempt but that the "primary
rates" were to be computed in all cases and that the tax is not
merely upon the excess over $25,000. In re Bull's Estate, 153 Cal.
715, 96 P. 366, followed in In re Timken's Estate, 158 Cal. 51, 106
P. 608.

Sections 1 to 4 providing for an ascending scale of rates and ex-
emptions necessitate a deduction of the exemption from the first
$25,000 in each distributive share instead of from the distributive
share as a whole. The entire amount of each share whether exempt
or not is considered for the purpose of fixing the rate of taxation.
The exemption is to be deducted from the first $25,000 and the tax
fixed on that first $25,000 less the exemptions. In re Timken's
Estate, 158 Cal. 51, 109 P. 608.

The Rule for Deduction of Exemptions.

Under date of January, 1908, the controller's office issued a
circular, No. 105, dealing with the subject of the method to be

1905, c. 314.] CALIFORNIA. 325

followed in deducting exemptions in figuring inheritance taxes.
At that time the question had not been passed on by the higher
courts, but subsequently the supreme court, in Estate of Bull
(153 Cal. 715), announced the principle.

The following is the more important portion of the circular
referred to: —

"Some confusion has arisen in the computation of inheritance taxes, principally
in connection with the figuring of exemptions when inheritances exceed in amount
$25,000. There should be no difficulty if there is kept in mind the invariable rule
that the deduction of the exemption, whatever it may amount to, is to be made
from the first $25,000 in value of the inheritance. Thus, if the property passing
to an heir or legatee is worth $30,000, and the exemption is $4,000 — the latter sum
should be deducted from the first $25,000, which will leave $21,000 taxable at the
primary rate. Then the tax on the remaining $5,000 is computed at the next
higher rate, and, of course, the sum of the taxes on the $21,000 and on the $5,000
is the total of the taxes to be paid. The mistake into which many persons would
fall in this instance would be that of computing the tax on the whole of the first
$25,000 at the primary rate, and then deducting the $4,000 exemption from the
remaining $5,000, These two methods of computation bring different results.
Assuming that in the above example the primary rate was 1 per cent, as it would
be if the person receiving the inheritance were a son or daughter, the tax would
be $285 by the first method of computation and $265 by the second.

To take another example we will suppose that upon his death A leaves to B,
his minor son, a bequest amounting to $60,000. In this instance the primary rate
is 1 per cent and the exemption is $10,000. Therefore, in computing the tax the
calculation will be made as follows: —

Total amount of bequest $60,000

Exemption is taken from first $25,000

Amount of exemption 10,000

Excess taxable at primary rate $15,000

Amounts taxable rates and sum of taxes
as follows —

At 1 per cent $15,000 Tax $150

At 11^ per cent 25,000 " 375

At 2 per cent 10,000 " 200

Total amount taxed $50,00 )

Exemption as above 10,000

$60,000 $725

If, in this instance, the computation had been made by figuring the first $25,000
all at 1 per cent, and the second $25,000 at IH per cent, and exempting the last
$10,000, the total of the tax would have been only $625, or $100 less than the
correct amount.

The equitable reason for the rule adopted is that it operates uniformly by mak-
ing the exemptions of equal value to all persons within any one of the several

326 STATUTES ANNOTATED. [Cal. St.

classifications enumerated in the statute. It can be easily shown that to deduct
exemptions from the total value of inheritances, instead of from the first $25,000,
would be to favor the persons receiving large inheritances by making the exemp-
tions of greater value to them than to heirs receiving less amounts. Assume, for
example, that there are three estates, valued at $30,000, $60,000 and $120,000,
respectively. Assume, also, that in each instance the entire estate, less tax, goes
to the widow. If, then, the $10,000 exemption be taken from the first $25,000,
the value of such exemption, at 1 per cent tax rate, will be $100 in each instance.
On the other hand, if the last $10,000 should be exempted in each case the value
of the exemptions would be: In the first estate, with $5,000 exempted at 1 per
cent and $5,000 at 13^, the value of exemption would be $125; in the second
estate, with $10,000 exempted at 2 per cent, value of exemption would be $200;
in third estate, with $10,000 exempted at 23^2 per cent, exemption would be worth
$250."

Sections 5 to 29 cover the assessment and collection of the tax.
Sections which have been construed are as follows : —

Administrators to Deduct Amount of Tax.

S. 9. Any administrator, executor or trustee having in charge or trust any
legacy or property for distribution, subject to the said tax, shall deduct the tax
therefrom, or if the legacy or property be not money he shall collect the tax
thereon upon the market value thereof, from the legatee or person entitled to
such property and he shall not deliver, or be compelled to deliver any specific
legacy or property subject to tax to any person until he shall have collected the
tax thereon; and whenever any such legacy shall be charged upon or payable
out of real estate, the executor, administrator or trustee shall collect said tax
from the distributee thereof, and the same shall remain a charge on such real
estate until paid; if however, such legacy be given in money to any person for
a limited period, the executor, administrator or trustee shall retain the tax upon
the whole amount; but if it be not in money he shall make application to the
superior court to make an apportionment, if the case require it, of the sum to be
paid into his hands by such legatees, and for such further order relative thereto
as the case may require.

Where a decree of distribution orders a deduction only of
"the amount of the inheritance tax as required by law" and does
not fix the amount of such tax nor expressly adjudicate that any
tax should be deducted, but leaves the matter dependent upon
whether or not the law requires any inheritance tax, the distributees
are entitled to the entire residue of the estate under that decree
where no inheritance tax could be collected. Wirringer v. Morgan,
12 Cal. App. 26, 106 P. 425.

Tax to be Paid to County Treasurer. — Receipt Must be Countersigned
by State Controller.

S. 11. Every sum of money retained by an executor, administrator or trustee,
or paid into his hands, for any tax on property, shall be paid by him, within thirty

1905, c. 314.] CALIFORNIA. 327

days thereafter, to the treasurer of the county in which the probate proceedings
are pending, and the said treasurer shall give, and every executor, administrator,
or trustee shall take, duplicate receipts for such payment, one of which receipts
said executor, administrator or trustee shall immediately send to the controller of
the state, whose duty it shall be to charge the treasurer so receiving the tax
with the amount thereof, and said controller shall seal said receipt with the seal
of his office and countersign the same and return it to the executor, administrator
or trustee, whereupon it shall be a proper voucher in the settlement of his accounts;
and an executor, administrator or trustee shall not be entitled to credits in his
accounts, nor be discharged from liability for such tax, nor shall said estate be
distributed, unless he shall produce a receipt so sealed and countersigned by the
controller, or a copy thereof, certified by him, and file the same with the court.

The provision that the controller shall countersign the receipts
for payment of taxes gives him no authority to revise the amount
of the tax as found by the court. In countersigning a receipt he
decides nothing, nor should the receipt be so framed as to bind the
state or conclude its right to have the question reviewed on appeal.
The receipt should be only for so much money on account of the
tax. Becker v. Nye (Cal. 1908), 96 P. 333.

The provision of section 8 of the act of 1893 that the estate
shall not be distributed until the administrator produces a receipt
showing that a tax has been paid is also found in section 11 of the
repealing act of 1905. This provision is therefore simply continued
in force by the act of 1905 and therefore the estate of one who died
before the repealing act was passed cannot be distributed until
the tax is paid. The repealing act could not renounce the vested
right of the state to the inheritance tax. In re Lander (Cal. 1907),
93 P. 202.

When Value of Inheritance or Bequest is Uncertain. — Ap-
praisement. — Expense of Same.

S. 14. When the value of any inheritance, devise, bequest or other interest
subject to the payment of said tax is uncertain, the superior court in which the
probate proceedings are pending, on the application of any interested party or
upon its own motion, shall appoint some competent person as appraiser, as often
as and whenever occasion may require, whose duty it shall be forthwith to give
such notice, by mail, to all persons known to have or claim an interest in such
property and to such persons as the court may by order direct, of the time and
place at which he will appraise such property and at such time and place to
appraise the same and make a report thereof, in writing, to said court, together
with such other facts in relation thereto as said court may by order require to be
filed with the clerk of said court; and from this report the said court shall, by
order, forthwith assess and fix the market value of all inheritances, devises,
bequests or other interests and the tax to which the same is liable and shall im-

328 STATUTES ANNOTATED. [Cal. St

mediately cause notxe thereof to be given, by mail, to all parties known to be
interested therein ; and the value of every future or contingent or limited estate,
income, or interest shall for the purposes of this act, be determined by the rule,
method and standards of mortality and of value that arv. set forth in the actuaries'
combined experience tables of mortality for ascertaining the value of policies
of life insurance and annuities and for the determination of the liabilities of life
insurance companies, save that the rate of interest to be assessed in computing
the present value of all future interests and contingencies shall be five per centum
per annum; and the insurance commissioner shall, on the application ot said
court, determine the value of such future or contingent or limited estate, income
or interest, upon the facts contained in such report and certify the same to the
court, and his certificate shall be conclusive evidence that the method of com-
putation adopted therein is correct. The said appraiser shall be paid by the
county treasurer out of any funds that he may have in his hands on account of
said tax, on presentation of a sworn itemized account and on the certificate of the
court, at the rate of five dollars per day for every day actually and necessarily
employed in said appraisement, together with his actual and necessary traveling
expenses.

The court refers to the fact that the practice as to appraisal
throughout the state has not been uniform, some judges taking the
inventory and appraisement as the basis, while others cause an
appraisement to be made under the inheritance tax law, and still
others resort to both methods. The act of 1905, section 5, provides
for the ascertainment of the value of life estates and future estates
by the appraiser to be appointed by the court, and the court of ap-
peals expresses the opinion that it would be better to appoint
appraisers in all cases. Becker v. Nye (Cal. 1908), 96 P. 333.
(See the recent Statute of 1911, c. 394.) v

Superior Court to have Jurisdiction.

S. 16. The superior court in the county in which is situate the real property of a
decedent who was not a resident of the state, or if there be no real property, then
in the county in which any of the personal property of such non-resident is
situate, or in the county of which the decedent was a resident at the time of his
death, shall have jurisdiction to hear and determine all questions in relation to
the tax arising under the provisions of this act, and the court first acquiring
jurisdiction hereunder shall retain the same, to the exclusion of every other.

This section gives the superior court jurisdiction as to appraisal
and the judgment of the court on this matter is conclusive, subject
only to be reviewed on appeal. The state as an interested party
may appeal from the decision. Becker v. Nye (Cal. 1908), 96 P.
333.

^ivb

5, c. 314.] CALIFORNIA. 329

OPINION OF THE ATTORNEY GENERAL IN REGARD TO PRO-
CEDURE ON CITATION.

There is reprinted herewith a letter written by Attorney General U. S. Webb
under date of March 30, 1908, in response to a request by Mr. Herbert C. Jones,
attorney for the county treasurer of Santa Clara County, for an opinion regarding
procedure under certain conditions. Mr. Jones* questions were the following: — ■

"* * * Suppose that all of a decedent's property has passed by deeds made
in contemplation of death, in which case there are no probate proceedings; and
suppose that the grantees wish to pay the inheritance tax. What is the proper
procedure to determine the market value of the taxable property? Is there any
provision for the appointment of an appraiser in such a case? If not, is the
market value to be fixed by the county treasurer, and are the grantees who pay
on the basis so fixed by him and file their receipt as provided in section 24 pro-
tected from any subsequent claim by the state that the market value was not
correct?"

To these questions the attorney general made reply as follows : —

"Section 1 of the act of 1905 (Stats. 1905, p. 341) provides that the tax shall be
assessed against all property passing by deed, grant, sale, or gift, made in con-
templation of the death of the grantor, etc. ; likewise that the tax shall be assessed
against all property passing by "deed, grant, sale, or gift * * * intended to take
effect in possession or enjoyment after the death of the grantor," etc.

Your question recognizes these facts, and is directed as to procedure.

Section 17 of the act provides that when it shall appear to the superior court
or judge thereof that a tax accrued under the act has not been paid, such judge or
court shall cause citation to issue for the parties known to have interest in the
property so liable, and further provides the manner of service and the procedure
after service.

Section 18 provides that when the county treasurer has reason to believe that
any accrued tax is unpaid, he shall notify the district attorney, and that the
district attorney so notified "shall prosecute the proceedings in the superior court,
as provided in section 17, for the enforcement and collection of this tax."

It would seem, under these sections, not only proper, but also the duty of the
district attorney (or the attorney acting instead of the district attorney, as pro-
vided by section 23 of the act) to present to the court a petition showing the ex-
istence of the facts which bring the matter within the provisions of said sections 17
and 18. That petition, it occurs to me, should show the fact of transfer, with
date, etc., the property conveyed, the parties to whom conveyed, and in whom
title rests, that such conveyance was made in contemplation of death, or, that
such conveyance was "intended to take effect in possession or enjoyment after
such death," the name of the person or persons in possession or enjoyment, the
fact that the tax has not been paid, and the probable value of the property con-
veyed. While these are the more essential facts, all other facts should be alleged
which would tend to place the court in possession of the exact situation.

After service of the citation and the appearance of the party or parties liable
for the tax, the court will have jurisdiction of the person or persons and of the
subject-matter, as fully as though it was sought to enforce the payment of the
tax from the estate of a deceased person.

330 STATUTES ANNOTATED. [Cal. St.

Assuming that the grantor in your case was a resident of the state, section 16,
so far as applicable to your case, reads : —

"The superior court * * * in the county of which the decedent was a resident
at the time of his death, shall have jurisdiction to hear and determine all questions
in relation to the tax arising under the provisions of this act, and the court first
acquiring jurisdiction hereunder shall retain the same, to the exclusion of every
other."

I am not overlooking the fact that in the language just quoted the word "de-
cedent" is used, but in section 28 of said act it is provided that: —

"The word 'decedent' as used in this act shall include the testator, intestate,
grantor, bargainor, vendor or donor."

Section 14 provides for the appraisement : —

"When the value of any inheritance, devise, bequest or other interest subject
to the payment of said tax is uncertain, the superior court in which the probate pro-
ceedings are pending * * * shall appoint some competent person as appraiser, "etc.

It is true that in the language quoted it is said "the superior court in which the
probate proceedings are pending " but this language must be read in conjunction
with the language heretofore quoted in section 16.

The primary purpose of section 14 is to fix the manner of appraisements, etc.,
and not the designation of jurisdiction, while section 16 is the section of the act
devoted wholly to the question of jurisdiction. That section, as heretofore quoted,
gives to the court jurisdiction "to hear and determine all questions in relation
to the tax arising under the provisions of this act."

Where the value of the "interest subject to the payment of said tax is uncertain,"
a necessity for appraisement exists and appraisement, in my view, is a question
in relation to the tax*, which the court has ample jurisdiction to determine.

In the foregoing I have assumed that the payment of the tax would be resisted.
When the petition has been filed and citation issued, where the person liable for
the tax is willing to pay the same, upon the amount being ascertained, upon the
filing of the petition the person could immediately appear and the appraisement
be speedily made. I entertain no doubt that the payment of the tax ascertained
to be due through the proceeding above indicated, in the absence of appeal,
would acquit the person so paying of liability under the act and protect him from
any claim subsequently made by the state.

This question has not yet reached the appellate courts and I am, therefore,
unable to give you decision supporting the views expressed. I trust, however,
that you will take the matter up along these lines, and if this office can be of any
service to you hereafter, such service will be cheerfully rendered.

Repeal of **Collateral Inheritance Tax Law.*'

S. 27. An act entitled 'An Act to establish a tax on collateral inheritances,
bequests and devises, to provide for its collection, and to direct the disposition of
the proceeds," approved March 23, 1893, and all amendments thereto, and all
acts and parts of acts in conflict with this act are hereby expressly repealed.

Effect on Taxes Already Due.

The right of the state to the inheritance tax under the law of
1893 is immediately upon the death of the decedent a vested right

905, c. 314.] CALIFORNIA. . 331

which cannot be surrendered by a legislative act and no amendment
or extension can take away this right. So a tax due before the
statute of 1905 was passed can be collected after it is passed. Trippet
V. State, 149 Cal. 521, 86 P. 1084, 8 L. R. A. (N. S.) 1210. In re
Lander (Cal. 1907), 93 P. 202.

Cal. St. 1905, c. 314, substantially enacted the provisions of
the former law respecting the payment and collection of succession
taxes and was done with the knowledge of the existence of certain
uncollected taxes and with the intent to continue in force a mode and
means for their collection. And the court has the authority under
this statute to order the executor to deduct from certain legacies
the amount of the tax, especially in view of St. 1905, c. 85, to
the effect that the court must be satisfied that any inheritance
tax has been paid before any decree or distribution of an estate is
made. In re Bowen's Estate (Cal. 1908), 94 P. 1055.

The court finds that the amendment of 1905 to the California
statute did not render the federal question as to the validity of the
prior statute a moot question in relation to the estate of one who
had died before the statute of 1905 was passed. Campbell v.
California, 200 U. S. 87, 26 S. Ct. 182, 50 L. Ed. 382.

Where a new law was passed in California in 1905, after a case was
taken to the supreme court at Washington repealing the prior
statutes without any clause saving the right of the state in respect
to charges already approved, the court was asked to reverse the
judgment of the California court on the ground that the state no
longer had any authority whatever to levy an inheritance tax, but
the court holds that it is its duty to decide the federal question
and to leave the local question to the supreme court of California.
Campbell v. California, 200 U. S. 87, 26 S. Ct. 182, 50 L. Ed. 382.

RULES OF PRACTICE OF THE CONTROLLER'S OFFICE UNDER
THE ACT OF 1905.

1. Form of receipt. — As it is necessary that the controller's office should keep
an intelligible record of payments, it is requested that treasurers' receipts be
made out to show date of death, total value of estate, relationship and share of
each distributee, exemptions allowed, net tax, interest due if any and total tax.
Blank forms of receipts are furnished by this office.

2. Incorrect computations. — When receipts presented for countersignature
show upon their face a probable error in computation of the tax, they will be
returned for fuller information or for correction. In every instance thus far the
courts have been found desirous of correcting errors where they have occurred.

332 STATUTES ANNOTATED. [Cal. St.

3. Mode of computing tax. — In computing the tax, and especially in the matter
of deducting exemptions from the first $25,000 in value of the estate, the rule laid
down by the supreme court inEstate of Bull (153 Cal. 715) should be followed. That
rule is more fully explained in the controller's circular (reprinted at p. 000, ante)

4. Court order necessary. — In cases where there have been no probate proceed-
ings, but an inheritance or transfer tax is due as, for example, when the whole
estate has been deeded in contemplation of death, an order fixing the amount
payable must be obtained from the superior court.

5. Increase or decrease of estate. — Inasmuch as the tax vests at date of death,
the appraised value should represent as nearly as possible what the estate was
worth at time of decease. Neither subsequent increase in value of the estate
nor its diminution should be considered. Rents, interest, and other increments
should not be included and no deduction should be made for expense of mainte-
nance or for improvements subsequent to the time the tax vested.

6. Payment on partial distribution. — When an order of partial distribution
has been made by probate court, payment may be made of that proportionate part
of the tax, the usual order fixing the tax due being first obtained.

7. Insufficient or excessive paymen . — The issue of a treasurer's receipt
countersigned by the controller does not release an estate from further payment
if subsequently additional property is discovered which was not covered by the
order fixing the tax. On the other hand, where the amount of tax paid was in
excess of what was actually due under the law, the excess may be recovered.

8. Method of recovery of excess. — In order to recover any excess of tax which
may have been paid, an order of court should be secured reciting the facts in
sufficient detail to make the record intelligible, after which the controller will
authorize the county treasurer to repay the amount of the excess out of any
inheritance tax funds in his (the treasurer's) hands, and to credit himself with
such amount in his next periodical settlement with the state.

9. Treasurers' commissions and appraisers' fees. — In computing the com-
missions to which county treasurers are entitled under section 22 of the Inheritance
Tax Act, the words "each year" are construed to mean each fiscal year. This rule
is based on an opinion rendered by Attorney General Ford under date of May 24,
1899. Treasurers, will credit themselves with the proper amount of commission
in each semi-annual settlement with state. Appraisers' fees may be paid any time
on order of court ou : of any inheritance tax money in treasurer's hands, but
in settlement with state a copy of each such order must be furnished the controller
so that he may credit the treasurer with such payments The net result of all such
transactions will, of course, appear in county auditor's report.

10. When an inheritance or transfer tax has been paid in a case where there
is no probate record, but a citation has been issued and order of court made,
especially where realty has been transferred, the controller will, on presentation
of the receipt of the county treasurer, with a description of the property, certify
to such payment of tax, which certificate may be recorded, if so desired.

Other Acts.

Cal. St. 1905, c. 85, p.83, approved March 7, 1905, is as follows: —

S. 1. Section 1669 o" the Code of Civil Procedure of the state of California is
hereby amended to read as follows: —

1911, c. 395.] CALIFORNIA. 333

1669. Before any decree of distribution of an estate is made, the court must
be satisfied, by the oath of the executor or administrator, or otherwise, that all
state, county and municipal taxes, legally levied upon property of the estate,
and any inheritance tax which is due and payable have been fully paid.

Cal. St. 1905, c. 325, p. 374, approved March 20, 1905, provides
machinery for the collection of the inheritance tax and also provides
that actions may be brought against the estate for the purpose of
quieting title to property against the lien or claim of lien of taxes
under the inheritance statutes.

Cal. St. 1909, c. 337, p. 557, approved March 20, 1909, provides
for the collection of taxes by an inheritance tax deputy.

THE PRESENT ACT.

Cal. St. 1911, c. 395. Approved April 7, 1911.

An Act to establish a tax on gifts, legacies, inheritances, be-
quests, DEVISES, successions AND TRANSFERS, to provide for
its collection, and to direct the disposition of its proceeds; to pro-
vide for the enforcement of liens created by this act and for suits
to quiet title against claims of lien arising hereunder; to repeal an
act entitled "An Act to establish a tax on gifts, legacies, inheritances, be-
quests, devises, successions and transfers, to provide for its collection and to
direct the disposition of its proceeds; to provide for the enforcement of liens
created by this act and for suits to quiet title against claims of lien arising
hereunder; to repeal an act entitled 'An Act to establish a tax on collateral
inheritances, bequests and devises, to provide for the collection and to direct
the disposition of its proceeds,' approved March 23, 1893, and all amendments
thereto, and to repeal all acts and parts of acts in conflict with this act," ap-
proved March 20, 1905, and all amendments thereto and all acts and parts
of acts in conflict with this act.

Property Subject to Tax. — Lien.

S. 1. A tax shall be and is hereby imposed upon the transfer of any property,
real, personal or mixed, or of any interest therein or income therefrom, in trust or
otherwise, to persons, institutions or corporations, not hereinafter exempted,
to be paid to the treasurer of the proper county, as hereinafter directed, for the use
of the state, in the following cases: —

(1) When the transfer is by will or by the intestate or homestead laws of this
state, from any person dying seized or possessed of the property while a resident
of the state, or by any probate homestead set apart from said property.

(2) When the transfer is by will or intestate laws of property within this state
and the decedent was a non-resident of the state at the time of his death.

(3) When the transfer is of property made by a resident, or by a non-resident
when such non-resident's property is within this state, by deed, grant, bargain,
sale, assignment or gift, made without valuable and adequate consideration in
contemplation of the death of the grantor, vendor, assignor or donor, or intended
to take effect in possession or enjoyment at or after such death. When any such

334 STATUTES ANNOTATED. [Cal. St.

person, institution or corporation becomes beneficially entitled in possession or
expectancy to any property or the income therefrom, by any such transfer
whether made before or after the passage of this act.

(4) Such taxes shall be and remain a Hen upon the property passed or trans-
ferred until paid, and the person to whom the property passes or is transferred
and all administrators, executors and trustees of every estate so transferred or
passed, shall be liable for any and all such taxes until the same shall have been
paid as hereinafter directed; provided, that unless sued for within five years
after they are due and legally demandable, such taxes shall cease to be a lien as
against any bona fide purchaser of real property; and provided that no such lien
shall cease within five years from the date of the passage of this act. The tax
so imposed shall be upon the market value of such property at the rates hereinafter
prescribed and only upon the excess over the exemptions hereinafter granted.

Whenever any person or corporation shall exercise a power of appointment
derived from any disposition of property made either before or after the passage
of this act, such appointment, when made, shall be deemed a transfer taxable
under the provisions of this act, in the same manner as though the property to
which such appointment relates belonged absolutely to the donee of such power,
and had been bequeathed or devised by such uonee by will; and whenever any
person or corporation possessing such power of appointment so derived shall
omit or fail to exercise the same within the time provided therefor, in whole
or in part, a transfer taxable under the provisions of this act shall be deemed to
take place to the extent of such omission or failure, in the same manner as though
the persons or corporations thereby becoming entitled to the possession or enjoy-
ment of the property to which such power related had succeeded thereto by a
will of the donee of the power failing to exercise such power, taking effect at the
time of such omission or failure.

[See notes to the Acts of 1893 and 1905, ante, pp. 313, 320.]

Primary Rates.

S. 2. When the property or any beneficial interest therein so passed or trans-
ferred exceeds in value the exemption hereinafter specified and shall not exceed in
value twenty-five thousand dollars, the tax hereby imposed shall be: —

(1) Where the person or persons entitled to any beneficial interest in such
property shall be the husband, wife, lineal issue, lineal ancestor of the decedent or
any child adopted as such in conformity with the laws of this state, or any child
to whom such decedent for not less than ten years prior to such transfer stood in
the mutually acknowledged relation of a parent, provided, however, such relation-
ship began at or before the child's fifteenth birthday, and was continuous for
said ten years thereafter, or any lineal issue of such adopted or mutually acknowl-
edged child, at the rate of one per centum of the clear value of such interest in
such property.

(2) Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister or a descendant of a brother or sister of the
decedent, a wife or widow of a son, or the husband of a daughter of the decedent,
at the rate of two per centum of the clear value of such interest in such property.

(3) Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the father or mother or a descendant

1911, c. 395.] CALIFORNIA. 335

of a brother or sister of the father or mother of the decedent, at the rate of three
per centum of the clear value of such interest in such property.

(4) Where the person or persons entitled to any beneficial interests in such prop-
erty shall be the brother or sister of the grandfather or grandmother or a descendant
of the brother or sister of the grandfather or grandmother of the decedent, at
the rate of four per centum of the clear value of such interest in such property.

[See notes to the Act of 1905, ante, p. 324.]

Progressive Rates.

(1) Upon all in excess of $25,000 and up to $50,000, two times the primary rate&

(2) Upon all in excess of $50,000 and up to $100,000, three times the primary
rates.

(3) Upon all in excess of $100,000 and up to $500,000, four times the primary
rates.

(4) Upon all in excess of $500,000, five times the primary rates.
[See notes to the Act of 1905, ante, p. 324.]

Exemptions.

S. 4. The following exemptions from the tax are hereby allowed : —

(1) All property transferred to societies, corporations and institutions now or
hereafter exempted by law from taxation, or to any public corporation, or to any
society, corporation, institution or association of persons engaged in or devoted
to any charitable, benevolent, educational, public or other like work (pecuniary
profit not being its object or purpose), or to any person, society, corporation,
institution or association of persons in trust for or to be devoted to any charitable,
benevolent, educational or public purpose, by reason whereof any such person or
corporation shall become beneficially entitled, in possession or expectancy, to any
such property or to the income thereof shall be exempt.

(2) Property of the clear value of twenty-four thousand ($24,000.00) dollars
transferred to the widow or to a minor child of the decedent, and of ten thousand
($10,000.00) dollars transferred to each of the other persons described in the first
sub-division of section two shall be exempt.

(3) Property of the clear value of two thousand ($2,000.00) dollars transferred
to each of the persons described in the second sub-division of section two shall
be exempt.

(4) Property of the clear value of one thousand five- hundred ($1,500.00)
dollars transferred to each of the persons described in the third sub-division of
section two shall be exempt.

(5) Property of the clear value of one thousand ($1,000.00) dollars transferred
to each of the persons described in the fourth sub-division of section two shall
be exempt.

336 STATUTES ANNOTATED. [Cal. St.

(6) Property of the clear value of five hundred ($500.00) dollars transferred
to each of the persons and corporations described in the fifth sub-division of
bcction two shall be exempt.

[See notes to the Act of 1905, ante, p. 324.]

Life Estates. — Estates Determinable on Future Events.

S. 5. When any grant, gift, legacy, devise or succession upon which a tax
is imposed by section one of this act shall be an estate, income, or interest for a
term of years or for life, or determinable upon any future or contingent event, or
shall be a remainder, reversion or other expectancy, real or personal, the entire
property or fund by which such estate, income or interest is supported, or of
which it is a part, shall be appraised immediately after the death of the decedent
and the market value thereof determined in the manner provided in section
fifteen of this act and the tax prescribed by this act shall be immediately due and
payable to the treasurer of the proper county and, together with the interest
thereon, shall be and remain a lien on said property until the same is paid; pro-
vided, that the person or persons, or body politic or corporate, beneficially
interested in the property chargeable with said tax, may elect not to pay the same
until they shall come into the actual possession or enjoyment of such property,
and in that case such person or persons or body politic or corporate, shall execute
a bond to the people of the state of California, in a penalty of twice the amount
of the tax arising upon personal estate, with such sureties as the said superior
court may approve, conditioned for the payment of said tax and interest
thereon, at such time or period as they or their representatives may come into
the actual possession or enjoyment of such property, which bond shall be
filed in the office of the county clerk of the proper county and a certified
copy thereof shall be immediately transmitted to the state controller;
provided further, that such person shall make a full and verified return of such
property to said court, and file the same in the office of the county clerk within
one year from the death of the decedent, and within that period enter into such
security and renew the same every five years.

Bequests to Executors or Trustees.

S. 6. Whenever a decedent appoints or names one or more executors or
trustees, and makes a bequest or devise of property to them in lieu of commissions
or allowances, which otherwise would be liable to said tax, or appoints them his
residuary legatees and said bequest, devises, or residuary legacies exceed what
would be a reasonable compensation for their services, such excess over and above
the exemptions herein provided for shall be liable to said tax; and the superior
court in which the probate proceedings are pending shall fix the compensation.

Taxes Due and Payable at Death. — Interest. — Discount.

S. 7. All taxes imposed by this act, unless otherwise herein provided for, shall
be due and payable at the death of the decedent and if the same are paid within
eighteen months, no interest shall be charged and collected thereon, but if not
so paid, interest at the rate of ten per centum per annum shall be charged and
collected from the time said tax accrued; provided, that if said tax is paid within
six months from the accruing thereof a discount of five per centum shall be allowed
and deducted from said tax. And in all cases where the executors, administrators

1911, c. 395.] CALIFORNIA. 337

or trustees do not pay such tax within eighteen months from the death of the
decedent, they shall be required to give a bond in the form and to the effect
prescribed in section five of this act for the payment of said tax, together with
interest.

Penalty. — Interest.

S. 8. The penalty of ten per cent per annum imposed by section seven hereof,
for the non-payment of said tax, shall not be charged in cases where, in the judg-
ment of the court, by reason of claims made upon the estate, necessary litigation
or other unavoidable cause of delay, the estate of any decedent, or a part thereof
can not be settled at the end of eighteen months from the death of the decedent;
but in such cases seven per cent per annum shall be charged upon the said tax
from the expiration of said eighteen months until the cause of such delay is re-
moved, after which ten per cent interest per annum shall again be charged until
the tax is paid ; but litigation to defeat the payment of the tax shall not be con-
sidered necessary' litigation.

Administrators to Deduct Amount of Tax.

S. 9. Any administrator, executor or trustee having in charge or trust any
legacy or property for distribution, subject to the said tax, shall deduct the tax
therefrom, or if the legacy or property be not money he shall collect the tax
thereon, upon the market value thereof, from the legatee or person entitled to such
property, and he shall not deliver, or be compelled to deliver, any specific legacy or
property subject to tax to any person until he shall have collected the tax thereon;
and whenever any such legacy shall be charged upon or payable out of real estate,
the executor, administrator or trustee shall collect said tax from the distributee
thereof, and the same shall remain a charge on such real estate until paid; if,
however, such legacy be given in money to any person for a limited period, the
executor, administrator or trustee shall retain the tax upon the whole amount;
but if it be not in money he shall make application to the superior court to make
an apportionment, if the case require it, of the sum to be paid into his hands by
such legatees, and for such further order relative thereto as the case may require.

[See notes to the Act of 1905, ante, p. 326.]

Power of Sale.

S. 10. All executors, administrators and trustees shall have full power to sell
so much of the property of the decedent as will enable them to pay said tax, in
the same manner as they may be enabled by law to do for the payment of debts
of the estate, and the amount of said tax shall be paid as hereinafter directed.

Payment. — Receipts.

S. 11. Every sum of money retained by an executor, administrator or trustee,
or paid into his hands, for any tax on property, shall be paid by him, within thirty
days thereafter, to the treasurer of the county in which the probate proceedings
are pending. Upon the payment to any county treasurer of any tax due under
this act, such treasurer shall issue a receipt therefor in triplicate, one copy of
which he shall deliver to the person paying said tax, and the original and one copy
thereof he shall immediately send to the controller of state, whose duty it shall be
to charge the treasurer so receiving the tax with the amount thereof, and said

338 STATUTES ANNOTATED. [Cal. St.

controller shall retain one of said receipts and the other he shall countersign and
seal with the seal of his office, and immediately transmit to the clerk of the court
fixing such tax. And an executor, administrator or trustee shall not be entitled
to credits in his accounts, nor be discharged from liability for such tax, nor shall
said estate be distributed, unless a receipt so sealed and countersigned by the
controller, or a copy thereof, certified by him, shall have been filed with the court.

Any person shall, upon payment to the county treasurer of the sum of fifty
cents, be entitled to a duplicate, or copy, of any receipt that may have been given
by said treasurer for the payment of any tax under this act.

[See notes to the Act of 1905, ante, p. 327.]

Refund to Pay Debts.

S. 12. Whenever any debts shall be proven against the estate of a decedent
after the payment of legacies or distribution of property from which the said tax
has been deducted or upon which it has been paid, and a refund is made by the
legatee, devisee, heir or next of kin, a proportion of the tax so deducted or paid
shall be repaid to him by the executor, administrator or trustee, if the said tax
has not been paid to the county treasurer or to the state treasurer, or by said
county treasurer, or said state treasurer (on warrant of the state controller) if
it has been so paid.

Duty of Administrator on Transfer of Stock.

S. 13. If a foreign executor, administrator or trustee shall assign or transfer
any stock or obligation in this state standing in the name of a decedent, or in
trust for a decedent, liable to any such tax, the tax shall be paid to the treasurer
of the proper county on the transfer thereof. No safe deposit company, trust
company, corporation, bank or other institution, person or persons having in
possession or under control securities, deposits or other assets belonging to or
standing in the name of a decedent who was a resident or non-resident or belonging
to, or standing in the joint names of such a decedent and one or more persons,
including the shares of the capital stock of, or other interests in, the safe deposit
company, trust company, corporation, bank or other institution making the
delivery or transfer herein provided, shall deliver or transfer the same to
the executors, administrators or legal representatives of said decedent, or to the
survivor or survivors when held in the joint names of a decedent and one or more
persons, or upon their order or request, unless notice of the time and place of
such intended delivery or transfer be served upon the state controller and county
treasurer at least ten days prior to said delivery or transfer; nor shall any such safe
deposit company, trust company, corporation, bank or other institution, person
or persons, deliver or transfer any securities, deposits or other assets belonging
to or standing in the name of a decedent, or belonging to, or standing in the joint
names of a decedent and one or more persons, including the shares of the capital
stock of, or other interests in, the safe deposit company, trust company, corpora-
tion, bank or other institution making the delivery or transfer, without retaining
a sufficient portion or amount thereof to pay any tax and interest which may
thereafter be assessed on account of the delivery or transfer of such securities,
deposits or other assets, including the shares of the capital stock of, or other
interests in, the safe deposit company, trust company, corporation, bank or other
institution making the delivery or transfer, under the provisions of this act, unless

1911, c. 395.] CALIFORNIA. 3S9

the state controller, or person by him in writing authorized so to do, consents
thereto in writing. And it shall be lawful for the state controller or the county
treasurer, personally or by representatives, to examine said securities, deposits
or assets at the time of such delivery or transfer. Failure to serve such notice
or failure to allow such examination, or failure to retain a sufficient portion or
amount to pay such tax and interest as herein provided, or violation of the pro-
visions of this section, shall render said safe deposit company, trust company,
corporation, bank or other institution, person or persons liable to the payment
of the amount of the tax and interest due or thereafter to become due upon said
securities, deposits or other assets, including the shares of the capital stock of,
or other interests in, the safe deposit company, trust company, corporation, bank
or other institution making the delivery or transfer, and in addition thereto, a
penalty of not less than one thousand nor more than twenty thousand dollars;
and the payment of such tax and interest thereon, or of the penalty above pre-
scribed, or both, may be enforced in an action brought by the state controller or
county treasurer in any court of competent jurisdiction.

Appraisers.

S. 14. The state controller shall appoint, and may at his pleasure remove, one
or more persons in each county of the state to act as inheritance tax appraisers
therein. Every such inheritance tax appraiser (in addition to any fees paid him
as appraiser under section 1444 of the Code of Civil Procedure) shall be paid by
the county treasurer, out of any funds that he may have in his hands on account
of said tax, on presentation of a sworn itemi ed account and on the certificate of
the superior court, at the rate of five dollars per day for every day actually and
necessarily employed in said inheritance tax appraisement, together with his
actual and necessary traveling and other incidental expenses, and the fees paid
such witnesses as he shall subpoena before him, which fees shall be the same as
those now paid to witnesses subpoenaed to attend in courts of record. Any such
appraiser who shall take any fee or reward, other than such as may be allowed
him by law, from any executor, administrator, trustee, legatee, next of kin or
heir of any decedent, or from any other person liable to pay said tax, or any por-
tion thereof, shall be guilty of a misdemeanor, and upon conviction thereof shall
be fined not less than two hundred and fifty dollars nor more than five hundred
dollars, or be imprisoned in the county jail ninety days, or both, and in addition
thereto the court shall dismiss him from such service. (C/. Cal. St., 1911, c. 394,
post p. 346.)

[See notes to the Act of 1905, ante, p. 328.]

Appraisal.

S. 15. (1) The superior court having jurisdiction to determine any such tax,
either upon its own motion or upon the application of any interested person,
including the state controller or county treasurer, shall by order direct the person,
or one of the persons, appointed pursuant to section 14 of this act, to fix the clear
market value of property of persons whose estates shall be subject to the payment
of any tax under this act. Every such appraiser shall forthwith give notice by
mail to all persons known to have aclaim or interest in the propertyto be appraised,
including the state controller and the treasurer of the county in which such tax
is to be paid, and to such person or persons as the superior court may by order

340 STATUTES ANNOTATED. [Cal. S^

direct, of the time and place when he will hear all persons interested in the aj
praisement of such estate. He shall thereupon appraise the said property at its'
fair market value as herein prescribed; and for the purpose of making said ap-
praisement the said appraiser is hereby authorized to issue subpoenas and compel
the attendance of witnesses before him, to administer oaths, and to take the
evidence of such witnesses under oath concerning such property and the value
thereof; and he shall make report thereof and of such value in writing to the
said superior court, together with the depositions of the witnesses examined, and
such other facts in relation thereto as said superior court may order or require;
and the value of every future or contingent or limited estate, income or interest
shall, for the purposes of this act, be determined by the rule, method and standards
of mortality and of value that are set forth in the actuaries' combined experience
tables of mortality for ascertaining the value of policies of life insurance and
annuities, and for the determination of the liabilities of life insurance companies,
save that the rate of interest to be assessed in computing the present value of all
future interests and contingencies shall be five per centum per annum.

The insurance commissioner shall, on the application of any superior court,
determine the value of any future or contingent estates, income or interest therein
limited, contingent, dependent or determinable upon the life or lives of persons
:'n being, upon the facts contained in any such appraiser's report, or other facts
to him submitted by said court, and certify the same to the superior court, and his
certificate shall be conclusive evidence that the method of computation adopted
therein is correct.

In estimating the value of any estate or interest in property, to the beneficial
enjoyment or possession whereof there are persons or corporations presently
entitled thereto, no allowance shall be made on account of any contingent in-
cumbrance thereon, nor on account of any contingency upon the happening of
which the estate or property or some part thereof or interest therein might be
abridged, defeated or diminished; provided, however, that in the event of such
incumbrance taking effect as an actual burden upon the interest of the beneficiary,
or in the event of the abridgment, defeat or diminution of said estate or property
or interest therein as aforesaid, a return shall be made to the person properly
entitled thereto of a proportionate amount of such tax on account of the incum-
brance when taking effect, or so much as will reduce the same to the amount
which would have been assessed on account of the actual duration or extent of th6
estate or interest enjoyed. Such return of tax shall be made in the manner provided
by section twelve hereof upon order of the court having jurisdiction.

Where any property shall, after the passage of this act, be transferred subject to
any charge, estate or interest, determinable by the death of any person, or at any
period ascertainable only by reference to death, the increase accruing to any
person or corporation upon the extinction or determination of such charge, estate
or interest, shall be deemed a transfer of property taxable under the provisions
of this act in the same manner as though the person or corporation beneficially
entitled thereto had then acquired such increase from the person from whom the
title to their respective estates or interests is derived.

When property is transferred in trust or otherwise, and the rights, interest
or estates of the transferees are dependent upon contingencies or conditions where-
by they may be wholly or in part created, defeated, extended or abridged, a tax
shall be imposed upon said transfer at the highest rate which, on the happening

11, c. 395.] CALIFORNIA. 341

of any of the said contingencies or conditions, would be possible under the pro-
visions of this act, and such tax so imposed shall be due and payable forthwith by
the executors or trustees out of the property transferred; provided, however,
that on the happening of any contingency whereby the said property, or any part
thereof, is transferred to a person or corporation exempt from taxation under the
provisions of this act, or to any person taxable at a rate less than the rate imposed
and paid, such person or corporation shall be entitled to a return of so much of
the tax imposed and paid as is the difference between the amount paid and the
amount which said person or corporation should pay under the provisions of this
act. Such return of overpayment shall be made in the manner provided by section
twelve of this act, upon order of the court having jurisdiction.

Estates in expectancy which are contingent or defeasible and in which pro-
ceedings for the determination of the tax have not been taken or where the
taxation thereof has been held in abeyance, shall be appraised at their full, un-
diminished value when the persons entitled thereto shall come into the beneficial
enjoyment or possession thereof, without diminution for or on account of any
valuation theretofore made of the particular estates for purposes of taxation, upon
which said estates in expectancy may have been limited.

Where an estate for life or for years can be divested by the act or omission of
the legatee or devisee it shall be taxed as if there were no possibility of such
divesting.

The report of the appraiser shall be made in duplicate, one of which duplicates
shall be filed with the clerk of said court and the other in the office of the state
controller.

(2) From such report of appraisal and other proof relating to any such estate,
or property, before the superior court, said court shall, by order, forthwith assess
and fix the market value of such property and the amount of tax to which the
same is liable, and the clerk of said court shall immediately give notice thereof
by mail to the county treasurer and the state controller and to all interested
persons who shall have furnished said clerk with their names and addresses for the
purpose of receiving such notice.

But said superior court may determine such tax or taxes without appointing
an inheritance tax appraiser; provided, that in such determination, said court
shall fix a day upon which it will hear all parties interested in said property and
in said tax, and said court shall order the clerk thereof to give notice of said
hearing for such time, not less than ten days, and in such manner as said court
shall direct, and said clerk shall at least ten days before said hearing mail a copy
of such notice to the county treasurer and a copy to the state controller.

[See notes to the Act of 1905, ante, p. 328, and the St. 1911, c. 394, post, p. 346.]

Jurisdiction of Superior Court.

S. 16. The superior court in the county in which is situate the real property
of a decedent who was not a resident of the state, or if there be no real property,
then in the county in which any of the personal property of such non-resident is
situate, or in the county of which the decedent was a resident at the time of his
death, shall have jurisdiction to hear and determine all questions in relation
to the tax arising under the provisions of this act, and the court first acquiring
jurisdiction hereunder shall retain the same, to the exclusion of every other

[See notes to the Act of 1905, ante, p. 328.]

342 STATUTES ANNOTATED. [Cal. St.

Citation.

S. 17. If it shall appear to the superior court upon petition of the state con-
troller or the county treasurer or any other interested person that any transfer
has been made within the meaning of this act and the taxability thereof and the
liability for such tax and the amount thereof have not been determined, and that
no proceedings are pending in any court in this state wherein the taxability of such
transfer, the liability therefor and the amount thereof may be determined, said
court shall issue a citation, citing the persons who may appear liable therefor, or
known to own any interest in or part of the property transferred, to appear before
the court on a day certain, not more than ten weeks from the date of such citation,
and show cause why said tax should not be determined and paid. The service
of such citation, and the time, manner and proof thereof, and the hearing and
determination thereon, and the enforcement of the determination or decree, shall
conform to the provisions of chapter XII of title XI of part three of the Code of
Civil Procedure; and the clerk of the court shall, upon the request of the state
controller or the treasurer of the county, furnish, without fee, one or more tran-
scripts of such decree, and the same shall be docketed and filed by the county
clerk of any county in the state, without fee, in the same manner and with the
same effect as provided by section six hundred and seventy-four of said Code of
Civil Procedure for filing a transcript of an original docket. The superior court
may hear the said cause upon the relation of the parties and the testimony of
witnesses, and evidence produced in open court, and, if the court shall find said
property is not subject to any tax, as herein provided, the court shall, by order,
so determine; but if it shall appear that said property, or any part thereof, is
subject to any such tax, the same shall be appraised and taxed as in other cases.

Actions to Recover Tax.

S. 18. If, after the expiration of eighteen months from the accrual of any tax
under this article, such tax shall remain due and unpaid after the refusal or neglect
of the persons liable therefor to pay the same, the county treasurer shall notify,
or the state controller may notify, the district attorney of the county in writing of
such failure or neglect, and such district attorney shall bring and prosecute an
action or actions in the name of the state as plaintiff, for the recovery of such tax
and for the purpose of enforcing any lien or liens against all or any of the property
subject thereto. In any such action the owner of any property or of any interest
in property against which the lien of any such tax is sought to be enforced and
any predecessor in interest of any such owner whose title or interest was deraigned
through any such decedent by will or succession or by decree of distribution of
the estate of such decedent, and any lienor or incumbrancer subsequent to the
lien of such tax may be made a party defendant. The enumeration in this section
of the persons who may be made defendants shall not be deemed to be exclusive,
but the joinder or non-joinder of parties, except when otherwise herein provided,
shall be governed by the rules in equity in similar cases.

Actions to Quiet Title.

(a) Actions may be brought against the state for the purpose of quieting the
title to any property, against the lien or claim of lien of any tax or taxes under
this act, or for the purpose of having it determined that any property is not subject
to any lien for taxes under this act. In any such action, the plaintiffs may be

1911, c. 395.] CALIFORNIA. 343

any administrator or executor of the estate or will of any decedent, whether the
said estate shall have been fully administered and the estate settled and closed
or not, and any heir, legatee or devisee of any such decedent, or trustee of the
estate or of any part of the estate of such decedent, or distributee of the estate
or of any part of the estate of any such decedent, and any assignee, grantee or
successor in interest of any of such persons and all or any other persons who
might be made parties defendant in any action brought by the state under the
provisions of this section, and notwithstanding that all or any of the persons
enumerated in this section shall or may have assigned, granted, conveyed or other-
wise parted with all or any interest in or title to the property, or any thereof,
involved in any such claim of lien before the commencement of such action. All
or any of the persons in this action enumerated may be joined or united as parties
plaintiff. The enumeration in this section of the persons who may be made parties
shall not be deemed to be exclusive, but the joinder or non-joinder of parties, except
when otherwise herein provided, shall be governed by the rules in equity in
similar cases. In all cases any person who might properly be a party plaintiff
in any such action who refuses to join as plaintiff may be made a defendant.

(b) All actions under this section shall be commenced in the superior court of
the county in which is situated any part of any real property against which any
lien is sought to be enforced, or to which title is sought to be quieted against any
lien, or claim of lien; but if in said action no lien against real property is sought
to be enforced, the action shall be brought in the superior court of the county which
has or which had jurisdiction of the administration of the estate of the decedent
mentioned herein.

(c) Service of summons in the actions brought against the state shall be made
on the controller of state and on the district attorney of the county in which the
estateof the decedent mentioned herein is being administered, or has been adminis-
tered in probate proceedings, and it shall be the duty of said district attorney to
defend all such actions.

(d) The procedure and practice in all actions brought under this section, except
as otherwise provided in this act, shall be governed by the provisions of the Code
of Civil Procedure in relation to civil actions, so far as the same shall or may be
applicable, including all provisions relating to motions for new trials and appeals.

(e) The remedies provided in this section shall be in addition to and not
exclusive of any remedies provided in the sections preceding this section.

K'oceedings for Determining and Collecting Tax.
S. 19. Whenever the treasurer of any county shall have reason to believe that
ly transfer has been made within the meaning of this act and that a tax due
ereon remains undetermined and unpaid, he shall notify the district attorney
in writing of such transfer, and the district attorney, if he have probable cause
to believe a tax is due, and remains undetermined, shall prosecute the necessary
proceeding in the superior court to determine and fix such tax and for the enforce-
ment and collection thereof.

The county treasurer in his discretion, for the better furtherance of the purposes
of this act, shall be allowed to employ such special attorney or attorneys as he
may deem necessary, provided that such attorney shall be paid for his services
out of the fees allowed such treasurer, as provided in section twenty-two of
this act.

344 STATUTES ANNOTATED. [Cal. St.

Expenses.

S. 20. Whenever the superior court of any county shall certify that there
was probable cause for issuing a citation and taking the proceedings specified in
section seventeen or eighteen of this act or for taking any proceeding or action
to determine the taxability of any transfer within the meaning of this act, or to
secure fair appraisement of any property taxable under this act, or for taking any
appeal from any order or judgment fixing such tax or determining the taxability
of any transfer within the meaning of this act, the state treasurer shall pay, or
allow, to the treasurer of any county, all expenses incurred therefor, and for his
other lawful disbursements that have not otherwise been paid.

Duties of County Treasurer.

S. 21. The treasurer of each county shall collect and pay the state treasurer
all taxes that may be due and payable under this act, who shall give him a receipt
therefor; of which collection and payment he shall make a report, under oath,
to the controller, between the first and fifteenth days of May and December of
each year, stating for what estate paid, and in such form and containing such
particulars as the controller may prescribe; and for all such taxes collected by him
and not paid to the state treasurer by the first day of June and January of each
year he shall pay interest at the rate of ten per centum per annum.

Fees of County Treasurer.

S. 22. The treasurer of each county shall be allowed to retain, on all taxes
paid and accounted for by him each year under this act, in addition to his salary
or fees, now allowed by law, three per centum on the first fifty thousand dollars
so paid and accounted for by him, one and one-half per centum on the next fifty
thousand dollars so paid and accounted for by him, and one-half of one per centum
on all additional sums so paid and accounted for by him; provided, that no
county treasurer shall be entitled to retain to his own use more than the sum of
two hundred dollars out of the inheritance taxes paid on account of any transfer
or transfers made by, or resulting from the death of, any one decedent.

Attorneys for County Treasurer.

S. 23. The treasurer of each county, in his discretion, for the better furtherance
of the purposes of this act, shall be allowed to employ such special attorney or
attorneys, as he may deem necessary, who shall have all the authority conferred
upon the district attorney by sections seventeen and eighteen of this act, and such
attorney shall be paid for his services out of the money collected under the pro-
visions of this act a reasonable fee to be allowed by the probate court having
jurisdiction, said fee, together with the sum retained by the county treasurer,
in no one case to exceed the per centum allowed in such case by section twenty-
two of this act.

Counsel. — Expenses.

S. 24. The state controller, whenever he shall be cited as a party in any pro-
ceeding or action to determine any tax under this act provided, or whenever
he shall deem it necessary for the better enforcement of this act to commence or
appear in any proceeding or action to determine any tax hereunder, may, by and
with the consent and approval of the attorney general, designate and employ

1911, c. 395.] CALIFORNIA. 345

counsel to represent him on behalf of the state, and, by and with such consent
of the attorney general, he is hereby authorized to incur the necessary expense
for such employment and any reasonable and necessary expense incident thereto.
And the county treasurer is hereby authorized and directed to pay out of any
funds which may be in his hands on account of this tax, on presentation of a sworn
itemized account and on certificate of the state controller and attorney general,
all expenses incurred as in this section above provided, but no expense for legal
services, up to and including the entry of the order of the court fixing the tax
and the same becoming final, shall exceed ten per centum of the tax and penalties
collected; provided, that all reasonable and necessary expenses incurred, other
than attorneys' fees, including expense of serving processes, procuring evidence
and printing and preparing of necessary legal papers, may be allowed and paid in
the manner above provided, even though no tax be recovered in such action or
proceeding, and the limitations herein made shall not apply thereto.

Use of Proceeds of Tax.

S. 25. All taxes levied and collected under this act, up to the amount of
$250,000 annually, shall be paid into the treasury of the state, for the uses of the
state school fund, and all taxes levied and collected in excess of $250,000 annually
shall be paid into the state treasury to the credit of the general fund thereof.

Penalties.

S. 26. Every officer who fails or refuses to perform, within a reasonable time,
any and every duty required by the provisions of this act, or who fails or refuses
to make and deliver within a reasonable time any statement or record required by
this act, shall forfeit to the state of California the sum of one thousand dollars, to
be recovered in an action brought by the attorney general in the name of the
people of the state on the relation of the controller.

Definitions.

S. 27. The words "estate" and "property" as used in this act shall be taken
to mean the real and personal property or interest therein of the testator, intestate,
grantor, bargainor, vendor or donor passing or transferred to individual legatees,
devisees, heirs, next of kin, grantees, donees, vendees, or successors and shall in-
clude all personal property within or without the state. The word "transfer"
as used in this act shall be taken to include the passing of property or any interest
therein, in possession or enjoyment, present or future, by inheritance, descent,
devise, succession, bequest, grant, deed, bargain, sale, gift or appointment in the
manner herein described. The word "decedent" as used in this act shall include
the testator, intestate, grantor, bargainor, vendor or donor.

The words "county treasurer" and "district attorney" and "inheritance tax
appraiser," as used in this act, shall be taken to mean the treasurer or the district
attorney or the inheritance tax appraiser of the county of the superior court having
jurisdiction, as provided in section sixteen of this act.

The words "contemplation of death" as used in this act shall be taken to include
that expectancy of death which actuates the mind of a person on the execution of
his will, and in nowise shall said words be limited and restricted to that expectancy
of death which actuates the mind of a person in making a gift causa mortis; and
it is hereby declared to be the intent and purpose of this act to tax any and all

346 STATUTES ANNOTATED. [Cal. St.

transfers which are made in lieu of or to avoid the passing of the property trans-
ferred by testate or intestate laws.

Repeal.

S. 28. An act entitled "An Act to establish a tax on gifts, legacies, inheritances,
bequests, devises, successions and transfers, to provide for its collection, and to
direct the disposition of its proceeds; to provide for the enforcement of liens
created by this act and for suits to quiet title against claims of lien arising here-
under; to repeal an act entitled 'An Act to establish a tax on collateral inheritances,
bequests and devises, to provide for the collection and to direct the disposition
of its proceeds,' approved March 23, 1893, and all amendments thereto, and all
acts and parts of acts in conflict with this act," approved March 20, 1905, and all
amendments thereto, and all acts and parts of acts in conflict with this act are
hereby expressly repealed; provided, however, that such repeal shall in no wise
affect any suit, prosecution or court proceeding pending at the time this act shall
take effect, or any right which the state of California may have at the time of
the taking effect of this act, to claim a tax upon any property under the provisions
of the act or acts hereby repealed, for which no proceeding has been commenced;
nor aff'ect any appeal, right of appeal in any suit pending, or orders fixing tax,
existing in this state at the time of the taking effect of this act.

S. 29. This act shall take effect and be in force from and after July 1, 1911.

[See notes to the Act of 1905, s. 27, ante, pp. 330, 331.]

Cal. St. 1911, c. 394. Approved April 7, 1911.

An Act to amend section 1444 of the Code of Civil Procedure of
THE state of California, relating to appraisers of estates of
deceased persons.

S. 1. Section 1444 of the Code of Civil Procedure of the state of California
is hereby amended to read as follows: —

1444. To make the appraisement, the court, or a judge thereof, must appoint
three disinterested persons, one of whom must be one of the inheritance tax
appraisers provided for by law (any two of which appraisers may act) ; provided,
that the court may, in its discretion, appoint said inheritance tax appraiser as
sole appraiser to appraise said estate. Said appraisers are entitled to receive
a reasonable compensation for their services, not to exceed five dollars per day,
to be allowed by the court or judge. The appraisers or appraiser must, with the
inventory, file a verified account of their or his services and disbursements. If
any part of the estate is in any other county than that in which letters issued, an
appraiser or appraisers thereof may in the same manner as above provided, be
appointed, either by the court or judge having jurisdiction of the estate, or by
the court or judge of such other county, on request of the court or judge having
jurisdiction. No clerk or deputy, nor any person related by consanguinity or
affinity to or connected by marriage with, or being a partner or employee of the
judge of the court, shall be appointed or shall be competent to act as appraiser in
any estate, or matter or proceeding pending before said judge or in said court.

S. 2. This act shall take effect and be in force from and after July 1, 1911.

Colo. St.l COLORADO. 347

COLORADO,

In General.

Colorado enacted an inheritance tax in 1901, using the Illinois
statute of 1895 as a model. It was radically amended in 1909.

Colorado taxes stock in a Colorado corporation owned by a
non-resident. It is only within the past year that such property
has been taxed to any appreciable extent. The state is now deriving
considerable revenue from this source.

Any person or corporation must notify the attorney general
before delivering or transferring securities of a non-resident, and
must see that the tax is paid. A non-resident's estate must make
an affidavit as to its property before consent will be given to the
transfer of securities.

Constitutional Limitations.

Colorado Constitution 1876, a. 10.

S. 3. All taxes shall be uniform upon the same class of subjects within the
territorial limits of the authority levying the tax, and shall be levied and collected
under general laws, which shall prescribe such regulations as shall secure a just
valuation for taxation of all property, real and personal. . . .

[This language remains unchanged, although the balance of the section was
amended in 1880, 1392 and 1904.]

List of Statutes.

1901.

Statutes of Colorado, c. 94, s. 23-43.

1902.

c. 3, p. 43.

1907.

" " " c. 214, p. 554.

1909.

" " " c. 193, p. 460.

Mill's Annotated Statutes (Revised Supplement 1891—1905), ss. 3813-3832
inclusive. (This is the 1902 Act above referred to.)

THE STATUTE OF 1901.

Colo. St. 1901, c. 94, s. 23, imposes a tax of 2 per cent on lineals,
with an exemption of $5,000; 3 per cent on collaterals, and in
all other cases the rate is graduated. On all estates of $10,000 or
less, 3 per cent; $10,000 to $20,000,4 per cent; $20,000 to $50,000,
5 per cent; over $50,000, 6 per cent, with an exemption of any
estate valued at less than $500.

348 STATUTES ANNOTATED. iColo. St.

Colo. St. 1901, c. 94, ss. 24-43, provide for the assessment and
collection of the tax. This statute was approved April 5, 1901.

THE STATUTE OF 1902.

History.

The Colorado statute is based upon the Illinois statute. In re
Inheritance Tax, 23 Colo. 392, 48 P. 535.

Title. — One Subject.

Colo. St. 1902, c. 3, s. 21, et seq., was approved March 22, 1902.
The act is entitled ''An Act in relation to public revenue and repeal-
ing all previous acts or parts of acts in conflict therewith."

This act is not void as being too general in title in view of the
financial history of the state. One would expect to find in an act
entitled Revenue, provisions imposing a duty upon privileges or
successions.

The statute is not void as containing more than one subject
simply because it includes an inheritance tax and a property tax.
The claim was made that the statute modified the law of descent
and the law of wills and also included the taxation of property.
The court is of the opinion that the title of the act clearly embraces
provisions providing for public revenue by tax on inheritances.
In re Magnes, 32 Colo. 527, 77 P. 853.

S. 21. All property, real, personal and mixed, 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 decedent was not a resident of this
state at the time of his death, which property or any part thereof shall be within
this state or any interest therein or income therefrom, which shall be transferred
by deed, grant, sale or gift made in contemplation of the death of the grantor or
bargainor or intended to take effect, in possession or enjoyment after such death,
to any person or persons or to any body politic or corporate in trust or otherwise,
or by reason whereof any person or body politic or corporate shall become bene-
ficially entitled in possession or expectation to any property or income thereof,
shall be and is, subject to a tax at the rate hereinafter specified to be paid to the
treasurer of the proper county for the use of the state, and all heirs, legatees and
devisees, administrators, executors and trustees shall be liable for any and all
such taxes until the same shall have been paid as hereinafter directed. When
the beneficial interests to any property or income therefrom shall pass to or for
the use of any father, mother, husband, wife, child, brother, sister, wife or widow
of the son or the husband of the daughter, or any child or children adopted as
such in conformity with the laws of the state of Colorado, or to any person to

1902, c. 3.] COLORADO. 349

whom the deceased, for not less than ten years prior to death, stood in the acknowl-
edged relation of a parent, or to any lineal descendant born in lawful wedlock, in
every such case the rate of tax shall be two dollars on every hundred dollars of
the clear market value of such property received by each person, and at and after
the same rate for every less amount; Provided, that the sum of ten thousand
dollars of any such estate shall not be subject to any such duty or taxes, and that
only the amount in excess of ten thousand dollars shall be subject to the above
duty or tax. When the beneficial interests to any property or income therefrom
shall pass to or for the use of any uncle, aunt, niece, nephew or any lineal descend-
ant of the same, in every such case the rate of such tax shall be three dollars on
every one hundred dollars of the clear market value of such property received
by each person. In all other cases the rate shall be as follows: On each and every
hundred dollars of the clear market value of all property and at the same rate
for any less amount; on all estates of ten thousand dollars and less — three dollars
on all estates of over ten thousand dollars and not exceeding twenty thousand
dollars, four dollars; on all estates over twenty thousand dollars and not exceeding
fifty thousand dollars, five dollars, and on all estates over fifty thousand dollars,
six dollars; Provided, that an estate in the above case which may be valued at a
less sum than five hundred dollars shall not be subject to any such duty or tax.

Nature.

The fact that a statute is called an inheritance tax is of much
significance. A tax upon an interest in personal property is a legacy
tax. A tax upon an interest in real property could be aptly termed
a succession tax.' Iv[o term sufficiently comprehensive could be
more aptly employed to embrace a tax upon the right to acquire
interests in both real and personal property passing by will or by
inheritance whether lineal or collateral than the term "inheritance
tax." By this term the legislature intended to express the specific
nature of the tax and that it should operate upon all interests to
which a person succeeded upon death. In re Macky, 46 Colo.
79, 102 P. 1075.

Not a Local or Special Law.

Colo. St. 1902, c. 3, is not repugnant to the constitutional pro-
hibition against local or special laws. The court decides that the
imposition of a succession tax does not change the law of descent
but that the laying of the tax merely casts upon the devolution of
property a burden that was not borne before. In re Magnes, 23
Colo. 527, 77 P. 853.

Uniformity. — Nature of Tax. — Succession Not a Natural
Right.

The Colorado inheritance tax law, St. 1902, c. 3, s. 21 et seq.,
is not void on the ground that it lacks uniformity as the Colorado

350 STATUTES ANNOTATED. iColo. St.

Constitution, article 10, section 3, applies only to taxes upon prop-
erty and the inheritance tax is not one on the property but on the
succession, and furthermore a right to take property by devise
or descent is a creature of the law and not a natural right; and
therefore the authority which confers it may impose conditions upon
it. In re Magnes, 32 Colo. 527, 77 P. 853.

The Colorado inheritance tax of 1902, c. 3, s. 21, is not a tax upon
the property but is a tax or excise upon the power or right of receiv-
ing property by a will or under intestate laws. In re Macky, 46
Colo. 79, 102 P. 1075.

"The right to impose such [inheritance] tax is based upon the
power of the state in its sovereign capacity to legulate and control
the transmission of property by inheritance. Although designated
as a tax, it is not such a tax upon property as is contemplated by
section 3 of article 10 of the state constitution. It is rather a
contribution which the state levies for itself as a condition upon
which the title to property shall pass upon the death of its owner."
In re Inheritance Tax, 23 Colo. 492, 493, 48 P. 535.

A Tax on Beneficiaries.

The Colorado statute of 1902 imposes a tax. on the right to
receive and not on the right to give, on the beneficiary rather than
the estate of the decedent. In re Macky, 46 Colo. 79, 102 P. 1075.

The exemptions apply to the amount taken by each
beneficiary and not to the amount of the whole estate of the de-
ceased. The tax is levied on the receipt of some beneficial interest and
the expression "such estate" relates to this beneficial interest and
not to the whole estate. People v. Koenig, 37 Colo. 283, 85 P. 1 129.

The court quotes as sustaining its doctrine HowelVs Estate,
147 Pa. St. 164, 23 A. 403; Matter of Cager, 111 N. Y. 343, 18 N.
E. 866; State v. Hamlin, 86 Me. 495, 30 A. 76, 25 L. R. A. 632,
41 Am. St. Rep. 569; Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct.
747, 44 L. Ed. 969. In the Pennsylvania case a peculiar provision
of the statute led to an opposite result to that in the other cases.
People V. Koenig, 37 Colo. 283, 85 P. 1129.

An implied exemption from taxation should be allowed
to state institutions as laying a tax upon them would in the end
produce no net revenue. And bequests to a state and county for
a hospital and to the regent of the state university for an auditorium
are not subject to the state inheritance tax. In re Macky, 46 Colo.
79, 102 P. 1075.

1902, c. 3.] COLORADO. 351

Compromise with **Heirs.'*

Where a son contested a will of his father and to settle his contest
he was paid a sum in excess of the legacy provided by the will, this
sum is subject to taxation. The money was paid to him by virtue
of his heirship because he was the son of the decedent. People v.
Rice, 40 Colo. 508, 91 P. 33.

Section 22 provides that life estates shall be exempt ; and property
shall be appraised after the death of the owner; and imposes a lien
on property.

Colo. St. 1902, c. 3.

S. 23. All taxes imposed by this act, unless otherwise herein provided for,
shall be due and payable at the death of the decedent, and interest at the rate
of six per cent per annum shall be charged and collected thereon for such time as
said taxes are not paid; Provided, that if said tax is paid within six months from
the accruing thereof, interest shall not be charged or collected thereon, but a
discount of five per cent shall be allowed and deducted from said tax, and in all
cases where the executors, administrators or trustees do not pay such tax within
one year from the death of the decedent, they shall be required to give a bond
in the form and to the effect prescribed in section twenty-two of this act for the
payment of said tax, together with interest.

"// said tax is paid within six months . . . interest shall not be
charged.''

This proviso does not have the effect of rendering the interest
charged a penalty, but it is only the usual inducement held out
to make those interested in estates pay their taxes promptly and
cannot be considered as fixing a time when the tax becomes de-
linquent after which a penalty is imposed for non-payment. People
V. Rice, 40 Colo. 508, 91 P. 33.

''Interest . . . for such time as said taxes are not paid.'*
The interest is chargeable although the estate for a long time was
involved in litigation and it was impossible to say at what rate the
tax should be paid if at all, as it was impossible to say what the
value of the estate was; and although a contest was made against
the will which lasted more than six months after the death of the
decedent, and although claims against the estate were made which
if successful would have made the estate insolvent. People v.
Rice, 40 Colo. 508, 91 P. 33.

Sections 24 to 30 contain various provisions as to collection and
payment of the tax.

352 STATUTES ANNOTATED [Colo. St-

Sections 31 and 32 cover appraisal.

Sections 33 to 41 cover jurisdiction of the courts and various
provisions as to collection and payment of the tax.

THE AMENDMENTS OF 1907 AND 1909.

Colo. St. 1907. c. 214, approved April 9, 1907, amends section
30 of Colo. St. 1902, c. 3, by providing elaborate provisions as to
the refund of taxes erroneously paid.

Colo. St. 1909, c. 193, p. 460, approved April 17, 1909, amends
Colo. St. 1902, ss. 21, 22, 29, 31 and 41.

Statute not Retroactive.
Colo. St. 1909, c. 193.

S. 6. This act shall affect only the estates of decedents dying after its pas-
sage and estates of all decedents dead before its passage shall be taxed under
previously existing law.

THE PRESENT ACT.

Colo. St. 1902, c. 3 (as amended).
Rates and Exemptions.

S. 1. All property, real, personal and mixed, which shall pass by will or by
the i;itestate laws of this state from any person who may die seized or possessed
of the same while a resident of this state, or if decedent was not a resident of this
state at the time of his death, whicb-property or any part thereof shall be within
this state, or any interest therein or income therefrom, which shall be transferred
by deed, grant, sale or gift made in contemplation of the death of the grantor or
bargainor, or intended to take effect, in possession or enjoyment after such death,
to any person or persons, or to any body politic or corporate, in trust or otherwise,
or by reason whereof any person or body politic or corporate shall become bene-
ficially entitled in possession or expectation to any property or income thereof,
shall be and is, subject to a tax at the rate hereinafter specified to be paid to the
treasurer of the proper county for the use of the state, and all heirs, legatees and
devisees, administrators, executors and trustees shall be liable for any and all
such taxes until the same shall have been paid as hereinafter directed. When-
ever the beneficial interest to any property or income therefrom shall pass to or
for the use of any father, mother, husband, wife, child, brother, sister, wife or
widow of the son, or the husband of the daughter, or any child or children adopted
as such in conformity with the laws of the state of Colorado, or to any person to
whom the deceased, for not less than ten years prior to death, stood in the acknowl-
edged relation of a parent, or to any lineal descendant born in lawful wedlock,
in every such case the rate of tax shall be two dollars on every hundred dollars
of the clear market value of such property received by each person, and at and
after the same rate for every less amount ; Provided, that the sum of ten thousand
dollars ($10,000) of any such estate, vesting in the grantee in perpetuity shall not
be subject to any such duty or tax, and that only the amount in excess of ten

1902, c. 3.] COLORADO. 353

thousand dollars ($10,000) shall be subject to the above duty or tax. When the
beneficial interests to any property or in,come therefrom shall pass to or fro (for)
the use of any uncle, aunt, niece, nephew, or any lineal descendant of the same,
in every such case the rate of such tax shall be three dollars on every one hundred
dollars of the clear market value of such property received by each person. In
all other cases the rate shall be as follows: On each and every hundred dollars
of the clear market value of all property and at the same rate for any less amount;
on all estates of ten thousand dollars and less, three dollars; on all estates of over
ten thousand dollars and not exceeding twenty thousand dollars, four dollars;
on all estates over twenty thousand dollars and not exceeding fifty thousand
dollars, five dollars, and on all estates over fifty thousand dollars, and not exceed-
ing five hundred thousand dollars, six dollars, and on all estates over five hundred
thousand dollars, ten dollars; Provided, that an estate in the above case which
may be valued at a less sum than five hundred dollars shall not be subject to any
such duty or tax; Provided, that the following classes of property shall be exempt
from the inheritance tax, to wit: All property devised, bequeathed or descending
by deed in contemplation of death to the state of Colorado, or to any county, city,
town, and any other municipality, or for the use of public libraries, for religious or
charitable purposes exclusively, or for schools and colleges not for profit.

(L. of '02, p. 49, s. 21; R. S. '08, s. 5551, as amended by Statute of '09, s. 1.)

[See notes to the Act of 1902, ante, p. 349.]

When Remainder Assessed.

Accrual — Interest.

S. 3. All taxes imposed by this act, unless otherwise herein provided for
shall be due and payable at the death of the decedent, and interest at the rate
of six per cent per annum shall be charged and collected thereon for such time
as said taxes are not paid; Provided, that if said tax is paid within six
months from the accruing thereof, interest shall not be charged or collected
thereon, but a discount of five per cent shall be allowed and deducted from
said tax, and in all cases where the executors, administrators or trustees
do not pay such tax within one year from the death of the decedent, they shall
be required to give a bond in the form and to the effect prescribed in section
twenty-two of this act for the payment of said tax, together with interest.

(L. '02, p. 51, s. 23; R. S. '08, s. 5553.)

(Section 22 referred to is section 2 above as it stood in Laws of '02.)

[See notes to the Act of 1902, ante, p. 351.J

354 STATUTES ANNOTATED. IColo. St.

Deduction of Tax.

S. 4. Any administrator, executor or trustee having any charge or trust in
legacies or property for distribution subject to the said tax shall deduct the tax
therefrom, or if the legacy or property be not money he shall collect a tax thereon
upon the appraised value thereof from the legatee or person entitled to such prop-
erty, and he shall not deliver or be compelled to deliver any specific legacy or
property subject to tax to any person until he shall have collected the tax thereon,
and whenever any such legacy shall be charged upon or payable out of real
estate, the executor, administrator or trustee, before paying the same shall deduct
said tax therefrom and pay the same to the county treasurer for the use of the
state, and the same shall remain a charge on such real estate until paid, and
the payment thereof shall be enforced by the executor, administrator or trustee
in the same manner that the said payment of said legacies might be enforced;
if, however, such legacy be given in money to any person for a limited period,
he shall retain the tax upon the whole amount, but if it be not in money, he shall
make application to the court having jurisdiction of his accounts to make an
apportionment, if the case requires it, of the sum to be paid into his hands by
such legatees, and for such further order relative thereto as the case may require.

(L. '02, p. 51, s. 24; R. S. '08, s. 5554.)

Power of Sale.

S. 5. All executors, administrators and trustees shall have full power to sell
so much of the property of the decedent as will enable them to pay said tax, in
the same manner as they may be enabled to do by law, for the payment of debts
of their testators and intestates, and the amount of said tax shall be paid as
hereinafter directed.

(L. of '02, p. 52, s. 25; R. S. '08, s. 5555.)

Payment and Receipts.

S. 6. Every sum of money retained by any executor, administrator or trustee,
or paid into his hands for any tax on any property, shall be paid by him within
thirty days thereafter to the treasurer of the proper county, and the said treasurer
or treasurers shall give, and every executor, administrator or trustee shall
take, duplicate receipts from him of said payments, one of which receipts
he shall immediately send to the state treasurer, whose duty it shall be to
charge the treasurer so receiving the tax with the amount thereof, and shall
seal said receipt with the seal of his office and countersign the same and return
it to the executor, administrator or trustee, whereupon it shall be a proper voucher
in the settlement of his accounts, but the executor, administrator or trustee shall
not be entitled to credit in his accounts or be discharged from liability for such
tax unless he shall produce a receipt so sealed and countersigned by the treasurer
and a copy thereof certified by him.

(L. of '02, p. 52, s. 26; R. S. '08, s. 5556.)

Information as to Real Estate.

S. 7. Whenever any of the real estate of which any decedent may die seized
shall pass to any body politic or corporate, or to any person or persons, or in
trust for them, or some of them, it shall be the duty of the executor, administrator
or trustee of such decedent to give information thereof in writing to the treasurer
of the county where said real estate is situated, within six months after they

1902, c. 3.] COLORADO. 355

undertake the execution of their duties, or if the fact be not known to them within
that period, then within one month after the same shall have come to their
knowledge.

(L. of '02, p. 53, s. 27; R. S. '08, s. 5557.)

Refund.

S. 8. Whenever debts shall be proved against the estate of the decedent after
distribution of legacies from which the inheritance tax has been deducted in com-
pliance with this act, and the legatee is required to refund any portion of the
legacy, a due proportion of the said tax shall be repaid to him by the executor or
administrator, if the said tax has not been paid into the state or county treasury,
or by the county treasurer if it has been so paid.

(L. of '02, p. 53, s. 28; R. S. '08, s. 5558.)

Foreign Fiduciaries.

S. 9. If a foreign executor, administrator or trustee, shall assign or transfer
any stock or obligations in this state standing in the name of a decedent, or in
trust for a decedent, liable to any such tax, the tax shall be paid to the treasurer
of the proper county on the transfer thereof. No safe deposit company, bank
or other institution, person or persons, holding or controlling the transfer of se-
curities or assets of a decedent, resident or non-resident, including the shares
of capital stock of, or other interest in, such institution shall deliver or transfer
the same to the executors, administrators, or legal representatives of the decedent,
or upon their order or request, unless notice in writing of the time and place of
such intended transfer be served upon the said appraiser of the proper district
and the attorney general of the state at least ten days prior to the said transfer;
Nor shall any such safe deposit company, bank or other institution, person
or persons, deliver or transfer any securities or assets of the estate of a non-
resident decedent without retaining a sufficient portion or amount thereof to pay
any tax and interest which may be due or thereafter be assessed on account of
the transfer of such securities or assets under the provisions of this article, unless
the attorney general consents thereto in writing. And it shall be lawful for the
said appraisor (appraiser) or attorney general to examine said securities or assets
at the time of such delivery or transfer. Failure to serve such notice or to allow
such examination or to retain a sufficient portion or amount to pay such tax and
interest as herein provided, shall render such safe deposit company, trust company,
bank or other institution, person or persons, liable to the payment of the tax and
interest due upon said securities or assets, in pursuance of the povisions (provi-
sions) of this article.

(L. '02, p. 53, s. 29; R. S. '08, s. 5559, as amended by Statute of '09, s. 3.)

Refund.

S. 10. When any amount of said tax has been paid or shall have been paid
erroneously to the state treasurer, it shall be lawful for, and be the duty of the
state auditor, upon certificate of any county treasurer, who collected same, and
of the state treasurer, and of the judge of the court, which ordered the payment
of any such erroneous tax (which said last certificate shall designate the amount
erroneously paid by each person paying same), to draw a warrant on the state
treasurer, payable to the executor, administrator or trustee, person or persons,
who may have paid any such tax in error, or to the heirs-at-law or person or

356 STATUTES ANNOTATED. [Colo. St.

persons legally entitled thereto, the amount of such tax so erroneously paid, and
it shall be the duty of the state treasurer, upon presentation of any such warrant
to pay the same.

It shall also be the duty of any county treasurer to whom any inheritance tax
has been erroneously paid, and to whom a commission or other allowance has
been paid for collecting same, upon certificate of the judge of the court under
seal of the court which ordered the payment of any such erroneous tax being filed
with him, showing in what amount the payment of any such inheritance tax was
erroneous, to refund and repay to the executor, administrator or trustee, person
or persons who may have paid any amount of such tax in error, or to the heirs-
at-law or person or persons legally entitled thereto, the amount of commission
or fees charged by such county treasurer for collecting the amount so erroneously
paid.

Provided, that all applications for the repayment of said tax erroneously paid
and for said treasurer's commission, shall be made within two years from the
date of said payment.

This section as hereby amended shall apply to all erroneous payments of in-
heritance tax heretofore made, as well as to those which may hereafter be made.

(L. of '02, p. 53, s. 30, as amended by L. of '07, p. 554, s. 1; R. S. '08, s. 5560.)

The third paragraph is a statute of limitations. Report of
Attorney General, 1907-08, p. 88.

Appraisers.

^ S. 11. For the purpose of facilitating and properly collecting the said inheritance
tax, and in order to fix the value of the property of persons, whose estates shall
be subject to the payment of said tax, the said counties of the state of Colorado
shall be grouped into three districts, to be known as districts number one, number
two and number three, and the attorney general shall appoint one person as
appraisor (appraiser) for each of these districts to serve for a period of two years;
and the attorney general shall have the power of removal of any of the said ap-
praisers for malfeasance in office or failure to perform their duties as appraisers,
as hereinafter provided.

The appraiser appointed for district number one shall receive an annual salary
of twenty -four hundred dollars ($2,400.00), together with his actual and necessary
traveling expenses and witness fees. The appraisers for district number two
and district number three shall each receive an annual salary of eighteen hundred
dollars ($1,800.00), together with their actual and necessary traveling expenses
and witness fees. The state treasurer shall pay the said salaries of the said apprais-
ers, together with their necessary travjeling expenses and witness fees monthly
out of any fund in his hands or custody on account of the inheritance tax, and he
shall retain out of any 'funds in his hands received from said inheritance tax a
sufficient fund, at all times, to pay the said salaries of said appraisers, together
with a sufficient fund to pay the necessary traveling expenses and witness fees
of the said appraisers. The state auditor is authorized to issue a warrant upon the
state treasurer, upon presentation to him of a voucher, signed by the governor and
the attorney general for the amount of said salaries, and the said necessary
traveling expenses and witness fees.

1992, c. 3.] COLORADO. 357

The counties of the state shall be and hereby are grouped, for the purpose of
appointment of appraisers, the appraisement of estates and the collection of the
inheritance tax into the following districts:

District Number One: Adams, Arapahoe, Cheyenne, Clear Creek, Denver,
Douglas, Elbert, Gilpin, Jefferson, Kit Carson, Logan, Morgan, Phillips, Sedgwick,
Washington, Weld, Yuma.

District Number Two: Archuleta, Baca, Bent, Conejos, Costilla, Custer,
Dolores, El Paso, Fremont, Huerfano, Kiowa, La Plata, Las Animas, Lincoln,
Mineral, Montezuma, Otero, Prowers, Pueblo, Rio Grande, Saguache, San Juan,
Teller.

District Number Three: Boulder, Chaffee, Delta, Eagle, Garfield, Grand,
Gunnison, Hinsdale, Lake, Larimer, Mesa, Montrose, Ouray, Park, Pitkin, Rio
Blanco, Routt, San Miguel, Summit.

Each of the said appraisers shall file with the secretary of the state his oath of
office, and his official bond in the penal sum of not less than one thousand dollars
($1,000.00) nor more than twenty thousand dollars ($20,000.00) in the discretion
of the attorney general, conditioned upon the faithful performance of his duties
as such appraiser, which bond shall be approved by the attorney general.

It shall be the duty of the several appraisers, as often as, or whenever the occa-
sion may require, or upon the motion of any person interested in the estate, in-
cluding the state or the county court itself, to appraise the estate of any deceased
person in the county to which the appraiser is appointed, and the appraiser
shall forthwith give notice by mail to all persons known to have or claim an in-
terest in such property, and to such persons as the county judge may by order
direct, of the time and place at which he will appraise such property, and at such
time and place to appraise the same at a fair market value, and for that purpose
the appraiser is authorized by leave of the county judge to use subpoenas for and
Compell (compel) the attendance of witnesses before him, and to take the evidence
of such witnesses under oath concerning such property and the value thereof,
and he shall make a report in duplicate thereof and of such value in writing to
the county court and the attorney general showing the fair market value of all
of the estate belonging to the deceased at the time of his death and the descrip-
tion of the same; all debts, claims, fees and commissions filed against said estate
or allowed by the county court, together with all fees which have been allowed
to the executor or administrator or which may be claimed by the executor
or administrator for services in behalf of said estate; the names, relationship
and residence of all persons receiving or claiming any of the estate of the
deceased together with the names of all corporations or institutions claim-
ing any of the estate of the deceased; a description of any property belong-
ing to the estate of said decedent that may have been transferred by deed,
grant, sale or gift made in contemplation of death of the grantor, or bargainor,
or intended to take effect in possession or enjoyment after such death; a descrip-
tion of all estates left by the decedent, whether estates in fee, annuities, life estates
or for a term of years; whether such decedent died intestate or left a will, together
with the depositions of the witnesses examined and such other facts in relation
thereto as the county court may by order require to be filed in the office of the
clerk of said county court; and from this report the said county court shall
forthwith make and order and fix the then cash value of all estates, annuities and
life estates or terms of years growing out of said estate, and the tax to which

358 STATUTES ANNOTATED. [Colo. St.

the same is liable, and shall immediately give notice by mail to all parties
known to be interested therein. It shall be the duty of each of the said
appraisers upon learning of the death of any person known to have or
supposed to have died possessed of an estate in his district to immediately
make an investigation, and to inform the attorney general and county
court of the county wherein the person lived, of any information received
by him respecting the estate of the deceased. Any person or persons dis-
satisified (dissatistied) with the assessment made or tax fixed by the county
court of the estate of the decedent may appeal therefrom, after the fixing of the
tax by the county court, to the district court of the proper county, within sixty
days after the making of said assessment and the fixing of said tax, upon giving
good and sufficient security to the satisfaction of the county judge to pay all
costs, together with whatever taxes shall be fixed by the county court.
Witnesses subpoenaed by said appraiser shall be paid such fees as now provided
by law; Provided, that the appraiser may with the consent of the county court
on the petition of the attorney general, call in expert witnesses, the amount of
whose fees shall be determined by the county court.

(L. of '02, p. 54, s. 31; R. S. '08, s. 5561, as amended by Statute of '09, s. 4.)

Appraisers to Receive no Reward from Parties Interested.

S. 12. Any appraiser appointed by this act who shall take any fees or reward
from any executor, administrator, trustee, legatee, next of kin or heir of any
decedent, or from any other person liable to pay said tax or any portion thereof,
shall be guilty of a misdemeanor, and upon conviction in any court having juris-
diction of misdemeanors he shall be fined not less than two hundred and fifty
d6llars, nor more than five hundred dollars, and imprisoned not exceeding ninety
days, and in addition thereto the county judge shall dismiss him from such service.

(L. of '02, p. 55, s. 32; R. S. '08* s. 5562.)

Jurisdiction of County Courts.

S. 13. The county court in the county in which the real property is situated,
of the decedent who was not a resident of the state, or in the county of which the
decedent was a resident at the time of his death, shall have jurisdiction to hear
and determine all questions in relation to the tax arising under the provisions
of this act, and the county court first acquiring jurisdiction hereunder shall retain
the same to the exclusion of every other.

(L. of '02, p. 55, s. 33; R. S. '08, s. 5563.)

Process for Collection.

S. 14. If it shall appear to the county court that any tax accruing under this
act has not been paid according to law, it shall issue a summons summoning the
persons interested in the property liable to the tax to appear before the court on
a day certain not more than three months after the date of such summons, to
show cause why said tax should not be paid. The process, practice and pleadings
and the hearing and determination thereof, and the judgment in said court in
such cases, shall be the same as those now provided or which may hereafter be
provided in probate cases in the county courts in this state, and the fees and costs
in such cases shall be the same as in probate cases In the county courts of this
state.

(L. of '02, p. 55, s. 34; R. S. '08, s. 5564.)

1902, c. 3.] COLORADO. 359

Prosecutions.

S. 15. Whenever the treasurer of any county shall have reason to believe
that any tax is due and unpaid under this act, after the refusal or neglect of the
person interested in the property liable to pay said tax to pay the same, he shall
notify the district attorney of the proper county, in writing, of such refusal to
pay said tax, and the district attorney so notified, if he has proper cause to believe
a tax is due and unpaid, shall prosecute the proceeding in the county court in the
proper county, as provided in section 34 of this act for the enforcement and col-
lection of such tax, and in such case said court shall allow as costs in th^ said case
such fees to said attorney as he may deem reasonable.

(L. of '02, p. 56, s. 35; R. S. '08, s. 5565.)

[Section 34 referred to is section 14 herein.]

Reports.

S. 16. The county judge and county clerk of each county shall, every three
months, make a statement in writing to the county treasurer of the county of
the property from which or the party from whom, he has reason to believe a
tax under this act is due and unpaid.

(L. of '02, p. 56, s. 36; R. S. '08, s. 5566.)

Costs and Expenses.

S. 17. Whenever the county judge of any county shall certify that there was
probable cause for issuing a summons and taking the proceedings specified in
section 34 of this act, the state treasurer shall pay or allow to the treasurer of
any county all expenses incurred for service of summons and his other lawful
disbursements that have not otherwise been paid.

(L. of '02, p. 56, s. 37; R. S. '08, s. 5567.)

[Section 34 referred to is section 14 herein.]

Returns.

S. 18. The treasurer of the state shall furnish to each county judge a book,
in which he shall enter the returns made by appraisers, the cash value of annuities,
life estates and terms of years and other property fixed by him, and the tax as-
sessed thereon, and the amounts of any receipts for payments thereof filed with
him, which book shall be kept in the office of the county judge as a public record.

(L. of '02, p. 56, s. 38; R. S. '08, s. 5568.)

Payments by County Treasurer.

S. 19. The treasurer of each county shall collect and pay the state treasurer
all taxes that may be due and payable under this act, who shall give him a re-
ceipt therefor, of which collection and payment he shall make a report under
oath to the state auditor on the first Mondays in March and September of each
year, stating for what estate paid, and in such form and containing such particu-
lars as the auditor may prescribe, and for all said taxes collected by him and not
paid to the state treasurer by the first day of October and April of each year,
he shall pay interest at the rate of ten per cent per annum.

(L. of '02, p. 56, s. 39; R. S. '08, s. 5569.)

360 STATUTES ANNOTATED. [Colo. St. 1902.

Tax becomes revenue for fiscal period paid in, not fiscal period of
death. Report of Attorney General, 1907-08, p. 103.

Fees of County Treasurer.

S. 20. The treasurer o each county shall be allowed to retain two per cent
on all taxes paid and accounted for by him under this act, in full for his services
in collecting and paying the same, to be taken as a part of his salary of fees now
allowed by law, but not otherwise.

(L. of '02, p. 57, s. 40; R. S. '08, s. 5570.)

Receipts — Lien.

S. 21. Any person or body politic or corporate, shall, upon the payment of
the sum of fifty cents, be entitled to a receipt from the county treasurer of any
county, or tne copy of the receipt, at his option, that may have been given by
said treasurer for the payment of any tax under this act, to be sealed with the
seal of his office, which receipt shall designate on what real property, if any,
of which any decedent may have died seized, said tax has been paid and by whom
paid, and whether or not it is in full cf said tax; and said receipt may be recorded
in the clerk's office of said county in which the property may be situated, in the
book to be kept by said clerk for such purpose.

The lien of the inheritance tax provided herein shall continue until the said
tax is settled and satisfied; Provided, that lien shall be limited to the property
chargeable therewith.

(L. of '02, p. 57, s. 41; R. S. '08, s. 5571, as amended by Statute of '09, s. 5.)
/■

Section as amended '09 applies only as indicated above. Amend-
ment strikes out last clause of original section.

Conn. St.] CONNECTICUT. 361

CONNECTICUT,

In General.

Connecticut adopted a collateral inheritance tax in 1889 and
extended it to direct heirs in 1897. The state supreme court decided
that the personal property of a non-resident was not taxable under
this statute, but that the law as amended in 1903 included such
property. There were important revisions in 1907 and 1909, and
the exemptions were extended by the statute of 1911.

The Connecticut statute is unique and commendable in that it
specifically sets forth the property of non-residents which is subject
to the tax. In most states the statute is silent on the subject, and
as there are few authoritative decisions, the tax authorities must
make their own ruling.

The retaliative provision, under which Connecticut taxes stock
and registered bonds of Connecticut corporations owned by
residents of states which so tax stocks and registered bonds of their
own corporations when owned by Connecticut residents, is an
interesting attempt to reduce double taxation and is more effective
in doing so than the Massachusetts reciprocal provision.

Because the wording of the inheritance tax statute in many of
the states is so ambiguous, the tax commissioner of Connecticut
considers it his duty to obtain official information from the different
states as to the practice which is there followed. Under date of
March 16, 1911, the tax commissioner enumerates the following
states as the ones whose residents must pay an inheritance tax on
stock of a Connecticut corporation wherever the certificate may be :
California, Colorado, Illinois, Iowa, Kansas, Maine, Massachusetts,
Michigan, Minnesota, New Hampshire, New Jersey, New York,
North Carolina, Oklahoma, Utah, Vermont, Washington, West
Virginia, Wisconsin. It would seem that in view of the legislation
of 1911, Maine and New York should be dropped from this list.

A resident of the following states must pay an inheritance tax
on the registered bonds of a Connecticut corporation wherever
the bonds may be: Colorado, Kansas, Michigan, New Hampshire,
Oklahoma, Vermont.

Estates of residents of the states not enumerated are not required
to pay a tax on Connecticut stock or registered bonds as the case
may be.

362 STATUTES ANNOTATED IConn. St.

Since 1908 thirteen states have been added to, and two states
dropped from the Connecticut list of states taxing stock of non-
residents, and three states added to the list of those taxing regis-
tered bonds.

Hon. William H. Corbin, tax commissioner of Connecticut, who
has been a leader in the movement for a uniform inheritance tax,
in urging that the duty of determining inheritance taxes be trans-
ferred to his office, says in his report to the 1911 legislature: —

"Under the present statute, each probate judge of Connecticut
determines the amount of the inheritance tax due the state on all
estates under his jurisdiction. There are one hundred and thirteen
probate judges in as many probate districts in the state. With
some diversity in the interpretation and application of the inheri-
tance tax law by these judges, a quite different method of determin-
ing this tax is followed by some judges from that which obtains
with others."

No Constitutional Limitations.

The Connecticut constitution appears to contain no clause re-
quiring uniformity of taxation or in any way limiting the legislature

in inheritance taxation.

/•

List of Statutes.

1889. Statutes of Connecticut, c. 180, pp. 106-109, inclusive.
1893. " " " c. 257, p. 406.

1897. " c. 201, p. 901.

1901. " " " c. 123, p. 1260.

1903. " " " c. 63, p. 42.

1905. " " " c. 256, p. 455.

1907. " " " c. 179, p. 729.

1909. " " " c. 218, p. 1161.

1911. " " " c. 204.

General Statutes of Connecticut (Revision of 1902), sections 2367-2377.
(See also Revision of 1888, section 3872.)

THE STATUTE OF 1889.

Conn. St. 1889, c. 180, p.' 106. Adopted June 5, 1889.

1889, c. 180.1 CONNECTICUT. 363

child, the lineal descendant of any adopted child, the wife or widow of a son, the
husband of the daughter of a decedent, or some charitable purpose, or purpose
strictly public within this state, shall be liable to a tax of five per centum of its
value, above the sum of one thousand dollars, for the use of the state and all
administrators, executors and trustees, and any such grantee under a conveyance
made during the grantor's life shall be liable for all such taxes, with lawful interest
as hereinafter provided, until the same shall have been paid as hereinafter directed.

S. 2 covers the tax on remainders.

S. 3 covers the tax on legacies to executors or trustees.

S. 4 fixes the time when the tax shall be payable as one year from the
death of the testator.

Ss. 5-16 provide for the collection of the tax.

S. 17 defines the words "person," "property" and "charitable purpose."

Brother and Sister Exempt under the Act of 1893.

Conn. St. 1893, c. 257, p. 406, approved July 1, 1893, exempted
from the collateral inheritance tax the brother or sister of the
decedent.

THE STATUTE OF 1897.

Constitutionality.

"Some form of death duty has been used as a mode of taxation
from ancient times. When the constitution of the United States
was adopted, death duties had been in use in England as well as
elsewhere, and were an established mode of taxation known to the
people, who, in the exercise of the sovereignty vested in them,
enacted the fundamental law. The imposition of death duties
must therefore have been included in the broad power of taxation
granted to the legislature by the constitution. This is true" of the
constitution of our state. Soon after the organization of the federal
government congress imposed death duties, and has used this
mode of taxation at intervals until the present time. The same mode
of taxation has been practiced by many of the state legislatures."
And the fact that the burden of the tax falls only on persons who are
legatees in estates exceeding $10,000 or more under Conn. Gen.
Sts. 1902, ss. 2367-2377, is not material to its validity. The court
notices the claim that this incidental inequality in the operation
of the tax is an arbitrary distinction but the court says that taxation
is necessarily arbitrary; that the arbitrary selection essential to
taxation is controlled by the legislative and not by judicial dis-
cretion. The Connecticut constitution did not require that the
tax should be uniform or equal and the' fact that the stress of the
tax may fall on some more than others does not render it void.

364 STATUTES ANNOTATED. [Conn. St.

And this is due to the mere accident of changing circumstances.
The law is simply and purely an imposition of an indirect tax or
duty and it is within the field where the legislature has absolute
discretion. Appeal of Nettleton, 76 Conn. 235, 241, 56 A. 565.

The court upholds the validity of the Connecticut statute of 1897,
following Appeal of Gallup, 76 Conn. 617, 57 A. 699, in Appeal of
Hopkins, 77 Conn. 644, 60 A. 657.

Nature of Tax.

A death duty is an exaction by the state to be collected from the
property left by a deceased person while in its custody prescribed
upon the occasion of his death and the consequent devolution of
his property by force of its laws. Appeal of Hopkins, 77 Conn. 644,
649, 60 A. 657.

"There are three plans which may be followed in subjecting the
estate of a deceased person to a succession tax : (1) A tax based upon
the distribution of the net proceeds of a decedent's property to the
persons upon whom it devolves by force of the laws of the taxing
state. This plan includes in the estate subject to the tax the net
proceeds of a decedent's land situate in the taxing state, and in
case the decedent was domiciled in the taxing state, but not other-
wise, of all his personal property. (2) A tax based upon any transfer
actual or potential, of a decedent's personal property situate at his
death within the taxing state, whether the net proceeds of that
property pass to the decedent's beneficiaries by force of the laws
of the taxing state or not. Under this plan the tax is more nearly
akin to an ordinary transfer duty, (3) The inclusion in one act of
a tax under each of these plans. There would seem to be no con-
stitutional objection to the adoption of either plan. {Blackstonev.
Miller, 188 U. S. 189, 23 Sup. Ct. 277, 47 L. Ed. 439.) Oursuccession
tax is laid in pursuance of the first plan, and the act is framed in
view of the existing law of domicile in relation to this subject."
Appeal of Gallup, 76 Conn. 617, 621, 57 A. 699.

Ten Thousand Dollars Exempt.

Conn. St. 1897, c. 201, p. 901. Approved June 1, 1897.

S. 1. So much of the estate of any deceased person as exceeds ten thousand
dollars in value shall be subject to the taxes hereinafter provided.

Exemptions Valid.

The exemptions of estates of less than $10,000 are arbitrary and
unequal but not unconstitutional for that reason. Appeal of
Nettleton, 76 Conn. 235, 241, 56 A. 565. [Reported more fully, ante,
p. 363.]

1897, c. 201.] CONNECTICUT. 365

Property Taxable.

S. 2. In all such estates any property within the jurisdiction of this state,
and any interest therein, whether tangible or intangible, and whether belonging
to parties in this state or not, which shall pass by will or by the inheritance laws
of this tate, to the parent or parents, husband, wife, or lineal descendants, or
legally dopted child of the deceased person, shall be liable to a tax of one-half
of one per centum of its value for the use of the state and any such estate or
interest therein which shall so pass to collateral kindred or to strangers to the
blood or to any corporation, voluntary association, or society, shall be liable to a
tax of three per centum of its value for the use of the state. And all executors and
administrators shall be liable for all such taxes with interest thereon at the rate of
nine per centum per annum, from the time when such taxes shall become payable
until the same shall have been paid as hereinafter directed.

"Any property within the jurisdiction of this state"

includes that residuum of the decedent's property remaining after
claims of creditors and charges of administration have been satisfied.
These words include land within the state belonging to any dece-
dent and all the personal property of a decedent domiciled here, but
cannot include personal property in this state which belonged to a
non-resident decedent. Appeal of Gallup, 76 Conn. 617, 57 A. 699.

Debts and Expenses Deducted.

The direction to the administrator to pay the duty implies that
it is to be paid from the property or from the proceeds of the property
of the decedent not applied to the satisfaction of the debts and
administration expenses. Appeal of Hopkins, 77 Conn. 644, 60 A.
657.

Real and Personal Property. — Property of Non- Residents.

The Connecticut statute of 1897 "is framed upon established
principles and is adapted to avoid the peculiar difficulties and to
meet with fairness the interstate obligations attending the im-
position of death duties."

Conn. Gen. Sts. 1902, ss. 2367-2377, imposing a succession tax
on any property within the jurisdiction, apply to land in Connecticut
belonging to any person and to personal property of residents of
Connecticut wherever situated, but not to personal property of
non-residents.

''This view of the legislative purpose is strengthened by an
examination of the amendment passed in 1903. (Public Acts of 1903,
p. 42.) The legislature amends section 2368 by striking out the words
"by the inheritance laws of this state," and inserting in lieu thereof
the words "by inheritance." Having thus removed the bar erected

366 . STATUTES ANNOTATED. [Conn. St.

by the original act, against the use of any of its provisions for im-
posing a transfer tax on personal property of non-residents, it
proceeds to authorize such a transfer tax and to prescribe the
machinery for its collection, coupling this, however, with instruc-
tions to the treasurer not to collect such transfer tax in any case
where the decedent resided in a state which does not collect transfer
or succession taxes from personal property therein "belonging to
the estates of Connecticut decedents. The amendment recognizes
the justice of the scheme adopted in the original act, and attempts
its modification only so far as may be necessary to add to the force
of example the influences of reciprocity." Per Hammersley, J., in
In re Gallup, 76 Conn. 617, 627, 57 A. 699.

S. 3 covers the duties of the probate court as to appraisal and inventory.

Inventory of Property of Non-Residents.

The fact that the main portion of the assets has been distributed
through ancillary administration in New York does not prevent the
court from ordering an inventory of that property to be filed for
the purpose of taxation in Connecticut. Appeal of Hopkins, 77
Conn. 644, 655, 60 A. 657.

Under Conn. St. 1897, it was proper for the probate court to
order the administrator to file an inventory and appraisal including
all the personal property wherever situated although the adminis-
trator could not be held liable upon his final account for the value
of personal property without the state of which it has been im-
possible for him to procure possession. Appeal of Bridgeport Trust
Co.,77Conn. 657, 60A. 662.

Computation of Tax.

Where the statute of 1897 contains no express direction as to
who shall compute the tax or the manner of computation the duty
is implied in the court of probate. The tax should be computed
by the jurisdiction of the domicile notwithstanding ancillary pro-
bate may be also necessary as to property existing outside of the
domicile. Appeal of Hopkins, 77 Conn. 644, 60 A. 657.

S. 4 provides for the payment of the tax.
S. 5 covers taxes on annuitants or life tenants.
Ss. 6 to 10 provide for the collection of the tax.

S. 11 extends the tax to transfers of real or personal estate to take effect
upon the death of the grantor or donor.

1897, c. 201.] CONNECTICUT. 367

Repeal.

S. 12. Chapter 180 of the public acts of 1889 and chapter 257 of the
public acts of 1893 are hereby repealed, but this act shall not apply to estates
of any persons deceased before the passage hereof, but the estates of such persons
shall be subject to the provisions of the said chapter 180 of the public acts of
1889, and chapter 257 of the public acts of 1893.

Gifts for Art Exempted in 1901.

Conn. St. 1901, c. 123, approved June 10, 1901, exempts from
the inheritance tax gifts which have been or may be made by will
to any corporation or institution located in the state for free ex-
hibition and preservation for the benefit of the public of works of
art or articles of beauty or interest.

Tax Extended to Non-Residents in 1903.

Conn. St. 1903, c. 63, s. 1. Approved May 6, 1903.

Section 2368 of the general statutes is hereby amended by striking out in line
four the words "by the inheritance laws of this state" and inserting in lieu thereof
the words "by inheritance," so that said section when amended shall read as
follows: In all such estates any property within the jurisdiction of this state,
and any interest therein, whether tangible or intangible, and whether belonging
to parties in this state or not, which shall pass by will or by inheritance to the
parent or parents, husband, wife, or lineal descendants, or legally adopted child
of the deceased person, shall be liable to a tax of one-half of one per centum of its
value for the use of the state; and any such estate or interest therein which shall
so pass to collateral kindred, or to strangers to the blood, or to any corporation,
voluntary association, or society, shall be liable to a tax of three per centum of its
value for the use of the state. All executors and administrators shall be liable for
all such t^xes, with interest thereon at the rate of nine per centum per annum
from the time when said taxes shall become payable until the same shall have
been paid as hereinafter directed.

As to the purpose and effect of this amendment see Appeal of
Gallup, 76 Conn. 617, 57 A. 699, treated at p. 365, supra.

Conn. St. 1905, approved July 19, 1905, c. 256, p. 455, amends
Conn. St. 1903, c. 63, s. 2. The statute provides that no property
shall be delivered to an executor appointed under the laws of another
state except after notice to the tax commissioner and the payment
of the tax, and it provides for the valuation of the property where
no ancillary administration is taken out.

THE STATUTE OF 1907.

Conn. St. 1907, c. 179, p. 729. Approved July 10, 1907.

S. 1. The provisions of section 2368 of the general statutes as amended by
section one of chapter 63 of the public acts of 1903 shall apply to the following

368 STATUTES ANNOTATED. [Conn. St.

property belonging to deceased persons, non-residents of this state, which shall
pass by will or inheritance under the laws of any other state or country, and such
property shall be subject to the tax prescribed in said section: All real estate
and tangible personal property, including moneys on deposit, within this state;
all intangible personal property, including bonds, securities, shares of stock,
and choses in action the evidences of ownership of which shall be actually withiil
this state; shares of the capital stock or registered bonds of all corporations
organized and existing under the laws of this state the certificates of which stock
or which bonds shall be without this state, where the laws of the state or country
in which such decedent resided shall, at the time of his decease, impose a succes-
sion, inheritance, transfer, or similar tax upon the shares of the capital stock or
registered bonds of all corporations organized or existing under the laws of such
state or country, held under such conditions at their decease by residents of this
state.

S. 2 provides for notice by the probate court to the state treasurer.

S. 3 provides that no executor, administrator or trustee appointed under
the laws of any other jurisdiction, shall assign, transfer or take possession of any
property in Connecticut of a non-resident decedent until the inheritance tax shall
have been paid.

S. 4 prohibits the transfer of property to a foreign executor, administrator
or trustee without giving notice to the tax commissioner and retaining a sufficient
amount of property to pay the tax, and provides for a penalty for failure to observe
these requirements.

S. 5 provides that the tax commissioner may assess the tax and give notice
to the state treasurer, with right of appeal to the probate court.

S. 6 repeals the statute of 1903, c. 63, as amended by the statute of 1905,
c. 256.

THE STATUTE OF* 1909.

Conn. St. 1909, c. 218, p. 1161, approved August 11, 1909,
amends General Statutes, sections 2367, 2368, 2371, 2376 and 305.

Conn. St. 1909, c. 218, p. 1161, s. 5, provides for the taxation of
the exercise of the power of appointment.

THE PRESENT ACT.

Connecticut General Statutes of 1902 as Amended.
Will Proved Without This State, How Proved in This State.

S. 305. When a will conveying property situated in this state has been proved
and established out of this state, in and by a court of competent jurisdiction, the
executor of said will, or any person interested in said property, may produce to
the court of probate in the district in which any of said property is situated a duly
authenticated and exemplified copy of such will, and of the record of the proceed-
ings proving and establishing the same, and request that such copies be filed and
recorded, which request shall be accompanied by a full and correct statement
in writing of all property and estate of the decedent in this state; and if, upon
due hearing had after public notice and such citation as said court shall order, no
sufficient objection be shown, said court shall order said copies to be filed and

1909, c. 218.] CONNECTICUT. 369

recorded, and they shall thereupon become part of the files and records of said
court, and shall have the same effect upon the property so conveyed as if said
will had been originally proved and established in said court of probate, but
nothing in this chapter shall give effect to a will made in this state by an inhabi-
tant thereof which is not executed according to the laws of this state. All property
so passing shall be subject to all laws of this state relative to inheritances and suc-
cessions.

[See notes to the Acts of 1897 and 1903, ante, pp. 363, 367.]

Succession Tax.

S. 2367. The estate of every deceased person to the amount of ten thousand
dollars, when said estate shall pass to the .parent or parents, lineal descendants,
legally adopted child, lineal descendants of any legally adopted child, the
wife or widow of a son, whether such son was born in wedlock or adopted,
the husband of a daughter, whether such daughter was born in wedlock or
adopted, or the brother or sister of the decedent, and, in addition to said
amount, all gifts of paintings, pictures, books, engravings, bronzes, curios,
bric-a-brac, arms, and armor, and collections of articles of beauty or interest,
made by will to any corporation or institution located in this state for free
exhibition and preservation for public benefit; also, in addition to said amount,
every devise, bequest or inheritance not exceeding five hundred dollars in
amount or appraised value passing to other kindred or strangers to the blood,
or to a corporation, voluntary association or society shall be exempt from the
payment of any succession tax; and, subject to such exemption, the estate of
every deceased person shall be subject to the tax in section 2368 provided. When
a portion of the property passes to or for the use of the parent or parents, husband,
wife, lineal descendants, legally adopted child, lineal descendents of any
legally adopted child, the wife or widow of a son, whether such son was born
in wedlock or adopted, the husband of a daughter, whether such daughter was
born in wedlock or adopted, or the brother or sister of the decedent, and
the remaining portion to other collateral kindred or strangers to the blood, or to a
corporation, voluntary association, or society, the amount exempted from taxa-
tion shall be that proportion of ten thousand dollars which the value of the
property passing to those persons mentioned in the first class bears to the total
value of the whole estate. The amount of the property of estates of non-resident
decedents which shall be exempt from the payment of a succession tax shall be
only that proportion of the whole exempted amount which is provided for the
estates of resident decedents which the amount of the estate of the non-resident
which is actually or constructively in this state bears to the total value of the
non-resident decedent's estate wherever situated. [As amended in 1911.]

[See notes to the Act of 1897, p. 363 et seq.]

Succession Tax for Different Classes. — Executors Liable. — Interest.

S. 2368. In all such estates any property within the jurisdiction of this state,
and any interest therein, whether tangible or intangible, and whether belonging
to parties in this state or not, which shall pass by will or by inheritance or by
other statutes to the parent or parents, husband, wife, or lineal descendants,
or legally adopted child of the deceased person, shall be liable to a tax of one per
centum of its value for the use of the state; and any such estate or interest
therein which shall so pass to collateral kindred, or to strangers to the blood, or

370 STATUTES ANNOTATED [Conn. St.

to any corporation, voluntary association, or society, shall be liable to a tax of
five per centum of its value for the use of the state. All executors and administra-
tors shall be liable for all such taxes, with interest thereon at the rate of nine per
centum per annum from the time when said taxes shall become payable until the
same shall have been paid as hereinafter directed.
[See notes to the Act of 1897, ante, p. 363 et seq.]

Glasses of Property of Non-residents to Which Tax Applies.

The provisions of section 2368 of the general statutes as amended by section one
of chapter 63 of the public acts of 1903 shall apply to the following property be-
longing to deceased persons, non-residents of this state, which shall pass by will
or inheritance under the laws of any other state or country, and such property
shall be subject to the tax prescribed in said section: All real estate and tangible
personal property, including moneys on deposit, within this state; all intangible
personal property, including bonds, securities, shares of stock, and choses in action,
the evidences of ownership of which shall be actually within this state; shares
of the capital stock or registered bonds of all corporations organized and existing
under the laws of this state, the certificates of which stock or which bonds shall
be without this state, where the laws of the state or country in which such de-
cedent resided shall, at the time of his decease, impose a succession, inheritance,
transfer, or similar tax upon the shares of the capital stock or registered bonds of
all corporations organized or existing under the laws of such state or country, held
under such conditions at their decease by residents of this state.

Non-residents; Notice to State Treasurer and to Tax Commissioner. —
Appeal.

Whenever ancillary administration has been taken out in this state on the
estate of any non-resident decedent having property subject to said tax under the
provisions of section one of this act, the court of probate having jurisdiction shall
have the same powers in relation to such tax and shall give the same notice to the
state treasurer of all hearings relating thereto as is required in the case of the
estates of resident decedents, and with the same right of app«al. The provisions of
this act concerning notice to the tax commissioner shall not apply to cases where
ancillary administration has been taken out in this state upon the estates of non-
resident decedents.

Possession Not to be Given Until Payment of Tax.

Where ancillary administration has not been taken out in tMs state on the
estate of a non-resident decedent, including any property within the provisions of
section one of this act, no executor, administrator, or trustee appointed under
the laws of any other jurisdiction shall assign, transfer or take possession of any
such property standing in the name or belonging to the estate of, or helcin trust
for, such decedent until the tax prescribed in section 2368 as amended shall have
been paid to the state treasurer or retained as hereinafter provided.

Foreign Executors ; Transfer of Property ; Notice to Tax Commissioner. —
Penalty.

No corporation or person in this state having possession of or control ov>r any
such property, including any corporation, any shares of the capital stock of which
may be subject to said tax, shall deliver or transfer the same to such fctreign

1909, c. 218.] CONNECTICUT. 371

executor, administrator, or trustee, or to the legal representatives of such decedent,
or upon their order or request, unless notice of the time and place of such intended
delivery or transfer be mailed to the tax commissioner at least ten days prior to
said delivery or transfer; nor shall any such corporation make any such delivery
or transfer without retaining a sufficient amount of said property to pay any such
tax which may be due or may thereafter become due under said section 2368
as amended, unless the said tax commissioner consents thereto in writing. Failure
to mail such notice, or to allow the tax commissioner to examine said property, or
to retain a sufficient amount to pay such tax shall, in the absence of the written
consent of the tax commissioner, render such corporation or person liable to the
payment of a penalty of three times the amount of such tax, which payment shall
be enforced in an action brought in the name of the state.

Assessment; Notice to Treasurer and Others. — Reassessment; Appeal.

Said ta}{ commissioner, personally or by his representative, may examine said
property at the time of said delivery or transfer, and it shall be his duty, as
speedily as possible after receiving notice of said property or of the intended
delivery or transfer thereof, to fix the valuation of such property for the purpose
of assessing such tax; and he shall assess the tax, and the amount thereof, payable
on said prop*erty. Wherever a tax is assessed on such property by such tax
commissioner he shall forthwith lodge with the state treasurer a statement showing
such valuation with the amount of said tax, and shall give notice thereof to the
person or corporation having possession of or control over said property. Any
administrator or executor appointed under the laws of any other jurisdiction who
is aggrieved by the valuation or assessment affixed as aforesaid by the tax com-
missioner, may, within twenty days after the date of the filing of the aforesaid
statement with the treasurer, apply to the court of probate in any district in which
any of said property so assessed is situated, which court shall have full power to
cause a revaluation of all property so assessed and a reassessment of the tax
thereon, to be made in the manner provided by law for the appraisal of and the
assessment of the succession tax on estates of resident decedents, and subject
to the same right of appeal.

[See notes to the Act of 1897, p. 366.]

Duty of Probate Court. — Negligent Executor Removable.

S. 2369. The court of probate having jurisdiction of the settlement of any
estate shall, within ten days after the filing of a will or the application for letters
of administration, if in its opinion said estate exceeds in value said sum of ten
thousand dollars, send to the treasurer of the state a certificate of the filing of
such will or application, and shall within ten days after the return and acceptance
of the inventory and appraisal of any such estate send a certified copy of said
inventory and appraisal to the treasurer of the state, together with his certificate
as to the correctness in his opinion of said inventory and appraisal; and if no
new appraisal is made as hereinafter provided the valuation therein given shall
be taken as the basis for computing said taxes. The said court of probate shall,
on the application of the treasurer of the state, or any person interested in the
succession thereof and within four months after granting administration, appoint
three disinterested persons who shall view and appraise such property at its actual
value for the purposes of said tax, and make return thereof to said court, and on
the acceptance of said return, after public notice and hearing, the valuation therein

372 STATUTES ANNOTATED. [Conn. St.

made shall be binding upon the persons interested and upon the state. If any ex-
ecutor or administrator shall neglect or refuse to return an inventory and appraisal
within the time now required by law, unless said time shall have been extended
by said court for cause, after hearing and such notice as the court of probate may
require the said court of probate may remove said executor or administrator and
appoint another person administrator with the will annexed, or administrator,
as the case may be.

[See notes to the Act of 1897, ante, p. 366.]

Tax to be Paid to Treasurer of State. — Extension.

S. 2370. All taxes imposed by section 2368 shall be paid to the treasurer of the
state by the executor or administrator within fourteen months after the qualifica-
tion of such executor or administrator, except as hereinafter provided. If, for
any cause found by the said court of probate to be reasonable, after hearing and
notice to the treasurer of the state, the executor or administrator is unable to pay
said tax within the time limited, the said court of probate shall have power in its
discretion to extend the time for the payment of said taxes.

Estate for Life or Years, or Annuity.

S. 2371. Where any estate or an annuity is bequeathed or devised to any person
for life or any limited period, with remainder over to another or others, and all
the beneficiaries are within the same class, the tax shall be computed on and paid
as aforesaid out of the principal sum of property o bequeathed or devised. Where
a life estate or an annuity is bequeathed or devised to a parent or parents, husband,
wife or lineal descendants, or legal y adopted child, and remainder over to collateral
kindred, or to strangers to the blood, or to a corporation, voluntary association,
of society, then the tax of one per centum shall be paid out of the principal sum
or estate so bequeathed or devised for life, or constituting the fund producing said
annuity, and the remaining four per centum aue from collateral kindred or
strangers to the blood shall be paid out of the said principal sum or estate at the
expiration of the particular estate or annuity. And where a life estate or annuity
is bequeathed or devised to collateral kindred or strangers to the blood, or to a
corporation, voluntary association, or society, with remainder to parent or parents,
husband, wife, or lineal descendants, or legally adopted child, a tax of five per
entum shall be paid as aforesaid to the treasurer of the state out of the principal
sum or estate, or fund producing said annuity; on the termination of said life
estate or annuity the treasurer of the state shall refund and pay to the person or
persons entitled to the remainder four-fifths of said tax. The said court of probate
shall send to the treasurer of the state a certificate of the date of the death of said
life tenant or annuitant within ten days after the same has come to its knowledge.

Where personal property was given to a life tenant the succession
taxes assessed against the net value of the property as a whole are
chargeable to principal. Bishop w. Bishop, 81 Conn. 509, 71 A. 583.

Sale of Estate to Pay Tax.

S. 2372. All administrators or executors shall have power to sell so much of
the estate as will enable them to pay said tax. In case specific estate or property
is bequeathed or devised to any person, unless the legatee or devisee shall pay to

1909, c. 218.] CONNECTICUT. 373

the executor the amount of the tax due thereon by the provisions of section 2368,
the executor shall sell said property or so much thereof as may be necessary to
pay said tax and the fees and expenses of said sale.

When Treasurer may have Administrator Appointed.

S. 2373. In case of the neglect or refusal of any person interested to apply for
letters of administration within thirty days after the death of any intestate,
the treasurer of the state may apply to the court of probate having jurisdiction
for the appointment of an administrator ; and thereupon after hearing and public
notice the said court of probate shall appoint an administrator of said estate.

Probate Court's Jurisdiction.

S. 2374. The court of probate having either principal or ancillary jurisdiction
of the settlement of the estate of the decedent, shall have jurisdiction to hear
and determine all questions in relation to said tax that may arise affecting any
devise, legacy, or inheritance under section 2368, subject to appeal as in other
cases, and the state treasurer shall represent the interests of the state in any
such proceeding.

[See notes to the Act of 1897, ante, p. 365.]

S. 2375. No final settlement of the account of any executor or administrator
shall be accepted or allowed by any court of probate, unless it shall show and the
judge of said .court shall find, that all taxes imposed by the provisions of
section 2368 upon any property or interest belonging to the estate to be settled
by said account, shall have been paid, and the receipt of the treasurer of the
state for such tax shall be the proper voucher for such payment. Settlement of
account not allowed till tax is paid.

S. 2376. All transfers and alienations by deed, grant, or other conveyance,
of real or personal estate to take effect upon the death of the grantor or donor,
shall be testamentary gifts within the taxation purposes of section 2368, and all
property so conveyed shall be conveyed subject to the tax imposed by said section
and upon the same principles and percentages regarding the degree of relationship;
and the grantee or donee of any such estate shall, upon the receipt thereof, pay
to the treasurer of the state a tax of three per cent, or one-half of one per cent of
the value of such property, according to his aforesaid degree of relationship to
the grantor or donor, and the executor or administrator of any such grantor or
donor shall at once communicate to the treasurer of the state his knowledge of any
and all such conveyances. No executor, administrator, or bailee having posses-
sion of any deed, grant, conveyance, or other evidence of such transfer or alienation
shall deliver the same or anything connected with the subject of such transfer or
alienation until the tax aforesaid has been paid to the treasurer of the state.

What Estates Affected by Preceding Sections.

S. 2377. Sections 2367 to 2376, both inclusive, shall not apply to the estates
of any persons deceased before June first, 1897; but the estates of all persons
who died before July first, 1893, and on or after August first, 1889, shall be
subject to the provisions of chapter 180 of the public acts of 1889; and the estates
of all persons who died before June first, 1897, and on or after July first, 1893,

374 STATUTES ANNOTATED. [Conn. St.

shall be subject to the provisions of said chapter 180 as modified by chapter 257
of the public acts of 1893. Said chapters 180 and 257 are continued in force for
the purposes in this section expressed.

Power of Appointment. (Conn. St. 1909, c. 218, s. 5.)

Whenever any person or corporation shall exercise the power of appointment
derived from any disposition of property made feither before or after the pas-
sage of this act, all property under such appointment when made, shall be
deemed to be taxable under the laws of this state in the same manner as though
the property to which such appointment relates belonged absolutely to the donee
of such power and had been bequeathed or devised by such donee by will; and
whenever any person or corporation possessing such power of appointment so
derived shall fail or omit to exercise the same within the time provided therefor,
in whole or in part, the passing of such property taxable under the laws of
this state shall be deemed to take place to the extent of such omission or failure,
in the same manner as though the persons or corporations thereby becoming en-
titled to the possession or enjoyment of the property to which such power related
had succeeded thereto by a will of the donee of the power failing to exercise such
power, taking effect at the time of such omission or failure.

Del. St.] DELAWARE. 375

DELAWARE,

In General.

Delaware adopted a collateral inheritance tax in 1869. In 1883
its application was limited to strangers in blood. In 1909 the present
schedule was adopted. There have been as yet no decisions
construing this statute.

The exeipption is $500 and applies to individual shares. No tax
is claimed on stock of Delaware corporations owned by non-residents.

Constitutional Limitations.
Delaware Constitution, 1897, a. 1.

S. 9. A\\ courts shall be open; and every man for an injury done him in his
reputation, person, movable or immovable possessions, shall have remedy by the
due course of law, and justice administered according to the very right of the
cause and the law of the land, without sale, denial, or unreasonable delay or
expense; and every action shall be tried in the county in which it shall be com-
menced, unless when the judges of the court in which the cause is to be tried shall
determine that an impartial trial thereof cannot be had in that county. Suits
may be brought against the state, according to such regulations as shall be made
by law.

Delaware Constitution, 1897, a. 8.

S. 1. All taxes shall be uniform upon the same class of subjects within the
territorial limits of the authority levying the tax, and shall be levied and collected
under general laws, but the general assembly may by general laws exempt from
taxation such property as in the opinion of the general assembly will best promote
the public welfare.

List of Statutes.

1869. Statutes of Delaware, Vol. 13, c. 390.

1871.
1871.
1877.
1883.
1883.
1909.

" 14, c. 21.
" 14, c. 24.
" 15, c. 337.
" 17, c. 8.
" 17, c. 11.
c. 229, p. 514.

Revised Code of 1852 (Revision of 1874), c. 7, p. 38.
Revised Code of 1852 (Revision of 1893), c. 7, p. 66.
Revised Statutes, 1893, pp. 66-69.

376 STATUTES ANNOTATED. [Del. St.

Former Statutes.

Del. St. 1869, v. 13, c. 390, p. 357, approved April 8, 1869, pro-
vides an inheritance tax in sections 12 to 22.

S. 12. All estates, real and personal, whatsoever, passing from any person
who may die seized and possessed thereof, being in this state, or any part of.such
estates, or any interest therein, transferred by deed, grant, bargain, gift or sale,
made or intended to take effect in possession after the death of the grantor,
bargainor, devisor or donor, to any person or persons, bodies politic or corporate,
in trust or otherwise, other than to or for the use of the father, mother, wife,
children and lineal descendants of the grantor, bargainor, devisor, donor or
intestate, shall be subject to a tax of three per centum on every hundred dollars
of the clear value of such estates, and all executors and administrators shall
only be discharged from liability for the amount of such tax, the payment of
which they may be charged with, by paying the same for the use of this state
as hereinafter directed: Provided, that no estate the value of which shall not
exceed five hundred dollars shall be subject to the tax imposed by this section.

Ss. 13 to 22 provide for the payment and collection of the tax.

Del. St. 1871, Vol. 14, c. 21, p. 31, amended Del. St. 1869, Vol. 13,
c. 390, p. 357, s. 12, by making the rate of tax as follows: —

"Where the successor shall be a brother or sister, or a descendant of a brother
or sister of the predecessor, a tax at the rate of one per centum upon the value of
the estate; where the successor shall be a brother or sister of the father or mother,
or a descendant of a brother or sister of the father or mother of the predecessor,
a tax at the rate of two per centum upon the value of the estate: where the
successor shall be a brother or sister of the grandfather or grandmother, or a
descendant of the brother or sister of the grandfather or grandmother of the
predecessor, a tax at the rate of three per centum upon the value of the estate;
where the successor shall be in any other degree of collateral consanguinity to the
predecessor than is hereinbefore described, or shall be a stranger in blood to him,
a tax at the rate of five per centum of the value of the estate: Provided, that no
tax shall be levied in respect of any succession existing before or subsequent to
the passage of this act, where the successor shall be the wife of the predecessor."

Del. St. 1871, c. 24, s. 5, repeals Del. St. 1869, c. 390, except
sections 12 to 22 inclusive.

Del. St. 1877, Vol. 15, c. 337, approved March 9, 1877, repealed
Del. St. 1869, c. 390, s. 14, and substituted a section the effect of
which was to take away from the assessor of state taxes and give
to the register of wills certain duties in regard to the appraisal of
real estate.

Del. St. 1883, Vol. 17, c. 8, s. 1, approved February 27, 1883,
amended section 13 of the Del. St. 1869, c. 390, by striking out

1909, c. 225.] DELAWARE. 377

the provision that executors or administrators shall pay to the
register of wills three per cent of the money in their hands for dis-
tribution ; and providing instead that the tax shall be paid out of
the money belonging to such legatees or distributees.

Del. St. 1883, Vol. 17, c. 11, approved March 27, 1883, provided
that so much of sections 12 and 13 of Del. St. 1869 as imposes
succession or collateral inheritance taxes except as to strangers
in blood of the predecessor be repealed.

Del. St. 1909, c. 225, was approved March 26, 1909.

THE PRESENT ACT.

Delaware St. 1909, c. 225.

Taxable Transfers. — Rates. — Exemptions.

S. 1. All property within the jurisdiction of this state, real and personal, and
every estate and interest therein, whether belonging to inhabitants of this state
or not, which shall, after the approval of this act, pass by will, or by the intestate
laws of this state, or by deed, grant or gift (except in cases of a bona fide purchase
for full consideration in money or money's worth) made or intended to take effect
in possession or enjoyment after the death of the grantor or donor, to any person
or persons, bodies politic or corporate, in trust or otherwise, other than to or for
the use of the father, mother, grandfather, grandmother, wife, husband, child
or children by birth or legal adoption, or lineal descendant, of the grantor, donor,
devisor, or intestate (hereinafter called the decedent) shall be subject to taxation
and pay the following taxes, that is to say : — where the successor shall be a
brother or sister, or a descendant of a brother or sister of the decedent, a tax at
the rate of one per centum upon the value thereof; where the successor shall be a
brother or sister of the father or mother, or a descendant of a brother or sister of
the father or mother of the decedent, a tax at the rate of two per centum upon the
value thereof; where the successor shall be a brother or sister of the grandfather
or grandmother, or a descendant of the brother or sister of the grandfather or
grandmother of the decedent, a tax at the rate of three per centum upon the
value thereof; where the successor shall be in any other degree of collateral con-
sanguinity to the decedent, than is hereinbefore described, or shall be a stranger in
blood to him, a tax at the rate of five per centum of the value thereof; provided
that if the value of the property, estate or interest therein, passing as aforesaid
to any successor, shall not exceed the sum of five hundred dollars ($500), then
and in such event the successor shall be entitled to receive the same, free and
exempt from any tax imposed by the provisions of this act; and provided further
that nothing in this act shall be construed to impose any tax upon any property,
estate or interest therein passing to or for the use, or in trust for, charitable,
educational or religious societies or institutions, or cities or towns for public
improvement, or to school districts or library commissions.

Payment of Tax. — Penalty.

S. 2. Every pecuniary legacy and every distributive share of an estate payable
in this state, shall be subject to the tax prescribed in section 1 of this act, and every

378 STATUTES ANNOTATED. [Del. St.

executor or administrator to whom administration may be granted, before he
pays any pecuniary legacy, or distributes the shares of any estate liable to the tax
imposed by the preceding section, shall pay to the register of wills of the proper
county, for the use of the state, that per centum of all moneys he may hold for
distribution among the distributees or legatees, as is prescribed in the preceding
section. The tax aforesaid shall be paid by such executor or administrator within
thirteen months from the granting of letters testamentary, or of administration,
and any executor or administrator neglecting or refusing to pay the said tax shall
not be allowed by the register any commissions on the estate, and shall be liable,
on his official bond, for the amount of the tax due the state on the funds in his
hands. The exemptions prescribed in section 1 of this act shall apply to all legacies
and distributive shares of estate.

Appraisal.

S. 3. The estate or interest of every person, body politic or corporate, in all
real and personal property, taxable under the provisions of section 1 of this act,
whether in remainder, reversion or otherwise, or in trust or otherwise, or condi-
tioned upon the happening of a contingency or dependent upon the exercise of
a discretion, or subject to a power of appointment, or otherwise, and all annuities
taxable as aforesaid, shall be valued by the register of wills for the purpose of
determining the amount of tax to be collected from such person, body politic,
or corporate, under the provisions of this act. Where the property shall pass
in trust or otherwise to one or more persons, bodies politic or corporate, for a
term of years or greater estate or interest, and with remainder or reversion to
one or more other persons, bodies politic, or corporate, the estate or interest of
each beneficiary shall be valued separately. The register of wills referred to in
this section shall be the register of wills of the county where letters testamentary
or of administration have been granted on the estate of the donor, grantor,
devisor or intestate from whom the property aforesaid shall have passed as set
forth in section 1 of this act, but if no such letters have been granted then the
said register shall be the register of wills of the county in which such property is,
or is situated. Such valuation shall be made within thirteen months of the death
of the donor, grantor, devisor or intestate aforesaid. The register shall give
one week's notice to the parties in interest by posting the same in his office or in
some other manner as he shall deem proper, of the time when he will hear any of
said parties relative to such valuation. The said register shall have power to
summon witnesses and take testimony relative to the valuation aforesaid.

Appeal.

In all cases there shall be an appeal from the determination of the register as
to the amount of taxes to be paid under the provisions of this act, to the orphans'
court of the county of said register; the said appeal must be taken to the term of
the said orphans' court next following the determination of the register as to the
valuation aforesaid. The decision of the said orphans' court shall be final.

The costs of the appeal shall in all cases be paid by the appellant and shall
be taxed by the court against said appellant. It shall be the duty of the register
to notify the attorney general or his deputy for the county of said register's
jurisdiction, whenever any such appeal shall be taken and it shall be the duty of
the attorney general to represent the state in person or by one of his deputies in
the hearing on the appeal.

1909, c. 225.] DELAWARE. 379

Lien.

Every estate and interest in real and personal property shall be charged with
a lien for the amount of the taxes for which such estate or interest is liable under
the provisions of this act, whether such estate or interest be held at the time the
tax is determined, by the first taker thereof, his heirs, assigns or any other persons,
and such a lien shall not be discharged until the tax shall be paid in full.

Duty of Executor or Administrator to Collect Tax.

It shall be the duty of the executor or administrator of the donor, grantor,
devisor or intestate from whom any property shall pass as set forth, in section 1
of this act, to collect the taxes determined in accordance with the provisions of
this section, to be due and payable on account of said property or any estate or
interest therein, from the parties liable to pay said tax, or their legal representative.
Such collection shall be made within thirty days after the amount of the tax has
been determined in accordance with the provisions of this section, provided that
the right of possession or enjoyment of the property, estate or interest taxed,
shall then have accrued, otherwise such collection shall be made within thirty
days after such right of possession or enjoyment shall accrue. If there shall be
no executor or administrator as aforesaid at such time, it shall be the duty of the
register of wills to appoint some suitable person as administrator.

Jurisdiction of Orphans' Court.

If the owner of any estate or interest subject to the payment of a tax under the
provisions of this act shall refuse or neglect to pay said tax to the executor or
administrator aforesaid, within the time prescribed for the collection thereof as
hereinbefore set forth, then the executor or administrator aforesaid shall apply
to the orphans' court of said county, and it shall be the duty of said court to grant
an order authorizing and directing said executor or administrator to sell for cash,
upon the usual notice, the said estate or interest, or so much thereof as may be
necessary to pay said tax and all expenses of such sale and the commissions of the
executor or administrator thereon. The said order, with the proceedings of the
executor or administrator therein, shall be returned to the next term of the said
orphans' court, and if the return aforesaid be approved by the court, the executor
or administrator making such sale shall execute and deliver to the purchaser a
deed for so much of said estate or interest as was sold, and such deed shall vest
in the purchaser the title thereto.

Legacy Charged on Land.

Whenever any legacy taxable under the provisions of this act, is charged upon
land, the holder of said land shall pay the same to the executor or administrator
in order that said executor or administrator may pay the taxes due thereon.

Property Held in Trust.

In case any property subject to the provisions of this act shall be held in trust,
it shall be the duty of the trustee to pay the taxes imposed under this act, to the
executor or administrator of the donor, grantor or devisor from whom the prop-
erty shall have passed as set forth in section 1 hereof, and if there shall be no such
executor or administrator then said trustees shall pay the said taxes to the register
of wills of the proper county.

380 STATUTES ANNOTATED. [Del. St.

Executor or Administrator to File Statement within Two Months.

It shall be the duty of every executor or administrator within two months after
the granting of letters testamentary or administration, to file in the office of the
register of wills of the county in which such letters have been granted, a statement
in writing, setting forth a general description of every parcel of real estate in this
state of which his decedent died seized, and the name of each party entitled to
any estate or interest in any parcel of said real estate and the relationship,'if afty,
of said party, to the decedent. Said statement shall be supported by the oath
or affirmation of said executor or administrator that the facts there incontained
are true according to his best information and belief.

Records.

Every such statement shall be recorded by the register of wills in a separate book
to be kept by him for that purpose and which shall be known as the "Inheritance
and Succession Docket," and shall be duly indexed. Whenever any parcel of real
property or any estate or interest therein described in the statement of the execu-
tor or administrator aforesaid, shall be subject to tax under the provisions of this
act, the register of wills shall make an entry in the docket aforesaid, of the amount
of the tax determined by him as hereinbefore set forth, to be against said parcel
and every estate and interest therein, and in the event of an appeal to the orphans'
court as aforesaid, shall further set down in said docket the amount of the tax
aforesaid as fixed by said court. When any tax as aforesaid shall be paid and
discharged, the said register shall make a note thereof in the said docket.

Duty to Examine Records. — Proceedings.

It shall be the duty of the state treasurer from time to time to examine every
such docket as aforesaid, and to notify the attorney general of any failure on the
part of any register of wills or of any executor or aclministrator to perform the
duties imposed upon them by this act. The attorney general shall thereupon
take proper proceedings against the party or parties delinquent. All taxes im-
posed under the provisions of this act shall be for the use of the state.

When no Executor or Administrator Tax to be Paid to Register of Wills.

If for any cause there shall be no executor or administrator to receive a tax
imposed under the provisions of this act, the party liable for said tax shall have
the right to pay the same direct to the register of wills of the proper county and
such payment shall operate as a discharge of said tax.

Bond of Executor or Administrator Liable.

S. 4. The bond of an executor or administrator shall be liable for all money
he may receive for taxes, or for the proceeds of the sale of any estate or interest
received by him under this act, and if any executor or administrator shall fail
to perform any of the duties imposed upon him under the provisions of this act
the register of \vins granting the letters of administration may revoke the same,
and his bond shall be liable, and the same proceedings shall be had as if his ad-
ministration had been revoked for any other cause. The powers and duties of an
administrator de bonis non, or de bonis non with the will annexed, shall be the
same, under this act, as an executor or administrator, and he shall be subject to
the same liabilities.

1909, c. 225.] DELAWARE. 381

Tax to be Paid to Register of Wills.

S. 5. Every executor or administrator collecting the tax aforesaid by sale of
any estate or interest as aforesaid, shall pay the tax so collected to the register
of wills of the proper county.

Receipts.

S. 6. Every register of wills receiving any tax under the provisions of this act,
shall give the person paying the same, duplicate receipts therefor, one of which
shall be forwarded by the person so paying as aforesaid, to the state treasurer
to be by him preserved, and either of said duplicate receipts shall be evidence in
suits upon the bond of said register to recover the taxes so by him received.

S, 7. It shall be the duty of the several register of wills in the state, to make
returns, urider oath to the state treasurer, on the first days of January, April,
July and October, in each year, or within thirty days thereafter, of all sums of
money received by them as taxes under the provisions of this act, the first return
to be made on the first day of July next after the passage of this act, and to pay
over to said state treasurer the amounts so by them received respectively, at
the time of making such returns, for which they shall be allowed a commission
of one-half of one per centum on the amount so paid over, and if any register of
wills shall fail to pay over, as required by this section, the state treasurer shall
give notice to the attorney general of the state, whose duty it shall be to institute
suit on the official bond of such register of wills, for the use of the state, to recover
the amount due from such register of wills, and in such suit the amount appearing
to be due, with interest thereon, and costs, shall be recovered, which recovery shall
be evidence of misbehavior in office, and upon conviction thereof such register
cf wills shall be removed from office.

The official bond of every register of wills of this state, now or hereafter ap-
pointed, shall be deemed and held to embrace and include the faithful performance
by such register of all and every the duties imposed upon him by this act. (Ap-
proved March 26, A.D. 1909.)

382 STATUTES ANNOTATED. [Del., Fla., Ga.

DISTRICT OF COLUMBIA.

There is no inheritance tax law in force in the District of Columbia.
A bill for an inheritance tax in the District passed the House in
December, 1910, but did not pass the Senate. It proposed to
tax direct inheritances from $10,000 to $100,000, 1 per cent;
$100,000 to $500,000, 21^ per cent; over $500,000, 5 per cent;
collateral inheritances, uniformly 5 per cent on the excess over
$3,000.

FLORIDA,

In General.

Florida has no inheritance tax and has never had an inheritance
tax.

Ftorida Constitution, 1885, a. 9.

S. 1. The legislature shall provide for a uniform and equal rate of taxation,
and shall prescribe such regulations as shall secure a jlist valuation of all property
both real and personal, excepting such property as may be exempted by law for
municipal, educational, literary, scientific, religious or charitable purposes.

GEORGIA.

In General.

Georgia has no inheritance tax and has never had an inheritance
tax.

Georgia Constitution, 1877, a. 7, s. 2, par. 1.

All taxation shall be uniform upon the same class of subjects, and ad valorem
on all property subject to be taxed within the territorial limits of the authority
levying the tax, and shall be levied and collected under general laws. The general
assembly may, however, impose a tax upon such domestic animals, as, from their
nature and habits, are destructive of other property.

Hawaii St.] HAWAII. 383

HAWAII.

In General.

This territory has had a collateral inheritance tax since 1892,
which was extended in 1905 to direct heirs. The act was further
amended in 1909.

List of Statutes.

1892.

Statutes of Hawaii,

, c. 106.

1896.

U (<

c. 21.

1903.

c. 30.

1905.

(< ((

c. 102.

1909.

" "

c. 66.

1909.

a i,

c. 147.

1911.

i( (<

c. 130.

1897.

Civil Laws,

sections 910-917.

1905.

Revised Laws of Hawaii, chapter 100, sections 1290-1297.

History of Legislation.

The Hawaii enabling act does not seem to contain any particular
restriction on inheritance taxes.

Hawaii St. 1896, c. 21, approved May 4, 1896, amends Hawaii
St. 1892, c. 106, s. 1, which imposed a collateral inheritance tax
of 5 per cent

Hawaii St. 1892, c. 106, and Hawaii St. 1896, c. 21, were codified
in the Civil Laws of the Hawaiian Islands, 1897, published as c.
63, ss. 910, 917.

Hawaii St. 1903, c. 30, affirmed chapter 63 of the Civil Laws of
Hawaii.

Hawaii St. 1905, Act 102, approved April 26, 1905, extended
the tax to direct heirs.

Hawaii St. 1909, Act 33, approved April 8, 1909, imposing an in-
come tax, is amended by Hawaii St. 1909, Act 66, by adding thereto
the provision that the tax should not be levied or assessed upon
money and the value of personal property acquired by gift or in-
heritance.

Hawaii St. 1909, Act 147, approved April 28, 1909, amended
sections 1, 5, 12, and 25 of Act No. 102 of the Laws of 1905, relating
to the inheritance tax.

384 STATUTES ANNOTATED. [Hawaii St.

THE PRESENT ACT.

Hawaii St. 1905, No. 102, as amended.

Transfers Taxable. — Rate. — Exemptions.

S. 1. All property which shall pass by will or by the intestate laws of this
territory, from any person who may die seized or possessed of the same while
a resident of this territory, or which being within this territory shall pass whether
by the laws of this territory or otherwise, from any person who may so. die while
not a resident of this territory, or which, or any interest in or income from which
shall be transferred by deed, grant, sale or gift, made in contemplation of the
death of the grantor, vendor, or bargainor, or intended to take effect in possession
or enjoyment after such death, to any person or persons, or to any body poHtic or
corporate, in trust or otherwise, or by reason whereof any person or body politic
or corporate shall become beneficially entitled, in possession or expectancy, to any
property, or to the income thereof, shall be and is subject to a tax hereinafter pro-
vided for, to be paid to the treasurer of the territory of Hawaii as hereinafter
directed, for the use of the territory; and such tax shall be and remain a lien upon
the property passed or transferred until paid and all administrators, executors
and trustees of every estate so transferred and the person to whom the property
passes or is transferred or passed shall be liable for any and all such taxes until the
same shall have been paid as hereinafter directed. The tax so imposed shall be
upon the market value of such property at the rates hereinafter prescribed and
only upon the excess over the exemptions hereinafter granted.

Whenever any person or corporation shall exercise a power of appointment
derived from any disposition of property made either before or after the passage of
this act, such appointment when made shall be deemed a transfer taxable under
the provisions of this act in the same manner as though the property to which
such appointment relates belonged absolutely to the donee of such power and
had been bequeathed or devised by such donee b^^ will ; and whenever any person
or corporation possessing such power of appointment so derived shall omit or
fail to exercise the same within the time provided therefor, in whole or in part,
a transfer taxable under the provisions of this act shall be deemed to take place
to the extent of such omissions or failures in the same manner as though the
persons or corporations thereby becoming entitled to the possession or enjoyment
of the property to which such power related had succeeded thereto by a will of
the donee of the power failing to exercise such power, taking effect at the time
of such omission or failure.

When the beneficial interest to any property or income therefrom shall so pass
to or for the use of his or her father, mother, husband, wife, child, grandchild, or
any child adopted as such in conformity with the laws of the territory of Hawaii,
the rate of the tax shall be two per cent of the market value of such property,
received by each person, in excess of five thousand dollars; in all other cases the
rate of tax shall be five per cent of the market value of such property in excess of
five hundred dollars. -All property so passing for which such exemption of five
thousand dollars can be maintained shall not be taxable as income under the
provisions bf any other law.

[As amended by St. 1909, Act 147, s. 1.]

"Inheritances otherwise taxed" as exempted from the income
tax include only inheritances otherwise taxed under the terri-

1906, No. 102.] HAWAII. 385

torial laws and not under the federal laws. Halstead v. Pratt,
14 Hawaii 38.

An inheritance of personal property is "acquired" within the
meaning of section 3 of the income tax law when it is received, or
at least when it is receivable, and not immediately upon the death
of the decedent. Halstead v. Pratt, 14 Hawaii 38.

Exemptions.

S, 2. All property transferred to societies, corporations and institutions now
or hereafter exempted by law from taxation, or to any public corporation, or to
any society, corporation, institution or association of persons engaged in or
devoted to any charitable, benevolent, educational, public or other like work
(pecuniary profit not being its object or purpose), or to any person, society, cor-
poration, institutions, or associations of persons in trust for or to be devoted to any
charitable, benevolent, educational or public purpose, by reason whereof any such
person or corporation shall become beneficially entitled, in possession or ex-
pectancy, to any such property or to the income thereof shall be exempt from this
tax.

Particular Estates and Remainders.

S. 3. When any grant, gift, legacy or succession upon which a tax is imposed
by section 1 of this act shall be an estate, income or interest for a term of years,
or for life, or determinable upon any future or contingent event, or shall be a
remainder, reversion or other expectancy, real or personal, the entire property or
fund by which such estate, income or interest is supported, or of which it is a
part, shall be appraised immediately after the death of the decedent, and the
market value thereof determined in the manner provided in section 12 of this act,
and the tax prescribed by this act shall be immediately due and payable to the
treasurer of the territory, and, together with the interest thereon, shall be and
remain a lien on said property until the same is paid, provided, that the person
or persons, or body politic or corporate, beneficially interested in the property
chargeable with said tax, may elect not to pay the same until they shall come into
the actual possession or enjoyment of such property, and in that case such person
or persons, or body politic or corporate, shall execute a bond to the treasurer of the
territory, in a penalty of twice the amount of the tax arising upon personal estate,
with such sureties as a circuit judge at chambers may approve, conditioned for
the payment of said tax, and interest thereon, at such time or period as they
or their representatives may come into the actual possession or enjoyment of
such property, which bond shall be filed in the office of the treasurer of the territory ;
provided further, that such person shall make a full and verified return of such
property to a circuit judge at chambers, and file the same in the office of the
treasurer within one year from the death of the decedent, and within that period
enter into such security, and renew the same every five years.

Gift to Executors or Trustees.

S. 4. Whenever a decedent appoints or names one or more executors or
trustees and makes a bequest or devise of property to them in lieu of commissions
or allowances, which otherwise would be liable to said tax, or appoints them his

386 STATUTES ANNOTATED. [Hawaii St.

residuary legatees, and said bequests, devises, or residuary legacies exceed what
would be a reasonable compensation for their services, such excess over and above
the exemptions herein provided for shall be liable to said tax; and the circuit
judge at chambers, before whom the probate proceedings are pending, shall fix
the compensation.

When Tax Accrues. — Interest. — Appraisal.

S. 5. All taxes imposed by this act, unless otherwise herein provided for, shall
be due and payable at the death of the decedent and if the same are paid within
eighteen months, no interest shall be charged and collected thereon, but if not
so paid, interest at the rate of ten per centum per annum shall be charged and
collected from the time said tax accrued ; provided, that if said tax is paid within
twelve months from the accruing thereof, a discount of five per centum shall be
allowed and deducted from said tax. And in all cases where the executors,
administrators or trustees do not pay such tax within eighteen months from the
death of the decedent, they shall be required to give a bond in the form and to
the effect prescribed in section 3 of this act for the payment of said tax, together
with interest.

Provided, that nothing in this act contained shall be construed to require the
collection or payment of any tax assessed or assessable against any property
or interest which upon final distribution in any estate cannot be distributed to
or come into the possession or enjoyment of the persons entitled thereto.

[As amended by St. 1909, Act 147, s. 2. See St. 1911, Act 130, post, p. 392.]

Penalties.

S 6. The penalty of ten per cent per annum imposed by section 5 hereof,
for the non-payment of said tax, shall not be charged in cases where, in the judg-
ment of the court, by reason of claims made upon Jthe estate, necessary litigation
or other unavoidable cause of delay, the estate of any decedent, or a part thereof
cannot be settled at the end of eighteen months from the death of the decedent;
and in such cases only seven per cent per annum shall be charged upon the said
tax from the expiration of said eighteen months until the cause of such delay
is removed, after which ten per cent interest per annum shall again be charged
until the tax is paid; but litigation to defeat the payment of the tax shall not
be considered necessary litigation.

Deduction of Tax from Gifts.

S. 7. Any administrator, executor or trustee having in charge or trust any
legacy or property for distribution, subject to the said tax, shall deduct the tax
therefrom, or if the legacy or property be not money he shall collect the tax thereon
upon the market value thereof, from the legatee or person entitled to such prop-
erty, and he shall not deliver, or be compelled to deliver, any specific legacy or
property subject to fax to any person until he shall have collected the tax thereon
and whenever any such legacy shall be charged upon or payable out of real estate,
the executor, administrator or trustee shall collect said tax from the distributee
thereof, and the same shall remain a charge on such real estate until paid; if,
however, such legacy be given in money to any person for a limited period, the
executor, administrator or trustee shall retain the tax upon the whole amount;
but if it be not in money he shall make application to the circuit judge, having

1905, No. 102.] HAWAII. 387

jurisdiction, to make an apportionment, if the case require it, of the sum to be
paid into his hands by such legatees, and for such further order relative thereto as
the case may require.

Power of Sale.

S. 8. All executors, administrators and trustees shall have full power to sell
so much of the property of the decedent as will enable them to pay said tax, in
the same manner as they may be enabled by law to do for the payment of debts
of the estate, and the amount of said tax shall be paid as hereinafter directed.

Payments. — Receipts.

S. 9. Every sum of money retained by an executor, administrator or trustee
or paid into his hands, for any tax on property, shall be paid by him, within thirty
days thereafter, to the treasurer of the territory, and the said treasurer shall
give, and every executor, administrator or trustee shall take duplicate receipts
for such payrnent, one of which receipts said executor, administrator or trustee
shall immediately file with the circuit judge having jurisdiction of the probate
proceedings, whereupon it shall be a proper voucher in the settlement of his
account; and an executor, administrator or trustee shall not be entitled to credits
in his accounts, nor be discharged from liability for such tax, nor shall said estate
be distributed, unless he shall produce a receipt so sealed and countersigned by
the treasurer, or a copy thereof, certified by him, and file the same with the court
aforesaid.

Refund to Pay Debts.

S. 10. Whenever any debts shall be proven against the estate of a decedent,
after the payment of legacies or distribution of property from which the said tax
has been deducted or upon which it has been paid, and a refund is made by the
legatee, devisee, heir or next of kin, a proportion of the tax so deducted or paid
shall be repaid to him by the executor, administrator or trustee, if the said tax
has not been paid to the treasurer.

Transfer by Foreign Executor, etc.

S. 11. If a foreign executor, administrator or trustee shall assign or fansfer
any stock or obligations in this territory standing in the name of a decedent, or
in trust for a decedent, liable to any such tax, the tax shall be paid to the treasurer
of the territory on the transfer thereof. No safe deposit company, trustee com-
pany, corporation, bank or other institution, person or persons having in posses-
sion or under control securities, deposits or other assets of a decedent, including
the shares of the capital stock of, or other interests in, the safe deposit company,
trust company, corporation, bank or other institution, making the delivery or
transfer herein provided, shall deliver or transfer the same to the executors, admin-
istrators or legal representatives of said decedent, or upon their order or request,
unless notice of the time and place of such intended delivery or transfer be served
upon the treasurer at least ten days prior to said delivery or transfer; nor shall
any such safe deposit company, trust company, corporation, bank or other insti-
tution, person or persons deliver or transfer any securities, deposits or other
assets of the estate of a non-resident decedent including the shares of the capital
stock of, or other interests in, the safe deposit company, trust company, corpora-
tion, bank or other institution, making the delivery or transfer, without retaining
a sufficient portion or amount thereof to pay any tax and penalty which may

388 STATUTES ANNOTATED. [Hawaii St.

thereafter be assessed on account of the delivery or transfer of such securities,
deposits or other assets including the shares of the capital stock of or other
interests in, the safe deposit company, trust company, corporation, bank or other
institution making the delivery or transfer, under the provisions of this act,
unless the treasurer consents thereto in writing. And it shall be lawful for the
said treasurer, personally, or by representative, to examine said securities, de-
posits or assets at the time of such delivery or transfer. Failure to serve such
notice and to allow such examination, and to retain a sufficient portion or amount
to pay such tax and penalty as herein provided, shall render said safe deposit
company, trust company, corporation, bank or other institution, person or persons
liable to the payment of two times the amount of the tax and penalty due or
thereafter to become due upon said securities, deposits or other assets, including
the shares of the capital stock of, or other interests in, the safe deposit company,
trust company, corporation, bank or other institution, making the delivery or
transfer; and the payment as herein provided shall be enforced in an action
brought in accordance with the provisions of section fifteen of this chapter.

Appraisal.

S. 12. When the value of any inheritance, devise, bequest or other interest
subject to the payment of said tax is uncertain, the circuit judge before whom the
probate proceedings are pending, on the application of any interested party, or
upon his own motion may appoint some competent person or persons as appraisers,
as often as and whenever occasion may require, whose duty it shall be forthwith
to give notice, by mail, to all persons known to have, or to claim an interest in
such property, to the treasurer of the territory and to such persons as the circuit
judge may by order direct, of the time and place at which he will appraise such
property, and at such time and place to appraise the same and make a report
thereof, in writing, to said circuit judge, together with sucl>.other facts in relation
thereto as said circuit judge may by order require to be filed with the clerk of said
court; and from this report, or in case appraisers are not appointed, in any event
the said circuit judge shall, by order, assess and fix the value of all iriheritances,
devises, bequests or other interests, and the tax to which the same is liable, and
shall immediately cause notice thereof to be given by mail, to all persons known
to be interested therein. The value of every future or contingent or limited estate,
income or interest shall, for the purpose of this act, be determined by the insurance
commissioner, by the rule, method and the standards of mortaUty and of value
that are set forth in the American experience tables of mortality for ascertaining
the value of policies of life insurance and annuities and for the determination of
the liabilities of life insurance companies, save that the rate of interest to be
assessed in computing the present value of all future interests and contingencies
shall be five per centum per annum, and said commissioner shall certify such value
to the appraisers or judge as the case may be. Every appraiser shall be paid on
the certificate of the circuit judge at chambers at the rate of five dollars per day
for every day actually and necessarily employed in such appraisal, and his actual
and necessary traveling expenses at the same rate now paid for traveling expenses
to witnesses subpoenaed to attend courts of record. Such fees and all other charges
herein provided for shall be paid out of the estate of the decedent as an expense
of administrator.

[As amended by St. 1909, Act 147, s. 3.]

[See further, s. 5, ante, p. 386.]

1905, No. 102.] HAWAII. 389

Appraisers to Take no Reward from Parties.

S. 13. Any appraiser appointed by virtue of this act who shall take any fee
or reward from any executor, administrator, trustee, legatee, next of kin, or heir
of any decedent, or from any other person liable to pay said tax, or any portion
thereof, shall be guilty of a misdemeanor, and upon conviction thereof, shall be
fined not less than two hundred and fifty dollars nor more than five hundred
dollars, or imprisoned for a period of ninety days, or both.

Jurisdiction of Court.

S. 14. The circuit judge at chambers having jurisdiction of the decedent's
estate in this territory, shall have jurisdiction to hear and determine all questions
in relation to the tax arising under the provisions of this act.

Citation.

S. 15. If rt shall appear to the circuit judge that any tax accruing under this
act has not been paid according to law, he shall issue a citation, citing the persons
known to own any interest in or part of the property liable to the tax or any person
or corporation liable under the law for the payment of said tax to appear before
him at chambers on a day certain, not more than ten weeks after the date of such
citation, and show cause why said tax should not be paid.

Circuit judges acting under this law shall have power to enter and enforce all
appropriate orders and decrees and all other appropriate powers that may be ex-
ercised by circuit judges at chambers whether in equity or probate.

Duties of Treasurer.

S. 16. Whenever the treasurer shall have reason to believe that any tax is
due and unpaid under this act, after the refusal or neglect of the persons interested
in the property liable to said tax to pay the same, he shall notify the attorney
general of the territory, in writing, of such failure to pay such tax, and the attor-
ney general, so notified, if he have probable cause to believe a tax is due and
unpaid, shall prosecute the proceeding before the circuit judge as provided in
section fifteen of this act, for the enforcement and collection of such tax;

Record.

S. 17. The treasurer of the territory shall furnish to each of the clerks of
the several circuit courts a book, which shall be a public record and in which he
shall enter the name of every decedent, upon whose estate an application has been
made to the circuit judges of the several circuit courts, for the issuance of letters
of administration, or letters testamentary, or ancillary letters, the date and place
of death of such decedent, the estimated value of his real and personal property,
the names, places or [sic] residence and relationship to him of his heirs at law,
the names and places of residence of the legatees and devisees in any will of any
such decedent, the amount of each legacy and the estimated value of any real
property devised therein, and to whom devised. These entries shall be made from
the data contained in the papers filed on any such application, or in any proceeding
relating to the estate of the decedent. The clerk of the circuit court shall also
enter in such book the amount of personal property of any such decedent, as shown
by the inventory thereof when made and filed in his office, and the returns made
by any appraiser appointed by the circuit judge, under this statute, and the

390 STATUTES ANNOTATED. [Hawaii St.

value of annuities, life estates, terms of years and other property of such decedent,
or given by him in his will or otherwise, as fixed by the circuit judge, and the tax
assessed thereon, and the amounts of any receipts for payment of any tax on the
estate of such decedent under this statute filed with him. The clerk of the
circuit court shall, on the first day of January, April, July and October of each
year make a report in duplicate, upon forms to be furnished by the treasurer con^
taining all the data and matters required to be entered in such book, and also of
the property from which, or the party from which, he has reason to believe the
tax under this act is due and unpaid, one of which shall be immediately delivered
to the treasurer and the other transmitted to the attorney general.

Expenses.

S. 18. Whenever a circuit judge at chambers shall certify that there was
probable cause for issuing a citation and taking the proceedings specified in section
fifteen of this act, the treasurer shall pay, or allow all expenses incurred for
services of citation, and other lawful disbursements that have not otherwise been
paid.

Treasurer to Collect Taxes.

S. 19. The treasurer shall collect all taxes that may be due and payable under
this act.

Special Attorneys.

^. 20. The treasurer, in his discretion, for the better furtherance of the pur-
poses of this act, shall be allowed to employ such special attorney or attorneys
as he may deem necessary, who shall have all the authority conferred upon the
attorney general by sections fifteen and sixteen of this act, and such attorney shall
be paid for his services reasonable fees.

Receipts.

S. 21. Any person, or body politic or corporate shall, upon payment of the
sum of fifty cents, be entitled to a receipt from the treasurer, or a copy of the
receipt at his option, that may have been given by said treasurer for the payment
of any tax under this act, to be sealed with the seal of his office, which receipt
shall designate on what real property, if any, of which any decedent may have
died seized, said tax has been paid, and by whom paid, and whether or not it is in
full of said tax; and said receipt may be recorded in the clerk's office of the circuit
court in which such estate was probated, in a book to be kept by said clerk for such
purpose, which shall be labeled "Inheritance Tax."

Penalties on Officers.

S. 22. Every officer who fails or refuses to perform, within a reasonable time,
any and every duty required by the provisions of this act, or who fails or refuses
to make and deliver within a reasonable time any statement or record required
by this act, shall forfeit to the territory of Hawaii the sum of one thousand dollars,
to be recovered in an action brought by the attorney general in the name of the
territory.

1905, No. 102.1 HAWAII 391

Repeal.

S. 23. Chapter 100 of the Revised Laws of Hawaii relating to inheritance tax
and all amendments thereto and all laws and parts of laws in conflict with this
act are hereby expressly repealed.

Definitions.

S. 24. The words "estate" and "property" as used in this act shall be taken
to mean the real and personal property or interest therein of the testator, intestate,
grantor, bargainor, vendor or donor passing or transferred to individuals, legatees,
devisees, heirs, next of kin, grantees, donees, vendees or successors and shall
include all personal property within or without the territory. The word "transfer"
as used in this act shall be taken to include the passing of property or any interest
therein, in possession or enjoyment, present or future, by inheritance, descent,
devise, succession, bequest, grant, deed, bargain, sale, gift or appointment in
the manner fierein described. The word "decedent" as used in this act shall
include the tes ator, intestate, grantor, bargainor, vendor or donor.

Actions.

S. 25. In all cases where any tax has become or shall hereafter become a lien
upon any property under or by virtue of any of the provisions of this act the
attorney general may, whenever any property of said estate has been distributed
without the payment to the territory of all or any part of the taxes payable on
account thereof, under this act bring and prosecute an action or actions in the
name of the territory as plaintiff for the purpose of enforcing such lien or liens
against all or any of the property subject thereto. In any such action the owner
of any property or of any interest in property against which the lien of any such
tax is sought to be enforced, and any predecessor in interest of any such owner
whose title or interest was derived through any such decedent by will or succession
or by decree or distribution of the estate of such decedent, and any lienor or in-
cumbrancer subsequent to the lien of such tax may be made a party defendant.
The enumeration in this section of the persons who may be made defendants shall
not be deemed to be exclusive; but the joinder or non-joinder of parties, except
when otherwise herein provided, shall be governed by the. rules in equity in similar
cases.

(a) Actions may be brought against the territory for the purpose of quieting
the title to any property, against the lien or claim of lien of any tax or taxes under
this act, or for the purpose of having to determine that any property is not subject
to any lien for taxes under this act. In any such action the plaintiffs may be any
administrator or executor of the estate or will of any decedent, whether the said
estate shall have been fully administered and the estate settled and closed or
not, and any heir to the legatee or devisee of any such decedent, or trustee of the
estate or of any part of the estate of such decedent, or distributee of the estate or
of any part of the estate of any such decedent, and any assignee, grantee or suc-
cessor in interest of any such persons, and all or any other persons who might be
made parties defendant in any action brought by the territory under the provisions
of this section, and notwithstanding that all or any of the persons enumerated in
this section shall or may have assigned, granted, conveyed or otherwise parted
with all or any interest in or title to the property, or any (part) thereof, involved
in any such claim of lien before the commencement of such action. All or any of

392 STATUTES ANNOTATED. [Hawaii St.

the persons in this action enumerated may be joined or united as parties plaintiff.
The enumeration in this section of the persons who may be made parties shall not
be deemed to be exclusive, but the joinder or non-joinder of parties, except when
otherwise herein provided, shall be governed by the rules in equity in similar cases.
In all cases any person who might properly be a party plaintiff in any such action
who refuses to join as plaintiff may be made a defendant.

(b) All actions under this section shall be triable before the circuit court of the
circuit in which decedent's estate is being or has been administered.

[As amended by the Statute of 1909, Act 147, approved April 28, 1909.]

(c) Service of summons in actions brought against the territory shall be made
on the attorney general, and it shall be the duty of said attorney general to defend
all such actions.

(d) The procedure and practice in all actions brought under this section, except
as otherwise provided in this act, shall be governed by the provisions of the
Revised Laws of Hawaii in relation to civil actions, so far as the same shall or may
be applicable, including all provisions relating to motions for new trials and
appeals.

(e) The remedies provided in this section shall be in addition to and not
exclusive of any remedies provided in the sections preceding this section.

Hawaii St. 1911, Act 130.

S. 5. All taxes imposed by this act, unless otherwise herein provided for,
shall be due and payable at the death of the decedent, and if the same are paid
within eighteen months, no interest shall be charged and collected thereon, but
if not so paid interest at the rate of ten per cent per annum shall be charged
and collected from the [date of death;] provided that if said tax is paid within
twelve months from the [date of death,] a discount of five per cent shall be allowed
and deducted from said tax, [and] in all cases where the executors, administra-
tors or trustees do not pay such tax within eighteen months from [the date of]
the death of the decedent, they shall be required to give a bond in the form and
to the effect prescribed in section 3 of this act? for the payment of said tax
together with interest.

[All property, the transfer of which is subject to tax under the provisions of
this act, shall be appraised at its full cash value as of the date of death. When-
ever, by reason of the provisions of this act, it shall become necessary to appraise
or ascertain the value of any stocks, bonds or securities, such as are customarily
bought or sold in open market in the city of Honolulu or elsewhere, the value of
such stocks, bonds or securities shall be ascertained by taking the price for which
such stocks, bonds or securities were bought and sold upon the date of death, or
if there were no sales upon such day, then by ascertaining the range of the mar-
ket and the average of prices as thus found running through a reasonable period
of time before and after the date of death.]

Material in brackets is new matter.

Idaho St.] IDAHO. 393

IDAHO.

In General.

Idaho, in 1907, copied the present California law almost verbatim.
The classification, rates of tax and exemptions are exactly as
given for California prior to the amendment of 1911.

Idaho is not collecting a tax on stock of an Idaho corporation
owned by a non-resident if the shares are physically outside of the
state, although the statute contains the common provision holding
the corporation responsible for the tax if it transfers such stock
before the inheritance tax is paid.

Constitutional Limitations.
Idaho Constitution, 1889, a. 7, s. 2.

The legislature shall provide such revenue as may be needful, by levying a
tax by valuation, so that every person or corporation shall pay a tax in proportion
to the value of his, her or its property, except as in this article hereinafter otherwise
provided. The legislature may also impose a license tax (both upon natural
persons and upon corporations, other than municipal, doing business in this
state); also a per capita tax: Provided, the legislature may exempt a limited
amount of improvements upon land from taxation.

Idaho Constitution, 1889, a. 8, s. 5.

All taxes shall be uniform upon the same class of subjects within the territorial
limits, of the authority levying the tax, and shall be levied and collected under
general laws, which shall prescribe such regulations as shall secure a just valuation
for taxation of all property, real and personal: Provided, that the legislature
may allow such exemptions from taxation from time to time as shall seem neces-
sary and just, and all existing exemptions provided by the laws of the territory,
shall continue until changed by the legislature of the, state: Provided further,
that duplicate taxation of property for the same purpose during the same year
is hereby prohibited.

List of Statutes.

1907. Statutes of Idaho, c. 78, p. 558 (approved March 16, 1907).
Idaho Revised Codes, 1908, Vol. 1, c. 5, p. 797, ss. 1873-1897.

394 STATUTES ANNOTATED. [Idaho Rev. Cds-

THE PRESENT ACT.

Idaho Revised Codes, Title 10, c. 5.
Transfers Taxable.

S. 1873. 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 resi-
dent of this state, or if such decedent was not a resident of this state at J;he time
of death, which property or any part thereof, shall be within this state, or any
interest therein, or income therefrom, which shall be transferred by deed, grant
sale or gift, made in contemplation of the death of the grantor, vendor or bar-
gainor, or intended to take effect in possession or enjoyment after such death, to
any person or persons, or to any body politic or corporate, in trust or otherwise,
or by reason whereof any person or body politic or corporate shall become bene-
ficially entitled, in possession or expectancy, to any property, or to the income
thereof, shall be and is subject to a tax hereinafter provided for, to be paid to the
treasurer of the proper county, as hereinafter directed for the benefit of the general
fund of this state to be used for all the purposes for which said fund is available.
And the county treasurer shall, upon the receipt of said tax, pay the same to the
state treasurer and take duplicate receipts thereof, one of which the county
treasurer shall retain, and transmit the other to the state auditor and receive from
him credit for the amount thereof on his account; and such tax shall be and
remain a lien upon the property passed or transferred until paid, and the person
to whom the property passes or is transferred, and all administrators, executors
and trusteees of every estate so transferred or passed, shall be liable for any
and all such taxes until the same shall have been paid as hereinafter directed. The
tax^so imposed shall be upon the market value of such property at the rates herein-
after prescribed, and only upon the excess over the exemptions hereinafter granted.

Appointment Deemed a Taxable Transfer.

S. 1874. Whenever any person or corporation shall exercise a power of
appointment derived from any disposition of property made either before or after
the passage of this chapter, such appointment when made shall be deemed a
transfer taxable under the provisions of this chapter in the same manner as though
the property to which such appointment relates belonged absolutely to the don^e
of such power, and had been bequeathed or devised by such donee by will; and
whenever any person or corporation possessing such apowerof appointment so
derived shall omit or fail to exercise the same within the time provided therefor,
in whole or in part, a transfer taxable under the provisions of this chapter shall be
deemed to take place to the extent of such omission or failure, in the same manner
as though the person or corporations thereby becoming entitled to the possession
or enjoyment of the property to which such power related had succeeded thereto
by a will of the donee of the power failing to exercise such power, taking effect at
the time of such omission pr failure.

Rate of Tax.

S. 1875. When the property or any beneficial interest therein so passed or
transferred exceeds in value the exemption hereinafter specified, and shall not
exceed in value twenty- five thousand dollars, the tax hereby imposed shall be: —

1. Where the person or persons entitled to any beneficial interest in such
property shall be the husband, wife, lineal issue, lineal ancestor of the decedent,

Title 10, c. 5.] IDAHO. 395

or any child adopted as such in conformity with the laws of this state, or any
child to whom such decedent, for not less than ten years prior to such transfer,
stood in the mutually acknowledged relation of a parent: Provided, however,
such relationship began at or before the child's fifteenth birthday, and was con-
tinuous for said ten years thereafter, or any lineal issue of such adopted or mutually
acknowledged child, at the rate of one per centum of the clear value of such
interest in such property.

2. Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister, or a descendant of a brother or sister, of
the decedent, a wife or widow of a son, or the husband of a daughter of the de-
cedent, at the rate of one and one-half per centum of the clear value of such
interest in such property.

3. Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the father or mother, or a descendant of
a brother or sister of the father or mother of the decedent, at the rate of three
per centum of the clear value of such interest in such property.

4. Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the grandfather or grandmother, or a
descendant of the brother or sister of the grandfather or grandmother, of the
decedent, at the rate of four per centum of the clear value of such interest in
such property.

5. Where the person or persons entitled to any beneficial interest in such
property shall be in any other degree of collateral consanguinity than is herein-
before stated, or shall be a stranger in blood to the decedent, or shall be a body
politic or corporate, at the rate of five per centum of the clear value of such
nterest in such property.

Progressive Rates.

S. 1876. The foregoing rates in the preceding section are for convenience
termed the primary fates. When the market value of such property or interest
exceeds twenty-five thousand dollars, the rates of tax upon such excess shall be
as follows: -r-

1. Upon all in excess of twenty-five thousand dollars and up to fifty thousand
dollars, one and one-half times the primary rates;

2. Upon all in excess of fifty thousand dollars and up to one hundred thousand
dollars, two times the primary rates;

3. Upon all in excess of one hundred thousand dollars and up to five hundred
thousand dollars, two and one-half times the primary rates;

4. Upon all in excess of five hundred thousand dollars, three times the primary
rates.

Exemptions.

5. 1877. The following exemptions from the tax are hereby allowed: —

1. All property transferred to societies, corporations and institutions now or
hereafter exempted by law from taxation, or to any public corporations, or to
any society, corporation, institution or association of persons engaged in or
devoted to any charitable, benevolent, educational, public or other like work
(pecuniary profit not being its object or purpose), or to any person, society, cor-
poration, institution or association of persons in trust for or to be devoted to any
charitable, benevolent, educational or public purpose, by reason whereof any

396 STATUTES ANNOTATED. [Idaho Rev. Cds.

such person or corporation shall become beneficially entitled, in possession or
expectancy, to any such property or to the income thereof shall be exempt;

2. Property of the clear value of ten thousand dollars transferred to the widow
or to a minor child of the decedent, and of four thousand dollars transferred to
each of the other persons described in the first subdivision of section 1875 shall be
exempt;

3. Property of the clear value of two thousand dollars transferred to each of
the persons described in the second subdivision of section 1875 shall be exempt;

4. Property of the clear value of one thousand five hundred dollars transferred
to each of the persons described in the third subdivision of section 1875 shall be
exempt;

5. Property of the clear value of one thousand dollars transferred to each of the
persons described in the fourth subdivision of section 1875 shall be exempt ;

6. Property of the clear value of five hundred dollars transferred to each of the
persons and corporations described in the fifth subdivision of section 1875 shall
be exempt.

Tax on Future and Contingent Estates,

S. 1878. When any grant, gift, legacy or succession upon which a tax is imposed
by section 1873 shall be an estate, income or interest for a term of years, or for life,
or determinable upon any future or contingent event, or shall be a remainder,
reversion, or other expectancy, real or personal, the entire property or fund by
which such estate, income or interest is supported, or of which it is a part, shall be
appraised immediately after the death of the decedent, and the market value
thereof determined, in the manner provided in section 1886, the tax prescribed
by t)iis chapter shall be immediately due and payable to the treasurer of the
proper county, and, together with the interest thereon, shall be and remain a lien
on said property until the same is paid: Provided, that the person or persons,
or body politic or corporate, beneficially interested in the property chargeable
with said tax, may elect not to pay the same until they shall come into the actual
possession or enjoyment of such property, and in that case such person or persons
or body politic or corporate, shall execute a bond to the people of the state of
Idaho, in a penalty of twice the amount of the tax arising upon personal estate,
with such sureties as the said probate court may approve, conditioned for the
payment of said tax, and interest thereon, at such time or period as they or their
representatives may come into the actual possession or enjoyment of such prop-
erty, which bond shall be filed in the office of the county recorder of the proper
county: Provided, further, that such person shall make a full and verified return
of such property to said court, and file the same in the office of the county recorder
within one year from the death of the decedent, and within that period enter into
such security, and renew the same every five years.

Tax on Gift to Executor.

S. 1879. Whenever a decedent appoints or names one or more executors
or trustees, and makes a bequest or devise of property to them in lieu of com-
missions or allowances, which otherwise would be liable to said tax, or appoints
them his residuary legatees, and said bequests, devises or residuary legacies exceed
what would be a reasonable compensation for their services, such excess over and
above the exemptions herein provided for shall be liable to said tax; and the
probate court in which the probate proceedings are pending shall fix the com-
. pensation.

Title 10, c. 5.J IDAHO. 397

Time of Payment. — Extension. — Interest.

S. 1880. All taxes imposed by this chapter, except as hereinafter provided,
shall be due and payable at the death of the person rendering such property sub-
ject to such taxation, and interest at the same rate as is now provided by law for
delinquent taxes shall be charged and collected thereon for such time as said
tax is not paid: Provided, that if said tax is paid within one year from the
accruing thereof, no interest shall be charged or collected thereon, and if said tax
is paid within six months from the accruing thereof, a discount of five per centum
shall be allowed and deducted from said tax: Provided, further, that if, by
reason of claims made upon the estate, necessary litigation or other unavoidable
cause of delay, the estate of the decedent or any part thereof cannot be settled
up at the end of the year from his or her decease, the probate court, or the judge
thereof, may make necessary extensions of time for the payment of such taxes,
but no single extension shall exceed one year, and in such cases only six per centum
per annum shall be charged upon the said tax from the death of the decedent to
the expiration of the period for which the extension of time was granted, after
which interest at the same rate as is now provided by law for delinquent taxes
shall be charged and in all such cases the tax on real estate shall remain a lien
on the real estate on which the same is chargeable until paid, and the executors,
administrators or trustees shall give a bond, to the people of the state of Idaho,
in a penalty of three times the amount of the said tax, with such sureties as the
probate judge of the proper county may approve, conditioned for the payment of
said tax and interest thereon at the expiration of such period, which bond shall
be filed in the office of said probate judge.

Collection of Tax by Administrator.

S. 1881. Any administrator, executor or trustee having in charge or trust any
legacy or property for distribution, subject to the said tax, shall deduct the tax
therefrom, or if the legacy or property be not money, he shall collect the tax there-
on, upon the market value thereof, from the legatee or person entitled to such prop-
erty and he shall not deliver, or be compelled to deliver, any specific legacy or
property subject to tax to any person until he shall have collected the tax thereon;
and whenever any such legacy shall be charged upon, or payable out of, real
estate, the executor, administrator or trustee shall collect said tax from the dist-
ributee thereof , and the same shall remain a charge on such real estate until paid:
if, however, such legacy be given in money to any person for a limited period, the
executor, administrator or trustee shall retain the tax upon the whole amount;
but if it be not in money he shall make application to the probate court to make
an apportionment, if the case requires it, of the sum to be paid into his hands
by such legatees, and tor such further order relative thereto as the case may
require.

Sale of Property to Pay Tax.

S. 1882. All executors, administrators and trustees shall have full power to
sell so much of the property of the decedent as will enable them to pay said tax,
in the same manner as they may be enabled by law to do for the payment of
debts of the estate, and the amount of said tax shall be paid as hereinafter
directed.

398 STATUTES ANNOTATED. [Idaho Rev. Cds.

Payment of Tax by Administrator,

S. 1883. Every sum of money retained by an executor, administrator or
trustee, or paid into his hands, for any tax on property, shall be paid by him,
within thirty days thereafter, to the treasurer of the county in which the probate
proceedings are pending, and the said treasurer shall give, and every executor,
administrator or trustee shall take, duplicate receipts for such payment, one
of which receipts said executor, administrator or trustee shall immediately send
to the state auditor, whose duty it shall be to charge the treasurer so receiving the
tax with the amount thereof, and said auditor shall seal said receipt with the seal of
his office, and countersign the same, and return it to the executor, administrator or
trustee, whereupon it shall be a proper voucher in the settlement of his accounts;
and an executor, administrator or trustee shall not be entitled to credit in his
accounts, nor be discharged from liability for such tax, nor shall said estate be
distributed, unless he shall produce a receipt so sealed and countersigned by the
state auditor, or a copy thereof, certified by him, and file the same with the court.

Refund of Excess Tax.

S. 1884. Whenever any debts shall be proven against the estate of a decedent
after the payment of legacies or distribution of property from which the said
tax has been deducted or upon which it has been paid, and a refund is made by
the legatee, devisee, heir or next of kin, a proportion of the tax so deducted or
paid shall be repaid to him by the executor, administrator or trustee, if the said
tax has not been paid to the county treasurer or to the state auditor, or by them,
if it has been so paid.

Collection of Tax from Non-Resident Administrator.

S^. 1885. If a foreign executor, administrator or trustee shall assign or transfer
any stock or obligations in this state standing in the name of a decedent, or in trust
for a decedent, liable to any such tax, the tax shall be paid to the treasurer of the
proper county on the transfer thereof. No safe deposit company, trust company,
corporation, bank or other institution, person or persons, having in possession
or under control securities, deposits or other assets of a decedent, including the
shares of the capital stock of, or other interests in, the safe deposit corr pany, trust
company, corporation, bank or other institution making the delivery or transfer
herein provided, shall deliver or transfer the same to the executors, administrators,
or legal representatives of said decedent, or upon their order or request, unless
notice of the time and place of such intended delivery or transfer be served upon
the county treasurer at least ten days prior to said delivery or transfer; nor shall
any such safe deposit company, trust company, corporation, bank or other in-
stitution, person or persons, deliver or transfer any securities, deposits or other
assets of the estate of a non-resident decedent including the shares of the capital
stock of, or other interest in, the safe deposit company, trust company, corpora-
tion, bank or other institution, making the delivery or transfer, without retaining
a sufficient portion or amount thereof to pay any tax and penalty which may
thereafter be assessed on account of the delivery or transfer of such securities,
deposits or other assets, including the shares of the capital stock of or other
interests in the safe deposit company, trust company, corporation, bank or other
institution making the delivery or transfer, under the provisions of this chapter,
unless the county treasurer consents thereto in writing. And it shall be lawful for
the said county treasurer, personally, or by representative, to examine said

Title 10, c. 5.] IDAHO. 399

securities, deposits or assets at the time of such delivery or transfer. Failure to
serve such notice and to allow such examination, and to retain a sufficient portion
or amount to pay such tax and penalty as herein provided, shall render said safe
deposit company, trust company, corporation, bank or other institution, person
or persons, liable to the payment of two times the amount of the tax and penalty
due or thereafter to become due upon said securities, deposits or other assets,
including the shares of the capital stock of, or other interests in, the safe deposit
company, trust company, corporation, bank or other institution making the
delivery or transfer; and the payment as herein provided shall be enforced in an
action brought in accordance with the provisions of section 1891 of this chapter.

Appraisal.

S. 1886. When the value of any inheritance, devise, bequest or other interest
subject to the payment of said tax is uncertain, the probate court in which the
probate proceedings are pending, on the application of any interested party,
or upon its own motion, shall appoint some competent person as appraiser, as
often as and whenever occasion may require, whose duty it shall be forthwith to
give such notice, by mail, to all persons known to have or claim an interest in such
property, and to such persons as the court may by order direct, of the time and
place at which he wi 1 appraise such property, and at such time and place to ap-
praise the same and make a report thereof, in writing, to said court, together with
such other facts in relation thereto as said court may by order require to be filed
with the clerk of said court; and from this report the said court shall, by order,
forthwith assess and fix the market value of all inheritances, devises, bequests
or other interest, and the tax to which the same is liable, and shall immediately
cause notice thereof to be given, by mail, to all parties known to be interested
therein; and the value of every future or contingent or limited estate, income
or interest shall, for the purposes of this chapter, be determined by the rule,
method and standard of mortality and of value that are set forth in the actuaries'
combined experience tables of mortality for ascertaining the value of policies
of life insurance and annuities, and for the determination of the liabilities of life
insurance companies, save that the rate of interest to be assessed in computing
the present value of all future interests and contingencies shall be five per centum
per annum; and the insurance commissioner shall, on the application of said
court, determine the value of such future or contingent or limited estate, income
or interest, upon the facts contained in such report, and certify the same to the
court, and his certificate shall be conclusive evidence that the method of compu-
tation adopted therein is correct. The said appraiser shall be paid by the county
treasurer out of any funds that he may have in his hands on account of said tax,
on presentation of a sworn itemized account, and on the certificate of the court,
at the rate of five dollars per day for every day actually and necessarily employed
in said appraisement, together with his actual and necessary traveling expenses.

Acceptance of Bribe by Appraiser.

S. 1887. Any appraiser appointed by virtue of this chapter, who shall take
any fee or reward from any executor, administrator, trustee, legatee, next of kin
or heir of any decedent, or from any other person liable to pay said tax, or any
portion thereof, shall be guilty of a misdemeanor, and upon conviction thereof
shall be punished by a fine of not less than two hundred and fifty dollars nor more

400 STATUTES ANNOTATED. [Idaho Rev. Cds.

than five hundred do lars, or by imprisonment in the county jail ninety days
or by both such fine and imprisonment, and in addition thereto the court shall
dismiss him from such service.

Jurisdiction Over Estate of Non-Resident.

S. 1888. The probate court in the county in which is situate the real property
of a decedent who was not a resident of the state, or if there be no real property,
then in the county in which any of the personal property of such non-resident is
situate, or in the county of which the decedent was a resident at the time of his
death, shall have jurisdiction to hear and determine a 1 questions in relation to
the tax arising under the provisions of this chapter, except as hereinafter provided,
and the court first acquiring jurisdiction hereunder shall retain the same to the
exclusion of every other.

Definitions.

S. 1889. The words "estate" and "property" as used in this chapter shall be
taken to mean the real and personal property or interest therein of the testator,
intestate, grantor, bargainor, vendor or donor passing or trans erred to individual
legatees, devisees, heirs, next of kin, grantees, donees, vendees or successors, and
shall include all personal property within or without the state. The word "trans-
fer" as used in this chapter shall be taken to include the passing of property or
any interest therein, in possession or enjoyment, present or future, by inheritance,
descent, devise, succession, bequest, grant, deed, bargain, sale, gift or appoint-
ment in the manner herein described. The word "decedent" as used in this
chapter, shall include the testator, intestate, grantor, bargainor, vendor or
donor.

Collection of Delinquent Tax.

S. 1890. If it shall appear to the probate court, or judge thereof, that any tax
accruing under this chapter has not been paid according to law, it shall issue a
citation, citing the persons known to own any interest in or part of the property
liable to the tax, or any person or corporation liable under the law for the pay ment
of said tax, to appear before the court on a day certain, not more than ten weeks
after the date of such citation, and show cause why said tax should not be paid.
The service of such citation, and the time, manner and proof thereof, and the
hearing and determination thereof, and the enforcement of the determination or
decree, shall conform as near as may be to the provisions now established by the
laws of this state in similar proceedings in the probate courts; and the clerk of the
court shall, upon the request of the county attorney or treasurer of the county,
furnish, without fee, one or more transcripts of such decree, and the same shall be
docketed and filed by the county recorder of any county in the state, without fee,
in the same manner and with the same effect as provided by section 4460 of these
Codes for filing a transcript of an original docket.

Same. — County Attorney to Institute Proceedings.

S. 1891. Whenever the treasurer of any county shall have reason to believe
that any tax is due and unpaid under this chapter, after the refusal or neglect of
the persons interested in the property liable to said tax to pay the same, he shall
notify the county attorney of the proper county, in writing, of such failure to pay

Title 10, c. 5.] IDAHO. 401

such tax, and the county attorney so notified, if he have probable cause to believe
a tax is due and unpaid, shall prosecute the proceeding in the probate court,
as provided in the preceding section for the enforcement and collection of such tax.

Record of Estates. — Entries. — Report *of Probate Judge.

S. 1892. The secretary of state shall furnish to each probate judge a book,
which shall be a public record, and in which he shall enter the name of every
decedent upon whose estate an application has been made to the probate court
for the issuance of letters of administration, or letters testamentary, or ancillary
letters, the date and place of death of such decedent, the estimated value of his
real and personal property, the names, places of residence and relationship to him
of his heirs-at-law, the names and places of residence of the legatees and devisees
in any will of any such decedent, the amount of each legacy and the estimated
value of any real property devised therein, and to whom devised. These entries
shall be made from the data contained in the papers filed on any such application,
or in any proceeding relating to the estate of the decedent. The probate judge
shall also enter in such book the amount of personal property of any such decedent,
as shown by the inventory thereof when made and filed in his office, and the
returns made by any appraiser appointed by the court under this chapter, and the
value of annuities, life estates, terms of years, and other property of such decedent,
or given by him in his will or otherwise, as fixed by the probate court, and the tax
assessed thereon, and the amounts of any receipts for payment of any tax on the
estate of such decedent under this chapter filed with him. The probate judge
shall, on the first day of January, April, July and October of each year, make a
report in duplicate, upon forms to be furnished by the state auditor, containing
all the data and matters required to be entered in such book, and also of the
property from which, or the party from whom, he has reason to believe the tax
under this chapter is due and unpaid, one of which shall be immediately delivered
to the county treasurer and the other transmitted to the state auditor.

Expenses of Collecting Tax.

S. 1893. Whenever the probate court of any county shall certify that there
was probable cause for issuing a citation and taking the proceedings specified in
section 1890, the state treasurer shall pay, or allow, to the treasurer of any county,
all expenses incurred for service of citation, and his other lawful disbursements
that have not otherwise been paid.

Settlements and Reports of County Treasurer.

S. 1894. The treasurer of each county shall collect and pay to the state
treasurer all taxes that may be due and payable under this chapter, who shall give
him a receipt therefor; of which collection and payment he shall make a report,
under oath, to the state auditor, between the first and fiiteenth days of May and
December of each year, stating for what estate paid, and in such form and con-
taining such particulars as the state auditor may prescribe; and for all such taxes
collected by him and not paid to the state treasurer by the first day of June and
January of each year, he shall pay interest at the rate of ten per centum per annum.

Receipts for Taxes Paid.

S. 1895. Any person, or body politic or corporate, shall, upon payment of
the sum of fifty cents, be entitled to a receipt from the county treasurer of any

402 STATUTES ANNOTATED. [Idaho Rev. Cds.

county, or a copy of the receipt, at his option, that may have been given by said
treasurer for the payment of any tax under this chapter, to be sealed with the
seal of his office, which receipt shall designate on what real property, if any, of
which any decedent may have died seized, said tax has been paid, and by whom
paid, and whether or not it is in full of said tax; and said receipt may be recorded
in the recorder's office in the county in which said property is situated, in a book
to be kept by said recorder for such purpose, which shall be labeled "Inheritance
Tax."

Failure of Officers to Perform Duties.

S. 1896. Every officer who fails or refuses to perform, within a reasonable
time, any and every duty required by the provisions of this chapter, or who fails
or refuses to make and deliver, within a reasonable time, any statement or record
required by this chapter, shall forfeit to the state of Idaho, the sum of one thousand
dollars, to be recovered in an action brought by the attorney general in the name
of the people of the state, on the relation of the state auditor.

Suits to Enforce Collection, and to Quiet Title Against Tax.

S. 1897. In all cases where any tax has become or shall hereafter become a
lien upon any property under or by virtue of any of the provisions of this chapter,
the county attorney of the county in which the estate of the decedent mentioned
in this chapter is being administered or has been administered in probate pro-
ceedings, may, whenever any property of said estate has been distributed without
the payment to the state of all or any part of the taxes payable on account thereof
under this chapter, bring and prosecute an action or actions in the name of the
state as plaintiff, for the purpose of enforcing such lien or liens, against all or any
of the property subject thereto. In any such action the owner of any property or
of any interest in property against which the lien of any such tax is sought to be
enforced, and any predecessor in interest of any such owner whose title or interest
was derived through any such decedent by will or succession or by decree of dis-
tribution of the estate of such decedent, and any lienor or incumbrancer subsequent
to the lien of such tax may be made a party defendant. The enumeration in
this section of the persons who may be made defendants shall not be deemed to be
exclusive, but the joinder or non- joinder of parties, except when otherwise herein
provided, shall be governed by the rules in equity in similar cases.

(a) Actions may be brought against the state for the purpose of quieting the
title to any property, against the lien or claim of lien of any tax or taxes under
this chapter, or for the purpose of having it determined that any property is not
subject to any lien for taxes under this chapter. In any such action, the plaintiffs
may be any administrator or executor of the estate or will of any decedent,
whether the said estate shall have been fully administered and the estate settled
and closed or not, and any heir, legatee or devisee of any such decedent, or trustee
of the estate or of any part of the estate of such decedent, or distributee of the
estate or of any part of the estate of any such decedent, and any assignee, grantee,
or successor in interest of any such persons, and all or any other persons who might
be made parties defendant in any action brought by the state under the provisions
of this section, and notwithstanding that all or any of the persons enumerated in
this section shall or may have assigned, granted, conveyed or otherwise parted
with all or any interest in or title to the property, or any part thereof, involved in
any such claim of lien before the commencement of such action. All or any of the

Title 10, c. 5.] IDAHO. 403

persons in this section enumerated may be joined or united as parties plaintiff.
The enumeration in this section of the persons who may be made parties shall not
be deemed to be exclusive, but the joinder or non- joinder of parties, except when
otherwise herein provided, shall be governed by the rules in equity in similar cases.
In all cases any person who might properly be a party plaintiff in any such action
who refuses to join as plaintiff may be made a defendant.

(b) All actions under this section shall be commenced in the district court of
the county in which is situated any part of any real property against which any
lien is sought to be enforced, or to which title is sought to be quieted against
any lien, or claim of liens.

(c) Service of summons in the actions brought against the state shall be made
on the secretary of state and on the county attorney of the county in which the
estate of the decedent mentioned herein is being administered, or has been
administered in probate proceedings, and it shall be the duty of said county
attorney to defend all such actions.

(d) The procedure and practice in all actions brought under this section, except
as otherwise provided in this chapter, shall be governed by the provisions of the
code of civil procedure in relation to civil actions, so far as the same shall or
may be applicable, including all provisions relating to motions for new trials and
appeals.

(e) The remedies provided in this section shall be in addition to and not ex-
clusive of any remedies provided in the sections preceding this section.

404 STATUTES ANNOTATED. [111. Sf

ILLINOIS.

In General.

Illinois adopted a tax on all kinds of inheritances in 1895,
which included progressive rates applying to distant relatives and
strangers, with a maximum of six per cent. The constitutionality
of the statute was sustained in the Illinois supreme court.
Later the question was raised in the supreme court of the
United States, which, in a very far-reaching decision, held that
progressive taxation and substantial exemptions do not infringe
the equal protection of the law guaranteed by the fourteenth
amendment.

The exemptions apply to the individual shares, not to the estate
as a whole. The exemption of $20,000 is the most liberal given to
direct heirs in any state.

Illinois taxes stock in Illinois corporations owned by non-residents
wherever held. If the corporation transfers the stock without
notifying the tax authorities, it is made liable for the tax and is
subject to a penalty as well.

Illinois requires the executor or administrator of a non-resident
estate to answer, under oath, a printed list of questions before
consent is given to the transfer of any Illinois stocks; but this does
not necessarily involve setting forth an inventory of the entire
estate.

Illinois is taxing stock, owned by non-residents, of foreign cor-
porations that own property in Illinois. We are informed by the
tax authorities "that it depends upon the conditions under which
the property is held here as to whether a claim would be made."
We have yet to learn, however, of any condition under which such
stock would not be taxed.

There seems to be more complaint made against the treatment
of non-resident estates by Illinois than in the case of any other
of the states, not even excepting New York. It refuses to apportion
the tax on such stocks as Illinois Central, organized under the laws
of Illinois and extending through several other states, while at the
same time insisting on an apportionment of such stocks as Rock
Island, which are incorporated in other states but have some of
their line in Illinois.

,*4ll:

111. St.] ILLINOIS. 405

On this subject the inheritance tax attorney for Illinois says:
"The rates of taxation in New York, New Jersey and all other
eastern states, as well as all states in the Union which have inheri-
tance tax laws, embody rates of taxation greatly in excess of those
provided in the inheritance tax laws of this state. The exemptions
provided by our law are so large and liberal that 90 per cent at
least of all of the securities transferred (owned at death by non-
resident decedent) are not taxable at all."

Constitutional Limitations.

Illinois Constitution, 1870, a. 9, s. 1.

The general assembly shall provide such revenue as may be needful by levying
a tax, by valuation, so that every person and corporation shall pay a tax in
proportion to the value of his, her or its property — such value to be ascertained
by some person or persons to be elected or appointed in such manner as the
general assembly shall direct, and not otherwise; but the general assembly shall
have power to tax pedlers, auctioneers, brokers, hawkers, merchants, commission
merchants, showmen, jugglers, inn-keepers, grocery-keepers, liquor-dealers, toll-
bridges, ferries, insurance, telegraph and express interests or business, venders
of patents and persons or corporations owning or using franchises and privileges,
in such manner as it shall from time to time direct by general law, uniform as to the
class upon which it operates.

List of Statutes.

1887. Statutes of Illinois, p. 183.

1891. " " " p. 137.

1895. "' " " p. 301.

1901. " " " p. 268.

1901. " " " p. 269.

1909. " " " p. 311.

Meyer's Revised Statutes of Illinois, p. 1304, s. 307.

Kurd's Revised Statutes of Illinois, 1898, p. 1367, s. 366-388, inc.

" " 1901, p. 1511, s. 366.

" " 1903, p. 1576, s. 366.

" " 1908, p. 1819, s. 366.
Jones & Addington's Supplement, pp. 1104-1105, ss. 70-74, inc.
1909. Revised Statutes of Illinois, c. 120, ss. 366-388.

Early Probate Duties.

III. St. 1887, p. 183, approved June 6, 1887, relates to fees and
salaries of clerks of probate courts in counties in the third class ; and
also provides a fee on a grant of probate, .administration, guardian-
ship or conservatorship, when the estate does not exceed five
thousand dollars, of five dollars ; from five thousand dollars to twenty

406 STATUTES ANNOTATED. llll. St-

thousand dollars, ten dollars; twenty thousand dollars to fifty
thousand dollars, twenty dollars; fifty thousand dollars to one
hundred thousand dollars, fifty dollars; one hundred thousand
dollars to three hundred thousand dollars, one hundred dollars;
three hundred thousand dollars to a million dollars, two hundred and
fifty dollars ; in all cases of a million dollars and upwards, a thousand
dollars. The law also provides an exemption where the deceased
leaves a surviving widow or children resident in this state and
where the entire estate of the deceased person did not exceed two
thousand dollars.

111. St. 1891, p. 137, approved June 19, 1891, provides for the fees
of clerks in probate in counties of the third class, in cases of pro-
bate, administration, guardianship or survivorship, where the
estate does not exceed five thousand dollars, five dollars; and one
dollar for every additional thousand dollars. It also provides an
exemption where the deceased leaves a surviving widow or children
resident in this state and his entire estate does not exceed two
thousand dollars. It also authorizes the judge in all estates not
exceeding five hundred dollars in value to suspend and modify or
remit the costs.

THE ACT OF 1895.

Follows New York Act in Language and Construction.

The Illinois statute is one of the most objectionable acts upon
the subject to be found, and it was evidently modeled after the
New York statute in many respects. In re Inheritance Tax, 23
Colo. 392, 493, 48 P. 535. It is a substantial copy of the New
York statute of 1885 as amended in 1887. People v. Griffith, 245
111. 532, 92 N. E. 313.

The general rule applies to inheritance laws that where a statute
is adopted from another state it will be presumed that the legislature
intended it to receive the construction given by the courts of that
state if it had been previously construed unless in conflict with the
spirit and policy of the laws of the second state. People v. Griffith,
245 111. 532, 92 N. E. 313.

The New York decisions are not of value in construing the Illinois
statute as to the taxation of remainder interests. One of the main
differences between the Illinois act and the New York act is that
the former taxes all successions excepting life estates and terms
for years mentioned in section 2, while the latter taxes only succes-

1895, p. 301.] ILLINOIS. 407

sions to collaterals or strangers in blood. In re Kingman, 220 111.
563, 77 N. E. 135.

Nature of Inheritance Tax.

The statute of 1895 was in effect an assertion of sovereignty
in the estate of deceased persons.

The laws of descent and the right to devise and take under a will
in Illinois owe their existence to the statute law of the state. The
laws of descent and devise being the creation of statute, the power
which creates may regulate and may impose conditions or burdens
on a right of succession to property of which there has ceased to
be an owner because of death. Kochersperger v. Drake, 167 111. 122,
47 N. E. 321, 41 L. R. A. 446, affirmed in Magoun v. Illinois Trust
and Savings Bank, 170 U. S. 283, 18 S. Ct. 594, 42 L. Ed. 1037.

An inheritance tax is not upon the property itself but upon the
right to succeed to the property. The succession to the ownership
of the property being by permission of the state, the state can im-
pose conditions regarding such privilege or permission. The courts
therefore have upheld the imposition of the inheritance tax whenever
the state had jurisdiction of the beneficiary or the subject matter,
regardless of the actual location of the personal property or the
domicile of the decedent. People v. Griffith, 245 111. 532, 92 N. E.
313.

"Inheritance or succession taxes are not laid on the property
inherited or taken by devise or bequest, but on the right to inherit
or to take ^uch property. The right to take property in pursuance
of the statute of descent or of the statute pertaining to wills is
property, but only for the reason that the law-making body of the
state has seen fit to create the right to so take by inheritance or by
devise or bequest. No person or corporation can inherit property
or can take by devise or bequest except when authorized so to do
by an act of the legislature. Such right may at any time be abro-
gated prospectively, at the will of the legislature, or, in the exercise
of the same power in quality though lesser in degree the law-making
department of the state may modify, regulate or impose conditions
on the right to succeed by inheritance or devise to property which
was owned by a person who has died. Thus, the power of the
legislature to lay a tax on the right of any person or corporation to
take property by inheritance or by devise or bequest is found to
be clear and undoubted. In laying such a tax the legislature may
consider the relation which the person or corporation given the

408 STATUTES ANNOTATED. [111. St.

right of succession sustains to the deceased, to the property or to
the state, and may regulate the amount of the tax to be required in
view of such relation, and in exercising this power may lay a tax
on the right of one class of persons or corporations to take and may
deem it wise to impose no tax upon the right of other classes of
persons or corporations to take. Embraced within the- power
possessed by the legislature to abrogate the right to take is the power
to qualify that right and to impose conditions and burdens upon it.
If a burden in the nature of taxation is laid upon the right, the
constitutional principle that taxes must be uniform as to the classes
upon which they operate must be observed. Subject to this re-
striction the legislature may lay taxes upon the right of one class
of persons and corporations to succeed to property of deceased
persons and exempt the right of other classes of persons or corpora-
tions from such taxation." Per Boggs, J., in In re Speed, 216 111. 23,
74 N. E. 809, 108 Am. St. Rep. 189, affirmed 203 U. S. 553, 27
S. Ct. 171, 51 L. Ed. 314.

111. St. 1895, p. 301. Approved June 15, 1895.
Transfers Taxable. — Rate.

1895, p. 301.] ILLINOIS. 409

beneficial interests to any property or income therefrom shall pass to or for the
use of any uncle, aunt, niece, nephew or any lineal descendant of the same, in
every such case the rate of such tax shall be two dollars on every one hundred
dollars of the clear market value of such property received by each person on the
excess of two thousand dollars so received by each person. In all other cases the
rate shall be as follows: On each and every hundred dollars of the clear market
value of all property and at the same rate for any less amount; on all estates of
ten thousand dollars and less, three dollars, on all estates of over ten thousand
dollars and not exceeding twenty thousand dollars, four dollars; on all estates
over twenty thousand dollars and not exceeding fifty thousand dollars, five
dollars, and on all estates over fifty thousand dollars, six dollars: Provided, that
an estate in the above case which may be valued at a less sum than five hundred
dollars shall not be subject to any duty or tax.

Progressive Feature and Classification by Relationship Up-
held.

Illinois Constitution, 1870, article 9, section 1, provides that taxes
shall be in proportion to the value of property. The act of 1895 is
not void under this provision on the ground that it provides cer-
tain classes of property depending on relationship and the size of
the property with a different rate of taxation for each class. The
class on which a tax is thus levied is general and uniform and per-
tains to all species of property included within that class. A tax
which affects the property within a specific class is uniform as to
that class and there is no provision of the constitution which pre-
cludes a tax on that particular class. No want of uniformity with
one living who owns property can be urged as a reason why the
statute makes an inconsistent rule. No person inherits nor can
take by devise except by statute, and the state having power to
regulate this question may create classes and provide for uni-
formity with reference to classes which were before unknown.
Kochersperger v. Drake, 167 111. 122, 47 N. E. 321, 41 L. R. A. 446,
affirmed in Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283,
18 S. Ct. 594, 42 L. Ed. 1037.

The Illinois St. 1895, page 301, is constitutional and is not void
as providing an arbitrary or unreasonable classification. There are
three main classes in the Illinois statute, the first and second being
composed respectively of lineal and collateral relationship and the
third being composed of strangers to the blood and distant rela-
tives. The latter is again divided into four sub-classes depending
upon the amount of the estate received. The first two classes,
therefore, depend upon substantial differences which bear a just
and proper relation to the attempted classification.

410 STATUTES ANNOTATED. [111. St.

The court says that it is true that the amount of the exemption
is greater in the Illinois law than in any other, but the right to
exempt cannot depend on that, as that is a legislative and not a
judicial function.

As to the progressive feature of the act, there are four classes
created and there is equality between the members of eachv class.
It was pointed out that the tax is not in proportion to the amount,
but varies with the amount arbitrarily fixed, and hence that one
who is given a legacy of $10,001 by the deduction of the tax re-
ceives $99.04 less than one who is given a legacy of $10,000. But
the court holds that this is not contrary to the rule of equality
of the fourteenth amendment and "that rule does not require, as
we have seen, exact equality of taxation. It only requires that the
law imposing it shall operate on all alike, under the same circum-
stances. The tax is not on money, it is on the right to inherit;
and hence a condition of inheritance, and it may be graded accord-
ing to the value of that inheritance. The condition is not arbitrary
because it is determined by that value; it is not unequal in opera-
tion because it does not levy the same percentage on every dollar;
does not fail to treat all "alike under like circumstances and con-
ditions, both in the privilege incurred and the liabilities imposed.'*
P^r^McKenna, J., in Magoun v. Illinois Trust &f Savings Banky
170 U. S. 283, 298, 300, 18, S. Ct. 594, 42 L. Ed. 1037, affirming
Kochersperger v. Drake, 167 111. 122, 47 N. E. 321; 41 L. R. A. 446.

The Illinois statute was also attacked before the supreme court
on the ground that the tax was a property tax and that the right
of inheritance and of testamentary disposition were natural
rights beyond the power of the legislature to take away. The su-
preme court had within two years expressed the contrary opinion
on both these points in United States v. Perkins, 163 U. S. 625,
and the court cites these decisions, but a determination of these
points was not necessary to the decision. The real basis of the
decisions was simply the principle that progressive taxation and
generous exemptions are not in violation of the rule of equality of
the fourteenth amendment. Magoun v. Illinois Trust and Sav-
ings Bank, 170 U. S. 283, 18 S. Ct. 594, 42 L. Ed. 1037, affirming
Kochersperger V.Drake, 167 111., 122, 47 N. E. 321, 41 L. R. A. 446.

"All Property." — Expenses Deducted.

Lawful expenditures and expenses incurred by the executors in
defending a will against the heirs at law should be deducted in

1895, p. 301.] ILLINOIS. 411

determining the amount on which to compute the inheritance tax
under the act of 1895. Connell v. Crosby, 210 111. 380, 71 N. E.
350, distinguishing In re Lines 155, Pa. St. 378, 26 A. 728, where the
expenses of legatees assisting the trustees were not deducted, and
In re Westurn, 152 N. Y. 93, 46 N. E. 315, where the expenses
of heirs who had successfully contested the will were not allowed.

Marshaling Assets to pay Debts. — Foreign Land not Taxed.

Where the estate of the testator consisted of real and personal
property in Illinois and real estate outside the state and a large
indebtedness, the lower court held erroneously that in order to as-
certain the amount on which to compute the tax the value of the
personal property should be deducted from the total indebtedness
of the estate and the remaining indebtedness should be appor-
tioned upon all the real estate both foreign and domestic and that
the tax should be laid upon the amount so apportioned on the
value of the lands in Illinois. This resulted by indirection in laying
a tax on the foreign lands and was erroneous. Connell v. Crosby,
210 111. 380, 392, 71 N. E. 350.

**Pass ... by the Intestate Laws of this State." — Land
in another State not Taxed, although Directed to be Sold.

A tax is laid on all property which shall pass by will or by the in-
testate laws of the state. This does not include land owned by the
testator in. other states, as such lands do not pass under the intes-
tate laws of Illinois, but under the statutes of the state where the
land is situated. The statute never intended to distinguish be-
tween the case of land passing under the intestate laws and land
passing by will. (This result was reached in New York in In re
Swift, 137 N. Y. 77, 32 N. E. 1096.)

Land in another state cannot be taxed although the will directs
it to be converted into money, as the doctrine of equitable conver-
sion cannot be applied in proceedings for the collection of inheri-
tance taxes. Connell v. Crosby, 210 III. 380, 71 N. E. 350.

**Pas8 ... by the Intestate Laws of this State." — Dower.

Dower less the exemption provided by statute is subject to the
inheritance tax. People v. Field, 248 III. 147, 93N. E. 721 ; Billings
V. People, 189 III. 472, 59 N. E. 798, 59. L. R. A. 507.

Under the statute of 1895, "intestate laws" include the widow's
dower. It was contended that dower is of great antiquity and was

412 STATUTES ANNOTATED. [111. St.

not created by statute but by the common law ; but the court holds
that the institution of dower is subject to full legislative control
and may be changed or modified at any time. The court holds
that the ''intestate laws" referred to are those laws of the state which
cover the devolution of estates and of persons dying intestate and
include all applicable rules of the common law in force in thi^ state
and they regulate and control the interest which the widow took
in her husband's property at his death. Billings v. People, 189 111.
472, 477, 59 L. R. A. 807.

Where the testator signed an ante-nuptial agreement by which
the wife took a certain sum in lieu of her dower rights on his death,
the court holds that this sum taken under the agreement is not
exempt from the inheritance tax. Being in lieu of dower it is
subject to tax as dower is. The amount received by the widow
should not be deducted in estimating the market value of the estate.
People V. Field, 248 111. 147, 93 N. E. 721.

"A Resident of this State."

"The terms 'residence,' 'abode,' ^domicile' and kindred terms
differ somewhat in meaning, but when used in statutes similar to
the Illinois inheritance statute have frequently been held to be
synonymous."

A man is a resident of Illinois who has lived in Illinois for some
years but who has declared his intention of moving out of the state
as soon as his business is settled, when he is taken ill and goes to the
house of his daughter in the other state where he dies. The facts
show that he went to his daughter's house for a temporary purpose
only. In re Moir, 207 111. 180, 69 N. E. 905, 99 Am. St. Rep. 205.

"Which Property shall be Within this State." — Situs of
Personal Property.

Rulings as to the situs of personal property under the general
tax law are not controlling on a construction of the inheritance law,
as the inheritance laws are not taxes in the strict sense of the term.

The liability of property to inheritance tax does not depend upon
its location, but upon whether the beneficiary came into its posses-
sion through the exercise of a privilege conferred by the state.

Where personal property of a non-resident is left in Illinois solely
for safe keeping and not for investment, stocks and bonds of domes-
tic corporations, cash on deposit and the tangible personal property
in Illinois are subject to tax, and stocks and bonds of foreign

1895, p. 301.] ILLINOIS. 413

corporations are not subject to tax. The counsel for the state
conceded that if this was so bonds of a railroad company organized
under the laws of Illinois and Iowa and located partly in both states
are not property within the meaning of the statute subject to the
tax. People v. Griffith, 245 111. 532, 542, 92 N. E. 313.

*'The tendency of modern legislation in this country is to extend
the state's taxing power to all property within its jurisdiction
(27 Am. & Eng. Ency. of Law, 2d ed., 650), and this is especially
true as to inheritance taxes on the right of succession to all property,
whether real or personal, tangible or intangible, which passes testate
or intestate from decedents to other persons.'*

"The ancient maxim that movables follow the domicile of the
person was an outgrowth of conditions which have long since
ceased to exist, and the rule has been greatly limited in certain
matters, such as taxation and the subjecting of personal property
of non-residents to the claims of local creditors. It is usually,
however, the law that personal property is sold, transmitted or
obtained under the will or intestate law according to the law of
the domicile and not that of the situs of the property." People v.
Griffith, 245 111. 532, 92 N. E. 313.

"Deed ... in Contemplation of the Death. . . ."

The question whether a gift was made in contemplation of death
is a question of fact. People v. Kelley, 218 111. 509, 75 N. E. 1038.

''A gift is made in contemplation of an event when it is made in
the expectation of that event and having it in view, and a gift
when the donor is looking forward to his death as impending and
in view of that event is within the language of the statute." Per
Cartwright, J., in Rosenthal v. People, 211 111. 306, 71 N. E. 1121.

Where a parent makes a deed in trust for the sole benefit of the
cestuis but reserves unto himself a certain income for life, the court
may divide the property and levy an inheritance tax on that portion
of it necessary to raise the income stipulated. People v. Kelley,
218 III. 509, 75 N. E. 1038, following People v. Moir, 207 111. 180,
69 N. E. 905, 99 Am. St. Rep. 205.

Under this statute a gift may be subject to tax if made in con-
templation of the death of the donor although the transfers were
absolute and were accepted by the donees who entered into posses-
sion and ownership of the property transferred, and after the
transfers the donor had no interest in the property. It was claimed
that a gift causa mortis is a transfer of property made without

414 STATUTES ANNOTATED. [111. St-

consideration in contemplation of death, and that the stipulation
that the gift was absolute prevents it from being a gift causa
mortis. But the court finds that as the gifts were made in con-
templation of death they were gifts inter vivos made in contempla-
tion of death and within the designation of gifts causa mortis.
Merrifield v. People, 212 111. 400, 72 N. E. 446.

It was argued in In re Benton, 234 111. 366, 84 N. E. 1026, that the
reasoning by which the inheritance tax law is declared constitu-
tional cannot be applied to gifts inter vivos and the court remarks
that the contention that a gift made "in contemplation of death"
should be construed as a gift causa mortis is more plausible than
sound, and dismisses the contention without further discussion.

The tax is due in a case where the grantor suffered from spinal
trouble with a malignant growth and became rapidly worse, and
where three days after the making of the grant he made his will and
died at the end of a month, although no evidence appeared of his
intent to defraud the state of his inheritance tax. No such intention
needs to appear. The statute covers all gifts made in contemplation
of death and that language does not naturally nor necessarily in-
volve a fraudulent intent. Rosenthal V. People, 211 111. 306, 71 N. E.
1121. Where an old man suffering from an incurable disease makes
gifts of a large portion of his property to various relatives because
he is afraid that his wife will claim her statutory dower in his
property which on her death would go to his stepson, and where
the object of the gifts to relatives is to avoid this result by reducing
the estate so that the wife by self interest will desire to take under
his will and not her statutory interest, this gift is made "in con-
templation of death" within the language of the Illinois statute.
In re Benton, 234 111. 366, 84 N. E. 1026. Where the deed and
partnership agreement between a father and his sons were executed
simultaneously and where the real estate was not a partnership
asset but the profits from the real estate were carried into the part-
nership account, and where the father received one-half the rents
on the land until his death, one-half of the lands are subject to
inheritance tax, as their possession and enjoyment was postponed
during the life of the' grantor. A conveyance must part with the
possession, the title and the enjoyment in the grantor's lifetime.
People v. Moir, 207 111. 180, 69 N. E. 905, 99 Am. St. Rep. 205.

A conveyance did not take effect in contemplation of death where
the grantor was not in immediate danger of death at the time the
deed was delivered, and the conveyance was made as a provision for

1895, p. 301.] ILLINOIS. 415

the grantor's two sons and the deed was withheld from record by
mutual arrangement between the parties, but was fully delivered
to the trustee and possession of the premises turned over to the
trustees at the time of the delivery of the trust deed. It is not
the object of the Illinois statute to prevent a parent from giving
the whole or any portion of his property to his children in his life-
time if he so desire. People v. Kelley, 218 111. 509, 75 N. E. 1038.

The comrade faithfully performed her part of the contract until
1904 when the daughter died, and the testator conveyed from time
to time various parts of his property to the companion. It appeared
that the companion had exclusive dominion over the property.
The testator was seventy-four years old when he made the agree-
ment, but he was in good health though not strong. The testator
might well expect the daughter to outlive him; but he did not
transfer his property to his daughter or in trust for her. Instead
he sold it in consideration of a contract for her care, the performance
of which began and was finished in her lifetime. The motive for
transferring the property was not his impending death but his de-
sire to provide for his daughter's future, whether he lived or died,
and hence no tax can be collected. The contemplation of death
must be the impelling motive, without which the conveyance would
not be made, in order to subject a transfer of property to the
inheritance tax. People v. Burkhalter, 247 111. 600, 93 N. E. 379.

^'Entitled ... in Expectation.''

Expectation does not include a future defeasible interest but
means a vested remainder not subject to any contingency. The
statute contemplates, to authorize the imposition of the tax on
practical and actual ownership, possession of a title to something
that can be conveyed. "The right to tax is based upon the right
to succeed. The amount of the tax is fixed by the amount of the
property which as a result of the right to succeed passes to
the beneficiary. The tax is levied on the succession and not on the
property as such. ... When the basis of the tax, the rate and the

416 STATUTES ANNOTATED. [111. St.

exemption, if any, cannot be fixed, the tax itself cannot be fixed.
No other course is left open in the practical administration of the
statute than to postpone the assessing and collecting of the tax
upon such remote contingent interests as are incapable of valuation
and as to which the rate and the exemptions cannot be determined."
People V. McCormick, 208 111. 437, 70 N. E. 350, 64 L. R. A. 775.

Estates in expectation are subject to tax under this section, and
remainders whether vested or contingent are estates in expectation
within the meaning of the statute and they are taxable at once on
the death of the testator. Ayers v. Chicago Title &' Trust Co., 187
111. 42, 58 N. E. 318. The language in Ayers v. Chicago Title &
Trust Co., 187 111. 42, 58 N. E. 318, to the effect that whether or
not the remainders were vested or contingent is not material, is
only dictum, and the court declines to follow it in People v.
McCormick, 208 111. 437, 70 N. E. 350, 64 L. R. A. 775.

"Beneficial Interests."

The tax provided on the "beneficial interests" to property passing
to or for any child of the testator is on the value given to the child
after deducting the cash value of the widow's dower. The court
distinguishes In re Kingman, 220 111. 563, 77 N. E. 135, as in
that case the estate was for years and not for life.

"Obviously, under sections 1 and 2 of the inheritance tax law
as construed by this court in the cases heretofore cited, the legisla-
ture intended that a person should be taxed only on the beneficial
interest that he receives. The only beneficial interest in the real
estate that passed to the daughter in this case from her father's
estate was the value of this real estate less the value of the dower
interest of the mother. The county court decided rightly in de-
ducting the cash value of said dower when fixing the beneficial
interest received by and taxed against the daughter." Per Carter,
J., in People v. Nelms, 241 111. 571, 89 N. E. 683.

"Clear Market Value."

"Clear market value" does not mean the selling price of property
at a forced or involuntary sale, so the appraisal may be made at the
price at which small blocks of stock held by the estate were sold at
or about the date of the death of the decedent, and the appraiser
should not consider the fact that the estate held large blocks of
stock which if all forced on the market at the death of the decedent
would have depressed the market price of the stock. Walker v.
People, 192 111. 106, 61 N. E. 489.

1895, p. 301.] ILLINOIS. 417

Exemptions.

In Murphy v. People, 213 III. 164, 72 N. E. 779, the court imposed
a tax of three per cent on a legacy to one who claimed she was a
niece of the testator and therefore entitled to two thousand dollars
of the legacy free from tax. The court discusses the questions only
arising out of the legality of the marriage claimed by the party
taxed.

Exemption to Life Tenants with Remainder to Collaterals
is Valid.

Section 1 as construed places a tax upon life tenants with re-
mainder to lineal descendants, and no tax on life tenants with
remainder to collateral heirs. This is not an arbitrary or warranted
discrimination between life tenants. A life estate with the fee
descending in lineal life might well be more desirable than a life
estate with remainder to collateral heirs or strangers to the blood.
The exemption may be regarded as a concession to beneficiaries
of the first class while the last of their line to hold and enjoy prop-
erty. Billings V. People, 189 111. 472, 59 L. R. A. 807.

Particular Estates and Remainders.

S. 2. When any person shall bequeath or devise any property or interest
therein or income therefrom to mother, father, husband, wife, brother and sister,
the widow of the son, or a lineal descendant during the life or for a term of years
or remainder to the collateral heir of the decedent, or to stranger in blood or to
body politic or corporate at their decease, or on the expiration of such term, the
said life estate- or estates for a term of years shall not be subject to any tax and
the property so passing shall be appraised immediately after the death at" what
was the fair market value thereof at the time of the death of the decedent in the
manner hereinafter provided, and after deducting therefrom the value of said
life estate, or term of years, the tax transcribed by this act on the remainder shall
be immediately due and payable to the treasurer of the proper county, and,
together with the interests thereon, shall be and remain a lien on said property
until the same is paid: Provided, that the person or persons or body politic or
corporate beneficially interested in the property chargeable with said tax elect
not to pay the same until they shall come into the actual possession of such prop-
erty, or, in that case said person or persons or body politic or corporate shall
give a bond to the people of the state of Illinois in the penalty three times the
amount of the tax arising upon such estate with such sureties as the county judge
may approve, conditioned for the payment of the said tax, and interest thereon,
at such time or period as they or their representatives may come into the actual
possession or enjoyment of said property, which bond shall be filed in the office of
the county clerk of the proper county: Provided, further, that such person shall
make a full, verified return of said property to said county judge, and file the same
in his office within one year from the death of the decedent, and within that
period enter into such securities and renew the same for five years

418 STATUTES ANNOTATED. [111. St.

Constitutionality.

This section in effect provided that a life estate should be tax-
able when the remainder was to lineal descendants and not tax-
able where the remainder was to collateral descendants or strangers.
It was claimed that this was void, as unreasonable classifica-
tion ; that life tenants constitute but a single class, as the inci-
dents of such an estate are the same irrespective of the ultimate
vesting of the remainder. The court holds, however, that this was
entirely within the discretion of the state legislature ; that the
power of the state to impose conditions upon the transfer or devo-
lution of estates is complete where no discrimination is exercised
in the creation of a class. "Crossing the lines of classes created
by the statute discriminations may be exhibited, but within the
classes there is equality." The court relies on the case of Magoun
V. Illinois Trust &f Savings Bank, 170 U. S. 283, 18 Sup. Ct. 594,
42 L. Ed. 1037; Billings v. People, 188 U. S. 97, 104, 23 S. Ct. 272,
47 L. Ed. 400; affirming 189 111. 472.

"To . . . Wife . . . During the Life."

The language exempting the life estate in any property devised
or bequeathed to the wife of the testator does not apply when the
wife renounces the will and elects to take her statutory rights.
Connell v. Crosby, 210 111. 380, 71 N. E. 350.

**0r remainder to the collateral heir" should be read
"and remainder," etc. Billings v. People, 189 111. 472, 59
L. R. A. 807. The word "or" before the word "remainder"
in this section can have no other meaning than "and." It
follows that the life estate or estate for a term of years referred
to in section 2 is only exempt from the inheritance tax when
the remainder following upon the expiration of such an estate
is to the collateral heir or stranger in blood, or to the body
politic or corporate. Ayers v. Chicago Title & Trust Co., 187 111. 42,
56, 58 N. E. 318.

Where a will creates a trust estate for a period of ten years and
provides that the full estate at the expiration of that time shall
be turned over to the wife and children they get a vested remainder,
and as there are none of them collateral heirs or strangers
the exception provided in 111. St. Hurd's Sts. 1903, p. 1576,
s, 2, does not apply; and therefore the estate was immediately
taxable under section 1. In re Kingman, 220 111. 563, 565, 77
N. E. 135.

1895, p. 301.] ILLINOIS. 419

**At Their Decease.''

The words "at their decease" refer back to the first clause of
section 2, and the word "their" refers to the persons or classes
mentioned in that clause. In other words the remainder referred
to is a remainder at the decease of "mother, father, husband, wife,
brother and sister, the widow of the son or a lineal descendant."
Ayers v. Chicago Title df Trust Co., 187 111. 42, 55, 58 N. E. 318.

**Property so Passing shall be Appraised Immediately After
the Death."

The words "after the death" refer to the death of the testator
and not to the death of the life tenant. Ayers v. Chicago Title &f
Trust Co., 187 111. 42, 58 N. E. 318.

"Deducting Therefrom the Value of said Life Estate.''

The only provision for deduction of the primary estate in assess-
ing the value of the remainder interest is in section 2 and that where
the remainder goes to the collateral heirs, to a stranger to the blood,
or to a body politic or corporate, in which case the value of the
preceding estate is first to be deducted and the tax extended on
the remainder only. In re Kingman, 220 111. 563, 77 N. E. 135.

"Provided that the . . . Persons . . . Interested . . . Elect
Not to Pay the Same until they come into Actual
Possession."

Under this section the right to succession under a will to an
estate in remainder is liable to be taxed and the valuation to be made
as of the date of the death of the testator, and the value to be taken
on the estate of the decedent less the value of the life estate ; and
where the remaindermen do not or cannot (as where they are un-
certain) make an election not to pay the tax until they come into
actual enjoyment as provided by section 2 the tax must be paid
at once. And the court further holds that where there is no pro-
vision for the remainder going to collateral relatives, a stranger to
the blood or to a corporation, there is no one to make an election
and the tax on the remainder becomes due under section 2 and sec-
tion 3 of the statute. Ayers v. Chicago Title & Trust Co., 187 111. 42,
58 N. E. 318.

''Shall Give a Bond."

The right of remaindermen to file a bond for the payment of
the tax is not decided, as it did not appear that any request to file

420 STATUTES ANNOTATED. [111. St.

such a bond had been made in the lower court. In re Kingman, 220
111. 563, 77 N. E. 135.

When Tax is Due. — Interest. — Discount.

S. 3, All taxes imposed by this act, unless otherwise herein provided for,
shall be due and payable at the death of the decedent, and interest at the rate of
six per cent per annum shall be charged and collected thereon for such time as
said taxes is not paid: Provided, that if said tax is paid within six months from
the accruing thereof, interest shall not be charged or collected thereon, but a
discount of five per cent shall be allowed and deducted from said tax, and in all
cases where the executors, administrators or trustees do not pay such tax within
one year from the death of the decedent, they shall be required to give a bond in
the form and to the effect prescribed in section two of this act for the payment of
said tax, together with interest.

'*A11 Taxes . . . Shall be Due and Payable at the Death of
the Decedent."

It is the intention of the Illinois inheritance law as appears from
sections 1, 2 and 3 that all the estates subject to taxation under the
act shall be appraised in value and the taxes thereon fixed promptly
upon the death of the testator or within a reasonable time thereafter.
In re Kingman, 220 111. 563, 77 N. E. 135.

The act provides that the tax shall be due and payable on the
death of testator, but it also provides that the tax shall be laid on
the market value of the property received by the beneficiary. Where
a future estate depends on such possibilities as the marriage or
having children of life tenants it is a mere possible interest which
could not have a market value ; and the courts in order to enforce
immediate collection of the tax cannot change the tax from one on
succession to one on property. No other course is left open in the
practical administration of the statute than to postpone the assess-
ing and collecting of tax upon such remote contingent interests
as are incapable of valuation and as to which the rate and the
exceptions cannot be determined. Billings v. People, 189 111. 472,
59 L. R. A. 807.

Where a will provides for many contingencies that may arise
in twenty years next succeeding the death of the testator, the im-
position of the inheritance tax is properly deferred until it can cer-
tainly be known who is the beneficiary entitled to the fund. Then
the legatee will get his property and the state will get its tax under
111. Kurd's Rev. Sts. 1901, c. 120, s. 366. People v. McCormick,
208 111. 437, 448, 70 N. E. 350, 64 L. R. A. 775.

1895, p. 301.] ILLINOIS. 421

The right to impose the tax presently depends not upon the char-
acter of the estate devised with reference to its being a contingent
or vested remainder, but upon the question whether the person
who will ultimately be entitled to a beneficial interest in the re-
mainder can be now identified, or whether the proportion to which
he will succeed can be now determined. People v. McCormick,
208 111. 437, 70 N. E. 350, 64 L. R. A. 775.

"Unless Otherwise Provided For."

The only provisions referring to "unless otherwise provided for"
are the provisions of section 2 with reference to remainders to
collateral heirs, strangers to the blood and the body politic or
corporate. Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E.
318.

Deduction of Tax from Shares of Beneficiaries.

S. 4. Any administrator, executor or trustee having any charge or trust in
legacies or property for distribution subject to the said tax shall deduct the tax
therefrom, or if the legacy or property be not money he shall collect a tax thereon
upon the appraised value thereof from the legatee or person entitled to such
property, and he shall not deliver or be compelled to deliver any specific legacy
or property subject to tax to any person until he shall have collected the tax
thereon, and whenever any such legacy shall be charged upon or payable out of
real estate, the heir or devisee, before paying the same, shall deduct said tax
therefrom and pay the same to the executor, administrator or trustee, and the
same shall remain a charge on such real estate until paid, and the payment thereof
shall be enforced by the executor, administrator or trustee in the same manner
that the said payment of said legacies might be enforced, if, however, such legacy
be given in money to any person for a limited period, he shall retain the tax
upon the whole amount, but if it be not in money, he shall make application to
the court having jurisdiction of his accounts to make an apportionment, if the case
requires it, of the sum to be paid into his hands by such legatees, and for such
further order relative thereof as the case may require.

The statute of 1895 gives the county court jurisdiction to deter-
mine the inheritance tax, but where the judge of the county court
is one of the parties in interest he may certify the question to the
circuit court. Section 4 of the statute of 1895, providing that the
executor shall apply to the court having jurisdiction over his ac-
counts to make an apportionment of the sum to be paid by the
legatees and for such further order as the case may require, does not
oust the county court of jurisdiction given it under sections 13, 14
and 15. Section 4 relates not to the collection of the tax but only
to questions which may arise as to the apportionment of taxes

422 STATUTES ANNOTATED. [111. St.

in the course of the settlement of the affairs of the estate, with no
intent to deprive the county court of jurisdiction of the proceedings
on the part of the state to collect the taxes. Connell v. Crosby, 210
III. 380, 71 N. E. 350.

Appraisal.

S. 11. In order to fix the value of property of persons whose estate shall be
subject to the payment of said tax, the county judge, on the application of any
interested party, or upon his own motion, shall appoint some competent person
as appraiser as often as, or whenever, occasion may require, whose duty it shall
be forthwith to give such notice by mail to all persons known to have or claim an
interest in such property, and to such persons as the county judge may by order
direct, of the time and place he will appraise such property, and at such time and
place to appraise the same at a fair market value, and for that purpose the
appraiser is authorized by leave of the county judge to use subpoenas for and to
compel the attendance of witnesses before him, and to take the evidence of such
witnesses under oath concerning such property and the value thereof, and he shall
make a report thereof and of such value in writing to said county judge, with
the depositions of the witnesses examined and such other facts in relation thereto,
and to said matter as said county judge may by order require to be filed in the
office of the clerk of said county court, and from this report the said county judge
shall forthwith use and fix the then cash value of all estates, annuities and life
estates or terms of years growing out of said estate, and the tax to which the same
is liable, and shall immediately give notice by mail to all parties known to be
interested therein. Any person or persons dissatisfied with the appraisement or
assessment may appeal therefrom to the county court of the proper county within
sixty days after the making and filing of such appraisement or assessment, on
paying the given security proof to the county judge to pay all costs, together with
whatever taxes that shall be fixed by said court. The said appraiser shall be paid
by the county treasurer out of any funds he may have in his hands on account of
said tax, on the certificate of the county judge, at the rate of three dollars per day
for every day actually and necessarily employed in said appraisement, together
with his actual and necessary traveling expenses.

**Fair Market Value.*'

Appraisers are not limited in the valuation of property to the
market quotation of the same, but may use the quotations of the
same on public exchanges, private sales of such property, testimony
as to the actual value of the same and their own knowledge of the
subject matter.

'The quotation .'of the stock exchange may be temporarily
uncertain and untrustworthy, if the sales thereon are suddenly
affected for speculative purposes, or by the forcing upon the market
and to sale of large blocks of stock in an extraordinary manner with
no explanation of such action, and where the purpose of it is left
to the conjecture of those dealing in the stocks ; but such quotations

1895. p. 301.] ILLINOIS. 423

may be a fair and safe guide when they are taken for a reasonable
period of sales made in the usual and ordinary course of business."
Per Magruder, J., in Walker v. People, 192 111. 106, 112, 61 N. E.
489.

"From This Report."

The appraiser should show the value of the estate received by
each residuary legatee under the will and in doing so should deduct
the gifts and legacies preceding the residuary clause of the will.
An appraisement should not be made on the basis of the entire
value of a decedent's property at the time of his death but rather
on the value of the estate received by each person under the will.
Ayers v. Chicago Title & Trust Co., 187 111. 42, 58 N. E. 318.

Jurisdiction of County Court.

S. 13. The county court in the county in which the real property is situated*
of the decedent who was not a resident of the state, or in the county of which the
deceased was a resident at the time of his death, shall have jurisdiction to hear
and determine all questions in relation to the tax arising under the provisions of
this act, and the county court first acquiring jurisdiction hereunder shall retain
the same to the exclusion of every other.

S. 14. If it shall appear to the county court that any tax accruing under this
act has not been paid according to law, it shall issue a summons summoning the
persons interested in the property liable to the tax to appear before the court
on a day certain not more than three months after the date of such summons, to
show cause why said tax should not be paid. The process, practice and pleadings
and the hearing and determination thereof, and the judgment in said court in
such cases shall be the same as those now provided or which may hereafter be
provided in probate cases in the county courts in this state and the fees and costs
in such cases shall be the same as in probate cases in the county courts of this state.

S. 15. Whenever the treasurer of any county shall have reason to believe
that any tax is due and unpaid under this act, after the refusal or neglect of the
person interested in the property liable to pay said tax, to pay the same, he shall
notify the state's attorney of the proper county, in writing, of such refusal to
pay said tax, and the state's attorney so notified, if he has proper cause to believe
a tax is due and unpaid, shall prosecute the proceeding in the county court in the
proper county, as provided in section 14 of this act, for the enforcement and
collection of such tax, and in such case said court shall allow as costs in the said
case such fees to said attorney as he may deem reasonable.

Amendment of Petition.

Where the treasurer in his original application claims a tax of
three per cent after the expiration of the period within which the
right to sue for the tax is limited, the application may be amended
by asking that the tax be computed at different rates, depending

424 STATUTES ANNOTATED. [111. St

on the finding of the court as to the facts, as this amendment does
not set up a new or different cause of action but merely corrects
the statement in the original application as to the rate at which the
tax should be computed. Connell v. Crosby, 210 111. 380, 71 N. E.
350.

Inventory.

Under the Illinois administration statute, section 51, the court
and the people have a right to compel the filing of the inventories
required by the statute. The statute confers no discretion upon the
executors and the state has a right to an order that the executor's
inventory be filed, and a judgment rendered in the absence of the
inventory should be reversed even though it is claimed that the
state obtained all necessary information in its examination of
witnesses. People v. Sholem, 244 111. 502, 91 N. E. 704.

Where a party makes a motion that an inventory be filed in a
tax inheritance case and the judge says that he will take the motion
under advisement but does not either then nor afterward make
an order for the inventory, but hears the case and enters final judg-
ment without doing so, this amounts to a denial of the motion.
People V. Sholem, 244 111. 502, 91 N. E. 704.

Refunding.

111. St. 1895, p. 303, ss. 10 and 19, do not authorize the county
treasurer to repay taxes erroneously paid to him. It was intended
that the state treasurer alone should have this power. People v.
Griffith, 245 111. 532, 92 N. E. 313.

THE ADMINISTRATIVE AMENDMENTS OF 1901.

111. St. 1901, p. 269. Approved May 10, 1901.

S. 1. Be it enacted by the People of the State of Illinois, represented in the
General Assembly : That section 11 of an act entitled, "An Act to tax gifts, legacies
and inheritances in certain cases, and to provide for the collection of the same,"
approved June 15, 1895, in force July 1, 1895, be, and the same are hereby,
amended, and that additional sections to be known as section 113^ and section
213^, be, and they are hereby, added so as to read as follows: —

S. 11. In prder to fix the value of property of persons whose estate shall be
subject to the payment of said tax, the county judge, on application of any
interested party, or upon his own motion, shall appoint some competent person
as appraiser as often as, or whenever occasion may require, whose duty it shall be
forthwith to give such notice by mail to all persons known to have or claim an
interest in such property, and to such persons as the county judge may, by order.

1901, p. 269.] ILLINOIS. 425

direct, of the time and place he will appraise such property, and at such time and
place to appraise the same at a fair market value, and for that purpose the ap-
praiser is authorized, by leave of the county judge, to use subpoenas for and to
compel the attendance of witnesses before him, and to take the evidence of such
witnesses under oath concerning such property and the value thereof, and he shall
make a report thereof and of such value, in writing, to said county judge, with the
depositions of the witnesses examined and such other facts in relation thereto
and to said matters as said county judge may, by order, require to be filed in the
office of the clerk of said county court and from this report the said county judge
shall forthwith assess and fix the then cash value of all estates, annuities and life
estates or terms of years growing out of said estate, and the tax to which the same
is liable, and shall immediately give notice by mail to all parties known to be
interested therein. Any person or persons dissatisfied with the appraisement or
assessment may appeal therefrom to the county court of the proper county within
sixty days after the making and filing of such appraisement or assessment, on
paying or giving security satisfactory to the county judge to pay all costs, together
with whatever taxes shall be fixed by said court. The said appraiser shall be paid
by the county treasurer out of any funds he may have in his hands on account of
the inheritance tax, as by law provided, on the certificate of the county judge, such
compensation as such judge may deem just for said appraiser's services as such
appraiser, not to exceed ten dollars per day for each day actually and necessarily
employed in said appraisement together with his actual and necessary traveling
expenses and disbursements, including such witness fees paid by him.

"Any Person . . . May Appeal."

The provision that any person dissatisfied with the appraisement
or assessment may appeal was intended to include the state, and
the people may appeal 'under this section from the action of the
county judge in appraising property directly to the supreme court.
The fact that section 11 provides for appeal only on paying or giving
security satisfactory to the county judge and that the state is not
required to give a bond does not affect the matter. In Illinois it
would be unconstitutional to permit an appeal only by the persons
interested in the property of the estate and not by the state itself.
People V. Sholem, 238 111. 203, 87 N. E. 390.

S. IIH- The fees of the clerk of the county court in inheritance tax matters
in the respective counties of this state, as classified in the act concerning fees and
salaries, shall be as follows: —

In counties of the first and second class, for services in all proceedings in each
estate before the county judge, the clerk shall receive a fee of five dollars. In all
such proceedings in counties of the third class, the clerk shall receive a fee of ten
dollars. Such fees shall be paid by the county treasurer, on the certificate of the
county judge, out of any money in his hands on account of said tax. In counties
of the third class, the attorney general of state may aopoint an attorney who
shall be known as the "inheritance tax attorney," and whose salary shall be not
to exceed three thousand dollars per year, payable month y, out of the state
treasury upon warrants drawn by the auditor of public accounts, on vouchesr

426 STATUTES ANNOTATED. [111. St-

approved by the attorney general. In counties of the third class, the clerk of the
county court may appoint a clerk in the office of the clerk of said court, to be
known as the "inheritance tax clerk," whose compensation shall be fixed by the
county judge, not to exceed fifteen hundred dollars per year, and not to exceed the
fee earned in said office in inheritance tax matters, the surplus of such fees over
said compensation so fixed to be turned into the county treasury. In addition
to the above, the clerk of the county court shall be entitled, in all suits .brought
for the collection of delinquent inheritance tax, and all contested inheritance tax
cases appealed from the county judge to the county court, and in all appeals from
the county court to the supreme court, the same fees as are now, or which may
hereafter be, allowed by law in suits at law, or in the matter of appeals at law,
to or from the county court, which fees shall be taxed as costs and paid as in other
cases at law; and in all cases arising under this act, including certified copies of
documents or records in his office, for which no specific fees are provided, the
clerk of the county court shall charge against and collect, from the person applying
for or entitled to, such services, or certified copies, the same fees as are now, or
which may hereafter be allowed for similar services or certified copies in other
cases in said court, and for recording inheritance tax receipts required to be re-
corded in his office, he shall receive the same fees which now are, or hereafter may
be, allowed by law to the recorder of deeds for recording similar instruments.

S. 21^. When any person interested in any property, in this state, which
shall pass by will or the intestate laws of this state, shal. deem the same not subject
to any tax under this act, he may file his petition in the county court of the proper
county to determine whether said property is subject to the tax herein provided
in which petition the county treasurer and all persons known to have or claim
any interest in said property shall be made parties. The county court may hear
the said cause upon the relation of the parties and the testimony of witnesses,
and evidence produced in open court and, if the court shall find said property
is not subject to any tax, as herein provided, the court shall, by order, so determine;
but if it shall appear that said property, or any part thereof, is subject to any such
tax, the same shall be appraised and taxed as in other cases. An adjudication
by the county court, as herein provided, shall be conclusive as to the lien of the
tax herein provided upon said property, subject to appeal to the supreme court
of the state by the county treasurer, or attorney general of the state, in behalf
of the people, or by any party having an interest in said property. The fees and
costs in all cases arising under this section shall be the same as are now, or may
hereafter be, allowed by law in cases at law in the county court.

Previous to the insertion by the amendment of 1901 of section
213^ there was no provision in the Illinois inheritance law per-
mitting an appeal from the order of the county court fixing the tax.
People V. Sholem, 238 111. 203, 87 N. E. 390.

THE CHARITABLE EXEMPTIONS OF 1901.

111. St. 1901, p. 268. Approved May 10, 1901.

S. 1. Be it enacted by the People of the State of Illinois, represented in the
General Assembly: That an act entitled, "An Act to tax gifts, legacies and in-
heritances in certain cases, and to provide for the collection of the same," approved

1901, p. 268.] ILLINOIS. 427

June 15, 1895, in forte July 1, 1895, be and the same is hereby, amended by adding
thereto an additional and new section, exempting certain grants, gifts and be-
quests therein named, to be known as section 23^, as follows: —

S. 23^. When the beneficial interests of any property or income therefrom
shall pass taor for the use of any hospital, religious, educational, bible, missionary,
tract, scientific, benevolent or charitable purpose, or to any trustee, bishop or
minister of any church or religious denomination, held and used exclusively for
the religious, educational or charitable uses and purposes of such church or re-
ligious denomination, institution or corporation, by grant gift, bequest or other-
wise, the same shall not be subject to any such duty or tax, but this provision
shall not apply to any corporation which has the right to make dividends or
distribute profits or assets among its members.

Prospective Only.

Amendments to the inheritance laws must be treated as prospec-
tive in the absence of language indicating they are retrospective
in character; so this statute had no effect upon the jurisdiction of
the court to collect taxes due under the act of 1895, but merely
extended the exemptions in an estate where death occurred after
the passage of the act of 1901. Where the testator died a month
before the statute of 1901 went into effect, it had no application to
the estate, as the right to a tax had accrued to the state under the
former statute on the death of the testator. The amendment did
not deprive the court of jurisdiction to collect the tax. Provident
Hospital & Training Assn. v. People, 198 111. 495, 64 N. E. 1031.
This statute does not affect the right to collect a tax on bequests
taxable under the statute of 1895 and exempt by this statute.
The act of 1901 does not in terms repeal the former act. Connell
V. Crosby, 210 111. 380, 71 N. E. 350.

Charitable bequests should be upheld and given effect whenever
possible, and because the statute now exempts these bequests from
the payment of the inheritance tax is no reason for departing from
or modifying this ancient rule of construction favoring charitable
gifts. So a certain gift to the public authorities for the erection of a
drinking fountain or drinking basin for horses and in connection
therewith a bronze statue of a certain horse, together with a record
of his performances, is exempt from the inheritance tax as a chari-
table gift. The courts in determining whether or not a gift is
charitable will not look to the motives of the donor, but rather
to the nature of the gift and the object which will be attained by it.
In re Graves, 242 III. 23, 89 N. E. 672, 134 Am. S. R. 302.

Exemptions Confined to Domestic Corporations.

The statute of 1901 gives an exemption to charitable corporations
which pay no dividends, but confines the exemption to corpora-

428 STATUTES ANNOTATED. [111. St.

tions organized under the laws of Illinois. This distinction is valid
and one which the state has a right to make. This distinction
is not contrary to the fourteenth amendment to the federal
constitution; as if a state exempt property bequeathed for
charitable and educational purposes from taxation it is not
unreasonable or arbitrary to require the charity to be exerqised or
education to be bestowed within her borders and for her people
whether exercised through persons or corporations. Board of
Education v. Illinois, 203 U. S. 553, 563, 27 S. Ct. 171, 51 L. Ed.
314; affirming In re Speed, 216 111. 23, 74 N. E. 809, 108 Am.
St. Rep. 189.

THE PRESENT ACT.

An Act to tax gifts, legacies, inheritances, transfers, appointments
and interests in certain cases, and to provide for the collection of the same,
and repealing certain acts therein named. Approved June 14, 1909. (p. 311.)

What Property is Subject to Tax. — Rates. — Exemptions.

S. 1. A tax shall be and is hereby imposed upon the transfer of any property,
real, personal or mixed, or of any interest therein or income therefrom, in trust
or otherwise, to persons, institutions or corporations, not hereinafter exempted,
in the following cases: —

1. When the transfer is by will or by the intestate laws of this state, from any
person dying, seized or possessed of the property while a resident of the state.

2. When the transfer is by will or intestate laws of property within the state
and the decedent was a non-resident of the state at the time of his death.

3. When the transfer is of property made by a resident, or by a non-resident
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift, made in contemplation of the death of the grantor, vendor or donor, or
intended to take effect in possession or enjoyment at or after such death. When
any such person, institution or corporation becomes beneficially entitled in posses-
sion or expectancy to any property or the income therefrom, by any such transfer,
whether made before or after the passage of this act.

4. Whenever any person, institution or corporation shall exercise a power of
appointment derived from any disposition of property made either before or after
the passage of this act, such appointment, when made, shall be deemed a taxable
transfer under the provisions of this act, in the same manner as though the prop-
erty to which such appointment relates belonged absolutely to the donee of such
power and had been bequeathed or devised by such donee by will ; and whenever
any person or corporation possessing such a power of appointment so derived shall
omit or fail to exercise the same within the time provided therefor, in whole or in
part, a transfer taxable under the provisions of this act shall be deemed to take
place to the extent of such omission or failure, in the same manner as though the
persons or corporations thereby becoming entitled to the possession or enjoyment
of the property to which such power related had succeeded thereto by a will of
the donee of the power failing to exercise such power, taking effect at the time
of such omission or failure.

1909, p. 311.] ILLINOIS. 429

When the beneficial interest to any property or income therefrom shall pass to
or for the use of any father, mother, husband, wife, child, brother, sister, wife or
widow of the son, or the husband of the daughter, or any child or children adopted
as such in conformity with the laws of the state of Illinois, or to any person to
whom the deceased, for not less than ten years prior to death, stood in the acknowl-
edged relation of a parent: Provided, however, such relationship began at or before
said person's fifteenth birthday and was continuous for said ten years thereafter:
And, provided, also, that the parents of such person so standing in such relation
shall be deceased when such relationship commenced, or to any lineal descendant
of such decedent born in lawful wedlock. In every such case the rate of tax shall
be two dollars on every one hundred dollars of the clear market value of such
property received by each person, when the amount so received exceeds in amount
the sum of one hundred thousand dollars, and one dollar on each one hundred
dollars of the clear market value of such property received by each person when
the amount so' received is one hundred thousand dollars or less; and at and after
the same rates, respectively, for every less amount: Provided, that any gift,
legacy, inheritance, transfer, appointment or interest which may be valued at a
less sum than twenty thousand dollars shall not be subject to any such duty or
taxes, and the tax is to be levied in the above cases only upon the excess of twenty
thousand dollars received by each person. When the beneficial interest to any
property or income therefrom shall pass to or for the use of any uncle, aunt, niece
or nephew or any lineal descendant of the same, in any such case the rate of such
tax shall be four dollars on every one hundred dollars of the clear market value
of such property received by each person on the excess of two thousand dollars
so received by each person when the amount so received exceeds the sum of
twenty thousand dollars; and two dollars on every one hundred dollars of the
clear market value of such property received by each person on the excess of two
thousand dollars so received by each person when the amount so received is
twenty thousand dollars or less. In all other cases the rate shall be as follows:
On each and every one hundred dollars of the clear market value of all property
and at the same rate for any less amount; on a 1 transfers of ten thousand dollars
and less^ three dollars; on all transfers over ten thousand dollars and not exceeding
twenty thousand dollars, four dollars; on all transfers over twenty thousand
dollars and not exceeding fifty thousand dollars, five dollars; on all transfers over
fifty thousand dollars and not exceeding one hundred thousand dollars, six dollars;
and on all transfers over one hundred thousand dollars, ten dollars: Provided,
that any gift, legacy, inheritance, transfer, appointment or interest which may be
valued at a less sum than five hundred dollars shall not be subject to any duty or
tax.

[See notes to the Act of 1895, ante, p. 406 et seq.]

Appraisal of Life Interests. — Lien. — Bond.

S. 2. When any property or interest therein or income therefrom shall pass
or be limited for the life of another, or for a term of years, or to terminate on the
expiration of a certain period the property of the decedent so passing shall be
appraised immediately after the death of the decedent, and the value of the said
life estate, term of years or period of limitation shall be fixed upon mortality
tables, using the interest rate or income rate of five per cent; and the value of the
remainder in said property so limited shall be ascertained by deducting the value
of the life estate, term of years or period of limitation from the fair market value of

430 STATUTES ANNOTATED. [111. Sf

the property so limited, and the tax on the several estate or estates, remainder or
remainders, or interests shall be immediately due and payable to the treasurer
of the proper county, together with interest thereon, and said tax shall accrue
as provided in section three (3) of this act, and remain a lien upon the entire
property limited until paid: Provided, that the person or persons, body politic
or corporate, beneficially interested in property chargeable with said tax, elect
not to pay the same until they shall come into actual possession or enjoyment
of such property, then in that case said person or persons, or body politic or
corporate, shall give bond to the people of the state of Illinois in a penal sum three
times the amount of the tax arising from such property, limited with such sureties
as the county judge may approve, conditioned for the payment of the said tax
and interest thereon at such time or period as they or their representatives may
come into the actual possession or enjoyment of said property; which bond shall
be filed in the office of the county clerk of the proper county: Provided, further,
that such person or persons, body politic or corporate, shall make a full verified
return of said property to said county judge and file the same in his office within
one year from ihe death of the decedent, with the bond and sureties as above
provided; and further, said person or persons, body politic or corporate shall
renew said bond every five years after the date of the death of decedent.
[See notes to the Act of 1895, ante, p. 418.]

Interest. — Bond.

S. 3. All taxes imposed by this act, unless otherwise herein provided for, shall
be due and payable, at the death of the decedent, and interest at the rate of six
per cent per annum shall be charged and collected thereon for such time as said
taxes are not paid: Provided, that if said tax is paid within six months from the
accruing thereof, interest shall not be charged or collected thereon, but a discount
of five per cent shall be allowed and deducted from said tax; and in all cases where
the executors, administrators or trustees do not pay such tax within one year from
the death of the decedent, they shall be required to give a bond in the form and
to the effect prescribed in section 2 of this act, for the payment of said tax, together
with interest.

[See notes to the Act of 1895, ante, p. 420.]

Duties of Executors and Administrators.

S. 4. Any administrator, executor or trustee having any charge or trust in
legacies or property for distribution subject to the said tax shall deduct the tax
therefrom, or if the legacy or property be not money he shall collect a tax thereon
upon the appraised value thereof from the legatee or person entitled to such
property, and he shall not deliver or be compelled to deliver any specific legacy
or property subject to tax to any person until he shall have collected the tax
thereon; and whenever any such legacy shall be charged upon or payable out of
real estate the heir or devisee before paying the same, shall deduct said tax
therefrom, and pay the same to the executor, administrator or trustee, and the
same shall remain a charge on such real estate until paid, and the payment thereof
shall be enforced by the executor, administrator or trustee in the same manner
that the said payment of said legacies might be enforced, if, however, such legacy
be given in money to any person for a limited period, he shall retain the tax upon
the whole amount, but if it be not in money he shall make application to the court

1909. p. 311.1 ILLINOIS. 431

having jurisdiction of his accounts, to make an apportionment if the case requires
it of the sum to be paid into his hands by such legatees, and for such further order
relative thereof as the case may require.
[See notes to the Act of 1895, ante, p. 421.

Liability of Executors and Others.

S. 5. All executors, administrators and trustees shall be personally liable for
the payment of taxes and interest, and where proceedings for collection of taxes
assessed be had, said executors, administrators and trustees shall be personally
liable for the expenses, costs and fees of collection. They shall have full power
to sell so much of the property of the decedent as will enable them to pay said
tax, in the same manner as they may be enabled to do by law, for the payment of
duties of their testators and intestates, and the amount of said tax shall be paid
as hereinafter directed.

Payments. -^ Receipts.

S. 6. Every sum of money retained by any executor, administrator or trustee,
or paid into his hands for any tax on any property, shall be paid by him within
thirty days thereafter to the treasurer of the proper county, and the said treasurer
or treasurers shall give, and every executor, administrator or trustee shall take
duplicate receipts from him of said payments, one of which receipts he shall
immediately send to the state treasurer, whose duty it shall be to charge the
treasurer so receiving the tax with the amount thereof, and shall seal said receipt
with the seal of his office and countersign the same and return it to the executor,
administrator or trustee, whereupon it shall be a proper voucher in the settlement
of his accounts; but the executor, administrator or trustee shall not be entitled
to credit in his accounts or be discharged from liability for such tax unless he shall
purchase a receipt so sealed and countersigned by the treasurer and a copy thereof
certified by him.

Duty to Give Information -

S. 7. Whenever any of the real estate of which any decedent may die seized
shall pass to any body politic or corporate, or to any person or persons, or in trust
for them, it shall be the duty of the executor, administrator or trustee of such
decedent to give information thereof in writing to the treasurer of the county
where said real estate is situated, within six months after they undertake the
execution of their expected duties, or if the fact be not known to them within that
period, then within one month after the same shall have come to their knowledge.

[As to inventory see notes to the Act of 1895, s. 15, ante, p. 424.]

Refund to Pay Debts.

S. 8. Whenever debts shall be proved against the estate of the decedent after
distribution of legacies from which the inheritance tax has been deducted in com-
pliance with this act, and the legatee is required to refund any portion of the
legacy, a proportion of the said tax shall be repaid to him by the executor or
administrator if the said tax has not been paid into the state or county treasury, or
by the county treasurer if it has been so paid.

Foreign Executors Transferring Stocks.

S. 9. If a foreign executor, administrator or trustee shall assign or transfer
any stock or obligations in this state standing in the name of a decedent or in trust

432 STATUTES ANNOTATED. fill. St.

for a decedent, liable to any such tax the tax shall be paid to the treasurer of the
proper county on the transfer thereof. No safe deposit company, trust company,
corporation, bank or other institution, person or persons having in possession or
under control securities, deposits, or other assets belonging to or standing in the
name of a decedent who was a resident or non-resident or belonging to, or standing
in the joint names of such a decedent and one or more persons, including the shares
of the capital stock of, or other interests in, the safe deposit company, trust com-
pany, corporation, bank or other institution making the delivery or transfer herein
provided, shall deliver or transfer the same to the executors, administrators or
legal representatives of said decedent, or to the survivor or survivors when held
in the joint names of a decedent and one or more persons, or upon their order or
request, unless notice of the time and place of such intended delivery or transfer
be served upon the state treasurer and attorney general at least ten days prior
to said delivery or transfer; nor shall any such safe deposit company, trust com-
pany, corporation, bank or other institution, person or persons deliver or transfer
any securities, deposits or other assets belonging to or standing in the name of a
decedent, or belonging to, or standing in the joint names of a decedent and one or
more persons, including the shares of the capital stock of, or other interests in,
the safe deposit company, trust company, corporation, bank or other institution
making the delivery or transfer, without retaining a sufficient portion or amount
thereof to pay any tax or interest which may thereafter be assessed on account
of the delivery or transfer of such securities, deposits or other assets, including
the shares of the capital stock of, or other interests in, the safe deposit company,
trust company, corporation, bank or other institution making the delivery or
transfer under the provisions of this article, unless the state treasurer and attorney
general consent thereto in writing. And it shall be lawful for the state treasurer,
together with the attorney general, personally or by representatives, to examine
said securities, deposits or assets at the time of such delivery or transfer. Failure
to serve such notice or failure to allow such examination, or failure to retain a
sufficient portion or amount to pay such tax and interest as herein provided shall
render said safe deposit company, trust company, corporation, bank or other
institution, person or persons liable to the payment of the amount of the tax and
interest due or thereafter to become due upon said securities, deposits or other
assets, including the shares of the capital stock of, or other interests in, the safe
deposit company, trust company, corporation, bank or other institution making
the delivery or transfer, and in addition thereto, a penalty of one thousand dollars;
and the payment of such tax and interest thereon, or of the penalty above pre-
scribed, or both, may be enforced in an action brought by the state treasurer in
any court of competent jurisdiction.

Refunding Excess of Tax Paid.

S. 10. When any amount of said tax shall have been paid erroneously to the
state treasury, it shall be. lawful for him on satisfactory proof rendered to him
by said county treasurer- of said erroneous payments to refund and pay to the
executor, administrator or trustee, person or persons who have paid any such
tax in error the amount of such tax so paid: Provided, that all applications for the
repayment of said tax shall be made within two years from the date of said pay-
ment.

[See notes to the Act of 1895, ante, p. 424.]

1909, p. 311.1 ILLINOIS. 433

AppraisaL

S. 11. In order to fix the value of property of persons whose estate shall be
subject to the payment of said tax, the county judge, on application of any
interested party, or upon his own motion shall appoint some competent person
as appraiser as often as or whenever occasion may require, whose duty it shall be
forthwith to give such notice by mail, to all persons known to have or claim
an interest in such property ,and to such persons as the county judge may, by order,
direct, of the time and place he will appraise such property, and at such time and
place to appraise the same at a fair market value, and for that purpose the appraiser
is authorized, by leave of the county judge, to use subpoenas for and to compel
the attendance of witnesses before him, and to take the evidence of such witnesses
under oath concerning such property and the value thereof, and he shall make
a report thereof and of such value in writing, to said county judge, with the
depositions of the witnesses examined and such other facts in relation thereto
and to said nlatters as said county judge may, by order, require to be filed in the
office of the clerk of said county court, and from this report the said county judge
shall forthwith assess and fix the then cash value of all estates, annuities and life
estates or terms of years growing out of said estate, and the tax to which the same
is liable, and shall immediately give notice by mail to all parties known to be
interested therein. Any person or persons dissatisfied with the appraisement or
assessment may appeal therefrom to the county court of the proper county within
sixty days after the making and filing of such appraisement or assessment on
paying or giving security satisfactory to the county judge to pay all costs, together
with whatever taxes shall be fixed by said court. The said appraiser shall be paid
by the county treasurer out of any funds he may have in his hands on account of
the inheritance tax collected in said appraisement, as by law provided, on the
certificate of the county judge, such compensation as such judge may deem just
for said appraiser's services as such appraiser, not to exceed ten dollars per day
for each day actually and necessarily employed in said appraisement, together
with his actual and necessary traveling expenses and disbursements, including
such witness fees paid by him.

[See notes to the Acts of 1895 and 1901, ante, pp. 422, 425.]

Fees. — Attorneys.

S. 12. The fees of the clerk of the county court in inheritance tax matters in
the respective counties of this state, as classified in the act concerning fees and
salaries, shall be as follows: —

In counties of the first and second class, for services in all proceedings in each
estate before the county judge the clerk shall receive a fee of five dollars. In all
such proceedings in counties of the third class, the clerk shall receive a fee of ten
dollars. Such fees shall be paid by the county treasurer, on the certificate of the
county judge, out of any money in his hands, on account- of said tax. In counties
of the third class, the attorney general of the state may appoint an attorney, who
shall be known as the "inheritance tax attorney," and whose salary shall be not
to exceed three thousand dollars per year, payable monthly out of the state
treasury upon warrants drawn by the auditor of public accounts, on vouchers
approved by the attorney general. In counties of the third class, the clerk of the
county court may appoint a clerk in the office of the clerk of said court, to be
known as the "inheritance tax clerk," whose compensation shall be fixed by the

434 STATUTES ANNOTATED. [111. St

county judge, not to exceed fifteen hundred dollars per year, and not to exceed
the fee earned in said office in inheritance tax matters, the surplus of such fees
over said compensation so fixed to be turned into the county treasury. In addi-
tion to the above, the clerk of the county court shall be entitled, in all suits
brought for the collection of delinquent inheritance tax, and all contested inheri-
tance tax cases appealed from the county judge to the county court, and in all
appeals from the county court to the supreme court, the same fees as are now,
or which may hereafter be, allowed by law in suits at law, or in the matter of
appeals at law, to or from the county court, which fees shall be taxed as costs and
paid as in other cases at law; and in all cases arising under this act, including
certified copies of documents or records in his office, for which no specific fees are
provided, the clerk of the county court shall charge against and collect from the
person applying for, or entitled to such services, or certified copies, the same fees
as are now, or which may hereafter be, allowed for similar services or certified
copies in said court, and for recording inheritance tax receipts required to be
recorded in his office, he shall receive the same fees which now are or hereafter may
be allowed by law to the recorder of deeds for recording similar instruments.

Appraiser. — Penalty for Receiving Reward.

S. 13. Any appraiser appointed by this act, who shall take any fee or reward
from any executor, administrator, trustee, legatee, next of kin or heir of any
decedent, or from any other person liable to pay said tax or any portion thereof,
shall be guilty of a misdemeanor, and upon conviction in any court having juris-
diction of misdemeanors, he shall be fined not less than two hundred and fifty
dollars nor more than five hundred dollars and imprisoned not exceeding ninety
days; and in addition thereto the county judge shall dismiss him from such service.

Jurisdiction of County Court Over Property of Non-Residents.

S. 14. The county court in the county in which the property is situated of the
decedent, who was not a resident of the state or in the county of which the de-
ceased was a resident at the time of his death, shall have jurisdiction to hear and
determine all questions in relation to the tax arising under the provisions of this
act, and the county court first acquiring jurisdiction hereunder shall retain the
same to the exclusion of every other.

[See notes to the Act of 1895, ante, p. 423.]

Proceedings for Collection.

S. 15. If it shall appear to the county court that any tax accruing under this
act has not been paid according to law, it shall issue a summons summoning the
persons interested in the property liable to the tax to appear before the court on
a day certain, not more than three months after the date of such summons, to
show cause why said tax should not be paid. The process, practice and pleadings,
and the hearing and determination thereof, and the judgment in said court in
such cases shall be the same as those now provided, or which may hereafter be
provided in probate cases in the county courts in this state, and the fees and costs
in such cases shall be the same as in probate cases in the county courts of this state.

[See notes to the Act of 1895, ante, p. 423.]

State's Attorney to Enforce Payment. — Fees.

S. 16. Whenever it appears that any tax is due and unpaid under this act, and
the persons, institutions or corporations liable for said tax have refused or neglected

1909, p. 311.] ILLINOIS. 43o

to pay the same, it shall be the duty of the state's attorney, in counties of the first
and second class, and the inheritance tax attorney, in counties of the third class,
if he has proper cause to believe a tax is due and unpaid, to prosecute the collection
of same in the county court in the proper county, in the manner provided in
section fifteen of this act, for the enforcement and collection of such tax; and in
every such case said court shall allow as costs in said case, such fees to said
attorney as the court may deem reasonable.
[See notes to the Act of 1895, ante, p. 423.]

Reports.

S. 17. The county judge and county clerk of each county shall, every three
months, make a statement in writing to the county treasurer of the county of the
property from which or the party from whom he has reason to believe a tax under
this act is due and unpaid.

Expenses.

S. 18. Whenever the county judge of any county shall certify that there was
probab e cause for issuing a summons and taking the proceedings specified in
sections 15 and 16 of this act, the state treasurer shall pay or allow to the treasury
of any county all expenses incurred for service of summons and his other lawful
disbursements that has not otherwise been paid.

Records.

S. 19. The treasurer of the state shall furnish to each county judge a book,
in which he shall enter the returns made by appraisers, the cash value of annuities,
life estates and terms of years and other property fixed by him, and the tax assessed
thereon and the amounts of any receipts for payments thereof filed with him,
which books shall be kept in the office of the county judge as a public record.

Reports.

S. 20. The treasurer of each county shall collect and pay to the state treasurer
all taxes that may be due and payable under this act, who shall give him a receipt
therefor, of which collection and payment he shall make a report under oath to
the auditor of public accounts, on the first JVIonday in IVlarch and September of
each year, stating for what estate paid, and in such form and containing such
particulars as the auditor may prescribe; and for all said taxes collected by him
and not paid to the state treasurer by the first day of October and April of each
year, he shall pay interest at the rate of ten per cent per annum.

Fees of County Treasurer.

S. 21. The treasurer of each county shall be allowed to retain two per cent
on all taxes paid and accounted for by him under this act in full for his services in
collecting and paying the same, in addition to his salary or fees now allowed by law.

Receipts.

S. 22. Any person or body politic or corporate shall, upon the payment of
the sum of fifty cents, be entitled to a receipt from the county treasurer of any
county or the copy of the receipt at his option that may have been given by said
treasurer for the payment of any tax under this act, to be sealed with the seal of

436 STATUTES ANNOTATED. [111. St.

his office, which receipt shall designate on what real property, if any, of which any
deceased may have died seized, said tax has been paid and by whom paid, and
whether or not it is in full of said tax; and said receipt may be recorded in the
clerk's office of said county in which the property may be situated, in a book to
be kept by said clerk for such purpose.

Assessment on Petition of Owner.

S. 23. When any person interested in any property in this state, which'shall
have been transferred within the meaning of this act shall deem the same not
subject to any tax under this act, he may file his petition in the county court of
the proper county to determine whether said property is subject to the tax herein
provided, in which petition the county treasurer and all persons known to have or
claim any interest in said property shall be made parties. The county court may
hear the said cause upon the relation of the parties and the testimony of witnesses,
and evidence produced in open court, and, if the court shall find said property is
not subject to any tax, as herein provided, the court shall, by order, so determine;
but if it shall appear that said property, or any part thereof, is subject to any such
tax, the same shall be appraised and taxed as in other cases. An adjudication by
the county court, as herein provided, shall be conclusive as to the lien of the tax
herein provided upon said property, subject to appeal to the supreme court of the
state by the county treasurer, or attorney general of the state, in behalf of the
people, or by any party having an interest in said property. The fees and costs
in all cases arising under this section shall be the same as are now or may hereafter
be allowed by law in cases at law in the county court.

[See notes to the Act of 1901, ante, p. 426.]

Lien. — Limitations.

S. 24. The lien of the collateral inheritance tax shall continue until the said
tax is settled and satisfied: Provided, that said lien shall be limited to the property
chargeable therewith: And, provided, further, that all inheritance taxes shall be
sued for within five years after they are due and legally demandable, otherwise
they shall be presumed to be paid and cease to be a lien as against any purchaser
of real estate.

Contingent or Defeasible Interests.

S. 25. When property is transferred or limited in trust or otherwise, and the
rights, interest or estates of the transferees or beneficiaries are dependent upon
contingencies or conditions whereby they may be wholly or in part created, de-
feated, extended or abridged, a tax shall be imposed upon said transfer at the
highest rate which, on the happening of any of the said contingencies or conditions,
would be possible under the provisions of this article, and such tax so imposed
shall be due and payable forthwith by the executors or trustees out of the property
transferred: Provided, however, that on the happening of any contingency whereby
the said property, or any part thereof is transferred to a person, corporation or
institution exempt from taxation under the provisions of the inheritance tax laws
of this state, or to any person, corporation or institution taxable at a rate less than
the rate imposed and paid, such person, corporation or institution shall be entitled
to a return of so much of the tax imposed and paid as is the difference between the
amount paid and the amount which said person, corporation or institution should

^fi^rn^.

1909, p. 311.1 ILLINOIS. 437

pay under the inheritance tax laws, with interest thereon at the rate of three per
centum per annum from the time of payment. Such return of over-payment shall
be made in the manner provided for refunds under section eight.

Estates or interests in expectancy which are contingent or defeasible and in
which proceedings for the determination of the tax have not been taken or where
the taxation thereof has been held in abeyance, shall be appraised at their full,
undiminished value when the persons entitled thereto shall come into the bene-
ficial enjoyment or possession thereof, without diminution for or on account of
any valuation theretofore made of the particular estates for the purposes of taxa-
tion, upon which said estates or interests in expectancy may have been limited.

Where an estate for life or for years can be divested by the act or omission of
the legatee or devisee it shall be taxed as if there were no possibility of such
divesting.

Compromise of Tax.

S. 26. The state treasurer, by and with the consent of the attorney genera
expressed in writing, is hereby empowered and authorized to enter into an agree
ment with the trustees of any estate in which remainders or expectant estates have
been of such a nature, or so disposed and circumstanced that the taxes therein
were held not presently payable, or where the interests of the legatees or devisees
were not ascertainable under an act to tax gifts, legacies, and inheritances, etc.,
in force July 1, 1885, and amendments thereto; and to compound such taxes upon
such terms as may be deemed equitable and expedient; and to grant discharge to
said trustees upon the payment of the taxes provided for in such composition:
Provided^ however, that no such composition shall be conclusive, in favor of said
trustees as against the interests of such cestuis que trust as may possess either
present rights of enjoyment, or fixed, absolute or indefeasible rights of future
enjoyment, or of such as would possess such rights in the event of the immediate
termination of particular estates, unless they consent thereto, either personally,
when competent, or by guardian. Composition or settlement made or effected
under the provisions of this section shall be executed in triplicate, and one copy
•filed in the office of the state treasurer, one copy in the office of the clerk of the
county court wherein the appraisement was had or the tax was paid, and one copy
delivered to the executors, administrators or trustees who shall be parties thereto.

Guardians ad litem.

S. 27. If it appears at any stage of an inheritance tax proceeding that any
j)erson known to be interested therein is an infant or person under disability, the
county judge may appoint a special guardian of such infant or person under
disability.

Exemptions to Churches, etc.

S. 28. When the beneficial interests of any property or income therefrom shall
pass to or for the use of any hospital, religious, educational, bible, missionary,
tract, scientific, benevolent or charitable purpose, or to any trustee, bishop or
minister of any church or religious denomination, held and used exclusively for
the religious, educational or charitable uses and purposes of such church or
religious denomination, institution or corporation, by grant, gift, bequest or other-
wise, the same shall not be subject to any such duty or tax, but this provision

438 STATUTES ANNOTATED. [111. St-

shall not apply to any corporation which has the right to make dividends or
distribute profits or assets among its members.
[See notes to the Act of 1901, ante, p. 427.]

Transfer Defined.

S. 29. When property, or any interest therein or income therefrom, shall pass
to or for the use of any person, institution or corporation by the death of another
by deed, instrument or memoranda, such passing shall be deemed a transfer within
the meaning of this act, and taxable at the same rates, and be appraised in the
same manner and subjected to the same duties and liabilities as any other form of
transfer provided in this act.

Certified Copies. — Fees.

S. 30. On the written request of the county treasurer or county judge, in the
county wherein an appraisement has been initiated, the clerk of the county court
and in counties having a probate court, the clerk of the probate court and the
recorder of deeds shall furnish certified copies of all papers within their care or
custody, or records material in the particular appraisement, and the said clerk
and recorder shall receive the same fee or compensation for such certified copies
as they would be entitled by law in other cases, which shall be paid to them by the
county treasurer of the proper county, out of moneys in his hands on account of
inheritance tax collections, on the presentation of itemized bills therefor, approved
by the county judge of the proper county.

Repeal.

S. 31. That "An Act to tax gifts, legacies and inheritances in certain cases,
and to provide for the collection of the same," approved June 15, 1895, in force
July 1, 1895, as amended by act approved May 10, 1901, in force July 1, 1901,
and all laws or parts of laws inconsistent herewith be and the same are hereby
repealed: Provided, however, that such repeal shall in no wise affect any suit, prose-
cution or court proceeding pending at the time this act shall take effect, or any
right which the state of Illinois may have at the time of the taking effect of this
act, to claim a tax upon any property under the provisions of the act or acts
hereby repealed, for which no proceeding has been commenced; and all appeals
and rights of appeal in all suits pending, or appeals from assessments of tax made
by appraisers' reports, orders fixing tax or otherwise existing in this state at the
time of the taking effect of this act.

Ind. Const.] INDIANA. 439

INDIANA,

Constitutional Limitations.

The proposed Indiana constitution of 1911 contains no specific
reference to inheritance taxes.

Indiana Constitution, 1851, a. 10, s. 1.

The general assembly shall provide, by law, for a uniform and equal rate of
assessment and taxation; and shall prescribe such regulations as shall secure a
just valuation for taxation of all property, both real and personal, excepting such
only for municipal, educational, literary, scientific, religious or charitable pur-
poses, as may be specially exempted by law.

The Present Situation.

Indiana has no inheritance tax and has never had an inheri-
tance tax. An attempt to pass such a law in 1911 failed.

440 STATUTES ANNOTATED. llowa St.

IOWA,

In General.

Iowa adopted a collateral inheritance tax in 1896. Inheritances
to father, mother, husband, wife, lineal descendant, adopted child,
step child, lineal descendant of adopted child or step child are
exempt. The exemption applies to the estate as a whole rather
than to the individual shares.

A heavy special tax on non-resident aliens was added to the act
in 1904, the validity of which has not been passed upon by the
courts, but it would be very surprising if it should not be held that
it is in violation of most of the present treaties with the important
foreign countries. (See antCy p. 49.)

The act of 1911 compiled the existing law, improving its form and
arrangement, and omitting a proposed graduated direct inheri-
tance tax.

Iowa taxes stock of an Iowa corporation owned by a non-resi-
dent, and the corporation is held responsible for the tax. Iowa
also claims a tax on the stock of a non-resident in a foreign cor-
poration which owns property in Iowa. Safe deposit companies
and kindred institutions are made liable for the tax unless they
notify the state treasurer before delivering over securities to the
representative of an estate. This tax has been producing between
$150,000 and $200,000 annually.

List of Statutes.

1896. Statutes of Iowa, 26 G. A., c. 28.

1898.

1900.

1902.

1904.

1906.

1909.

1911. ' 34 G. A., c. 68.

Code of Iowa, 1897, c. 4, ss. 1467-1481 inc., p. 650.

Supplement to Code of Iowa, 1902, pp. 145-158. This includes amendments
to the code and rules and regulations relating to the assessment and collection
of the collateral inheritance tax.

27 G. A.

c. 37.

28 G. A.

c. 51.

29 G. A.

c. 55, s.

29 G. A.

c. 63.

30 G. A.

c. 51.

31 G. A.

c. 54-55

33 G. A.

c. 92.

1896, c. 28.] IOWA. 441

Supplement to the Code of Iowa, 1907, c. 4, pp. 307-322. This includes
amendments to the code and rules and regulations relating to the assessment
and collection of the collateral inheritance tax.

The code and supplements above referred to contain the general laws cited
above with the addition of the rules and regulations aforesaid.

Constitutional Limitations.
Iowa Constitution, 1857, a. 1, s. 6.

All laws of a general nature shall have a uniform operation; the general assembly
shall not grant to any citizen or class of citizens, privileges or immunities, which
upon the same terms shall not equally belong to all citizens.

A. 3, 8. 30.

The general assembly shall not pass local or special laws in the following
cases: —

For the assessment and collection of taxes for state, county, or road purposes;

For laying out, opening, and working roads for highways;

For changing the names of persons;

For the incorporation of cities and towns;

For vacating roads, town plats, streets, alleys, or public squares;

For locating or changing county seats.

In all the cases above enumerated, and in all other cases where a general law can
be made applicable, all laws shall be general, and of uniform operation through-
out the state; and no law changing the boundary lines of any county shall have
effect until upon being submitted to the people of the counties affected by the
change, at a general election, it shall be approved by a majority of the votes in
each county, cast for and against it.

THE ACT OF 1896.
Nature of Statute.

This statute is not a tax upon property but a tax upon the
succession. McGhee v. State, 105 Iowa 9, 74 N. W. 695.

Constitutionality.

This statute is unconstitutional on account of the omission of
any provision for notice to the heirs or devisees before appraisal
of the property for the purposes of inheritance tax. The court
relies upon In re McPherson, 104 N. Y. 321, 10 N. E. 685, and con-
cludes that the statute is a deprivation of property without due
process of law, in that it gives the party to be taxed no right to be
heard as to the amount of tax. The court notices the claim that
the tax is against the estate alone and remarks that the claim is
not against the estate alone but as a rule the administrator has

442 STATUTES ANNOTATED. [Iowa St.

nothing to do with the real estate. Section 15, giving the district
court jurisdiction to hear and determine questions relating to the
tax, does not afford such hearing as avoids the constitutional objec-
tion, as it does not give the court authority to attack the valuation
for the purposes of taxation. Ferry v. Campbell, 110 Iowa 290, 81
N. W. 604, 50 L. R. A. 92. ^ •

Retroactive.

There is nothing to prevent the state from taxing estates undis-
tributed even if the act is passed subsequently to the date of death.
Attorney General v. Middleton, 3 Hurl. & N. 124, Lacy v. State
Treasurer (Iowa 1909), 121 N. W. 179, 184, (McClain, J., dissenting.)

A constitutional defect in the statute consisting of want of notice
on appraisal can be cured after the death of the testator by a
retroactive amendment providing for notice. Ferry v. Campbell,
110 Iowa 290, 81 N. W. 604, 50 L. R. A. 92.

Retroactive effect of the act of 1898, see further, infra, p. 452,

When Law Became Effective.

Where the testator died in 1895 and the estate was not dis-
tributed before July 4, 1896, the Iowa collateral inheritance tax,
which took effect July 4, 1896, could not apply to it. The right to
the property attached eo instante upon the decedent's death and is
not within the terms of the statute. Gilbertson v. Ballard, 125
Iowa 420, 101 N. W. 108.

The testator died in 1897 after the passage of the collateral
inheritance law, but before it had been made valid and enforce-
able by amending the unconstitutional provision as to appraise-
ment. Before this amendatory act went into effect the executors
were appointed and distributed the estate without any authority
from the probate court and before the executors had filed proof of
notice of their appointment or an inventory and before the expira-
tion of the time for filing claims. The probate court still had
jurisdiction of the estate and the payment could not affect the
inheritance law where no final accounting was made until after
the amendatory act ^ent into effect. Montgomery v. Gilbertson,
134 Iowa 291, 111 N: W. 964, 10 L. R. A. N. S. 986.

When Law Effective on Agreement Dependent on Death.

The testator died before 1892 and in that year the devisee of cer-
tain land entered into an agreement with the collateral heirs by
which the devisee was to have the use of the land for his life and on

1896, c. 28.] IOWA. 443

his death that it should go over to the collateral heirs, this agree-
ment being made in consideration that the collateral heirs would not
contest the will. The devisee died in 1906 and the court holds
that the interest acquired by the collateral heirs is subject to the
tax, as the statute is very clear and applies to all cases where wills,
grants, deeds, etc., are made or intended to take effect in posses-
sion or enjoyment after the death of the grantor or donor. Here,
even if the title passed either mediately or immediately from
testator, it did not take effect either in possession or enjoyment
until after the death of the devisee, the estate of the testator was
subject to the control of the district court in virtue of the contract
for a long time after the collateral inheritance law went into effect,
and by reason of that fact the land was subject to the tax. The
collateral heirs by making a contract with the devisee sur-
rendered their right to take immediate possession and enjoyment
of the property and if they now have title through the testator
they by their own acts delayed the determination of their rights
until after the collateral inheritance tax law went into effect.
Whether the collateral heirs took under the will of the testator
or not it is very clear that the property did not pass by will, deed,
grant, etc., to take effect in possession or enjoyment immediately.
Possession and enjoyment were clearly postponed until the death
of the devisee. The payment of a tax can only be defeated by
such a bona fide conveyance as parts absolutely with the title,
possession- and enjoyment during the grantor's lifetime. The
court considered the suggestion that as the contract was made
before the passage of the collateral inheritance law this law cannot
apply, for the reason that it impairs the obligations of a contract
and deprives the collateral heirs of their property without due
process of law. The court answers this suggestion by showing
that until the death of the devisee it was entirely unsettled as to
who would get the property at the time of his death, as it depended
on the survival of the collateral heirs. The time of possession
and enjoyment was postponed until the death of the devisee, and
the estate of the original testator was still undistributed. It was
therefore entirely competent for the legislature to impose a tax
upon the right to receive in possession and enjoyment although
the right was given by a contract.

The majority of the court finds, however, that certain land
which was not devised directly to the devisee but which was
covered by the contract is not subject to the tax, for the reason

444 STATUTES ANNOTATED. [Iowa St.

that it vested immediately upon the death of the testator in the
collateral heirs, and cannot be made subject to a tax created by a
subsequent act of the legislature.

Deemer, J., who writes the majority opinion, dissents from this
last conclusion, believing that by the contract the vesting in pos-
session and enjoyment was postponed until the death of the dQvisee
and that until that event it was uncertain who might take. Lacy v.
State Treasurer (Iowa 1909), 121 N.W. 179. (McClain, J., dis-
senting.)

Iowa St. 1896, c. 28. Approved April 14, 1896, in effect July 4, 1896.

S. 1. Transfers taxable. — Rates. — Exemptions. All property within
the jurisdiction of this state, and any interest therein, whether belonging to the
inhabitants of this state or not, and whether tangible or intangible, which shall
pass by will or by the intestate laws of this or any other state, or by deed, grant,
sale, or gift made or intended to take effect in possession or in enjoyment after
the death of the grantor, or donor, to any person in trust or otherwise, other than
to or for the use of the father, mother, husband, wife, lineal descendant, adopted
child, the lineal descendant of an adopted child of a decedent, or to or for charitable,
educational or religious societies or institutions within this state, shall be subject
to a tax of five per centum of its value, above the sum of one thousand dollars,
after the payment of all debts, for the use of the state; and all administrators,
executors and trustees, and any such grantee under a conveyance, and any such
donor \inder a gift, made during the grantor's or donor's life, shall be respectively
liable for all such taxes to be paid by them respectively, except as herein otherwise
provided, with lawful interest as hereinafter set forth, until the same shall have
been paid. The tax aforesaid shall be and remain a lien on such estate from the
death of the decedent until paid. (Code, s. 1467.)

Levied on Death.

The inheritance tax is levied at the date of the testator's death.
In re Wells, 142 Iowa 255, 120 N. W. 713.

**A11 Property within the Jurisdiction." — Situs of Tangible
Personal Property.

Under the Iowa code in force in 1901, section 1467, where a resi-
dent of Iowa died owning cattle outside the state, the estate was
not required to pay an inheritance tax on these cattle on the ground
that tangible property like this may have a situs other than that of
the domicile of the owner, and that there may be a distinction
between tangible property such as horses and cattle and intangible
property such as debts and choses in action. Cattle belonging to
the deceased were not within the jurisdiction of the state unless it
be constructively.

1896, c. 28.] IOWA. 445

The fact that the cattle were sold about four months after the
death of testator and the proceeds brought within the state later
does not affect the matter. The death of the testator seems to
fix the time when the property became subject to the tax, and at
the death of the testator the cattle were not in the state. When
this property passed to the collateral heirs it was clearly not sub-
ject to the tax. If the property had been distributed in the state
of Missouri there would be no doubt that it would not have been
subject to the tax imposed by our law, and the bringing of the
proceeds into this state for the purpose of distribution would not
make it subject to the tax. Weaver v. State, 110 Iowa 328, 81 N. W.
603. (The statute has been amended, however, since this decision
to include such property.)

**A11 Property within the Jurisdiction.'' — Situs of Intan-
gible Personal Property.

The court does not determine whether a non-resident creditor
by placing intangible property in the hands of an agent within
this state for management and control for business purposes may
fix its situs for taxation.

Money deposited in banks in Iowa by a non-resident who took
out a certificate of deposit therefor which she owned and had in
possession in New Hampshire at the time of her decease, is not
subject to the Iowa collateral inheritance tax.

Intangible choses in action held by a non-resident in her possession
at the date of her death in New Hampshire where she resided are
not taxable under the Iowa collateral inheritance tax where the
debtor was a resident of Iowa. The court holds that the situs of
the choses in action attaches to the owner, that any debt has its
situs at the residence of the creditor. The court remarks that
Bridges v. Griffin, 33 Ga. 113, is the only case it has been able to
find which holds that the residence of the debtor fixes the situs of
the property. See, however, In re Joyslin, 76 Vt. 88, 56 A. 281.

Gilhertson v. Oliver, 129 Iowa 568, 105 N. W. 1002, 4 L. R. A.
N. S. 953, is said m In re Culver, 145 Iowa 1, 123 N. W. 743, not
to apply to bank or other corporation stock, as the inheritance tax
on such shares was paid without a contest and the entire discussion
related to evidences of debt and securities therefor other than
corporate shares of stock.

Under Iowa code, section 1467, the inheritance tax is applicable
to the estate of a non-resident owner of stock in a domestic

446 STATUTES ANNOTATED. [Iowa St.

corporation. A share of stock in a corporation may be defined
as a right which its owner has in the management, profits and
ultimate assets of the corporation. The shares of stock rep-
resented an interest in the earnings of the property of the corpora-
tion, and a certificate is not stock itself, but only a convenient
representation of it, though one may be a stockholder without Jiav-
ing a certificate issued to him. The court finds that the decedent
owned an "interest" in the property of the bank within the meaning
of the inheritance statute and that such interest is property within
the jurisdiction of the state. In re Culver, 145 Iowa 1, 123 N. W.
743, citing inter alia, Faxton v. McCosh, 12 Iowa 527.

'*Deed."

Where the testator in 1900 joined with his wife in making a deed
of real estate to the son of his adopted child in consideration of
support for himself and his wife for the rest of their lives, and the
son carried out the contract faithfully, and the testator died in
1906 having by his will provided that certain expenses should be
paid out of the personal estate and not by the son, as the contract
required, the court holds that the property so transferred is not
subject to the inheritance tax. The son took immediate possession
of thejand and continued to occupy the same down to the date of
trial. The son paid the taxes on the land, had full possession and
the testator never claimed ownership after the conveyance, in fact
expressly disclaimed any interest in the land, and many times
asserted that it belonged exclusively to the son, and it was not sug-
gested that these arrangements were for the purpose of defeating
the inheritance tax. Lamb v. Morrow, 140 Iowa 89, 117 N. W.
1118, 18 L. R. A. N. S. 226.

*'Deed." — Consideration.

Where a deed to a son of an adopted daughter is made in consid-
eration of support, reserving a life estate in the grantor, it is proper
to show by parol a cancellation of the written contract and a waiver
of life estate reserved by the deed. This modification of the obliga-
tion of the written contract remaining executory is sufficient con-
sideration for the subsequent oral one. Lamb v. Morrow, 140
Iowa 89, 117 N. W. 1118, 18 L. R. A. N. S. 226.

"Deed . . . to Take Effect . . . After the Death."

Where a grantor made a deed of an undivided three-fourths inter-
est of land to a brother and two sisters, reserving a one-fourth

1896, c. 28.] IOWA. 447

interest to himself and delivered it to a third person with instructions
to record it and sell the land and divide the proceeds equally
among the grantees and himself, and he died before it was recorded
or the land sold, the deed is not one taking effect in possession or
enjoyment after the death of the grantor and is therefore not sub-
ject to the inheritance tax. The statute relates plainly to estates
granted in deeds or conveyances which in some way make the
estate granted dependent on the grantor's death ; that is, to inter-
ests in real estate the possession or enjoyment of which is postponed
until after the death of the grantor. The deed in question con-
tained no reference to the death of the grantor, and there was
nothing in the conveyance which indicates that it was the
grantor's purpose to postpone possession or enjoyment of the in-
terests granted until after his death. In re Bell, 146 Iowa 617,
130 N. W. 798.

'*To Any Person." — Effect of Renunciation by Benefi-
ciary.— Evasion of Tax.

The words in Iowa inheritance tax law, St. 1896, chapter 28,
section 1, provide a tax on property which shall pass "to any per-
son." The phrase "to any person" does not necessarily mean one
person only, but will include more than one when that is required
to give the statute the effect it was intended to have. McGhee v.
State, 105 Iowa 9, 74 N. W. 695.

No tax can be levied where the collateral beneficiaries under a
will renounce all interest in the will and allow the property to be
distributed in accordance with the intestate laws. In this case the
court on the agreement of all parties revoked the probate of the will,
and the estate was distributed as if intestate. This deprived the
state of any interest in the estate and relieved the administrators
from any obligation to file an inventory, as there were direct heirs
who took all the property and the Iowa statute taxed only col-
laterals. In re Stone, 132 Iowa 136, 109 N. W. 455.

Classes Exempted. — Effect of Death of Devisee.

Iowa code, section 3281, provides that where a devisee dies
before the testator his heirs inherit directly from the testator,
and the property does not go to the children of the devisee as though
he had survived the testator, and therefore the property passes
directly from the decedent to the persons who are determined
to be his heirs by the application of these rules construing the statute.

448 STATUTES ANNOTATED. [Iowa St.

Therefore where a testator dies devising property to his mother,
who died before the testator, leaving as heirs a brother and sister
of decedent, the succession to these heirs is subject to a collateral
inheritance tax. In re Hulett, 121 Iowa 423, 96 N. W. 952. The
court relies upon Suydam v. Voorhees, 58 N. J. Eq. 157, 43 A. 4.

"Adopted Child."

Where certain adoption proceedings did not comply with the
statute, it was urged that the attempt to adopt should be con-
sidered equitably as though it had been properly consummated.
But the court says that the proceeding for the collection of an
inheritance tax is not in equity and that one cannot be made an
heir of another by any such considerations. Lamb v. Morrow,
140 Iowa 89, 117 N. W. 1118, 18 L. R. A. N. S. 226.

"Charitable, Educational or Religious Societies."

The exemption clause in the Iowa inheritance statute is to be
liberally construed to permit the benevolent purpose of the exemp-
tion. Morrow v. Smith, 145 Iowa 514, 124 N. W. 316; In reSpangler
(Iowa 1910), 127 N. W. 625.

A Masonic lodge, a part of the activities of which is engaged in
helping the families of members who become in want, is exempt
under this statute. Morrow v. Smith, 145 Iowa 514, 124 N. W. 316.

The exemption does not apply to a gift or bequest to the Salva-
tion Army or other religious or charitable institutions organized
under the corporation laws of another state. In re Crawford
(Iowa 1910), 126 N. W. 774, citing In re Prime, 136 N. Y. 347,
32 N. E. 1091, 18 L. R. A. 713; Humphreys v. State, 70 Ohio St. 67,
70 N. E. 957, 65 L. R. A. 776; People v. Society, 87 111. 246.

The will devised certain land in perpetuity to the dependent
poor persons of a certain county, constituting the supervisors of
said county trustees to carry a trust into effect. This is clearly
a charitable gift and exempt from the inheritance tax even though
given to the supervisors of the county. Any society or institution
is within the terms of the law charitable when by the law of its
organization or by usage it has the duty of providing and adminis-
tering charitable relief even though it has and exercises other
functions of a totally different character.

The county being charged by the statute with the duty of reliev-
ing and supporting the poor is to that extent a charitable organiza-
tion, and a gift made specifically in aid of this feature of its work

1896. c. 28.] IOWA. 449

is to all reasonable intents and purposes a gift to or for a charitable
institution. In re Spangler (Iowa 1910), 127 N. W. 625.

Although a gift is made nominally to a charitable corporation
organized under the laws of another state, still where the gift is not
to or for the corporation itself and where the corporation is given
no power or authority to take it out of the jurisdiction of the state
or to expend it for any other than the local purposes mentioned in
the will, it is exempt from the inheritance tax. The court distin-
guishes between a gift made generally to or for a charitable society
organized in another state and a gift made to aid the work of a
strictly legal charity with which the foreign society may be asso-
ciated. The court regards it as a trust in which the existence of
the trustee is not material. In re Crawford (Iowa 1910), 126
N. W. 774.

"Value."

The Iowa statute of 1896 uses in sections 1, 3, 4 and 5 for the
appraisal of the property the expressions 'Value," "appraised
value" and "actual market value," and the court holds that the
statute means in each case a fair market value and not the assessed
value of the property fixed for the purpose of ordinary taxation.
McGhee v. State, 105 Iowa 9, 74 N. W. 695.

* 'Above the Sum of One Thousand Dollars After the Payment
of AH Debts."

This statute means that the thousand dollars exemption applies
to the property of the estate and not to the share of each heir.
The court remarks on the expression "after the payment of all
debts," and says that this must mean the debts of the estate, as the
officer charged with the duties of settling the estate cannot have
official knowledge of the debts of the heirs or devisees and there
does not appear to be any good reason for granting such a person
because he is in debt an exemption at the expense of the state which
is not granted to a person of the same class who is not in debt.
The exemption of one thousand dollars does not invalidate the tax.
McGhee v. State, 105 Iowa 9, 74 N. W. 695. The court declines to
follow In re Howe, 112 N. Y. 100, 19 N. E. 513.

The effect of the law is that all estates of less value than
one thousand dollars shall be exempt, and when exceeding in
value such sum all property passing to the collateral heirs is subject

450 STATUTES ANNOTATED. [Iowa St.

to the inheritance tax. The court relies on the words of sections
1470, 1471, which provide for any estate exceeding one thousand
dollars and on the fact that many years will usually intervene
between the collection of the tax on the remainder and other por-
tions of the estate and it would be utterly impossible to apportion
one thousand dollars of the exemption among the collateral heirs
equitably. Heriott v. Bacon, 110 Iowa 342, 81 N. W. 701. The
court distinguishes State v. Hamlin, 86 Me. 495, 30 A. 76, 41 Am.
St. Rep. 569 n., 25 L. R. A. 632, as in that state other provisions
of the statute unequivocably indicate the opposite result.

The Iowa code, sections 1467, 1470 and 1471, must be read to-
gether and the court declines to construe section 1467 separately
as meaning that the first thousand dollars of the estate are exempt
and providing that a collateral inheritance tax must be paid on all
property in excess of that thousand dollars. The court afhrms
Heriott v. Bacon, 110 Iowa 342, 81 N. W. 701, and concludes that
there is no exemption whatever where the value of an estate after
the payment of debts exceeds a thousand dollars. Gilbertson v.
McAuley, 117 Iowa 522, 91 N. W. 788.

S. 2. Lien. It shall be the duty of the executor, administrator or trustee,
immediately upon his appointment, to make and file a separate inventory, any
will to the contrary notwithstanding, of all the real estate of the decedent liable
to such tax, and to cause the lien of the same to be entered upon the lien book
in the office of the clerk of the court in each county where each particular part of
said real estate is situated, and no conveyance of said estate or interest therein,
which is subject to such tax before or after the entering of said lien, shall discharge
the estate so conveyed from the operation thereof. (Code, s. 1468.)

S. 3. Appraisal. All the real estate of the decedent subject to such tax shall,
except as hereinafter provided, be appraised within thirty days next after the
appointment of an executor, administrator or trustee, and the tax thereon, calcu-
lated upon the appraised value, shall be paid by the person entitled to said estate
within fifteen months from the approval by the court of such appraisement; and
in default thereof the court shall order the same, or so much thereof as may be
necessary to pay such tax, to be sold. (Code, s. 1469.)

These sections as to appraisal were void for lack of notice to
parties. See Ferry y. Campbell, ante, p. 441. As to the effect of the
amending act of 1898 see post, p. 452.

Second Appraisal.

The district court may order a second appraisement of the
property where the state was not a party to the first appraisement

1896, c. 28.] IOWA. 451

and on showing error in proceedings theretofore had to correct the
error by means of a new appraisement. McGhee v. State, 105 Iowa
9, 74 N. W. 695.

"Appraised value" means fair market value. McGhee v. State,
105 Iowa 9, 74 N. W. 695.

S. 4. Remainders. When any person whose estate, over and above the
amount of his just debts, exceeds the sum of one thousand dollars, shall bequeath
or devise any real property to or for the use of the father, mother, husband, wife,
lineal descendant, adopted child or lineal descendant of such child, during life
or for a term of years, and the remainder to a collateral heir or to a stranger to
the blood, the court, upon the determination of such estate for life or years, shall,
upon its own motion or upon the application of the treasurer of state, cause such
estate to be appraised at its then actual market value, from which shall be de-
ducted the value of any improvements thereon, or betterments thereto, if any,
made by the remainderman during the time of the prior estate to be ascertained
and determined by the appraisers, and the tax on the remainder shall be paid by
such remainderman within sixty days from the approval by the court of the
report of the appraisers. If such tax is not paid within said time the court shall
then order said real estate, or so much thereof as shall be necessary to pay such
tax to be sold.

"Actual market value" means fair market value and not tne
value assessed for annual tax. McGhee v. State, 105 Iowa 9, 74
N. W. 695.

Sections 5 to 15 provide for appraisal and collection of taxes.

THE AMENDMENTS OF 1898.

Iowa St. 1898, c. 37, approved April 7, 1898, s. 1, provided
additional regulations as to the appraisal of property. The statute
of 1896 was amended as follows: —

Code S. 1476. Method of appraisement. — Notice. — Hearing. — Appeal.

All appraisements of real estate subject to such tax shall be made and filed in
the manner provided for appraisement of personal property. When such real
estate is situated in another county, the same appraisers may serve, or others
may be appointed. It shall be the duty of all appraisers appointed under the
provisions of this chapter to forthwith give notice to the treasurer of state and
other persons known to be interested in the property to be appraised, of the time
and place at which they will appraise such property, which time shall not be less
than ten days from the date of such notice. The notice shall be served in the
same manner as is prescribed for the commencement of civil actions unless a
different one is ordered by the court or judge, and the notice with the proof of

'452 STATUTES ANNOTATED. [Iowa St.

service thereof, shall be returned to the court, with the appraisement. The
treasurer of state, or any person interested in the estate appraised, may file
exceptions to the appraisement, on the hearing of which, as an action in equity,
either party may produce evidence competent or material to the matters therein
involved. If, upon such hearing, the court finds the amount at which the property
'- is appraised is its value on the market in the ordinary course of trade, and the
appraisement was fairly and in good faith made, it shall approve such appraise-
ment; but if it finds that the appraisement was made at a greater or less sum than
the value of the property in the ordinary course of trade, or that the same was not
fairly or in good faith made, it shall set aside the appraisement, appoint new
appraisers and so proceed until a fair and good appraisement of the property is
made at its value in the market in the ordinary course of trade. The treasurer of
state, or any one interested in the property appraised may appeal to the supreme
court from the order of the district court approving or setting aside any appraise-
ment to which exceptions have been filed. Notice of appeal shall be served within
thirty days from the date of the order appealed from, and the appeal shall be
perfected in the time now provided for appeals in equitable actions. In case of
appeal the appellant, if he is not the treasurer of state, shall give bond to be
approved by the clerk of the court, to pay the tax, which bond shall provide that
the said appellant and sureties shall pay the tax for which the property may be
liable, with costs of the appeal. (26 G. A., c. 28, s. 10.) (27 G. A., c. 37, s. 1.)

[See Montgomery v.Gilbertson, and Ferry v. Campbell, reported ante, pp. 441, 442.]

S. 2 covers the payment of taxes on real estate.

S. 3 provides for the payment of taxes on corporate stock.

S. 4 gives a lien on corporate securities and assets.

S. 5Vequires the collection of a list of heirs.

S. 6 provides for the framing of rules and regulations relating to assessment
and collection of the collateral inheritance tax.

S. 7 covers the duty and compensation of the county attorney and collection
of the tax.

This statute was passed in part for the purpose of making the
act valid by providing adequate notice to parties of the assessment
of the tax. See Montgomery v. Gilbertson, reported ante, p. 442, and
Ferry v. Campbell, reported ante^ p. 441.

S. 8. In Effect. This act, being deemed of immediate importance, shall
take effect and be in force from and after its publication in the Iowa State Register
and Des Moines Leader, newspapers published at Des Moines, Iowa.

Retroactive Effect of the Act of 1898.

Although a judgment restraining the collection of an inheritance
tax on the ground that the Iowa statute 1896, chapter 28, was un-
constitutional, has been obtained, still the legislature may thereupon
cure the defect in the statute by a retroactive amendment to it,
(Iowa statute 1898, chapter 37), and the supreme court may then

1898, c. 37.] IOWA. 453

reverse the judgment and permit the tax to be collected. A judg-
ment is not of itself a contract in a constitutional sense so that its
effect cannot be taken away by legislation. Ferry v. Campbell,
110 Iowa 290, 81 N. W. 604, 50 L. R. A. 92.

Where the testator died after the enactment of Iowa statute
1896, chapter 28, and before the amendment enacted by Iowa statute
1898, chapter 37, and where the first statute was void for lack of
notice on appraisal the court holds that the amendment although
retroactive in form cannot authorize a legal inheritance tax on real
estate of the testator. The court distinguishes the case of Ferry v.
Campbell, 110 Iowa 290, 81 N. W. 604, 50 L. R. A. 92, as that case
applied solely to personal property. The court shows that title
to personal property does not pass to the legatees or distributees
until actual distribution, while real estate passes at once on the
death of testator without any further action by the administrator.
The amending statute is not in the nature of a curative act but
purports only to aid in the collection of a valid tax. If then the
land is not subject to or liable for the payment of the tax the act
has no application. At the death of the testator there was no
remedy by which a tax could be fixed or enforced. A tax that cannot
be enforced by any remedy is no tax at all. If a tax on succession,
the amount of which cannot be ascertained, may relate back one
year, it may stretch back over a period of twenty or any number of
years and the citizens never know with any degree of certainty
what burdens are to be imposed . The court distinguishes the case of
Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39 L. R. A. 170, as
it appears from that case that real estate in Montana is subject
to the control of the court and held in possession by the adminis-
trator until the order of distribution. Heriott v. Potter, 115 Iowa
648, 89 N. W. 91.

Iowa St. 1900, c. 51. Approved April 7, 1900.

S. 1. Debts deducted. The term "debts" in the eleventh line of section
fourteen hundred and sixty-seven (1467) of the code shall include, in addition to
debts owing by decedent at the time of his death, the local or state taxes due from
the estate prior to his death, and a reasonable sum for funeral expenses, court
costs, including the costs of appraisement made for the purpose of assessing the
collateral inheritance tax, the statutory fees of executors, administrators, or
trustees, and no other sum ; but said debts shall not be deducted unless the same
are approved and allowed, within fifteen months from the death of decedent, as
established claims against the estate, unless otherwise ordered by the judge or
court of the proper county. (Code, s. 1467a.)

454 STATUTES ANNOTATED. [Iowa St-

Purpose of Section.

The purpose of the Iowa code, section 1467a, is that an estate
whose value is near the dividing line shall not be carried into the
exempt class by extraordinary charges under the guise of funeral
expenses or by presentation of stale or fictitious claims which are
not allowed within fifteen months. Morrow v. Durant, 140 Iowa 437,
118 N. W. 781, 23 L. R. A. (N. S.) 474 n.

When State can Invoke this Section.

Where the residuary legatees concede the propriety and reason-
ableness of the fund for erecting a tomb to the testator the state in
the absence of fraud or collusion cannot interfere nor has it a right
to try the question of the reasonableness of an expense under
section 1467a except for the purposes of determining the classi-
fication of an estate as exempt or non-exempt from taxation.
Neither section 1467 relating to a tax on estates whose value is
above one thousand dollars after payment of all debts, nor 1467a
is applicable to a case where it is admitted that the estate is of a
value above the sum of one thousand dollars after the payment
of debts. Morrow v. Durant, 140 Iowa 437, 118 N. W. 781, 23
L. R. A. (N. S.) 474 n.

** Funeral Expenses."

The question whether the amount reserved by a will for the erec-
tion of a tomb is "reasonable" is a question of mixed law and fact
on which it is very important that the will of the decedent expressly
provided for this expenditure and this provision of the will raises
the presumption of reasonableness. The court refuses to consider
from the lack of evidence the question whether a provision of
two thousand dollars for a tomb is reasonable, especially where the
residuary legatees concede its reasonableness. Morrow v. Durante
140 Iowa 437, 118 N. W. 781, 23 L. R. A. (N. S.) 474 n.

Payments to Compromise Contest.

The testator made two wills, and a legatee under the first will
who was omitted from' the second contested the second will. The
parties then made a compromise by which the contestant was paid
a sum of money in settlement of his claim. The court holds that
payments in adjustment of conflicting claims to an estate by those
asserting title thereto cannot be construed as debts nor treated
as expenses in its settlement. The entire estate, including the sums

e entire e

1900, c. 51.] IOWA. 465

to be paid the contestant, passed to the legatees of the deceased
upon his death, and payments in settlement are in law by the
legatees rather than an expense of the estate. In re Wells, 142
Iowa 255, 120 N. W. 713. The court relies on In re Westburn,
152 N. Y. 93, 46 N. E. 315. The court distinguishes the case
of In re Hawley, 214 Pa. St. 525, as in that case the daugh-
ters who took the property under the will and paid over in compro-
mise were direct descendants and therefore no tax was due, while
in the Wells case the estate was acquired by the heirs, and as they
were collaterals was subject to the tax, and in paying it out they
were handed their own property. The court also distinguishes
In re Kerr, 159 Pa. St. 512, 28 A. 354, as there the compromise
was of a contest over the testator's title.

Where under an agreement of compromise executed by the
parties, it was agreed that contestants were to "pay C. the legacy
given her under said [second] will," the court was evenly divided
on the question whether this payment was subject to the inheritance
tax. If the payment was made under the will it was subject to the
tax and if the payment went under the agreement it was not. In re
Wells, 142 Iowa 255, 120 N. W. 713.

S. 2. Property subject to tax. Except as to property passing to the
persons, corporations and societies exempted by section fourteen hundred
and sixty-seven (1467) of the code from the collateral inheritance tax, and real
property located outside of the state passing in fee from the decedent owner,
the tax imposed under chapter four (4) of title seven (7) of the code shall
hereafter be assessed against, and be collected from, property of every kind,
which, at the death of the decedent owner, is subject to, or thereafter, for the
purpose of distribution, is brought into this state and becomes subject to the
jurisdiction of the courts of this state for distribution purposes, or which was
owned by any decedent domiciled within the state at the time of the death
of such decedents even though the property of said decedent so domiciled was
situated outside of the state. (Code, s. 14676.)

This section alters the law as laid down in In re Weaver, reported
ante J p. 444.

"Property of Every Kind."

These words do not render property reserved by the will for a
tomb subject to tax. The court remarks that that interpretation
would make the statute unconstitutional as it is only upheld on t he
theory that it is not a tax upon the property itself but on the right
to succession to property. Morrow v. Durante 140 Iowa 437, 118
N. W. 781, 23 L. R. A. (N. S.) 474 n.

456 STATUTES ANNOTATED. [Iowa St.

Effect of Collateral Adjudication of Title.

A decree of a district court passing upon a title to land involved
in an agreement of compromise of a will is of no effect on the question
of inheritance tax, as the state treasurer was not a party to that
suit and was in no way interested therein. Lacy v. State Treasurer
(Iowa 1909), 121 N.AV. 179. (McClain, J., dissenting.)

S. 3. Foreign estates and deduction of debts. Whenever any property
belonging to a foreign estate, which estate, in whole or in part, is liable to pay a
collateral inheritance tax in this state, the said tax shall be assessed upon the
market value of said property remaining after the payment of such debts and
expenses as are chargeable to the property under the laws of this state; in the
event that the jexecutor, administrator or trustee of such foreign estate files
with the clerk of the court having ancillary jurisdiction, and with the treasurer
of state, duly certified statements exhibiting the true market value of the entire
estate of the decedent owner, and the indebtedness for which the said estate has
been adjudged liable, which statements shall be duly attested by the judge of
the court having original jurisdiction, the beneficiaries of said estate shall then
be entitled to have deducted such proportion of the said indebtedness of the
decedent from the value of the property as the value of the property within this
state bears to the value of the entire estate. (Code, s. 14Sld.)

S. 4. Foreign estates and direct and collateral beneficiaries. Whenever
any property, real or personal, within this state belongs to a foreign estate, and
isaid foreign estate passes in part exempt from the collateral inheritance tax,
and in part subject to said collateral inheritance tax, and it is within the authority
or discretion of the foreign executor, administrator or trustee administering the
estate to dispose of the property, not specifically devised to direct heirs or devisees
in the payment of the debts owing by decedent at the time of his death, or in the
satisfaction of legacies, devises, or trusts given to direct and collateral legatees
or devisees or in payment of the distributive shares of any direct and collateral
heirs, then the property within the jurisdiction of this state, belonging to such
foreign estate, shall be subject to the collateral inheritance tax imposed by chapter
four (4) of title seven (7) of the code, and the tax due thereon shall be assessed
as provided in the next preceding section of this act, and with the same proviso
respecting the deduction of the proportionate share of the indebtedness, as therein
provided. (Code, s. 1467e.)

S. 5 applies to appraisements.

S. 6 allows the court to extend the time for filing the inventory.

S. 7 provides for the valuation of life estates and remainders.

S. 8 provides for compromise.

S. 9 covers reports to be filed with the treasurer.

S. 10 covers the payment of costs, and

S. 11 the fees of county attorneys.

S. 12. Construction. In the construction of this statute, the words "col-
lateral heirs" shall be held to mean all persons who are not excepted from the
provisions of the collateral inheritance tax by section fourteen hundred and sixty-

"^^

1900, c. 51.] IOWA. 457

seven (1467) of the code, and this act, except section two (2) thereof, shall apply
to all pending estates which are not closed, and the property subjected by this
act to the said tax is liable to the provisions incorporated in chapter four (4) of
title seven (7) of the code, as to the amount and lien thereof, and the manner of
enforcement and collection thereof, except as herein specifically provided other-
wise.

LATER AMENDMENTS.
Appraisers' Fees.

Iowa St. 1902, c. 55, approved April 4, 1902, covers the com-
pensation of appraisers — provides that it shall be two dollars
per day.

Refund.

Iowa St. 1902, c. 63, approved April 10, 1902, provides for the
refunding of surplus collateral inheritance tax paid above the
amount legally due.

Alien Non-Residents.

Iowa St. 1904, c. 51, approved April 6, 1904, amends section 1467
of the Iowa Code by adding the following: —

"Whenever property, or any interest therein, shall pass to heirs, devisees or
other beneficiaries, as contemplated in the foregoing provisions, who are aliens,
non-residents of the United States, the same shall be subject to a tax of twenty
per centum (20%) of its true value, except where such foreign beneficiaries are
brothers or sisters of the decedent owner, when the rate of tax to be assessed and
collected therefrom shall be ten per centum (10%) of the value of the property
or interest so passing."

Stepchild or Descendants.

Iowa St. 1906, c. 54. Approved February 26, 1906.

S. 1. Exemptions. Section one thousand four hundred and sixty-seven
,(1467) of the code is hereby amended by inserting after the word "decedent" at
the end of the eighth line of said section, and before the word "or" at the beginning
of the ninth line of said section, the following: "stepchild, or the lineal descendant
of a stepchild of a decedent."

Hospitals, Public Libraries and Art Galleries Exempted.

Iowa St. 1906, c. 55. Approved March 10, 1906.

S. 1. Exemptions. That section fourteen hundred and sixty-seven (1467)
of the code be amended by inserting a comma after the word "institutions" in
the ninth line of said section and the following words, to wit: "including hospitals,
public libraries and public art galleries kept open to the free use of the public
not less than three days of each week."

458 STATUTES ANNOTATED [Iowa St.

Religious Services or Cemetery Associations.

Iowa St. 1909, c. 92, approved April 7, 1909, amends section 1467 of the Sup-
plement to the Code of 1907 by inserting after the word "week": —

"Or any bequest, not to exceed $500.00, to and in favor of any person, having
for its purpose the performance of any religious service to be performed for and
in behalf of decedent or any person named in his or her last will and testament,
or any cemetery associations;".

THE PRESENT ACT.

Iowa St. 1911, c. 68.

An Act relating to the assessment and collection of a tax upon
COLLATERAL ESTATES, annuities, legacies, bequests, gifts, transfers and
inheritances, and repealing the law as it appears in chapter four (4), of
title seven (7), of the Supplement to the Code, 1907, and chapter ninety-two
(92) of the Acts of the Thirty-Third (33) General Assembly and to enact a
substitute therefor. (In effect July 4, 1911.)

Transfers Taxable. — Rate. — Lien. — Liabilities.

S. 1. The estates of all deceased persons, whether they be inhabitants of this
state or not, and whether such estate consists of real, personal or mixed property,
tangible or intangible, and any interest in, or income from any such estate or
property, which property is, at the death of the decedent owner, within this state
or is subject to, or thereafter, for the purpose of distribution, is brought within
this state and becomes subject to the jurisdiction of the courts of this state, or
the prbperty of any decedent, domiciled within this state at the time of the death
of such decedent, even though the property of such decedent so domiciled was
situated outside of the state, except real estate located outside of the state passing
in fee from the decedent owner, which shall pass by will or by the statutes of
inheritance of this or any other state or country, or by deed, grant, sale, gift or
transfer made in contemplation of the death of the donor, or made or intended to
take effect in possession or enjoyment after the death of the grantor or donor,
to any person, or for any use in trust or otherwise, other than to or for the use
of persons, or uses exempt by this act shall be subject to a tax of five (5)per centum,
provided, however, that when property or any interest therein shall pass to heirs,
devisees or other beneficiaries subject to the tax imposed by this act who are
aliens, non-residents of the United States, the same shall be subject to a tax of
twenty (20) per centum of its true value except when such foreign beneficiaries
are brothers or sisters of the decedent owner, when the rate of tax to be assessed
and collected therefrom shall be ten (10) per centum of the value of the property
or interest so passing. Any person beneficially entitled to any property or interest
therein because of any sueh gift, legacy, devise, annuity, transfer or inheritance,
and all administrators, executors, referees and trustees, and any such grantee
under a conveyance, and any such donee under a gift, and any such legatee,
annuitant, devisee, heir or beneficiary, shall be respectively liable for all such taxes
to be paid by them respectively. The tax aforesaid shall be for the use of the
state, shall accrue at the death of the decedent owner, and shall be paid to the
treasurer of state within eighteen (18) months thereafter, except when otherwise
provided in this act, and shall be and remain a legal charge against and a lien

1911, c. 68.] IOWA. 459

upon such estate, and any and all of the property thereof from the death of the
decedent owner until paid.

[See notes to the Statute of 1896, ante, p. 441 et seq.]

Exemptions.

S. 2. The tax imposed by this act shall not be collected,

1st — When the entire estate of the decedent does not exceed the sum of one
thousand dollars ($1,000.00) after deducting the debts as defined in this act.

2d — When the property passes to the husband or wife.

3d — When the property passes to the father, mother, lineal descendant,
adopted child or the lineal descendant of an adopted child of decedent.

4th — When the property passes to educational and religious societies or
institutions, public Hbraries and public art galleries within this state and open to
the free use of the public.

5th — Property passing to or for hospitals withm this state open to the public
and not operated for gain, or to societies within this state organized for purposes
of public charity, including cemetery associations, but not including societies
maintained by fees, dues or assessments in whose benefits the public may not
share.

6th — Bequests for the care and maintenance of the cemetery or burial lot
of decedent and his family, and bequests not to exceed five hundred dollars
($500.00) in any estate, to or for the performance of a religious service or services
by some person regularly ordained, authorized or licensed by any religious society
to perform such service to be performed for or in behalf of the testator, or some
person named in his last will, provided such person so named is, or would be
exempt from the tax imposed by this act.

7th — When the property passes to a municipal or political corporation within
this state for a purely public purpose.

[See notes to the Act of 1896, ante, p. 447.J

Debts.

S. 3. The term "debts" as used in this act shall include, in addition to debts
owing by the decedent at the time of his death, the local or state taxes due from
the estate in January of the year of his death, a reasonable sum for funeral ex-
penses, court costs, the cost of appraisement made for the purpose of assessing
the collateral inheritance tax, the statutory fees of executors, administrators
or trustees estimated upon the appraised value of the property, the amount paid
by the executor or administrator for a bond, the attorney fee in a reasonable
amount to be approved by the court, for the ordinary probate proceedings in said
estate, and no other sum; but said debts shall not be deducted unless the same are
approved and allowed by the court within eighteen (18) months from the death
of the decedent, as established claims against the estate, unless otherwise ordered
by the judge or court of the proper county.

[See notes to the Act of 1896, ante, p. 449.]

Petition by State Treasurer for Administration. — Non-Residents.

S. 4. If, upon the death of any person leavihg an estate that may be liable to
a tax under the provisions of this act, a will disposing of such estate is not offered
for probate, or an application for administration made within four months
from the time of such decease, the treasurer of state may, at any time thereafter,

460 STATUTES ANNOTATED. [Iowa St.

make application to the proper court, setting forth such fact and praying that an
administrator may be appointed, and thereupon said court shall appoint an
administrator to administer upon such estate. When the heirs or persons entitled
to inherit the property of an estate subject to the tax hereby imposed, desire to
avoid the appointment of an administrator as provided in this section, they or
one of them shall, before the expiration of four months from the death of the
decedent, file under oath the inventories and reports and perform all the dyties
required by this act, of administrators, including the filing of the lien ; proceedings
for the collection of the tax when no administrator is appointed, shall conform as
nearly as may be to the provisions of this act in other cases.

A non-resident of this state shall not be appointed as executor, administrator
or trustee of any estate that may be subject to the tax imposed by this act, unless
such non-resident first file a bond conditioned upon the payment of all tax,
interest and costs for which the estate may be liable, such bond to be signed
by not less than two resident freeholders or by an approved surety company and
in an amount not less than twenty-five per cent (25 per cent) of the total value of
the estate, or of the property within this state if the estate is a foreign estate.

Appraisers.

S. 5. In each county, the court shall annually at the first time of the court
therein appoint three competent residents and freeholders of said county, to act
as appraisers of all property within its jurisdiction which is charged or sought to
be charged with the collateral inheritance tax. Said appraisers shall serve for
one year, and until their successors are appointed and qualified. They shall each
take an oath to faithfully and impartially perform the duties of the office, but
shall not be required to give bond. They shall be subject to removal at any time
at the discretion of the court, and the court or judge thereof in vacation, may also
in its discretion, either before or after the appointment of the regular appraisers,
appoint other appraisers to act in any given case. Vacancies occurring otherwise
than by expiration of term, shall be filled by the appointment of the court or by a
judge in vacation. No person interested in any manner in the estate to be
appraised may serve as an appraiser of such estate

Comtnission to Appraisers.

S. 6. Whenever it appears that an estate or any property or interest therein
is or may be subject to the tax imposed by this act, the clerk shall issue a com-
mission to the appraisers, who shall fix a time and place for appraisement, except
that if the only interest that is subject to such tax is a remainder or deferred
interest upon which the tax is not payable until the determination of a prior estate
or interest for life or term of years, he shall not issue such commission until the
determination of such prior estate, except at the request of parties in interest
who desire to remove the lien thereon.

Notice by Appraisers.

S. 7. It shall be the duty of all appraisers appomted under the provisions of
this act, upon receiving a commission as herein provided, to forthwith give notice
to the treasurer of state and other persons known to be interested in the property
to be appraised, of the time and place at which they will appraise such property,
which time shall not be less than ten days from the date of such notice. The
notice shall be served in the same manner as is prescribed for the commencement

1911, c. 68.] IOWA. 461

of civil actions, and if not practicable to serve the notice provided for by statute,
they shall apply to the court or a judge thereof in vacation for an order as to
notice and upon service of such notice and the making of such appraisement, the
said notice, return thereon and appraisement shall be filed with the clerk, and
a copy of such appraisement shall at once be filed by the clerk with the treasurer
of state. When property is located in more than one county, the appraisers of
the county in which the estate is being administered may appraise the whole
estate, or those of the several counties may serve for the property within their
respective counties or other appraisers be appointed as the district 'court if in
session, or judge thereof in vacation may direct. •

[See notes to the Act of 1896 and 1898, ante, pp. 441, 450.1

Objections and Appeal from Appraisal.

S. 8. The treasurer of state or any person interested in the estate or property
appraised,' may, within twenty (20) days thereafter, file objections to said ap-
praisement and give notice thereof a:s in beginning civil actions, on the hearing
of which as an action in equity either party may produce evidence competent
or material to the matters therein involved. If upon such hearing the court finds
the amount at which the property is appraised is its value on the market in the
ordinary course of trade, and the appraisement was fairly and in good faith made,
it shall approve such appraisement; but if it finds that the appraisement was made
at a greater or less sum than the value of the property in the ordinary course of
trade, or that the same was not fairly or in good faith made, it shall set aside the
appraisement, appoint new appraisers and so proceed until a fair and good ap-
praisement of the property is made at its value in the market in the ordinary course
of trade. The treasurer of state or anyone interested in the property appraised,
may appeal to the supreme court from the order of the district court approving
or setting aside any appraisement to which exceptions have been filed. Notice
of appeal shall be served within sixty days from the date of the order appealed
from, and the appeal shall be perfected in the time now provided for appeals in
equitable actions. In case of appeal the appellant, if he is not the treasurer of
state, shall give bond to be approved by the clerk of the court, which bond shall
provide that the said appellant and sureties shall pay the tax for which the
property may be liable with cost of appeal. If upon the hearing of objections to
the appraisement, the court finds that the property is not subject to the tax,
the court shall upon expiration of time for appeal, when no appeal has been
taken, order the clerk to enter upon the lien book a cancellation of any claim
or lien for taxes. If at the end of twenty (20) days from the filing of the appraise-
ment with the clerk, no objections are filed, the appraisement shall stand approved.

Appraisal.

* S. 9. Within ninety (90) days after the transfer of ^ny property that may be
liable for a tax under the provision of this act, except as herein otherwise provided,
the clerk of the proper county upon his own motion or upon the application of the
treasurer of state, county attorney, or person interested in the property, shall cause
the property to be appraised as provided herein. If there be an estate or property
subject to said tax wherein the records in the clerk's office do not disclose that there
may be a tax due under the provisions of this act, the person or persons interested
in the property shall report the matter to the clerk with an application that the
property be appraised. The appraised value of the property shall in all cases

462 STATUTES ANNOTATED. [Iowa St.

be its market value in the ordinary course of trade, and in domestic estates the
tax shall be calculated thereon after deducting the debts as defined herein;
provided, however, that the debt of a domestic estate owing for or secured by
property outside of the state, shall not be deducted before estimating the tax,
except when the property for which the debt is owing or by which it is secured is
subject to the tax imposed by this act, or when the foreign debt exceeds the value
of the property securing it or for which it was contracted, then the excess may be
deducted provided that satisfactory proof of the value of the foreign property
and the amount of such debt is furnished to the treasurer of state.

Appraisal, cofitinued.

S. 10. All estates subject in whole or in part to the tax imposed by this act
shall be appraised for the purpose of computing said tax by the regular collateral
inheritance tax appraisers; provided, that estates liable for the payment of the
inheritance tax upon specific legacies, annuities, bequests of money or other
property, the value of which may be determined without appraisement, and
estates which consist of money, book accounts, bank deposits, notes, mortgages
and bonds, need not be appraised by the collateral inheritance tax appraisers if
the administrator, executor or trustee or the persons entitled to or claiming such
property are willing to charge themselves with the full face value of such bequests
or property, together with the interest, earnings, or undivided profits which may
be due on said properties, at the time of death of the testator or intestate, as
the basis for the assessment of said tax, but in all cases the relief from appraise-
ment for the collateral inheritance tax is dependent upon the consent of the
treasurer of state, and the subsequent approval thereof by the court or judge
thereof in vacation. In the event that the estate has been duly appraised under
the orciinary statutes of inheritance or the property has been sold and such ap-
praisement or selling price is accepted by the treasurer of state as satisfactory
for collateral inheritance tax purposes, the court or judge thereof in vacation may,
upon proper application, relieve the estate from the appraisement by the collateral
inheritance tax appraisers; but in order to obtain such relief, the administrator,
executor, trustee or other party interested must file an application for relief with
the consent of the treasurer of state thereto in the office of the clerk of the court
before said clerk issues a commission to the collateral inheritance tax appraisers.
The court or judge thereof in vacation may, upon application of the representatives
of the estate or parties interested, relieve the estate of the appraisement for
collateral tax purposes if it be shown to said court that the market value of the
entire estate will not exceed one thousand dollars; provided, that prior to the
application to said court or judge the written consent of the treasurer of state to
such relief is procured. In all cases where an estate is relieved from an appraise-
ment for collateral inheritance tax purposes, the order granting relief shall be
recorded in the clerk's office, and the fact of such relief and reasons therefor shall
be duly noted in the decree or order of final settlement made by the court.

Appraisal. — Remainders in Real Estate.

S. 11. When any person, whose estate over and above the amount of his
debts, as defined in this act, exceeds the sum of one thousand dollars, shall be-
queath or devise any real property to or for the use of persons exempt from the
tax imposed by this act, during life or for a term of years, and the remainder to a
collateral heir, said property upon the determination of such estate for life or

1911, c. 68.] IOWA. 463

years, shall be appraised at its then actual market value from which shall be
deducted the value of any improvements thereon, or betterments thereto, if any,
made by the remainderman during the time of the prior estate, to be ascertained
and determined by the appraisers and the tax on the remainder shall be paid by
such remainderman as provided in the next succeeding section.

Same.

S. 12. Whenever any real property of a decedent shall be subject to such tax
and there be an estate or interest for life or term of years given to a party other
than those especially exempt by this act, the clerk shall cause such property to
be appraised at the actual market value thereof, as is provided in ordinary cases,
and the party entitled to such estate or interest shall within one (1) year from the
death of decedent owner pay such tax, and in default thereof the court shall order
such interest in said estate, or so much thereof as shall be necessary to pay such
tax and interest, to be sold. Upon the determination of any prior estate or
interest, when the remainder or deferred estate or interest or any part thereof
is subject to such tax and the tax upon such remainder or deferred interest has
not been paid, the person or persons entitled to such remainder or deferred
interest shall immediately report to the clerk of the proper court the fact of the
determination of the prior estate, and upon receipt of such report, or upon in-
formation from any source, of the determination of any such prior estate when
the remainder interest has not been appraised for the purpose of assessing such
tax, the clerk shall forthwith issue a commission to the collateral inheritance tax
appraisers, who shall immediately proceed to appraise the property as provided
in like cases in the next preceding section, and the tax upon such remainder in-
terest shall be paid by the remainderman within one (1) year next after the
determination of the prior estate. If such tax is not paid within said time the
court shall then order said property, or so much thereof as may be necessary to
pay such tax, and interest to be sold.

Appraisal. -^ Interests in Personal Property.

S. 13. Whenever any personal property shall be subject to the tax imposed
by this act and there be an estate or interest for life or term of years given to one
or more persons and remainder or deferred estate to others, the clerk shall cause
the property so devised or conveyed to be appraised as provided herein in ordinary
estates and the value of the several estates or interests so devised or conveyed
shall be determined as provided in section seventeen (17) of this act, and the
tax upon such estates or interests as are liable for the tax imposed by this act
shall be paid to the treasurer of state from the property appraised or by the
persons entitled to such estate or interest within eighteen (18) months from the
death of the testator, grantor, or donor, provided, however, that payment of
the tax upon any deferred estate or remainder interest may be deferred until the
determination of the prior estate by the giving of a good and sufficient bond
as provided in the next succeeding section.

Remainder Interests. — Bond. — When Tax Payable.

S. 14. When in case of deferred estates or remainder interests in personal
property or in the proceeds of any real estate that may be sold during the time
of a life, term or prior estate, the persons interested who may desire to defer the
payment of the tax until the determination of the prior estate, shall file with the

464 STATUTES ANNOTATED. [Iowa St.

clerk of the proper district court a bond as provided herein in other cases, such
bond to be renewed every two years until the tax upon such deferred estate is
paid. If at the end of any two year period the bond is not promptly renewed
as herein provided and the tax has not been paid, the bond shall be declared
forfeited.

When the estate of a decedent consists in part of real and in part of personal
property, and there be an estate for life or for a term of years to one or more
persons and a deferred or remainder estate to others, and such deferred or remain-
der estate is in whole or in part subject to the tax imposed by this act, if the
deferred or remainder estates or interests are so disposed that good and sufficient
security for the payment of the tax for which such deferred or remainder estates
may be liable can be had because of the lien imposed by this act upon the real
property of such estate, then payment of the tax upon such deferred or remainder
estates may be postponed until the determination of the prior estate without
giving bond as herein required to secure payment of such tax, and the tax shall
remain a lien upon such real estate until this tax upon such deferred estate or
interest is paid.

Bonds. — Form and Amount.

S. 15. All bonds required by this act shall be payable to the treasurer of state
and shall be conditioned upon the payment of the tax, interest and costs for which
the estate may be liable, and for the faithful performance of all the duties hereby
imposed upon and required of the person whose acts are by such bond to be guaran-
teed, and shall be in an amount equal to twice the amount of the tax interest
and costs that may be due, but in no case less than five hundred dollars
($500.00) and must be secured by not less than two resident freeholders or
by a fidelity or surety company authorized by the auditor of state to do business
in this state.

Removing Property from State without Paying Tax.

S. 16. It shall be unlawful for any person to remove from this state any
property, or the proceeds thereof, that may be subject to the tax imposed by
this act, without paying the said tax to the treasurer of state. Any person
violating the provisions of this section shall be guilty of a felony and upon con-
viction shall be fined an amount equal to twice the amount of tax, interest and
costs for which the estate may be liable, but in no case less than two hundred
dollars ($200.00) and imprisoned as the court shall direct, until the fine is paid.
Provided, however, that the penalty hereby imposed shall not be enforced, if
prior to the removal of such property or the proceeds thereof the person desiring
to effect such removal files with the clerk a bond conditioned upon the payment
of the tax, interest and costs, as is provided in the preceding section hereof.

Annuity Tables Used.

S. 17. The value of any annuity, deferred estate or interest, or any estate for
life or term of years, subject to the collateral inheritance tax, shall be determined
for the purpose of computing said tax by the rule of standards of mortality and of
value commonly used in actuaries' combined experience tables as now provided
by law. The taxable value of annuities, life or term, deferred or future estates,
shall be computed at the rate of four (4) per cent per annum of the appraised
value of the property in which such estate or interest exists or is founded. When-

1911, c. 68.] IOWA. 465

ever it is desired to remove the lien of the collateral inheritance tax on remainders,
reversions, or deferred estates, parties owning the beneficial interest may pay at
any time the said tax on the present worth of such interests determined according
to the rules herein fixed.

Duty of Executors, etc., to Pay Tax. — Power of Sale. — Actions.

S. 18. It is hereby made the duty of all executors, administrators, trustees
or other persons charged with the management or settlement of any estate subject
to the tax provided for in this act, to collect and pay to the treasurer of state the
amount of tax due from any devisee, grantee, donee, heir or beneficiary of the
decedent, except in cases where payment of the tax is deferred until the determina-
tion of a prior estate in which cases the treasurer of state shall collect the same.
Executors, administrators, trustees or the state treasurer, shall have power to
sell so much of the property of the decedent as will enable them to pay said tax,
in the same manner as is now provided by law for the sale of such property for
the payment of debts of testators or intestates. The treasurer of state may bring
or cause to be brought in his name of office, suit, for the collection of said tax,
interest and costs, against the executor, administrator or trustee, or against the
person entitled to property subject to said tax, or upon any bond given to secure
payment thereof, either jointly or severally, and obtaining judgment may cause
execution to be issued thereon as is provided by statute in other cases. The
proceedings shall conform as nearly as may be to those for the collection of ordi-
nary debt by suit.

If because of necessary litigation or other unavoidable cause of delay enforced
payment of the tax hereby imposed, by suit and execution, would result in loss
or be to the de'triment of the best interests of the estate, the court may extend the
time for the payment of the tax. Such extensions of time shall not be granted
except in cases where security is given for payment of the tax, interest and costs.

Tax to be Deducted by Executors, etc.

S. 19. Every executor, administrator, referee or trustee having in charge or
trust any property of an estate subject to said tax, and which is made payable
by him, shall deduct the tax therefrom or shall collect the tax thereon from the
legatee or person entitled to said property and pay the same to the treasurer of
state, and he shall not deliver any specific legacy or property subject to said tax
to any person until he has collected the tax thereon.

Probate Accounts not Settled till Tax Paid.

S. 20. No final settlement of the account of any executor, administrator
or trustees shall be accepted or allowed unless it shall show, and the court shall
find, that all taxes imposed by the provisions of this act upon any property or
interest therein, that is hereby made payable by such executors, administrators
or trustees, and to be settled by said account, shall have been paid, and the
receipt of the treasurer of state for such tax shall be the proper voucher for such
payment. Any order contravening the provision of this section shall be void.
Upon the filing of such receipt showing payment of the tax, the clerk shall record
the same upon the collateral inheritance tax lien book in his office.

466 STATUTES ANNOTATED. [Iowa St.

Jurisdiction of District Court.

S. 21. The district court in the county in which some part of the property is
situated, of the decedent who was not a resident, or such court in the county of .
which the deceased was a resident at the time of his death or where such estate is
administered, shall have jurisdiction to hear and determine all questions regularly
brought before it in relation to said tax that may arise affecting any devise, legacy,
annuity, transfer, grant, gift or inheritance, subject to appeal as in other cases,
and the treasurer of state shall in his name of office, with all the rights and privi-
leges of a party in interest, represent the state in any such proceedings.

Bequests to Executors, etc.

S. 22. Whenever a decedent appoints one or more executors or trustees and
in lieu of their allowance or commission, makes a bequest or devise of property
to them which would otherwise be liable to said tax, or appoints them his residuary
legatees, and said bequests, devises or residuary legacies exceed the statutory
fees as compensation for their services, such excess shall be liable to such tax.

Legacies Charged on Real Estate.

S. 23. Whenever any legacies subject to said tax are charged upon or payable
out of any real estate, the heir or devisee, before paying the same, shall deduct said
tax therefrom and pay it to the executor, administrator, trustee or treasurer of
state, and the same shall remain a charge against and be a lien upon said real
estate until it is paid; and payment thereof shall be enforced by the executor,
administrator, trustee or treasurer of state in his name of office as herein provided.

Paynient. — Interest.

S. 24. All taxes imposed by this act shall be payable to the treasurer of state,
and except when otherwise provided in this act, shall be paid within eighteen (18)
months from the death of the testator or intestate. All taxes not paid within
the time prescribed in this act shall draw interest at the rate of eight per centum
per annum thereafter until paid.

Information to be Furnished.

S. 25. Before issuing his receipt for the tax, the treasurer of state may de-
mand from administrators, executors, trustees or beneficiaries such information
as may be necessary to verify the correctness of the amount of the tax and in-
terest, and when such demand is made they shall send to said treasurer certified
copies of wills, deeds, or other papers, or of such parts of their reports as he may
demand, and upon the refusal or neglect of said parties to comply with the demand
of the treasurer of state, it is the duty of the clerk of the court to comply with
such demand, and the expenses of making such copies and transcripts shall be
charged against the estate, as are other costs in probate, or the tax may be assessed
without deducting the debts for which the estate may be liable.

Records.

S. 26. The clerk of the district court in and for each county shall provide and
keep a suitable book, substantially bound and suitably ruled, to be known as the
collateral inheritance tax and lien book, in which shall be kept a full and accurate

1911, c. 68.] IOWA. 467

record of all proceedings in cases where property is charged or sought to be charged
with the payment of a collateral inheritance tax under the laws of this state, to
be printed and ruled so as to show upon one page: —

(1) The name, place of residence, and date of death of the decedent.

(2) Whether the decedent died testate, or intestate, and if testate, the record
and page where the will was probated and recorded.

(3) The name and post-office address of the executor, administrator, trustee
or grantee, with date of appointment or transfer.

(4) The names, post-office address and relationship, if known, of all the heirs,
devisees and grantees.

(5) The appraised valuation of the personal property.

(6) The amount of inheritance tax due upon said personal property.

(7) A record of payment with amount and date.

(8) Date of, filing objections and names of objectors.

(9) Blank for index and reference to all proceedings and for memorandum
entries of the court or judge in relation thereto.

Upon the opposite page of such record shall be printed:

(1) "Real estate derived from (naming decedent)
which is subject to the lien prescribed by the statute for collateral inheritance
tax."

(2) A full and accurate description of such real estate, by forty-acre or frac-
tional tracts, or by lots, or other complete individual description.

(3) The appraised valuation as reported by the appraisers, with a reference
to the record of their report, as to each piece of such real estate.

(4) The amount of the inheritance tax due upon each such piece.

(5) A record of payments, with dates and amounts.

Report by Executors, etc.

S. 27. Upon the appointment and qualification of such executor, administrator
and testamentary trustee, the clerk issuing the letters shall at the same time
deliver to him a blank form upon which he shall be required to make detailed
report of the following facts: —

(1) Name and last residence of decedent.

(2) Date of death.

(3) Whether or not he left a will.

(4) Name and post-office of executor, administrator or trustee.

(5) Name and post-office of surviving wife or husband if any.

(6) If testate, name and post-office of each beneficiary under will.

(7) Relationship of each beneficiary to the testator.

(8) If intestate, name and postoffice of each heir at law.

(9) Relationship of each heir at law to decedent.

(10) Inventory of all real estate of the decedent giving amount and description
of each tract.

(11) Whether the property passes in possession and enjoyment in fee for life
or for a term of years.

Within thirty days after his qualification, each executor, administrator and
testamentary trustee shall make and return to the clerk, under oath, a full and
detailed report as indicated in the preceding paragraph, any will to the contrary
notwithstanding, and upon his failure to do so, the clerk shall forthwith report

468 STATUTES ANNOTATED. [Iowa St.

his delinquency to the district court if in session, or to a judge of said court
if in vacation, for such order as may be necessary to enforce an observ-
ance of this section. If it appears from the inventory or report so filed
that the real estate or any part of it is subject to an inheritance tax it
shall be the duty of the executor or administrator or of any person interested
in the property if there be no administration, to cause the lien of the same to be
entered upon the lien book in the office of the clerk of the court in each county
where each particular tract of said real estate is situated, and when said real
estate or any interest therein, is subject to such tax, no conveyance either before
or after the entering of said lien, shall discharge the real estate so conveyed from
said lien, no final settlement of the account of any executor, administrator or
trustee shall be accepted or allowed unless a strict compliance with the provisions
of this section has been had by such person. Upon the filing of such report, the
clerk of the court shall immediately forward a true copy thereof to the treasurer
of state.

Extending Time for Inventories.

S. 28. Whenever, by reason of the complicated nature of an estate, or by reason
of the confused condition of the decedent's affairs, it is impracticable for the
executor, administrator, trustee or beneficiary of said estate to file with the
clerk of the court a full, complete and itemized inventory of the personal assets
belonging to the estate, within the time required by statute for filing inventories
of the estates, the court may, upon the application of such representatives or
parties in interest, extend the time for making the collateral inheritance appraise-
ment for a period not to exceed three months beyond the time fixed by this act.

Report by Person Entitled.

S. 29. Whenever any property passing under the intestate laws may be sub-
ject to the tax imposed by this act, the person or persons entitled to such property
shall make or cause to be made to the clerk of the courts of the county wherein
such property is located, within ninety (90) days next following the death of such
intestate, a report in writing embodying therein substantially the information
required by the second preceding section of this act. Failure to furnish such
report or to probate the will in a testate estate shall not relieve the estate from
the lien created hereby or the persons entitled to the property of such decedent
from payment of the tax, interest or other penalties imposed by this act.

Records by Clerk.

S. 30. The clerk shall enter upon the collateral inheritance tax and lien book,
the title of all estates subject to the inheritance tax as shown by the inventories
or lists of heirs filed in his office, or as reported to him by the county attorney,
treasurer of state, or other person, and shall enter in said book as against each
estate or title at the appropriate place, all such information relating to the situ-
ation and condition of the estate as he may be able to obtain from the papers
filed in his office, or from any other source, as may be necessary to the collection
and enforcement of the tax. He shall also immediately index in the book kept in
his office for that purpose, all liens entered upon the collateral inheritance tax
and lien book. Failure to make such entries as are herein required, shall not
operate to relieve the estate from the lien or defeat the collection of the tax.

1911, c. 68.] IOWA. 469

Same.

S. 31. In all cases entered upon the inheritance tax and lien book, the clerk
shall make a complete record in the proper probate record, of all the proceedings,
orders, reports, inventory, appraisements and all other matters and proceedings
therein.

Reports by Clerks.

S. 32. It shall be the duty of each clerk of the district court to make examina-
tion from time to time of all reports filed with him by administrators, executors and
trustees, pursuant to law; also to make examination of all foreign wills offered for
probate or recorded within his county, as well as of the record of deeds and convey-
ances in the recorder's office of said county, and if from such examination or from
information or knowledge coming to him from any other source, he finds or believes
that any property within his county, or within the jurisdiction of the district
court of said county has, since July 4, 1896, passed by will or by the intestate
laws of this or any other state, or by deed or other method of conveyance, made
in anticipation of or intended to take effect, in possession or in enjoyment after
the death of the testator, donor or grantor, to any person other than to or for the
use of the persons, societies, or organizations exempt from the tax hereby imposed,
he shall make report thereof in writing to the treasurer of state, embodying in
such report such information as he may be able to obtain as to the name and resi-
dence of decedent, date of death, name and address of administrator, executor or
trustee, the description of any property liable to said tax and the county in which
it is located and name and relationship of all beneficiaries or heirs. Any citizen
of the state having knowledge of property liable to such tax, against which no
proceeding for enforcing collection thereof is pending, may report the same to
the clerk and it shall be the duty of such officer to investigate the case, and if
he has reason to believe the information to be true, he shall forthwith enter the
estate and report the same substantially as above indicated. For reporting such
estates or property the clerk shall receive a compensation of one dollar ($1.00)
for each one hundred dollars ($100.00) or fraction thereof of tax paid, but not to
exceed the sum of five dollars ($5.00) in any one estate, the same to be in addition
to the compensation now allowed him by law. Except when this information
has first been received from another source, the treasurer of state, when he has
issued his receipt for the tax in such estate, shall certify to the auditor of state
the amount due the clerk for such service and the auditor of state shall issue his
warrant on the treasurer of state in favor of said clerk for the sum due as herein
provided.

County Attorney. — Fees.

S. 33. It shall be the duty of the county attorney of each county, when directed
by the treasurer of state, to perform such legal services as shall be necessary in the
enforcement of said tax, but such attorney shall have no authority to receipt for
or receive any of such tax. He shall advise and assist the clerk and appraisers
in the discharge of their duties in collateral inheritance tax matters, and see
that the notices required by law are properly made and returned. In each estate
where the county attorney has performed such legal services, he shall receive a
compensation as follows, viz.: on the first one hundred dollars ($100.00) or frac-
tion thereof of tax paid, ten per cent; on the excess of one hundred dollars
($100.00) to five hundred dollars ($500.00) five per cent; on the excess of five

470 STATUTES ANNOTATED. [Iowa St.

hundred dollars ($500.00) to one thousand dollars ($1,000.00) three per cent;
on all sums in excess of one thousand dollars ($1,000.00) one per cent but not to
exceed one hundred and fifty dollars ($150.00) from any one estate. Provided,
however, that except in cases of litigation requiring the filing of a petition or
answer in court, the fee in any case shall not exceed the sum of fifty dollars
($50.00). When the treasurer of state has issued his receipt for the tax in an estate,
in which the county attorney has been directed to render legal services, arid has
performed such services, the treasurer of state shall certify the amount due for
such services to the auditor of state, who shall issue his warrant on the treasurer
of state in favor of said county attorney for the sum due. If the county attorney
is attorney for the executor, administrator or other person interested in the estate,
the treasurer of state may employ another attorney to represent the state.

Same.

S. 34. In the event of uncertainty or of conflicting claims as to fees due county
attorneys or clerks under this act, the treasurer of state is empowered to determine
the amount of fees, to whom payable, and when the same are due, and as far as
possible, such determination shall be in accord with fixed rules made by the
treasurer of state.

Reports to Court.

S. 35. On the first day of each regular term, the court shall require the clerk
to present for its inspection the inheritance tax and lien book hereinbefore pro-
vided for, together with all reports of administrators, executors and trustees
which have been filed pursuant to this act, since the last preceding term. The
county attorney shall also attend and make report to the court concerning the
progress of all cases pending for the collection of such taxes, together with any
other facts, which in his judgment may aid the court in enforcing the general
observance of the collateral inheritance tax law. If from information obtained
from the records or reports, or from any other source, the court has reason to
believe that there is property within its jurisdiction liable to the payment of an
inheritance tax, against which proceedings for collection are not already pending,
it shall enter an order of record, directing the county attorney to institute such
proceedings forthwith. Should any estate, or the name of any grantee or grantees
be placed upon the book at the suggestion of the county attorney, the treasurer
of state, or other person, in which the papers already on file in the clerk's office
do not disclose that an inheritance tax is due or payable, the county attorney shall
forthwith give to all parties in interest such notice as the court or judge may
prescribe, requiring them to appear on a day to be fixed by the said court or judge,
and show cause why the property should not be appraised and subjected to said
tax. At any such hearing any person may be required to appear and answer as
to his knowledge of any such estate or property. If upon any such hearing the
court is satisfied that 'any property of the decedent or any property devised,
granted or donated by him, is subject to the tax, the same proceedings shall be
had as in other cases, so far as applicable.

Costs.

S. 36. In all cases where an estate or interest therein so passes as to be liable
to taxation under this act, all costs of the proceedings had for the assessment of
such tax shall be chargeable to such estate as other costs in probate proceedings

1911, c. 68.] IOWA. 471

and to discharge the lien, all costs, as well as the taxes must be paid. In all other
cases the costs are to be paid as ordered by the court. When a decision adverse
to the state has been rendered, with an order that the state pay the costs, it shall
be the duty of the clerk of the court in which such action was pending to certify
the amount of such costs to the treasurer of state, who shall, if said costs be
correctly certified, and the case has been finally terminated, and the tax if any
due has been paid, present the claim to the executive council to audit, and said
claim being allowed by said council, the auditor of state is directed to issue a
warrant on the treasurer of state in payment of such costs.

Transfers Forbidden till Tax Paid.

S. 37. No safe deposit company, trust company, bank or other institution,
person or persons holding securities or assets of the decedent shall deliver or
transfer the same to the executor, administrator or legal representative of said
decedent unless the tax for which such securities or assets are liable under this
act shall be first paid, or the payment thereof is secured by bond as herein pro-
vided. It shall be lawful for and the duty of the treasurer of state personally,
or by any person by him duly authorized, to examine such securities or assets at
the time of any proposed delivery or transfer. Failure to serve ten days notice
of such proposed transfer upon the treasurer of state or to allow such examination
on the delivery of such securities or assets to such executor, administrator or
legal representative shall render such safe deposit company, trust company, bank
or other institution, person or persons liable for the payment of the tax upon such
securities or assets as provided in this act.

Foreign Executor, etc., to Pay Tax Before Transfer.

S. 38. If a foreign executor, administrator or trustee shall assign or transfer
any corporate stock or obligations in this state standing in the name of a decedent,
or in trust for a decedent, liable to such tax, the tax shall be paid to the treasurer
of state on or* before the transfer thereof; otherwise the corporation permitting
its stock to be so transferred shall be liable to pay such tax, interest and costs,
and it is the duty of the treasurer of state to enforce the payment thereof.

Reports by Domestic Corporations.

S. 39. All Iowa corporations organized for pecuniary profit, shall on July 1st
of each year, by its proper officers under oath make a full and correct report to the
treasurer of state of all transfers of its stocks made during the preceding year by any
person who appears on the books of such corporation as the owner of such stock,
when such transfer is made to take effect at or after the death of the owner or
transferor, and all transfers which are made by an administrator, executor, trustee,
referee, or any person ocher than the owner or person in^ whose name the stocks
appeared of record on the books of such corporation, prior to the transfer thereof.
Such report shall show the name of the owner of such stocks and his place of
residence, the name of the person at whose request the stock was transferred, his
place of residence and the authority by virtue of which he acted in making such
transfer, the name of the person to whom the transfer was made, and the residence
of such person; together with such other information as the officers reporting
may have relating to estates of persons deceased who may have been owners of
stock in such corporation. If it appears that any such stock so transferred is

472 STATUTES ANNOTATED. [Iowa St.

subject to tax under the provisions of this act, and the tax has not been paid, the
treasurer of state shall notify the corporation in writing of its liability for the pay-
ment thereof, and shall bring suit against such corporation as in other cases herein
provided unless payment of the tax is made within sixty (60) days from the date
of such notice.

Foreign Estate. — Indebtedness.

S. 40. Whenever any property belonging to a foreign estate, which estate
in whole or in part passes to persons not exempt herein from such tax, the said tax
shall be assessed upon the market value of said property remaining after the
payment of such debts and expenses as are chargeable to the property under the
laws of this state. In the event that the executor, administrator or trustee of
such foreign estate files with the clerk of the court having ancillary jurisdiction,
and with the treasurer of state, duly certified statements exhibiting the true
market value of the entire estate of the decedent owner, and the indebtedness for
which the said estate has been adjudged liable, which statements shall be duly
attested by the judge of the court having original jurisdiction, the beneficiariesof
said estate shall then be entitled to have deducted such proportion of the said
indebtedness of the decedent from the value of the property as the value of the
property within this state bears to the value of the entire estate.

Foreign Estate. — Assessment of Tax.

S. 41. Whenever any property, real or personal, within this state belongs
to a foreign estate and said foreign estate passes in part exempt from tht ax
imposed by this act and in part subject to said tax and there is no specific devise
of th^ property within this state to direct heirs or if it is within the authority
or discretion of the foreign executor, administrator or trustee administering the
estate to dispose of the property not specifically devised to direct heirs or devisees
in the payment of debts owing by the decedent at the time of his death, or in the
satisfaction of legacies, devises, or trusts given to direct or collateral legatees or
devisees or in payment of the distributive shares of any direct and collateral heirs,
then the property within the jurisdiction of this state, belonging to such foreign
estate, shall be subject to the tax imposed by this act, and the tax due thereon
shall be assessed as provided in the next preceding section of this act relating to
the deduction of the proportionate share of indebtedness. Provided, however,
that if the value of the property so situated exceeds the total amount of the
estate passing to other persons than those exempt hereby from the tax imposed
by this act such excess shall not be subject to said tax.

Compromise of Tax.

S. 42. Whenever an estate charged or sought to be charged with the collateral
inheritance tax is of such-a nature, or is so disposed, that the liability of the estate
is doubtful, or the value thereof cannot with reasonable certainty be ascertained
under the provisions of law, the treasurer of state may, with the written approval
of the attorney general, which approval shall set forth the reasons therefor, com-
promise with the beneficiaries or representatives of such estates, and compound the
tax thereon; but said settlement must be approved by the district court or judge
of the proper court, and after such approval the payment of the amount of the
taxes so agreed upon shall discharge the lien against the property of the estate.

1911, c. 68.] IOWA. 473

Payment When Persons Entitled are Unknown.

S. 43. Whenever the heirs or persons entitled to any estate, or any interest
therein, are unknown or their place of residence cannot with reasonable certainty
be ascertained, a tax of 5 per cent shall be paid to the treasurer of state upon all
such estates or interests, subject to refund as provided herein in other cases;
provided, however, that if it be afterwards determined that any estate or interest
passes to aliens, there shall be paid within sixty (60) days after such determination
and before delivery of such estate or property an amount equal to the difference
between five per centum, the amount paid, and the amount which such person
should pay under the provisions of this act.

Refund.

S. 44. When within five years after the payment of the tax, a court of compe-
tent jurisdiction may determine that property upon which a collateral inheritance
tax has been paid is not subject to or liable for the payment of such tax, or that
the amount of tax paid was excessive, so much of such tax as has been overpaid
to the treasurer of state shall be returned or refunded to the executor or adminis-
trator of such estate, or to those entitled thereto, when a certified copy of the
record of such court showing the fact of non-liability of such property to the pay-
ment of such tax has been filed with the executive council of the state, the execu-
tive council shall if the case has been finally determined issue an order to the
auditor of state directing him to issue a warrant upon the treasurer of state to
refund such tax. Such order of court shall not be given until fifteen days notice
of the application therefor shall have been given to the treasurer of state of the
time and place of the hearing of such application, which notice shall be served in
the same manner as provided for original notices.

Estates in Expectancy. — Defeasible. — Contingent.

S. 45. Estates in expectancy which are contingent or defeasible and in which
proceedings for the determination of the tax have not been taken or where the
taxation thereof has been held in abeyance, shall be appraised at their full, un-
diminished value when the persons entitled thereto shall come into the beneficial
enjoyment or possession thereof, without diminution for or on account of any
valuation theretofore made of the particular estates for purposes of taxation, upon
which said estates in expectancy may have been limited.

When an estate, devise, or legacy can be divested by the act or omission of the
legatee or devisee, it shall be taxed as if there were no possibility of such divesting.

When a devise, bequest or transfer is one in part contingent, and in part vested
so that the beneficiary will come into possession and enjoyment of a portion of
his inheritance on or before the happening of the event upon which the possible
defeating contingency is based, a tax shall be imposed and collected upon such
bequest or transfer as upon a vested interest, at the highest rate possible under
the terms of this act if no such contingency existed; provided, that in the event
such contingency reduces the value of the estate or interest so taxed, and the
amount of tax so paid is in excess of the tax for which such bequest or transfer is
liable upon the removal of such contingency, such excess shall be refunded as is
provided in section forty-four (44) of this act in other cases.

474 STATUTES ANNOTATED. [Iowa

Definitions.

S. 46. In the construction of this act, the words "collateral heirs" shall be
held to mean all persons who are not specifically exempt from the tax imposed
by the provisions hereof. The word "person" shall include a plural as well as
singular, and artificial as well as natural persons. This act shall not be construed
to confer upon a county attorney authority to represent the state in any case,
and he shall represent the treasurer of state only when especially authorized by
him to do so. This act shall apply to all estates subject to taxation under the
law repealed by this act if the tax for which such estates are liable shall not
have been paid prior to the taking effect of this act.

Records by State Treasurer.

S. 47. The treasurer of state shall record in a book kept in his office for that
purpose, all estates reported to him as liable for a tax under the provisions of this
act, showing —

1. The name of the decedent.

2. The place of his residence or county from which such estate was reported.

3. The date of his death.

4. The name of the administrator, executor or trustee.

5. The appraised value of the property, or the value of any taxable pecuniary
legacy.

6. The amount of indebtedness that was deducted before estimating the tax.

7. The amount of tax collected.

8. The amount of fees paid for reporting and collecting such tax.

9. The amount of tax, if any refunded.

He shall also keep a separate record of any deferred estate upon which the tax
due is not paid within eighteen (18) months froni the death of the decedent,
showing substantially the same facts as is required in other cases, and also show-
ing—

(a) The date and amount of all bonds given to secure the payment of the
tax with a list of the sureties thereon.

(b) The name of the person beneficially entitled to such estate or interest, with
place of residence.

Repeal.

S. 48. Chapter four (4), of title seven (7), of the supplement to the code, 1907,
and chapter ninety-two (92) of the Acts of the Thirty-Third (33) General Assembly
and all other acts or parts of acts in conflict herewith, are hereby repealed.

RULES AND REGULATIONS.

The following rules and regulations for the assessment and collection of the
tax on collateral inheritances in Iowa were drafted and adopted in accordance with
the provisions of section six, chapter thirty-seven, of the acts of the Twenty-
Seventh General Assembly, which follow : —

The chief justice of the supreme court shall, prior to July 1, 1898, appoint five
of the district judges of the state to meet with him at Des Moines on a date to

Rules.] IOWA. 475

be by him fixed, for the purpose of framing uniform rules and regulations relative to
to the assessment and collection of the collateral inheritance tax, for the guidance
of the district judges, officers of the court, executors and administrators. Said
rules and regulations shall aim to give more publicity to the provisions of this
chapter, and to secure the strict enforcement of the same, and when made shall
form a part of and be published with the rules of the district courts of the state.
Pursuant to the authority conferred in the above section. Judge H. E. Deemer,
chief justice of the supreme court, directed Judges S. M. Weaver, of the eleventh
judicial district; L. E. Fellows, of the thirteenth; H. M. Towner, of the third;
Z. A. Church, of the sixteenth, and M. J. Wade, of the eighth judicial district of
Iowa, to meet with him in Des Moines. The rules and regulations for the assess-
ment and collection of the collateral inheritance tax herewith published were
adopted June 11, 1898.

Rules and Regulations Relating to the Assessment and Collection of the

Collateral Inheritance Tax.
Rule 1. — Lien Book.

The clerk of the district court in and for each county shall provide and keep a
suitable book, substantially bound and suitably ruled, to be known as the Col-
lateral Inheritance Tax and Lien Book, in which shall be kept a full and accurate
record of all proceedings in cases where property is charged or sought to be charged
with the payment of a collateral inheritance tax under the laws of this state, to be
printed and ruled so as to show, upon one page —

1. The name, place of residence, and date of death of the decedent.

2. Whether the decedent died testate, or intestate, and if testate the record
and page where the will was probated and recorded.

3. The name and post-office address of the executor, administrator, trustee or
grantee, with date of appointment or transfer.

4. The name's, post-office addresses and relationship, if known, of all the heirs,
devisees and grantees.

5. The appraised valuation of the personal property.

6. The amount of inheritance tax due upon said personal property.

7. A record of payment with amount and date.

8. Date of filing objections and names of objectors.

9. Blank for index and reference to all proceedings, and for memorandum entries
of the court or judge in relation thereto.

Upon the opposite page of such record shall be printed : —

1. "Real estate derived from (naming decedent)

which is subject to the lien prescribed by the statute for collateral inheritance tax."

2. A full and accurate description of such real estate, by forty-acre or fractional
tracts, or by lots, or other complete individual description.

3. The appraised valuation as reported by the appraisers, — with reference to
the record of their report, — as to each piece of such real estate.

4. The amount of the inheritance tax due upon each such piece.

5. A record of payments, with dates and amounts.

6. Date of filing objections, and names of objectors.

7. Blank for index and reference to all proceedings, and for memorandum
entries of court or judge in relation thereto.

476 STATUTES ANNOTATED. [Iowa

Rule 2. — Report by Administrators, etc.

Upon the appointment and qualification of each executor, administrator and
testamentary trustee, the clerk issuing the letters shall at the same time deliver
to him a blank form upon which he shall be required to make detailed report
of the following facts: —

1. Name and last residence of decedent.

2. Date of death.

3. Whether or not he left a will.

4. Name and post-office of executor, administrator or trustee.

5. Name and post-office of surviving wife or husband, if any.

6. If testate, name and post-office of each beneficiary under will.

7. Relationship of each beneficiary to the testator.

8. If intestate, name and post-office of each heir at law.

9. Relationship of each heir at law to the decedent.

10. Inventory of all the real estate of the decedent, giving amount and descrip-
tion of each tract.

Within ten days after his qualification each executor, administrator and
testamentary trustee shall make and return to the clerk, under oath, a full and
detailed report as indicated in the preceding paragraph, and upon his failure so
to do, the clerk shall forthwith report his delinquency to the district court if in
session, or to a judge of said court if in vacation, for such order as may be necessary
to enforce an observance of these rules.

If it appears from the inventory or report so filed, that the real estate, or any
part of it, is subject to an inheritance tax, it shall be the duty of the executor or
adnjinistrator to cause the lien of the same to be entered upon the lien book in the
office of the clerk of the court in each county where each particular tract of said real
estate is situated.

Rule 3. — Duties of the Clerk.

The clerk shall from time to time enter upon the collateral inheritance tax and
lien book, the title of all estates subject to the inheritance tax, as shown by the
inventories or lists of heirs filed in this office, or as reported to him by the county
attorney or the treasurer of state, and shall enter in said book as against each
estate or title at the appropriate place, all such information relating to the situa-
tion and condition of the estate as he may be able to obtain from the papers
filed in his office, or from the county attorney or the treasurer of state, as may be
necessary to the collection and enforcement of the tax. He shall also immediately
index all liens entered upon the collateral inheritance tax and lien book in the book
kept in his office for that purpose.

Should any estate, or the name of any grantee or grantees, be placed upon the
book at the suggestion of the county attorney or the treasurer of state, in which the
papers already on file in the clerk's office do not disclose that an inheritance tax
is due or payable, the county attorney shall forthwith give to all parties in interest,
such notice as the court or judge may prescribe, requiring them to appear on a
day to be fixed by the said court or judge, and show cause why the property
should not be appraised and subjected to said tax. If upon hearing at the time
so fixed, the court is satisfied that any property of the decedent, or any property
devised, granted or donated by him, is subject to the tax, the same proceedings
shall be had as in other cases, so far as applicable.

Rules.] IOWA. 477

Rule 4. — Appointment of Appraisers.

At the first term of court in each county, after the publication of these rules,
and annually thereafter, the court shall appoint three competent residents and
freeholders of said county, to act as appraisers of all property within its juris-
diction, which is charged or sought to be charged with a collateral inheritance tax.
Said appraisers shall serve for one year, and until their successors are appointed
and qualified. They shall each take an oath to faithfully and impartially perform
the duties of the office, but shall not be required to give bond. They shall be
subject to removal at any time at the discretion of the court, and the court, or a
judge thereof in vacation, may also, in its discretion, either before or after the
appointment of the regular appraisers, appoint other appraisers to act in any given
case. Vacancies occurring otherwise than by expiration of term, shall be filled
by the appointment of the court, or by a judge in vacation.

Rule 5. — Duties of Appraisers.

When an estate is opened in which there is property which may be subject
to the inheritance tax, the clerk shall forthwith issue a commission to the appraisers
who shall fix a time and place for appraisement, and if not practicable to serve
the notice provided for by statute, they shall apply to the court or judge for an
order as to notice, and upon service of such notice and the making of such appraise-
ment, the said notice return thereon and appraisement shall be filed with the
clerk, and a copy of such appraisement shall be filed by the clerk with the treasurer
of state.

Any person interested may, within twenty days thereafter, file objections to
said appraisement or taxation, and the same shall then stand for trial and further
proceedings as provided by statute. If upon such hearing the court finds that
the property is not subject to the tax, the court shall upon expiration of time for
appeal, when no appeal has been taken, order the clerk to enter upon the lien
book a cancellation of any claim or lien for taxes.

Rule 6. — Duty of County Attorney.

It shall be the duty of each county attorney to make examination from time
to time of all reports filed with the clerk by administrators, executors and trustees,
pursuant to law or the provisions of these rules; also to make examination of all
foreign wills offered for probate or recorded within his county, as well as of the
records of deeds and conveyances in the recorder's office of said county, and if
from such examination, or from information or knowledge coming to him from any
other source, he finds or believes that any property within his county, or within
the jurisdiction of the district court of said county, has since July 4, 1896, passed
by will or by the intestate laws of this or any other state, or by deed, grant, sale
or gift, made or intended to take effect, in possession or enjoyment after the death
of the testator, donor or grantor, to any person other than to or for the use of the
father, mother, husband, wife, lineal descendant, adopted child, the lineal de-
scendant of an adopted child of a decedent, or to or for charitable, educational or
religious societies, or institutions within this state, he shall make report thereof
in writing to the clerk of the district court, embodying in such report, so far as
he is able, all the facts mentioned in rule 2 of these rules, and cause the notice
required by rule 3 hereof to be properly given and returned.

Any citizen of the state having knowledge of property liable to such tax
against which no proceeding for enforcing collection thereof is pending, may report

478 STATUTES ANNOTATED. [Iowa

the same to the county attorney, and it shall be the duty of such officer to investi-
gate the case, and if he has reason to beUeve the information to be true, he shall
forthwith institute such proceedings substantially as above indicated. He shall
also advise and assist the clerk and appraisers in the discharge of their duties
in cases of this nature, and see that notices required by law and these rules are
properly made, served and returned.

Rule 7. — Duty of Court.

On the first or second day of each regular term, the court shall require the clerk
to present for its inspection, the inheritance tax and lien book hereinbefore pro-
vided for, together with all reports of administrators, executors and trustees which
have been filed pursuant to these rules, since the last preceding term. The county
attorney shall also attend and make report to the court concerning the progress
of all cases pending for the collection of such taxes, together with any other facts,
which, in his judgment, may aid the court in enforcing the general observance
of the collateral inheritance tax law. If from information obtained from the
records or reports, or from any other source, the court has reason to believe that
there is property within its jurisdiction liable to the payment of an inheritance tax
against which proceedings for collection are not already pending, it shall enter an
order of record, directing the county attorney to institute such proceedings forth-
with.

Rule 8. — Record.

In all cases entered upon the inheritance tax and lien book, the clerk shall make
a complete record in the proper probate record, of all the proceedings, orders,
repbrts, inventory, appraisements and all other matters and proceedings therein.

Rule 9. — Costs.

In all cases where property is found to be liable to taxation under the inheritance
tax law, all costs of the proceedings had for the assessment of such tax shall be
chargeable to such property, and to discharge the lien upon such property all costs,
as well as the taxes, must be paid. In all other cases the costs are to be paid as
ordered by the court.

Rule 10. — Books and Blanks.

The book herein provided for, and all blanks to be used in carrying out the
provisions of the law and of these rules, shall be in form to be approved by the
chief justice of the supreme court, which form shall be furnished to the clerk of
each county by the treasurer of state.

It shall be the duty of the state treasurer to give such publicity to these rules,
and the provisions of the statute regarding the collection of such tax, as may by
him be deemed advisable and practicable.

Rule 11. — Construction.

These rules are not to be construed as in any manner superseding any of the
requirements of the statute governing the levy and collection of collateral in-
heritance taxes, or as relieving executors, administrators, trustees or officers of
court, or any of them, from a strict observance of all the duties which such statute
imposes upon them.

Tables.] IOWA. 479

These rules shall be in full force and effect from and after the 4th day of July,
1898.

Be it Remembered, That the above and foregoing rules were adopted this 11th
day of June, 1898, by the following: H. E. Deemer, chief justice of the supreme
court of Iowa; S. M. Weaver, judge of the eleventh judicial district of Iowa; L.
E. Fellows, judge of the thirteenth judicial district of Iowa; H. M. Towner, judge
of the third judicial district of Iowa; Z. A. Church, judge of the sixteenth judicial
district of Iowa; M. J. Wade, judge of the eighth judicial district of Iowa. Said
district judges having been appointed by the said chief justice of the supreme court,
pursuant to section six, chapter thirty-seven of the acts of the Twenty-Seventh
General Assembly of the state of Iowa.

Witness my hand the 11th day of June, 1898,

H. E. Deemer,
Chief Justice of the Supreme Court of Iowa.
Attest: M. J. Wade, Secretary.

Tables for Determining the Valuation or Present Worth of Life and Term
Estates or Annuities and Remainders or Reversionary Interests
Computed at Four Per Cent Per Annum, for the Use of the Courts
of Iowa in the Assessment of Collateral Inheritance Tax.

Section seven (7) of chapter fifty-one (51) of the acts of the Twenty-Eighth (28)
General Assembly provides: —

"The treasurer of state is directed to obtain and publish for the use of the courts
and appraisers throughout the state tables showing the average expectancy of
life and the value of annuities or life and term estates, and the present worth or
value of remainders and reversions. The taxable value of life or term, deferred or
future estates shall be computed at the rate of 4 per cent interest."

Pursuant to the foregoing provisions, the following tables for determining the
taxable value, — namely, the present worth, of life estates or annuities and
remainders or reversionary interests are hereby published and promulgated for
the use of the courts and appraisers of the state.

Table No. 1 gives the basis for valuing "Life Estates" or annuities, the proceeds
of which the beneficiary enjoys during his or her life.

Table No. 2 relates to "Term Estates" or annuities terminable at a certain
period, definitely stated in the provisions of the in^rument creating the estate.

The tables printed herein are those used by the United States Government
in the assessment of the inheritance tax under the war revenue act of June 13,

1898, prepared for the internal revenue service under the direction of the govern-
ment actuary, Mr. J. S. McCoy. They are based upon the "Actuaries' or Com-
bined Experience Tables," money being considered worth four (4) per cent per
annum. Both the tables and notes are reproduced from circulars No. 527, March,

1899, and No. 21,231, Decembc, 1899, issued by the commissioner of internal
revenue.

The treasurer of state is indebted to Hon. G. W. Wilson, commissioner of
internal revenue at Washington, D. C, for permission to reprint and use the tables
employed by the national government, and he desires here to acknowledge the
courtesy and the very valuable favor rendered by him.

480

STATUTES ANNOTATED.

[Iowa

Table No. 1. — Single-life, 4 per cent, showing the present worth of
annuity, or life interest, and of a reversionary interest.

w** hccs

*> U>*-U- I

w*i hoes

♦. i,>+-,^ 1

rt o c o

C rt o o-G

*.J2 o ^g

C rt O 0*3

11 -lit

G
o

*■&

c<*- ^ 5 «

S^-O C S S 4)
S.2 OJ'o 4> <n

JS.

g5-§S5^

|S.

C rt 3 d^'^

l^-Slc.^

23.179

$14.72829

$0.39507

18.113

$12.47032

$0.48191

30.552

17.30771

0.29586

17.527

12.17919

0.49311

35.626

18.69578

0.24247

16.947

11.88408

0.50446

37.572

19.15901

0.22465

16.372

11.58531

0.51595

38.702

19.41226

0.21491

15.804

11.28325

0.52757

39.352

19.55301

0.20950

15.243

10.99789

0.53931

39.654

19.61731

0.20703

14.689

10.66982

0.55116

39.691

19.62502

0.20673

14.143

10.35931

0.56310

39.625

19.61097

0.20727

13.603

10.04630

0.57514

39.264

19.53413

0.21022

13.072

9.73131

0.58726

38.891

19.45359

0.21332

12.549

9.41474

0.59943

38.507

19.36943

0.21656

12.029

9.09765

0.61163

38.113

19.28184

0.21993

11.532

8.78052

0.62382

37.710

19.19065

0.22344

11.039

8.46412

0.63600

37.298

19.09590

0.22708

10.557

8.14888

0.64812

36.877

18.99764

0.23086

10.088

7.83552

0.66017

36.447

18.89569

0.23478

9.630

7.52476

0.67212

36.010

18.79010

0.23884

9.185

7.21699

0.68396

35.565

18.68070

0.24305

8.753

6.91298

0.69565

-35.113

18.56751

0.24740

8.333

6.61301

0.70719

34.652

18.45038

0.25191

7.926

6.31716

0.71857

34.186

18.32932

0.25656

7.532

6.02612

0.72976

33.711

18.20416

0.26138

7.151

5.74003

0.74077

33.230

18.07471

0.26636

6.782

5.45928

0.75157

32.742

17.94097

0.27150

6.425

5.18402

0.76215

32.248

17.80274

0.27682

6.081

4.91463

0.77251

31.747

17.65984

0.28231

5.749

4.65125

0.78264

31.239

17.51224

0.28799

5.428

4.39383

0.79254

30.725

17.35968

0.29386

5.119

4.14286

0.80220

30.205

17.20225

0.29991

4.823

3.89858

0.81159

29.678

17.03961

0.30617

4.537

3.66071

0.82074

29.147

16.87176

0.31262

4.262

3.42900

0.82965

28.608

16.69846

0.31929

3.995

3.20258

0.83836

28.067

16.51964

• 0.32617

3.737

2.98024

0.84691

27.516

16.33503

0.33327

3.484

2.76106

0.85534

26.961

16.14437

0.34060

3.236

2.54366

0.86371

26.401

15.94755

0.34817

2.992

2.32795

0.87200

25.834

15.74427

0.35599

2.752

2.11384

0.88024

25.263

15.53421

0.36407

2.517

1.90115

0.88842

24.685

15.31722

0.37241

2.286

1.69107

0.89650

24.101

15.09295

0.38104

2.062

1.48540

0.90441

23.511

14.86102

0.38996

1.845

1.28432

0.91214

22.915

14.62122

0.39918

1.637

1.09024

0.91961

22.313

14.37356

0.40871

1.442

0.90647

0.92667

21.708

14.11860

0.41852

1.263

0.73687

0.93320

21.103

13.85713

0.42857

1.103

0.58435

0.93906

20.499

13.58958

0.43886

0.975

0.46182

0.94378

19.896

13.31698

0.44935

0.877

0.36698

0.94742

19.298

13.03942

0.46002

0.746

0.24038

0.95229

18.703

12.75716

0.47088

0.500

0.00000

0.96154

Tables.] IOWA. 481

Explanatory Notes and Examples.

The first column shows the age of the person under consideration.

The second column shows the corresponding "mean redemption period" and
represents the time in years in which the present values of annuities and reversions
certain will become equal, respectively, to the present value of annuities and
reversions contingent on the duration of life. The "mean redemption period"
is a mean between the last payment of the annuity and the payment of the
reversion, averaging six months later than the former payment and six months
earlier than the latter payment. (This period is ordinarily designated the expect-
ancy of life during which a beneficiary will enjoy the life estate.)

The third column shows the present value of an annuity for life of one dollar
per annum, the last payment being made at the end of the year prior to the one
in which death occurs.

The fourth column shows the present worth of one dollar payable at the end
of the year in which death occurs.

Example 1.

A person dying bequeaths to his nephew, aged forty years, an annuity of one
thousand dollars during life. What is the present value of the annuity?

Reference to the foregoing table shows that the present value of one dollar
a year, payable at the end of each year during the life of a person aged forty years,
is fifteen dollars, nine cents, two mills and ninety-five one-hundredths of a mill
($15.09295) ; therefore, the present value of one thousand dollars is one thousand
times as much, or fifteen thousand and ninety-two dollars and ninety-five cents
the amount upon which tax accrues.

Example 2.

A person dying bequeaths to his sister, aged thirty-five years, a life interest in
personal property amounting to fifty thousand dollars ($50,000), the estate to
revert absolutely at her death to other collateral parties. Required the present
value, at the date of death of the testator, of the life interest of the sister in the
estate; also, required at the same date, the present value of the reversionary
interest of said other parties in the estate.

At a net interest of four per cent per annum, the assumed rate, the estate of
$50,000 will realize an income or annuity of $2,000 per annum. The present
value of the sum of $1, payable at the end of each year during the life of a person
aged thirty-five years, is found by the table to be $16.14437, and the present
value of an* annuity of $2,000 for the same time would be two thousand times as
much, or $32,288.74, the amount upon which tax accrues.

The reversion or present value of $1.00, due at the end of the year of death of
a person aged thirty-five years, is found by the table -to be $0.34060, and such
value of $50,000 would be fifty thousand times as much, or $17,030, the amount
upon which tax accrues.

482

STATUTES ANNOTATED.

[Iowa

Table No. 2. — Present value of annuities and reversions certain upon a
4 per cent basis.

resent worth of an
annuity of one dol
lar. payable at the
end of each year,
for a certain num-
ber of years.

resent worth of one
dollar, payable at
the end of a certain
number of years.

esent worth of an
annuity of one dol-
lar, payable at the
end of each year,
for a certain num-
ber of years.

resent worth of one
dollar, payable at
the end of a certain
number of years.

^ 1

! £

Annuity.

Reversion.

Annuity.

Reversion.

S 0.96154

$0.961538

11.65229

$0.533908

1.88609

0.924556

12.16567

0.513373

2.77509

0.888996

12.65929

0.493628

3.62989

0.854804

13.13394

0.474642

4.45182

0.821927

13.59032

0.456387

5.24214

0.790314

14.02916

0.438834

6.00205

0.759918

14.45111

0.421955

6.73274

0.730690

14.85684

0.405726

7.43533

0.702587

15.24696

0.390121

8.11089

0.675564

15.62208

0.375117

8.76047

0.649581

15.98277

0.360689

9.38507

0.624597

16.32958

0.346816

9.98565

0.600574

16.66306

0.333477

10.56312

0.577475

16.98371

0.320651

11.11839

0.555265

17.29203

0.308319

Example.

A man dies leaving personal property to the amount of $50,000, his niece
to have the income from it for twenty years, it then to revert to his youngest
brother. What is the present worth of these legacies?

The income from $50,000 would be $2,000 per annum, assuming money at
4 per cent.

Kansas St.] KANSAS. 483

KANSAS.

In General.

Kansas adopted a tax on all inheritances in 1909. The exemp-
tions apply to each individual share, not to the estate as a whole.
If the Kansas portion of the inheritance is less than the exemp-
tion Kansas collects no tax.

Kansas is taxing stock of a Kansas corporation owned by
a non-resident, and registered bonds as well. The corpora-
tion is held responsible if it transfers securities before the tax
is paid.

The Kansas statute contains the same reciprocal clause for
avoiding double taxation that is found in Massachusetts. Per-
sonal property of a deceased resident outside the state which
is taxed by another state or country is not taxed by Kansas
unless such tax is less than the Kansas tax, and then Kansas collects
only the difference. Property of a non-resident in Kansas, including
stock wherever situated in a Kansas corporation, will not be taxed
(except for the difference if Kansas rates are higher) if owned by
a resident of a state which extends similar courtesies to residents
of Kansas. Massachusetts, Maine, Vermont and New York seem
to be the only states that do so.

It is the practice in Kansas to require a complete inventory of
the estate of a non-resident which has any property subject to
Kansas jurisdiction.

Constitutional Limitations.

Kansas Constitution 1859, a. 11, s. 1.

The legislature shall provide for a uniform and equal rate of assessment and
taxation; but all property used exclusively for state, county, municipal, literary,
educational, scientific, religious, benevolent and charitable purposes and personal
property to the amount of at least two hundred dollars for each family, shall be
exempted from taxation.

List of Statutes.

1909. Statutes of Kansas, c. 248.

1909. General Statutes, c. 116, a. 7, ss. 9265 to 9291.

484 STATUTES ANNOTATED. [Kansas St.

THE PRESENT ACT.

Kansas St. 1909, c. 248, approved March 12, 1909, published in official
state paper March 16, 1909.

General Statutes of 1909, ss. 9265 to 9291.

An Act to provide for the assessment and taxation of legacies
AND successions and to prescribe the manner and method by which to
collect the taxes for which such provision is herein made.

S. 9265. Legacies and successions subject to taxation. S. 52. All

property, corporeal or incorporeal, and any interest therein, within the jurisdiction
of the state, whether belonging to the inhabitants of the state or not, which shall
pass by will or by the laws regulating intestate succession, or by deed, grant or gift
made in contemplation of death, or made or intended to take effect in possession
or enjoyment after the death of the grantor, to any person, absolutely or in trust
— except in case of a bona fide purchase for full consideration in money or money's
worth; and except property to or for the use of literary, educational, scientific,
religious, benevolent and charitable societies or institutions: Provided, such use
entitles the property so passing to be exempt from taxation; and except property
to or for the use of the state, a county or a municipality for public purposes; and
except property to or for the use of a class herein designated as class A, being the
husband, wife, lineal ancestor, lineal descendant, adopted child, the lineal de-
scendant of any adopted child, the wife or widow of a son or the husband of a
daughter of a decedent; and except property to or for the use of a class herein
designated as class B, being the brother, sister, nephew or niece of a decedent,
not tt) exceed twenty-five thousand dollars, shall be subject to a tax of five per
cent of its value and all such property which shall so pass in excess of twenty-five
thousand dollars and not to exceed fifty thousand dollars shall be subject to a tax
of seven and one-half per cent of its value; and all such property which shall so
pass in excess of fifty thousand dollars and not to exceed one hundred thousand
dollars shall be subject to a tax of ten per cent of its value; and all such property
which shall so pass in excess of one hundred thousand dollars and not to exceed
five hundred thousand dollars shall be subject to a tax of twelve and one-half
per cent of its value; and all such property which shall so pass in excess of five
hundred thousand dollars shall be subject to a tax of fifteen per cent of its value;
and all such property which shall so pass to or for the use of a member of class A
not to exceed twenty-five thousand dollars shall be subject to a tax of one per cent
of its value; and all such property which shall so pass to or for the use of a member
of class A in excess of twenty-five thousand dollars and not to exceed fifty thousand
dollars shall be subject to a tax of two per cent of its value; and all such property
which shall so pass to or for the use of a member of class A in excess of fifty thou-
sand dollars and not to exceed one hundred thousand dollars shall be subject to
a tax of three per cent of its value; and all such property which shall so pass to
or for the use of a member of class A in excess of one hundred thousand dollars
and not to exceed five hundred thousand dollars shall be subject to a tax of four
per cent of its value; and all such property which shall so pass to or for a member
of class A in excess of five hundred thousand dollars shall be subject to a tax of
five per cent of its value; and all such property which shall so pass to or for the
use of a member of class B not to exceed twenty-five thousand dollars shall be

1909, c. 248.] KANSAS. 485

subject to a tax of three per cent of its value; and all such property which shall so
pass to or for the use of a member of class B in excess of twenty-five thousand
dollars and not to exceed fifty thousand dollars shall be subject to a tax of five
per cent of its value; and all such property which shall so pass to or for the use of
class B in excess of fifty thousand dollars and not to exceed one hundred thousand
dollars shall be subject to a tax of seven and one-half per cent of its value; and all
such property which shall so pass to or for the use of a member of class B in excess
of one hundred thousand dollars and not to exceed five hundred thousand dollars
shall be subject to a tax of ten per cent of its value; and all such property
which shall so pass to or for a member of class B in excess of five hundred thousand
dollars shall be subject to a tax of twelve and one-half per cent of its value; and all
taxes hereinafter provided for shall be for the use of the state ; and administrators,
executors and trustees, and any grantees under any such conveyance made during
the grantor's life, shall be liable for such taxes, with interest at the legal rate, until
the same shall have been paid: Provided, that no bequest, devise or distributive
share of an estate which shall so pass to or for the use of a husband, wife, father,
mother, child or adopted child of the deceased, shall be subject to the provisions
of this act, unless its value exceeds five thousand dollars: And provided further
that no bequest, devise or distributive share of an estate which shall so pass to
or. for the use of a brother, sister, nephew or niece of the deceased shall be subject
to the provisions of this act unless its value exceeds one thousand dollars. Property
shall be deemed to have been transferred by grant or gift in contemplation of
death, under this act, when such grant or gift shall have been executed within
one year prior to the death of the grantor or donor. (L. 1909, c. 248, s. 1 ; March
16.)

S. 9266. Property out of state, or of non-resident within state. S. 53.

Property of a resident of the state, which is not therein at the time of his death,
shall not be taxable under the provisions of this act if legally subject in another
state or country to a tax of like character and amount to that hereby imposed:
Provided, such tax be actually paid, guaranteed or secured in such other state
or country. If, however, such property be legally subject in another state or
country to a tax of like character but of less amount than that hereby imposed,
and such tax be actually paid, guaranteed or secured as aforesaid, such property
shall be taxable under this act to the extent of the excess for which such property
would otherwise be liable hereunder over the tax thus actually paid, guaranteed
or secured. Property of the estate of a non-resident decedent, which is situated
in the state at the time of his death, if subject to a tax of like character with that
imposed by this act by the law of the state or country where decedent had his
residence, shall b§ subject only to such portion of the tax hereby imposed as may be
in excess of such tax imposed by the laws of such other state or country: Provided,
that a like exemption is made by the laws of such other state or country in favor
of estates of citizens of this state, but in such cases no exemption shall be allowed
until the tax provided for by the law of such other state or country shall be actually
paid, guaranteed or secured in accordance with law.

S. 9267. Payment of taxes imposed by this act. S. 54. Except as here-
inafter provided, taxes imposed by the provisions of this act shall be payable to
the county treasurer of the county in which is situated the probate court having
jurisdiction as in this act provided, by the executors, administrators or trustees,

486 STATUTES ANNOTATED. [Kansas St.

at the expiration of one year after the date of their giving bond; but if legacies
or distributive shares are paid within the one year, the taxes thereon shall be
payable at the same time. In cases where property is transferred by deed, grant
or gift made in contemplation of death, the tax thereon shall be due and payable
at the time of such transfer. In all cases where there shall be a grant, devise,
descent or bequest, to take effect in possession or come into actual enjoyment after
the expiration of one or more life estates or after a term of years, the taxes thereon
shall be payable by the executors, administrators or trustees in office when such
right of possession accrues, or, if there is no such executor, administrator or
trustee, by the person so entitled thereto, at the date when the right of possession
accrues to the person or persons so entitled. If the taxes contemplated by this
act are not paid when due, interest at the legal rate shall be charged and collected
from the time the same becomes payable. Property of which a decedent died
seized or possessed, subject to taxes as aforesaid, in whatever form or investment
it may happen to be, and all property acquired in substitution therefor, shall be
charged with a lien for all taxes and interest thereon which are or may become due
on such property; but said lien shall not affect any personal property after the
same has been sold or disposed of for value by the executors, administrators or
trustees. The lien charged by this act upon any real estate or separate parcel
thereof may be discharged by the payment of all taxes due and to become due
which are secured by such lien on real estate, or such lien for taxes may be satisfied,
in relation to any real estate or separate parcel thereof, on condition that the
payment of the tax to the state is first secured by bond or deposit or that other
real estate is substituted in the place of that which is sought to be released:
Provided, that the probate court having jurisdiction shall first approve the bond
or deposit tendered or in advance thereof shall approve of the substitution of other
real estate as security for the taxes, in lieu of that which is to be released.

S. 9268. Deposit when bequest or grant is contingent, etc. S. 55. In
every case where there shall be a bequest or grant of personal estate made or
intended to take effect in possession or enjoyment after the death of the grantor,
to take effect in possession or come into actual enjoyment after the expiration
of one or more life estates or a term of years, whether conditioned upon the
happening of a contingency, or dependent upon the exercise of a discretion, or
subject to a power of appointment or otherwise, the executor or administrator
or grantor may deposit with the county treasurer a sum of money sufficient in
the opinion of the said county treasurer to pay all taxes which may become due
upon such bequest or grant, and the person or persons having the righ to the use
or income of such personal estate shall be entitled to receive from the said county
treasurer interest at the rate of four per cent per annum upon such deposit, and
when said tax shall become due the said county treasurer shall repay to the
persons entitled thereto the difference between the tax certified and the amount
deposited ; or any executor, administrator, trustee or grantee, or any person in-
terested in such bequest or grant may give bond to the probate court having juris-
diction of the estate of the decedent, in such amount and with such sureties as
said court may approve, with the condition that the obligor shall notify the tax
commission when said tax becomes due and shall then pay the same to the county
treasurer.

S. 9269. How tax assessed. S. 56. Except as hereinafter provided, said
tax shall be assessed upon the actual value of the property at the time of the

1909, c. 248.] KANSAS. 487

death of the decedent. In every case where property is transferred by deed,
grant or gift made in contemplation of death, the tax thereon shall be a lien on
the interest of the beneficiary therein from the date of transfer and shall be assessed
when the beneficiary becomes entitled to the possession and enjoyment thereof.
In every case where there shall be a devise, descent, bequest or grant to take effect
in possession or enjoyment after the expiration of one or more life estates or a term
of years, the tax shall be assessed on the actual value of the property or the
interest of the beneficiary therein at the time when he becomes entitled to the
same in possession or enjoyment. The value of an annuity or a life interest in
any such property, or any interest therein less than an absolute interest, shall be
determined by the "American Experience Tables" at four per cent compound
interest.

S. 9270. Payment on future interests. S. 57. Any person or persons en-
titled to a future interest or to future interests in any property may pay the tax
on account of the same at any time before such tax would be due in accordance
with the provisions hereinbefore contained, and in such cases the tax shall be
assessed upon the actual value of the interest at the time of the payment of the
tax, and such value shall be determined by the tax commission as hereinafter
provided. In every case in which it is impossible to compute the present value
of the future interest the tax commission may, with the approval of the attorney
general, effect such settlement of the tax as it shall deem to be for the best interests
of the state, and payment of the sum so agreed upon shall be a full satisfaction
of such tax.

S. 9271. Bequests in lieu of compensation. S. 58. If a testator gives
bequeaths or devises to his executors or trustees any property otherwise liable to
said tax, in lieu of their compensation, the value thereof in excess of reasonable
compensation, as determined by the probate court upon the application of any
interested party or of the tax commission, shall nevertheless be subject to the
provisions of this act.

S. 9272. Duty of executor, etc. S. 59. An executor, administrator or
trustee holding property subject to said tax shall deduct the tax therefrom or
collect it from the legatee or person entitled to said property; and he shall not
deliver property or a specific legacy subject to said tax until he has collected
the tax thereon. An executor or administrator shall collect taxes due upon land
which is subject to tax under the provisions hereof from the heirs or devisees en-
titled thereto, and he may be authorized to sell said land according to the pro-
visions of section 11 if they refuse or neglect to pay said tax.

S. 9273. Legacy a charge on real estate. S. 60. If a legacy subject to
said tax is charged upon or payable out of real estate, the heir or devisee, before
paying it, shall deduct said tax therefrom and pay it to the executor, adminis-
trator or trustee, and the tax shall remain a lien upon said real estate until it is
paid. Payment thereof may be enforced by the executor, administrator or trustee
in the same manner as the payment of the legacy itself could be enforced.

S. 9274. Provision in will for tax. S. 61. When provision is made by any
will or other instrument for payment of the legacy or succession tax upon any

488 STATUTES ANNOTATED. [Kansas St.

gift thereby made out of any property other than that so given, no tax shall be
chargeable upon any money to be applied in payment of such tax.

S. 9275. Sale of real estate to pay tax. S. 62. The probate court of the
proper county may authorize executors, administrators and trustees to sell the
real estate of a decedent for the payment of such tax in the same manner as it
may authorize them to sell real estate for the payment of debts.

S. 9276. Penalty, failing to file inventory. S. 63. An inventory and ap-
praisal under oath of every estate shall be filed in the probate court by the
executor, administrator or trustee within three months after his appointment.
If he neglects or refuses to file such inventory and appraisal he shall be liable to a
penalty of not more than five thousand dollars, which shall be recovered in the
proper district court by the attorney general or county attorney of the proper
county at the instance of the tax commission, in the name of the state, for the
use of the state; and the probate judge shall notify the tax commission within
thirty days after the expiration of said three months of the failure of any executor,
administrator or trustee to file an inventory and appraisal in his office.

S. 9277. Record of inventory; transmission. S. 64. The probate judge
shall record the inventory and appraisal of every estate which is filed in his office,
and he shall, within thirty days after the same has been filed, send by mail to
the tax commission such inventory and appraisal or a copy thereof. The probate
judge shall also, within the same period, send by mail to the tax commission
a copy of the will of the decedent, if such nas been allowed by the probate court.
The^probate judge shall also furnish such copies of papers in his office as the tax
commission shall require, and shall furnish information as to the records and
files in his office in such form as the tax commission may require. The tax com-
mission shall excuse the probate court from filing inventories or copies of in-
ventories and of wills of estates no part of which appears to be subject to a tax
under the provisions of this chapter.

S. 9278. Payment of tax on stock transferred by foreign executor, etc.

S. 65. If a foreign executor, administrator or trustee assigns or transfers any
stock in any national bank located in this state or in any corporation organized
under the laws of this state owned by a deceased non-resident at the date of
his death and liable to a tax under the provisions of this act, the tax shall be
paid to the county treasurer of the proper county at the time of such assignment
or transfer; and if it is not paid when due, such executor, administrator or trustee
shall be personally liable therefor until it is paid. A bank located in this state or
a corporation organized under the laws of this state which shall record a transfer
of any share of its stocl^: made by a foreign executor, adminis rator or trustee, or
issue a new certificate for a share of its stock at the instance of a foreign executor,
administi^ator or trustee, before all taxes imposed thereon by the provisions of this
act have been paid, shall be liable for such tax in an action of contract brought
by the county attorney of the proper county or the attorney general in the name
of the state and at the instance of either the probate court or the tax commission.

S. 9279. Assets of estate of non-resident not delivered, until. S. 66.

Securities or assets belonging to the estate of a deceased non-resident shall not be

1909, c. 248.1 KANSAS. 489

delivered or transferred to a foreign executor, administrator or legal representative
of said decedent without serving notice upon the tax commisson of the time
and place of such intended delivery or transfer seven days at least before the
time of such delivery or transfer. The tax commission, by any member or by
representative, may examine such securities or assets prior to the time of such
delivery or transfer. Failure to serve such notice or to allow such examination
shall render the person or corporation making the delivery or transfer liable to
the payment of the tax due upon said securities or assets, in an action brought
by the county attorney of the proper county or the attorney general in the name
of the state.

S. 9280. Repayment of tax. S. 67. If a person who has paid such tax
afterward refunds a portion of the property on which it was paid, or if it is judi-
cially determined that the whole or any part of such tax ought not to have been
paid, such tax, or the due proportion thereof, shall be repaid to him by the execu-
tor, administrator or trustee.

S. 9281. Value of property, how determined. S. 68. The value of the
property upon which the tax is computed shall be determined by the tax commis-
sion and notified by it to the person or persons by whom the tax is payable and
to the probate court and county treasurer of the proper county, and such
determination shall be final unless the value so determined shall be reduced by
proceedings as herein provided. At any time within three months after such de-
termination the probate court shall, upon the application of any party interested
in the succession, or on application of the executor, administrator or trustee,
appoint three disinterested appraisers, who, first being sworn, shall appraise such
property at its actual value in money as of the day of the death of the decedent,
and shall make return thereof to said court. Such return, when accepted by said
court, shall be final: Provided, that any party aggrieved by such appraisal shall
have an appeal upon matters of law. One-half of the fees of said appraisers, as
determined by the judge of said court, shall be paid by the county treasurer, and
one-half of said fees shall be paid by the other party or parties to said proceedings.

S. 9282. Commission determine amount of tax due. S. 69. The tax

commission shall determine the amount of tax due and payable upon any estate,
or upon any part thereof, and shall certify the amount so due and payable
to the probate court and to the county treasurer and to the person or persons
by whom the tax is payable; but in the determination of the amount of any
tax said tax commission shall not be required to consider any payments on
account of debts or expenses of administration which have not been allowed
by the probate court having jurisdiction of said estate. Payment of the amount
so certified shall be a discharge of the tax. An executor, administrator, trustee
or grantee who is aggrieved by any determination of the tax commission may
within one year after the payment of any tax to the county treasurer, apply
by a petition to the probate court having jurisdiction of the estate of the decedent
for the abatement of said tax, or any part thereof, and if the court adjudges that
said tax, or any part thereof, was wrongly exacted it shall order an abatement
of such portion of said tax as was assessed without authority of law. Upon a
final decision ordering an abatement of any portion of said tax the county treasurer
shall refund the amount adjudged to have been illegally exacted, with interest at
the legal rate, without any further act or resolve making appropriation therefor.

490 STATUTES ANNOTATED. [Kansas St.

S. 9283. Jurisdiction of probate court. S. 70. The probate court having
jurisdiction of the settlement of the estate of the decedent, subject to appeal
as in other cases, shall hear and determine all questions relative to said tax,
and the county attorney of the proper county, at the request of the tax com-
mission or of the county treasurer, shall represent the state in any such proceed-
ings. If the court shall find that any tax remains due, it shall order the executor,
administrator or trustee to pay the same, with interest and costs; and if it appears
that there are no goods or assets of the estate in his hands, the court may assess
the amount of the tax against the executor, administrator or trustee, as if for
his own debt, and may enforce compliance with such order by proper procedure
as now authorized by probate practice; but the administrators, executors, trus-
tees and grantees hereinbefore mentioned shall be personally liable only for
such taxes as shall be payable while they continue in the said offices or have title
as such grantees, respectively. In the cases where the tax is due and payable
by and collectible from the beneficiary, all actions shall be prosecuted by the
attorney general or the county attorney of the proper county in the name of the
state, and such actions may be brought in the same courts as other actions for
money.

S. 9284. Administration at instance of commission. S. 71. If upon
the decease of a person leaving an estate liable to a tax under the provisions of
this act a will disposing of such estate is not offered for probate, or an application
for administration made within four months after such decease, the probate
court, upon application by the county attorney of the proper county or the
attorney general at the instance of the tax commission, shall appoint an adminis-
trator if it then appears that there is no will in existence.

S. 9285. Final account not allowed unless tax paid. S. 72. No final ac-
count of an executor, admmistrator or trustee shall be allowed by the probate
court unless such account shows, and the judge ot said court finds, that all taxes
imposed by the provisions of this act upon any property or interest therein belong-
ing to the estate to be settled by said account and already payable have been
paid, and that all taxes which may become due on said estate have been paid
or settled as hereinbefore provided, or that the payment thereof to the state is
secured by bond or deposit or by lien on real estate. The certificate of the tax
commission and the receipt of the county treasurer for the amount of the tax
therein certified shall be conclusive as to the payment of the tax, to the extent
of said certification.

S. 9286. Proceedings for recovery of taxes. S. 73. The county attorney
of the proper county or the attorney general, at the instance of the county treas-
urer or the tax commission, shall commence proceedings for the recovery of any
of said taxes within six months after the same become payable, and also whenever
the judge of a probate court certifies to him that the final account of an executor,
administrator or trustee has been filed in such court and that the settlement of
the estate is delayed because of the non-payment of said tax. The probate court
shall so certify upon the application of any heir, legatee or other person interested
therein, and may extend the time of payment of said tax whenever the circum-
stances of the case require.

1909, c. 248.1 KANSAS. 491

S. 9287. Act not apply. S. 74. This act shall not apply to estates of persons
deceased prior to the date when it takes effect, or to property passing by deed,
grant, sale or gift made prior to said date.

S. 9288. Report of county treasurer. S. 75. Each county treasurer shall
make a report, under oath, to the state treasurer on the 1st day of January,
April, July and October, respectively, of each, year, of all taxes received by him
under this act, which report shall state for what estate and by whom and when
paid. The form of such report may be prescribed by the tax commission, and
all moneys received in pursuance of this act by such treasurer shall be turned
over to the state treasurer by the county treasurer, in such manner as the laws
at the time in force in relation to drawing of state moneys from county treasurers
shall direct.

S. 9289. Per cent retained by county treasurer. S. 76. The county
treasurer shall retain, for the use of the county, as compensation to the county
for services of county officers, out of all taxes paid to and accounted for by him
each year under this act, five per cent of the tax paid on the first fifty thousand
dollars, three per cent on the next fifty thousand dollars, and two per cent on
all additional sums.

S. 9290. Tax paid to state treasury. S. 77. All taxes levied and collected
under this act, less any expenses of collection, shall be paid into the treasury of
the state for the benefit of the general revenue fund, and shall be applicable
to such purposes as the legislature by law may direct.

S. 9291. Definitions of terms. S. 78. The words "estate" and "property,"
as used in this act, shall be taken to mean the real, personal and mixed property
or interest therein of the testator, intestate, grantor, bargainor, vendor or donor
which shall pass or be transferred to legatees, devisees, heirs, next of kin, grantees,
donees, vendees or successors, and shall include all personal property within or
without the state. The word "transfer," as used in this act, shall be taken to
include the passing of property or any interest therein in possession or enjoyment,
present or future, by inheritance, descent, devise, succession, bequest, grant,
deed, bargain, sale, gift or appointment in the manner herein prescribed. The
word "decedent," as used in this act shall include the testator, intestate, grantor,
bargainor, vendor or donor.

492 STATUTES ANNOTATED." [Ky. St.

KENTUCKY.

In General.

Kentucky adopted a collateral inheritance tax in 1906.

The attorney general has ruled that stock of a Kentucky cor-
poration owned by a deceased non-resident is subject to the tax.
Kentucky claims a tax on stock owned by a non-resident in a foreign
corporation which owns property in Kentucky if the proportionate
value of the Kentucky property can be ascertained.

Constitutional Limitations.

Kentucky Constitution, 1890.

S. 171. The general assembly shall provide by law an annual tax, which,
with other resources, shall be sufficient to defray the estimated expenses of the
commonwealth for each fiscal year. Taxes shall be levied and collected for public
purposes only. They shall be uniform upon all property subject to taxation
within the territorial limits of the authority levying the tax; and all taxes shall
be levied and collected by general laws.

S. 172. All property, not exempted from taxation by this constitution, shall
be assessed for taxation at its fair cash value, estimated at the price it would
bring at a fair voluntary sale; and any officer, or other person authorized to assess
values for taxation, who shall commit any willful error in the performance of his
duty, shall be deemed guilty of misfeasance, and upon conviction thereof shall
forfeit his office, and be otherwise punished as may be provided by law.

List of Statutes.

1906. Statutes of Kentucky, c. 22, a. 19, p. 240.

1910. " " " c. 36, p. 95.

Statutes of Kentucky (Russell 1909) a. 6, ss. 6117 to 6131, inclusive. (This
is the Act of 1906 above referred to.)

Ky. St. 1909, s. 4281a to 42815. (The act of 1906.)

[For report of Sheriff as to revenue collected, etc., see section 6001 of Statutes
of Kentucky, 1909.)

Ky. St. 1906, c. 22, a. 19, p. 240, covers the taxation of inheritances.
This statute was approved March 15, 1906, and is printed post, p. 495
et seq.

Ky. St. 1910, c. 36, p. 95, approved March 21, 1910, provides
that any money that has been paid under the inheritance tax,

1906, c. 22.] KENTUCKY. 493

section 4281a, prior to October 27, 1908, the date of the decision in
Booth V. Commonwealth, where the amount of the legacy was no
more than five hundred dollars, shall be refunded.

History.

No inheritance tax was ever imposed in Kentucky prior to the
statute of 1906. Boothw. Commonwealth, 130Ky.88, 113S. W.61,63.

Likeness to Maine Statute.

The Kentucky statute is practically identical with that of Maine.
Booth V. Commonwealth, 130 Ky. 88, 113 S. W. 61.

Nature.

An inheritance tax is a special or excise tax. Booth v. Common-
wealth, 130 Ky. 88, 113 S. W. 61.

It is insisted that as the tax is a certain per cent of the value of
the estate and the property pays it, it is therefore a tax on the
property itself. But the court, relying on Eyre v. Jacobs, 14 Gratt.
422, remarks that this is by no means a necessary logical conclusion,
that the intention of the legislature was plainly to tax the trans-
mission of property by devise or descent to collateral kindred and to
require that a party then taking the benefit of a civil right accrued
to him under the law should pay a certain premium for its enjoy-
ment, and as it was thought just and reasonable that the amount
of the premium should bear a certain proportion to the value of
the subject enjoyed it is fixed at a certain percentum upon the value
of the whole estate transmitted. Booth v. Commonwealth, 130 Ky.
88, 113S.W.61.

What Law Applies when Remainder Void.

A will left property to A. B. with power to dispose of it
absolutely by will or otherwise and further provided that any part
of the property undisposed of at the death of A. B. should go to
the heirs of the testator. The provision over to the heirs was void
under Kentucky law and therefore the heirs took by descent from
A. B. and not under the will of the testator, and therefore the suc-
cession was subject to an inheritance tax, the statute of 1906 being
passed after the original testator died and before the death of A. B.
Commonwealth v. Stall, 132 Ky. 234, 116 S. W. 687, withdrawing
opinion 114 S. W. 279.

494 STATUTES ANNOTATED. [Ky. St-

Source of Power to Tax Inheritances.

The privilege or right to take property by inheritance or devise
is not a natural or inherent right of person but is a creature of the
law and is subject to regulation by statute. Booth v. Commonwealth,
130 Ky. 88, 113 S. W. 61.

"The right of property, however, is an inherent or inalienable right of the
citizen, and 'consists in the free use, enjoyment, and disposal of his acquisitions,
without any control or diminution, save only of the laws of the land.' Black-
stone's Com., Vol. 1, p. 138. But we venture to say that among the absolute
rights of individuals enumerated by Blackstone no mention is made of a right
to inherit property from another. All estates derived upon the death of another
have been created by law, and are for that reason always subject to regulation by
statute; indeed, frequent changes by legislative enactment have been and will
doubtless yet be made in the law of descent and distribution. It is patent, there-
fore, that the guaranty in the bill of rights, and other provisions of the constitu-
tion, with respect to the right of acquiring and protecting property, does not
include the mere privilege, right, or expectancy of inheritance." Booth v. Com-
monwealth, 130 Ky. 88, 113 S. W. 61.

The power of the legislature to tax is an inherent rather than a
conferred power and the words "the legislative power" are a com-
prehensive phrase meaning all powers that appertain to or are
usually exercised by a legislative body. The power to tax is incident
to and arises from the legislative power with which the constitution
clothed the general assembly; therefore the fact that the power to
lay an inheritance tax is not expressly conferred in the sections
of the constitution of Kentucky, 169 to 182, relating to revenue
and taxation does not prevent the legislature from passing an
inheritance tax. Booth v. Commonwealth, 130 Ky. 88, 113 S. W. 61.

Uniform and Equal. — Nature of Tax.

An inheritance tax is not a tax on property within the provision
of the constitution of Kentucky, section 171, which requires taxes
on property to be uniform and equal. The Kentucky inheritance
law of 1906 is not invalid as violating any provision of the state or
federal constitution requiring uniformity or equality of taxation
on account of discriminations between relations or between relations

1910, c. 36.] KENTUCKY. 495

and strangers. Kentucky constitution, section 171, requiring
equality and uniformity in taxation applies to a direct tax on
property, but the court holds that the provisions of the Ken-
tucky statute of 1906 were not lacking in equality or uniformity
because the tax is proportioned to the value of the interest or
because of the exemption where the estate is of the value of five
hundred dollars or less. Booth v. Commonwealth, 130 Ky. 88,
113S. W. 61.

As the court decides that the Kentucky statute of 1906 does not
violate the provision of the constitution with respect to uniformity
of taxation, it does not decide whether or not the rule as to uni-
formity applies to a special or excise tax such as the statute of 1906.
An inheritance tax is a special or excise tax. Booth v. Commonwealth,
130 Ky. 88, 113 S. W. 61, citing State v. Switzler, 143 Mo. 287, 45
S. W. 245, where the following language is used: "As already
remarked, no doubt longer exists that it is competent for the legis-
lature to levy a tax upon the succession of estates. It is quite
universally held that such a tax is not a tax upon property, in the
ordinary sense, but is in the nature of an excise or bonus, ex-
acted by the state upon the privilege or right to inherit or succeed
to an estate."

THE PRESENT ACT.
Taxable Transfers. — Rate.

S. 1. All property which shall pass, by will or by the intestate laws of this
state, from aily 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 this state, or any in-
terest therein, or income therefrom, which shall be transferred by deed, grant,
sale or gift, made in contemplation of the death of the grantor or bargainor, or
intended to take effect in possession or enjoyment after such death, to any person
or persons, or to any body politic or corporate, in trust or otherwise, or by reason
whereof any person or body politic or corporate shall become beneficially entitled
in possession or expectancy, to any property, or to the income thereof, other than
to or for the use of his or her father, mother, husband, wife, lawful issue, the wife
or widow of a son, or the husband of a daughter, or any child or children adopted
as such in conformity with the laws of the commonwealth of Kentucky, and
any lineal descendant of such decedent born in lawful wedlock, shall be, and is,
subject to a tax of five dollars on every hundred dollars of the fair cash value of
such property, and at a proportionate rate for any less amount, to be paid to the
sheriff or collector of the proper county, as hereinafter defined for the general
use of the commonwealth ; and all administrators, executors and trustees shall be
liable for any and all taxes until the same shall have been paid as hereinafter
directed: Provided, that the first five hundred dollars of every estate shall not
be subject to such duty or tax.

496 STATUTES ANNOTATED. [Ky. St.

"All Property."

The property of a non-resident which is not physically present
in the state is not taxable in Kentucky simply because the executor
is a resident of Kentucky and he cannot be forced to file a list of
such property for taxation. Commonwealth v. Peebles, 134 Ky 121,
119 S. W. 774.

"By Will." — Where Will is Made in Pursuance of Contract.

The testator devised all his property to his mother and entered
into a written contract with her that in consideration of the devise
she would leave by will one-half of the property she received to A. B.
The testator died leaving his mother surviving and on her death she
devised the property in accordance with her contract. The in-
heritance tax act was passed after the making of the contract by
the mother and before her death, and the court holds that the
property passing to A. B. is not subject to the tax. The court says
that reading the will and contract together as they must be read,
the mother took a life estate only and the obligation to leave by will
to A. B. and that therefore A. B. really took under the will of the
testator and not under that of the mother. The court relies on
Emmons v. Shaw, 171 Mass. 410, 50 N. E. 1033, and In re Lansing,
182 N. Y. 238, 74 N. E. 882, in both of which cases the exercise
of a power to appoint by will was referred to the original will, and
no tax is levied where the statute was passed after the original
will went into effect. Winn v. Schenck, 33 Ky. L. Rep. 615, 110
S. W. 827.

"The First Five Hundred Dollars Shall Not be Subject to
such Duty or Ta]^."

This exemption does not render the statute void as lacking
uniformity. This phrase refers to the estate passing by will to the
collateral relative or stranger or under the statute of descent and
distribution and not to the estate of the testator or decedent, and
means that an estate passing by will to the collateral which is
valued at five hundred dollars or less shall not be subject to the tax.
The tax is upon the individual and can be imposed only when the
particular interest in the decedent's estate passing to him exceeds
five hundred dollars. Booth v. Commonwealth, 130 Ky. 88, 113 S.
W. 61. (The collection officers had previously ruled otherwise and
Ky. St. 1910, c. 36 was passed to allow refund of money paid in
prior to this decision under the construction of the statute held by
those officers.)

1910, c. 36.] KENTUCKY. 497

Exemptions.

The act of 1906 makes no exception in favor of charitable or
religious institutions. Leavell v. Arnold, 131 Ky. 426, 115 S. W. 232.
The Ky. St. 1906 is valid although its effect may be to tax prop-
erty otherwise exempt from taxation, as a tax may be levied on a
religious institution receiving a devise although its property is by
law exempt from taxation. The court replies to this suggestion
that the tax is not imposed upon the property but on the right of
succession, and quotes Plummerv. Coler, 178 U.S. 115, 20 S.Ct. 829,
44 L. Ed. 998, Wallace v. Myers (C. C), 38 Fed. 184, 4 L. R. A. 171,
where state inheritance taxes upon legacies of United States
bonds were sustained on that principle. Booth v. Commonwealth,
130Ky.88, 113S.W.61.

Devise for Public School not Exempt.

The tax is not levied upon the fund but upon its trans-
mission, and hence the argument that it is against the policy
of the law to levy a tax upon a fund devised for a public school has
no bearing upon the case at bar, for the reason that this fund does
not become a fund devoted to the maintenance of a school until
the law relative to its transmission has been complied with. The
tax must be paid before the fund in question can become the prop-
erty of the school or be devoted to educational purposes. Leavell
V. Arnold, 131 Ky. 426, 115 S. W. 232.

Legtacy to Debtor of Testator.

The act of 1906 makes no exception in favor of legatees who
may be indebted to the estate. Leavell v. Arnold, 131 Ky. 426, 115
S. W. 232.

Particular Estates and Remainders.

S. 2. When any grant, gift, devise, legacy or succession upon which a tax is
imposed by section 1 of this article shall be an estate, income or interest for a term
of years or for life, or determinable upon any future or contingent event, or shall
be a remainder, reversion of other expectancy, real or personal, the entire property
or fund by which such estate, income or interest is supported, or of which it is a
part, shall be appraised immediately after the death of the decedent, and the
fair cash value thereof, estimated at the price it would bring at a fair voluntary
sale, determined in the manner provided in section 11 of this article and the tax
prescribed shall be immediately due and payable to' the sheriff or collector of the
proper county, and, together with the interest thereon, shall be and remain a lien
on said property until the same is paid: Provided, that the person or persons, or
body politic or corporate, beneficially interested in the property chargeable with

498 STATUTES ANNOTATED. [Ky. St.

said tax, may elect not to pay the same until they shall come into the actual
possession or enjoyment of such property, and in that case such person or persons
or body politic or corporate, shall execute a bond to the commonwealth of Ken-
tucky, in a sum of twice the amount of the tax arising upon personal estate, with
such sureties as the county court may approve, conditioned for the payment of
said tax and interest thereon, at such time or period as they or their representatives
may come into the actual possession or enjoyment of such property, which bond
shall be filed in the office of the county clerk of the proper county: Provided,
further, that such person shall make a full and verified return of such property
to said court, and file the same in the office of the county clerk within one year
of the death of the decedent, and within that period enter into such surety and
renew the same every five years.

Gifts to Executors or Trustees in Lieu of Commissions.

S. 3. Whenever a decedent appoints or nominates one or more executors or
trustees, and makes a bequest or devise of property to them in lieu of commissions
or allowances, which otherwise would be liable to said tax, or appoints them his
residuary legatees and said bequest, devises, or residuary legacies exceed what
would be a lawful compensation for their services, such excess shall be liable
to said tax, and the county court in which the personal representatives of .the
decedent has qualified shall fix the compensation.

When Tax Accrues. — Interest. — Discount.

S. 4. All taxes imposed by this chapter, unless otherwise herein provided for,
shall be due and payable at the death of the decedent, and if the same are paid
within eighteen months, no interest shall be charged and collected thereon, but
if not so paid, interest at the rate of ten per centum per annum shall be charged
and collected from the time said tax accrued: Provided, that if said tax is paid
within nine months from the accruing thereof a discount of five per centum shall
be allowed and deducted from said tax. And in all cases where the executors,
administrators or trustees do not pay such tax within eighteen months from the
death of the decedent, they shall be required to give a bond in the form and to
the effect prescribed in section 2 of this chapter for the payment of said tax, to-
gether with interest.

The court construes sections 4281 d, e, /, h to mean that it was not
intended that during the first eighteen months the executors should
be harassed by suits to recover the tax or subjected to heavy penal-
ties, but when eighteen months have run, unless the payment is
further postponed by the execution of the bond provided for in
sections 42816 and 4281c^, or by the conditions described in section
4281e, the tax must.be paid and a failure to pay subjects the de-
linquent to a suit by a revenue agent and to the payment of the
penalties allowed these agents under the general law. The ad-
ministrator should have paid the tax within thirty days after
distributing any part of the estate subject to the tax, and as he
failed to pay the tax on that portion of the estate distributed after

1910, c. 36.] KENTUCKY. 499

more than thirty days, the county attorney had the authority to
institute such proceedings as might be necessary to compel its
payment although not entitled to any penalty. Commonwealth v.
Gaulbert, 134 Ky. 157, 119 S. W. 779.

Penalty.

S. 5. The penalty of ten per centum per annum imposed by section 4 hereof,
for the non-payment of said tax, shall not be charged in case where, by reason
of claims made upon the estate, necessary litigation, or other unavoidable cause
of delay, the estate of any decedent, or a part thereof, can not be settled at the
end of eighteen months from the death of the decedent; and in such case only
six per centum per annum shall be charged upon the said tax from the expiration
of said eighteen months until the cause of such delay is removed.

Tax to be Deducted.

S. 6. Any administrator, executor or trustee having in charge or trust any
legacy or property for distribution subject to the said tax, shall deduct the tax
therefrom, or if the legacy or property be not money, he shall collect the tax
thereon upon the fair cash value thereof, from the legatee or person entitled to
such property, and he shall not deliver, or be compelled to deliver, any specific
legacy or property subject to tax to any person until he shall have collected the
tax thereon and whenever any such legacy shall be charged upon or payable
out of real estate, the executor, administrator or trustee shall collect said tax from
the distributee thereof, and the same shall remain a charge on such real estate
until paid; if, however, such legacy be given in money to any person for a limited
period, the executor, administrator or trustee shall retain the tax upon the whole
amount; but if it be not in money, he shall make application to the county court
to make an apportionment if the case require it, of the sum to be paid into his
hands by such legatees, and for such further orders relative thereto as the case
may require. '

Lien on Proceeds of Sale.

Where a sale of real estate was made by the probate court to
settle an estate it was claimed that the sales should not be confirmed
as the state had a lien on the real estate for the inheritance tax.
The court holds, however, that as the proceeds arising from the sale
either are now in court or will be paid into court and will in any
event be subject to the order of the court, the objection is
without merit. The lien of the state is against the property of the
decedent and will first be satisfied out of' any personal estate left
by him, and if this sum is not sufficient then the real estate may be
subjected to the payment of this claim of the state, and the trial
court can make such order with the entire estate under its control
as is necessary to satisfy any claim of the state against the estate
for taxes, inheritance or otherwise. Mandel v. Fidelity Trust Co.
(Ky- 1908), 32 Ky. L. Rep. 1104, 107 S. W. 775.

500 STATUTES ANNOTATED. [Ky. St.

Power of Sale.

S. 7. All executors, administrators and trustees shall have full power to sell
so much of the property of the decedent as will enable them to pay said tax, in
the same manner as they may be enabled by law to do for the payment of debts
of the estate, and the amount of said tax shall be paid as hereinafter directed.

Payment. — Receipts.

S. 8. Every sum of money retained by an executor, administrator or trustee or
paid into his hands, for any tax on property, shall be paid by him, within thirty
days thereafter, to the sheriff or collector of the county in which the said tax is
due and payable and the said sheriff or collector shall give and every executor,
administrator or trustee shall take, duplicate receipts for such payment, one of
which receipts said executor, administrator or trustee shall immediately send to
the auditor of public accounts, whose duty it shall be to charge the said sheriff
or collector so receiving the tax with the amount thereof, and said auditor shall
seal said receipt with the seal of his office and countersign the same, and return
it to the executor, administrator or trustee, whereupon it shall be a proper voucher
in the settlement of his accounts; and an executor, administrator or trustee
shall not be entitled to credits in his accounts, nor be discharged from liability
for such tax, nor shall said estate be distributed unless he shall produce a receipt
so sealed and countersigned by the auditor, or a copy thereof, certified by him.

Refunding to Pay Debts.

S. 9. Whenever any debts shall be proven against the estate of a decedent after
the payment of legacies or distribution of property, from which the said tax
has^Deen deducted or upon which it has been paid, and a refund is made by the
legatee, devisee, heir or next of kin, a proportion of the tax so deducted or paid
shall be repaid to him by the executor, administrator or trustee, if the said tax
has not been paid to the sheriff or collector or to the auditor or by the auditor if
it has been so paid.

Payment on Transfer.

S. 10. Whenever any foreign executor or administrator shall assign or transfer
any stocks or loans in this state standing in the name of a decedent, or held in
trust for a decedent, which shall be liable to the said tax, such tax shall be paid
to the sheriff or collector of the proper county on the transfer thereof; otherwise
the corporation permitting such transfer shall become liable to pay such tax.
Appraisal.

S. 11. When the value of any inheritance, devise, bequest or other interest
subject to the payment of said tax is uncertain, the county court in which the
said tax settlement proceedings are pending, on the application of any interested
party, or upon his own motion, shall appoint some competent person as appraiser,
as often as and whenever occasion may require, whose duty it shall be forthwith
to give such notice by mail to all persons known to have or claim an interest in
such property, and to such persons as the court may by order direct, of the time
and place at which he will appraise such property, and at such time and place
to appraise the same and make a report thereof, in writing, to said court, together
with such other facts in relation thereto as said court may by order require to be

1910, c. 36.] KENTUCKY. 501

filed with the clerk of said court; and from this report the said court shall, by
order, forthwith assess and fix the fair cash value, as hereinbefore provided, of all
inheritances, devises, bequests, or other interests and the tax to which the same
is liable, and shall immediately cause notice hereof to be given, by mail, to all
parties known to be interested therein ; and the value of every future or contingent
or limited estate, income or interest shall, for the purpose of this chapter, be
determined by the rule, method and standards of mortality prescribed by the mor-
tality tables authorized by Kentucky statutes for ascertaining the value of life
estates, annuities and remainder interests save that the rate of interest to be as-
sessed in computing the present value of all future interest and contingencies
shall be five per centum per annum; and the insurance commissioner shall, on
the application of said court, de ermine the value of such future or contingent
or limited estate, income or interest, upon the facts contained in such report,
and certify the same to the court, and his certificate shall be conclusive evi-
dence that the method of computation adopted therein is correct. The said
appraiser shall be paid by the personal representative of the decedent, out of
any funds that may be or may come into his hands on account of said tax, on
the certificate of the court, at the rate of three dollars per day for every day
actually and necessarily employed in said appraisement, together with his
actual and necessary traveling expenses.

This section should be read together with the general law as to
filing of an appraisal and the court therefore finds that the appraisal
required under the inheritance tax law with the names of the
distributees or devisees should be filed within ninety days after
qualification of the executor, and if the statement is not filed within
this time the county court may upon its own motion or upon motion
of any party interested in the estate take such proceeding as may
be necessary to compel a statement to be filed, and after it has been
filed to require if necessary that it shall be made sufficiently full
and specific to furnish such information as will enable the county
court to ascertain with reasonable certainty the character and
value of the estate and the beneficiaries thereof, and this independent
of the power conferred on the court by section 4281^. Under this
section the court may upon its own motion or that of any interested
party have an appraisement of the estate made at any time after
the expiration of ninety days from the date of the death of the
testator, or even before this time if it should appear necessary to
secure the payment of the tax. Commonwealth v. Gaulbert, 134 Ky.
157, 119 S.W. 779.

Misdemeanor of Appraiser.

S. 12. Any appraiser appointed by virtue of this chapter who shall take any
fee or reward from any executor, administrator, trustee, legatee, next of kin or
heir of decedent, or from any other person liable to pay said tax, or any portion

502 STATUTES ANNOTATED. [Ky. St.

thereof, shall be guilty of a misdemeanor, and upon conviction thereof shall be
fined not less than two hundred dollars nor more than five hundred dollars, or
imprisoned in the county jail sixty days, or both so fined and imprisoned, and in
addition thereto the court shall dismiss him from such service.

Jurisdiction of County Court.

S. 13. The county court in the county in which is situated the real property
of a decedent who was not a resident of the state, or in the county of which the
decedent was a resident at the time of his death, shall have jurisdiction to hear
and determine all questions in relation to the tax arising under the provisions
of this chapter and the court first acquiring jurisdiction hereunder shall retain
the same, to the exclusion of every other.

Sections 13, 14 and 15 confer jurisdiction on the county court to
determine questions arising in relation to the tax, but this jurisdic-
tion is not exclusive when the jurisdiction of the court of equity is
invoked to distribute an estate, and the interest of each or any
number of the heirs at law is subject to the inheritance or other tax.
The court at the instance of the official representative of the
commonwealth charged with the duty of collecting such tax may
require its payment out of the share or shares of those chargeable
with the tax before distributing the estate or funds among them,
and thereby save both the tax collector and the heirs the trouble
and expense of a separate and independent proceeding in the county
court to compel the payment of the tax. The circuit court therefore,
in requiring the payment of the tax before distribution, did not
exceed its jurisdiction. Barret v. Commonwealth, 130 Ky. 109, 114
S. W. 750.

Summons.

S. 14. If it shall appear to the judge of the county court that any tax accruing
under the provisions of this chapter has not been paid according to law, the cleric
of said court shall issue a summons, summoning the persons known to own any
interest in or part of the property liable to the tax to appear before the court
on a day certain and show cause why said tax should not be paid. The service
of said summons, and the time, manner and proof thereof, and the hearing and
determination thereon, and the enforcement of the judgment or decree, shall
conform to the provisions of the Kentucky statutes and the Civil Code of Practice
applicable to and pursued in the levy, ascertainment and collection of taxes.

The jurisdiction of the county court is not exclusive but the tax
may be collected on distribution in equity. Barret v. Commonwealth^
130 Ky. 109, 114 S. W. 750.

1910. c. 36.] KENTUCKY. 503

Proceedings.

S. 15. Whenever the sheriff or collector of any county shall have reason to
believe that any tax is due and unpaid under the provisions of this chapter, after
the failure or refusal of the persons interested in the property liable to said tax
to pay the same, he shall notify the county attorney of the proper county, in
writing, of such failure to pay such tax, and the county attorney so notified, if
he have probable cause to believe a tax is due and unpaid, shall prosecute the
proceedings in the county court, as provided in section 14 of this chapter, for the
enforcement and collection of such tax.

The jurisdiction of the county court is not exclusive. See ante,
p. 502.

The fact -that a revenue agent was joined with the county attorney
in a proceeding to collect an inheritance tax did not render the
petition bad on demurrer, although a motion to strike the name of
the revenue agent from the petition would have been proper. Com-
monwealth V. Gaulbert, 134 Ky. 157, 119 S. W. 779.

S. 16. The county clerk of each county shall, every six months, make a
statement, in writing, to the sheriff or collector of the property from which, or
the party from whom he has reason to believe a tax, under the provisions of this
chapter, is due and unpaid.

S. 17. The county clerk of each county shall keep a book to be furnished by
the auditor, in which he shall enter the values of inheritances, devises, bequests
and other interests subject to the payment of such tax, and the tax assessed
thereon, and the amounts of any receipts for payments thereon filed with him,
which book shall be kept by him as public record.

S. 18. The sheriff or collector of each county shall collect and pay to the
aud'tor all taxes that may be due and payable under this chapter, who shall give
him the receipt therefor; of which collections and payment he shall make a report,
under oath, to the auditor of public accounts at the same time and m the same
manner as provided by law that he shall report and pay the state's revenue,
stating for what estate paid, and in such form and containing such particulars
as the auditor may prescribe; and for all such taxes collected by him and not paid
to the auditor by the first day of March of each year he shall pay interest at the
rate of ten per centum per annum.

S. 19. All acts and parts of acts in conflict with this act are hereby repealed
except the act of 1904, approved March 24, 1904, which is chapter 104 of session
acts 1904, fixing a tax of fifty cents on each bafrel of blended or rectified whiskey,
which act is not hereby repealed, but left in force as it now is. If any section in
this bill shall be held to be unconstitutional, that fact shall not affect any other
section of the act, it being the intention of the general assembly in enacting this
bill to enact each section separately, and if any proviso or exception contamed in
any section of this bill shall be declared unconstitutional, that fact shall not affect
the remaining portion of said section; it being the intention of the legislature to
enact each section of said bill and each proviso and exception thereto separately.

504 STATUTES ANNOTATED. [La. Sf

LOUISIANA,

In General.

Four states, California, Louisiana, Iowa and Washington, have
at some time discriminated severely against non-resident aliens.
Such tax has been repealed in California and Washington, the
attempt to revive it in Louisiana has been found invalid, and it
still stands only in Iowa.

Louisiana was the second state to tax inheritances. This was
in the form of a tax of 10 per cent imposed on estates passing to
non-resident aliens, which was enacted in 1828, repealed in 1830
and re-enacted in 1842. This remained in force until 1877 when it
was repealed and an attempt to revive it in 1894 was declared
invalid by the court.

The constitution of 1898 authorizes a direct inheritance tax and
provides that the "tax shall not be enforced when the property
donated or inherited shall have borne its just proportion of taxes
prior to the time of such donation or inheritance." It is a common
argument in defence of an inheritance tax that it reaches much
property that has escaped taxation during the owner's lifetime,
without considering that it equally reaches property that has not
escaped. Louisiana by exempting property that has borne its
proper burden is the only state in the country that is honest in this
respect.

The present law was adopted in 1904 and modified in 1906. The
exemption applies to the individual shares, not to the estate as a
whole.

We are informed that Louisiana is taxing stock of a Louisiana
corporation owned by a non-resident. The statute provides that
no bank having money or securities shall turn them over, and no
corporation, the stock or registered bonds of which are owned by
the deceased, shall deliver or transfer the same to any heir until
the tax is paid. Louisiana is not included, however, in the Con-
necticut list of states that are taxing stock or bonds owned by
non-residents. This tax has been producing from $100,000 to
$200,000 a year.

1828, c. 95.]

LOUISIANA.

505

List of Statutes,

1828. Statutes of Louisiana, No. 95, ss. 1 to 2.

1830.

March 15, s. 1.

1842.

c. 154, p. 434.

1855.

c. 315, p. 398.

1877.

c. 47, p. 60.

1877.

' " c. 86 (extra session).

1877.

c. 86, p. 125 (extra session).

1888.

c. 109, p. 173.

1894.

c. 130.

1904.

c. 45, p. 102.

1906.

c. 145, p. 249.

1906.

c. 109, p. 173.

1856. Revised Statutes of Louisiana, p. 220, s. 113.

1856.

p. 9, s. 13.

1856.

p. 541, s. 7.

1870.

p. 715, ss. 3683 to 36

1870.

p. 288, s. 1470.

1870.

p. 648, s. 3345.

Revised Civil Code 1870, arts. 1221 to 1223.

1876. Revised Statutes of Louisiana, p. 853 (1876 Voorhies), s. 3345.

1898. Constitution of Louisiana, arts. 235 to 236.

1904. Constitution and Revised Laws of Louisiana (Wolff), Vol. 2, arts. 235
to 236, p. 1974.

1897. Revised Laws of Louisiana (Wolff), ss. 13, 1113, 1470, 3683.

1900. Merrick's Revised Civil Code of Louisiana, Vol. 1, c. 9, arts. 1221, 1222
and 1223.

THE ALIEN TAX.
History of Alien Tax.

La. St. 1828, c. 95, was repealed in 1830 and re-enacted in 1842.
La. St. 1842 was revised and reproduced by La. St. 1855. In 1870
the civil code was revised and the provisions in the act of 1842
were incorporated therein as articles 1221, 1222, 1223. They con-
tinued without alteration until 1877 when these articles were
expressly repealed and so remained until 1894 when the legislature
revived them and re-enacted them in terms and without change in
phraseology. The act of 1894 was, however, subsequently declared
invalid, in Succession of Rixner, 48 La. Ann. 552, 19 S. 597, 32 L.
R. A. 177.

The Alien Tax Statute of 1828 and its Repeal in 1830.

La. St. 1828, c. 95. Approved March 25, 1828.

S. 1. Be it enacted by the Senate and House of Representatives of the State
of Louisiana, in General Assembly convened, that any person who is not a citizen

506 STATUTES ANNOTATED. [La. St.

of the United States, or is not domiciliated in any part of the said states, shall be
subject to pay to this state ten per cent on all sums which may be due to him
as an heir, legatee or donee by any succession which may be opened in this state:
And that, therefore, all administrators of the said succession and their securities,
under whatever title they may administer the same, shall be bound under this
responsibility, to retain in their hands ten per cent on all the sums which may
accrue to any person of the above description, as an heir, legatee or donee, in
the successions by them administered, and to pay over the same, to wit: to the
state treasurer, with respect to the successions which may be opened in the parish
of Orleans and to the judge of the court of probates of the parish where the
succession may be opened, with respect to the other parishes of the state, and
when the said legacy, inheritance or donation shall be or consist of specific prop-
erty, the same shall be taken at the appraised value, as made in the inventory
of the succession from which the same shall come.

[La. St. 1828, c. 95, s. 2, provides for the payment of the inheritance tax by
the parish judges to the state treasurer.]

This statute is constitutional and if it be in diminution of the
right of aliens to transmit their property by will or descent, that
right established by law is susceptible of being curtailed by later
laws. Arnaud v. Arnaud, 3 La. 336.

La. St. 1830, p. 76, approved March 15, 1830, repeals the statute
of March 25, 1828, entitled An Act relative to the revenue of the
state, etc., and amends section 2 of the statute of 1828 as to the
duties of judges in regard to the payment of tax.

The tax was held properly charged upon the estate of one who
died while the act of 1830 was in force. Whatever may be the
effect of the repeal of a law in criminal matters it leaves all civil
rights acquired under the law unaffected. A tax cannot be
assimilated to a forfeiture which presupposes an offence. Arnatid
V. Arnaud, 3 La. 336.

The tax under the statute of 1828 is due on the estate of a de-
cedent who died before the repeal of the tax in 1830, as the rights
acquired by the state to the tax are not divested by the repealing
act. Quessart v. Canonge, 3 La. 560.

The Alien Tax Statute of 1842.

La. St. 1842, c. 154, s. 4, p. 434. Approved March 26, 1842.

Be it further enacted, etc., that each and every person, not being domiciliated
in this state, and not being a citizen of any state or territory in the union, who
shall be entitled, whether as heir, 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 actually receive from said succession, or so much
thereof as is situated in this state, after deducting debts due by said successions.
When the said inheritance, donation or legacy consists of specific property, and

1842, c. 154.] LOUISIANA. 507

the same has not been sold, the appraisement thereof in the inventory shall be
considered as the value thereof. Every executor, curator, tutor or administrator
having the charge or administration of succession property belonging, in whole
or in part, to a person residing out of this state, and not being a citizen of any other
state or territory, shall be bound to retain in his hands the amount of the tax
imposed by this act, and to pay over the same to the state treasurer, if the succes-
sion be opened in the parish of Orleans or Jefferson, or to the sheriff if the succes-
sion be opened in any other parish, in default whereof every such executor, curator,
tutor or administrator, and his securities, shall be liable for the amount thereof.
It shall be the special duty of the judges of the courts of probate to see that
the tax imposed by virtue of this section be collected and paid over, and each of
said judges shall be bound to furnish to the treasurer, once a year, a statement or
list of the successions opened in his parish whereof persons who are neither resi-
dents of this state or citizens of any other state or territory in the union are heirs,
legatees or donees, in whole or in part, and of the amount accruing to such persons;
and any judge failing to furnish such statement shall be subject to a fine not
exceeding five hundred dollars for each and every such omission; and that he be
responsible to the state for the amount due; and that the sheriffs of the different
parishes throughout the state, except those of the parishes of Orleans and Jefferson,
shall pay over the taxes thus received from successions in the same manner, and
be subject to the same penalties as in the payment of other taxes; and that the
taxes thus received be taken in view in the execution of the sheriff's bond.

Not Retroactive.

This statute does not apply to successions opened before its enact-
ment. Succession ofDeyraud, 9 Rob. (La.) 357, relying on Succession
of Oyon, 6 Rob. (La.) 504. The court remarks that the legis-
lature might impose a tax on all sums to be paid over to the
aliens without reference to the opening of the succession from which
they may be Entitled to receive such sums, but unless that intention
is clearly and unequivocally expressed we are bound to suppose that
according to the ordinary rules of legislation they intended to
provide for the future and not to affect in any way the rights
previously acquired. Succession of Oyon, 6 Rob. (La.) 504.
Validity.

"Now the law in question is nothing more than an exercise of the power which
every state and sovereignty possesses, of regulating the manner and terms upon
which property real or personal within its dominion may be transmitted by last
will and testament, or by inheritance; and df prescribing who shall and who
shall not be capable of taking it. Every state or nation may unquestionably
refuse to allow an alien to take either real or personal property, situated within
its limits, either as heir or legatee, and may, if it thinks proper, direct that
property so descending or bequeathed shall belong to the state. In many of the
states of this union at this day, real property devised to an alien is liable to escheat.
And if a state may deny ihe privilege altogether, it follows that, when it grants it,
it may annex to the grant any conditions which it supposes to be required by its

508 STATUTES ANNOTATED. [La. St.

interests or policy. This has been done by Louisiana. The right to take is given
to the alien, subject to a deduction of ten per cent for the use of the state.

"In some of the states, laws have been passed at different times, imposing a tax
similar to the one now in question, upon its own citizens as well as foreigners; and
the constitutionality of these laws has never been questioned. And if a state may
impose t upon its own citizens, it will hardly be contended that aliens are entitled
to exemption; and that their property in our own country is not liable to the
same burdens that may lawfully be imposed upon that of our own citizens.

"We can see no objection to such a tax, whether imposed on citizens and aliens
alike, or upon the latter exclusively. It certainly has no concern with commerce,
or with mports or exports. It has been suggested, indeed in the argument, that
as the legatee resided abroad, it would be necessary to transmit to her the pro-
ceeds of the portion of the estate to which she was entitled, and that the law was
therefore a tax on exports. But if that argument was sound, no property would
be liable to be taxed in a state, when the owner intended to convert it into money
and send it abroad." Per Taney, C. J., in Mager v. Grima, 8 How. 490.

The court holds that the Louisiana inheritance tax on non-
residents and aliens is not obnoxious to the constitution of 1845.
To be uniform, taxation need not be universal. Certain objects
may be made its subject and others may be exempted from its
operation, certain occupations may be taxed and others not; so
some occupations may be taxed for a greater amount and others
for a less, but as between the subjects of taxation in the same class,
there must be an equality. The object subjected to taxation in
the present case is a succession within the state falling to alien heirs
who are non-residents. By the terms of the act, the tax is equal and
uniform, the rate of the tax and the description of property subject
to it being the same throughout the state. State v. Poydras, 9 La.
Ann. 165, 167.

The Louisiana inheritance law on non-residents has been upheld
since 1845 in the following cases: State v. Martin, 2 La. Ann. 667;
Succession of George, 4 La. Ann. 223 ; Succession of Pehan, 5 La.
Ann. 304.

To whom Applicable.

It was contended that the act of 1842 must be construed according
to its own terms, and that the discrepancy between its language
excepting those whp are not citizens of any state in the union and
the La. St. 1850 which excepts only those who are not citizens
of any other state or territory means that heirs who are citizens of
the United States and heirs who are domiciled in Louisiana are
exempt from taxes. The court, however, by reference to the French
version of the statute and the original exemplification finds that
the word "other" has been inadvertently omitted in the English

1842, c. 154.] LOUISIANA. 509

text and from this view of the statute the court concludes that the
tax attaches not only to property falling to alien heirs who are
non-residents but also to property falling to citizens of Louisiana
residing abroad. The only exceptions to non-resident heirs are
citizens of any other state or territory of the United States than
the state of Louisiana. This exemption was probably intended to
satisfy the second section of the fourth article of the constitution
of the United States. The object of the law was not only to increase
the revenues of the state but to discourage absenteeism. State v.
Poydras, 9 La. Ann. 165.

Effect of Federal Treaties.

This act was abrogated by a treaty between the United States
and France dated February 23, 1853, as to French citizens taking
under successions in Louisiana. Succession ofDufour, 10 La. Ann. 391.

The treaty of 1853 between England and France stipulated that
it should remain in force for the space of ten years from the day of
the exchange of the ratifications. The court holds that therefore
it did not go into effect until the ratifications were exchanged,
which occurred August 11, 1853, and therefore the succession of a
testator who died July 22, 1853, was not affected by it. Succession
of Schaffer, 13 La. Ann. 113.

The validity of an inheritance tax levied under the laws of
Louisiana upon the estate of one who died in 1848 is not affected
by a treaty between the United States and France ratified in 1853,
providing. that Frenchmen shall in no case be subject to taxes on
transfers or inheritances different from those paid by the citizens of
the United States. The court holds that the tax vested in the state
at the death of testator and that the property vested in the peti-
tioner at that time as heir, and that therefore the treaty had no
effect upon it. Prevost v. GreneauXy 19 How. 1, affirming Succession
of Prevost, 12 La. Ann. 577.

Where the heirs of the decedent are subjects of Bavaria the
court holds that the treaty between the United States and Bavaria
of 1845 (U. S. Sts. at Large, Vol. 9, p. 26), prevents the subjects of
Bavaria from being liable to an inheritance tax. Succession of
Crusius, 19 La. Ann. 369.

The court follows the Dufour case, 10 La. Ann. 391, and Succession
of Prevost, 12 La. Ann. 577, and holds that the French treaty of
1853 prevents the imposition of the Louisiana alien tax. State v.
Circe, Man. Unreported Cases (La.) 412.

510 STATUTES ANNOTATED. [La. St.

A treaty between the Unif^d States and the King of Wurtemberg,
dated April 10, 1844, provided that citizens of each country should
have a right to take as heirs, paying such duties only as the inhabi-
tants of the country where the property lies. The court holds that
the Louisiana statute does not make any discrimination between
citizens of the state and aliens in the same circumstances as a
citizen of Louisiana domiciled abroad is subject to the tax. Further-
more, 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 contemplation of the treaty.
So the tax should be collected on the estate of a citizen of Louisiana
leaving property to a citizen of Wurtemberg. Frederickson v. State,
23 How. (U. S.) 445.

The Statute of 1850.

La. St. 1850, No. 194, p. 146, imposes the duty on executors or
administrators having charge of succession property belonging in
whole or in part to a person residing out of this state and not being
a citizen of any other state to retain in his hands the amount of the
tax imposed by law and pay over the same to the state treasurer,
in default whereof every such executor shall be liable for the amount
of the tax.

The Statute of 1855.

La. St. 1855, c. 315, s. 7, p. 399. Approved March 15, 1855.

Be it further enacted, etc., that each and every person not being domiciliated
in this state and not being a citizen of any state or territory in the union, who shall
be entitled, whether as heir, legatee or donee, to the whole or any part of the suc-
cession 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 said succession;
when the inheritance, donation or legacy consists of specific property and the
same has not been sold, the appraisement thereof in the inventory shall be con-
sidered as the value thereof. Every executor, curator, tutor or administrator
having the charge or administration of succession property belonging in whole
or in part to a person residing out of this state, and being a citizen of any other
state or territory, shall be bound to retain in his hands the amount of the tax
imposed, and to pay over the same to the state treasurer, or to the officer appointed
by him; in default whereof every such executor, curator, tutor or administrator,
and his securities shall be liable for the amount thereof.

This tax is not a debt of the succession, it is simply a debt of the
heir who happens to be domiciled in a foreign country, and therefore

1855, c. 315.] LOUISIANA. 511

a suit to recover this tax should be brought directly against the
heirs who under the statute owe it to the state, and the court does
not decide the effect of the French treaty on this statute. Succession
of Pargoud, 13 La. Ann. 367.

Repeal of the Alien Tax Act.

La. St. 1877, c. 47, approved March 10, 1877, amended Louisiana
Revised Statutes 1870, section 313, to read as follows: —

"Whenever any person, permanently residing without the state, shall die,
being the owner of any bank stock, railroad stock, insurance or other stock, in
any bank or incorporated companies of this state, or in any national banking
association, located in this state, except the property banks, no state tax pre-
scribed in cases of succession shall be applicable to such stock."

La. St. 1877, c. 86 (extra session), p. 125, approved April 20, 1877,
repealed Louisiana Revised Civil Code, articles 1221, 1222 and 1223,
and the Louisiana Revised Statutes of 1870, sections 2683, 2684,
"provided that the repeal of said articles of the civil code and
sections of the Revised Statutes shall not affect the right of the
state to collect said tax in successions already opened."

La. St. 1888, c. 109, p. 173, approved July 12, 1888, amended La.
St. 1877, c. 47, of the regular session by omitting any reference to
succession taxes.

The Invalid Alien Statute of 1894.

La. St. 1894, c. 130, approved July 11, 1894, amends and re-enacts
Louisiana Civil Code, articles 1221, 1222, 1223, imposing a tax
on foreign heirs, legatees and donees. The articles as re-enacted
are as follows : —

A. 1221. Each and every person, not being domiciliated in this state, and not
being a citizen of any state or territory in the union, who shall be entitled, whether
as heir, 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 for the benefit of the Charity Hospital in New Orleans of ten per cent on
all sums 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 said succession; when the inheritance, donation or legacy consists
of specific property and the same has not been sold, the appraisement thereof
in the inventory shall be considered the value thereof.

A. 1222. Every executor, curator, tutor or administrator having the charge or
administration of succession property belonging in whole or in part to a person
residing out of the state, and not being a citizen of any other state or territory,
shall be bound to retain in his hands the amount of the tax imposed, and to pay

512 STATUTES ANNOTATED. [La. St.

over the same to the treasurer of said hospital; in default whereof every such exec-
utor, curator, tutor or administrator and his securities shall be liable for the
amount thereof.

A. 1223. It shall be the special duty of clerks of courts to see that the tax im-
posed by the preceding section be collected and paid over; and each of such
clerks shall be bound to furnish the auditor and the treasurer of said hospital once
in a year, a statement or list of the successions opened in his parish, whereof
persons who are neither residents of this state nor citizens of any other state, or
territory in the United States, are heirs, legatees or donees, in whole or in part,
and of the amount accruing to such persons, and any clerk failing to furnish such
statement or to comply with the provisions of the laws relative to vacant succes-
sions shall be responsible to the state for the amount due.

Invalid as Revenue Legislation Introduced in the Senate.

The act of 1894 was attacked as being in conflict with article 35
of the constitution which requires that all bills for raising a revenue
and appropriating money shall originate in the house of representa-
tives. The statute did originate in the senate and it was denied that
the act was one raising revenues or appropriating money. It
was claimed that the statute is a legal limitation upon the right
of inheritance ; that it simply fixes as a necessary condition for the
existence of a capacity to receive by succession the payment of a
certain sum. The court holds that the statute does not make the
payhient of the tax a condition precedent to a right of inheritance
but that the law permits a foreigner to inherit and having so
inherited charges him with the payment of the tax, and that as
such the legislation is revenue legislation. The beneficiary of the
fund to be raised from foreign heirs and legatees is the charity
hospital, a public institution of the state. The statute was held
unconstitutional. Succession of Sala (1898), 50 La. Ann. 1009,
24 S. 674. Succession of Givanovich, 50 La. Ann. 625, 24 S. 679.

Federal Treaties.

Where the testator, a citizen of Italy, died in Louisiana and left
an heir in Italy, the court holds that he was exempt from this tax
under the treaty between the United States and Italy of 1871;
that the situation of the litigants is identical with that of the liti-
gants in the Dufour case of the earlier statute, the heir having in-
voked the benefit "of the most favored nation" in the Italian
treaty with the United States. Succession of Rixner, 48 La. Ann.
552, 19 S. 597, 32 L. R. A. 177.

The court remarks that the Louisiana statute of 1894, act No. 130,
follows the language of the repealed articles of the Revised Civil

1894, c. 130.] LOUISIANA. 513

Code very closely, as said in the Succession of Rixner, 48 La. Ann.
558, 19 S. 597. It must have the same interpretation as was placed
on the law in force from 1842 to 1877.

The treaty between France and the United States of August 12,
1853, provides in article 7: *'In all the states of the union whose
existing laws permit it, so long and to the same extent as the said
laws shall remain in force. Frenchmen shall have the right of possess-
ing personal and real property by the same title and in the same
manner as the citizens of the United States. They shall be free to
dispose of it as they please, either gratuitously or for value received,
by donation, testament or otherwise, just as those citizens them-
selves; and in no case shall they be subjected to taxes on transfer,
inheritance or any others different from those paid by the latter or
to taxes which shall not be equally imposed."

The charity hospital of the city of New Orleans claimed to be
entitled to 10 per cent on all sums and property to which the heirs
and legatees not domiciled in the state of Louisiana would be en-
titled under the statute of 1894, act No. 130.

The court denies this claim and says that the statute of 1894 left
the right of Frenchmen to inherit as absolute and untrammeled
as it was before the passage of the statute. What the statute
attempted to do was not to make the right of inheritance contingent
upon the payment of the tax, but to make the payment of the tax
follow and result from the vesting of the title to the property.

The court, says that the legislature may have the right to pro-
hibit Frenchmen from possessing and owning personal and real
property as may citizens of the United States; but if it has such
right it has not as yet exercised it, but has permitted them to stand
in that respect on the same plane as citizens of Louisiana. Occu-
pying that status the treaty provisions declare that in no case
shall they be subjected to tax on transfer, inheritance or any other
condition from those paid by the citizens of Louisiana or to tax
which shall not be equally imposed. Succession of Rabasse, 49 La.
Ann. 1405, 22 So. 767, 772.

The treaty of 1795 between the United States and Spain provides
that the citizens and subjects of each party shall have power to
dispose of their "personal goods" within the jurisdiction of the
other, and their representatives being subjects of the other party
shall succeed to their said personal goods and dispose of the same
at their will, paying such dues only as the inhabitants of the country
wherein the goods are shall be subject to pay in like cases.

514 STATUTES ANNOTATED. [La. Const.

The court finds that the words "personal goods" include movable
property only and not real estate or immovable property. The
word "inhabitants" was intended to have as broad a signification
as would be needed to insure to the citizens of each country full
protection which it was intended to secure. The general assembly
did not have in view the imposition of a succession tax upon the
citizens of Louisiana living away from the state. The treaty would
have no effect if the Louisiana statute was extended to Spanish
heirs or legatees living in their own country.

The act of 1894 was not, however, aimed at any portion of the
people of Louisiana and therefore Spanish heirs and legatees have
the same rights that they do to exemption. Succession of Sala,
50 La. Ann. 1009, 24 S. 674.

11.

THE GENERAL SUCCESSION TAX.
Constitutional Limitations.
Louisiana Constitution 1845, a. 127.

Taxation shall be equal and uniform throughout the state. After the year 1848
all property, on which taxes may be levied, in this state, shall be taxed in pro-
portion to its value, to be ascertained as directed by law. No one species of prop-
erty shall be taxed higher than another species of property of equal value, on which
taxes shall be levied; the legislature shall have the power to levy an income tax,
and to tax all persons pursuing any occupation, trade or profession.

Louisiana Constitution 1898. Adopted May 12, 1898.

A. 235. The legislature shall have power to levy, solely for the support of
the public schools, a tax upon all inheritances, legacies and donations; provided,
no direct inheritance or donation to an ascendant or descendant, below ten
thousand dollars in amount or value, shall be so taxed; provided, further, that
no such tax shall exceed three per cent for direct inheritances and donations
to ascendants or descendants, and ten per cent for collateral inheritances, and
donations to collaterals or strangers; provided, bequests to educational, religious
or charitable institutions shall be exempt from this tax.

A. 236. The tax provided for in the preceding article shall not be enforced
when the property donated or inherited shall have borne its just proportion of
taxes prior to the time .of such donation or inheritance.

Not Applicable to Taxes Levied before the Constitution went
into Effect.

The court holds that this section and the provisions of the
Louisiana statutes carrying these articles of the constitution into

1898, a. 235.] LOUISIANA. 515

effect do not extend or reach back to conditions anterior to the
constitution itself; that where taxes due in 1878 and 1883 on cer-
tain lands had not been paid the collector urged that it made no
difference how far back in the past the failure to pay taxes may have
occurred nor who the owners of the lot may have been at that time ;
but the court holds that taxes due before the passage of the con-
stitution do not affect the question of inheritance tax. Succession
of Westfeldt, 122 La. Ann. 836, 48 S. 281.

Nature of Succession Tax.

The court follows the ruling in Succession of Sala, 50 La. Ann.
1009, 24 S.' 674, and holds that a succession tax is a bill for the
purpose of raising revenue and must, within the Louisiana consti-
tution, originate in the house of representatives. Succession of
Givanovich, 50 La. Ann. 625, 24 S. 679.

The exemption in La. Const. 1898 from the operation of the
inheritance tax, of property which had borne its just share of tax-
ation, arose from a misapprehension of the inheritance tax which
is not a tax proper but a bonus or premium exacted by the sovereign
on the transmission of an estate, the amount being measured by
the value of the property. In its very nature it is a privilege or
franchise tax and is not affected by the nature and character of the
property transmitted. Succession of Kohn, 115 La. Ann. 71, 38 S.

Non-Taxable Property not Exempt.

As an inheritance tax is not one on property but upon its
transmission by will or by descent, it does not matter whether
the property of an estate is taxable or not, or has or has not been
taxed.

If the law-maker had intended to include property exempt from
taxation he would have said so. Non-taxable bonds cannot be said
to have borne their just proportion of taxation as they are exempt
from such a burden. The law-maker evidently referred to property
subject to assessment and taxation on which taxes had been paid
prior to the time of the devolution of the inheritance. Exemption
from taxation is strictly construed and cannot be read into a statute
by inference or implication; therefore state and municipal bonds
exempt from taxation are subject to the inheritance tax. The court
relies on Plummer v. Coler, 178 U. S. 115, 20 S. Ct. 829, 44 L. Ed.
998. Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

516 STATUTES ANNOTATED. [La. St.

THE GENERAL SUCCESSION STATUTE OF 1904.
La. St. 1904, c. 45, p. 102.

"An Act to carry into effect Articles 235 and 236 of the Constitution
of 1898 relative to inheritance taxes."

Purpose.

This act was passed to carry into effect articles 235 and 236 of
the Louisiana constitution of 1898, relative to inheritance taxes.
Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

Title Sufficient.

The court holds that the title sufficiently suggests the object
of the act and is therefore not void under La. Const., article 31.
Succession of Levy, 115 La. 377, 39 S. 37, affirmed Cahen v. Brewster,
203 U. S. 552, 27 S. Ct. 174, 51 L. Ed. 310.

S. 1. Be it enacted by the General Assembly of the State of Louisiana: That
there is now and shall hereafter be levied, solely for the support of the public
schools, a tax upon all inheritances, legacies and donations, provided no direct
inheritance, or donation, to an ascendant or descendant, below ten thousand
dollars in amount or value shall be so taxed; a special inheritance tax of three
per cent on direct inheritances and donations to ascendants or descendants and
ten per cent for collateral inheritances and donations to collaterals or strangers;
provided bequests to educational, religious or charitable institutions shall be
exempt from this tax and provided further that this tax shall not be enforced
when the property donated or inherited shall have borne its just proportion of
taxes prior to the time of such donation or inheritance; this tax to be collected
on all successions not finally closed and administered upon and on all successions
hereafter opened.

Retroactive.

La. St. 1904 became operative in New Orleans July 30, 1904,
and the court holds that it embraced all successions, those opened
and not settled as well as to be opened, and that it is not void as
retroactive on that ground. The court holds that the power to
tax is without limit in its force and in the extent of its search ; that
the legatees acquire no vested right in the property bequeathed
which could enable them to successfully defend their inheritance
against the demand of the state. It was property within the limits
of the state which the state could tax for the purposes mentioned
until it passed out of the succession of the testator.

The court notes that it does not appear just to tax all successions

1904, c. 45.] LOUISIANA. 517

opened since the statute went into effect and not yet closed and not
tax those that have been opened and closed in that time. The court
replies that it would be utterly impracticable to tax successions that
have been closed for the reason that there is no succession remaining.
The tax is not a tax upon the property itself but upon its trans-
mission. It is a tax upon the right to dispose of property and as
long as a succession, the ideal or juridical person, remains in
the hands of the executors, the legislative power may classify
it and subject it to a tax. Succession of Levy, 115 La. 378, 39
S. 37, affirmed Cahen v. Brewster, 203 U. S. 552, 27 S. Ct. 174,
51 L. Ed. 310.

The court says that there is nothing in the cases of United States
v. Perkins, 163 U. S. 625, Magoun v. Illinois Trust &• Savings Bank,
170 U. S. 283; KnowUon v. Moore, 178 U. S. 41, which restrains
the power of the state as to the time of the imposition of the tax.
*Tt may select the moment of death, or it may exercise its power
during any of the time it holds the property from the legatee."

Where the testator died in May, 1904, before the statute went
into effect the statute properly was made to impose the tax upon
the estate.

La. St. 1904, c. 45, provided that the inheritance tax might be
collected "on all successions not finally closed and administered
upon." It was argued that the closing of the succession cannot
affect the question as to when the rights of the heirs vested and
cannot be the cause for differentiation among the heirs and such a
classification is purely arbitrary. Besides, such a classification
rests on the theory that the tax is one of property, when in fact it
is one on the right of inheritance. But the court holds that the
property bequeathed was subject to the jurisdiction of the court
until it had passed out of the succession of the testator, and it was
not improper classification to make the tax depend upon a fact
without which it would have been invalid. "In other words, those
who are subject to be taxed cannot complain that thev are denied
the equal protection of the laws because those who cannot legally
be taxed are not taxed." Cahen'v. Brewster, 203 U. S. 543, 552,
27 S. Ct. 174, 51 L. Ed. 310, affirming 115 La. 378, 39 S. 37.

Where the testator died in 1903 and his property was in large part
distributed before the passage of La. St. 1904 the tax is not operative
as to such property, as the statutes should not be construed as
retroactive when impairing vested rights. Succession of Stauffer,
119 La. Ann. 66, 43 S. 928.

518 STATUTES ANNOTATED. [La. St.

Value Based on Share of Each Heir.

It was admitted that the liability for tax is determined by the
amount falling to each of the heirs and not by the aggregate amount
falling to all of them. Succession of Abadie, 118 La. Ann. 708, 43 S.
306.

Usufruct Not Taxable.

Under Louisiana statutes the surviving spouse takes the usufruct
of a community property under the marriage contract and not
merely by inheritance on the death of the decedent, and therefore
the right of usufruct in such case is not subject to the inheritance
tax law of 1904. Succession of Marsal, 118 La. Ann. 212, 42 S. 778.

What Property Taxable. — Debts Excepted.

Under La. St. 1904 the legatees should pay the inheritance tax
upon the amount of all property, upon its securities, monies,
jewelry, bills, etc., belonging to the successions as shown by the
inventory and account except the value of the real estate, and the
amount of religious and charitable bequests. There should also be
excepted from payment of the tax the debts of the succession.
Succession of Levy, 115 La. 378, 39 S. 37, affirmed Cahen \. Brewster,
203 U. S. 552, 27 S. Ct. 174, 51 L. Ed. 310.

United States bonds are not free from tax as such. Succession
of Levy, 115 La. 377, 39 S. 37, affirmed Cahen v. Brewster, 203 U. S.
552, 27 S. Ct. 174, 51 L. Ed. 310, following the case of Plummer v.
Coler, 178 U. S. 115, 20 S. Ct. 829, 44 L. Ed. 998.

**This Tax Shall Not be Enforced When the Property . . .
Shall Have Borne its Just Proportion of Taxes.'*

This just provision seems to be contained in no other inheritance
tax in this country. The court holds that "the values which are
liable to the inheritance tax are to be arrived at by deducting from
the total value of the estate the aggregate amount of the debts and
special legacy and then subtracting from the remainder the value
of the property shown to have previously borne its just proportion
of tax, this second remainder to be divided in parts representing
respectively the taxable inheritances" of the descendants. Succes-
sion of Abadie, 118 La. Ann. 708, 43 S. 306.

It was claimed that shares of stock were exempt under this pro-
vision where an assessment against the corporations had been made
on all of their property. The court holds, however, that the taxation

1904, c. 45.] LOUISIANA. 519

of corporate capital stock, franchises and property is not a taxation
of the shares held by individual stockholders; and therefore these
taxes are not exempt from the operation of the inheritance tax law
of 1904. Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

It was argued that the tax should not be collected on bonds be-
longing to the estate because in 1905 the decedent sold certain real
estate on which the taxes had been paid and with the proceeds of
the sale during the same year purchased bonds which she owned
at the time of her death in January, 1906. It was not contended that
any taxes have ever been paid on these bonds but it was argued that
as the decedent had paid all taxes assessed against her real estate
and with the p^-oceeds of the sale purchased bonds the latter must
be construed in the light of property which has borne its just
proportion of taxes. The court holds that there would be weight
in this contention if the constitution had exempted persons who
have paid all the taxes assessed against them, but as the law excepts
property inherited it cannot construe the article so as to substitute
persons for property. The question of the exemption of property
from the tax can only arise after the opening of the succession by
the death of the decedent, and the right ol the heirs and of the fisc
must be determined by the state of facts then existing. That other
property formerly owned by the decedent may have borne its just
proportion of taxes is a matter entirely foreign to the inquiry. Suc-
cession of Pritchard, 118 La. Ann. 883, 43 S. 537.

The contract of an insurance agent with his company provided
that in case of his death his representative should be entitled to
certain commissions on renewals. It was claimed under La. St.
1906, c. 109, p. 173, providing that the tax shall not be imposed
on the property inherited until it shall have borne its just proportion
of taxes prior to the time of such inheritance, that as the premiums
had been taxed therefore the inheritance tax should not be laid.
The court holds, however, that the premiums .do not form the sub-
ject-matter of the inheritance, but are due to and are paid to and
belong to the company, and the heirs inherit simply an incorporeal
right, whose only relation to the premiums is that its amount is
determined by a computation based on their net amount, and the
contract does not invest the heirs ,withi the ownership of the premi-
ums or any part thereof, but only with the right to require of the
insurance company payment of an amount of money measured by
the net amount of the premiums, and the right thus inherited has
never been assessed ^and has never borne taxes. Succession of Fell,
119 La. Ann. 1037, 44 S. 879.

520 STATUTES ANNOTATED. [La. St.

La. St. 1904, c. 45, p. 102, s. 2, requires the judge to get proof
of the exemption from the tax before granting a discharge to the
executor or other officer in charge of the succession.

La. St. 1904, c. 45, ss. 3, 4 and 5, cover the collection and payment
of the tax and the disposition of the funds.

Fees for Collection.

Section 4 provides that it shall be the duty of the district attorney
to take proceedings to enforce the act, and this section is held a
complete bar to the claim of the tax collector for an attorney's fee
of ten per cent for the services of the attorney by whom he is
represented in the suit. Succession of Levy, 115 La. 378, 39 S. 37,
affirmed Cahen v. Brewster, 203 U. S. 552, 27 S. Ct. 174, 51 L. Ed. 310.

La. St. 1904, c. 45, p. 102, does not provide for the payment of
interest or penalties in enforcement of the inheritance tax. It is
a charge on all the property in the hands of the administrator or
executor and is secured by his official bond. The administrator or
executor cannot be discharged nor the heirs be put in possession
until this tax is paid to the tax collector. No duty as to the collec-
tion of such tax is imposed on that official beyond receiving it from
the succession representative. Section 4 of the statute provides
tha^t it shall be the duty of the district attorney to take proceedings
to enforce the act. The act contemplates that the district attorney
should do this work without other emolument than his official
salary. The provisions of the act exclude the idea of attorney's fees
as a penalty, and substitute the district attorney for the official
attorney of the tax collector, who, as in words already stated, has
no duty to perform except to receive the tax. Therefore the attorney
for the tax collector is not entitled to 10 per cent of the tax as a fee.
Succession of Kohn, 115 La. Ann. 71, 38 S. 898.

La. St. 1906, c. 145, p. 249, approved July 10, 1906, was a special
appropriation for compensation to an individual for his services
in the collection of inheritance taxes.

The Present Act a Substitute and Not a Repeal of the
Statute of 1904.

This act does notrefer to the St. 1904 and contains no repealing
clause, but it purports to cover the whole subject legislated upon
and may therefore be regarded as a substitute for the act of 1904.
Succession of Frigalo, 123 La. Ann. 71, 48 S. 652. It contains no
repealing clause and there is no repugnancy between its provisions
and those of the act of 1904 except as to the rate of the inheritance

1906, c. 109.] LOUISIANA. 521

tax which was reduced from 3 to 2 per cent on direct inheritances
and from 10 to 5 per cent on all other inheritances. The act of 1906
was not intended to repeal the act of 1904 as to successions already
closed or in which final accounts had not been rendered. There is
nothing in the act of 1906 which tends to the conclusion that the
law-maker intended to remit inheritance taxes due the state on
successions closed or on which final accounts had not been rendered.
Such a construction would operate in unjust discrimination against
heirs and legatees who had paid their taxes under the act of 1904
and would furnish good grounds for the restitution of all the taxes
collected under the provisions of that statute. Where a succession
was closed 'in February, 1906, and a sum of money deposited to
cover the inheritance tax the fact that the tax was not paid at that
time does not change the law which is applicable to the succession.
The tax was due in February, 1906, and it should have been paid
before the heirs were put in possession. The state acquired a vested
right in the fund to the extent of the tax due and the deposit operated
as a payment of the lawful claims of the state and therefore the
succession is bound to pay under the La. St. 1904 and not under
La. St. 1906. The court relies on Arnaud v. Arnaud, 3 La. 336;
Succession of Pritchard, 118 La. Ann. 883, 43 S. 537.

THE PRESENT ACT.

La. St. 1906, c. 109. Approved July 7, 1906.

An Act to carry into effect articles 235 and 246 of the consti-
tution, and to levy taxes solely for the support of the public schools on all
inheritances, legacies and other donations mortis causa, to provide exemptions
therefrom, to prescribe the manner of collecting the same, to fix the fees of
attorneys and commissions of tax collectors, and to repeal all conflicting laws.

Transfers Taxable. — Rate.

S. 1. Be it enacted by the General Assembly of the State of Louisiana, That
there is now and shall hereafter be levied, solely for the support of the public
schools, on all inheritances, legacies and other donations mortis causa to or in
favor of the direct descendants or ascendants of the decedent, a tax of two per
centum, and on all such inheritances or dispositions to or in favor of the collateral
relatives of the deceased or strangers, a tax of five per centum on the amount or
the actual cash value thereof at the time of the death of the decedent.

Debts Deducted.

The inheritance tax is not levied on propisrty left by the decedent
but on the Value actually received by the heir or legatee and there-
fore under the La. St. 1906, c. 109, where the deceased bequeathed

522 STATUTES ANNOTATED. [La. St.

to her husband all her property, which consisted entirely of her
share of the community property, that the debts of the succession
should be deducted in fixing the amount of the tax on inheritances.
Succession of May, 120 La. 692, 45 S. 551.

Adopted Children.

The act of 1906 laid taxes on four classes of persons, ascendants,
descendants, collaterals and strangers. Adopted children are not
related by blood, so that they are neither ascendants nor collaterals;
on the other hand, as they are legal heirs of the estate they are not
strangers. It follows, therefore, that they must be persons who by
law are given the status of descendants if subject to tax at all.
Succession ofFrigalo, 123 La. Ann. 71, 48 S. 652.

Uncertain Contract Rights.

Where a tax was levied under La. St. 1906, c. 109, p. 173, on the
right under an insurance contract to certain commissions on re-
newal premiums, the claim was made that the inheritance tax
could not be exacted because the value of the inheritance was too
uncertain, as the policies on renewal might be suffered to lapse and
hence that the premiums might never be collected. The court holds
that the certainty or uncertainty of policies being renewed is a
matter pertaining to the insurance business and that the actuary
of the company can no doubt make an estimate sufficiently close
for all practical purposes of the actual or present value of this claim
against the company. Succession of Fell, 119 La. Ann. 1037, 44 S.
879.

Foreign Real Estate.

The court holds that this act in both sections 1 and 2 must be
given the same meaning and that that means Louisiana property
and therefore does not include in its terms real estate of the suc-
cession in another state. The inheritance law is unquestionably
dealing with the Louisiana succession law and the word "inheritance"
in the first and second sections of the act must be held to have the
same meaning. and scope. The heirs and legatees do not receive by
inheritance under the laws of Louisiana real estate in another state.
The legislature must be supposed to have measured the burden
of the tax by the extent of the right and privilege which it has
itself conferred and not upon that which has been conferred by the

1906, c. 109.] LOUISIANA. 523

laws of another state. Succession of Westfeldt, 122 La. Ann. 836,
48 S. 281.

See notes to the act of 1904, ante, p. 518.

Exemptions.

S. 2. Be it further enacted, etc.. The said tax shall not be imposed in the
following cases: —

(a) On any inheritance, legacy or other donation mortis causa to or in favor
of any ascendant or descendant of the decedent below ten thousand dollars in
amount or value.

(6) On any legacy or other donation mortis causa to or in favor of an educa-
tional, religious or charitable institution.

(c) When the property inherited, bequeathed or donated shall have borne
its just proportion of taxes prior to the time of such donation, bequest or in-
heritance.

[See notes to the act. of 1904, ante, p. 518.]

An inheritance to descendants of less value than $10,000

is exempt from taxation under this statute. Succession of Frigalo,
123La. Ann. 71,48 S. 652.

Sale does not Affect Exemption.

Where payment of the debts absorbed the whole amount of the
proceeds of the personal property and the balance due had to be
made from the proceeds of the realty to satisfy the legacies the
court holds that there can be no question. The legacy from funds
that are not proceeds of property exempt owes a tax. But where
there is an exemption the fact of a sale or other disposition made
necessary to the discharge of the legacy does not forfeit the exemp-
tion. The character of the property was fixed at the date of the
death of the testator and the inheritance tax is due on a legacy not
paid from the proceeds of exempt property, but it is not due on a
legacy necessarily paid from the proceeds of exempt property under
111. St. 1906, c. 109, p. 173. Succession of Becker, 118 La. Ann. 1056,
43 S. 701.

Property which has borne its just proportion of taxes.

When a partnership has been assessed and has paid the usual taxes,
this is sufficient to render the property acquired from the partner-
ship free from tax although the partner's interest has not been
assessed and taxed. The court distinguishes the case of a partner
from that of a stockholder in a corporation. Succession of Stauffer,
119La.Ann. 66,43 8.928.

524 STATUTES ANNOTATED. [La. St.

Duties and Liabilities of Beneficiaries.

S. 3. Be it further enacted, etc., It shall be unlawful for any heir, legatee or
other beneficiary of a donation mortis causa to take or be in possession of any part
of the things or property composing the inheritance, legacy or other donation
mortis causa, or to dispose of the same or any part thereof, until he shall have
obtained the authority of the court to that effect, as hereafter provided; and
in case he shall so take or be in possession or shall so dispose of such things or
property, or any part thereof, he shall no longer have the right of renouncing
such inheritance or donation mortis causa, and shall remain personally liable for
the tax thereon; but he may, without waiting for authority, do such acts as may
seem necessary to preserve the property from waste, damage or loss.

Assessment of Tax.

S. 4. Be it further enacted, etc.. The executor of the will of a person deceased,
or the administrator of his succession, shall, after payment of his debts, proceed
against the tax collector and all the heirs and legatees of the deceased summarily
by rule before the court which has jurisdiction of the succession, to fix the amount
of tax due by each heir or legatee, and on trial thereof the court shall render judg-
ment for the same against each heir or legatee, with interest and costs, as here-
inafter provided.

Power of Sale.

S. 5. Be it further enacted, etc.. The executor or administrator shall thereupon
pay to the tax collector the amount of tax, with interests and costs, so fixed, on
each inheritance, legacy or donation, out of the funds comprised therein, if
sufficient. Should there not be sufficient funds, the court shall, on the application
of the heir or legatee, grant an order for the sale of the property composing such
inheritance, legacy or donation, or so much thereof as may be necessary, for the
purpose of paying such judgment. If the same be not paid by the heir or legatee,
or an order of sale be not granted, as above provided, within thirty days after the
date of the judgment, the court shall, on the application of the executor or ad-
ministrator, grant an order of sale for the said purpose, as above provided, and
the executor or administrator shall pay the said judgment out of the proceeds of the
sale. Such sale shall be made in such manner, and on such terms and condi-
tions as the court shall prescribe, and the expense thereof shall be borne by
the heir or legatee.

Duties of Executor.

S. 6. Be it further enacted, etc.. No executor or administrator shall deliver
any inheritance or legacy until the tax thereon shall be fixed and paid, as herein
provided; otherwise he, together with his surety, shall be personally liable for
said tax, with interest and cost. And no executor or administrator shall be
discharged until it is shown that all taxes under this act, due by the heirs and
legatees, have been paid, or until it is judicially determined by the process herein
provided that no tax is due.

Inventory.

S. 7. Be it further enacted, etc.. In all cases in which an administration is
not ordered by the court, the legal or instituted heir, or universal or residuary

1906, c. 109.] LOUISIANA. 525

legatee, shall within six months after the death of the decedent, or, should there
be a will, within the same time after the discovery of the same, present to the
court a detailed descriptive list, sworn to and subscribed by him, of all items
of property contained in and composing the estate of the decedent, and therein
shall state the actual cash value of each such item at the time of the death of
the decedent, and service thereof shall be made on the tax collector who shall have
the right to traverse the same. Should the deceased have made special or partic-
ular legacies or donations mortis causa, the legatee shall also be served, and ; after
summarily hearing the said parties the court shall fix the amount of tax due as
aforesaid by each such heir or legatee, and shall render judgment therefor, with
interest and cost, against each of them.

Payment of Tax on Special or Particular Gifts.

S. 8. Be it -further enacted, etc.. In the same manner as provided in section 5,
the heir or universal or residuary legatee shall thereupon pay or take measures
for the payment of the tax due on all special or particular legacies or donations.

Sale.

S. 9. Be it further enacted, etc., The heir or universal or residuary legatee
may likewise obtain an order for the sale of the property of his inheritance or
legacy, or part thereof, for the purpose of paying the tax thereon. But if such
tax be not paid, or such order of sale be not made within thirty days after the
date of the judgment fixing the amount of the tax, a similar order for the same
purpose shall be granted on the application of the tax collector, and thereunder
any property forming part of the inheritance or legacy may be sold, and the
proceeds thereof shall be applied to the payment of the tax with interest and
costs.

Legacy Not to be Delivered till Tax Paid.

S. 10, Be it further enacted, etc.. The heir or residuary or universal legatee
shall not deliver any legacy until the tax thereon shall have been fixed and paid;
otherwise he shall be personally liable for the said tax, with interest and costs.

Search for WiU.

S. 11. Be it further enacted, etc.. If during the six months next following the
death of any person leaving property, movable or immovable, within this state,
an administration of his succession be not applied for, or his legal or instituted
heir or universal or residuary legatee do not apply to the court to be placed in
possession thereof, as herein provided, the court shall ex parte and on the applica-
tion of the tax collector grant an order directing that a search be made for the
will of the deceased by a notary public, and in aid of the same may order that
all persons having in their possession or control any books, papers or documents
of the deceased, or any bank box, safe deposit vault or other receptacle likely or
designed to contain the same, shall open such receptacle and exhibit the contents
thereof, as well as all other books, papers and documents of the deceased, to the
said notary.

Probate of Will.

S. 12. Be it further enacted, etc.. Should the said notary find any document
appearing to be the will of the deceased, he shall take possession of the same

526 STATUTES ANNOTATED. [La. St.

and produce it in court; and on application of the tax collector, or of any party
in interest, the court shall proceed to the probate thereof, as now provided by
law. If an executor be therein appointed, the person named shall be notified,
and if he do not within ten days after notification accept the appointment, and if
within the ten days next following this delay no person entitled to be appointed
dative testamentary executor shall apply for the appointment, then the public
administrator in the parish of Orleans, and in the other parishes the tax collector,
shall be appointed dative testamentary executor of the said decedent and the
administration of his succession shall proceed as herein directed and according
to existing law.

Assessment of Tax where no Will Found.

S. 13. Be it further enacted, etc., If the notary can find no will, he shall report
the fact to the court; and thereupon the tax collector shall proceed against the
legal heir or heirs of the deceased summarily by rule to fix the amount of tax due
by him or them, and each of the heirs shall be ordered, within a delay to be fixed
by the court, which may be exte ided from time to time in the discretion of the
court, to make and file a detailed descriptive list, sworn to and subscribed by him,
of all the items of property contained in and composing the estate of the decedent,
stating therein the actual cash value of each such item at the time of the death
of the decedent, and the tax collector shall have a right to traverse the same.
On trial of the rule the court shall fix the amount of tax due by each of the heirs,
and shall render judgment for the same against each of them, and in such case,
as well as in the cases mentioned in section 12, shall include, in the costs payable
by the heir or legatee, a fee of not more than ten per cent on the amount of tax
due^by each heir or legatee in favor of the attorney for the tax collector, in the
same manner and under the same conditions as provided in sections 5 and 9
of this act, such heirs or legatees shall have the right to procure the sale of their
inheritances or legacies for the purpose ot paying the tax due thereon, with interest,
costs and attorney's fees; and if payment thereof be not made by the heir or
legatee, or if an order of sale, as above provided, be not granted, within thirty
days after the date of the judgment, the tax collector shall be entitled to a similar
order, and thereunder any property forming part of the inheritance or legacy
may be sold.

Parties.

S. 14. Be it further enacted, etc.. Should there be more than one legal or
instituted heir or universal or residuary legatee any one of them may institute
the proceedings provided by this act, and the others shall be made parties thereto,
and such heir shall be entitled to recover out of the mass of the succession one
reasonable attorney's fee, besides his costs.

Creditors' Rights Preserved.

S. 15. Be it further enacted, etc.. Nothing contained in this act shall affect the
rights of creditors. of persons deceased, or the rights of the creditors of the heirs
or legatees of such persons, as established by the general law.

Restrictions on Beneficiaries.

S. 16. Be it further enacted, etc.. Each inheritance or legacy is indivisible,
and must be accepted or renounced for the whole; and the heir or legatee shall

1906, c. 109.1 LOUISIANA. 527

not be entitled to be placed in possession of the same, and shall be without right
or capacity to alienate any part thereof, until the tax on the whole shall have been
fixed and paid, or until it shall have been judicially determined, in the manner
herein provided, that no part of the same is subject to the tax imposed by this
act.

Liabilities on Transfer.

S. 17. Be it further enacted, etc.. No bank, banker, trust compan5^ warehouse-
man, or other depositary and no person or corporation or partnership having on
deposit or in possession or control any moneys, credits, goods or other things or in-
terest rights of value for a person deceased, or in which he had any interest, and no
corporation the stock or registered bonds of which are owned by a person deceased
shall deliver or transfer such moneys, credits, stock, bonds or other things or
rights of value to any heir or legatee of such deceased person, unless the tax due
thereon under this act shall have been paid, or unless it be judicially determined
in the manner herein prescribed that no tax is due by such heir or legatee. Other-
wise the person or corporation so making delivery or transfer shall be liable for
the said tax. But the order of a court of competent jurisdiction, directing such
delivery or transfer, shall be full authority for the same.

Burden of Proving Exemption.

S. 18. Be it further enacted, etc., The burden of proving facts establishing
exemption from the tax imposed by this act is upon the person claiming exemp-
tion.

Jurisdiction of District Court.

S. 19. Be it further enacted, etc.. The district court of the last domicile of
the deceased, and in the parish of Orleans the civil district court, shall have
original jurisdiction to hear and determine all the proceedings provided by this
act. In the -case of a non-resident decedent, the district court, or civil district
court, of any parish in which he left property, movable or immovable, shall ex-
ercise such jurisdiction, and the court in which such proceedings shall be first
begun shall have exclusive original jurisdiction thereof.

Absentees.

S. 20. Be it further enacted, etc.. Non-residents and unknown heirs and
legatees, and those whose whereabouts are unknown, shall be represented by
curator ad hoc appointed by the court, and all notices, citations and demands
prescribed by this act shall be served on such officers. Though there be in any
case more than one unknown or absent heir or legatee, all may be represented by
the same curator.

Officers.

S. 21. Be It further enacted, etc., The tax collector spoken of and intended by
this act is the sheriff and ex officio tax collector of the parish in which was the last
residence of the decedent, or in which is situated property of a non-resident
decedent, and in the Parish of Orleans the clerk of the civil district court. They
shall receive a commission of two per cent on their collections of taxes under this
act.

528 STATUTES ANNOTATED. [La. St.

Attorneys to Collect Tax.

S. 22. Be it further enacted, etc., In and for the Parish of Orleans the governor
shall appoint, by and with the advice and consent of the senate, for a term of
four years, an attorney at law, whose duty it shall be to a vise, assist and repre-
sent the clerk of the civil district court in the enforcement of this act. For his
services, except as provided in sections 12 and 13, he shall receive a fee of four
per cent on all taxes collected hereunder, payable out of the same before trans-
mission to the treasury. In all other parishes of the state the said duties shall be
performed by the attorneys appointed under existing law to assist the tax col-
lectors in the collection of delinquent licenses, and the compensation of such
attorneys shall be as above provided.

[See notes to the Act of 1904, ante, p. 520.]

Use of Mortality Tables.

S. 23. Be it further enacted, etc., In fixing the value of any legacy or donation
mortis causa which consists in whole or in part of an annuity or usufruct or right
of use or habitation, the court shall consider the expectancy of life of the legatee
or donee according to the table known as the American experience table of
mortality, at six per cent per annum compound interest.

Interest.

S. 24. Be it further enacted, etc.. The taxes hereby levied shall bear interest
at the rate of two per cent per month, beginning six months after the death of
the decedent; saving to any heir, legatee or donee the right to stop the running
of interest against him by paying the amount of his tax with accrued interest,
or by tendering the same to the tax collector in the manner prescribed by the
general law; provided, however, that in cases in which the settlement of the
succession is not unduly delayed, or in which the right of any party to receive
an inheritance or legacy is contested, and in all cases in which the failure to pay
tax on any legacy or inheritance within the period aforesaid is not imputable to
the laches of the heir or legatee, the court may, in its discretion, remit such in-
terest.

Costs. — To what Estates the Act Applies.

S. 25. Be it further enacted, etc.. The costs of all proceedings under this act
shall be borne by the mass of the succession; provided, that in cases in which it
seems to him equitable to do so the judge shall have power to apportion the
costs among the several parties, or allow any party to retain his costs out of any
sum found to be due by him for tax hereunder. Provided, the provisions of this
act shall affect all successions not finally closed, or in which the final account has
not been filed.

"All Successions not Finally Closed."

Where the decedent died January 11, 1906, and the succession
was closed by a. judgment February 7, 1906, recognizing the heirs
and ordering them to be put into possession, and as this was done
before the La. St. 1906 went into effect, this succession was not
affected by that statute but was governed by the La. St. 1904.
Succession of Pritchard, 118 La. Ann. 883, 43 S. 537.

1906, c. 109.] LOUISIANA. 529

The testator died in 1903 and his succession was opened and a
large portion of the property distributed prior to the passage of
the statute of 1904 and the succession was not finally closed at the
date of the passage of the statute of 1906. The court, relying upon
the case of Cahen Y.Brewster, 203 U. S. 543, 27 S. Ct. 174, 51 L. Ed.
310, affirming Succession of Levy, 115 La. 378, 39 S. 37, holds that
it is competent for the legislature to impose a tax on inheritances
which are in gremio legis and which have not as a matter of fact
passed into the possession of the heirs or donees, and therefore the
La. St. 1906 may properly apply to this succession. Succession of
Stauffer, 119 La. Ann. 66, 43 S. 928.

530 STATUTES ANNOTATED. [Me. Const.

MAINE.

In General.

Maine began to tax collateral inheritances in 1893 and direct
inheritances under a progressive rate in 1909. The act of 1911 did not
alter the rates but added adopting parents to the most favored class.

Exemptions apply to each individual inheritance and not to the
estate as a whole. Probate courts have charge of inheritance tax
matters. In some of them the tax is imposed on the full amount
of the inheritance ; thus an inheritance of $40,000 to a child is taxed
$400, one per cent on the whole $40,000; but in other probate courts
the tax is collected on the excess over the exemption only, and in
such courts the tax would be only $300, one per cent on the excess
over $10,000. The same uncertainty prevails in the case of large
inheritances, as to whether they are taxable at the increased rate
only, on the excess over the minimum figure or on the entire in-
heritance. There has been as yet no authoritative decision.

Maine has taken an advanced position in trying to avoid double
taxation. Property of a resident situated outside the state, if taxed
by another state or country, is taxed in Maine only for the difference
if the Maine tax is the greater. Property of a non-resident within
the jurisdiction of Maine, if subject to a tax in his home state or
country, pays to Maine only so much as the Maine tax may be in
excess of the tax in the place of residence.

Maine is taxing stock of Maine corporations owned by non-
residents, except such as have less than $1,000 in property within
the state, but the usual provision that the corporation itself shall
be responsible for the tax if it transfers stock before the tax is paid
was not inserted until 1911.

It used to be the general practice in the probate courts to tax
Boston & Maine shares on their full value, though the company
is also incorporated in Massachusetts and New Hampshire, and
only a relatively small portion of its line is in Maine, but the act
of 1911 has upset this practice.

1875 a. 1-9.] MAINE. 531

Constitutional Limitations.
Maine Constitution 1875, a. 1, s. 1.

All men are born equally free and independent, and have certain natural,
inherent and inalienable rights, among which are those of enjoying and defending
life and liberty, acquiring, possessing and protecting property, and of pursuing
and obtaining safety and happiness.

A. 9, s. 7.

While the public expenses shall be assessed on polls and estates, a general
valuation shall be taken at least once in ten years.

A. 9, s. 8.

All taxes upon real and personal estate, assessed by authority of this state,
shall be apportioned and assessed equally according to the just value thereof.

List of Statutes.

1893.

Laws of Maine, c. 146.

1895.

" c. 96.

1901.

" c. 225. (See also c. 1 , s. 6, In re Construction of Statutes. )

1903.

" c. 156.

1905.

" c. 124.

1909.

" c. 186.

1909.

" c. 187

1911.

U <(

" c. 163.

1903.

Revised Statutes of Maine, c. 8, ss. 69 to 85.

1905.

port

Revision of the Public Laws, pp. 148, 977.

History of Succession Taxes.

"Succession duties or taxes have been in existence in other
countries for centuries, and have been regarded with favor, as a
convenient and comparatively non-burdensome means of revenue.
They were well known in Roman jurisprudence (Gibbon's Rome,
Vol. 1, p. 133), and were imposed upon all successions, except those
to the nearest relatives, and to the poor. The practice has long been
resorted to in European countries, and was introduced in England
in the last century, and was enlarged from time to time till 1853,
when it was extended to all successions to real property, chattels
real, and a vast variety of personal property and rights." Per
Strout, J., in State v. Hamlin, 86' Me. 495, 498, 30 A. 76, 41 Am.
St. Rep. 569,25 L. R. A. 632.

Right of Descent is Merely Statutory.

"The constitution guarantees to the citizen the right of acquiring,
possessing and protecting property. (Article 1, section 1, which
includes also the right of disposal.) But the guaranty ceases to

532 STATUTES ANNOTATED. [Me. St.

operate at the death of the possessor. There is no provision of our
constitution, or that of the United States, which secures the right
to any one to control or dispose of his property after his death, nor
the right to any one, whether kindred or not, to take it by inheri-
tance. Descent is a creature of statute, and not a natural right.
2 Blackstone's Com., pages 10, 11, 12, 13; Strode v. Com., supra.
At common law, prior to the statute of distribution in England,
22 and 23 Car. 11, descent of personal property could hardly be
recognized even after the statute requiring administration to be
granted; the administrator, after the payment of the debts and
funeral expenses of the deceased, was entitled to retain to himself
the residue of his effects, the court holding that there was no power
to compel a distribution. 2 Bl. Com. 515; Edwards v. Freeman,
2 P. Wms. 442." Per Strout, J., in State v. Hamlin, 86 Me. 495,
30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632.

THE ACT OF 1893.
Statute Adopted from New York.

This statute contains substantially the same provisions and nearly
the same exemptions as the N. Y. St. 1885, c. 483. State v. Hamlin,
86 Me. 495, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632.

Due Process of Law.

It was claimed that the act of 1893 was in violation of the four-
teenth amendment of the federal constitution which prohibited
any state from depriving any person of property without due
process of law, and the court holds that section 12, providing for
appraisal of the estate upon application of any person interested,
and section 13, giving the probate court power to hear and determine
all questions in relation to such tax that may arise subject to appeal
as in other cases, fully secure the rights of all parties interested and
satisfy the requirement of due process of law. State v. Hamlin,
86 Me. 495, 507, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632.

Me. St. 1893, c. 146. . Approved February 9, 1893.

1893, c. 146.] MAINE. 533

child, the lineal descendant of any adopted child, the wife or widow of a son, or
the husband of the daughter of a decedent, shall be liable to a tax of two and a
half per cent of its value, above the sum of five hundred dollars, for the use of
the state, and all administrators, executors and trustees, and any such grantee
under a conveyance made during the grantor's life shall be liable for all such taxes,
with lawful interest as hereinafter provided, until the same shall have been paid
as hereinafter directed.

Not a Property Tax. — Uniformity.

The court holds that the Maine inheritance law of 1893 is clearly
an excise tax and not a tax upon property and is therefore not
obnoxious to the constitutional provision above quoted. It is
uniform in its rates as to the entire class of collaterals and stran-
gers, which satisfies the constitutional requirement of uniformity.
State V. Hamlin, 86 Me. 495, 502, 30 A. 76, 41 Am. St. Rep. 569,
25 L. R. A. 632.

Classification by Relationship Valid.

"It is necessary to make a collateral inheritance tax uniform
as to the entire class of collaterals. It must not tax one and exempt
another in the same class. But it is not a violation of this principle
to require an excise from all collaterals and strangers and exempt
from the excise classes nearer in blood to the deceased. "The right
to dispose of estates by will is of very ancient origin, but is a creature
of municipal law, and not a natural right. Redfield Wills, c. 1, s. 1 ;
Mager v. Gr.ima, 8 How. 494. Before the statute of wills in England,
32, 34 and 35, Henry VIII, the right did not extend to real estate,
and was limited as to personal, if the testator left a widow or
children. If he had both, he could dispose of but one-third of his
personal estate by will; if but one, he could dispose of one-half.
This right has since been extended by statute to include real estate,
and all personal. The restriction has never existed in this country,
except as to widows, where right to dower and a share of the personal
estate is secured by statute in most of the states, and in Louisiana,
where the rules of the civil law prevail." Per Strout, J., in State
V. Hamlin, 86 Me. 495, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A.
632.

Valid as Applied to Non-Residents.

Me. St. 1893 applies equally to citizens of Maine and other states
and therefore is not in conflict with a provision of the fourteenth
amendment that "no state shall make or enforce any law which

534 STATUTES ANNOTATED. [Me. St.

shall abridge the privileges or immunities of the citizens of the
United States." State v. Hamlin, 86 Me. 495, 507, 30 A. 76, 41
Am. St. Rep. 569, 25 L. R. A. 632.

* 'Above the Sum of Five Hundred Dollars."

The court holds that this exemption of five hundred dollars is not
an exemption from the corpus of the estate but is a several exemp-
tion of that sum from each portion of the estate passing by will or
descent. The court relies on the provisions of the second section
providing for the deduction of five hundred dollars from taxable
interests on appraisal. State v. Hamlin, 86 Me; 495, 508, 30 A.
76, 41 Am. St. Rep. 569, 25 L. R. A. 632.

Me. St. 1893, c. 146, s. 2, covers the taxation of remainders. Section 3
provides that the excess above reasonable compensation bequeathed to executors,
or trustees, shall be liable to tax. Sections 4 to 16 cover the appraisal of the
property and the collection and payment of the tax.

Me. St. 1893, c. 146.

S. 17. In the foregoing sections relating to collateral inheritances the word
"person" shall be construed to include bodies corporate as well as natural persons;
the word "property" shall be construed to include both real and personal estate,
and any form of interest therein whatsoever, including annuities.

S. 18. This act shall not apply to any case now pending in the probate court ,
and shall take effect when approved.

Not Retrospective.

The court finds that this statute was never intended to have
a retroactive effect and therefore that where the testator died before
the statute went into effect and where his will was filed and probated
after the statute was passed no inheritance tax was due.

The court remarks that to construe the statute as applying to
estates where distribution had not been made when the statute
was passed, although the testator died before that time, would
result in great inequality, as the liability to taxation would in many
instances be determined by the fact whether proceedings for the
settlement of the estate- were commenced before or after February 9,
1893. It is unnecessary to impute to the legislature a purpose to
frame legislation which would thus have the practical effect to dis-
turb vested rights and create a test of liability thus depending upon
accident and chance. In re Collateral Inheritance Tax, 88 Me. 587,
34 A. 530.

1893, c. 146.] MAINE. 535

The Amendments of 1895.

Me. St. 1895, c. 96, approved March 14, 1895, amends Me. St.
1893, c. 146, s. l,byaddingtotheexempted classes "any educational,
charitable or benevolent institution in this state." Section 2 makes
the foregoing amendment to section 1 applicable to all such taxes
unpaid.

Section 3 made certain changes in the tax on remainders to
conform with section 1 as amended, and also changed the times of
payment by providing that the tax might be paid within one year
from the death of said testator or within such further time as the
judge of probate may allow.

Section 4 amended section 4 of the statute of 1893.

Section 5 amended section 5 of the statute of 1893; section 6
amended section 12 of the statute of 1893 by providing that the
property shall be appraised "after public notice or personal notice
to the state assessors and all persons interested in the succession to
said property."

Section 7 repealed section 14 of the statute of 1893; section 8
amended section 16 of the statute of 1893; section 9 provides for
personal liability of the executors for the tax.

Later Amendments.

Me. St. 1901, c. 225, approved March 20, 1901, amends Me. St.
1895, c. 96, by changing the rate of tax from two and one-half per
cent to four per cent.

Me. St. 1903, c. 156, approved March 26, 1903, adds religious
institution to the exempt classes.

S. 2. All such taxes heretofore assessed or to be assessed upon legacies or
bequests to religious institutions are hereby abated.

Me. St. 1905, c. 124, approved March 21, 1905, amends revised
statutes, chapter 8, by adding sections 86 and 87. Section 86
provides that the register of probate shall annually deliver to
the county attorneys a list of the estates appearing to be liable
to the collateral inheritance tax and that the county attorney shall
investigate and may cite parties into the probate court. Section 87
gives the county attorney authority to proceed to have an adminis-
trator appointed where no application for probate or administration
was made within six months after the death of the decedent.

Me. St. 1909, c. 186, approved April 1, 1909, amends Revised
Statutes, chapter 8, sections 69 and 70; and chapter 187 amends

536 SLATUTES ANNOTATED. [Me. Rev. St.

Revised Statutes, chapter 8, sections 86 and 87, as enacted by the
statute of 1905, chapter 124. Chapter 187 also amends Revised
Statutes, chapter 8, sections 72, 79, 82, 83, 85. Sections 88 and 89
are further added to the act.

Me. St. 1911, c. 163, approved March 30, 1911, amends Revised
Statutes, chapter 8, sections 69, 72 and 88, and adds seven new
sections, and is entitled : —

An Act to amend chapter eight of the Revised Statutes, as
amended by chapter one hundred and eighty-six of the public laws of nine-
teen hundred and nine, chapter one hundred and twenty-four of the* public
laws of nineteen hundred and five and chapter one hundred and eighty-
seven of the public laws of nineteen hundred and nine, in relation to collec-
tion of inheritance taxes.

THE PRESENT ACT.

Maine Revised Statutes, c. 8, s. 69. [As amended by St. 1911, c. 163.1
Taxable Transfers. — Rates. — Exemptions.

All property within the jurisdiction of this state, and any interest therein, whether
belonging to inhabitants of this state or not, and whether tangible or intangible,
which shall pass by will, by the interstate laws of this state, by allowance of a
judge of probate to a widow or child by deed, grant, sale or gift, except in cases
of a bona fide purchase for full consideration in money or money's worth, and ex-
cept^as herein otherwise provided made or intended to take effect in possession
or enjoyment after the death of the grantor, to any person in trust or otherwise
except to or for the use of any educational, charitable, religious or benevolent
institution in this state, the property of which is by law exempt from taxation,
shall be subject to an inheritance tax for the use of the state as hereinafter pro-
vided. Property which shall so pass to or for the use of (class A) the husband,
wife, lineal ancestor, lineal descendant, adopted child, the adopted parent, the
wife or widow of a son, or the husband of a daughter of a decedent, shall be
subject to a tax upon the value of each bequest, devise or distributive share, in
excess of the exemption hereinafter provided, of one per cent if such value does
not exceed fifty thousand dollars, one and one-half per cent if such value exceeds
fifty thousand dollars and does not exceed one hundred thousand dollars, and
two per cent if such value exceeds one hundred thousand dollars; the value ex-
empt from taxation to or for the use of a husband, wife, father, mother, child,
adopted child, or adopted parent shall in each case be ten thousand dollars, and
the value exempt from taxati )n to or for the use of any other member of (class A)
shall in each case be five hundred dollars. Property which shall so pass to or for
the use. of (class B) a brother, sister, uncle, aunt, nephew, niece or cousin of
decedent, shall be subject to a tax upon the value of each bequest, devise or
distributive share in excess of five hundred dollars, and the tax of this class
shall be four per cent of its value for the use of the state if such value does not
exceed fifty thousand dollars, four and one-half per cent if its value exceeds fifty
thousand dollars and does not exceed one hundred thousand dollars and five
per cent if its value exceeds one hundred thousand dollars. Property which shall

c. 8, ss. 70-72.] MAINE. 537

pass to or for the use of any others than members of class A, Class B and the
institutions excepted in the first sentence of this section, shall be subject to a tax
upon the value of each bequest, devise or distributive share in excess of five
hundred dollars, and the tax of this class shall be five per cent of its value for the
use of the state if such value does not exceed fifty thousand dollars, six per cent
if its value exceeds fifty thousand and does not exceed one hundred thousand
dollars and seven per cent if its value exceeds one hundred thousand dollars.
Administrators, executors and trustees, and any grantees under such conveyances
made during the grantor's life shall be liable for such taxes, with interest, until
the same have been paid.

[See notes to the Act of 1893, ante, p. 533 et seq^.\

Value of Prior Estate, how Determined and how Taxed.

S. 70. [As amended by St. 1909, c. 186, s. 2.] Whenever property shall descend
by devise, descent, bequest or grant to a person for life or for a term of years
and the remainder to another, except to or for the use of any educational, chari-
table, religious or benevolent institution in this state, the value of the prior estate
shall be determined by the actuaries' compound experience tables at four per
cent compound interest and a tax imposed at the rate prescribed in the preceding
section for the class to which the devisee, legatee or grantee of such estate belongs
and a tax shall be imposed at the same time upon the remaining value of such
property at the rate prescribed in said section for the class to which the devisee,
legatee or grantee of such remainder belongs, subject to the exemptions provided
in the preceding section.

Excess of Reasonable Compensation to Executors for Services when
Residuary Legatees, shall be Taxed.

S. 71. Whenever a decedent appoints one or more executors or trustees, and
in lieu of their allowance makes a bequest or devise of property to them which
would otherwise be liable to said tax, or appoints them his residuary legatees, and
said bequests, devises or residuary legacies exceed a reasonable compensation for
their services, such excess shall be liable to such tax, and the court of probate
having jurisdiction of their accounts shall determine the amount of such reasonable
compensation.

When Tax Payable. — Petition for Assessment. — Lien.

S. 72. [As amended by St. 1909, c. 187, s. 2; St. 1911, c. 163.] All taxes
imposed by section sixty-nine upon the estates of deceased residents of this state
shall be payable to the treasurer of state and all taxes imposed by said section
sixty-nine upon the estates of non-resident decedents to the attorney general
by the executors, administrators or trustees at the expiration of two years after
the granting of letters testamentary or of administration; but if legacies or
distributive shares are paid within two years, the tax thereon shall be payable
at the same time; and if the same are not so paid, interest at the rate of six per
cent a year shall be charged and collected from the time the same became payable ;
but no such tax upon estates of residents or inhabitants of this state shall be
accepted except upon presentation of a certificate from a probate court showing
the amount of such tax due. It shall be the duty ot the personal representative
of said deceased to petition the probate court having jurisdiction to assess such

538 STATUTES ANNOTATED. [Me. Rev. St.

taxes before the payment of any such legacies or distributive shares, and before
the expiration of two years after the granting of letters aforesaid. The register
of probate shall send by registered mail a copy of such petition to the attorney
general at least seven days before the hearing thereon unless the attorney general
in writing waives the same.

If no such petition is filed within the time limited, the attorney general may
file a similar petition, of which, unless notice is waived, at least fourteen days'
notice shall be given such personal representative or his agent. In either case
the attorney general may appear and be heard upon the assessment of such tax
and an appeal may be had from the decree of the judge of probate by either party.
Real estate of which the decedent died seized or possessed, subject to taxes as
aforesaid shall be charged with a lien for all such taxes and interest, which lien
may be discharged by the payment of all taxes due and to become due upon said
real estate or separate parcel thereof, or by an order or decree of the probate
court discharging said lien, said order or decree to be granted by the probate
court upon the deposit with said court of a sum of money or a bond, sufficient
to secure to the state the payment of any tax due or to become due on said real
estate. Orders or decrees discharging such lien may be recorded in the registry
of deeds in the county where said real estate is located.

Failure to Pay Tax Renders Administrator Liable. — An Action of Debt
may be Maintained for Tax.

S. 73. After failure to pay such tax, as provided in the preceding section, such
an administrator, executor or trustee is liable to the state on his administration
bond for such tax and interest, and an action shall lie thereon without the authority
of the judge of probate; or an action of debt may be maintained in the name of
the state against any such administrator, executor or trustee, or any such grantee,
for such tax and interest. But if such administrator, executor or trustee, after
being duly cited theretor, refuses or neglects to return his inventory or to settle
an account, by reason whereof the judge of probate cannot determine the amount
of such tax, such administrator, executor or trustee shall be liable to the state
on his administration bond for all damages occasioned thereby.

Property shall not be Delivered to Legatee until Tax is Paid.

S. 74. Any administrator, executor or trustee, having in charge or trust any
property subject to such tax, shall deduct the tax therefrom, or shall collect the
tax thereon, and interest chargeable under section seventy-two from the legatee
or person entitled to said property, and he shall not deliver any specific legacy
or property subject to said tax to any person until he has collected the tax thereon.

All Taxes Payable upon Real Estate shall Remain a Charge thereon
until Paid.

S. 75. Whenever any legacies subject to said tax shall be charged upon or
payable out of any real estate, the heir or devisee, before paying the same, shall
deduct said tax therefrom and pay it to the executor, administrator or trustee,
and the same shall remain a charge upon said real estate until it is paid; and
payment thereof shall be enforced by the executor, administrator or trustee, in
the same manner as the payment of the legacy itself could be enforced.

c. 8, ss. 76-81.1 MAINE. 539

When Legacy is in Money for a Limited Period, Executor sliall Retain
Tax on Wliole Amount, otlierwise Judge of Probate siiall Malce an
Apportionment.

S. 76. If any such legacy be given in money to any person for a limited period
such administrator, executor or trustee shall retain the tax on the whole amount;
but if it be not in money, he shall make an application to the judge of probate
having jurisdiction of his accounts to make an apportionment, if the case requires
it, of the sum to be paid into his hands by such legatee on account of said tax and
for such further order as the case may require.

Sale of Real Estate to Pay Tax.

S. 77. All administrators, executors and trustees shall have power to sell so
much of the estate of the deceased as will enable them to pay said tax in the same
manner as they may be empowered to do for the payment of his debts.

No Final Settlement of Accounts shall be Allowed until all Taxes
have been Paid.

S. 78. No final settlement of the account of any executor, administrator
or trustee shall be accepted or allowed by any judge of probate unless it shall show,
on oath or affirmation of the accountant, and the judge of said court shall find,
that all taxes, imposed by the provisions of section sixty-nine, upon any property
or interest therein belonging to the estate to be settled by said account, shall have
been paid, and the receipt of the treasurer of state for such tax shall be the proper
voucher for such payment.

Inventory or Copy thereof of any Estate Subject to Tax shall be Fur-
nished Attorney General.

S. 79. [As amended by 1909, c. 187, s. 3.] A copy of the inventory of every
estate, any part of which may be subject to a tax under the provisions of section
sixty-nine, or if the same can be conveniently separated, then a copy of such
part of such inventory with the appraisal thereof, shall be sent by mail by the
register or the judge of the court of probate in which such inventory is filed to
the attorney general within ten days after the same is filed. The fees for such
copy shall be paid by the executor, administrator or trustee, and allowed in his
account.

Whenever any Real Estate Passes to Another Person and Subject to Tax,
State Assessors shall be Informed.

S. 80. Whenever any of the real estate ot a decedent shall so pass to another
person as to become subject to said tax, the executor, administrator or trustee
of the decedent shall inform the board of state assessors thereof within six months
after he has assumed the duties of his trust, or if the fact is not known to him
within that time, then within one month after it does become so known to him.

Whenever any Property shall be Refunded by Legatee, Tax shall be Paid
Back.

S. 81. Whenever for any reason the devisee, legatee or heir who has paid anj'
such tax shall refund any portion of the property on which it was paid, or it shall
be judicially determined that the whole or any part of such tax ought not to have

540 STATUTES ANNOTATED. [Me. Rev. St.

been paid, said tax, or the due proportional part of said tax, shall be paid back to
him by the executor, administrator or trustee.

How Value of Property Shall be Fixed. — Fees for Appraisal, How Paid.

S. 82. [As amended by 1909, c. 187, s. 4.] The value of such property as may
be subject to said tax shall be its actual market value as found by the judge
of probate, after public notice or personal notice to the board of state assessors
and all persons interested in the succession to said property, or the board of state
assessors or any of said persons interested may apply to the judge of probate
having jurisdiction of the estate and on such application the judge shall appoint
three disinterested persons, who, being first sworn, shall view and appraise such
property at its actual market value for the purposes of said tax, and shall make
return thereof to said probate court, which return may be accepted by said court
in the same manner as the original inventory of such estate is accepted, and if so
accepted it shall be binding upon the person by whom such tax is to be paid, and
upon the state. And the fees of the appraisers shall be fixed by the judge of
probate and paid by the executor, administrator or trustee.

This section with the following section, satisfies the provision
of the federal constitution as to due process of law. State v. Hamlin,
86 Me. 495, 507, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632.

Court of Probate shall have Jurisdiction to Determine all Questions
Relating to Tax. — Notice and Hearing. — Appeals.

S. 83. [As amended by 1909, c. 187, s. 5.] The court of probate, having either
principal or ancillary jurisdiction of the settlement of the estate of the decedent,
shall have jurisdiction to hear and determine all questions in relation to said tax
that may arise affecting any devise, legacy or inheritance under this chapter,
subject to appeal as in other cases, and the attorney general shall represent the
interests of the state in any such proceedings. The judge of probate, having
jurisdiction as aforesaid, shall fix the time and place for hearing and determining
such questions and shall give public notice thereof and personal notice to the
executor, administrator or trustee. Appeals in behalf of the estate shall be taken
in the name of the executor, administrator or trustee and service upon the attorney
general shall be sufficient. When appeals are taken by the state, service shall be
made upon the executor, administrator or trustee.

This and the previous section together satisfy the provision of
the federal constitution as to due process of law. State v. Hamlin,
86 Me. 495, 507, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632.

Fees of Judges and Registers of Probate.

S. 84. The fees of judges or registers of probate for the duties required of
them by the fifteen preceding sections shall be, for each order, appointment,
decree, judgment, or approval of appraisal or report required hereunder, fifty
cents, and for copies of records, the fees that are now allowed by law for the
same. And the administrators, executors, trustees or other persons paying said

c. 8, ss. 85-86.] MAINE. 541

tax shall be entitled to deduct the amount of all such fees paid to the judge or
register of probate from the amount of said tax to be paid to the treasurer of state.

How Words shall be Construed.

S. 85. [As amended by 1909, c. 187, s. 6.] In the foregoing sections relating
to inheritances the word "person" shall be construed to include bodies corporate
as well as natural persons; the word "property" shall be construed to include
both real and personal estate, and any form of interest therein whatsoever
including annuities.

[Compare Revised Statutes, c. 1, s. 6.]

X. The word "land or lands," and the words "real estate," include lands and
all tenements and hereditaments connected therewith, and all rights thereto and
interest therein.]

Registers of Probate shall Annually Deliver to Attorney General List
of Estates Appearing to be Liable to Collateral Inheritance Tax. —
Proceedings Thereon.

S. 86. [As added by 1905, c. 124; amended by 1909, c. 187, s. 1.] The registers
of probate in the several counties shall deliver to the attorney general, on or before
the first day of June in each year, a list of all estates in which it appears from
the record that some part of said estate may be liable to an inheritance tax, and
in which a will has been offered for probate or administration granted for more
than one year prior to the time of filing such list, and in which no inheritance tax
has been assessed or paid.

Said list shall contain the name of the deceased, the date of the administration
granted, and the name and residence of the administrator or executor.

The attorney general shall promptly investigate all cases so reported, by noti-
fying the executor, administrator, trustee, heir or devisee, and in such other
manner as he may determine, and if it appears to him that in any such case an
inheritance tax is due the state and has not been paid to the state, he shall,
unless said tax is paid to the state, within thirty days after notice from him to the
executor, administrator, trustee, heir or devisee that the same is due, cite the
executor, administrator, trustee, heir or devisee, whose duty it is to- pay said tax,
before the proper probate court in such manner as is provided for the citation of
trust officers in probate proceedings and shall take all other action necessary to
secure the payment of said tax.

In such proceedings the attorney general shall recover costs to be fixed and
determined by the judge of probate in his discretion, which costs may be retained
by said attorney general for his own use and shall be additional to any salary
allowed to him by law.

Certain Actions in Behalf of the State may be Brought in any County.
Revised Statutes, c. 83, s. 15.

An action in behalf of the state to enforce the collection of state taxes
upon any corporation, or to recover of any person or corporation moneys due the
stats, public funds or property belonging to the state, or the value thereof, may
be brought in any county; provided, that on motion of the defendant, any justice
of the supreme judicial court, holding the term at which such action is returnable,

542 STATUTES ANNOTATED. [Me. Rev. St.

may, for sufficient reasons shown, remove the same to the docket of said court in
any other county for trial, and may upon such removal award costs to the de-
fendant for one term, to be paid by the treasurer of state on presentation of the
certificate of the amount thereof, from the clerk of courts of the county from
which said action is transferred.]

Proceedings when Estate Liable to Pay Inheritance Tax is not Before
Probate Court within Six Months.

S. 87. [As added by 1905, c. 124; amended by 1909, c. 187, s. 1.] If, upon the
decease of a person leaving an estate liable to pay an inheritance tax, a will dis-
posing of such estate is not offered for probate, or an application for administration
made within six months after such decease, the proper probate court upon
application by the attorney general, shall appoint an administrator for such estate,
and it shall be the duty of the attorney general, when such case is brought to his
attention to petition for administration on such estate and the judge in his dis-
cretion may appoint such attorney general or other suitable person as such
administrator, and said attorney general shall be entitled to costs as in other
probate proceedings.

Penalty for Neglect or Refusal to File Inventory of Estate.

S. 88. [As added by 1909, c. 187, s. 7 and amended by St. 1911, c. 163.] If any
executor, administrator or trustee neglects or refuses to file an inventory of the
estate under his charge within three months from the date of the warrant of
appraisal, unless such time be extended by the judge of probate, he shall be cited
to file such inventory by the judge of probate and if he neglects or refuses to
file such inventory within sixty days thereafter he shall be liable to a penalty
of not more than five hundred dollars which shall be recovered in an action of debt
by the attorney general for the use of the state and the register of probate shall
notify the attorney general of the failure of any executor, administrator or trustee
to file an inventory as above provided.

Property of a Deceased Resident of This State, Subject to Taxation in
Another State, Not Liable to Taxation in This State. — Property
of Non-Resident Decedent.

S. 89. [As added by 1909, c. 187, s. 7.] Property belonging to a deceased
resident of this state which shall be distributed by order of the probate court
subsequent to the passage of this act, and which is not therein at the time of his
death shall not be taxable under the provisions of this chapter if legally subject
in another state or country to a tax of like character and amount to that imposed
by section sixty-nine and if such tax be actually paid or guaranteed or secured in
accordance with the law of such other state or country; if legally subject in another
state or country to a tax of like character, but of less amount than that imposed
by section sixty-nine and such tax be actually paid, guaranteed or secured as
aforesaid, such property shall be taxable under the provisions of section sixty-nine
to the extent of the difference between the tax thus actually paid, guaranteed
or secured and the amount for which such property would otherwise be liable
under this chapter. Property of non-resident decedent which is within the
jurisdiction of the state at the time of his death, if subject to a tax by the law
of the state or country of his residence, of like character with that imposed by
this chapter, shall be subject only to such portion of the tax imposed hereunder as
may be in excess of such tax imposed by the laws of such state or country.

c. 8, ss. 90-93.] MAINE. 543

Reports by City and Town Clerks.

S. 90. [Added by the Statute of 1911.] Clerks of cities and towns shall report
to the attorney general the names of all persons dying within their respective
municipalities who in the judgment of said clerks leave estates the value whereof
exceeds five hundred dollars, together with the names of husband, wife and
next of kin so far as known to him; such report shall be mailed to the attorney
general within ten days of the time when the certificate of death is filed with
such clerk, and a fee of twenty-five cents shall be paid said clerk by the state there-
for. The attorney general shall prepare and furnish blanks for such returns-
Corporations Incorporated in Two or More States.

S. 91. [Added by the Statute of 1911.] When the personal estate passing
from any person, not an inhabitant or resident of this state, as provided in section
sixty-nine of chapter eight of the revised statutes, shall consist in whole or in part
of shares of any railroad, or street railway company or telegraph or telephone
company incorporated under the laws of this state and also of some other state or
country, so much only of each share as is proportional to the part of such com-
pany's lines lying within this state shall be considered as property of such person
within the jurisdiction of this state for the purposes of this chapter.

The courts of IVIassacliusetts and New Yorlc had already reached
this eminently just result without statutory aid. See ante, p. 170.

Tax on Stock, etc., Limited to Corporations Having $1,000 of Property in
Maine.

S. 92. [Added by the Statute of 1911.] When the personal estate passing
from any deceased person not an inhabitant or resident of this state, as provided
in section sixty-nine, shall consist of the stocks, bonds or other debt or certificate
of indebtedness of any corporation organized under the laws of Maine, no col-
lateral inheritance tax shall be assessed upon the same unless said corporation
shall at the time of such decease have tangible property within the state exceeding
one thousand dollars in value. The attorney general, upon satisfactory evidence
and payment of a fee of five dollars to the use of the state shall file a certificate
in the office of the secretary of state that any such corporation has not tangible
property within the state exceeding one thousand dollars in value. Such certifi-
cate may at any time after notice and upon satisfactory evidence, be revoked.
A copy of the certificate of revocation shall be sent to the clerk, and to any stock
registrar or transfer agent whose name is on file with said secretary. Until the
receipt of such certificate of revocation any such stock registrar or transfer agent
may lawfully transfer the stock of said corporation and perform all other duties
incident to his office.

This provision seems to be unique and is evidently intended as
an inducement to non-residents to incorporate in Maine.

Fiduciaries and Corporations Liable for Tax on Transfer of Stock of Non-
Residents.

S. 93. [Added by the Statute of 1911.] Subject to the provisions of section
ninety-two if a foreign executor, administrator or trustee assigns or transfers

544 STATUTES ANNOTATED. [Me. Rev. St.

any stock in any national bank located in this state or in any corporation organ-
ized under the laws of this state, owned by a deceased non-resident at the date of
his death and liable to a tax under the provisions of this chapter, the tax shall be
paid to the attorney general at the time of such assignment or transfer; and
if it is not paid when due, such executor, administrator or trustee shall be per-
sonally liable therefor until it is paid. Subject to the provisions of section ninety-
two a bank located in this state or a corporation organized under the laws of this
state which shall record a transfer of any share of its stock made by a foreign
executor, administrator or trustee, or issue a new certificate for a share of its
stock at the instance of a foreign executor, administrator or trustee before all
taxes imposed thereon by the provisions of this chapter have been paid, shall be
liable for such tax in an action of debt brought by the attorney general.

This closes an obvious loophole in the Maine law. Prior to the
passage of this statute corporations might transfer stock without
liability although it had been the practice of large corporations to
require the assent of the Maine tax officers before doing so.

S. 94. [Added by the Statute of 1911.] Subject to the provisions of section
ninety-two no person or corporation shall deliver or transfer any securities or
assets belonging to the estate of a non-resident decedent to anyone unless au-
thority to receive the same shall have been given by a probate court of this state,
and upon satisfactory evidence that all inheritance taxes provided for by this
chapter have been paid, guaranteed or secured as hereinbefore provided. Any
person or corporation that delivers or transfers any securities or assets in violation
of the provisions of this section shall be liable for such tax in an action of debt
brought by the attorney general.

Proceedings by the Attorney General.

S. 95. [Added by the Statute of 1911.] The attorney general shall promptly
commence proceedings for the recovery of any of said taxes within six months
after the same became payable; and shall commence the same when the judge
of a probate court certifies to him that the final account of an executor, adminis-
trator or trustee has been filed in such court, and that the settlement of the estate
is delayed because of the non-payment of said tax. The judge of the probate
court shall so certify upon the application of any heir, legatee or other person
interested therein, and may extend the time of payment of said tax whenever
the circumstances of the case require.

Not Retroactive.

S. 96. [Added by the Statute of 1911.] This act shall not apply to estates of
persons deceased prior to the date of taking effect of the same, nor to property
passing by deed, grant, sale or gift made prior to said date, but said estates
and property shall remain subject to the provisions of law in force prior to the
taking effect of this act."

[See notes to the Act of 1893, ante, p. 534.]

Payment to State Treasurer.

S. 97. [Added by the Statute of 1911.] All moneys received by the attorney
general as taxes collected under the provisions of this chapter shall be by him
forthwith paid to the state treasurer.

Md. St.]

MARYLAND.

545

MARYLAND.

In General.

Maryland adopted a collateral inheritance tax in 1845. The
present tax is on collateral inheritances only; the rate is uniformly
5 per cent with an exemption of $500, which applies to the estate as
a whole, not to individual shares. No tax is levied on an inheritance
to father, mother, husband, wife, child or lineal descendant. The
commissions of executors are also subject to tax.

It would seem that Maryland formerly attempted to tax shares
of Maryland corporations owned by non-residents, but they are
not now considered taxable. Securities of a non-resident deposited
in Maryland for safekeeping are taxable.

Constitutional Limitations.

Maryland Constitution 1864, Declaration of Rights. Ratified October 12
and 13, 1864.

A. 15. That the levying taxes by the poll is grievous and oppressive, and ought
to be prohibited; that paupers ought not to be assessed for the support of the
government; but every other person in the state, or persons holding property
therein, ought to contribute his proportion of public taxes for the support of gov-
ernment, according to his actual worth in real or personal property; yet fines,
duties or taxes may properly and justly be imposed or laid, with a political view,
for the good government and benefit of the community.

[This provision is embodied in the constitution of 1867.]

List of Statutes.

1844. Statutes of Maryland

, c. 184.

1844.

< u

c. 237.

1845-46. "

c. 71.

1845-46. "

c. 391.

1846-47. "

c. 344.

1847-48. "

c. 222.

1847-48. "

c. 230.

1849-50. "

♦ c. 447.

1860. Maryland

Code, Vol.

1, a. 81,

ss. 106 to 114, 124 to 148.

546 STATUTES ANNOTATED. [Md. St-

1862. Statutes of Maryland, c. 18.

1862. " " " c. 157.

1864. ■ " " " c. 200.

1864. " " " c. 372.

1865. " " " c. 127.

1868. c. 196.

1874. " " " c. 483.

1878. Revised Code of Maryland, p. 117, ss.l04 to 125, inclusive.

1880. " " " " c. 444.

1880. " " " " c. 455.

1888. Public General Laws of Maryland, Vol. 2, a. 81, ss. 97 to 125.

1890. Statutes of Maryland, c. 249.

1892. " " " c. 473.

1892. " " " c. 564.

1894. " " " c. 493.

1898. Supplement to Public General Laws (1890-1898), p. 536, ss. 115 a., 120

and 124.

1904. Statutes of Maryland, c. 222.

1904. Public General Laws of Maryland, Vol. 2, p. 1835.

1908. Statutes of Maryland, c. 695.

History of Legislation.

Collateral inheritances were first taxed for revenue to the state
by Md. St. 1844, c. 237. Banks v. State, 60 Md. 305.

The Maryland collateral inheritance tax was passed in 1844,
chapter 237, and its constitutionality was never questioned until
Tyson v. State, 28 Md. 577.

Tax on Commissions of Executors.

Md. St. 1844, passed February 22, 1845, c. 184, s. 1, provides
that commissions to executors and administrators shall be subject
to a tax of ten per cent. Sections 2, 3, 4, 5 and 6, provide for the
assessment and collection of this tax.

Retroactive.

Where the testator died March 27, 1845, the court holds that the
commissions of the trustees were subject to a tax of 10 per cent in
favor of the state, imposed by the act of 1844, chapter 184, which
went into effect June 2, 1845. Williams v. Mosher, 6 Gill (Md.) 454.

Md. St. 1845, c. 391, passed March 10, 1846, gives the orphans'
courts jurisdiction to fix and determine the commission which
shall be allowed executors; and provides further for inventories
and a determination of the tax on commissions allowed to executors
and administrators.

1847 to 1888.] MARYLAND. 547

Md. St. 1847, c. 230, passed March 9, 1848, provides that in
every case the court shall fix the amount of commission to which
the executor is by law entitled and shall impose a tax upon it
whether the executor claims the commission or not.

Md. St. 1849, c. 447, passed March 9, 1850, extends the provisions
of Md. St. 1844, c. 184, to cases where non-residents die owning
Maryland stock or bonds.

Md. Code 1860, a. 81, ss. 106 to 114, codify existing statutes.

Md. St. 1860, c. 163, provides that where the executor renounces
his commission he shall not be taxed thereon.

Retroactive.

Where this statute was enacted before the passage of the execu-
tor's account, the executor having renounced his commission was
not liable to the state tax of ten per cent on such commissions.
Owings V. State, 22 Md. 116.

Md. St. 1861-62, c. 18, passed January 6, 1862, amends Md.
Code, a, 81, s. 107, as to the commissions of executors to be fixed
by the orphans* courts.

Md. St. 1864, c. 372, passed March 7, 1864, amends Md. Code,
a. 81, s. 106, providing that commissions allowed to executors
or administrators shall be subject to a tax of five per cent; and
where a legacy is left to an executor by way of compensation such
legacy shall be reckoned in the commissions fixed by the court.

Md. St. 1865, c. 127, passed March 24, 1865, amends Md. Code,
a. 81, s. 106, by increasing the tax on commissions to executors or
administrators to ten per cent.

Md. Code of 1888, a. 81, ss. 97 to 99, continues the tax on the
commissions of executors.

Sections 97 to 99 of article 81 of the code of 1888, do not authorize
the orphans' court to allow commissions where the executor is
given a legacy in lieu of commissions larger than the commissions
would amount to. Renshaw v. Williams, 75 Md. 498.

There is no tax on commissions of the administrator in Maryland
with respect to a fund which had been paid to the foreign executor
before the administrator was appointed in Maryland, as he was
not entitled to commissions thereon. Citizens' Nat. Bank v. Sharpy
53 Md. 521.

Public General Laws of Maryland of 1904, a. 81, ss. 112 to 116,
imposes a tax on commissions allowed to executors or administrators
of ten per cent.

548 STATUTES ANNOTATED. [Md St.

Md. St. 1904, c. 222. Approved April 1, 1904.

An Act to repeal and re-enact with amendments sections 113, 114, 115 and
116 of article 81 of the Code of Public General Laws, title, "Revenue and
Taxes," sub-title, "Collateral Inheritance Tax."

S. 1. Be it enacted by the General Assembly of Maryland, That sections 113,
114, 115 and 116 of article 81 of the Code of Public General Laws, title "Revenue
and Taxes," sub-title "Collateral Inheritance Tax," be and the same are hereby
repealed and re-enacted so as to read as follows: —

S. 113. The amount of said tax shall be a lien on said real estate for the
period of four years from the date of the death of the decedent, who shall have
died seized and possessed thereof.

S. 114. The executor or administrator shall collect the same from the parties
liable to pay said tax or their legal representatives within thirteen months from the
date of his administration, and pay the same to the register of wills of the county
or city in which administration is granted ; and if the said parties shall neglect or
fail to pay the same within that time, the orphans' court of the said county
or city shall order the executor or administrator to sell for cash so much of said
real estate as may be necessary to pay said tax and all the expenses of said sale,
including the commissions of the executor or administrator thereon; and after the
report of said sale, the ratification thereof and the payment of the purchase
money, the executor or administrator may execute a valid deed for the estate sold,
and not before; provided, however, that nothing in this section contained shall
be construed to confer authority on the orphans' court to order the sale of any real
estate for the satisfaction of collateral inheritance tax after the expiration of four
years from the date of the death of the decedent, who shall have died seized and
possessed of said real estate.

S. 115. Whenever any estate, real, personal or mixed, of a decedent shall be
subject to the tax mentioned in the thirteen preceding sections, and there be a life
estate or interest for a term of years, or a contingent interest,* given to one party
and the remainder, or reversionary interest to another party, the orphans' court of
the county or city in which administration is granted shall determine in its discre-
tion and at such time as it shall think proper what proportion the party entitled to
said life estate, or interest for a term of years, or contingent interest, shall pay of
said tax, and the judgment of said court shall be final and conclusive, and the
party entitled to said life estate or interest for a term of years, or other contingent
interest, shall within thirty days after the date of such determination, pay to the
register of wills his proportion of said tax; and thereafter the said court shall
from time to time, after the determination of the preceding estate and as the
remainder of said estate shall vest in the party or parties entitled in remainder or
reversion, determine in its discretion what proportion of the residue of said tax
shall be paid by the party or parties in whom the estate shall so vest; and the
judgment of the said court shall be final and each of the parties successively
entitled in remainder or reversion shall pay his proportion of said tax to the
register of wills within thirty days after the date of such determination as to him;
and the proportion of the tax so determined to be paid by the party entitled
to the life interest or estate shall be and remain a lien upon such interest or estate
for the period of four years after the date of the death of the decedent, who shall

1904, c. 222.] MARYLAND. 549

have died seized and possessed of the property; and the proportion of the tax
so determined to be paid by the persons respectively entitled to the remainder
or revisionary interest, shall be a lien on such interest for the period of four years
from the date of which such interest shall vest in possession.

S. 116. If any of the parties mentioned in the last preceding section shall re-
fuse or neglect to pay the several proportions so decreed by the orphans' court
within thirty days from the time of such decree, the court shall order and direct
the executor or administrator to sell all the right, title and interest of such party
in and to said estate or property, or so much thereof as the court may deem
necessary, to pay his proportion of said tax and all expenses of sale; provided,
however, that nothing in this section contained shall be construed to confer
authority on the orphans' court to order the sale for the satisfaction of collateral
inheritance tax-of any life interest after the expiration of four years from the date
of the death of the decedent, who shall have died seized and possessed of the
property, or of any remainder or reversionary interest after the expiration of
four years from the date at which such interest shall vest in possession.

S. 2. And be it enacted. That this act shall be retroactive in its operation and
shall take effect from the date of its passage.

The Inheritance Statutes.

Md. St. 1844. Passed February 26, 1845, c. 237.

S. 1. Be it enacted by the General Assembly of Maryland, That from and
after the first day of June next, all estates, real, personal and mixed, money,
public and private securities for money, of every nature and kind whatsoever,
passing from any person who may die seized and possessed thereof, being in this
state, either by will or under the intestate laws of this state, or any part of such
estate, or estates, money, or securities as aforesaid, or interest therein, transferred
by deed, grant, bargain, gift or sale, made or intended to take effect in possession
or enjoyment after the death of the grantor, bargainor, devisor or donor, to any
person or persons, or bodies politic or corporate, in trust or otherwise, other than
to or for the use of the father, mother, wife, children and lineal descendants,
born in lawful wedlock, of the grantor, bargainor, devisor, donor or intestate
shall be and they are hereby made subiect to a tax or duty of two and one-half
per centum on every hundred dollars of the clear value of such estate or estates,
or money or securities as aforesaid, to be paid to the use of this state; and all
executors and administrators and their sureties, shall only be discharged from
liability of the amount of such tax, the payment of which they may be charged
with, by paying the same over for the use of this state, as hereinafter directed;
provided, that no estate which may be valued at a less sum than, five hundred
dollars, shall be subject to the duty or tax aforesaid.

Constitutionality.

This statute is not repugnant to the fifteenth article of the
declaration of rights of the constitution of 1864. The court finds
that this article did not engraft upon fundamental law any new

550 STATUTES ANNOTATED. [Md. St.

principle of. taxation, but that this same provision is to be found
in every constitution adopted in Maryland from 1776 down.
While this article provided for a uniform mode of taxation on
property it was not the purpose of the friends of the constitution
to prohibit any other species of taxation but to leave the legislature
power to impose such other taxes as the necessities of the govern-
ment might require. The fact that the collateral inheritance tax
was understood to be legal under the constitution by the convention
which framed it is significant. Tyson v. State, 28 Md. 577.

Manumission of Slave. — Taxable.

The manumission or bequest of freedom to a slave by last will
and testament confers on such slave the identical rights which
would pass if the testator had bequeathed the same slave to another
person, and therefore the bequest of freedom is a legacy on which
the executor is liable to pay a tax on the appraised value of the
slave. State v. Dorsey, 6 Gill (Md.) 388.

The court on the petition of a manumitted slave affirms the case
of State V. Dorsey, 6 Gill (Md.) 388, to the effect that a manumission
of a slave is a legacy and as such subject to the inheritance tax.
The court bases its decision on the theory that a large part of the
personal property in the state consists of slaves, which should pay
their share of the taxes. Spencer v. Negro Dennis, 8 Gill (Md.) 314.

St. 1844, c. 237, s. 2, covers the collection of the tax. Section 3
provides that all money collected by the register shall be paid to
the state treasurer. Section 4 provides that the levy courts shall
take an account of all real estate subject to the inheritance tax.
Section 5 provides that the tax shall be a lien on real estate. Sec-
tion 6 provides for an oath by the administrators to comply with
the statute.

Md. St. 1845, c. 71, s. 3, passed January 31, 1846, requires the
register of wills to pay over to the state treasury all money received
by him under the Md. St. 1844, chaps. 184, 187, 237, every six
months.

Md. St. 1845, c. 202, s. 1, passed March 2, 1846, imposes the
duty on the executors to pay the tax imposed by Md. St. 1844, c.
237. Section 2 provides that where real estate is liable for the tax
the orphans' court shall issue a notice to the parties entitled.
Section 3 covers penalties for neglect to pay. Section 4 provides for
a lien. Section 5 covers the duty of the registers to account for
moneys collected.

j^^mh.

1846 to 1874.] MARYLAND. 551

Md. St. 1846, c. 344, passed March 10, 1847, provides that the
orphans' court shall determine the apportionment of tax where
there is a particular estate and a remainder. It further provides
that the tax shall be a lien, and that the executor shall take oath to
comply with the law.

Md. St. 1847, c. 22, passed March 8, 1848, provides particularly
for the collection of the tax imposed by Md. St. 1844, c. 237, and
covers the matter of inventories and appraisals and procedure for
collection of the tax.

Md. Code 1860, a. 81, ss. 124 to 148, codifies the existing law.

Md. Code 1860, a. 81, s. 137.

Whenever a'ny estate, real, personal or mixed, of a decedent shall be subject
to the tax mentioned in the preceding section, and there be only a life estate, or
an interest for a term of years, or a contingent interest given to one party, and
the remainder or reversionary interest to another, the orphans* court of the
county or city in which administration is granted, shall determine in its dis-
cretion, and at such time as it shall think proper, what proportion each party
who may be thus interested in said estate or property shall pay of said tax; and
the judgment of the said court shall be final and conclusive; and every such party
shall pay to the register of wills his proportion of said tax within thirty days after
the date of such determination; and any party entitled in remainder or reversion,
shall be required to pay his proportion within the same time as if his interest had
vested in possession.

Jurisdiction of Court.

Under Md. St. 1844, and s. 137, a. 81 of the Cede, the orphans*
court should properly determine what proportion each party who
may be interested in an estate shall pay of the tax by it imposed.
Tyson v. State, 28 Md. 577.

Md. St. 1862, c. 157, passed March 3, 1862, provides that the
clerks and registers of wills shall pay inheritance taxes to the state
treasurer, deducting for themselves a commission of five per cent.

Md. St. 1864, c. 200, passed March 7, 1864, amends Md. Code,
1860, a. 81, ss. 124 and 125, by reducing the tax to one and one-half
per cent.

Md. St. 1868, c. 196, approved March 28, 1868, amends Md. Code,
a. 81,ss. 146 and 147.

Md. St. 1874, c. 483, approved April 11, 1874, repeals Md. Code,
a. 81, and re-enacts the same with amendments. Section 113,
imposes a collateral inheritance tax of two and one-half per
cent on every hundred dollars of the clear value of all estates,
provided that no estate which is valued at less than five hundred
dollars shall be subject to tax. Cited in Montague v. State, 54
Md. 481.

552 STATUTES ANNOTATED. iMd. Code-

Md. Code 1878, a. 11, s. 117.

Whenever any estate, real, personal, or mixed, of a decedent shall be subject
to the tax mentioned in the preceding section, and there be only a life estate, or
an interest for a term of years, or a contingent interest given to one party, and
the remainder or reversionary interest to another, the orphans' court of the county
or city in which administration is granted shall determine, in its discretion, and
at such time as it shall think proper, what proportion each party who may be
thus interested in said estate or property shall pay of said tax; and the judgment
of the said court shall be final and conclusive; and every such party shall pay
to the register of wills his proportion of said tax within thirty days after the date
of such determination, and any party entitled in remainder or reversion shall be
required to pay his proportion within the same time as if his interest had vested
in possession.

Md. St. 1880, c. 44, approved April 14, 1880, amends Md. St.
1874, c. 483, s. 113, by adding surviving husbands to the exempt
class.

Release by Statute Retroactive.

The act of 1880, c. 444, declared that the collateral inheritance
tax shall not be imposed where property may pass from a deceased
wife to her surviving husband; and that in all cases where such a
tax has been "heretofore claimed of but not actually paid by the
husband" of any decedent such claim shall be released or abandoned.
The court says this is not exactly an exemption, but a release, and
so does not fall within the rule that exemptions are to be strictly
construed. The law is valid and the statute applied to a case which
was pending on appeal when the law was passed. Montague v. State,
54 Md. 481.

Validity of Release by Statute.

This statute was not void on the ground that it was a release
of taxes and that under Md. Const, a. 3, s. 33, it did not appear
upon the face of the act that the release had been recommended
by the governor or officers of the treasury department and that the
act did not provide that such recommendation shall be obtained
before the release shall take effect. The court replies to this claim
that the constitution provides that the general assembly shall not
pass any local or special laws of that character, that the release
of debts or obligations to the state is a public general law not for-
bidden by the constitution. Montague v. State, 54 Md. 481.

Md. St. 1880, c. 455, approved April 14, 1880, provides that when
there is a particular estate and estates in remainder the tax shall
be paid only as the remainder shall vest in the parties entitled.

1888, a. 81.] MARYLAND. 553

Md. Code 1888, a. 81, ss. 102 to 125, codifies existing law.

S. 102. All estates, real, personal and mixed, money, public and private
securities for money of every kind passing from any person who may die seized
and possessed thereof, being in this state, or any part of such estate or estates,
money or securities, or interest therein, transferred by deed, will, grant, bargain,
gift or sale, made or intended to take effect in possession after the death of the
grantor, bargainor, devisor or donor, to any person or persons, bodies politic or
corporate, in trust or otherwise, other than to or for the use of the father, mother,
husband, wife, children and lineal descendants of the grantor, bargainor, testator,
donor or intestate, shall be subject to a tax of two and a half per centum on every
hundred dollars of the clear value of such estates, money or securities; and all
executors and administrators shall only be discharged from liability for the amount
of such tax, the payment of which they may be charged with, by paying the same
for the use of this state, as hereinafter directed; provided, that no estate which
may be valued at a less sum than five hundred dollars, shall be subject to the tax
imposed by this section.

The words **being within this state" in Md. Code 1888, a. 81,
s. 102, refer to the situation of the estate, not to the mere accidental
residence of the owner, as in Pennsylvania the words in a similar
statute, "being within this commonwealth," had reference to the
property and not to the person of the resident. Commonwealth
V. Smith, 5 Pa. St. 142; /?i re Short, 16 Pa. St. 63.

These words include the property of non-residents actually
situated in Maryland at the date of death. So where a resident
of California died shortly after the death of his brother who resided
in Maryland and the estate of the Californian is entitled to certain
securities and other property from the estate of the resident of
Maryland, this property, so far as it went to collaterals, was
subject to tax. State v. Dalrymple, 70 Md. 294, 301, 17 A. 82,
3 L. R. A. 372.

Property of Non-Residents. — Beneficiaries.

The court holds that personal property of a non-resident actually
situated in Maryland at the date of the death of the decedent is
subject to a Maryland inheritance tax so far as the personal property
goes to relations who are liable for the tax under the Maryland
statute. The court in this case did not need to consider and did not
consider the question of the division of the property as to whether
the; particular property in Maryland actually went to a collateral
or to a direct descendant, as in this case the will gave the whole
of the personal property to a collateral, so that the property in
question was clearly subject to the tax. State v. Dalrymple, 70 Md.
294, 17 A. 82, 3 L. R. A. 372.

554 STATUTES ANNOTATED. [Md. St.

Power of Legislature.

The state in allowing property actually located here or personal
property situated elsewhere but owned by a resident to be disposed
of by will, and in designating who shall take such property where
there is no will, may prescribe such conditions as the legislature
may deem expedient. State v. Dalrymple, 70 Md. 294, 17 A. 82,
3 L. R. A. 372.

Md. St. 1890, c. 249, exempts from the inheritance tax a certain
legacy to a home for aged women which the testator intended to
endow for its permanent support and maintenance, but which
sudden death prevented him from doing, so that the home was left
destitute.

Md. St. 1892, c. 473, approved April 7, 1892, amends Md. Code,
a. 81, s. 120, as to a summons to persons interested in an inheritance
tax.

Md. St. 1892, c. 493, approved April 6, 1894, provides for taxation
of an interest less than an absolute interest.

Md. St. 1892, c. 564, approved April 7, 1892, amends Md. Code,
a. 81, s. 124, as to the commissions of clerks and registers of wills.

Md. St. 1908, c. 695. Approved April 8, 1908.

An Act to repeal and re-enact with amendments sections 117 and 140
of article 81 of the Code of Public General Laws of Maryland, title "Revenue
and Taxes," sub-title, "Collateral Inheritance Tax."

THE PRESENT ACT.

Public General Laws of Maryland (1904), a. 81, s. 117. [As amended by

Md. St. 1908, c. 695.]
Transfers Taxable.

S. 117. All estates, real, personal and mixed, money, public and private securities
for money of every kind passing from any person who may die seized and possessed
thereof, being in this state, or any part of such estate or estates, money or securi-
ties, or interest therein, transferred by deed, will, grant, bargain, gift or sale, made
or intended to take effect in possession after the death of the grantor, bargainor,
devisor or donor, to any person or persons, bodies politic or corporate, in trust
or otherwise, other than to or for the use of the father, mother, husband, wife,
children and lineal descendants of the grantor, bargainor or testator, donor or
intestate, shall be subject to a tax of five per centum in every hundred dollars of
the clear value of such estates, money or securities; and all executors and adminisT
trators shall only be discharged from liability for the amount of such tax, the
payment of which they be charged with, by paying the same for the use of this
state, as hereinafter directed; provided, that no estate which may be valued at
a less sum than five hundred dollars shall be subject to the tax imposed by this
section.

1904, a. 81.] • MARYLAND. 555

As to the constitutionality of the statute see notes to the Act of
1844, ante, p. 546.

As to a tax on the manumission of a slave see notes to the Act
of 1844, ante, p. 550.

Situs of Debt.

No collateral inheritance tax is payable in Maryland on the fund
paid by a debtor in Maryland to his creditor's executor where the
testator was domiciled in another state, the executor was appointed
in that other state and payment was made before any administration
had been granted in Maryland. Citizens' Bank v. Sharp (1879),
53Md. 521.'

"Clear Value'' on Death.

Where a Maryland testator died leaving his property in trust
for the life tenant and on her death to be disposed of as she might
by will direct, and the life tenant did leave property by will, the
inheritance tax on her death should be reckoned on the value of the
property at that time, although it had doubled in value while in
the hands of the trustees. The court holds that Md. Code, a. 81,
s. 117, provides that the tax is imposed upon the clear value of all
estates at the time of transfer or receipt by the collateral bene-
ficiary. Fisher v. State, 106 Md. 104, 66 A. 661.

Absence of Provisions for Ascertainment and Recovery of
Tax is not Fatal.

The court holds that the manifest intention of the legislature was
to tax the transmission of all property to collaterals situated in the
state as provided by the statute and that the fact that the statute
does not contain special provision for the ascertainment and collec-
tion of the tax cannot defeat the state's right to a recovery. Fisher
V. State, 106 Md. 104, 66 A. 661.

"Being in This State."

See notes to the Code of 1888, ante, p. 553.

Powers.

Where property is given by deed in trust providing that the
cestui, being the life tenant, shall have the right to dispose of the
fund by will, the transfer by will of the life tenant is not liable to
the collateral inheritance tax under the provisions of Md. Code,

666 STATUTES ANNOTATED. [Md. St.

a. 81, s. 117, et seq. The court holds that the description in the
Code does not include the property involved under the deed of
trust. Gallard v. Winans, 111 Md. 434, 472, 74 A. 626.

Laid on Trustee and not Cestui.

The collateral inheritance tax is properly laid upon the trustee
holding the property rather than upon the cestui. Tyson v. State,
28 Md. 577.

Deduction of Tax.

S. 118. Every executor or administrator, to whom administration may be
granted, before he pays any legacy, or distributes the shares of any estate liable
to the tax imposed by the preceding section, shall pay to the register of wills of
the proper county or city, two and a half per centum of every hundred dollars
he may hold for distribution among the distributees or legatees, and at that rate
for any less sum, for the use of the state; this section shall not be construed so
as to release any tax already fixed on any collateral inheritance, distributive share
or legacy.

Action Against Legatee.

If an administrator or executor actually pays over money of his
decedent to a collateral distributee or legatee without retaining
therefrom a tax it becomes to the extent of the tax money had and
received by him for the use of the state, and an action may be
maintained against such distributee or legatee therefor. Montague
V. State (1879), 54 Md. 481, 487.

Tax on Appraised Value. — Power of Sale.

S. 119. When any species of property other than money or real estate shall
be subject to said tax, the tax shall be paid on the appraised value thereof as filed
in the office of the register of wills of the proper county or city ; and every executor
shall have power, under the order of the orphans' court, to sell, if necessary,
so much of said property as will enable him to pay said tax.

When Tax Payable.

S. 120. Every executor or administrator shall, within thirteen months from
the date of his administration, pay said tax on distributive shares and legacies
in his hands, and on failure to do so he shall forfeit his commissions.

Appraisers of Real Estate.

S. 121. In all cases where real estate of any kind is subject to the said tax,
the orphans' court of the county in which administration is granted shall appoint
the same persons who may have been appointed to value the personal estate to
appraise and value all the real estate of the deceased within the state.

1904, a. 81.] MARYLAND. 557

Warrant and Oath of Appraisers.

S. 122. The form of the warrant to such appraisers shall be the same as to
appraisers of personal property, except that the words "real estate" shall be in-
serted therein instead of the words "goods, chattels and personal estate," and the
words "price of property" instead of the word "article," and the appraisers shall
take the oath prescribed for appraisers of personal estate, except that the words
"real estate" shall be substituted for the words "goods, chattels and personal
estate," and their duties and proceedings shall, in every respect, be the same as
those of the appraisers of personal estate.

Appraisers in Different Counties.

S. 123. If the estate or property lies in more than one county, and it is not
convenient for, the appraisers to visit the other county, the court may appoint
two appraisers in said county.

Inventory of Real Estate.

S. 124. The inventory of the real estate shall be entirely separate and distinct
from that of the personal estate.

Vacancy among Appraisers.

S. 125. On the death or refusal of any appraiser to act, the court may appoint
another in his place.

Proceedings on Inventory.

S. 126. The appraisers shall return the inventory, when completed, to the
executor or administrator, whose duty it shall be to return the same to the office
of the register of wills, to which the inventory of the personal estate is returnable,
and within the same time and under like penalty, and shall make oath that said
inventory or inventories is or are a true and perfect inventory or inventories of
all the real estate of the deceased, within this state, that has come to his knowledge
and that, should he thereafter discover any other real estate belonging to the de-
ceased, in this state, he will return an additional inventory thereof.

Appraisement to be Deemed True Value.

S. 127. The appraisement thus made shall be deemed and taken to be the true
value of the said real estate upon which the said tax shall be paid.

Lien.

S. 128. The amount of said tax shall be a lien on said real estate for the period
of four years from the date of the death of the decedent, who shall have died
seized and possessed thereof.

Payment. — Sale of Real Estate.

S. 129. The executor or administrator shall collect the same from the parties
liable to pay said tax or their legal representatives within thirteen months from
the date of his administration, and pay the same to the register of wills of the
county or city in which administration is granted; and if the said parties shall
neglect or fail to pay the same within that time, the orphans' court of the said

558 STATUTES ANNOTATED. [Md. St.

county or city shall order the executor or administrator to cell for cash so much of
said real estate as may be necessary to pay said tax and all the expenses of said
sale, including the commissions of the executor or administrator thereon; and
after the report of said sale, the ratification thereof and the payment of the pur-
chase money, the executor or administrator may execute a valid deed for the
estate sold, and not before; provided, however, that nothing in this section
contained shall be construed to confer authority on the orphans' court to order the
sale of any real estate for the satisfaction of collateral inheritance tax after the
expiration of four years from the date of the death of the decedent, who shall have
died seized and possessed of said real estate.

Particular Estates and Remainders.

S. 130. Whenever any estate, real, personal or mixed, of a decedent shall be
subject to the tax mentioned in the thirteen preceding sections, and there be a
life estate or interest for a term of years, or a contingent interest, given to one
party and the remainder or reversionary interest, to another party, the orphans'
court of the county or city in which administration is granted shall determine
in its discretion and at such time as it shall think proper what proportion the party
entitled to said life estate, or interest for a term of years, or contingent interest,
shall pay of said tax, and the judgment of said court shall be final and conclusive,
and the party entitled to said life estate or interest for a term of years, or other
contingent interest, shall within thirty days after the date of such determination
pay to the register of wills his proportion of said tax; and tnereafter the said
court shall from time to time after the determination of the preceding estate and
as the remainder of said estate shall vest in the party or parties entitled in re-
mainder or reversion determine in its discretion what proportion of the residue
of said tax shall be paid by the party or parties in whom the estate shall so vest;
and the judgment of the said court shall be final and each of the parties succes-
sively entitled in remainder or reversion shall pay his proportion of said tax to
the register of wills within thirty days after the date of such determination as to
him ; and the proportion of the tax so determined to be paid by the party entitled
to the life interest or estate shall be and remain a lien upon such interest or estate
for the period of four years after the date of the death of the decedent, who shall
have died seized and possessed of the property; and the proportion of the tax so
determined to be paid by the persons respectively entitled to the remainder,
or reversionary interest, shall be a lien on such interest for the period of four years
from the date of which such interest shall vest in possession.

S. 131. Whenever an interest in any estate, real, personal or mixed, less than
an absolute interest, shall be devised or bequeathed to or for the use and benefit
of any person or object not exempted from the tax under section 117, then only
such interest so devised or bequeathed shall be liable for said tax; and it shall be
the duty of the orphans' court of the county or city in which administration is
granted, or any other court assuming jurisdiction over such administration, to
determine as soon after administration is granted as possible, on application of
such person or object, the value of such interest liable for said tax, by deducting
from the whole value of the estate so much thereof as shall be the value of the
interest therein, of any person who under said section 117, is exempt from said
tax, and the residue thereof shall be the value of said interest upon which said
tax is payable; and said tax so ascertained shall be paid by such person or object

1904, a. 81.] MARYLAND. 559

within ninety days from such ascertainment, with interest thereon at six per
cent per annum, after the expiration of twelve (12) months from the date of the
death of the decedent, under whose will or by whose intestacy said interest is
acquired, if said tax has not sooner been paid, or within ninety days from the
time that it shall be ascertained that such person or object shall be entitled to any
such interest in any estate; but such tax shall bear interest at the rate of six
per cent per annum from the expiration of twelve (12) months from said death;
but if such person or object shall fail to pay said tax, as above provided, then such
person or object shall at the time when he, she or it comes into possession of such
estate, pay a tax as provided for in said section 117, on the whole value thereof

S. 132. If any of the parties mentioned in sections 129 and 130 shall refuse
or neglect to pay the several proportions so decreed by the orphans' court within
thirty days from the time of such decree, the court shall order and direct the execu-
tor or administrator to sell all the right, title and interest of such party in and to
said estate or property, or so much thereof as the court may deem necessary, to
pay his proportion of said tax and all expenses of sale; provided, however, that
nothing in this section contained shall be construed to confer authority on the
orphans' court to order the sale for the satisfaction of collateral inheritance tax
of any life interest after the expiration of four years from the date of the death of
the decedent, who shall have died seized and possessed of the property, or of any
remainder or reversionary interest after the expiration of four years from thedate
at which such interest shall vest in possession. Sections 128, 129, 130 and 132
shall take effect from April 1, 1904, and be retroactive.

Bonds of Executors, etc., Liable for Tax.

S. 133. The bond of an executor or administrator shall be liable for all money
he may receive under this article for taxes, or for the proceeds of the sales of real
estate received by him thereunder.

Revocation -of Administration on Failure to Pay Tax.

S. 134. If any executor or administrator shall fail to perform any of the duties
imposed upon him by this article, the orphans' court of the county in which
the administration was granted may revoke his administration, and his bond
shall be liable, and the same proceedings shall be had against him as if his ad-
ministration had been revoked for any other cause.

Administrator de bonis.

S. 135. The powers and duties of an administrator de bonis non, or with the will
annexed, shall be the same under this article as those of an executor or adminis-
trator, and he shall be subject to the same liabilities.

Summons. — Proceedings.

S. 136. In all cases where any estate real, personal or mixed, shall be subject
to the collateral inheritance tax imposed by this article and no administration
is taken out on the estate of the person who died seized and possessed thereof,
within ninety days after the death of said person the orphans' court of the county
in which such administration should be granted shall issue a summons for the
parties entitled to administration to show cause wherefore they do not administer;
provided, however, that when any real estate shall be subject to said tax and no

560 STATUTES ANNOTATED. [Md. St.

administration has been taken on the estate of the person who died seized thereof,
the orphans' court of the county where said real estate shall be situate may,
on the application of any one interested in said real estate, appoi.it appraisers
to value the same as provided by the preceding sections of this article, and the
amount of said tax may be paid to the register of wills of the county where the
said application shall be made.

Where Parties Entitled do Not Administer.

S. 137. If the parties entitled by law to administration do not administer
within a reasonable time to be fixed by the said court, or if they be incapable, or
being incapable if they decline or refuse to appear on proper summons or notice,
administration shall be granted to such person as the court may deem proper

Information as to Real Estate.

S. 138. In all cases where application is made to the orphans' court or register
of wills of any county or the city of Baltimore for letters testamentary or of
administration, the said court or register shall inquire of the person making
application whether he knows or believes that there is any real estate of the
decedent liable to the collateral inheritance tax, and the answer of such applicant
shall be given on oath if the court or register requires it.

Duplicate Receipts.

S. 139. The register of wills shall give to the person paying the collateral
inheritance tax imposed by this article duplicate receipts for said tax, one of
which shall be forwarded by said person to the treasurer to be by him preserved,
and copies thereof shall be evidence in suit upon the bond of said register.

Accounting and Fees of Clerks and Registers.

S. 140. [As amended by St. 1908, c. 695.] It shall be the duty of the several
clerks and the several registers of wills in this state to account with and pay to the
treasurer on the first Monday of March, June, September and December in each
and every year all sums of money received by them respectively, for which the
clerks shall be allowed a commission of two and one-half per centum, and the
register of wills shall be allowed a commission of twelve and one-half per centum
upon the amount of said collateral inheritance tax, and the said clerks shall be
allowed a commission of five per centum, and the register of wills shall be allowed
a commission of twenty-five per cent upon the amount received of the tax on
official commissions and executors' commissions respectively, so paid over.

Compensation of Register.

The register of wills in Maryland is not entitled to retain as extra
compensation the five per cent commission allowed by law on the
amount of taxes on collateral inheritances received by him, but by
the Const. 1851 he is required to account for it as part of the income
or receipts of the office. Banks v. State (1883), 60 Md. 305.

1904, a. 81.] MARYLAND. 561

Proceedings for Recovery.

S. 141, If any of the said clerks or registers shall fail to account and pay over
as required in the preceding section, the comptroller shall, in thirty days there-
after, give notice thereof to the state's attorney for the county or city whose
duty it shall be to put the bond of such clerk or register in suit for the use of the
state, in which suit a recovery shall be had for the amount appearing to be due,
with interest at the rate of ten per cent per annum, from the date or dates when
the same was payable as aforesaid, which recovery shall be evidence of misbehavior
and upon conviction thereof the said clerk or register shall be removed from office,
which shall thereupon be filled as prescribed by the constitution; and such failure
on the part of any clerk or register shall amount to a forfeiture of the commission
to which he would otherwise be entitled.

662 STATUTES ANNOTATED. [Mass. Const.

MASSACHUSETTS.

In General.

Massachusetts first adopted a collateral inheritance tax in 1891,
and a direct inheritance tax in 1907, which applies to estates of
persons who have died since September 1, 1907.

Exemptions apply to each individual inheritance and not to the
estate as a whole. In the case of a non-resident, the inheritance
is taxable if the entire amount of the share passing is greater
than the amount exempted, though the portion of the share in
Massachusetts is less than the exempted amount; but in such
case the tax is levied only on the portion of the inheritance subject
to Massachusetts jurisdiction. For example, a non-resident leaves
a child $100,000, of which $5,000 is stock in a Massachusetts
corporation. Massachusetts taxes this $50, one per cent on $5,000.

It should be noted that the tax, where levied, is on the full amount
without deducting the exemption. Thus a bequest of $10,000 by a
resident to a child would be taxed nothing, a bequest of $20,000
would be taxed $200, one per cent on the full $20,000. But the tax
must not reduce the inheritance below the exempted figure, so an
inheritance of $10,001 would pay only $1.

Shares in voluntary associations, like Massachusetts Gas and
Massachusetts Electric, and also shares in local real estate trusts,
have been regarded by the tax commissioner as standing on the
same footing as Massachusetts corporations, and have been taxed
whether owned by a resident or non-resident. The right to collect
such a tax on real estate trust shares is being contested in a case
now pending in the supreme court.

A corporation that transfers stock, and a person or corporation
that delivers over securities of a non-resident estate before the tax
is paid, are made liable for the tax.

It is the practice of the tax commissioner's office to require an
inventory of the entire estate of a non-resident, as the commissioner
deems it necessary for a proper computation of the tax.

Massachusetts is one of the very few states that have made any
attempt to avoid double taxation.

If personal property of a deceased resident, which is outside the
state, has been taxed in other states — and this includes stock in

1780, pt. 2.] MASSACHUSETTS. 563

foreign corporations, whether the certificate is actually kept in
Massachusetts or not — Massachusetts will not tax it, unless the
outside tax is less than the Massachusetts tax, and then Massachu-
setts collects only the difference. This exemption has been ex-
tended in 1911 to shares owned by a resident, in a company
incorporated in Massachusetts and other states.

The result is that at present, so far as the inheritance tax is
concerned, for a Massachusetts investor, stocks in Massachusetts
corporations are most desirable, stocks in corporations of states
whose taxes are no heavier than Massachusetts are a second choice,
while stocks in corporations of states whose taxes are heavier than
Massachusetts are less desirable.

The attempt to avoid double taxation in the case of non-residents
has as yet been of little practical value. There is a reciprocal clause
in favor of non-residents owning stocks in Massachusetts corpora-
tions which provides that such stock shall not be taxed (except for
the difference if Massachusetts rates are higher) if owned by a
resident of a state which extends similar courtesies to residents of
Massachusetts. There are only six other states to which by any
possibility this could apply. It has been ruled that residents of
Maine are entitled to the exemption; the same ruling is likely to
be made when occasion arises as to Vermont, Kansas and
New York. The attorney general has ruled that the retaliative
provision in the Connecticut law does not satisfy the reciprocal
requirements, and it is probable that the same ruling would be
made as to West Virginia.

Constitutional Limitations.

Massachusetts Constitution 1780, pt. 2, c. 1, s. 1, a. 4.

And further, full power and authority are hereby given and granted to the
said general court, from time to time, ... 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, mer-
chandise and commodities, whatsoever, 'brought into, produced, manufactured
or being within the same.

• 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 Massachusetts constitution and an
excise may be laid upon it. Minot v. Winthrop, 162 Mass. 113,
122, 38 N. E. 512, 26 L. R. A. 259 (Lathrop, J., dissenting).

564

STATUTES ANNOTATED.

[Mass. St.

Right of Succession Cannot be Abolished.

"The descent or devolution of property on the death of the owner
in England and in this country has always been regulated by law.

''The legislature cannot so far restrict the right to transmit
property by will or by descent as to amount to an appropriation of
property generally, ... 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, dis-
tributees 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 regu-
lating 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 reason-
able way."- Per Field, C. J.,in Minot v. Winthrop, 162 Mass. 113,
117, 38 N. E. 512, 26 L. R. A. 113.

It should be noted that this language is contrary to the great
weight of authority in this country. See ante, p. 24. A note in
8 Harvard Law Review, p. 226, criticizes adversely the attitude
of the court. The editor suggests that this statement is a dictum
and that the only necessary incident of private property is that
there be a succession of some kind on the death of the owner. Who
shall succeed is quite a different question which has been answered
differently at different times and places.

List of Statutes.

1836-1853. Supplement to Revised Statutes, c. 355.

1841. ' " c. 123.

1843. " " " " c. 11.

1868. Statutes of Massachusetts, c. 132.

1882-1887. Public Statutes of Massachusetts, c. 24, s. 18.

1889-1895. Supplement to Public Statutes, pp. 512 to 516, 642, 1386, 1430.

1891. Statutes of Massachusetts, c. 425.

1892. " " " c. 379.

1893. " " " c. 432.
1895. " " " c. 307.

1895. " " " c. 430.

1896. " " . " c. 108.

1900. u ■ u u ^ 371^

1901. " " " c. 277.

1901. " " " c. 297.

1902. " " " c. 473.

1903. " " " c. 248.
1903. " " " c. 251.
1903. " " " c. 276.

1841, c.

123.]

MASSACHUSETTS.

1904.

Statutes of Massachusetts, c. 421.

1905.

a li

c. 367.

1905.

a «

c. 470.

1906.

'• "

c. 436.

1907.

(< i<

c. 452.

1907.

(( 11

c. 563.

1908.

a n

p. 840.

1908.

a a

c. 268.

1908.

" "

c. 624.

1909.

u a

c. 266.

1909.

a ((

c. 268.

1909.

" "

c. 490. pt. 4.

1909.

c. 527.

1910.

«t "

c. 440.

1910.

c. 481.

1911.

(( <(

c. 191.

1911.

(< u

c. 359.

1911.

(( ((

c. 502.

1911.

. " "

c. 551.

1902.

Revised Laws,

c. 15.

1902.

" "

c. 6, p. 70, ss. 4 to 5.

1906.

Supplement to the Revised Laws, c. 15, p. 94

565

History.

Neither in England or the province of Massachusetts had there
been a tax on legacies and inheritances when the Massachusetts
constitution was adopted in 1780. Minot v. Winthrop, 162 Mass.
113, 116, 38 N. E. 512, 26 L. R. A. 259.

Early Probate Fees.

Mass. St. 1841, c. 123, approved March 18, 1841, imposed a
tax of one-quarter of one per cent on all personal property of
any deceased person distributable among his heirs and legatees after
the payment of his debts and expenses of administering the estate,
including the proceeds of real estate sold to pay legacies, with an
exemption of five hundred ($500) dollars.

Mass. St. 1841, c. 123, was repealed by Mass. St. 1843, c. 11,
saving liabilities already incurred under the Mass. St. 1841.

Mass. St. 1836-53, Supplement to Revised Statutes, c. 355.

An Act to exempt the personal property of widows and unmar-
ried FEMALES FROM TAXATION, IN CERTAIN CASES.
No tax shall hereafter be assessed upon the personal property of any widow or
unmarried female, or female minor whose father is deceased, which was not
received by gift, legacy, devise or inheritance; provided that the whole estate,
real or personal, of such persons (person), whose personal property is so exempted
from taxation, does not exceed in value the sum of five hundred dollars, exclusive
of property exempted from taxation by existing laws of this state. (May 21, 1853.)

566 STATUTES ANNOTATED. [Mass. St.

THE COLLATERAL INHERITANCE TAX OF 1891.
Validity.

The act of 1891 is constitutional. Crocker v. Shaw, V74l Mass. 266;
Minot V. Winthrop, 162 Mass. 113, 115, 38 N. E. 512, 26 L* R.
A. 259.

Nature of Tax.

The collateral inheritance tax of 1891 is properly construed as an
excise, and is not meant to be a substitute for the annual tax on
estates or an additional tax of that nature. Minot v. Winthrop,
162 Mass. 113, 122, 38 N. E. 512, 26 L. R. A. 259.

It is not a property tax, but strictly an excise or franchise tax,
although the amount of it may be made dependent to a greater or
less extent upon the value of property. Kingsbury v. Chapin, 196
Mass. 533, 537, 82 N. E. 700.

Whether an inheritance tax is a tax on the right of testators
to dispose of their property or on the right of beneficiaries to receive
it will depend to some extent upon the provisions of the particular
statute. Minot v. Winthrop, 162 Mass. 113, 38 N. E. 512

The Massachusetts inheritance tax is not upon the property
itself, although its value is made the basis of taxation, but on the
right of transmission. State Street Trust Co. v. Stevens, 209 Mass. 373,
95 N. E. 851, 44 Bank, and Tr. 149

Mass. St. 1891, c. 425. Approved June 11, 1891.
Transfers Taxable. — Rates.

S. 1. All property within the jurisdiction of the commonwealth, and any
interest therein, whether belonging to inhabitants of the commonwealth or not,
and whether tangible or intangible, which shall pass by will or by the laws of the
commonwealth regulating intestate succession, or by deed, grant, sale or gift,
made or intended to take effect in possession or enjoyment after the death of
the grantor, to any person in trust or otherwise, other than to or for the use of the
father, mother, husband, wife, lineal descendant, brother, sister, adopted child,
the lineal descendant of any adopted child, the wife or widow of a son, or the
husband of a daughter fo a decedent, or to or for charitable, educational or re-
ligious societies or institutions, the property of which is exempt by law from
taxation, shall be subject to a tax of five per centum of its value, for the use of the
commonwealth; and all administrators, executors and trustees, and any such
grantee, under a conveyance made during the grantor's life, shall be liable for all
such taxes, with lawful interest as hereinafter provided, until the same have
been paid as hereinafter directed; provided, however, 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.

1891, c. 425.] MASSACHUSETTS. 567

**A11 Property/'

A legacy tax paid to the United States is to be deducted before
paying the state succession tax, under Mass. St. 1891, c. 425,
although that act contains no express exception. The court pro-
ceeds on the theory that the words of the act most naturally signify
the property which the legatee actually would get were it not for
the state tax imposed and that as a matter of justice he should not
be taxed for more. Hooper v. Shaw, 176 Mass. 190, 57 N. E. 361.

Annuity of Fluctuating Value.

Where a testator directed his executors and trustees to pay over
to his sister such sums as with the income of her own property
should give her a net annual income of $10,000 the court ruled that
she was to be taxed on an annuity to the amount of the difference
between $10,000 and her net annual income at the death of the
testator. The objection was made that the sum bequeathed was
neither an annuity nor a life estate, as it was of an uncertain amount
and liable to fluctuate from year to year. The court takes the
position that it did not appear how great the fluctuations might
be and it might be treated as an annuity of $10,000 a year subject
to reduction so that the value of the interest might be treated as an
annuity of $10,000 a year. Howe v. Howe, 179 Mass. 546, 554,
61 N. E. 225, 55 L. R. A. 626.

Marshaling . Assets.

The court holds that the executors cannot use stock in Massa-
chusetts corporations for the payment of debts and legacies to the
exemption of the property in New Hampshire and so relieve it
from liability to a tax imposed by Massachusetts law.

The court holds that the rights of all parties, including the rights
of the commonwealth to its tax, vest at the death of the testator.
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 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." Per Knowlton, C. J., in
Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700.

568 STATUTES ANNOTATED. [Mass. St.

The tax commissioner regards this case as requiring him to
apportion among all the beneficiaries, including the pecuniary
legatees but excepting specific legatees, the tax on each separate
item of personal property in the estate. The same rule probably
applies to real estate though distributed to beneficiaries specifically.

•'Within the Jurisdiction."

Real estate outside the state is not taxable. 1 Op. Att. Gen. 75.
For the purposes of the inheritance tax the legislature regards
personal property as having a situs at the domicile of the owner
although this may lead to double taxation. Frothingham v. Shaw,
175 Mass. 59, 61, 55 N. E. 623, 78 Am. St. Rep. 475.

The fact that certificates of stock in Massachusetts corporations
owned by a non-resident were actually outside the state at the time
of the death of the testatrix is immaterial. Greves v. Shawy 173
Mass. 205, 208, 53 N. E. 372.

There can be no doubt that stock in corporations organized under
the laws of Massachusetts and of national banking corporations
located in Massachusetts, is property within the jurisdiction of
the state within the meaning of the act of 1891.

>So stock in a Massachusetts corporation owned by a non-resident
is subject to tax although the executor transferred it under the
authority of his appointment in New York before he was appointed
in Massachusetts. It was claimed that under these circumstances
the property should be treated as if it had never been within the
jurisdiction of Massachusetts and be free from taxation inasmuch as
it did not come into the hands of the local administrator or executor.
The court, however, concludes that the provisions of the statute
are absolute and the statute assumes that the property will be
administered by an executor or administrator appointed in Massa-
chusetts. It could not be supposed that the question whether the tax
should be levied or not should depend on the ability or inability
of the foreign executor to obtain possession of it without a suit.

Persons claiming a succession to property in Massachusetts
under non-resident owners must hold their right subject to the prior
right of the commonwealth to have the property administered here
in order that taxes may be paid upon the succession. Greves v. Shaw,
173 Mass. 205, 210, 53 N. E. 372.

The legal right of the legislature to tax the succession to "property
of a non-resident owner rests upon the fact that the property is

1891, c. 425.] MASSACHUSETTS. 569

within the State and subject to its jurisdiction. This power is as
large in reference to the property of a non-resident decedent as in
reference to that of the inhabitants of the commonwealth. It covers
the property within the jurisdiction. A ground for its exercise
is that the property has the protection of our laws and that our
laws are invoked for the administration of it when a change of
ownership is to be effected." Per Knowlton, J., in Callahan v.
Woodhridge, 171 Mass. 595, 597, 51 N. E. 176.

Callahan v. Woodbridge, 171 Mass. 595, 51 N. E. 176, does not
stand for the principle that the succession to the personal
property in Massachusetts took place by virtue of the law of Massa-
achusetts although the testator was domiciled in New York.
That case and Greves v. Shaw, 53 N. E. 372, 173 Mass. 205, and
Moody v. Shaw, 173 Mass. 375, 53 N. E. 891, rest on the right of
a State to impose a tax or duty in respect to the passing on the
death of a non-resident of personal property belonging to him
and situated within its jurisdiction. Frothingham v. Shaw, 175
Mass. 59, 55 N. E. 623, 78 Am. St. Rep. 475.

Non-Taxable Property Not Exempt.

"It is very plainly shown in Plummer v. Coler, 178 U. S. 115,
20 Sup. Co. 829, that property which is not taxable as such may
constitutionally be considered under the statute in fixing the
amount of an excise tax." Per Knowlton, C. J., in Kingsbury
V. Chapin, 196 Mass. 533, 537, 82 N. E. 700.

Situs of Stocks and Bonds.

Stocks and bonds of foreign corporations are properly taxed in
Massachusetts when the testator lived there although they were
and for many years had been in the hands of his agents in New York.
Frothingham v. Shaw, 175 Mass. 59, 55 N. E. 623, 78 Am. St.
Rep. 475.

Situs of Mortgage Interests.

A mortgage debt for the purpose of taxation may be regarded
as having a situs in the domicile of the mortgagee. Frothingham v.
Shaw, 175 Mass. 59, 61, 78 Am. St. Rep. 475.

The court does not decide whether a note and mortgage kept
in Massachusetts signed by a non-resident covering land outside
the state is taxable in Massachusetts as part of the assets of the
estate of a non-resident. Callahan v. Woodbridge, 171 Mass. 595,
599, 51 N. E. 176.

570 STATUTES ANNOTATED. [Mass. St-

Callahan v. Woodhridge, 171 Mass. 595, 51 N. E. 176, is dis-
tinguished, as there the testator's domicile was in New York and
it does not appear that the note and mortgage were in Massachu-
setts. Frothingham v. Shaw, 175 Mass. 59, 61, 55 N. E. 623, 78
Am. St. Rep. 475.

The testator died domiciled in New Hampshire, holding there a
certain note secured by conveyance on the deposit book in The
Cambridge Real Estate Associates, which was a voluntary associa-
tion for investment in real estate; but the title to which remained
in trustees. The court holds that the testator held an equitable
interest in this real estate and that therefore, this note is subject
to the succession tax. Kinney v. Stevens, 207 Mass. 368, 371,
93 N. E. 586.

The testator was a resident of New Hampshire and the court
holds that certain promissory notes belonging to him, secured by
mortgage on real estate in Massachusetts, are subject to tax in
Massachusetts. The court notes that in Massachusetts the mort-
gagee takes not merely a lien upon the land, but he holds the legal
title subject to the right of redemption and that the interest of the
mortgagee is subject to taxation under the Massachusetts statute;
that while for general purposes the interest of the mortgagee is
treated as personal property it has a local situs and carries with it
ownership of the land until it is redeemed by the payment of the
debt. The court holds, therefore, that these notes and mortgages are
property within the jurisdiction of Massachusetts within the mean-
ing of the Massachusetts statute of 1909, c. 527, s. 1, although they
were held by the testator at his domicile in New Hampshire at the
time of his death. Kinney v. Stevens, 207 Mass. 368, 93 N. E. 586.

Corporations Incorporated in Two States.

A railroad company with a Massachusetts charter formed by
the consolidation of Massachusetts and New York corporations,
and owning tracks in both states, is a Massachusetts corporation
so far as the act of 1891 is concerned, and stock in the company
owned by a non-resident decedent is assessable under that statute.
Moody V. Shaw, 173 Mass. 375, 377, 53 N. E. 89.

The court holds that its value for the purpose of taxation was
intended to be limited by the value of the franchise and property
which it specially represents within the state of Massachusetts;
and the stock in each state represents only the property within that
state. Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700.

[This same result is now reached by St. 1909, c. 490, pt. 4, s. 2.]

1891, c. 425.] MASSACHUSETTS. 571

**And Any Interest Therein."

A fund was given in trust to pay the income to H. till he reached
forty-five and then to pay the principal to him unless he died before
that time, when the principal was to go to such heirs of his body as
should be living when he would have reached the age of forty-five.
The court ruled that under the act of 1891, any interest to which H.
will become entitled if he dies before reaching that age, or any
interest of his heirs, is subject to the tax to be paid by the executor
and that the determination of the value of such future interest be
postponed until the happening of that future event. Howe v. Howe,
179 Mass. 546, 550, 61 N. E. 225, 55 L. R. A. 626.

"Whether Belonging to Inhabitants of the Commonwealth
or Not/'
Double taxation, both in the state where personal property
is situated and in the state of its owner's domicile, is apparently
approved in Frothingham v. Shaw, 175 Mass. 59, 61, 55 N. E. 623,
78 Am. St. Rep. 475.

"Tangible."

Real estate, cash on hand and railroad and government bonds
belonging to a non-resident but within the state of Massachusetts
are all taxable in Massachusetts as "tangible property." Callahan
V. Woodbridge, 171 Mass. 595, 598, 51 N. E. 176.

**Which shall Pass."

The statute applies only to cases where the death occurs after the
statute was passed. 1 Op. Att. Gen. 2

Law Applicable to Exercise of Power of Appointment by Will.

A., by trust deed executed prior to the passage of the act of 1891,
placed property in trust for herself for life and on her death subject
to appointment under her will. She died in 1895 leaving a will, and
the court holds that interests under her will are taxable.

The court holds that the property passed by a deed intended to
take effect in possession or enjoyment after the death of the grantor.
It makes no difference that the donor of the power and the person
executing it are one and the same.

The fact that the deed is dated before the passage of the act of
1891 is immaterial. It is the vesting of the property in possession
and enjoyment on the death of the life tenant and after the statute

572 STATUTES ANNOTATED. [Mass. St.

took effect that renders it liable to the tax, although there is no
such express provision in the statute making it applicable whether
the transfer was made before or after the passage of the act as in
In re Green, 153 N. Y. 223 ; In re Seaman, 147 N. Y. 69, 77 ; Crocker
V. Shaw, 174 Mass. 266, 54 N. E. 549.

Where a will creates a power to appoint by will, the original
testator is the decedent whose estate is subject to tax under the
act of 1891. Although the tax is a duty on the privilege of trans-
mitting property by will, still the statute does not provide that all
property transmitted by will shall be taxed, but only the property
which passes by will intended to take effect on death. Emmons
V. Shaw, 171 Mass. 410, 413, 50 N. E. 1033.

Income received after the testator's death is not covered by
the statute. Hooper v. Bradford, 178 Mass. 95, 59 N. E. 678.

"By Will or by the Laws of the Commonwealth."

This language applies to foreign wills and to property of a foreign
owner dying intestate. Callahan v. Woodbridge, 171 Mass. 595, 597,
51 N. E. 176.

**By Deed."

The decedent died before the trust fund was terminated and
the court holds that a tax is due on the transfer to the third party.
The court holds that this gift was intended to take effect in posses-
sion or enjoyment after the death of the grantor, as the beneficiary
could have no possession or enjoyment of the principal until after
his death; and the fact that she had possession and enjoyment
of the income in his lifetime makes no difference. The income and
principal stood each by itself and were as independent of each other

1891, c. 425.] MASSACHUSETTS. 573

as if the income had been given to a third person. The property
is subject to a tax to be assessed as of a time thirty days after the
expiration of the five years referred to in the agreement and interest
is to be paid upon the tax from that time. New England Trust Co.
V. Abbott, 205 Mass. 279, 91 N. E. 379.

"Other Than To or For the Use of the Father, etc."

The fact that an inheritance tax is imposed on collaterals only
does not make it unreasonable on the ground that it is not imposed
on all heirs or beneficiaries. Minot v. Winthrop, 162 Mass. 113, 123,
26 L. R. A. 259.

Where the will leaves property to one for life and makes no
disposition of the remainder, and one of the heirs is a brother of
the testator and another is a nephew, the interest of the brother is
not taxable and that of the nephew is taxable. Dow v. Abbott,
197 Mass. 283, 288, 84 N. E. 96.

"Charitable, Educational, or Religious."

A free public library may fairly be called an "educational or
charitable institution" and takes exempt from the inheritance tax.
Essex V. Brooks, 164 Mass. 79, 83, 41 N. E. 119.

"Institutions" very likely need not be incorporated. The
court holds that a gift to a trust company in trust for "needy aged
men and women" is not exempt, as such a trust cannot by the
broadest latitude be called an "institution." Very likely the
"institution"' need not be incorporated, but it is contemplated
as an owner of property, not as property. Hooper v. Shaw, 176
Mass. 190, 57 N. E. 361.

"The Property of Which is Exempt by Law from Taxation."

It appeared that under the Massachusetts statutes there was
no general exemption from taxation of property given charitable,
educational or religious societies, but certain property of religious
associations, houses of worship and pews and furniture are exempt
from taxation. Under them the personal and real property of a
religious society is taxable even although the income is used to
support religious worship.

The commonwealth contended that the exemption clause in the
inheritance tax statute should be construed to provide that property
passing to charitable, educational or religious societies is to be
exempt to the extent to which the property of such societies or
institutions is exempt by general laws.

574 STATUTES ANNOTATED. [Mass. St.

But the court finds that the test should depend upon the question
whether the institution is one whose property is generally exempt
from taxation. In the case at bar the property was bequeathed for
a parsonage and parsonages are not exempt from taxation. But the
court holds that this is an accident, that houses of religious worship
are the principal property held by religious societies and that
therefore a devise to a religious society is a devise to a society
whose property is generally exempt from taxation and is not
subject to an inheritance tax. First Universalisi Society v. Bradford,
185 Mass. 310, 70 N. E. 204.

The exemption extends only to institutions whose property is
exempted by Massachusetts law and not by the law of another state.
1 Op. Att. Gen. 75.

Confined to Domestic Corporations.

This exemption is confined to societies the property of which
is exempt by the laws of Massachusetts, and does not include a
New York corporation. Minot v. Winthrop, 162 Mass. 113, 126,
26 L. R. A. 259.

A corporation formed for the purpose of administering a deed
of^trust for charitable purposes is exempt as a charitable institution
although the corporation might expend the money in charitable
purposes in another state. Batch v. Shaw, 174 Mass. 144, 54 N.
E*. 490.

A bequest to Bowdoin College, a Maine institution, is not exempt
from the inheritance tax although Bowdoin College was a corporation
created by Massachusetts by the statute of 1794 before Maine was
separated from Massachusetts. The court holds that nevertheless
after the separation it ceased to be an institution incorporated
within the state of Massachusetts within the meaning of the Massa-
chusetts statute, and therefore it is subject to tax. The court
follows Rice v. Bradford, 180 Mass. 540, 63 N. E. 7; Batt v.
Stevens, 209 Mass. 319 (June 20, 1911), 95 N. E. 784.

"And all Administrators . . . shall be Liable for all Such
Taxes . . . until . . . Paid.''

This provision plainly imports that nothing except payment shall
operate as a discharge or bar the collection of the tax. Howe v.
Howe, 179 Mass. 546, 549, 55 L. R. A. 626. See further, notes to
section 18, post, 582.

1891, c. 425] MASSACHUSETTS. 575

**Unless the Value . . . shall Exceed the Sum of Ten Thou-
sand Dollars."

The court discusses the history of exemptions in the Massachu-
setts act ini Davis v. Stevens, 208 Mass. 343, 94 N. E. 556.
Where the estate exceeds ten thousand dollars exclusive of debts
it is taxable although after the payment of the probable expenses
of administration the estate will probably be less than ten thou-
sand dollars. This is so although for the purpose of determining
on what amount the tax is to be computed expenses of adminis-
tration must be deducted. Callahan v. Woodbridge, 171 Mass.
595, 599, 51 N. E. 176.

The exemption is reckoned only on the Massachusetts property
of a non-resident. Attorney General v. Barney, 211 Mass. 134, 97
N. E. 750.

An exemption of all estates of a value not exceeding ten thousand
dollars is not unreasonable. It was objected that the excise, if
upon the privilege of taking property by will or descent, should be
the same whenever the privilege enjoyed is the same in kind and
extent, whatever might be the value of the estate, and that the ex-
emptions should relate to the value of the property received and
not to the value of the estate. But the court remarks that the
privilege taxed can be regarded either as the privilege of the owner
of property to transmit it on his death, or as the privilege of these
persons to receive the property. The tax too has some of the
characteristics of a duty on the administration of the estates of
deceased persons. The cost of administering small estates is
proportionately greater than that of administering large ones.
Minot V. Winthrop, 162 Mass. 113, 124, 38 N. E. 512, 26 L. R. A. 259.

Particular Estates and Remainders.

S. 2. When any person bequeaths or devises any property to or for the use of
father, mother, husband, wife, lineal descendant, brother, sister, an adopted
child, the lineal descendant of any adopted child, the wife or widow of a son, or
the husband of a daughter, during life or for a term of years, and the remainder
to a collateral heir or to a stranger to the blood, the value of the prior estate shall,
within three months after the date of giving bond by the executor, administrator
or trustee, be appraised in the manner hereinafter provided, and deducted from
the appraised value of such property, and the remainder shall be subject to a tax
of five per centum of its value.

This section was referred to as looking to a scheme of valuation
as of a date earlier than the distribution in Hooper v. Bradford, 178
Mass. 95, 97, 59 N. E. 678.

576 STATUTES ANNOTATED. [Mass. St.

Gifts to Executors or Trustees in Lieu of Commissions.

Section 3 provides for the taxation of property in excess of reason-
able compensations bequeathed to executors or trustees in lieu of
their allowance.

When Tax Accrues. — Interest. — Lien. — To Whom Tax
Payable.

S. 4. All taxes imposed by this act shall be payable to the treasurer of the
commonwealth by the executors, administrators or trustees, at the expiration
of two years from the date of their giving bond; provided, that whenever legacies
or distributive shares are paid within the two years, the taxes thereon shall be
payable at the time the same are paid. In cases, however, where the probate
court has ordered the executor or administrator to retain funds to satisfy a claim
of a creditor, whose right of action for which does not accrue within the two years,
the payment of the tax may be suspended by an order of the court to await the
disposition of such claim. If the taxes are not paid when due, interest at the rate
of six per centum per annum shall be charged and collected from the time the
same became due; and the taxes and interest that may accrue on the same shall
be and remain a lien on the property subject to the taxes till the same are paid
to the commonwealth. An executor, administrator or trustee may, if he prefers,
pay the tax to the treasurer of the county in which the probate court having
jurisdiction of the estate is located, and the several county treasurers shall account
with the treasurer of the commonwealth.

This section was referred to mGreves v. Shaw, 173 Mass. 205, 209,
53 N. E. 372. It does not bar suit for recovery after the two years.
Howev. Howe, 179 Mass. 546, 548, 61 N. E. 225, 55 L. R. A. 626.

The state treasurer has no discretion as to the time for payment
of inheritance taxes. 1 Op. Att. Gen. 268. It is not the duty of
the state treasurer to determine when a tax should be paid. 1 Op.
Att. Gen. 76.

Tax on Annuity.

The statute contemplates that the tax shall be paid out of an
annuity as soon as the annuity becomes payable, and at the time
when payments on account of the annuity are made, and is a
method which the legislature could adopt although the tax exhausts
the whole of the first payment or payments. Minot v. Winthropj 162
Mass. 113, 126, 38. N-. E. 512, 26 L. R. A. 259.

Interest.

Where the Massachusetts statute provides that the tax shall be
payable at the expiration of two years after the date of giving bond
with interest from that date, interest should be computed according

1891, c. 425.] MASSACHUSETTS. 577

to that rule, although a part of the estate was given in remainder
or the dispositions of the will were modified by an agreement that
was entered into. The whole estate was liable to the tax and there
was nothing to effect the time when it was payable. Bradford v.
Storey, 189 Mass. 104, 75 N. E. 256.

Remainder.

Where a testator gives property to one for life and leaves the
remainder undistributed, and one of the heirs is a nephew, his tax
is not payable until he comes into actual possession of the estate.
It is to be assessed on its then value except that at his option it may
be paid any time after deducting the value of the life estate, and is
to be paid by him. Unless the nephew has given, the bond under
Mass. St. 1903, c. 276, for the payment of the tax on the personal
property within one year from the death of the testatrix, then the
tax is due and payable. It must be paid by the administrator upon
the value at the time of the death of the testatrix of the interest
coming to the nephew.

The value of the life interest is to be deducted in order to ascertain
the value of the interest of the nephew. Dow v. Abbott, 197 Mass.
283, 288, 84 N. E. 96.

Deducted from Principal.

This section contemplates that the tax shall be deducted from
the principal sum and paid over to the treasurer. Where ten thou-
sand dollars is given in trust for a life tenant, who is exempt from
taxation, and the tax diminishes the principal below ten thousand
dollars and reduces the income proportionately, there is no warrant
for taking any part of the principal of the trust fund or of the estate
generally to make up the loss of the life tenant. Minot v. Winfhrop,
162 Mass. 113, 125, 38 N. E. 512, 26 L. R. A. 259.

Tax Deducted by Executor, etc.

S. 5. Any administrator, executor, or trustee having in charge or trust any
property subject to said tax, shall deduct the tax therefrom, or shall collect the
tax thereon from the legatee or person entitled to said property, and he shall not
deliver any specific legacy or property subject to said tax to any person until he
has collected the tax thereon.

This section was referred to inGreves v. Shaiv, 173 Mass. 205, 207,
53 N. E. 372, and in Howe v. Howe, 179 Mass. 546, 548, 61 N. E.
225, 55 L. R. A. 626.

678 STATUTES ANNOTATED. [Mass. St.

This section makes it the duty of the administrator, executor or
trustee to collect the tax before delivering articles of personal
property specifically bequeathed to the legatee. 1 Op. Att. Gen. 30.

Deduction of Tax from Legacies Charged on Real Estate.

S. 6. Whenever any legacies subject to said tax are charged upon or payable
out of any real estate, the heir or devisee, before paying the same, shall deduct
said tax therefrom and pay it to the executor, administrator or trustee, and the
same shall remain a charge upon said real estate until it is paid; and payment
thereof shall be enforced by the executor, administrator or trustee, in the same
manner as the payment of the legacy itself could be enforced.

This section was referred to in Howe v. Howe, 179 Mass. 546, 548,
61 N. E. 225, 55 L. R. A. 626.

Tax Deducted or Apportioned in Certain Cases.

Section 7 provides that if a legacy is given in money for a limited
period, the executor or trustee shall retain the tax on the whole
amount, and if it is not in money the tax may be apportioned.

Sale of Real Estate.

Section 8 provides for the sale of real estate for the payment of
the tax.

Inventory.

S. 9. An inventory of every estate, any part of which may be subject to a tax
under the provisions of this act, shall be filed by the executor, administrator or
trustee, within three months from his appointment and qualification. In case
such executor, administrator or trustee neglects or refuses to file such inventory
as above required, he shall be liable to a penalty of not more than one thousand
dollars, and the treasurer of the commonwealth shall commence in his own name
appropriate proceeding against such executor, administrator or trustee for the
recovery of such penalty.

This section was referred to in Hooper v. Bradford, 178 Mass. 95,
97, 59 N. E. 678.

The state treasurer has no authority to waive the filing of the
inventory. 1 Op. Att. Gen. 52. An inventory of the whole estate
■ should be filed and not merely of such portion as is subject to the
tax. 1 Op. Att. Gen. 40.

The state treasurer may rely on the provisions of sections 9, 10
and 11 for information concerning estates liable to tax and need
not institute independent inquiry as to the existence of such estates.
1 Op. Att. Gen. 30.

1891, c. 425] MASSACHUSETTS. 579

Inventory Filed with State Treasurer.

S. 10. A copy of the inventory of every estate, any part of which may be
subject to a tax under the provisions of this act, or if the same can be conveniently
separated, then a copy of the inventory of such part of such estate, with the
appraisal thereof, shall be sent by mail, by the register of the probate court in
which such inventory is filed, to the treasurer of the commonwealth within
thirty days after the same is filed. The fees for such copy shall be paid by the
treasurer of the Commonwealth.

This section was referred to as contemplating a tax on the ap-
praised value. Hooper v. Bradford, 178 Mass. 95, 97; 59 N. E. 678.

State Treasurer to be Notified of Transfer of Real Estate.

Section 11 provides that the executor or trustee is to notify the
state treasurer of the passing of any real estate subject to the tax.

Refund.

S. 12. Whenever, for any reason, the devisee, legatee or heir, who has paid
any such tax, afterwards refunds any portion of the property on which it was paid,
or it is judicially determined that the whole or any part of such tax ought not to
have been paid, said tax, or the due proportional part of said tax, shall be paid back
by him to the executor, administrator or trustee.

This section was referred to in Callahan v. Woodbridge, 171 Mass.
595, 598, 51 N. E. 176.

Appraisal.

S. 13. The valufe of such property as may be subject to said tax shall be its
actual value as found by the probate court, but the treasurer of the common-
wealth, or any person interested in the succession to said property, may apply
to the probate court having jurisdiction of the estate, and on such application
said court shall appoint three disinterested persons who, being first sworn, shall
appraise such property at its actual market value, for the purposes of said tax,
and shall make return thereof to said court, which return may be accepted by
said court; and if so accepted it shall be binding upon the person by whom the
tax is to be paid, and upon the commonwealth. And the fees of the appraiser
shall be fixed by the judge of probate, and paid by the treasurer of the common-
wealth. In case of an annuity or life estate the value thereof shall be determined
by the so called actuaries' combined experience tables and four percent compound
interest.

This section was referred to in Hooper w. Bradford, 178 Mass. 95,
97, 59 N. E. 678.

Where the statute makes no specific provision for a case exactly
like the one in question the values can be ascertained according to

580 STATUTES ANNOTATED. [Mass. St.

the method pointed out for similar cases. Dow v. Abbott, 197 Mass.
283, 288, 84 N. E. 96.

At Death of Testator.

The valuation under this section is to be as of the date of the
death of the testator as the act implies the value when the property
passes even in case o a future estate. Howe v. Howe, 179 Mass.
546, 551, 61 N. E. 225, 55 L. R. A. 626.

Life Estate.

Where the will leaves real and personal property for life to one
who is not related to the testator and makes no disposition of the
remainder, the life interest under the Massachusetts collateral
inheritance statute is to be assessed on its value at the death of
the testatrix, and its amount ascertained, and the tax to be paid
by the administrator, who has a right to collect from the life tenant
so much as is due on the life interest. Dow v. Abbott, 197 Mass. 283,
84 N. E. 96.

Remainder. — Interest under Power.

The value of a remainder interest is reckoned by deducting the
value of a life estate reckoned according to the annuity tables as
of the death of the testator, and not by reckoning it according to
the time the life tenant actually lived, while the interest of an ap-
pointee under a life tenant is ascertained by deducting the value
of the life interest reckoned according to the annuity tables as of the
death of the testator. Howe v. Howe, 179 Mass. 546, 551, 61 N. E.
225, 55 L. R. A. 626.

Equity of Redemption.

Where the testator died domiciled in New Jersey owning real
estate subject to mortgage in Massachusetts, the court holds that
the inheritance tax is to be computed only upon the value of the
equity of redemption above the amount of the mortgage

It was contended by the state treasurer that the doctrine of
equitable conversion and exoneration should be applied to relieve
the land from the encumbrance of the mortgage. But the court
holds that the answer to this contention is that the rights and obli-
gations of all parties are to be determined as of the time of the
death of the decedent. And that, furthermore, the law of equitable
conversion ought not to be invoked merely to subject property to

1891, c. 425.] MASSACHUSETTS. 581

taxation, especially when the question is one of jurisdiction between
different states. The court follows In re Skinner, 106 N. Y. App.
Div. 217; In re Sutton, 3 N. Y. App. Div. 208; McCurdy v.
McCurdy, 197 Mass. 248, 83 N. E. 881.

Jurisdiction of Probate Court.

S. 14. The probate court having jurisdiction of the settlement of the estate
of the decedent, shall have jurisdiction to hear and determine all questions in
relation to said tax that may arise affecting any devise, legacy or inheritance
under this act, subject to appeal as in other cases, and the treasurer of the com-
monwealth shall represent the interests of the commonwealth in any such pro-
ceedings.

This section was referred to in Callahan v. Woodbridge, 171 Mass.
595, 596, 51 N. E. 176, and in Greves v. Shaw, 173 Mass. 205, 209,
53 N. E. 372.

The probate court has jurisdiction over a petition praying the
court to determine whether such a tax is payable and to fix its
amount. Bradford v. Storey, 189 Mass. 104, 75 N. E. 256.

This section does not give the probate court exclusive jurisdiction
but the legatee may sue the executor at law to recover his legacy.
Essex V. Brooks, 164 Mass. 79, 41 N. E. 119. In this case the
executor had the state treasurer summoned in as a party to settle
the inheritance tax, and the treasurer withdrew his objection to
being brought in.

The state treasurer has no power to determine nor duty to advise
in advance as to whether any legacy is taxable, or any other such
questions which are within the jurisdiction of the probate courts.
1 Op. Att. Gen. 85.

The question as to the liability to pay a tax is a question affecting
devise, legacy or inheritance under the act, for if the tax is paid
the devise, legacy or inheritance will be diminished by the payment
and therefore under this section the probate court has jurisdiction
of the question whether the executor of a foreign will approved in
Massachusetts is liable to a tax there. Callahan v. Woodhridge,
171 Mass. 595, 51 N. E. 176.

State Treasurer to Administer Estates in Certain Cases.

Section 15 empowers the state treasurer to take out administration
where application is not made within four months from the death
of the decedent.

582 STATUTES ANNOTATED. [Mass. St.

Accounts Must Show Payment.

Section 16 provides that probate accounts cannot be settled unless
the account shows and the court finds that the inheritance taxes
have been paid.

Section 16 was referred to in Howe v. Howe, 179 Mass. 546,
549, 55 L. R. A.

Definitions.

S. 17. In the foregoing sections the word "person" shall include the plural
as well as the singular and artificial as well as natural persons; the word "prop-
erty" shall include both real and personal estate, and any forms of interest therein
whatsoever, including annuities.

Suits for Collection of Tax. — When to be Brought.

S. 18. The treasurer of the commonwealth shall, within six months after the
same shall be due and payable, bring suit in his own name for the recovery of all
taxes remaining unpaid, and shall also bring such suit when the judge of a probate
court shall certify to him that a final account of any executor, administrator or
trustee has been filed in said court, and that the final settlement of such estate
is delayed by reason of the non-payment of such tax, and such certificate shall
issue upon the application of any heir, legatee or any person in interest; pro-
vided, however, that the probate court may extend the time when any tax shall
be due and payable whenever the circumstances of the case may require.

Limitations.

This section does not operate to set a limit of two years and six
months on the right of recovery, but the provision as to action is
directory merely. Howe v. Howe, 179 Mass. 546, 61 N. E. 225,
55 L. R. A. 626.

The Massachusetts Revised Laws, c. 202, s. 2, provide for six
years' limitation on actions of contract founded upon contracts
or liabilities expressed or implied. The court holds that a petition
under the inheritance statute for the fixing of the inheritance tax
is not included in this limitation, although the limitation applies
expressly to "actions brought by the commonwealth or for its
benefit." The court holds that a tax is not a debt in the ordinary
sense of the word and is not founded upon a contract expressed or
implied, and the collector cannot maintain an action to recover it
except as authorized -by statute.

The word ''liability" is, it is true, of large significance, but as
used in the general and special statutes of limitations refers plainly
to liabilities of a contractual nature and not to proceedings to
collect the inheritance tax. Bradford v. Storey, 189 Mass. 104, 75
N. E. 256.

1891, c. 425.1 MASSACHUSETTS. 583

Power.

This statute contained no provision relating to interests that
vest after the death of the testator and the question arose as to
the tax on an estate arising by appointment after the death of the
life tenant. The court holds that although it was not ascertained
till after the time appointed for payment whether the interest
under the appointment was exempt or not, the tax might be col-
lected when the appointment had been made, as under the provi-
sions of this section the court may extend the time when any tax
may be due whenever the circumstances may require. Howe v.
Howe, 179 Mass. 546, 551, 61 N. E. 225, 55 L. R. A. 626.

AMENDMENTS TO THE ACT OF 1891.

Mass. St. 1892, c. 379, amends Mass. St. 1891, c. 425, s. 12, by
correcting a verbal error in the original act.

Mass. St. 1893, c. 432, approved June 9, 1893, provides for
extra clerical assistance in the assessment and collection of taxes.

Mass. St. 1895, c. 307, provides an exemption on all bequests
unless the value of such bequest exceeds $500, and exempts also
bequests to towns for any public purpose.

This statute is not retrospective. 1 Op. Att. Gen. 288. It is only
prospective in its operation and does not apply to legacies to which
the parties became entitled before it took effect. Howe v. Howe,
179 Mass. 546, 552, 61 N. E. 225, 55 L. R. A. 626.

Mass. St. 1895, c. 430, approved May 29, 1895, strikes out the
provision from section 4 of the statute of 1891 that the taxes might
be paid to the county treasurers. It also amends Mass. St. 1891, c.
425, s. 9, by making it optional instead of obligatory on the state
treasurer to commence proceedings against the executor for the
recovery of the penalty, and by making it obligatory on the registers
of probate to notify the state treasurer within thirty days for any
neglect or refusal to file an inventory.

Mass. St. 1896, c. 108, extends the exemption of five hundred
dollars on bequests to include also "distributive shares."

Mass. St. 1900, c. 371, s. 1, provides that the tax on national
bank or state corporation stock or obligations shall be paid on
assignment or transfer, and if not, the exequtor, administrator or
trustee shall be personally liable until paid. And any bank or
corporation accepting such transfer and issuing new stock shall be
liable for the tax.

584 STATUTES ANNOTATED. [Mass. St.

Section 2 forbids a safe deposit company, bank or other insti-
tution, person or persons holding securities or assets belonging to
the estate of a deceased non-resident to transfer the same to a
foreign executor, administrator or legal representative of such
decedent until he has been licensed to receive the same, and until
notice has been served on the treasurer of the intended transfer.

Section 3 provides that the treasurer and receiver general shall
be made a party to all petitions by foreign executors, administrators
or trustees brought under Public Statutes, c. 142, s. 3, for sale of
personal estate and shall be entitled to fourteen days' notice.

Mass. St. 1901, c. 277, amends Mass. St. 1891, c. 425, s. 5,
by adding to the section authority to administrators or ex-
ecutors to collect taxes on real estate from the heirs or devisees
entitled.

Mass. St. 1901, c. 297, struck out the exemption of estates which
did not exceed the sum of ten thousand ($10,000) dollars in value.

Tax on Remainders.

Mass. St. 1902, c. 473, s. 1. In all cases where there has been or shall be a
devise, descent or bequest to collateral relatives or strangers to the blood, liable
to collateral inheritance tax, to take effect in possession or come into actual en-
joyment after the expiration of one or more life estates or a term of years, the
tax on such property shall not be payable nor interest begin to run thereon until
the person or persons entitled thereto shall come into actual possession of such
property, and the tax thereon shall be assessed upon the value of the property at
the time when the right of possession accrues to the person entitled thereto as
aforesaid, and such person or persons shall pay the tax upon coming into posses-
sion of such property. The executor or administrator of the decedent's estate
may settle his account in the probate court without being liable for said tax:
provided, that such person or persons may pay the tax at any time prior to their
coming into possession, and in such cases the tax shall be assessed on the value
of the estate at the time of the payment of the tax, after deducting the value of
the life estate or estates for years; and provided, further, that the tax on real
estate shall remain a lien on the real estate on which the same is chargeable until
it is paid.

Mass. St. 1902, c. 473, postponed the operation of an inheritance
tax on remainders until the remainders fell in. And the act applied
to "all cases where there has been or shall be a devise." The court
holds that this is plainly retrospective in operation and applies
to estates of decedents who died before the passage of the statute
where the tax has not been paid. Stevens w. Bradford, 185 Mass. 439,
70 N. E. 425.

1902-1904.] MASSACHUSETTS. 585

The statute of 1902, chapter 473, is applicable to estates of
resident decedents in cases where the intervening life estate is
taxable. 2 Op. Att. Gen. 373. This statute does not apply to the
estates of non-resident decedents. 2 Op. Att. Gen. 373.

Lien on Real Estate.

Mass. St. 1903, c. 248, amends Revised Laws, c. 15, s. 17, by
giving the probate court jurisdiction to discharge the lien created
by the act on real estate and make proper order to secure the pay-
ment of the tax to the commonwealth.

Compounding Tax.

Mass. St. 1903, c. 251, authorizes the treasurer to effect such
settlement as he deems for the best interest of the state of interests
dependent upon the happening of a contingency or upon the exer-
cise of a discretion.

Tax on Remainders.

Mass. St. 1903, c. 276, amended Mass. St. 1902, c. 473, by re-
quiring one entitled in remainder to give bond within one year from
the death of the decedent for the payment of the tax on coming into
possession ; and on failure to give bond the tax was made payable as
in other cases.

Where a remainder is not disposed of by will and vests as intestate
estate in a brother of the testatrix it is free from tax, while the
remainder which vested in a nephew is subject to tax payable when
the nephew comes into actual possession of the estate. It is assessed
upon its then value except that at his option it may be paid at any
time after deducting the value of the life estate, and is to be paid
by him. If the nephew gives a bond under the statute of 1903,
chapter 276, the provisions of the statute are clear as to the tax
upon the personal property. If he has not given the bond required
by the statute then the tax as to the personal estate is due and
payable as set forth in Revised Laws, c. 15, s. 4. The value of the
life interest is to be deducted in order to ascertain the value of the
interest of the remainderman. Dow v. Abbott, 197 Mass. 283, 288,
84 N. E. 96.

Compounding Tax.

Mass. St. 1904, c. 421, provides that the state treasurer may
effect a settlement of the tax in any case where there is a particular
estate to open with power of appointment by deed or will.

586 STATUTES ANNOTATED. [Mass. St.

Fees of Appraisers.

Mass. St. 1905, c. 367, approved May 4, 1905, amends Revised
Laws, c. 15, s. 16, by providing that one-half of the fees of appraisers
appointed on the application of any party interested by the probate
court shall be paid by the treasurer and one-half by the other party
or parties to the proceeding. *

See notes to Dow v. Abbott, ante, p. 579, 197 Mass. 283, 84 N. E. 96.

Exemptions.

Mass. St. 1905, c. 470, amends the exemption to charitable,
educational or religious societies by providing that all gifts "for the
use of" said societies are exempt from taxation.

Mass. St. 1906, c. 436, approved May 31, 1906. This statute
provides in section 1 that exemptions for charitable purposes shall
extend to the trustee or trustees for public charitable purposes
within the commonwealth.

S. 2. The provisions of this act shall apply to all cases in which such tax
remains unpaid at the date of the passage thereof.

The court holds that a legacy to trustees for the purpose of
establishing a certain Latin school in a foreign country is not
exempt from taxation under the statute of 1906, chapter 436. The
fact that the will authorized the trustees to form a corporation
to administer the fund and that the trustees did form a Massa-
chusetts corporation does not alter the case, as the fund vested
in the trustees on the death of the testator, and there was no re-
quirement that a corporation should be formed. The gift took
effect absolutely in the trustees on the death of the testator.

The court distinguishes the case oiBalch v. Shaw, 174 Mass. 144,
54 N. E. 490, where there was no gift to anyone until the corpora-
tion was formed. Pierce v. Stevens, 205 Mass. 219, 91 N. E. 319.

Direction in Will to Pay Tax from Residue.

Mass. St. 1907, c. 452, s. 1, provides that when a tax by the
terms of the will is payable from the residue of the estate or from
any source other than the legacy or devise itself, the tax shall be
calculated and paid upon the appraised value of the property be-
queathed or devised, without increase or addition of any kind on
account of the direction that the tax shall be payable from the
residue or otherwise.

This statute provided that the act should apply to all cases in
which the tax remains unpaid at the date of the passage thereof.

1909, c. 527.] MASSACHUSETTS. 587

The Direct Inheritance Tax and Amendments.

Mass. St. 1907, c. 563, in effect September 1, 1907, is the first
direct inheritance tax in Massachusetts and was substantially the
same as the present act, printed in full, infra.

Mass. St. 1908, c. 268, approved May 25, 1908, authorizes the
tax commissioner to excuse the register from filing inventories
where no part of the estate appears to be subject to tax.

Mass. St. 1908, c. 624, approved June 12, 1908, authorizes the
treasurer to abate inheritance taxes except those imposed under
the statute of 1907, chapter 563, at any time after the expiration
of six years from the date when such taxes become payable.

Mass. St. 1*908, p. 840, is a special exemption granted to certain
individuals in a certain estate.

Mass. St. 1909, c. 266, authorizes the state treasurer to bring
actions of contract for the taxes. See post, p. 600.

Mass. St. 1909, c. 268 added to class A subject to the lower rate
of taxation, the adoptive parent or the lineal ancestor of an adoptive
parent.

Mass. St. 1909, c. 490, pt. 4, was approved June 12, 1909, and
went into effect July 12, 1909. (C/. R. L., c. 8, s. 1.) St. 1909,
c. 527, was approved and went into effect June 19, 1909.

Mass. St. 1910, c. 440, approved April 25, 1910, authorizes the
probate court to determine the taxes on real estate.

Mass. St. 1910, c. 481, approved May 4, 1910, amends St. 1909,
c. 490, pt. 4, s. 23, as to the allowance of final accounts only on
payment of the tax. See post, p. 597.

Mass. St. 1911, c. 191, approved March 25, 1911, applies to
probate accounts. See post, p. 601.

Mass. St. 1911, c. 359, approved April 29, 1911, restricts access
to papers placed on file. See post, p. 601.

Mass. St. 1911, c. 502, approved May 27, 1911, amends Mass.
St. 1909, c. 490, pt. 4, s. 3. See post, p. 590.

Mass. St. 1911, c. 551, approved June 16, 1911, amends St. 1909,
c. 490, pt. 4, s. 22. '

THE PRESENT ACT.

Transfers Taxable. — Rates. — Exemptions. (St. 1909, c. 527.)

S. 1. All property within the jurisdiction of the commonwealth, corporeal or
incorporeal, and any interest therein, wheth r belonging to inhabitants of the
commonwealth or not, which shall pass by will, or by the laws regulating in-
testate succession, or by eed, grant, or gift, except in cases of a bona fide purchase
for full consideration in money or money's worth, made or intended to take effect

588 STATUTES ANNOTATED. [Mass. St.

in possession or enjoyment after the death of the grantor, to any person, abso-
lutely or in trust, except to or for the use of charitable, educational or religious
societies or institutions, the property of which is by the laws of this common-
wealth exempt from taxation, or for or upon trust for any charitable purposes, to
be carried out within this commonwealth, or to or for the use of a city or town
within this commonwealth for public purposes, or to or for the use of (class A)
the husband, wife, lineal ancestor, lineal descendant, adopted child, the lineal de-
scendant of any adopted child, the adoptive parent or lineal ancestor of an adop-
tive parent, the wife or widow of a son, or the husband of a daughter, of a decedent,
or to or for the use of (class B) the brother, sister, nephew or niece of a decedent,
shall be subject to a tax of five per cent of its value for the use of the common-
wealth; and such property which shall so pass to or for the use of a member of
class A shall be subject to a tax of one per cent of its value for the use of the
commonwealth if such value does not exceed fifty thousand dollars, to a tax of
one and one-half per cent if its value exceeds fifty thousand and does not exceed
one hundred thousand dollars, and to a tax of two per cent if its value exceeds one
hundred thousand dollars; and such property which shall so pass to or for the
use of a member of class B shall be subject to a tax of three per cent of its value for
the use of the commonwealth if such value does not exceed twenty-five thousand
dollars, to a tax of four per cent if its value exceeds twenty-five thousand and does
not exceed one hundred thousand dollars, and to a tax of five per cent if its value
exceeds one hundred thousand dollars; and administrators, executors and
trustees, and any grantees under such conveyance made during the grantor's
life, shall be liable for such taxes, with interest, until the same have been paid;
but no bequest, devise or distributive share of an estate which shall so pass to
or-for the use of a husband, wife, father, mother, child, adopted child, adoptive
father or adoptive mother of the deceased, unless its value exceeds ten thousand
dollars, and no other bequest, devise or distributive share of an estate unless its
value exceeds one thousand dollars, shall be subject to the provisions of this act;
but no tax shall be exacted upon property so passing which shall reduce its value
below the amount of the above exemptions.

[See notes to the Act of 1891, ante. As to valuation of remainder see notes
to Dow v. Abbott, ante, p. 585.]

The Mass. St. 1909, c. 527, s. 1, is merely a declaratory act.
"The curious part of St. 1909, c. 527, which we now hold to be a
declaratory act, is that although it is an act subsequent to the
codifying act (St. 1909, c. 490), it amends not the codifying act
but one of the earlier acts re-enacted in the codifying act. The
explanation is that the latter act went into effect on its passage,
June 19, 1909, w^hile the codifying act (which was passed on June
12) did not. [Cf. R. L., c. 8, s. 1.] The matter is further ex-
pressly dealt with in St. 1909, c. 490, pt. 4, s. 27." Per Loring,
J., in Davis v. Stevens, 208 Mass. 343, 94 N. E. 556.

**Within the Jurisdiction/'

The court notes the contention of the state treasurer that because
debts owned by a non-resident against a resident of Massachusetts

1909, c. 527.] MASSACHUSETTS. 589

can only be enforced by the aid of Massachusetts' courts it ought
to hold they are property within the jurisdiction of the state ; but the
court does not decide this contention. Kinney v. Stevens, 207 Mass.
368, 93 N. E. 586.

The words "which shall pass by will" in the Mass. St. 1909,
c. 490, pt. 4, s. 1, described only property which passed by the
terms of the will as written and not as changed by any agreement
for compromise made within or without the statute. Any other
interpretation would make the amount to be assessed hinge on the
manner in which the agreement was to be carried out. The court
comes to this conclusion after examining the history of the Massa-
chusetts statute allowing the parties with the approval of the court
to alter by compromise the terms of a will. Baxter v. Stevens,
209 Mass. 459, 95 N. E. 854.

**For Full Consideration in Money or Money's Worth."

Under the Mass. St. 1909, c. 490, pt. 4, s. 1 (repeated in 1909,
c. 527, s. 1), a transfer for a consideration is not exempt from tax
unless "the consideration, whatever form it may assume, is not
only valuable, but full, by covering the value in money, or the
equivalent in money of the property transferred. ... If services
rendered, or to be rendered, constitute the consideration . . . their
value may be inquired into and ascertained, and where in "money's
worth" they equal or exceed the fair value of the property at the
death of the transferror no tax can be imposed. If they fall below
such value, there is no provision for a reduction, leaving the excess
only to be taxed as a gratuity." Per Braley, J., in State Street Trust
Co. V. Stevens. 95 N. E. 851 (June 22, 1911.)

The testator made an agreement to leave property by will in
consideration of care and support to be given him for the rest of
his life and he made a will carrying out the agreement. The court
finds that this is not a *' bona fide purchase for full consideration for
money or money's worth made ... to take effect . . . after the
death of the grantor." The court finds that the devisee took no
title in her lifetime, but that the words quoted applied only to a
deed, not to a will. As the will was made and allowed the devisee
is bound by an effective performance of the agreement and must
take compensation under the will, and as an incident of the transfer
of the estate to her she must suffer the assessment of the tax. The
court suggests that for actual disbursements incurred in the service

590 STATUTES ANNOTATED. [Mass. St.

the devisee may well be a creditor of the estate. In re Perry.
(Middlesex County Probate Court, July, 1911, unreported.)

Religious Societies.

It has been decided at nisi prius and affirmed in the supreme
court that the Young Men's Christian Association is a religious
corporation. Little v. Newburyport, 210 Mass. 414, 96 N. E. 1032.

"To or For the Use of a City or Town."

The testator made a bequest to a town in New Hampshire of the
residue of her property as a perpetual fund in trust, the income
to be expended in aid of the worthy poor of American parentage,
residents of the town. The testator died November 23, 1908, and
the court holds that the Mass. St. 1909, c. 527, s. 1, providing that
the exemption of gifts to charitable purposes shall be an exemption
of gifts to "charities to be carried out within this commonwealth";
and that the exemption of bequests to a "state or town for public
purposes" shall be an exemption to "a city or town within this
commonwealth for public purposes" is merely declaratory of pre-
vious statutes. The court notes that the charitable exemption has
always been confined in Massachusetts to towns of Massachusetts
ahd finds in the history of the statutes which it discusses no rea-
son to think that this policy had ever been altered. Davis v.
Stevens, 208 Mass. 343, 94 N. E. 556.

Corporations Incorporated in Two States.

St. 1909, c. 490, pt. 4.

S. 2, When the personal estate so passing from any person not an inhabitant
of this commonwealth shall consist in whole or in part of shares in any railroad
or street railway company or telegraph or telephone company incorporated under
the laws of this commonwealth and also of some other state or country, so much
only of each share as is proportional to the part of such company's line lying within
this commonwealth shall be considered as property of such person within the juris-
diction of the commonwealth for the purposes of this part.

[See notes to the Act of 1891, ante, p. 570.]

Mass. St. 1911, c. 502, s, 1, approved May 27, 1911, amends
St. 1909, c. 490, pt. 4, s. 3, to read as follows: —

Stock in Companies in Two or More States.

Property of a resident of the commonwealth which is not therein at the
time of his death, including so much of each share of stock in any railroad or street
railway company or telegraph or telephone company incorporated under the
laws of this commonwealth and also under the laws of some other state or country
as is proportional to the part of such company's line lying without the common-

1909, c. 527.] MASSACHUSETTS. 591

wealth, shall not be taxable under the provisions of this part if legally subject
in another state or country to a tax of like character and amount to that hereby
imposed, and if such tax be actually paid or guaranteed or secured in accordance
with law in such other state or country; if legally subject in another state or
country to a tax of like character but of less amount than that hereby imposed
and such tax be actually paid or guaranteed or secured as aforesaid, such property
shall be taxable under this part to the extent of the difference between the tax
thus actually paid, guaranteed or secured and the amount for which such property
would otherwise be liable hereunder. Property of a non-resident decedent which
is within the jurisdiction of the commonwealth at the time of his death, if subject
to a tax of like character with that imposed by this part by the law of the state
or country of his residence, shall be subject only to such portion of the tax hereby
imposed as may be in excess of such tax imposed by the laws of such state or
country: provided, that a like exemption is made by the laws of such other state
or country in favor of estates of citizens of this commonwealth, but no such ex-
emption shall be allowed until such tax provided for by the law of such other
state or country shall be actually paid, guaranteed or secured in accordance with
law.

S. 2. The provisions of this act shall apply to all cases in which the tax re-
mains unpaid at the date of the passage hereof.

S. 3. This act shall take effect upon its passage.

[See notes to the Act of 1891, ante, p. 568 et seq. As to the effect of this
provision see general notes, ante, p. 563.]

Tlie following states have reciprocal provisions for inheritance
taxes paid in another state: W. Va. St. 1904, c. 6, s. 6; ]VIass. St.
1907, c. 563, s. 3; Vt. St. 1904, no. 30, s. 3. Connecticut tried a
reciprocal provision (statute of 1903, chapter 63) but has now-
adopted a retaliatory arrangement (statute of 1907, chapter 179).
When Payable. — Interest. — Lien. (St. 1909, c. 527, s. 2.)

Except as hereinafter provided, taxes imposed by the provisions of this
act shall be payable to the treasurer and receiver general by the executors, ad-
ministrators or trustees at the expiration of two years after the date of their giving
bond. If the probate court, acting under the provisions of section thirteen of
chapter one hundred and forty-one of the Revised Laws, has ordered the executor
or administrator to retain funds to satisfy a claim of a creditor, the payment of the
tax may be suspended by the court to await the disposition of such claim. In
all cases where there shall be a grant, devise, descent or bequest to take effect
in possession or come into actual enjoyment after the expiration of one or more
life estates or a term of years, the taxes thereon shall be payable by the executors,
administrators or trustees in office when such right of possession accrues, or, if
there is no such executor, administrator or trustee, by the person or persons so
entitled thereto, at the expiration of one year after the date when the right of
possession accrues to the person or persons so entitled. If the taxes are not paid
when due, interest shall be charged and collected from the time the same became
payable. Property of which a decedent dies seized or possessed, subject to taxes
as aforesaid, in whatever form of investment it may happen to be, and all prop-
erty acquired in substitution therefor, shall be charged with a lien for all taxes and

692 STATUTES ANNOTATED. [Mass. St.

interest thereon which are or may become due on such property; but said lien
shall not affect any personal property after the same has been sold or disposed
of for value by the executors, administrators or trustees. The lien charged by
this act upon any real estate or separate parcel thereof may be discharged by
the payment of all taxes due and to become due upon said real estate or separate
parcel, or by an order or decree of the probate court discharging said lien and
securing the payment to the commonwealth of the tax due or to become due by
bond or deposit as hereinafter provided, or by transferring such lien to other
real estate owned by the owner or owners of said real estate or separate parcel
thereof.

[Applicable to all cases where tax unpaid, see St. 1909, c. 527, s. 10, post,
p. 600. See notes to the Act of 1891, ante, p. 576.]

The effect of this section is that there is no inducement to pay the tax within
the two-year period. The tax commissioner's office declines to give any credit
for prompt payment within that time even under the section authorizing the
compromise of claims.

Deposit in Lien of Tax. (St. 1909, c. 490, pt. 4.)

S. 5. In every case where there shall be a bequest or grant of personal estate
made or intended to take effect in possession or enjoyment after the death of the
grantor, to take effect in possession or come into actual enjoyment after the ex-
piration of one or more life estates or a term of years, whether conditioned upon
the happening of a contingency or dependent upon the exercise of a discretion,
or subject to a power of appointment or otherwise, the executor or administrator
or grantee may deposit with the treasurer and receiver general a sum of money
sufficient in the opinion of the tax commissioner to pay all taxes which may be-
come due upon such bequest or grant, and the person or persons having the right
to the use or income of such personal estate shall be entitled to receive from the
commonwealth interest at the rate of two and one-half per cent per annum upon
sach deposit, and when said tax shall become due the treasurer and receiver
general shall repay to the persons entitled thereto the difference between the
tax certified and the amount deposited; or any executor, administrator, trustee or
grantee, or any person interested in such bequest or grant may give bond to a
judge of the probate Court having jurisdiction of the estate of the decedent, in
such amount and with such sureties as said court may approve, with the condition
that the obligor shall notify the tax commissioner when said tax becomes due and
shall then pay the same to the treasurer and receiver general.

Method of Valuation. (St. 1909, c. 527, s. 3.)

Except as hereinafter provided, said tax shall be assessed upon the ac-
tual value of the property at the time of the death of the decedent. In every
case where there shall be a devise, descent, bequest or grant to take effect in
possession or enjoyment after the expiration of one or more life estates or a term
of years, the tax shall be assessed on the actual value of the property or the
interest of the beneficiary therein at the time when he becomes entitled to the
same in possession or enjoyment. The value of an annuity or a life interest in
any such property, or any interest therein less than an absolute interest, shall
be determined by the American experience tables at four per cent compound
interest.

[See notes to the Act of 1891, ante, p. 579.]

1909, c. 627.] MASSACHUSETTS. 593

Tax on Future Interests. (St. 1909, c. 527, s. 4.)

Any person or persons entitled to a future interest or to future interests
in any property may |)ay the tax on aoeount of the same at any time before such

tax would lie (I 111- ill .u i .m . I.m.r w il li (lie |)H'\ iMtuis lici I'iiil xh m r i<>ii( .1 i iuhI, and
in sn«-h c.i m:- ( he l.i \ •.li.ill I m- .1 •.•,(■■-.. 1 up. m | lie ,1. ( ii.il x.iliie ol 1 hr iiUcn-st at the
time ol liic iM\ nuiu ol (lie (.i\, .iii.l ;,ih h \,iliir •.li.ill Le deternuned by the tax
eoiniiii-.M.Mici .!^; licuiu.itiri- ] )i > i\ k Ic. 1 . Ill cxciN t.isc ill whieli it is impossible
to roiiipiilt' llu- pu'-riil N.iiiicol .iii\ iiilcn'.l (he (,i\ ruminissioiU'i 111. i\. willi
the .ippiox .il oi I lie .11 Idi luv ^r 111 1.1 1, illi. I mu li m( I KiiiiiK ol | lie l.i\ .i:, ju- :.li.ill
deem («> In- l.u (lie \h-A lulcicsls of I he » i )iiiuh uiw c.ildi, .1 iid p.i\ iiuiil ol I lir ..lun
tjo .u;ifed upon .nIliII Iu- .1 lull s.il isl.ul 1. .11 ol mu li l.i\.

lApplicil.lo (o.dl (.IMS wli.-.r l,,x in.p.nd. :.rr M. 1009, C. 617, 8. 10. ScC llOtCS
to tlie Act of ISiH, unit', p. J.SO.J

Property Requeathed to an Executor, etc., in Lieu of Compensation.

(St. 1909. e. -lOO. pi. l.)

S. S. 11. 1 I, .i.iioi ii\( , luiiiK .11 hs or devises to his e.xecutora or trustees any
propii(> oiluiwi.c li.iMf to ...lid (.i\. in lieu of their compensation, the value
thereof in excess of k ,1 .oii.d>l. roiupriisation, as determined by the probate
court upon the applic.K loii of any iiitcit •led party or of the tax commissioner,
shall iu'\i 1 llu 1. .-. I.c Mil.|ic-t to the pro\ i 1011 , ol this part.

ICxecutor, etc., Holding Property Subject to Tax sliall Deduct the Tax
or Collect it from tlie Lcftateo, etc. (Si. 1<)()9, * . 190. pt. 4.)
S. 9. An executor, adniiiiisii.Koi- or 1 1 II .Iff lioMm;' piopnix Mihject to snld

tax shall dl'duet tlu> I.l\ llicicliom or collr, l il hom llu- Ir-.iPc oi pci'.oii .nlillfd
to said p|-op(-i(\ ; .iiid lie sli.ill iiol dilixrr piopiil\ or .i .spcritic Ici'.k \ ^.lll)n•^•t
to ^.iid (.i\ iiiilil lu- 1 1. 1 :. roiicvl cd (lie l.i\ liuu-oii. An cxrciilor or .idiumisl i ,i( or
shall coll,-, I l.ixts dm- upon l.iiid wLuli is mi1>m>I Io |.i\ iiiidcr (lu- jMoxisioiis
hereof liom llu- luip. or d<\ i:..-,:. .Mlill.d ih. u lo, .ind lu- iii.iN- In- ,i ii ( lion.-.-,l tO
sell said 1.1 lid. .u. oidiiij; to the piovibiun^ uf t.ccliuii twclw-, if {\wy icfiiso or
nei'lct I Io p.i\ :..iid i.i\.

If a Legacy is Payable out of Real Estate the Devisee shall Pay the Tax
to the Executor, etc. (St. 1909, c. 490, pt. 4.)
S. 10. If a legacy subject to said tax is charged upon or payable out of real
estate, the heir or devisee, before paying it, shall deduct said tax therefrom and
pay it to the executor, administrator or trustee, and the tax shall remain a lien
upon said real estate until it is paid. Payment thereof may be enforced by the
executor, administrator or trustee in the same manner as the payment of the
legacy itself could be enforced.

No Tax Chargeable Upon Money Applied in Payment of Succession Tax
in Certain Cases. (St. 1909, c. 400, pt. 4.)
S. 11. When provision is made by any will or other instrument for payment
of the legacy or s ccession tax upon any gift thereby made out of any property
other than that so given, no tax shall be chargeable upon any money to be applied
ill payment of such tax.

594 STATUTES ANNOTATED. [Mass. St.

Probate Court May Authorize Sale of Real Estate in Certain Cases.

(St. 1909, c. 490, pt. 4.)
S. 12. The probate court may authorize executors, administrators and
trustees to sell the real estate of a decedent for the payment of said tax in the same
manner as it may authorize them to sell real estate for the payment of debts.

Inventory. (St. 1909, c. 527, s. 5.)

A full and complete inventory and appraisa mder oath of every estate shall
be filed in the probate court or with the tax commissioner by the executor, ad-
ministrator or trustee within three months ^fter his appointment, and such
inventory shall contain a complete list of all the assets within the knowledge
of the said executor, administrator or trustee. If he neglects or refuses to file
such an inventory and appraisal he shall be liable to a penalty of not more than
one thousand dollars, which shall be recovered by the tax commissioner for
the use of the commonwealth, and the register of probate shall notify the
tax commissioner within thirty days after the expiration of said three
months of the failure of any executor, administrator or trustee to file an inven-
tory and appraisal in his ofifice.

[To what cases applicable, see St. 1909, c. 527, s. 11. See notes to the Act
of 1891, s. 9, ante, p. 578.]

Within thirty days after the filing of the inventory and appraisal provided
for, in the preceding section, the register of probate shall send by mail to the tax
commissioner a copy thereof. The register shall also, within the same period,
send by mail to the tax commissioner a copy of the will of the decedent, if such
has been allowed by the probate court. The register shall also furnish such copies
of papers in his office as the tax commissioner shall require, and shall furnish
information as to the records and files in his office in such form as the tax com-
missioner may require. A refusal or neglect by the register so to send a copy of
such inventory and appraisal, or to furnish such copies or information shall be a
breach of his official bond; but the tax commissioner may excuse the register
from filing inventories or copies of inventories and of wills of estates no part of
which, in his judgment, appears to be subject to a tax under the provisions of this
chapter.

[See notes to the Act of 1891, s. 10, ante, p. 579.]

In Cases of Assignment or Transfer of Stock the Tax shall be Paid to
the Treasurer and Receiver General, etc. (St. 1909, c. 490, pt. 4.)
S. 15. If a foreign executor, administrator or trustee assigns or transfers any
stock in any national bank located in this commonwealth or in any corporation
organized under the laWs of this commonwealth, owned by a deceased non-resident
at the date of his death and liable to a tax under the provisions of this part, the
tax shall be paid to the treasurer and receiver general at the time of such assign-
ment or transfer; and if it is not paid when due, such executor, administrator
or trustee shall be personally liable therefor until it is paid. A bank located in
this commonwealth or a corporation organized under the laws of this common-
wealth which shall record a transfer of any share of its stock made by a forcing

1909, c. 490.] MASSACHUSETTS. 595

executor, administrator or trustee, or issue a new certificate for a share of its stock
at the instance of a foreign executor, administrator or trustee, before all taxes
imposed thereon by the provisions of this party have been paid, shall be
liable for such tax in an action of contaact brought by the treasurer and receiver
general.

License for Transfer of Property of Non-Resident. (St. 1909, c. 527, s. 7.)
Securities or assets belonging to the estate of a deceased non-resident shall not
be delivered or transferred to a foreign executor, administrator or legal repre-
sentative of such decedent, unless such executor, administrator or legal representa-
tive has been licensed to receive the said securities or assets under the provisions
of section three of chapter one hundred and forty-eight of the Revised Laws.
License to receive, sell, transfer or convey securities or assets under the provisions
of section three of said chapter one hundred and forty-eight of the Revised Laws
shall not be granted unless it appears to the judge of the probate court that all
taxes imposed by the provisions of this act have been paid or secured according
to law.' Any person or corporation that delivers or transfers any securities or
assets belonging to the estate of a non-resident decedent before all taxes imposed
thereon by the provisions of this act have been paid or secured according to law,
shall be liable for such tax in an action of contract brought by the treasurer and
receiver general.^ The notice required by section three of said chapter one hundred
and forty-eight to be given to the treasurer and receiver general shall be given to
the tax commissioner in regard to all property subject to the provisions of this
act, instead of being given to the treasurer and receiver general.

The Tax Commissioner to be a Party to Petitions by Foreign Executors,
etc. (St. 1909, c. 490, pt. 4.)

S. 17. The tax commissioner shall be made a party to all petitions by foreign
executors, administrators or trustees brought under the provisions of section three
of chapter one hundred and forty-eight of the Revised Laws, and no decree
shall be made upon any such petition unless it appears that notice of such petition
has been served on the tax commissioner fourteen days at least before the return
of such petition.

[See notes to the act of 1891, s. 14, ante, p. 581.]

Refund. (St. 1909, c. 490, pt. 4.)

S. 18. If a person who has paid such tax afterward refunds a portion of the
property on which it was paid, or if it is judicially determined that the whole or
any part of such tax ought not to have been paid, such tax, or the due proportion
thereof, shall be repaid to him by the executor, administrator or trustee.

[See notes to the Act of 1891, s. 12, ante, p. 579.]

Value of Property Liable to Tax to be Determined by the Tax Commis-
sioner, etc. (St. 1909, c. 490, pt. 4.)
S. 19. The value of the property upon which the tax is computed shall be
determined by the tax commissioner and notified by him to the person or persons
by whom the tax is payable, and such determination shall be final unless the value
so determined shall be reduced by proceedings as herein provided. At any time

596 STATUTES ANNOTATED. [Mass. St.

within three months after such determination the probate court shall, upon the
application of any party interested in the succession, or of the executor, adminis-
trator or trustee, appoint one disinterested appraiser or three disinterested
appraisers, who, first being sworn, shall appraise such property at its actual market
value, as of the day of the death of the decedent and shall make return thereof
to said court. Such return, when accepted by said court, shall be final: provided,
that any party aggrieved by such appraisal shall have an appeal upon matters
of law. One-half of the fees of said appraisers, as determined by the judge of
said court, shall be paid by the treasurer and receiver general, and one-half of
said fees shall be paid by the other party or parties to said proceeding.
[See notes to the Act of 1891, s. 13, ante, p. 579.]

Tax Commissioner shall Certify Amount of Tax Due to the Treasurer
and Receiver General, etc. (St. 1909, c. 490, pt. 4.)

S. 20. The tax commissioner shall determine the amount of tax due and
payable upon any estate or upon any part thereof, and shall certify the amount
so due and payable to the treasurer and receiver general and to the person or
persons by whom the tax is payable; but in the determination of the amount of
any tax said tax. commissioner shall not be required to consider any payments on
account of debts or expenses of administration which have not been allowed by
the probate court having jurisdiction of said estate. Payment of the amount
so certified shall be a discharge of the tax. An executor, administrator, trustee
or grantee who is aggrieved by any determination of the tax commissioner may,
within one year after the payment of any tax to the treasurer and receiver general,
apply by a petition in equity to the probate court having jurisdiction of the estate
of the decedent for the abatement of said tax or any part thereof, and if the court
adjudges that said taxor any part thereof was wrongly exacted it shall order an
abatement of such portion of said tax as was assessed without authority of law.
Upon a final decision ordering an abatement of any portion • of said tax, the
treasurer and receiver general shall pay the amount adjudged to have been illegally
exacted, with interest, without any further act or resolve making appropriation
therefor.

[See notes to the Act of 1891, ante, p. 579.]

The Probate Court to Hear and Determine all Questions, etc. (St. 1909
c. 490, pt. 4.)

S. 21. The probate court having jurisdiction of the settlement of the estate
of the decedent shall, subject to appeal as in other cases, hear and determine
all questions relative to said tax, and the treasurer and receiver general shall
represent the commonwealth in any such proceedings. If the court shall fine
that any tax remains due, it shall order the executor, administrator or trusted
to pay the same, with interest and costs; and execution shall be awarded against
the goods and estate of the deceased in the hands of the executor, administrator
or trustee, or, if it appears ,that there are no such goods or estate in his hands,
against the goods and estate of the executor, administrator or trustee, as if for
his own debt; but the administrators, executors, trustees and grantees herein-
before mentioned shall be personally liable only for such taxes as shall be payable
while they continue in the' said offices or have title as such grantees respectively^

[See notes to the Act of 1891, s. 14, ante, p. 581.]

1909, c. 490.1 MASSACHUSETTS. 597

If a Will is Not Oflfered for Probate within Four Months the Probate
Court to Appoint an Administrator, etc. (St. 1909, c. 490, pt. 4.)
S. 22. If, upon the decease of a person leaving an estate liable to a tax under
the provisions of this part, a will disposing of such estate is not offered for probate,
or an application for administration made within four months after such decease,
the probate court, upon application by the tax commissioner, shall appoint an
administrator. (As amended by St. 1911, c. 551.)

No Final Account Allowed Till Taxes Paid. (St. 1910, c. 481, s. 1, amend-
ing St. 1909, c. 490, pt. 4. s. 23.)

The final or other account heretofore or hereafter filed of an executor, adminis-
trator or trustee heretofore or hereafter appointed, may be allowed by the probate
court, if such account shows, and the judge of said court finds, that all taxes
imposed by the provisions of part four of chapter four hundred and ninety of the
acts of the year nineteen hundred and nine, and of acts in amendment thereof or
in addition thereto, upon any property or interest therein belonging to the estate
to be settled by said account and already payable have been paid, and that such
property, or interest therein, has been transferred to a trustee appointed by a
probate court of this commonwealth who has given bond, with sufficient sureties,
in such a sum as to insure the payment of all taxes which may become due on
said estate, unless such trustee is exempted from giving sureties by the probate
court appointing him.

[See notes to the Act of 1891, s. 16, ante, p. 582.]

Proceedings for Recovery. (St. 1909, c. 490, pt. 4.)

S. 24. The treasurer and receiver general shall commence proceedings for
the recovery of any of said taxes within six months after the same become payable,
and also whenever the judge of a probate court certifies to him that the final
account of an executor, administrator or trustee has been filed in such court,
and that the settlement of the estate is delayed because of the non-payment of
said tax. The probate court shall so certify upon the application of any heir;
legatee or other person interested therein, and may extend the time of payment
of said tax whenever the circumstances of the case require.

Decree of Distribution no Defence to Action.

The intestate died in 1892 and the defendant was appointed
administrator in that year and her final account was allowed in
March, 1895. It was admitted that an inheritance tax should have
been paid on the estate and never was paid ; but the administrator
claims that she is protected froni liability by the decrees of dis-
tribution of the probate court under which she acted.

The court assumes that the decrees were properly entered and
that the probate, court had jurisdiction and that the administrator
acted in good faith, but the court holds that the probate decrees
are no protection to the administrator, relying on Attorney General

598 STATUTES ANNOTATED. [Mass. St.

V. Stone, 209 Mass. 186, 95 N. E. 395; Attorney General v.
Rafferty, 209 Mass. 321, 95 N. E. 747.

Not to Apply in Certain Cases. (St. 1909, c. 490, pt. 4.)

S. 25. This part shall not apply to estates of persons deceased prior to the
date when chapter five hundred and sixty-three of the acts of the year nineteen
hundred and seven took effect, nor to property passing by deed, grant, sale or
gift made prior to said date; but said estates and property shall remain subject to
the provisions of law in force prior to the passage of said chapter.

How Construed. (St. 1909, c. 490, pt. 4.)

S. 26. The provisions of this act, so far as they are the same as those of
existing statutes, shall be construed as continuations thereof, and not as new
enactments, and a reference in a statute which has not been repealed to provisions
of law which have been revised and re-enacted herein shall be construed as apply-
ing to such provisions as so incorporated in this act; they shall not affect any act
done, liability incurred, or any right accrued and established, or any suit or
prosecution, civil or criminal, pending or to be instituted, to enforce any right
or penalty or punish any offence under the authority of existing laws, but the
proceedings in such cases shall conform to the provisions of this act.

Not Affecting* Other Legislation of 1909. (St. 1909, c. 490, pt. 4.)

S. 27. Nothing in this act contained shall be construed as repealing or in

any way affecting any other legislation passed in the year nineteen hundred and

nine.

[Approved June 12, 1909. In effect July 12, 1909, under the terms of R. L.,

c. 8, s. 1.]

Powers. (St. 1909, c. 527.)

S. 8. Whenever any person shall exercise a power of appointment derived
from any disposition of property made prior to September first, nineteen hundred
and seven, such appointment when made shall be deemed to be a disposition
of property by the person exercising such power, taxable under the provisions of
chapter five hundred and sixty-three of the acts of the year nineteen hundred and
seven, and of all acts in amendment thereof and in addition thereto, in the same
manner as though the property to which such appointment relates belonged
absolutely to the donee of such power, and had been bequeathed or devised by
the donee by will ; and whenever any person possessing such a power of appoint-
ment so derived shall omit or fail to exercise the same within the time provided
therefor, in whole or in part, a disposition of property taxable under the pro-
visions of chapter five hundred and sixty-three of the acts of the year nineteen
hundred and seven and all acts in amendment thereof and in addition thereto
shall be deemed to take place to the extent of such omission or failure in the
same manner as though the persons or corporations thereby becoming entitled
to the possession or enjoyment of the property to which such power related had
succeeded thereto by a will of the donee of the power failing to exercise such pov er,
taking effect at the time of such omission or failure. The provisions of chapter
fifteen of the Revised Laws, chapter four hundred and seventy-three of the acts
of the year nineteen hundred and two, chapters two hundred and forty-eight,

1909, c. 527.] MASSACHUSETTS. 599

two hundred and fifty-one and two hundred and seventy-six of the acts of the
year nineteen hundred and three, chapter four hundred and twenty-one of the
acts of the year nineteen hundred and four, chapters three hundred and sixty-seven
and four hundred and seventy of the acts of the year nineteen hundred and five and
chapter four hundred and thirty-six of the acts of the year nineteen hundred
and six are hereby repealed in so far as they apply to the taxation of property
passing through or by reason of powers of appointment created in dispositions of
property made subsequent to June eleventh, eighteen hundred and ninety-one,
and prior to September first, nineteen hundred and seven, which have not been
fully exercised prior to the passage of this act or the taxes thereon settled under the
provisions of chapter four hundred and twenty-one of the acts of the year nine-
teen hundred and four. The provisions of section twenty-five of chapter five
hundred and sixty-three of the acts of the year nineteen hundred and seven
are hereby repealed in so far as the same are inconsistent with the provisions
of this act.

[See notes to the Act of 1891, ante, p. 571.]

Tlie IVlass. St. 1909, c. 527, s. 8, is different from tlie former
statutes in tliat it provides that the taxation of property subject
to a power of appointment shall be in the same manner as though
the property belonged absolutely to the donee of the power
and had been bequeathed or devised by the donee by will.
In this respect the provision is different from the construction
that is given to the previous statute in Emmons v. Shaw, 171
Mass. 410, 50 N. E. 1033; Minot v. Stevens, 207 Mass. 588, 38
N. E. 512.

The donor by marriage settlement executed in 1844 conveyed
property to trustees to pay the income to a certain person for life,
and on her death to convey it as she might by will appoint and in
default of appointment to her heirs at law. The life tenant died
August 17, 1909, without exercising the power and the court holds
that a succession tax is due under the statute of 1909, chapter 527,
section 8.

The court remarks that it is held without dissent that the legis-
lature has power to lay a tax on the exercise of the power of appoint-
ment although the power was created before the passage of the
statute.

The court goes further and says that property held subject to
a power may be said by the legislature to be not vested in anybody
and that when it vests in possession through a proper disposition
of it which is dependent upon the will and conduct of the donee
a succession tax shall be imposed, whether the succession is de-
termined by action or refraining from action on the part of the
donee. Minot v. Stevens, 207 Mass. 588, 38 N. E. 512.

eOO STATUTES ANNOTATED. [Mass. St.

Highest Rate to Apply Where Information is Not Furnished. (St. 1909,
c. 527.)
S. 9. Whenever an executor, administrator, trustee or any person who is
liable to taxation under the provisions of chapter five hundred and sixty-three
of the acts of the year nineteen hundred and seven and all acts in amendment
thereof and in addition thereto, refuses or neglects to furnish the tax commissioner
with any information which in the opinion of the tax commissioner is necessary
to the proper computation of the taxes payable by such executor, administrator,
trustee or person, after having been requested so to do, the tax commissioner shall
certify such taxes at the highest rate at which they could in any event be computed.

Sections 2 and 4 to Apply Where Tax is Unpaid. (St. 1909, c. 527.)

S. 10. The provisions of sections two and four of this act shall apply to all
cases in which the tax remains unpaid at the date of the passage hereof.

Section 5 Not to Apply to Executors, etc., Appointed Prior to Passage.

(St. 1909, c. 527.)
S. 11. The provisions of section five of this act shall not apply to executors,
administrators or trustees appointed prior to the passage hereof, but such execu-
tors, administrators or trustees shall remain subject to the provisions of said
section thirteen prior to its amendment.

Actions to Recover. (St. 1909, c. 266.)

S. 1. Taxes imposed by chapter four hundred and twenty-five of the acts
of ^he year eighteen hundred and ninety-one, and the acts in amendment thereof
and in addition thereto, and by chapter fifteen of the Revised Laws, and the acts
in amendment thereof and in addition thereto, and by chapter five hundred and
sixty-three of the acts of the year nineteen hundred and seven, and the acts in
amendment thereof and in addition thereto, may be recovered by the treasurer
and receiver general in an action of contract brought in the name of the common-
wealth, or by an information in equity brought in the supreme judicial court
by the attorney general at the relation of the treasurer and receiver general. In
a proceeding under this act for the collection of taxes imposed by chapter four
hundred and twenty-five of the acts of the year eighteen hundred and ninety-one,
and the acts in amendment thereof and in addition thereto, or by chapter fifteen
of the Revised Laws, and the acts in amendment thereof and in addition thereto,
a final decree of the probate court in a proceeding to which the treasurer and re-
ceiver general was a party, fixing the amount of the tax, shall be conclusive as
to such amount; but if there has been no such determination the amount may
be determined in proceedings under this act. In a proceeding under this act for
the collection of taxes imposed by chapter five hundred and sixty-three of the
acts of the year nineteen hundred and seven, and the acts in amendment thereof
and in addition thereto, the determination by the tax commissioner in accordance
with the provisions of section twenty of said chapter, of the amount of the tax
shall be final as to such amount: provided, however, that an executor, adminis^-ra-
tor, trustee or grantee may show, in any proceeding brought against him under
this act, any facts which would entitle him to an abatement under the provisions
of section twenty of said chapter, and a judgment or decree shall be entered for
the amount of the tax so determined less the amount proved to have been assessed

1911, c. 359.] MASSACHUSETTS. 601

without authority of law, together with interest and costs. If upon an information
brought under this act the court shall find that any tax remains due, it shall
order the executor, administrator, trustee or grantee to pay the same, with in-
terest and costs, and execution may be awarded therefor. Execution awarded
upon judgments and decrees for taxes imposed by chapter five hundred and
sixty-three of the acts of the year nineteen hundred and seven, and the acts in
amendment thereof and in addition thereto, shall be awarded in accordance with
the provisions of section twenty-one of said chapter.
[See notes to section 24, ante p. 597.]

Penalties and Forfeitures, etc.

S. 2. Penalties and forfeitures incurred by persons under the provisions of
chapter five hundred and sixty-three of the acts of the year nineteen hundred and
seven, and the acts in amendment thereof and in addition thereto, may be re-
covered by the treasurer and receiver general in an action of contract brought in
the name of the commonwealth, or by the information in equity brought in the
supreme judicial court by the attorney general at the relation of the treasurer
and receiver general.

S. 3. This act shall take effect upon its passage. [Approved April 8, 1909.]

Assessment of Tax on Real Estate.

IVIass. St. 1910, c. 440, approved April 25, 1910, authorizes the
probate court to determine the amount of taxes imposed on real
estate; that after such determination the state treasurer may
collect the taxes and interest by a sale.

Final Account of Fiduciary. (Mass. St. 1911, c. 191.)

S. 1. In all cases in which a tax is due under the provisions of chapter four
hundred and ninety, part IV, of the acts of the year nineteen hundred and nine,
and the amount thereof cannot be ascertained, the final account of the executor,
administrator or trustee liable therefor may be allowed if it appears that all
taxes imposed by the provisions of said chapter upon any property or interest
therein belonging to the estate to be settled by said account and already payable,
the amount of which can be ascertained, have been paid, and that such property
or interest therein, has been transferred to a trustee appointed by a probate
court of this commonwealth who has given bond, with sufficient sureties, in such
a sum as to insure the payment of all taxes which are or may become due on
said estate, unless such trustee is exempted from giving sureties by the probate
court appointing him; and such trustee shall be liable for such taxes and the
interest thereon in the same manner and to the same amount as if he had been
the executor, administrator or trustee originally liable therefor, and the property
received by him shall be subject to a Hen for said taxes and interest until the
same are paid.

S. 2. This act shall take effect upon its passage. [Approved March 25, 1911.]

Access Restricted to Papers Filed. (Mass. St. 1911, c. 359.)

S. 1. Papers, copies of papers, affidavits, statements, letters and other in-
formation and evidence filed with the tax commissioner in connection with the

602 STATUTES ANNOTATED. [Mass. St.

assessment of taxes upon legacies and successions, except inventories filed with
the tax commissioner under the provisions of section thirteen of part four of chapter
four hundred and ninety of the acts of the year nineteen hundred and nine,
as amended by section five of chapter five hundred and twenty-seven of the acts
of the year nineteen hundred and nine, shall be open only to the inspection of
persons charged or likely to become charged with the payment of taxes in the case
in which such paper, copy, affidavit, statement, letter or other information or
evidence is filed, or their representatives, and to the tax commissioner, his deputy
assistants and clerks and such other officers of the commonwealth and other
persons as may, in the performance of their duties, have occasion to inspect the
same for the purpose of assessing or collecting taxes.

S. 2. Nothing in this act shall be construed as limiting the duties imposed
upon the supervisors of assessors by section six of part three of chapter four
hundred and ninety of the acts of the year nineteen hundred and nine, or as
prohibiting the use of such papers, copies, affidavits, statements, letters and other
information and evidence in legal proceedings involving the assessment, collection
or abatement of taxes.

S. 3. This act shall take effect upon its passage. [Approved April 29, 1911.]

Practice. — Forms.

The tax commissioner requires the following data and gives the
following information : —

AFFIDAVIT OF EXECUTOR OF NON-RESIDENT.

(2)* That the total amount of property, real and personal, wherever
situated, of which said decedent died seized or possessed, at its actual value
on the date of h death was

REAL ESTATE,
PERSONAL ESTATE,

an itemized statement of which is hereto annexed, made a part hereof, and
marked "Schedule A":

(3) * That the total amount of property, real and personal, within the jurisdiction
of Massachusetts, owned by said decedent at its actual value on the date of h
death was

REAL ESTATE, $

PERSONAL ESTATE, $

an itemized statement of which is hereto annexed, made a part hereof, and marked
"Schedule B":

(4) That at the time of h death the said decedent had no safe deposit box,

individually or jointly, no bonds, public or private, no money, no real estate nor

mortgages on property within the state of Massachusetts; no interest in any

* In valuing mortgaged real estate in this item, the value of the equity alone is to be given.

Forms.] MASSACHUSETTS. 603

business or co-partnership carried on therein; no shares of stock in National Banks
situated therein nor in corporations organized and existing under the laws of
Massachusetts; no interest in the estate of a deceased resident of Massachusetts;
no claims against nor debts due from residents of Massachusetts; no deposits
in banks, trust companies nor savings institutions in Massachusetts, in h own
name, jointly or in trust; no jewelry, horses, carriages or furniture within said
state; and was seized or possessed of or entitled to no other property of any kind
whatsoever in the said state except as set forth in said Schedule B.
(5) That prior to h death the said decedent made no transfer of property within
the jurisdiction of Massachusetts by deed, grant or gift (except bona fide sales for
full consideration in money or money's worth), made or intended to take effect
in possession or enjoyment after death; and the said decedent had no power of
appointment over property within the jurisdiction of Massachusetts except as
below stated: '

(6) a. That the amount of debts incurred by the decedent and due Massachusetts
creditors at the time of h death (not including debts secured by mortgage on
real estate) was $

h. That the amount of debts incurred by the de-
cedent and payable at the time of h death other
than above (not including debts secured by mortgage
of real estate) was $

c. That the expenses of administration in Massa-
chusetts are $

d. That all other expenses of administration and

funeral charges are $

That hereto annexed, marked "Schedule C" and

made a part hereof is an itemized statement of the

above debts and expenses.

Total, $

(7) That the amount of succession tax paid, guaranteed or secured by law in
the state of the domicile of the decedent on the personal estate within the juris-
diction of Massachusetts is as follows:* —

PROPERTY

VALUE

RATE OF TAX

AMOUNT OF

*(No statement as to succession tax paid, guaranteed or secured in the state of the domicile of
the decedent need be made unless such state by law exempts from the application of its succes-
sion tax laws, property within its jurisdiction belonging to Massachusetts decedents.

604 STATUTES ANNOTATED. [Mass. St.

(8) That annexed hereto, marked "Schedule D," and made a part hereof, is a
true copy of the last will and testament of the decedent, as allowed by the court
of domicile.

(9) That all the persons who are mentioned in the will of the decedent or who take
any share of the property with the amounts of their respective shares and their
relationships to the decedent ; also the dates of birth of life tenants and remainder-
men, are as follows: —

SCHEDULE "B."

Assets Within the Jurisdiction of Massachusetts.

Note: — The following kinds of property are within the scope of the legacy
and succession tax law: —

1. Money, bonds, stock in trade, furniture and all kinds of tangible property
which were physically presenc in Massachusetts at the date of death of the de-
cedent.

2. Real estate and mortgages on real estate situated in Massachusetts.

3. Shares in corporations incorporated under the laws of Massachusetts,
including railroad companies incorporated under the laws of Massachusetts and
one or more other states.

4. Interests in co-partnerships doing business in Massachusetts or owning
stock in trade, fixtures or book accounts with residents of Massachusetts.

5. Choses in action against residents of Massachusetts.

6. Deposits in Savings Banks, National Banks, Trust Companies, etc., doing
business in Massachusetts.

7. Shares of National Banks located in Massachusetts.

RESIDENT DECEDENT.

AFFIDAVIT OF DEBTS, EXPENSES, ETC.

Estate of

Late of

INSTRUCTIONS.

In General: No debt or expense of any kind should be included in this affidavit
unless the same is a proper charge against PRINCIPAL of the estate. Fees
based on income are not allowable.

Mortgiage Notes secured by real estate of the decedent should not be included
as debts — the equity only of such real estate having been valued for taxation.

Local Taxes and assessments should not be included as debts unless the same
were assessed as of May first (or April first, if on or after April first, 1910) prior
to the death of the decedent. When taxes or water rates are included give the
year for which they were assessed.

Forms.] MASSACHUSETTS. 605

Foreign Legacy Taxes should not be included as debts as the same are de-
ducted in another manner. The original documents showing the details of the
assessment of the foreign tax, together with the receipt for its payment, should
be enclosed for the inspection of the tax commissioner. These papers will be re-
turned after examination.

INFORMATION GIVEN ON VALUATION.

The Valuation herewith enclosed, after deductions for debts, funeral expenses
and expenses of administration, constitutes the basis upon which the inheritance
tax, if any, will be computed.

This Valuation Becomes Final unless an appeal is taken within three months
from the date thereof.

The Inheritance Tax Becomes Due at the expiration of two years from
the date of giving bond.

The Tax Upon Future Interests (remainders after life estates or terms of
years) becomes due at the expiration of one year from the date the gift vests in
possession or enjoyment. The tax may be paid upon the present worth of future
interests at any time upon request by the persons entitled. A form for such request
will be furnished.

If Certification for Immediate Payment is Desired the tax commissioner
should be furnished with a waiver of appeal from the enclosed valuation, and an
affidavit of the debts, expenses, etc., on the enclosed form. In any event this
affidavit should be furnished at least two weeks before the tax becomes due to
allow for computation.

If Succession Taxes Have Been Paid in Other States on any of the prop-
erty of the decedent, the original receipts and other papers showing the details
of the assessment of such tax should be forwarded to this department for ex-
amination. The same will be returned after inspection.

606 STATUTES ANNOTATED. [Mich. St.

MICHIGAN.

In General.

Michigan's first inheritance tax law, enacted in 1893, was held
unconstitutional. The present statute dates from 1899, with impor-
tant amendments in 1903, 1907 and 1909. An interesting feature
is that in the case of direct inheritances personal property only is
taxed. The exemptions apply to individual shares, not to the estate
as a whole.

The Michigan statute seems to contain no penalty or lien and
so it would seem not to be collectible against the estates of non-
resident stockholders in Michigan corporations. For example,
Calumet & Hecla and Osceola mining stock can be transferred
without reference to the state authorities.

However, Michigan attempts to tax stock of a Michigan corpora-
tion owned by a non-resident wherever held. It taxes registered
bonds of a Michigan corporation as well. A person or corporation
that transfers or delivers securities or assets of a non-resident before
the tax is paid is responsible for the tax.

Michigan taxes stock or bonds of a foreign corporation owned
by a non-resident if the certificates are kept in Michigan. It is
the practice to require an inventory of the entire estate before per-
mission is given to transfer securities of a Michigan corporation.

List of Statutes.

1893.

Statutes of Michigan, c. 205, p. 344.

1899.

c. 188, p. 284, ss. 1 to 21

1903.

No. 195, p. 277, s. 1.

1907.

c. 155, p. 199.

1907.

c. 328, p. 475.

1909.

c. 44, p. 70.

1909.
1911.

c. 298, p. 700.
c. 73, p. 105.

Constitutional Limitations.
Michigan Constitution 1850, a. 14.

S. 1. All specific state taxes, except those received from the mining companies
of the upper peninsula, shall be applied in paying the interest upon the primary
school, university and other educational funds, and the interest and principal
of the state debt, in the order herein recited, until the extinguishment of the
state debt, other than the amounts due to educational funds, when such specific

1893, c. 205.1 MICHIGAN. 607

taxes shall be added to, and constitute a part of the primary school interest fund.
The legislature shall provide for an annual tax, sufficient with other resources,
to pay the estimated expenses of the state government, the interest of the state
debt, and such deficiency as may occur in the resources.

S. 11. The legislature shall provide an uniform rule of taxation except on
property paying specific taxes, and taxes shall be levied on such property as shall
be prescribed by law.

S. 14. Every law which imposes, continues or revives a tax shall distinctly
state the tax, and the object to which it is to be applied; and it shall not be
sufficient to refer to any other law to fix such tax or object.

S. 11 (as amended in 1900). The legislature shall provide a uniform rule of
taxation, except on property paying specific taxes, and taxes shall be levied on
such property as shall be prescribed by law: Provided, that the legislature shall
provide an uniform rule of taxation for such property as shall be assessed by a
state board of assessors, and the rate of taxation on such property shall be the
rate which the state board of assessors shall ascertain and determine is the
average rate levied upon other property upon which ad valorem taxes are assessed
for state, county, township, school and municipal purposes.

How to Test the Validity of the Statute.

In Chamhe v. Durfee, 100 Mich. 112, 58 N. W. 661, and in Union
Trust Co. V. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N.
597, the question of the constitutionaHty of the statute was raised
by a writ of prohibition brought against the probate court to enjoin
that court from collecting the tax.

THE UNCONSTITUTIONAL STATUTE OF 1893.

Mich. St. 1893, c. 205. Approved June 1, 1893.

S. 1. The people of the state of Michigan enact, That after the passage of
this act a tax shall be and is hereby imposed upon the transfer of any property,
real or personal, of the value of five hundred dollars or over, or of any interest
therein or income therefrom, in trust or otherwise, to persons or corporations, on
real or personal property, in the following cases: —

1. When the transfer is by will or by the intestate laws of this state from
any person dying seized or possessed of the property while a resident of this state.

2. When the transfer is by will or intestate law, of property within the state,
and the decedent was a non-resident of the state at the time of his death.

3. When the transfer is of property made by a resident or by a non-resident,
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor,
or intended to take effect, in possession or enjoyment at or after such death.
Such tax shall also be imposed when any such person or corporation becomes
beneficially entitled, in possession or expectancy, to any property or the income
thereof by any such transfer, whether made before or after the passage of this act.
Such tax shall be at the rate of five per cent upon the clear market value of such
property, except as otherwise prescribed in the next section.

Ss. 2 to 20 cover the assessment, collection and payment of the tax.
S. 21 defines the words "estate" and "property" and "transfer."

608 STATUTES ANNOTATED. [Mich. St.

This statute is unconstitutional in that it provides that the pro-
ceeds of the tax shall be paid into the state treasury for the use of
the state and shall be applicable to the expenses of the state govern-
ment, and to such other purposes as the legislature shall by law
direct. Mich. Const, a. 14, s. 14, provides that every tax law shall
distinctly state the tax and the object to which it is to be applied.
Mich. Const, a. 14, s. 1, provides that all specific state taxes
except mining taxes shall be applied in paying the interest
upon educational debts and the principal and interest of the
state debt.

The court holds that the collateral inheritance tax, if it is a specific
tax, is unconstitutional as in violation of this provision of the
constitution. If the inheritance tax is a tax upon property it was
conceded that it violated the provisions of the Michigan consti-
tution requiring uniformity. The court further finds that the
whole act must be held unconstitutional, as the money to be raised
under it cannot be applied as the act provides, and it is fair to
assume that the statute would not have met the approval of the
legislature had the moneys arising from it been appropriated as
provided by the constitution. Chambe v. Durfee, 100 Mich. 112,
58 N. W. 661.

THE PARTIALLY VALID STATUTE OF 1899.

Mich. St. 1899, c. 188. Approved May 2, 1899.

An Act to provide for the taxation of inheritances, transfers of prop-
erty by will, transfer of property by the intestate laws of this state, or transfers
of property by deed, grant, barga n, sale or gift, made in contemplation of the
death of the grantor, vendor or donor, or intended to take effect in possession
or enjoyment at or after such death.

Title.

This title is sufficient within Mich. Const, a. 14, s. 14, as the tax
is clearly defined and no other law is referred to either to fix the tax
or its object. It is imposed upon everybody who is not exempt.
So the reference in section 11 to mortality tables to ascertain the
value of future interests does not change the rule of taxation or
modify it, but only prescribes a rule of estimating the values and
is valid within the constitution. Union Trust Co. v. Durfee, 125
Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N. 597.

1899, c. 188.] MICHIGAN. 609

Transfers Taxable. — Rate.

S. 1. That af er the passage of this act a tax shall be and is hereby imposed
upon the transfer of any property, real or personal, of the value of five hundred
dollars or over, or of any interest therein or income therefrom, in trust or other-
wise, to persons or corporations not exempt by law from taxation on real or
personal property, in the following cases: —

First, When the transfer is by will or by the intestate laws of this state from
any person dying seized or possessed of the property while a resident of this state.

Second, When the transfer is by will or intestate law of property within the
state, and the decedent was a non-resident of the state at the time of his death.

Third, When the transfer is of property made by a resident or by a non-resident,
when such non-resident's property is within this state by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor
or intended to t&ke effect, in possession or enjoyment at or after such death.
Such tax shall also be imposed when any such person or corporation becomes
beneficially entitled in possession or expectancy to any property or the income
thereof by any such transfer, whether made before or after the passage of this
act. Such tax shall be at the rate of five per cent upon the clear market value of
such property, except as otherwise prescribed in the next section.

[See further, notes to section 21, post, p. 613.]

Based on the Early New York Statute. — Construction.

This statute is nearly identical with the New York statute prior
to the amendments made in 1892 and was incorporated from the
state of New York together with the construction which had been
given to the New York statute by the courts of New York. Stell-
wagen v. Durfee, 130 IVIich. 166, 89 N. W. 728, 8 Detroit Leg. N.
1204; Miller v. McLaughlin, 141 IMich. 425, 104 N. W. 777, 12
Detroit Leg.'N..501 ; In re Stanton, 142 IMich. 491, 105 N. W. 1122,
12 Detroit Leg. N. 829.

Constitutionality.

This statute is valid as it is not a tax on property but is a specific
tax on a privilege, and it is not void on the ground that the amount
of the tax is based on the value of the property which is the subject
of the privilege.

The act is not void on the ground that it does not provide for a
personal notice and opportunity to resist this assessment and that
it therefore takes private property without due process of law.
This loses sight of the fact that it is not taking the property of the
legatee, but is imposing a condition upon the acquisition of property.

This act was attacked on the ground of non-uniformity on
account of its progressive rate and the court thinks there is much
force in the point, but upholds the validity of the tax, following

610 STATUTES ANNOTATED. [Mich. St.

Magoun v. Savings Bank, 170 U. S. 301, 18 Sup. Ct. 601; Union
Trust Co. V. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg.
N. 597.

Not Retroactive. — Remainder Interests.

Where the testator died in 1865, devising his estate to Hfe tenants
and on the death of the life tenants to their children, a transfer on
the death of a life tenant after the passage of the act of 1899 is
not subject to the inheritance tax. The court cites and follows
New York cases construing the New York inheritance law, as
follows: In re Seaman, 147 N. Y. 69; Matter of Pell, 171 N. Y. 48,
57 L. R. A. 540, 89 Am. St. Rep. 791; Miller v. McLaughlin, 141
Mich. 425, 104 N. W. 777, 12 Detroit Leg. N. 501.

Double Taxation Upheld.

Personal property of a non-resident decedent may be taxed in
Michigan where it is actually situated within the state of Michigan
at the death of the testator although the same property has already
paid an inheritance tax under the law of New York, on the theory
that the situs of the personal estate is the domicile of the testator.
In re Stanton, 142 Mich. 491, 105 N. W. 1122, 12 Detroit Leg. N.
829.

Stock Actually Within the State.

Where a non-resident owned stock in an Illinois corporation
whose business ofhce and all of whose property was situated in the
state of Illinois the stock is not taxable under the Michigan statute
although the stock appeared to be actually within the state at the
time of the death of the testator. In re Stanton, 142 Mich. 491,
105 N. W. 1122, 12 Detroit Leg. N. 829.

Land Contracts of Non-Resident.

Where the testator was domiciled and resided in New York at
her death and owned certain land in Michigan and had made a
contract to sell this land, but the title remained in the testator
at her death, these land contracts were taxable to the estate of
the decedent as personal property under this statute. In re Stanton,
142 Mich. 491, 105 N. W. 1122, 12 Detroit Leg. N. 829.

In re Stanton, 142 Mich. 491, was cited as holding that an
inheritance tax may be levied in this state upon notes and mortgages
and contracts relating to land in this state owned by a resident of

1899, c. 188.] - MICHIGAN. 611

another state, but which notes and mortgages have always been
kept in Michigan for the purpose of collection and reinvestment
though they might have been temporarily taken to New York.
This seems to be predicated upon the theory that the state
where such property has situs may control the right of succession
and practically does so, so that the transfer depends upon its laws.
In re Merriam, 147 Mich. 630, 9 L. R. A. (N. S.) 1104, 111 N. W.
196, 14 Detroit Leg. N. 6, 118 Am. St. Rep. 561.

Non-Resident's Mortgage on Michigan Land.

Where a resident of New Jersey died possessed of a promissory
note secured by a mortgage upon real estate in Michigan and both
note and mortgage were in the possession of the testator in New
Jersey up to the time of his death, the debt is subject to the succes-
sion tax, as there was a credit secured by the mortgage on lands in
Michigan and the evidence of indebtedness had a situs in Michigan.

The court distinguishes the case from the Matter of Bronson^
150 N. Y. 1, which held that bonds and certificates of stock in a
New York corporation owned by and in possession of a non-resi-
dent, at his domicile out of the state, at the time of his death, were
not subject to taxation, as in the case at bar. There was a credit
secured by a mortgage on the lands in Michigan and the evidence
of indebtedness, namely the mortgage on Michigan land, had a
situs in Michigan. In re Merriam, 147 Mich. 630, 9 L. R. A. (N.
S.) 1104, 111 N. W. 196, 14 Detroit Leg. N. 6, 118 Am. St. Rep.
561. The court refuses to follow Matter of Preston, 75 N. Y.
App. Div. 250.

Exceptions and Limitations.

S. 2. When the property or any beneficial interest therein passes by any such
transfer to or for the use of any father, mother, husband, wife, child, brother,
sister, wife or widow of a son or the husband of a daughter, or to or for the use
of any child or children adopted as such in conformity with the laws of this state,
of the decedent, grantor, donor or vendor, or to any person to whom any such
decedent, grantor, donor or vendor for not less than ten years prior to such trans-
fer stood in the mutually acknowledged relation of a parent, or to or for the use
of any lineal descendant of such decedent, grantor, donor or vendor born in
lawful wedlock, such transfer of property- shall not be taxable under this act,
unless it is personal property of the value of five thousand dollars or more, in
which case it shall be taxable under this act at the rate of one per centum upon
the clear market value of all such property in excess of five thousand dollars.

The exceptions of section 2 of the act applyed to each individual
share and not to the entire estate, following the construction placed

612 STATUTES ANNOTATED. [Mich. St.

Upon the New York statute in In re Gager, 111 N. Y. 343. StelU
wagen v. Durfee, 130 Mich. 166, 89 N. W. 728, 8 Detroit Leg. N. 1204.

Exemptions Valid.

The exemptions provided do not render the statute void, as
there is as much authority to make exemptions from this tax as
from any other. Union Trust Co. v. DurfeCj 125 Mich. 487, 84
N. W. 1101, 7 Detroit Leg. N. 597.

There is no difference in principle between an exemption given
to direct inheritances and a progressive tax. The same inequaUty
exists in the one case as in the other; and if there is unjust discrim-
ination in the one case there is also in the other. The difference is
one of degree and not of principle. In re Fox, 154 Mich. 5, 11,
117 N. W. 558.

Ss. 3 to 19 cover the assessment, collection and payment of the tax.

Provisions for Collection Sufficient.

The fact that there is no established practice of the probate court
in like cases made and provided for the service of citations out of
that court if it is a fact, does not make the law unconstitutional. If
the executor does not perform his -duties the method usual in such
cases should doubtless prove efficacious. The practice prescribed
by statute to enforce collection seems clear enough. Union Trust
Co. V. Durfee, 125 Mich. 487, 84 N. W. 1101, 7 Detroit Leg. N. 597.

Duties of Probate Judge.

This statute does not impose duties not judicial upon the judge
of probate. The duties imposed are necessarily incident to the
settlement of estates and may be properly performed by the judge
of probate. Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W.
1101, 7 Detroit Leg. N. 597, quoting State v. Gloucester Circuit
Judge, 50 N. J. L. 585, 611, 15 A. 272, 1 L. R. A. 86.

Application of Proceeds Void.

S. 20. All taxes levied and collected under this act shall be paid into the state
treasury, and be applied in paying the interest upon the primary school, univer-
sity and other educational funds, and the interest and principal of the state debt
in the order herein recited, until the extinguishment of the state debt, other than
the amounts due to educational funds, when such taxes shall be added to and
constitute a part of the primary school interest fund, in pursuance of and in com-
pliance with section one of article fourteen of the constitution of this state.

1899, c. 188.] MICHIGAN. 613

Mich. St. 1899, c. 188, is unconstitutional only in so far as it
provides that the money raised shall be applied to the payment of
fees, expenses and cost of possible litigation.

Mich. Const., a. 14, s. 1, provides that all specific state taxes
shall be applied in paying interest upon the school fund, etc., and
therefore the provision in the statute as to the application of the
proceeds is void. But the court holds that the remainder of the
act is not so dependent upon it as to require holding the entire
act void. Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101,
7 Detroit Leg. N. 597.

Definitions. ,

S. 21. The words "estate" and "property" as used in this act shall be taken
to mean the property or interest therein of the testator, intestate, grantor,
bargainor or vendor, passing or transferred to those not herein specifically ex-
empted from the provisions of this act, and not as the property or interest therein
passing or transferred to individual legatees, devisees, heirs, next of kin, grantees,
donees, or vendees and shall include all property or interest therein whether
situated within or without this state, over which this state has any jurisdiction
for the purposes of taxation. The word "transfer" as used in this act shall be
taken to include the passing of property or any interest therein in possession or
enjoyment, present or future by inheritance, descent, devise, bequest, grant,
deed, bargain, sale or gift, in the manner herein prescribed. The words "county
treasurer" and "prosecuting attorney" as used in this act shall be taken to mean
treasurer or prosecuting attorney of the county having jurisdiction as provided
in section ten of this act.

[See further, notes to section 1, ante, p, 609.]

Not Confined to Property which the State has Selected for
Taxation.

The legislature intended the tax to be measured by the property
which it is within the power of the state to tax and not by property
which state policy had selected for the purposes of general taxation.
This intention has been found in the New York act of which the
Michigan statute is a copy. Matter of Whiting, 150 N. Y. 27, 44 N.
E. 715; In re Stanton, 142 Mich. 491, 105 N. W. 1122, 12 Detroit
Leg. N. 829.

There are three reasons for holding that the legislature intended
the tax to be measured by property which it is within the power of
the state to tax, and not by property which state policy has selected
for purposes of general taxation. One reason is that the statute is
adopted, together with a judicial interpretation of the language
above quoted, from the state of New York. Stellwagen v. Wayne
Probate Judge, 130 Mich. 168. And, as interpreted by the courts

614 STATUTES ANNOTATED. [Mich. St.

of New York, the design of the legislature to tax the transfer of
everything which it has the power to tax is found in the act. Matter
of Whiting, 150 N. Y. 27, 34 L. R. A. 232, 55 Am. St. Rep. 640;
Matter of Houdayer, 150 N. Y. 37, 34 L. R. A. 235; Matter of
Sherman, 153 N. Y. 1 ; Matter of Hellman, 174 N. Y. 254. See
also Blackstone v. Miller, 188 U. S. 189; Plummer v. Coler, 178
U. S. 115. The second reason is that a policy of general taxation,
which recognizes, to some extent at least, the rule of universal
succession and the theory of taxation of personal property generally,
at the domicile of the owner, is not logically controlling of the inter-
pretation of a statute imposing a tax upon a right of succession or
upon a transfer of property which can only be tangible and en-
forceable — be made effective — in the jurisdiction, and by virtue
of the laws and institutions of the situs of the property. A third
reason is that, as a tax upon succession or transfer, uniformity of
operation and an equal measure of the tax to the property of
residents and non-residents can be, with no other construction,
secured. There is property situated within the state, belonging
to non-residents, which the state does not tax, generally {Village
of Howell V. Gordon, 127 Mich. 517 ;Baars v. City of Grand Rapids,
129Mich. 572), though it might tax it {Catlin v. Hull, 21 Vt. 152;
New Orleans v. Stempel, 175 U. S. 309). Property of the same
class owned by residents is taxed, generally. Per Ostrander, J., in
/wrgStanton, 142Mich. 491, 105 N. W. 1122, 12 Detroit Leg. N. 829.

Tax is on the Entire Estate of the Decedent.

This section places the tax on each transfer and merges all the
taxes into one upon the entire property. The court follows the
construction of this section given in the case In re Hoffman, 143
N. Y. 327, 38 N. E. 311, where it was held that the section was
enacted for the express purpose of making plain the intention that
the exemptions should be taken from the estate of the decedent as a
whole and not from each interest transferred. As so construed
the section is constitutional. Stellwagen v. Durfee, 130 Mich. 166,
173, 89 N. W. 728, 8 Detroit Leg. N. 1204.

Mich. St. 1899^ c. 188, consists of twenty-one sections. The
first twenty sections are carefully drawn, and leave but one con-
clusion possible, viz. : that each transfer stands by itself, that the
tax is imposed upon each transfer, and that no tax is imposed upon
property. It recognizes the personal and individual right of each
devisee, heir, grantee or donee to receive and enjoy the property

1903, c. 195.] MICHIGAN. 615

transferred to him upon the payment of the tax imposed upon his ■
right to receive it. Each devise, gift, conveyance, or right of
inheritance is complete in itself, without any regard to the others.
Each transferee is entitled to receive his property upon payment of
the tax, or upon giving bond as provided in section 7. Section 3
gives a lien only upon the property of each transferee. This is
conceded. But the sole claim is that under section 21, — the last
section of the act, — entitled ''Definitions," a definition has been
given to the words "estate" and "property," which completely
nullifies the language of the other sections of the act, overrules
legal and popular definitions, and imposes the tax upon the entire
estate of every decedent, grantor, donor or vendor of property.
The section attempts to declare that the words "transfer to or for
the use of any father, mother, husband, wife, child, brother, sister,"
etc., used in section 2, cover all transfers, and impose a tax upon
the entire estate, and that any transferee desiring to receive his
own must pay the tax upon all if the others do not pay. Per Grant,
J., dissenting, in Stellwagen v. Durfee, 130 Mich. 166, 89 N. W. 728,
8 Detroit Leg. N. 1204.

THE VALID STATUTE OF 1903.

Mich. St. 1903, c. 195. Approved June 9, 1903. (Amends ss. 1-19 and 21
of the Statute of 1899, No. 188).

Transfers Taxable. — Rates.

S. 1. That after the passage of this act a tax shall be and is hereby imposed
upon the transfer of any property, real or personal, of the value of one hundred
dollars or over, or of any interest therein or income therefrom, in trust or other-
wise, to persons or corporations not exempt by law from taxation on real or
personal property, in the following cases: —

First, When the transfer is by will or by the intestate laws of this state from
any person dying seized or possessed of the property while a resident of this
state;

Second, When the transfer is by will or intestate law of property within the
state, and the decedent was a non-resident of the state at the time of his death;

Third, When the trnsfer is of property made by a resident or by non-resident,
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor
or intended to take effect, in possession or enjoyment at or after such death.
Such tax shall also be imposed when any such person or corporation becomes
beneficially entitled in possession or expectancy to any property or the income
thereof by any such transfer, whether made before or after the passage of this
act. Such tax shall be at the rate of five per cent upon the clear market value of
such property, except as otherwise prescribed in the next section.

616 STATUTES ANNOTATED. [Mich. St.

Constitutionality.

Because of the peculiar provisions of their respective constitutions
the courts of Minnesota, New Hampshire, Ohio and Wisconsin are
not in entire harmony in their decisions with other courts. As was
stated by the supreme court of Minnesota in Drew v. Tiffty 79 Minn.
187, 47 L. R. A. 525, Minnesota is the only state whose constitu-
tion in express terms limits the power of the legislature in the
laying of an inheritance tax. In re Fox, 154 Mich. 5, 117 N. W. 558,
15 Detroit Leg. N. 674. (C/. however, Alabama.)

The courts agree that the constitutional rule of equality and
uniformity is complied with if all the members of the same class
are treated alike. The differences among courts arise only in the
application of that rule. Adopted per Sessions, J., in 7w re Fox,
154 Mich. 3, 13, 117 N. W. 558. The following cases are cited to
show that an unequal graduated rate is unconstitutional: Black
V. State, 113 Wis. 205; State v. Ferris, 53 Ohio St. 314; Drew
v. Tifft, 79 Minn. 187; State w. Bazille, 87 Minn. 503. In the
recent case, State v. Bazille, 97 Minn. 11, the court has explained
and somewhat modified its former holdings. The same may be
said of the Wisconsin and Ohio courts in their recent utterances.
See Nunnemacher v. State, 129 Wis. 190; State v. Guilbert, 70
Ohio St. 229; In re Fox, 154 Mich. 5, 12.

No Deduction for Mortgage Indebtedness.

The court on rehearing overrules its opinion given in 154 Mich.
5, on the question whether in the determination of an inheritance tax
a debt of the deceased secured by real estate mortgage should be
deducted from a personal estate in determining the amount upon
which the tax is to be paid. The court is convinced that in reaching
the conclusion in the former case that no deductions should be
made on account of such mortgage indebtedness, it failed to give
sufficient force to the distinction which exists between New York
and Michigan as to the law for the distribution of estates. It finds
that it is the law in Michigan that the net personal estate for dis-
tribution consists of the personal property after the payment of
debts and expenses, including the debts secured by mortgage on
real estate, while by the New York statute the heir or devisee taking
real estate is bound to satisfy and discharge any mortgage upon
it out of his own property. In re Fox, 159 Mich. 420, 124 N. W.
60, 16 Detroit Leg. N. 943. McAlvay, J., dissenting. See In re Fox,
154 Mich. 5, 117 N. W. 558, 15 Detroit Leg. N. 674.

1903, c. 195.] MICHIGAN. 617

Exemptions.

S. 2. When the property or any beneficial interest therein passes by any such
transfer to or for the use of one or more of the following named persons: Father,
mother, husband, wife, child, brother, sister, wife or widow of a son, or the husband
of a daughter, or to or for the use of any child or children adopted as such in
conformity with the laws of this state of the decedent, grantor, donor or vendor,
or to or for the use of any persons to whom any such decedent, grantor, donor
or vendor, for not less than ten years prior to such transfer stood in the mutually
acknowledged relation of a parent, or to or for the use of any lineal descendant
of such decedent, grantor, donor or vendor, such transfer of property shall not be
taxable under this act, unless it is personal property of the clear market value of
two thousand dollars or over, in which case the entire transfer shall be taxed under
this act at the rate of one per cent upon the clear market value thereof. The
exemptions of sections one and two of this act shall apply and be granted to each
beneficiary's interest therein, and not to the entire estate of a decedent.

The exemption where the value of the property transferred is
less than two thousand dollars and taxing the entire transfer where
its value is two thousand dollars or more is constitutional. In re
Fox, 154 Mich. 5, 117 N. W. 558.

Lien. — Payment. — Receipts.

S. 3. Every such tax shall be and remain a lien upon the property transferred
until paid, and the person to whom the property is so transferred and the ad-
ministrator, executor, and trustee of every estate so transferred, shall be personally
liable for such tax until its payment; except that the executor or administrator
shall not be personally liable for the tax upon a reversion or remainder consisting
of real estate where the election provided for in section seven is made, and where
in pursuance of the order of the probate court the estate had been distributed
by the executor or administrator prior to June first, nineteen hundred and one,
and the tax had not been fixed by the court. The tax shall be paid to the treasurer
of the county in which the probate court has jurisdiction as herein provided,
and said treasurer shall make out, upon forms prescribed by the auditor general,
receipts in duplicate, and immediately send the same to the auditor general, and
accompany them with the amount received in funds by law receivable at the state
treasury. It shall then be the duty of the auditor general to charge the treasurer
so receiving the tax with the amount thereof and credit him with payment of
same to state treasurer, and in case the determination of said tax and said receipt
are believed to be in accordance with law, seal said receipts with the seal of
his office and countersign the same and return one of them to the county treasurer
who shall file and preserve it in his office, and immediately send the other of such
receiptstothejudgeof probate who shall, file and preserve it in his office, where-
upon it shall be a voucher in settlement of the accounts of the executor, adminis-
trator or trustee of the estate upon which the tax is paid. At the same time
the auditor general shall send to the county treasurer, state treasurer's receipt
countersigned as required by law, showing payment of tax. The sealing and
countersigning of said receipts shall not prejudice the right of the state to a
review of the determination fixing the tax. The receipts issued under this section

618 STATUTES ANNOTATED. [Mich. St.

shall show whether the amount paid is a payment of the tax upon any beneficial
interest or upon the entire transfer. But no executor, administrator or trustee
of an estate, in settlement of which a tax is due under the provisions of this act,
shall be discharged and the estate or trust closed by a decree of the court, unless
there shall be produced a receipt signed by the county treasurer and sealed
and countersigned by the auditor general, or a copy thereof, certified by the
county treasurer, or unless payment of the tax has been deferred as prescribed
by section seven of this act. When any such tax shall be paid to the county
treasurer, he shall, in addition to the duplicate receipts required to be issued upon
the form prescribed by the auditor general, give the executor, administrator,
rustee or other person paying the tax, a simple receipt for the amount received.
All taxes imposed by this act shall accrue and be due and payable at the time
of transfer, which is the date of death: Provided, however, that taxes upon the
transfer of any estate, property or interest therein limited, conditioned, dependent
or determinable upon the happening of any contingency or future event, by
reason of which the clear market value thereof can not be ascertained at the time
of the transfer as herein provided, shall accrue and become due and payable when
the persons or corporations beneficially entitled thereto shall come into actual
possession or enjoyment thereof.

Sections 3 and 5, providing that it is the duty of the executor
to collect the inheritance tax and that he shall not deliver any
property subject to tax to any person until the tax assessed has
been paid to him or to the county treasurer, do not prevent the
institution of an action in ejectment by the devisees. No delivery
of possession of real estate to the devisees was necessary. Under
the will they took title subject to the right of the executor to take
possession for the purposes of administration. The rights of the
state are of no concern to the descendants. Weller v. Wheelock,
155 Mich. 698, 118 N. W. 609.

Non-Resident's Interests in Michigan Land.

The testator died in New York, of which state he was a resident,
and administration of the estate was granted in New York and
ancillary proceedings were had in Michigan. The Michigan
authorities attempted to hold for an inheritance tax mortgages,
notes and land contracts. All the devisees, legatees and the heirs
at law resided in New York. At the time of the death of the testator
all the mortgages, notes, land contracts and papers representing
property in the state of Michigan were in the actual possession of
the testator at his residence in New York and were habitually kept
by him at his residence in New York. The mortgages were recorded
in Michigan. The court holds that this property is subject to a
tax in Michigan in In re Rogers, 149, Mich. 305, 112 N. W. 931
11 L. R. A. (N. S.) 1134, 119 Am. St. Rep. 677, 14 Detroit Leg.

1903, c. 195.] MICHIGAN. 619

N. 444, following In re Stanton, 142 Mich. 491, 105 N. W. 1122;
In re Merriam, 147 Mich. 630, 9 L. R. A. (N. S.) 1104 n., 118
Am. St. Rep. 561; Blackstonev. Miller, 188 U. S. 189, 23 Sup. Ct.
277. The court remarks that the case of Gilbert v. Oliver, 129
Iowa 568, 4 L. R. A. (N. S.) 953, is not in harmony with In re
Stanton, 142 Mich. 491, 105 N. W. 1122.

The court remarks that the mortgagee could not preserve his
lien without complying with the registry law of Michigan ; that the
debts secured cannot be collected without the aid of the laws of
Michigan; that the estate of the testator cannot be properly
administered or closed without ancillary letters of administration
obtained under the laws of Michigan; and therefore it is subject
to an inheritance tax in Michigan.

It was claimed that the situs of personal property was the
domicile of the owner — mortgages, notes and land contracts and
papers representing property in Michigan. ^'Several authorities are
cited in support of this claim, and it is insisted the case is controlled
by the Iowa case of Gilbertson v. Oliver, 129 Iowa 568, 4 L. R. A.
(N. S.) 953. In that case the justice writing the opinion said:
'The controversy presents for determination but one legal question,
namely: Was the property of the deceased within the jurisdiction
of this state at the time of her death? There is a conflict in the
adjudicated cases as to whether such evidences of indebtedness are
taxable at the domicile of the owner, or whether the actual situs of
such property, and not the domicile of the owner, determines
the liability to taxation.' The great weight of authority, however,
supports the holding of our own cases that this species of personal
property, which is in a sense intangible and incorporeal, is taxable
at the domicile of the owner, and not elsewhere, unless the owner
has himself given it a different situs." Per Moore, J., in In re Rogers,
149 Mich. 305, 112 N. W. 931, 11 L. R. A. (N. S.) 1134, 14 Detroit
Leg. N. 444, 119 Am. St. Rep. 677.

The court cites, however, In re Stanton's Estate, 142 Mich. 491,
Q,nd Blackstonev. Miller, 188 U. S. 189, 23 Sup. Ct. 277.

[See notes to the Act of 1899, ante, pp. 610, 611. Section 4 is printed as
amended on p. 623.]

Power of Sale. — Deduction.

S. 5. Every executor, administrator, trustee or other person shall have full
power to sell or mortgage so much of the property of the decedent as will enable
him to pay such tax in the same manner as he might be entitled by law to do for
the payment of the debts of a decedent or ward; except that in cases where the
transfer is to two or more persons in common, and one or more of them shall

620 STATUTES ANNOTATED. [Mich. St.

have paid his proportion of such tax, such executor, administrator, trustee or
other person shall sell or mortgage only the interest of such of the persons to whom
the property was transferred as have not paid the tax, to pay the tax due upon
such share or shares. Any such administrator, executor, trustee or other person
having in charge or in trust any legacy or property for distribution subject to
such tax, shall deduct the' tax therefrom; and within thirty days thereafter shall
pay over the same to the county treasurer as herein provided. If such legacy or
property be not in money, he shall collect the tax thereon as determined by the
judge of probate from the person entitled thereto, unless such tax has been paid
to the county treasurer. He shall not deliver or be compelled to deliver any
specific legacy or property subject to tax under this act to any person until the
tax assessed thereon has been paid to him or to the county treasurer. If any such
legacy shall be charged upon or payable out of real property and is taxable under
this act, the devisee charged with the payment of such legacy shall deduct such
tax therefrom and pay it to the county treasurer or the administrator, executor
or trustee. And the payment thereof shall be enforced by the executor, adminis-
trator or trustee, in the same manner as payment of the legacy might be enforced
or by the attorney general or prosecuting attorney by the appropriate legal pro-
ceeding. ' If such legacy shall be given in money to any such person for a limited
period, the administrator, executor, trustee or other person shall retain the tax
upon the whole amount, but if not in money, he shall make such application to
the court having jurisdiction of an accounting by him, to make an apportionment,
if the case require it, of the sum to be paid by such legatee and for such further
order relative thereto as the case may require.
[See note under section 3, supra^ p. 618.]

Personal Property of Non-Residents.

Mich. St. 1903, c. 195, amending section 21 of the Mich. St. 1899,
c. 188, by eliminating from section 21 the words "over which this
state has any jurisdiction for the purposes of taxation" has no effect
to narrow the provisions of the statute as to the taxation of the
personal property of non-residents. The court for that reason
follows In re Merriam, 147 Mich. 630, 111 N. W. 196, 9 L. R. A.
(N. S.) 1104, 14 Detroit Leg. N. 6, decided under the earlier act,
as to the interests of non-residents in Michigan real estate. In re
Rogers, 149 Mich. 305, 112 N. W. 931, 11 L. R. A. (N. S.) 1134,
14 Detroit Leg. N. 444, 119 Am. St. Rep. 677.

REGENT AMENDMENTS.

Mich. St. 1907, No. 155, approved June 17, 1907, amends Mich.
St. 1899, c. 188, ss. 3, 4, 11 and 19.

Mich. St. 1907, c. 328, approved June 28, 1907, amends Mich.
St. 1899, c. 188, s. 21, as to the definition of property to read as
in the present act, printed post, p. 621.

Mich. St. 1909, c. 44, approved April 21, 1909, amends Mich. St.
1899, c. 188, s. 19.

1899, c. 188.] MICHIGAN. 621

Mich. St. 1911, c. 73, approved April 13, 1911, amends Mich. St.
1899, c. 188, s. 18, making elaborate provisions as to the collec-
tion of the tax on property in the state belonging to a non-resident.

Mich. St. 1909, c. 298. Approved June 2, 1909.

An Act in relation to the collection of inheritance taxes in
certain cases.
S. 1. No heir, legatee, beneficiary, trustee, executor, administrator or surety
shall be held liable for any inheritance tax upon the transfer of property in any
estate in which the property has been distributed by order of the court prior to
January first, nineteen hundred five; nor where the executor or administrator
or trustee has been discharged by order of the court prior to January first, nine-
teen hundred five; nor where the estate has been closed prior to January first,
nineteen hundred five. All inheritance taxes which may have been assessed
in any such estate as comes within the provisions of this act shall not be subject
to enforcement, and all inheritance tax liens upon such property are hereby
released.

THE PRESENT ACT.

Mich. St. 1899, c. 188, as amended.

An Act to provide for the taxation of inheritances, transfers of
property by will, transfers of property by the intestate laws of this state, or
transfers of property by deed, grant, bargain, sale or gift, made in contem-
plation of the death of the grantor, vendor or donor, or intended to take
effect in position or enjoyment at or after such death.

Taxable Transfers.

S. 1. (As amended by St. 1903, c. 195.) That after the passage of this
act a tax shall be and is hereby imposed upon the transfer of any property,
real or personal, of the value of one hundred dollars or over, or of any interest
therein or income therefrom, in trust or otherwise, to persons or corporations not
exempt by law from taxation on real or personal property, in the following
cases : —

First, When the transfer is by will or by the intestate laws of this state from
any person dying seized or possessed of the property while a resident of this
state ;

Second, When the transfer is by will or intestate law of property within the
state, and the decedent was a non-resident of the state at the time of his death.

Third, When the transfer is of property made by a resident or by non-resident;
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor
or intended to take effect, in possession or enjoyment at or after such death.
Such tax shall also be imposed when any such person or corporation becomes
beneficially entitled in possession or expectancy to any property or the income
thereof by any such transfer, whether made before oi; after the passage of this act.
Such tax shall be at the rate of five per cent upon the clear market value of such
property, except as otherwise prescribed in the next section.

[See notes to the Act of 1899 and 1903, ante, pp. 609, 616.]

622 STATUTES ANNOTATED. [Mich. St.

Exemptions.

S. 2. (As amended by St. 1903, c. 195.) When the property or any bene-
ficial interest therein passes by any such transfer to or for the use of one or
more of the following named persons: Father, mother, husband, wife, child,
brother, sister, wife or widow of a son, or the husband of a daughter, or to or
for the use of any child or children adopted as such in conformity with
the laws of this state of the decedent, grantor, donor or vendor, or to or
for the use of any persons to whom any such decedent, grantor, donor
or vendor, for not less than ten years prior to such transfer stood in the
mutually acknowledged relation of a parent, or to or for the use of any lineal
descendant of such decedent, grantor, donor or vendor, such transfer of property
shall not be taxable under this act, unless it is personal property of the clear market
value of two thousand dollars or over, in which case the entire transfer shall be
taxed under this act at the rate of one per cent upon the clear market value thereof.
The exemptions of sections one and two of this act shall apply and be granted
to each beneficiary's interest therein, and not to the entire estate of a decedent.

[See notes to the Act of 1899 and 1903, ante, pp. 611, 617.]

Lien. — Liabilities. — Payment. — When Tax Accrues.

S. 3. (As amended by St. 1907, c. 155.) Every such tax and the interest
thereon herein provided for shall be and remain a lien upon the property
transferred until paid and the person to whom the property is so trans-
ferred and the administrator, executor, and trustee of every estate so trans-
ferred, shall be personally liable for such tax until its payment; except that
the executor or administrator shall not be personally liable for the tax upon
a reversion or remainder consisting of real estate where the election provided
for in section seven is made. [Three lines in 1903 omitted here.] The tax
shall be paid to the treasurer of the county in which the probate court
has jurisdiction as herein provided, and said treasurer shall make out, upon
forms prescribed by the auditor general, receipts in duplicate, and immediately
send the same to the auditor general, and accompany them with the amount
received in funds by law receivable at the state treasury. It shall then
be the duty of the auditor general to charge the treasurer so receiving the
tax with the amount thereof and credit him with the payment of same to
state treasurer, and in case the determination of said tax and said receipt are
believed to be in accordance with law, seal said receipts with the seal of his office
and countersign the same and return one of them to the county treasurer who shall
file and preserve it in his office and immediately send the other of such receipts
to the judge of probate who shall file and preserve it in his office, whereupon it
shall be a voucher in settlement of the accounts of the executor, administrator,
or trustee of the estate upon which the tax is paid. At the same time the auditor
general shall send to the county treasurer the state treasurer's receipt, counter-
signed as required by law, showing payment of tax. The sealing and countersign-
ing of said, receipts shall not prejudice the right of the state to a review of the
determination fixing the tax. The receipts issued under this section shall show
whether the amount paid is a payment of the tax upon any beneficial interest
or upon the entire transfer. But no executor, administrator or trustee of an
estate, in settlement of which a tax is due under the provisions of this act, shall
be discharged and the estate or trust closed by a decree of the court, unless there
shall be produced a receipt signed by the county treasurer and sealed and counter-

1899, c. 188.] MICHIGAN. 623

signed by the auditor general, or a copy thereof, certified by the county treasurer,
or unless payment of the tax has been deferred as prescribed by section seven of
this act. When any such tax shall be paid to the county treasurer, he shall, in
addition to the duplicate receipts required to be issued upon the form prescribed
by the auditor general, give the executor, administrator, trustee, or other person
paying the tax, a simple receipt for the amount received. All taxes imposed by
this act shall accrue and be due and payable at the time of transfer, which is
the date of death: Provided, however, that taxes upon the transfer of any estate,
property or interest therein limited, conditioned, dependent or determinable
upon the happening of any contingency or future event, by reason of which the
clear market value thereof cannot be ascertained at the time of the transfer as
herein provided, shall accrue and become due and payable when the persons
or corporations beneficially entitled thereto shall come into actual possession
or enjoyment thereof.

[See notes to the Act of 1903, ante, p. 618.)

Discount. — Interest.

S. 4. (As amended by St. 1907, c. 155.) If in any case, whether such trans-
fer shall take effect prior or subsequent to the taking effect of this act,
such a tax is paid within twelve months from the accruing thereof, a dis-
count of five per centum shall be allowed and deducted therefrom. If such
tax is not paid within eighteen months from the accruing thereof interest
shall be charged and collected thereon at the rate of eight per cent per annum
from the time the tax accrued, unless by reason of claims made upon the
estate, necessary litigation or other unavoidable cause of delay, such tax can-
not be determined and paid as herein provided, in which case interest at the
rate of six per cent per annum shall be charged upon such tax from and after the
expiration of said eighteen months until the tax is determined, or could be de-
termined and after the determination, or after the time it could be determined,
interest at eight per cent per annum shall be charged until the date of the pay-
ment thereof. In all cases where payment is deferred as provided in section
sever of this act, interest shall be charged at the rate of five per centum per
annum from the accrual of the tax until the date of the payment thereof.

Power of Sale. — Tax Deducted from Legacy.

S. 5. (As amended by St. 1903, c. 195.) Every executor, administrator
trustee or other person shall have full power to sell or mortgage so much
of the property of the decedent as will enable him to pay such tax in the
same manner as he might be entitled by law to do for the payment of the
debts of a decedent or ward; except that in cases where the transfer is to
two or more persons in common, and one or more of them shall have paid
his proportion of such tax, such executor, administrator, trustee or other per-
son shall sell or mortgage only the interest of such of the persons to whom
the property was transferred as have not paid the tax, to pay the tax due
upon such share or shares. Any such administrator, executor, trustee or other
person having in charge or in trust any legacy or property for distribution sub-
ject to such tax, shall deduct the tax therefrom ; and within thirty days there-
after shall pay over the same to the county treasurer as herein provided. If
such legacy or property be not in money, he shall collect the tax thereon as de-

624 STATUTES ANNOTATED. [Mich. St

termined by the judge of probate from the person entitled thereto, unless such tax
has been paid to the county treasurer. He shall nor deliver or be compelled to
deliver any specific legacy or property subject to tax under this act to any person,
until the tax assessed thereon has been paid to him or to the county treasurer,
If any such legacy shall be charged upon or payable out of real property and is
taxable under this act, the devisee charged with the payment of such legacy shall
deduct such tax therefrom and pay it to the county treasurer or the administrator,
executor or trustee. And the payment thereof shall be enforced by the executor,
administrator or trustee, in the same manner as payment of the legacy might be
enforced, or by the attorney general or prosecuting attorney by the appropriate
legal proceeding. If such legacy shall be given in money to any such person for
a limited period, the administrator, executor, trustee or other person shall retain
the tax upon the whole amount, but if not in money, he shall make such application
to the court having jurisdiction of an accounting by him, to make an apportion-
ment, if the case require it, of the sum to be paid by such legatee and for such
further order relative thereto as the case may require.
[See notes to the Act of 1903, ante, p. 618.]

Refund.

S. 6. (As amended by St. 1903, c. 195.) If any debt shall be allowed against
the estate of a decedent after the payment of any legacy or distributive share
thereof, from which any such tax has been deducted or upon which it has
been paid by the person entitled to such legacy or distributive share, and such
person is required to refund the amount of such debts or any part thereof,
an equitable proportion of the tax shall, upon the order of the court, be paid to
him by the executor, administrator, trustee or other person, if the tax has
not been paid to the county treasurer. When any amount of said tax shall
have been paid erroneously into the county treasury by reason of the allowance
of debts or otherwise, it shall be lawful for the auditor general, upon satis-
factory proof by the order or certificate of the proper court of the allowance
of such debts or of the reversal, correction or alteration, in accordance with
law, of the order fixing such tax, to draw his warrant upon the state treasury
for such erroneous payment, to be refunded to the executor, administrator, trustee,
person or persons entitled to receive it, and charge the same to the fund which
receives credit from the payment of taxes under the provisions of this act: Pro-
vided, however, that all applications for such refunding of erroneous tax shall be
made within six months from the allowance of such debts or the reversal, correc-
tion or alteration of said order.

When Bond Required in Case of Deferred Payments.

S. 7. (As amended by St. 1903, c. 195.) Any person or corporation bene-
ficially interested in the reversion or remainder of any property chargeable
with a tax under this act, and executors, administrators and trustees thereof,
may elect within one year from the transfer thereof as herein provided, not to
pay such tax until the person or persons beneficially interested therein shall
come into the actual possession or enjoyment thereof. If it be personal
property, the person or persons so electing shall give a bond to the state in
the penalty of three times the amount of such tax, with such sureties as the
judge of probate of the proper county may approve, conditioned for the pay-
ment of such tax and interest thereon at such time and period as the person

1899, c. 188.] MICHIGAN. 625

or persons beneficially interested therein may come into the actual possession
or enjoyment of such property, which bond shall be executed and filed
and a full return of such property upon oath made to the probate court
within one year from the date of the transfer thereof, as herein provided, and
such bond must be renewed every five years: Provided, that the time fixed herein
for making such election may be extended by the court in its discretion for a period
not to exceed two years.

When Bequest to Executors, etc., Subject to Tax.

S. 8. (As amended by St. 1903, c. 195.) If a testator bequeath or devise
his property to one or more executors or trustees in lieu of their commissions
or allowances, to an amount exceeding the commissions or allowances pre-
scribed by law for an executor or trustee, the excess in value of the property so
bequeathed or devised above the amount of commissions or allowances pre-
scribed by law shall be taxable under this act.

Transfers by Foreign Executors, etc*

S. 9. (As amended by St. 1903, c. 195.) If a foreign executor, adminis-
trator or trustee shall assign or convey any stock or obligation in this state
standing in the name of a decedent, or in trust for a decedent, liable to any
such tax, the tax shall be paid to the treasurer of the proper county on the
transfer thereof; and any corporation, person or persons having control over
any such assets, shall not deliver or transfer the same to any person or cor-
poration other than an executor, administrator, trustee or guardian duly
qualified under the laws of this state, until the tax to which the same is
liable has been paid as provided in this act. No safe deposit company, trust
company, bank or other institution, person or persons holding securities or
assets of a decedent shall deliver or transfer the same to the executors, adminis-
trators, or legal representatives of said decedent or their assignees unless notice
of the time and place of such intended delivery or transfer be served upon the
county treasurer by said company, bank, institution, person or persons, at least
five days prior to the said delivery or transfer. And it shall be lawful for the
said county treasurer and is hereby made his duty personally or by representative
to examine said securities or assets at the time of or prior to such delivery or
transfer. Failure to serve such notice or to allow such examination on the de-
livery or transfer herein prohibited shall render such safe deposit company, bank,
or other institution, person or persons liable to the payment of the tax due or to
become due upon said securities or assets in pursuance of the provisions of this
act.

The attorney general has ruled that any foreign executor or ad-
ministrator must take out ancillary administration in the state
for the purpose of settling the tax.

The Michigan statute seems to contain no penalty or liability
on a domestic corporation transferring its own stock, and so the
tax would seem not to be easily collectible against the estates of
non-resident stockholders in Michigan corporations. For example,
Calumet & Hecla and Osceola mining stock can be transferred
without reference to the state authorities.

626 STATUTES ANNOTATED. iMich. St.

Jurisdict on of Probate Court.

S, 10. (As amended by St. 1903, c. 195.) The probate court of every county
of this state having jurisdiction to grant letters testamentary or of adminis-
tration upon the estate of a decedent whose property is chargeable with any
tax under this act, or to appoint a trustee of such estate or any part thereof,
or to give ancillary letters thereon, shall have jurisdiction to hear and determine
all questions arising under the provisions of this act and to do any act in
relation thereto authorized by law to be done by a judge of probate in other
matters or proceedings coming within his jurisdiction, and if two or more
probate courts shall be entitled to exercise any such jurisdiction, the judge
of probate first acquiring jurisdiction hereunder shall retain the same, to the
exclusion of every other judge of probate. Every petition for ancillary letters
testamentary or ancillary letters of administration shall set forth a true and cor-
rect statement of all the decedent's property in this state and the value thereof.

Appraisal.

S. 11. (As amended by St. 1907, c. 155.) The judge of probate, upon the
application of any interested party, including the auditor general and county
treasurers, or upon his own motion, shall as often as and whenever occasion
may require, appoint a competent person as appraiser to fix the clear market
value at the time of the transfer thereof of property which shall be subject to
the payment of any tax imposed by this act, a description of which property
and the names and residences of the persons to whom it passes shall be given
by the judge of probate to such appraiser. If the property, upon the transfer
of which the tax is imposed, shall be an estate, income or interest for a term
of years or for life, or determinable upon any future or contingent estate, or
shall be a remainder or reversion or other expectancy, real or personal, the
entire property or fund by which such estate, income or interest is supported,
or of which it is a part, shall be appraised immediately after such transfer,
or as soon thereafter as may be practicable, at the clear market value thereof
as of that date: Provided, however, that when such estate, income or in-
terest shall be of such a nature that its clear market value cannot be ascertained
at such time, it shall be appraised in like manner at the time when such value first
became ascertainable. The value of every future or contingent or limited estate,
income, interest or annuity, dependent upon any life or lives in being, shall be
determined by the rule, method or standard of mortality and value employed
by the commissioner of insurance in ascertaining the value of policies of life
insurance companies, except that the rate of interest for computing the present
value of all future and contingent interests or estates shall be five per centum per
annum.. The commissioner of insurance shall, upon request of the auditor
general, prepare such tables of values, expectancies and other matters as may be
necessary for use in computing, under the provisions of this act, the value of life
estates, annuities, reversions and remainders, which shall be printed and fur-
nished by the auditor general to the several judges of probate upon request:
Provided further, that the clear market value of the transfer of a money legacy,
presently taxable, shall for the purposes of this act be taken to be the face value
of the money at the date of death of decedent.

Appraisers* Proceedings. — Compensation.

S. 12. (As amended by St. 1903, c. 195.) Every such appraiser shall forth-
with give notice by mail to all such persons as he is notified by the judge of

1899, c. 188.] MICHIGAN. 627

probate are interested in the property to be appraised, and to the county treas-
urer, of the time and place when he will appraise the property. He shall at such
time and place appraise the same at its clear market value as herein prescribed,
and for that purpose said appraiser is authorized to issue subpoenas to compel
the attendance of witnesses before him, and to take the evidence of such
witnesses under oath concerning such property and the value thereof, and he
shall make report thereof and of such value in writing to said judge of pro-
bate, together with the depositions of the witnesses examined and such
other facts in relation thereto and to the said matter as the said judge of
probate may order and require. Every appraiser shall be reimbursed for his
actual and necessary traveling and other expenses and shall be entitled to three
dollars per day for every day actually and necessarily employed in such appraise-
ment. The fees of the necessary witnesses shall be the same as those now paid to
witnesses subpoenaed to attend a court of record. A statement in detail of such
compensation and disbursements as are authorized by this section shall be
approved by the judge of probate and paid by the county treasurer from the
general or contingent fund of the county.

Appraisal. — Report. — Appeal. — Rehearing.

S. 13. (As amended by St. 1903, c. 195.) The report of the appraiser shall
be filed in the office of the judge of probate, and from such report and other
proof relating to any such estate before the judge of probate, the judge of
probate shall forthwith, as of course, determine the clear market value of all
such estates as of the date of transfer, and the amount of tax to which the
same is liable, or the judge of probate may so determine the clear market value
of all such estates and the amount of tax to which the same are liable without
appointing an appraiser. The judge of probate may, and shall on application
of the attorney general or auditor general, require the executor, administrator
or trustee of any estate to file with him an itemized statement or, petition
containing itemized statement, under oath, of the personal property and
real property within his knowledge or possession or under his control as
such executor, administrator or trustee, which statement shall indicate the
date from which interest and dividends were due and unpaid upon each item of the
personal estate, together with the rate of such interest and also of the amount
and character of any incumbrances upon such real estate at the time of the death
of said deceased, and other data, such as debts, expenses of administration and
other charges which constitute proper deductions in reaching a taxable remainder
under the provisions of this act. The judge of probate before determination
of the tax upon the estate of decedent as a whole is made, may determine the tax
upon any specific legacy or devise, or upon the real estate of a decedent, and may
authorize and direct any executor or administrator to pay to the county treasurer
a sum in gross on account of the inheritance tax due from the estate when by
reason of claims made against the estate, litigation or other unavoidable cause of
delay the tax cannot be determined by the court within eighteen months from its
accrual; but the five per centum discount provided in section four of this act shall
not be allowed upon this gross sum. The judge of probate in the order determin-
ing the tax upon such estate shall state the amount authorized to be paid in gross
as above provided and the date of such order. The commissioner of insurance
shall, on the application of any judge of probate, or the auditor general, determine
the value of any such future or contingent estate, income or interest limited, con-

628 STATUTES ANNOTATED. [Mich. St.

tingent, dependent, or determinable upon the life or lives of persons in being
upon the facts contained in any such appraiser's report, or facts stated by the
judge of probate, and certify the same to the auditor general or the judge of
probate, and his certificate shall be prima facie evidence that the method of com-
putation adopted therein is correct. In case the state shall appeal from the
appraisement, assessment or determination of the tax, it shall not be necessary
to give any bond. The judge of probate shall immediately give notice upon
the determination by him of the value of any estate which is taxable under this
act, and of the tax to which the same is liable, to each heir, legatee or devisee
or his attorney and of the tax assessed upon his share of the estate, by mailing
such notice, postage prepaid, to the last known address of each of such pers ns,
or his attorney except those who were in court in person or by attorney at the
time the tax was so determined: Provided, that the judge of probate shall, upon
the written application of any person interested, including the attorney general,
file with him within sixty days after the determination by him of any tax under
this act, grant a rehearing upon the matter of determining such tax; and if, on
such rehearing, he shall modify his former determination he shall enter an order
redetermining the tax, and make the necessary entries in the book provided for
in section seventeen of this act, and make report thereof to the auditor general
and county treasurer, as provided in section eighteen of this act.

Proceedings for Collection.

S. 14. (As amended by St. 1903, c. 195.) If the auditor general or the treas-
urer of any county shall have reason to believe that any tax is due and unpaid
under this act, after the refusal or neglect of the persons liable therefor to pay
the same, he shall notify the attorney general in writing of such failure or
neglect, and such attorney general may apply, or cause the prosecuting
attorney of the county to apply, in behalf of the state, to the probate court
for a citation citing the persons liable to pay such tax to appear before the
court on a day specified not more than three months after the date of such
citation, and show cause why the tax should not be paid. The judge of
probate upon such application and whenever it shall appear to him that any such
tax accruing under this act has not been paid as required by law, shall issue such
citation, and the service of such citation, and the time, manner and proof thereof
and the hearing and determination thereon, and the enforcement of the determina-
tion or order made by the judge of probate shall conform to the practice of the
probate court in like cases made and provided for the servic^ of citations out of
the probate court, and the hearing and determination thereon a^nd its enforcement,
so far as the same may be applicable. In all cases where an estate has been
declared closed without fixing or payment of the tax upon the transfers therein,
and the attorney general shall believe such transfers to be subject to a tax and
real estate in said estate to be subject to the lien thereof and shall contemplate
the institution of proceedings for the fixing and enforcing, or the enforcing of the
same when it has been fixed, he, may in his discretion file with the register of deeds
of the county a notice setting forth such fact, together with a description of the
real estate claimed to be subject to the same, which shall operate with the same
force and effect as a lis pendens under existing statutes: Provided, that the
failure to file such notice shall not in any manner prejudice the rights of the state.
The judge of probate or the probate clerk or register shall, upon the request of

1899, c. 188.] MICHIGAN. 629

the attorney general, prosecuting attorney, or treasurer of the county, furnish
one or more transcripts of such decree which shall be docketed and filed by the
county clerk of any county of the state without fees, in the same manner and with
the same effect as provided by law for filing and docketing transcripts, judgments
and decrees of circuit courts in this state. As a cumulative remedy for the collec-
tion of the tax. the state may proceed by an action of assumpsit in any court of
competent jurisdiction. Whenever the probate judge shall issue a citation and
take the proceedings specified in this section, he shall certify such fact to the
county treasurer, together with an itemized bill of all expenses incurred for the
services of such citation, and other lawful disbursements not otherwise paid,
and thereupon the county treasurer shall pay the same from the general or contin-
gent fund of the county. In all proceedings to which any county treasurer, or
the auditor general, is cited to appear under sections eleven and twelve of this
act and all proceedings arising or instituted hereunder, the attorney general shall
represent the interests of the state therein, the compensation and expenses of
necessary assistants and the expenses of the said attorney general to be paid after
approval by the attorney general on the warrant of the auditor general out of the
general fund in the state treasury.

Receipts.

S. 15, (As amended by St. 1903, c. 195.) Any person shall, upon the pay-
ment of the sum of fifty cents to the county treasurer, be entitled to a
certified copy of the receipt issued by the county treasurer under section three
of this act for the payment of any tax under this act, which receipt shall desig-
nate upon what real property, if any, such tax shall have been paid, by whom
paid, and whether in full of such tax. Such receipts may be recorded in the
office of the register of deeds of the county in which such property is situated,
in a book to be kept by him for that purpose, which shall be labeled "Transfer
Tax."

Fees of County Treasurer.

S. 16. (As amended by St. 1903, c. 195.) The treasurer of each county,
except in counties where the treasurer is paid a salary in lieu of fees, shall be
allowed on each and all taxes paid and accounted for by him under this act one
per centum. Such fees shall be in addition to the fees or compensation now
allowed by law to such officers, and shall be paid out of the general fund or
contingent fund of the different counties.

Records.

S. 17. (As amended by St. 1903, c. 195.) The auditor general shall furnish
to each judge of probate a book, which shall be a public record, in which
he shall enter a formal order containing the name of every decedent upon
whose estate letters of administration or letters testamentary or ancillary letters
have issued, the date of death -and place of residence at the time of death
of such decedent, the names, places of residence and relationship to him of his
heirs at law, in case he died intestate or left estate not disposed of by will,
the names, places of residence and relationship to him of the legatees and de-
visees in the will of the decedent, in case he died testate, the ages of all life
tenants and beneficiaries under life estates, the clear market value of his real

630 STATUTES ANNOTATED. [Mich. St.

and personal property, the clear market value of the property, real and per-
sonal, passing to each heir, legatee and devisee, and the clear market value of
annuities, life estates, terms of years, and other property of such decedent, or
given by him in his will and otherwise, as fixed and determined by the j udge
of probate, and the amount of tax assessed thereon, and the amount of tax
assessed on the share of each heir, legatee and devisee, when from the records of
the court or the testimony given there appears to be property in such estate
liable to tax under this act: Provided, the description of no real estate need be
given except such as is taxable under this act, and a sufficiently definite descrip-
tion shall be given to fully identify such taxable real estate and the persons
to whom the several parcels are devised. He shall also enter in said book the
name, date of death, and place of residence at time of death of every decedent,
grantor, vendor or donor who has made a transfer of property in contemplation
of death or intended to take effect in possession or enjoyment at or after his
death, subject to tax under this act; the name and residence of the grantee, ven-
dee or donee and his relationship to the grantor, vendor or donor, the clear market
value as determined by the judge of probate of the property so transferred by
him and the tax determined by the court payable thereon. These entries shall be
made from data contained in the papers filed in the probate court and testimony
taken in any proceedings relating to the estate of the decedent. The judge of
probate shall also enter in such book the amount of the real and personal property
of such decedent as shown by the inventory thereof when made and filed in his
office. In case the judge of probate shall determine the amount of tax to be paid
upon any specific legacy or devise or upon the real estate of a decedent before the
determination of the tax by him upon the estate as a whole, only such entries
need be made in such book in that particular case as refer to such legacy or devise
or real estate, but it shall be distinctly stated in said book that it is but a partial
determination by the judge of probate of the tax due from the estate. Whenever
the determination of the tax in such estate by the judge of probate is general or
final, the deductions made by the judge of probate from the full value of the
estate shall be particularly specified, so that the several reasons for the deductions
made shall clearly appear upon the record; such record so required to be furnished
by the auditor general shall be in the following form, and shall be of such size and
so arranged as he shall determine will best meet the requirements of this act.

ABSTRACT OF TAXABLE INHERITANCES. VOL. NO.

Page No

State of Michigan.

The probate court for the county of

At a session of said court held at

said county the . . . . ' day of

A. D. 19

Present, the Honorable

Probate Judge.

In the matter of the inheritance tax upon transfers in the estate of .
deceased.

Form.] MICHIGAN. 631

In this matter it being represented to me and appearing that the said deceased
was, at the time of his death on the day of

a resident of and possessed

property the transfer of which or some interest or estate therein is taxable under
the inheritance tax law (act 188 of the public acts of 1899 and

of 1903); that ; . .of

was duly and regularly appointed

of the said estate and , and that as appears

from the inventory on file in this court, the amount of property belonging to said
estate is stated to be as follows : —

Personal property, $ ; real property, $

It further appears and I hereby find that the debts of said deceased owing at
the time of his death (exclusive of interest accruing thereafter) amount to $

; that the funeral expenses of said deceased amount to $ ;

and that the expenses of administration of the estate of said decedent (exclusive
of all items of disbursement for repairs to buildings or other property belonging
to, or taxes accruing after death, upon the estate of said deceased, all allowances
for the support of widow and children of said deceased, expenses incurred in
contesting the will of said deceased, and other items of disbursement for the
benefit of the beneficiaries of said estate, not strictly expenses of administration)
amount to the sum of $ ; the total debts and expenses of adminis-
tration being $

After due and careful investigation, examination and consideration, I find
and determine that the clear market value of all of said decedent's personal
property and real estate, at the date of his death, was as follows: —

Personal property, $ ; real property, $ ; and that

after deduction therefrom of the total debts and expenses of administration
(debts secured upon realty being deducted from the value of the real estate, and
debts unsecured and secured on personalty being deducted from the value of
the personalty), there remains subject to taxation under the provisions of said
act before deducting statutory exemptions, transfers of personal property to

the amount of $ ; and transfers of real property to the amount of

$ ; and that of said transfers certain interests hereinafter set forth

in detail in the schedule hereto are not presently taxable by reason of the following
contingency, rendering it impossible to determine presently the value of the
interests passing and the amount of the tax thereon, namely,

And I hereby find and determine that the tax upon the presently taxable

transfers in said estate amounts to the sum of $ and find that the

several names, residences, relationships and ages, where interest consists of life
estates or annuities, of the several beneficiaries, together with the character and
amount of the several interests or estates passing thereto, the rate of tax to which
each is subject, and the portion of the tax fixed upon .apportioned to, and required
to be borne by each of the several taxable transfers, is as set forth in detail in
the following schedule: —

632

STATUTES ANNOTATED.

[Mich. St.

[The schedule shall contain the following headings for the several columns
and space for sufficient entries, remarks, etc.]

Name of Heir at

Law, Legatee or

Devisee to whom

Estate Passes.

Residence.

Relationship.

Age of Life
Tenant or
Annuitant.

Rate of Tax.

Per Cent.

Value of Legacy

or Personal
Estate Passing.

Value of Personal
Estate Exempt.

Value of Legacy

or Personal
Estate Taxable.

Amount of Tax

on Personal

Estate.

Value of Real
Estate Passing.

Value of Real
Estate Exempt.

Value of Real
Estate Taxable.

Amount of Tax
on Real Estate.

Value of Annui-
ties, Life Estates,
etc., Passing.

Value of Annui-
ties, Life Estates,
etc. , Exempt.

Value of Annui-
ties, Life Estates,
etc., Taxable.

Amount of Tax

on Annuities,

Life Estates, etc.

Total Amount
of Tax.

Remarks: — Including descriptions of real estate taxed and any explanations
necessary to a complete understanding of the foregoing entries

Judge of Probate.

The form of which said order, exclusive of the schedule, shall be varied to
meet the requirements of special cases, but none of the matter required thereby
shall be omitted.

This form of record indicates that debts secured by mortgage
are to be deducted from real property. This form was evidently
copied from the New York statute, but can hardly be held in and
of itself to establish a rule for fixing the amount of the inheritance
tax where land of the testator is subject to mortgage. That is

1899, c. 188.1 MICHIGAN. 633

done by other provisions of the statute which render the form
inserted inapplicable. In re Fox, 159 Mich. 420, 124 N. W. 60,
16 Detroit Leg. N. 943.

Reports.

S. 18. (As amended by St. 1903, e. 195, and St. 1911, c. 73.) Each judge of
probate shall, within three days after he shall have determined the tax and entered
the order required in the preceding section, make a duly certified copy of such order
upon forms furnished by the auditor general, containing all the data and mat-
ter required to be entered in such book, one of which shall be immediately
delivered to the county treasurer, from which data the said county treasurer
shall obtain the information for making the duplicate receipt required by this
act, and the other transmitted to the auditor general. If in any calendar
quarter beginning January, April, July or October first in each year, there
has been no tax determined, the judge of probate shall make a report to the
auditor general affirmatively showing this fact. The register of deeds of each
county shall, upon blanks prescribed and furnished by the auditor general, as
often as any deed or other conveyance is filed or recorded in his office of any prop-
erty which appears to have been made in contemplation of death or intended to
take eiTect in possession or enjoyment after the death of the grantor or vendor,
make reports in duplicate containing a statement of the name and place of resi-
dence of such grantor or vendor, the name, relationship and place of residence
of the grantee or vendee, and a description and the value of the property
transferred and the consideration for the transfer as stated in the instrument
filed or recorded, one of which duplicates shall be immediately delivered to the
county treasurer, and the other transmitted to the auditor general.

Whenever any non-resident shall die leaving property, or any interest therein,
in this state which has not been duly administered under the laws of this state
and it shall be necessary to have the question of the taxation of the transfer
thereof determined, such question may be presented and determined upon
petition to be filed by the attorney general in any probate court of this state.
The said petition shall set forth the name of the decedent; residence at time of
death; the total amount of property constituting said estate; a description of
and the value of all property in Michigan; and any and all such other data as
may be necessary to inform the court of the facts in connection with such matter.
It shall be the duty of the probate court with which such petition is filed to
fix a date for hearing thereon and to give notice of such hearing in such manner
as shall be prescribed. Publication of the notice of such hearing shall not be
necessary unless ordered by the court. It shall be the duty of the executor,
administrator, trustee or any interested party in said estate to furnish all such
facts, data, information, reports and certified copies of proceedings had in con-
nection with said estate in any other court, as shall be required by the attorney
general or directed by the probate court. The probate court shall appoint a
resident of Michigan to represent the said estate at such hearing and the person
so appointed shall perform such duties as shall be required by the court. The
person so appointed shall have and possess all of the powers of an executor or
administrator for the purposes of this section, but shall not be personally liable
for any inheritance tax in said estate and shall not be required to give any bond
unless so directed by the court. The said probate court shall at the hearing

634 STATUTES ANNOTATED. [Mich. St.

on said petition or at an adjourned hearing, determine whether the transfer of
such property is taxable and if found taxable, he shall proceed as in all other
cases to fix and determine the amount thereof. If it is found that the transfer
of such property is not taxable, an order to that effect shall be entered in the
said probate court. A re-determination of said order may be had and an appeal
therefrom may be taken in the same manner provided for in this act. A certified
copy of all such orders determining that there is no inheritance tax due and
payable may be procured from the probate court upon the payment of fifty
cents: Provided, That no order shall be entered in any such case until there is
filed in said probate court receipts showing full payment of all expenses incurred
including compensation due the person appointed to represent said estate,
all of which expenses or compensation shall be paid by the executor, administra-
tor, or any perso' interested in said estate: Provided further, That in case it
may be necessary to have any such property subjected to regular probate pro-
ceedings in this state, or if any such estate shall have been administered in this
state, the right to proceed under this section shall be discretionary with the
probate court This section shall not operate to relieve any such person as is
referred to in section nine of this act from the liability therein expressed until
sixty days after the date of entry of the order determining that there is no tax
upon the transfers in said estate, or in case a tax is determined, until proper
receipts showing payment thereof have been duly signed by the state treasurer
and countersigned by the auditor general.

Reports. — Examiners.

S7 19. (As amended by St. 1909, c. 44.) Each county treasurer shall make
a report under oath to the auditor general on January, April, July and October
first of each year of all taxes received by him under this act during the preced-
ing calendar quarter, stating for what estate and by whom and when paid.
If in any calendar quarter the county treasurer has received no tax under
this act, the report shall affirmatively show this fact. The form of such report
shall be prescribed by the auditor general. If receipts issued by the county
treasurer and money received thereon are not forwarded within the time speci-
fied in section three of this act, he shall pay interest at the rate of eight per
cent per annum in addition to the amount of such delinquent taxes then in
arrears. The auditor general may employ not to exceed two examiners whose
duties shall be to make examinations of the records of the several probate
courts, county treasurers and registers of deeds in this state, and report their
findings to him and perform such other duties under the provisions of this act
as the auditor general may direct, at a salary of not to exceed fifteen hundred
dollars per annum, payable in the same manner as the salaries of other state
officers are now paid. The expenses of said examiners shall be paid out of the
general fund in the state treasury upon allowance by the state board of audi-
tors after approval by the auditor general. [From here on is not in 1903.] There
is hereby appropriated out of the general fund in the state treasury a sufficient
amount of money to carry out the provisions of this section. The auditor general
shall add to and incorporate in the state tax for the year nineteen hundred nine,
and each year thereafter, a sufficient sum to reimburse the general fund in the
state treasury for the amount herein appropriated.

Practice.] MICHIGAN. 635

Application of Proceeds.

S. 20. (St. 1899, c. 188.) All taxes levied and collected under this act shall
be paid into the state treasury, and be applied in paying the interest upon the
primary school, university and other educational funds, and the interest and
principal of the state debt in the order herein recited, until the extinguishment
of the state debt, other than the amounts due to educational funds, when such
taxes shall be added to and constitute a part of the primary school interest fund,
in pursuance of and in compliance with section one of article fourteen of the
constitution of this state.

[See notes to the Act of 1899, ante, p. 613.]

Definitions.

S. 21. (As amended by St. 1907, c. 328.) The word "estate" and "property"
as used in this act shall be taken to mean the property or interest therein of
the testator, intestate, grantor, bargainor or vendor, passing or transferred to
those not herein specifically exempted from the provisions of this act, and not as
the property or interest therein passing or transferred to the individual legatees,
devisees, heirs, next of kin, grantees, donees or vendees, and shall include all
property or interest therein whether situated within or without this state iThe
rest of this sentence is not in 1903.] and including all property represented or
evidenced by note, certificate, stock, land contract, mortgage or other kind
or character of evidence thereof, and regardless of whether any such evidence
of property is owned, kept or possessed within or without this state. The word
"transfer" as used in this act shall be taken to include the passing of property
or any interest therein in possession or enjoyment, present or future, by inheri-
tance, descent, devise, bequest, grant, deed, bargain, sale or gift in the manner
herein prescribed. The words "county treasurer," "prosecuting attorney,"
as used in this act shall be taken to mean the county treasurer or prosecuting
attorney of the county having jurisdiction in section ten of this act.

[See notes to the Acts of 1899 and 1903, ante, pp. 613, 620.]

PRACTICE.

The following instructions were issued by the auditor general in
1907: —

JUDGE OF PROBATE.

In connection with volume three, "Record of Taxable Inheritances," the
following suggestions and instructions should be observed by the judges in their
work under Act 195, Public Acts of 1903, commonly called the inheritance tax law:

1. In estates where there are no taxable transfers, no orders should be made.
Where there are any taxable transfers in an estate, a full report of every transac-
tion, whether taxable or not, should be made.

2. A description of real estate that is not taxable need not be given, but a
sufficiently definite description should be given to fully identify each parcel of
taxable real estate and the persons to whom the several parcels are devised.

636 STATUTES ANNOTATED. rMich.

3. The duplicate orders to the county treasurer and auditor general must refer
upon the upper right hand corner of the first page thereof to the volume and page
of the book from which it was copied.

4. The orders should be sent to the county treasurer and auditor general re-
spectively within three days, if possible, after the record upon the book is made,
as the auditor general cannot countersign and seal the receipts until such orders
are received.

5. When a delay in the payment of a tax of more than eighteen months from
the date of death of decedent occurs, the record upon the book and the copies
thereof, under the head of "Remarks" should show the cause of such delay if it
is such as to entitle the executor or administrator to a reduction of he interest
from eight per cent to six per cent.

6. No addition to the tax found to be due by the judge of probate on account
of interest should be made by him, nor any deduction for payment within twelve
months. Such additions and deductions should be left to the county treasurer.

Legal and Administrative Questions.

First. Subjects of Taxation.

1. The transfer of all property of residents, without regard to its location, is
taxable. The transfer of all property belonging to residents of this state,
without regard to its location (except real estate situate without the state), is
taxable, unless same is exempt. This includes credits secured by mortgages upon
lands situate in other states, and stocks and bonds of foreign corporations.

2. The transfer of all property of non-residents situate within this state is
taxable. This includes securities, stocks and bonds habitually kept or deposited
within this state, money on deposit in banks in this state, and stocks of corpora-
tions of this state, whether within the state or not.

3. Credits belonging to non-residents, secured upon lands in this state are
taxable.

4. Land contracts should be treated as personal property when given by de-
cedent, as real property when held by decedent.

5. Tax titles held by decedent should be treated as personal property.
Second. Exemptions.

A. From the whole value of the estate of a decedent, the following exemptions
or deductions are permissible : —

1. Bequests or legacies to persons, corporations and organizations specifically
exempted. Religious, charitable and similar institutions and organizations of a
domestic character are specifically exempted by statute. Foreign corporations
are not so exempted.

2. The estate of a decedent under $100 in value.

3. The transfer of real estate to persons of the relationship designated in
section two of said act.

4. The transfer of personal property under the value of $2,000 to the persons
mentioned in said section 2.

5. Expenses of administration.

6. Debts of decedent.

7. Taxes accrued and which are a lien at the date of death.

8. Funeral expenses, except as hereafter noted.

9. Monument or tombstone where provided for by will or allowed by order
of court.

Practice.! MICHIGAN. 637

10. Bequests or devises to executors or trustees for services as such to the
amount of the fees or commissions allowed by law,

11. The exemptions provided for in sections 1 and 2 are allowed from each
distributive share. For example, a legacy of seventy-five dollars to a niece would
not be taxable, but a legacy of one hundred dollars or over to a niece would be
taxable at five per cent. In the same way, a legacy to a son of one thousand five
hundred dollars would not be taxable, but a legacy of two thousand dollars or
over to a son would be taxable at one per cent for the full amount of the legacy.

B. The following will not be exempt or allowed to be deducted in arriving at
taxable values: —

1. Under section 1, where the established value of each distributive share of
the property of a decedent, either real or personal, or a combination of the two
is one hundred dollars or more, and passes to persons or corporations not exempt
by law from .taxation, or to persons not exempt in section two, such transfer
is taxable at five per cent.

2. Funeral expenses where the decedent is survived by her husband.

3. Taxes, interest or insurance accruing after the date of death of decedent.

4. Expenses of repairs or improvements to property after date of death.

5. Monuments or tombstones provided by heirs or legatees without direction
in will or order of court.

6. A legacy or bequest to pay debts or satisfy obligations.

7. The state inheritance tax.

8. Expense of litigatio.i between heirs, devisees or legatees

9. Loss or depreciation in value of property after date of death of decedent.

10. Devises or bequests to foreign institutions or corporations.

11. Devises or bequests to executors or trustees for services in excess of com-
missions or allowances provided for by law.

12. Disbursements made for benefit of beneficiaries other than expenses of
administration.

13. Allowances for support of widow, or other beneficiary.
Third. Appraisal and Assessment of Tax.

1. The established value of the property of a decedent, for the purpose of
taxation on the transfer thereof, is its actual true cash value at the date of death
of decedent.

2. The appraisal can be made either by the judge of probate personally, or
by an appraiser appointed by the court for that purpose. [See sections 11, 12
and 13, Act 195, Public Acts of 1903.]

3. When an appraiser is appointed, the report of the appraiser may be followed
or disregarded by the judge of probate in his discretion in determining the value
of an estate.

4 Whenever in the preliminary steps for the determination of the taxable
transfer of an estate, the judge of probate has reason to believe that excessive
charges for expenses are being made, or that a fraudulent or excessive claim has
been allowed, he should, before the allowance of said charges and claims as a
deduction in fixing the tax, notify the attorney or auditor general so that the state
may be represented if it so elects.

6. In determining the amount of debts of deceased, care should be taken not
to include any taxes paid by an executor or administrator unless the same were a
lien on the land at the date of death of decedent.

638 STATUTES ANNOTATED. [Mich. St.

6. Care should also be taken that no interest accruing after the death of de-
cedent upon any of decedent's debts is included.

7. No disbursements of whatever character, made for the benefit of benefi-
ciaries can be exempted as part of the debts of decedent.

8. Funeral expenses do not include traveling and similar expenses of friends and
relatives in attending funeral, but do include burial and incidental expenses.

9. Executors and administrators cannot be discharged nor the estate or trust
closed until receipts, sealed and countersigned by the auditor general showing
payment of the tax, have been produced and filed.

10. When the tax is not heretofore fixed, the notice to heirs of hearing final
account should include notice that the inheritance tax will also be determined
upon that date.

11. All estates or interest in expectancy, and reversions or remainders, where
the value of the same is determinable, are presently taxable unless election is
made and bond filed under section seven of the inheritance tax law. Only in
:hose cases where the value of the interest of any beneficiary is not presently
determinable, or where bond is given, can interest of this character be left until
the party beneficially entitled comes into possession thereof.

12. The judge of probate should require an inventory of every estate as required
by section 9348, compiled laws of 1897.

13. Whenever the judge of probate is in doubt as to the proper method of
determining the tax by reason of some peculiarity not anticipated in the prepara-
tion of these suggestions or instructions, it is recommended that he either send
in a trial order for examination by the auditor general, or ask for the assistance of
an inheritance tax examiner from the auditor general's department, who will be
pleased to call and assist in computing the tax without expense to the estate or
probate court.

14. Especial care should be taken by the judge of probate and the above
suggestions thoroughly considered before the tax is determined in connection
with any estate.

COUNTY TREASURER.
Instructions as to Use of Blanks.

1. The duplicate statement and receipts in the book furnished county treas-
urers are numbered consecutively, and should be issued in chronological order.
I-n the upper left-hand corner of the statement will be found a blank space for
reference to the volume and number of the order of the judge of probate. This
volume and number should always be given.

2. When any inheritance tax shall be paid to the county treasurer, he shall,
in addition to duplicate receipts required to be issued, give the executor, adminis-
trator, trustee or other person paying the tax, a simple receipt for the amount
received. [See section 3, Act 195, Public Acts of 1903.]

3. The county treasurer should not issue a receipt to an executor or adminis-
trator until the order of the judge of probate is on file with him.

4. The blanks in the form of duplicate statement and receipt should be filled
m as indicated by parenthetical instructions contained thereon.

5. Whenever any portion of the tax upon a transfer is based upon real estate
values, the description of such real estate as passes under the transfer to bene-
ficiaries liable to an inheritance tax, should be included in the statement and

Practice.] MICHIGAN. 639

receipt issued by the county treasurer. Whenever there is not room upon the
back of the receipt in the space left for the description, such portion as cannot
be entered thereon should be placed upon paper similar in size and quality to that
of the receipt and attached firmly to the receipt.

Legal and Administrative Questions.

1. No deduction from the tax as determined by the judge of probate should
be made unless it is paid to the county treasurer within twelve months from the
date of death of decedent, in which case a discount of five per cent should be
allowed. Interest at the rate of eight per cent per annum from the date of death
of decedent up to the time of payment of the tax should be added to the tax
determined by the judge of probate, if it is not paid within eighteen months from
the date of death of decedent. Whenever the order of the judge of probate
indicates that there was necessary litigation or unavoidable delay, interest should
be charged at the rate of six per cent per annum from and after the expiration of
eighteen months from the date of death of decedent. [See section 4, Act 195,
Public Acts of 1903.]

2. Receipts issued by the county treasurer and the money received thereon
shall be forwarded to the auditor general immediately (within three days from the
time of payment); otherwise he shall pay interest at the rate of eight per cent
per annum on such sum or sums collected in addition to the amount received.
[See sections 3 and 19, Act 195, Public Acts of 1903.]

3. The county treasurer, except in counties where the treasurer is paid a
salary in lieu of fees, shall be allowed one per cent on all inheritance taxes collected
and accounted for by him. Such fees shall be in addition to the fees or com-
pensation now allowed by law to such officers and shall be paid out of the general
or contingent fund of the different counties. [See section 16, Act 195, Public
Acts of 1903.]

4. Each county treasurer shall make a report (on blank No. 2673) to the
auditor general on January, April, July and October first of each year of all taxes
received by him under this act during the preceding calendar quarter, stating for
what estate and by "whom and when paid. If, in any calendar quarter, the
county treasurer has received no tax under this act, the report shall affirmatively
show this fact. [See section 19, Act 195, Public Acts of 1903.]

5. Section 6, Act 195, Public Acts of 1903, provides for refunding taxes, when
erroneously paid, under certain conditions. County treasurers should not refund
under any circumstances, as the law provides that all refundings shall be made
direct by the auditor general to the executor, administrator, trustee, person or
persons entitled to receive the same.

6. The county treasurer cannot accept a deposit to cover a tax before the tax
is determined by the judge of probate for the purpose of taking advantage of
the five per cent discount nor for the purpose of avoiding the eight per cent penalty.

7. Especial care should be taken by the county treasurer and the suggestions
contained in this pamphlet well considered before he issues his receipt fof the tax.

640 STATUTES ANNOTATED. [Minn. St.

MINNESOTA.

List of Statutes

1875.

Statutes of Minnesota, c. 37.

1878.

General Statutes, c. 7, s. 8.

1885.

Statutes of Minnesota, c. 103.

1888.

General Statutes Suppl., c. 7, s. 8.

1893.

General Laws, c. 1.

1895.

" p. 3.

1897.

Statutes, c. 293.-

1901.

" c. 255.

1902.

c. 3.

1905.

c. 168.

1905.

c. 288.

1909.

Revised Statutes, ss. 1038-1 to 1038-24.

1911.

Statutes, c. 209.

1911.

" c. 372.

In General.

Minnesota has had much difficulty in getting an inheritance
tax that would satisfy the courts. Graduated probate fees similar
to those in Wisconsin, first adopted in 1875 and extended in 1885,
were held unconstitutional. The same fate successively befell the
inheritance tax laws of 1897, 1901 and 1902. The act adopted in
1905 survived, but none too easily. A restrictive constitutional
amendment adopted in 1894, which the legislature persisted in dis-
regarding, was supplanted in 1906 by another amendment, which
gives the legislature broad powers to impose inheritance taxes.

In response to the urgent suggestions of the state tax commission
to differentiate between lineals and collaterals the legislature
passed an amendment to this effect in 1909, but it was vetoed by
the governor, as in. his opinion it was unconstitutional. The recent
legislation of 1911 has now, Jiowever, made the distinction between
lineals and collaterals in a statute which also radically decreases
exemptions and increases rates which now run as high as 15 per
cent. This act bids fair to withstand attack, in view of the
broad provisions of the constitutional amendment of 1906.

1905, c. 168.] MINNESOTA. 641

Constitutional Limitations.
Minnesota Constitution, a. 1.

S. 8. Redress of injuries and wrongs. Every person is entitled to a certain
remedy in the laws for all injuries or wrongs which he may receive in his person,
property or character; he ought to obtain justice freely and without pui'chase;
completely and without denial; promptly and without delay, conformably to
the laws. <,

Minnesota Constitution, a. 6.

S. 7. Probate Court. There shall be established in each organized county in
the state a probate court, which shall be a court of record, and be held at such
times and places as may be prescribed by law. It shall be held by one judge,
who shall be elected by the voters of the county for the term of two years. He
shall be a resident of such county at the time of his election, and reside therein
during his continuance in office, and his compensation shall be provided by law.
He may appoint his own clerk, where none has been elected, but the legislature
may authorize the election by the electors of any county, of one clerk or register
of probate for such county, whose powers, duties, term of office and compensation
shall be prescribed by law. A probate court shall have jurisdiction over the
estates of deceased persons, and persons under guardianship, but no other juris-
diction, except as prescribed by this constitution.

Minn. Const. 1857, a. 9, s. 1, provided as follows: —

"All taxes to be raised in this state shall be as nearly equal as may be, and all
property on which taxes are to be levied shall have a cash valuation, and be
equalized and uniform throughout the state: provided that the legislature may,
by general law or special act, authorize municipal corporations to levy assess-
ments for local improvements. ..."

This paragraph was amended in 1894 by a restrictive provision
which has been supplanted by the amendment of 1906.

Minn. St. 1905, c. 168. Approved April 13, 1905.

Be it enacted by the Legislature of the State of Minnesota: The following
amendment to article nine of the constitution of the state of Minnesota, to take
the place of sections one, two, three, four and the amendment added to the end
of said article adopted in 1896, relating to taxation, is hereby proposed to the
people of the state of Minnesota for their approval or rejection, which amendment
when adopted shall be known as section one of said article nine, that is to say; —

S. 1. The power of taxation shall never be surrendered, suspended or con-
tracted away. Taxes shall be uniform upon the same class of subjects, and shall
be levied and collected for public purposes, but public burying grounds, public
schoolhouses, public hospitals, academies, colleges, universities and all seminaries
of learning, all churches, church property, and houses of worship, institutions
of purely public charity and public property used exclusively for any public
purpose, shall be exempt from taxation, and there may be exempted from taxation
personal property not exceeding in value $200, for each household, individual

642 STATUTES ANNOTATED, [Minn. St.

or head of a family, as the legislature may determine: Provided, that the legis-
lature may authorize municipal corporations to levy and collect assessments for
local improvements upon property benefited thereby without regard to a cash
valuation, and, provided further, that nothing herein contained shall be con-
strued to affect, modify or repeal any existing law providing for the taxation
of the' gross earnings of railroads.

[This amendment was adopted in 1906.]

[See further the constitutional amendment of 1894, post, p 645.]

Nature of Tax.

An inheritance tax is not a tax upon property but upon the right
of succession. State v. Bazille, 97 Minn. 11, 106 N. W. 93, 6 L. R. A.
(N. S.) 732.

Statute to be Fairly Construed.

The rule of strict construction ordinarily applied to the operation
and effect of statutes on taxation and to proceedings thereunder
does not apply to inheritance taxes. The statute must be given a
fair and reasonable construction. State v. Bazille, 97 Minn. 11, 106
N. W. 93, 6 L. R. A. (N. S.) 732.

How to Test the Validity of the Statute.

The constitutionality of the inheritance tax was brought to the
attention of the court by an application by the treasurer for a writ
of mandamus commanding the judge of probate to appoint ap-
praisers to value certain legacies and devises for the purpose of
determining the amount of the inheritance tax in State v. Bazille,
97 Minn. 11, 106 N. W. 93, 6 L. R. A. (N. S.) 732.

The Effect of an Unconstitutional Statute.

Where an unconstitutional statute was nominally in force at
the date of a certain transfer and after the transfer was made a
valid law was passed, the transfer is subject to no tax whatever.
The act was void from the beginning and its nominal existence in
no way affected the validity of the transactions. Where the trans-
fer was made while the unconstitutional statute was in force and
later before the death of the transferor the legislature passed an
act which was valid, the court says that it is possible that the parties
may have had the possibilities of an inheritance tax in mind, but
the law which the state was attempting to apply was not then in
force and the case therefore does not present the question of the
effect of a transfer of property with the intention and for the
purpose of avoiding the operation of an existing inheritance tax law.

1875, c. 37.] MINNESOTA. 643

State V. Probate Court, Washington County, 102 Minn. 268, 286,
113N.W. 888.

Avoiding Tax by Transfer to Corporation.

The transferor organized a corporation and conveyed to it his
property in return for the issue to him of most of its capital stock.
His wife and children all signed agreements by which the transferor
agreed to transfer to the wife and children certain shares of the
stock on their agreement to lease the same stock to the transferor
for life, and on the agreement that the wife would transfer the stock
which she was to receive to the children, and who were to lease it
to her for life on the same conditions. The court holds that the
absolute ownership of the stock was not in the original transferor,
but that the effect of these transactions was to give him a life
estate with an interest in reversion in the wife and children. The
court holds that a life estate in personal property although unknown
at common law may now be created and that the original transferor
reserved no power of disposition of property, and a will made after
the transfers assuming to give the stock to other persons would
have been of no effect and that therefore the stock did not pass
by inheritance. The court was precluded by the stipulation under
which the case came before it that there was no verbal or outside
agreement not before the court from considering the question
whether the agreement was made to avoid an inheritance tax.
State V. Probate Court, Washington County, 102 Minn. 268, 294,
113 N. W. 888.

THE VOID STATUTE OF 1875.

Minn. St. 1875, c. 37.

644 STATUTES ANNOTATED. [Minn. St.

exceed the sum of twenty thousand dollars, and in addition all sums necessarily
expended in serving or publishing notices required Dy law: Provided, that in all
cases where application is made for the appointment of any guardian for any
minor or minors residing out of this state, but having property therein, or for the
admission to probate of a will already probated in some other state, the person
making such application shall pay in lieu of the sums above named the sum
of ten dollars, and no other or different sum shall be required to be paid by any
party seeking the aid of such probate court, except as provided above.

Minn. Gen. St. of 1878, c. 7, s. 8, is a copy of Minn. St. 1875,
c. 37, s. 4.

Minn. St. 1885, c. 103, approved March 9, 1885, amends Minn.
St. 1875, c. 37, s. 4, and Minn. Gen. St. 1878, c. 7, s. 8, to read as
follows : —

S. 4. For the purpose of reimbursing the county treasury for the salaries
provided to be paid in this act to the judge of probate, it shall be the duty of each
executor, administrator, or guardian to pay or cause to be paid to the county
treasurer for the use and benefit of the county in whose probate court proceedings
are to be instituted to settle the estate of any deceased person, minor, spendthrift
or insane person the following sums according to the value of the estate and
property of such deceased person, minor, spendthrift, or insane persons, shown by
the inventory and appraisal, that is to say ten (10) dollars when such value shall
exceed two thousand (2,000) dollars and shall not exceed five thousand (5,000)
dollars; twenty-five (25) dollars when such value shall exceed five thousand (5,000)
dollars and not exceed ten thousand (10,000) dollars; thirty-five (35) dollars when
such value exceeds ten thousand (10,000) dollars and does not exceed fifteen thou-
sand (15,000) dollars; fifty (50) dollars when such value exceeds fifteen thousand
(15,000) dollars and does not exceed twenty thousand (20,000) dollars; seventy-
five (75) dollars when such value exceeds twenty thousand (20,000) dollars
and does not exceed thirty-five thousand (35,000) dollars; one hundred (100)
dollars when such value exceeds thirty-five thousand (35,000) dollars and does
not exceed fifty thousand (50,000) dollars; two hundred (200) dollars when such
value exceeds fifty thousand (50,000) dollars and does not exceed seventy-five
thousand (75,000) dollars; three hundred (300) dollars when such value exceeds
seventy-five thousand (75,000) dollars and does not exceed one hundred thousand
(100,000) dollars; five hundred (500) when such value exceeds one hundred thou-
sand (100,000) and does not exceed one hundred and fifty thousand (150,000)
dollars; eight hundred (800) dollars when such value exceeds one hundred and
fifty thousand (150,000) dollars and does not exceed two hundred thousand
(200,000) dollars; one thousand (1,000) dollars when such value exceeds two hun-
dred thousand (200,000) dollars and does not exceed five hundred thousand
(500,000) dollars; five thousand (5,000) dollars when such value exceeds five
hundred thousand (500,000) dollars and in addition such executor, administrator
or guardian shall pay all sums necessarily expended in serving or publishing
notices required by law. There shall be no discrimination made between resident
and non-resident executors, administrators or guardians, or the estate of residents
or non-residents of the state, no other or different sum shall be required to be paid
by any party asking the aid of such probate court except as provided above.

1885, c. 103.] MINNESOTA. 645

The court holds that there is no question about the power of the
legislature to require suitors to pay reasonable fees and costs, but it
regards this inheritance tax as taxes in the ordinary sense of that
word. The court finds that the arbitrary sums exacted and the
fact that there is no probable correspondence between the sums
to be paid and the character and extent of the service which may
be required, show that this payment is an exaction as "taxes." If
estates are taxable in this manner at all an exemption of estates not
exceeding two thousand dollars is contrary to the requirement of
the constitution. Therefore this statute is void as imposing a tax
which is not equal.

The exaction of these arbitrary sums is further obnoxious to the
Minnesota constitution providing that justice shall be obtained
freely and without purchase. Suitors in this probate court of
exclusive jurisdiction should not be required to pay as a condition
to their suit being entertained a tax measured by the value of their
property and without regard to the nature or extent of the judicial
proceedings which may be invoked or become necessary. State v.
Gorman, 40 Minn. 232, 41 N. W. 948, 2 L. R. A. 701.

The case just cited has been understood as an authority that the
requirement of our constitution that all taxes to be raised in this
state shall be as nearly equal as may be applied to excise and impost
taxes, and therefore a statute laying an inheritance tax would be
unconstitutional. "It is not quite clear whether this decision was
based upon the proposition that the tax was one laid upon property
or upon the" privilege of having estates settled and distributed in
the probate court. If the former — which was probably the case —
the decision is not an authority for or against the right of the
legislature to levy an inheritance tax under section 1, article 9, of the
constitution. "If the word 'taxes,' as used in this section as
it originally stood, includes excise and impost taxes, it by no
means follows that a statute laying an inheritance tax, which aimed
at practical equality, would not be valid." Per Start, C. J., in Drew
V. Tifft, 79 Minn. 175, 183, 81 N. W. 839, 47 L. R. A. 525, 79
Am. St. Rep. 446.

The Constitutional Amendment of 1894.

Minnesota Constitution 1893, First Amendment. Adopted November 6,

1894.

And provided further, that there may be by law levied and collected a tax

upon all inheritances, devises, bequests, legacies and gifts of every kind and

description above a fixed and specified sum of any and all natural persons and

646 STATUTES ANNOTATED. [Minn. St.

corporations. Such tax above such exempted sum may be uniform, or it may be
graded or progressive, but shall not exceed a maximum tax of five per cent.

Minnesota was, so far as the court was advised, the only state
whose constitution in express terms limited the power of the legis-
lature in the laying of an inheritance tax. Drew v. Tifft, 79 Minn.
175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446. [See,
however, Alabama, ante, p. 3t3.]

The clearly disclosed object of the amendment to the Minnesota
constitution, 1894, was to authorize an inheritance tax law similar
tc those in force in other states of this country. The Minnesota
constitution provides that the tax may be "uniform, graded or
progressive." Authority to classify persons and property for the
purpose of taxation is well settled and graded or progressive taxation
is intimately associated with that of classification and perhaps
amounts substantially to the same thing. State v. Bazille, 97 Minn.
11, 106 N. W. 93, 6. L. R. A. (N. S.) 732.

The proviso in the Minn. Const., a. 9, s. 1, as to an inheritance
tax was added in 1894, presumably to meet the difficulties the court
found in the case of State v. Gorman, 40 Minn. 232, 41 N. W. 948,
2 L. R. A. 701. This amendment was incorporated into the existing
constitution and the section in question must be construed pre-
cisely as if the proviso had been a part of the original section ; hence
the mandate of equality qualifies the provisions of the amendment
and applies to the whole section. The court therefore holds that
the requirement of equality in taxation applies to inheritance
taxes exactly as it does to taxes on property except as expressly
provided in the last clause of the section. Drew v. Tifft, 79 Minn.
175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446.

THE VOID STATUTE OF 1897.

Minn. St. 1897, c. 293.

An Act for a tax on gifts, inheritances, devises, bequests and

legacies in certain cases.

S. 1. A tax shall be and is hereby Imposed upon the transfer of any personal
property, of the value of five thousand (5,000) dollars or over, or of any interest
therein or income therefrom, in trust or otherwise, to persons or corporations not
exempt by law from taxation on real or personal property, in the following cases: —

First: When the transfer is by will or by the intestate laws of this state from any
person dying seized or possessed of the property while a resident of the state.

Second: When the transfer is by will or intestate law, of property within
the state, and the decedent was a non-resident of the state at the time of
his death.

1897, c. 293.] MINNESOTA. 647

Third: When the transfer is of property made by a resident or by a non-resident,
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift, made in contemplation of the death of the grantor, vendor or donor,
or intending to take effect, in possession or enjoyment, at or after such death.
Such tax shall also be imposed when any such person or corporation becomes
beneficially entitled, in possession or expectancy, to any property or the income
thereof, by any such transfer, whether made before or after the passage of this act.
Such tax shall be at the rate of five (5) per cent upon the clear market value of
such property, except as otherwise prescribed in the next section.

Exemption of Realty Void.

Under the Minn. Const., a. 9, s. 1, a statute laying an inheritance
tax must include real property as well as personal, and there can
be no discrimination in this respect; therefore, the act of 1897 is
unconstitutional. Drew v. Tifft, 79 Minn. 175, 81 N. W. 839, 47
L. R. A. 525, 79 Am. St. Rep. 446.

Exemption of Persons Exempt by General Law.

The act is further unconstitutional as it excepts from its operation
persons and corporations whose property is exempt by law from
taxation under the provision of the Minn. Const., a. 9, s. 1. Such
a statute must lay the tax upon all bequests, devises and gifts to
any and all natural persons and corporations. Drew v. Tifft, 79
Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446.

Tax should be only on Excess above Exemption.

This act is void for inequality because it leaves the tax upon the
entire devise, bequest or distributive share if of the specified value
and not upon the excess above a fixed, specified, exempted sum as
the amendment of 1894 to the Minnesota constitution requires.
Drew V. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79
Am. St. Rep. 446.

Minn. St. 1897, c. 293.

S. 2. When the property or any beneficial interest therein passes by any such
transfer to or for the use of father, mother, husband, wife, child, brother, sister,
wife or widow of a son, or the husband of a daughter, or any children adopted
as such, in conformity with the laws of this state, of the decedent, grantor, donor
or vendor, or to any person to whom any such decedent, grantor, donor or vendor
for not less than ten (10) years prior to such transfer, stood in the mutually
acknowledged relation of a parent, or to any lineal descendant of such decedent,
grantor, donor or vendor, born in lawful wedlock, such transfer of property
shall not be taxable under this act, unless it is personal property of the value

648 STATUTES ANNOTATED [Minn. St.

of ten thousand (10,000) dollars or more, in which case it shall be taxable
under this act at the rate of one (1) per centum upon the clear market value
of such property.

Classification by Relationship Upheld.

This act is not unconstitutional for the reason that it taxes lineal
heirs and distributees at 1 per cent and collateral heirs at 5 per cent.
** There is a natural reason for taxing the privilege of the latter of
receiving the property at a higher rate than that of the former" and
the amendment of 1894 to the Minnesota constitution "authorizes
such graduation of the tax." Drew v. Tift, 79 Minn. 175, 81 N. W.
839, 47 L. R. A. 525, 79 Am. St. Rep. 446. See to the same effect
dictum in State v.Bazille, 97 Minn. 11, 106 N. W. 93, 6 L. R. A.
(N. S.) 732.

Distinction between Exemptions to Lineals and Collaterals.

The amendment of 1894 to the Minnesota constitution provides
that an inheritance tax may be laid on inheritances above a fixed
and specified sum, and that such tax may be uniform or it may
be graded or progressive. These are exceptions to the rule of
equality in taxation and authorize the exemption of inheritances
to the extent of a fixed and uniform sum. The exemption, however,
must be uniform and apply equally to all persons and corporations,
and therefore a larger exemption to lineals of ten thousand dollars
than to collaterals of five thousand dollars makes the statute void.
Drew V. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 625, 79 Am.
St. Rep. 446.

Minn. St. 1897, c. 293, ss. 3 to 17, provide for the assessment and
collection of the tax. Section 18 covers the definition of terms.

THE VOID STATUTE OF 1901.
Minn. St. 1901, c. 255.

S. 1. A tax shall be and is hereby imposed upon the transfer of any property
real, personal or mixed, tangible or intangible, over which this state has juris-
diction; or of any interest therein, or income therefrom in trust or otherwise,
when the value of such property, interest or income exceeds five thousand dollars
($5,000), in the following cases: —

First: When the transfer is by will, or by the intestate laws of this state from
any person dying, deceased or possessed of the property while a resident of this
state.

Second: When the transfer is by will, or intestate law of property within the
state and the decedent was a non-resident of the state at the time of his death.

Third: When the transfer is of property made by a resident or by a non-
resident when such non-resident's property is within the state, by deed, grant,
bargain, sale or gift made in contemplation of the death of the grantor, vendor

1901, c. 255.] MINNESOTA. 649

or donor, or intending to take effect in possession or enjoyment at or after such
death.

Such tax is also imposed when any person or corporation becomes beneficially
entitled in possession or expectancy to any property or the income thereof by
any such transfer, whether made before or after the passage of this act.

Such tax shall be at the rate of five per cent of the clear market value of such
property, interest or income, except as otherwise provided in the next section;
provided, that any estate, property, interest or income so transferred, that shall
be valued at five thousand dollars ($5,000), or less, shall be exempt from and
not subject to the tax hereby imposed.

S. 2. When such property interest or income, or any beneficial interest therein
passes by any such transfer to the use of a father, mother, husband, wife, child,
brother, sister, wife or widow of a son, or the husband of a daughter, or any child
adopted as such, in conformity with the laws of this state, of the decedent,
grantor, donor or vendor, or to any person to whom such decedent, grantor,
donor or vendor, for not less than ten (10) years prior to such transfer, stood in
the mutually acknowledged relation of parent, or to any lineal descendant of such
decedent, grantor, donor or vendor, born in lawful wedlock, then such tax shall
be at the rate of one per cent upon the clear market value of the property, inter-
est or income so transferred, in excess of said sum of five thousand dollars ($5,000).

Exemptions Void.

This statute was in all probability intended to meet the require-
ments of Drew v. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525,
79 Am. St. Rep. 446. The court, however, decides that the statute
is still unconstitutional, as there is a flagrant want of uniformity
and equality not only as between collateral and lineal descendants
but also as between collaterals. The tax is imposed upon any trans-
fer to collaterals which exceeds five thousand dollars, and not upon
the excess over and above that amount but upon the whole value
where it exceeds five thousand dollars, and the court holds that this
is clearly unequal, as if the value of the transfer should be five
thousand one hundred dollars the tax would be laid upon the whole
amount, while the person receiving less than five thousand dollars
would pay no tax at all. State v.Bazille, 87 Minn. 500, 92 N. W. 415,
94 Am. St. Rep. 718.

Section 18 provides that the words "estate" and "property" as
used in the act shall be taken to mean the personal property of the
testator. This section limits the effect of the statute to personal
property and is therefore void, as decided in the case of Drew v. Tifft,
79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446;
State V. Bazille, 87 Minn. 500, 92 N. W. 415, 94 Am. St. Rep. 718.

Minn. St. 1901, c. 255, ss. 3 to 18, cover the appraisal of the prop-
erty and the collection and payment of the tax.

650 STATUTES ANNOTATED. [Minn. St.

THE VOID STATUTE OF 1902.

Minn. St. 1902, c. 3. Approved March 12, 1902.

S. 1. Subject to Tax. A tax shall be and is hereby imposed upon all inherit-
ances, devises, bequests, legacies and gifts of every kind and description, the value
whereof exceeds ten thousand dollars, and upon such excess only.

S. 2. Rates of Tax. When such inheritance, devise, bequest, legacy or gift
is for the use or benefit of a father, mother, husband, wife, child, brother, sister,
grandchild, nephew or niece, wife or widow of a son, or the husband of a daughter
or any child legally adopted, of the decedent or donor, or to any person to whom
such decedent or donor for not less than ten years prior to the taking effect of
such inheritance, devise, bequest, legacy or gift, stood in the mutually acknowl-
edged relation of parent, or to any lineal descendant of such decedent or donor
born in lawful wedlock, then such tax shall be at the rate of one-half of 1 per
centum, and in all other cases at the rate of 10 per centum upon the full and true
value of such inheritance, devise, bequest, legacy or gift, to be computed upon
the valuation thereof in excess of $10,000.

This act is void, as it provides for a tax of 10 per cent on collaterals
and the Minn. Const., a. 9, s. 1, limits the tax to 5 per cent. State
V. Harvey, 90 Minn. 180, 95 N. W. 764.

Void in its Entirety.

Where the Minn. St. 1902, c. 3, is void, as the tax on collaterals
is 10 per cent while the constitution only permits a tax of 5 per cent,
it was urged that the tax as to lineal heirs is within the constitutional
limitation and is separate and distinct from the tax as to the
collateral heirs, and therefore the statute might be sustained as
to lineals. The courc replies to this claim that any such statute
would be unconstitutional, as all must be taxed or none. Quoting
Drew V. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am.
St. Rep. 446. State v. Harvey, 90 Minn. 180, 95 N. W. 764.

The claim was made that the greater includes the less and that
a 10 per cent tax included a 5 per cent tax and that therefore the
statute might be upheld as imposing a tax valid to the extent of
5 per cent. The court, however, finds that the rate of taxation and
the whole thereof ordained by the legislature is absolutely void
and the statute is in legal effect one in which the rate of taxation
as to collateral heirs and other parties is left blank. Such being
the case the court has no more power to fill by construction the
blank in the statute by reading into it a rate of taxation which
will be within the limitation of the constitution than it has to
decree an inheritance tax in advance of any legislation on the subject.
State V. Harvey, 90 Minn. 180, 95 N. W. 764.

[Ss. 3 to 22 cover the assessment and collection of the tax.]

1905, c. 288.] MINNESOTA. 651

THE VALID STATUTE OF 1905.

Minn. St. 1905, c. 288. Approved and in effect April 19, 1905.

An Act providing for taxation of and fixing the rate of taxation
ON inheritances, devises, bequests, legacies and gifts, and providing for the
manner of payment as well as the manner of enforcing payment thereof.

Transfers Taxable. — Exemptions.

S. 1. A tax shall be and is hereby imposed upon all inheritances, devises,
bequests, legacies and gifts of every kind and description, of any and all persons
and corporations, the value of which exceeds ten thousand dollars ($10,000),
and upon such excess only.

Not Retroactive.

This act has no application to property which was actually sold
and disposed of before the date of its enactment. State v. Probate
Court, Washington County, 102 Minn. 268, 285, 113 N. W. 888.

All Gifts to each Individual should be Consolidated in
Reckoning Exemptions.

Where a will provides tor the creation of a trust estate and the
payment of the principal to him in instalments as he reaches
certain designated ages, there is but one legacy to him and but one
exemption of ten thousand dollars under the Minn. St. 1905. Where
the exemption of ten thousand dollars has already been deducted
from the first instalment of the residue of the estate, which has
akeady been paid to him, there can be no further exemption as to
him. State v. Probate Court, 100 Minn. 192, 197, 110 N. W. 865.
See further, notes to section 2, post.

Rates.

S. 2. Such tax shall be computed upon the full and true value of such inherit-
ance, devise, bequest, legacy or gift, above such excess, at the following rates,
viz.: —

1. When such valuation is over ten thousand dollars ($10,000) and less than
fifty thousand dollars ($50,000), the rate shall be one and one-half (1^) per cent
thereof.

2. When such valuation is fifty thousand dollars ($50,000) or over and less
than one hundred thousand dollars ($100,000), the rate shall be three (3) per
cent thereof.

3. When such valuation is one hundred thousand dollars ($100,000) or over,
the rate shall be five (5) per cent thereof.

652 STATUTES ANNOTATED. [Minn. St.

Construction of Rates and Exemptions.

The use of the word "excess" in section 2 is an inadvertence;
the intention of the legislature was to tax everything above ten
thousand dollars and the word ''exemption" was the undoubted
intention of the legislature and might be supplied; properly con-
strued the section lays a tax upon all inheritances in excess of an
exemption of ten thousand dollars. The court further finds that
this section did not intend to give an exemption of twenty thousand
dollars to persons coming within the first class receiving less than
ten thousand dollars. The statute did not mean that unless the
inheritance exceeds the sum of ten thousand dollars over and above
the previously fixed exemption of ten thousand dollars no tax is
imposed at all, while those of the class who receive over ten thou-
sand dollars and less than fifty thousand dollars are taxed at the
rate there prescribed on the whole amount. The court holds that
this is not the intention of the statute but that the manifest in-
tention was to lay the tax upon all inheritances between the values
of ten thousand dollars and fifty thousand dollars. State v. Bazille,
97 Minn. 11, 106 N. W. 93, 6 L. R. A. (N. S.) 732.

State V. Vance, 97 Minn. 532, 106 N. W. 98, follows in all respects
State V. Bazille, 97 Minn. 11, 106 N. W. 93, 6 L. R. A. (N. S.) 732.

Sections 2 of this statute contains two verbal errors. In
section 2 the use of the word "excess" instead of the word "ex-
emption" is a mistake in the first paragraph. Section 2 contains
a mistake in inserting the words "over ten thousand dollars," in
subdivision 1, section 2. The court thinks the use of these words
was evidently an abortive attempt to make it clearer that ten
thousand dollars of an inheritance should be exempt from tax, but
it is plainly repugnant to the first paragraph of section 2 which
provides that the tax shall be computed on the value of the inherit-
ance above the exemption. Subdivision 1 must be construed, there-
fore, as if the words "over ten thousand dollars" had been omitted.
So construing the statute the court finds that an inheritance tax
must be computed in all cases upon the true value of the in-
heritance above an exemption of ten thousand dollars; but when
such valuation is less than fifty thousand dollars the tax rate
is one and one-half per cent thereof; but when such valuation
is fifty thousand dollars or over and less than one hundred thou-
sand dollars the rate is 3 per cent; that when such valuation is
one hundred thousand dollars or over the rate is 5 per cent; and
that a tax on a legacy of the total value of fifty-eight thousand

1905, c. 288.] MINNESOTA. 653

dollars should be at the rate of one and one-half per cent. It is
clear from State v. Bazille, 97 Minn. 11, 106 N. W. 93, 6 L. R. A.
(N. S.) 732, that it was the intention to hold in that case that a tax
was laid upon all inheritances less than fifty thousand dollars in
value above the exemption at the rate of only one and one-half
per cent. State v. Probate Court, 111 Minn. 297, 126 N. W. 1070.

Progressive Feature Upheld. — Equality.

''The authority to make the tax graded or progressive was in-
corporated in the law advisedly, and in view of the well-known
and firmly established system of such taxation in force in this
country, basfed upon the wise and wholesome doctrine that ability
to pay is the true basis for all taxation. Though it results in a
measure in inequality, it conforms to a system sanctioned and
supported by the authorities generally, and is not repugnant to
constitutional principles. Three distinct classes are created by the
statute, and there is absolute equality between the members of
each. The same exemption is allowed to those of all classes, and the
same rate of taxation is imposed upon members coming within the
several classes." Per Brown, J., in State v.Bazille, 97 Minn, 11, 22,
106 N. W. 93, 6 L. R. A. (N. S.) 732.

"It is insisted that the proviso authorizing the inheritance tax
must be construed in connection with the equality mandate, and
that, properly construed, the tax, although it may be graded or
progressive, must, as respects graded or progressive features, be made
as nearly equal as may be, and that the statute does not conform
to this requirement. Counsel contend that this construction is
sustained by the Drew case. In this we do not concur.

"The history of taxation is, in harmony with all human affairs, one
of evolution. Its progress from the earliest times to the present
day is one of constant development, in keeping with the advancing
intelligence of man, unrolling step by step, with changing economic
and social conditions, tardily, however, new methods and means
of subjecting untaxed property to the tax rolls. Originally public
revenue was raised by voluntary contributions from the citizens;
later, in response to appeals and solicitations of the rulers; and
finally, when voluntary contributions ceased, as at the present
day, by compulsory assessments enforced by the operation of law.
With this latter method came the demand; born of injustice and
oppression, for uniformity and equality, and provisions securing
it have long been a part of the fundamental law of all democratic

654 STATUTES ANNOTATED. [Minn. St.

forms of government. Formerly tangible property only was taxed.
Franchises of corporations, special privileges, and other intangible,
yet valuable, property rights, never reached the tax lists. But
in more recent times new species of property, 'new in kind, unsub-
stantial in character, vast in extent, enormous in value,' have,
owing to industrial growth and commercial enterprise, come rapidly
into existence (Jaggard, J., in State v. Western Union Tel. Co., 96
Minn. 22, 104 N. W. 567), and methods and means of reaching and
subjecting the same to its share of the public burdens have developed
and been put into practical operation by the legislatures and courts
of this country. Ability or faculty to pay has come to be the test
in determining the justness of taxation. It is not only the basis of
taxation but the goal toward which society is steadily working. It
lies instinctively and unconsciously at the bottom of all of our
endeavors at reform." Seligman, Tax. 72.

"The equity and fairness of this theory, in its broadest sense,
when we reflect upon the vast fortunes accumulated as the result
of especially advantageous opportunities and facilities not possessed
by people in general, is apparent and obvious. It works no injustice
or harm to those thus fortunately situated, does not injuriously affect
productive or industrial agencies, and relieves in a measure those
witlf lesser opportunities, and those to whom taxation is always
an extreme burden. This theory does not, however, harmonize
well with a strict application of the fundamental mandate of
equality, as applied more particularly to the proportional system of
taxation in force in this and other states. We mean by "propor-
tional system" a tax at a fixed and uniform rate, in proportion to
the amount of taxable property, based upon a cash valuation; and
legislatures and courts have been not a little embarrassed in attempts
to apply it.

1905, c. 288.] MINNESOTA. 655

upon property only, and is generally held by the courts of this
country to have no application to inheritance taxation, because a
tax of that nature is not one upon property but upon the right
of succession or inheritance (27 Am. & Eng. Enc. (2d ed.) 338),
though in this state it was held to apply to inheritance taxes in
Drew V. Tifft, supra, and also to a similar statute in State v. Gorman,
40 Minn. 232, 234, 41 N. W. 948, 2 L. R. A. 701, precisely as in
other taxation, except as otherwise provided by the amendment
under consideration." Per Brown, J., in State v.Bazille, 97 Minn. 11,
16, 106 N. W. 93, 6 L. R. A. (N. S.) 732.

Validity Settled.

The validity of Minn. St. 1905, c. 288, has been fully established
by previous decisions of this court. State v. Probate Court, 112 Minn.
279, 128 N. W. 18, 19.

Rate of Tax on Income.

Where payments of income are provided for by will the rate of
taxation will not be increased from IJ^ per cent to 3 per cent under
the Minn. St. 1905, c. 288, until the value of the right acquired by
the life tenant exceeds exclusive of the statutory exemptions fifty
thousand dollars, and in like manner the rate cannot be increased
to 5 per cent until such value exclusive of the exemption exceeds
one hundred thousand dollars. State v. Probate Court, 112 Minn. 279,
128 N. W. 18, 22.

When Tax Accrues.

S. 3. All taxes imposed by this act shall take effect at and upon the death of
the decedent or donor and shall be due and payable at the expiration of one (1)
year from such death, except as otherwise provided in this act; provided, however,
that taxes upon any devise, bequest, legacy or gift limited, conditioned, depend-
ent or determinable upon the happening of any contingency or future event by
reason of which the full and true value thereof cannot be ascertained at or before
the time when the taxes become due and payable as aforesaid, shall accrue and
become due and payable when the person or corporation beneficiallv entitled there-
to shall come into actual possession or enjoyment thereof.

[See notes under section 15.]

Deduction of Tax.

656 STATUTES ANNOTATED. [Minn. St.

the tax upon the whole amount; but if it be not in money, he shall make appli-
cation to the court having jurisdiction of an accounting by him to make an
apportionment, if the case requires, of the sum to be paid into his hands by such
legatee or beneficiary, and for such further order relative thereto, as the case
may require.

Tax Deducted on Payment.

Where there is a remainder in the hands of the trustees it should
be distributed to the several legatees mentioned in the will only-
after deducting the tax due on such of them as may exceed in value
ten thousand dollars. State v. Probate Court, 100 Minn. 192, 198,
110 N. W. 865.

Time of Appraisal.

S. 15. Every inheritance, devise, bequest, legacy or gift upon which a tax
is imposed under this act shall be appraised at its full and true value immediately
upon the death of decedent, or as soon thereafter as may be practicable : Provided,
however, that when such devise, bequest, legacy or gift shall be of such a nature
that its full and true value cannot be ascertained at such time, it shall be ap-
praised in like manner at the time such value first becomes ascertainable.

Tax on Remainders Accrues at Death of Testator.

State V. Probate Court, 100 Minn. 192, as to the imposition of an
inheritance tax on legatees or devisees at the time of the death
of the testator where the possession is postponed, is quoted with
approval in State v. Probate Court, 101 Minn. 485, 112 N. W. 878.

The Court is to Assess only Present Tax.

The court holds that the probate court had no jurisdiction to
provide for the future payment of taxes or to determine when or
under what circumstances the rate of taxation would increase. The
question before the court is what tax has accrued and the court
should limit itself to that question. State v. Probate Court, 112
Minn. 279, 128 N. W. 18, 21.

When Tax on Income Accrues.

The court affirms 5/a/g v. Probate Court, 100 Minn. 192, 110 N. W.
865, to the effect that the taxation of a right to income cannot be
made until the income is paid. When the testator gives the bene-
ficial use of his property for a limited time to one person after which
the corpuf of the estate goes to another, it would not be claimed
that the right of each legatee is not subject to taxation. The fact
that both bequests are to the same individual should not change
the result. To hold otherwise would defeat the entire purpose

1905, c. 288.] MINNESOTA. 657

of the statute, which can only be given effect by insisting that when
the amount actually paid exceeds the exemption a tax based on
that amount is then due. State v. Probate Court, 112 Minn. 279,
128 N. W. 18, 20.

When Tax Accrues on Gift Conditional on Reaching Certain
Age.

The will provided that if a certain grandson E. B. survived the
testator his estate should go to trustees for the grandson, the
principal to be paid the grandson in instalments if he should reach
various ages ; and if he failed to reach the age designated the trustees
should pay the balance in their hands to certain persons and chari-
table institutions designated in the will. The testator died May 25,
1905, and the case was governed by Minn. St. 1905, c. 288, ss. 1,
3, 4, 6 and 15. The court finds, construing these statutes, that they
provide a tax to be paid within one year after the death of the
decedent except as otherwise provided, and further, that under the
express provisions and provisos to sections 3 and 15 a tax upon
any gift which is limited, conditional, depending or determinable
upon the happening of any contingency or future event, so that the
true value cannot be presently ascertained, accrues and becomes
payable only when the beneficiary is entitled to the possession
or enjoyment thereof. Therefore under this will the probate court
erred in imposing a tax upon the transfer of the property to the
trustees, as they took no beneficial interest in the property. The
transfer to them was simply a transfer to hold until the beneficiaries
could be determined, which could only be done by the happening
of an uncertain future event. Whether the grandson would ever
be entitled to the property depends upon the contingency of his
surviving to reach a certain age. The attorney general contended
that the right to receive the net income from the property so long
as the grandson lived is a life estate in the property, vesting in him
at the time of the testator's death. But the court finds that the
payment of income is limited in any event to a given number of
years, hence, the legacy has none of the elements of a life estate,
and the present value of the right to receive the income for a limited
number of years cannot be ascertained for the value depends upon
the contingency of his living until the limitation expires.

It follows, therefore, that a tax on the income will accrue and
become payable as the time arrives for the payment to the bene-
ficiary, and that it is the duty of the trustee to deduct the tax from
the amount of any instalment of income to which he becomes

658 STATUTES ANNOTATED. [Minn. St.

entitled and pay the amount thereof to the proper officer. State v.
Probate Court, 100 Minn. 192, 196, 197, 110 N. W. 865.

Conditional Interests.

The testator who died in 1908 left property in trust to be paid
the widow during her life, and while she remained unmarried the
net income from the estate, while if she married she was to receive
only one-fourth of the estate while the residue of the estate was
bequeathed to the testator's two sons, and the court holds that the
tax on this legacy is due and payable when the beneficiary goes into
possession. State v. Probate Court, 112 Minn. 279, 128 N. W. 18, 20.

It was claimed that it was impossible to ascertain the value of
an estate given to one until she marries when she was to have a
different interest, as no one could say how long she would remain
unmarried. The court, however, observes that when a particular
individual claims an exemption from burdens which the law imposes
upon all alike and bases his claim upon provisions of the statute
which refer exclusively to the methods to be employed, it is the
duty of the court to construe these provisions so as if possible to
give effect to the statutory intent. Therefore when the valuation
takes place it is to be made as of the date of the testator's death.
The court avoids the difficulty by deciding that the probate court
should determine what is the value of each instalment as it is actu-
ally paid to the beneficiary. From the value of the first payments
should be deducted the exemption of ten thousand dollars and the
tax computed upon the remainder. This avoids a possible result
that the custodians of the estate would be at liberty to transfer it
to the beneficiaries in instalments and in the meanwhile be unable
to collect any tax whatever. State v. Probate Court j 112 Minn. 279,
128 N. W. 18, 20. The court relies somewhat on In re Millward,
6 Misc. (N. Y.) 425, 27 N. Y. Suppl. 286.

Valuation.

S. 17. The report of the appraisers shall be filed with the probate court, and
from such report and other proof relating to any such estate before the probate
court the court shall forthwith, as of course, determine the true and full value
of all such estate and the amount of tax to which the same are liable; or the
probate court may so determine the full and true value of all such estates and
the amount of tax to which the same are liable without appointing appraisers.

Omission of Means for Valuation of Life Estates is not Fatal.

The fact that the Minn. St. 1895, c. 288, does not provide any
method for ascertaining the value of the life estate is not material ;

1905, c. 288.] MINNESOTA. 659

for the court may in the absence of express direction adopt some
practical way for ascertaining the value of the life estate — for
example, by referring to life and annuity tables. State v. Probate
Court, 100 Minn. 192, 197, 110 N. W. 865.

Jurisdiction of Probate Court.

Minn. Const., a. 6, s. 7, limits the probate courts to jurisdiction
over estates of deceased persons and persons under guardianship,
and it was argued that the provisions of Minn. St. 1905, c. 288, as
to the levying of assessments and collection of taxes was void.
But the court holds that the jurisdiction given to the probate courts
under the ^constitution includes every matter necessarily connected
with the administration of the estate. The ascertainment of the
amount of the inheritance tax is a judicial question, and being a
necessary proceeding in the administration of the estate of deceased
persons may be properly committed to the probate court. State v.
Probate Court, 112 Minn. 279, 128 N. W. 18, 21.

Expenses of Administration Deducted.

The expenses of the administration of the estate of a deceased
person are proper to be deducted in ascertaining the value of the
estate for the purposes of taxation under the inheritance tax law.
State v. Probate Court, 101 Minn. 485, 487, 112 N. W. 878.

Trustee's Fees not Deducted.

The will provides compensation for the trustee of five thousand
dollars a- year for ten years, or fifty thousand dollars; and the court
holds that the compensation of the trustee, earned not in the
administration of the estate but in the management thereof for the
benefit of the legatees or devisees, does not come properly within
the class or reason for exempting the administration expenses.
Such services have no reference to closing the estate for the purpose
of distribution to those entitled to it and are not required or essen-
tial to the rights of the heirs or legatees. Continuing trusts created
for the benefit of those to whom the property ultimately passes
are of voluntary creation and are intended for the preservation
of the estate. The court relies somewhat on In re Gihon, 169 N. Y.
443, 62 N. E. 561, and In re Silliman, 79 N. Y. App. Div. 98, 80 N. Y.
Suppl. 336; State v. Probate Court, 101 Minn. 485, 487, 112 N. W.
878.

[Sections omitted have not been construed and provided for the assessment
and collection of the tax.]

660 STATUTES ANNOTATED. [Minn. St.

THE LEGISLATION OF 191L

Minn. St. 1911, c. 209, amended the existing law and was approved
April 18, 1911. Minn. St. 1911, c. 372, was approved April 20, 1911,
and went into effect July 1, 1911. It radically altered sections 1
and 2 of the existing law and provided further as follows : —

S. 3. This act shall take effect and be in force from and after July 1, 1911
provided, however, that the provisions of this act shall apply only to legacies,
inheritances, devises and transfers received from persons who shall die sub-
sequent to the passage of this act; all gifts, legacies, inheritances and devises
heretofore or hereafter received from any person who shall have died prior to
the passage of this amendatory act shall be taxed and shall be subject to the
provisions of sections 1 and 2 of chapter 288, Laws 1905, to the same extent and
in the same manner as though this amendatory act had not been passed.

THE PRESENT ACT.
St. 1911, c. 209.
Taxable Transfers.

S. 1. A tax shall be and is hereby imposed upon any transfer of property,
real, personal or mixed, or any interest therein, or income therefrom in trust
or otherwise, to any person, association or corporation, except county, town or
municipal corporation within the state, for strictly county, town or municipal
purposes, in the following cases: —

(1) When the transfer is by will or by the intestate laws of this state from
any person dying possessed of the property while a resident of the state.

(2) When a transfer is by will or intestate law, of property within the state or
within its jurisdiction and the decedent was a non-resident of the state at the time
of his death.

(3) When the transfer is of property made by a resident or by a non-resident
when such non-resident's property is within this state, or within its jurisdiction,
by deed, grant, bargain, sale or gift, made in contemplation of the death of the
grantor, vendor or donor, or intended to take effect in possession or enjoyment
at or after such death.

(4) Such tax shall be imposed when any such person or corporation become
beneficially entitled, in possession or expectancy to any property or the income
thereof, by any such transfer whether made before or after the passage of this act.

(5) Whenever any person or corporation shall exercise a power of appointment
derived from any disposition of property made either before or after the passage
of this act, such appointment when made shall be deemed a transfer taxable
under the provisions of this act in the same manner as though the property to
which such appointment relates belonged absolutely to the donee of such power
and had been bequeathed or devised by such donee by will ; and whenever any
person or corporation possessing such a power of appointment so derived shall
omit or fail to exercise the same within the time provided therefor, in whole or
in part a transfer taxable under the provisions of this act shall be deemed to take
place to the extent of such omission or failure, in the same manner as though
the persons or corporations thereby becoming entitled to the possession or
enjoyment of the property to which such power related had succeeded thereto

1911, c. 209.] MINNESOTA. 661

by a will of the donee of the power failing to exercise such power, taking effect
at the time of such omission or failure. (St. 1911, c. 372.)
[See notes to the Act of 1905, ante, p. 651.]

Rates and Exemptions.

S. 2. The tax so imposed shall be computed upon the true and full value in
money of such property at the rates hereinafter prescribed and only upon the
excess of the exemptions hereinafter granted.

S. 2a. When the property or any beneficial interest therein passes by any
such transfer where the amount of the property shall exceed in value the exemp-
tion hereinafter specified and shall not exceed in value fifteen thousand dollars
the tax hereby imposed shall be: —

(1) Where the person entitled to any beneficial interest in such property shall
be the wife, or lineal issue, at the rate of one per centum of the clear value of
such interest in such property.

(2) Where the person or persons entitled to any beneficial interest in such
property shall be the husband, lineal ancestor of the decedent or any child adopted
as such in conformity with the laws of this state, or any child to whom such de-
cedent for not less than ten years prior to such transfer stood in the mutually
acknowledged relation of a parent; provided, however, such relationship began
at or before the child's fifteenth birthday, and was continuous for said ten years
thereafter, or any lineal issue of such adopted or mutually acknowledged child,
at the rate of one and one-half per centum of the clear value of such interest in
such property.

(3) Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister or a descendant of a brother or sister of
the decedent, a wife of widow of a son, or the husband of a daughter of the dece-
dent, at the rate of three per centum of the clear value of such interest in such
property.

(4) Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the father or mother or a descendant
of a brother or sister of the father or mother of the decedent, at the rate of four
per centum of the clear value of such interest in such property.

(5) Where the person or persons entitled to any beneficial interest in such prop-
erty shall be in any other degree of collateral consanguinity than is hereinbefore
stated, or shall be a stranger in blood to the decedent, or shall be a body politic
or corporate, at the rate of five per centum of the clear value of such interest in
such property.

S. 2b. The foregoing rates in section 2a are for convenience termed the primary
rates.

When the amount of the clear value of such property or interest exceed fifteen
thousand dollars, the rates of tax upon such excess shall be as follows: —

(1) Upon all in excess of fifteen thousand dollars and up to thirty thousand
dollars, one and one-half times the primary rates.

(2) Upon all in excess of thirty thousand dollars, and up to fifty thousand
dollars, two times the primary rates.

(3) Upon all in excess of fifty thousand dollars and up to one hundred thousand
dollars, two and one-half times the primary rates.

(4) Upon all in excess of one hundred thousand dollars, three times the primary

662 STATUTES ANNOTATED. [Minn. St.

S. 2c. The following exemptions from the tax are hereby allowed : —

(1) All property transferred to municipal corporations within the state for
strictly county, town or municipal purposes, shall be exempt.

(2) Property of the clear value of ten thousand dollars transferred to the widow
of the decedent or husband of the decedent, each of the lineal issue of the decedent,
or any child adopted as such in conformity with the laws of this state, or any
child to whom the decedent for not less than ten (10) years prior to such transfer,
stood in the mutually acknowledged relation of a parent; provided, however,
such relationship began at or before the child's fifteenth birthday, and was
continuous for said ten years thereafter, or any lineal issue of such adopted or
mutually acknowledged child, shall be exempt.

(3) Property of the clear value of three thousand dollars transferred to each
of the lineal ancestors of the decedent shall be exempt.

(4) Property of the clear value of one thousand dollars transferred to each of
the persons described in the third subdivision of section two a (2a) shall be exempt.

(5) Property of the clear value of two hundred and fifty dollars transferred
to each of the persons described in the fourth subdivision of section two a (2a)
shall be exempt.

(6) Property of the clear value of one hundred dollars transferred to each of
the persons and corporations described m the fifth subdivision of section two a
(2a) shall be exempt; provided, however, that property of the clear value of
two thousand five hundred dollars transferred to a public hospital, academy,
college, university, seminary of learning, church or institution of purely public
charity within this state, shall be exempt. (St. 1911, c. 372.)

[See notes to the Act of 1905, ante, p. 651.]

A dfctum in State v.Bazille, 97 Minn. 11, 106 N. W. 93, upholds
the power of the legislature to make a distinction between collateral
and lineal descendants. See, also, language used in Drew v. Tifft,
79 Minn. 175; 81 N. W. 839; 47 L. R. A. 525; 79 Am. St. Rep. 446.

When Tax Accrues. — Valuation.

S. 3. All taxes imposed by this act shall take effect at and upon the death
of the person from whom the transfer is made and shall be due and payable at
the expiration of one year from such death, except as otherwise provided in this
act.

The value of every future or limited estate, income, interest or annuity depend-
ent upon any life or lives in being, shall be determined by the rule, method and
standard of mortality and value employed by the commissioner of insurance
in ascertaining the value of policies of life insurance and annuities for the deter-
mination of liabilities of life insurance companies, except that the rate of interest
for making such computations shall be five per centum per annum.

When any transfer is made in trust for any person or persons, or corporation
or corporations, and the right of the beneficiaries of said trust to receive the
property embraced in said trust is susceptible of present valuation, then and in
such case the tax thereon shall be paid at the same time and in the same manner,
and in like amount, that would be the case if the beneficiaries of such trust re-
ceived the same directly from the decedent or the persons from whom the property
is transferred.

1911, c. 209.] MINNESOTA. 663

Where an estate for life or for years can be divested by the act or omission
of the legatee or devisee, it shall be taxed as if there were no possibility of such
divesting.

When property is transferred in trust or otherwise, and the rights, interest or
estates of the transferee are dependent upon contingencies or conditions whereby
they may be wholly or in part created, defeated, extended or abridged, a tax shall
be imposed upon said transfer at the highest rate which, on the happening of
any of said contingencies or conditions, would be possible under the provisions of
this act, and such tax so imposed shall be due and payable forthwith by the
executors or trustees out of the property transferred; provided, however, that
on the happening of any contingency whereby the said property, or any part
thereof, is transferred to a person or corporation exempt from taxation under the
provisions of this act, or to any person taxable at a rate less than the rate imposed
and paid, such'person or corporation shall be entitled to a return of so much of
the tax imposed and paid as is the difference between the amount paid and the
amount which said person or corporation should pay under the provisions of this
article, with interest thereon at the rate of three per centum per annum from the
time of payment. Such return of overpayment shall be made in the manner
provided by section 21c (section 9 of this act).

In estimating the value of any estate or interest in property, to the beneficial
enjoyment or possession whereof there are persons or corporations presently
entitled thereto, no allowance shall be made on account of any contingent in-
cumbrance thereon, nor on account of any contingency upon the happening of
which the estate or property, or some part thereof or interest therein might be
abridged, defeated or diminished; provided, however, that in the event of such
incumbrance taking effect as an actual burden upon the interest of the beneficiary
or in the event of the abridgment, defeat or diminution of said estate or property,
or interest therein, as aforesaid, a return shall be made to the person properly
entitled thereto of a proportionate amount of such tax on account of the incum-
brance when taking effect, or so much as will reduce the same to the amount
which would have been assessed on account of the actual duration or extent of
the estate or interest enjoyed. Such return of tax shall be made in the manner
provided by section 21c (section 9 of this act).

Where any property shall, after the passage of this act, be transferred subject
to any charge, estate or interest, determinable by the death of any person, or at
any period ascertainable only by reference to death, the increase accruing to any
person or corporation upon the extinction or determination of such charge,
estate or interest, shall be deemed a transfer of property taxable under the pro-
visions of this act in the same manner as though the person or corporation bene-
ficially entitled thereto had then acquired such increase from the person from
whom the title to their respective estates or interests is derived.

The tax on any devise, bequest, legacy, gift or transfer limited, conditioned,
dependent or determinable upon the happening of any contingency or future
event, by reason of which the full and true value thereof cannot be ascertained
as provided for by the provisions of this act at or before the time when the taxes
become due and payable as hereinbefore provided, shall accrue and become due
and payable when the person or corporation beneficially entitled thereto shall
come into actual possession or enjoyment thereof.

664 STATUTES ANNOTATED. [Minn. St.

Estates in expectancy which are contingent or defeasible and in which pro-
ceedings for the determination of the tax have not been taken or where the
taxation thereof has been held in abeyance, shall be aporaised at their full, un-
diminished value when the persons entitled thereto shall come into the beneficial
enjoyment or possession thereof, without diminution for or on account of any
valuation theretofore made of the particular estates for purposes of taxation, upon
which said estates in expectancy may have been limited.

Deduction of Tax by Administrator, etc.

S. 4. Any administrator, executor or trustee having in charge or in trust any
property for distribution embraced in or belonging to any inheritance, devise,
bequest, legacy or gift, subject to the tax thereon as imposed by this act, shall
deduct the tax therefrom and within thirty days thereafter he shall pay over the
same to the county treasurer as herein provided.

If such property be not in money, he shall collect the tax on such inheritance,
devise, bequest, legacy or gift upon the appraised value thereof, from the person
entitled thereto.

He shall not deliver, or be compelled to deliver, any property embraced in any
inheritance, devise, bequest, legacy or gift, subject to tax under this act, to any
person untH he shall have collected the tax thereon.

[See notes to the Act of 1905, ante, p. 656.]

Payment.

S. 5. The tax imposed by this act upon inheritances, devises, bequests or
legacies shall be paid to the treasurer of the county in which the probate court
having jurisdiction, as herein provided, is located; and the cax so imposed upon
gifts shall be payable to the state treasurer, and the treasurer to whom the tax
is paid shall give the executor, administrator, trustee or person paying such tax,
duplicate receipts therefor, one of which shall be immediately transmitted to the
state auditor, whose duty it shall be to charge the treasurer so receiving the tax
with the amount thereof; and where such tax is paid to the county treasurer
he shall seal said receipt with the seal of his office and countersign the same and
return it to the executor, administrator or trustee, whereupon it shall be a proper
voucher in the settlement of his accounts.

No executor, administrator, or trustee shall be entitled to a final accounting of
an estate, in the settlement of which a tax may become due under the provisions
of this act, until he shall produce a receipt, so sealed and countersigned by the
state auditor, or a certified copy of the same. All taxes paid into the county
treasury under the provisions of this act shall immediately be paid into the state
treasury upon the warrant of the state auditor and shall belong to and be a part of
the revenue fund of the state.

Lien. -^ Liabilities.

S. 6. Every tax imposed by this act shall be a lien upon the property embraced
in any inheritance, devise, bequest, legacy or gift until paid, and the person to
whom such property is transferred and the administrators, executors and trustees
of every estate embracing such property shall be personally liable for such tax,
until its payment, to the extent of the value of such property.

1911, c. 209.] MINNESOTA. 665

Interest.

S. 7. If such tax is not paid within one year from the accruing thereof, interest
shall be charged and collected thereon at the rate of seven (7) per centum per
annum from the time the tax is due, unless, by reason of claims upon the estate,
necessary litigation or other unavoidable cause of delay, such tax cannot be de-
termined as herein provided; in such case interest at the rate of six per centum
per annum shall be charged upon such tax from the accrual thereof until the cause
of such delay is removed, after which seven (7) per centum shall be charg^.

Power of Sale.

S. 8. Every executor, administrator or trustee shall have full power to sell
so much of the property embraced in any inheritance, devise, bequest or legacy
as will enable him to pay the tax imposed by this act, in the same manner as he
might be entitled by law to do for the payment of the debts of a testator or in-
testate.

Legacy Charged on Property.

S. 9. If any bequest or legacy shall be charged upon or payable out of any
property, the heir or devisee shall deduct such tax therefrom and pay such tax
to the administrator, executor or trustee, and the tax shall remain a lien or
charge on such property until paid; and the payment thereof shall be enforced
by the executor, administrator or trustee in the same manner that payment
of the. bequest or legacy might be enforced, or by the county attorney under
section 20 of this act. If any bequest or legacy shall be given in money to any
person for a limited period, the administrator, executor or trustee shall retain
the tax upon the whole amount; but if it be not in money, he shall make applica-
tion to the court having jurisdiction of an accounting by him to make an appor-
tionment, if the case requires, of the sum to be paid into his hands by such legatee
or beneficiary, and for such further order relative thereto, as the case may require.

Refund.

S. 10. When any tax imposed by this act shall have been erroneously paid,
wholly or in part, the person paying the same shall be entitled to a refundment
of the amount so erroneously paid, and the auditor of the state shall, upon satis-
factory proofs presented to him of the facts relating thereto, draw his warrant
upon the state treasurer for the amount thereof, in favor of the person entitled
thereto; provided, however, that all applications for such refunding of erroneous
taxes shall be made within three years from the payment thereof.

Proceedings on Transfers. — Liabilities.

S. 11. Subdivision 1. If a foreign executor, administrator or trustee shall
assign or transfer any stock or obligation in this state, standing in the name of a
decedent or in trust for a decedent, liable to any such tax, the tax shall be paid
to the state treasurer on the transfer thereof, and no such assignment or transfer
shall be valid until such tax is paid.

If any non-resident of this state dies owning personal property in this state
sach property may be transferred or assigned by the personal representative of,
or trustee for the decedent, only after such representative or trustee shall have
procured a certificate from the attorney general consenting to the transfer of

666 STATUTES ANNOTATED. [Minn. St.

such property. Such consent shall be issued by the attorney general only in case
there is no tax due hereunder; or in case there is a tax, when the same shall have
been paid.

Any personal representative, trustee, heir or legatee of a non-resident decedent
desiring to transfer property having its situs in this state may make application to
the attorney general for the determination of whether there is any tax due to the
state on account of the transfer of the decedent's property and such applicant
shall furnish to the attorney general therewith an affidavit setting forth a descrip-
tion of all property owned by the decedent at the time of his death and having
its situs in the state of Minnesota, the value ot such property at the time of said
decedent's death; also when required by the attorney general, a description of
and statement of the true value of all the property owned by the decedent at the
time of his death and having its situs outside the state of Minnesota, and also a
schedule or statement of the valid claims against the estate of the decedent,
including the expenses of his last sickness and funeral and the expenses of ad-
ministering his estate. Such person shall also, on request of the attorney general,
furnish to the latter a certified copy of the last will of the decedent in case he died
testate, or an affidavit setting forth the names, ages and residences of the heirs
at law of the decedent in case he died intestate and the proportion of the entire
estate of such decedent inherited by each of said persons, and the relation, if any,
which each legatee, devisee, heir, or transferee sustained to the decedent or person
from whom the transfer was made. Such affidavits shall be subscribed and sworn
to by the personal representative of the decedent or some other person having
knowledge of the facts therein set forth.

The statements in any such affidavits as to the value or otherwise shall not
be biijding on the attorney general in case he believes the same to be untrue.
From the information so furnished to him and such other information as he may
have with reference thereto, the attorney general shall, with reasonable expedition,
determine the amount of tax, if any, due to the state under the provisions of this
act and notify the person making the application of the amount thereof claimed to
be due. On payment of the tax so determined to be due or in case there is no
tax due to the state, the attorney general shall issue a consent to the transfer of
the property so owned by the decedent.

No corporation organized under the laws of the state of Minnesota shall transfer
on its books any shares of its capital stock standing in the name of a non-resident
decedent, or in trust for a non-resident decedent, without the consent of the
attorney general first procured as hereinbefore provided for. Any corporation
violating the provisions of this section shall be liable to the state for the amount
of any tax due to the state on a transfer of any such shares of stock, and in addi-
tion thereto a penalty equal to ten per cent of the amount of such tax; to be re-
covered in a civil action in the name of and for the benefit of the state.

Any person aggrieved by the determination of the attorney general in any
matter hereinbefore provided for, may, within twenty days thereafter, appeal
to the district court of Hennepin County or Ramsey County, Minnesota, by filing
with the attorney general a notice in writing setting forth his objections to such
determination and that he appeals therefrom and thereupon within ten days there-
after the attorney general shall transmit the original papers and records which have
been filed with him in relation to such application for consent, to the clerk of the
district court to which the appeal shall have been taken, and thereupon said

1911, c. 209.] MINNESOTA. 667

court shall acquire jurisdiction of such application and proceeding. Upon eight
days' notice given to the attorney general by the appellant, the matter may be
brought on for hearing and determination by such court either in term time or
vacation, at a general or special term of said court, or at Chambers as may be
directed by order of the court. The said court may determine any and all ques-
tions of law and fact necessary to the enforcement of the provisions of this act
according to its intent and purpose, and may by order direct the correction,
amendment or modification or (of) any determination made by the attorney
general.

On such hearing either party may introduce the testimony of witnesses and
other evidence in the same manner and subject to the same rules which govern
in civil actions. When necessary, the court may adjourn or continue its hearings
from time to time, to enable the parties to secure the attendance of witnesses or
the taking oi depositions.

Depositions may be taken and used in such proceedings in the same manner
as is now provided by law for the taking of depositions in civil actions.

The attorney general and any person aggrieved by the order of the district
court may appeal to the supreme court from any such order made by said courts,
within the time and in the manner now provided by law for the taking of appeals
from orders in civil actions.

Subdivision 2. No tax shall be imposed, however, upon any transfei of personal
property within this state owned by a non-resident of this state at the time of his
death, where by the laws of the state of the decedent's domicile, an inheritance,
succession or transfer tax is imposed on transfers of personal property of decedents,
provided the laws of such state exempt, or do not impose a tax upon transfers of
personal property of residents of Minnesota having its situs in such vState. It
is hereby expressly declared that the inclusion in this act of the provisions of this
subdivision is not an indispensable inducement to the passage of this act and if
at any time the provisions of this subdivision shall be held to be unconstitutional,
the other provisions of this act shall not be invalidated thereby.

Duty of Company Holding Securities.

S. 12. No safe deposit company, bank or other institution, person or persons
holding securities or assets of a decedent, shall deliver or transfer the same to
the executors, administrators or legal representatives of said decedent, or upon
their order or request, unless notice of the time and place of such intended transfer
be served upon the county treasurer, personally or by representative, to examine
said securities at the time of such delivery or transfer. If upon such examination
the county treasurer or his said representatives shall for any cause deem it ad-
visable that such securities or assets should not be immediately delivered or trans-
ferred, he may forthwith notify in writing such company, bank, institution or
person to defer delivery or transfer thereof for a period not to exceed ten days from
the date of such notice, and thereupon it shall be the duty of the party notified to
defer such delivery or transfer until the time stated in such notice or until the
revocation thereof within such ten days. Failure to serve the notice first above
mentioned, or to allow such examination, or to defer the delivery of such securities
or assets for the time stated in the second of said notices, shall render said safe
deposit company, trust company, bank or other institution, person or persons,
liable to the payment of the tax due upon the said security or assets, pursuant
to the provisions of this act.

668 STATUTES ANNOTATED. [Minn. St.

Notice and Proceedings.

S. 13. Upon the presentation of any petition to any probate court of this state
for letters testamentary or of administration, or for ancillary letters, testamentary
or of administration, the probate court shall cause a copy of the citation or order
for the hearing of such petition to be served upon the county treasurer of his
county not less than ten days prior to such hearing. The court shall thereupon,
as soon as practicable after the granting of any such letters, proceed to ascertain
and determine the value of every inheritance, devise, bequest or legacy embraced
in or payable out of the estate in which such letters are granted and the taxes due
thereon. The county treasurers of the several counties, and the attorney general,
shall have the same rights to apply for letters of administration as are conferred
upon creditors by law.

Appraisers.

S. 14. The probate court may, in any matter mentioned in the preceding
section, either upon its own motion or upon the application of any interested
party, including county treasurers and the attorney general, and as often as and
when occasion requires, appoint one or more impartial and disinterested persons
as appraisers to appraise the true and full value of the property embraced in any
inheritance, devise, bequest, or legacy, subject to the payment of any tax imposed
by this act.

Time of Appraisal.

S. 15. Every inheritance, devise, bequest, legacy, transfer or gift upon which
a tax is imposed under this act shall be appraised at its full and true value immedi-
ately upon the death of decedent, or as soon thereafter as may be practicable;
provided, however, that when such devise, bequest, legacy, transfer or gift shall
be of such a nature that its true and full value cannot be ascertained, as herein
provided at such time, it shall be appraised in like manner at the time such value
first becomes ascertainable.

[See notes to the Act of 1905, ante, p. 656.]

Appraisers. — Proceedings. — Compensation.

S. 16. The appraisers appointed under the provisions of this act shall forth-
with give notice by mail to all persons known to have a claim or interest in the
inheritance, devise, bequest, legacy or gift to be appraised, including the county
treasurer, attorney general, and such persons as the probate court may by order
direct, of the time and place when they will make such appraisal. They shall at
such time and place appraise the same at its full and true value, as herein prescribed,
and for that purpose the probate court appointing said appraisers is authorized
and empowered to issue subpoenas and compel the attendance of witnesses before
such appraisers at the place fixed by the appraisers as the place where they will
meet to hear such testimony and make such appraisal. Such appraisers may
administer oaths or affirmations to such witnesses and require them to testify
concerning any and all property owned by the decedent and the true value thereof
and any disposition thereof which may have been made by the decedent during
his life time or otherwise. The appraisers shall make a report in writing, setting
forth their appraisal of the property embraced in each legacy, inheritance, de-
vise or transfer, including any transfer made in contemplation of death, with

1911, c. 209.] MINNESOTA. 669

the testimony of the witnesses examined and such other facts in relation to the
property and its appraisal as may be requested by the attorney general, or directed
by the order of the probate court. Such report shall be in writing and one copy
thereof shall be filed in the probate court and the others shall be mailed to the
attorney general at his office in the city of St. Paul, Minnesota.

Every appraiser shall be entitled to compensation at the rate of $3.00 per day,
and in extraordinary cases such additional sum per day, not exceeding $7.00
altogether as may be allowed by the probate judge, for each day actually and
necessarily employed in such appraisal, and his actual and necessary traveling
expenses, and such witnesses and the officer or person serving any such subpoena
shall be entitled to the same fees as are allowed witnesses or sheriffs for similar
services in courts of record. The compensation and fees claimed by any person
for services performed under this act shall be approved by the judge of probate
who shall certify the amount thereof, to the state auditor, who shall examine
the same, and, if found correct, he shall draw his warrant upon the state treasury
for the amount thereof in favor of the person entitled thereto.

Such warrants shall be paid out of the moneys appropriated for the payment
of the expenses of inheritance tax collections.

[See notes to the Act of 1905, s. 17, ante, p. 658.]

Appraisers' Report.

S. 17. The report of the appraisers shall be filed with the probate court, and
from such report and other proof relating to any such estate before the probate
court the court shall forthwith, as of course, determine the true and full value
of all such estate and the amount of tax to which the same are liable; or the
probate court may so determine the full and true value of all such estates and the
amount of tax to which the same are liable without appointing appraisers.

Notice of Appraisal.

S. 18. The probate court shall immediately give notice, upon the determina-
tion of the value of any inheritance, devise, bequest, legacy, transfer or gift
which is taxable under this act, and the tax to which it is liable, to all parties
known to be interested therein, including the state auditor, attorney general
and the county treasurer.

Such notice shall be given by serving a copy on the attorney of all persons
who may have appeared by attorney, and as to persons who have not so appeared,
by mail, where the addresses of the persons to be notified are known or can be
ascertained, otherwise such notice shall be given by publishing said notice once
in a qualified newspaper. The expense of such publication shall be certified and
paid by the state treasurer in the same manner as hereinbefore provided for the
payment of the fees and expenses of appraisers.

Objections to Assessment.

S. 19. Within thirty days after the assessment and determination by the
probate court of any tax imposed by this act, the attorney general, county treas-
urer or any person interested therein, may file with said court objections thereto,
in writing, and praying for a reassessment and redetermination of such tax.
Upon any objection being so filed the probate court shall appoint a time for the

670 STATUTES ANNOTATED. [Minn. St-

hearing thereof and cause notice of such hearing to be given to the attorney general,
county treasurer and all parties interested at least ten days before the hearing
thereof. Such notice shall be served in the manner provided for in section 18,
as amended by section 7 of this act.

At the time appointed in such notice the court shall proceed to hear such
objections and any evidence which may be offered in support thereof or opposi-
tion thereto; and if, after such hearing, said court shall be of the opinion that a
reassessment or redetermination of such tax should be made, it shall, by order,
set aside the assessment and determination theretofore made and order a re-
assessment in the same manner as if no assessment had been made, or the said
court may, without ordering a resubmission to appraisers, set aside the assess-
ment and determination theretofore made and fix and determine the value of the
property embraced in any legacy, inheritance, devise or transfer and fix and de-
termine the amount of the tax thereon in accordance with the appraisal thereto-
fore filed, so far as the same is not in dispute, and in accordance with the evidence
introduced by the respective parties in interest as to any items of the appraisers'
report which may have been objected to by any party interested, including the
attorney general and the personal representatives of the decedent.

In any case where objections are filed by the attorney general as hereinbefore
provided for, he shall, within ten days before the time set by the court for the
hearing thereof, file with the clerk of the court a bill of particulars setting forth
the items in any such report objected to and as to which he proposes to offer
testimony; he shall also mail a copy thereof, within said time, to the personal
representative of the decedent or the attorney or attorneys for the latter. In
case objections are filed by any other person, he or she shall likewise file such a bill
of particulars with the court and serve a copy thereof upon the attorney general
within ten days after the filing of the objections.

Citation.

S. 20. If the treasurer of any county shall have reason to believe that any
tax is due and unpaid under this act after the refusal or neglect of the persons
liable therefor to pay the same, he shall notify, in writing, the county attorney
of his county, of such failure or neglect, and such county attorney, if he have
probable cause to believe that such tax is due and unpaid, shall apply to the
probate court for a citation, citing the persons liable to pay such tax to appear
before the court on a day specified, not more than three months from the date of
such citation, and show cause why the tax should not be paid. The judge of the
probate court, upon such application, and whenever it shall appear to him that
any such tax accruing under this act has not been paid as required by law, shall
issue such citation, and the service of such citation, and the time, manner and proof
thereof, and the hearing and determination thereon, shall conform as near as
may be to the provisions of the probate code of this state, and whenever it shall
appear that any such tax is due and payable and the payment thereof cannot
be enforced under the provisions of this act in said probate court, the person or
corporation from whom the same is due is hereby made liable to the state for
the amount of such tax, and it shall be the duty of the county attorney of the
proper county to sue for in the name of the state and enforce the collection of such
tax, and all taxes so collected shall be forthwith paid into the county treasury.
It shall be the duty of said county attorney to appear for and represent the
county treasurer on the hearing of such citation.

1911, c. 209.1 MINNESOTA. 671

Records.

S. 21. The auditor of state shall furnish to each probate court a book which
shall be a public record, and in which shall be entered by the judge of said court
the name of every decedent upon whose estate an application has been made
for the issue of letters of administration, or letters testamentary or ancillary letters,
the date and place of death of such decedent, names and places of residence and
relationship to decedent of the heirs at law of such decedent, the estimated value
of the property of such decedent, names and places of residence and relationship
to decedent of the heirs at law of such decedent, the names and places of residence
of the legatees, devisees and other beneficiaries in any will of any such decedent,
the amount of each legacy, and the estimated value of any property devised therein
and to whom devised.

These entries shall be made from data contained in the papers filed on such
application or m. any proceeding relating to the estate of the decedent.

The judge of probate shall also enter in such book the amount of the property
of any such decedent, as shown by the inventory thereof, when made and filed in
his office, and the returns made by any appraisers appointed by him under this
act, and the value of all inheritances, devises, bequests, legacies and gifts inherited
from such decedent, or given by such decedent in his will or otherwise as fixed
by the probate court and the tax assessed thereon, and the amounts of any
receipts for payment thereof filed with him.

The state auditor shall also furnish forms for the reports to be made by such
judge of probate, which shall correspond with the entries to be made in such book.

Each judge of probate shall, on the first day of January, April, July and
October of each year, make a report in duplicate upon the forms furnished by the
state auditor containing all the data and matters required to be entered in such
book, one of which shall be immediately delivered to the county treasurer and the
other transmitted to the auditor of state.

The register of deeds of each county shall, at the same time, make reports in
duplicate to the auditor of state, containing a statement of any conveyance filed
or recorded in his office of any property which appears to have been made or
intended to take effect in possession or enjoyment after the death of the grantor
or vendor, with the name and place of residence of the vendor or vendee, and the
description of the property transferred, as shown by such instrument, one of
which duplicates shall be immediately delivered to the county treasurer and the
other transmitted to the auditor of state.

Compromise of Tax.

S. 21 a. The attorney general, by and with the consent and approval of the
state auditor, in case of the estate of a non-resident decedent whose estate has not
been probated in this state, and the consent and approval of the probate judge
in the case of any estate probated in this state, expressed in writing, is hereby
authorized and empowered to enter into an agreement with the trustees of any
estate in which remainders or expectant estates are of such a nature or so disposed
and circumstanced that the taxes are not presently payable or where the interests
of the legatees or devisees are or were not ascertainable under the provisions of
this chapter, at the time fixed for the appraisal and determination of the tax
on estates and interests transferred in fee, and to thereby compound the tax
upon such transfers upon such terms as are deemed equitable and expedient;
to grant a discharge to said trustees on account thereof upon payment of the

672 STATUTES ANNOTATED. [Minn. St.

taxes provided for in such composition agreement; provided, however, that no
such composition shall be conclusive in favor of said trustees as against the
interests of such cestui que trust as may possess either present rights of enjoyment,
or fixed, absolute or indefeasible rights of future enjoyment or of such as would
possess such rights in the event of the immediate termination of any particular
estate, unless they consent thereto either personally or by duly authorized
attorney, when competent, or by guardian or committee. Composition agree-
ments made, affected and entered into under the provisions of this section shall
be executed in triplicate, and one copy thereof filed in the probate court of the
county in which the tax is to be paid, one copy in the office of the attorney general
and one copy shall be delivered to the persons paying the tax thereunder.

The attorney general shall not consent to the assignment or delivery of any
property embraced in any legacy, devise or transfer from a non-resident decedent
to a non-resident trustee thereof under the provisions of section 11, as amended
by section 2 of this act, where the property embraced in such legacy, devise or
transfer is so circumstanced and disposed of that the tax thereon cannot be
presently ascertained, but is so circumstanced and disposed of as to authorize
him to enter into a composition agreement with reference to the tax on any
estate or interest therein as herein provided, until the tax on the transfer of any
such estate or interest shall have been compounded and the tax paid as herein-
before provided for; or in lieu thereof the trustee or other person to whom the
possession of such property is delivered shall have made, executed and delivered
to the attorney general a bond to the state of Minnesota in an amount equal to
the amount of tax which in any contingency may become due and owing to the
state on account of the transfer of such property, such bond to be approved by
the attorney general and conditioned for the payment to the state of Minnesota
of any tax which may accrue to the state under this act on the subsequent transfer
or delivery of the possession of such property to any person beneficially entitled
thereto. The provisions of sections 4523, 4524 and 4525, Revised Laws 1905,
shall apply to the execution of said bond and the qualification of the surety or
sureties thereon.

No property having its situs in this state embraced in any legacy or devise
bequeathed or devised to a non-resident trustee and circumstanced or disposed
of as last hereinbefore described, shall be decreed or distributed by any court of
this state to such non-resident trustee until he shall have compounded and paid
the tax as provided for in this section; or in lieu thereof given a bond to the state
as provided for in this section with reference to transfers of property owned by
non-resident decedents.

Proceedings to Obtain Information.

S. 21 b. The attorney general is hereby authorized and empowered to issue
a citation to any person whom he may believe or have reason to believe has any
knowledge or information concerning any property which he believes or has
reason to believe has been transferred by any person and as to which there is
or may be a tax due to the state under the provisions of this act, and by such
citation require such person to appear bef9re him at a time and place to be desig-
nated in such citation and testify under oath as to any fact or information within
his knowledge touching the quantity, value and description of any such property
and its ownership and the disposition thereof which may have been made by
any person, and to produce and submit to the inspection of the attorney general,

1911, c. 209] MINNESOTA. 673

any books, records, accounts or documents in the possession of or under the
control of any person so cited. The attorney general shall also have power to
inspect and examine the books, records and accounts of any person, firm or cor-
poration, including the stock transfer books of any corporation, for the purpose
of acquiring any information deemed necessary or desirable by him for the proper
enforcement of this act and the collection of the full amount of the tax which may
be due to the state hereunder. Any and all information acquired by the attorney
general under and by virtue of the means and methods provided for by this section
shall be deemed and held by him as confidential and shall not be disclosed by him
except so far as the same may be necessary for the enforcement and collection
of the inheritance tax provided for by this act.

Refusal of any person to attend before the attorney general in obedience to
any such citation, or to testify, or produce any books, accounts, records or
documents in hi§ possession or under his control and submit the same to inspec-
tion of the attorney general, when so required, may, upon application of the
attorney general, be punished by any district court in the same manner as if the
proceedings were pending in such court.

Witnesses so cited before the attorney general, and any sheriff or other officer
serving such citation shall receive the same fees as are allowed in civil actions;
to be paid by the attorney general out of funds appropriated for the enforcement
of this act.

Proceedings for Refund.

S. 21 c. Whenever, under the provisions of section 3 of this act, as amended,
any person or corporation shall be entitled to a return of any part of a tax pre-
viously paid, he shall make application to the attorney general for a determination
of the amount which he is entitled to have returned, and on such application shall
furnish the attorney general with affidavits and other evidence showing the facts
which entitle him to such return and the amount he is entitled to have returned.
The attorney general shall thereupon determine the amount, if any, which the
applicant is entitled to have returned, and shall certify his findings in regard
thereto to the state auditor who shall thereupon issue his warrant on the state
treasurer for the amount so certified by the attorney general and deliver such
warrant to the persons entitled to the refund.

It shall be the duty of the state treasurer to pay such warrants out of any
funds in the state treasury not otherwise appropriated. The moneys necessary to
pay such warrants are hereby appropriated out of any moneys in the state treasury
not otherwise appropriated.

Any person aggrieved by the determination of the attorney general may appeal
to the district court in the manner and with the same effect as is provided for in
section 11, as amended by section 2 of this act.

Warrant to County Treasurers.

S. 21 d. On or before the first of November in each year the state auditor shall
compute the amount of inheritance tax which has been paid into the state treasury
by the county treasurers of the several counties of this state, from estates of
residents thereof, during the preceding fiscal year ending July 31st, and thereupon
draw his warrant on the state treasurer in favor of each county from which
any tax shall have been received during the fiscal year ending July 31st next
preceding, for ten per cent of the amount of the inheritance tax money so received

674 STATUTES ANNOTATED. [Minn. St.

from each county respectively, less ten per cent of any tax which has been returned
under the provisions of the last preceding section and which was originally paid
to the county treasurer of any such county, and transmit the same to the county
auditor of each county, to be placed to the credit of the county revenue fund;
provided, however, that the provisions of this section shall apply only to such
moneys as shall be received as a tax on transfers from persons who shall die
subsequent to the passage of this amendatory act.

It shall be the duty of the state treasurer to pay such warrants out of any funds
in the state treasury not otherwise appropriated. The moneys necessary to
pay such warrants are hereby appropriated out of any moneys in the state
treasury not otherwise appropriated.

Seal.

S. 21 e. The attorney general shall provide himself with a seal whereon shall
be inscribed the words: "Attorney General, State of Minnesota, Inheritance
Tax." All his formal official acts done and performed under the provisions of
this act shall be authenticated with such seal.

Assistant Attorney General.

S. 21 f. The attorney general is hereby authorized to designate one of his
assistants as "assistant attorney general in charge of inheritance tax matters."
Such designation shall be in writing and filed in the office of the secretary of state
and shall continue in force until revoked by the attorney general. The assistant so
designated, so long as such designation remains unrevoked, shall have and may
exercise all the rights, powers and privileges conferred on the attorney general
by tKe provisions of this act and all the duties and obligations hereby imposed
upon the attorney general are likewise imposed upon the assistant so designated.

Chapter 288, Laws 1905, approved April 19, 1905.

Chapter 209, Laws 1911, approved April 18, 1911.

Miss. Cons.] MISSISSIPPI. 675

MISSISSIPPI.

In General.

There is no inheritance tax at present in Mississippi.

Constitutional Limitations.
Mississippi Constitution 1890, a. 4.

S. 112. Taxation shall be uniform and equal throughout the state. Property
shall be taxed in proportion to its value. The legislature may, however, impose
a tax per capita upon such domestic animals as from their nature and habits
are destructive of other property. Property shall be assessed for taxes under
general laws, and by uniform rules, according to its true value. But the legislature
may provide for a special mode of valuation and assessment for railroads, and
railroad and other corporate property, or for particular species of property
belonging to persons, corporations or associations not situated wholly in one
county. But all such property shall be assessed at its true value, and no county
shall be denied the right to levy county and special taxes upon such assessment
as in other cases of property situated and assessed in the county

676 STATUTES ANNOTATED. [Mo. Cons.

MISSOURI.

In General.

Missouri's first attempt at a collateral inheritance tax in 1895
was held unconstitutional. A second attempt in 1899 fared better.
Collateral inheritances only are taxed. The rate is uniformly 5
per cent and there is no amount exempted. The inheritances
exempt are those to father, mother, husband, wife, lineal descendant
and adopted child. This law has produced from $200,000 to $400,-
000 annually. An interesting detail is that the proceeds of the tax
are devoted to the support of the University of Missouri, providing
a sort of compulsory bequest for higher education from every estate.

Missouri taxes stock of a Missouri corporation owned by a
non-resident; it taxes stock of a corporation organized elsewhere
owning property in Missouri, and it apparently taxes slock of a
foreign corporation owned by a non-resident if the stock certificate
is kept in Missouri.

Constitutional Limitations.
Missouri Revised Statutes 1899, Vol. 1. Missouri Constitution, a. 4.

S. 43. Appropriations, order of. All revenue collected and moneys received
by the state from any source whatsoever shall go into the treasury, and the
general assembly shall have no power to divert the same, or to permit money to
be drawn from the treasury, except in pursuance of regular appropriations made
by law. All appropriations of money by the successive general assemblies shall
be made in the following order: —

First, For the payment of all interest upon the bonded debt of the state that
may become due during the term for which each general assembly is elected.

Second, For the benefit of the sinking fund, which shall not be less annually
than two hundred and fifty thousand dollars.

Third, For free public school purposes.

Fourth, For the payment of the cost of assessing and collecting the revenue.

Fifth, For the payment of the civil list.

Sixth, For the support of the eleemosynary institutions of the state.

Seventh, For the pay of the general assembly, and such other purposes not
herein prohibited as it may deem necessary; but no general assembly shall have
power to make any appropriation of money for any purpose whatsoever, until
the respective sums necessary for the purposes in this section specified have been
set apart and appropriated or to give priority in its action to a succeeding over

Mo. Cons.] MISSOURI. 677

Missouri Constitution 1875, a. 10.

S. 3. Taxes for public purposes only. — Must be uniform. Taxes may
be levied and collected for public purposes only. They shall be uniform upon
the same class of subjects within the territorial limits of the authority levying
the tax, and all taxes shall be levied and collected by general laws.

Missouri Constitution 1909, a. 10.

S. 4. Taxes in proportion to value. All property subject to taxation
shall be taxed in proportion to its value.

S. 6. Property exempt from taxation. The property, real and personal,
of the state, counties and other municipal corporations, and cemeteries, shall be
exempt from taxation. Lots in incorporated cities or towns or within one mile
of the limits of any such city or town, to the extent of one acre, and lots one mile
or more distant Jrom such cities or towns, to the extent of five acres, with the
buildings thereon, may be exempted from taxation, when the same are used
exclusively for religious worship, for schools, or for purposes purely charitable ; also,
such property, real or personal, as may be used exclusively for agricultural or horti-
cultural societies: Provided, That such exemptions shall be only by general law.

S. 7. Other exemptions void. All laws exempting property from taxation,
other than the property above enumerated, shall be void.

List of Statutes.

1895. Statutes of Missouri, p. 278.

1897. " " " p. 237.

1899. " " " p. 328.

1899. Revised Statutes of Missouri, p. 185, a. 16, ss. 299-322.

1901. Statutes of Missouri, p. 43.

1903. p. 52.

1909. " " " p. 56, s. 11.

1909. RevisedStatutesof Missouri, Vol. 1, a. 14, ss. 309 to 331.

Inheritance Tax is a **Tax."

Mo. Const., a. 10, s. 3, provides that "taxes may be levied and
collected for public purposes only." The court notices the argument
that an inheritance tax is not a tax, strictly speaking, but a bonus
or price exacted as a condition upon which persons take the estate
whose owner is dead. But still the vital point remains that by
whatever name this burden may be called, still it falls within the
purview of the word "taxes," in its generic sense in the constitution,
as that word includes every character and kind of tax, general or
special. The power of the state to demand such a bonus is referable
only to the taxing power. State v. Switzler, 143 Mo. 287, 315, 45
S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.

How to Attack the Statute.

The validity of the Mo. St. 1899, p. 186, was attacked by cer-
tiorari in State v. Henderson, 160 Mo. 190, 60 S. W. 1093.

678 STATUTES ANNOTATED. [Mo. St.

THE VOID STATUTES OF 1895 AND 1897.

Mo. St. 1895, p. 278.

An Act providing for the endowment of the state university, and
for the establishment and endowment of free scholarships of merit therein in
each county. ,

Objections to the title of Mo. St. 1895 were not considered by
the court, which found the act void on other grounds, in State v.
Switzler, 143 Mo. 287, 331, 45 S. W. 245, 40 L. R. A. 280, 65 Am.
St. Rep. 653.

Mo. St. 1895, p. 278, s. 1. Approved April 1, 1895.

S. 1. All property conveyed by will, or by the death of an intestate, or by
deed, grant, bargain, sale or gift, made or intended to take effect in possession
or enjoyment after the death of the grantor, or bargainor, or any person or
persons, either directly or in trust, or otherwise, whereby a beneficial interest
shall be created in possession or expectancy to any property or the income thereof,
to any person other than the father, mother, husband, wife or direct lineal de-
mendant of the testator, intestate, grantor or bargainor, except property conveyed
for some educational, charitable or religious purpose exclusively, shall be subject
to the payment of a collateral succession tax of five dollars for each and every one
hundred dollars of the clear market value of such property, where the money or
property affected shall be ten thousand dollars or less in value, and where the
morjey or property affected exceeds ten thousand dollars in value, the same shall
be subject to a tax of five dollars for each and every one hundred dollars of the
clear market value thereof, up to and including ten thousand dollars in value, and
a tax of seven and one-half dollars, in addition, for every such one hundred dollars
in value in excess of ten thousand dollars; and for the enforcement and collection
of such tax there is hereby created against the property affected thereby a first
lien in favor of the state of Missouri, upon which a civil action may be prosecuted
in any court having competent jurisdiction; and when collected, such tax shall
be paid into the county treasury, of the county where the testator, intestate,
grantor or bargainor resided, or in the case where there is no such residence
in the state, then such tax shall be paid into the county treasury of the county
where such property exists or is situate. All taxes provided by this section,
which shall not be paid within one year after the death of the person rendering
such property subject to taxation, shall bear interest at the same rate, from the
date of the death of such person, as is now provided by law for delinquent taxes,
and suits therefor may be prosecuted by the same person provided by law for
the purpose of instituting suits for delinquent taxes, unless the county court shall
make an order requiring the prosecuting attorney to institute suits for the re-
covery of such collateral succession taxes.

Classification by Relationship Upheld. — Progressive Tax
Condemned.

The court seems to approve of discrimination among classes of
relatives and disapprove of a tax graduated according to the value

1895, p. 278.] MISSOURI. 679

of the interest received. The statute of 1895 is void as contravening
Mo. Const., a. 10, s. 3, as it is not "uniform upon the same class
of subjects within the territorial limits of the authority levying
the tax." It is clear that where the amount of property received
is made the basis of the tax, uniformity is only attainable by
levying the same per cent upon all property belonging to persons
bearing the same relation to the decedent.

While the legislature might perhaps distribute the collaterals
according to the different degrees of kinship to the decedent, and
levy a different rate upon the different degrees, yet when it ignores
all such natural classification and makes the amount of money
received by each the test of classification it runs counter to another
principle that is wellnigh universally accepted, that a uniform rate
of taxation secures equality of burden. To levy a different rate
simply because the amount of each man's holding is different would
produce favoritism and destroy that principle of equality before
the law which is the boast of free government. If it be urged that
the one receiving the larger bounty enjoys the greater privilege,
still the principle of uniformity answers that the value of his right
to receive is in direct proportion to the value of the property to which
he succeeds, and must, if taxation is to be uniform, be taxed in that
proportion or according to one uniform rate. State v. Switzler, 143
Mo. 287, 333, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.

Void as a Property Tax.

The statutes of 1895 and 1897 are void as property taxes, imposing
an additional burden on property. State v. Henderson, 160 Mo.
190, 215, 60 S. W. 1093.

A testator died December 6, 1896, and his will was probated
December 7, 1896, and the court holds that the questions involved
are governed by Mo. St. 1895, as by its terms the devolution of the
property and the right of the state to tax accrues immediately
upon the death of the testator. The Mo. Const., a. 10, s. 4, does
not render Mo. St. 1895 unconstitutional if it is a succession tax, as
such a tax is not a tax upon property in the ordinary sense, but is
in the nature of an excise or bonus exacted by the state upon the
privilege or right to inherit or succeed to an estate.

Mo. St. 1895, as amended in 1897, requires the tax to be levied
upon the appraised value of the whole estate left by the deceased.
The tax is at once levied upon that estate and the personal repre-
sentatives of the deceased, not the devisees and legatees, are required

680 STATUTES ANNOTATED. [Mo. St.

to pay the tax. The mere calling such a tax a succession tax does
not make it different from an ordinary tax upon property and the
effect and operation are identical with an ordinary property tax.
But the court holds that the language of the act imposes a tax
directly upon the property of the decedent and not upon those who
may succeed to his estate, and if it is a property tax it is unconsti-
tutional, as it subjects the estate to an additional property tax to
that levied upon all other like property in the state for the same
year and is not levied in proportion to its value. State v. Switzler,
143 Mo. 287, 330, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.

Mo. St. 1895, approved April 1, 1895, p. 278, s. 2, provides a filing fee for
corporations.

Mo. St. 1895, p. 278. Approved April 1, 1895.

S. 5. All taxes or fees or moneys collected or received under the provisions
of this act during each month by any county official, and for the purpose of this
act the city of St. Louis shall be affected through its corresponding officers as if
it were a county, shall be paid during the first week of the following month to
the county treasurer, who shall thereupon credit three-fourths of the moneys
so received to a fund hereby created, to be known as "the state university scholar-
ship fund," and remit the remaining one-fourth to the state treasurer; and from
all taxes and fees received from corporations, and all escheats received under the
provisions of this act, the state treasurer shall monthly, in the same manner,
reserve one-fourth, and remit the remaining three-fourths in each instance to the
county treasurer of the county in which the corporation is located or from which
the escheat came, to be credited to "the state university scholarship fund" of
such county.

Public Purpose.

The legislature has a right to levy an inheritance tax so long as
it is for a public purpose. State v. Switzler, 143 Mo. 287, 316, 45
S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.

Scholarship Fund not a Public Purpose.

The act of 1895 levied an inheritance tax for the purpose of an
endowment for the state university and further to be paid to
students "while attending the university for defraying the expenses
of such attendance," in what was known as the State University
scholarship fund. It was argued that this was no different from
providing free tuition at the State University. But the court says
it is one thing to provide for the establishment and maintenance
of a system of public education and a wholly different thing to
support private individuals who attend a university and public
schools by public taxation; and the court concludes that the tax

1899, p. 328.] MISSOURI. 681

is levied for a purely private purpose and for that reason is in
contravention of the constitution of Missouri. State v. Switzler,
143 Mo. 287, 326, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653.
The case of State v. Switzler was followed in declaring the act of
1895 void as not for a public purpose in Simmons Medicine Co. v.
Ziegenhein, 145 Mo. 368, 47 S. W. 10.

Mo. St. 1895, approved April 1, 1895, p. 278, ss. 6-11 cover the collection and
expenditure of the money provided by the statute.

The act of 1897, p. 237, repealed the progressive feature of the
original statute of 1895 and added specific provisions for the valu-
ation of inheritances and enforcing collection of taxes. State v.
Switzler, 143 Mo. 28, 313, 45 S, W. 245, 40 L. R. A. 280, 65 Am.
St. Rep. 653.

The statute of 1897 is void. See notes to the Act of 1895, supra,
p. 679.

THE VALID STATUTE OF 1899.

Mo. St. 1899, p. 328.

An Act to tax collateral inheritances, legacies, gifts and conveyances,
in certain cases, to provide revenue for educational purposes, for the main-
tenance and support of the Missouri state university and its departments.
How and when collected and where deposited.

S. 1. All property which shall pass by will, or by the intestate law of this
state from any person who may die seized or possessed of the same while a resident
of this state, or, if decedent was not a resident of this state at the time of death,
which property or any part thereof shall be within this state, or any interest therein
or income therefrom, which shall be transferred by deed, grant, bargain, sale or
gift, made or intended to take effect in possession or enjoyment after the death
of the grantor, bargainor, vendor or donor, to any person or persons, or to any
body politic or corporate, either directly or in trust or otherwise, or by reason
whereof any person or body politic or corporate shall become beneficially entitled
in possession or expectancy, to any property or the income thereof, other than to
or for the use of the father, mother, husband, wife, legally adopted children or
direct lineal descendant of the testator, intestate, grantor, bargainor, vendor
or donor, except property conveyed for some educational, charitable or religious
purpose exclusively shall be and is subject to the payment of a collateral inheritance
tax of five dollars for each and every one hundred dollars of the clear market value
of such property, and at and after the same rate for every less amount, to be paid
to the collector of revenue of the proper county, and for the purposes of this act
the city of St. Louis shall be afi^ected through its corresponding officers as if it
were a county, for the use of the state as hereinafter provided; and for the en-
forcement and collection of Such tax there is hereby created against the property
affected thereby a first Hen in favor of the state of Missouri, upon which a civil
action may be prosecuted in any court having proper jurisdiction; and all heirs,
next of kin, legatees and devisees, administrators, executors and trustees, grantees,
vendees and donees shall be liable for any and all such taxes until the same shall

682 STATUTES ANNOTATED. [Mo. St.

have been paid as hereinafter directed: Provided, that all collateral inheritance,
taxes shall be sued for within five years after they are due and legally demandable,
otherwise they shall cease to be a lien as against any purchasers of the property:
Provided further, that the word "property," as used in this section, shall be taken
to mean the property or interest therein passing or transferred to individual legatees,
devisees, heirs, next of kin, grantees, vendees or donees, and not as the property
or interest therein of the testator, intestate, grantor, bargainor, vendor or donor.

Uniform, though confined to Collateral Inheritances.

The act of 1899 does not violate the rule as to uniformity pre-
scribed by Mo. Const., a. 10, s. 3, as the statute imposes the same
per cent upon all inheritances which are taxed; that is, collateral
inheritances. The court says that the legislature has seen fit
to make the classification and unless it is so arbitrary that the court
can say beyond doubt that it transcends constitutional limitations
the court is bound to accept it. The court finds no provision of the
constitution which it violates and accordingly it seems to be a
natural and reasonable classification. State v. Henderson, 160 Mo.
190, 216, 60 S. W. 1093.

Not a Property Tax.

The statute of 1899 does not impose a tax upon the property of
the decedent in addition to its burden in common with all other
property, as was the casein the acts of 1895 and 1897; but it is
levied only upon its transmission by will, descent or grant. It is
a bonus or duty levied upon the right or privilege of the devisee,
heir or distributee of receiving his share. While referring to the
property, devised or inherited it does so only to secure uniformity
among the beneficiaries receiving the property, the object being
to tax each in proportion to his or her interest received and for
that privilege. State v. Henderson, 160 Mo. 190, 215, 60 S. W. 1093.

Not Void as an Appropriation.

This statute is not obnoxious to the Mo. Const., a. 4, s. 43, which
provides the order of payment of money received into the treasury.
It was contended that this act which provides that the receipts
from the inheritance tax law shall be appropriated to the state
university is itself an appropriation of the money, as every dollar
raised thereby is instantly and perpetually appropriated to the
maintenance of the. university. The court replies that the statute
itself forbids expenditure save in pursuance of regular appropriations
of the general assembly. State v. Henderson, 160 Mo. 190, 213,
60 S. W. 1093.

1899, p. 328.1 MISSOURI. 683

Exemptions Valid.

It was argued that the exemptions in the act of 1899 violated
Mo. Const., a. 10, ss. 6 and 7, which limit the amount of property
which may be exempted from taxation, and as this statute pre-
scribes no limit to the amount of property it is therefore void. The
argument is predicated on the fact that this is a property tax, as
the section of the constitution relied upon deals directly with prop-
erty taxation. But the court holds that this is valid, as the statute
is not a property tax. State v. Henderson, 160 Mo. 190, 217, 60 S. W.
1093.

Sections 2 to 23 cover the assessment and collection of the tax.

Application of Proceeds Valid.

Mo. Const., a. 4, s. 43, provides that all revenue in money
received by the state shall go into the treasury and that all appropria-
tions shall be made in the order set forth in the section. It was
argued that this means that all revenue shall go into one common
general fund unfettered and unpledged and that these words pro-
hibit the creation of any special fund in the treasury to be supplied
out of revenue provided by the general assembly; and that there-
fore the Mo. St. 1899, which provided that the receipts from the
inheritance tax should be accredited to the "state seminary moneys"
rendered the act void. The court replies that the constitution itself
provides elsewhere for special funds and holds that the constitution
simply requires the general assembly to proceed in the order desig-
nated in passing its appropriation bills. In prescribing the order
for the passage of the appropriation bill there was no intention to
create special liens upon the money in the treasury or give any
priority of payment to one appropriation over another. State v.
Henderson, 160 Mo. 190, 211, 60 S. W. 1093.

AMENDMENTS.

Mo. St. 1901, p. 43, amends Revised Statutes 1899, c. 1, s. 302,
by providing that one-fifth instead of one-eighth of the receipts
shall be turned over to the school of mines and metallurgy.

Mo. St. 1903, p. 52, amended Revised Statutes 1899, c. 1, a. 16,
s. 321, by giving the probate judge one-half instead of one-fifth of
the sums collected by the county collectors.-

Mo. St. 1909, p. 56, s. 11, makes an appropriation from the
inheritance tax.

684 STATUTES ANNOTATED. [Mo. St.

THE PRESENT ACT.

[References are to the Missouri Revised Statutes of 1909.]
S. 309. Estates subject to payment of collateral inheritance tax. 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 decedent was not a resident of this state at the time of death, which property
or any part thereof shall be within this state, or any interest therein or income
therefrom which shall be transferred by deed, grant, bargain, sale or gift, made
or intended to take effect in possession or enjoyment after the death of the grantor,
bargainor, vendor or donor, to any persons, or to any body politic or corporate,
either directly or in trust or otherwise, or by reason whereof any person or body
politic or corporate shall become beneficially entitled in possession or expectancy,
to any property or the income thereof, other than to or for the use of the father,
mother, husband, wife, legally adopted children, or direct lineal descendant of
the testator, intestate, grantor, bargainor, vendor or donor, except property
conveyed for some educational, charitable or religious purpose exclusively, shall
be and is subject to the payment of a collateral inheritance tax of five dollars
for each and every one hundred dollars of the clear market value of such property
and at and after the same rate for every less amount, to be paid to the collector
of revenue of the proper county, and for the purposes of this article, the city of
St. Louis shall be affected through its corresponding officers as if it were a county,
for the use of the state as hereinafter provided; and for the enforcement and
collection of such tax there is hereby created against the property affected thereby
a first lien in favor of the state of Missouri, upon which a civil action may be
prosecuted in any court having a proper jurisdiction; and all heirs, next of kin,
legatees, and devisees, administrators, executors and trustees, grantees, vendees
and donees shall be liable for any and all such taxes until the same shall have been
paid as hereinafter directed: Provided, that all collateral inheritance taxes shall
be sued for within five years after they are due and legally demandable, otherwise
they shall cease to be a lien as against any purchasers of the property: Provided,
further, that the word "property," as used in this section, shall be taken to mean
the property or interest therein passing or transferred to individual legatees,
devisees, heirs, next of kin, grantees, vendees or donees, and not as the property
or interest therein of the testator, intestate, grantor, bargainor, vendor or donor.
[See notes to the Acts of 1895 and 1899, ante, pp. 678, 682.]

S. 310. Tax, when due and payable. All taxes imposed by this article,
except as hereinafter provided, shall be due and payable at the death of the person
rendering such property subject to such taxation, and interest at the same rate
as is now provided by law for delinquent taxes, shall be charged and collected
thereon for such time as said tax is not paid: Provided, that if said tax is paid
within one year from the accruing thereof no interest shall be charged or collected
thereon, and if said tax is paid within six months from the accruing thereof a
discount of five per cent shall be allowed and deducted from said tax: Provided,
further, that if by reason of claims made upon the estate, necessary litigation or
other unavoidable caiise or delay the estate of the decedent or any part thereof
can not be settled up at the end of the year from his or her decease, the probate
court, or the judge thereof in vacation, may make necessary extensions of time
for the payment of such taxes, but no single extension shall exceed one year.

1909 V. 1, a. 14.] MISSOURI. 685

and in such cases oniy six per cent per annum shall be charged upon the said
tax from the death of the decedent to the expiration of the period for which the
extension of time was granted, after which interest, at the same rate as is now
provided by law for delinquent taxes shall be charged; and in all cases the tax
on real estate shall remain a lien on the real estate on which the same is chargeable
until paid, and the executors, administrators or trustees shall give a bond, to the
people of the state of Missouri, in a penalty of three times the amount of the said
tax, with such sureties as the probate judge of the proper county may approve,
conditioned for the payment of said tax, and interest thereon, at the expiration
of such period, which bond shall be filed in the office oi said probate judge.

S. 311. When and to whom collector shall account. The collector of
each county shall, on or before the fifteenth day of each month, pay to the state
treasurer all taxes, collected or received by him under the provisions of this
article, before the first day of said month, deducting therefrom his commissions,
as provided in section 331 of this article, and all lawful disbursements made by
him, in accordance with the provisions of this article, upon the certificate of the
probate judge of his county of which collection and payment he shall make a
report under oath to the state auditor, on or before the fifth day of each month,
stating for what estate paid, and in such form and containing such particulars
as the state auditor may prescribe; and for any failure to make such monthly
payments he shall be subject to the penalty prescribed by section 11474, of the
Revised Statutes of 1909.

S. 312. Money to be deposited by state treasurer. — How used. The

moneys received by the state treasurer under the provisions of this article shall
be deposited in the state treasury to the credit of the fund now existing in the
state treasury and known as the "state seminary moneys," for the maintenance,
support and better equipment of the buildings, apparatus, books, instruction,
etc., of the university of the state of Missouri, to an amount not exceeding in any
one year the equivalent of one-tenth of one mill upon every dollar of the assessed
valuation of taxable property of this state for said year: Provided, that one-fifth
of all such moneys so received shall be devoted to the use of the school of mines
and metallurgy, a department of the said university: Provided further, that if the
net amount deposited in any one year by the state treasurer under the provisions
of this article to the credit of the "state seminary moneys" be not equivalent to
one-tenth of one mill upon every dollar of the assessed valuation of taxable prop-
erty of this state for the said year, it shall be the duty of the state treasurer to
make good this deficiency out of the first moneys received under the provisions
of this article in the next succeeding year: Provided, further, that all said moneys
shall be disbursed in pursuance of regular appropriations of the general assembly,
in accordance with the provisions of section 1450 of the Revised Statutes of 1909.
[See notes to the Acts of 1895 and 1899, ante, pp. 680, 682.]

S. 313. When state treasurer shall deposit moneys received to credit
of "Educational fund." The moneys received by the state treasurer under
the provisions of this article which shall exceed in any one year the amount re-
quired by section 312 of this article to be deposited to the credit of the "state
seminary moneys," shall be deposited in the state treasury to the credit of a fund
to be known as the "educational fund," which is hereby created and established.

686 STATUTES ANNOTATED. [Mo. St.

The moneys deposited in the said fund shall be appropriated by the general as-
sembly for public educational purposes.

S. 314. When and how tax is paid on remainders, reversions or other
estates in expectancy, real or personal. When any grant, gift, legacy or
inheritance upon which a tax is imposed by section 309 of this article, shall be
a remainder, reversion or other expectancy, real or personal, the tax on such
estate shall not be payable, nor interest begin to run thereon, until the person or
persons liable for the same shall come into actual possession of such estate by
the termination of the estate for life or years, and the tax shall be assessed upon
the value of the estate at the time the right of possession accrues to the owner
as aforesaid: Provided, that in all such cases the tax on real estate shall remain
a lien on the real estate on which the same is chargeable until paid : Provided,
further, that the person or persons, or body politic or corporate beneficially in-
terested in the property as aforesaid shall make a full, verified return of said
property to the probate judge of the proper county and file the same in his office
within one year from the death of the decedent, and within that period give a
bond in form and to the effect prescribed in section 310 of this article, conditioned
for the payment of said tax at such time or period as the right of possession shall
accrue to the owner or the representatives of said owner as aforesaid, and in case
of failure so to do, the tax shall be immediately payable and collectible on the
clear market value of the estate, to be determined as hereinafter provided : Pro-
vided further, that the owner shall have the right to pay the tax at any time prior
to his or her coming into possession, and in such cases, the tax shall be assessed
in the manner hereinafter provided, on the value of the estate at the time of the
payment of the tax, after deducting the value of the life estate or estates for
years.

S. 315. Property bequeathed to executors or trustees in lieu of com-
missions, excess above fair compensation subject to tax. Where a
testator bequeaths or devises property to one or more executors or trustees in
lieu of their commissions or allowances, which property otherwise would be
liable to said tax, or appoints them his residuary legatees, and said bequests,
devises or residuary legacies exceed what would be a fair compensation of their
services, such excess shall be subject to the payment of the said tax; the rate of
compensation to be fixed by the probate court having jurisdiction in the case.

S. 316. Administrators or trustees not required to deliver specific
legacy or other property until tax is paid, etc. Any administrator, execu-
tor or trustee having in charge or trust any legacy or property for distribution,
subject to the said tax, shall deduct the amount Of the tax therefrom, or if the
legacy or property be not money, he shall demand payment of the amount of the
tax thereon upon the appraised value thereof from the legatee or person entitled
to such property, and he. shall not deliver, or be compelled to deliver, any specific
legacy or property subject to tax until he shall have collected the tax thereon;
and in case of neglect or refusal on the part of said legatee or person to pay the
same, such specific legacy or property, or so much thereof as shall be necessary
shall be sold by such administrator, executor or trustee at public sale, after
notice to such legatee or person, and the balance that may be left in the hands
of the administrator, executor or trustee, after deducting the amount of the said

1909, V. 1, a. 14.] MISSOURI. 687

tax, shall be distributed, as is or may be directed by law; and whenever any such
legacy or property shall be charged upon or payable out of real estate, the heir
or devisee before paying the same, shall deduct the amount of the said tax there-
from, and pay the amount so deducted to the executor or other trustee, and
the same shall remain a charge on such real estate until paid and the payment
thereof shall be enforced by the executor or other trustee in the same manner
that the payment of such legacy or property might be enforced, or by the prosecu-
ting attorney of the proper county as provided in section 329 of this article.

S. 317. Duty of executor or trustee when legacy or property subject
to tax is given for limited period. If the legacy- or property subject to the
tax imposed by this article be given in money to any person for a limited period,
the executor or other trustee shall retain the tax upon the whole amount, but
if it be not in money, he shall make application to the court having jurisdiction
of an accounting by him, to make an apportionment, if the case require it, of the
sum to be paid into his hands by such legatee or person, and for such further
action relative thereto as the case may require.

S. 318. Tax coming into hands of executor, etc., shall be paid to
county collector, receipt sent state treasurer, etc. Every sum of money
retained by an executor, administrator or other trustee, or paid into his hands,
for any tax imposed by this article on any property, shall be paid by him within
thirty days thereafter, to the collector of revenue of the county in which the
probate court, having jurisdiction of the estate or accounts, is situated, and the
said collector shall give, and every executor, administrator or other trustee shall
take duplicate receipts from him of such payment, one of which receipts he shall
immediately send to the state treasurer, whose duty it shall be to charge the
collector so receiving the tax with the amount thereof, and shall seal said receipt
with the seal of his office and countersign the same and return it to the executor,
administrator or other trustee, whereupon it shall be a proper voucher in the
settlement of his accounts, but an executor, administrator or other trustee. shall
not be entitled to credits in his accounts, nor be discharged from liability for such
tax, unless he shall produce a receipt so sealed and countersigned by the state
treasurer, or a copy thereof certified by him.

S. 319. When, how and by whom proportion of tax is repaid to legatee,
etc. Whenever any debts shall be proven against the estate of a decedent,
after the payment of legacies or distribution of property from which the said tax
has been deducted or upon which it has been paid, and a refund is made by the
legatee, devisee, heir or next of kin, a proportion of the tax so paid shall be repaid
to him by the executor, administrator or other trustee, if the said tax has not
been paid to the county collector or by the county collector if the tax has been paid
to him. The county collector shall pay such sums, upon the order of the probate
judge, out of any money that he has in his possession or shall receive on account
of the tax imposed by the provisions of this article. The state auditor shall
credit the county collector with all such sums paid by him upon the order of the
probate judge.

S. 320. Duty of executor or trustee to notify probate court, when real
estate of decedent is subject to tax. Whenever any of the real estate of which

688 STATUTES ANNOTATED. [Mo. St.

any decedent may die seized shall be subject to the tax provided by this article,
it shall be the duty of the executors, administrators or other trustees to give
information thereof, in writing, to the probate judge of the court ha\ ing jurisdic-
tion of the estate of the decedent, within six months after they undertake the
execution of their expected duties, or if the fact be not known to them within
that period, within one month after the same shall have come to their knowledge,
and it shall be the duty of the owners of such estate, immediately upon the
vesting of the estate, to give information thereof, in writing, to the probate
judge aforesaid.

S. 321. Transfers of stocks or loans in this state, liable to tax, made
by foreign executors, administrators or trustees. — Tax when and where
paid and who liable for failure to pay. Whenever any foreign executor, ad-
ministrator or other trustee shall assign or transfer any stocks or loans in this state
standing in the name of a decedent, or in trust for a decedent, which shall be liable
for the tax imposed by the provisions of this article, such tax shall be paid, on the
transfer thereof, to the collector of the county where the transfer is made; other-
wise the corporation permitting such transfer shall become liable to pay such tax:
Provided, that such corporation had knowledge before such transfer that said
stocks or loans were liable for such tax.

S. 322. Probate court to appoint competent person as appraiser to fix
valuation of estates subject to payment of tax. The probate judge of the
court having jurisdiction of the estate of the decedent, upon the application of any
interested party, including county collectors, or upon his own motion, shall, as
often and whenever occasion may require, appoint a competent person as appraiser
to fix *he valuation of estates which shall be subject to the payment of any tax
imposed by this article. Every such appraiser shall forthwith give notice by
mail to all persons known to have a claim or interest in the property to be appraised
including the county collector of revenue, and to such persons as the probate
judge may by order direct, of the time and place when he will appraise such
estate or property. He shall at such time and place appraise the same at its
clear market value, at the time of the death of the decedent, excluding therefrom
an amount equivalent to the sum of all of the lawful debts of the decedent, and
for that purpose the said appraiser is authorized to issue subpoenas and to compel
the attendance of witnesses before him and to take the evidence of such witnesses
under oath concerning such property and the value thereof; and he shall make
report thereof and of such value, in writing, to the said probate judge, together
with the depositions of the witnesses examined, and such other facts in relation
thereto, and to the said matter as said probate judge may order or require. Every
appraiser shall be paid on the certificate of the probate judge, at the rate of three
dollars per day for every day actually and necessarily employed in such appraisal,
and his actual and necessary traveling expenses, and the fees paid such witnesses,
which fees shall be the same as those now paid to witnesses subpoenaed to attend
in courts of record, by the county collector out of any funds he may have in his
hands on account of any tax imposed under the provisions of this arcicle.

S. 323. Report of appraiser to be filed in probate court, assessment of
cash value, amount of tax, etc. The report of the appraiser shall be filed in
the office of the probate judge, and from such report and other proof relating

1909, V. 1, a. 14.] MISSOURI. 689

to any such estate before the probate judge, the probate judge shall forthwith
assess and fix the cash value of all estates and the amount of tax to which the same
are liable; or, the probate judge may so determine the cash value of all such
estates and the amount of the tax to which the same are liable without appointing
an appraiser. The value of every limited estate, income, interest or annuity de-
pendent upon any life or lives in being shall be determined by the rule, method
and standards or [of] mortality and value, which are employed by the superinten-
dent of the insurance department in ascertaining the value of policies of life insurance
and annuities, save that the rate of interest for computing the value of such estates
or interest shall be five per centum per annum; and the superintendent of the
insurance department shall, on the application of any probate judge, determine
the value of such limited estates or interests upon the facts contained in such
report, and certify the same to the probate judge, and his certificate shall be
conclusive evidence that the method of computations adopted therein is correct.
Any person dissatisfied with the appraisement or assessment and determination
of tax, may appeal therefrom to the probate judge within sixty days from the
fixing, assessing and determination of the tax by the probate judge as herein
provided, upon filing in the office of the probate judge a written notice of appeal
which shall state the grounds upon which the appeal is taken and on paying or
giving security, approved by the probate judge, to pay all costs of the proceeding.
The probate judge shall immediately give notice, upon the determination by him
as to the value of any estate which is taxable under this article and of the tax to
which it is liable, to all persons known to be interested therein.

S. 324. Duty of state auditor when he believes the value of an estate
has been fraudulently or erroneously determined. Within two years after
the entry of an order or decree of a probate judge determining the value of an
estate and assessing the tax thereon, the state auditor may, if he believe that
such appraisal, assessment or determination has been fraudulently, collusively
or erroneously made, make application to the circuit judge of the judicial circuit
in which the, former owner of such estate resided for a reappraisal thereof. The
judge to whom such application is made may thereupon appoint a competent
pet-son to reappraise such estate. Such appraiser shall possess the powers, be
subject to the duties and receive the compensation provided by sections 322 and
323 of this article Such compensation shall be payable by the county collector
of revenue out of any funds he may have on account of any tax imposed under
the provisions of this article, upon the certificate of the judge appointing him.
The report of such appraiser shall be filed with the judge by whom he was ap-
pointed, and thereafter the same proceedings shall be taken and had by and before
such judge as are herein provided to be taken and had by and before the judge of
the probate court. The determination and assessment of such judge of the cir-
cuit court shall supersede the determination of the probate judge, and shall be
filed by such circuit judge in the office of the state auditor.

S. 325. Appraiser taking any fee or reward from executors, etc., guilty
of misdemeanor. Any appraiser appointed by virtue of this article who shall
take any fee or reward from any executor, administrator, trustee, legatee, next
of kin or heir of any decedent, or from any other person liable to pay said tax,
or any portion thereof, shall be guilty of a misdemeanor, and upon conviction
in any court having jurisdiction of misdemeanor, he shall be fined not less than

690 STATUTES ANNOTATED. [Mo. St.

two hundred and fifty dollars nor more than five hundred dollars, and imprisoned
not exceeding ninety days, and in addition thereto the probate judge shall dis-
miss him from such service and he shall be disqualified from serving hereafter as
an appraiser.

S. 326. Probate court given jurisdiction to hear all questions arising
as to tax, duty of prosecuting attorney and attorney general, etc. The
court of probate, having either principal or auxiliary jurisdiction of the settlement
of the estate of the decedent, shall have jurisdiction to hear and determine all
questions in relation to said tax that may arise, affecting any devise, legacy or
inheritance under this article, subject to appeal as in other cases, and the prose-
cuting attorney of the proper county shall represent the interests of the state in
any such proceedings: Provided, that in any such proceedings carried on appeal
to either of the courts of appeal or the supreme court the attorney general shall
represent the interest of the state.

S. 327. State auditor to furnish books and forms for reports to probate
judge, entries, etc. The state auditor shall furnish to each probate judge a
book, which shall be a public record, and in which he shall enter the name of every
decedent upon whose estate an application to him has been made for the issue of
letters of administration or letters testamentary, the date and place of death of
such decedent, the estimated value of his real and personal property, the names,
places, residences and relationship to him of his heirs-at-law, the names and
places of residence of the legatees and devisees in any will of any such decedent,
the amount of each legacy and the estimated value of any real property devised
therein, and to whom devised. These entries shall be made from the data con-
tained in the papers filed on any such application, or in any proceeding relating
to the 'estate of decedent. The probate judge shall also enter in such book the
amount of the personal property of any decedent, as shown by the inventory
thereof when made and filed in his office, and the returns made by any appraiser
appointed by him under this article, and the value of annuities, life estates, terms
of years and other property of any such decedent or given by him in his will or
otherwise, as fixed by the probate judge, and the tax assessed thereon, and the
amount of any receipts for payment of any tax on the estate of such decedent
under this article filed with him. The state auditor shall also furnish to each pro-
bate judge forms for the reporcs to be made by such probate judge, which shall
correspond with the entries to be made in such book.

S. 328. Probate judge shall make reports to county collector and state
auditor, when. Each probate judge shall, on January, April, July and October
first of each year, make a report in duplicate, upon the forms furnished by the
state auditor, containing all the data and matters required to be entered in the
book aforesaid, one of which shall be immediately delivered to the county collec-
tor of revenue and the other transmitted to the state auditor. The recorder of
each county shall at the same times make reports in duplicates, containing a
statement of any deed or other conveyance filed or recorded in his office of any
property, which appears to have been made or intended to take effect in possession
or enjoyment after the death of the grantor or vendor, the name and place of
residence of such grantor or vendor, the name and place of residence of the
grantee or vendee, and a description of the property transferred, one of which dup-
licate shall be immediately delivered to the county collector of revenue and the
other transmitted to the state auditor.

1909, V. 1, a. 14.1 MISSOURI. 691

S. 329. Necessary proceedings to cite persons to appear before probate
court to show cause why tax should not be paid, duty of collector and
prosecuting attorney. If the collector of revenue of any county shall have
reason to believe that any tax is due and unpaid under this article, after the
refusal or neglect of the persons liable therefor to pay the same, he shall notify
the prosecuting attorney of the county, in writing, of such failure or neglect,
and such prosecuting attorney, if he have probable cause to believe that such tax
is due and unpaid, shall apply to the probate court for a citation, citing the
persons liable to pay such tax to appear before the court on the day specified,
not more than three months after the date of such citation, and show cause why
the tax should not be paid. The probate judge, upon such application, and
whenever it shall appear to him that any such tax accruing under this article has
not been paid, as required by law, shall issue such citation, and the service of such
citation, and the hearing and determination thereon and the enforcement of the
determination or decree made by the probate judge and the fees and costs in such
cases shall be the same as those now provided, or which may hereafter be provided,
in cases in the probate courts of this state, and the probate judge shall allow
as costs in the said case such fees to said prosecuting attorney as he may deem
reasonable. Whenever the probate judge shall certify that there was probable
cause for issuing a citation and taking the proceedings specified in this section,
the state auditor shall credit the collector of the county with all expenses incurred
for the service of citations and other lawful disbursements. In proceedings to
which any county collector is cited as a party under section 322 of this article,
the state auditor is authorized, in his discretion, to designate and retain counsel
to represent such county collector therein, and to direct such county collector
to pay the expenses thereby incurred out of the funds which may be in his hands
on account of this tax.

S. 330. Collector shall issue receipt under official seal to any person
upon payment of twenty-five cents, showing real estate upon which tax
is paid, ^tc. Any person shall, upon payment of the sum of twenty-five cents,
be entitled to a receipt from the county collector of any county, or at his option,
to a copy of a receipt that may have been given by such collector for the payment
of any tax under this article, under the official seal of said collector, which
receipt shall designate on what real property, if any, of which any decedent may
have died seized, such tax shall have been paid, by whom paid, and whether
in full of said tax, and said receipt may be recorded in the recorder's office in
which said property is situate, in a book to be kept by said recorder for such
purpose, which shall be labeled "inheritance tax."

S. 331. Collector entitled to certain per centum, in addition to other
fees. The collector of each county shall be allowed to retain, on all taxes paid
and accounted for by him in each year, under this article, in addition to his salary
or fees now allowed by law, five per centum on the first twenty thousand dollars
so paid and accounted for by him, and three per centum on all additional sums
so paid and accounted forl)y him: Provided that said collector shall, every three
months, pay one-half of all the sums so retained by him, during such period,
to the probate judge of the said county for the use of said probate judge and to
defray the clerical expense arising in the office of said probate judge in connection
with proceedings under this article.

692 STATUTES ANNOTATED. [Mont. St.

MONTANA.

In General.

Montana's inheritance tax was adopted in 1897. The exemptions
apply to the estate as a whole, not to the individual shares.

Montana is not taxing stock of Montana corporations owned by
non-residents, though the statute contains a provision holding the
corporation responsible for the tax if it transfers stock with actual
or constructive knowledge that it is subject to the tax. It is there-
fore rather surprising to find that Montana taxes stock of non-
residents in foreign corporations which own property in Montana.
It is not the practice to require an inventory of a non-resident's
estate.

The act contains a curious provision for including in the valuation
for the purpose of the tax the "increase" of property of the estate
up to the time of final distribution. This should have the effect
of hastening the settlement of estates as far as possible.

Constitutional Limitations.

Montana Constitution 1889, a. 12.

S. 1. The necessary revenue for the support and maintenance of the state
shall be provided by the legislative assembly, which shall levy a uniform rate of
assessment and taxation, and shall prescribe such regulations as shall secure a
just valuation for taxation of all property, except that specially provided for in
this article. The legislative assembly may also impose a license tax, both upon
persons and upon corporations doing business in the state.

Montana Constitution 1889, a. 12.

S. 11. Taxes shall be levied and collected by general laws and for public
purposes only. They shall be uniform upon the same class of subjects within the
territorial limits of the authority levying the tax.

List of Statutes. '

1897. Statutes of Montana, p. 83.

1905. " " " p. 94, c. 46.

1907. Revised Codes, Vol. 2, c. 13, ss. 7724 to 7751.

1897, p. 83.] MONTANA. 693

THE STATUTE OF 1897.
The Montana statute is modeled after the New York statute
of 1885. State v. District Court, 41 Mont. 357, 109 P. 438, 442.

Mont. St. 1897, p. 83. Approved March 4, 1897.

An Act to establish a tax on direct and collateral inheritances,

BEQUESTS AND DEVISES to provide for its collection and direct the disposition

of its proceeds.

S. 1. After the passage of this act, 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 his death, which property, or any part thereof, shall be
within this state, or any interest therein or income therefrom, which shall be
transferred by deed, grant, sale or gift made in contemplation of the death of the
grantor or bargainor, or intended to take effect in possession or enjoyment after
such death to any person or persons, or to any body politic corporate, in trust or
otherwise, or any property, which shall be in this state or the proceeds of all
property outside of this state, which may come into this state, and which may be
or should be distributed in this state to any such heirs, devisees or legatees, by
reason whereof any person or corporation shall become beneficially entitled
in possession or expectancy, to any such property, or to the income thereof, other
than to or for the use of his or her father, mother, husband, wife, lawful issue,
brother, sister, the wife or widow of the son, or the husband of a daughter, or
any child or children adopted as such in conformity with the laws of the state
of Montana, and any lineal descendant of such decedent born in lawful wedlock,
shall be and is subject to a tax of five dollars on every hundred dollars of the market
value of such property, and at a proportionate rate for any less amount, to be paid
to the treasurer of the proper county hereinafter defined for the use of said
county and state in the proportions hereafter stated; and all administrators,
executors and trustees shall be liable for any and all such taxes until the same have
been paid as hereinafter directed. When the beneficial interests to any personal
property or income therefrom shall pass to or for the use of any father, mother,
husband, wife, child, brother, sister, wife or widow of the son, or the husband
of a daughter, or any child or children adopted as such in conformity with the
laws of the state of Montana, or to any person to whom the deceased, for not less
than ten years prior to death, stood in mutually acknowledged relation of a parent,
or to any lineal descendant born in lawful wedlock; in every such case the rate
of tax shall be one dollar on every hundred dollars of the clear market value of
such property, and at and after the same rate for every less amount, provided,
that an estate which may be valued at a less sum than seventy-five hundred
dollars shall not be subject to any such tax or duty. In all other cases the rate
shall be five dollars on each and every hundred dollars of the clear market value
of all property and at the same rate for any amount, provided, that an estate
which may be valued at a less sum than five hundred dollars shall not be subject
to any such duties or tax, provided, further, that said tax shall be levied and
collected upon the increase of all property, arising between the date of death and
the date of the decree of distribution, and upon all estates which have been
probated before, and shall be distributed after the passage and taking effect of
this act.

694 STATUTES ANNOTATED. [Mont. St.

Nature of Tax.

This act is not a property tax but is a tax on the right of succes-
sion, although the statute expressly says that "all property" shall
be subject to a tax. The court relies upon State v. Hamlin, 86
Me. 495, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632, and on
State V. Ferris, 53 Ohio St. 314, 41 N. E. 579, where the statutes
also on their face were upon the "property." Gelsthorpe v. Furnell,
20 Mont. 299, 51 P. 267, 268, 39 L. R. A. 170.

Mont. Const., a. 12, s. 3, provides that mines and mining claims
shall be taxed at the price paid the United States therefor. But
the court holds that the inheritance tax is not a tax upon the prop-
erty itself, but an impost or excise, and is therefore not obnoxious
to this provision of the constitution even where the estate consists
in large part of mines or mining claims. In re Tuohy, 35 Mont.
431, 90 P. 170, 172.

Right to Receive Property is Taxed.

The most exact rule is that which regards the inheritance tax
as upon the right to receive property rather than the right to dispose
of it. The court relies upon State v. Ferris, 53 Ohio St. 314, 41
N. E. 579, and State v. Alston, 94 Tenn. 674, 30 S. W. 750. "In
view of the authorities cited, it must be conceded that the general
assembly has the power to pass an inheritance tax for purposes
of general revenue, unless prohibited by the constitution of our
state. Properly understood, it is not the right to transmit, but
the right and privilege to receive, that is taxed. The right to
dispose of property during the lifetime of the owner cannot be
separated from the property itself, and therefore to tax the right
of disposal by contract in the lifetime of the owner, even though
it take effect at his death, is to tax the property itself. But the
right to dispose of the property by will or descent, taking effect
after the death of the owner, is not so closely connected with the
right of property, and it is not clear that such right may not
be taxed. But, when the right to receive the property is con-
sidered, it is clear that the right is distinct and separate from the
property itself, and the state may tax this right to receive property;
and this is so whether the property is disposed of by the owner
during his lifetime, or at his death. This right to receive property
is under the control of the legislature, and it has the power to
regulate and lay such burdens thereon as it may see fit, within the
provisions of the constitution. To regulate by taxation or otherwise

1897, p. 83.1 MONTANA. 695

the privilege or right to receive property is not in conflict with the
first section of the bill of rights, which recognizes the inalienable
right of acquiring, possessing and protecting property. Were it
otherwise, all our laws as to wills, descent, distribution and con-
veyances would be unconstitutional." Per Burkett, ].,'m State v.
Ferris, 53 Ohio St. 314, 41 N. E. 579. Gelsthorpe v. Furnell, 20 Mont.
299, 51 P. 267, 39 L. R. A. 170.

Measure by Valuation of Property Upheld.

"In nearly all inheritance tax laws the statutes provide for the
appraising of property to be inherited, but the object of such valua-
tion is not to tax the property itself. It is to arrive at a measure
of price by which the privilege of inheriting can be valued." Per
Hunt, J., inGelsthorpew Furnell, 20 Mont. 299, 51 P. 267, 39 L. R. A.
170.

Exemptions Upheld.

This statute exempts successions valued at a less sum than
seven thousand five hundred dollars and the court holds that this
exemption does not make the statute void as wanting in uniformity.
The legislature is not prevented by the constitution from the
exercise of discretion as to what classes of rights or privileges it
may enumerate as subject to taxation, provided the tax imposed
is uniform in its application to all rights and privileges within the
class defined. Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267,
39 L. R. A. 170.

Real Estate.

The statute provides that the rate except to direct descendants
and the husband and wife of the decedent shall be five per cent and
that when the beneficial interest of any personal property passes
to a direct descendant the rate shall be one per cent. Real estate
passing under a will to the widow of testator is not subject to tax.
Hinds V. Wilcox, 22 Mont. 4, 55 P. 355.

**Tax shall be Levied and Collected upon the Increase of all
Property.'

The argument was made that the words "increase of all property"
included only those estates the property of which is of such a
character that it increases in kind, as for instance when it consists
in whole or in part of live stock, such as sheep, cattle, etc. But the

696 STATUTES ANNOTATED. [Mont. Codes.

court holds that following the common acceptance of the word
"increase" an increase means increase in value as well as increase
in kind. The court upholds the method pursued by the lower
court which appointed an appraiser to ascertain the value of the
estate for the purpose of enabling it to fix the amount of inheritance
tax to be paid by the executor prior to the final distribution among
its devisees. In re Tuhy, 35 Mont. 674, 90 P. 170.

How to Attack Assessment.

The Montana Revised Code, section 7724, is attacked by cer-
tiorari and the court does not take up the question whether cer-
tiorari or prohibition is the proper remedy to review an order of
the district court laying an inheritance tax. State v. District Court,
41 Mont. 357, 109 P. 438, 442.

S. 2. When any grant, gift, legacy or succession upon which a tax is imposed
by section 1, of this act, shall be an estate, income or interest for a term of years,
or for life, or determinable upon any future or contingent event, or shall be a re-
mainder, or reversion or other expectancy, real or personal, the entire property
or fund by which such estate, income or interest is supported, or which is a part,
shall be appraised immediately after death of the deceased, and the market value
thereof determined, in the manner provided in section 15 of this act, and the tax
prescfibed by this act shall be immediately due and payable to the treasurer
of the proper county, and, together with the interest thereon, shall be and remain
a lien on said property until the same is paid; provided, that the person or
persons, or body politic or corporate, beneficially interested in the property
chargeable with said tax, may elect not to pay the same until they shall come
into the actual possession or enjoyment of such property, and in that case, such
person or persons or body politic or corporate shall execute a bond to the state
of Montana in a penalty of twiec the amount of tax, including interest at ten per
cent per annum, arising upon the personal estate, with such sureties as the clerk
of the district court of the proper county may approve, conditioned for the
payment of said tax, and interest thereon, at such time or period as they or their
representatives may come into the actual possession or enjoyment of such prop-
erty, which bond shall be filed in the office of the clerk of the district court of the
proper county; provided further, that such person or corporation shall make a full
and verified return of such property to said court, and file the same in the office of
the clerk of the district court for said county and a duplicate thereof in the office
of the clerk and recorder of said county within one year from the death of the
deceased, and within that period enter into such security and bond, and renew
the same every three years.

S 28. This act shall apply to all estates remaining undistributed at the time
this law shall take effect, and the tax shall be determined and collected as in other
cases, and it shall take effect and be in force from and after its passage and
approval by the governor.

1907, s. 7724.] MONTANA. 697

Retroactive Feature Upheld.

This act applies to estates which have been probated before its
passage and are to be distributed after it takes effect. Testamentary
dispositions under Montana statutes are presumed to vest at the
testator's death and the rights of heirs and legatees to take and
receive their shares are vested immediately upon the death of the
testator, as the right to a distributive share in an estate vests
directly upon the death of the intestate. This right is valuable
and may be sold or mortgaged and no law can be so changed as to
deprive the owner of it and bestow it upon another without his
consent; but on the other hand a vested right is held subject to
the laws for the enforcement of public duties. Therefore, a right
to take a legacy may be subject to the laws for the assessment and
collection of a tax as a premium upon the right and privilege to
receive the inheritance, as much as it is subject to laws which
authorize the taxation of the very property bequeathed. Gelsthorpe
V. Furnell, 20 Mont. 299, 51 P. 267, 270, 39 L. R. A. 170. The
court relies upon In re McPherson, 104 N. Y. 306, 10 N. E. 685.

Sections 3 to 26 provide for the assessment and collection of the tax.

Mont. St. 1905, c. 46, amends Mont. St. 1897, p. 83, s. 20, by
striking out the provision making it a misdemeanor for any county
attorney or his partner or any one connected with him by blood
or marriage to act as attorney for any person liable under the act.

THE PRESENT ACT.

Montana Revised Codes of 1907.

S. 7724. Inheritance tax, Property subject to. After the passage of this
act, 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 his
death, which property or any part thereof, shall be within this state, or any
interest therein or income therefrom, which shall be transferred by deed, grant,
sale or gift made in contemplation of the death of the grantor or bargainor, or
intended to take effect in possession or enjoyment after such death to any person
or persons, or to any body politic corporate, in trust or otherwise, or any property,
which shall be in this state or the proceeds of all property outside of this state,
which may come into this state, and which may be or should be distributed in
this state to any such heirs, devisees or legatees, by reason whereof any person or
corporation shall become beneficially entitled in possession or expectancy, to any
such property, or to the income thereof, other than to or for the use of his or her
lawful issue, brother, sister, the wife or widow of the son, or the husband of a
daughter, or any child or children adopted as such in conformity with the laws

698 STATUTES ANNOTATED. [Mont. Codes.

of the state of Montana, and any lineal descendant of such decedent born in
lawful wedlock, shall be and is subject to a tax of five dollars on every hundred
dollars of the market value of such property, and at a proportionate rate for any
less amount, to be paid to the treasurer of the proper county hereinafter defined
for the use of said county and state in the proportions hereafter stated; and all
administrators, executors, and trustees shall be liable for any and all such taxes
until the same have been paid as hereinafter directed. When the beneficial in-
terests to any personal property or income therefrom shall pass to or for the use of
any father, mother, husband, wife, child, brother, sister, wife or widow of the
son, or the husband of a daughter, or any child or children adopted as such in
conformity with the laws of the state of Montana, or to any person to whom the
deceased, for not less than ten years prior to death, stood in mutually acknowl-
edged relation of a parent, or to any lineal descendant born in lawful wedlock;
in every such case the rate of tax shall be one dollar on every hundred dollars of
the clear market value of such property, and at and after the same rate for every
less amount, provided, that an estate which may be valued at a less sum than
seventy-five hundred dollars shall not be subject to any such tax or duty. In all
other cases the rate shall be five dollars on each and every hundred dollars of the
clear market value of all property and at the same rate for any amount, provided,
that an estate which may be valued at a less sum than five hundred dollars shall
not be subject to any such duties or tax, provided, further, that said tax shall be
levied and collected upon the increase of all property arising between the date
of death and the date of the decree of distribution, and upon all estates which
have been probated before, and shall be distributed after the passage and taking
effect of this act.

[See notes to the Act of 1897, ante, p. 681.]

[It seems to have been intended to exempt from taxation real estate passing
to direct heirs. The language of the statute is very much confused, and as it
reads, real estate passing to lawful issue, brother, sister, wife or widow of son,
husband of daughter, adopted child and lineal descendant of adopted child is
not taxed; but real estate passing to father, mother, husband or wife is taxed
b%.—Ed\

Power over Estate of Non-Resident.

The testator died domiciled in Ireland owning real estate in
Montana. It was claimed by the petitioners that the inheritance
tax is imposed not upon the property but upon the right or privilege
to take, and that the court must therefore have jurisdiction not
only of the distribution but also of the distributees, in order to
levy the tax; and that since neither of these essentials exists there
can be no lawful levy of the tax in this case. But the court says
that the delivery provided by section 7675 serves all the purposes
of distribution and the power to direct the delivery is tanta-
mount to the power to order distribution directly to the persons
entitled to take. State v. District Court, 41 Mont. 357, 109
P. 438, 441.

1907, s. 7725.1 MONTANA.

Rates. — Exemptions.

Mont. Revised Code, section 7724, provided that an estate which
may be valued at a less sum than five hundred dollars shall not be
subject to any such duty or tax. Where an estate is of value in
excess of five hundred dollars and all the legatees must be paid in
money, none of the exemptions apply; hence the whole of the estate
is subject to the tax. It may be that when the time comes to fix
the amount to be paid, a part of it will have to be fixed at one rate
and part of it at another, according as the relationship of the testator
to the legatees is made to appear. Such a proportion of the amount
as will go to a favored class, if any of the legatees fall within that
class, will be subject to a tax at the lower rate and the rest at the
higher rate, but these proportions will be easily ascertainable when
the facts appear. Payment of the tax is in no wise dependent upon
the distribution of the estate or upon the amount of the specific
legacies or distributive shares. It is due and payable upon the value
of the estate at the death of the decedent. Therefore, while under
the requirements contained in the Mont. Revised Code, section
7675, the power to order distribution according to the terms of the
will may be assumed to have been taken from the state court and
it must, when an estate is ready for distribution, order its delivery
to the executor or administrator having charge of the administration,
this does not relieve the estate from the burden of the tax, nor
impair the power of the court to collect it. State v. District Courts
41 Mont. 357, 109 P. 438, 440.

S. 7725. Appraisement of contingent or determinable estates. When
any grant, gift, legacy or succession upon which a tax is imposed by section
7724 (1) of this act, shall be an estate, income or interest for a term of years, or
for life, or determinable upon any future or contingent event, or shall be a re-
mainder, or reversion or other expectancy, real or personal, the entire property
or fund by which such estate, income or interest is supported, or which is-a part,
shall be appraised immediately after death of the deceased, and the market value
thereof determined, in the manner provided in section 7738 (15) of this act,
and the tax prescribed by this act shall be immediately due and payable to the
treasurer of the proper county, and, together with the interest thereon, shall
be and remain a lien on said property until the same is paid; provided, that the
person or persons, or body politic or corporate, beneficially interested in the
property chargeable, with said tax, may elect not to pay the same until they shall
come into the actual possession or enjoyment of such property, and in that case,
such person or persons or body politic or corporate shall execute a bond to the
state of Montana in a penalty of twice the amount of tax, including interest
at ten per cent, per annum, arising upon the personal estate, with such 'sureties as
the clerk of the district court of the proper county may approve, conditioned for
the payment of said tax, and interest thereon, at such time or period as they or

700 STATUTES ANNOTATED. [Mont. Codes.

their representatives may come into the actual possession or enjoyment of such
property, which bond shall be filed in the office of the clerk of the district court
of the proper county; provided further, that such person or corporation shall
make a full and verified return of such property to said court, and file the same in
the office of the clerk of the district court for said county and a duplicate thereof
in the office of the clerk and recorder of said county within one year from the death
of the deceased, and within that period enter into such security and bond, and
renew the same every three years

7726. Devise or bequest to executor in lieu of fees. Whenever a decedent
appoints or names one or more executors or trustees, and makes a bequest or
devise of property to them in view of commissions or allowances, which otherwise
would be liable to said tax or appoints them his residuary legatees, and said be-
quests, devises or residuary legacies exceed what would be a reasonable com-
pensation for their services, such excess shall be liable to said tax; and the district
court in which the probate proceedings are pending shall fix the compensation.

7727. When tax due. — Interest. All taxes imposed by this act, unless
otherwise herein provided for, shall be due and payable at the death of the decedent
and if the same are paid within ten months, no interest shall be charged and
collected thereon, but if not so paid, interest at the rate of ten per centum per
annum shall be charged and collected from the time said tax accrues; provided,
that if said tax is paid within six months from the accruing thereof a discount of
three per centum shall be allowed and deducted from said tax. And in all cases
where the executors, administrators or trustees do not pay such tax within
ten months from the death of the decedent, they shall be required to give bond
in the fdrm and to the effect prescribed in section 772.5 (2) of this ac t for the
payment of said tax with interest.

7728. Penalty for non-payment. The penalty of ten per centum imposed
by section 7727 (4) hereof for non-payment of said tax thereof, shall not be
charged in where, by reason of claims made upon the estate, necessary litigation
or other unavoidable causes of delay, the estate of any decedent or a part thereof
cannot be settled at the end of eighteen months from the death of the decedent;
and in such cases only seven per centum shall be charged upon said tax from
the expiration of said eighteen months until the cause of delay is removed.

7729. Duty of executor to deduct tax from legacy. Any administrator,
executor or trustee having in charge or trust, any legacy, or property for dis-
tribution subject to said tax, shall deduct the tax therefrom, or if the legacy or
property be not money, he shall collect the tax thereon upon the market value
thereof, from the legatee or person entitled to such property, and he shall not
deliver, or be compelled to deliver, any specific legacy or property subject to
tax to any person until he shall have collected the tax thereon, and whenever
any such legacy shall be charged. upon or payable out of the real estate, the execu-
tor, administrator, or trustee shall collect said tax therefrom, and the same shall
remain a charge on such real estate until paid; if, however, such legacy be given
in money, to any person for a limited period, the executor, administrator or trustee
shall retain the tax on the whole amount. But if it be not in money, he shall make
application to the district court of the proper county to make an apportionment,

1907, ss. 7730-33.1 MONTANA 701

if the case require it, of the same to be paid into his hands by such legatee or
legatees and for such other order relative thereto as the case may require.

Appraisal.

Under Montana Code, sections 7725, 7727, there is an implication
that the measure for computing the amount of a tax is the value of
the estate as it is made to appear by appraisement of it in the
ordinary way. These sections are not exclusive but section 7729
is an additional provision intended to apply also in any case and
at any time, when in the opinion of the court the circumstances
require an appraisement to be made ; for appraisement may be had
"as often as and whenever occasion may require." Section 7729
was intended to apply where the payment was delayed, as in case
of future uncertain interests, and it is impossible to appraise at
once. State v. District Court, 41 Mont. 357, 109 P. 438.

7730. Power of executor to sell property to pay tax. All executors,
administrators and trustees shall have full power to sell so much of the property
of the decedent as shall enable them to pay said tax in the same manner as they
may be enabled by law to do for the payment of debts of the estate, and the amount
of said tax shall be paid as hereinafter directed.

7731. Payment to county treasurer and receipts. Every sum of
money retained by an executor, administrator, or trustee, or paid into his hands,
for any tax on property shall be paid by him within ten days thereafter to the
treasurer of the county in which the probate proceedings are pending, and the
said treasurer shall give, and every executor, administrator or trustee shall
take duplicate receipt for such payment, one of which said receipts said executor,
administrator, or trustee shall immediately send to the treasurer of the state whose
duty it shall -be to charge the County Treasurer so receiving the taxwith the amount
thereof due the state and said state treasurer shall seal said receipt with the seal
of his office, if he have one, and countersign the same, and return it to the executor,
administrator, or trustee, whereupon it shall be a proper voucher in the settle-
ment of his accounts; and an executor, administrator, or trustee shall not be
entitled to credits in his accounts, nor be discharged from liability for such tax,
nor shall said estate be distributed unless he shall produce a receipt so sealed
and countersigned by the state treasurer or a copy thereof certified by him.

7732. Liability of executor's bond. The bond of an executor or adminis-
trator shall be liable for all moneys he may receive under this article of taxes, or
for proceeds of sale of real estate received by him thereunder, or pursuant thereto.

7733. Proceedings upon failure of executor to pay tax. If any executor
or administrator or trustee shall fail to perform the duties imposed upon him
by this article the district court upon petition of the county treasurer, or any per-
son interested in said estate may revoke his administration and his bond shall be
liable, and the same proceedings shall be had against him as if his administration
had been revoked for any other cause.

702 STATUTES ANNOTATED. Mont. Codes.

7734. Administrators de bonis non. The power and duty of an administra-
tor de bonis non, or with the will annexed, or the public administrator shall be
the same under this article as those of an executor or administrator, and he shall
be subject to the same duties and liabilities

7735. Reduction of tax upon refund to pay debts. Whenever any debts
shall be proven against the estate of the deceased, after the payment of legacies
or distribution of property from which the said tax has been deducted or upon
which it has been paid, and a refund is made by the legatee, devisee, heir, or next
of kin, a proportion of the tax so deducted or paid shall be repaid to him by the
executor, administrator or trustee if the said tax has not been paid to the county
treasurer or state treasurer, or by them, in the proper proportionate shares, if
it has been so paid.

7736. Refund of erroneous collection. When any amount of said tax shall
have been paid erroneously to the county and state treasurer, or to either of
them, it shall be lawful for them, on satisfactory proof rendered to the clerk of
the district court, in the case of the county treasurer, and to the state auditor
in the case of the state treasurer, of such erroneous payment, to refund and pay
to the executor, administrator, person or persons who have paid any such tax in
error, the county's and state's proportionate amount of such tax so paid provided
that all such applications for repayment of such tax shall be made within two years
from the date of such payment.

7737. Foreign executors. Tax on stocks or loans. Whenever any foreign
executor or administrator shall assign or transfer any stocks or loans in this
state, standing in the name of the decedent, or held in trust for a decedent, which
shall be liable to the said tax, such tax shall be paid to the treasurer of the proper
county on the transfer thereof; otherwise, the corporation permitting such trans-
fer shall become liable to pay such tax; provided that such corporation had
actual or constructive knowledge before such transfer that said stocks or loans
are liable to said tax.

7738. Appraisement of estate. When the value of an inheritance, devise,
bequest, or other interest subject to the payment of said tax, is uncertain, the
district court in which the probate proceedings are pending, or the judge thereof
on his own motion, or on the application of any interested party shall appoint
some competent person as appraiser, as often as, and whenever occasion may re-
quire, whose duty it shall be forthwith to give such notice, by registered mail, to
all persons known to have or claim any interest in such property, and to such persons
as the court may direct, of the time and place at which he will appraise such
property, and at such time and place to appraise the same, and to make the report
thereof, in writing, to said court, together with such other facts in relation thereto,
as said court may by order require, to be filed with the clerk of such court; and
from this report the said court, shall by order, forthwith assess and fix the market
value of all inheritances, devises, bequests or other interests, and the tax to which
the same is liable, and shall immediately cause notice thereof to be given, by regis-
tered mail, to all persons known to be interested therein; and the value of every
future or contingent, or limited estate, income, or interest, shall for the purpose
of this act, be determined by the rule, method and standards of mortality, and of

1907. s. 7739.] MONTANA. 703

values that are set forth in the actuaries' combined experience tables of mortality
for ascertaining the values of policies of life insurance and annuities, and for
the determination of the liabilities of life insurance companies, save that the rate
of interest be assessed in computing the present value of all future interest and
contingencies shall be at seven per cent, per annum; and the value of such future,
or contingent, or limited estate, income, or interest, shall be determined in the
usual manner upon the facts contained in such report, and shall be certified to
the court, which said certificate shall be made by some one known to the court
to be familiar with the method of procedure by companies, and his certificate,
verified by oath, shall be prima facie evidence that the method of computation
adopted therein is correct. The said appraiser shall be paid by the county treas-
urer out of any funds that he may have in his hands on account of said tax, and
the certificate of the court, at the rate of five dollars per day for every day actually
and necessarily employed in said appraisement, together with the actual and
necessary traveling expenses, a sworn statement of which must be filed with the
clerk of the district court in which the probate proceedings are pending. The per-
son designated by the court or judge thereof, to make the computations, in this
section required, shall receive such compensation as the court or judge thereof
shall deem reasonable and just.

Notice of Appraisal.

This section gives sufficient notice to satisfy the constitution of
the appraisal and assessment of the tax. The clause provides for
notice "by registered mail" and the provision lays upon the court
the duty to fix the time for the appraisement within such reasonable
limits as will give every person interested the opportunity to be
present and have a hearing if he so desires. This may be difficult,
as where, in the case at bar, the testator died in Ireland, where he
resided, but the task is no more difficult for the court in Montana
than for the court in Ireland.

The statute further provides that after the tax has been assessed
the court shall immediately give notice by registered mail, and
this is an additional notice which requires knowledge by the court
of the names and whereabouts of all interested persons, and this
knowledge it is presumed the court will get. The Montana statute
(Revised Code, section 7724, et seq.) is modeled after the New York
statute of 1885 and the provisions contained in it for the giving of
notice are substantially identical with those contained in the
Montana statute. They were examined by the New York court
in the Matter of McPherson, 104 N. Y. 306, 10 N. E. 685; State v.
District Court, 41 Mont. 357, 109 P. 438, 442.

7739. Misconduct of appraiser. Any appraiser, appointed by virtue of
this act, who shall take any fee or reward from an executor, administrator, trustee,
legatee, next of kin, or heir of any decedent or from any other person liable to
pay said tax, or his or their attorney, or any other person, or any portion thereof,

704 STATUTES ANNOTATED. [Mont. Codes.

shall be guilty of a misdemeanor, and upon conviction thereof, shall be fined not
less than one hundred dollars nor more than five hundred dollars, or imprisonment
inthecounty jail ninety days,or both such fine and imprisonment, and in addition
thereto, the court shall dismiss him from such service. The district courts shall
have concurrent jurisdiction with the justices of the peace courts for all violations
of the law mentioned in this section.

7740. Jurisdiction of courts. The district court of the county in which is
situate the real property of the decedent, who was not a resident of this state,
or in the county in which the decedent was a resident at the time of his death,
shall have jurisdiction to hear and determine all questions in relation to the tax
arising under the provisions of this act, and the court first acquiring jurisdiction
hereunder shall retain the same to the exclusion of every other.

7741. Citation to compel payment. If it shall appear to the district court,
or judge thereof, that any tax accruing under this act, has not been paid according
to law, the court or judge shall issue a citation, citing the person known to own
any interest or part of the property liable to the tax to appear before the court
on a day certain, not more than ten weeks from the date of said citation, and show
cause why said tax should not be paid. The service of such citation and the
time, manner, and proof thereof, and the hearing and determination thereof,
and the enforcement of the determination or decree shall conform to the pro-
visions of chapter 12, of title 12 of the Code of Civil Procedure; and the
clerk of the court, shall upon the request of the county attorney or county
treasurer furnish without fee, one or more transcripts of such decree, and the
same shall be docketed and filed in the office of the county clerk and recorder
of any cpunty in the state, and in the ofiice of the clerk of the district court of
any county in the state, in the same manner and with the same effect as provided
by section 6807 (1197) of the said Code of Civil Procedure for filing transcript of
judgment, or of an original docket.

7742. Proceedings upon failure to administer estates. In all cases
where any estate, real, personal or mixed, shall be subject to the direct or collat-
eral inheritance tax imposed by this act, and no administration is taken on the
estate of the person who died seized and possessed thereof, within ninety days
after the death of said person, the clerk of the district court of the county in which
administration should be granted, or taken out, shall issue a citation for the parties
entitled to administration, to show cause wherefore they do not administer;
provided, however, that when any real estate shall be subject to said tax and no
administration has been taken out on the estate of the person who died seized
thereof, the district court of the county where said real estate shall be situate,
may on the application of any one interested in said real estate, or of the county or
state treasurer appoint an appraiser to value the same, as provided in this act,
and the amount of the tax which may be found due on said property shall be paid
to the county treasurer and disposed of the same as other taxes provided for in
this act.

7743. Collection by suit. Whenever the treasurer of any county shall have
reason to believe that any tax is due and unpaid under this act, after the refusal
or neglect of the persons interested in the property liable to said tax, to pay the

1907, ss. 7744-48.] MONTANA. 705

same, he shall notify the county attorney of the proper county, in writing, of such
failure to pay such tax, and the county attorney so notified, if there is a probable
cause to believe a tax is due and unpaid, shall prosecute the proceedings in the
district court of the proper county, as provided in sections 7741 (18) and 7742
(19) of this act, for the enforcement and collection of such tax.

7744. Clerk's quarterly statement. The clerk of the district court shall,
every three months, make a statement in writing, to the county treasurer, of the
property from which, or the party from which, he has reason to believe, or knows,
a tax under this act, is due and unpaid.

7745. Costs of collection. Whenever the district court of any county or the
judge thereof shall certify that there is probable cause for issuing a citation, and
taking the proceedings specified in section 7741 (18) of this act, to the state
auditor, the state auditor shall allow said claim, and shall draw his warrant on the
state treasurer in favor of the county treasurer of the county wherein said pro-
ceedings were taken or had for all expenses incurred for services of said citation,
and his other lawful expenses that have not otherwise been paid ; provided that if
it shall appear to the district court that the party to whom the citation is issued
was wilfully endeavoring to evade the terms and provisions of this act, and the
payment of the tax hereunder, the costs of said proceeding shall be taxed to him
and execution shall issue therefor in the same manner as on judgments in the
district court.

7746. Record of clerk of court. The clerk of the district court of each
county shall keep a book in which he shall enter the value of inheritances, devises,
bequests and other interests subject to the payment of said tax, and the tax,
assessed thereon, and the amounts of any receipts for the payments thereon filed
with him, which book shall be kept by him as public records.

7747. County treasurer. Annual report. The treasurer of each county
shall collect all taxes that may be due and payable under this act, and he shall
pay to the state sixty per cent thereof, and the state treasurer shall give him
a receipt therefor. The county treasurer shall make a report under oath to the
state auditor between the first and fifteenth days of December of each year of
said tax so paid, stating for what estate paid, and in such form aiid containing
such particulars as the auditor may prescribe ; and for all such taxes collected by
him and not paid to the state treasurer by the first day of June and January of
each year he shall be liable upon his official bond.

7748. Record of receipts. Any person or body politic or corporate, shall,
upon the payment of the sum of fifty cents, be entitled to a receipt from the
county treasurer of any county, or a copy of the receipt at his option, that may
have been given by said treasurer for the payment of any tax under this act,
which said receipt shall be countersigned by the clerk of the district court and the
seal of the district court attached thereto, and shall designate on what real
property, if any, of which decedent may have died seized, said tax has been
paid, and by whom paid, and whether or not it is in full of said tax, and the
description of the property upon which said tax is paid; and the said receipt may
be recorded in the office of the county clerk and recorder of the county in which

706 STATUTES ANNOTATED. [Mont. Codes.

said property is situate, in a book to be kept by said clerk for such purpose, which
shall be properly indexed and labeled "District and Collateral Tax."

7749. Distribution of tax. Sixty per cent of the taxes levied and col-
lected under this act, shall be paid into the treasurer of this state for the use of
the general fund, and forty per cent thereof into the treasurer of the county for
the use of the general school fund.

7750. Inconsistent acts repealed. All acts and parts of acts inconsistent
with the provisions of this act, are hereby repealed, as far as they affect the pro-
visions hereof.

7751. Estates to which applicable. This act shall apply to all estates re-
maining undistributed at the time this law shall take effect, and the tax shall be
determined and collected as in other cases, and it shall take effect and be in force
from and after its passage, and approval by the governor.

Neb. St.] NEBRASKA. 707

NEBRASKA.

In General.

Nebraska enacted its inheritance tax in 1901. The exemptions
apply to each individual share rather than to the estate as a whole,
though the language creating the five hundred dollar exemption
is ambiguous.

It is a fair construction of the statute that stock in a Nebraska
corporation owned by a non-resident is subject to the tax, especially
as there is a provision holding the corporation responsible if it
transfers stock for a foreign executor before the tax is paid, if it has
knowledge that the stock is subject to tax. The tax authorities
are not collecting a tax on such stock at present if the certificate
is kept outside the state.

The proceeds of the inheritance tax are to be spent for the im-
provement of county roads.

Constitutional Limitations.

Nebraska Constitution 1875, a. 9.

S. 1. The legislature shall provide such revenue as may be needful, by levying
a tax by valuation, so that every person and corporation shall pay a tax in propor-
tion to the value of his, her, or its property and franchises, the value to be ascer-
tained in such manner as the legislature shall direct; and it shall have power to
tax pedlers, auctioneers, brokers, hawkers, commission-merchants, showmen,
jugglers, inn-keepers, liquor-dealers, toll-bridges, ferries, insurance, telegraph
and express interests or business, venders of patents, in such manner as it shall
direct by general law, uniform as to the class upon which it operates.

List of Statutes.

1901, c. 54, p. 414.

1905, c. 117, p. 523.

1907, c. 103, p. 356.

1907, c. 104.

1911, c. 107, p. 386.

Compiled Statutes 1905, ss. 5176 to 5196,

708 STATUTES ANNOTATED. [Neb. St.

THE STATUTE OF 1901.

Nebraska St. 1901, c. 54, p. 414. Approved April 1, 1901.

S. 1. All property, real, personal and mixed 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 decedent was not a resident of this
state at the time of his death, which property or any part thereof shall be within
this state, or any interest therein or income therefrom, which shall be transferred
by deed, grant, sale or gift made in contemplation of the death of the grantor,
or bargainor or intended to take effect, in possession or enjoyment after such
death, to any person or persons or to any body politic or corporate, in trust or
otherwise, or by reason thereof any person or body corporate shall become bene-
ficially entitled in possession or expectation to any property or income thereof,
shall be and is subject to a tax, at the rate hereinafter specified to be paid to the
treasurer of the proper county for the use of the state, and all heirs, legatees and
devisees, administrators, executors and trustees shall be liable for any and all
such taxes until the same shall have been paid as hereinafter directed. When the
beneficial interests to any property or income therefrom shall pass to or for the
use of any father, mother, husband, wife, child, brother, sister, wife or widow of
the son, or husband of the daughter, or any child or children adopted as such in
conformity with the laws of the state of Nebraska, or to any person to whom the
deceased for not less than ten years prior to death stood in the acknowledged re-
lation of a parent, or to any lineal descendant born in lawful wedlock, in every such
case the rate of tax shall be one dollar on every one hundred dollars of the clear
market value of such property received by each person, and at the same rate for
every l^ss amount; provided, that any estate which may be valued at a less sum
than ten thousand dollars shall not be subject to any such duty or the taxes, and
the taxes to be levied in the above case only upon the excess of ten thousand dol-
lars received by each person; when the beneficial interests to any property or
income therefrom shall pass to or for the use of any uncle, aunt, niece, nephew
or other lineal descendant of the same, in every such case the rate of such tax shall
be two dollars on every one hundred dollars of the clear market value of such prop-
erty received by each person on the excess of two thousand dollars so received by
each person; In all other cases the rate shall be as follows: on each and every
hundred dollars of the clear market value of all property and at the same rate
for any less amount, two dollars; on all estates ot ten thousand dollars and less,
three dollars; on all estates of over ten thousand dollars not exceeding twenty
thousand dollars, four dollars; on all estates of over twenty thousand dollars
and not exceeding fifty thousand dollars, five dollars; and on all estates over fifty
thousand dollars, six dollars; provided that an estate in the above case which
may be valued at a sum less than five hundred dollars shall not be subject to any
duty or tax.

S. 2 provides for taxation of. remainder interests.

S. 3 provides that taxes imposed shall be due and payable at the death of the
decedent.

S. 4 covers the assessment and collection of the tax.

1905, c. 117.] NEBRASKA. 709

THE AMENDMENTS OF 1905.

Neb. St. 1905, c. 117, s. 1. Approved March 8, 1905.

S. 1. Sections amended. That sections 10706, 10711, 10713, 10715 and
10724 respectively of Cobbey's Annotated Statutes for 1903 be amended to read
as follows: —

S. 10706. Inheritance tax. — Rate. All property, real, personal and mixed
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 decedent
was not a resident of this state at the time of his death, which property or any part
thereof shall be within this state, or any interest therein or income therefrom
which shall be transferred by deed, grant, sale or gift made in contemplation of
the death of the grantor or bargainor or intended to take effect, in possession
or enjoyment after such death, to any person or persons or to any body politic
or corporate, in trust or otherwise, or by reason thereof any person or body
corporate shall become beneficially entitled in possession or expectation to
any property or income thereof, shall be and is subject to a tax at the rate here-
after specified to be paid to the treasurer of the proper county for the use of a
permanent road fund as hereinafter provided, and all heirs, legatees, devisees
administrators, executors and trustees shall be liable for any and all such taxes
until the same shall have been paid as hereafter directed. When the beneficial
interest to any property or income therefrom shall pass to or for the use of any
father, mother, husband, wife, child, brother, sister, wife or widow of the son,
or husband of the daughter, or any child or children adopted as such and conforma-
tive with the laws of the state of Nebraska, or to any person to whom the deceased
for not less than ten years prior to death stood in the acknowledged relation of a
parent, or to any lineal descendant born in lawful wedlock, in every such case the
rate of tax shall be one dollar on every one hundred dollars of the clear market
value of such property received by each person, and at the same rate for less
amount; provided, that any estate which may be valued at a less sum than ten
thousand dollars shall not be subject to any such duty or the taxes, and the taxes
to be levied in the above case only upon the excess of ten thousand dollars received
by each person; when the beneficial interest to any property or income therefrom
shall pass to or from the use of any uncle, aunt, niece, nephew, or other lineal
descendant of the same, in every such case the rate of such tax shall be two
dollars on every one hundred dollars of the clear market value of such property
received by each person on the excess of two thousand dollars so received by each
person. In all other cases the rate shall be as follows: On each and every one
hundred dollars of the clear market value of all property and at the same rate for
any less amount, two dollars; on all estates of ten thousand dollars and less, three
dollars; on all estates of over ten thousand dollars and not exceeding twenty
thousand dollars, four dollars; on all estates of over twenty thousand dollars and
not exceeding fifty thousand dollars, five dollars; and on all estates over fifty
thousand dollars, six dollars; provided that an estate in the above case which
may be valued at a sum less than five hundred dollars shall not be subject to any
duty or tax

710 STATUTES ANNOTATED. [Neb. St.

Nature of Tax.

This act is a tax upon the right to succession to property, that is,
upon the right to receive the property from the estate of the de-
cedent and not upon the estate itself. State v. Vinsonhalery 74
Neb. 675, 105 N. W. 472.

Certainty.

The court does not decide whether some clause or clauses of
the act of 1901 as amended in 1905, are void for uncertainty. State
V. Vinsonhaler, 74 Neb. 675, 105 N. W. 472.

Tax is on each Beneficiary and is Uniform.

The act of 1901, as amended in 1905, in that part of the section
beginning with the words "in all other cases," in some instances
requires the tax to be levied upon the whole estate and it was there-
fore argued that this is a tax upon property, and not being uniform
was therefore unconstitutional. For the purposes of this taxation
the estates seem to be classified according to their value, but it does
not follow that the tax is placed upon the property constituting
the gross estate of the decedent. The tax is placed upon the estate
received by each heir or devisee, and its rate is uniform as to its
class, and this classification is reasonable and within the province
of the legislature. State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472,
474.

Double Taxation Upheld.

It was argued that as the beneficiaries had paid one inheritance
tax in New York, equity and good conscience dictated that a
second burden should not be laid in Nebraska. The court remarks
that "the question presented is not one of general equities, but of
jurisdiction. It has been held, and logically, that the taxing authori-
ties must be controlled solely by the laws of the state, and not by
proceedings in another and distinct jurisdiction, to ascertain whether
or not a certain tax should be levied or collected. Payment in one
state is not a defence when called upon to pay in the other unless
so provided by law. Mann v. Carter, 74 N. H. 345, 68 A. 130, 15
L. R. A. (N. S.) 150, Blackstone v. Miller, 188 U. S. 189, 206, 207,
23 Sup. Ct. 277, 47 L. Ed. 439." Per Root, J., in In re Douglas
County, 84 Neb. 506, 121 N. W. 593.

'1907, c. 104.] NEBRASKA. 711

Stock of Non-Resident Trustee.

The testator had in 1905 executed a certain trust agreement
by which he conveyed all his property by voluntary deed to a
trustee, a resident of New York City, who took actual possession
of the securities at that time and transferred them to New York,
where they did after that remain. The securities have been kept
intact and the dividends paid to the testator during his life. The
court holds that for the purposes of taxation the shares in the stock
of a Nebraska corporation were within the state of Nebraska and
therefore subject to the inheritance tax. It further appeared that
the deed provided that the settlor reserved the right to limit in his
will the terms upon which the beneficiaries might enjoy his bounty
and if he did make his will then devolution of the property was
subject to the laws of Nebraska and subject to its inheritance tax.
In re Douglas County, 84 Neb. 506, 121 N. W. 593.

S. 10711. Same. — Payment. — Time. Every sum of money retained by
any executor, administrator or trustee or paid into his hands for any tax on any
property shall be paid by him within thirty days thereafter to the treasurer of the
proper county, and the said treasurer or treasurers shall give and every executor,
administrator or trustee shall take a receipt from him of said payments. The
words "proper county" shall be taken to mean the county in which the property
was situated and subject to taxation at the time of the death of the owner.

S. 10713. Refund of tax. Whenever debts shall be proved against the estate
of the deceased after distribution of legacies from which the inheritance tax
had been deducted in compliance with this act, and the legatee is required to
refund any portion of the legacy, a proportion of the said tax shall be paid to
him by the executor or administrator, if the said tax has not been paid into the
county treasury or by the county treasurer if it has been so paid.

S. 10715. When any amount of the said tax shall have been paid erroneously
to the county treasurer it shall be lawful for him, on satisfactory proof rendered
to him of said erroneous payment, to refund and pay to the executor, administra-
tor or trustee, person or persons who have paid any such tax in error the amount
of such tax so paid provided that all applications for the repayment of the said
tax shall be made within two years of the date of said payment.

Neb. St. 1905, c. 117, approved March 8, 1901, amended Neb. St. 1901, c. 54,
(Cobbey's Annotated Statutes, section 10724), by appropriating the inheritance
tax to a permanent road fund.

AMENDMENTS IN 1907.

Neb. St. 1907, c. 103, approved April 6, 1907, amends Cobbey's Annotated
Statutes, section 10706, to read as printed post, p. 712, section 5176 of the
present act.

Neb. St. 1907, c. 104, approved March 18, 1907, amends Cobbey's Annotated
Statues, sections 10724, 10716, to read as printed post, pp. 714, 716, sections
5186 and 5194 of the present act.

712 STATUTES ANNOTATED. Neb. St.

THE PRESENT ACT.

Nebraska Compiled Statutes 1905.

5176 S. 1. Property taxable. — Rate. All property, real, personal and mixed
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 decedent
was not a resident of this state at the time of his death, which property or any
part thereof shall be within this state, or any interest therein or income there-
from, which shall be transferred by deed, grant, sale or gift made in contemplation
of the death of the grantor, or bargainor, or intended to take effect, in possession
or enjoyment after such death, to any person or persons or to any body politic or
corporate in trust or otherwise, or by reason thereof any person or body corporate
shall become beneficially entitled in possession or expectation to any property or
income thereof, shall be and is subject to a tax, at the rate hereinafter specified
to be paid to the treasurer of the proper county for the use of the state and all
heirs, legatees and devisees, administrators, executors and trustees shall be liable
for any and all such taxes until the same shall have been paid as hereinafter di-
rected. When the beneficial interests to any property or income therefrom shall
pass to or for the use of any father, mother, husband, wife, child, brother, sister,
wife or widow of the son, or husband of the daughter, or any child or children
adopted as such in conformity with the laws of the state of Nebraska, or to any
person to whom the deceased for not less than ten years prior to death stood in
the acknowledged relation of a parent, or to any lineal descendant born in lawful
wedlock in every such case the rate of tax shall be one dollar on every one hundred
dollars of the clear market value of such property received by each person, and
at the same rate for every less amount; provided, that any estate which may be
value^ at a less sum than ten thousand dollars shall not be subject to any such
duty or the taxes, and the taxes to be levied in the above case only upon the excess
of ten thousand dollars received by each person; when the beneficial interests to
any property or income therefrom shall pass to or for the use of any uncle, aunt,
niece, nephew or other lineal descendant of the same, in every such case the rate
of such tax shall be two dollars on every one hundred dollars of the clear market
value of such property received by each person on the excess of two thousand
dollars so received by each person; In all other cases the rate shall be as follows:
On each and every hundred dollars of the clear market value of all property and
at the same rate for any less amount, up to five thousand dollars, two dollars;
on all estates of over five thousand dollars and not exceeding ten thousand dollars,
tjhree dollars; on all estates of over ten thousand dollars not exceeding twenty
thousand dollars, four dollars; on all estates of over twenty thousand dollars and
not exceeding fifty thousand dollars, five dollars; and on all estates over fifty
thousand dollars, six dollars; provided that an estate in the above case which may
be valued at a sum less than five hundred dollars shall not be subject to any
duty or tax. [1901, c. 54. Amended 1905, H. R. 90; 1907, S. F. 41.]

[See notes to the Act of 1905, ante, p. 710.]

5177 S. 2. Estates for life. — Remainder. — Tax when payable. When
any person shall bequeath or devise any property or interest therein or income
therefrom to mother, father, husband, wife, brother, or sister, the widow of the
son, or the lineal descendant, during the life or for a term of years with remainder
to the collateral heir of the decedent, or to the stranger in blood or to a body cor-

Comp. 1905.J NEBRASKA. 713

porate at their decease on the expiration of such term, the said life estate or estates
for a term of years shall be subject to the tax prescribed in section 1, and the
property so passing shall be appraised immediately after the death at what was
the fair market value thereof at the time of the death of the decedent in the
manner hereinafter provided, and after deducting therefrom the value of said
life estate, or term of years, the tax prescribed by this act on the remainder shall
be immediately due and payable to the treasurer of the proper county, the interest
thereon shall be and remain a lien on said property until the same is paid; Pro-
vided, that the person or persons or body corporate beneficially interested in
the property chargeable with said tax elect not to pay the same until they have
come into actual possesssion or enjoyment of such, in that case such person or
persons or body corporate shall give a bond to the state of Nebraska in a penal
sum three times the amount of the tax arising upon such estate, with such sureties
as the county judge may approve, conditioned for the payment of said tax at
such time or period as they or their representatives may come into the actual
possession or enjoyment of said property, which bond shall be filed in the office
of the clerk of the proper county; Provided, further, that such person shall make
a full verified return of said property to said county judge, and file the same in
his office within one year from the death of the decedent, and within that period
enter into such securities and may renew the same for five years.

5178 S. 3. Taxes when payable. — Interest. All taxes imposed by this
act, unless otherwise herein provided for, shall be due and payable at the death
of the decedent, and interest at the rate of seven per cent per annum shall be
charged and collected therefrom for such time as such taxes are not paid; Pro-
vided, that if said tax is paid within one year from the accruing thereof,
interest shall not be charged or collected thereon, and in all cases where the
executors and administrators or trustees do not pay such tax within one year from
the death of the decedent they shall be required to give a bond in the form and
to the effect prescribed in section two of this act, for the payment of said tax
together with interest. (As amended by St. 1911, c. 107.)

5179 S. 4. Executors, administrators, duties. Any administrator, executor
or trustee having any charge or trust in legacies or property for distribution
subject to said tax, shall deduct the tax therefrom, or if the legacy or property
be not money, he shall collect the tax thereon upon the appraised value thereof
from the legatee or person entitled to such property, and he shall not deliver or
be compelled to deliver any specific legacy or property subject to tax to any person
until he shall have collected the tax thereon, and whenever any such legacy shall
be charged upon or payable out of real estate, the heir or devisee before paying
the same shall deduct such tax therefrom and pay the same to the executor, ad-
ministrator or trustee, and the same shall remain a charge upon such real estate
until paid, and the payment thereof shall be enforced by the executor, adminis-
trator or trustee in the same manner that the said payment of said legacies might
be enforced ; if, however, such legacy be given in money to any person for a limited
period, he shall retain the tax upon the whole amount, but if it be not in money
he shall make application to the court having jurisdiction of his accounts to make
apportionment if the case requires it of the sum to be paid into his hands
by such legatees, and for such further order relative thereto as the case may
require.

714 STATUTES ANNOTATED. [Neb. St.

5180 S. 5. Same. — Sale of property. All executors, administrators and
trustees shall have full power to sell so much of the property of the decedent as
will enable them to pay said tax, in the same manner as they may be enabled to
do by law, for the payment of debts of their testators and intestates and the
amount of said tax shall be paid as hereinafter directed.

5181 S. 6. Same. — Payment of tax. — Voucher on settlement. Every
sum of money retained by any executor, administrator or trustee or paid into his
hands for any tax on any property, shall be paid by him within thirty days there-
after to the treasurer of the proper county, and the said treasurer or treasurers
shall give, and every executor, administrator or trustee shall take a receipt from
him of said payments. The words "proper county" shall be taken to mean the
county in which the property was situated and subject to taxation at the time
of the death of the owner. [Amended 1905, H R. 90-]

5182 S. 7. Trust estates. Whenever any of the real estate of which any de-
cedent may die seized shall pass to any body corporate or to any person or persons
or in trust for them or some of them, it shall be the duty of the executor, adminis-
trator or trustee of such decedent to give information thereof, in writing, to the
treasurer of the county where said real estate is situated, within six months after
they undertake the execution of their expected duties, or if the facts be not known
within that period, then within one month after the same shall have come to their
knowledge.

5183 S. 8. Debts. — Refunding tax. Whenever debts shall be proved against
the estate of the deceased after distribution of legacies from which the inheritance
tax had been deducted in compliance with this act, and the legatee is required
to refu^nd any portion of the legacy, a proportion of the said tax shall be paid
to him by the executor or administrator; if the said tax has not been paid into
the county treasury or by the county treasurer if it has been so paid. [Amended
1905, H. R. 90.]

5184 S. 9. Foreign executor. — Transfer of stocks or loans. Whenever
any foreign executors or administrators shall assign or transfer any stocks or
loans in this state standing in the name of the decedent, or in trust for a decedent
which shall be liable to the said tax, such tax shall be paid to the treasury or
treasurer of the proper county on the transfer thereof; otherwise the corporation
making such transfer shall become liable to pay such taxes, provided that such
corporation has knowledge before such transfer that said stocks or loans are liable
for such taxes.

5185 S. 10. Erroneous taxes. — Refunding. When any amount of the said
tax shall have been paid erroneously to the county treasurer it shall be lawful
for him, on satisfactory proof rendered to him of said erroneous payment, to
refund and pay to the executor, administrator or trustee, person or persons who
have paid any such tax in error, the amount of such tax so paid provided that all
applications for the repayment of the said tax shall be made within two years
of the date of said payment. [Amended 1905, H. R. 90.]

5186 S. 11. Appraisement. In order to fix the value of property of persons
ate shall be subject to the payment of said tax, the county judge.

whose estate shall be sul

Comp. 1905.1 NEBRASKA. 715

whenever an estate appears to be subject to the tax provided by this act or upon
the application of any interested party, shall appoint some competent person
as appraiser as often as, or whenever occasion may require, whose duty it shall be
forthwith to give such notice by mail to all persons, and to such persons as the
county judge may by order, direct, of the time and place he will appraise such
property; and at such time and place to appraise the property at the fair market
value, of the same, and for that purpose the appraiser is authorized by leave
of the county judge to use subpoenas and to compel the attendance of witnesses
before him, and to take the evidence of such witnesses under oath concerning
guch property, and the value thereof, and he shall make a report thereof ana of
such value in writing to the county judge, with the depositions of the witnesses
and such other facts relating thereto, as the county judge may by order require
to be filed with the records of the county court, and from this report the county
judge shall forthwith determine and fix the then cash value of all estates, annuities
and life estates for terms of years growing out of said estates, and the tax to
which the same is liable, and shall give immediate notice through the mails to all
parties known to be interested therein. Any person or persons dissatisfied with
the appraisement or assessment, may appeal therefrom to the county court of the
proper county within sixty days after the making and filing of such appraisement
or assessment, conditioned upon the giving of security to the court to pay all
costs, together with all taxes that may be fixed by the court. The said appraisers
shall be paid by the county treasurer out of any funds he may have in his hands
on account of said tax, on the certificate of the county judge a reasonable fee to
be fixed by the county judge together with legal mileage. Witnesses shall be
allowed the sum of $2.00 per day for every day's attendance before the appraisers
or county court, together with legal mileage. The officer serving process under this
act shall receive the same fees and mileage as is now provided by law for similar
services, and the county judge for services performed under this act shall receive
the same fees as is now provided by law for similar services. All costs made or
incurred under this act shall be paid by the county treasurer out of any funds
he may have in his hands on account of said tax, on certificate of the county judge.
[Amended March 18, '07; S. F. 21, s. 2.]

5187 S. 12. Appraiser. — Malfeasance. Any appraiser appointed under
the authority and by virtue of this act who shall take any fee or reward from any
executor, administrator, trustee, legatee, next of kin, or heir of any decedent, or
from any person or corporation liable to pay said tax or any portion thereof,
shall be guilty of a misdemeanor, and upon conviction in any court of competent
jurisdiction, he shall be fined not less than one hundred dollars nor more than
five hundred dollars, and in addition thereto the county judge shall dismiss him
from such service.

5188 S. 13. Jurisdiction over questions. The county court in the county
in which the real property is situated of a decedent who was not a resident of the
state, or in the county of which the deceased was a resident at the time of his
death, shall have jurisdiction to hear and de^rmine all questions in relation to all
taxes arising under this act, and the county court first acquiring jurisdiction here-
under shall retain the same to the exclusion of every other.

5189 S. 14. Taxes not paid. — Procedure. If it shall appear to the county
court that any tax accruing under this act has not been paid according to law,

716 STATUTES ANNOTATED. [Neb. St.

it shall issue a summons commanding the persons or corporation liable to pay
such tax or interested in such property to appear before the court on a certain
day not more than three months after the date of such summons, to show cause
why such tax should not be paid. The process, practice and pleadings and the
hearing and determination thereof, and the judgment in said court in such cases
shall be the same as those now provided or those which may be hereafter provided
in probate cases in the county courts of this state and the fees and costs in such
cases shall be the same as in probate cases in the county courts of this state.

5190 S. 15. Same. Whenever the treasurer of any county shall have reason
to believe that any tax is due and unpaid under this act, after the refusal or neglect
of the person interested in the property liable to pay said tax to pay the same, he
shall notify the county attorney of the proper county in writing of such refusal
to pay said tax, and the county attorney so notified, if he has cause to believe a
tax is due and unpaid, shall prosecute the proceeding in the county court in the
proper county, as provided in section fourteen of this act, for the enforcement
and collection of this tax.

5191 S. 16. Same. — Report. The county judge and county clerk of each
county shall, every three months, make a statement in writing to the county
treasurer of the county, of the party from which or the party from whom they have
reason to believe a tax under this act is due and unpaid.

5192 S. 17. Expenses. [Repealed. Laws 1905, H. R. 90.]

5193 S. 18. Records. The secretary of state shall furnish to each county judge
a book m which he shall enter the returns made by appraisers, the cash value of
annuities, life estates and terms of years and other property fixed by him, and the
tax assessed thereon and the amounts of any receipts for payments thereof filed
with him, which book shall be kept in the office of the county judge as public
records.

5194 S. 19. Funds. — Road improvements. The county treasurer of each
county shall keep all money collected under the provisions of this act in a separate
and special fund to be expended under the direction of the county board of each
county, for the sole purpose of the permanent improvement of the county roads;
such roads shall not be built within the corporate limits of any city or village, but
shall begin at the limit of any city or village and extending therefrom, in the direc-
tion most traveled by the public; to be determined upon by the said county
board. Provided that such improvements may be made from the limit of any
city of the metropolitan or first class and through a city of the second class, or
village where the road so determined upon to be improved is a main road between
the country and such city of the metropolitan or first class. All contracts for
such permanent improvements shall be let by the said board, by competitive
bids after the plans and specifications therefor drawn by the county surveyor or
engineer have been filed with the county clerk of each respective county. All
bids for the construction of such roads shall be deposited with the county judge
of the respective counties and opened by him in the presence of the county
commissioner and county clerk, and then filed with the county clerk. All such .
permanent road beds shall not be less than twelve feet nor more than sixteen feet in

Comp. 1905.1 NEBRASKA. — NEVADA. 717

width, and shall be constructed of the most durable and approved material, and
the remaining part of the said road shall be constructed at one side of the said
permanent part, and be used as dirt road; Provided that it shall be lawful for
the county commissioners of any county having a population of not more than
thirty thousand to use said fund in the manner herein provided for the improve-
ment of any grade, bridge, cut, fill, or dirt road leading into any city or village
within said county. Provided, that all money heretofore paid by the various
county treasurers to the state treasurer, under the provisions of this act shall be,
upon proper vouchers signed by the county judge and county treasurer, paid
back to the said county from which said tax was received, and said money when
so refunded by the state treasurer shall be placed in the special fund heretofore
mentioned in each county and shall be expended in like manner and for like
purposes as hereinabove specified. [Amended 1905, H. R. 90; March 18, 1907;
S. F. 21, s. l.J

5195 S. 20. Receipts. Any person or body corporate shall, upon the payment
of fifty cents, be entitled to a receipt from the county treasurer of any county
or the copy of the receipt at his option, that may have been given by the treasurer
for the payment of any tax under this act, which receipt shall designate on what
real property, if any, of which deceased may have died seized, said tax has been
paid and by whom paid, and whether or not it is in full of said tax, and said
receipt may be recorded in the clerk's office of said county in which the property
may be situated, in the book to be kept by said clerk for such purpose.

5196 S. 21. Lien. The lien of the inheritance tax shall continue until the said
tax is settled and satisfied : Provided, that said lien shall be limited to the property
chargeable therewith: and Provided further, that all inheritance taxes shall be
sued for within five years after they are due and legally demandable, otherwise
they shall be presumed to be paid and cease to be a lien as against any purchaser
of real estate.

NEVADA,

Constitutional Limitations.

Nevada Constitution, 1864, a. 10.

S. 1. The legislature shall provide by law for a uniform and equal rate of
assessment and taxation, and shall prescribe such regulations as shall secure a
just valuation for taxation of all property, real, personal and possessory, except-
ing mines and mining claims, the proceeds of which alone shall be taxed, and also
excepting such property as may be exempted by law for municipal, educational,
literary, scientific, religious or charitable purposes.

There is no inheritance tax at present in Nevada.

718 STATUTES ANNOTAfED. [N. H. Const.

NEW HAMPSHIRE,

New Hampshire's first inheritance tax, one per cent on collateral
inheritances, enacted in 1878, was held unconstitutional in 1882.
An amendment to the constitution in 1903 paved the way for the
present collateral inheritance tax enacted in 1905. The tax is on
collateral inheritances only, the rate is uniformly 5 per cent, and
no amount is exempt. No tax is levied on an inheritance to father,
mother, husband, wife, lineal descendant, brother, sister, adopted
child, lineal descendant of adopted child, wife or widow of son,
husband of daughter.

New Hampshire taxes stock in a New Hampshire corporation
owned by a non-resident and, moreover, taxes registered bonds
of a New Hampshire corporation owned by a non-resident though
kept outside the state. Corporations and individuals transferring
or delivering securities or other assets of non-residents are made
responsible for the tax. Railroad, telegraph or telephone stock
where the company is organized in more than one state is taxed
Only on the proportion of the line within New Hampshire.

It is the practice to require a complete inventory of a non-resi-
dent's estate.

New Hampshire is the only New England state that has no
provision whatever for preventing or reducing double taxation.

Constitutional Limitations.
New Hampshire Constitution, 1783, Bill of Rights, a. 12.

Every member of the community has a right to be protected by it in
the enjoyment of his life, liberty and property. He is, therefore, bound to
contribute his share in the expense of said protection, and to yield his personal
service, when necessary, or an equivalent. But no part of a man's property
shall be taken from him or applied to public uses without his own consent or that
of the representative body of the people. Nor are the inhabitants of this state
controllable by any other laws than those to which they or their representative
body have given their consent.

New Hampshire Constitution, 1792, pt. 2, a. 5.

. . . And further full power and authority are hereby giv.en and granted to
the said general court ... to impose and levy proportional and reasonable
assessments, rates and taxes upon all the inhabitants of, and residents within
the said state; and upon all estates within the same; to be issued and disposed

1903, a. 6.] NEW HAMPSHIRE. 719

of by warrant under the hand of the governor of this state for the time being, with
the advice and consent of the council, for the public service, in the necessary de-
fence and support of the government of this state, and the protection and preserva-
tion of the subjects thereof, according to such acts as are or shall be in force within
the same.

New Hampshire Constitution, 1903, a. 6.

The public charges of government or any part thereof may be raised by taxation
upon polls, estates and other classes of property, including franchises and prop-
erty when passing by will or inheritance.

Progressive Tax. The supreme court was asked its opinion
as to the validity of the progressive tax and replied that the question
is new in New Hampshire; and on the question whether in view
of the constitution as it was construed and understood prior to
1903, it was intended by the amendment then made to authorize
a progressive tax, the court is divided in opinion and therefore
declines to express any opinion whatever. In re Opinion of Justices
(N. H. 1911), 79 A. 490.

Classification by Relationship Upheld, The court in answer to
a request for an opinion sees no objection to an assessment of
different rates upon classes standing in different relation to the
original owner of the property; that the tax may be assessed at a
different rate upon property passing to direct heirs and to collateral,
and a distinction may be made between relatives more or less
remote in the direct line. In re Opinion of Justices (N. H. 1911),
79 A. 490. .

Tax need not be Proportional. The court holds that the intention
and effect of the amendment of 1903 to the constitution of New
Hampshire was to provide in addition to taxation as hereto defined
a different method of meeting public charges by an inheritance tax.
As an inheritance tax is necessarily disproportional and is unequal
in its lack of proportion, and it is impossible to lay a proportional
tax upon property upon the occasion of death, it cannot have been
understood that such impossibility would defeat the express power
to lay such a tax, but it must follow that the express authority
to impose such a tax is an authority to disregard the general rule
of proportion so far as is necessary to exercise the power. For
instance, poll taxes are recognized by the constitution, but they are
not proportional, they are constitutional acts recognized by the
constitution and have never been understood to have been rendered
unconstitutional by lack of proportion or inability to pay, Thomp-

720

STATUTES ANNOTATED.

[N. H. St-

son V. Kidder, 74 N. H. 89, 96, 65 A. 392. The constitution as it
was before the amendment of 1903 provided that every inhabitant
is bound to contribute only his share, which, according to the
uniform decisions of the New Hampshire court for more than half a
century, cannot be more than his proportional share of the common
burden. Curry v. Spencer, 61 N. H. 624, 630, 60 Am. St. Rep. 337.

List of Statutes.

1878.

Statutes of New Hampshire, c. 74.

1878.

General Laws, c.

64, p. 163.

1883.

Statutes of New Hampshire, c. 50.

1883.

I a a

c. 75.

1905.

' " "

c. 40, p. 432, ss. 1 to 23.

1907.

i a a

c. 64, p. 63.

1907.

< n a

c. 68, p. 66.

1907.

I It n

c. 69, p. 71.

1907.

< << <4

c. 82, p. 85.

1907.

< H U

c. 86, p. 89.

1907.

' <4 «

c. 138, p. 136.

1909.
1911.

< << «

c. 104, p. 444.
c. 42, p. 44.

History.

The New Hampshire constitution of 1783 and its antecedents
and the history of legislation in New Hampshire are discussed in
Thompson v. Kidder, 74 N. H. 89, 94, 65 A. 392.

THE UNCONSTITUTIONAL STATUTE OF 1878.

N. H. St. 1878, c. 74. Approved August 17, 1878.

S. 1. All estates settled in the probate courts of this state, and all transfers
of property from the dead to the living, by gift, bequest or devise, and every
succession made under the laws of this state, regulating the distribution of in-
testate estates, exclusive of the just indebtedness of each and all of said estates,
shall pay one per cent on the value of said estates, to be deducted from each gift,
bequest or distributive share, by the administrator or executor, so that each
gift, bequest or distributive share shall pay its proportional rate; provided, that
all legacies or property passing by will or by the laws of this state to husband or
wife, children and grandchildren of the person who died possessed as aforesaid,
shall be exempt from tax or duty; provided, further, that any legacy or share of
personal property, or any devise or share of real estate, passing as aforesaid,
to a minor child of the person who died possessed as aforesaid, shall be exempt
from taxation under this section, unless such legacy or share of personal estate,
and devise or share of the real estate, shall exceed the sum of one thousand
dollars, in which case the excess only above that sum shall be liable to such

1878, c. 74.] NEW HAMPSHIRE. 721

taxation; provided, further, that the aggregate of such legacy or share of the
personal estate, and devise and share of the real estate, shall not exceed the
sum of one thousand dollars to such minor child.

Power to Tax. — Nature of Right of Succession.

"It is not to be questioned that the power to tax is vested in the
legislature; that it is unrestricted, except when it is opposed to
some provision of the federal or state constitution; and that it
extends 'to every trade or occupation, to every object of industry,
use or enjoyment, and to every species of possession.' Nor is it
to be questioned that the subject of taxation in the present case is
one within legislative control, because inheritances, distributive
shares, and legacies are but creatures of the law; in fact, the only
right to take or dispose of property by descent or devise is derived
from the sovereign power of the state through its laws. Wills,
therefore, and testaments, rights of inheritance and successions,
are all of them creatures of the civil or municipal laws, and accordingly
are in all respects regulated by them. 2 Blk. Com. 12." Per
Blodgett, J., in Curry v. Spencer, 61 N. H. 624, 630, 60 Am. St. Rep.
337.

Object of Statute is Immaterial.

The fact that its object was *'to defray the cost of probate courts"
is not entitled to any weight, because the constitutional rule of
equality cannot be limited or qualified by any consideration of
expediency or convenience. The purj^ose of the act cannot change
its character in this respect. Curry v. Spencer , 61 N. H. 624, 631,
60 Am. St. Rep. 337.

Tax not Proportional and hence Void.

"Immunity from disproportional taxation being expressly
reserved in our bill of rights, and the power of proportional taxation
only being granted the legislature by the constitution, we are
unaware of any ground upon which the statute under consideration
(Gen. Laws, c. 64) can be upheld ; for if it is to be regarded as a
tax on property, it is open to the objection of unequal and double
taxation, and if it is to be regarded as a tax on a civil right or privilege
it is discriminating and disproportional. See State v. United States
& Can. Express Co., 60 N. H. 219." Per Blodgett, J., in Curry v.
Spencer, 61 N. H. 624, 631, 60 Am. St. Rep. 337. The legislature
"cannot lawfully make discriminations and cast a burden upon one
class of beneficiaries and exempt all other classes from its operation;

722 STATUTES ANNOTATED. [N. H. St.

and it cannot, therefore, for purposes of taxation exempt legacies
and successions to lineal descendants and include only those to
collaterals and others than those specified. Such a tax is founded
upon pure inequality, and "is simply extortion in the name of
taxation; and it can therefore never be sustained in this jurisdiction
so long as equality and justice continue to be the basis of constitu-
tional taxation."

The court distinguishes Eyre v. Jacob, 14 Gratt. (Va.) 422, and
Tyson v. State, 28 Md. 577, on the ground that in neither of the states
affected was the constitutional restriction on taxes the same as in
New Hampshire. Curry v. Spencer, 61 N. H. 624, 631, 60 Am. St.
Rep. 337.

[A comparison of the constitutions of Maryland and Virginia,
however, fails to reveal any basis for this distinction. This case
would seem now to be generally discredited. The court in
Thompson v. Kidder, 74 N. H. 89, 97, 65 A. 392, explains this de-
cision as proceeding on the theory that the privileges of the probate
court were in question. — Ed. ]

N. H. St. 1878, ss. 2 to 24 cover, the assessment, collection and payment of
the tax.

N. H. St. 1883, c. 50, repealed General Laws, c. 64 (the inheritance tax),
approved August 23, 1883.

N. H. St. 1883, c. 75, provided for the refunding of taxes paid under the un-
constitutional statute of 1878.

THE CONSTITUTIONAL AMENDMENT OF 1903.

[See ante, p. 719.]

THE VALID STATUTE OF 1905.
Adopted from Massachusetts.

Section 1 of this statute is almost a literal copy of the Massa-
chusetts Revised Laws, c. 15, s. 1, and the other sections of the act
are substantially the same as the corresponding sections of the
Massachusetts act. Therefore, existing decisions construing the
Massachusetts act are adopted by the New Hampshire legislature.
Mann v. Carter, 74 N. H. 345, 347, 68 N. E. 130.

N. H. St. 1905, c. 40. Approved March 8, 1905.

1905, c. 40.] NEW HAMPSHIRE. 723

grant, sale or gift, made or intended to take effect in possession or enjoyment
after the death of the grantor, to any person, absolutely or in trust, except to
or for the use of the father, mother, husband, wife, lineal descendant, brother,
sister, adopted child, the lineal descendant of any adopted child, the wife or widow
of a son, or the husband of a daughter, of a decedent, or to or for the use of chari-
table, educational or religious societies or institutions in this state, the property
of which is by law exempt from taxation, or to a city or town in this state for
public purposes, shall be subject to a tax of five per cent of its value, for the use
of the state; and administrators, executors and trustees, and any such grantees
under a conveyance made during the grantor's life, shall be liable for such taxes,
with interest, until the same have been paid.

Validity.

This statute is constitutional. The court distinguishes Curry v.
Spencer, 61 N. H. 624, as there the right then in question was the
right to the privileges of the probate court for the purposes of
administration; and if one estate was entitled to be there settled
without payment of fee all were. The right under the N. H. St.
1905, however, is a right to the passing of property, and the court
says that there are good reasons why the passing of property to near
relatives or the gift of it to charitable purposes or directly to the
public should not be subject to an exaction by the state. Reasonable
exemptions of property have not been considered to affect the
validity of the tax upon other property, and the exemptions in this
statute do not render assessment unreasonable. Thompson v.
Kidder, 74 N. H. 89, 97, 65 A. 392.

C}, notes to the constitutional amendment of 1903, ante p. 719.

"Within the Jurisdiction of the State."
Corporations Organized in More than one State.

The Boston and Maine Railroad is incorporated under that name
in Maine, New Hampshire and Massachusetts, and has but a single
issue of stock. It owns franchises and property in all three states
which make up the market value of all of its stock.

It was contended that only such proportional part of the market
value of the stock should be taxed in New Hampshire as the value
of the franchises and property of the corporation here situated
bears to the total value of its franchises and property wherever
situated. The court relies upon Kingsbury v. Chapin, 196 Mass.
533, 82 N. E. 700, and In re Cooley, 186 N, Y. 220, 78 N. E. 939,
and decides that a due regard for the language of the statute as well
as justice to the tax payer calls for such a construction of the law.

"Under N. H. St. 1905, c. 40, s. 1, the statute would seem to be

724 STATUTES ANNOTATED. [N. H. St.

limited in its operation to such property as is located in the state
or such as by reason of the domicile of the owner has its legal situs
here and requires the aid of our laws for its transmission.

"The Boston and Maine Railroad is a domestic corporation in
each of the states in which it is incorporated ; and while the estate
of a deceased non-resident stockholder requires the aid of the
probate laws of this state to effectuate a transmission of the stock-
holder's right in the property of the local corporation, their aid is
not required to effectuate the transmission of his right to property
of the corporation in other states in which it is also chartered ; and
the value of the property requiring the aid of our laws for its
transmission must, in such case at least, be taken as the measure
of the tax called for by our statute.

"It may be difficult to ascertain the exact value of the plaintiff's
right in the property of the local corporation; but if the tax is
assessed upon such a percentage of the value of the stock as the
amount of trackage within the state bears to the total trackage in
the several states of its incorporation, the practical difficulty may
be obviated; and it does not appear that the requirements of the
statute would not be met." Per Brigham, J., in Gardiner v. Carter,
74 N. H. 507, 510, 69 A. 939. (This result is embodied in the
present act, section 1 — Ed.)

Situs of Interest in Savings Banks Deposits.

Where the testator was domiciled in New Hampshire and had
deposits in savings banks in Massachusetts, she had a direct
interest in the property as well as in the management of the bank,
and her position was in many respects analogous to that of a
stockholder in a business corporation. She was in fact one of the
owners of the property in the possession of the incorporated partner-
ships, and therefore, following Frothingham v. ShaWy 175 Mass. 59,
65 N. E. 523, this interest is subject to tax under the inheritance
tax of New Hampshire. This is property which follows the person
of the owner and for many purposes it has situs here. Mann v.
Carter, 74 N. H. 345, 68 A. 130.

Foreign Executor should take out Ancillary Administration.

Since the enactment of N. H. St. 1905, c. 40, a foreign executor
or administrator where any part of his testator's or intestate's
property within the jurisdiction of the state is subject to a tax
must take out ancillary administration, and an inventory should be
filed as required by chapter 40, section 9; and these steps should

1905, c. 40.] NEW HAMPSHIRE. 725

be taken before application is made to the probate court under the
statute of 1905, chapter 40, section 14. Petitions under pubHc
statutes, chapter 189, section 123, can no longer be maintained if any
part of the property of the deceased within the jurisdiction of the
state is subject to a tax under statute 1905, chapter 40. Gardiner
V. Carter, 74 N. H. 507, 510, 69 A. 939.

Double Taxation Upheld.

Where the testator died living in New Hampshire and having
savings banks deposits in Massachusetts these deposits are subject
to tax in New Hampshire although they were also subject to tax
in Massachusetts. The court relies upon Blackstone v. Miller, 188
Mass. 189, 206, 207, and says that "the fact that the property may
be subject to a similar burden in another state does not deprive
this state of its power to impose the tax here upon the property
which passes by inheritance or by will under our laws." The court
goes on to say that this is not double taxation, as the two burdens
are created by two different independent states for wholly different
local purposes. Man.vw. Carter, 74 N. H. 345, 68 A. 130.

Upon the question of double taxation the court relies on the
following cases: —

Hartman Case, 70 N. J. Eq. 664, 667; Hopkins Appeal, 77 Conn.
644; Bridgeport Trust Co., 77 Conn. 657; Matter of Swift, 137 N. Y.
77, 18 L. R. A. 709; Matter of Houdayer, 150 N. Y. 37, 34 L. R. A.
235, 55 Am. St. Rep. 642; State v. Dalrymple, 70 Md. 294, 3 L. R.
A. 372; Eidman v. Martinez, 184 U. S. 578, 581; Dos Passos Inher.
Taxes, 29; Dicey Conf. Laws, 682, et seq. But see In re Joyslin,
76 Vt. 88.

"Charitable, Educational or Religious Societies.'*

Congregational and Baptist churches are religious societies and
public charitable associations or societies within the meaning of
the act of 1895, c. 66. Carter v. Eaton, 75 N. H. 560, 78 Alt. 643.
Societies connected with the Methodist church for religious,
educational and philanthropic purposes are therefore charitable,
and the fact that they may more directly benefit their members
than those who are not members does not deprive them of their
public character. They are therefore exempt from taxation under
the act of 1905. Carter v. Whitcomb, 74 N. H. 482, 69 A. 779.

The Home Missionary Society was not entitled to an exemption
as it devoted substantially all its funds to the support of charities
outside of New Hampshire. The question was whether its charity

726 STATUTES ANNOTATED. [N. H. St.

was of such a character and so administered as to be of any sub-
stantial benefit or advantage to the people of New Hampshire,
and this was a question of fact to be determined upon competent
evidence. Carter v. Whitcomb, 74 N. H. 482, 491, 69 A. 779.

The Home for Aged Women is a charitable corporation although
its beneficiaries are required to turn over to the institution what
property they possess, and they are required to pay an established
fee upon their admission. Carter v. Whitcomb, 74 N. H. 482, 488,
69 A. 779.

A legacy to the New Hampshire Baptist convention was not
subject to the inheritance tax. The convention is authorized by
its charter to receive and hold donations and use the same for
"the purpose of promoting foreign and domestic missions and the
education of indigent and pious young men for the gospel ministry
and any other religious charities which they may deem proper."
The convention had always confined its work to this state, and
purposes to ask the legislature to amend its charter so as to prevent
its use of funds outside the state. In view of these facts it seems
clear that the charity is of substantial benefit to the people of
New Hampshire and is therefore exempt from taxation. Carter
v. Story, (N. H. 1911,) 78 A. 1072.

The Woman's Foreign Missionary Society, the principal object
of which is the "evangelization of heathen women," is not a public
charity, even though there may be heathen women in New Hamp-
shire, as it was found that none of the funds of the society could be
used within the state of New Hampshire. "The expenditure of
large sums of money for the enlightenment upon religious subjects
of the natives of the antipodes evidently was not one of the objects
the legislature intended to encourage, when in 1895 the property
of charitable associations *devoted exclusively to the uses and
purposes of public charity' was exempted from taxation, or when
in 1905 legacies to such associations 'in the state' were exempted
from the inheritance tax." Per Walker, j., in Carter v. Whitcomb,
74 N. H. 482, 489, 69 A. 779.

The Woman's Relief Corps is a public charity exempt from the
inheritance tax although its benefits are bestowed only upon those
who have been soldiers or upon their families to the exclusion of
all others. Carter v. Whitcomb, 74 N. H. 482, 489, 69 A. 779.

The Young Women's Christian Association, which holds gospel
services, teaches English to foreigners and furnishes food and
lodging for women passing through the city, for which compensa-

1905, c. 40.] NEW HAMPSHIRE 727

tion is received from those who are able to pay, is religious and
charitable in its general object, and is therefore entitled to exemp-
tion from the inheritance tax. So the Woman's Auxiliary of the
Young Men's Christian Association is also charitable and exempt
from the inheritance tax. Carter v. Whitcomb, 74 N. H. 482, 488,
69 A. 779.

Legacy to Church as Trustee. A legacy was made to a Baptist
church of three thousand dollars, the income of which is to be
used for the benefit of the church. The court holds that as the
church holds the principal fund as trustee and can only use the
income, and since the income can only be used for church purposes,
it follows that the legacy is not subject to the inheritance tax.
Carter v. Story, (N. H. 1911,) 78 A. 1072 (citing Carter v. Eaton,
75 N. H. 560, 78 A. 643).

Use Determines Exemption. Under the New Hampshire statute
of 1905, as amended in 1907, if the gift is absolute it is the use
made of the property or fund constituting the gift that determines
the exemption, but if it is in trust it is the use made of the income
or beneficial interest that governs, for in such case it is that property
or interest alone which comes into the hands of the donee for use.
And so where bonds are given to churches as trustees the question
is not whether the bonds should be exempt from tax, but whether
their income in the hands of the beneficiaries should be exempt.
Carter v. Eaton, 75 N. H. 560, 78 A. 643.

'The property of which is by law exempt from taxation" does
not require that the exemption shall only apply when the asso-
ciation Holds all its property free from yearly taxation. The
sole test suggested by the ... statute . . . is to ascertain whether
the legatee is a charitable, educational or religious society whose
property when used exclusively in carrying out the purposes of the
association is exempt from taxation. It is the character of the
institution and the purposes it was organized to accomplish and its
liability or non-liability to taxation for property devoted to those
purposes that determine whether it falls within or without the
exception provided in the inheritance tax law." Carter v. Whit-
comb, 74 N. H. 482, 485, 69 A. 779.

Whether inheritance taxes are a charge against the estate or are to
be deducted from the several legacies is a question of the testator's
intention. Where the will directs the executors to pay taxes that
may become due upon any legacies ''given by this will to individ-
uals," this language has no reference to legacies given to indi-

728 STATUTES ANNOTATED. [N. H. St.

viduals in trust for establishing a charity. Kingsbury v. Bazeley,
75 N. H. 13, 70 A. 916.

The question whether foreign legacy taxes paid are to he deducted
or whether they are an expense of administration which should be
paid out of the estate, leaving the legacy payable in full, is a
question of intention. Where a testator makes no provision for
the payment of such taxes from his estate, he must have intended
the actual benefit to be received by the subject of his bounty to
be as much less than a sum named in his will as he is presumed
to have known the state would take for itself in transmitting
property. In a gift of specific personal property located in a
foreign state the amount demanded by such state as the price of
transfer of title would naturally be a charge against the subject of
the legacy, not because of the testator's presumed familiarity with
the law of the jurisdiction, but because under that law he has
not the power to transfer by will the entire title.

In a gift of a pecuniary legacy of a certain amount, the apparent
intention is to benefit the legatee to the full amount named. If
such will is to be administered by the law of the jurisdiction im-
posing no inheritance tax, or none upon the class to which the
legatee belongs, the purpose to transmit the full amount to such
legatee ^would seem secure. The conclusion that a less sum was
intended because at the time of the testator's death some portion
of his property happened to be within the jurisdiction authorizing
a tax upon such a transfer seems strained and illogical. To hold
that the effect of the foreign law is to reduce the legacy given by
the will construed in accordance with the law of the testator's
domicile is to permit the foreign law to regulate the testamentary
capacity of a citizen of this state; as the foreign tax depends upon
the jurisdiction over the property and is not sustainable as a
regulation of the exercise of testamentary power by the citizen of
another state, it follows that the tax is merely a charge upon the par-
ticular property and not upon the pecuniary legacies given by the will .

No exact decision has been found, though it is ruled in consider-
ing questions more or less analogous that such taxes are to be
deducted from the legacy in New York and not in Massachusetts.
In re Swift, 137 N. Y. 77, 32 N. E. 1096, and Hooper v. Shaw,
176 Mass. 190, 57 N. E. 361. Kingsbury v. Bazeley, 75 N. H.
13, 70 A. 916.

"No ground can be found, in the absence of a direction either
express or implied in the will, for a pro rata distribution among all

1905, c. 40.] NEW HAMPSHIRE. 729

the pecuniary legacies of the sums paid as foreign death duties.
On account of some legacies a charge may be made in some states
and not in others. A deduction from a legacy on account of a tax
imposed on others in a particular jurisdiction would not be sup-
ported by any basis of reason. The only method which could be
followed would be the division of the legacies into as many classes
as were made by the laws of all the states in which property was
found, and a division of the sums paid pro rata among each class.
This would plainly be an administration of the estate according
to laws which have no force here, and which cannot, in the absence
of legislative authority for such course, properly be followed. The
executors have in hand, if they are ready to settle, so much property.
The will, construed by the law of this state, directs how the distri-
bution shall be made. The fact that the executors have less than
they would have had, except for the demands of jurisdictions to
which they were obliged to go to get the property and bring it
here for distribution, cannot alter the law of the state or the terms
of the will. In the absence of evidence from which a contrary
direction can be implied from the will, the amount deducted by
other states before permitting the transfer of property within their
limits to the executor for distribution here {Greves v. Shaw^ 173
Mass. 205, 209, 53 N. E. 372) is not property within this state for
distribution. The executors are chargeable only for what has
come to their hands — the property less the duties paid. If they
charge themselves with the full value of the property, a practical
method of accounting would permit them to discharge them-
selves by accounting for the foreign duties paid as expenses of
administration."

In the present case there are no facts showing an intention to
charge the pecuniary legacies with foreign duties for the benefit
of the residuary legatees. "There is a class of cases, where the
residuary bequest, by reason of the special circumstances of the
case, has been construed as a particular legacy, not liable to fail,
except ratably with the other legacies, on account of any un-
expected deficiency of the estate, or to be augmented by the
unforeseen failure of the legacies." 2 Red. Wills, 447; Dyose v.
Dyose, 1 P. Wms. 305. "There is nothinginthe present case tending
to show that the residuary bequest was intended as anything
except the ordinary disposal of a residuum which might be left, while
the first part of the eighty-second clause establishes that the testa-
trix considered the possibility that the residuary legatees would

730 STATUTES ANNOTATED. IN. H. St.

receive nothing. In the latter part of the same clause the testatrix
directs her executors to pay any and all inheritance and succession
taxes that may become due upon any legacies given to individuals.
This implies a recognition of the possibility of such taxes, and, as
to legatees other than individuals, a purpose that the duties legally
chargeable upon such legacies should be borne by them; but as the
foreign duties are not due upon the legacies given by the will, but are
a deduction from property which may be used in carrying out the
purpose of the will, the language is insufficient to require the court
to administer the law of all the states in which property may have
been found and taxes paid." Per Parsons, C. J., in Kingsbury v.
5a2e%, 75 N. H. 13, 70 A. 916, 919.

S. 2. If a person bequeaths or devises property to or for the use of a father,
mother, husband, wife, lineal descendant, brother, sister, an adopted child, the
lineal descendant of an adopted child, the wife or widow of a son, or the husband
of a daughter, for life or for a term of years, with the remainder to a collateral
heir or to a stranger to the blood, the value of such particular estate shall, within
three months after the appointment of the executor, administrator or trustee, be
appraised in the manner provided in section 16 and deducted from the appraised
value of such property, and the remainder shall be subject to a tax of five per cent
of its value.

S. 3 covers gifts to executors.

Ss. 4— ?2 provide for the appraisal of the property, assessment, collection and
payment of the tax.

THE AMENDMENTS OF 1907.

Exemption of Charitable, etc., Societies. N. H. St. 1907, approved March
20, 1907, c. 68, s. 1, amended N. H. St. 1905, c. 40, s. 1, by providing that chari-
table, educational or religious societies or institutions in this state are exempt from
taxation "when such society or institution is bound by the terms of the will, deed,
grant, sale or gift or by the limitation of its powers to devote such property solely
to such uses and purposes that the property in its hands will be by law exempt
from taxation."

Not Retroactive.

The testator died September 21, 1905, when the N. H. St. 1905, c.
40, was in force. Before a decree of distribution was made in the
estate the statute of 1907, c. 68, became effective by making the
exemption in the statute of 1905 apply only when the society exempt
is bound to devote its property solely to such uses and purposes
that the property in its hands will be by law exempt from taxation.

The N. H. St. 1907 is prospective, as it relates to property
"which shall pass by will." The rights of the legatees became
fixed at the death of the testator, and at the same time the right

1905, c. 40.] NEW HAMPSHIRE. 731

of the public to the tax accrued, and the legatees' interest vested
at the death of the testatrix or upon the probate of the will. The
rights of the parties to the proceeding must be determined in
accordance with the statute of 1905, which was in force when the
testatrix died. Carter v. Whitcomh, 74 N. H. 482, 69 A. 779, 17
L. R. A. (N. S. ) 733 n.

Error corrected.

. N. H. St. 1907, c. 68, s. 2, corrects an error in N. H. St. 1905, s. 2, by insert-
ing the figures 13 in place of the figures 16 where reference is made to the
section on appraisals.

Information by Executor.

N. H. St. 1905, c. 40, s. 9, is amended by N. H. St. 1907, c. 68, s. 3, by insert-
ing a provision that every administrator shall prepare a statement in duplicate,
showing, as far as can be ascertained, the names of all the heirs-at-law and their
relationship to the decedent, and every executor shall prepare a like statement
showing the relationship to the decedent of all legatees whose relationship is
not shown by the will, and the age at the time of the death of the decedent of
all legatees to whom property is bequeathed or devised for life or for a term of
years, and the names of those, if any, who have died before the decedent, one
copy of which the administrator or executor shall file with the state treasurer,
and the other with the register of probate, within thirty days after his appoint-
ment; and when he files his account in the probate court, he shall file a dupli-
cate thereof with the state treasurer.

N. H. St. 1905, c. 40, s. 10, is amended by N. H. St. 1907, c. 68, s. 4, by striking
out the first sentence of the section and inserting in place thereof the following:
"The register of probate shall within thirty days after it is filed, send to the
state treasurer, by mail, a copy of every will containing legacies which are sub-
ject to a tax under the provisions of this chapter, and a copy of the inventory
and appraisal of every estate, any part of which may be subject to such a tax,
unless notified by the state treasurer that such copies will not be required."

Refunding.

N. H. St. 1905, c. 40, s. 12, is amended by N. H. St. 1907, c. 68, s. 5, by add-
ing the following: "Whenever in such a case the executor, administrator or
trustee has paid over the tax to the state treasurer, it shall be repaid to him
by the state treasurer."

Appraisal.

N. H. St. 1905, c. 40, s. 13, is amended by N. H. St. 1907, c. 68, s. 6, by insert-
ing after the word "property" in the second line of the section, the words "at
the time of the death of the decedent," and by striking out in the seventh and
eighth lines of said section the words "such return, when accepted by said court,
shall be final," and by inserting in the eighth line of said section before the
words "the fees" the words "one-half of" and by striking out the words "party

732 STATUTES ANNOTATED. [N. H. St.

applying for such appraisal" in the ninth and tenth lines of said section and
inserting in place thereof the words "state treasurer, and one-half of said fees shall
be paid by the other party or parties to said proceeding, provided, however,
that in all proceedings arising under this section said probate court upon
agreement of parties may appoint a single disinterested appraiser who shall upon
oath appraise such property as hereinbefore provided."

Lien.

N. H. St. 1905, c. 40, s. 14, is amended by N. H. St. 1907, c. 68, s. 7, by adding
at the end thereof the following: "Whenever any real estate or separate parcel
thereof is subject to a lien created by this act, or any amendment thereof, the
probate court shall have jurisdiction in like proceedings to make such order or
decree as will otherwise secure to the state the payment of any tax due or to
become due on such real estate or separate parcel thereof, and upon the per-
formance of such order or decree to discharge such lien."

Actions to Record Tax.

N. H. St. 1905, c. 40, s. 17, is amended by N. H. St. 1907, c. 68, s. 8, by striking
out, in the first line of said section, the word "shall" and inserting in place
thereof the word "may" and by striking out in the second line of said section the
words "within six months" and inserting in place thereof the words "at any
time."

Delivery of Securities to Foreign Executor.

N. H. St. 1905, c. 40, s. 19, is amended by N. H. St. 1907, c. 82, by inserting
in the eleventh line thereof, after the word "transfer" the following sentence:
"When such securities or assets are liable to a tax under the provisions of this
chapter, such tax shall be paid before such delivery or transfer," and by insert-
ing in the twelfth line thereof, after the word "examination" the words "or
delivery or transfer of such securities or assets before the payment of such tax
to the state treasurer."

Parties to Petition by Foreign Administrator.

N. H. St. 1905, c. 40, s. 20, is amended by N. H. St. 1907, c. 68, by inserting
after the words "this act,"' in the third line of said section, the words "or under
section 23 of chapter 189 of the Public Statutes."

Attorney for Collection.

N. H. St. 1905, c. 40, s. 22, is amended by N. H. St. 1907, c. 138, by substitut-
ing a new provision authorizing the state treasurer to appoint an attorney to
assist in the collection of the tax with assistants at a total salary not to exceed
twenty-one hundred dollars.

Remainders.

N. H. St. 1907, c. 64. Approved March 20, 1907.

S. 1. In all cases where there has been or shall be a devise, descent or bequest,
liable to an inheritance tax, to take effect in possession or to come into actual

1907, c. 64.] NEW HAMPSHIRE 733

enjoyment after the expiration of one or more life estates or a term of years,
the tax on such property, devise, descent or bequest shall not be payable, nor
interest begin to run thereon, except as hereinafter provided, until the person
or persons entitled thereto shall come into actual possession of such property,
and the tax thereon shall be assessed on the value of the property, at the time when
the right of possession accrues to the person entitled thereto as aforesaid, and
such person or persons shall pay the tax upon coming into possession of such
property. Upon the filing of the bond hereinafter required the executor or
administrator of the decedent's estate may settle his account in the probate
court without being liable for said tax, provided that such person or persons may
pay the tax at any time prior to their coming into possession, and in such cases
the tax shall be assessed on the value of the estate at the time of the payment
of the tax, after deducting the value of the life estate or estates for years; and
provided, further, that the tax on real estate shall remain a lien on the real
estate on which the same is chargeable until it is paid. Any person or persons
beneficially interested in remainder or reversion in any property liable to a tax
upon which such tax is postponed by the provisions of this section shall, within
one year after the date of the death of the decedent give bond to the judge of
the probate court having jurisdiction of the estate of such decedent, in such
amount and with such sureties as said court may approve, conditioned upon the
payment of such tax at the time or period when such person or persons shall
come into possession or actual enjoyment of the same. If any such person or
persons shall fail to file such bond within the period required, the tax shall be
due and payable under the provisions of section 4 of chapter 40 of the Laws
of 1905.

S. 2. This act shall take effect upon its passage, but shall not apply to the
estate of any person who died before the passage thereof.

Compromise of Tax.

N. H. St. 1907, c. 69, provides that the state treasurer may with the approval
of the attorney general effect a settlement of the tax where a devise, descent
or bequest is liable to a legacy tax on a contingency or dependent upon the
exercise of a discretion, or where the life tenant or tenant for years has a power
of appointment.

Bond by Executor who is Residuary Legatee.

N. H. St. 1907, c. 86, amends Public Statutes, c. 188, s. 13, by extending the pro-
vision providing that the executor who is a residuary legatee may give bond to
cover the legacy and succession taxes as well as debts and legacies.

Bond by Executor.

N. H. Public Statutes, c. 188, s. 14, is amended by'N. H. St. 1907, c. 86, s. 2,
by providing that when a will so directs an executor or trustee under a will
shall be exempt from giving a bond except a bond for the payment of debts
and legacy and succession taxes.

734 STATUTES ANNOTATED. [N. H. Sf

THE SUBSTITUTE ACT OF 1911.

N. H. St. 1911, c. 42, approved March 9, 1911, amends the
existing law by striking out sections 1-21, and inserting new sec-
tions in place thereof, which are printed as the present act, post.

Title.

In Amendment of Chapter 40 of the Laws of 1905, as amended by
Chapter 68 of the Laws of 1907, relating to a Tax on Collateral Legacies and
Successions. Approved March 9, 1911.

To what Estates Applicable.

S. 2. This act shall not apply to estates of persons deceased prior to the
date when it takes effect, or to property passing by deed, grant, bargain, sale
or gift taking effect prior to said date; but said estates and property shall remain
subject to the provisions of the laws in force prior to the passage of this act.
Chapter 64 of the Laws of 1907 is hereby repealed, except in so far as it applies
to estates of persons deceased prior to the passage of this act.

S. 3. This act shall take effect upon its passage.

THE PRESENT ACT.

N. H. St. 1911, c. 42.
Transfers Taxable. — Exemptions.

S. 1. All property within the jurisdiction of the state, real or personal,
and any interest therein, whether belonging to inhabitants of the state or not,
which shall pass by will, or by the laws regulating intestate succession, or
by deed, grant, bargain, sale or gift, made or intended to take effect in
possession or enjoyment after the death of the grantor or donor, to any
person, absolutely or in trust, except to or for the use of the father,
mother, husband, wife, brother, sister, lineal descendant, adopted child, the
lineal descendant of any adopted child, the wife or widow of a son, or
the husband of a daughter of a decedent, or to or for the use of educa-
tional, religious, cemetery, or other institutions, societies or associations of
public charity in this state, or for or upon trust for any charitable purpose in
the state, or for the care of cemetery lots, or to a city or town in this state for pub-
lic purposes, shall be subject to a tax of five per cent of its value, for the use of
the state; and administrators, executors, and trustees, and any such grantees
under a conveyance made during the grantor's life, shall be liable for such taxes,
with interest, until the same have been paid. An institution or society shall
be deemed to be in this state, within the meaning of this act, when its sole object
and purpose is to carry on charitable, religious or educational work within the
state, but not otherwise. When the personal estate so passing from any person
not an inhabitant of this state shall consist in whole or in part of shares in any
railroad or street railway company or telegraph or telephone company incorpo-
rated under the laws of this state and also of some other state or country, so
much only of each share as is proportional to the part of such company's right

1911, c. 42.1 NEW HAMPSHIRE. 735

of way, lying within this state shall be considered as property of such person
within the jurisdiction of the state for the purposes of this act.

[See notes to the Acts of 1878 and 1905, ante^ pp. 721, 723 et seq.\
Life Estates. — Annuities. — Remainder. — Valuation.

S. 2. When any interest in property less than an estate in fee shall pass by
will, or otherwise, as set forth in section 1, to one or more beneficiaries, with
remainder to others, the several interests of such beneficiaries, except such as
may be entitled to exemption under the provisions of section 1, shall be subject
to said tax. The value of an annuity or life estate shall be determined by the
"actuaries' Combined Experience Tables," at four per cent compound interest,
and the value of any intermediate estate less than a fee shall be so determined
whenever possible. The value of a remainder after such estate shall be deter-
mined by subtracting the value of the intermediate estate from the total value
of the bequest or devise. Whenever such intermediate estate or remainder is
conditioned upon the happening of a contingency, or dependent upon the exercise
of a discretion, so that the value of either cannot be determined by the tables
as hereinbefore provided, the value of the property which is the subject of the
bequest shall be determined as provided in section 13, and such value having
thus been ascertained the state treasurer shall, upon such evidence as may be fur-
nished by the will and the executor's statement, or by the beneficiaries or other-
wise, determine the value of the interests of the several beneficiaries,and the values
thus determined shall be deemed to be the values of such several interests for
the purpose of the assessment of the tax, except in so far as they shall be changed
by the court upon appeal. The executor or any beneficiary aggrieved by such
determination of the value of any such interest by the state treasurer may at
any time within three months after notice thereof appeal therefrom to the
probate court having jurisdiction of the estate of the decedent, which court shall
determine such value subject to appeal as in other cases. Whenever the identity
of the beneficiary who is to take such a remainder is conditioned upon the hap-
pening of a contingency, or dependent upon the exercise of a discretion, • the
state treasurer shall assess and collect the tax upon such remainder as upon a tax-
able legacy, and the executor shall be liable for such tax as in other cases. Pro-
vided, however, that if at the termination of the intermediate estate such remainder,
or any portion thereof, shall pass to a person or corporation which at the time
of the death of the decedent was exempt from such tax, such person or corpora-
tion may at any time within one year after the termination of the intermediate
estate, but not afterwards, apply to the probate court for an abatement of the
tax on such remainder as provided in section 12, and the state treasurer shall
repay the amount adjudged to have been illegally exacted as provided in said
section 12, with interest thereon at three per cent per annum from the date of the
payment of the tax. Provided, however, that the power of the state treasurer, with
the approval of the attorney general, to adjust the tax by compromise in certain
cases, as set forth in chapter 69 of the Laws of 1907, shall remain in force.

Gifts to Executors, etc., in Lieu of Compensation.

S. 3. If a testator gives, bequeaths or devises to his executors or trustees
any property otherwise liable to said tax, in lieu of their compensation, the
value thereof in excess of reasonable compensation, as determined by the pro-
bate court upon the application of any interested party or the state treasurer,
shall nevertheless be subject to the provisions of this chapter.

736 STATUTES ANNOTATED. [N.H.St.

When Tax Accrues.

S. 4. All taxes imposed by the provisions of this chapter, including taxes
on intermediate estates and remainders as set forth in section 2, shall be due
and payable to the state treasurer by the executors, administrators or trustees,
at the expiration of two years after the date of their giving bonds. If the pro-
bate court has ordered the executor or the administrator to retain funds to satisfy
a claim of a creditor, the payment of the tax may be suspended by the court
to await the disposition of such claim. If the taxes are not paid when due,
interest at the rate of ten per cent per annum shall be charged and collected
from the time the same became payable; and said taxes and interest shall be
and remain a lien on the property, subject to the taxes until the same are paid.

Tax to be Deducted.

S. 5. An executor, administrator or trustee holding property subject to
said tax shall deduct the tax therefrom, or collect it from the legatee or person
entitled to said property, and he shall not deliver property or a specific legacy
subject to said tax until he has collected the tax thereon. When a specific
bequest of personal property other than money is subject to a tax under the
provisions of this act and the legatee neglects or refuses to pay the tax upon
demand, the executor or trustee may, upon such notice as the probate court
may direct, be authorized to sell such property, or if the same can be divided,
such portion thereof as may be necessary, and shall deduct the tax from the
proceeds of such sale, and shall account to the legatee for the balance, if any, of
such proceeds in lieu of the property. An executor or administrator shall
collect taxes due upon land which is subject to tax under the provisions hereof
from the heirs or devisees entitled thereto, and he may be authorized to sell
said land according to the provisions of section 8 if they refuse or neglect to
pay said tax.

Tax on Legacy Charged on Real Estate to be Deducted.

S. 6. If a legacy subject to said tax is charged upon or payable out of real
estate, the heir or devisee, before paying it, shall deduct said tax therefrom and
pay it to the executor, administrator or trustee, and the tax shall remain a
charge upon said real estate until it is paid. Payment thereof may be enforced
by the executor, administrator or trustee in the same manner as the payment
of the legacy itself could be enforced.

Deduction of Tax in Case of Particular Estates and Remainders.

S. 7. When any interest in property less than an estate in fee is devised
or bequeathed to one or more beneficiaries with remainder to others, and the
interest of one or more of the beneficiaries is subject to said tax, the executor
shall deduct the tax upon such taxable interests from the whole property thus
devised or bequeathed, and whenever property other than money is so devised
or bequeathed he may, unless the taxes upon all the taxable interests are paid
when due by the beneficiaries, be authorized to sell such property or such portion
thereof as may be necessary, as provided in sections 5 and 8, and having deducted
the unpaid taxes on such taxable interests from the proceeds of such sale, he
shall account for the balance in lieu of the property sold as in other cases.

1911, c. 42.] NEW HAMPSHIRE. 737

Power of Sale.

S. 8. The probate court may authorize executors, administrators and
trustees to sell the real estate of a decedent for the payment of said tax in the
same manner as it may authorize them to sell real estate for the payment of
debts.

Information by Administrators, etc., to be furnished.

S. 9. Every administrator shall prepare a statement in duplicate, showing
as far as can be ascertained the names of all the heirs-at-law and their relation-
ship to the decedent, and every executor shall prepare a like statement showing
the relationship to the decedent of all legatees named in the will, and the age
at the time of the death of the decedent of all legatees to whom property is
bequeathed or devised for life or for a term of years, and the names of those, if
any, who have died before the decedent, and shall file same with the register
of probate at the time of his appointment. Letters of administration shall
not be issued by the probate court to any executor or administrator until he has
filed such statement in duplicate, and has given bond with sufficient sureties to pay
all taxes for which he may be, or become, liable under the provisions of this
act, and to comply with all of its provisions. Every executor and administrator,
when he files his account in the probate court, shall file a duplicate thereof with
the state treasurer. An inventory and appraisal under oath of the whole of
every estate, any part of which may be subject to a tax under the provisions
of this act, in the form prescribed by the statute, shall be filed in probate court
by the executor, administrator or trustee within three months after his appoint-
ment. If he neglects or refuses to comply with any of the requirements of
this section he shall be liable to a penalty of not more than one thousand dollars,
which shall be recovered by the state treasurer for the use of the state, and
after hearing and such notice as the court of probate may require, the said
court of probate may remove said executor or administrator, and appoint another
person administrator with the will annexed, or administrator, as the case may
be; and the register of probate shall notify the state treasurer within thirty
days after the expiration of said three months of the failure of any executor,
administrator or trustee to file such inventory and appraisal in his office.

Information to State Treasurer.

S. 10. The register of probate shall, within thirty days after it is filed, send
to the state treasurer, by mail, one copy of every statement filed with him by
executors and administrators as provided in section 9, a copy of every will con-
taining legacies which are subject to a tax under the provisions of this chapter,
and a copy of the inventory and appraisal of every estate, any part of which
may be subject to such a tax, unless notified by the state treasurer that such
copies will not be required. The fees for such copies shall be paid by the state
treasurer. The register shall also furnish such copies of papers and such informa-
tion as to the records and files in his office, in such form as the state treasurer
may require. A refusal or neglect by the register so to send such copies, or
to furnish such information, shall be a breach of his official bond. The fees of
registers of probate for copies furnished under the provisions of this section
shall be one dollar for each will or inventory not exceeding four full typewritten
pages, eight by ten and one-half inches, and twenty-five cents for each page in
excess of four.

738 STATUTES ANNOTATED. [N.H.St.

Information as to Real Estate.

S. 11. If real estate of a decedent so passes to another person as to become
subject to said tax, his executor, administrator or trustee shall inform the state
treasurer thereof within six months after his appointment, or if the fact is not
known to him within that time, then within one month after the fact becomes
known to him.

Assessment of Tax. — Abatement.

S. 12. The state treasurer shall determine the amount of all taxes due and
payable under the provisions of this act, and shall certify the amount so due
and payable to the executor or administrator, if any, otherwise to the person or
persons by whom the tax is payable; but in the determination of the amount
of any tax said state treasurer shall not be required to consider any payments on
account of debts or expenses of administration which have not been allowed by
the probate court having jurisdiction of said estate. The amount due upon
the claim of any creditor against the estate of a deceased person arising under
a contract made after the passage of this act, if payable by the terms of such
contract at or after the death of the deceased shall be subject to the same tax
imposed by this chapter upon a legacy of like amount. The value of legacies
or distributive shares in the estates of deceased persons for the purpose of the
legacy or succession tax shall not be diminished by reason of any claim against
the estate based upon such a contract in favor of the persons entitled to such
legacies or distributive shares, except in so far as it may be shown affirmatively
by competent evidence that such claim was legally due and payable in the life-
time of the decedent. Payment of the amount so certified shall be a discharge
of the tax. An executor, administrator, trustee or grantee, who is aggrieved
by any such determination of the state treasurer and who pays the tax assessed
without appeal, may, within one year after the payment of such tax to the
treasurer, but not afterwards, apply to the probate court having jurisdiction
of the estate of the decedent for the abatement of said tax or any part thereof,
and if the court adjudges that said tax or any part thereof was wrongfully exacted
it shall order an abatement of such portion of said tax as was assessed without
authority of law, which said order or decree shall be subject to appeal as in
other cases. Upon a final decision ordering an abatement of any portion of
said tax, the state treasurer shall repay the amount adjudged to have been
illegally exacted without any further act or resolve making appropriation therefor.
Whenever a specific bequest of household furniture, wearing apparel, personal
ornaments or similar articles of small value is subject to a tax under the pro-
visions of this act, the state treasurer in his discretion may abate such tax if
in his opinion the tax is not of sufficient amount to justify the labor and expense
of its collection.

Appraisal. — Inventory.

S. 13; If an executor or administrator shall fail to file an inventory and
appraisal in the probate court as provided in section 9 of this act, or if the state
treasurer is not satisfied with the inventory and appraisal which is filed, the
state treasurer may employ a suitable person to appraise the property and the
executor or administrator shall show the property of the decedent to such
appraiser upon demand, and shall make and subscribe his oath that the property

1911, c. 42] NEW HAMPSHIRE. 739

thus shown includes all the property of the decedent that has come to his knowl-
edge or possession. Such appraiser shall prepare an inventory of said property,
and shall appraise it at its actual market value at the time of the decedent's
death, and shall return such inventory and appraisal to the state treasurer.
The expense of such appraisal shall be a charge upon the estate of the decedent
as an expense of administration in all cases where an inventory and appraisal
has not been filed as provided in said section 9, otherwise the expense shall be
paid by the state treasurer. An executor or administrator who shall neglect
or refuse to show the property of the decedent to such appraiser upon demand
or to make and subscribe such oath shall be liable to the same penalty as for
a violation of the provisions of said section 9. Said tax shall be assessed upon
the actual market value of the property at the time of the decedent's death.
Such value shall be determined by the state treasurer and notified by him to the
person or persons by whom the tax is payable, and such determination shall
be final unless the value so determined shall be reduced by proceedings as
herein provided. Upon the application of any party interested in the suc-
cession, or of the executor, administrator, or trustee, made at any time within
three months after notice of such determination, the probate court shall ap-
point three disinterested appraisers, or with the consent of the state treasurer,
one disinterested appraiser, who first being sworn, shall appraise such property
at its actual market value, as of the date of the death of the decedent and shall
make return thereof to said court. Such return when accepted by said court
shall be final; provided, that any party aggrieved by such appraisal shall have
an appeal upon the matters of law. One-half of the fees of said appraisers, as
determined by the judge of said court, shall be paid by the state treasurer, and
one-half of said fees shall be paid by the other party or parties to said proceeding.

Appeal.

S. 14. An executor, administrator, trustee or grantee, who is aggrieved
by the assessment of any tax by the state treasurer as provided in section 12,
may at aay time within three months after notice of such assessment appeal
therefrom to the probate court having jurisdiction of the settlement of the
estate of the decedent, which court shall, subject to appeal as in other cases,
hear and determine all questions relative to said tax, and the state treasurer
shall represent the state in any such proceeding. Whenever any real estate
or separate parcel thereof is subject to a lien created by this act, or any
amendment thereof, the probate court shall have jurisdiction in like proceedings
to make such order or decree as will otherwise secure to the state the pay-
ment of any tax due or to become due on such real estate or separate parcel
thereof, and upon the performance of such order or decree to discharge such
lien.

Application for Administration by State Treasurer.

S. 15. If, upon the decease of a person leaving an estate liable to a tax under
the provisions of this chapter, a will disposing of such estate is not offered for
probate, or an application for administration made within four months after
such decease, the proper probate court, upon application by the state treasurer,
shall appoint an administrator.

740 STATUTES ANNOTATED. [N. H. St.

Probate Accounts not Allowed till Tax Paid.

S. 16. No account of an executor, administrator or trustee, shall be allowed
by the probate court until the certificate of the state treasurer has been filed
in said court, that all taxes imposed by the provisions of this act upon any
property or interest therein belonging to the estate to be included in said account,
and already payable, have been paid, and that all taxes which may become due
on said estate have been paid, or settled as hereinbefore provided, or that the
payment thereof to the state is secured by deposit or by lien on real estate.
The certificate of the state treasurer as to the amount of the tax and his receipt
for the amount therein certified shall be conclusive as to the payment of the tax,
to the extent of said certification.

Production of Books, Papers, etc.

S. 17. At any time after the expiration of two years from the date of the
bond of the executor or administrator of any estate upon which the tax has not
been determined as provided in section 12, or upon which no tax has been paid,
the state treasurer may require such executor or administrator, or any person
or corporation interested in the succession to appear at the state treasury, at
such time as the treasurer may designate, and then and there to produce for
the use of the treasurer in determining whether or not the estate is subject to
said tax and the amount of such tax, if any, all books, papers or securities which
may be in the possession or within the control of such executor, administrator
or beneficiary relating to such estate or tax, and to furnish such other informa-
tion relating to the same as he may be able and the treasurer may require.
Whenever the treasurer shall desire the attendance of an executor, adminis-
trator or beneficiary as herein provided, he shall issue a notice stating the time
when such attendance is required, and shall transmit the same by registered
mail to such person or corporation, fourteen days at least before the date when
such person or corporation is required to appear. If a person or corporation
receiving such notice neglects to attend, or to give attendance so long as may be
necessary for the purpose for which the notice was issued, or refuses to pro-
duce such books, papers or securities, or to furnish such information, such person
or corporation shall be liable to a penalty of twenty-five dollars ($25.00) for
each offence, which shall be recovered by the state treasurer for the use of the
state. The state treasurer may commence an action for the recovery of any
of said taxes at any time after the same become payable; and also whenever
the judge of a probate court certifies to him that the final account of an executor,
administrator or trustee has been filed in such court and that the settlement
of the estate is delayed because of the non-payment of said tax. The probate
court shall so certify upon the application of any heir, legatee or other person
interested therein, and may extend the time of payment of said tax whenever
the circumstances of the case require.

Liabilities on Transfer of Stock, by Foreign Executor.

S. 18. If a foreign executor, administrator or trustee assigns or transfers
any stock or obligation in any national bank located in this state, or in any
corporation organized under the laws of this state, owned by a deceased non-
resident at the date of his death and liable to a tax under the provisions of this
chapter, the tax shall be paid to the state treasurer at the time of such assign-

1911, c. 42.] NEW HAMPSHIRE. 741

ment or transfer, and if it is not paid when due, such executor, administrator
or trustee shall be personally liable therefor until it is paid. A bank located
in this state, or a corporation organized under the laws of this state which shall
record a transfer of any share of its stock or of its obligations made by a foreign
executor, administrator or trustee, or issue a new certificate for a share of its
stock or of this transfer of an obligation at the instance of a foreign executor,
administrator or trustee, before all taxes imposed thereon by the provisions of
this chapter have been paid, shall be liable for such tax in an action brought
by the state treasurer.

Conditions of Delivering Assets to Foreign Executor.

S. 19. Securities or assets belonging to the estate of a deceased non-resident
shall not be delivered or transfered to a foreign executor, administrator or legal
representative of said decedent, unless such executor, administrator or legal
representative has been licensed to receive such securities or assets by the pro-
bate court without serving notice upon the state treasurer of the time and place
of such intended delivery or transfer, seven days at least before the time of
such delivery or transfer. The state treasurer, either personally or by repre-
sentative, may examine such securities or assets at the time of such delivery
or transfer. When such securities or assets are liable to a tax under the pro-
visions of this chapter, such tax shall be paid before such delivery or transfer.
Failure to serve such notice or to allow such examination, or delivery or transfer
of such securities or assets before the payment of such tax to the state treasurer
shall render the person or corporation making the delivery or transfer liable
in an action brought by the state treasurer to the payment of the tax due upon
said securities or assets.

Parties. — Notice.

S. 20. The state treasurer shall be made a party to all petitions by foreign
executors, administrators or trustees brought under the provisions of this act,
or under section 23 of chapter 189 of the Public Statutes, and no decree shall
be made upon any such petition unless it appears that notice of such petition
has been served on the state treasurer, fourteen days at least before the return
day of such petition. The state treasurer shall be entitled to appear in any
proceeding in any court in which the decree may in any way affect the tax, and
no decree in any such proceeding, or upon appeal therefrom, shall be binding
upon the state unless personal notice of such proceeding shall have been given
to the state treasurer.

Books and Blanks provided by State Treasurer.

S. 21. The state treasurer shall provide the judges and registers of pro-
bate of the state with such books and blanks as are requisite for the execution
of this act.

742 STATUTES ANNOTATED. [N. J. St.

NEW JERSEY,

New Jersey has had a collateral inheritance tax since 1892.
There have been various revisions, the last one in 1909.

A strict construction of the constitutional requirement that
the title shall express the subject of a statute has played havoc
with the inheritance taxes, no less than three acts having been
declared ineffective in part for defective titles.

Collateral inheritances only are taxed, at the uniform rate of
five per cent, with an exemption of $500 which applies to indi-
vidual shares, not to the estate as a whole. Inheritances not taxed
are those to father, mother, husband, wife, child, lineal descendant,
brother, sister, wife or widow of son, husband of daughter.

Under the present law New Jersey is taxing stock in a New
Jersey corporation owned by a non-resident. A corporation
which transfers such stock without permission from the comp-
troller is responsible for the tax and subject to a penalty as well.

If the entire estate of a non-resident passes to exempt heirs, the
executor or administrator must file with the comptroller a copy
of the will, if any, and an affidavit setting forth the names and
relationship of the beneficiaries, whereupon a waiver will be issued
permitting any New Jersey stock to be transferred.

If any portion of a non-resident's estate goes to other than
exempt heirs, it is necessary to file in addition a complete inven-
tory of the estate. In such a case the tax on the portion of the
estate in New Jersey is that proportion of the tax which the estate
would have had to pay if the deceased had been a resident of New
Jersey which the New Jersey portion of the estate bears to the entire
estate.

The comptroller is authorized to make an arrangement to pay
a percentage of the tax that may be collected to any person giving
information about estates of residents that have not taken out
administration within one year after the date of death, and
estates of non-residents that have any property taxable in the
state if the tax is not paid within three months after the death.

1893, c. 210.]

NEW JERSEY.

List of Statutes.

1709-1895.

Gen. Sts. of New Jersey, Vol. 3, p. 3339

1892.

Statutes "

" "

c. 122. p. 206.

1893.

(( It

u n

c. 210, p. 367.

1894.

<( 11

" "

c. 210, p. 318.

1898.

i( (<

" "

c. 62, p. 106.

1902.

ti K

( <<

c. 217, p. 670.

1903.

n a

< ,1

c. 90, p. 128.

1906.

it <(

i a

c. 22V, p. 432.

1906.

<i (<

I (t

c. 228, p. 432.

1908.

il n

' "

c. 131, p. 200.

1909.

" "

' "

c. 31, p. 49.

1909.

^ " "

< (<

c. 159, p. 236.

1909.

<< <<

' "

c. 209, p. 304.

1909.

It 4<

1 u

c. 228, p. 325.

1909.

II 11

I It

c. 238, p. 375.

1910.

11 11

I It

c. 28, p. 42.

743

(Also Gen. Sts. p. 3339.)

Constitutional Limitations.

New Jersey Constitution. Amendment of 1844.

Art. 4, S. 7, No. 12. Property shall be assessed for taxes under general laws,
and by uniform rules, according to its true value.

S. 7, No. 4. To avoid improper influences which may result from intermixing
in one and the same act such things as have no proper relation to each other,
every law shall embrace but one object, and that shall be expressed in the title.
No law shall be revived or amended by reference to its title only; but the act
revived, or the section or sections amended, shall be inserted at length. No
general law shall embrace any provision of a private, special or local character.
No act shall be passed which shall provide that any existing law, or any part
thereof, shall be made or deemed a part of the act, or which shall enact that
any existing law, or any part thereof, shall be applicable, except by inserting
it in such act.

THE STATUTE OF 1892.

N. J. St. 1892, c. 122, approved March 23, 1892, provided a
collateral inheritance tax of five per cent. It was repealed by
N.J.St. 1893,0.210. .

The acts of 1892 and 1893 are void as to realty, as the title does
not mention real estate, which defect was avoided in the act of
1894. Grossman v. Hancock, 58 N. J. L. 139, 32 A. 689; Von
Riper v. Heffenheimer, 17 N. J. L. J. 49; In re Dobermiller, 17
N. J. L. J. 378.

THE STATUTE OF 1893.

N. J. St. 1893, approved March 16, 1893, c. 210, p. 367, s. 1,
provides for a tax of five per cent on collaterals, with an exemption
where an estate may be valued at less than five hundred dollars.

744 STATUTES ANNOTATED. [N. J. St.

The act is void as to real estate, as the title does not mention
real estate. Grossman v. Hancock, 58 N. J. L. 139, 32 A. 689;
Von Riper V, Heffenheimer, 17 N. J. L. J. 49; In re Dobermiller, 17
N. J. L. J. ?78.

Ss. 2-22 cover the assessment, collection and payment of the tax.

S. 4. And be it enacted. That all taxes imposed by this act, unless otherwise
herein provided for, shall be due and payable at the death of the testator, grantor,
or intestate, as the case may be, and if the same are paid within one year, interest
at the rate of six per centum per annum shall be charged and collected thereon,
but if not so paid, interest at the rate of ten per centum per annum shall be
charged and collected from the time said tax accrued; provided, that if said tax
is paid within six months from the accruing thereof, interest shall not be charged
or collected thereon, but a discount of five per centum shall be allowed and
deducted from said tax; and in all cases where the executors, administrators or
trustees do not pay such tax within one year from the death of the decedent they
shall be required to give a bond, in the form and to the effect prescribed in section
two of this act, for the payment of said tax, together with interest.

Future Indeterminate Interests are Taxable.

N. J. St. 1893, c. 210, s. 4, provides that all taxes imposed by the
act shall be due at the death of the testator unless otherwise pro-
vided and it was claimed that the necessary effect of this language
was that the act does not provide for the imposition of a tax which
cannot be determined at the death of the testator. But this con-
tention fails to take account of the phrase in this fourth section
that the tax imposed by the act shall be due and payable at the
death of the testator unless otherwise provided. It also fails to
take account of the provision of section 13, to the effect that in
order to fix the value of property subject to the tax, the surrogate
or register of the prerogative court shall "appoint an appraiser as
often as and whenever the occasion may require." The court
relies on similar provisions in the New York statute as construed
in In re Stewart, 131 N. Y. 274. Hoyt v. Hancock, 65 N. J. Eq.
688, 55 A. 1004.

S. 13. And be it enacted, That in order to fix the value of property of persons
whose estates shall be subject to the payment of said tax, the surrogate or register
of the. prerogative court, on the application of any interested party, or upon
his own motion, shall appoint- some competent person as appraiser as often as,
and whenever occasion may require, whose duty it shall be forthwith to give
such notice by mail, and to such persons as the surrogate or register of the pre-
rogative court may by order direct, of the time and place he will appraise such
property, and at such time and place to appraise the same at its fair market
value, and make a report thereof in writing to said surrogate or register of the

1894, c. 210 NEW JERSEY. 745

prerogative court, together with such other facts in relation thereto as said
surrogate or register of the prerogative court may by order require, to be filed
in the office of such surrogate or register of the prerogative court, and from this
report the said surrogate or register of the prerogative court shall forthwith
assees and fix the then cash value of all estates, annuities and life estates, or
term of years growing out of said estates, and the tax to which the same is liable,
and shall immediately give notice thereof by mail to the state comptroller and
to all parties known to be interested therein ; any person or persons dissatisfied
with said appraisement or assessment may appeal therefrom to the ordinary or
orphans' court of the proper county, within sixty days after the making and
filing of such assessment, on paying or giving security, approved by the ordinary
or orphans' court, to pay all costs, together with whatever tax shall be fixed by
said court; the said appraiser shall be paid by the state treasurer on the warrant
of the comptroller, on the certificate of the ordinary or surrogate, duly filed
with the comptroller, at the rate of three dollars per day for every day actually
and necessarily employed in said appraisement, together with his actual and
necessary traveling expenses.

[See notes to section 4, ante, p. 744.]

THE STATUTE OF 1894.
History — Construction.

The New Jersey statute of 1894 was modelled after the New
York act of 1885, and if the New Jersey legislature had made no
change in that act it would be held upon well-settled principles to
have adopted with the act the construction previously placed
thereon by the New York courts in the case oi Enston, 113 N. Y.
174, 21 N. E. 87. Neilson v. Russell, 76 N. J. L. 655, 71 A. 286,
287.

N. J. St. 1894, c. 210, p. 318. Approved May 15, 1894.

Taxable Transfers. — Rate.

S. 1. Be it enacted by the Senate and General Assembly of the State of
New Jersey, That after the passage of this act 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 being a resident of the state, and all property
which shall be within this state, and any part of such property, and any interest
therein or income therefrom, which shall be transferred by inheritance, dis-
tribution, bequest, devise, deed, grant, sale or gift aforesaid, made or intended
to take effect in possession or enjoyment after the death of the intestate, testator,
grantor or bargainor, to any person or persons, or to a body politic or corporate,
excepting churches, hospitals and orphan asylums, public libraries, bible and
tract societies, and all religious, benevolent and charitable institutions and
organizations, in trust or otherwise, or by reason whereof any person or body
politic or corporate shall become beneficially entitled", in possession or expectancy,
to such property, or to the income thereof, other than to or for the use of the
father, mother, husband, wife, children, brother or sister, or lineal descendants

746 STATUTES ANNOTATED. IN. J. St.

born in lawful wedlock, or the wife or widow of a son, or the husband of a daughter,
shall be subject to a tax of five dollars on every hundred dollars of the clear
market value of such property, to be paid to the treasurer of the state of New
Jersey for the use of the state, and all administrators, executors and trustees
shall be liable for any and all such taxes until the same shall have been paid
as hereinafter directed; provided, that an estate which may be valued at a
less sum than five hundred dollars shall not be subject to said duty or tax.

As to exemptions, see post, p. 759.

The New Jersey statute of 1894 taxes the legacy and not the
estate. Neilson v. Russell 76 N. J. L. 655, 71 A. 286, reversing
76 N. J. L. 27, 69 A. 476.

Distinguished from the New York Act.

The New Jersey statute of 1894 modified the language of the
New York statute of 1885 by inserting at the beginning of the
clause the words "all property" in place of the mere relative "which,"
and by adding the words "inheritance, distribution, bequest,
devise."

This act differs from the New York act of 1892, which assumes
to tax the transfer of property within the jurisdiction, while the
New Jersey statute of 1894 does not undertake to tax all transfers
of property within the jurisdiction, but only taxes an inheritance,
distribution, bequest or devise. In this respect the New Jersey
statute differs also from the Maryland statute construed in State
V. Dalrymple, 70 Md. 294, 17 A. 82, 3 L. R. A. 372. For the same
reason the question is different from what it is in Massachusetts as
in Greves v. Shaw, 173 Mass. 205, 53 N. E. 372. In short, the
New Jersey statute imposes a legacy duty and not a transfer or
succession tax as was decided in reference to the English statute
in Thomason v. Advocate General, 12 CI. & F. 1. Neilson v.
Russell, 76 N. J. L. 655, 71 A. 286, reversing 76 N. J. L. 27, 69
A. 476.

Constitutionality.

The act of 1894 is not a property tax and is constitutional.
Neilson v. Russell, 76 N. J. L. 655, 71 A. 286, reversing 76 N. J. L.
27, 69 A. 476.

Double Taxation Upheld.

The situs of personal property for the purpose of a legacy or
succession tax is the domicile of the decedent and the right to
its imposition is not affected by the statute of a foreign state

1894, c. 210.] NEW JERSEY. 747

which subjects to similar taxation such portion of the personal
estate of any non-resident testator or intestate as he may take
and leave there for safe keeping or until it should suit his
convenience to carry it away. In re Hartman, 70 N. J. Eq. 664,
62 A. 560.

"A Resident of the State."

The decedent was the wife of an Episcopal rector in Dover,
New Jersey, who resided there at the death of the decedent. The
decedent was a wealthy woman and at the time of her marriage
owned and resided in a comfortable property in New York City,
and until her death maintained her establishment in that place.
She had repeatedly declared that she would never remove to
Dover, where her husband resided, for the purpose of establishing
her home there. After the marriage her husband lived with the
decedent in New York City during the week, she going with him to
Dover at the end of each week, where they remained until the
beginning of the next week, in order that he might officiate during
the Sunday services. But she used to spend about two weeks in
the spring and the same period in the fall of each year at the rectory
in Dover as a part of her summer vacation. In May, 1903, she
accompanied her husband to Dover for the purpose of attending
a church entertainment, expecting to remain but a day or two,
and while there was taken suddenly ill and died. The court holds
that the legal domicile of the husband was in New Jersey and her
domicile was therefore also in New Jersey, according to the estab-
lished rule that where the husband and wife are living together as
members 6f one family, the residence of the husband is considered
in law as the residence of the wife. In re Hartman, 70 N. J. Eq.
664, 62 A. 560.

"Property which shall be within this State."

The court assumes that shares of stock in a New Jersey corpora-
tion have a situs in this state, and that succession thereto or
transfer thereof may be taxed by the New Jersey legislature.
Neilson v. Russell, 76 N. J. L. 655, 71 A. 286, reversing 76 N. J. L.
27, 69 A. 476.

There was no doubt expressed in Neilson v. Russell, of the
power of the legislature to tax the succession to property located
in this state of a non-resident decedent. Dixon v. Russell, 79
N. J. L. 490, 76 A. 982, reversing 78 N. J. L. 296, 73 A. 51.

748 STATUTES ANNOTATED. [N. J. St.

** Inheritance, Distribution, Bequest and Devise." — Non-
Residents.

The court holds that a legacy in an English estate of stock in a
New Jersey corporation is not taxable by the New Jersey statute of
1894, even if the court disregards the technical force of the words
"inheritance, distribution, bequest and devise,'' and looks at the tax
as a succession tax. The tax cannot be sustained as a property
tax. The ground upon which it can be sustained is that the rights
of testamentary disposition and of succession are creatures of law,
and the court thinks that it follows logically that the only law
which can impose the terms is the law that creates the right. In
this case it is the English law. The title to the stock passed by
virtue of the will to the executors from the moment of the testa-
tor's death, and the probate was operative only as the authenti-
cated evidence, not as the foundation of the executors' title. The
English executors were authorized without probate in this state to
transfer the stock.

The court remarks that the New Jersey administration is ancil-
lary only and the provisions of the statute authorizing the executors
to collect the tax from the legatee or to take it from the legacy
cannot be enforced; and after administration here the balance of
the estate would probably be transferred to the English executors
for distribution in accordance with the laws of the domicile of
the testator. Neilson v. Russell, 76 N. J. L. 655, 71 A. 286, revers-
ing 76 N. J. L. 27, 69 A. 476.

Where the decedent had never resided in New Jersey, and was
not seized of real estate in New Jersey, the court holds that the
tax upon non-residents was imposed only in case of inheritance,
distribution, bequest and devise. The court holds that these words
were naturally applicable to the general succession to the whole
estate and not to the particular succession to a special portion of
the estate which in this case is the stock of a New Jersey corpora-
tion. That general succession was succession under the foreign
law and therefore not taxable in this state. Astor v. State (N. J.
1903), 72 A. 78 (governed by Neilson v. Russell, ante).

Marshaling Assets.

The executor could not release the New Jersey property of a
resident of New York from taxation by applying it to the payment
. of exempt legacies and by paying the taxable legacies out of the
New York property.

1894, c. 210.] NEW JERSEY. 749

The court remarks upon In re James, 144 N. Y. 6, 38 N. E. 961,
where the New York court held that the devotion of the New York
property to the payment of exempt legacies rendered that property
immune from the imposition of the collateral inheritance tax under
a New York statute.

In Massachusetts a different rule has been applied, on the ground
that the property passed at the death of the testator, in Kingsbury
V. Chapin, 196 Mass. 533, and this rule, adopted in Kingsbury v.
C/^a^iw, has subsequently been followed in In re Ramsdill, 190 N. Y.
492, 83 N. E. 584, so far as it applied to intestacy.

The court says that there is no ground apart from strictly specific
legacies for differentiating the case of intestacy from that of testacy ;
and it therefore applies to the case of a testator. Tilford v. Dick-
inson 79 N. J. L. 302, 75 A. 574, reversed on another point in 79
N. J. L. 574, 79 A. 1119.

Taxation not Dependent on Probate in New Jersey.

Where there is a question whether a married woman is domiciled
within the state of New Jersey or of New York, the fact that the
will was never probated in New Jersey, but the probate was taken
out in New York, does not deprive the state of New Jersey of
jurisdiction to levy an inheritance tax upon it. The authority of
the surrogate does not depend upon the probate of the will which
speaks from the death of the testatrix. In re Hartman, 70 N.J.
Eq. 664, 668, 62 A. 560.

Power of Appointment.

If a testator died before the passage of an inheritance tax, leav-
ing a life interest by his will with the power of appointment in the
life tenant, it seems that the interest acquired under the appoint-
ment is not subject to tax, as that interest is to be considered as
acquired at the time of the will taking effect. Hoyt v. Hancock,
65 N. J. Eq. 688, 55 A. 1004, relying upon In re Harbeck, 161 N. Y.
211.

Gift of Bonds to Debtor is Taxable.

Where the testator was the holder of certain debenture bonds
of a corporation and bequeathed these bonds to the corporation,
it was contended that no assessment could be made upon this
legacy, as such a gift only released to a debtor evidences of his debt
held by his creditor. The court replies, however, that the deben-

750 STATUTES ANNOTATED. [N. J. St.

ture bonds in question were the property of the testator and that
when he bequeathed them to the corporation the property passed
from him to it ; that it might cancel the bonds or it might properly
transfer them to any one who might be willing to pay their value
and that the tax was properly imposed upon them. In re Roths-
child, 72 N. J. Eq. 425, 65 A. 1118, affirming 71 N. J. Eq. 210.

S. 2 provides for the appraisal of remainder interests; section 3 covers a tax
on legacies to executors; section 4 provides that the tax shall be due at the
death of the testator; section 5 covers the penalty.

When Executor should Pay Tax. — Liability for Interest and
Penalty.

The executor showed in his account that he had paid a certain
sum for inheritance tax, including interest and a penalty, and objec-
tion was made to the allowance of the account.

The court holds that the executor is not bound to pay the tax
until the expiration of a year allowed him by law within which to
settle the estate. He is entitled to know the amount payable for
the payment of legacies after the debts are paid and to have a
reasonable time thereafter before he pays the tax and the legacies.

The court holds, therefore, that the executor should be allowed
in his account for the principal of the tax he has paid, together
with interest collected thereon under the statute for one year ; and
that as he is bound to pay this tax on the legacies at the expiration
of the year he cannot be allowed any interest he has paid thereon
after that period. The executor is personally chargeable with the
whole penalty, and is not entitled to be allowed in the accounting
for the excess interest or penalty. Wyckoff v. O'Neill 72 N. J.
Eq. 880, 67 A. 32.

S. 6 provides for the deduction of the tax; section 7 gives the executors power
to sell property to pay the tax; sections 8 and 9 cover the payment of the tax.

Executor's Accounts should Show Inheritance Tax Payments.

It was suggested by the lower court that the amount of the
inheritance tax paid did not enter into the executor's accdunt, as
the amount of the tax on each legacy should be deducted from
the legacy itself in settlement with the legatee.

1894, c. 210.] NEW JERSEY. 751.

The court of appeals holds, however, that the executor should
show in his account every payment made by him as executor.
The distribution of these payments among the various legatees
is a matter of subsequent arrangement between him and them when
he comes to pay the legacies. In settling his account it would be
better, doubtless, if the accountant should distribute the sum
total of the inheritance taxes, showing just how much was charge-
able against each legacy. But the failure to so distribute is no
reason for disallowing the items in the account. Wyckoff v.
O'Neih 72 N. J. Eq. 880, 67 A. 32.

Refund to Pay Debts.

S. 10. And be it enacted, That whenever any debts shall be proven against the
estate of a decedent, after the payment of legacies or distribution of property
from which the said tax has been deducted, or upon which it has been paid, and
a refund is made by the legatee, devisee, heir or next of kin, a proportion of the
tax so paid shall be repaid to him by the executor, administrator or trustee, if
the said tax has not been paid to the state treasurer, or by them if it has been
so paid.

Section 10, which authorizes a refund of taxes where the legatee
has been obliged to refund part of the legacy to pay debts, shows
that it is the legacy that is taxed and not the estate, and shows
further, that an insolvent estate is not liable to the tax. Neilson
V. Russell (N. J. Errors and Appeals), 71 A. 286, reversing 69 A.
476.

Foreign Executor or Administrator.

S. 11. And be it enacted. That whenever any foreign executor or adminis-
trator shall assign or transfer any stocks or loans in this state, standing in the
name of a decedent, or in trust for a decedent, which shall be liable to the said
tax, such tax shall be paid to the state treasurer on the transfer thereof, other-
wise the corporation permitting such transfer shall become liable to pay such
tax; provided, that such corporation has knowledge before such transfer that
said stocks or loans are liable to said tax.

The claim of the state of New Jersey to tax non-residents' stock
in New Jersey corporations is not helped by the statute of 1894,
c. 210, s. 11, which applies only to the case of stock which is liable
to the tax and is intended to afford a means of collection of a tax
imposed by other sections and is not of itself intended to impose
a tax. Neilson v. Russell (N. J. Errors and Appeals), 71 A. 286,
reversing 69 A. 476.

S. 12 provides that taxes erroneously paid shall be refunded.

7li8 STATUTES ANNOTATED. [N. J. St

AppraisaL

S. 13. And be it enacted. That in ordar to fix the \'alue (A propoty of persmis
whose estates shall be subject to the pay-menc of said tax, the surrogate or register
of the prerogative court, on the application of any interested part>', or upon his
own motion, shall appoint some competent person as appraiser as oStca as^ and
iHienever occasion may require, whose duty it shall be forthwith to give sadbi
notioe by mail and to suc^ persons as the surrogate or roister of the prerogative
court may by order direct, of the time and place he will apfMraise such property,
and at such time and place to ai^raise the same at its fair market value, and
make a report therecrf in writing to said surrogate <»* register of the prerogative
court, together with such other facts in rdation thereto as said surrogate or
leipsta' <tf the prerogative court may by order require, to be filed in the office
of such surrogate or r^ist^ <rf the prerogati\-e court, and from this rqiort the
said surrogate <x register of the prerogati\'e court shall forthwith assess and fix
the then ca^ value of all estates, annuities and life estates, <»* term of years
growii^ out of said estates, and the tax to which the same is liable, and shall
immediatdy give notioe thereof by mail tx> the state comptrcJler and in all
parties known to be interested therein; any person or persons dissatisfied with
said ai^raisaDent <»- assessmrat may appeal therrfrom to the ordinary or orphans'
court of die proper county, within sixty days after the making and filii^ of sudi
assessment, on payii% <h- giving security, approved by the ordinary or orpbans'
court, to pay all costs, together with whatever tax shall be fixed by said court;
the said a|^>raiser shall be paid by the state treasurer on the warrant <^ the
comptroller, on the cntificate of the mdinary or surrogate, duly filed with the
axnptroUer, at the rate c^ three dcdlars per day for every day actually and neces-
sarily eiqployed in said af^xaiseocient, together with his actual and necessary
travriing expenses.

Under the New Jersey statute of 189i, section 13, the surrogate
upon the application of an interested party may appcnnt an ap-
praiser who may assess the tax. Dixon v. Russdl, 78 N. J. L. 296,
73 A. 51.

Yaluatiofi on Death.

Where propoty passed to the collateral relatives by wHl, wfaidi
speaks from the death of the testatrix, the prt^jerty passed upon
the death of the testatrix and was not suspended or postponed for
want of probate. The tax is to be assessed as of the date of the
inheritance, and the amount of the assessment is not affected by
the increase cm- depredation of the estate between the death of the
testatrix and the probate of tiie will, whidi in cases of contest may
"^ cover a long period, fcM* the act provides that aU taxes imposed
"shall be due and payable at the death of the testator," under
New Jersey St. 1894, c 210, s, 4. In re Hartman. 70 N. J. Eq.
664, 668, 62 A. 560.

1894. c 210.1 NEW JERSEY. 753

Valuation of Annuities.

Wliere the testator by a codicil directed his residuary legatee to
pay a certain person a thousand dollars a year during her life, this
is a charge upon the residuar>^ estate, and therefore was property
which passed to the annuitant. The value may properly be fLxed
by a determination of its worth at testator's decease considered in
the light of the legatee's probability of life. In re Rothschild,
72 N. J. Eq. 425, 65 A. 1118, 71 N. J. Eq. 210, affirming 71 N. J.
Eq. 210.

Failure to Appeal not a Bar.

Under N. J. St. 18^ (Gen. Sts. p. 3339) the surrogate appointed
an appraiser under the pro\4sions of section 13 of this act and
fixed the value of the estate and gave notice thereof in the manner
prescribed by that section, and no appeal was made either to the
ordinary or to the orphan's court within sixty days after the surro-
gate's assessment was made and found. The tax was not paid and
the state controller thereupon notified the prosecutor of the county
of the failure to pay and the prosecutor thereupon proceeded under
the pro\-isions of section 17 of the act to procure a decree from the
orphan's court under the power conferred upon it by the pro\'isions
of section 16. It was contended that the orphan's court had no ju-
risdiction to entertain the question of liability, because the parties
interested were debarred from raising that question by their failure
to appeal from the surrogate's assessment ^*ithin the time limited
by the terms of section 13. The court, however, construes section
16 as empowering the orphan's court to determine whether the tax
should be paid and to enforce its decree, and holds that a party
interested must be deemed to be permitted to interpose any objec-
tion to such a decree. The court distinguishes In re Wolfe, 137
N. Y. 205, construing section 15 of the New York act, which is
in substantially identical terms with section 13 of the New Jersey
statute, on the ground that the New York act in section 15 expressly
confers on the surrogate's court jurisdiction *'to hear and deter-
mine all questions in relation to the tax arising under the pro-
visions" of the act. The New Jersey statute, however, confers
no such jurisdiction on the surrogate, but section 15 of the New
Jersey act expressly confers that jurisdiction upon the ordinary or
orphan's court. In re Vlneland Historical and Antiquarian Society,
66 N. J. Eq. 291, 56 A. 1039.

Section 14 forbids an apjaaiser from takii^ any fee or reward from an
executM".

754 STATUTES ANNOTATED. [N. J. St.

Jurisdiction of Ordinary or Orphan's Court.

S. 15. And be it enacted, That the ordinary or the orphan's court in the
county in which the real property is situate of a decedent who was not a resident
of the state, or in the county of which the decedent was a resident at the time
of his death, shall have jurisdiction to hear and determine all questions in rela-
tion to the tax arising under the provisions of this act.

Sections 16-22 provide for the collection and payment of the tax.

Record on Appeal.

The record for the Court of Appeals should print the will of the
decedent. Astor v. State (N. J. 1903) 72 A. 78.

Repeal.

S. 23. And be it enacted. That all acts or parts of acts inconsistent with the
provisions of this act are hereby repealed, except so far as herein re-enacted; but
nothing in this repealer shall affect or impair the lien of any taxes heretofore
assessed, or due and payable, or any remedies for the collection of the same, or to
surrender any remedies, powers, rights or privileges acquired by the state under
any act heretofore passed, or to relieve any person or corporation from any pen-
alty imposed by said acts; provided, however, thai the exception in the first section
hereof in favor of churches, hospitals, orphan asylums, public libraries, bible and
tract societies, and all religious, benevolent and charitable institutions and organ-
ization^, shall be construed and held to apply to any and all bequests, devises and
legacies heretofore made, in trust or otherwise, to or in favor of such institutions,
or any of them, in all cases where said tax shall not have been paid prior to the
passage of this act.

Effect of Saving Clause in Repeal .

N. J. St. 1893, c. 210, was superseded and repealed by the statute
of 1894, p. 318. "If the repealer was without any saving clause,
there could be no doubt that the tax in question would be invalid,
because such a repealer would abolish the machinery by which the
assessment could be laid, and such special taxes as these can only
be imposed by the machinery provided by the legislature.

But the repealer of the act of 1893 was not without a saving
clause. The repealer was of all acts or parts of acts inconsistent
with the provisions of the act of 1894 "except so far as herein re-
enacted," and the provisions for the imposition of the assessment
were all practically re-enacted. Besides, by the provisions of sec-
tion 23, in which the repealer is contained, there was a saving clause.
The language of it is not happily chosen, but, in my judgment, the
proper construction is that the repealer should not be considered
"to surrender any remedies, powers, rights or privileges acquired by

1906, c. 228.] NEW JERSEY. 755

the state under any act heretofore passed." Under the construc-
tion I have given to the act of 1893, a right was acquired by the
state to impose a tax upon the interest acquired by one who was
appointed by the will of the life beneficiary to receive a share of a
fund under a power of appointment. By that act the state ac-
quired power to enforce the right thus obtained. The act further
provided remedies for the enforcement of that right. When the
legislature saved the rights and powers and remedies of the state
under previous acts, I think the repealer in no respect deprived the
state of power to enforce such a tax." Therefore the state had
power to collect the tax where the testator died August 26, 1893,
leaving a power of appointment to the life tenant who died March
25, 1895, leaving a will exercising the power of appointment. The
court holds that the tax on this power of appointment can be col-
lected under the statute of 1893. Hoyt v. Hancock, 65 N. J. Eq.
688, 55 A. 1004.

AMENDMENTS.
Exemptions.

As to the act of 1898, see post p. 761

Counsel for State Comptroller.

N. J. St. 1902, c. 217, approved April 9, 1902, amends N. J. St.
1894, c. 210, s. 17, by authorizing the state comptroller to retain
counsel to represent him in proceedings to collect the inheritance
tax. . "

Remainders.

N. J. St. 1903, c. 90, supplements N. J. St. 1894, by providing
that all remainder interests shall be appraised and taxed immedi-
ately after the death of the testator or grantor and such tax shall
remain a lien until paid, but the tax shall not become due or pay-
able until the remaindermen are entitled to possession.

The Statutes of 1906.

N. J. St. 1906, c. 227, approved May 15, 1906, provides that
the state comptroller may contract to pay a contingent fee to
persons who give information in regard to the inheritance tax.

N. J. St. 1906, c. 228. Approved May 15, 1906. .

An Act to amend an Act entitled, "An act to tax intestates' estates,
gifts, legacies, devises and collateral inheritance in certain cases," approved
May fifteenth, one thousand eight hundred and ninety-four.

756 STATUTES ANNOTATED. [N. J. St.

Be it enacted by the Senate and General Assembly of the State of New Jersey:

1. Section one of the act to which this act is amendatory be and the same
hereby is amended to read as follows:

1. A tax shall be and is hereby imposed upon the transfer of any property,
real or personal, of the value of five hundred dollars or over, or of any interest
therein or income therefrom, in trust or otherwise, to persons or corporations,
in the foUowmg cases:

First. When the transfer is by will or by the intestate laws of this state Ifrom
any person dying seized or possessed of the property while a resident of the state.

Second. When the transfer is by will or intestate law, of property within the
state, and the decedent was a non-resident of the state at the time of his death.

Third. When the transfer is of property made by a resident or by a non-resident,
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor,
or intended to take effect, in possession or enjoyment, at or after such death.
Such tax shall also be imposed when any such person or corporation becomes
beneficially entitled, in possession or expectancy, to any property or the income
thereof by any such transfer, whether made before or after the passage of this
act. Such tax shall be at the rate of five per centum upon the clear market
value of such property, to be paid to the treasurer of the state of New Jersey,
for the use of the state, and all administrators, executors and trustees shall be
liable for any and all such taxes until the same shall have been paid as hereinafter
directed.

All property passing to churches, hospitals and orphan asylums, public libra-
ries, Bible and tract societies, and all religious, benevolent and charitable institu-
tions apd organizations, or to a father, mother, husband, wife, child, brother or
sister, or lineal descendant born in lawful wedlock, or the wife or widow of a
son, or the husband of a daughter, shall be exempt from the payment of taxes
under this act, but no other exemption of any kind shall be allowed.

This statute repealed the act of 1898. As to exemptions, see
post, p. 759.

After the decision in Neilson v. Russell (71 A. 286), the legis-
lature passed New Jersey statute 1906, Public Laws, c. 228, pro-
viding for the imposition of a tax "when the transfer is by will
or intestate law of property within the state and the decedent was
a non-resident of the state at the time of his death." Dixon v.
Russell, 78 N. J. L. 296, 73 A. 51, reversed in 79 N. J. L. 490.

Void as to New Jersey Stocks of Non-Residetit.

The act of 1906 intended to substitute a tax on the transfer of
property which is the subject of a legacy for a tax on the legacy
itself. This purpose was- not expressed in the title and the statute
is therefore void as applied to New Jersey stocks belonging to a
non-resident. Dixon v. Russell, 79 N. J. L. 490 A., reversing
78 N. J. L. 296, 73 A. 51. This case was followed in Tilford v.
Dickinson, 79 N. J. L. 302, 79 A. 1119, reversing 75 A. 574.

1909, c. 238.] NEW JERSEY. 757

N. J. St. 1906, c. 228.

S. 4. All taxes imposed by this act shall be due and payable at the death of the
testator, grantor or intestate, as the case may be, unless otherwise provided for
and if the same are paid within one year a discount of five per centum shajl be
allowed and deducted from such taxes; if not paid within one year from the date
of the death of the testator, grantor or intestate, as the case may be, such tax shall
bear interest at the rate of ten per centum per annum, to be computed from the
expiration of one year from the date of the death of such testator, grantor, or
intestate, until the same is paid, and in all cases where the executors, adminis-
trators or trustees do not pay such tax within one year from the death of the
decedent they shall be required to give a bond, in the form and to the effect pre-
scribed in section two of the act to which this act is amendatory, for the payment
of such tax together with interest.

Jurisdiction of Courts.

N. J. St. 1908, c. 131, approved April 9, 1908, amended N. J. St. 1894, c. 210,
s. 15, to read as follows:

"That the ordinary, or the orphans' court of the county in which the real
property of a non-resident decedent is situate, or the orphans' court of the county
in which the decedent was a resident at the time of his death, or in case of a non-
resident decedent leaving no real property within this state, the orphans' court
of the county in which the surrogate shall first assume jurisdiction, shall have
jurisdiction to hear and determine all questions in relation to a tax arising under
the provisions of this act."

THE STATUTES OF 1909.
Title of Statute Amended.

N. J. St. 1909, c. 209, approved April 20, 1909, amends N. J. St.
1894, c. 210, entitled "An act to tax intestates' estates, gifts,
legacies, devises and collateral inheritance, in certain cases," to
read "An act to tax the transfer of property of resident and
non-resident decedents by devise, bequest, descent, distribu-
tion by statute, gift, deed, grant, bargain and sale, in certain
cases."

These statutes of April 20, 1909, did not apply to the estate of
one who died March 9, 1909. Tilford v. Dickinson, 79 N. J. L.
574, 79 A. 1119, reversing 75 A. 574.

Disposition of Receipts.

N. J. St. 1909, c. 238, approved April 21, 1909, requires the
state treasurer to pay to the county five per cent of the transfer
tax collected from property of resident decedents in that county,
provided the N. J. St. 1909, c. 228, became law.

758 STATUTES ANNOTATED. [N.J.St.

N. J. St. 1909, c. 228, approved April 20, 1909, is entitled "An
act to tax the transfer of property, of resident and non-resident
decedents, by devise, bequest, descent, distribution by statute,
gift,'deed, grant, bargain and sale, in certain cases," and provides
a complete inheritance tax system.

This statute did not apply to the estate of one who died before
its passage. Tilford v. Dickinson, 79 N. J. L. 574, 79 A. 1119, re-
versing 79 N. J. L. 302, 75 A. 574.

N. J. St. 1909, c. 228.

S. 28. All acts and parts of acts inconsistent with the provisions of this act
are hereby repealed, but nothing in this repealer shall affect or impair the lien of
any taxes heretofore assessed, or any tax due and payable, or any remedies for
the collection of the same, or to surrender any remedies, powers, rights or privi-
leges acquired by the state under any act heretofore passed, or to relieve any per-
son or corporation from any penalty imposed by said acts.

Property of Non-Resident.

N. J. St. 1909, c. 31, provides for jurisdiction for the taxation
of property in New Jersey of a non-resident decedent and author-
izes the surrogate or the register wherever the decedent had real
property, or, if he was not the owner of real property within the
state, the surrogate of any county or the register of the prerogative
court to exercise jurisdiction over the tax.

N. J. St. 1909, c. 159, amends N. J. St. 1894, c. 210, s. 11, by
providing that the tax shall be paid on the transfer by a foreign
executor, administrator or trustee of any stock or obligations in
New Jersey standing in the name of a decedent or standing in the
joint names of such decedent and one or more persons, or in trust
for a decedent. Corporations are further required to give ten
days* notice to the state comptroller of transfer of any such stock,
which transfer must not take place without the consent of the
comptroller, as any transfer without his consent makes the cor-
poration liable to pay the tax and to a penalty of a thousand
dollars. The chapter further provides : "On the transfer of property
in this state of a non-resident decedent, if all or any part of the
estate of such decedent, wherever situated, shall pass to persons
or corporations who would have been taxable under this act, if
such decedent had been a resident of this state such property located
within this state shall be subject to a tax, which said tax shall
bear the same ratio to the entire tax which the said estate of such
decedent would have been subject to under this act if such non-resi-

1909, c. 159.] NEW JERSEY. 759

dent decedent had been a resident of this state, as such property
located in this state bears to the entire estate of such non-resident
decedent, wherever situated; provided, that nothing in this clause
contained shall apply to any specific bequest or devise of property
in this state."

EXEMPTIONS.
Exemptions Strictly Construed.

In State v. N. Y. Meeting of Friends, 61 N.J. Eq. 620, 48 A. 227,
it was conceded that the legatee must come clearly within the
words of the New Jersey exemption statute in order to obtain an
exemption. ,

Burden on Legatee to Prove Exemptions.

The burden is upon a legatee to show its right to be exempted
as a charitable society. In re Vineland Historical and Antiquarian
Society, 66 N. J. Eq. 291, 56 A. 1039.

Exemption Confined to Domestic Corporations.

Exemptions in favor of charitable corporations under the New
Jersey statute of 1894 do not cover corporations organized under
the laws of states other than New Jersey. Alfred University v.
Hancock, 69 N. J. Eq. 470, 46 A. 178. In re Rothschild, 72 N. J.
Eq. 425, 65 A. 1118, affirming 71 N. J. Eq. 210.

Foreign corporations were exempted under the act of 1898 and
not under the act of 1906. See ^05/, pp. 761, 762.

Education is Charitable.

Alfred University, a school of learning, having an academic,
collegiate and a theological department, is a corporation which has
no capital stock and pays no dividends and is primarily supported
by funds derived from public and private charity, together with
tuition fees. Whatever is received is devoted to the object of
sustaining the institution and increasing its benefits to the public
by extending and improving its accommodations and diminishing
its expenses. A gift to such an institution is a bequest to a chari-
table institution, and all gifts for the promotion of education are
charitable in a legal sense where the elements of private gain are
wanting and where the scheme is in part supported by public or
private contributions. Aljred University v. Hancock, 69 N. J. Eq.
470,46 A. 178.

760 STATUTES ANNOTATED. [N. J. St.

To the same effect see In reVineland Historical and Antiquarian
Society, 66 N. J. Eq. 291, 56 A. 1039.

Vineland Historical and Antiquarian Society is not Chari-
table. — Powers and not Practice Decisive of Liability.

Under N. J. St. 1894, the Vineland Historical and Antiquarian
Society is not a charitable institution within the meaning of the
language used in section 1 of the act. This society was organized
under the statute of 1875 to incorporate societies " for the pro-
motion of learning." Gifts for educational purposes are gifts to
valid charitable uses in New Jersey. But it is not enough to say
that the institution was incorporated under the act for the pro-
motion of learning or avows itself to be organized for the purpose
of promoting learning. An institution claiming exemption on the
ground of its educational character must disclose the objects to
which it is bound to devote its property. It must appear that
the objects disclosed have some educational value and that the
benefits and advantages of the institution in respect to such objects
are open to the general public, or at least to such persons as may
seek them. The society in question, however, has for its object
to collect and preserve historical and current accounts of events
and other matters connected with the interests of Vineland; and
the court finds that the society has failed to show that such a
collection is of educational value. "Such a collection would not
resemble a library, but rather a museum."

It also appeared that the legacy given to the society was given
without any limitation or condition, and therefore imposed no
duty on the society except that which may be inferred from the
terms contained in the organization of the society as a corporation.
The mere fact, therefore, that the society now opens its collection
to the public would not bind the society to continue to do so.
In re Vineland Historical and Antiquarian Society, 66 N. J. Eq.
291, 56 A. 1039.

Where a corporation is organized under a statute which per-
mits incorporation for various objects, some of which would render
it exempt from taxation, the obvious test of exemption is not
incorporation under an act permitting incorporation for objects
that would exempt, but incorporation for objects that entitle to
exemption. The corporation is not exempt unless it is actually
incorporated for objects which entitle it to be exempt. In re
Rothschild, 72 N. J. Eq. 425, 65 A. 1118, affirming 71 N. J. Eq.
210.

1898, c. 62.] NEW JERSEY. 761

THE AMENDMENT OF 1898.

N. J. St. 1898, c. 62.

S. 1. All gifts, grants, legacies, bequests and devises, whether by will, deed or
otherwise, of real or personal property, by residents or citizens of this state, to
any Bible or tract society, or religious institution, boards of the church or organi-
zations thereof, in trust or otherwise, not confined in their operations and bene-
factions to local or state purposes, but for the general good of the people
interested therein, of the United States or of foreign lands, as the board of home
and foreign missions of various church denominations, shall not be taxed under
said act, whether said societies, religious institutions or boards aforesaid, are or-
ganized under the laws of this state, or incorporated and organized under the laws
of some other state.

S. 2. This provision of this supplement and its exemptions shall apply to all
gifts, grants, legacies, bequests and devises aforesaid on which the tax has not
been assessed and paid.

Religious Institutions.

Under the act of 1898 the Union for Ministerial Education,
whose purpose is to assist in educating for the ministry suitable
men, is a religious institution; so the Baptist Education Society, the
object of which is to furnish the means for instruction to young men
of personal piety, who have a call to the ministry, and the Ameri-
can Baptist Home Missionary Society, whose object is to promote
the preaching of the gospel in North America, are all religious
institutions. As the first two are not limited to students of any
particular locality, this is certainly not local in its nature, and the
board of missions is clearly of a general purpose also. Therefore,
all three of these institutions are exempt from payment of the
collateral inheritance tax. In re Jones (N. J. 1907), 67 A. 1035,
affirmed 70 A. 1101.

A College with a Theological Department is not a Religious
Institution.

The court finds that Alfred University is not included within the
exemption of the act of 1898, as it is not a Bible or tract society,
nor can it be regarded as a religious institution, although it has
a theological department which is an adjunct of the principal
departments of the institution which are academic and collegiate.
If the theological department is to be regarded as religious, the
two others are purely secular. An institution of such blended
secular and religious qualities can in no sense be classed as a reli-
gious institution. Alfred University v. Hancock, 69 N. J. Eq.
470, 46 A. 178.

762 STATUTES ANNOTATED. [N. J. St.

The New York Yearly Meeting of Friends Exempt.

The will of the decedent made a bequest to the New York Yearly
Meeting of Friends. The court finds that this institution is the
general governing body of the Society of Friends and has primary
control over the missionary purposes and general benefactions of such
minor bodies as act by its authority. Funds are set apart for the work
among the Indians and for the benefit of former slaves in the south.
It has missions in Mexico, North Carolina, Palestine and Japan
and China. Its membership is not confined to the state of New
York. It has meetings organized in Vermont and in Canada, and
membership in these meetings is not confined to state lines. The
court holds that there is no difference between the methods of
these meetings and the methods of the boards of home and foreign
missions of the various religious organizations. Therefore, the
Society of Friends comes clearly within the statutory exemption
of the act of 1898. State v. N. Y. Meeting of Friends, 61 N. J. Eq.
620, 48 A. 227.

Foreign Religious Corporations not Exempt under the Act
of 1906.

N. J. St. 1906, Public Laws, p. 432, which covers an exemption
to religious corporations, repeals by implication the exemption
given under the New Jersey Public Laws of 1898, p. 106, and
therefore, under the statute of 1906, a foreign religious corporation
is not exempt from the inheritance tax. In re Gopsill (N. J.
Prerog.),77 A. 793.

Public monuments or memorials are exempt under the act of
1910, post p. 771.

THE PRESENT ACT.

N. J. St. 1909, c. 228.

An Act to tax the transfer of property, of resident and non-
resident DECEDENTS, by devise, bequest, descent, distribution by statute,
gift, deed, grant, bargain and sale, in certain cases. As to title to statute
see notes to the Acts of 1892, 1893, 1894 and 1906. ante p. 000.

Transfers Taxable. — Rate. — Exemptions.

1. A tax shall be and is hereby imposed upon the transfer of any property!
real or personal, of the value of five hundred dollars or over or any interest therein
or income therefrom, in trust or otherwise, to persons or corporations, in the
following cases:

First. When the transfer is by will or by the intestate laws of this state from
any person dying seized or possessed of the property while a resident of the state.

1909, c. 228.] NEW JERSEY. 763

Second. When the transfer is by will or intestate law, of property within the
state, and the decedent was a non-resident of the state at the time of his death.

Third. When the transfer is of property made by a resident or by a non-resi-
dent, when such non-resident's property is within this state, by deed, grant, bar-
gain, sale or gift made in contemplation of the death of the grantor, vendor or
donor, or intended to take effect, in possession or enjoyment, at or after such
death.

Fourth. When any person or corporation comes into the possession or enjoy-
ment, by a transfer from a resident or non-resident decedent when such non-resi-
dent decedent's property is within this state, of an estate in expectancy of any
kind or character which is contingent or defeasible, transferred by an instrument
taking effect after the passage of this act, or of any property transferred pursuant
to a power of appointment contained in any instrument taking effect after the
passage of this act.

All taxes imposed by this act shall be at the rate of five per centum upon the
clear market value of such property, to be paid to the treasurer of the state of
New Jersey, for the use of said state, and all administrators, executors, trustees,
grantees, donees, or vendees, shall be personally liable for any and all such taxes
until the same shall have been paid as hereinafter directed, for which an action of
debt shall lie in the name of the state of New Jersey.

Property passing to churches, hospitals and orphan asylums, public libraries,
bible and tract societies, religious, benevolent and charitable institutions and
organizations, or to a father, mother, husband, wife, child or children, or lineal
descendant born in lawful wedlock, brother or sister, or the wife or widow of a son,
or the husband of a daughter, shall be exempt from taxation under this act, but
no other exemption of any kind shall be allowed.

[See notes to the Acts of 1892, 1893, 1894 and 1906, ante, pp. 743, 744,
746, 756. As to exemptions see ante, p. 759.]

Particular Estate and Remainder.

2. Wheri any persons shall bequeath or devise, convey, grant, sell or give any
property or interest therein, or income therefrom, to any person or corporation for
life or for a term of years, and a vested interest in the remainder or corpus of said
property to any person, or to any body politic or corporate, the whole of said
property, so transferred as aforesaid, shall be appraised immediately at its clear
market value, and after deducting from such appraisement the value of the
estate for life or estate for a term of years, the tax on such life estate or for a term
of years, if taxable under this act, shall be immediately levied and assessed, and
the tax on the remainder of the property so as aforesaid transferred, if such
property is taxable under this act, shall be levied and assessed immediately, but
such tax shall not become due or payable until the time or period arrives when
said remainderman, or his representatives, shall become entitled to the actual
possession or enjoyment of such property, and shall then become due and payable
immediately, and, if not paid within thirty days, interest at the rate of ten per
centum per annum shall be charged and collected from the time when said tax
became due and payable. If the property passing to a remainderman, as here-
inabove provided, be personal property, such remainderman, or the executor or
trustee of the estate, shall give a bond to the state of New Jersey in double the
amount of the tax on the property of such remainderman, conditioned to pay said

764 STATUTES ANNOTATED. [N. J. St

tax, and any interest which may fall due thereon, said bond to be approved as to the
form and sufficiency thereof by the attorney general of this state, and any
executor or trustee who shall assign or deliver to any such remainderman any
personal property liable to a tax under this act, unless a bond be given as specified
in this section, or said tax be paid, shall be personally liable for said tax and all
interest due thereon, which liability may be enforced in an action of debt in the
name of the state of New Jersey.

[See notes to the Act of 1893, ante, p. 744.]

When Tax Accrues in Various Gases. — Duties of Executors, etc. —
Compromise of Tax.

3. Where an instrument creates an executory devise, or an estate in expectancy
of any kind or character which is contingent or defeasible, the property trans-
ferred in accordance with such executory devise or the property in which such
contingent or defeasible interest is created by any such instrument, shall be
appraised immediately at its clear market value, and after deducting from such
appraisement the value of the life estate, or estate for a term of years, created by
such instrument, the tax on such life estate, or estate for a term of years, if taxable
under this act, shall be immediately levied and assessed, but the tax on the bal-
ance of said appraised value of such estate shall not be levied or assessed until the
person or corporation entitled to said property comes into the beneficial enjoy-
ment, seizin or possession thereof, and if taxable, shall then be taxed. Where
an instrument creates a power of appointment, the life estate, or estate for a term
of years, created and transferred by such instrument, if taxable, shall be im-
mediately appraised and taxed at its clear market value, but the appraisal and
taxation of the interest or interests in remainder to be disposed of by the donee of
power shall be suspended until the exercise of the power of appointment, and
shall then be taxed, if taxable, at the clear market value of such property, which
value of such property shall be determined as of the date at the death of the
creator of the power.

A tax on an estate for life or on an estate for a term of years, levied and as-
sessed as directed in this section, shall be due and payable as provided in section
five of this act. All other taxes levied and assessed as directed in this section
and all taxes on any property which may be transferred to the residuary legatees,
heir or next of kin of any decedent, or which may revert to the heir of any dece-
dent by reason of the failure of any contingency upon which any remainder may
be limited, shall be due and payable within two months after the person entitled
to the property shall come into the enjoyment, seizin or possession thereof, and
if not paid shall thenceforth bear interest at the rate of ten per centum per
annum until paid. No executor or trustee shall turn over any property of an
estate mentioned in this section until the tax due thereon, and interest, if any,
shall have been paid to the treasurer of this state, and any executor or trustee
who shall turn over any property prior to the payment of the tax due thereon,
together with interest, shall be personally liable for such tax and interest, which
said liability may be enforced by an action of debt in the name of the state of
New Jersey.

The comptroller of the treasury of this state, by and with the consent of the
attorney general, expressed in writing, is hereby empowered and authorized to
enter into an agreement with the executors or trustees of any estate in which re-
mainders or expectant estates have been of such a nature, or so disposed and cir-

1909, c. 228.] NEW JERSEY. 765

cumstanced that the taxes therein were held not presently payable, or where the
interest of the legatees or devisees were not ascertainable at the death of the tes-
tator, grantor, donor or vendor, and to compound such taxes upon such terms as
may be deemed equitable and expedient; and to grant discharge to said executors
and trustees upon the payment of the taxes provided for in such composition;
provided, however, that no such composition shall be conclusive in favor of said
executors or trustees as against the interest of such cestuis que trust as may possess
either present rights of enjoyment, or fixed, absolute or indefeasible rights of future
enjoyment, or of such as would possess such rights in the event of the immediate
termination of particular estates, unless they consent thereto, either personally,
when competent, or by guardian or committee.
[See note to the Act of 1894, ante, p. 750.]

Gift to Executors in Lieu of Commissions.

4. Whenever a decedent appoints or names one or more executors or trustees,
and makes a bequest or devise of property to them in lieu of their commissions or
allowances, which otherwise would be liable to said tax, or appomts them his
residuary legatees, and said bequest, devise or residuary legacy exceeds what
would be a reasonable compensation for their services, such excess shall be liable
to said tax, and the ordinary, or the orphans' court, having jurisdiction in the
case, shall fix such compensation.

When Tax Due. — Discou nt Penalty. — Lien.

5. All taxes imposed by this act shall be due and payable at the death of the
testator, intestate, grantor, donor, vendor, unless in this act otherwise provided,
and if the same are paid within one year a discount of five per centum shall be
allowed and deducted from such taxes; if not paid within one year from the date
of the death of the testator, intestate, grantor, donor or vendor, such tax shall
bear interest at the rate of ten per centum per annum, to be computed from the
expiration of one year from the date of the death of such testator, intestate,
grantor, donor or vendor; until the same is paid, and in all cases where the executors,
administrators', grantees, donees, vendees or trustees do not pay such tax within
one year from the death of the decedent they shall be required to give a bond, in
the form and effect prescribed in section two of this act, for the payment of such
tax, together with interest.

All taxes levied and assessed under this act on the transfer of any real
property shall be and remain a lien on said real property until paid.

When Penalty not Enforced.

6. The penalty of ten per centum per annum imposed by section five hereof
for the non-payment of said tax shall not be charged where in cases by reason of
claims made upon the estate, necessary litigation or other unavoidable cause of
delay the estate of any decedent, or a part thereof, cannot be settled at the end
of a year from the death of the decedent, and in such cases only six per centum
per annum shall be charged upon the said tax from the expiration of such year
until the cause of such delay is removed.

Deduction of Tax.

7. Any administrator, executor or trustee having in charge or trust any
legacy or property for distribution, subject to said tax, shall deduct the tax

766 STATUTES ANNOTATED. [N. J. St.

therefrom, or if the legacy or property be not money he shah collect the tax there-
on upon the appraised value thereof from the legatee or persons entitled to such
property, and he shall not deliver or be compelled to deliver any specific legacy
or property subject to tax to any person until he shall have collected the tax
thereon, and whenever any such legacy shall be charged upon or payable out of
real estate, the heir or devisee, before paying the same, shall deduct said tax
therefrom and pay the same to the executor, administrator or trustee, and the
payment thereof shall be enforced by the executor, administrator or trustee in the
same manner that the payment of such legacy might be enforced; if, however,
such legacy be given in money to any person for a limited period he shall retain
the tax upon the whole amount, but if it be not in money he shall make application
to the court having jurisdiction of his accounts to make an apportionment, if
the case require it, of the sum to be paid into his hands by such legatees, and for
such further order relative thereto as the case may require.

Power of Sale.

8. All executors, administrators and trustees shall have full power to sell so
much of the property of the decedent as will enable them to pay said tax in the
same manner as they may be enabled by law to do for the payment of debts of
their testators and intestates, and the amount of said tax shall be paid as herein-
after directed.

Payment. — Receipts. — Records.

9. Any sum of money retained by an executor, administrator or trustee, or
paid into his hands for any tax due under this act, shall be paid by him within
thirty days thereafter, to the treasurer ot this state, and the person so paying
shall be entitled to receive a receipt signed by the treasurer of this state and
countersigned by the comptroller thereof, for such payment, which receipt shall
be a proper voucher in the settlement of the account of any such executor, admin-
istrator or trustee; such person so paying, in addition to the foregoing receipt,
shall, if the tax be paid in part or in whole upon real property, be entitled to
receive an additional receipt, signed by the treasurer of this state and counter-
signed by the comptroller thereof, in which shall be designated upon what real
property, if any, said tax has been paid, and by whom paid, and whether or not
it is in full of said tax on said real property, and said receipt may be recorded in
the clerk's office of the county in which said real property is situated, in a book
which shall be kept by said clerk for such purpose and labelled "collateral tax."

[See notes to the Act of 1894, ante, p. 750.]
Information as to Real Estate.

10. Whenever any of the real estate of which any decedent may die seized
shall pass to any body politic or corporate, or to any person other than the
father, mother, husband, wife, child, or lineal descendant born in lawful wedlock,
brother or sister, wife or widow of a son, or husband of a daughter, or in trust for
them, or some of them, it shall be the duty of the executors, administrators or
trustees of such decedent to give information thereof in writing to the comp-
troller of the treasury of this state within six months after they undertake the
execution of their respective duties, or, if the fact be not known to them within
that period^ then within one month after the same shall have come to their
knowledge.

1909, c. 228.] NEW JERSEY. 767

Refund.

11. Whenever any debts shall be proven against the estate of the decedenti
after the payment of the legacies or distribution of property from which the
said tax has been deducted, or upon which it has been paid, and a refund is made
by the legatee, devisee, heir, or next of kin, a proportion of the tax so paid shall
be repaid to him by the executor, administrator or trustee, if the said tax has not
been paid to the state treasurer, or by the state treasurer, if the same has been
paid into the state treasury.

[See notes to the Act of 1894, ante, p. 751.]

Transfer by Foreign Executor. — Property of Non-Resident.

12. If a foreign executor, administrator or trustee shall assign or transfer any
stock or obligations in this state standing in the name of a decedent, or standing
in the joint names of such a decedent and one or more persons, or in trust for
a decedent, liable to any such tax, the tax shall be paid to the treasurer of this
state on the transfer thereof. No corporation of this state shall transfer any
such stock, unless notice of the time of such intended transfer be served upon
the comptroller of the treasury of this state at least ten days prior to such transfer,
nor until said comptroller shall consent thereto in writing. Any corporation
making such a transfer without first obtaining the consent of the comptroller
of the treasury as aforesaid shall be liable for the amount of any tax which may
thereafter be assessed on account of the transfer of such stock, together with the
interest thereon, and in addition thereto a penalty of one thousand dollars,
which liability for such tax and interest and said penalty herein prescribed may
be enforced in an action of debt in the name of the state of New Jersey.

On the transfer of, property in this state of a non-resident decedent, if all or
any part of the estate of such decedent wherever situated shall pass to persons
or corporations who would have been taxable under this act, if such decedent
had been a resident of this state, such property located within this state shall be
subject to a tax, which said tax shall bear the same ratio to the entire tax which
the said estate of such decedent would have been subject to under this act if
such non-resident decedent had been a resident of this state, as such property
located in this state bears to the entire estate of such non-resident decedent
wherever situated; provided, that nothing in this clause contained shall apply
to any specific bequest or devise of any property in this state.

[See notes to the Act of 1894, ante, p. 751.]

Investigation by State Comptroller.

13. The comptroller of the treasury of this state, either personally or by
any of his employes, may investigate the question of the liability of any property
to any tax due prior to the passage of this act, and if said comptroller is satisfied
that any taxes are due this state, he shall report such fact to the register of the
prerogative court, or surrogate of the proper county, whereupon said register
or surrogate shall cause said property to be taxed.

Mortality Tables.

14. In determining the value of a life estate, annuity, or estate for a term
of years, the American Experience Table of Mortality, with interest at the rate
of five per centum per annum, shall be used.

768 STATUTES ANNOTATED. [N. J. St.

Refund Erroneous Payments.

15. When any amount of said tax shall have been paid erroneously to the
state treasurer, it shall be lawful for the comptroller of the treasury, on satis-
factory proof rendered to him of such erroneous payments, to draw his warrant
on the state treasurer, in favor of the executor, administrator, person or persons
who have paid any such tax in error, or who may be lawfully entitled to receive
the same, for the amount of such tax so paid in error; provided, that all such appli-
cations for the repayment of such tax shall be made within two years from the
date of such payment.

Comptroller Notified by Register or Surrogate.

16. The register of the prerogative court and every surrogate of any county
in this state shall, within ten days after the probate of any will, either foreign or
domestic, of the filing of a copy of any foreign will, or the taking out of letters of
administration, notify, in writing, the comptroller of the treasury of this state
of such probate or administration; and any surrogate or the register of the
prerogative court, failing to notify said comptroller in writing of the probate
of any will, or the filing of a copy of any foreign will, or the taking out of any
letters of administration, shall be liable to a penalty of two hundred dollars, to
be recovered in an action of debt in the name of the state of New Jersey.

Comptroller Empowered to Examine Papers, Records, etc.

17. The comptroller of the treasury of this state, either personally or by his
assistant or other employe, is hereby empowered to examine any and all papers,
documents and files which now are or hereafter may be filed or lodged with the
registex of the prerogative court, or with the surrogate of any county or with any
other official of this state or of any municipality thereof, or with any person or
corporation, for the purpose of ascertaining what, if any, property is, or shall
be, liable to the payment of the tax provided for by this act. The sum of ten
thousand dollars is hereby appropriated to the comptroller of the treasury of this
state for the purpose of enabling said comptroller to carry out the provisions
of this act.

Appraisal. — Appeal.

18. In order to fix the value of property of persons whose estates shall be
liable to the payment of a tax under this act, whether the same be in the owner-
ship of a resident or non-resident decedent, the comptroller of the treasury of
this state on the application of any interested party, or upon his own motion,
shall appoint some competent person as appraiser as often as and whenever occa-
sion may require. Every such appraiser shall forthwith give notice, by mail,
to such persons as the comptroller of the treasury of this state shall direct, of
the time and place when and where he will appraise such property. He shall
at such time and place appraise the same at its fair market value, and for that
purpose the said appraiser is authorized to issue subpoenas and to compel the
attendance of witnesses, and to take the evidence of such witnesses under oath
concerning such property and the value thereof, and he shall make report thereof,
and of such value, in writing to said comptroller of the treasury, together with
such other facts in relation thereto as the said comptroller of the treasury may,
by order, require, which report and other data required by said comptroller

1909, c. 228.] NEW JERSEY. 769

shall be filed in the office of such comptroller, and from said report the said
comptroller of the treasury shall forthwith assess and fix the cash value of such
estate and levy the tax to which the same is liable, and shall immediately give
notice thereof, by mail, to all parties known by said comptroller of the treasury
to be interestd therein. Any person or corporation dissatisfied with said appraise-
ment or assessment may appeal therefrom to the ordinary of this state within
sixty days after the making and fiUng of such assessment, on giving a bond,
approved by the ordinary of this state, conditioned to pay said tax so as afore-
said levied by the said comptroller of the treasury, together with interests and
costs, if the said tax be affirmed by the ordinary. Any person failing to attend
before an appraiser after service of a subpoena, or refusing to give evidence
concerning any estate, shall be liable to a penalty of two hundred dollars, to be
recovered in an action of debt by the comptroller of the treasury.

[See notes to 'the Act of 1894, ante, p. 752.]
Appraisers. — Misconduct. — Compensation.

19. Any appraiser appointed pursuant to the provisions of this act who shall
take any fee or reward, either directly or indirectly, from any executor or admin-
istrator, or any other person liable to pay any tax or any portion thereof, under
the provisions of this act, shall be guilty of a misdemeanor, and, on conviction,
shall be punished by a fine: not exceeding one thousand dollars, or by imprison-
ment not exceeding one year, or both, at the discretion of the court, and, in
addition thereto, the comptroller of the treasury of this state shall immediately
dismiss such appraiser from his employment. The compensation of said ap-
praisers shall be a sum not exceeding five dollars per day, to be fixed and deter-
mined upon by the said comptroller of the treasury, and to be paid out of the
treasury of this state. Such appraisers shall also be reimbursed for all actual
expenses incurred in the discharge of their duties.

Jurisdiction.

20. The ordinary of this state shall have jurisdiction to hear and determine
all questions in relation to any tax levied under the provisions of this act.

Citation.

21. If it shall appear to the comptroller of the treasury of this state that
any tax which has accrued under this act has not been paid according to law
said comptroller shall report such fact, in writing, to the register of the preroga-
tive court, and said register shall issue a citation citing the persons or corpora-
tions interested in the property liable to said tax to appear before the ordinary
on a certain day, not more than three months from the date of such citation, and
show cause why such tax should not be paid; the service of such citation and the
subsequent proceedings had thereon shall conform to the practice prevailing in
the prerogative court. Upon the making of any decree the register of the pre-
rogative court shall, upon the request of the comptroller of the treasury of this
state furnish one or more copies of said decree, and the same shall be docketed
and filed by the clerk of the supreme court, or by the county clerk of any county
in this state, upon the request of the comptroller of the treasury of this state,
and the same shall have the same effect as a lien by judgment, and execution shall
issue thereon according to the rules and practice appertaining to other judg-
ments docketed and filed with said respective clerks.

770 STATUTES ANNOTATED. [N. J. St.

Attorney General to Prosecute Unpaid Taxes.

22. Whenever the comptroller of the treasury of this state shall have reason
to believe that any tax is due and unpaid under this act, after the neglect and
refusal of the persons or corporations interested in the property and liable to said
tax to pay the same, he shall notify the attorney general of this state, in writing,
of such failure to pay such tax, and the said attorney general, when so notified,
if he have probable cause to believe that a tax is due and unpaid, shall prosecute
the proceeding before the ordinary of this state, as provided for in section twenty-
one of this act, and the state treasurer shall, on the warrant of the comptroller,
pay all the expenses of said proceeding.

Records Kept by Comptroller.

23. The comptroller of the treasury of this state shall keep a record in his
department of all returns made by appraisers, the cash value of annuities, life
estates and term of years, and the amount of all taxes assessed by him; in addi-
tion to the foregoing the said comptroller may enter in said books all other
information and data which he may deem desirable or proper.

Information as to Property Liable to Tax.

24. Whenever a resident of this state has died, or shall hereafter die, testate or
intestate, seized or possessed of any property liable to the payment of a tax under
the provisions of this act, and no letters testamentary or of administration have
or shall have been taken out on such estate within one year from the date of the
death of such person, or whenever there is property, real or personal, within
this state owned by a non-resident decedent which is liable to the payment of
a tax^under this act, and such non-resident decedent has been deceased for a
period of three months without the tax due this state having been paid, it shall
be lawful for the comptroller of the treasury of this state to enter -nto an agree-
ment, in writing, with any person giving him information of the existence of
property so liable to a tax, to pay to such person or persons out of any sum which
may be collected from any such estate an amount not exceeding ten per centum
thereof.

Penalty for False Statements or Reports.

25. Every executor, administrator, trustee, grantee, donee or vendee who
wilfully and knowingly subscribes or makes any false statement of facts, or
knowingly subscribes or exhibits any false paper or false report with intent to
deceive any appraiser appointed pursuant to the provisions of this act, shall be
guilty of a misdemeanor and punished accordingly.

Definitions.

26. The words "estate" and "property," wherever used in this act, except
where the subject or context is repugnant to such construction shall be construed
to mean the interest of the testator, intestate, grantor, bargainor or vendor
passing or transferred to the individual or specific legatee, devisee, heir, next of
kin, grantee, donee or vendee, not exempt under the provisions of this act, whether
such property be situated within or without this state. The word "transfer,"
as used in this act, shall be taken to include the passing of property, or any

1910, c. 28.] NEW JERSEY. 771

interest therein, in possession or enjoyment, present or future, by distribution
by statute, descent, devise, bequest, grant, deed, bargain, sale or gift-
Invalidity of Part not to Affect Other Sections.

27. In case for any reason any section or any provision of this act shall be
questioned in any court, and shall be held to be unconstitutional or invalid, the
same shall not be held to affect any other section or provision of this act.

Repealer. — Action heretofore not Impaired.

28. All acts and parts of acts inconsistent with the provisions of this act are
hereby repealed, but nothing in this repealer shall affect or impair the lien of
any taxes heretofore assessed, or any tax due and payable, or any remedies for
the collection of the same, or to surrender any remedies, powers, rights or privi-
leges acquired by the state under any act heretofore passed, or to relieve any
person or corporation from any penalty imposed by said acts.

Approved April 20, 1909.

[See notes to the Act of 1894, ante, p. 754.]

Public ]VIonuments or Memorials Exempted.

N. J. St. 1910, c. 28. Approved March 17, 1910.

A FURTHER SUPPLEMENT TO AN ACT entitled "An Act to tax the transfer of
property of resident and non-resident decedents by devise, bequest, descent,
distribution by statute, gift, deed, grant, bargain and sale in certain cases,"
approved May fifteenth, one thousand eight hundred and ninety-four.

1. All property passing to any executor, trustee or public corporation for,
or to be expended in, the erection of a public monument or public memorial
in this state, shall be exempt from the payment of taxes under the act to which
this is a supplement.

2. The exemption from the payment of such taxes, hereby provided for, shall
extend to all property that may have heretofore passed for such purpose as well
as to all property that may hereafter pass for such purpose.

3. This act shall take effect immediately.
[As to exemptions see ante, p. 759.]

772 STATUTES ANNOTATED. [N. Y. St.

NEW YORK.

In General.

New York has had a collateral inheritance tax since 1885, a
direct inheritance tax on personal property since 1891, and on
real estate since 1903. Until 1910 the rate was 1 per cent on
direct inheritances, and 5 per cent on collateral inheritances. The
much-criticised law of 1910 took effect July 11, 1910, and intro-
duced graduated rates running up to 25 per cent.

It would be hard to find an important law of any sort which so
quickly defeated its own purpose as this law. Its exorbitant
rates, its inequalities and the intolerable burdens that it placed
upon the property of non-residents quickly aroused most em-
phatic protests from all classes in the community, and resulted
in the repeal of all its more offensive features at the next legis-
lature.

The act of 1911 substantially reduces the rates of tax although
leaving them higher than they were before 1910 and retaining
the progressive feature. Perhaps its most commendable feature is
that it does away with the double taxation of property of non-
residents by providing that the inheritance tax in the case of non-
residents shall be collected only on their tangible property within
the state. Tangible property is so defined that it does not include
money, bank deposits, shares of stock or bonds.

In one respect non-residents gain more than residents of New
York who must pay an inheritance tax on tangible property within
the state and their intangible property wherever situated. If
some other state taxes shares in a local corporation owned by a
resident of New York, it does not relieve the estate from paying
a tax to New York as well.

As has been seen, in some states credit is allowed for taxes so
paid to another state, and other states have a reciprocal or retali-
ative provision designed to prevent other states from taxing in-
tangible property of non-residents. But neither of these features
is found in the New York act.

List.]

NEW YORK.

773

The law of 1911 is more liberal as to bequests to charitable
institutions in making such bequests exempt from inheritance tax
wherever the institution is located. Formerly such bequests were
taxable unless the charitable institution was located in the state
of New York.

The exemptions apply to each inheritance rather than to the
estate as a whole. In the case of a non-resident, apparently, if
the New York portion of the inheritance is less than the exempted
amount, the inheritance is not taxable.

It is the usual practice to require an inventory of the entire
property of a non-resident. The comptroller's office states that
this is ''only for the purpose of seeing that the stocks of New York
corporations are fully set forth, and for the purpose of prorating
the property in this state in the payment of legacies under the
decedent's will or the interstate law of decedent's domicile."
That is to say, for the purpose of preventing non-resident execu-
tors from satisfying only tax-exempt inheritances out of the New
York portion of the property. This purpose becomes less im-
portant under the act of 1911.

List of Statutes.

1885.

Statutes of New York

:, c. 483.

1887.

c. 713.

1889.

c. 307.

1889.

c. 479.

1890.

c. 553.

1891.

c. 34.

1891.

c. 215.

1892.

c. 167.

1892.

c. 168.

1892.

c. 169.

1892.

c. 399.

1892.

c. 443.

1893.

c. 199.

1893.

c. 704.

1894.

c. 767.

1895.

c. 191.

1895.

c. 378.

1895.

c. 515.

1895.

c. 556.

1895.

c. 861.

1896.

c. 160.

1896.

c. 908.

1896.

c. 952.

1896.

c. 953.

1897.

c. 284.

774

STATUTES ANNOTATED.

[N. Y. St.

1897. Statutes of New York,-c. 375.

1898.

c. 88.

1898.

c. 289.

1899.

c. 76.

1899.

c. 269.

1899.

c. 270.

1899.

c. 389.

1899.

c. 406.

1899.

c. 672.

1899.

c. 737.

1900.

c. 379.

1900.

c. 382.

1900.

c. 658.

1900.

c. 723.

1901.

c. 173.

1901.

c. 288.

1901.

c. 458.

1901.

(

c. 493.

1901.

c. 609.

1901.

Revised Statutes and Gen. Laws (Birdseye), pp. 3591-3604.

1902.

Statutes 3f New York, c. 101.

1902.

c. 283.

1902.

c. 496.

1903.

c. 41.

1904.

c. 758.

1904.

Consolidated Laws, vol. 5, c. 62, ss. 220-245.

1905.

Statutes of New York, c. 368.

1905.

Revised Stats., Codes and Gen. Laws (Birdseye), v. 3 a. 10. ss. 220-243

1905.

Gilbert's Annotated Code, s. 447.

1905.

Code of Procedure, s. 118.

1906.

Statutes of New York, c. 111.

1906.

c. 567.

1906.

c. 699.

1907.

c. 204.

1907.

c. 323.

1907.

c. 709.

1908.

€.310.

1908.

c. 312.

1908.

•' " " c. 321.

1909.

c. 62.

1909.

c. 596.

1909.

Birdseye, Cummings & Gilbert, Consolidated Laws, vol. 5, p. 5977,

Bs. 220-245.

1910.

Statutes of New York, c. 70.

1910.

c. 600.

1910.

c. 706.

1911.

c. 732.

1910.

Annotated Consolidated Laws (Birdseye, Cummings & Gilbert), Sup-

plement,

ss. 220-302, pp. 1171-1189.

Penal Code

, s. 48c added L. 1903, c. 692.

1885, c. 483.] NEW YORK. 775

Constitutional Limitations.
New York Constitution, 1894, a. 3, s. 20.

Every law which imposes, continues or revises a tax shall distinctly state the
tax and the object to which it is to be applied, and it shall not be sufficient to re-
fer to any other law to fix such tax or object,

[New York Constitution, 1894, seems to contain no provision requiring uni-
formity in taxation. See Thorpe, vol. 5, p. 2694, et seq.]

THE ACT OF 1885.

[N. Y. St. 1885, c. 483. Approved June 10, 1885; in effect June 30, 1885.]

An Act to tax gifts, legacies and collateral inheritances in
certain cases.

[Title amended by St. 1891, c. 215. See Matter of Howe, 112 N. Y. 100.1

S. 1. Transfers Taxable. — Rate. — Exemptions. After the passage of
this act, 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 being a resi-
dent of the state, or which property shall be within this state, or any part of such
property, or any interest therein, or income therefrom, transferred by deed, grant,
sale or gift made or intended to take effect in possession or enjoyment after the
death of the grantor or bargainor, to any person or persons, or to a body politic
or corporate, in trust or otherwise, or by reason whereof any person, or body poli-
tic or corporate shall become beneficially entitled, in possession or expectancy, to
any property, or to the income thereof, other than to or for the use of father,
mother, husband, wife, children, brother and sister and lineal descendants born
in lawful wedlock, and the wife or widow of a son and the husband of a daughter,
and the societies, corporations and institutions now exempted by law from taxa-
tion, shall be and is subject to a tax of five dollars on every hundred dollars of the
clear market value of such property, and at and after the same rate for any less
amount, to be paid to the treasurer of the proper county, and in the city and county
of New York to the comptroller thereof, for the use of the state, and all admin-
istrators, executors and trustees shall be liable for any and all such taxes until
the same shall have been paid, as hereinafter directed; provided that an estate
which may be valued at a less sum than five hundred dollars shall not be subject
to said duty or tax.

[Amended by St. 1887, c. 713, 1891, c. 215, and 1892, c. 169.]

Nature. — A Tax on Successions.

This act imposes a tax on the right of succession and not on
property. In re Swift, 137 N. Y. 77, 88, 32 N. E. 1096, 18 L. R. A.
709, 64 Hun 639; 16 N. Y. Suppl. 193; 19 N. Y. Suppl. 292. In
Matter of McPherson, 104 N. Y. 306, 10 N. E. 685, 58 Am. Rep. 502,
this question was not determined. The. court remarks that in
either case it is a special tax. In the one case it is a tax upon the
particular class of property, and in the other case a tax upon

776 STATUTES ANNOTATED. [N. Y. St.

succession or devolution of property, or the right to receive prop-
erty. In either case it is free from constitutional objection.

Constitutionality.

The court entertains no doubt that the act is constitutional, that
the power of the state extends to an inheritance tax. In re Mc-
Pherson, 104 N. Y. 306, 316, 10 N. E. 685, 58 Am. Rep. 502. This
act does not conflict with the fourteenth amendment to the federal
constitution. Wallace v. Myers, 38 Fed. 184, 4 L. R. A. 171.

Imperfections. — Contingent Estates.

It was pointed out that the statute contains many imperfections
and that there would be great embarrassment and difficulty in
executing the act in the cases of contingent remainders and expec-
tant estates. But the court holds that this is no reason for con-
demning the entire act. In re McPherson, 104 N. Y. 306, 324,
10 N. E. 685, 58 Am. Rep. 502.

Not Retroactive on Contingent Interests.

Where the testator died in 1881 and left a legacy to his nephew
to be paid when he should reach twenty-one, which occurred in
October, 1885, this legacy is not subject to the inheritance tax of
1885, as the interest passed from the testator before the taking
effect of the statute. In re Cogswell, 4 Dem. Surr. (N. Y.) 248.

Law of Date of Original Will Governs Power of Appointment.

One who takes on the execution of a power of appointment con-
tained in a will takes under the will and is subject to taxation
unless excepted by the act of 1885. Where the testator died in
1886 the power was exercised in 1890. In re Stewart, 131 N.
Y. 274, 30 N. E. 184, 14 L. R. A. 836, affirming

On Property of a Non-resident.

This act imposed a tax upon two classes of property: (1) upon all
property which shall pass from any person who may die seized or
possessed of the same while being a resident of the state ; (2) upon
property that shall be within this state transferred inter vivos to
take effect at the death of the grantor. And the court finds that
there was no intention by this section to impose a succession ta:
upon property passing by will or intestacy from a non-resident o.
the state to his collateral relatives.

1885, c. 483.] NEW YORK. 777

The fact that the New York statute of 1887, c. 713, amended
the statute of 1885, s. 1, so as to subject to its operation the prop-
erty within the state of a non-resident decedent, furnishes some evi-
dence that prior thereto the proper construction of the section did
not include such property within its operation.

"The corporate stocks of the decedent were not, under the
general laws of this state, taxable here, although the share certi-
ficates may have been held here by her agents. The certificates
are in no general sense property. They simply represent inter-
ests in the corporations, and the situs of the property owned by a
shareholder in a corporation is either where the corporation exists
or at the domicile of the shareholder; it can in no proper sense be
said to be where the certificates happen to be in the hands of an
agent in a state where the corporation has no existence and the
owner no domicile. So, too, the bonds of foreign corporations in
the hands of the agents of the decedent here were not, in a legal
sense, property within this state, and they were not, under the gen-
eral laws or the policy of the state, taxable here. On the contrary,
they were, by the general policy of the state, exempted from taxa-
tion here. There is nothing in the act of 1885 from which it can
be inferred that the legislature meant so far to depart from its gen-
eral system and policy of taxation as to impose here a succession
tax property thus situated. It was dealing with taxation upon the
property of persons domiciled here, and used language sufficient
to impose taxation upon such property, but not upon property of
non-residents which had no situs in this state. It cannot be pre-
sumed that it was the intention of the legislature to impose taxa-
tion upon all the property of any decedent found within this state.
Suppose a foreigner should come here with negotiable securities in
his possession for the purpose of buying property here, and soon
after should die here. Or suppose a merchant should come here
from some other state with negotiable drafts or securities in his
possession and should die here shortly after reaching this state;
can it be supposed in either of such cases that it was the legis-
lative intent that before the property of the decedent could be
taken out of this state to the jurisdiction of his domicile it should
be subjected to a tax to enhance the revenues of the state? Then,
again, if this act is to be so construed as to reach personal estate
of non-resident decedents, how is it to be administered? There
are no means of ascertaining here how much of the estate will pass
to collateral relatives under a will or by intestacy. That can only

778 STATUTES ANNOTATED. [N. Y. St.

be known after the entire expenses of administration and the
debts and liabilities of the deceased have been ascertained and
deducted at the place of his domicile. Suppose a non-resident
dies, leaving $1,000,000 in this state, and is largely indebted at
the place of his domicile, what his net estate will be after deducting
debts and expenses of administration can only be ascertained at
his domicile, where his estate must be finally administered and
adjusted*, and there can be no way of adjusting the estate here,
as there is no machinery in the law here appropriate to such a
purpose ; and thus it would be impractical to administer this statute.

"Still further, if a succession tax is demanded and paid here upon
the property of a non-resident decedent, that does not answer a
claim for a further tax at the place of the decedent's domicile;
and thus his estate might, and many times would be, subjected to
a double succession tax. There is in the state of Pennsylvania a
law for the taxation of collateral inheritances like that which
exists here, and if this estate be subjected to this tax in this state,
it may again be subjected to a like tax in that state. All these
considerations should lead us to hesitate to put upon section 1
such a construction as would bring within its purview the prop-
erty of a non-resident decedent left in this state at his death."
Per Andrews, J., in In re Enston, 113 N. Y. 174, 181, 21 N. E. 87,
3 L. R. A. 464; 22 N. Y. St. 569, reversing 46 Hun 506, 19 Abb.
N. Cas. 227; 10 N. Y. St. 380, 5 Dem. Surr. 93; 8 N. Y. St. 781,
overruling In re Leavitt, 4 N. Y. Suppl. 179.

In re Enston was followed in In re Hall, 55 Hun 608, 8 N. Y.
Suppl. 556.

United States Bonds.

A bequest of United States government bonds is subject to the
inheritance tax. In re Carver, 4 Misc. Rep. 592, 25 N. Y. Suppl.
991. Wallace v. Myers, 38 Fed. Rep. 184.

Property Exempt under General Law.

Life insurance policies and other property not taxable under
general law can still be included for taxation under the inheritance
tax law. In re Knoedler. 140 N. Y. 377, 380, 35 N. E. 601, affirm-
ing 68 Hun 150.

Real Estate out of the State.

A tax on real estate situated out of the state though owned by a
resident of New York was not imposed by this act. In re Swift,

1885, c. 483.1 NEW YORK. 779

137 N. Y. 77, 88, 32 N. E. 1096, 18 L. R. A. 709; 64 Hun 639,
16 N. Y. Suppl. 193, 19 N. Y. Suppl. 292.

In Foreign Corporations.

Certificates of stock belonging to a testator in New York of
corporations created under the laws of other states are not subject
to the New York inheritance tax of 1885, where the testatrix died
February 18, 1887. In re Thomas, 3 Misc. Rep. 388, 24 N. Y.
Suppl. 713.

Adopted Children.

The words "lineal descendants born in lawful wedlock" might
under some circumstances be given wide meaning so as to bring
in natural or illegitimate children, but can be carried no farther.
The word "children" is not broad enough on its face to cover the
case of an adopted child. In re Miller, 110 N. Y. 216. 222, 18 N. E.
139, affirming 47 Hun 394. [Adopted children were exempted by
the act of 1887, c. 713.]

Descendants of Brothers and Sisters.

Under the statute of 1885 descendants of brothers and sisters are
not intended to be exempt from the tax. In re Miller, 5 Dem.
Surr. (N. Y.) 132, 45 Hun 244.

The Husband of a Daughter.

The New York statute of 1885 exempts from taxation the hus-
band of a daughter, and the court holds that the daughter's death
before the testator does not subject the legacy to the husband to
the inheritance tax. In re McGarvey, 6 Dem. Surr. 145, 20 St..
Rep. 135.

Bequest to the United States.

A state inheritance tax levied upon a bequest to the United
States is not void as an attempt to tax the property of the United
States, since the tax is imposed upon the legacy before it reaches
the hands of the government. The legacy becomes the property
of the United States only after it has suffered a diminution to the
amount of the tax, and it is only upon this condition that the legis-
lature assents to a bequest of it. United States v. Perkins,
163 U. S. 625, 630, affirming In re Merriam, 141 N. Y. 479,
36 N. E. 505.

780 STATUTES ANNOTATED. [N. Y. St

**Societies, Corporations and Institutions now Exempted
by Law."

What is a General Exemption from Taxation?

Exemption of any building used by a church for public worship
did not constitute a general exemption of the church from taxa-
tion within the meaning of the collateral inheritance act, and
therefore the church is not exempt from taxation upon a legacy of
"ten thousand dollars towards the building of a new church."
Sherrill v. Christ Church, 121 N. Y. 701, 702, 25 N. E. 50,
reversing In re Van Kleeck, 55 Hun 472.

It is enough to exempt societies that they are included in the
list of societies exempted from tax by a general law, and the exemp-
tion need not arise from a special provision of a statute. In re
Miller, 5 Dem. Surr. (N. Y.) 132, 45 Hun 244.

The exemption under the New York statute of 1885 of charitable
corporations which are exempt by law is not confined to corpora-
tions the property of which is completely exempt, but may apply
to a corporation which is exempt from taxation up to a certain
valuation in its property, as it is assumed that the corporation
will not exceed its corporate powers and take more property than
is authorized. In re Vassar, 127 N. Y. 1, 12, 27 N. E. 394,
reversing 58 Hun 378, 12 N. Y. Suppl. 203.

Particular Societies.

The following societies have been held subject to tax under this
act: American Museum of Natural History. [In re Vanderbilt,
10 N. Y. Suppl. 239, 2 Con. Surr. 319.] The Board of Home
Missions of the Presbyterian Church. [In re Board of Home
Missions, 11 N. Y. Suppl. 311.] The Metropolitan Museum of
Art. [In re Vanderbilt, 10 N. Y. Suppl. 239, 2 Con. Surr. 319.]
The Young Men's Christian Association. [In re Vanderbilt, 10
N. Y. Suppl. 239, 2 Con. Surr. 319.]

The Metropolitan Museum of Art is not exempt from taxation
as a free public charity, as it derives its income from membership
and sales of books. Its privileges and advantages are not free to
the general public. In re Wolfe, 15 N. Y. Suppl. 539, 2 Con.
Surr. 600.

The Church Foundation is exempt from the statute of 1885, as
it IS based on personal property which is specifically exempted by
law from taxation. Church Charity Foundation v. People, 6 Dem.
Surr. (N. Y.) 154.

1885, c. 483.1 NEW YORK. 781

Where only the Real Estate of a Corporation is Exempt.

Where a statute giving a corporation additional privileges ex-
pressly provides that its real estate shall be exempt from taxation,
this shows by inference that its personal property was not exempt,
and therefore it is subject to the inheritance tax, although it
would not have been exempt as an almshouse under general law
if there had been no special provision in its special statute con-
ferring upon it additional privileges. In re Forrester, 58 Hun
611, 12 N. Y. Suppl, 774.

'*For the Use of the State."

It was objected that the requirement that the inheritance tax
should be paid for the use of the state did not comply with the
New York constitution, article 3, section 20, which provides that
all tax laws "shall distinctly state the tax and the object to which
it is to be applied.'* But the court holds that this provision of the
constitution did not apply to the inheritance tax, as it has no
reference to special taxes which may be collected in a variety of
ways under general laws. In re McPherson, 104 N. Y. 306, 319,
10 N. E. 685, 58 Am. Rep. 502.

"Provided that an Estate . . . less . . . than Five Hundred
Dollars shall not be Subject to . . . Tax."

The statute imposes the tax upon the individual and it can be
imposed only when the particular interest devised exceeds in
value th^ amount of limitation provided by the statute. In re
Cager, 111 N. Y. 343, 347, 19 N. Y. St. 497, 18 N. E. 866, affirm-
ing 46 Hun 657; In re Hopkins, 6 Dem. Surr. 1; In re McCready,
6. Dem. Surr. 292; In re Smith, 5 Dem. Surr. (N. Y.) 90. Contra,
In re Miller, 5 Dem. Surr. (N. Y.) 132, 45 Hun 244.

A life estate of a value of less than five hundred dollars is not
subject to taxation. In re Cager, 111 N. Y. 343, 347, 19 N. Y. St.
497, 18 N. E. 866, affirming 46 Hun 657.

S. 2. When any person shall bequeath or devise any property, or interest
therein, or income therefrom, to a father, mother, husband, wife, children, brother
and sister, the widow of a son, or a lineal descendant, during life or for a term
of years, and the remainder to a collateral heir of the decedent, or to a stranger in
blood, or to a body politic or corporate at their decease, or on the expiration of
such term, the property so passing shall be appraised immediately after the death
of the decedent, at what was the fair market value thereof, at the time of the
death of the decedent, in the manner hereinafter provided, and after deducting
therefrom the value of said life estate, or term of years, the tax prescribed by this

782 STATUTES ANNOTATED. [N. Y. St.

act on the remainder shall be immediately due and payable to the treasurer of the
proper county, and in the city and county of New York to the comptroller thereof,
and together with the interest thereon, shall be and remain a lien on said property
until the same is paid; provided that the person or persons, or body politic or cor-
porate beneficially interested in the property chargeable with said tax may elect
not to pay the same until they shall come into the actual possession or enjoyment
of such property, or, and in that case, such person or persons, or body politic or
corporate, shall give a bond to the people of the state of New York in a penalty
three times the amount of the tax arising upon personal estate, with such sureties
as the said surrogate may approve, conditioned for the payment of said tax and
interest thereon, at such time or period as they or their representatives may come
into the actual possession or enjoyment of such property, which bond shall be
filed in the office of the surrogate of the proper county; provided, further, that
such person shall make a full verified return of such property to said surrogate,
and file the same in his office within one year from the death of the decedent and
within that period enter into such security and renew the same every five years.

** Remainder."

A "remainder" under section 2 of this statute must apply only to
vested remainders, and a contingent remainder cannot be included ;
when the property bequethed or devised actually vests, and it
passes to the collateral heir, then the tax becomes due and pay-
able. In the case of a vested remainder the vesting takes place
at the death of the decedent; in the case of a contingent re-
mainder the vesting takes place when the defeating contingency
has been rendered impossible. In re Lefever, 5 Dem. Surr.
(N. Y.) 184.

Contingent Interests.

Contingent future interests in an annuity cannot be taxed, but
they should be reserved for future action until the contingency has
been determined. In re Clark, 1 Con. Surr. 431, 22 N. Y. St. 354,
5 N. Y. Suppl. 199. To the same effect see In re Wallace, 4 N. Y.
Suppl. 465.

The court distinguishes the Matter of Stewart, 131 N. Y. 277, as
that case does decide that contingent interests, although Vesting
in possession at a future day, may be at once valued and assessed.
And the court says that it may possibly be that where the only

1885, c. 483.] NEW YORK. 783

contingency of the future is upon which of the several named per-
sons or classes of persons, all of whom are liable to taxation, the
beneficial interest will ultimately devolve, the appraisal and assess-
ment need not be postponed. Yet where the contingency touches
the taxable character of .he succession, where it is only in the chance
of uncertain events that the beneficial interests will finally alight
where they will be taxable at all, a delay until the contingency is
solved is both just and necessary. In re Curtis, 142 N. Y. 219,
223, 36 N. E. 887, affirming 73 Hun 185; 56 N. Y. St. 113, 25 N. Y.
Suppl. 909.

When the estate transferred has a fixed or ascertainable value
at the tim^ of the death of the testator, the value at that time
must be the basis of the appraisal whenever made. But if the
person to whom the property passed cannot be known till the death
of the life tenant, the tax cannot be imposed until after that event.
So interest in a vested remainder taking effect after the death
of the life tenant must be appraised as of the death of the testator
and not as of the death of the life tenant. In re Davis, 149 N. Y.
539, 547, 44 N. E. 185, affirming 91 Hun 53.

Valuation of Life Estate.

Valuation of a life estate under the New York statute of 1885
should be made according to the rules of the supreme court where no
tables are specified in the statute. In re Robertson, 5 Dem. Surr.
(N. Y.) 92.

Life Estate Determinable in Marriage.

Where the widow is given the use of the whole of an estate for
life, but in case of her remarriage then the use of one-half only,
the value of her estate or of the remainder cannot now be ascer-
tained for the purpose of the assessment of the tax. That cannot
be done until her death or remarriage, /w re Millward, 6 Misc.
Rep. 425, 27 N. Y. Suppl. 286.

Value at Date of Change of Title.

As the inheritance tax is a tax upon succession and not upon
property, the true test of value is the value of the estate at the time
of the transfer of title, and not its value dt the time of the transfer
of possession. In re Davis, 149 N. Y. 539, 547, 44 N. E. 185,
affirming 91 Hun 53.

784 STATUTES ANNOTATED. [N. Y. St.

From Principal or Income.

The tax on the life estate ought to be taken out of the income and
the tax on the remainder out of the capital. In re Johnson, 6 Dem,
Surr. 146.

Direction in Will.

The fact that a will directs that the amount of the tax upon
legacies and devises should be paid as an expense of administration
does not affect the imposition of the tax. The amount of the tax
to be assessed on prior legacies should not be deducted from the
residuary estate in ascertaining its value for the purpose of taxa-
tion. That which is to be reported by the appraiser for the pur-
pose of the tax is the value of the interest passing to the legatee
under the will without any deduction for any purpose, nor under
any testamentary direction. In re Swift, 137 N. Y. 77, 87, 32
N. E. 1096, 18 L. R. A. 709, 64 Hun 639, 16 N. Y. Suppl. 193,

19 N. Y. Suppl. 292.

S. 3 provides a tax on the excess over commissions or reasonable compensation.

A bequest in addition to commissions to an executor is not
within the intention of this section, which provides for a case
where ^a bequest is made in lieu of commissions. In re Underbill,

20 N. Y. Suppl. 134, 2 Con. Surr. 262.

S. 4 provides that all taxes are due at the death of the decedent with interest
at six per cent from that time if paid within one year, and if not so paid with inter-
est at ten per cent, provided that if the tax is paid within six months no interest
shall be charged and a discount of five per cent shall be allowed.

Interest. — Penalty.

S. 5. The penalty of ten per cent per annum, imposed by section four hereof
for the non-paynient of said tax, shall not be charged where in cases by reason of
claims made upon the estate, necessary litigation or other unavoidable cause of
delay, the estate of any decedent, or a part thereof, cannot be settled at the end
of a year from the death of the decedent, and in such cases only six per cent per
annum shall be charged upon the said tax from the expiration of such year until
the cause of such delay is removed.

Penalty.

Where the estate cannot be settled at the end of a year from death,
the intention is merely to relieve the estate from the penalty and
not from the interest. In re Prout, 22 N. Y. St. Rep. 334, 3 N. Y.
Suppl. 834.

1885, c. 483.1 NEW YORK. 785

Interest. — To what Estates Applicable.

These provisions apply to the will of one who died in 1890
although proceedings for collection were pending after the passage
of the act of 1892. In re Fayerweather, 143 N. Y. 114, 38 N. E.
278.

Interest. — Unavoidable Cause of Delay.

Section 4 intends to provide that the interest at ten per cent
shall be remitted and no interest whatever charged during the first
year, provided that a cause for remitting the interest on account
of an unavoidable cause of delay under section 5 exists. The
burden of showing that such unavoidable cause of delay in settling
any estate exists is on the estate. People v. Prout, 53 Hun 541,
6 N. Y. Suppl. 457.

The legatee should be relieved from the payment of interest at
ten per cent for the period covered by the contest of the wills of
two heirs at law of the decedent, pending which contest the estates
of these heirs had no legal representative. In re Prout, 3 N. Y.
Suppl. 831. The lower rate of interest should be charged under
this section where litigation prevented the executors from taking
any action. In re Stewart, 131 N. Y. 274, 285, 30 N. E. 184, 14
L. R. A. 836.

S. 6. The administrator or executor is to deduct the tax.

S. 7. The executor, administrator or trustee shall have power to sell the prop-
erty to enable him to pay the tax.

S. 8. Payment of the tax is to be made to the county treasurer of the "proper
county."

"Proper County."

This section provides that every tax shall be paid to the treasurer
of the proper county, and it was contended that this means the
county where the property liable to tax is situated. The court
finds that the words "proper county" evidently refer to the county
of the surrogate first properly acquiring jurisdiction, and the surro-
gate of a county retains such jurisdiction throughout all proceed-
ings even should there be real estate in every county in the state.
In re Keenan, 5 N. Y. Suppl. 200, 1 Con. Surr. 226.

S. 9. Executors are to give notice to the treasurer or comptroller of the county.
S. 10 provides for a refund of the tax where the legatee is forced to refund to
pay debts.

786 STATUTES ANNOTATED. [N. Y. St.

S. 11 provides that the tax is to be paid on the transfer of stocks by a foreign
executor or administrator.

S. 12. A tax paid erroneously is to be refunded.

S. 13. Appraisal. In order to fix the value of property of persons whose
estates shall be subject to the payment of said tax, the surrogate, on the appli-
cation of any interested party, or upon his own motion shall appoint some compe-
tent person as appraiser as often as, and whenever occasion may require, whose
duty it shall be forthwith to give such notice by mail, and to such persons as the
surrogate may by order direct, of the time and place he will appraise such property;
and at such time and place to appraise the same at its fair market value, and
make a report thereof in writing to said surrogate, together with such other facts
in relation thereto as said surrogate may by order require, to be filed in the office
of such surrogate; and from this report the said surrogate shall forthwith assess
and fix the then cash value of all estates, annuities and life estates, or term of
years growing out of said estate, and the tax to which the same is liable, and shall
immediately give notice thereof by mail to all parties known to be interested
therein. Any person or persons dissatisfied with said appraisement or assessment
may appeal therefrom to the surrogate of the proper county within sixty days
after the making and filing of such assessment, on paying, or giving security ap-
proved by the surrogate to pay all costs, together with whatever tax shall be fixed
by said court. The said appraiser shall be paid by the county treasurer or comp-
troller out of any funds he may have in his hands on account of said tax, on the
certificate of the surrogate, at the rate of three dollars per day for every day actu-
ally and necessarily employed in said appraisement, together with his actual and
necessary traveling expenses.

Duties to Surrogate. — Notice to Comptroller.

As the surrogate is invested with the duty and authority to
assess and fix the tax to which the property is liable under this
section, which carries the power to determine the question of lia-
bility, a prior determination of that question is conclusive upon
the comptroller and district attorney, and leaves no scope for the
operation of sections 16 and 17, except in the case of a refusal or
a neglect to pay the tax which is due. Therefore the tax was legally
assessed, although neither the treasurer nor the comptroller was
given any notice of the proceedings.

"When we read all of the provisions of this act, it is perfectly
apparent that a special system of taxation was created for the
benefit of the state, with all the necessary machinery for its work-
ing; the control with respect to which was vested in the surro-
gate's court, with a jurisdiction exclusive in its nature. In the
assessment of a tax upon property passing by will, or by the in-
testate law, the responsibility is imposed by the law upon the
surrogate. He acts for the state and he is commanded to assess
and fix the tax to which the property is liable. To comply with
the command in section 13 of the act, in that respect, he must,

1885, c. 483.1 NEW YORK. 787

necessarily, determine the question of liability to -taxation, inas-
much as if no such liability exists he is without jurisdiction in the
matter. When the machinery of this system of taxation is set
in motion, under section 13 of the act, whether upon the applica-
tion of interested parties, or upon his own motion, the surrogate, by
force of its provisions, is at once invested with the office and the
functions of an assessor for the state, whose duty it is to assess
for its use a tax, and in whom, not only by virtue of the office,
but by the further provisions of section 15, inheres the authority,
and upon whom rests the obligation, to determine the question
of whether the property of the decedent, which passes to others,
is subject or liable to taxation by the state. He must decide
whether the property is taxable, for that fact lies at the founda-
tion of his jurisdiction and is of the essence of his right to pro-
ceed with the assessment. Not all the property of decedents may
be subject to the tax imposed by the first section, and what property
shall be assessed for taxation is left, by the thirteenth section,
for the surrogate to determine. To quote again the language,
he 'shall assess and fix the cash values of all the estates, etc., and
the tax to which the same is liable,' and this direction to assess
involves the necessity, as well as the power, to determine the
question of liability; as much as it does in the case of assessors of
taxes in the general scheme of taxation."

"I can see no difference between the principle upon which the
surrogate acts, in proceeding to assess property for taxation under
the act, and that upon which, in the general system of taxation
in the state, tax assessors act in the assessment of persons or
property for purposes of taxation. It is well settled, as to them,
that in their proceedings they must determine the question of
liability to taxation as a fact, which gives them jurisdiction to
assess. It is not only an important, but it is a conditional step in
the proceeding for the assessment. That the doctrine of notice has
any application in such proceedings to the case of the comptroller,
is a proposition which has neither support in some requirement
of the act, nor is justified by his relation to the subject-matter.
He is not a person who has any interest in the property. He
is an utter stranger to it. Contingently upon the refusal or
neglect to pay a tax due under the act, it may become his duty
to notify the district attorney to proceed to enforce collection.
The performance of that duty, however, involves the idea of a
failure of the surrogate to act at all, or of a neglect or refusal to

788 STATUTES ANNOTATED. [N. Y. St-

obey the decree of the Surrogate's Court. It, doubtless, is very
proper that the surrogate should cause the comptroller to be
notified of the proceedings for appraisement and assessment, in
order that a question which concerns the interests of the state
may be tried out in the fullest possible manner; but nothing in
the law, or in the relations of the comptroller, makes notice to
him a prerequisite to a complete determination by the surrogate
of the questions presented in the proceedings.. The doctrine of
notice is one which finds application when it is sought to tax the
property of the citizen. When he is to be assessed it is essential
that he shall be given an opportunity to be heard, to establish a
demand against him. As matter of fact, in this proceeding, it
appears that the comptroller was caused to be notified by the
surrogate before he passed upon the question of the liability of
these legacies to taxation; so that he had his opportunity to
appear and be heard, if he had chosen to avail himself of it. I
can see no more force in the argument as to an implied require-
ment of notice to him, than if the argument was made, in the
case of the assessment and taxation of property under the general
system of taxation in the state, that some state official should
have notice and the opportunity to be heard." Per Gray, J., in
In re Wolfe, 137 N. Y. 205, 211, 33 N. E. 156, affirming 66 Hun
389, 29 Abb. N. Cas. 340, 21 N. Y. Suppl. 515 ; reversing 2 Connoly
600, 15 N. Y. Suppl. 539.

Contingent Interests.

The court holds that contingent interests are subject to the
power given under the provisions of section 13, and that the con-
tingent interests given by a will which after the death of a testator
are converted by the happening of the event upon which they are
limited into actual vested estates may then be appraised and taxed
under the provisions of section 13. The intention of the legis-
lature under this act was to impose a tax on every interest
immediate or future, derived under a testator or intestate not em-
braced in the exception. No collateral inheritance was excepted
in terms. In re Stewart, 131 N. Y. 274, 281, 30 N. E. 184, U
L. R. A. 836.

Notice to Parties.

^ The act was attacked on the ground that no proper notice was
given to the taxpayer. The court construes section 13 of the act
liberally as requiring the surrogate to give notice to all persons

1885, c. 483.] NEW YORK. 789

interested, and it is further provided that immediately after he has
assessed a tax the surrogate shall "give notice by mail to all parties."

The section further provides a right of appeal and upon such
appeal there is another opportunity to be heard. There is still
further opportunity to be heard under section 16 of the act, which
provides for the service of a citation on an order to show cause
why the tax should not be paid.

It is clear that the person thus cited may allege any reason
whatever which shows that he ought not to pay it. He may
answer that he has not had an opportunity to be heard at the
appraisal, and that therefore the tax as to him is void. He may
show any error affecting the validity of the tax, or that he has never
received and never will receive the inheritance or legacy, and it
would undoubtedly be a justification for refusing to pay that he
absolutely renounced and refused to accept or receive the inheri-
tance or legacy. If the surrogate should err in his decision th^re
would be the right of appeal to the supreme court.

The court concludes that in all these ways there is sufficient
provision for notice and hearing for all parties interested. In re
McPherson, 104 N. Y. 306, 323, 10 N. E. 685, 58 Am. Rep. 502.

S. 14 makes it a misdemeanor for the appraiser to take any reward from the
person liable to pay the tax.

S. 15. Jurisdiction. The surrogate's court in the county in which the real
property is situate of a decedent who was not a resident of the state, or in the
county of which the decedent was a resident at the time of his death, shall have
jurisdiction to hear and determine all questions in relation to the tax arising under
the provisions of this act, and the surrogate first acquiring jurisdiction hereunder
shall retain the same to the exclusion of every other.

Jurisdiction of Surrogate's Courts.

The imposition and collection of this tax are simply incidents in
the final settlement and adjustment of estates, and therefore
properly within the jurisdiction of surrogate's courts. In re Mc-
Pherson, 104 N. Y. 306, 324, 10 N. E. 685, 58 Am. Rep. 502.

Power to Declare Will Void.

This section creates a special grant of power aside from the ordi-
nary jurisdiction of the surrogate. This includes the power to
hold void any provision in the will and thus to decide that nothing
passed under it to the beneficiary named. In re Ullman, 137 N. Y.
403, 33 N. E. 480.

S. 16 provides for citation to issue on proceedings to enforce payment of the tax.

790 STATUTES ANNOTATED. [N. Y. St.

The surrogate has no authority to decide the liability of the execu-
tor for the inheritance tax upon motion by the executor. The only
way to obtain a decision in this question is by proceedings insti-
tuted by the district attorney under section 16. In re Farley,
15 N. Y. St. Rep. 727.

Omitted Property.

Under this statute the state has a right after an appraisal has
been had and property has been withheld from the notice of the ap-
praiser, to proceed under sections 16 and 17 of the statute to levy
the tax on the omitted property. In re Smith, 23 N. Y.
Suppl. 762.

S. 17 provides for referring cases of refusal to pay to the district attorney.

Under this section the comptroller is required whenever he has
reason to believe a tax is due and unpaid to notify the district
attorney. In re Vanderbilt, 10 N. Y. Suppl. 239, 2 Con.
Surr. 319.

S. 18 requires the surrogate and county clerk to make a statement of parties
liable to the tax to the county treasurer or comptroller.

S. 19 provides for the payment of expenses.

S. 20 designates the book to be furnished to the surrogate.

S. 21 provides for the payment and collection of taxes.

S. 22 allows the county officers to retain five per cent as compensation for
collection.

S. 23 covers the receipt for and recording of the payment. [ This section was
amended by St. 1891, c. 215.]

THE ACT OF 1887.

N. Y. St. 1887, c. 713. Approved June 25. 1887.

Chapter four hundred and eighty-three of the laws of eighteen hundred and
eighty-five, entitled "An act to tax gifts, legacies and collateral inheritances in
certain cases," is hereby amended so as to read as follows:

S. 1. Transfers Taxable. — Rate. — Exemptions. After the passage of
the act 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 this state, or any interest
therein, or income therefrom which shall be transferred by deed, grant, sale or

1887, c. 713.] NEW YORK. 791

gift, made or intended to take effect in possession or enjoyment after the death
of the grantor or bargainor, to any person or persons, or to any body politic or
corporate, in trust or otherwise, or by reason whereof any person or body politic
or corporate shall become beneficially entitled, in possession or expectancy, to any
property or to the income thereof, other than to or for the use of his or her father,
mother, husband, wife, child, brother, sister, the wife or widow of a son, or the
husband of a daughter, or any child or children adopted as such in conformity
with the laws of the State of New York, or any person to whom the deceased for
not less than ten years prior to his or her death stood in the mutually acknow-
ledged relation of a parent, and any lineal descendant of such decedent born in
lawful wedlock, or the societies, corporations and institutions now exempted by
law from taxation by reason whereof any such person or corporation shall become
beneficially entitled, in possession or expectancy, to any such property or to the
income thereof, shall be and is subject to a tax of five dollars on every hundred
dollars of the clear market value of such property, and at and after the same rate
for any less amount, to be paid to the treasurer of the proper county, and in the
city and county of New York to the comptroller thereof, for the use of the State,
and all administrators, executors and trustees shall be liable for any and all such
taxes until the same shall have been paid as hereinafter directed, provided that
an estate which may be valued at a less sum than five hundred dollars shall not
be subject to such duty or tax.

[See notes to the Act of 1885, s. 1, ante, p. 775 et seq.\

Act Poorly Drawn.

Surrogate Ransom has used the following language concerning
the statute of 1885 as amended by the statute of 1887: —

"This legislation in form and substance is justly entitled to
severe condemnation for great looseness and incoherence of expres-
sion. There is no symmetry in its provisions, and it is impossible
to be certain of the intention of the lawmakers in respect of the
various steps which it may be necessary to take to effectuate its
purpose. And if much is required by me to be done to put in motion
the cumbersome and awkward machinery set up for the collection
of taxes upon collateral inheritances, etc., which may seem to be
unnecessary, the cause therefor must be looked for within the halls
of legislation, where this anomalous statute was invented and sent
forth to confuse and therefore exasperate the personal representa-
tives of deceased persons and the courts, by its glaring inconsis-
tencies and absurdities. After much patient reading and rereading
of this act, I have concluded upon a course of procedure which
I hope and believe will bear the test of superior judicial investi-
gation. Fortunately, the constitutionality of the law cannot now
be mooted. The court of appeals has settled that {Re McPher-
son, 104 N. Y. 306)." In re Astor, 20 Abb. N. Gas. 405, 6 Dem.
Surr. 402.

792 STATUTES ANNOTATED. [N. Y. St.

Nature. — Treaty not Applicable.

The act of 1887 is not a "detraction tax," but a succession tax,
and is therefore not included within the terms of the treaty of 1844
between the kingdom of Wurtemberg and the United States.
In re Stroebel, 5 N. Y. App. Div. 621, 39 N. Y. Suppl. 169.

A Continuation of the Act of 1885.

The act of 1887 does not repeal the statute of 1885 except so
far as inconsistent with it; therefore a tax due under the statute of
1885 may be collected under the statute of 1887. In re Arnett,
49 Hun 599, 18 N. Y. St. 576, 2 N. Y. Suppl. 428. Warrimer v.
People, 6 Dem. Surr. (N. Y.) 211. See In re Cager, 111 N. Y. 343,
347, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun 657.

Purpose of Amendment to Tax Property of Non-residents.

The change in the existing law effected by N. Y. St. 1887, c. 713,
was to impose a succession tax with respect to the property of
non-residents which should be within the state. As the law stood
under the act of 1885, it could not be gathered from its language
that the legislature intended to impose a tax upon property in this
state; and the act of 1887 was undoubtedly passed in order to
comprehend such cases as In re Enston, 113 N. Y. 174. Under its
provisions the question of the residence of the owner and of the
legatee is of no materiality. It is the property of the decedent
which is sought to be subjected to the tax. The right of the state
to impose the tax is based upon its dominion over property situated
within its territory. If the property consisted in personalty its
legal situs would follow the domicile of its owner, and thus if he
were a resident of the state become subject to taxation there. In re
James, 144 N. Y. 6, 10, 38 N. E. 961, affirming 77 Hun 211, 27
N. Y. Suppl. 288, 6 Misc. 206.

The purpose and effect of the amendment Was to subject to
taxation property within the state of New York of a non-resident
decedent, whether he died testate or intestate, it having been
declared in In re Enston, 113 N. Y. 174, that such property was
not taxable under the original act. In re Gibbes, 176 N. Y. 565,
68 N. E. 1117, affirming 84 N. Y. App. Div. 510, 83 N. Y. Suppl.
53, reversing 83 N. Y. Suppl. 56.

A Property Tax on Non-Residents.

As to personal property within the state of New York belong-
ing to non-resident decedents succession is under the law of a for-

1887, c. 713.] NEW YORK. 793

eign state and that succession cannot be taxed by New York.
In such case the right of the state to impose a tax is based on its
dominion over the property situated within its territory. This is
a property tax on such property. In re Embury, 154 N. Y. 746,
49 N. E. 1096, affirming 19 N. Y. App. Div. 214, 45 N. Y.Suppl. 881.

Real Estate of Non- Residents.

N. Y. St. 1887, c. 713, conferred on the surrogate jurisdiction
in the case of non-resident decedents of those only who died seized
of real estate within the surrogate's county; and the act of 1885
amended by the act of 1887 declared this property taxable but
omitted to give the surrogate's court jurisdiction to impose the
tax where the non-resident had no real estate in the state and the
personal property was moved out of the state before the imposition
of any tax. In re Embury, 154 N. Y. 746, 49 N. E. 1096, affirm-
ing 19 N. Y. App. Div. 214, 45 N. Y. Suppl. 881.

Covers both Testate and Intestate Non-Residents.

The legislature did not intend to discriminate between the
property of a non-resident who made a will and one who did not.
The court says that the legislature intended by the first part of the
sentence to provide for succession to the estates of residents to
which the intestate laws of this state apply; that after providing
for that class a change is made to another subject covering non-
residents. In re Romaine, 127 N. Y. 80, 85,27 N. E. 759, 12 L. R.
A. 401, affirming 58 Hun 109.

Not Retroactive.

The New York statute of 1887 is not retroactive so as to govern
the assessment and collection of a tax on interests passing under
the will of one who died before the passage of the act. In re
Brooks, 6 Dem. Surr. (N. Y.) 165, 20 N. Y. St. 149.

The question of validity of a tax is not affected by the amend-
ment made to the law of 1885 by the statute of 1887, c. 713, as the
tax was adjudicated and imposed by the surrogate before the amend-
ment took effect. In re Cager, 111 N. Y. 343, 347, 19 N. Y. St.
497, 18 N. E. 866, affirming 46 Hun 657.

Not Retroactive as to Interests under Deed.

The act of 1887 does not apply to remainder interests created by
a deed executed in 1882 which took effect in possession on the

794 STATUTES ANNOTATED. [N. Y. St.

death of the grantor in 1888. In re Hendricks, 3 N. Y. Suppl.
281, 1 Con. Surr. 301.

Gifts Causa Mortis.

This act subjects gifts causa mortis to tax. In re Edwards,
146 N. Y. 380, 41 N. E. 89, affirming 85 Hun 436, 66 N. Y. St.
Rep. 231, 32 N. Y. Suppl. 901.

Exemptions.

A gift to the American Bible Society is subject to the inheritance
tax. In re Lenox, 9 N. Y. Suppl. 895.

The Bank Clerks' Mutual Benefit Association not being exempt
from taxation by its charter is not exempt from taxation on a
legacy to it. In re Jones, 50 Hun 603, 2 N. Y. Suppl. 671, 22
Abb. N. Cas. 50, 1 Con. Surr. 125.

Under this act charitable or religious corporations are exempt
from the inheritance tax only by special exemption either by
charter or by some special act. So the Missionary Congregation
of St. Paul the Apostle is subject to the inheritance tax. In re
Kavanagh, 6 N. Y. Suppl. 669.

Grace Church is not exempt from taxation as a charity, as its
benefits and privileges are not free to all, and hence it is not a
free public charity. In re Wolfe, 15 N. Y. Suppl. 539, 2 Con.
Surr. 600, following Catlin v. Trustees, 113 N. Y. 133, 20 N. E. 864.

The Wartburg Orphan Farm School is exempt from taxation
under general law in New York as a "house of industry," and is,
therefore exempt from the collateral inheritance tax of 1887. In
re Herr, 55 Hun 167, 7 N. Y. Suppl. 852, affirmed in 57 Hun 591,
10 N. Y. Suppl. 680.

Foreign Corporations not Exempt.

The language excepting certain charities "now exempted by
law" refers to exemptions under the New York statute. An
exemption of a foreign corporation under the law of its origin
from taxation does not render it exempt from a collateral inherit-
ance tax in New York. Catlin v. Trinity College Trustees, 113
N. Y. 133, 142, 22 N. Y. St. 189, 20 N. E. 864, 3 L. R. A. 206,
affirming 49 Hun 278, 17 N. Y. St. 707, 1 N. Y. Suppl. 808.

Under this act a legacy to a college located and incorporated
in another state is subject to the tax. In re McCoskey, 1 N. Y.
Suppl. 782, 22 Abb. N. Cas. 20, 6 Dem. Surr. 438.

1887, c. 713.] NEW YORK. 795

Municipal Corporations.

Under this statute the exemption of "societies, corporations and
institutions now exempted by law from taxation" was not intended
to apply to bequests to municipal corporations. The property of
municipal corporations is never included in the terms of 'any law
providing for the imposition of a tax, not because it is exempt,
but for the reason that in the nature of things it never was and
never can be taxable, as this would be a tax by the government
upon itself and utterly useless. Exemption implies that the person
or corporation to which it applies is or would otherwise be taxable.
To include public property which is not and in the nature of things
cannot be taxable at all within the terms of an exemption act
would be to do a vain and useless thing which cannot be imputed
to the legislature. There is no sound distinction between this
case and that of a bequest to the United States which was held
subject to the tax. In re Hamilton, 148 N. Y. 310, 314, 42 N. E.
717, affirming 90 Hun 608.

* 'Estate which may be Valued at a Less Sum than Five
Hundred Dollars.'*

This language refers to the estate given to the beneficiaries
under the will or that descends under the intestate laws to the
heirs. It is property or estate taken by any person or persons
that is taxed and not the estate of the deceased. McVean v.
Sheldon, 48 Hun 163.

The court holds that this language does not mean that five
hundred dollars in value of every legacy is exempt, but it means
simply that if the legacy is less than five hundred dollars it is
exempt, if more than five hundred dollars all of it is subject to
tax. In re Sherwell, 125 N. Y. 376, 26 N. E. 464, affirming 12
N. Y. Suppl. 200, reversing 11 N. Y. Suppl. 897.

S. 2. Particular Estates and Remainders. When any grant, gift, legacy
or succession upon which a tax is imposed by section first of this act, shall be an
estate, income or interest for a term of years or for life, or determinable upon any
future or contingent event, or shall be a remainder, reversion or other expectancy,
real or personal, the entire property or fund by which such estate, income or inter-
est is supported, or of which it is a part, shall be appraised immediately after the
death of the decedent, at what was the fair and clear market value thereof at the
time of the death of the decedent, in the manner hereinafter provided, and the
surrogate shall thereupon assess and determine the value of the estate, income or
interest subject to said tax, in the manner recorded in section thirteen of this
act, and the tax prescribed by this act shall be immediately due and payable to

796 STATUTES ANNOTATED. [N. Y. St.

the treasurer of the proper county, and in the city or county of New York to the
comptroller thereof, and, together with the interest thereon, shall be and remain
a lien on said property until the same is paid; provided that the person or persons,
or body politic or corporate beneficially interested in the property chargeable with
said tax, may elect not to pay the same until they shall come i nto the actual pos-
session or enjoyment of such property, and in that case such person or persons or
body politic or corporate, shall give a bond to the people of the state of New
York in a penalty of three times the amount of the tax arising upon personal es-
tate, with such sureties as the surrogate of the proper county may approve con-
ditioned for the payment of said tax and interest thereon at such time or period
as they or their representatives may come into the actual possession or enjoyment
of such property, which bond shall be filed in the office of the surrogate of the
proper county; provided further, that such person shall make a full verified re-
turn of such property to said surrogate, and file the same in his office within one
year from the death of the decedent, and within that period enter into such secur-
ity and renew the same every five years.

Vested Remainder.

A vested remainder after a life estate is subject to the inheritance
tax of 1887. In re Vinot, 7 N. Y. Suppl. 517.

Remainders not Ascertained.

Where the property is bequeathed in trust to pay the income to
the wife for life and on her death to give annuities to various
persons with cross remainders contingent on survivorship inter se,
the remainders and annuities are not subject to the inheritance
tax under the New York statute of 1887, until the death of the life
tenant, as it could not be known until then who would benefit by
the will. In re Roosevelt, 143 N. Y. 120, 38 N. E. 281, 25 L. R. A.
695, affirming 27 N. Y. Suppl. 741, 76 Hun 257.

Valuation of Remainder Based on Actual Duration of the
Life Estate.

The testator gave property in trust to pay the income to his wife
for life. If the income was insufficient to realize $5,500 a year they
are directed to use the principal to make up that amount. The
testator died in 1889 and the appraiser reported that the rights
of the remaindermen were uncertain and therefore not ascertainable.
The widow died in 1900 and the appraiser on her death appraised
her interest according to the annuity tables as of the death of the
testator. The widow also actually survived longer than the
annuity tables reckoned and the court holds that the valuation of
the estate in remainder should be made as of the death of the life
tenant. In re Hall, 36 Misc. Rep. 618, 73 N. Y. Suppl. 1124.

1887, c. 713.] NEW YORK. 797

This case is decided in New York county and the surrogate
notes that in other counties it has been held that the appraiser
cannot hear such evidence, but that deductions must be made by
the surrogate himself, and quotes In re Millward, 6 Misc. 425,
27 N. Y. Suppl. 286, In re Ludlow, 4 Misc. 594, 25 N. Y. Suppl.
989.

N. Y. St. 1887, c. 713, ss. 3, 6-8, 10, 11, 14-18, 20,21,23, are the same as sec-
tions of these numbers i n the act of 1885.

Interest. — Penalty.

S. 4 amends N. Y. St. 1885, c. 483, s. 4, by providing that if the taxes are paid
within eighteen months, no interest shall be charged and collected thereon; but
if not so paid, interest at the rate of ten per cent per annum shall be charged and
collected from the time said tax accrued, provided that if said tax is paid within
six months from the accruing thereof a discount of five per cent shall be allowed
and deducted from said tax.

S. 5 amends N. Y. St. 1885, c. 483, s. 5, by providing that the penalty of ten
per cent shall not be charged where the estate by reason of litigation cannot be
settled at the end of eighteen months from the death of the decedent.

Litigation among distributees of an estate to determine their
respective shares is "an unavoidable cause of delay in settling
the estate" within the terms of section 5, and therefore in such case
interest should be charged only from the expiration of eighteen
months from the death of the decedent. In re Moore, 90 Hun 162,
35 N. Y. Suppl. 782.

Adopted Children. — Relation of Parent.

S. 9 adds to the exception the brother, sister, "child or children adopted by
such decedent according to law, or any person to whom the deceased for not
less than ten years prior to his or her death, stood in the mutually acknowledged
relation of a parent."

The Exemption to Adopted Children.

The testatrix died in 1886 and the court holds that the statute
of 1887 is not retroactive and does not apply to the case. The
fact that the language in the statute of 1887 declares that the
statute of 1885 "is amended so as to read as follows," is immate-
rial, as is also the fact that the statute of 1887 closes with the
words "all acts and parts of acts inconsistent with the provisions
of this act are hereby repealed." In re Miller, 110 N. Y. 216, 223,
18 N. E. 139, affirming 47 Hun 394.

798 STATUTES ANNOTATED. [N. Y. St.

The same result was reached in In re Thompson, 14 N. Y. St.
Rep. 487, In re Ryan, 3 N. Y. Suppl. 136. See also, Kissam v.
People, 3 N. Y. Suppl. 135, 6 Dem. Surr. 171.

S. 12 extends the time for making application for refund to five years from the
date of payment.

Appraisal.

S. 13 adds to N. Y. St. 1885, c. 483, s. 13, "and the value of every future or
contingent or limited estate, income or interest shall, for the purposes of this act,
be determined by the rule, method and standards of mortality and of value, which
are employed by the superintendent of the insurance department in ascertaining
the value of policies of life insurance and annuities, for the determination of the
liabilities of life insurance companies, save that the rate of interest to be assessed
in computing the present value of all future interests and contingencies shall be
five per cent per annum; and the superintendent of the insurance department
shall, on the application of any surrogate, determine the value of such future or
contigent or limited estate, income or interest, upon the facts contained in such
report, and certify the same to the surrogate, and his certificate shall be conclu-
sive evidence that the method of computations adopted therein is correct."

[This section was amended by St. 1889, c. 307, 1891, c. 34, and 1892, c. 165.]

, There is an elaborate opinion as to the practice on appraisal
under the New York statute of 1887 in In re Astor, 20 Abb. N. Cas.
405, 6 Dem. Surr. 402, 14 N. Y. St. 478, 2 N. Y. Suppl. 630.

S. 17 was amended by St. 1892, c. 168.

S. 19 refers to section 17 instead of section 16.

S. 22. Fees. The treasurer of each county and the comptroller of the city and
county of New York, shall be allowed to retain, on all taxes paid and accounted
for by him each year, under this act, in addition to his salary or fees now
allowed by law, five per cent on the first fifty thousand dollars so paid and ac-
counted for by him, three per cent on the next fifty thousand dollars so paid and
accounted for by him, and one per cent on all additional sums so paid and ac-
counted for by him.

S. 24. Use of Receipts. All taxes levied and collected under this act shall
be paid into the treasury of the state, for the uses of the state, and shall be appli-
cable to the payment of the general expenses of the state government, and to such
other purposes as the legislature may by law direct.

S. 25. Repeal. All acts or parts of acts inconsistent with the provisions of
this act are hereby repealed.

[See amendment by St. 1890, c. 479.]

1891, c. 34.] NEW YORK. 799

Amendments to the Acts of 1885 and 1887.

N. Y. St. 1889, c. 307, approved May 27, 1889, amends N. Y. St. 1887, c. 713,
s. 13, by adding thereto provisions for the appointment by the surrogate of the
city and county of New York, of a clerk for assessing the inheritance taxes.

N. Y. St. 1889, c. 479, approved June 14, 1889, amended N. Y. St. 1887, c. 713,
s. 25, to read as follows: "All acts and parts of acts inconsistent with the provi-
sions of this act are hereby repealed, but this act shall apply to all estates of
deceased persons where no assessment of the tax has been made to which such
estate or estates are liable under the provisions of the foregoing act."

The assessment having been made in a case at the time of the
passage of the act of 1889, the exemption to adopted children pro-
vided by the statute of 1887 became operative and two legatees
who stood in the mutually acknowledged relation of a child to the
testator stood in the same situation as if the claus*e exempting
them had been contained in the original act. Under the saving
clause in the statute of 1892 these rights to exemption were not
modified. In re Thomas, 3 Misc. Rep. 388, 24 N. Y. Suppl. 713.

St. 1890, c. 553, provides that the collateral inheritance tax shall not apply
to certain corporations.

This statute giving certain exemptions is prospective in opera-
tion and does not apply to a tax which became due and payable
before its passage. Sherrill v. Christ Church, 121 N. Y. 701, 703,
25 N. E. 50, reversing In re Van Kleeck, 55 Hun. 472.

Foreign Corporations not Exempt.

This "act exempts from taxation only domestic corporations.
The fact that a foreign charitable corporation was given a limited
privilege of taking and holding real and personal property in New
York did not relieve that corporation from a legacy due it; that
was an enabling statute merely. The corporation remained a for-
eign corporation as before, but possessing in this state a privilege
granted by that statute. In re Prime, 136 N. Y. 347, 363, 32 N. E.
1091, 18 L. R. A. 713, affirming 64 Hun. 50.

N. Y. St. 1891, c. 34, approved February 25, 1891, provides that appraisers
shall "value the real estate at its full and true value, taking into consideration
actual sales of neighboring real estate similarly situated, during the year immedi-
ately preceding the date of such appraisal, if any; and they shall value all such
property, stocks, bonds' or securities as are customarily bought or sold in open
markets in the city of New York or elsewhere, forthe day on which such appraisal
or report may be required, by ascertaining the range of the market and the aver-
age of prices as thus found, running through a reasonable period of time."

800 STATUTES ANNOTATED. [N. Y. St.

N. Y. St. 1891, c. 215, s. 1, approved April 20, 1891, amends N. Y. St. 1885,
c. 483, by including in the transfers subject to tax a "deed, grant, sale or gift
made in contemplation of the death of the grantor or bargainor;" and providing
for a tax of one per cent on direct descendants, brothers and sisters, with an exemp-
tion of estates which may be valued at a less sum than ten thousand dollars*

Continuity of Law.

N. Y. St. 1891, c. 215, which amends N. Y. St. 1885, c. 483, s. 1,
"so as to read as follows," operates as a repeal of inconsistent
provisions in the former law, and where the amended act re-
enacts provisions in the former law the law will be regarded as
having been continuous, and the new enactment as to such part
will not operate as a repeal so as to affect a duty accrued under
the prior law, although as to all new transactions the later law will
be referred to as the ground of obligation. In re Prime, 136 N.
Y. 347, 355, 32 N. E. 1091, 18 L. R. A. 713, affirming 64 Hun. 50.

Foreign Property of Resident.

Promissory notes, bonds and mortgages belonging to a resident
of New York, which at the time of the testator's death were in the
hands of his agent in Michigan, are taxable under the statute of
1885, as amended by the statute of 1891, chapter 215. In re Corn-
ing, 3 Misc. Rep. 160, 51 N. Y. St. 265, 23 N. Y. Suppl. 285.

The United States not Exempt.

N. Y. St. 1885, c. 483, as amended by St. 1891, c. 215, exempted
from the inheritance tax societies, corporations and institutions
now exempted by law from taxation and the court holds that the
United States is not a corporation exempt by law from taxation.
It is a settled doctrine of New York that exemption from taxation
is granted only to domestic corporations and this doctrine is applied
to their inheritance tax law in the Matter of Prime,, 136 N. Y. 347.
The legislature intended to allow an exemption only in favor of
such corporations as it had itself created and which might reason-
ably be supposed to be the special objects of its solicitude and
bounty. We think it was not intended to apply the exemption to a
purely political or governmental corporation like the United
States. United States v. Perkins, 163 U. S. 625, affirming In re
Merriam, 141 N. Y. 479, 36 N. E. 505.

N. Y. St. 1891, c. 215, s. 2, approved April 20, 1891, provides that the record
book in which receipts are to be kept as provided in section 23 of N. Y. St. 1885,
c. 483, shall be labeled "legacy and inheritance tax."

1892, c. 399.] NEW YORK. 801

N. Y. St. 1891, c. 215, s. 3, amends the title of N. Y. St. 1885, c. 483, to read
as follows: "An act to tax gifts, legacies and inheritances."

N. Y. St. 1892, c. 167, approved March 19, 1892, amended N. Y. St. 1887, c. 713,
s. 13, by providing that the appraiser is authorized to summon witnesses and take
testimony and make a report thereof in writing to the surrogate.

N. Y. St. 1892, c. 168, approved March 19, 1892, amends N. Y. St. 1887, c. 713,
s. 17, by adding that costs may be fixed by the surrogate but shall not exceed in
any case one hundred dollars where there has been no contest and two hundred
and fifty dollars where there has been a contest.

N. Y. St. 1892, c. 169, approved March 19, 1892, amends N. Y. St. 1885, c. 483,
s. 1, by adding an exemption of gifts to bishops or religious corporations.

N. Y. St. 1892, c. 443, approved May 3, 1892, amended N. Y. St. 1885, c. 483,
s. 13, by providing an inheritance tax clerk for the surrogate of Kings County.

THE ACT OF 1892.

N. Y. St. 1892, c. 399. Passed March 19, 1892, in effect May 1, 1892.

S. 1. Taxable transfers. A tax shall be and is hereby imposed upon the
transfer of ?ny property, real or personal, of the value of five hundred dollars or
over, or of any interest or income therefrom, in trust or otherwise, to persons or
corporations not exempt by law from taxation on real or personal property in the
following cases:

(1) When the transfer is by will or by the intestate laws of this state from any
person dying seized or possessed of the property while a resident of the state.

(2) When the transfer is by will or intestate law, of property within the state,
and the decedent was a non-resident of the state at the time of his death.

(3) When the transfer is of property made by a resident or by a non-resident,
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor,
or intended to take effect, in possession or enjoyment, at or after such death.
Such tax shall also be imposed when any such person or corporation becomes bene-
ficially entitled, in possession or expectancy, to any property or the income thereof
by any such transfer, whether made before or after the passage of this act. Such
tax shall be at the rate of five per cent upon the clear market value of such prop-
erty, except as otherwise prescribed in the next section.

"Five Hundred Dollars or Over."

Where the estate passing to the hands of a public administrator
amounts to eleven hundred ($1100) dollars nieces are taxable,
although the share which each takes is less than five hundred
($500) dollars. The court follows In re Corbett, 171 N. Y. 516,
holding that it is the aggregate amount of the personal property
left by the decedent and not the amount of the particular estate
transferred to any beneficiary which determines whether the tax
shall be imposed or not. The statute of 1892 changed the law in
this respect.

802 STATUTES ANNOTATED. [N. Y. St.

"Prior to the amendment of the Inheritance Tax Law by chapter
399 of the laws of 1892 it was held that the law imposed a tax upon
the right of succession to the property of the testator or intestate
which vested in the successors severally. The act of 1892 worked
a complete change in the manner of assessing the tax." In re
Costello, 189 N. Y. 288, 292, 82 N. E. 139, modifying 117 N. Y.
App. Div. 807, 103 N. Y. Suppl. 6.

To the same effect see In re Flynn, 30 N. Y. Suppl. 388; In re
Hall, 88 Hun 68, 68 N. Y. St. Rep. 538, 34 N. Y. Suppl. 616.

Under the statute of 1892, chapter 399, the share of one who
stood in the relation of a child to the testator should be added to
the shares of nephews and their wives in order to make the aggre-
gate estate transferred exceed five hundred ($500) dollars. While
the share of this adopted child is not taxable, yet under the authori-
ties she is not a person "specifically exempt from taxation," as is
a bishop or a religious corporation, for the reason that if the estate
had been sufficiently large to bring her share within the provisions
of the law she would then have been a taxable person under it.
In re McMurray, 96 N. Y. App. Div. 128, 89 N. Y. Suppl. 71,
ciring In re Corbett, 171 N. Y. 516, 64 N. E. 209, affirming 55
N. Y. App. Div. 124, 67 N. Y. Suppl. 46; In re Hoffman, 143 N. Y.
327, -38 N. E. 311; In re Garland, 88 N. Y. App. Div. 380, 84,
N. Y. Suppl. 630. See contra, In re Bliss, 6 N. Y. App. Div. 192,
39 N. Y. Suppl. 875.

•'Property within the State."

The court notes the language of the N. Y. St. 1892, c. 399,
as confining the tax on non-residents to "property within the
state," and refers to section 22 of the act, which defines the word
"property" as meaning all property or interest therein "over
which this state had any jurisdiction for the purposes of taxation."
In re Bronson, 150 N. Y. 1, 4, 44 N. E. 707, 34 L. R. A. 238, 55
Am. St. Rep. 632, modifying 1 N. Y. App. Div. 546, 37 N. Y.
Suppl. 476.

Where no Property in State when Statute was Passed.

While the New York, statute of 1887 was in effect, the testator,
a non-resident, died leaving deposits and stocks on deposit in
New York. The executors promptly withdrew them and the
court holds that the tax cannot subsequently be collected under the
laws of 1892, as there was then no property of the estate in New

1892, c. 399.] NEW YORK. 803

York, and the tax cannot be legally imposed unless the statute,
in addition to creating a tax, provided for an officer or tribunal
who shall impose and assess the property on notice to the owner.
In re Embury, 154 N. Y. 746, 49 N. E. 1096, affirming 19 N. Y.
App. Div. 214, 45 N. Y. Suppl. 881.

"Intended to Take Effect ... at or after such Death.*'

Where a grantor by a trust deed conveys property to trustees
in trust to pay an annuity to his daughter for life and the balance
of the income to the grantor, and on his death to pay over the
principal as provided in the trust deed, this transfer to the remain-
dermen on his death is intended to "take effect in possession or
enjoyment at or after the death" of the donor, and was therefore
subject to the inheritance tax under N. Y. St. 1892, c. 399, s. 1,
the trust deed being dated in September, 1892, and the testator
dying in 1898. In re Cruger, 166 N. Y. 602, 59 N. E. 1121, affirm-
ing 54 N. Y. App. Div. 405, 66 N. Y. Suppl. 636.

"When any . . . Person . . . Becomes Beneficially Entitled."

The testator died in 1884, and the life tenant died in 1889, and
the court holds that the provisions of the statute of 1892 did not
relate back to the possession taken in December, 1889, under the
statute of 1892, chapter 399, section 1, taxing transfers as of the
time when the transferee "becomes beneficially entitled." In re
Travis, 19 Misc. Rep. 393, 44 N. Y. Suppl. 349, 2 Gibbons 91.

"Whether made before or after the Passage of this Act.'*

This language refers solely to gifts causa mortis and does not
apply to the case of a decedent dying before the passage of the
statute. It is of no consequence that the will was executed before
the statute if the death occurs after, and the same rule is intended
to be explicitly applied to grants causa mortis. The transfer in
both instances is to date from death, the one event which makes it
operative and effective. In re Seaman, 147 N. Y. 69, 77, 41 N. E.
401, reversing 87 Hun 619.

In re Seaman was approved and applied to a statute containing
no express provision making the statute applicable whether the
transfer was made before or after the passage of the act, in Crocker
V. Shaw, 174 Mass. 266, 267, 268.

This statute does not apply to gifts inter vivos made before the
passage of the act. In re Birdsall, 22 Misc. Rep. 180, 49 N. Y.
Suppl. 450, 2 Gibbons 293.

804 STATUTES ANNOTATED. [N. Y. St

Where the testator died in 1873 and the remaindermen became
entitled in 1893 on the death of the Hfe tenant, no tax can be
levied. In re Forsyth, 10 Misc. Rep. 477, 32 N. Y. Suppl. 175.
Where the testator died in 1884 and the life tenant died in 1893,
but where the interests of the remaindermen became vested at the
testator's death, therefore they are not subject to any tax under
the provisions of the statute. In re Travis, 19 Misc. Rep. 393,
44 N. Y. Suppl. 349, 2 Gibbons, 91.

Bank Deposit of Non-resident.

Where a non-resident deposited money in a New York bank it
is subject to taxation in New York under the act of 1892, although
the money of the decedent was mingled with those of an estate he
represented as trustee. All the justices did not agree with the
reasoning given by Vann, J., who wrote the opinion, but they are of
the opinion that a deposit of money in a bank, although techni-
cally a debt, is still money for all practical purposes and as such
is taxable under the transfer tax act. In re Houdayer, 150 N. Y.
37, 41, 44 N. E. 718, 34 L. R. A. 235, 55 Am. St. Rep. 642, revers-
ing 3 N. Y. App. Div. 474, 38 N. Y. Suppl. 323.

Bonds of Non-residents Issued by Domestic Corporation.

The bonds of a domestic corporation held outside the state by
non-residents do not represent "property within the state" in any
conceivable sense. The property they represented consisted in
the debt of their maker, and that species of property is a chose
in action belonging to the owner and inseparable from his per-
sonalty. In re Bronson, 150 N. Y. 1, 8, 44 N. E. 707, 34 L. R. A.
238, 55 Am. St. Rep. 632, modifying 1 N. Y. App. Div. 546; 37
N. Y. Suppl. 476.

Stock of Non-resident.

Corporate shares must be regarded as property within the broad
meaning of that term, hence it cannot be said, if the property repre-
sented by a share of stock has its legal situs either where the cor-
poration exists, or at the holder's domicile, that the state is with-
out jurisdiction over it for taxation purposes. Therefore stock
held by a non-resident in a New York corporation is subject to
tax under N. Y. St. 1892.

• "The attitude of a holder of shares of capital stock is quite
other than that of a holder of bonds, towards the corporation which

1892, c. 399.1 NEW YORK. 805

issued them. While the bondholders are simply creditors, whose
concern with the corporation is limited to the fulfilment of its
particular obligation, the shareholders are persons who are inter-
ested in the operation of the corporate property and franchises and
their shares actually represent undivided interests in the corporate
enterprise. The corporation has the legal title to all the proper-
ties acquired and appurtenant; but it holds them for the pecuniary
benefit of those persons who hold the capital stock. They appoint
the persons to manage its affairs ; they have the right to share in
surplus earnings, and after dissolution they have the right to have
the assets reduced to money and to have them ratably distributed.
Each share represents a distinct interest in the whole of the cor-
porate property." Per Gray, J., in In re Bronson, 150 N. Y.
1, 8, 44 N. E. 707, 34 L. R. A. 238, 55 Am. St. Rep. 632. modify-
ing 1 N. Y. App. Div. 546, 37 N. Y. Suppl. 476.

Legacy to Lineals of Proceeds of Real Estate.

Under the New York statute of 1892, chapter 399, legacies to
lineal descendants out of the proceeds of testator's real estate are
exempt. In re Cobb, 14 Misc. Rep. 409 71 N. Y. St. 506, 36 N. Y.
Suppl. 448.

Gifts Inter Vivos.

It was claimed that the statute did not impose a tax upon the
transfer of property by gifts inter vivos, but was confined to gifts
causa mortis. The court holds that the words "made in contempla-
tion of death" show that the statute covered gifts inter vivos.
In re Birdsall, 22 Misc. Rep. 180, 49 N. Y. Suppl. 450, 462, 2 Gib-
bons 293.

Exercise of Power Created before the Passage of the Statute.

Where the testator died in 1877 leaving the power of appoint-
ment which was exercised by will in 1896, there can be no inherit-
ance tax on the property passing by the power, as the source of
title is the original will of 1877, and into that instrument must be
read the names of the appointees, although designated by a later
instrument. In re Harbeck, 161 N. Y. 211, 55 N. E. 850, reversing
43 N. Y. App. Div. 188, 59 N. Y. Suppl. 362. See, however. In re
Brooks, 65 N. Y. St.' Rep. 255, 32 N. Y. Suppl. 176, 1 Gibbons 188.

Constitutionality.

N.Y.St. 1892, c. 399, is constitutional. InreGoxiXd, 156 N. Y. 423.

g06 STATUTES ANNOTATED. [N. Y. St.

When Took Effect.

N. Y. St. 1892, c. 399, took effect May 1, 1892. Matter of Payer-
weather, 143 N. Y. 114, 38 N. E. 278.

Purpose and Construction of Statute.

This act was enacted as a general act in relation to the taxation
of transfers of property from a decedent. It was intended las a gen-
eral law of the state upon the subject, and its exemption of any
religious corporation should receive the same construction which a
similar provision in a prior act had received. In re Balleis, 144
N. Y. 132, 134, 38 N. E. 1007, affirming 78 Hun 275.

Continuous with Prior Legislation.

The statute of 1892, chapter 399, repealed the act of 1885, with-
out any saving clause ; still the tax law has been continuously in
force to the present time since 1885, because of the statutory con-
struction law statute of 1892, chapter 677. Therefore the surro-
gate had jurisdiction to make an order assessing the inheritance
tax in 1901 on the estate of one who died in 1888. In re Jones,
54 Misc. 202, 105 N. Y. Suppl. 932.

Not Retroactive.

The testator, a resident of New Jersey, died there March 19,
1782, leaving personal property in New York state, and some of the
assets were not removed to New Jersey until after May 1, 1892,
when the New York statute of 1892, chapter 399, became
operative. The court holds that the fact that the property was in
New York when the statute of 1892 went into effect does not make
it subject to tax, as this would render the statute retroactive. "If
the right of taxation because of decease does not exist at the time
of death it never can be thereafter imposed upon the ground of
such death." In re Pettit, 171 N. Y. 654, 63 N. E. 1121, affirming
65 N. Y. App. Div. 30, 72 N. Y. Suppl. 469. To the same effect
see In re Fayerweather, 143 N. Y. 114, 38 N. E. 278.

The testator died in 1887 and the appraisal was made in that
year and appeal was taken from the appraisal and decided in 1890.
The statute of March 19, 1892, was passed, providing that "any
property heretofore devised or bequeathed or which may hereafter
be devised or bequeathed to any person who is a bishop or to any
religious corporation, shall be exempt" from taxation. As the assess-
ment had been entirely completed so far as the surrogate was con-

1892, c. 399.] NEW YORK. 807

cerned, prior to the enactment of the exemption clauses, the legatees
can derive no benefit therefrom. In re Wolfe, 66 Hun 389, 29
Abb. N. Cas. 340, 21 N. Y. Suppl. 515, affirming 15 N. Y. Suppl.
539 (s. c. 137 N. Y. 205, 33 N. E. 156).

S. 2. Exceptions and limitations. When the property or any beneficial
interest therein passes by any such transfer to or for the use of any father, mother,
husband, wife, child, brother, sister, wife or widow of a son or the husband of a
daughter, or any child or children adopted as such in conformity with the laws
of this state, of the decedent, grantor, donor or vendor, or to any person to whom
any such decedent, grantor, donor or vendor for not less than ten years prior to
such transfer stood in the mutually acknowledged relation of a parent or to any
lineal descendant of such decedent, grantor, donor or vendor born in lawful wed-
lock, such transfer of property shall not be taxable under this act, unless it is per-
sonal property of the value of ten thousand dollars or more, in which case it shall
be taxable under this act at the rate of one per centum upon the clear market
value of such property. But any property heretofore or hereafter devised or
bequeathed to any person who is a bishop or to any religious corporation shall
be exempted from and not subject to the provisions of this act.

Adopted Children.

Rights to "exemption of adopted children under the act of 1887
are not modified by the act of 1892. In re Thomas, 3 Misc. 388,
24 N. Y. Suppl. 713.

"Unless it is Personal Property of the Value of Ten Thousand
Dollars or More.'*

Under N. Y. St. 1892, c. 399, s. 22, the purpose of the entirely
new provision there is to compel a change of the previous construc-
tion of the court which applied the ten thousand dollar exemption
to the share of each beneficiary and required the court to attach the
limitation to the estate of the decedent and not to the several and
particular estates passing to the successor. Therefore, a devise
to the mother of the decedent is taxable at one per cent although
itself of the value of l^ss than ten thousand dollars, because the
aggregate transfers by will to taxable persons exceeded that amount.
In re HofTman, 143 N. Y. 327, 38 N. E. 311, modifying 76 Hun
399, 5 Misc. 439. In re Taylor, 6 Misc. Rep. 277, 27 N. Y. Suppl.
232. See, however. In re SkiUman, 66 N. Y. St. Rep. 140, 10
Misc. Rep. 642, 32^ N. Y. Suppl. 780.

The interest of an infant in the proceeds of the sale of real estate
in partition is not exempt as real property under the statute. The
transfer tax act taxes, not the property, but the individual who

808 STATUTES ANNOTATED. [N. Y. St.

receives the property, and in this case what the individual receives
is money and not real estate. In re Stiger, 7 Misc. Rep. 268, 28
N. Y. Suppl. 163.

•*To any Person who is a Bishop."

The testator died in 1896 leaving a legacy "to Bishop William
Taylor, or his living successor, to be used in his African mission
work." Bishop Taylor died before the testator, and his living
successor was a resident of New Jersey and not of New York.
It was argued that the bishop took this in his official capacity
and that it was therefore subject to taxation as a charitable gift
to a foreign corporation. But the court holds that the office of
bishop is not a state office and that the bishop is not a corporation
sole. The state does not recognize the existence of any ecclesi-
astical office, the result of which is to give to the holders of it the
right of perpetual succession, or any other rights similar to those
which are enjoyed by corporations. The designation of a person
as a bishop is a mere descriptio personcB. Therefore, this legacy
is exempt from taxation under the statute of 1892 exempting from
the tax legacies "to any person who is a bishop, or to any religious
corporation." In re Palmer, 158 N. Y. 669, 52 N. E. 1125, affirm-
ing 33 N. Y. App. Div. 307, 53 N. Y. Suppl. 847.

•*To any Religious Corporation." — Foreign Religious Cor-
porations not Exempted.

The exemption in this act of certain religious corporations
applies only to domestic corporations. In re Balleis, 144 N. Y.
132, 38 N. E. 1007, affirming 78 Hun 275. In re Smith, 77 Hun
134, 28 N. Y. Suppl. 476. In re Fayerweather, 30 N. Y. Suppl.
273, 31 Abb. N. Cas. 287. In re Taylor, 80 Hun 589, 30 N. Y.
Suppl. 582.

The American Baptist Publication Society was empowered by
the New York statute to take and hold property in New York
state, but the court holds that this right alone does not relieve tlie
respondent from taxation. In re Wolfe, 23 Misc. Rep. 439, 52
N. Y. Suppl. 415, 2 Gibbons 446.

S. 3. Lien of tax and payment thereof. Every such tax shall be and re-
main a hen upon the property transferred until paid and the person to whom the
property is so transferred, and the administrators, executors and trustees of every
estate so transferred shall be personally liable for such tax until its payment. The
tax shall be paid to the treasurer or comptroller of the county of the surrogate
having jurisdiction as herein provided; and said treasurer or comptroller shall

1892, c. 399.] NEW YORK. 809

give, and every executor, administrator or trustee shall take, duplicate receipts
from him of such payment, one of which he shall immediately send to the comp-
troller of the state, whose duty it shall be to charge the treasurer or comptroller
so receiving the tax with the amount thereof and to seal said receipt with the seal
of his office and countersign the same and return it to the executor, administrator
or trustee, whereupon it shall be a proper voucher in the settlement of his accounts;
but no executor, administrator or trustee shall be entitled to a final accounting
of an estate in settlement of which a tax is due under the provisions of this act
unless he shall produce a receipt so sealed and countersigned by the comptroller
or a copy thereof certified by him, or unless a bond shall have been filed as pre-
scribed by section seven of this act. All taxes imposed by this act shall be due
and payable at the time of the transfer, provided, however, that taxes upon the
transfer of any estate, property or interest therein limited, conditioned, depend-
ent or determinable upon the happening of any contingency or future event by
reason of which the fair market value thereof can not be ascertained at the time
of the transfer as herein provided shall accrue and become due and payable when
the persons or corporations beneficially entitled thereto shall come into actual
possession or enjoyment thereof.

When Tax Accrues on Interests Unascertained.

The court remarks that the legislature under the statute of
1892 has given a practical construction to its previous legislation
on the subject when it provides that where the fair market value
of the property or interest cannot be ascertained at the time of
the transfer, the tax shall become due and payable when the
beneficiary shall come into actual possession or enjoyment. In re
Roosevelt, 143 N. Y. 120, 38 N. E. 281, 25 L. R. A. 695, affirming
27 N. Y. Suppl. 741, 76 Hun 257.

Where the testator left a fund to pay the income to her mother
for life and on her death to the daughter, and on the death of the
daughter the principal to go to her issue, if any, and in default of
issue to certain other persons, and where the will also provided that
if the daughter were not living at the mother's death the prin-
cipal sum should then be paid over to the issue of the daughter,
if any, or to certain other persons, the estates of the daughter and
her child were not taxable until the death of the mother. She
ought not to be taxed until events make it certain that there is
an actual and beneficial transfer of the property to her. The tax
should be confined to a present enjoyment or a fixed and absolute
right of future enjoyment. In re Hoffman, 143 N. Y. 327, 38
N. E. 311, modifying 76 Hun 399, 5 Misc. 439.

To Survivors, on t)eath of Life Tenant.

A gift to survivors on the death of the life tenant tax accrues
then, /wre Davis, 149 N.Y. 539, 44 N.E. 185, affirming 91 Hun 53.

810 STATUTES ANNOTATED. IN. Y. St.

Where a devise is given to a sister for life and on her death to
certain survivors or their issue as set forth in the will, the court
finds that no tax can be assessed on the remainder until it is
known to whom the property would pass. In re Plum, 37 Misc.
Rep. 466, 75 N. Y. Suppl. 940.

The will of a testator provided for two life estates and on the
death of the survivor he gave the remainder to one E., if he be
then living, but if he is not living at that time then the remainder
is given to other persons. Under the statute of 1887, chapter 713,
the devise to E. is not presently taxable. In re Westcott, 11
Misc. Rep. 589, 33 N. Y. Suppl. 426, following In re Hoffman,
143 N. Y. 327, 38 N. E. 311.

Life Estate in Remainder.

Where a testator gives to his wife for life and on her death a
life estate to G., the estate to G. comes within the statutory defi-
nition of a vested remainder, but it is very different from a case
where the will gives a life estate to A. and the remainder to B.
and his heirs. At the present time G. has no estate that she
could sell to any one at any price, and therefore the inheritance
tax must be postponed until the death of the life tenant. In re
Westcott, 11 Misc. Rep. 589, 33 N. Y. Suppl. 426.

S. 4 combines the provisions of N. Y. St. 1887, c. 713, ss. 4 and 5.

This section does njt apply where the decedent died in 1890.
In re Fayerweather, 143 N. Y. 114, 38 N. E. 278.

Interest on Remainder from the Death of the Life Tenant.

Where a will left property to a life tenant, and on her death
to her children who might be living at the time of her death, it was
not certain until that time whether the property would be subject
to an inheritance or transfer tax, or whether the remainderman
would ever be entitled to the possession of the property and thus
become liable to be taxed. Until that time no tax accrued. There-
fore interest at six per cent should be charged only from the death
of the life tenant. In re Davis, 149 N. Y. 539, 548, 44 N. E. 185,
affirming 91 Hun. 53. (This result would now be different as a
result of the act of 1899.) .

Awaiting Disposition of Will Contest.

Where litigation over the probate of a will is pending it cannot
be known whether the property will pass under the will or as in

1892, c. 399.] NEW YORK. 811

case of intestacy, and until this fact is ascertained it is impracti-
cable to proceed to fix a transfer tax under the act of 1892, since
the ascertainment of the persons entitled to the property of a
decedent must precede the imposition of any tax. In re Westurn,
152 N. Y. 93, 99, 46 N. E. 315, reversing 8 N. Y. App. Div. 59.

S. 5 combines N. Y. St. 1887, c. 713, ss. 6 and 7.

S. 6 amends N. Y. St. 1887, c. 713, s. 10, by adding to it provisions authorizing
the state comptroller to refund or require the refunding of taxes erroneously
paid.

The debts of a testator, it plainly appears from the sixth section
of N. Y. St. 1892, are to be deducted in arriving at the valuation
of the property and in fixing the tax. In re Westurn, 152 N. Y.
93, 100, 46 N. E. 315, reversing 8 N. Y. App. Div. 59. See, how-
ever. In re Ludlow, 4 Misc. Rep. 594, 25 N. Y. Suppl. 989.

S. 7 allows parties interested to defer payment on proper security until they
come into actual possession of the property transferred.

S. 8 practically continues the provisions of N. Y. St. 1887, c. 713, s. 3.

S. 9 provides for the payment of the tax on transfer of stock, and that no safe
deposit company or other institution or person holding securities or assets of a
decedent shall deliver or transfer the same except on five days' notice to the county
I treasurer or comptroller. Failure to observe these provisions renders the corpo-

ration or person liable to the tax. [Compare N. Y. St. 1887, c. 713, s. 11.]

S, 10 gives the surrogate's court jurisdiction to appoint trustees or to give ancil-
lary letters to hear and determine all questions arising under the provisions of
the act, and to do any act in relation thereto authorized by law to be done by a
surrogate, and other matters or proceedings coming within his jurisdiction. [See
N. Y. St. 1887, c. 713, s. 15.]

Exclusive.

The jurisdiction given to the surrogate to determine and assess
the inheritance tax is exclusive and cannot be exercised by the
supreme court on a petition to construe a will. Weston v. Goodrich^
86 Hun. 194, 33 N. Y. Suppl. 382.

Property in Two Counties.

The jurisdiction to assess a tax on a non-resident depends on
the appointment of an ancillary administrator. Where the prop-
erty of a non-resident is situated in two counties and an ancillary
administrator has been appointed in one county, there can be no

812 STATUTES ANNOTATED. [N. Y. St.

appointment in another county and the surrogate of the county
which first obtained jurisdiction is the only surrogate who can
assess the tax. In re Hathaway, 27 Misc. Rep. 474, 59 N. Y.
Suppl. 166.

Power to Order Refund.

Under this section the surrogate has power to order the county
treasurer to refund taxes in his hands, the amount of the tax not
having been paid into the state treasury. In re Park, 8 Misc.
Rep. 550, 29 N. Y. Suppl. 1081.

S. 11. * •Appointment of appraisers.** The surrogate, upon the application
of any interested party, including county treasurers, or the comptroller of New
York city, or upon his own motion, shall, as often as and whenever occasion may
require, appoint a competent person as appraiser, to fix the fair market value, at
the time of the transfer thereof, of property of persons whose estates shall be sub-
ject to the payment of any tax imposed by this act. If the property upon the
transfer of which a tax is imposed shall be an estate, income or interest for a term
of years, or for life, or determinable upon any future or contingent estate, or shall
be a remainder or reversion or other expectancy, real or personal, the entire prop-
erty or fund by which such estate, income or interest is supported, or of which it
is a part, shall be appraised immediately after such transfer, or as soon thereafter
as may be practicable, at the fair and clear market value thereof at that time, pro-
vided, however, that when such estate, income or interest shall be of such a nature
that its fair and clear niarket value can not be ascertained at such time, it shall
be appraised in like manner at the time when such value first became ascertain-
able. The value of every future or contingent or limited estate, income, interest
or annuity dependent upon any life or lives in being shall be determined by the
rule, method and standards of mortality and value employed by the superintend-
ent of insurance in ascertaining the value of policies of life insurance and annu-
ities for the deterifiination of liabilities of life insurance companies; except that
the rate of interest for computing the present value of all future and contingent
interests or estates shall be five per centum per annum.

Deduction of debts and expenses on appraisal, see notes to sec-
tion 6, ante.

Appraisal of Uncertain Interests.

Where a life estate is created subject to determination on the
remarriage of the life tenant, it is impossible on the death of the
testator to ascertain the value of the interest ultimately going to
' the remainderman. Therefore the value should be appraised under
the N. Y. St. 1892, "as soon as may be practicable," which isonthe
death of the life tenant. Still, whenever the appraisal is made,
the value of the property is to be appraised according to the fair

1892, c. 399.] NEW YORK. 813

and clear market value of the interest at the time of the death of
the testator. In re Sloane, 154 N. Y. 109, 47 N. E. 978, 19 N. Y.
App. Div. 411, 46 N. Y. Suppl. 264.

When May Appoint. — Expenses of Litigation.

It was claimed that the surrogate under this section had no power
to appoint an appraiser or to fix the tax until the fact whether
there were claims against the estate had been ascertained in due
course. But the statute provides that the surrogate may appoint
an appraiser "as often as and whenever occasion may require."
It seems to be left to his sound discretion when the power shall
be exercised.

The sums expended by the heirs in successfully testing the pro-
bate of a will are properly disallowed, as they are not claims exist-
ing against the decedent or his properl y, although the court charged
certain costs and allowances in their favor upon the estate, as this
was practically a charge upon their own property for the benefit
of their attorneys. In re Westurn, 152 N. Y. 93, 102, 46 N. E.
315, reversing 8 N. Y. App. Div. 59.

Special Guardian.

Where the will left all the property to the wife for life and the
remainder to an infant, and where it appeared that the infant's
estate could not be appraised at the present time, it is improper
to appoint a special guardian for the infant. In re Post, 5 N. Y.
App. Div. 113, 38 N. Y. Suppl. 977.

Reappraisal.

The authority to a surrogate to appoint an appraiser "as often
as occasion may require" has for its object to collect the tax on the
whole taxable estate ; and where all the assets have been appraised
and the tax fixed to cover any omission by additional or supple-
mental appraisals and when such omissions are discovered upon the
new appraisal, property of the decedent which had not been ap-
praised at the previous proceeding was properly included. But
the appraiser has no authority to increase the appraisal on prop-
erty which was included in the former appraisal, even although
the executor had since the former appraisal actually received for
such property respective sums for which they were valued in the
new appraisal. The court treats this difference as an increase in
value subsequent to the date of the death of the decedent. In re

814 STATUTES ANNOTATED. IN. Y. St.

Rice, 56 N. Y. App. Div. 253, 68 N. Y. Suppl. 1147, affirming 61
N. Y. Suppl. 911.

On the reappraisal the appraiser should not increase the valua-
tions on property already appraised, as reappraisals are intended
only to reach property omitted in former appraisals and the val-
uation is to be measured by the value at the death of testate.
Matter of Rice, 56 N. Y. App. Div. 253, 68 N. Y. Suppl. 1147,
affirming 61 N. Y. Suppl. 911.

S. 12 practically continues the provisions of N. Y. St. 1887, c. 713, s. 13.

S. 13. Determination by surrogate. The report of the appraiser shall be
filed in the office of the surrogate, and from such report and other proof relating
to any such estate before the surrogate, the surrogate shall forthwith as of course
determine the cash value of all estates and the amount of tax to which the same
are liable; or, the surrogate may so determine the cash value of all such estates
and the amount of tax to which the same are liable without appointing an
appraiser. The superintendent of insurance shall, on the application of any
surrogate, determine the value of any such future or contingent estates, income or
interest limited, contingent, dependent or determinable upon the life or lives of
persons in being, upon the facts contained in any such appraiser's report, and
certify the same to the surrogate, and his certificate shall be conclusive evidence
that the method of computation adopted therein is correct. Any person dissatis-
fied with the appraisement or assessment and determination of tax may appeal
therefrom to the surrogate within sixty days from the fixing, assessing and
determination of tax by* the surrogate as herein provided, upon filing in the office
of the surrogate a written notice of appeal, which shall state the grounds upon
which the appeal is taken. The surrogate shall immediately give notice, upon
the determination by him as to the value of any estate which is taxable under this
act, and of the tax to which it is liable, to all parties known to be interested
therein.

Notice of appeal must be filed and the hearing must be limited
to the errors noted in the appeal. In re Davis, 149 N. Y. 539, 548,
44 N. E. 185, affirming 91 Hun. 53.

S. 14 covers the salaries of surrogate's assistants in New York city.

S. 15 practically continues the provisions of N. Y. St. 1887, c. 713, s. 16, and
adds thereto further provisions as to costs and expenses.

The affidavit to commence the proceedings to enforce the trans-
fer tax under section 15 must contain a statement that there was
'probable cause for the proceeding, and an affidavit which simply
says that the comptroller notified the district attorney and that the
proceedings were commenced in good faith furnishes no evidence
as to the facts and circumstances from which the court may form

1892, c. 399.] NEW YORK. 815

an opinion as to the existence of probable cause. In re McCarthy,
5 Misc. Rep. 276, 25 N. Y. Suppl. 987.

S. 16 covers the form of receipt on payment of tax.
S. 17 covers the fees of the county treasurer and comptroller.
S. 18 provides for the books and forms to be furnished by the state comp-
troller.

S. 19 provides for the reports of the surrogate and county clerk.
S. 20 provides for the reports of the county treasurer and comptroller of the city
of New York.

S. 21 covers application of taxes.

S. 22. Definitions. The words "estate" and "property" as used in this act
shall be taken to mean the property or interest therein of the testator, intestate,
grantor, bargainor or vendor, passing or transferred to those not herein specifi-
cally exempted from the provisions of this act and not as the property or interest
therein passing or transferred to individual legatees, devisees, heirs, next-of kin,
grantees, donees or vendees, and shall include all property or interest therein,
whether situated within or without this state, over which this state has any juris-
diction for the purposes of taxation. The word "transfer" as used in this act
shall be taken to include the passing of property or any interest therein in posses-
sion or enjoyment, present or future, by inheritance, descent, devise, bequest,
grant, deed, bargain, sale or gift in the manner herein prescribed. The words
"county treasurer," "comptroller" and "district attorney" as used in this act
shall be taken to mean the treasurer, comptroller or district attorney of the county
of the surrogate having jurisdiction as provided in section ten of this act.

**Over which this State has Any Jurisdiction for the Pur-
poses of Taxation." — United States Bonds.

The court holds that N. Y. St. 1892 did not tax United States
bonds physically present in the state belonging to a non-resident.
Although the state may have the power to impose a succession
tax upon United States bonds, it has not yet done so ; the phrase
"property over which this state has any jurisdiction for the pur-
poses of taxation" refers to the jurisdiction actually exercisfed
through contemporary statutes rather than to the entire juris-
diction actually possessed by the state. In re Whiting, 150 N. Y.
27, 31, 44 N. E. 715, 34 L. R. A. 232, 55 Am. St. Rep. 640, modify-
ing 2 N. Y. App. Div. 590, 38 N. Y. Suppl. 131. To the same effect
is In re Coogan, 27 Misc. Rep. 563, 59 N. Y. Suppl. 111.

The court follows In re Whiting, 150 N. Y. 27, and refers to
Wallace v. Myers, 38 Fed. 184, which was governed by the act of
1887, c. 713. The court remarks, however, that the statute of 1892
contains a new provision, section 22, not found in the prior acts,

816 STATUTES ANNOTATED. [N. Y. St.

which is a limitation on the taxing power, and that therefore United
States bonds are not subject to tax.

The court affirms the power of the state under the inheritance
tax laws to ascertain the value of the property for the purpose
of fixing a tax to include the value of federal securities owned by
the decedent. In re Sherman, 153 N. Y. 1, 4, 46 N. E. 1032, affirm-
ing 15 N. Y. App. Div. 628.

S. 23 names laws repealed, as follows: —

Laws of 1885, c. 483. Laws of 1889, c. 479.

" " 1887, c. 713. " " 1891, c. 215.

" " 1889, c. 307.

S. 24. Saving clause. The repeal of a law or any part of it specified in the
annexed schedule shall not affect or impair any act done, or right accruing, accrued
or acquired, or liability, penalty, forfeiture or punishment incurred prior to May
first, eighteen hundred and ninety-two, under or by virtue of any law so repealed,
but the same may be asserted, enforced, prosecuted or inflicted as fully and to
the same extent as if such law had not been repealed ; and all actions and proceed-
ings, civil or criminal, commenced under or by virtue of the law so repealed and
pending on April thirtieth, eighteen hundred and ninety-two, may be prosecuted
and defended to final effect in the same manner as they might under the laws
then existing, unless it shall be otherwise specially provided by law.

The decedent died in November, 1890, and contest arose over
the probate of the will, which was decided in March, 1891. The
question arose whether interest on the amount of the tax due
should be charged from the date of the death of the decedent or
from a date eighteen months subsequent thereto. N. Y. St. 1892,
c. 399, s. 4, does not apply to this case, as when the decedent died
the law of 1887 applied, and under its provisions the executors
would have a right to ask that the interest charged against them
for delayed payment of the tax should be six per cent from eighteen
months after the death of the decedent.

The repealing act of 1892 altered this provision, but at the same
time saved the right which in the meaning of the statute
had either accrued or was accruing at the time of its passage.
This provision of the fifth section of the act of 1887 may well be
called a "right" within the meaning of the act of 1892. It was
something which gave to. the parties the absolute right to have
^ the interest charged at a certain percentage and from a certain
date, upon the fact appearing which the statute provided for; and
the saving feature of the repealing act of the statute of 1892 applies
to it. In re Fayerweather, 143 N. Y. 114, 38 N. E. 278.

1896, c. 908.] NEW YORK. 817

S. 25. Construction. The provisions of this act, so far as they are substan-
tially the same as those of laws existing on April thirtieth, eighteen hundred and
ninety-two, shall be construed as a continuation of such laws, modified or amended
according to the language employed in this act, and not as new enactments. Ref-
erences in laws not repealed to provisions of laws incorporated into this act and
repealed, shall be construed as applying to the provisions so incorporated. Noth-
ing in this act shall be construed to amend or repeal any provision of the Criminal
or Penal Code.

AMENDMENTS TO THE ACT OF 1892.

N. Y. St. 1893, c. 199, approved March 24, 1893, provides for an assistant for
the collection of inheritance taxes in the county of Kings, and repeals N. Y. St.
1892, c. 443. '

N. Y. St. 1893, c. 704, approved May 13, 1893, amends N. Y. St. 1892, c. 399,
s. 17, as to the fees of the county treasurer and comptroller.

N. Y. St. 1894, c. 767, approved May 24, 1894, amends N. Y. St. 1892, c. 399,
s. 14, as to surrogate's and district attorney's assistant in New York city.

N. Y. St. 1895, c. 191, approved March 30, 1895, amends N. Y. St. 1892, c. 399,
8. 14, by providing an assistant to the district attorney in Erie county for the
collection of the tax.

N. Y. St. 1895, c. 378, approved April 23, 1895, amends N. Y. St. 1892, c. 399,
s. 15, by adding a provision authorizing the state comptroller and a justice of the
supreme court to compromise and settle the amount of the tax in any case where
controversies have arisen or may arise as to the relationship of the beneficiaries
to the former owner.

N. Y. St. 1895, c. 515, approved May 2, 1895, amends N. Y. St. 1892, c. 399,
s. 14, as to surrogate's and district attorney's assistants in New York city and
the county of Erie.

N. Y. St. 1895, c. 556, approved May 8, 1895, amends N. Y. St. 1892, c. 399,
s. 13.

N. Y. St. 1895, c. 861, approved June 1, 1895, provides for a surrogate's assis-
tant for the collection of inheritance taxes in Westchester county.

N. Y. St. 1896, c. 160, makes an appropriation for salaries and expenses in the
collection of corporation and inheritance taxes.

N. Y. St. 1896, c. 952, became law May 28, 1896, amended N. Y. St. 1892, c. 399,
s. 14.

THE ACT OF 1896.

N. Y. St. 1896, c. 908. In effect May 27, 1896.

Sections 220 to 242 of this act provide a complete system of
inheritance taxation.

Validity.

This act is constitutional. In re Kimberly, 27 N. Y. App. Div.
470, 50 N. Y. Suppl. 586.

S. 220. Transfers taxable. A tax shall be and is hereby imposed upon the
transfer of any property, real or personal, of the value of five hundred dollars or

818 STATUTES ANNOTATED. [N. Y. St.

over, or of any interest therein or income therefrom, in trust or otherwise, to per-
sons or corporations not exempt by law from taxation on real or personal prop-
erty, in the following cases:

(1) When the transfer is by will or by the intestate laws of this state from any
preson dying seized or possessed of the property while a resident of the state.

(2) When the transfer is by will or intestate law, of property within the state,
and the decedent was a non-resident of the state at the time of his death.

(3) When the transfer is of property made by a resident or by a non-resident,
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor,
or intended to take effect, in possession or enjoyment, at or after such death. Such
tax shall also be imposed when any such person or corporation becomes benefi-
cially entitled, in possession or expectancy to any property or the income thereof
by any such transfer, whether made before or after the passage of this act. Such
tax shall be at the rate of five per centum upon the clear market value of such prop-
erty except as otherwise prescribed in the next section.

S. 221. Exemptions. When the property or any beneficial interest therein
passes by any such transfer to or for the use of any father, mother, husband, wife,
child, brother, sister, wife or widow of a son or the husband of a daughter, or any
child or children adopted as such in conformity with the laws of this state, of the
decedent, grantor, donor or vendor or to any person to whom any such decedent,
grantor, donor or vendor for not less than ten years prior to such transfer stood
in the mutually acknowledged relation of a parent, or to any lineal descendant of
such decedent, grantor, donor or vendor born in lawful wedlock, such transfer of
property shall not be taxable under this act, unless it is personal property of the
value of ten thousand^dollars or more, in which case it shall be taxable under this
act at the rate of one per centum upon the clear market value of such property.
But any property heretofore or hereafter devised or bequeathed to any person
who is a bishop or to any religious corporation shall be exempted from and not
subject to the provisions of this act.

S. 222. Lien of tax and payment thereof. Every such tax shall be and re-
main a lien upon the property transferred until paid and the person to whom the
property is so transferred, and the administrators, executors and trustees of every
estate so transferred shall be personally liable for such tax until its payment. The
tax shall be paid to the treasurer or comptroller of the county of the surrogate hav-
ing jurisdiction as herein provided; and said treasurer or comptroller shall give,
and every executor, administrator or trustee shall take, duplicate receipts from
him of such payment, one of which he shall immediately send to the comptroller
of the state, whose duty it shall be to charge the treasurer or comptroller so receiv-
ing the tax with the amount thereof and to seal said receipt with the seal of his
office and countersign the same and return it to the executor, administrator or
trustee, whereupon it shall be a proper voucher in the settlement of his accounts;
but no executor, administrator or trustee shall be entitled to a final accounting
of an estate in settlement of which a tax is due under the provisions of this act
unless he shall produce a receipt so sealed and countersigned by the comptroller
or a copy thereof certified by him, or unless a bond shall have been filed as pre-
scribed by section two hundred and twenty-six of this chapter. All taxes imposed
by this article shall be due and payable at the time of the transfer ; provided, how-

1896, c. 908.] NEW YORK. 819

ever, that taxes upon the transfer of any estate, property or interest therein limited,
conditioned, dependent or determinable upon the happening of any contingency
or future event by reason of which the fair market value thereof can not be ascer-
tained at the time of the transfer as herein provided shall accrue and become due
and payable when the persons or corporations beneficially entitled thereto shall
come into actual possession or enjoyment thereof.

S. 223. Discount, interest and penalty. If such tax is paid within six
months from the accruing thereof, a discount of five per centum shall be allowed
and deducted therefrom. If such tax is not paid within eighteen months from the
accruing thereof, interest shall be charged and collected thereon at the rate
of ten per centum per annum from the time the tax accrued; unless by reasons of
claims made upon the estate, necessary litigation or other unavoidable cause of
delay, such tax can not be determined and paid as herein provided, in which case
interest at the rate of six per centum per annum shall be charged upon such tax
from the accrual thereof until the cause of such delay is removed, after which ten
per centum shall be charged. In all cases when a bond shall be given under the
provisions of section two hundred and twenty-six of this chapter, interest shall
be charged at the rate of six per centum from the accrual of the tax until the date
of payment thereof.

Ss. 224-242 cover the assessment and collection of the tax.

S. 230. Appointment of appraisers. The surrogate, upon the applica-
tion of any interested party, including county treasurers, or the comptroller of
New York city, or upon his own motion, shall, as often as and whenever occasion
may require, appoint a competent person as appraiser, to fix the fair market
value, at the time of the transfer thereof of property of persons whose estates
shall be subject to the payment of any tax imposed by this article. If the prop-
erty upon the transfer of which a tax is imposed shall be an estate, income or inter-
est for a term of years, or for life, or determinable upon any future or contingent
estate, or shall be a remainder or reversion or other expectancy, real or perspnal,
the entire property or fund by which such estate, income or interest is supported,
or of which it is a part, shall be appraised immediately after such transfer, or as
soon thereafter as may be practicable, at the fair and clear market value thereof
at that time; provided, however, that when such estate, income or interest shall
be of such a nature that its fair and clear market value can not be ascertained at
such time, it shall be appraised in like manner at the time when such value first
became ascertainable. The value of every future or contingent or limited estate,
income, interest or annuity dependent upon any life or lives in being shall be deter-
mined by the rule, method and standard of mortality and value employed by the
superintendent of insurance in ascertaining the value of policies of life insurance
and annuities for the determination of liabilities of life insurance companies;
except that the rate of interest for computing the present value of all future and
contingent interests or estates shall be five per centum per annum. Whenever
an estate for life or for years can be divested by the act or omission of the legatee
or devisee, it shall be taxed as if there were no possibility of such limitation.

Contingent Interests.

Under the statute of 1896, contingent or defeasible interests
should not be appraised until the death of the life tenant and then

820 STATUTES ANNOTATED. [N. Y. St.

should be appraised at their full value when the persons entitle
come into the beneficial enjoyment thereof. In re Connoly, 38
Misc. Rep. 533, 77 N. Y. Suppl. 1113.

Where the testator died in 1897, the law in existence at his
death governs the valuation of a contingent interest; and there-
fore the value of the contingent estate on coming into possession
must be assessed without deduction of the value of the life estate.
In re Goelet, 78 N. Y. Suppl. 47.

THE ACT OF 1897.

N. Y. St. 1897, c. 284, s. 220, added to N. Y. St. 1896, c. 908, s. 220, by insert-
ing the following provisions: —

(4) (Such tax shall be imposed) When any such person or corporation becomes
beneficially entitled, in possession or expectancy, to any property or the income
thereof by any such transfer, whether made before or after the passage of this act.

(5) Whenever any person or corporation shall exercise a power of appoint-
ment derived from any disposition of property made either before or after the pas-
sage of this act, such appointment when made shall be deemed a transfer taxable
under the provisions of this act in the same manner as though the property to
which such appointment relates belonged absolutely to the donee of such power
and had been bequeathed or devised by such donee by will ; and whenever any
person or corporation possessing such a power of appointment so derived shall
omit or fail to exercise the same within the time provided therefor, in whole or
in part, a transfer taxable under the provisions of this act shall be deemed to take
place to the extent of such omissions or failure, in the same manner as though the
persons or corporations thereby becoming entitled to the possession or enjoyment
of the property to which such power related had succeeded thereto by a will of
the donee of the power failing to exercise such power, taking effect at the time
of such omission or failure.

(6) The tax imposed thereby shall be at the rate of five per centum upon the
clear market value of such property, except as otherwise prescribed in the next
section.

Appraisal of Remainder Interests at Death not Binding on
State.

Where in 1898 the life estate and the remainders were appraised,
although no tax was laid on the remainder interests as it could not
then be definitely ascertained to whom such remainders would
ultimately descend, the court holds that the determination of the
value of remainder interests was not binding upon the remainder-
^ men, neither was it binding on the state. Therefore, when the
' question came on the death of the life tenant on the tax to be paid
by the remaindermen, the state was not bound by the appraisal
formerly made. In re Naylor, 189 N. Y. 556, 82 N. E. 1129,
affirming 120 N. Y. App. Div. 738, 105 N. Y. Suppl. 667.

1896, Amend.] NEW YORK. 821

Powers of Appointment.

The New York statute of 1885 did not create any contract right
that a person dying while that statute was in force might dispose
of his estate without any further tax except as then in existence.
Therefore the statute of 1897 could tax powers of appointment
which were not taxable under the statute of 1885. In re Vander-
bilt, 163 N. Y. 597, 57 N. E. 1127, 50 N. Y. App. Div. 246, 63
N. Y. Suppl. 1079.

The tax imposed by the New York statute of 1897 upon trans-
fers made under a power of appointment is a tax on the right of
succession and not on property; and therefore no exemption
can arise from the fact that the funds are invested in state and
municipal bonds. In re Dows, 167 N. Y. 227, 60 N. E. 439, 52
L. R. A. 433, 88 Am. St. Rep. 508, affirming 60 N. Y. App. Div.
630 (affirmed suh nomine, Orr v. Gilman, 183 U. S. 278, 22 S. Ct.
213, 46 L. Ed. 196).

It was claimed that the New York statute of 1897 imposing a
tax upon transfers made under the power of appointment was a
tax on property and not on the right of succession; and as a por-
tion of the fund was invested in state and city bonds exempt from
taxation, such exemption formed part of the contract under which
these securities were purchased, and the tax imposed was in viola-
tion of the federal constitution forbidding the states to pass laws
impairing the obligation of contracts.

The court holds that this tax does not impair the obligation of
the contract within the meaning of the federal constitution. Orr
v Gilman 183 U. S. 278, 22 S. Ct. 213, 46 L. Ed. 196, affirming
In re Dow, 167 N. Y. 227, 60 N. E. 439, 52 L. R. A. 433, 88 Am.
St. Rep. 508. [See, further, notes to the present act, post, p. 884.]

N. Y. St. 1897, c. 284, amended section 222 of N. Y. St. 1896 by providing that
taxes limited or determinable upon a contingency or future event shall accrue
and become due and payable when the persons beneficially entitled shall come
into actual possession or enjoyment thereof.

N. Y. St. 1897, c. 284, s. 4, amends N. Y. St. 1896, s. 225.

N. Y. St. 1897, c. 284, s. 5, amends N. Y. St. 1896, s. 226.

N. Y. St. 1897, c. 284, s. 6, amends N. Y. St. 1896, s. 230.

N. Y. St. 1897, c. 284, s. 7, amends N. Y. St. 1896, s. 232.

AMENDMENTS TO THE ACT OF 1896.

N. Y. St. 1896, c. 953, provided for a transfer tax clerk in the county of Onondaga-
N. Y. St. 1897, c. 375, approved April 29, 1897, provided for an additional trans-
fer tax clerk in the county of Oneida.

822 STATUTES ANNOTATED. [N. Y. Sf

N. Y. St. 1898, c. 88, approved March 21,1898, amended N. Y. St. 1896, c. 908,
a. X,s.221,by limiting exception as to any person to whom the decedent or gran-
tor stood in the relation of a parent "to any child" . . . "provided, however,
such relationship began at or before the child's fifteenth lairthday and was contin-
uous for ten years thereafter."

N. Y. St. 1898, c. 88, amended N. Y. St. 1896, c. 908, a. X, s. 242,
by adding to the definition of the word "estate" and by striking out the
words "over which this state has any jurisdiction for the purposes of
taxation."

N. Y. St. 1898, c. 289, approved April 19, 1898, amended N. Y. St. 1896, c. 908,
s. 233, by raising the salary of the assistant in the county of Erie.

N. Y. St. 1898, c. 289, amended N. Y. St. 1896, c. 908, s. 237, as to
the payment of the percentage of the money collected to the county where
collected.

N. Y. St. 1899, c. 76, approved March 14, 1899, amends N. Y. St. 1896,
c. 908, s. 230, by giving the state comptroller the power jointly with the
county treasurers or the comptroller of New York city to appoint an appraiser.
The section further provides that whenever a transfer of property is made upon
which there is or may be a tax imposed, such property shall be appraised
immediately.

No deduction shall be made in favor of persons or corporations presently
entitled to the beneficial enjoyment of property on account of any contingent
encumbrance or any contingency which may defeat or diminish the estate. But
in case of a happening of such contingency a proper refund of the tax paid shall
be made. When property is transferred subject to any charge determinable on
the death of any person, the increase of benefit accruing on the determination of
such charge is a transfer-of property taxable under the statute, as though the per-
son beneficially entitled had then acquired such increase of benefit. When prop-
erty is transferred in trust or otherwise and the rights of transferees are dependent
upon contingencies or conditions whereby they may be wholly or in part created,
defeated, extended or abridged, a tax shall be imposed upon said transfer at the
highest rate which on the happening of any of the contingencies or conditions
could be possible, and such tax shall be due and payable forthwith out of the prop-
erty transferred. But in case of a subsequent diminution the taxpayer shall be
entitled to a refund. All estates upon remainder or reversion which vested prior
to June 30, 1885, but which will not come in actual possession or enjoyment until
after the passage of this act shall be appraised and taxed as soon as the person or
corporation beneficially interested shall be entitled to the actual possession or
enjoyment thereof.

Purpose of Amendment.

The amendments of 1899, c. 76, and 1900, c. 658, were passed to
supply what were deemed omissions in the transfer tax law as it then
stood, as some of the courts had decided that the transfer tax on
Hfe estates was payable out of income and no tax could be imposed
on contingent remainders. [In re Johnson, 6 Dem. 146, In re Roose-
velt, 143 N. Y. 120.] In re Tracy, 179 N. Y. 501, 508, 72 N. E.
519, reversing g7 N. Y. App. Div. 215.

1896, Amend.] NEW YORK. 823

Nature and Validity of Tax.

The transfer tax under this act of 1899 still remains a tax upon
succession. Each trust estate created is to be separately appraised
and the tax determined according to the percentage fixed by the
statute for those who are contingently entitled to the estate, and
when fixed the tax is forthwith payable out of the trust property.
In re Vanderbilt, 172 N. Y. 69, 73, 64 N. E. 782, modifying 68
N. Y. App. Div. 27, 74 N. Y. Suppl. 450. In re Brez, 172 N. Y.
609, 64 N. E. 958.

This is a tax on the succession of property and not a direct tax.
If this act were a direct tax upon property it is clearly unconsti-
tutional, aa'it does not apportion the burden equally among the
owners of estates sought to be taxed. This is evidence that the
intention of the legislature was not to exercise its power of direct
taxation. In re Pell, 171 N. Y. 48, 60, 63 N. E. 789, 57 L. R. A.
540, 89 Am. St. Rep. 791, reversing 60 N. Y. App. Div. 28b, 70
N. Y. Suppl. 196.

Unconstitutional in so far as Retroactive.

The testator died in 1863, leaving property to a life tenant who
died December 20, 1899, at which time all the estates in remainder
came into actual possession and enjoyment, although they vested
in 1863 on the death of the testator. N. Y. St. 1899, c. 76, pro-
vided for a tax upon all estates in remainder or reversion which
vested prior to June 30, 1885, but which will not come into actual
possession or enjoyment until after the passage of the act. The
court remarks that legislation which impairs the value of a vested
estate is unconstitutional.

"In the case before us it is an undisputed fact that these re-
mainders had vested in 1863, and the only contingency leading to
their divesting was the death of a remainderman in the lifetime
of the life tenant, in which event the children of the one so dying
would be substituted. If these estates in remainder were vested
prior to the enactment of the Transfer Tax Act there could be in
no legal sense a transfer of the property at the time of possession
and enjoyment. This being so, to impose a tax based on the
succession would be to diminish the value of these vested estates,
to impair the obligation of a contract, and take private property
for public use without compensation." Fer Bartlett, J., in In re
Pell, 171 N. Y. 48, 55, 63 N. E. 789, 57 L. R. A. 540, 89
Am. St. Rep. 791, reversing 60 N. Y. App. Div. 286, 70 N. Y.
Suppl. 196.

824 STATUTES ANNOTATED. [N. Y. St.

Effect of Amendment.

Under the statute of 1899 the transfer is the passing of the title
of a valuable interest out of or from the estate of the decedent,
though the transferee is not now ascertainable, and every such
transfer is presently taxable, however obscure, contingent or nebu-
lous the ultimate vesting of the transferred interest may be.
Therefore remainders for certain survivors not now ascertainable
are now taxable. In re Le Brun, 39 Misc. Rep. 516, 80 N. Y. Suppl.
486.

N. Y. St. 1899, c. 269, approved April 7, 1899, authorizes the appointment of a
transfer tax clerk in the county of Ulster.

N. Y. St. 1899, c. 270, approved April 7, 1899, provides for the appointment of
a transfer tax clerk in the county of Erie.

N. Y. St. 1899, c. 389, amends N. Y. St. 1896, c. 908, s. 234, by providing for a
surrogate's transfer clerk in the county of Suffolk.

N. Y. St. 1899, c. 406, approved April 24, 1899, provides for the collection in
the county of Queens of the transfer tax through an inheritance tax clerk.

N. Y. St. 1899, c. 672, approved May 25, 1899, amended N. Y. St. 1896, c. 908,
s. 232, by inserting in that section a provision for the appointment of a special
guardian to protect the rights of infants or incompetents interested in the matter
of the inheritance tax.

N. Y. St. 1899, c. 737, approved May 26, 1899, amended N. Y. St. 1896, c. 908,
s; 282.

"Article 13, s. 282. Limitation of time. The provisions of the code of civil
procedure, relative to the limitation of time of enforcing a civil remedy, shall not
apply to any proceeding or action taken to levy, appraise, assess, determine or
enforce the collection of any tax or penalty prescribed by articles nine or ten of
said chapter, and this act shall be construed as having been in effect as of date of
the original enactment of the corporation and inheritance tax law, provided, how-
ever, that as to real estate in the hands of bona fide purchasers, the transfer tax
shall be presumed to be paid and cease to be a lien as against such purchasers
after the expiration of six years from the date of accrual. This act shall not affect
any action or proceeding now pending."

N. Y. St. 1900, c. 379, approved April 11, 1900, authorized agreements of com-
promise of taxes not presently payable.

N. Y. St. 1900, c. 382, in effect April 11, 1900, amends article 10, c. 908 by add-
ing a section, 243, to read as follows:

Exemptions in article one not applicable. The exemptions enumerated
in section four of the tax law, of which this article is a part, shall not be construed
as being applicable in any manner to the provisions of article ten hereof.

Cooper Union.

A legacy given to the Cooper Union by a testator who died in
1901 is subject to the transfer tax, although the Cooper Union
was free of tax under the law. The court relies upon In re Hunt-
ington, 168 N. Y. 399, 61 N. E. 643; Cooper Union v. Gass, 190

1896, Amend.] NEW YORK. 825

N. Y. 323, 83 N. E. 64, 123 Am. St. Rep. 549. In re Kucielski,
128 N. Y. Suppl. 768.

Educational.

The statute of 1900, chapter 382, made a change in the law and
under it a corporation organized exclusively for educational pur-
poses is no longer exempt from the inheritance tax. In re Grouse,
34 Misc. 670, 70 N. Y. Suppl. 731,

Religious.

The Episcopal Church Missionary Society for Seamen is a
religious corporation although it has power to conduct a seamen's
boarding house, where its main object is to provide floating or
other churches for seamen at different points in New York City.
In re Prall, 78 N. Y. App. Div. 301, 79 N. Y. Suppl. 971.

N. Y. St. 1900, c. 382, in effect April 11, 1900, amends N. Y. St. 1896, c. 908,
s. 225, as to the refund of taxes erroneously paid.

N. Y. St. 1900, c. 658, approved April 25, 1900, amends N. Y. St. 1896, c. 908,
s. 230, by placing the appointment of appraisers within the control of the state
comptroller. The amendment further provides for the salaries of the appraisers.

N. Y. St. 1900, c. 658, s. 2, amends N. Y. St. 1896, c. 908, s. 231, by increasing
the rate of compensation of the appraisers.

[See notes to the Act of 1899, c. 76, ante, p. 822.]

N. Y. St. 1900, c. 723, exempts the New York Society for the Suppression of
Vice from the operation of the inheritance tax law.

N. Y. St. 1901, c. 173, added to N. Y. St. 1896, s. 222, the following language:
"All taxes, which, at the time the amendment of this section takes effect, have
been assessed by an order of the surrogate, or which have accrued, in a county in
which the office of appraiser is salaried, shall be paid to the state comptroller, as
provided by this article."

N. Y. St. 1901, c. 173, s. 2, amended s. 224 of N. Y. St. 1896.

N. Y. St. 1901, c. 173, s. 3, amended s. 225 of N. Y. St. 1896.

N. Y. St. 1901, c. 173, s. 4, amended ss. 228 and 229 of N. Y. St. 1896.

N. Y. St. 1901, c. 173, s. 5, amended s. 230 of N. Y. St. 1896.

Effect on Contingent Interests.

Under the amendment of 1899, statute of 1899, chapter 76, the
intention of the legislature was m.ade clear and certain to change
from a future to a present taxation in all cases of future estates.
By the amendment of 1901, c. 173, the language of the amendment of
1899 was retained, showing the general legislative intent remained
the same. Certain language was inserted providing that in speci-
fied cases a future taxation was intended, as under the amendment

826 STATUTES ANNOTATED. [N. Y. St.

of 1897 this provision that "estates in expectancy . . . shall be
appraised at their full undiminished value, etc.," was intended to
apply only to those cases unprovided for by the statute of 1899 where
the transfers had occurred prior to 1899 and there had, under the
amendment of 1897, been no proceedings taken to impose the tax.
As the amendment of 1899 omitted the provision as to future
assessment contained in the amendment of 1897 these cases were
covered by no provision of the statute and hence this one was
inserted in the amendment of 1901 to provide therefor. The
legislature did not intend to change the general policy of px"esent
instead of future assessments of the estates of this nature as clearly
indicated in the amendment of 1899. Miller v. Tracy, 93 N. Y.
App. Div. 27, 86 N. Y. Suppl. 1024.

Retrospective as to Appraisal.

The court holds that the language in the statute of 1901, chapter
173, section 5, "where the taxation thereof has been held in
abeyance," clearly makes the section apply retroactively and that
therefore the appraisal must take place not in accordance with the
valuation of 1891, but that a new appraisal was necessary. In re
Hosack, 39 Misc. Rep. 130, 78 N. Y. Suppl. 983.

N. Y. St. 1901, c. 173, "shall take effect April 1st, 1901."

N. Y. St. 1901, c. 173, s. 6, amended N. Y. St. 1896, by adding s. 230a, giving
the tax officials authority to compromise the taxes on certain remainder or future
interests.

N. Y. St. 1901, c. 173, s. 7, amends N. Y. St. 1896, s. 231, as to appraisal.
N. Y. St. 1901, c. 173, s. 8, amends N. Y. St. 1896, s. 232.
N. Y. St. 1901, c. 173, s. 9, amends N. Y. St. 1896, s. 233.
N. Y. St. 1901, c. 173, s. 10, amends N. Y. St. 1896, s. 234.
N. Y. St. 1901, c. 173, s. 11, amends N. Y. St. 1896, ss. 235 and 236.
* N. Y. St. 1901, c. 173, s. 12, amends N. Y. St. 1896, s. 237.

N. Y. St. 1901, c. 173, s. 13, amends N. Y. St. 1896, ss. 239 and 240.
N. Y. St. 1901, c. 173, s. 14, amended N. Y. St. 1896, by inserting a new section,
^4Ufl, as to the report of the state comptroller and the payment of taxes.
N. Y. St. 1901, c. 173, s. 15, amends N. Y. St. 1896, s. 241.

1896, Amend.] NEW YORK. 827

N. Y. St. 1901, c. 173, s. 16, amends N. Y. St. 1896, s. 242, as amended by N. Y.
St. 1898, c. 88.

N, Y. St. 1901, c. 288, approved April 5, 1901, applied to the appointment of
salaried appraisers in various counties.

N. Y. St. 1901, c. 458, approved April 22, 1901, amends N. Y. St. 1896, c. 908,
s. 221, by adding to the exempted classes the following: Corporations organized
exclusively for bible or tract purposes, corporations or associations organized
exclusively for the moral and mental improvement of men and women, or for
charitable, benevolent, missionary, hospital, infirmary, educational, scientific,
literary, library, patriotic, cemetery or historical purposes, or for the enforcement
of laws relating to children or animals; unless any officer, member or employee
of such corporations shall receive any pecuniary profit from the operations thereof
other than reasonable compensation, or unless the corporation be a guise or pre-
tence for makin'g pecuniary profit or if it not be in good faith organized or con-
ducted for such purposes.

N. Y. St. 1901, c. 493, approved April 23, 1901, further amended N. Y. St. 1896,
c. 908, s. 230, by giving the comptroller of the state of New York the right to move
for an appraisal.

N. Y. St. 1901, c. 609, in effect September 1, 1901, provides that the state of
New York may be made a party defendant in any action brought affecting real
estate upon which the state has a lien under the transfer tax act.

N. Y. St. 1902, c. 101, approved March 6, 1902, amends N. Y. St. 1896, c. 908,
s. 228, by putting the collection of the tax and the right of inquiry in the hands
of the state comptroller, and by making other changes in that section.

N. Y. St. 1902, c. 283, approved March 29, 1902, amends N. Y. St. 1896, c. 908,
s. 234, as to surrogate's assistants and their salaries.

N. Y. St. 1902, c. 496, approved April 10, 1902, further amends N. Y. St. 1896,
c. 908, s. 230, as to the appointment, salaries and duties of appraisers.

The statute of 1902, chapter 496, does not in express terms
apply to a remainder which has vested prior to the passage of the
act. In re Meyer, 83 N. Y. App. Div. 381, 82 N. Y. Suppl. 329,
reversing 82 App. Div. 636; 81 S. 1135.

N. Y. St. 1903, c. 41, approved March 16, 1903, amended N. Y. St. 1896, c. 908,
s. 221, by providing that real or personal property to lineals, husband and wife
and brother and sister, shall be exempt from taxation up to ten thousand dollars
whether real or personal property. If the property so transferred is of the value
of ten thousand dollars or more it shall be taxable at the rate of one per cent upon
the clear market value of such property.

Constitutionality.

This act is constitutional. It was attacked for insufficiency of
the certificate of the secretary of state which omitted to state that
three-fifths of all the members of the legislature were present as
required by law at its passage. In re Weeks, 185 N. Y. 541, 77

828 STATUTES ANNOTATED. [N. Y. St.

N. E. 1197, affirming 109 App. Div. 859, 96 N. Y. Suppl. 876.
Matter of Stickney, 185 N. Y. 107, 77 N. E. 77, 993; affirming 110
N. Y. App. Div. 294, 97 N. Y. Suppl. 336; affirmed in Stickney v.
Kelsey, 209 U. S. 419, 52 L. Ed. 863.

See In re Fisher, 96 N. Y. App. Div. 133, 89 N. Y. Suppl. 102,
to the effect that the only effect of this amendment is that in esti-
mating the value of the property passing, real estate as well as
personal property is to be now included.

N. Y. St. 1904, c. 758, approved May 14, 1904, further amended N. Y. St. 1896,
c. 908, s. 230, by raising the salary of the appraiser in the county of Albany.

N. Y. St. 1905, c. 368, approved May 4, 1905, amends all sections of N. Y. St.
1896.

(St. 1896, c. 908, s. 226, providing machinery for deferring payments until pos-
sesion is actually taken was repealed by being omitted from St. 1905, c. 368. Cf.
St. 1899, c. 76.)

N. Y. St. 1906, c. Ill, approved March 28, 1906, amends N. Y. St. 1896, c. 908
as amended by N. Y. St. 1905, c. 368, s. 240a.

N. Y. St. 1906, c. 567, approved May 23. 1906, amends N. Y. St. 1896, c. 908,
6. 229.

N. Y. St. 1906, c. 699, approved June 2, 1906, amends N. Y. St. 1896, c. 908,
8. 234, as to the salary of a transfer tax assistant in Westchester county.

N. Y. St. 1907, c. 204, approved April 25, 1907, amends N. Y. St. 1896, c. 908,
s. 221.

N. Y. St. 1907, c. 323, approved May 8, 1907, amends N. Y. St. 1896, c. 908,
8. 225, as to the interest on refunds or taxes erroneously paid.

N. Y. St. 1907, c. 709, approved July 23, 1907, amends N. Y. St. 1896, c. 908,
8. 229, as to expenses of appraisal in New York county.

N. Y. St. 1908, c. 310, approved May 18, 1908, amends N. Y. St. 1896, c. 908,
ss. 220, 221, 227, 229, 232, 235 and 237.

N. Y. St. 1908, c. 312, approved May 18, 1908, amends N. Y. St. 1896, c. 908,
8. 234.

N. Y. St. 1908, c. 321, approved May 19, 1908, amends N. Y. St. 1896, c. 908,
8. 229.

N. Y. St. 1909, c. 62, is an act in relation to taxation constituting c. 60 of the
consolidated laws.

N. Y. St. 1909, c. 595, approved May 29, 1909, provides that in construing the
consolidated laws these laws shall be considered as having been enacted as of the
various times when such provisions and sections first became laws by the earlier
statutes, the purpose being to prescribe that the statutory laws shall be of
the same force and effect as they were before the enactment of the consolidated
laws.

1910, c. 706.J NEW YORK. 829

N. Y. St. 1910, c. 70, approved April 5, 1910, amends N. Y. St. 1909, c. 62, s. 234,
as to the salary of the transfer tax clerk in the county of Albany.

N. Y. St. 1910, c. 600, approved June 23, 1910, amends N. Y. St. 1909, c. 62,
s. 221. The words "for religious ceremonies, observances or commemorative ser-
vices of or for the deceased donor or," are new in the section. [See Matter of
Epping, 63 Misc. 613, 118 N. Y. Suppl. 683.]

N. Y. St. 1910, c. 706, approved July 11, 1910, amended N. Y. St. 1909, c. 62.
s. 220, by providing that a tax shall be imposed upon the transfer of any property
of the value of more than one hundred dollars. The provision formerly was of
"five hundred dollars or over."

N. Y. St. 1910, c. 706, approved July 11, 1910, amends N. Y. St. 1909, c. 62,
s. 221, by cutting down the exemptions to lineals and to collaterals from ten thou-
sand dollars to five hundred dollars. A graduated tax is also provided.

N. Y. St. 1910, c. 706, approved July 11, 1910, amends N. Y. St. 1909, c. 62,
s. 229, by adding an additional appropriation for extra work in the comptroller's
office at Albany.

N. Y. St. 1910, c. 706, approved July 11, 1910, amends N. Y. St. 1909, c. 62,
s. 243.

THE GRADUATED TAX ACT OF 1910.

This statute, the most drastic ever passed by any eastern state,
raised such a storm of protest from bankers and other interests
affected that it was promptly repealed by St. 1911, c. 732.

N. Y. St. 1910, c. 706. In effect July 11, 1910.

S. 220. Taxable transfers. A tax shall be and is hereby imposed upon the
transfer of any property, real or personal, of the value of more than one hundred
dollars or of any interest therein or income therefrom, in trust or otherwise, to
persons or corporations not exempt by law from taxation on real or personal prop-
erty, in the following cases:

(1) When the transfer is by will or by the intestate laws of this state from any
person dying seized or possessed of the property while a resident of the state.

(2) When the transfer is by will or intestate law, of property within the state,
and the decedent was a non-resident of the state at the time of his death.

(3) Whenever the property of a resident decedent or the property of a non-
resident decedent within this state, transferred by will, is not specifically be-
queathed or devised, such property shall, for the purposes of this article, be
deemed to be transferred proportionately to, and divided pro rata among all
the general legatees and devisees named in said decedent's will, including all
transfers under a residuary clause of such will.

(4) When the transfer is of property made by a resident or by a non-resident
when such non-resident's property is within this state, by deed, grant, bargain,
sale or gift made in contemplation of the death of the grantor, vendor or donor, or
intended to take effect in possession or enjoyment at or after such death.

(5) When any such person or corporation becomes beneficially entitled, in
possession or expectancy, to any property or the income thereof by any such trans-
fer, whether made before or after the passage of this chapter.

830 STATUTES ANNOTATED. [N. Y. St.

(6) Whenever any person or corporation shall exercise a power of appointment
derived from any disposition of property made either before or after the passage
of this chapter, such appointment when made shall be deemed a transfer taxable
under the provisions of this chapter in the same manner as though the property
to which such appointment relates belonged absolutely to the donee of such power
and had been bequeathed or devised by such donee by will; and whenever any
person or corporation possessing such a power of appointment so derived shall
omit or fail to exercise the same within the time provided therefor, in whole or in
part, a transfer taxable under the provisions of this chapter shall be deemed to
take place to the extent of such omission or failure, in the same manner as though
the persons or corporations thereby becoming entitled to the possession or enjoy-
ment of the property to which such power related had succeeded thereto by a will
of the donee of the power failing to exercise such power, taking effect at the time
of such omission or failure.

(7) The tax imposed hereby shall be at the rate of five per centum upon the
clear market value of such property, except as otherwise prescribed in the next
section. (As amended by L. 1910, c. 706.)

S. 221. Exceptions and limitations. When property, real or personal, or
any beneficial interest therein, of the value of not more than five hundred dollars
passes by any such transfer to or for the use of any father, mother, husband, wife,
child, brother, sister, wife or widow of a son or the husband of a daughter, or any
child or children adopted as such in conformity with the laws of this state, of the
decedent, grantor, donor, or vendor, or to any child to whom any such decedent,
grantor, donor or vendor for not less than ten years prior to such transfer stood in
the mutually acknowledged relation of a parent, provided, however, i«:uch rela-
tionship began at or before the child's fifteenth birthday and was continuous for
said ten years thereafter,-and provided also that, except in the case of a stepchild,
the parents of such child shall have been deceased when such relationship com-
menced, or to any lineal descendant of such decedent, grantor, donor or vendor
born in lawful wedlock, such transfer of property shall not be taxable under this
article; if real or personal property, or any beneficial interest therein, so trans-
ferred is of the value of more than five hundred dollars, it shall be taxable under
this article at the rate of one per centum upon the clear market value of such prop-
erty except as herein provided No such tax shall be assessed upon property,
real or personal, or any beneficial interest therein so transferred to a father,
mother, widow or minor child of the decedent, grantor, donor or vendor, if the
amount so transferred to such father, mother, widow or minor child is the sum
of five thousand dollars or less; but if the amount so transferred to a father,
mother, widow or a minor child is over five thousand dollars the excess shall be
taxable at the rate of one per centum upon the clear market value of such prop-
erty as hereinbefore provided. The rates of taxation hereinbefore prescribed in
this and the preceding section are hereby designated as "primary rates."
Whenever any property, real or personal, or any beneficial interest therein which
passes by any such transfer to or for the use of any person or corporation, shall
exceed the amount of twenty-five thousand dollars over and above the exemp-
tions hereinbefore provided the rate of taxation shall be as follows:

Upon all amounts in excess of the said twenty-five thousand dollars and
up to and including the sum of one hundred thousand dollars, twice the primary
rates:

1910, c. 706.1 NEW YORK. 831

Upon all amounts in excess of the said one hundred thousand dollars and up to
and including the sum of five hundred thousand dollars, three times the primary
rates;

Upon all amounts in excess of the said five hundred thousand dollars and up
to and including the sum of one million dollars, four times the primary rates;

Upon all amounts in excess of the said one million dollars, five times the pri-
mary rates. But any property devised or bequeathed for religious ceremonies,
observances or commemorative services of or for the deceased donor, or to any
person who is a bishop or to any religious, educational, charitable, missionary,
benevolent, hospital or infirmary corporation, including corporations organized
exclusively for Bible or tract purposes, shall be exempted from and not subject
to the provisions of this article. There shall also be exempted from and not sub-
ject to the provisions of this article personal property other than money or secur-
ities bequeathed to a corporation or association organized exclusively for the
moral or mental improvement of men or women or for scientific, literary,
library, patriotic, cemetery or historical purposes or for the enforcement of laws
relating to children or animals or for two or more of such purposes and used
exclusively for carrying out one or more of such purposes. But no such corpora-
tion or association shall be entitled to such exemption if any officer, member or
employee thereof shall receive or may be lawfully entitled to receive any pecun-
iary profit from the operations thereof except reasonable compensation for ser-
vices in effecting one or more of such purposes or as proper beneficiaries of its
strictly charitable purposes; or if the organization thereof for any such avowed
purpose be a guise or pretense for directly or indirectly making any other pecun-
iary profit for such corporation or association or for any of its members or
employees or if it be not in good faith organized or conducted exclusively for one
or more of such purposes. [As amended by L. 1910, chaps. 600 and 706.]

N. Y. St. 1896, s. 221, as amended by the statute of 1910, c. 706,
provides for a graduated tax, and it was claimed that the secondary
rates are to be calculated upon so much of the transfer as exceed
the amounts taxable at a lower rate. The court considered that
the words "property" and "interest" are by their context confined
to the interest which passed to the individuals. On a grammatical
construction of the statute in consideration of its language the
court holds that the words "up to and including the sum of" relate
to the excess over the amount subject to the previous rate of taxa-
tion, and should be read as if the words in question were "upon all
amounts of legacy which shall be in excess of said $25,000." The
amounts of each class are reckoned beginning with the amount of
the next lower class and not by considering the amount of the whole
estate in question. In re Jourdan, 128 N. Y. Suppl. 728.

S. 243. Definitions. The words "estate" and "property," as used in this
article, shall be taken to mean the property or interest therein passing or trans-
ferred to individual or corporate legatees, devisees, heirs, next-of-kin, grantees,
donees or vendees and not the property or interest therein of the decedent, grantor.

832 STATUTES ANNOTATED. [N. Y. St.

donor or vendor passing or transferred and shall include all property or interest
therein, whether situated within orwithout this state. The word "transfer," as
used in this article, shall be taken to include the passing of property or any inter-
est therein in possession or enjoyment, present or future, by inheritance, descent,
devise, bequest, grant, deed, bargain, sale or gift, in the manner herein prescribed.
The words "county treasurer" and "district attorney," as used in this article,
shall be taken to mean the treasurer or the district attorney of the county of the
surrogate having jurisdiction as provided in section two hundred and twenty-
eight of this article. (Former s. 242, as amended by L. 1910, c. 706.)

THE PRESENT ACT.

IN. Y/St. 1909, c. 62, as amended.]

In General.
History. — Nature.

"While the laws of all civilized states recognize in every citizen
the absolute right to his own earnings, and to the enjoyment of
his own property and the increase thereof, during his life, except
so far as the state may require him to contribute his share for pub-
lic expenses, the right to dispose of his property by will has always
been considered purely a creature of statute and within legislative
control. *By the common law, as it stood in the reign of Henry II,
a man's goods were to be divided into three equal parts; of which
one went to his heirs or lineal descendants, another to his wife, and
a third was at his own disposal; or if he died without a wife, he
might then dispose of one moiety, and the other went to his chil-
dren; and so, e converso, if he had no children, the wife was entitled
to one moiety, and he might bequeath the other; but if he died
without either wife or issue, the whole was at his own disposal.'
II Bl. Com. 492. Prior to the Statute of Wills, enacted in the
reign of Henry VIII, the right to a testamentary disposition of
property did not extend to real estate at all, and as to personal estate
was limited as above stated. Although these restrictions have
long since been abolished in England, and never existed in this
country, except in Louisiana, the right of a widow to her dower
and to a share in the personal estate is ordinarily secured to her
by statute.

"By the Code Napoleon, gifts of property, whether by acts inter
vivos or by will, must not exceed one half the estate if the testator
leave but one child ; one third, if he leaves two children ; one fourth,
if he leaves three or more. If he have no children, but leaves
ancestors, both in the paternal and maternal line, he may give away
but one half of his property, and but three fourths if he have

1909, c. 62.] NEW YORK.

ancestors in but one line. By the law of Italy, one half a testa-
tor's property must be distributed equally among all his children ;
the other half he may leave to his eldest son or to whomso-
ever he pleases. Similar restrictions upon the power of disposition
by will are found in the codes of other continental countries, as well
as in the state of Louisiana. 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 legis-
lature from taking away or limiting the right of testamentary dis-
position or imposing such conditions upon its exercise as it may deem
conducive to 'public good."

The New York inheritance tax is not a tax upon the property
itself but upon its transmission by will or descent. Per Brown, J.,
in United States v. Perkins, 163 U. S. 625, 627, affirming In re
Merriam, 141 N. Y. 479, 36 N. E. 505, in which the court cites the
following cases: Matter of Swift, 137 N. Y. 77; Matter of Hoffman,
143 N. Y. 327; Schoolfeld v. Lynchburg, 78 Va. 366; Strode v. Com-
monwealth, 52 Pa. St. 181; State v. Dalrymple, 70 Md. 294, 299.

As to the history and purpose of the legislation, see discussion
by CuUen, J., in In re Hellman, 174 N. Y. 254, 66 N. E. 809, 95
Am. St. Rep. 582, reported post, pp. 851, 852.

The New York transfer tax is one on the right of succession and
not on property. In re Vanderbilt, 172 N. Y. 69, 73, 64 N. E.
782, modifying 68 N. Y. App. Div. 27, 74 N. Y. Suppl. 450.

In discussing the effect of the general tax law on the collateral
inheritance act the court says: "Nearly sixty years intervened
between the passage of the earlier and the later statute, and the
latter was enacted under different conditions from the former.
It proceeds upon a new theory of the right of the government to
tax and establishes a new system of taxation. It taxes the right
of succession to property, and measures the tax in the method
specifically prescribed. All property having an appraisable value
must be considered, whether it is such as might be taxed under
the general law or not. Many kinds of property might be enu-
merated which are not assessable under the general law, but which
are appraisable under the collateral inheritance act. The defi-
nition of the different kinds of property which the legislature has
incorporated in the general tax law, for the purposes of that law,
cannot be imported into the collateral inheritance tax law upon
any sound principle of statutory construction. It is therefore
immaterial whether life insurance policies can be valued and

834 STATUTES ANNOTATED. [N. Y. St.

assessed for taxation under the general law." Per Maynard, J.,
in In re Knoedler, 140 N. Y. 377, 380, 35 N. E. 601, affirming
68 Hun. 150.

What Law Governs.

Time.

As to the statute governing powers, see notes to the act of
1897, ante, p. 821.

The law in force at the testator's death governs substantive
rights and liabilities under the inheritance tax. In re Sterling,
9 Misc. Rep. 224, 30 N. Y. Suppl. 385. In re Milne, 76 Hun. 328,
27 N. Y. Suppl. 727 (penalties and interest). In re Moore, 90
Hun. 162, 35 N. Y. Suppl. 782.

The method of procedure in a proceeding for the ascer-
tainment and the determination of an inheritance tax is controlled
by the statute on the subject in force at the time of the institution
of the proceeding although the tax itself and the rights of the
parties are controlled by an earlier statute. In re Sloane, 154
N. Y. 109, 47 N. E. 978, 19 N. Y. App. Div. 411, 46 N. Y. Suppl.
264. In re Davis, 149 N. Y. 539, 545, 44 N. E. 185, affirming
91 Hun. 53.

A law passed after vested though future interests had fully ac-
crued, attempting to tax such interests would be unconstitutional
though these interests had not come into possession. In re Craig,
181 N. Y. 551, 74 N. E. 1116, affirming 97 N. Y. App. Div. 289,
89 N. Y. Suppl. 971. In re Hitchins, 43 Misc. 485, 89 N. Y.
Suppl. 472.

A vested remainder of one dying before the transfer tax act
went into effect is not subject to the tax, although the life tenant
dies after the tax statute has been passed. In re Backhouse, 185
N. Y. 544, 77 N. E. 1181, affirming 110 N. Y. App. Div. 737, 96
N. Y. Suppl. 466.

Where the children of the testator took vested interests sub-
ject to open and let in after born children on the one hand, and
on the other hand subject to be defeated by death without issue,
it is. obvious that a right of succession to the estates in remainder
passed at once on the death of the testator; and where the testator
died in 1876 these remainder interests were not subject to the
inheritance tax.

The court distinguishes In re Curtis, 142 N. Y. 219, on the
ground that that case did not decide, as claimed, that such remainder

1909, c. 62.] NEWYOPK. 835

interests were taxable when they became beneficial interests. It
was claimed that the beneficial interests did not pass until the
termination of the life estates. The court says that in one sense
that is true, but says that a necessary delay in appraisal as pro-
vided for by the statute of 1892 is a very different matter from
the provision that no beneficial right of succession passed at all
until after the death of the life tenants. To include such cases
would give the statute a retrospective operation and subject to
taxation rights of succession which accrued before the statute came
into existence. To say that no beneficial interest passed into
hands where it was taxable is very different from saying that no
beneficial interest passed at all. In re Seaman, 147 N. Y. 69,
41 N. E. 401, reversing 87 Hun. 619.

Law at Date of Deed.

The deceased executed a trust deed in 1875 transferring all his
property to trustees in contemplation of his then pending marriage,
by the terms of which the net income of all the property was
made payable to the deceased for his life and at his death the
principal was to be paid to his widow and the issue of the marriage.
The deceased died in 1901. The marriage took place before 1885.
The right as a property right to take the gifts when the time for
possesssion and enjoyment of it arrived at the death had fully
accrued on the marriage and the birth of the children free from any
existing tax, hence subsequent legislation imposing such a tax
must be considered unconstitutional. No reservation being made
of the power of revocation it became operative and effective as a
grant upon execution and delivery wholly irrespective of the time
when possession was to be given and the estate conveyed. In re
Craig, 181 N. Y. 551, 74 N. E. 1116, affirming 97 N. Y. App. Div.
289, 89 N. Y. Suppl. 971.

N. Y. St. 1887, c. 713, does not apply to render taxable property
under an irrevocable deed executed by the decedent in 1882 trans-
ferring property to trustees to pay the income to the grantor for
life and on her death then over to nephews and nieces. The grantor
died in 1888 and the court holds that the transfer took place to
the nephews and nieces on the execution of the deed and not at the
death of the testator. At the decedent's death she owned none
of the property in question as her title had been conveyed to
others long before. In re Hendricks, 3 N. Y. Suppl. 281, 1 Con.
Surr. 301.

836 STATUTES ANNOTATED. [N. Y. St.

Domicile,

The exercise by a non-resident of a power of appointment under
the will of a resident is not subject to tax in New York. In re
Fearing, 200 N. Y. 340, 93 N. E. 956, affirming 123 N. Y. Suppl.
396.

The rights of the parties are governed by the law of the place
which formed testator's domicile at his death. So where the testa-
tor while a citizen of France married, and under French law his
wife was entitled to one half of his property on his death, the court
holds that where he afterwards becomes a citizen of New York
and owns property there, one half his property is not exempt
from taxation on the ground that it belongs to his wife under
French law. In re Majot, 135 N. Y. App. Div. 400, 119 N.
Y. Suppl. 888.

Construction of Statute.

Executors have a right to claim that they shall be clearly brought
within the terms of the inheritance law before they shall be sub-
jected to its burdens. It is a well established rule that a citizen
cannot be subjected to special burdens without the clear warrant
of the law. In re Enston, 113 N. Y. 174, 178, 21 N. E. 87, 3 L. R. A.
464, 22 N. Y. St. 569, reversing 46 Hun. 506, 19 Abb. N. Cas. 227,
10 N. Y. St. 380, 5 Dem. Surr. 93, 8 N. Y. St. 781.

Taxes imposed by the collateral inheritance tax are special and
not general, and the rule is that special tax laws are to be con-
strued strictly against the government and favorable to the tax
payer; that a citizen cannot be subjected to special burdens with-
out clear warrant of law. In re Vassar, 127 N. Y. 1, 12, 27 N. E.
394, reversing 58 Hun 378, 12 N. Y. Suppl. 203.

The statute should be strictly construed in favor of the citizen,
since it assumes to impose a special burden upon particular prop-
erty and persons and is not in any proper sense a general tax.
But where a particular subject is within the scope of the first sec-
tion and an exemption from taxation is claimed on the ground that
the legislature has not provided proper machinery for accomplish-
ing the legislative purpose in a particular instance, a liberal rather
than a strict construction should be applied, and if by fair and
reasonable construction of its provisions the purpose of the statute
can be carried out, that interpretation ought to be given to effectu-
ate the legislative intent. In re Stewart, 131 N. Y. 274, 282, 30
N. E. 184, 14 L. R. A. 836.

1909, c. 62.] NEW YORK. 837

Validity.

See notes to the Acts of 1885, 1887 and 1892, ante, pp. 776, 792,
801.

Classification by Relationship.

The suggestion that the New York statute is unconstitutional
as providing a different rate of taxation for different classes of rela-
tives, even if tenable, could not render the statute void in entirety.
In re Keeney, 194 N. Y. 281, 286, 87 N. E. 428, affirming 128 N. Y.
App. Div. 893.

Discrimination Among Life Estates.

The objection was made thac the New York statute was void
as singling out for taxation transfers where a life estate is reserved
to the grantor leaving all other transfers or conveyances exempt.

''We think that there are sufficient reasons to support the classifi-
cation made by the statute; at least that the classification can-
not be said to be devoid of reasonable ground on which to rest.
Inheritance tax laws have been very generally adopted throughout
the states of the Union. A substantial part of the revenue
necessary to support their governments is now derived from
that source. A not wholly unnatural desire exists among owners
of property to avoid the imposition of inheritance taxes upon the
estates they may leave, so that such estates may pass to the objects
of their bounty unimpaired. It is a matter of common knowledge
that for this purpose trusts or other conveyances are made whereby
the grantor reserves to himself the beneficial enjoyment of his
estate during life. Were it not for the provision of the statute
which is challenged, it is clear that in many cases the estate on the
death of the grantor would pass free from tax to the same persons
who would take it had the grantor made a will or died intestate.
It is true that an ingenious mind may devise other means of avoid-
ing an inheritance tax, but the one commonly used is a transfer
with reservation of a life estate. We think this fact justified the
legislature in singling out this class of transfers as subject to a
special tax." Per Cullen, C. J., in In re Keeney, 194 N. Y. 281,
286, 87 N. E. 428, affirming 128 N. Y. App. Div. 893.

Who May Object to Discrimination in Rate.

Grantees in a deed subject to the lowest rate of taxation have no
valid cause of complaint as to the constitutionality of the transfer
tax because other grantees are subjected to a higher rate. That
objection if tenable could be taken only by the grantees taxed at

838 STATUTES ANNOTATED. [N. Y. St.

the higher rate. In re Keeney, 194 N. Y. 281, 286, 87 N. E. 428,
affirming 128 N. Y. App. Div. 893.

Not Impair Contract.

Where the law imposing a tax was in force before the deposit
was made by a non-resident in the state of New York it did not
impair the obligation of the contract, if a tax otherwise lawful
ever can be said to have that effect. Blackstonev. Miller, 188 U. S.
189, 23 S. Ct. 277, 47 L. Ed. 439, affirming 171 N. Y. 682, 69 N. Y.
App. Div. 127, quoting Pinney v. Nelson, 183 U. S. 144, 147.

Evasion of Tax.

Evasion of tax by marshaling assets, see p. 936.

Evasion of tax by joint ownership, see ante, p. 846.

Good faith the test in transfers, see p. 877.

Assignment of interests, see p. 840.

Exercise of power following direction in will, see p. 889.

Deed in trust for the use of the testator for life and on his death
subject to appointment by his will, see p. 882.

Election to take under original will instead of under the exercise
of a power of appointment, see p. 891.

Rate on assignment of legacy, see p. 905.

Where no next of kin appear, see p. 904.

Effect of leaving legal title to property in a non-resident trustee,
see p. 856.

Leaving Stock with Brokers.

The decedent, a resident of Louisiana, had ordered the pur-
chase through her stock brokers in New York of certain stock
and the certificates were taken in the name of the brokers, but
paid for by her, and the stock was transferred on the books of the
corporation, which was a New York corporation, to the brokers,
who thereupon endorsed their names upon the blank transfer
printed upon the certificates so that the same could be transferred
to the testatrix, and the certificates so endorsed were then delivered
by the brokers to the testatrix. The court holds that although
she did not have the legal title to the stock at the time of her
death, she did have an equitable title which at any time she could
have transferred into a legal title by simply presenting the cer-
tificates to the officers of the corporations, and that this was an
interest in the property which passed by her will and which was

1909, c. 62.] NEW YORK. 839

taxable. She was entitled at any time to become vested with the
legal title and certainly this equitable title was something more
than a mere chose in action. It was in effect a property interest
in these domestic corporations. In re Newcomb, 172 N. Y. 608,
64 N. E. 1123, affirming 71 N. Y. App. Div. 606, 76 N. Y. Suppl.
222.

Renunciation by Legatee.

In one case the legatees renounced the legacy and the property
bequeathed therefore went to the residuary legatees. The court
therefore holds that the tax should be laid at the rate as if the
legacy had been originally given to the residuary legatees. The
tax is laid solely upon the transfer and not upon the property
transferred, nor upon the estate of the legatee. If the legatee
renounced a gift, refused to receive it, no tax can be collected
with respect to him because there has been no transfer to him.
His right to renounce the privilege of accepting the donation is
not denied or forbidden by the statute, and on his effective renun-
ciation the title or ownership of the property remains in the estate,
to be disposed of under the terms of the will, and the succession is
taxable in accordance with the nature of the ultimate devolution.
In re Wolfe, 179 N. Y. 599, 72 N. E. 1152, affirming 89 N. Y.
App. Div. 349.

The court affirms and distinguishes In re Wolfe, 89 N. Y. App.
Div. 349, 179 N. Y. 599, as there was no transfer by will to. the
executors, and therefore no transfer tax could be imposed.
In re Cook, 187 N. Y. 253, 79 N. E. 991, reversing 114 N. Y. App.
Div. 718, 99 N. Y. Suppl. 1049.

Property Disclaimed by Executor.

A disclaimer by the executor of property claimed to be included
in a gift inter vivos by the decedent does not deprive the surrogate
of jurisdiction to appraise it. In re Lansing, 31 Misc. 148, 64 N. Y.
Suppl. 1125.

The investment of a trust fund in tax-exempt securities does not
avoid the tax which is on successions and not on property. In re
Dow, 167 N. Y. 227, 230, 60 N. E. 439, 52 L. R. A. 433, 88 Am.
St. Rep. 508, affirming 60 N. Y. App. Div. 630.

Account Placed in Wife's Name.

Where a partner in a firm invested the profits witn the firm
and transferred this account to his wife to protect his wife from

840 STATUTES ANNOTATED. [N. Y. St.

his creditors, on the death of the wife a transfer tax should be
levied on the property, as his intention to protect his wife could be
effectuated only in case it was her money. In re Anthony, 40
Misc. Rep. 497, 82 N. Y. Suppl. 789.

Bequest Void.

Where it appeared that the beneficiaries under a residuary
clause conceded its invalidity as a perpetuity and abandoned all
claim to the property to the heirs, who sold it and received the
consideration therefor, and that it did not pass under the will,
the surrogate had jurisdiction to find that the proper cy did not
pass under the will, and that no tax was assessable against the
residuary beneficiaries named. In re Ullman, 137 N. Y. 403,
33 N. E. 480.

Assignment by Legatee. — Payment by Executor out of his own
Funds.
Where one of the executors previous to the death of the testator
had so invested the testator's property that it was worthless and
then on his death destroyed his will, one of the legatees by threats
of criminal prosecution obtained payment of her legacy from the
executor, at the same time assigning the legacy and all her interest
in the same to the executor. The legacy was paid with the indi-
vidual property of the executor. The legacy was two thousand
dollars and the total assets of the estate of the testator amounted
to less than eight hundred dollars. The court holds that no
transfer tax can be levied on this legacy, as the legatee never
received any property from the estate, and has in fact assigned
all her rights against the estate. In re Weed, 10 Misc. Rep. 628,
32, N. Y. Suppl. 777.

S. 220. [As amended by St. 1911, c. 732, in effect July 21, 1911.] Taxable
transfers. A tax shall be and is hereby imposed upon the transfer of any tang-
ible property within the state and of intangible property, or of any interest therein
or income therefrom, in trust or otherwise, to persons or corporations in the
following cases, subject to the exemptions and limitations hereinafter prescribed :

(1) When the transfer is by will or by the intestate laws of this state of any
intangible property, or of tangible property within the state, from any person
dying seized or possessed thereof while a resident of the state.

(2) When the transfer is by will or intestate law, of tangible property within
the state, and the decedent was a non-resident of the state at the time of his death.

(3) Whenever the property of a resident decedent, or the property of a non-
resident decedent within this state, transferred by will is not specifically be-
queathed or devised, such property shall for the purposes of this article, be

1911, c. 732.] NEW YORK. 841

deemed to be transferred proportionately to and divided pro rata among all the
general legatees and devisees named in said decedent's will, including all trans-
fers under a residuary clause of such will.

(4) When the transfer is of intangible property, or of tangible property within
the state, made by a resident, or of tangible property within the state made by a
non-resident, by deed, grant, bargain, sale or gift made in contemplation of the
death of the grantor, vendor or donor or intended to take effect in possession or
enjoyment at or after such death.

(5) When any such person or corporation becomes beneficially entitled, in
possession or expectancy, to any property or the income thereof by any such trans-
fer whether made before or after the passage of this chapter.

(6) Whenever any person or corporation shall exercise a power of appoint-
ment derived from any disposition of property made either before or after the
passage of this' chapter, such appointment when made shall be deemed a transfer
taxable under the provisions of this chapter in the same manner as though the
property to which such appointment relates belonged absolutely to the donee of
such power and had been bequeathed or devised by such donee by will.

(7) The tax imposed hereby shall be upon the clear market value of such prop-
erty, at the rates hereinafter prescribed.

[See notes to the Act of 1885, c. 483, s. 1; 1887, c. 713; 1891. c. 215; 1892,
c. 169; 1892, c. 399, s. 1; 1896, c. 908, s. 220; 1897, c. 284, s. 2; 1905, c. 368;
1908, c. 310; 1909, c. 62, s. 220; 1910, c. 706; 1911, c. 732.

Definitions.

The words "estate," "property," "tangible property," "intang-
ible property," "transfer," "intestate laws of this state," are
defined in section 243, post, p. 969.

**Transfer.'* — Direction to Pay Debt or Other Obligation.

The testator by his will gave to H. all money which might
become due and payable at his decease on account of his membership
in a certain Masonic Aid Association. The testator had taken
out this membership to secure an indebtedness to H. The court
holds that while H. may be entitled to receive money by virtue
of the will he does not get it as a gift, but as payment of a debt,
and the words used accomplish no more than the usual general
direction in wills to pay debts and funeral expenses. In re Rogers,
10 N. Y. Suppl. 22, 2 Con. Surr. 198.

A husband signed an agreement to pay an annuity through a
trustee to the wife, and by his will he created a trust in his executors
to continue the annuity in case she refused a gross sum allowed
her in the will. The court holds that this direction as to the trust
in the will is nbt taxable, as it is no transfer and confers no benefit
upon the widow. It is simply a direction of the testator as to

842 STATUTES ANNOTATED. [N. Y. St.

the manner in which his estate shall be administered. In re
Daniell, 40 Misc. Rep. 329, 81 N. Y. Suppl. 1033.

The testator gave a legacy to a doctor in view of his care and
services during the testator's years of sickness "without asking
any reward for services rendered, as he knew my means were
somewhat limited." The court holds that the question is not
whether there is a claim which the testator may honorably, but not
legally appoint to pay, but whether the creditor has a claim to
which there is no legal defence which he can enforce by legal pro-
ceedings. The court says that the physician by neglecting to make
a claim as a creditor has waived any rights and must come in as
a legatee only.

"By neglecting to present any account to the executor, or prove
any claim against the estate, and having accepted the gratuity
which the deceased provided for him in her will, it was the duty
of the executor, on its payment to him, to deduct therefrom the
tax which had been assessed by the surrogate. If he desired to
escape the payment of the tax, or was dissatisfied with the amount
of the legacy, he should have established his debt, if he had any,
against the estate, and had it paid by the executor in the usual
manner, and let the legacy to him go into the residuary assets.

"The times have been
That, when the brains were out, the man would die,
And there an end; but now they rise again,
With twenty mortal murders on their crowns.
And push us from our stools.

"So, in the settlement of estates, the legal skeletons of stale
claims and outlawed demands stalk forth from their charnel houses
and their graves, and seek to push from their stools the guests whom
the testator has invited to the feast." Per Kennedy, S., in In re
Doty, 7 Misc. Rep. 193, 56 N. Y. St. 626, 27 N. Y. Suppl. 653, 656.

Contract to Leave by Will.

The testator died in 1901 leaving a will, and the inheritance tax
was compromised by the executor. An action was brought rely-
ing on an ante-nuptial contract with the testator to leave by will
.certain property, which agreenient the testator had failed to ful-
fill. The action ended by a judgment for the plaintiff, and the
court ordered the executors to turn over to the plaintiff the prop-
erty covered by the contract.

1911, c. 732.1 NEW YORK. 843

The court holds that this transfer is subject to the inheritance
tax, as it was not a contract to convey, but a contract to make a
will. Had the deceased performed his agreement and bequeathed
the property the estate would have been subject to the tax. It
does not affect the question of the liability of the estate to taxation
that in consequence of the failure of the testator to carry out his
promise the beneficiary was obliged to resort to a court for relief.
The judgment of the court converts the devisees or heirs at law,
as the case may require, into trustees for the beneficiary under the
original agreement. Therefore the devolution of the property has
in fact taken place under the will, and such devolution is subject
to the transfer tax. In re Kidd, 188 N. Y. 274, 279, 80 N. E. 924,
reversing 115 N. Y. App. Div. 205, 100 N. Y. Suppl. 917.

Where in 1899 the intestate entered into an ante-nuptial contract
in writing, by the terms of which, in consideration of his marriage,
he agreed to provide for his wife by his last will and testament in case
she survived him, the court holds that her rights are in the nature
of a debt, and therefore not subject to taxation under the transfer
tax law. She takes under the contract and not by will. In re
Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 N. Y. App. Div.
530, 82 N. Y. Suppl. 390, 38 Misc. 151, 77 N. Y. Suppl. 170.

Bequest for Consideration.

The will of Jay Gould recited that, his son having conducted his
business for many years with great ability, he had fixed the
value of the son's services at five million dollars; and evi-
dence was introduced that this legacy was by agreement in view
of the son's services and was for compensation and no other
purpose. The court holds, however, that the New York statute
does not limit the tax to property "gratuitously given by will,"
but that the word "transfer" covers the gift by will, whatever the
method may be, whether to pay a debt or to discharge a moral
obligation, or to benefit a relative for whom the testator entertained
a strong affection. In re Gould, 156 N. Y. 423, 428, 51 N. E. 287,
modifying 19 N. Y. App. Div. 352.

On the other hand, where a bequest is made to the foreman of
the testator of four thousand dollars on condition he should accept
it in full of all claims, and it appeared that the amount of the
legatee's claim for services was in excess of the sum bequeathed,
the legacy is not a gift and is not subject to the inheritance tax.
In re Underhill, 20 N. Y. Suppl. 134, 2 Con. Surr. 262.

g44 STATUTES ANNOTATED. [N. Y. St.

Ante- Nuptial Contract.

An ante-nuptial contract entered into by which the testator
agrees to leave certain property by will to his wife is not one "in-
tended to take effect in possession or enjoyment" until after the
death of the obligor. It is not subject to taxation under the
transfer tax act unless it can be shown that the agreement was
entered into in bad faith where the husband in fact died intestate.
In re Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 N. Y.
App. Div. 530, 82 N. Y. Suppl. 390, 38 Misc. 151, 77 N. Y. Suppl.
170.

An ante-nuptial agreement by which the husband transferred
certain stock to the wife, and the next day she transferred the
same stock back to him as trustee to apply to the mutual use of
the parties during their joint lives, is not a gift to the wife in con-
templation of death.

The court holds that the two agreements are not contempo-
raneous. In re Miller, 77 N. Y. App. Div. 473, 78 N. Y. Suppl.
930, overruling 75 N. Y. Suppl. 929. See, however. In re Kidd,
188 N. Y. 274, 80 N. E. 924, reversing 115 N. Y. App. Div. 205,
100 N. Y. Suppl. 917, noted fully ante, p. 842.

Money Advanced to Legatee.

The testator left the remainder of his property to his wife for
life and on her death among his six children, deducting from the
share of two of his sons money advanced to them, and charging
their shares with these sums.

The court holds that these sums lent in advance to the sons are
not regarded as advancements, but that they are claims belonging
to the estate, and hence they are subject to the inheritance tax.
In re Bartlett, 4 Misc. Rep. 380, 25 N. Y. Suppl. 990.

"Of ANY Tangible Property within the State and of
Intangible Property."

This language is entirely new and was inserted by the act of
1911.

Insurance Policies which Testator had Assigned.

Where two policies upon their face were payable to the estate
of the decedent and at his death were found in his safe deposit
vault, and attached to each policy was an assignment of it in con-
sideration of love and affection to his wife, the comptroller contends

1911, c. 732.] NEW YORK. 845

that under section 220 the tax is payable upon the transfer of those
poHcies upon the theory that the transfer was first by death and
second by an assignment to take effect in possession or enjoyment
at the death of the decedent.

The court holds that as against the state the deceased was not
possessed of the policies at the time of his death and that the
widow did not obtain title to them through his will or by the laws
of the state of New York. This is an absolute present assignment
of the interests of the assignor in the policy; therefore, no transfer
tax is assessable. In re Parsons, 117 N. Y. App. Div. 321, 102 N. Y.
Suppl. 168, affirming 51 Misc. 370, 101 N. Y. Suppl. 430.

Stock Held as Collateral.

Where stock is purchased by stock brokers for a customer with
their own money and they hold the stock as collateral with other
stock deposited with them, the customer is merely the pledgee of
the stock, the brokers being the owners of the property subject
to a right to redeem upon paying the entire amount of the debt,
and therefore the stock should not be included in the transfer of the
estate of the customer. A subsequent sale of the stock by the
brokers for the satisfaction of their lien extinguishes whatever right
or title the decedent had and demonstrates that instead of being
the owner of the property the estate was indebted in a large sum
to the brokers. In re Havemeyer, 32 Misc. Rep. 416, 66 N. Y.
Suppl. 722.

The testator was a non-resident of New York and had a specula-
tive stock account with brokers in the city of New York, and on the
day of his death owed them large sums of money on stocks and bonds
purchased by them for him with their own money.

The court holds that the deceased was under contract with the
brokers to apply certain pledged securities to the payment of the
debt and the executrix performed that contract. The executrix
argued that having paid a portion of the debt with pledged non-
taxable securities, which are not under the transfer tax law con-
sidered as "property" in this state, she has a right to treat such por-
tion of the debt as still existing for the purpose of offsetting against
it property otherwise taxable. But the court holds that the execu-
trix cannot claim that the balance of the debt after applying
taxable property pledged which has actually been paid with non-
taxable securities pledged for that purpose should be carried as a
debt to credit and offset against clearly taxable property. And

g46 STATUTES ANNOTATED. [N. Y. St.

while for the purposes of taxation non-taxable property is not to
be treated as taxable property, yet it was part of the estate of the
deceased which passed to the executrix and she chose to cause its
sale and application to the debt of the deceased; and therefore
the balance of the taxable property in the state of New York con-
sisting of real estate and personal property is subject to the tax.
In re Burden, 47 Misc. 329, 95 N. Y. Suppl. 972.

Equitable Interests.

A gift in contemplation of death was made by a father to a
daughter and she died within a few days of his death before the
certificates of stock had been actually transferred to her, before
she had received any dividends. The stock passed under her will
as her property, and so passing is a transfer under the transfer tax
law of the state which must suffer a tax. In re Borup, 28 Misc.
Rep. 474, 59 N. Y. Suppl. 1097.

Joint Deposit.

The courts have sought so far as possible to ascertain the real
ownership in a joint deposit and measure the tax accordingly.
Hence a joint deposit in a savings bank made up of sums which were
given by the decedent to his wife was not taxable. In re Rosen-
berg, 114 N. Y. Suppl. 726. A deposit made in a national bank
in the joint names of the husband and wife was originally owned by
the decedent. Where the amount of the deposit at the time the
account was made joint was made up entirely of money belonging
to the decedent and where the checks were drawn out for house-
hold expenses and made up by money of the wife, the court says
that if the money belonged to the wife then it is not taxable and
if it was a joint account with right of survivorship then the case
is governed by the Stebbins case, 103 N. Y. Suppl. 563, and the
money is not taxable in either event. In re Graves, 52 Misc. 433,
103 N. Y. Suppl. 571.

Where the husband and wife deposited money in a savings
bank in their joint names, with account payable to either or sur-
vivor, the wife has an interest in the deposit to give her an equal
right with him to withdraw it during their joint lives and vests her
with the absolute title in case she survives him. The court holds
'that in this case it was not the intention of either party to divest
himself of the control and use of this money so long as both lived,
and that the accounts were entered so that either could draw
money during their joint lives as a matter of convenience, and

1911, c. 732.] NEW YORK. 847

upon the death of either the deposits would become the absolute
property of the survivor.

The court holds that the husband did not surrender the absolute
possession and dominion of the money in question during his life-
time, and that although there was intention on the part of the
parties to evade the transfer tax law, yet as the transfer had not
become absolute until the death of the depositor such parts of
the different deposits as were not the money of the wife when
deposited are taxable. In re Kline, 65 Misc. 446, 121 N. Y.
Suppl. 1090.

An account was opened in a trust company in the following
form in 1899: "H. H. Stebbins, Julia A. Stebbins, either or the
survivor may draw." The money contributed originally belonged
to the wife, Julia A. Stebbins, and her husband contributed his
salary to the household expenses, while the wife contributed various
sums for the same purpose. The court notes section 225 and
holds that sections 220 and 242 do not provide for the taxation
of joint deposits. The act of depositing money in the joint names
of the husband and wife indicates an intent to invest the title of
the money in the survivor, and the deposit being joint is in
the nature of an agreement or contract between the husband and
wife. It is not testamentary nor does it depend upon the intestacy
or testacy of the decedent. In this case there is no suggestion
that the joint deposit was made with intent to evade the transfer
tax. The survivorship is a mere incident. In re Stebbins,. 52
Misc. 438, 103 N. Y. Suppl. 563.

Not Limited to Property Subject to General Taxation.

Property subject to the transfer tax is not confined to property
subject to general taxation. In re Knoedler, 140 N. Y. 377, 35 N. E.
601, affirming 68 Hun 150 (insurance policy). In re Hellman,
174 N. Y. 254, 66 N. E. 809, 95 Am. St. Rep. 582, reversing 77
N. Y. App. Div. 355, 79 N. Y. Suppl. 201 (seat in stock exchange) .

Real Estate.

Taxes on real estate, see post, p. 954.

Lien on real estate for whole tax to life tenant and remainderman,
see post, p. 918.

Mortgaged Real Estate,

Where real estate is devised subject to mortgage the interest or
equity of the testator in the real estate only is to be considered

848 STATUTES ANNOTATED. [N. Y. St.

as devised and the executors have no right to deduct the amount
of the mortgages from the value of the personal estate in settling
the inheritance tax. In re Sutton, 3 N. Y. App. Div. 208, 38 N. Y.
Suppl. 277, affirming 15 Misc. 659, 38 N. Y. Suppl. 102. In re
Kene, 8 Misc. Rep. 102, 29 N. Y. Suppl. 1078.

Direction to Pay Mortgages out of Personalty.

Where the will leaves real and personal property and empowers
the executor to pay certain mortgages on the real estate out of the
personal property the fact that the executors do so does not reduce
the amount of personal property liable to the tax. The court dis-
tinguishes In re James, 144 N. Y. 6, and says that the subsequent
act of the executor had no greater effect to reduce the tax on the
personalty than would the taking of the money by the beneficiary
out of one pocket and putting it into the other. In re Livingston,
1 N. Y. App. Div. 568, 37 N. Y. Suppl. 463.

The testator at the date of his death owned equities in real estate
subject to mortgages and directed by his will that these mortgages
be paid out of his personal estate. The personalty should be ap-
praised, as it was at the testator's death, less debts and mortgages
payable. The court holds that the estate must be appraised in the
condition in which it was at the death of the testator. In re
Offerman, 25 N. Y. App. Div. 94, 48 N. Y. Suppl. 993, following
In re Sutton, 3 N. Y. App. Div. 208, 38 N. Y. Suppl. 277, and In
re Livingston, 1 N. Y. App. Div. 568, 37 N. Y. Suppl. 463.

Where the testator devised real estate and directed that the mort-
gage upon it should be paid by his executor, the amount so used
should be treated as personalty subject to the transfer tax. In re
De Graaf, 24 Misc. Rep. 147, 53 N. Y. Suppl. 591, 2 Gibbons
516, following In re Offerman, 25 N. Y. App. Div. 94, 48
N. Y. Suppl. 993.

Co-Tenancy. — Allowance for Improvements.

Where the decedent was a co-tenant of land on which other
co-tenants had made improvements and where each co-tenant
presumed and knew what the others were doing, and the improve-
ments were made under such conditions that on partition the co-
'tenants would be entitled to allowance for the improvements, only
the balance of the interest of the decedent should be taxed, notwith-
standing the fact that no proceeding for contribution had been com-
menced, and notwithstanding the fact that it might be claimed that

1911, c. 732.] NEW YORK. 849

no contribution would ever be asked. This does not justify the
taxation of property that the decedent did not own which does not
pass to the heirs-at-law as her property. In re Wood, 123 N. Y.
Suppl. 574.

Real Estate Outside the State.

Under the statute of 1885 real estate situated in Rhode Island
belonging to a resident of New York is not subject to taxation in
New York. Lorillard v. People, 6 Dem. Surr. (N. Y.) 268.

Perpetual Leases.

Perpetual leases on real estate in Japan are real estate. In re
Vivanti, 122 N. Y. Suppl. 954, reversing 63 Misc. 618, 118 N. Y.
Suppl. 680.

Joint Stock Association Owning Real Estate,

The testator died in 1891 bequeathing shares in a joint stock
association called "The New York Times" which owned personal
property. The executors contended that as the association owned
real estate the interest therein of the shareholder was realty also,
and as it passed under his will in the direct line, was exempt, the
statute taxing transfers of realty only when passing to collaterals'
or strangers. See N. Y. St. 1891, c. 215.

The court discusses the difference between joint stock associa-
tions and corporations and concludes that "the fact that a joint
stock association is not in legal contemplation a corporation, and
not liable to taxation under acts seeking to reach corporations,
in no way militates against the position assumed by the comptroller
in this case. It is competent for private individuals to create a
joint stock association, issue shares of stock, and in that form dis-
pose of property by last will and testament. The associates by
contract have created the same situation as to shares of stock that
a corporation secures by charter." Per Bartlett, ]. /in In re Jones,
172 N. Y. 575, 65 N. E. 570, 60 L. R. A. 476, reversing 69 N. Y.
App. Div. 237. 74 N. Y. Suppl. 702.

On Annulment of Fraudulent Conveyance.

850 STATUTES ANNOTATED. [N. Y. St.

Subsequently, in a contest between the heirs, it was determined
that this gift was fraudulent and void, and the court then decided
that as it now appeared that the property was transferred by the
will of the testator and not by gift, it became taxable under the
statute. In re Lansing, 31 Misc. Rep. 148, 64 N. Y. Suppl. 1125.

Personalty. •

Debt.

A bequest of a debt to the debtor is property and subject to the
inheritance tax. In re Wood, 40 Misc. Rep. 155, 81 N. Y. Suppl. 511.

Value of note signed by legatee and bequeathed to him by holder,
see p. 932.

Good Will.

As to the appraisal of the good will, see post, p. 933.

The good will of a firm is taxable under the transfer tax. In re
Dun, 40 Misc. Rep. 509, 82 N. Y. Suppl. 802. (See, however, In re
Dun. 30 Misc. 616, 80 N. Y. Suppl. 657.) In re Hellman, 77 N. Y.
App. Div. 255, 79 N. Y. Suppl. 201, which was, however, reversed
in 174 N. Y. 254, 66 N. E. 809, 95 Am. St. Rep. 355, 79 N. Y.
Suppl. 201.

Where a business was conducted by and carried on by an adminis-
tratrix in the name oF the decedent, the good will of the business
is an assest in her hands and as such it is taxable. In re Keahon,
60 Misc. 508, 113 N. Y. Suppl. 926.

Leasehold Interest,

The interest of a lessee of real estate is personal property, subject
to taxation under N. Y. St. 1896, c. 908, s. 221, although buildings
erected by the tenant may be assessed to him as land under the
tax law. In re Althause, 168 N. Y. 670, 61 N. E. 1127, affirming
63 N. Y. App. Div. 252, 71 N. Y. Suppl. 445.

Partnership Profits,

Profits permitted to remain on deposit with the partnership
should be included among the taxable assets. In re Probst, 40
Misc. Rep. 431, 82 N. Y. Suppl. 396.

Partner's Claim against Partnership.

Where a partner makes a loan to a partnership this money, as
regards the rest of the world, is capital and not a loan, and is

1911, c. 732.] NEW YORK. 851

therefore subject to the transfer tax. In re Probst, 40 Misc. Rep.
431, 82 N. Y. Suppl. 396.

Insurance.

A life insurance poHcy on the life of the decedent held by him
at the time of his death is property owned by him at his death,
and so subject to appraisal for the purposes of taxation under
the inheritance tax law. The argument was made that it was
only property liable to taxation under the general tax law of the
state which could be taxed under the act relating to taxable trans-
fers, and that inasmuch as life insurance policies cannot be included
in the valuation of the taxpayer's property under the general law
they cannot be considered in assessing the tax under the collateral
inheritance law. But the taxable transfer law has no reference
or relation to the general law. While the object of both is to raise
revenue for the support of the government they have nothing else
in common. In re Knoedler, 140 N. Y. 377, 35 N. E. 601, affirm-
ing 68 Hun 150.

The testator was a member of the New York Produce Exchange,
and was a subscriber of the gratuity fund of that body, which under
its by-laws belonged to beneficiaries provided for on his death,
and was not liable to the payment of debts or legacies. This
money passed, not by virtue of will or of any administration, but
by the contract of the testator with the Produce Exchange.

The distinction between the two classes of policies— the first
class where the contract is made for the benefit of the insured and
the proceeds pass to his personal representatives as part of his
estate; and the second class where the contract is made for the
benefit of others and the proceeds are transferred to them by the
terms of the contract — was clearly laid down by the court. In
re Fay, 25 Misc. Rep. 468, 55 N. Y. Suppl. 749.

Seat in Stock Exchange.

The court holds that a seat in the stock exchange is property
and subject to tax within the meaning of the N. Y. St. 1896, c.
908, s. 242.

"In determining the construction to be given to the broad and
comprehensive language of section 242, we must consider that the
statute has a history plainly indicating the trend of legislative
action, and that as to the transfer tax it is a literal reproduction
of the then existing law. First enacted in 1885 (Chap. 483) the
Inheritance Tax Law was limited to property passing to collateral

852 STATUTES ANNOTATED. [N. Y. St.

relatives. It was subjected to repeated amendments, the effect of
which in nearly every instance was either to enlarge the class of
persons subject to the tax or to extend its application to some spe-
cies of property which the courts had held not to fall within its
terms. The distinction between property justly subject to ordi-
nary taxation and that liable to the imposition of the transfer tax
was early appreciated. In Matter of Knoedler (140 N. Y. 377) a
policy of life insurance payable to the estate of the deceased was
held subject to the tax. In the opinion there rendered Judge
Maynard said: 'The argument is made that it is only property
which is liable to taxation under the General Tax Law of the state
which can be taxed under the act relating to taxable transfers, and
that, inasmuch as life insurance policies cannot be included in the
valuation of a taxpayer's property under the general law, they can-
not be considered in assessing a tax upon the collateral inheritance.
The main premise upon which this proposition rests is mani-
festly inadmissible. The Taxable Transfer Law has no reference
or relation to the general law ... it proceeds upon a new theory
of the right of the government to tax and establishes a new system
of taxation. It takes the right of succession to property and
measures the tax in the method specifically prescribed. All
property having an appraisal value must be considered, whether
it is such as might be taxed under the general law or not. Many
kinds of property might be enumerated which are not assessable
under the general law, but which are appraisable under the col-
lateral inheritance tax.' Such was the settled construction of the
inheritance tax laws when the act of 1896 was passed. That act,
as already said, was a revision of the existing law, and an attempt
to bring into a single statute all existing legislation relative to
taxation by the state. In Henavie v. N. Y. C. & H. R. R. Co.
(154 N. Y. 278, 281) Judge Vann said : 'The rule in the case of a re-
vision of statutes is that where the law, as it previously stood, was
settled either by adjudication or by frequent application of the
statute without question, a mere change in the phraseology is not to
be construed as a change in the law, unless the purpose of the legis-
lature to work a change is clear and obvious' Therefore, because
section 242 prescribes that 'all property' shall be subject to the
transfer tax and because the revision of the statute should not be
held to work a change in the settled law unless the legislative
in cent to that effect is clearly manifest, we are of opinion that the
seat held by the testator was subject to the tax imposed upon it."

1911, c. 732.] NEW YORK. 853

Per Cullen, J., in In re Hellman, 174 N. Y. 254, 257, 66 N. E. 809,
95 Am. St. Rep. 582, reversing 77 N. Y. App. Div. 355, 79 N. Y.
Suppl. 201.

A seat in the stock exchange is a privilege of value subject to
the inheritance tax. In re Curtis, 31 Misc. Rep. 83, 64 N. Y. Suppl.
574.

Conversion.

Conversion by Direction to Pay Mortgages out of Personalty.

The New York courts have consistently refused to follow the
Pennsylvania rule but have maintained that the test of taxability
is the actual condition of property at the testator's death unaffected
by any direction in the will for sale or investment. In re Mills,
reported post, p. 854, is not a modification but is an example of this
rule.

Direction to Sell Real Estate.

The power of sale conferred on executors does not operate to
transfer real estate into personal property for purposes of taxation
as the doctrine of equitable conversion is not applicable to subject
real estate to taxation. In re Swift, 137 N. Y. 77, 88, 32 N. E.
1096, 18 L. R. A. 709, 64 Hun. 639, 16 N. Y. Suppl. 193, 19 N. Y.
Suppl. 292.

Where land is devised and the executor is directed absolutely
to sell it the better rule is to assess the tax on the property trans-
ferred as the testator leaves it without regard to the operation or
effect of equitable rules that apply only to the administration of
the estate. In re Sutton, 3 N. Y. App. Div. 208, 38 N. Y. Suppl.
277, affirming 15 Misc. 659, 38 N. Y. Suppl. 102.

A decedent transferred real estate in trust giving a power of sale
to the trustees. After the death of the grantor the trust property
was condemned for park purposes and the proceeds invested in
bonds and mortgages. Upon the death of the daughter without
exercising the power given her by the trustee, the court holds that
the trust estate descending to her issue is to be treated as personal
property.

The courts have held that the doctrine of equitable conversion
cannot be invoked for the purpose of subjecting property to taxa-
tion under the act. The converse of that proposition must be true
and the doctrine should not be invoked for the purpose of exempt-
ing the property from taxation. It is only by applying this fiction

854 STATUTES ANNOTATED. [N. Y. St.

that the securities now constituting the trust fund can be regarded
as realty. The better rule is to assess the tax on the property trans-
ferred as the decedent left it. It is unreasonable that an equitable
rule should attach to such absolute property, giving to it a fictitious
character different from the real nature, so as to affect the right of
the estate to subject the same to taxation. In re Bartow, 30 Misc.
Rep. 27, 62 N. Y. Suppl. 1000. A contrary result was reached in
In re Wheeler, 1 Misc. Rep. 450, 22 N. Y. Suppl. 1075.

Direction to Invest in Real Estate.

Where the will directed a remainder to be paid to a certain New
York church "ten thousand dollars towards the building of a new
church" this bequest cannot be treated as real estate, but is personal
property, and by no rule of equitable conversion can it become
real estate until it has been invested in real estate as directed.
It must therefore be treated as a legacy of money. Sherrill v.
Christ Church, 121 N. Y. 701, 702, 25 N. E. 50, reversing In re Van
Kleeck, 55 Hun. 472.

Tax on Power of Appointment.

Where a will directs a conversion of real estate into personal
property the court holds that the actual form in which the property
existed at the death "^of the testator determines its liability to a
transfer tax. And this same rule applies to a tax on the execution
of the power of appointment. As it is the execution of a power
which subjects grantees under it to a transfer tax, it follows that
the condition or form of the property at the time of such execution
must control. In re Dows, 167 N. Y. 227, 232, 60 N. E. 439,
52 L. R. A. 433, 88 Am. St. Rep. 508, affirming 60 N. Y. App. Div.
630, affirmed suh nomine, Orr v. Cilman, 183 U. S. 278, 22 S. Ct.
213, 46 L. Ed. 176.

Interest of Testator in Estate, the Property of which was Directed
to he Sold.
The testator direcced a sale of his real property and his daughter
took his share in the proceeds of the real estate. She died before
any actual sale and conversion had taken place, leaving a will by
which her interest in her father's estate passed to her husband.
The court holds that by the direction under the will of the father
the land became personal property and therefore there was no tax
on the interest passing from the daughter to her husband. In re

1911, c. 732.1 NEW YORK. 865

Mills, 177 N. Y. 562, 69 N. E. 1127, affirming 86 N. Y. App. Div.
555, 84 N. Y. Suppl. 1135.

Domicile or Situs of Property.

Adjudication of Domicile in Different States.

The fact that the California courts decided that a certain dece-
dent was a resident of California and administered his estate and
assessed a tax on that basis does not bar the New York courts.
It is not res judicata as to them. In re Cummings, 142 N. Y. App.
Div. 377, 127 N. Y. Suppl. 109, reversing 63 Misc. 621, 118 N. Y.
Suppl. 684, citing Tilt v. Kelsey, 207 U. S. 43, 28 S. Ct. 1, 52
L. Ed. 95. ' The court distinguishes the case of Tilt v. Kelsey
on the ground that the California probate was only binding on
heirs or beneficiaries and not on claimants.

Constitutionality of Double Taxation,

Where a law imposing a tax was in force before the deposit was
made by a non-resident in New York, although this fact does not
seem to be relied upon by the court, the tax may be levied by the
state of New York, although the tax has already been paid on the
same deposit by the state of Illinois where the testator was domi-
ciled. The court holds that this does not violate the fourteenth
amendment.

"The fact that two states, dealing each with its own law of suc-
cession, both of which the plaintiff in error has to invoke for her
rights, have taxed the right which they respectively confer, gives
no cause' for complaint on constitutional grounds. The universal
succession is taxed in one state, the singular succession is taxed in
another. The plaintiff has to make out her right under both in
order to get the money." Per Holmes, J., in Blackstone v. Miller^
188 U. S. 189, 207, 23 S. Ct. 277, 47 L. Ed. 439, affirming 171 N. Y.
682, 69 N. Y. App. Div. 127.

"Faith and Credit" to Judgment of Another State.

Where Illinois had already laid a tax upon the interest of a
citizen of Illinois in a deposit in a trust company in New York,
it was claimed that for New York to attempt to assess the interest
as within the jurisdiction of New York was not giving due faith
and credit to the judgment in Illinois. The court replies that the
tax does not deprive the plaintiff in error of any of the privileges
and immunities of the citizens of New York. It is no such depri-

856 STATUTES ANNOTATED. [N. Y. St.

vation that if she had lived in New York the tax on the transfer
of the deposit would have been part of the tax on the inheritance
as a whole. Blackstone v. Miller, 188 U. S. 189, 23 S. Ct. 277,
47 L. Ed. 439, affirming 171 N. Y. 682, 69 N. Y. App. Div. 127.

Legal Title in Trustee in Another State.

The deceased was a resident of this state at the time of the
transfer and the property was in this state and the transfer was
here made. The deed in question was the deed in trust reserving
a life estate to the grantor. In re Keeney, 194 N. Y. 281, 287,
87 N. E. 428, affirming 128 N. Y. App. Div. 893.

Personal Property of Resident.

The personal property of a resident decedent situated whether
within or without the state is subject to the tax imposed by the
act. In re Swift, 137 N. Y. 77, 88, 32 N. E. 1096, 18 L. R. A.
709, 64 Hun. 639, 16 N. Y. Suppl. 193, 19 N. Y. Suppl. 292.

The intestate, a resident of New York, died in 1894, leaving per-
sonal property in Iowa. An administrator appointed by the Iowa
court paid a brother of the intestate who lived in Iowa out of the
Iowa property. The court holds that the property in question
although in a foreign state was subject to the New York tax.
The court remarks that whether or not the tax when so assessed
can be collected is a question in no manner presented to the court.
In re Dingman, 66 N. Y. App. Div. 228, 72 N. Y. Suppl. 694.

Claim Against Estate of Non-resident.

Where the personal estate of a resident of New York consisted
entirely of her distributive share in the estate of a deceased sister
who resided in Ohio, but no part of this estate had come into the
possession of the testatrix prior to her death, but consisted of
4noney sent directly from the trustee of the estate of the deceased
sister to the executor of the New York testator for the purposes
of distribution, that portion of the personal estate is not liable
to taxation. In re Thomas, 3 Misc. Rep. 388, 24 N. Y. Suppl. 713.

1911, c. 732.] NEW YORK. 857

Property of Non-residents.

Debts of non-resident exhausting his New York assets, see
p. 938.

The statute of 1911 has upset the policy of the state as to the
taxation of property of non-residents. The act was passed in
response to the demands of bankers and business men who claimed
that the act of 1910 was driving capital out of the state. In
particular it appeared that over four hundred millions of dollars
deposited in banks and trust companies had been withdrawn from
the state and that the high rates had resulted in no increase in
revenue.

The act of 1911 limits the tax to tangible property within the
state and to intangible property of residents of the state. Tan-
gible property is confined by the act to corporeal property such as
real estate and goods, wares and merchandise, and does not include
money, bank deposits, stock, bonds, notes, credits or evidences of
an interest in property and evidences of debt.

These provisions closely follow the uniform inheritance law sug-
gested by the International Tax Conference of 1910.

Personal Estate in New York of Non-residents.

The state has a right to tax personal estate of non-residents
which exists in the state of New York. In re Romaine, 127 N. Y.
80, 86, 27 N. E. 759, 12 L. R. A. 401, affirming 58 Hun. 109; In re
Vinot, 7 N. Y. Suppl. 517. This is now limited by St. 1911, c.
732, to tangible property of non-residents.

New York Real Estate of a Non-resident,

Real property in New York of a non-resident is subject to the
inheritance tax. In re Vinot, 7 N. Y. Suppl. 517.

Bonds.

The cases cited below are not applicable to estates where the
transfer occurred after July 21, 1911 under N. Y. St. 1911, c. 702,
as bonds of non-residents are not under that act taxable in New
York.

Where the testator, a resident of South Carolina, died in 1888,
leaving an estate, part of which was invested in bonds of corpora-
tions outside of the state of New York, which were on deposit at
the time of hrs death with a New York bank, neither under the act
of 1887 any more than the original act of 1885 are such bonds

858 STATUTES ANNOTATED. [N. Y. St.

property left within this state subject to the payment of the tax.
In re Gibbes, 176 N. Y. 565, 68 N. E. 1117, affirming 84 N. Y.
App. Div. 510; 83 N. Y. Suppl. 53, reversing 83 N. Y. Suppl. 56.

The decedent died in 1905, a resident of Alabama. He was a
stockholder in a certain foreign consolidated coal company. The
decedent was the president of the consolidated company which
executed a deed of trust to a New York trust company, conveying
their property to secure a bond issue. The decedent as president
of the consolidated company commenced to sign these bonds in
Alabama, but they were never all signed by him before his death.
The decedent was entitled to some of these bonds, but he never
received any certificates from the New York trust company, or
anyone else that he was entitled to them, although such a certifi-
cate was delivered to his executrix after his death. The direction
of the vice-president of the consolidated company to the New York
trust company to deliver to the decedent five hundred thousand
of the bonds of the consolidated company, directing that such
bonds be deposited with the trust company for safe keeping in his
name, and the receipt therefor sent to the consolidated company
at Alabama, cannot be considered as a legal disposition of the
bonds which belonged to the coal company, so that they thereby
became the property of the decedent. If the decedent received
these bonds it would be as president of the coal company. This
right to receive these bonds of the foreign corporation which were
never executed and which the decedent, a non-resident, was entitled
to receive because he was a stockholder of another foreign corpora-
tion, was not property within this state and was not subject to
taxation. In re Hillman, 116 N. Y. App. Div. 186, 101 N. Y.
Suppl. 640.

While deposits are taxable at the place of deposit (In re Houd-
ayer, 150 N. Y. 37), irrespective of the place where the certificates
of deposit may be kept (In re Hewitt, 181 N. Y. 547), bonds are
considered by the New York courts at least, as following the owner's
domicile. In re Bronson, 150 N. Y. 1; In re Whiting, 150 N. Y.
27; In re Morgan, 150 N. Y. 35. See In re Schermerhorn, 50
Misc. 233, 100 N. Y. Suppl. 480.

, Non-resident's Claim against Estate of Another.

Under N. Y. St. 1911, c. 732," only tangible assets in New York
of a non-resident are taxable in New York.

The testator died in 1891 leaving the residue to a non-resident.
The residuary legatee died in 1892. The New York transfer tax

1911, c. 732.] NEW YORK. 859

authorities fixed the amount of her estate subject to tax including
the residuary legacy to the non-resident, and the tax was paid.
The legacy to the non-resident was never paid to him nor was it in
a condition to be paid, as he died while the testator's estate was
unsettled. By his will he gave his estate to his widow.

This proceeding was brought under the statute of 1887 as amended
by the statute of 1891, chapter 215.

The court notices the doctrine as to the situs of tangible personal
property, but says that a mere chose in action has never yet been
given the attribute of tangibility and this was all that the residuary
legatee had at the time of his death. He had a right to claim the
amount of money which his share of the residuary estate would
result in and nothing more. He had no right in any particular
piece of property or any particular sum of money. Until this
residuary estate was ascertained he might not be even able to
maintain an action for its recovery. The court holds, therefore, that
no tax should have been laid upon this legacy as the statute was
intended to cover only tangible property kept within this state by
the decedent and that property which is transiently here, as upon
the person or in the baggage of a man suddenly dying within this
state, was never intended to be covered by the provisions of the
act. In re Phipps, 143 N. Y. 641, 37 N. E. 823, affirming 77 Hun.
325, 28 N. Y. Suppl. 330.

The testator was a citizen of France and died before the payment
to him of his share in his father's estate, the father being a resident
of New York and his will being admitted to probate in this state.
Subsequently distribution was had and the executor of the son ap-
pointed in New York received certain securities in satisfaction of
his share of the father's estate. It was contended that at the time
of the death of the son his interest in his father's estate was a mere
chose in action, the situs of which was not this state but at the son's
domicile in France, that hence that was not property within the
state and subject to our inheritance laws.

The court holds that it cannot concede that a claim due a non-
resident from a resident of this state is not property within this
state subject to the imposition of the transfer tax. The court refuses
to follow In re Phipps, 143 N. Y. 641, 77 Hun. 325, and says that
that case has been overruled in effect by In re Blackstone, 171
N. Y. 682, affirmed inBlackstone v. Miller, 188 U. S. 189. Under the
doctrine of the Blackstone case the interest of the son in his father's
estate was subject to the inheritance tax imposed by the laws of

860 STATUTES ANNOTATED. [N. Y. St

this state as it was a claim due a non-resident from a resident of
this state. In re Clinch, 180 N. Y. 300, 73 N. E. 35, affirming
99 N. Y. App. Div. 298; 90 N. Y. Suppl. 923, 44 Misc. 190, 89
N. Y. Suppl. 802.

Where the husband and wife are both residents of New Jersey
and the husband dies leaving in a safe deposit box in New York
certain securities, and cash on deposit in a New York bank, and
bequeathing by will all of his property to his wife, before the will
was admitted to probate the wife died, leaving a last will and testa-
ment by which she left certain legacies. After the death of the
wife the will of her husband was admitted to probate by a New
Jersey court and later her will was also admitted to pro-
bate by this court. Subsequently the executor of the husband
removed his securities to New Jersey and paid to the executor of
the wife various sums of money in payment of her legacy. The
court finds that although the property of the husband was actually
in the state of New York at his death still the claim of the wife
against this estate was never property within the state of New
York, as the right that the wife had in her husband's estate was
not a right to the particular personal property which he owned,
but a right to the balance of the proceeds of his property after
the payment of debts and expenses of administration. And that
right at her death was solely a claim against his executor and was
not, therefore, property within the state of New York at the death
of the wife. In re Lord, 186 N. Y. 549, 79 N. E. 1110, affirming
111 N. Y. App. Div. 152, 97 N. Y. Suppl. 553.

The testator, a resident of New Jersey, died in 1892. By his
will he gave all his estate to his wife. He also exercised a power of
appointment of certain property held by trustees in favor of his
wife and appointed his wife and nephew executors. Before this
will was admitted to probate his wife died, a resident of New
Jersey. The original testator owned no real property within the
state of New York and as the statute at that time provided no
means of assessing and collecting a tax upon a non-resident not
owning real estate within the state the transfer of his property was
not taxable.

After the will of the testator had been admitted to probate in
New Jersey the surviving executor took the property of the testator
which was within the state of New York to the state of New Jersey.

There are three funds involved : first, a trust fund created by a
trust deed of 1873, of which the testator was life tenant with the

1911, c. 732.] NEW YORK. 861

power of disposal by will. By his will he exercised this power in
favor of his wife and by this exercise of the power the title vested
in her and passed under her will. Second, a trust created by a will
of a relative who died in 1880, the income to be paid to the testator
for life with the power of appointment of the remainder. This he
also exercised in favor of his wife and that property vested in her
and passed under her will. Third, property bequeathed by the
testator to his wife, which was subsequent to her death realized
by his executor and the proceeds paid by him to the executors of
the wife.

At the time of the death of the testator the property created under
the first trust was held by the trustees who were residents of New
York and the property was in New York. Upon the exercise of
the power of appointment the title to that property vested abso-
lutely in the wife, her title relating back to the deed and will creat-
ing the trust. The property constituting these trust funds that
was in the state at the time of her death which was transferred by
her last will was clearly taxable under the New York statute of
1885 as amended by the statutes of 1887 and 1891, c. 215. In re
Lord, 186 N. Y. 549, 79 N. E. 1110, affirming 111 N. Y. App. Div.
152, 97 N. Y. Suppl. 553.

Debt to Non-resident by Association with an Office in New York,

The decedent resided in New Jersey and was president of a joint
stock association and owned a majority of its stock. At the time of
his death the association was indebted to the decedent on an open
account;' and the court holds that this account is not subject to
tax in New York, although the association had an office in the city
of New York. In re Horn, 39 Misc. Rep. 133, 78 N. Y. Suppl. 979.

Deposit in Bank by Non-resident.

The cases cited below are not applicable to transfers which took
place after July 21, 1911, under N. Y. St. 1911, c. 732, which
exempted the bank accounts of non-residents from the inheri-
tance tax.

Bank account of non-resident in N. Y. is taxable. In re Clark,
92 N. Y. St. 650, 9 N. Y. Suppl. 444, 2 Con. Surr. 183.

''If the transfer of the deposit necessarily depends upon and
involves the law of New York for its exercise, or, in other words,
if the transfer is subject to the power of the state of New York,
then New York may subject the transfer to a tax." United States v.

862 STATUTES ANNOTATED. [N. Y. St.

Perkins, 163 U. S. 625, 628, 629; McCullough v. Maryland, 4 Wheat.
316, 429. But it is plain that the transfer does depend upon the
law of New York, not because of any theoretical speculation concern- •
ing the whereabouts of the debt, but because of the practical fact
of its power over the person of the debtor. The principle has been
recognized by this court with regard to garnishments of a domestic
debtor of an absent defendant. Chicago, Rock Island & PacificRy.
Co. V. Sturmy 174 U. S. 710. See Wyman v. Halstead, 109 U. S.
654. What gives the debt validity? Nothing but the fact that
the law of the place where the debtor is will make him pay. It
does not matter that the law would not need to be invoked in the
particular case. Most of us do not commit crimes, yet we never-
theless are subject to the criminal law, and it affords one of the
motives for our conduct. So again, what enables any other than
the very creditor in proper person to collect the debt? The law of
the same place. To test it, suppose that New York should turn
back the current of legislation and extend to debts the rule still
applied to slander that actio personalis moritur cum persona^
and should provide that all debts hereafter contracted in New
York and payable there should be extinguished by the death
of either party. Leaving constitutional considerations on one
side, it is plain that the right of the foreign creditor would
be gone.

"Power over the person of the debtor confers jurisdiction, we
repeat. And this being so we perceive no better reason for deny-
ing the right of New York to impose a succession tax on debts
owed by its citizens than upon tangible chattels found within the
state at the time of the death. The maxim mohilia sequuntur per-
sonam has no more truth in the one case than in the other. When
logic and the policy of a state conflict with a fiction due to historical
tradition, the fiction must give way.

"There is no conflict between our views and the point decided
in the case reported under the name of State Tax on Foreign Held
Bonds, 15 Wall. 300. The taxation in that case was on the inter-
est on bonds held out of the state. Bonds and negotiable instru-
ments are more than merely evidences of debt. The debt is
inseparable from the paper which declares and constitutes it, by a
4;radition which comes down from more archaic conditions. Bacon
v. Hooker, 111 Mass. 335, 337. ' Therefore, considering only the
place of the property, it was held that bonds held out of the state
could not be reached. The decision has been cut down to its pre-

1911, c. 732.] NEW YORK. 863

cise point by later cases. Savings & Loan Society v. Multnomah
County, 169 U. S. 421, 428; New Orleans v. Stempel, 175 U. S. 309,
319 320.

"In the case at bar the law imposing the tax was in force before
the deposit was made, and did not impair the obligation of the
contract, if a tax otherwise lawful ever can be said to have that
effect. Pinney v. Nelson, 183 U. S. 144, 147. The fact that two
states, dealing each with its own law of succession, both of which the
plaintiff in error has to invoke for her rights, have taxed the right
which they respectively confer, gives no cause for complaint on
constitutional grounds. Coe v.Errol, 116 U. S. 517, 524; Knowlton
v. Moore, 178 U. S. 41, 53. The universal succession is taxed in
one state, the singular succession is taxed in another. The plaintiff
has to make out her right under both in order to get the money.
See Adams v. Batchelder, 173 Mass. 258." Per Holmes, J., in
Blackstone v. Miller, 188 U. S. 189, affirming In re Blackstone, 171
N.Y. 682,64 N.E. 1118, 69 N.Y. App. Div. 127, 74 N.Y. Suppl. 508.

Special Deposit.

The testator was a resident of Montana and died November 12,
1900, owning a debt against a resident of New York city. The tes-
tator had previously loaned money to a resident of New York who
gave a check during the last illness of the testator to the testator's
secretary in payment of the loan. The secretary deposited this
in a New York bank in a special account to the credit of the
testator.

The court holds that this account is subject to the New York
transfer tax although it has also paid a tax in Montana. The court
relies on the case Blackstone v. Miller, 188 U. S. 189. In re Daly,
182 N. Y. 524, 74 N. E. 1116, affirming 100 N. Y. App. Div. 373,
91 N. Y. Suppl. 858. (The opposite result would now be reached
under N. Y. St. 1911, c. 732.)

Deposit in Savings Bank.

A resident of Pennsylvania died holding certain deposits in sav-
ings banks in New York state and also in the hands of her legal
adviser here a certain sum of money, and also a bond for ten
thousand dollars secured by a mortgage on real estate in the city
of New York.

The court holds that as the money in the savings banks was under
the protection of the laws of New York it is subject to tax in New
York. In rg'Burr, 16 Misc. Rep. 89, 74 N. Y. St. 490, 38 N. Y.
Suppl. 811.

864 STATUTES ANNOTATED. [N. Y. St.

Deposit in Trust Company.

The cases cited below are not applicable to transfers which took
place after July 21, 1911, under N. Y. St. 1911, c. 732, which
exempted deposits of non-residents from the inheritance tax.

Money, the proceeds of a sale of stock in an Illinois corporation
owned by an Illinois corporation, deposited with a New York trust
company in New York where the funds lay at the death of the tes-
tator, is subject to the New York transfer tax. The court relies
on In re Houdayer, 150 N. Y. 37. In re Blackstone, 171 N. Y. 682,
affirming 69 N. Y. App. Div. 127; 74 N. Y. Suppl. 508, reversing
72 N. Y. Suppl. 59, affirmed Blackstone v. Miller, 188 U. S. 189,
23 S. Ct. 277.

The testator, a citizen of Illinois, made a deposit in a trust
company in New York and his estate paid the Illinois transfer tax.
The supreme court, however, sustains the levy of a tax by the
state of New York also.

"What gives the debt validity? Nothing but the fact that the
law of the place where the debtor is will make him pay. It does
not matter that the law would not need to be invoked in the par-
ticular case. Most of us do not commit crimes, yet we neverthe-
less are subject to the criminal law, and it affords one of the motives
for our conduct. So again, what enables any other than the very
creditor in proper person to collect the debt? The law of the same
place. To test it, suppose that New York should turn back the
current of legislation and extend to debts the rule still applied
to slander that actio personalis moritur cum persona, and should
provide that all debts hereafter contracted in New York and
payable there should be extinguished by the death of either
party. Leaving constitutional considerations on one side, it is
plain that the right of the foreign creditor would be gone.

"Power over the person of the debtor confers jurisdiction, we
repeat. And this being so we perceive no better reason for deny-
ing the right of New York to impose a succession tax on debts

1911, c. 732.] NEW YORK. 865

owed by its citizens than upon tangible chattels found within the
state at the time of the death. The maxim mohilia sequunter per-
sonam has no more truth in the one case than in the other. When
logic and the policy of a state conflict with a fiction due to his-
torical tradition, the fiction must give way." Per Holmes, J., in
Blackstone v. Miller, 188 U. S. 189, 23 S. Ct. 277, 47 L. Ed. 439;
affirming 171 N. Y. 682, 69 N. Y. App. Div. 127.

The court remarks that "no one doubts that succession to a
tangible chattel may be taxed wherever the property is found and
none the less that the law of the situs accepts its rules of succes-
sion from the law of the domicile, or that by the law of the domicile
the chattel is' part of a universitas and is taken into account again
in the succession tax there." The court holds that there is no
distinction for the purposes of taxation between the power to tax
chattels of a non-resident within the state and his rights in a deposit
in a trust company within the state. Blackstone v. Miller, 188
U. S. 189, 204, 23 S. Ct. 277, 47 L. Ed. 439; affirming 171 N. Y.
682, 69 N. Y. App. Div. 127.

Where a deposit is made in a trust company where it remains
fourteen months while the owner is seeking new investment, a
finding is justified that the property was not ''in transitu in such a
sense as to withdraw it from the power of the state." Blackstone
V. Miller, 188 U. S. 189, 203, 23 S. Ct. 277, 47 L. Ed. 439; affirming
171 N. Y. 682, 69 N. Y. App. Div. 127.

Money deposited by a non-resident in a New York trust company
is property within the state subject to the inheritance tax. "If
he had deposited in specie, to be returned in specie, there can be
no doubt that the money would be property in this state subject
to taxation. But, instead, he did as business men generally do,
deposited his money in the usual way, knowing that, not the same,
but the equivalent, would be returned to him upon demand. While
the relation of debtor and creditor technically existed, practically
he had his money in the bank and could come and get it when he
wanted it. It was an investment in this state subject to attach-
ment by creditors. If not voluntarily repaid, he could compel
payment through the courts of this state. The depositary was a
resident corporation, and the receiving and retaining of the money
were corporate acts in this state. Its repayment would be a
corporate act in this state. Every right springing from the deposit
was created by the laws of this state. Every act out of which
those rights arose was done in this state. In order to enforce

866 STATUTES ANNOTATED. [N. Y. St.

those rights, it was necessary for him to come into this state. Con-
ceding that the deposit was a debt ; conceding that it was intan-
gible, still it was property in this state for all practical purposes,
and in every reasonable sense within the meaning of the Trans-
fer Tax Act. {In re Romaine, 127 N. Y. 80, 89.)

"While distribution of the fund belongs to the state where the
decedent was domiciled, as such distribution cannot be made until
his administrator has come into this state to get the fund, possibly,
after resorting to the courts for aid in reducing it to possession,
the fund has a situs here, because it is subject to our laws. A
reasonable test in all cases, as it seems to me, is this: Where the *
right, whatever it may be, has a money value and can be owned
and transferred, but cannot be enforced or converted into money
against the will of the person owning the right without coming
into this state, it is property within this state for the purposes of a
succession tax. Thus the right in question is property, because
it is capable of being owned and transferred. It is within this
state, because the owner must come here to get it. It is subject
to taxation, because it is under the control of our laws. It has a
money value, because it is virtually money, or can be converted
into money upon demand. It is subject to a transfer tax, because
the passing, by gift or inheritance, of 'all property, or interest
therein, whether within or without this state, over which this
state has any jurisdiction for the purposes of taxation,' comes
within the expressed intention of the legislature." Per Vann, J.,
in In re Houdayer, 150 N. Y. 37, 40, 44 N. E. 718, 34 L. R. A.
235,55 Am. St. Rep. 642, reversing 3 N. Y. App. Div. 474, 38 N. Y.
Suppl. 323.

A deposit in a trust company by a non-resident in this state for
nearly two months before the date of the death of the testator is
subject to tax notwithstanding the contention that the deposit
was here temporarily for the purpose of investment only. In re
Myer, 129 N. Y. Suppl. 194.

Deposit with Broker,

The testator, a resident of Montana, had delivered to stock-
brokers $250,000 to margin stock transactions. The stock pur-
chased had been closed out and this sum was held by the brokers
subject to his further instructions as to buying stock or whatever
else he saw fit to do with it. The court holds that this relation
created an indebtedness the same as obtains between a bank and its

1911, c. 732.] NEW YORK. 867

depositors. In the technical sense it undoubtedly was a debt, but
within the authorities for purposes of taxation it is regarded as
money on account due to the depositor and subject to his order.
It was transferred as such to his estate, and is therefore taxable.
In re Daly, 100 N. Y. App. Div. 373, 91 N. Y. Suppl. 858.

(The opposite result would now be reached under N. Y. St. 1911,
c. 7S2.— Ed.)

Securities on Deposit.

The following cases are not applicable to transfers which have
taken place since July 21, 1911, under N. Y. St. 1911, c. 732.

The court remarks that two of the notes are made by residents
of New York and says that it is possible that they should be treated
differently, but that it does not seem to the court that the resi-
dence of the debtor can change the character of property or deter-
mine whether it is liable to an inheritance tax. In re Tiffany,
128 N. Y. Suppl. 106.

The intestate died in March, 1887, a resident of New Jersey,
leaving on deposit with a safe deposit company in New York for
safe keeping certain securities, and the court holds that this prop-
erty has neither passed by will nor been transferred by deed,
grant, sale or gift, nor passed by the intestate law of the state of
New York, and therefore it is not subject to the tax imposed by the
New York statute of 1885, chapter 483. In re Tulane, 51 Hun
213, 4 N. Y. Suppl. 36.

Bonds and stock held by a non-resident and deposited in a
trust company in New York are physically within the state of
New York and constitute property subject to taxation. They
were regarded as tangible assets and apparently as in the nature
of chattels. In re Whiting, 150 N. Y. 27, 29, 44 N. E. 715, 34
L. R. A. 232, 55 Am. St. Rep. 640, modifying 2 N. Y. App. Div.
590, 38 N. Y. Suppl. 131.

868 STATUTES ANNOTATED. IN. Y. St.

Where only Ground for Taxation that Stock Certificates are in State,
The court holds that stock in foreign corporations belonging to
a non-resident is not taxable in New York simply because the certifi-
cates were in the state of New York at the date of the death of the
testator. The 5tock of foreign corporations which formed part of
this estate were not property in the legal sense. The share certifi-
cates which the testator held represented interests which he
possessed in the corporations which issued them and the legal
situs of that species of personal property is where the corporation
exists or where the shareholder has his domicile. In re James,
144 N. Y. 6, 12, 38 N. E. 961, affirming 77 Hun 211, 27 N. Y.
Suppl. 288, 6 Misc. 206; In re Bishop, 82 N. Y. App. Div. 112, 81
N. Y. Suppl. 474, reversing 40 Misc. 64, 81 N. Y. Suppl. 252.
C/., however, Blackstone v. Miller, 188 U. S. 189, 23 Sup. Ct.
277, affirming In re Blackstone- 171 N. Y. 682, 64 N. E. 1118.
See also, St. 1911, c. 732.

Funds for Investment.

The decedent, a non-resident, three days before his death sent
one hundred thousand ($100,000) dollars to New York city for
the purpose of purchasing stock in a foreign corporation; and he
died before the transaction was completed. The court holds that
this money is not subject to the New York transfer tax. In re
Leopold, 35 Misc. Rep. 369, 71 N. Y. Suppl. 1032.

Insurance Policies,

The following cases under the old statute are still law under St.
1911, c. 732.

Where an insurance policy is issued by a New York corporation
on the life of a non-resident and the corporation has property
sufficient to pay the policy in the estate of the insured and has there
appointed an attorney to receive service ; where the policy had always
been kept within the state of the insured; where the insured died
there; and executors were appointed there and premiums were
paid there, the court holds that this is sufficient to distinguish the
case from Blackstone v. Miller, 188 U. S. 189.

The court says that in all cases where the tax has been imposed
at the domicile of the debtor, the creditor has been forced of neces-
*sity to go to that domicile for the collection of his tax, but as that
fact did not appear in this case it would be unreasonable to tax
the proceeds of this poUcy in New York. In re Gordon, 186 N. Y.
471, 474, 79 N. E. 722, 10 L. R. A. N. S. 1089, affirming 114 N. Y.
App. Div. 202, 99 N. Y. Suppl. 630.

1911, c. 732.] NEW YORK. 869

"In conclusion we might say that we are unable to contemplate
with a confidence born of great optimism the results which would
follow from the adoption and enforcement of the doctrine urged
by appellant. If the contract in this case is subject to the imposi-
tion of a transfer tax, then any contract of insurance issued to a
non-resident, passing to and held by his non-resident represen-
tatives or assigns, and being administered and enforceable in a for-
eign jurisdiction, whether in the state of Texas or California, or
in some foreign country, would afford the basis of taxation in this
state, provided only the policy was issued by a New York corpora-
tion and access could be obtained by the tax collector to its pro-
ceeds. No distance of domicile of the assured and his transferees
or beneficiaries, and no completeness of foreign jurisdiction over
administration and enforcement, and no lack of anticipation of
such a result upon the part of the assured, would be a bar to the at-
tempted application of the taxing power. It requires no great
imaginative processes to picture the limits and the disapproval
and friction to which this theory would lead if logically carried to
its full length.

"It was undoubtedly the intent of the legislature that the statute
under consideration should be liberally construed to the end of
taxing the transfer of all property which fairly and reasonably
could be regarded as subject to the same, and this court has un-
equivocally placed itself upon record in favor of construing the
statute in the light of such intent. But the proposition now pro-
pounded, if adopted, would lead far beyond any point which has
thus far been reached, and we do not believe that it would be wise
or practicable to adopt it. We can scarcely believe that the various
states and countries, which have so carefully and positively protected
their citizens holding policies of insurance issued by foreign cor-
porations from the burden and annoyance of being compelled to
go to distant forums for the purpose of enforcing their contracts,
would permit them to be subjected to a species of taxation based
upon an assumed necessity for resort to foreign courts which has
thus been obviated. We believe that if the policy being urged upon
us were adopted, the great business of insurance now being con-
ducted by corporations chartered and under the protection of the
state of New York would be subjected to new and unexpected em-
barrassment." Per Hiscock, J., in In re Gordon, 186 N. Y. 471,
483, 79 N. E. 722, 10 L. R. A., N. S. 1089, affirming 114 N. Y. App.
Div. 202, 99 N. Y. Suppl. 630.

870 STATUTES ANNOTATED. [N. Y. St.

The same result was reached in In re Abbett, 29 Misc. Rep. 567,
61 N. Y. Suppl. 1067; In re Horn, 39 Misc. Rep. 133, 78 N. Y.
Suppl. 979.

The mere fact that policies of insurance are in this state does
not make them subject to tax where they are on the life of a non-
resident and issued by a foreign corporation. In re Gibbs, 60 Misc.
645, 113 N. Y. Suppl. 939. The court follows In re Gordon, 186
N. Y. 471, 79 N. E. 722, 10 L. R. A., N. S. 1089.

Mortgages Held hy Non-resident on New York Real Estate.

Bonds owned by a non-resident secured by mortgages on land
in New York are not subject to tax in New York, In re Fearing,
200 N. Y. 340, 93 N. E. 956, affirming 123 N. Y. Suppl. 396, relying
upon In re Bronson, 150 N. Y. 1, 44 N. E. 707, 34 L. R. A. 238, 55
Am. St. Rep. 632.

Under N. Y. St. 1887, personal property of a non-resident of
New York consisting of bonds secured by a mortgage on real
estate in New York is not exempt as the property has enjoyed the
protection "afforded by the laws of the state" and must pay,
as the condition upon which the privilege of allowing it to pass is
granted, the tax by law. In re Clark, 29 N. Y. St. 650, 9 N. Y.
Suppl. 444, 2 Con. Surr. 183.

The testator was a resident of New Jersey possessed of certain
bonds and mortgages, the latter covering real estate in New York.
The court holds that there is no tax assessable in New York, fol-
lowing In re Bronson, 150 N. Y. 1, 44 N. E. 707. In re Preston,
75 N. Y. App. Div. 250, 78 N. Y. Suppl. 91, affirming 37 Misc. 236,
75 N. Y. Suppl. 251.

(The opposite result would now be reached under N. Y. St. 1911,
c. n2.—Ed.)

Railroad in Several States.

Under N. Y. St. 1911, c. 732, stock in domestic corporations
owned by non-residents is not taxable.

Where a non-resident held stock in a New York railroad cor-
poration it was claimed that the tax should be only upon that
proportion of its value which represents the proportion of the
capital and assets of the company employed within the state of
New York. That where it appeared that only sixty-four per cent
of the capital was invested in the state of New York, it is argued
that the appraisal of the value of the stock should have been pro-
portionately less. The court holds, however, that the market

1911, c. 732.] NEW YORK. 871

value of the stock may or may not represent proportionately the
actual value of the corporate properties. "That value, whatever
it may be in the market, is the worth attached to an interest in
the corporate assets and properties, regarded as a whole. A share
of capital stock represents the distinct interest which its holder
has in the corporation, and his right to participate in the distri-
bution of the net earnings of the corporation. They evidence the
extent of his proprietary interest and their assessment for taxa-
tion purposes must be upon that interest, and must be regarded
as an entity, and is unapportionable with reference to the situs of
the corporate properties. The tax imposed by the state upon the
transfer of such property upon the decease of its owner is not upon
the property which passes; it is upon the right of succession to it."
{In re Palmer, 183 N. Y. 238, 76 N. E. 16, affirming 102 N. Y.
App. 616.)

"The assessment of the stockholder, however, is computed upon
the value of his interest in the whole of the corporate property,
as evidenced by the number of the shares of stock which he
holds. Their market value may, or may not, represent, propor-
tionately, the actual value of the corporate properties. Very often
it does not and the market value of the shares of capital stock may
be quite disproportionately influenced by considerations, or by
circumstances, having little reference to actual conditions. That
value, whatever it may be in the market, is the worth attached to
an interest in the corporate assets and properties, regarded as
a whole. A share of capital stock represents the distinct inter-
est which its holder has in the corporation, and his right to partici-
pate in the distribution of the net earnings of the corporation, as
a going concern, or in that of its assets, upon a dissolution, is pro-
portionate to the number of shares which he holds. They evidence
the extent of his proprietary interest and their assessment for
taxation purposes must be upon that interest, regarded as an entity,
and is unapportionable with reference to the situs of the corporate
properties. The tax, imposed by the state upon the transfer of
such property, upon the decease of its owner, is not upon the
property which passes; it is upon the right of succession to it.
The Transfer Tax Act operates upon that general right to succeed
to the interest of the deceased in the corporation, and it is incon-
ceivable that the value of the interest, upon which the tax is com-
puted, is determinable by the location of the corporate properties."
Per Gray, J., in In re Palmer, 183 N. Y. 238, 241, 76 N. E. 16,
affirming 102 N. Y. App. Div. 616, 92 N. Y. Suppl. 1137.

872 STATUTES ANNOTATED. [N. Y. St.

In deciding that the stock in the Boston and Albany Railroad
was properly taxable in New York only for the amount which
represents the property in New York state, the court distinguishes
In re Palmer, 183 N. Y. 238, on the ground that it did not appear
in that case that the corporation had any other corporate existence
outside of New York.

The court suggests that there may be difficulties in appraising
the property of a railroad corporation to ascertain just what
property is in each state where it is incorporated. But the court
suggests that an apportionment based upon trackage or figures
drawn from the books or balance sheets of the company may
doubtless be easily reached which will be substantially correct,
and any inaccuracies of which when reflected in a tax of one per
cent will be inconsequential. In re Cooley, 186 N.Y. 220, 232, 78
N. E. 939, 10 L.R.A.N.S. 1010, reversing 113 N.Y. App. Div. 388.

"I see nothing in the statute which prevents us from paying
decent regard to the principles of interstate comity and from
adopting a policy which will enable each state fairly to enforce
its own laws without oppression to the subject. This result will
be attained by regarding the New York corporation as owning the
property situate in New York and the Massachusetts corporation
as owning that situate in Massachusetts, and each as owning a share
of any property situate outside of either state or moving to and
fro between the two states, and assessing decedent's stock upon that
theory. That is the obvious basis for a valuation if we are to leave
any room for the Massachusetts corporation and for a taxation
by that state similar in principle to our own without double taxa-
tion." Per Hiscock, J., in In re Cooley, 186 N. Y. 220, 228, 78
N. E. 939, 10 L. R. A. N. S. 1010, reversing 113 N. Y. App. Div.
388, 98 N. Y. Suppl. 1006.

Where a corporation has but a single corporate existence under
the laws of one state there is no difficulty in determining in such
a case that a shareholder in such a corporation has an interest in
all the corporate property wherever situated. But where stock
in the Boston and Albany Railroad, incorporated in several states,
is held by a non-resident, the sole jurisdiction of New York to assess
it is based upon the theory that it is held in the company as a
•^New York corporation. .

If the courts of New York hold that this stock is assessable at
its full value in New York, then the courts of Massachusetts
should also hold that it is assessable for its full value in Massa-

1911, c. 732.] NEW YORK. 873

chusetts, which would lead to great injustice as double taxation.
Double taxation is one which the courts should avoid whenever it
is possible within reason to do so. {Matter of James, 144 N. Y.
6, 11.) It is never to be presumed. Sometimes tax laws have
that effect, but if they do it is because the legislature has unmis-
takably so enacted. All presumptions are against such an impo-
sition. {Tennessee v. Whitworth, 117 U. S. 129.) In re Cooley,
186 N. Y. 220, 227, 78 N. E. 939, 10 L. R. A. N. S. 1010, reversing
113 N. Y. App. Div. 388, 98 N. Y. Suppl. 1006.

"The Boston and Albany Railroad Company is a consolidation
formed by the merger of one or more New York corporations and
one Massachusetts corporation. The merger was authorized and
the said consolidated corporation duly and separately created
and organized under the laws of each state. It was, so to speak,
incorporated in duplicate. There is but a single issue of capital
stock representing all of the property of the consolidated and dual
organization. Of the track mileage about five-sixths is in Massa-
chusetts and one-sixth in New York. The principal offices, in-
cluding the stock transfer office, are situated in Boston and there
also are regularly held the meetings of its stockholders and direc-
tors. The deceased was a resident of the state of Connecticut
and owned four hundred and twenty-six shares of the capital
stock, the value of which for the purposes of the transfer tax was
fixed at the full market value of $252.50 per share of the par value
of $100." Per Hiscock, J., in In re Cooley, 186 N. Y. 220, 223?
78 N. E. 939, 10 L. R. A. N. S. 1010, reversing 113 N. Y. App.
Div. 388', 98 N. Y. Suppl. 1006.

The testator, a resident of Illinois, died in 1902, and the court
holds that his interest in the New York Central Railroad Com-
pany, a New York corporation, is taxable under the New York
statute, following In re Bronson, 150 N. Y. 1. In re Palmer, 183
N. Y. 238, 240, 76 N. E. 16, aff'irming 102 N. Y. App. Div. 616,
92 N. Y. Suppl. 1137.

The court holds that where a railroad has lines indifferent
states the appraisal shall be apportioned on the basis of the total
mileage in each state and not on the mileage between terminals.
Branch lines are then taken into account as elements of value.
In re Thayer, 58 Misc. 117, 110 N. Y. Suppl. 751.

Stock in Domestic Corporations Owned by Non-residents.

Under St. 1911, c. 732, stock in domestic corporations owned by
non-residents is not taxable in New York.

874 STATUTES ANNOTATED. [N. Y. St.

Stock in a national bank doing business in New York owned by
a non-resident stockholder is subject to the transfer tax although
the certificate was out of the state at the death of the testator.
In re Gushing, 40 Misc. Rep. 505, 82 N. Y. Suppl. 795.

Where the testatrix, a resident of Connecticut, died leaving use
of certain stock in a New York corporation to her mother for life
and on her death to her niece, both the life tenant and the remainder-
man took their interest in the property as a matter of sovereign
favor. The life tenant cannot complain that the principal of which
she is entitled to the use is diminished by the tax, nor can the
remainderman resist the imposition of the tax upon the ground
that she may never come into possession of the property as she took
a vested indefeasible interest in the property. In re Bushnell,
172 N. Y. 649, 65 N. E. 1115, affirming 73 N. Y. App. Div. 325,
77 N. Y. Suppl. 4.

The testator, a non-resident, died in 1894 and distribution was
made under the direction of the probate court in Connecticut
where the testatrix Hved in 1895. In April, 1897, the comptroller
of the city of New York instituted a proceeding in the surrogate's
court for the determination of the tax on certain shares in a New
York corporation.

The court remarks that in the matter of Bronson, counsel did
not challenge the jurisdiction of the surrogate's court which im-
posed the tax and therefore the question was not considered by the
court. The surrogate's jurisdiction was given under N. Y. St. 1892,
c. 399, s. 10. The question may be determined by an answer to
the question. Had the court power to issue letters?

The court holds that this interest which the testator had in the
New York corporation must be held to the property within the
meaning of the word as used in the Code giving the surrogate's
court jurisdiction over estates for purposes of administration.
And hence, the surrogate's court has under section 10 of the inherit-
ance act jurisdiction to impose the tax. In re Fitch, 160 N. Y. 87,
43 N. E. 701, affirming 39 N. Y. App. Div. 609.

"The appellant further contends that the property in question
was not 'within this state,' according to the true meaning of the
statute, and the contention is supported by the argument that it
^ would be unreasonable to tax money found upon the person of a
non-resident who died while traveling in this state. We should
hesitate before applying the statute to any property casually
brought into the state for a temporary purpose, as by a visitor or

1911, c. 732.] NEW YORK. 875

traveler, but the record before us does not present such a case.
It might well be held that such property, although literally 'within
this state,' was not here in the sense meant by the statute, on
account of the transitory and accidental character of its presence
and the immediate custody of the owner. {Herron, Treasurer, v.
Keeran, 59 Ind. 472, 476.) Where, however, the money of a non-
resident is invested in this state, as it was by Mr. Romaine in the
bond and mortgage in question, and in the deposits made by him
in the savings banks, or where the property of a non-resident is
habitually kept, even for safety, in this state, we think that the
statute applies both in the letter and spirit. Such property is
within this state in every reasonable sense, receives the protection
of its laws and has every advantage from government, for the
support of which taxes are laid, that it would have if it belonged
to a resident.'* Per Vann, J., in In re Romaine, 127 N. Y. 80, 88,
27 N. E. 759, 12 L. R. A. 401, affirming 58 Hun 109.

Loans from and to Non-resident.

Loans from a resident of New Jersey to another resident of New
Jersey do not create a balance within the state of New York sub-
ject to the transfer tax, and the fact that in the inventory the
debtor is described as a banker who does business in New York
cannot vary the result, where no pass book or voucher was ever
delivered, and it does not appear that the decedent ever drew checks
upon the account or that it was to be repaid otherwise than
upon oral demand. In re Bentley, 31 Misc. Rep. 656, 66 N.
Y. Suppl. 95.

**By Will or Intestate Law" — Curtesy, Dower and Statu-
tory Rights of Surviving Spouse.

Curtesy.

The words ''intestate laws of this state" are defined by N. Y. St.
1911, c. 732, to include the curtesy or statutory rights of a husband
on the death of his wife.

Under the statute of 1905, chapter 360, section 220, the estate
by curtesy was not taxable. This estate is an ancient one arising
from the marriage relation and not by inheritance or from the wife's
estate and is not an incident to the wife's death and intestacy. In re
Starbuck, 137 N. Y. App. Div. 866, 122 N. Y. Suppl. 584, affirming
63 Misc. 156," 116 N. Y. Suppl. 1030.

Personal estate of a resident of New York who dies intestate

g76 STATUTES ANNOTATED. [N. Y. St.

leaving a husband and no descendants is not subject to the inherit-
ance tax as the estate devolves on the husband as a matter of law on
account of the marriage relation.

When a wife, a resident of the state, dies without a will, leaving
her husband and no descendants, there is no taxable transfer as the
husband takes by virtue of his marriage, and not by virtue of the
death of his wife.

To uphold the tax it must be found that the husband has taken
the property "by the intestate laws of this state" and the court
holds that the intestate laws refer simply to the statutes govern-
ing the distribution of the decedent's property. In re Green, 68
Misc. 1, 124 N. Y. Suppl. 863.

Dower Deducted.

The widow's dower became vested as an inchoate estate upon
her marriage and consummate upon the death of her husband inde-
pendent of the will and not by virtue thereof, and is therefore not
subject to the transfer tax. In re Weiler, 122 N. Y. Suppl. 608.

A will gave to the widow all the decedent's personal estate for
life and devised all the real estate to the executors under a trust to
dispose of it for the benefit of persons other than the widow. The
will contained no direction that the provision in favor of the widow
should be in lieu of doWer. Under the law the widow is not put
to her election as between dower and the provision by the will;
and therefore the value of the wife's dower since it is not taxable
should be deducted from the gross value of the lands for the pur-
poses of the inheritance tax. In re Shields, 68 Misc. 264, 124 N. Y.
Suppl. 1003; In re Riemann, 42 Misc. 648, 87 N. Y. S. 731.
Legacy in Lieu of Dower.

A legacy accepted in lieu of dower is subject to the inheritance tax,
as by the acceptance of the legacy the widow elected to take under
the will and release all claim to dower {In re Riemann, 42 Misc.
Rep. 648, 87 N. Y. Suppl. 731) although it was claimed that the
legacy was given for consideration. In re De Graaf, 24 Misc. Rep.
147, 53 N. Y. Suppl. 591, 2 Gibbons 516.
Statutory Exemptions.

. The husband's statutory rights on the death of his wife are
subject to tax under the act of 1911, c. 732.

The exemption to the widow of certain articles enumerated
under the New York statute renders them not subject to the
transfer tax whether the decedent died testate or intestate. This

1911, c. 732.] NEW YORK. 877

property is not to be included in estimating the value qf the estate
subject to tax. In re Page, 39 Misc. Rep. 220, 79 N. Y. Suppl. 382.
A husband claimed that a deduction should be made from the
estate of his wife of the exemptions enumerated in the New York
Code, section 2713, sub-division 3, of things which he would have
been entitled to had they existed, but as they did not exist he was
nevertheless entitled to receive their assumed cash value in lieu
of them, and that accordingly such value is no part of the estate
to be transferred under the will and subject to the tax. The
husband relied on In re Williams, 31 N. Y. App. Div. 617, 52 N. Y.
Suppl. 700, but the court decides that no such exemption should
be allowed as the tax law itself makes no provision for the deduc-
tion from the taxable estate of the value of articles which would
have been exempted for the use of husband or wife had such
articles existed, but which do not in fact exist. In re Libolt, 102
N. Y. App. Div. 29, 92 N. Y. Suppl. 175.

**In Contemplation of the Death."

Definition.

The words "in contemplation of the death" do not refer to that
general expectation which every mortal entertains, but rather
the apprehension which arises from some existing condition of body
or some impending peril. In re Baker, 178 N. Y. 575, 70 N. E.
1094, affirming 83 N. Y. App. Div. 530, 82 N. Y. Suppl. 390,
38 Misc. 151, 77 N. Y. Suppl. 170.

Gifts Inter Vivos.

The expression "in contemplation of death" does not refer simply
to a gift causa mortis^ but does include a gift inter vivos. In re
Palmer, 117 N. Y. App. Div. 360, 102 N. Y. Suppl. 236. In re
Price, 62 Misc. 149, 116 N. Y. Suppl. 283.

Good Faith the Test,

The court holds that "the rule may be stated to be that the
property transferred by gifts inter vivos is not taxable under the
provisions of the taxable transfer act unless made and received
with the intent and for the purpose of evading its provisions."
In re Spaulding, 163 N. Y. 60.7, 57 N. E. 1124, affirming 49 N. Y.
App. Div. 541, 549.

The court considers the evidence as to the good faith of the
transaction by which the grantor made a deed on trust to care
for the testator during his lifetime, in In re Thorne, 162 N. Y.
238, 56 N. E. 625, 44 N. Y. App. Div. 8, 60 N. Y. Suppl. 419.

878 STATUTES ANNOTATED. [N. Y. St.

The testator, at the age of eighty-three, gave his daughter
certificates of stock by transferring his certificates in writing on
the back and delivering them to the daughter; but the certificates
were never transferred on the books of the company and the
testator continued to receive the dividends and act as officer of
the company in question. The court finds that though the facts
are open to doubt that no fraud or bad faith appeared to the
surrogate, and his decision on that matter is therefore final and
no tax is therefore due. In re Bullard, 76 N. Y. App. Div. 207,
78 N. Y. Suppl. 491, affirming 37 Misc. 663, 76 N. Y. Suppl. 309.

Decedent Critically III.

Where the decedent was suffering from a chronic disease and ten
days before his death he sends for his attorney telling him that
he desired to make such a disposition of his property as would save
his son the nuisance of a will contest and executes deeds by which
he conveys all his real estate to his adopted son, this transfer is
subject to the inheritance tax. In re Price, 62 Misc. 149, 116
N. Y. Suppl. 283.

Where a woman seventy-nine years old was afflicted with
consumption from which she knew she could not recover and was
very weak, and made a transfer of property eight days before her
death, the court finds that this was made in contemplation of
death under the New York statute. In re Birdsall, 22 Misc. Rep.
180, 49 N. Y. Suppl. 450, 2 Gibbons 293.

Consideration. Transfer to Erect Monument.

A transfer of stock to transferees who agree as part of the con-
sideration to erect a monument is not subject to taxation as the
provision for a monument is considered part of the funeral expenses
and so not subject to the tax as ordinarily understood. In re
Edgerton, 158 N. Y. 671, 52 N. E. 1124, affirming 35 N. Y. App.
Div. 125, 54 N. Y. Suppl. 700. See further, as to gifts for a monu-
ment, post p. 895.

Payment of Annuity.

A transfer of stock to persons who in return agree to pay an
annuity to the transferor and to deposit the stock as security
with a trust company for the payment of the annuity is not a
transfer in contemplation of death subject to the inheritance tax.
In re Edgerton, 158 N. Y. 671, 52 N. E. 1124, affirming 35 N. Y.
App. Div. 125, 54 N. Y. Suppl. 700.

1911, c. 732.] NEW YORK. 879

Support.

A deed reserving to the grantor a right to reside on premises
and made in consideration of support is not in contemplation of
death and is not subject to the transfer tax. In re Hess, 187 N. Y.
554, 80 N. E. 1111, affirming 110 N. Y. App. Div. 476, 96 N. Y.
Suppl. 990.

To Relinquish Child.

Where the testator made an agreement with the mother of his
illegitimate child on consideration that the child should be sur-
rendered to him to give his property to the child on his death, the
property is not subject to the transfer tax on his death as this trans-
fer is by contract of bargain and sale, and such contract made in
1862 was not in contemplation of death and therefore it is not
subject to tax. In re Demers, 41 Misc. Rep. 470, 84 N. Y. Suppl.
1109.

As Property a Burden.

Where an old man, eighty-six years old, physically feeble but
mentally active, makes two gifts to his children of securities of
large amounts stating to them that his property is a burden to
him, that he intends to give it to them and will divide a part of
it at the present time, and where the securities are actually de-
livered and transferred to the donees, and the testator exercises
no control over them whatever, these gifts are not gifts in con-
templation of death within the meaning of the New York transfer
statute, in re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming
49 N. Y. App. Div. 541.

The court finds on the evidence that a certain gift of stock by
a husband in good health to his wife was not made in contempla-
tion of death where it appeared that he was gradually failing and
desired to be relieved from the cares of business. In re Graves,
52 Misc. 433, 103 N. Y. Suppl. 571.

For Convenience.

The testator was the president and the owner of nearly all the
stock in a corporation and it was his duty to sign all corporation
notes, drafts, checks and other papers, but this duty becoming
burdensome during his illness and he having been told by his
physician that when he recovered he would have to take a long
vacation, he expressed the desire that he might transfer his stock

880 STATUTES ANNOTATED. [N. Y. St.

to his wife, so that she could become a member of the company
at once and transact the business in his place. He did this, retain-
ing only one share for himself so that he might continue to be a
member of the company and have a right to vote at its meetings.
The court holds that this is not a transfer in contemplation of
death although the testator died within three weeks after the
transfer. The testator had a natural right to give this stock to
his wife and his wife took possession of it and voted upon it and^
the circumstances under which it was transferred show that his
death was not in mind in making the transfer. The fact that he
made a will on the same day was not evidence of the contemplation
of death except as a remote contingency. There is a strong dis-
senting opinion on the ground that the testator had been advised
to put his worldly affairs in order and that he was too weak to sign
the assignment and was at the time desperately ill, and that
positive evidence of an intention to evade the statute should not
be required. In re Mahlstedt, 67 N. Y. App. Div. 176, 73 N. Y.
Suppl. 818.

Heirs not Bound by Statement of Beneficiary.

The court holds that the heirs of the nephew are not bound by
his acts but have a right to rely upon the deed rather than upon
the will and that therefore they cannot be assessed for an inherit-
ance tax for the transfer of this real estate. In re Mather, 179 N. Y.
526, 71 N. E. 1134, affirming 90 N. Y. App. Div. 382; 85 N. Y.
Suppl. 657, 84 N. Y. Suppl. 1105, 41 Misc. 414.

Withholding Facts Evidence of Bad Faith.

Where the testator a few months before his death made with-
out consideration an assignment of all his property to his son, the
court on all the evidence and in view of the evasiveness of the son
-in answering questions holds that the assignment was taken on a
trust to carry out the will of the testator.

The court holds that the heirs are the only ones who have the
power of showing by direct evidence just the extent and nature of

1911, c. 732.] NEW YORK. 881

the trust and that a lack of evidence on this question shows that
the assignment was not made in good faith. In re Palmer, 117
N. Y. App. Div. 360, 102 N. Y. Suppl. 236.

Deeds Unrecorded and Undelivered.

Where the decedent made deeds of his farms and the deeds
remained unrecorded and in the possession of the grantor until his
death; that the insurance continued to be payable to the grantor
and he made contracts with the tenants; that the son continued
to reside on the home farm and work it; that the farms continued
to be assessed to the grantor who paid the taxes; that the crops
were mostly marketed at the grantor's warehouse, and the accounts
kept in his books, practically as though he owned them; that all
settlements with the tenants were made by the grantor, is evi-
dence sufficient to show that the transfer is within the statute as
intended to take effect only on death, hi re Jones, 65 Misc. 121,
120 N. Y. Suppl. 862.

Deeds not Delivered.

Where a testator signed certain deeds and other papers and
placed them in envelopes described as property of persons by whom
they were endorsed, and placed the envelopes in a box in a bank,
this property was still his for the purposes of the tax where he
received the income from it and treated it as his own during his
life. In re Sharer, 36 Misc. Rep. 502, 73 N. Y. Suppl. 1057. .

Deed Signed by Decedent under Contract hut not Delivered.

Where at the time of the decedent's death she was under contract
to sell lands in another state and left a conveyance thereof which
was delivered on the day after her death in consideration of the price
named in the contract, as the land was not subject to tax there is
no tax on its proceeds. In re Baker, 67 Misc. 360, 124 N. Y. Suppl.
827.

In Trust until Majority.

Where a trust deed was executed dated December 1, 1892,
directing the trustees to pay the net income to the guardian of a
certain grandson until his majority on December 3, 1895, when the
principal shall be paid to him, this was not subject to the inherit-
ance tax. In re Masury, 159 N. Y. 532, 53 N. E. 1127, affirming
28 N. Y. App. Div. 580.

882 STATUTES ANNOTATED. [N. Y. St.

Use Reserved to Grantor.

In 1901 the grantor transferred by deed all his real and personal
property in consideration of the grantee's services rendered and
to be rendered in trust nevertheless for the use and benefit of the
grantor during the term of his natural life, and at his death to
become the property of the grantee absolutely. There was a
collateral agreement to the effect that the grantor during his life
should have the right to use any portion of the properties men-
tioned. As the grantee never got full title the tax was assessable.
In re Skinner, 45 Misc. 559, 92 N. Y. Suppl. 972 (s. c. 106 N. Y.
App. Div. 217, 94 N. Y. Suppl. 144).

A grantor gave a trust transferring property described in trust
for his three sisters, reserving to himself certain powers, namely,
to direct the payment of the income to himself for life, or to such
other persons as he may designate in writing; to withdraw the
securities and secure others; to alter or amend the trust and add
property thereto and terminate the same at any time by a written
notice to a trustee.

The court holds that the donor has reserved during his life such
numerous and extensive powers over the property transferred as
to preclude the legitimate inference of an intention on his part that
they were to take effect in absolute possession or enjoyment before
his death. If a person intends in good faith to make an absolute
gift of his property during his life to others and thereby make a
provision for them which shall not be contingent upon the event
of his death, there is no prohibition in the act in that respect.
But in this case the trust deed did not constitute an absolute gift of
the grantor's property during his life. In re Bostwick, 160 N. Y. 489,
55 N. E. 208, affirming 38 N. Y. App. Div. 223, 56 N. Y. Suppl. 495.

Where the decedent deposited money in savings banks in trust
for his children these interests are identical with those passing by
a will. The decedent reserved to himself all of the rights of own-
ership in the interests until his death when he is presumed to have
intended that each trust shall come to an end and that the funds
shall revert to his estate if the beneficiaries do not survive him.
In re Barbey, 114 N. Y. Suppl. 725.

Where a testator has given personal property to a trust com-
pany in trust to pay the income from the fund to the use of the
testator during his natural life and upon his death to assign and
transfer the property to such person and in such shares as the tes-
tator should by his last will and testament or instrument in the

1911, c. 732.] NEW YORK. 883

nature thereof appoint, and in default of such appointment to the
next of kin of the testator, the court finds that this trust is not
irrevocable but that the deceased retained after its execution such
an interest or ownership as to render it taxable under the provi-
sions of the statute. The trust company never became owner of
the property and "a fair construction should be given to the statute
and not a forced or technical one. No opportunity should be given
parties to evade the statute and prevent the taxation of the prop-
erty fairly within its provisions and we are unable to give any
construction to the statute which will aid parties in the evasion of
the law." In re Ogsbury, 7 N.Y. App. Div. 71, 39 N.Y. Suppl. 978.

Remainders Taking Eifect on the Death of the Donor.

Where a trustee gives the income of his estate to beneficiaries
for life and the principal to them at his death, it is as to the principal
a transfer intended to take effect at the death, and hence subject
to the inheritance tax. In re Patterson, 127 N. Y. Suppl. 284.

The decedent in 1896 transferred a large amount of property to
one Crispell on an oral agreement that principal and income should
belong to Crispell, and that he could dispose of it at any time he
chose, but that the decedent was to have the income as long as he
lived, although the gift was to be absolute to Crispell. In 1897
the decedent made another gift to Crispell on a written agreement
that the decedent was to have for life such part of the net income
as he might wish, with power to the decedent to give his sister ten
thousand dollars out of the security transferred. The court holds
that under these agreements the testator reserved a life interest
to himself; that although possession of the securities was given
to the donee, this did not make him their absolute owner and the
donee during the donor's life held the securities in trust to pay the
income to the donor. The gift is therefore taxable under the trans-
fer act of 1896 as a transfer to take effect after the death of the
donor. In re Cornell, 170 N. Y. 423, 63 N. E. 445, modifying 66
N. Y. App. Div. 162, 73 N. Y. Suppl. 32.

Where the decedent transferred her property to trustees on
trust to collect the income and apply the same to her use during
her life, and after her death to divide and pay over the same and
the proceeds among her three nieces, reserving the power to modify
the instrument, the court holds that it is not important to deter-
mine whether the trust instrument was made in contemplation of
death. The real question is whether the remainders which the

884 STATUTES ANNOTATED. [N. Y. St.

nieces took were intended to "take effect in possession or enjoy-
ment" at or after the death of the donor. And the court holds that
it is quite clear that these nieces did take by an instrument intended
to take effect at or after the death of the donor. In re Green,
153 N. Y. 223, 47 N. E. 292, reversing 7 N. Y. App. Div. 339.

The decedent in 1893 transferred to his four daughters eleven
shares of stock in a certain company and the daughters on the
same day delivered to him an instrument reciting that he had
transferred the stock on condition that he is to receive all divi-
dends during his life ; and also on condition that he has the right
to vote upon the stock as though no transfer had been made. The
agreement further provided that it was not revocable, but to con-
tinue in full force until the death of the decedent. The court
holds that the two instruments being executed at the same time
must be construed together as a single instrument ; that the effect
of these was to transfer to the daughters the remainder in stock
after the donor's death reserving to the latter an estate for his life.
The court relying on In re Green, 153 N. Y. 223, holds that this
is a gift of remainder after the death of the donor and is taxable
as a transfer "intended to take effect in possession or enjoyment
at or after such death." In re Brandeth, 169 N. Y. 437, 62 N.
E. 563, 58 L. R. A. 148, reversing 58 N. Y. App. Div. 575, 69
N. Y. Suppl. 142. ^

Deposit in Trust,

A deposit in a savings bank in trust for another is taxable so
far as it represents deposits made by the decedent out of his own
funds, but not so far as it was contributed by a third party. In re
Rosenberg, 114 N. Y. Suppl. 726.

**Whenever ANY Person . . . shall Exercise a Power
OF Appointment.'*

Nature and Validity of Tax.

The court holds that the statute of 1897 does not attempt to impose
a tax upon property, but upon the exercise of the power of appoint-
ment. The beneficiary is compelled to resort to the will in order
to establish his rights, for the deed alone would not suffice. "The
privilege of making a will is not a natural or inherent right, but
one which the state can grant or withhold in its discretion. If
granted, it may be upon such conditions and with such limitations
as the legislature sees fit to create. The payment of a sum in

1911, c. 732.] NEW YORK. 885

gross, or of an amount measured by the value of the property
affected, may be exacted, or the right may be limited to one or more
kinds of property and withdrawn as to all others. The legis-
lature could provide that no power of appointment should be
exercised by will, or that it should be exercised only upon the pay-
ment of a gross or ratable sum for the privilege. It could exact
this condition, independent of the date or origin of the power. All
this necessarily flows from the absolute control by the legislature
of the right to make a will." Quoting In re Vanderbilt, 163 N. Y.
597, and In re Dows, 167 N. Y. 227. Per Vann, J., in In re Delano,
176 N. Y. 486, 491, 64 L. R. A. 279, 177 N. Y. 540, 69 N. E. 1122,
reversing 82 N. Y. App. Div. 147, 81 N. Y. Suppl. 762 (affirmed
suh nomine, Chanter v. Kelsey, 205 U. S. 466, 27 S. Ct. 550, 51
L. Ed. 882).

Governed by Law in Effect at the Exercise of the Power.

The testator died in 1885, and at the time of his death the trust
fund in question was not taxable under the collateral inheritance
law. The will created a power to leave by will which was executed
in 1899 when the trust funds were subject to the inheritance tax.

It was claimed that the execution of the power of appointment
related back to the will of the testator and that therefore everything
connected with the exercise of that power is to be regarded as
coming under the administration of the estate of the testator and
must be governed by the law in operation at that time and before
the passage of the amendment of 1897.

The court says that there was no complete vesting of an estate
in the children of the appointee under the power until that power
was exercised, and that the amount of the tax can only be deter-
mined after the execution of the power. The court holds that the
law cannot be applied with more certainty than by making the
tax relate to the date of the determination of the estate. In re
Vanderbilt, 163 N. Y. 597, 57 N. E. 1127, affirming 50 N. Y. App.
Div. 246, 63 N. Y. Suppl. 1079.

Tax Assessed on Present Value of Property Appointed.

Where a life tenant has power to appoint the remainder and
does so, the tax should be levied on the whole value of the property
transferred and not merely on the value of the remainder as assessed
under the will of the original testator. In re Tucker, 27 Misc.
Rep. 616, 59 N. Y. Suppl. 699.

886 STATUTES ANNOTATED. [N. Y. St.

Relationship to Donee of Power the Test.

The statute of 1897 renders the exercise of a power of appoint-
ment a transfer taxable under the act, and therefore the relation-
ship of the appointees should be considered for the purpose of the
inheritance tax as though the property to which the appointment
relates belonged absolutely to the donee of such power and
had been bequeathed or devised by such donee by will.
Therefore, the exercise of the power of appointment by devise
to lineal descendants of the donee who were collateral heirs of
the donee should be taxed at the rate of five per cent and not
of one per cent. In re Walworth, 66 N. Y. App. Div. 171, 72
N. Y. Suppl. 984.

Where Power Created by Grant, before the Existence of the
Inheritance Tax.

It is immaterial how the power is created, whether by will or
by deed, in considering the right to tax the exercise of the power.
In re Delano, 176 N. Y. 486, 493, 64 L. R. A. 279, 177 N. Y. 540,
69 N. E. 1122, reversing 82 N. Y. App. Div. 147, 81 N. Y. Suppl.
762, affirmed suh nomine^ Chanter v. Kelsey, 205 U. S. 466, 27 S. Ct.
550, 51 L. Ed. 882.

Notwithstanding the common law rule that the estate created by
the execution of a power takes effect as if created by the original
deed, for some purposes the execution of the power is considered
a source of title. The New York court found where the original
deed creating the power was executed before the passage of the
statute, but the power was executed by the will after the passage
of the statute, that the inheritance tax was properly levied. That
the will was effectual to transfer the estate was decided by the
New York court and its decision on the question was binding upon
the court of appeals. The supreme court says that it cannot say
that property has been taken without due process of law and that
the effect has not been to violate any contract right of the parties.
Chanler v. Kelsey, 205 U. S. 466, 27 S. Ct. 550, 51 L. Ed. 882
affirming In re Delano, 176 N. Y. 486, 64 L. R. A. 279, 177 N.
Y. 540, 69 N. E. 1122. (Holmes and Moody, JJ., dissenting, on
"the ground that this was a succession tax and it was plain
that there was no succession for it to operate upon, as the
property passed under the original deed and not under the ap-
pointment.)

1911, c. 732.] NEW YORK. 887

Power Created by Will before the Existence of the Inherit-
ance Tax.

The testator died in 1880, leaving real estate in trust to pay the
income to his son for life, and upon the death of the son the property
was to go as the son might by last will appoint. But in case the
son died intestate, then the property was to vest in his children.
And the will gave the trustee power of sale of the real estate which
was exercised during the life of the son and the proceeds invested
in stocks of corporations. The son died January 13, 1899, leaving
a will exercising the power. And the court imposed a tax on the
property parsing under this power of appointment both on the life
estates and on the remainders created by the will of the son.

The court holds that whatever be the technical source of title of
a grantee under a power of appointment, it cannot be denied that
in reality and substance it is the execution of the power that gives
the grantee the property passing under it. When the father
"devised this property to the appointees under the will of his son,
he necessarily subjected it to the charge that the state might impose
on the privilege accorded to the son of making a will. That charge
is the same in character as if it had been laid on the inheritance of
the estate of the son himself." . . . "Had the fund passed in
default of an exercise of the power of appointment, a very different
proposition would be presented." In re Dows, 167 N. Y. 227, 232,
60 N. E. 439, 52 L. R. A. 433, 88 Am. St. Rep. 508, affirming 60
N. Y. App. Div. 630 (affirmed suh nomine, Orr v.Gilman, 183 U. S.
278,. 22 S. Ct. 213, 46 L. Ed. 196).

The court finds that the New York court of appeals held that
it was the execution of the power of appointment which subjected
grantees under the statute to the transfer tax. This conclusion
is binding upon this court in so far as it involves a construction
of the will and of the statute. Even if the view of the New York
court was wrong, it was an error which the United States supreme
court has no power to review. Orr v. Gilman, 183 U. S. 278, 288,

888 STATUTES ANNOTATED. [N. Y. St.

22 S. Ct. 213, 46 L. Ed. 196, affirming In re Dow, 167 N. Y. 227,
60 N. E. 439, 52 L. R. A. 433, 88 Am. St. Rep. 508, affirming 60
N. Y. App. Div. 630.

It is quite immaterial that there was no statute imposing a
succession tax of any kind in force when the power was created.
That transfer is not taxed and the statute makes no effort to reach
it. It is the practical transfer through the exercise of the power by
will that is taxed and nothing else under N. Y. St. 1897. The
right of the legislature to impose a tax on the privilege of exercising
a power by will is not affected by the fact that no such tax was
imposed when the power was created. In re Delano, 176 N. Y.
486, 494, 64 L. R. A. 279, 177 N. Y. 540, 69 N. E. 1122, reversing
82 N. Y. App. Div. 147, 81 N. Y. Suppl. 762, affirmed suh nomine,
Chanler v. Kelsey, 205 U. S. 466, 27 S. Ct. 550, 51 L. Ed. 882.

The testator died in 1869 leaving property to his wife for life
with a power of appointment which she exercised by a will in 1900.
It is the exercise and not the creation of the power of appointment
which affects the transfer upon which the tax has been forced;
and hence the fund must for taxing purposes be regarded as having
passed from a life tenant to her appointee. In re Rogers, 172 N. Y.
617, 64 N. E. 1125, affirming 71 N. Y. App. Div. 461, 75 N. Y.
Suppl. 835.

The original testa tordied in 1877 leaving property in trust for a
life tenant with a power of appointment on her death. She died in
1899, and the court holds that under the amendment of 1897, the
property passing under her will in exercising the power is subject to
the tax. Inre Potter, 51 N. Y. App. Div. 212, 64 N. Y. Suppl. 1013.

Where Original Testator a Non-resident.

The testator died in Maryland, where his will was proved. He
left his property to trustees upon trust and gave a power of appoint-
ment. The donee of the power died in 1902, being a resident of
New York. He exercised the power by will, which was admitted
to probate in New York and subsequently in Maryland. There is
no transfer subject to tax in New York, as all of the assets are in the
state of Maryland held by trustees residing in Maryland under a
will of a citizen of Maryland pursuant to the laws of that state.
In re Thomas, 39 Misc. Rep. 136, 78 N. Y. Suppl. 981.

Where Donee is a Non-resident.

Where a testator died in 1870 a resident of New York, leaving a
will under which he gave his daughter a life estate with the power

1911, c. 732.] NEW YORK. 889

of appointment; and the daughter died in 1908, being a resident of
the state of Rhode Island, leaving a will by which she exercised the
power, no tax can be imposed under New York law, as the life tenant
in making her will exercised a privilege granted by the laws of her
own state and not by those of the state of New York. In re Fear-
ng, 200 N. Y. 340, 93 N. E. 956, affirming 123 N. Y. Suppl. 396.

The exercise of a power of appointment is under the statute of
1897 the basis for the tax, and where the grantor of the power was
a resident of New York but the donee of the power was a resident
of New Jersey, where it was exercised. The only privilege granted
by the state of New York was to permit the transfer of the property
and locate it in New York to pass to the appointees in accordance
with the provisions of the will probated in New Jersey ; and there-
fore the jurisdiction of the state of New York is limited to the prop-
erty situated in this state at the time of the death of the donee of
the power. In re Kissel, 65 Misc. 443, 121 N. Y. Suppl. 1088,
affirmed in 142 N. Y. App. Div. 934, 127 N. Y. Suppl. 1127.

Where Exercise of Power is Like Will.

Where the will makes a bequest to a life tenant with a power in
the life tenant, those who take on the exercise of this power exactly
as in the will take under the will of the original testator and hence
are not taxable if he died before 1885. In re Backhouse, 185 N. Y.
544, 77 N. E. 1181, affirming 110 N. Y. App. Div. 737, 96 N. Y.
Suppl. 466.

The testator died in 1890 leaving property in trust to a life tenant
and on her death to such children of a relative as she by last will
and testament shall appoint. The donee of the power died in 1903
exercising the power. It appears that there was a necessity for
exercising the power, that it cannot be treated as a nullity and that
therefore the transfer tax under the statute was properly assessed.
In re Cooksey, 182 N. Y. 92, 98, 74 N. E. 880. affirming 100 N. Y.
App. Div. 516, 91 N. Y. Suppl. 1091.

Where the testator died in 1869, giving property to his grand-
daughter subject to the exercise of a power of appointment, and
the power of appointment was exercised in favor of the grand:
daughter, the intent to exercise the power neither increased nor
diminished the estate of the granddaughter and did not affect in
any degree the value of her grandfather's gift. It did not affec-
tively transfer any property whatever, for she took from her grand-
father and nothing was added or taken away from the gift by the

890 STATUTES ANNOTATED. [N. Y. St.

exercise of the power through the will of her mother. The execu-
tion of the power left the title where it stood before and the result
was the same as if there had been no power to exercise. The
exercise of a power which leaves everything as it was before is a
mere form with no substance. The transfer tax is imposed upon
the right to succession or on the privilege of making a will and
thereby exercising the power of appointment.

The donee of the power exercised it over property belonging
to her as well as property derived from the grandfather, and the
court holds that the fact that the granddaughter accepted under
the will of the appointor property which belonged to her does not
prove that she accepted the title tendered by the appointment,
although both gift and appointment were made by the same in-
strument. The granddaughter could claim as a devisee of her
mother and disclaim as her appointee. In re Lansing, 182 N. Y.
238, 245, 74 N. E. 882, modifying 103 N. Y. App. Div. 596.

The testator died in 1892, leaving a will which created a trust
for the benefit of certain life tenants, and provided that on the
death of either leaving issue a share of the one so dying shall, unless
otherwise disposed of as directed by his last will, be held for the
use and benefit of his lawful issue. The life tenant died in 1905,
leaving a widow and four children surviving, and a will providing
for those children. The court holds that the surrogate should not
impose a transfer upon the children's share in the trust property
as they take their interests directly under the provisions of the
will of their grandfather and not by virtue of the exercise of the
power of appointment given their father. The father's will
only "otherwise disposed of" one-fifth of the property by giving
it to his wife and the balance went as provided in the will of the
grandfather. Instead of being benefited the interests of the chil-
dren were injured by the exercise of the power and therefore
they took under the will of their grandfather and their estate is
not subject to the transfer tax. In re Ripley, 192 N. Y. 536, 84
N. E. 574, affirming 122 N. Y. App. Div. 419, 106 N. Y. Suppl. 844.

Where the will of the donee of a power neither adds to nor takes
from any of the final beneficiaries the benefits which the will of
the donee of the power expressly conferred upon them, no inher-
itance tax can be assessed on this transfer. In re Spencer, 119
N. Y. App. Div. 883, 107 N. Y. Suppl. 543, affirming 91 Hun 141.

The testator died in 1892, leaving a share of his estate in trust
to another for life, and remainder on his death to his lawful issue,

1911, c. 732.] NEW YORK. 891

unless otherwise directed by the will of the life tenant. The life
tenant died exercising the power of appointment, and the court
holds that where the exercise of the power was to four of the
beneficiaries as named in the original will then no tax should be
levied on these four, as they took under the original will of the
testator; and that a temporary payment made to the tax com-
missioner by the trustees could be recovered back in part so as
to leave only the portion due. People v. Williams, 127 N. Y.
Suppl. 749.

Election to Take under Original Will Rather than under
Appointment.

Where a will creates a power of appointment to such issue of
the life tenant as she may by will appoint, and in case of failure
to appoint then to such issue absolutely, and she by will exercises
the power, the issue have a right to elect to take under the original
will instead of under the exercise of the power of appointment.
In re Lewis, 194 N. Y. 550, affirming 129 N. Y. App. Div. 905,
reversing 60 Misc. 643, on authority of In re Lansing, 182 N. Y.
238, and In re Haggerty, 194 N. Y. 550.

Where the donee of the power of appointment exercises that power
as provided by appointing to those to whom the property would
go under the will, on failure to exercise the power no transfer tax
should be collected on the exercise of the power, and an election
to take under the original will rather than under the power need
not be in any particular form and it is sufficient if it appears by
opposition to the imposition of a transfer tax. In re Chapman,
133 N. Y. App. Div. 337, 117 N. Y. Suppl. 679, affirming 61 Misc.
593, 115 N. Y. Suppl. 981.

The testator died in 1875, leaving a will which created a power
of appointment and in default of such appointment then over to
his daughters. The life tenant exercised the power in favor of
the daughter, who prior to the execution of that power had a
vested remainder in the property. The daughter renounced her
rights under the execution of the power and claimed under the
original will, and the court holds that her interest is not subject
to the inheritance tax. In re Haggerty, 194 N. Y. 550, 87 N. E.
1120, affirming 128 N. Y. App. Div. 479, 112 N. Y. Suppl. 1017.

Property Subject to a Power.

A will gave -a certain estate in trust to pay the income to the
wife for life, the remainder to the nephew; but the codicil gave

892 STATUTES ANNOTATED. [N. Y. St.

the wife power to appoint a portion of the estate given to the
nephew. From the interest of the nephew should be deducted the
value of the property over which the wife had the power of appoint-
ment. In re Field, 36 Misc. Rep. 279, 73 N. Y. Suppl. 512.

Vested Remainders.

Where the testator died in 1880, leaving real estate in trust to
pay the income to his son for life, and upon his death the property
shall vest absolutely in his children, as he may by will appoint;
and where the son by will appoints for life with vested remainders
over, these vested remainders are subject to taxation under the New
York statute of 1897. They are alienable, devisable and descend-
ible; therefore, they do not fall within the exception of the statute
and are subject to present taxation. In re Dows, 167 N. Y. 227,
233, 60 N. E. 439, 52 L. R. A. 433, 88 Am. St. Rep. 508, affirming
60 N. Y. App. Div. 630 (affirmed suh nomine, Orr v. Gilman,
183 U. S. 278; 22 S. Ct. 213, 46 L. Ed. 196).

Where Donee has Absolute Estate.

Where the testator gave property to his wife to be disposed of
as she might think proper without any remainder or trust being
created, this was an absolute estate to the wife and therefore on
her death without exercising her power there was no reason for
levying a tax on the heirs of the original testator. In re Lynn, 34
Misc. 681, 70 N. Y. Suppl. 730.

Direction to Pay Loan.

Where the donee of the power of appointment in her will gave a
direction to repay a loan heretofore made to her out of the fund
over which she exercised her power, this is a transfer to the creditor
and was taxable under the statute of 1897. In re Rogers, 172 N. Y.
617, 64 N. E. 1125, affirming 71 N. Y. App. Div. 461, 75 N. Y.
Suppl. 835.

When Interests Depend on Power.

Where under an original will and in default of the exercise of the
power the children will take an immediate and equal division of
the estate and under the power the property is given to a life tenant
^ for life and then to three of the four children named in the original
will, the children named must make title under the exercise of the
power of appointment and this is therefore subject to the inherit-
ance tax. In re Warren, 62 Misc. 444. 116 N. Y. Suppl. 1034.

911, c. 732.] NEW YORK. 893

The testator by will provided that her estate should pass to
trustees for her children for life and on the death of either of them
as they might by will appoint and in default of a will then to the
issue. The daughter bequeathed to her husband for life and
upon his death to her two children and the court says that as the
power of appointment was exercised by the life tenant and as it
was only in case of a failure to exercise the power that the remainder
vested in the children of the donee, they derived their title to the
property through the exercise of the power of appointment and not
directly under the will of the testator. In re Lowndes, 60 Misc.
506, 113 N. Y. Suppl. 1114.

Failure to Exercise Power.

The testatrix died in 1883 leaving the residue of her estate to
her husband with the right ot use and enjoyment during his life, and
giving him the right to dispose of the same on his death by will, and
that so much as might remain undisposed of at his death should pass
to two legatees named. The husband died in 1894, leaving a will
which directed his executors to distribute his wife's estate "accord-
ing to the provisions of her last will and testament." The court
finds that this was a refusal or renunciation of the power ; that the
legatees who took on the death of the husband therefore took under
the will of the wife and as she died before the inheritance tax in
1885, no tax was collectible on the estate. In re Langdon, 153 N. Y.
6, 9, 46 N. E. 1034, affirming 11 N. Y. App. Div. 220, 43 N. Y.
Suppl. 419.

Statute Ineffective over Interests in Default of Exercise of
Power.

The provision that the failure or omission to exercise the power of
appointment subjects the property to a transfer tax in the same
manner as if the donee of the power had owned the property and
devised it by will is ineffective, as where there is no transfer there
can be no tax; and a transfer made before the passage of the act
relating to transfers is not affected by it.

If it be assumed that a remainder interest in default of the execu-
tion of a power is contingent, nevertheless it is acquired under the
will of the testator and cannot be subject to tax when the testator
died before the imposition of a transfer tax. It then became a prop-
erty right in the remainderman which was just as sacred and just
as immune from any legislative attack as any other property right;

894 STATUTES ANNOTATED. [N. Y. St.

and where the power of appointment is not exercised no tax can
be laid upon it. In re Lansing, 182 N. Y. 238, 248, 74 N. E. 882,
modifying 103 N. Y. App. Div. 596.

No Defence that Tax Paid under Original Bequest Creating
Power.

The testator died in December, 1887, leaving a life estate with a
power of appointment in the life tenant. The life tenant died in
1904 after exercising the power, and the court holds that, although
all property was made subject to the tax under the will of the
original testator, still the exercise of the power of appointment
is taxable under the statute of 1897. The court holds that the fact
that the tax was erroneously assessed in 1888 on the whole in-
terest instead of merely on the life interest does not prevent the
collection of the tax on the exercise of the power of appoint-
ment. In re Buckingham, 106 N. Y. App. Div. 13, 94 N. Y.
Suppl. 130.

S. 221. [As amended by St. 1911, c. 732, in effect July 21, 1911.] Exceptions
and limitations. Any property devised or bequeathed for religious ceremonies,
observances or commemorative services of or for the deceased donor, or to any
person who is a bishop or to any religious, educational, charitable, missionary,
benevolent, hospital or infirmary corporation, wherever incorporated, including
corporations organized exclusively for Bible or tract purpose shall be exempted
from and not subject to the provisions of this article. There shall also be
exempted from and not subject to the provisions of this article personal prop-
erty other than money or securities bequeathed to a corporation or association
wherever incorporated or located, organized exclusively for the moral or mental
improvement of men or women or for scientific, literary, library, patriotic,
cemetery or historical purposes or for the enforcement of laws relating to chil-
dren or animals or for two or more of such purposes and used exclusively for
carrying out one or more of such purposes. But no such corporation or associa-
tion shall be entitled to such exemption if any officer, member or employee
thereof shall receive or may be lawfully entitled to receive any pecuniary
profit from the operations thereof except reasonable compensation for services
in effecting one or more of such purposes or as proper beneficiaries of its
strictly charitable purposes; or if the organization thereof for any such avowed
purpose be a guise or pretense for directly or indirectly making any other pecun-
iary profit for such corporation or association or for any of its members or em-
ployees or if it be not in good faith organized or conducted exclusively for one
or more of such purposes.

[See notes to the Act of 1885, c. 483, s. 1; 1887, c. 713; 1891, c. 215; 1892.
c. 169; 1892, c. 399, s. 2; 1896, c. 908, s. 221; 1898, c. 88; 1900, c. 723; 1901,
C.458; 1903, c. 41; 1905, c. 368; 1907, c. 204; 1908, c. 310; 1909, c. 62, s. 221;
1910, c. 600; 1910, c. 706; 1911, c. 732]

1911, c. 732.] NEW YORK. 895

Care of Cemetery Lot.

A bequest to a cemetery association of a thousand dollars, the
interest to be used for perpetual care of the testator's lot, is not
part of the funeral expenses. There is a distinction between
expenditures for a burial lot made by an executor in his discretion
and a bequest made by a decedent in his last will to a certain bene-
ficiary and for a certain specific purpose; and as cemetery associa-
tions are not specifically mentioned as being exempt, the transfer
is subject to tax. In re Fay, 62 Misc. 154, 116 N. Y. Suppl. 423.

Monument.

A monument is part of the funeral expenses. In re Edgerton,
158 N. Y. 671, 52 N. E. 1124, affirming 35 N. Y. App. Div. 125,
54 N. Y. Suppl. 700.

Municipal Corporations.

Under the New York statute of 1896 there was a material change
in the exemption law as to the property of public corporations.
The statute renders all property in the state taxable unless exempt
from taxation by law and in the next section specifies property of
a municipal corporation as exempt. Therefore a bequest to a
municipal corporation for a public library is exempt from the trans-
fer tax under the New York statute of 1896. In re Thrall, 157
N. Y. 46, 51 N. E. 4il.

The United States.

It is urged that the United States if regarded as a corporation
is a corporation exempt from taxation under the transfer tax, but
the exemptions in the statute apply only to domestic corporations,
and the United States is not a domestic corporation so far as the
state of New York is concerned. In re Merriam, 141 N. Y. 479,
484, 36 N. E. 505, affirmed in United States v. Perkins, 163 U. S. 625.

"This tax, in effect, limits the power of testamentary disposition
and legatees and devisees take their bequests and devises subject
to this tax imposed upon the succession of property. This view
eliminates from the case the point urged by the appellant that to
collect this tax would be in violation of the well-established rule
that the state cannot tax the property of the United States. Assum-
ing this legacy vested in the United States at the moment of testa-
tor's death, yet in contemplation of law the tax was fixed on the
succession at the same instant of time. This is not a tax imposed

896 STATUTES ANNOTATED. [N. Y. St.

by the state on the property of the United States. The property
that vests in the United States under this will is the net amount
of its legacy after the succession tax is paid." Per Bartlett, J.,
in In re Merriam, 141 N. Y. 479, 484, 36 N. E. 505, affirmed in
United States v. Perkins, 163 U. S. 625.

"The legislation taxing legacies is not directed against the United
States nor against the legatees nor devisees who receive the benefit.
It operates against the person making the will because it limits his
power of testamentary disposition and it is well settled that it is
exclusively within the jurisdiction of the state to legislate upon and
regulate the general rights, duties and liabilities of its citizens."
In re Murphy, 4 Misc. Rep. 230, 25 N. Y. Suppl. 107.

The testator died February 28, 1892, leaving a bequest to the
government of the United States on certain conditions and the
court holds that as the tax is upon the right of succession and not
upon property, and that this bequest is subject to the New York
inheritance tax. In re Cullum, 5 Misc. Rep. 173, 25 N. Y. Suppl. 699.

Fund in Hands of Court.

The court reverses the order of the surrogate to the effect that
where a devise in trust for the purpose of founding a home for the
aged was made, the trust to last during two lives only, that the fund
after the end of the trust was in the hands of the supreme court
and therefore exempt from taxation. The appellate division
remarks that the fund is not a gift to the state and does not become
the property of the state ; that the omission of the testator to supply
a trustee after the two lives is supplied by the legislative interven-
tion, but that does not alter the character of the gift, nor give any
control over it for any purpose beyond that outlined by the will.
Furthermore, a gift to a municipality or to the United States is
chargeable with the deduction for the succession tax as either takes
the bequest subject to the same burden as an individual. Knight v.
Stevens, 72 N. Y. Suppl. 815, reversing In re Graves, 70 N. Y.
Suppl. 727.

Government Bonds.

See notes to the Acts of 1885, 1892 and 1897, ante, pp. 778, 815, 821.
- The tax imposed by the act of 1896 is a tax on the right of suc-
cession and not on property; and therefore it is immaterial that
the trust fund passing by will is invested in bonds of the state of
New York or incorporated companies liable to taxation on their

1911, c. 732.] NEW YORK. 897

own capital. In re Dows, 167 N. Y. 227, 230, 60 N. E. 439, 52 L. R.
A. 433, 88 Am. St. Rep. 508, affirming 60 N. Y. App. Div. 630
(affirmed sub nomine, Orr v. Giltnan, 183 U. S. 278, 22 S. Ct. 213,
46 L. Ed. 196).

Government bonds are not considered in arriving at the value
of the property which measures the taxable inheritance as the
language of the transfer act itself defines the words "estate" and
"property" to mean property passing from the testator over which
the state has jurisdiction for the purposes of taxation.

Government bonds, however, are equally responsible for debts
and expenses of administration with other property, and there is
therefore no reason for not requiring the government bonds to bear
their proportion of the debts and the expenses. The appraiser
in finding the amount of property subject to tax should deduct
only that proportion of the value of the bonds after deducting a
proportional share of the debts and expenses. In re Purdy, 24
Misc. Rep. 301, 53 N. Y. Suppl. 735, 2 Gibbons 527.

**For Religious Ceremonies." — Masses.

Bequests for masses are now exempt from taxation by a clause in-
troduced in St. 1910, c. 600, and continued in St. 1911, c. 732, s. 221.

The following cases before the statutory exemption are of interest.

The testator left a legacy of five hundred dollars to the execu-
tors in trust, to be used for masses for the repose of the soul of the
testatrix. The testatrix and her husband had expressed her
desire that such masses be celebrated by a certain priest named.
It was claimed that this was part of the funeral expenses, but the
court holds that this is a distinct legacy and cannot be considered
as part of the funeral expenses. The court finds the bequest to
be valid. That the beneficiary has designated as a wish on the
part of the testatrix to have a particular priest celebrate the masses
is equivalent to a direction and therefore the bequest is subject to
the inheritance tax. In re Black, 24 N. Y. St. 341, 5 N. Y. Suppl.
452, 1 Con. Surr. 477.

The will bequeathed to a priest, or in the event of his death to
his successors, the sum of $800 to be used in saying eight hundred
low masses, two hundred for each of four different persons. This
bequest is not specially exempted and is not a provision for funeral
expenses, and the low mass in no sense is a part of the funeral
service even so far as such masses were said for the testator.
In re McAvoy, 112 N. Y. App. Div. 377, 98 N. Y. Suppl. 437.

898 STATUTES ANNOTATED. [N. Y. St.

The testatrix left two legacies to churches for masses to be read
for the repose of her soul. It was claimed that the bequests were
taxable as under the rules of the Roman Catholic Church all be-
quests for masses go to the priest individually who says the masses
and do not go to the church as a religious or charitable body. This
statement was contradicted. The court holds that as the legacies
are bequeathed directly to religious bodies and as the provision for
masses is merely collateral and incidental they are therefore exempt
under section 221. In re Didion, 54 Misc. 201, 105 N. Y. Suppl.
924.

For Religious Use.

The testator bequeathed certain sums to be expended from time
to time for masses for the repose of her soul, and also for the repose
of the souls of her deceased parents, in the discretion of the execu-
tors. The court holds that a gift for the saying of masses for the
repose of the dead is a gift for religious use, and that therefore,
under the statute of 1893, chapter 701, there is a gift to the execu-
tors for a religious use upon a valid trust, and the transfer should
be taxed at the rate of five per cent. In re Eppig, 63 Misc. 613,
118 N. Y. Suppl. 683.

To Bishop.

This exemption covers a bequest made to an archbishop or cardi-
nal archibishop in his official capacity, as they are all bishops as
well as the religious and temporal heads of their church. The clear
intent and object of the law was to exempt the property held by
religious corporations, whether held in the name of the corporation
itself or in the name of one of the religious heads of the church or de-
nomination. In re Kelly, 29 Misc. Rep. 169, 60 N. Y. Suppl. 1005.

"To ANY Religious, Educational. Charitable, etc

Corporation."

Whether Retrospective.

The statute of 1900, chapter 382, rendered legacies to charitable
corporations subject to the transfer tax, but legacies to such cor-
T)orations are only taxable where the testators have died after the
passage of that act. In re Vanderbilt, 68 N. Y. App. Div. 27,
74 N. Y. Suppl. 450 (reversed on other points in 172 N. Y. 69),
citing In re Huntington, 168 N. Y. 399, 61 N. E. 643.

1911. c. 732.] NEW YORK. 899

New York statute of 1892, chapter 169, gave an exemption to
gifts to a bishop or religious societies. The court holds that this
exemption applies, whether the devise had become operative prior
to the operation of the act or subsequent thereto, and therefore
applied to a devise made by a testator who died in 1885, where
the tax had not been collected. Roman Catholic Church v. NileSy
86 Hun 221, 33 N. Y. Suppl. 243.

Construction of Exemption Statutes.

Statutes of exemption from taxation must be strictly construed
against the state where a tax imposed is not a common burden
but a special tax reaching only special cases. The rule is that to
subject such a class of persons requires a clear legislative intention.
In re Mergentime, 195 N. Y. 572, 88 N. E. 1125, affirming 129
N. Y. App. Div. 367, 113 N. Y. Suppl. 948.

Test of Exemption of Corporation.

The status of a corporation as to the inheritance tax should
be decided entirely by its charter and the law governing it, and
evidence to show what business it actually does is inadmissible.
In re White, 118 N. Y. App. Div. 869, 103 N. Y. Suppl. 688.
See, however. Matter of Mergentime, 129 N. Y. App. Div. 367,
113 N. Y. Suppl. 948, as to the test since the amendment of 1905.

In Trust for Exempt Society.

Where the testator makes a direct bequest in absolute form and
where it .appears that a valid parole trust was created enforceable
in equity in favor of certain religious corporations which were of
a class exempt under the statute, the bequest itself is exempt from
taxation. In re Murphy, 4 Misc. Rep. 230, 25 N. Y. Suppl. 107.

Failure to Claim Exemption.

A charitable legatee which was exempt from tax and was noti-
fied of the proceedings for appraisal, but which failed to claim an
exemption before the appraiser, to which no notice of assessment of
tax on its legacy was given, filed a petition more than sixty days
after the entry of the decree taxing its legacy, that the decree be
opened and modified. The court holds that notice should have
been given of the entry of the decree; that the petition is not an
appeal but is properly an application to the court to open and modify
its decree, which the surrogate court has discretion to do. In re
Rep. Daly, 34 Misc. Rep. 148, 69 N. Y. Suppl. 494.

900 STATUTES ANNOTATED. [N. Y. St.

Corporation to be Created.

Where a non-resident left an interest in an estate to a corpora-
tion to be created and no such corporation has ever been created,
no tax can be levied upon the gift. In re Chesebrough, 34 Misc.
Rep. 365, 69 N. Y. Suppl. 848.

The testator died July 21, 1896, and under the act of 1896, s. 220,
the court holds that a corporation to be organized under the testa-
tor's will for a home for the aged should be free of taxation. In re
Graves, 171 N. Y. 40, 63 N. E. 787, reversing 66 N. Y. App. Div.
267, 72, N. Y. Suppl. 815, 34 Misc. 677, 70 N. Y. Suppl. 727.

Incorporation in Several States.

Where one charitable corporation has only a single entity but is
incorporated in three states theoretically it must be said that there
is a distinct entity in each of three states, but the substance is the
same in all. It has a single body possessing the franchises and privi-
leges of a domestic corporation in three states. To say that the
bequest is to a foreign corporation merely because the testatrix
named the place where its principal ofhce is located as Boston,
Massachusetts, is to substitute form for substance. In re Lyon,
141 N. Y App. Div. 34, 128 N. Y. Suppl. 1004.

Particular Societies.

Almshouse. — Entrance Fee.

A certain home for aged men is free of taxation as an almshouse
where its charter provides that its object is the support of men who
are unable to support themselves, although one of the by-laws of
the organization provides an entrance fee to all those who are
admitted. In re Vassar, 127 N. Y. 1, 14, 27 N. E. 394, reversing
58 Hun 378, 12 N. Y. Suppl. 203.

Institutions to be exempt as an almshouse must be absolutely
free and all benefits must be given gratuitously. In re Vanderbilt,
10 N. Y. Suppl. 239, 2 Con. Surr. 319.

An institution for the blind which does not receive pay from
patients under any circumstances is exempt as an almshouse. In re
Underhill, 20 N. Y. Suppl. 134, 2 Con. Surr. 262.

A home for aged women which charges board is not an almshouse
and is therefore subject to the tax. In re Lenox, 9 N. Y. Suppl. 895.

The Baptist Home Society of New York requires a payment of
an admission fee of a thousand dollars and that all those who enter
shall make a will in its favor; and it is therefore not an almshouse

1911, c. 732.] NEW YORK. 901

and so is not exempt under the New York statute. In re Keech^
57 Hun 588, 11 N. Y. Suppl. 265.

Charity.

The New York Association for Improving the Condition of the
Poor which is a pure charity making no charge whatever is exempt
from taxation. In re Lenox, 9 N. Y. Suppl. 895.

Homes.

Under the statute of 1905, chapter 368, section 221, a home for
friendless children is exempt from the inheritance tax. In re
Higgins, 55 Misc. 175, 106 N. Y. Suppl. 465.

Hospitals.

Hospital corporations are expressly exempted by the present act.
Under New York statute of 1896, chapter 908, section 220,
imposing a tax on transfers to the persons or corporations not
exempt by law from taxation, the Buffalo General Hospital is
exempt from taxation as it is made exempt by general law. The
mere fact that religious corporations are referred to in the statute
of 1896, chapter 908, section 4, subdivision 7, does not confine
the exemption to religious corporations. In re Kimberly, 27 N. Y.
App. Div. 470, 50 N. Y. Suppl. 586.

The St. John's Riverside Hospital is a charitable institution whose
object is the maintenance and support of a hospital for indigent
patients and as such is an almshouse and so exempt under New
York law from the inheritance tax. In re Curtis, 25 N. Y. St.
1028, 7 N. Y. Suppl. 207, 1 Con. Surr. 471.

Under the statute of 1905, chapter 368, section 221, a bequest to
a corporation organized to carry on a general city hospital is exempt
from taxation. In re Higgins, 55 Misc. 175, 106 N. Y. Suppl. 465.

The Craig Colony for Epileptics organized to treat a class of
unfortunates is charitable and therefore exempt from taxation.
In re Moore, 66 Misc. 116, 122 N. Y. Suppl. 828.

Libraries.

A bequest of money to a memorial library association is subject
to the transfer tax under N. Y. St. 1896, c. 221, as amended by N. Y.
St. 1905, c. 368. N. Y. St. 1896, s. 220, as amended by N. Y. St.
1903, c. 41, gave a limited exemption of certain personal property
passing to educational, library or certain other corporations. The

902 STATUTES ANNOTATED. [N. Y. St.

Statute of 1905 transferred to the exempt class educational
corporations but retained in the limited exempt class library cor-
porations, and therefore they cannot be held to be entirely free
from the tax although a library association is educational. In re
Francis, 189 N. Y. 554, 82 N. E. 1126, affirming 121 N. Y. App.
Div. 129, 105 N. Y. Suppl. 643.

Under the statute of 1905, chapter 368, section 221, a public
library corporation is exempt from the transfer tax. In re Higgins,
55 Misc. 175, 106 N. Y. Suppl. 465.

Missionary Societies.

Under the present act a missionary society is exempt.

The Board of Foreign Missions of the Presbyterian Church was
subject to taxation. In re Board of Foreign Missions, 58 Hun
116, 33 N. Y. St. 789, 11 N. Y. Suppl. 310.

The missionary society of the Methodist Episcopal Church is
not a religious corporation and a legacy to it is subject to tax, where
the testator died after St. 1900, c. 382. In re Watson, 171 N. Y.
256, 63 N. E. 1109, reversing 70 N. Y. App. Div. 623, 36 Misc. Rep.
504, 73 N. Y. Suppl. 1058, 171 N. Y. 256.

A mission corporation organized for general mission purposes
is not a religious corporation and is not exempt from taxation.
In re White, 1.18 N. Y. App. Div. 869, 103 N. Y. Suppl. 688.

Museums.

The New York Art Museum is exempt under the New York
statute of 1905, c. 368, as an educational corporation. In re Mer-
gentime, 195 N. Y. 572, 88 N. E. 1125, affirming 129 N. Y. App. Div.
367, 113 N. Y. Suppl. 948.

This museum had been held subject to tax under the statute of
1885. See ante.

Prevention of Cruelty.

^^ Societies for the prevention of cruelty may well be exempt as
"benevolent" under the present act.

The Society for the Prevention of Cruelty to Children is not
wtthin the wholly exempt class as this is a corporation within the
partially exempt class "organized for the enforcement of laws
relating to children." In re Moses, 123 N. Y. Suppl. 443, modify-
ing and affirming 60 Misc. 637, 113 N. Y. Suppl. 930.

1911, c. 732.] NEW YORK. 903

The American Society for the Prevention of Cruelty to Animals
is not a charitable corporation, as its work is confined to animals
and not to human beings. As it is not expressly exempted from
taxation by its charter a legacy to is it subject to the New York
inheritance tax. In re Keith, 5 N. Y. Suppl. 201, 1 Con. Surr. 370.

Publication Societies.

The American Baptist Publication Society organized for the
purpose of promoting evangelical religion by means of the Bible,
prmting press, colportage, Sunday schools and other appropriate
ways is not a "charitable" corporation, as a person or corporation
seeking to advance the cause of religion only cannot be said to be
engaged in a charitable work in the ordinary sense in which that
term is used. In re McCormick, 127 N. Y. Suppl. 493. (The
society might, however, be benevolent under the present act. — Ed.)

Temperance.

The Woman's Christian Temperance Union falls within the class
of benevolent educational charitable corporations intended to be
exempt. In re Moore, 66 Misc. 116, 122 N. Y. Suppl. 828.

Young Men's Christian Association.

Under the present act a Young Men's Christian Association
might well be exempt as "benevolent" or "educational." The
Young Men's Christian Association is not a religious corporation
and hence a legacy to it is subject to tax under St. 1900, c. 382.
In re Watson, 171 N. Y. 256, 63 N. E. 1109, reversing 70 N. Y. App.
Div. 623, 36 Misc. 504, 73 N. Y. Suppl. 1058.

The Young Men's Christian Association and the Young Women's
Christian Association are "educational," and therefore not subject
to tax under section 221 of the tax law. In re Moses, 123 N. Y.
Suppl. 443, modifying and affirming 60 Misc. 637, 113 N. Y.
Suppl. 930. See, however. In re Fay, 37 Misc. Rep. 532, 76
N. Y. Suppl. 62; Young Men's Christian Association v. New York,
113 N. Y. 187, 21 N. E. 86.

S. 221 a. [As added by St. 1911, c. 732, In effect July 21, 1911] Rates of tax.
1. Upon a transfer taxable under this article of property or any beneficial inter-
est therein, of an amount in excess of the value of five thousand dollars to any
father, mother, husband, wife, child, brother, sister, wife or widow of a son, or
the husband of a daughter, or any child or children adopted as such in conformity
with the laws of this state, of the decedent, grantor, donor or vendor, or to any
child to whom any such decedent, grantor, donor or vendor for not less than ten

904 STATUTES ANNOTATED. [N. Y. St.

years prior to such transfer stood in the mutually acknowledged relation of a
parent, provided, however, such relationship began at or before the child's fif-
teenth birthday and was continuous for said ten years thereafter, or to any lineal
descendant of such decedent, grantor, donor or vendor born in lawful wedlock,
the tax on such transfer shall be at the rate of

One per centum on any amount in excess of five thousand dollars up to the sum
of fifty thousand dollars.

Two per centum on any amount in excess of fifty thousand dollars up to the
sum of two hundred and fifty thousand dollars.

Three per centum on any amount in excess of two hundred and fifty thousand
dollars up to the sum of one million dollars.

Four per centum on any amount in excess of one million dollars.

2. Upon a transfer taxable under this article of property or any beneficial
interest therein of an amount in excess of the value of one thousand dollars to any
person or corporation other than those enumerated in paragraph one of this sec-
tion, the tax shall be at the rate of

Five per centum on any amount in excess of one thousand dollars up to the sum
of fifty thousand dollars.

Six per centum on any amount in excess of fifty thousand dollars up to the sum
of two hundred and fifty thousand dollars.

Seven per centum on any amount in excess of two hundred and fifty thousand
dollars up to the sum of one million dollars.

Eight per centum on any amount in excess of one million dollars.

This section was formerly a part of St. 1896, c. 908, s. 221, and
was divided from that section by St. 1911, c. 732. See notes to
section 221, ante, p. 804. The graduated feature was first intro-
duced by St. 1901, c. 706, and the rates were materially reduced by
St. 1911, c. 732. As to the construction of the graduated tax see
notes to the act of 1910, c. 706, ante, p. 831.

Where No Next of Kin Appear.

The decedent died in New York a native of Sweden, and inquiry
failed to disclose his family or next of kin. The court holds that
on his death his personal property vested in a public adminis-
trator who was appointed, and his next of kin were entitled to the
property upon proving their relationship. No such person has
appeared and no such person has been found to be in existence.
There is the presumption, however, that he left next of kin, but
there is no presumption that he left a widow or descendants.
It is presumed, therefore, that the property vested in the next of
kin of the deceased and is therefore taxable under section 220 of
the tax law, and as it does not appear that it is exempt under sec-
tion 221 of the tax law the tax imposed by sub-division 6 of sec-
tion 220 applies, and it is taxable at the rate of five per cent.

1911, c. 732.] NEW YORK. 906

In re Lind, 132 N. Y. App. Div. 321, 117 N. Y. SuppL 49,
reversing

Assignment by Legatee.

Where the legatee assigns his legacy and the assignee does not
take from the testator for he did not give it to him, the assignee
took as assignee and not as legatee. Unless she took as assignee
she did not take at all. The legatees assigned to her and the rate
of taxation is fixed by their relation to the testator. As she did
not take through the will a succession tax cannot be fixed at the
rate as in the case of a bequest to the assignee but must be fixed
at the rate as in the case of a bequest to the original legatee. In re
Cook, 187 N. Y. 253, 259, 79 N. E. 991, reversing 114 N. Y. App.
Div. 718, 99 N. Y. Suppl. 1049.

Renunciation by Legatee.

The court finds that where a legacy is renounced by the legatee
that the tax should be at the rate at which a gift to the original
residuary legatees would have been imposed. In re Wolfe, 179
N. Y. 599, 72 N. E. 1152, affirming 89 N. Y. App. Div. 349, 85
N. Y. Suppl. 949.

Where One was Both Stepson and Nephew.

The court holds that if he had been included by name there
would be no doubt that he would be taxable as a stepchild. As a
stepchild he could not take under the statute and the will expressly
provides that the property shall go to the relatives of full blood
only, and therefore the respondent takes as a nephew as one of
the class as though he took under the statute of distribution.

The court says the transfer to the respondent was not made
because of his relationship is a stepson but as a nephew and
for the purposes of this case he must be treated solely as a
nephew. Inre Linkletter, 134 N. Y. App. Div. 309, 118 N. Y.
Suppl. 878.

906 STATUTES ANNOTATED. [N. Y. St.

**IN Excess of the Value of Five Thousand Dollars.''
Value of Estate the Test under the Act of 1896.

The following decisions were rendered under the act of 1896.
It seems that under the act of 1911 exemptions should be reckoned
by the value of each inheritance rather than the estate as a whole.
The minimum amounts of five hundred dollars and $10,000 under
the act of 1896 are reckoned by the amount of the whole estate
and not by the value of each share.

Where the estate of the intestate was valued at eleven thousand
dollars to be divided into thirds, the court holds that under the act
of 1896 a tax of five per cent should be imposed upon the share of
each niece and a tax of one per cent upon the shares of the brother
and sister; and the tax was challenged on the ground that the
aggregate amount to which the brother and sister are en-
titled is less than ten thousand dollars. It was contended that
one per cent could be imposed upon a sum passing to brothers
and sisters in the event only that the total amount passing
to them as a class is equal to the sum of ten thousand dollars
however large the estate may be. The court, however, follows
the construction given to N. Y. St. 1892, c. 399, ss. 2 and 22,
in In re Hoffman, 143 N. Y. 327. The court remarks that the
statute of 1896 is a re--enactment of the act of 1892, section 2
becoming section 21 of the latter act, and section 22 becoming
section 242. In re Corbett, 171 N. Y. 516, 64 N. E. 209, affirm-
ing 65 N. Y. App. Div. 124.

It is well settled that all legacies whether they are in excess of
five hundred ($500) dollars or not are taxable if the entire personal
estate exceeds the sum of ten thousand ($10,000) dollars. In re
Curtis, 31 Misc. Rep. 83, 64 N. Y. Suppl. 574.

As the aggregate of all personal property passing to the legatees
by will exceeds ten thousand ($10,000) dollars, it is subject to the
tax, although the value of the individual legacies is less than ten
thousand ($10,000) dollars. In re Birdsall, 22 Misc. Rep. 180,
49 N. Y. Suppl. 450, 2 Gibbons 293, following In re Hoffman, 143
N. Y. 327, 38 N. E. 311.

Where the amount of the estate is $663, of which $372 passes to
Sisters of the decedent and $291 to a nephew as the property
passmg from the decedent to taxable persons exceeded $500 in
value, the transfer to the nephew must be taxed. In re Rosendahl,
40 Misc. Rep. 542, 82 N. Y. Suppl. 992. The court remarks that

1911, c. 732.] NEW YORK. 907

the cases of In re Bliss, 6 N Y. App. Div. 192, 39 N. Y. Suppl.
875, and In re Conklin, 39 Misc. Rep. 771, 80 N. Y. Suppl. 1124,
have been reversed in In re Corbett, 171 N. Y. 516, 64 N. E. 209,
affirming 55 N. Y. App. Div. 124, 67 N. Y. Suppl. 46.

The testator died intestate October 25, 1903, leaving as his next
of kin one sister, two brothers and five nephews and a niece. The
whole estate was of the value of $10,122, of which one-fourth was
distributed to each of the brothers and sister and one-fourth to
the nephews and niece. The question was whether any tax was due
on the shares going to the brothers and sister. The Corbett case,
171 N. Y. '516, 64 N. E. 209, affirming 55 N. Y. App. Div. 124,
67 N. Y. Suppl. 46, would have been conclusive of this question,
but section 221 of the tax law was amended by the statute of
1903, chapter 41.

The court, however, holds that there is the same necessity for
resorting to the statutory definition of property given in sec-
tion 242 now as there was before the amendment of 1903, and that
the only effect of the amendment is that in estimating the value of
the property passing, real estate as well as personal property is to
be now included, and that property in section 221 is still to be con-
strued as it is defined in section 242. In re Fisher, 96 N. Y. App.
Div. 133, 89 N. Y. Suppl. 102.

Under the statute of 1895, sections 220, 221 and 242, a legacy
was given to an uncle of $337, and other property of $500
to the widow, and the court holds that the legacy to the
uncle although less than $500 considered in connection with
the legacy to the widow is worth more than $500; and as the
widow is not exempt from the operation of the law the legacy
to the uncle is subject to the tax. In re Garland, 88 N. Y. App.
Div. 380, 84 N. Y. Suppl. 630, reversing 40 Misc. 579, 82 N. Y.
Suppl. 989.

Where the testator died July 11, 1896, it was claimed that as
each of the legatees received less than $10,000 and were lineal
descendants their succession was not taxable. The court notes,
however, that In re Skillman, 10 Misc. Rep. 642, 32 N. Y. Suppl.
780, is not authority, as it is in conflict with the doctrine laid down
in In re Hoffman, 143 N. Y. 327, 38 N. E. 311. In re De Graaf,
24 Misc. 147, 53 N. Y. Suppl. 591, 2 Gibbons 516. The following
cases to the contrary have been overruled. In re Conklin, 39 Misc.
Rep. 771, 80'N. Y. Suppl. 1124; In re Bliss, 6 N. Y. App. Div. 192,
39 N. Y. Suppl. 875.

908 STATUTES ANNOTATED. [N. Y. St.

Discount for Delay in Payment.

Bequests of five hundred dollars each to several charitable insti-
tutions are exempt, as they are payable at the end of a year from
the date of the appointment of the executors, and the cash value
therefore is less than five hundred dollars. In re Underhill, 20
N. Y. Suppl. 134, 2 Con. Surr. 292, following In re Peck, 9 N. Y.
Suppl. 465, 24 Abb. N. Cas. 365, 2 Con. Surr. 201. Compare
In re De Graaf, 24 Misc. 147, 53 N. Y. Suppl. 591, 2 Gibbons 516.

Real Estate Considered.

The testator gave his sister personal property worth more than
$10,000 and real estate to the value of $6,500, and died in 1904.
In section 221 the words "real or personal property" are to be con-
strued as in section 220, and therefore the total of the property
both real and personal should be considered in fixing the exemption.
Therefore the tax on the value of the real estate should be collected
in this case. In re Hallock, 42 Misc. Rep. 473, 87 N. Y. Suppl. 255.

Power of Appointment.

The testator died in 1883, leaving a will applying property for
the use of his brother's widow for life, and on her death giving
her a power of disposal. She died in 1899, exercising the power of
appointment in favor of her son; and the court holds that under
the statute of 1897, chapter 284, section 220, of the tax act the
fund must be regarded for taxing purposes as having passed from
the mother to the son, the power of appointment being in itself a
transfer and the case is governed by section 221 and not by sec-
tion 220. It is therefore not subject to tax unless the transfer is
of the value of ten thousand ($10,000) dollars or more. In re
Seaver, 63 N. Y. App. Div. 283, 71 N. Y. Suppl. 544.

Tax on Entire Legacy if Any Taxable.

The decedent died August 6, 1910, a resident of New York,
leaving legacies to various children. The court holds tha;t a legacy
to a child of $700 is taxable at one per cent on the entire legacy and
not on the amount which exceeds $500 under section 220, sub-
division 1 and 7 and section 221. In re Mason, 69 Misc. 280, 126
N. Y. Suppl. 998.

"Husband of a Daughter."

This exemption applies to the widow, where the daughter has
died , and this even although the widower has married again before

1911. c. 732.] NEW YORK. 9Q9

the death of the testator. In re Ray, 13 Misc. Rep. 480, 35 N. Y.
Suppl. 481.

**Child . . . Adopted as Such."

The adoption does not need to be under the laws of New York.
A child legally adopted under the laws of Massachusetts,
who is taken into the testator's family at the age of two, is
treated as a son and stayed in the family for eleven years,
until the testator's death, is in the mutually acknowledged
relation of a parent.

The court says that experience teaches us that children of three
years recognize their parents and the court finds no difficulty in
concluding that the appellant recognized the testator as his father
and that the testator recognized him as an adopted son for more
than ten years. In re Butler, 58 Hun 400, 34 N. Y. St. 189, 12
N. Y. Suppl. 201.

"This boy was legally adopted, under laws substantially similar
to our own, so far as the mode of procedure is concerned, and
that is sufficient to answer the requirements of this law. More-
over, the deceased stood in the mutually acknowledged relation
of a parent to this appellant for eleven years and a half prior to
his death. No evidence of adoption is required by this portion
of the statute but mutual acknowledgment, and that is proven in
this case by all the facts and circumstances which cluster round
these parties from the commencement of their relation to • the
death of the testator. The appellant, from his earliest recollec-
tion, believed the testator to be his father, recognized him as such,
and knew no other, and the testator took him to his home as a
child and treated him in all respects as a son. Their relations
were parental, and their entire conduct was a mutual acknowledg-
ment of their relation. The child was taken in helpless infancy,
with no expectation of compensation for services. He was treated
as a son, and was obedient to his foster father, and dependent
upon him, and the statute requires no higher proof of mutual
acknowledgment. The word 'mutual' in this statute has no
abstruse signification. It means and required 'reciprocity of
action,' 'co-relation,* and 'interdependence,* and finds its
best illustration and application in the relation existing between
parents and children, which are always mutual." Per Dyk-
man, J., in In re Butler, 58 Hun 400, 34 N. Y. St. 189, 12
N. Y. Suppl. 201.

910 STATUTES ANNOTATED. IN. Y. St.

**MUTUALLY ACKNOWLEDGED RELATION OF A PARENT.''

See In re Butler, ante, p. 909.

Formal Adoption Unnecessary.

A person may stand in the mutually acknowledged relation of a
parent, although there has been no formal adoption. In re Stil-
well, 34 N. Y. Suppl. 1123. The court follows In re Butler, 58
Hun 400, 12 N. Y. Suppl. 201, and In re Spencer, 4 N. Y. Suppl.
395, and refuses to follow In re Hunt, 33 N. Y. Suppl. 256.

Blood Relations.

This language is not confined to blood relations. In re Beach,
154 N. Y. 242, 249.

Adults.

The fact that at the inception of the relationship the beneficiary
was an adult does not take the case out of the statute, although
the fact that the person claiming to stand in loco filice was an
adult when the alleged relationship had its inception may well
be regarded in considering the degree and sufficiency of the evidence.
In re Beach, 154 N. Y. 242, 249.

Parent Living.

Two stepdaughters of the testatrix had always been recognized
and treated like her own children. But the fact that the father
is still living prevents them from being recognized as such and
given an exemption and they are therefore taxable at five per cent.
In re Stebbins, 52 Misc. 438, 103 N. Y. Suppl. 563.

N. Y. St. 1905, c. 368, amended the tax as to persons standing
in the mutually acknowledged relation of a parent by inserting the
provision "provided also that the parents of such child shall be
deceased when such relationship commenced." Therefore legacies
to stepchildren are taxable unless the parents of the child were
dead when the relationship commenced. In re Wheeler, 115
N. Y. App. Div. 616, 100 N. Y. Suppl. 1044.

•^ Both parents must have been dead when the relationship com-
menced, to entitle an adopted child standing in the mutually ac-
knowledged relation of a parent to exemption. In re Harder,
124 N. Y. App. Div. 77, 108 N. Y. Suppl. 154.

1911, c. 732.] NEW YORK. 911

** Widow of a Son."

Under section 221 as amended by the statute of 1905, chapter
368, a "widow of a son" includes the widow of a deceased adopted
son of the testator. The court follows In re Cook, 187 N. Y. 253,
79 N. E. 991. In re Duryea, 128 N. Y. App. Div. 205, 112 N. y!
Suppl. 611.

Children of Adopted Child.

The question was raised whether the child of an adopted child
came within the class of legatees taxed at the rate of one per cent
or five per cent. The relation of an adopted child to the foster
parent is created by statute. Nature has nothing to do with it.
The question is therefore what relation was created by the statute
between the descendant and the adopted child and the foster
parent with reference to the subject of succession to property.

The court holds that where the statute gives an adopted child
the same legal relation to the foster parent as to a child of his body
that the relation extends to the heirs and next of kin of the child,
that the artificial relation was given the same effect as the actual
relation, and although the N. Y. St. 1896, c. 908, s. 221, does not
mention the heirs and next of kin of adopted children, still the
natural relation and the statutory relation are made one and the
same as to the devolution of property. Therefore these children
must be taxed at one per cent. In re Cook, 187 N. Y. 253, 261, 79
N. E. 991, reversing 114 N. Y. App. Div. 718, 99 N. Y. Suppl. 1.049.

The contrary result had been reached in the following cases.
In re Moore, 90 Hun 162, 35 N. Y. Suppl. 782; In re Bird, 32 N. Y.
St. 899, 11 N. Y. Suppl. 895, 2 Con. Surr. 376; In re Fisch, 34
Misc. 146, 69 N. Y. Suppl. 493.

Illegitimates.

The words exempting those who have stood in the mutually
acknowledged relation of parent are not confined to illegitimate
children. In re Nichol, 91 Hun 134, 36 N. Y. Suppl. 538; In re
Beach, 154 N. Y. 242, 48 N. E. 516.

Living with Foster Parent.

The circumstance that the parties lived together is important
to show the relation of a parent. So stepdaughters of a testatrix
who had lived with her for a long time and called her "mother"
were found to stand in the mutually acknowledged relation of

912 STATUTES ANNOTATED. [N. Y. St.

parent, while another stepdaughter who was married and did not
live with her did not come within that class, in In re Capron,
30 N. Y. St. 948, 10 N. Y. Suppl. 23. The mutually acknowledged
relation of parent was found to exist where the niece when twenty-
two years old had gone to live with her aunt, was a member of the
family for twenty-eight years, and always addressed her as "Auntie, "
and where during her residence there the niece married and with
her husband continued to live with her aunt, the testatrix, who
supported the household. In re Spencer, 4 N. Y. Suppl. 395, 1
Con. Surr. 208.

But mere living in the same house does not of itself prove the
parental relationship. The mere fact that the testator lived with
his sister and her children as one family, that the household ex-
penses were met out of a common fund to which each contributed,
and that the sister died, and from that time one of the children
had charge of the household affairs and they continued to live
together as one family down to the death of the testator, and that
the testator was very affectionate with his nieces, is not enough
to show the mutually acknowledged relation of a parent, as the
testator did not take them into his family and support and edu-
cate and maintain them. In re Moulton, 11 Misc. Rep. 694,
33 N. Y. Suppl. 578. Where a maiden aunt is in possession of a
farm as a housekeeper as- tenant in common with her adult nephews,
the acknowledged relation of parent was not found, in In re Sweet-
land, 20 N. Y. Suppl. 310. Where an aunt, a wealthy woman,
took care of her two infant nieces and charged them out of their
estate with all sorts of trivial expenses, the court finds that the
mutually acknowledged relation of a parent and child did not exist
under the statute of 1892, chapter 399. In re Birdsall, 22 Misc. Rep.
180, 49 N. Y. Suppl. 450, 2 Gibbons 293.

How Designated in Family.

The mere fact that a transferee is described in a will as "my niece
and adopted daughter" does not exempt her from the inheritance
tax. Further evidence of the mutually acknowledged relation
of a parent must be given. In re Fisch, 34 Misc. 146, 69 N. Y.
Suppl. 493.

»^The fact that the alleged foster parents and children addressed
each other by some other relationship is a circumstance tending
to show the parental relationship did not exist, though it is not
conclusive. In re Spencer, N. Y. Suppl. 395, Con. Surr. 208.

1911, c. 732.] NEW YORK. 913

The court holds that the mutually acknowledged relation of
parent did not exist where children lived with their uncle and
aunt and always referred to them as uncle and aunt, and the latter
referred to the former as niece and the terms father, mother or
daughter were never used. In re Deutsch, 107 N. Y. App. Div.
192, 95 N. Y. Suppl. 65. The court relies upon In re Davis, 98
N. Y. App. Div. 546, 90 N. Y. Suppl. 244.

Where a legatee was an orphan and had lived in the family of the
testator since the age of six years, and was always treated like one of
the family, she is one to whom the testator stood in the mutually
acknowledged relation of a parent, although she was designated
by the will as a "friend" and not a "daughter." In re Wheeler,
1 Misc. Rep. 450, 22 N. Y. Suppl. 1075.

The court sustains the finding that a niece stood in the "mutually
acknowledged relationship of a parent" to her uncle where it appears
that she had been in her uncle's family for thirteen years and sup-
ported by him although it also appears that she did not call her
uncle and aunt father and mother, nor did they call her daughter.
It was also objected that the uncle did not account to the niece
for the income received by him on her legacy under her grand-
father's will. It is urged that this shows that he assumed to set
off the expense of her support against such income. Where the
niece had been thirteen years in the family of her uncle supported
wholly at his expense before she had any property whatever, it
was natural that after the legacy had become payable to her the
uncle should think it wise to apply that income to give her greater
educational advantages than he felt himself able to afford. A
father might have done the same, even if we assume that without
authority from some court it would have been unjustified. In re
Davis, 184 N. Y. 299, 77 N. E. 259, reversing 98 N. Y. App. Div.
546, 90 N. Y. Suppl. 244.

Evidence.

The fact that the beneficiaries were taken into the family of the
testatrix in their infancy, were reared, educated and provided for
as children, were called by her name and adopted the same, and
were treated as her children, and that the testatrix spoke of and
to them as her daughters and furnished them on their marriage
with their wedding and outfit as is customary, is sufficient to bring
them within the words of the statute providing exemption where the
mutually acknowledged relation of parent exists. In re Nichol,
91 Hun 134, 36 N. Y. Suppl. 538.

914 STATUTES ANNOTATED. [N. Y. St.

The evidence showed the mutually acknowledged relation of a
parent in In re Lane, 39 Misc. Rep. 522, 80 N. Y. Suppl. 380.

Burden of Proof.

The burden is upon the one claiming an exemption as standing
in the acknowledged relation of a child to prove it. In re Davis,
98 N. Y. App. Div. 546, 90 N. Y. Suppl. 244.

**To ANY Lineal Descendant."

The words "lineal descendants" are restricted to descendants
of the ancestor and do not extend to collateral heirs. In re Smith,
5 Dem. Surr. (N. Y.) 90.

S. 222. Accrual and payment of tax. All taxes imposed by this article
shall be due and payable at the time of the transfer, except as herein otherwise
provided. Taxes upon the transfer of any estate, property or interest therein
limited, conditioned, dependent or determinable upon the happening of any
contingency or future event by reason of which the fair market value thereof
cannot be ascertained at the time of the transfer as herein provided, shall accrue
and become due and payable when the persons or corporations beneficially
entitled thereto shall come into actual possession or enjoyment thereof. Such
tax shall be paid to the state comptroller in a county in which the office of ap-
praiser is salaried and in other counties, to the county treasurer, and said state
comptroller or county treasurer shall give, and every executor, administrator
or trustee shall take, duplicate receipts from him of such payment as provided
in section two hundred and thirty-six.

[See notes to the act of 1885, c. 483, s. 4; 1892, c. 399, s. 3; 1896, c. 908, s.
222; 1897, c. 284, s. 3; 1899, c. 76; 1901, c. 173; 1905, c. 368.]

The tax accrues on the death of the testator, see ante, p. 803.

Taxes upon the Transfer of any Estate . . . Determin-
able upon the Happening of any Contingency or Future
Event.

This section of the statute has no application to vested remainders
after a life estate where they are absolute and not subject to be
divested or to fail in any contingency whatever. The present
value of these remainders is capable of ready computation by the
annuity tables, and they are therefore subject to present taxation.
In re Dows, 167 N. Y. 227, 233, 60 N. E. 439, 52 L. R. A. 433, 88
'Am. St. Rep. 508, affirming 60 N. Y. App. Div. 630 (affirmed sub
nomine, Orr v. Gilman, 183 U. S. 278, 22 S. Ct. 213, 46 L. Ed. 196).

Date for appraisal of contingent and remainder interests, see
ante, p. 820.

1909, c. 62.] NEW YORK. 915

Applies to Gifts Causa Mortis.

The court remarks that the rule that the will takes effect from
the death of the testator and that if the inheritance tax was in
force at the death of the testator then the tax should be collected
applies also to gifts causa mortis. In re Masury, 159 N. Y. 532,
53 N. E. 1127, affirming 28 N. Y. App. Div. 580.

S. 223. Discount and interest. If such tax is paid within six months
from the accrual thereof, a discount of five per centum shall be allowed and
deducted therefrom. If such tax is not paid within eighteen months from the
accrual thereof, interest shall be charged and collected thereon at the rate of
ten per centum per annum from the time the tax accrued; unless by reason
of claims made upon the estate, necessary litigation or other unavoidable cause
of delay, such tax cannot be determined and paid as herein provided, in which
case interest at the rate of six per centum per annum shall be charged upon such
tax from the accrual thereof until the cause of such delay is removed, after
which ten per centum shall be charged.

[See notes to act of 1885, c. 483, s. 4; 1887, c. 713; 1892, c. 399; 1896, c. 908,
s. 223; 1905, c. 368.]

Interest. — Delay.

The executor should not be charged with five per cent interest
upon the amount of the transfer tax on the estate upon the
ground that he should have had the tax assessed and paid within
six months after the death of the testator, where the testator died
October 10, 1896, and probate was issued February 3, 1897, and
the tax was assessed May 27, 1897. In re Sudds, 32 Misc. Rep.
182, 66 N. Y. Suppl. 231.

Ignorance of Law no Reason for Remitting Penalty.

Hardship resulting from ignorance of the law is no reason for
relieving from the ten per cent penalty provided by the New York
statute for non-payment of the tax. In re Piatt, 8 Misc. Rep.
144, 29 N. Y. Suppl. 396.

Litigation as Ground for Remitting Penalty.

Litigation over an estate is a proper ground for remitting the
penalty of six per cent for failure to pay the tax. In re Bolton,
35 Misc. Rep. 688, 72 N. Y. Suppl. 430.

Appeal.

A decree assessing taxes does not concern itself with the amount
of interest or penalty and therefore the penalty is not a proper

916 STATUTES ANNOTATED. [N. Y. St.

ground of appeal. If the penalty is to be remitted a special appli-
cation should be mad^ to the surrogate. In re De Graaf, 24 Misc.
147, 53 N. Y. Suppl. 591, 2 Gibbons 516.

S. 224. Lien of tax and collection by executors, administrators and
trustees. Every such tax shall be and remain a lien upon the property trans-
ferred until paid and the person to whom the property is so transferred, aad
the executors, administrators and trustees of every estate so transferred shall
be personally liable for such tax until its payment. Every executor, adminis-
trator or trustee shall have full power to sell so much of the property of the
decedent as will enable him to pay such tax in the same manner as he might
be entitled by law to do for the payment of the debts of the testator or intestate.
Any such executor, administrator or trustee having in charge or in trust any
legacy or property for distribution subject to such tax shall deduct the tax
therefrom and shall pay over the same to the state comptroller or county treasurer
as herein provided. If such legacy or property be not in money, he shall collect
the tax thereon upon the appraised value thereof from the person entitled thereto.
He shall not deliver or be compelled to deliver any specific legacy or property
subject to tax under this article to any person until he shall have collected the
tax thereon. If any such legacy shall be charged upon or payable out of real
property, the heir or devisee shall deduct such tax therefrom and pay it to the
executor, administrator or trustee, and the tax shall remain a lien or charge
on such real property until paid; and the payment thereof shall be enforced
by the executor, administrator or trustee in the same manner that payment of
the legacy might be enforced, or by the district attorney under section two hun-
dred and thirty-five of this chapter. If any such legacy shall be given in money
to any such person for a liniited period, the executor, administrator or trustee
shall retain the tax upon the whole amount, but if it be not in money, he shall
make application to the court having jurisdiction of an accounting by him,
to make an apportionment, if the case require it, of the sum to be paid into
his hands by such legatees, and for such further order relative thereto as the case
may require.

[See notes to the act of 1885, c. 483, ss. 4 and 7; 1887, c. 713; 1892, c. 399,
s. 5; 1896, c. 908, s. 224; 1901, c. 173; 1905, c. 368.]

Executor's Liability.

The liability to pay upon the executor is enforced by refusing
to allow him credit of such liability on his accounting unless he
produce the voucher required by the act. In re Jones, 5 Dem.
Surr. (N. Y.) 30.

Relying on Void Order.

^ The court holds that where executors have paid a legacy in good
faith relying upon a void order of the surrogate they are person-
ally liable. If the surrogate had no jurisdiction then it is difficult
to see how such decree could be a protection for anybody for any-

1909, c. 62.] NEW YORK. 917

thing done in pursuance thereof. In re Wolfe, 21 N. Y. Suppl.
522, reversing 15 N. Y. Suppl. 539.

Distribution to Beneficiaries under Decree of Court is no
Defence.

The fact that an administrator who was also the sole next of
kin had paid out the whole amount received under a decree on her
own account prior to the assessing of the tax is no excuse for non-
payment of the tax. In re Hacket, 14 Misc. Rep. 282, 35 N. Y.
Suppl. 1051.

Lien.

On Real Estate to be Sold.

Where the testator directs that real estate shall be sold for carry-
ing out the provisions of his will and paying debts and legacies
and the real estate is not specifically devised nor expressly charged
with the payment of any legacy, but formed a part of the testa-
tor's general estate, the court holds that under the statute of 1905,
chapter 368, section 224, no lien exists against the real estate.
The lien provided by this section attaches only to the fund to be
distributed or the particular property when it passes by specific
devise or bequest. Brown v. Lawrence Park Realty Co., 133 N. Y.
App. Div. 753, 118 N. Y. Suppl. 132.

On Mortgaged Real Estate.

''This Hen, however, was not paramount to the lien of the mort-
gage, which was in existence prior to the decease of the testatrix.
So far as the mortgagee is concerned, his rights could not well be
impaired by subsequent devolutions of the title and the creation
of liens associated therewith. The tax in question is not to be
assimilated with the general taxes which are imposed by public
authority, and which attach to property affected thereby as a
whole, and without discrimination with respect to particular
estates or interests therein. The right of the state in such cases
is always paramount. It is not concerned with the particular estates
or liens which affect the property, but, dealing with it as a whole,
imposes the tax, leaving it to the parties interested in the property
to secure, as between themselves, such an adjustment of the burden
as the circumstances of the case may seem to require. But in the
case of the transfer tax a different condition exists. It is imposed
upon the right of succession, and is levied upon successors in respect

918 STATUTES ANNOTATED. [N. Y. St

to the shares to which they succeed. In re Hoffman, 143 N. Y.
327, 331, 38 N. E. 311. In no sense, then, can the tax be deemed
to affect the interest of one who had a lien upon the property which
was paramount to the ownership of the testatrix, and therefore
superior to any estate or interest which the testatrix might assume
to create in the property." Per Beekman, J., in Kitching v.
Shear, 26 Misc. Rep. 436, 57 N. Y. Suppl. 464.

On the foreclosure of a mortgage where the mortgagor has died,
the lien of the transfer tax although subordinate to the mortgage
still cannot be wiped out as the statutes give the mortgagee no
right to make the state a party to the foreclosure proceedings;
and therefore the mortgagee cannot tender a title which a purchaser
is bound to take. The legislature should remedy this situation
which exists under the statute of 1892, chapter 399. Kitching v.
Shear, 26 Misc. Rep. (N. Y.) 436, 57 N. Y. Suppl. 464. [The diffi-
culty suggested in this case does not seem to be remedied as
y^t.— Ed]

On Real Estate Devised for Life with Remainder Over.

Where real estate was left to a life tenant with remainder to the
brothers and sisters who survived, with a contingent remainder
over, the court holds that the property is subject to a lien for the
payment of the whole lax, and that if there is no money forth-
coming to pay the whole tax, it is the duty of the executor to pay
it. And the court directs the sale of so much of the whole of that
property as may be necessary to raise the fund to pay the whole
tax. In re Wilcox, 118 N. Y. Suppl. 254.

S. 225. Refund of tax erroneously paid. If any debts shall be proven
against the estate of a decedent after the payment of any legacy or distributive
share thereof, from which any such tax has been deducted or upon which it has
been paid by the person entitled to such legacy or distributive share, and such
person is required by order of the surrogate having jurisdiction, on notice to
the state comptroller, to refund the amount of such debts or any part thereof, an
equitable proportion of the tax shall be repaid to him by the executor, adminis-
trator or trustee, if the tax has not been paid to the state comptroller or county
treasurer; or if such tax has been paid to such state comptroller or county
treasurer, such officer shall refund out of the funds in his hands or custody to
the credit of such taxes such equitable proportion of the tax, and credit himself
with the same in the account required to be rendered by him under this article.
If after the payment of any tax in pursuance of an order fixing such tax, made
by the surrogate having jurisdiction, such order be modified or reversed within
two years from and after the date of entry of the order fixing the tax, on due
notice to the state comptroller, the state comptroller shall, if such tax was paid

1909, c. 62.] NEW YORK. 919

in a county in which the office of appraiser is salaried, refund to the executor,
administrator, trustee, person or persons by whom such tax was paid, the
amount of any moneys paid or deposited on account of such tax in excess of the
amount of the tax fixed by the order modified or reversed, out of the funds
in his hands or custody to the credit of such taxes, and to credit himself
with the same in the account required to be rendered by him under this
article, or if paid in a county in which the office of appraiser is not salaried,
he shall by warrant direct and allow the county treasurer of the county to refund
such amount in the same manner; but no application for such refund shall be
made after one year from such reversal or modification, and the representatives
of the estate, legatees, devisees or distributees entitled to any refund under
this section shall not be entitled to any interest upon such refund, and the state
comptroller shall deduct from the fees allowed by this article to the county
treasurer the amount theretofore allowed him upon such overpayment. Where
it shall be proved to the satisfaction of the surrogate that deductions for debts
were allowed upon the appraisal, since proved to have been erroneously allowed,
it shall be lawful for such surrogate to enter an order assessing the tax upon the
amount wrongfully or erroneously deducted.

[See notes to the act of 1885, c. 483, ss. 10 and 12; 1892, c. 399, s. 6; 1896,
c. 908, s. 225; 1897, c. 284, s. 4; 1900, c. 382; 1901, c. 173; 1905, c. 368; 1907,
c. 323.]

Power of surrogate under this section to modify his own decree
and order the tax refunded, see post, p. 962.

What Law Governs.

The right to obtain a refund of a tax is governed by the law in
effect at the time that the proceeding is commenced and not .by
the law in force at the death of the testator. In re Coogan, 27
Misc. Rep. 563, 59 N. Y. Suppl. 111.

Appeal not a Prerequisite.

The executor does not need to appeal from the order assessing
the tax in order to avail himself of the refunding provisior of the
statute of 1896, chapter 908, section 225. In re Sherar, 25 Misc.
Rep. 138, 54 N. Y. Suppl. 930, 2 Gibbons 28.

Mistake of Law.

Where a widow by misconception of the law advanced the money
to pay more than was really chargeable to her and where the
property is sold for the tax she is subrogated to the rights of the
state and should be repaid what she has" erroneously paid with
interest at six per cent from the time of repayment. In re Wilcox,
118 N. Y. Suppl. 254.

920 STATUTES ANNOTATED. IN. Y. St.

Payment under Unconstitutional Statute.

Where a tax was collected under a statute declared void in
In re Pell, 171 N. Y. 48, the comptroller was obliged under N. Y.
St. 1896, c. 908, s. 225, as amended, to refund the taxes collected.
The court remarks: 'The tax in question was imposed and col-
lected by the state under color of a law that was absolutely void.
It was a void tax and not merely voidable for some irregularity
or error, and had no support except an unconstitutional statute.
Such a law is simply void. It confers no rights, imposes no duties,
confers no power, and in legal contemplation is as inoperative, for
any purpose, as if it had never been passed." Per O'Brien, J., in
In re O'Berry, 179 N. Y. 285, 287, 72 N. E. 109, affirming 91 N. Y.
App. Div. 3.

Temporary Payment.

A temporary payment of the account to the comptroller is de-
ductible from the amount finally due and if nothing be due then
it must be refunded, but it is not the concern of the appraiser or
the surrogate. In re Skinner, 106 N. Y. App. Div. 217, 94 N. Y.
Suppl. 144, modifying 92 N. Y. Suppl. 972.

Mandamus.

A mandamus is the proper proceeding to compel the state comp-
troller to make the refund. In re Coogan, 27 Misc. Rep. 563,
59 N. Y. Suppl. HI.

Interest.

As the state has promised to refund the tax the obligation to
refund money received and retained without right implies and
carries with it the right to interest, although section 225 makes
no mention of interest while section 256 relating to the repayment
of illegal or excessive taxes expressly provides for the payment of
interest. Interest should be reckoned at six per cent. In re
O'Berry, 179 N. Y. 285, 287, 72 N. E. 109, affirming 91 N. Y.
App. Div. 3; In re Wilcox, 118 N. Y. Suppl. 254.

Where a remainderman recovers taxes paid by his trustee under
an unconstitutional statute of 1899, chapter 76, he is entitled to
interest on the money recovered. The question of interest was
not discussed in In re Scrimgeour, 175 N. Y. 507, 67 N. E. 1089,
but it was necessarily involved in the order made in that case.
In re Wood, 91 N. Y. App. Div. 3, 86 N. Y. Suppl. 269, affirming
38 Misc. Rep. 64, 76 N. Y. Suppl. 967.

1909, c. 62.] NEW YORK. 921

Relief Denied to Perjurer.

Where a person was named as a life tenant in a will who really
was the owner of the property under a deed in his possession and
he testifies that he is only a life tenant and does not disclose his
ownership under the deed and pays the tax as life tenant, the
surrogate court eight years later refuses to allow a refunding of
the tax. In re Mather, 41 Misc. Rep. 414, 84 N. Y. Suppl. 1105.

Limitations.

The executor may make a motion for a refunding of part of the
transfer tax even after the end of two years provided by section
1290 of the Code of Civil Procedure. In re Sherar, 25 Misc. Rep.
138, 54 N. Y. Suppl. 930, 2 Gibbons 28.

An illegal tax was paid in November, 1895, and the law then in
force, the statute of 1892, gave the taxpayer five years in which
to apply for a refund of any part of the transfer tax. This period
had not expired when the statute of 1897, c. 284, went into effect,
apparently providing for an unlimited period in which to apply
for a modification or reversal of the original order, but required the
application for the refund to be made within one year after such
modification or reversal. N. Y. St. 1900, c. 382, limited the
period within which both the application for modification or
reversal and for a refund must be made. The taxpayer applied
to the surrogate in October, 1903, for an order, modifying the
original order, which fixed the transfer tax, and the court holds
that under section 6, article 7, of the state constitution "neither
the legislature, the canal board nor any person or persons acting
in behalf of the state shall audit, allow or pay any claim which,
as between citizens of the state, would be barred by lapse of time."
It therefore seems clear that the comptroller could not have
audited, allowed or paid this claim even if the two years' limi-
tation in the statute of 1900 did not apply. While it is to be
observed, moreover, that the statute of 1900, with its two years*
limitation, is to be treated as purely prospective, the same test
must be applied to the act of 1897 in which event the respondent
is relegated to the statute of 1892 with its five years' limita-
tion which had elapsed by more than three years before he sought
relief. In re Hoople, 179 N. Y. 308, 313, 72 N. E. 229, reversing
93 N. Y. App. Div. 486, 87 N. Y. Suppl. 842.

S. 226. Taxes upon devises and bequests in lieu of commissions.

If a testator bequeaths or devises property to one or more executors or trustees

922 STATUTES ANNOTATED. ' [N. Y. St.

in lieu of their commissions or allowances, or makes them his legatees to an
amount exceeding the commissions or allowances prescribed by law for an
executor or trustee, the excess in value of the property so bequeathed or de-
vised above the amount of commissions or allowances prescribed by law in
similar cases shall be taxable under this article.

[See notes to the act of 1885, c. 483, s. 3; 1887, c. 713; 1892, c. 399, s. 8; 1896,
c. 908, s. 227; 1905, c. 368. As to trustees' commissions see post, p. 952.]

S. 227. Liability of certain corporations to tax. If a foreign executor,
administrator or trustee shall assign or transfer any stock or obligations in this
state standing in the name of a decedent, or in trust for a decedent, liable to
any such tax, the tax shall be paid to the state comptroller or the treasurer of
the proper county on the transfer thereof. No safe deposit company, trust
company, corporation, bank or other institution, person or persons having in
possession or under control securities, deposits, or other assets belonging to or
standing in the name of a decedent who was a resident or non-resident, or
belonging to, or standing in the joint names of such a decedent and one or more
persons, including the shares of the capital stock of, or other interests in, the
safe deposit company, trust company, corporation, bank or other institution
making the delivery or transfer herein provided, shall deliver or transfer the
same to the executors, administrators or legal representatives of said decedent,
or to the survivor or survivors when held in the joint names of a decedent and
one or more persons, or upon their order or request, unless notice of the time
and place of such intended delivery or transfer be served upon the state comp-
troller at least ten days prior to said delivery or transfer; nor shall any such
safe deposit company, trust company, corporation, bank or other institution,
person or persons, deliver or transfer any securities, deposits or other assets
belonging to or standing in the name of a decedent, or belonging to, or standing
in the joint names of a decedent and one or more persons, including the shares
of the capital stock of, or other interests in, the safe deposit company, trust
company, corporation, bank or other institution making the delivery or transfer,
without retaining a sufficient portion or amount thereof to pay any tax and
interest which may thereafter be assessed on account of the delivery or transfer
of such securities, deposits or other assets, including the shares of the capital
stock of, or other interests in, the safe deposit company, trust company, cor-
poration, bank or other institution making the delivery or transfer, under the
provisions of this article, unless the state comptroller consents thereto in writing.
And it shall be lawful for the said state comptroller, personally or by repre-
sentative, to examine said securities, deposits or assets at the time of such
delivery or transfer. Failure to serve such notice or failure to allow such exami-
nation or failure to retain a sufficient portion or amount to pay such tax and inter-
est as herein provided shall render said safe deposit company, trust company,
corporation, bank or other institution, person or persons, liable to the payment
of the amount of the tax and interest due or thereafter to become due upon said
securities, deposits or other assets, including the shares of the capital stock of,
or other interests in, the safe depos'it company, trust company, corporation,
bank or other institution making the delivery or transfer and in addition thereto,
a penalty of not less than five or more than twenty-five thousand dollars; and
the payment of such tax and interest thereon, or of the penalty above prescribed.

1909, c. 62.] NEW YORK. 923

or both, may be enforced in an action brought by the state comptroller in any
court of competent jurisdiction.

[See notes to the act of 1885, c. 483, s. 11; 1892, c. 399, s. 9; 1896, c. 908,
s. 228; 1901, c. 173; 1902, c. 101; 1905, c. 368; 1908, c. 310.]

St. 1911, c. 736, would seem to have rendered a large portion of
this section inapt at the present time. There is, for example, now
no reason for requiring notice of the transfer of stock in domestic
corporations owned by non-residents. Possibly such provisions
have been repealed by implication by the act of 1911. This view
would seem to find favor from the ruling in Dunham v. City Trust
Co., noted post.

We are informed by the attorney for the tax commissioner that
the practice of his office is still to require notice as before.

Stock in a foreign corporation owned by a non-resident is
non-taxable and therefore the consent of the state comptroller
provided for by this section is not necessary to the transfer.
Dunham v. City Trust Co., 115 N. Y. App. Div. 584, 101 N. Y.
Suppl. 87.

S. 228. Jurisdiction of the surrogate. The surrogate's court of every
county of the state having jurisdiction to grant letters testamentary or of admin-
istration upon the estate of a decedent whose property is chargeable with any
tax under this article, or to appoint a trustee of such estate or any part thereof,
or to give ancillary letters thereon, shall have jurisdiction to hear and deter-
mine all questions arising under the provisions of this article, and to do any
act in relation thereto authorized by law to be done by a surrogate in other
macters or proceedings coming within his jurisdiction; and if two or more
surrogates' jourts shall be entitled to exercise any such jurisdiction, the surro-
gate first acquiring jurisdiction hereunder shall retain the same to the exclusion
of every other surrogate. Every petition for ancillary letters testamentary or
ancillary letters of administration made in pursuance of the provisions of article
seven, title three, chapter e ghteen of the code of civil procedure shall set forth
the name of the state comptroller as a person to be cited as therein prescribed,
and a true and correct statement of all the decedent's property in this state and
the value thereof; and upon the presentation thereof the surrogate shall issue
a citation directed to the state comptroller; and upon the return of the citation
the surrogate shall determine the amount of the tax which may be or become
due under the provisions of this article and his decree awarding the letters may
contain any provision for the payment of such tax or the giving of security
therefor which might be made by such surrogate if the state comptroller were
a creditor of the decedent..

[See notes to the act of 1885, c. 483, s. 15; 1892, c. 399, s. 10; 1896, c. 908
s. 229; 1901, c. 173, s. 4; 1905, c. 368.]

924

STATUTES ANNOTATED. [N. Y. St.

To Settle Exemptions.
Petition for Exemption.

An administrator's petition for an order of exemption is insuffi-
cient to support such an order where it relates only to the personal
property of the decedent and contains no proof that he did not die
seized of real estate liaole to taxation under the statute of 1903,
chap. 41. In re Collins, 104 N.Y. App. Div. 184, 93 N.Y. Suppl. 342.

Order of Exemption.

There is no provision in the tax law which expressly empowers
the surrogate's court to grant an order of exemption, but the order
may properly be made, however, in a proceeding to appraise the
estate in view of the language of section 229. In re Collins, 104
N. Y. App. Div. 184, 93 N. Y. Suppl. 342.

Notice to Comptroller.

Section 231 expressly requires that where there is an appraisal,
notice of the time and place thereof must be given to the state
comptroller and it would seem, therefore, that an order of exemp-
tion should be made only after notice to the state comptroller.
In re Collins, 104 N. Y. App. Div. 184, 93 N. Y. Suppl. 342.

S. 229. (As amended by St. 1910, c. 706.) Appointment of appraisers,
stenographers and clerks. The state comptroller shall appoint and may at
pleasure remove not to exceed six persons in the county of New York; three persons
in the county of Kings, and one person in the counties of Albany, Dutchess, Erie,
Monroe, Nassau, Oneida, Onondaga, Orange, Queens, Rensselaer, Richmond,
Suffolk and Westchester, to act as appraisers therein. The appraisers so
appointed shall receive an annual salary to be fixed by the state comptroller,
together with their actual and necessary traveling expenses and witness fees,
as hereinafter provided, payable monthly by the state comptroller out of any
funds in his hands or custody on account of transfer tax. The salaries of each
of the appraisers so appointed shall not exceed the following amounts: In New
York county, four thousand dollars; in Kings county, four thousand dollars;
in Erie county, three thousand dollars; in Westchester and Albany counties,
twenty-five hundred dollars; in Nassau county, two thousand dollars; in Queens,
Monroe and Onondaga counties, one thousand five hundred dollars; in Dutchess,
Oneida, Orange, Rensselaer, Richmond and Suffolk counties, one thousand
dollars. Each of the said appraisers shall file with the state comptroller his
Qath of office and his official bond in the penal sum of not less than one thousand
dollars, in the discretion of the state comptroller, conditioned for the faithful
performance of his duties as such appraiser, which bond shall be approved by
the attorney general and the state comptroller. The state comptroller shall
retain out of any funds in his hands on account of said tax the following amounts:

1909, c. 62.] NEW YORK. 925

First, a sum sufficient to provide the appraisers of New York county with six
stenographers, three clerks and an examiner of values, of Kings county with
three stenographers, and of Erie county with one clerk, appointed by the state
comptroller, whose salary shall not exceed fifteen hundred dollars a year each.
Second, a sum to be used in defraying the expenses for office rent, stationery,
postage, process serving and other similar expenses necessarily incurred in the
appraisal of estates, not exceeding ten thousand five hundred dollars a year
in New York county, and three thousand dollars a year in Kings county. Third,
a sum not exceeding ten thousand dollars to be used in defraying the expenses
for extra clerical and stenographic services in the transfer tax bureau of the
comptroller's office at Albany, during the period ending September thirtieth,
nineteen hundred and eleven.

[See notes to the acts of 1885, c. 483, s. 13; 1892, c. 399, ss. 11, 14; 1896,
c. 908, s. 230; 'l897, c. 284, s. 6; 1899, c. 76; 1900, c. 658; 1901, c. 173, s. 4;
1901, c. 493; 1902, c. 496; 1904, c. 758; 1905, c. 368; 1906, c. 567; 1907,
c. 709; 1908, c. 310; 1908, c. 312; 1908, c. 321; 1909, c. 283; 1909, c. 62,
s. 229; 1910, c. 706.]

Application to Appoint.

An application of the state comptroller upon a verified petition
setting forth every fact upon which the jurisdiction of the surro-
gate to act depended made upon information and belief is a proper
application to force the surrogate to appoint appraisers. Kelsey v.
Church, 112 N. Y. App. Div. 408, 98 N. Y. Suppl. 535.

Appointment Compelled by Mandamus.

Section 230 of the tax law that the surrogate shall appoint a
competent person as appraiser whenever occasion may require
is mandatory and he may be forced to appoint such an appraiser
by an application for a mandamus. Kelsey v. Church, 112 N. Y.
App. Div. 408. 98 N. Y. Suppl. 535.

Jurisdiction of Comptroller and Surrogate to Appoint.

The surrogate is bound to appoint as appraiser a person appointed
under the provision of the New York statute of 1900, chapter 658.
In re Sondheim, 69 N. Y. App. Div. 5, 74 N. Y. Suppl. 510, 66 N. Y.
Suppl. 726.

N. Y. St. 1896, c. 368, a. 10, ss. 229 and 234, provide for the
appointment of tax appraisers and tax assistants by the comp-
troller of the state. The court holds that these sections invest
the comptroller with absolute power of appointing and removing
such officials. The transfer tax assistants, however, are connected
with the administration of the surrogate's office and the statute
therefore plainly provides for the joint action of both officials and
selection and control of this clerk.

926 STATUTES ANNOTATED. [N. Y. St.

The surrogate's power, however, is limited to a recommendation,
and if the recommendation is not satisfactory the comptroller is
not compelled to accept it and make the appointment, and the posi-
tion remains vacant. Duell v. Glynn, 191 N. Y. 357, 84 N. E. 282,
affirming 122 N. Y. App. Div. 314, 56 Misc. 41, 106 N. Y. Suppl.
716.

Under the statute of 1896, section 230, the surrogate had juris-
diction to appoint an appraiser with or without a petition and of
his own motion whenever in the sound exercise of his discretion
he deems it proper to do so, in a case in which he is officially cog-
nizant of the fact that property has been transferred so as to be
subject to the tax. As the surrogate may of his own motion appoint
an appraiser without petition his authority is not limited because
the petition is presented by a competent person with allegations
made upon information and belief. In re O'Donohue, 44 N. Y.
App. Div. 186, 60 N. Y. Suppl. 690.

Removal of Appraisers.

The statute of 1900, chapter 658, authorized the removal of a
state transfer tax appraiser by the state comptroller without a
hearing and although there were no charges of incompetency or
misconduct against him. People v. Glynn, 128 N. Y. App. Div.
257, 112 N. Y. Suppl.-695.

S. 230. Proceedings by appraiser. In each county in which the office
of appraiser is not salaried the county treasurer shall act as appraiser. The
surrogate, either upon his own motion, or upon the application of any interested
person, including the state comptroller, shall by order direct the person or one of
the persons appointed pursuant to section two hundred and twenty-nine of
this article in counties in which the office of appraiser is salaried, and in other
counties, the county treasurer, to fix the fair market value of property of persons
whose estates shall be subject to the payment of any tax imposed by this article.

Every such appraiser shall forthwith give notice by mail to all persons known
to have a claim or interest in the property to be appraised, including the state
comptroller, and to such persons as the surrogate may by order direct, of the
time and place when he will appraise such property. He shall at such time and
place appraise the same at its fair market value as herein prescribed; and for
that purpose the said appraiser is authorized to issue subpoenas and to compel
the attendance of witnesses before him and to take the evidence of such witnesses
under oath concerning such property and the value thereof; and he shall make
report thereof and of such value in writing, to the said surrogate, together with
the depositions of the witnesses examined, and such other facts in relation thereto
and to said matter as the surrogate may order or require. Every appraiser,
except in the counties in which the office of appraiser is salaried, for which
provision is hereinbefore made, shall be paid by the state comptroller and after

1909, c. 62.] NEW YORK. 927

the audit of said state comptroller, his actual and necessary traveling expenses
and the fees paid such witnesses, which fees shall be the same as those now
paid to witnesses subpoenaed to attend in courts of record, payment to be made
out of funds in the hands of the county treasurer of the proper county on account
of the tax imposed under the provisions of this article.

The value of every future or limited estate, income, interest or annuity depend-
ent upon any life or lives in being, shall be determined by the rule, method and
standard of mortality and value employed by the superintendent of insurance
in ascertaining the value of policies of life insurance and annuities for the deter-
mination of liabilities of life insurance companies, except that the rate of interest
for making such computation shall be five per centum per annum.

In estimating the value of any estate or interest in property, to the beneficial
enjoyment or possession whereof there are persons or corporations presently
entitled thereto, no allowance shall be made on account of any contingent in-
cumbrance thereon, nor on account of any contingency upon the happening
of which the estate or property or some part thereof or interest therein might be
abridged, defeated or diminished; provided, however, that in the event of such
incumbrance taking effect as an actual burden upon the interest of the benefi-
ciary, or in the event of the abridgment, defeat or diminution of said estate or
property or interest therein as aforesaid, a return shall be made to the person
properly entitled thereto of a proportionate amount of such tax on account of
the incumbrance when taking effect, or so much as will reduce the same to the
amount which would have been assessed on account of the actual duration or
extent of the estate or interest enjoyed. Such return of tax shall be made in
the manner provided by section two hundred and twenty-five of this article.

Where any property shall, after the passage of this chapter, be transferred
subject to any charge, estate or interest, determinable by the death of any
person, or at any period ascertainable only by reference to death, the increase
accruing to any person or corporation upon the extinction or determination of
such charge, estate or interest, shall be deemed a transfer of property tajiable
under the provisions of this article in the same manner as though the person or
corporation beneficially entitled thereto had then acquired such increase from
the person from whom the title to their respective estates or interests is derived.

When property is transferred in trust or otherwise, and the rights, interest
or estates of the transferees are dependent upon contingencies or conditions
whereby they may be wholly or in part created, defeated, extended or abridged,
a tax shall be imposed upon said transfer at the highest rate which, on the
happening of any of the said contingencies or conditions, would be possible
under the provisions of this article, and such tax so imposed shall be due and
payable forthwith by the executors or trustees out of the property transferred;
provided, however, that on the happening of any contingency whereby the said
property, or any part thereof, is transferred to a person or corporation exempt
from taxation under the provisions of this article, or to any person taxable at
a rate less than the rate imposed and paid, such person or corporation shall be en-
titled to a return of so much of the tax imposed and paid as is the difference
between the amount paid and the amount which said person or corporation
should pay under the provisions of this article, with interest thereon at the rate
of three per centum per annum from the time of payment. Such return of
overpayment shall be made in the manner provided by section two hundred and
twenty-five of this article.

928 STATUTES ANNOTATED. [N. Y. St.

Estates in expectancy which are contingent or defeasible and in which pro-
ceedings for the determination of the tax have not been taken or where the
taxation thereof has been held in abeyance, shall be appraised at their full,
undiminished value when the persons entitled thereto shall come into the benefi-
cial enjoyment or possession thereof, without diminution for or on account of
any valuation theretofore made of the particular estates for purposes of taxation,
upon which said estates in expectancy may have been limited.

Where an estate for life or for years can be divested by the act or omission of
the legatee or devisee it shall be taxed as if there were no possibility of such
divesting.

The report of the appraiser shall be made in duplicate, one of which dupli-
cates shall be filed in the office of the surrogate and the other in the office of
the state comptroller.

[See notes to the acts of 1885, c. 483, s. 13; 1887, c. 713; 1892, c. 167; 1892,
c. 399, ss. 11, 12; 1896, c. 908, s. 231; 1897, c. 284, s. 6; 1899, c. 76; 1900, c.
658; 1901, c. 173, s. 5; 1902, c. 496; 1905, c. 368.]

Duty of Executor.

N. Y. St. 1887, c. 713, s. 13, makes it primarily the duty of the
executor to apply for an appraisement so that he may ascertain
and pay the tax; and the power given to the surrogate on his own
motion to cause appraisement to be made was not intended to
relieve the executor from his duty in the matter. Frazer v.
People, 3 N. Y. Suppl. 134, 6 Dem. Surr. 174.

Under the statute of 1885, chapter 483, the administrator was
under no duty or obligation voluntarily to aid the appraiser in any
manner whatever in making the appraisal ; and the court holds,
therefore, that the administrator was not guilty of any fraudulent
acts in failing to appraise the appraiser of certain claims belonging to
the estate. In re Smith, 14 Misc. Rep. 169, 35 N. Y. Suppl. 701.

Notice.

Notice to Comptroller.

A surrogate's decree producing an assessment made without
notice to the state comptroller and county treasurer in 1899 should
be vacated. In re Fulton, 30 Misc. Rep. 70, 62 N. Y. Suppl. 995.

An appraisal is irregular where the proof of service does not show
that the comptroller of the city of New York was notified of the
time and place of the appraisal. In re Bolton, 35 Misc. Rep. 688,

72 N. Y. Suppl. 430.

♦-

Notice to Heirs.

The district attorney sought to obtain an order for the payment
of the inheritance tax by the administrators, and they appeared

1909, c. 62.] NEW YORK. 929

in opposition as well as one of the heirs. It appeared that no
notice of the appraisement was given to an heir, although a condi-
tion of affairs might arise in which she would be personally liable
for the tax and could be compelled to pay it as a person who "had
received the property transferred."

The district attorney claimed that the tax must be paid and if
any part of it is shown to be illegal it might be refunded. But
the court holds that this would place an unjust burden upon the
estate; that the proceeding is fatally defective and that therefore
the tax assessed cannot be collected. The court set aside the report
of the appraiser and allowed an application to be made for a new
appraisal. In re Winter, 21 Misc. Rep. 552, 48 N. Y. Suppl. 1097.

It was claimed that an order affirming the appraisal was made
without notice. The court finds that it is sufficient that the
appraiser was duly appointed and that he gave notice as required
by law of the time and place the appraisal would be made. The
court says that the beneficiary had a right of appeal from the
decision of the surrogate. In re Miller, 110 N. Y. 216, 224, 18
N. E. 139, affirming 47 Hun 394.

On the Death of the Testator.

Propert}^ should in general be valued as of the date of the death
of the testator. In re Davis, 149 N. Y. 539, 547, 44 N. E. 185,
affirming 91 Hun 53.

The report of an appraiser is defective in not stating the value
of the property subject to tax on the date of the death of the
testator. ' In re Earle, 74 N. Y. App. Div. 458, 77 N. Y. Suppl.
503, affirming 71 N. Y. Suppl. 1038.

Where Executor Disclaims Property.

The surrogate has authority under the New York statute of
1892, chapter 399, section 11, to appoint an appraiser to appraise
property adjudged to be subject to the will of a deceased person
in an action between the heirs, although the executor had claimed
that it was not a part of the estate as it had been given to a certain
heir during the life of the decedent. In re Lansing, 31 Misc.
Rep. 148, 64 N. Y. Suppl. 1125.

Only Property of Taxable Beneficiaries Included.

It is the duty of an appraiser under the statute of 1885 to fix
the value only of property of persons taking by succession from

930 STATUTES ANNOTATED. [N. Y. St.

the decedent and the appraisers need not fix the value of the whole
estate of the testator. In re Jones, 5 Dem. Surr. (N. Y.) 30

Report to Subject After-discovered Property.

In a report in a proceeding to subject after-discovered property
to the payment of an inheritance tax, the report should clearly
express that it embraces all other property which may be taxed
at the date of the death of the testator. Where the surrogate
signs a report defective in this particular, he has authority to
vacate it and set it aside. In re Earle, 74 N. Y. App. Div. 458,
77 N. Y. Suppl. 503, affirming 71 N. Y. Suppl. 1038.

Postponement where Value of Property Unknown.

Where the real estate of the testator consisted almost entirely
of partnership property used in the prosecution of the lumbering
and tannery business, and where the actual value of such real
estate is dependent largely upon the manner in which it is con-
trolled, it is impracticable to ascertain the value of such interests
at present, but would seem to be a very proper case for post-
poning the assessment and collection of the tax to which the
same might be subject until the parties entitled come into actual
possession or enjoyment thereof. In re Wheeler, 1 Misc. Rep.
450, 22 N. Y. Suppl. 1075.

When Litigation over Title.

Where litigation is threatened over the title to certain property
it is proper not to impose a transfer tax upon it. In re Newcomb,
35 Misc. Rep. 589, 72 N. Y. Suppl. 58.

Evidence of Securities Owned.

The testimony of one hostile witness that ten years before the
death of the testator he was shown by the testator a box contain-
ing securities which the testator then stated amounted to $420,000,
and that five years prior to the death of the testator the witness
was taken to a safe deposit vault and shown a box of securities
which the testator stated were worth $700,000, which the witness
did not handle, estimate or count, is insufficient as a basis for
inheritance tax proceedings. In addition to this, accounts with
brokers and with a national bank showing considerable amounts
of money passing through the account are insufficient especially
where it appears that the testator was speculating in the stock
market. In re Kennedy, 113 N. Y. App. Div. 4, 99 N. Y. Suppl. 72.

1909, c. 62.] NEW YORK. 931

In estimating the value of the shares in a joint stock association
for the purpose of the inheritance tax, the value of the real estate
owned by the association should be taken into account notwith-
standing it is compelled to pay a tax upon the same periodically.
In re Jones, 28 Misc. Rep. 356, 59 N. Y. Suppl. 983,

Construction of Will.

In proceedings for appraisal under the transfer tax act the
will may be construed. In re Peters, 69 N. Y. App. Div. 465, 74
N. Y. Suppl. 1028.

Claims.

A claim of an estate on another estate which is in genuine liti-
gation may be excluded from consideration for the purpose of
the inheritance tax. In re Skinner, 106 N. Y. App. Div. 217,
94 N. Y. Suppl. 144, modifying 45 Misc. 559, 92 N. Y. Suppl. 972.

Where an administrator makes an honest and prudent com-
promise of a claim of the estate against another, the claim will
not be appraised at a greater value than the compromise. In re
Thomas, 39 Misc. Rep. 223, 79 N. Y. Suppl. 571.

Claims in Favor of Estate.

Where the administrator had brought suit on a note made
payable to the intestate, which the maker of the note claimed
had been paid and litigation was still pending at the time of the
appraisal, it was the duty of the surrogate to exclude this claim
from the valuation at the time, reserving it for future appraisal
in case the administrator succeeded in collecting it. In re West-
urn, 152 N. Y. 93, 103, 46 N. E. 315, reversing 8 N. Y. App. Div. 59.

The question raised was whether a certain worthless account
is to be deemed to be property transferred or disposed of by will
within the contemplation of the statute and to be included in the
value of the estate for the purpose of taxation.

The court holds that the tax is imposed upon the shares of the
estate that the beneficiaries take under the will and the account
or item in question does not represent any property that passed
from the deceased to anyone within the fair meaning of the statute ;
hence the final order of the surrogate excluding the account from
the estimated value of the estate was correct. In re Manning,
169 N. Y. 449, 62 N. E. 565, affirming 59 N. Y. App. Div. 624.

932 STATUTES ANNOTATED. [N. Y. St.

Claim of Estate against Legatee.

Where a bequest of the residue of an estate includes a note made
by the residuary legatee, the legatee must either accept the benefit
provided by the will under the condition of assuming with it the
burden imposed by law, or he may reject it. If he elects to reject
the legacy the legacy would go as in case of intestacy. In that
event the next of kin could sue upon the note. The tax should
properly include the value of this note. In re Tuigg, 15 N. Y.
Suppl. 548, 2 Con. Surr. 633, following Tyson's Appeal, 10 Pa. St.
220.

Claim against Beneficiary.

Where the estate has a claim against a beneficiary but of a less
amount than the beneficiary is entitled to under the will, the
claim should be appraised. However a failure to appraise cannot
be corrected by a proceeding to set aside the appraisal but only by
appeal. In re Smith, 14 Misc. Rep. 169, 35 N. Y. Suppl. 701.

Claim vs. Worthless Legatee.

Where a testator held notes against certain relatives and by his
will the notes and the amounts due thereon were given to the makers
of the notes, and the directors were directed to cancel and surrender
the notes to the makers without payment, the court holds that as
the makers Of the notes were insolvent it is fair to appraise the
legacy as valueless. It was claimed that notwithstanding the
insolvency of the makers inasmuch as the notes were given as
legacies to the makers themselves they should be assessed at their
fair value. But the court replies that under section 230 of the
statute "fair market value" is the test. No such exception of
cases where promissory notes are given to their makers is made
by the statute. Morgan v. Warner, 162 N. Y. 612, 57 N. E. 1118,
affirming 45 N. Y. App. Div. 424.

Claim against Unsettled Estate of another Decedent.

The testator died in 1874 leaving a will giving his wife one third
of his property for life with remainder to his son and daughter and
vesting in his widow the power to appoint remainders to such of
his descendants as she might by will direct. The son died in 1879
leaving property to his mother for life, remainder to his sister,
and the mother died in 1895 having exercised the power of appoint-
ment in favor of her daughter. The mother's will was admitted

1909, c. 62.] NEW YORK. 933

to probate February 29, 1896, and the daughter died on that same
day, and her will was admitted to probate in January, 1898, the
daughter being a residuary legatee under the will of her mother.

The court holds that the two estates in remainder which vested
absolutely in the daughter on the death of her mother under her
father's and brother's wills were taxable in passing to the residuary
legatee of the daughter.

It was also decided that the amount to which the daughter was
entitled as a residuary legatee under her mother's will was not
taxable, it appearing that there had been no settlement of the
executor's accounts under the will, and consequently the amount
of the residuary estate, if any there should be, was unascertained.
But the court holds that when the estate of the mother is settled
it will be the duty of the executor to see that the transfer tax is paid
before distributing the residue to the legal representative of the
daughter.

As to the two estates in remainder under the wills respectively
of the father and brother of the daughter, the latter was vested
with the title to the residue on the death of each testator, but pos-
session and enjoyment were postponed until the falling in of the
life estate, and when that event occurred the entire estate, legal
and equitable, vested instantly in the remainderman. The execu-
tor of the daughter, under the circumstances, was liable to pay the
transfer tax before he could distribute the personal property in his
hands, or to the possession of which he was immediately entitled.
In re Rohan-Chabot, 167 N. Y. 280, 283, 60 N. E. 598, affirming 44
N Y. App. Div. 340.

Test of Value.
Joint Interests.

Where the testator and his brother had been doing business
under an agreement dated 1877, reciting that the parties are
"jointly" interested in firm property on the death of the intestate,
the court on the evidence finds that the whole estate of the intestate
is subject to the inheritance tax. In re Wormser, 28 Misc. 608,
59 N. Y. Suppl. 1088.

Good Will.

The court holds that there was no authority for fixing the value
of the good will in a business at the amount of the decedent's share
of the profits of the business for the year immediately preceding.

934 STATUTES ANNOTATED. [N. Y. St.

The amount fixed by the agreement of the parties at the time must
determine the value. What is to be determined is the value of
the good will as of the time of the decedent's death. In re Vivanti,
138 N. Y. App. Div. 281, 122 N. Y. Suppl. 954, reversing 63 Misc.
618, 118 N. Y. Suppl. 680.

The court approves the suggestion that the proper rule for ascer-
taining the value of good will based on earnings would be to multiply
the net earnings by a certain number of years, depending on the
nature of the business, and where a net profit upon a compara-
tively small capital was about $26,000 per annum and it was not
a business that depended upon any special qualifications in the de-
cedent, the court estimates the value at about three times the annual
net profits. In re Keahon, 60 Misc. 508, 113 N. Y. Suppl. 926.

Inactive Securities.

The statute of 1891, chapter 34, providing for appraisal of
stocks customarily bought or sold in the open market, does not
apply to a stock held largely by a private family with only a few
sales of small lots. On this question expert witnesses are admissi-
ble. In re Curtice, 111 N. Y. App. Div. 230, 97 N. Y. Suppl. 444.

The value of stock not listed on the stock exchange is sufficiently
shown by testimony of various purchases during the year, although
the stock was very inactive and the sales infrequent. Evidence of
sales for a reasonable time after as well as before the death of the
testator is admissible. In re Proctor, 41 Misc. Rep. 79, 83 N. Y.
Suppl. 643.

Where stock had no market value, as the corporation made
porous plasters and medicines dependent on certain trade secrets,
the earning power of the corporation is competent evidence of
its value and is to be considered in determining the valuation to
be placed upon the stock for the purposes of taxation. Where it
is impossible for an appraiser to ascertain the market value of
the stock of a corporation by reason of the fact that there is none,
the state does not thereby lose the tax upon the transfer. The
ownership of secret receipts is not tangible and is to some extent
of uncertain and precarious value dependent upon the good faith
of those who possess the secret. Still a large portion of their
v^lue lies in judicious advertising and in the name under which
they have sold, and therefore these secret receipts are properly
to be considered in estimating the value. In re Brandreth, 28
Misc. Rep. 468, 59 N. Y. Suppl. 1092.

1909, c. 62.] NEW YORK. 935

Sales.

Where a manufacturing company paid eight per cent dividends
during the first year of its incorporation its stock is not necessarily
worth par in view of sales during the year at fifty dollars a
share. In re Smith, 71 N.Y. App. Div. 602, 76 N.Y. Suppl. 185.

It appeared that the devisee of real property had sold it for
the best price that she could obtain and therefore the court holds
it unjust to fix the price much larger than that simply on
account of the evidence of a real estate appraiser. In re Arnold,
114 N. Y. App. Div. 244, 99 N. Y. Suppl. 740, 37 Civ. Prod.
Rep. 177. ,

The average sales of stock for the three months first prior to
the decedent's death is a proper way to ascertain the value of the
stock under the New York statute of 1891, chapter 34, section 1.
In re Crary, 31 Misc. Rep. 72, 64 N. Y. Suppl. 566.

Opinions.

The executor was permitted to give his opinion on the value of
certain notes in Morgan v. Warner, 162 N. Y. 612, 57 N. E. 1118,
affirming 45 N. Y. App. Div. 424.

The declarations of the testator are not evidence as to the value
of certain notes bequeathed. Morgan v. Warner, 162 N. Y. 612,
57 N. E. 1118, affirming 45 N. Y. App. Div. 424.

Experts.

Expert witnesses may be heard as to value of inactive securities.
In re Curtice, HI N. Y. App. Div. 230, 97 N. Y. Suppl. 444.

Joint Stock Association Owning Real Estate.

Where the testator bequeathed shares in a joint stock associa-
tion and died in 1891, and where the N. Y. St. 1891, c. 215, did
not levy a tax on a bequest of real estate to lineal descendants,
the court holds that the real estate should be considered in apprais-
ing property. The real estate constituted a greater part of the
assets of the association. The shares were not listed upon the
stock exchange or sold in open market and the only way to get
at their value was to ascertain the property they repre-
sented. In re Jones, 172 N. Y. 575, 586, 65 N. E. 570,
60 L. R. A.' 476, reversing 69 N. Y. App. Div. 237, 74 N. Y.
Suppl. 702.

936 statutes annotated. [n. y. st.

Marshaling Assets.

Marshaling securities for payment of indebtedness of non-
resident to stock-brokers, see post, p. 949.

Right of Executor to Elect to Pay Certain Legacies with
New York Assets.

A foreign executor may marshal the assets by paying legacies
to collaterals or strangers out of assets in his jurisdiction and pay-
ing legacies to lineals out of assets in the jurisdiction where some
of the personal property may happen to be, and thus escape a
tax in New York. The property of which an English testator
died possessed in Great Britain was largely in excess of the amount
given by him in legacies and some portion of these legacies had
already been paid from the English estate and the executor had
declared his determination of appropriating that part of the tes-
tator's property to their payment so that the American estate
should constitute the residuary estate disposed of by the will in
favor of the testator's brothers.

"This he may rightly do and thus save the estate from the
payment of the succession tax imposed by our laws. The fact
of such an appropriation will, of course, appear upon his accounting.
If the executor determines to pay the legacies from the English
estate, the American estate is thereby freed from the burden of
the special tax, the imposition of which depends upon the fact
of a succession by the legatee to some property which is within
the state. If the American estate is appropriated to persons who
are within the excepted degrees of relationship to the testator, the
right to claim the tax from the executor is gone. It does not lie
with the officers of the state to say in such a case which part of
the testator's property shall be appropriated to the payment of
the legacies. The law is not arbitrary in its application. It is
simply absolute in its requirements when the precise case arises
which it was framed to meet; and where, as here, the case is not
presented of an appropriation of any part of the American estate
in payment of the legacies to the foreign legatees, this special tax
law cannot and should not apply. To this view we are all the more
disposed because to hold otherwise might be to subject this estate
to taxation both in Great Britain and in this state. Such a result
of a double taxation is one which the courts should incline to
avoid whenever it is possible within reason to do so." Per
Gray, J., in In re James, 144 N. Y. 6, 11, 38 N. E. 961, affirm-
ing 77 Hun 211, 27 N. Y. Suppl. 288, 6 Misc. 206.

1909, c. 62.] NEW YORK. 937

Where property outside the state has been used by the executor
in the exercise of his acknowledged right of election to pay the
pecuniary legacies, where it has proved sufficient to pay all of
them, and all property in this state passes to a residuary legatee
who is in the class of persons taxable at one per cent, the tax
must be imposed at that rate. (See, however, N. Y. St. 1908,
c. 310, noted post, p. 939.) In re Whiting, 127 N. Y. Suppl. 960,
reversing 113 N. Y. S. 941.

It was the practice under these decisions for the executor to
file with the surrogate a formal election.

Administrator no Right to Elect.

Where nine per cent of the decedent's total personal estate was
in the state of New York, it is proper for the surrogate's court to
deduct nine per cent of the debts and expenses of the estate of the
non-resident decedent, and the balance is the net assets within
this state. In re Ramsdill, 190 N. Y. 492, 493, 83 N. E. 584, revers-
ing 119 N. Y. App. Div. 890.

Where the administrator of the foreign intestate elects to appro-
priate all the assets situated within the state of New York in pay-
ment of the distributive share of the intestate's brother, the court
holds that this action cannot prevent the imposition of an inherit-
ance tax in the state of New York. The court distinguishes the
case of In re James, 144 N. Y. 6, as in that case the property was
appropriated to the specific legacies and it was property which
was in fGreat Britain and never came within the jurisdiction of
New York. The persons entitled to the legacies could have com-
pelled their payment out of the English fund without resort to
the New York courts. In the case at hand the situation is radically
different. Upon the intestate's death his estate passed eo instanti
to the persons who, by virtue of the intestate law, were entitled
thereto.

The New York statute involves a tax upon transfers based upon
the portion of the estate found within our jurisdiction, but this is
not a tax upon the specific property which passes. The right of
the state to the tax is therefore coincident with the devolution of
title or interest; and the right of the state to exact the tax as well
as the obligation of the transferee to pay it depend not upon a
formal, complete and immediate change of title or possession, but
upon the instant right to a beneficial share or interest subject only
to the due administration of the estate.

938 STATUTES ANNOTATED. [N. Y. St.

"When a specific foreign legatee of a foreign testator can obtain
satisfaction of his legacy in a foreign jurisdiction, the executor
cannot be compelled to pay such a legacy out of the assets within
our jurisdiction. This is the necessary result of the practical and
obvious distinction between testacy and intestacy as applied to
this subject of taxation. If a specific legatee needs not the inter-
vention of our laws or courts to obtain what comes to him under a
foreign will through foreign assets in a foreign jurisdiction, our
laws cannot coerce an executor into paying his legacy out of funds
within our jurisdiction for the sole purpose of exacting a tax. But
in a case of intestacy the rule is essentially different, because the
distributee takes an undivided interest in the whole estate; and
if part of it happens to be within our jurisdiction, he can only get
his share of what is here under our laws and through our courts.
This is the theory upon which the nephews and nieces of the intes-
tate in the case at bar are clearly taxable under our statute." Per
Werner, J., in In re Ramsdill, 190 N. Y. 492, 496, 83 N. E. 584,
reversing 119 N. Y. App. Div. 890.

Executor Presumed to Elect.

The decedent was a resident of New Jersey leaving personal
property in New York and also in New Jersey. The executor paid
taxable legacies out of the New Jersey assets and distributed the
New York assets among people of one per cent class who were not
taxable at all, because the New York assets are less than ten thou-
sand dollars in amount. The court holds that it was the legal right
of the executor to elect to pay the taxable legacies out of the New
Jersey assets and to distribute the New York assets to persons who
under our law are exempt from any tax whatever. "It was his
plain duty to exercise this right in the interests of parties claiming
under the will as legatees, and he owed no duty to the state of
New York to do anything different. He had this right of election
until he had actually appropriated the New York assets to the
payment of debts and legacies. There was no warrant of law to
justify the appraiser in assuming that the taxable legacies would
be paid pro rata out of both funds. The natural inference was
that the assets would be marshaled in such a way as to require the
smallest payment of tax, and- if the intent of the executor was
material to produce a different result, the burden of proving the fact
rested upon the state and the executor should have been questioned
upon the subject by the appraiser before the report was made." Per
Thomas, S., in In re McEwan, 51 Misc. 455, 101 N. Y. Suppl. 733.

1908, c. 310.1 NEW YORK. 939

The Act of 1908.

The act of 1908, c. 310, noted ante, p. 828, was passed in view of
the Ramsdill case supra, p. 937, intending to make the practice
the same for executors as for administrators. This act was incor-
porated in the Consolidated Laws of 1909 as section 220, subd. 3,
and appears in the present act, ante, pp. 840, 841. The statute
does away with marshaling.

Under the statute of 1908, chapter 310, the executors have no
right to marshal assets by electing to appropriate New York assets
to the payment of legacies exempt or taxable at the minimum rate
leaving the payment of legacies at a higher rate from assets out-
side the state. The executor claimed that when he selected the
securities in New York to pay the two legacies in question such
securities became in effect as much "specifically bequeathed" as
if named directly in the will. But the court holds that the will
fixed the character of the legacies as general legacies and that the
act of the executor could not change this character. In re Porter,
67 Misc. 19, 124 N. Y. Suppl. 676.

Annuities.
Value of Annuity.

A tax on an annuity as covered in section 230 of the New York
statute should be ascertained by fixing the value under the insur-
ance tables and then computing the amount of the transfer tax
thereon, which becomes payable forthwith out of the fund set
aside for creating the annuity. The method of returning to
the estate the tax so paid by the trustees is as follows :
"Take for illustration an annuitant whose probable duration
of life is ten years. The trustees would deduct from each
annual payment as made one-tenth of the tax and restore it
to the residuary estate."

Where the death of the annuitant took place before the tax had
been restored to the estate entirely, any portion of a transfer
tax not restored to the estate by the process indicated at the time
of the annuitant's death would be a loss which the estate must
sustain. In re Tracy, 179 N. Y. 501, 509, 72 N. E. 519, reversing
87 N. Y. App. Div. 215.

Legacy for Care.

The direction by will that certain persons shall receive $75
per month for caring for the brother of the testatrix is subject

940 STATUTES ANNOTATED. [N. Y. St.

to a tax at the rate of five per cent. In re Eaton, 55 Misc. 472,
106 N. Y. Suppl. 682.

Legacy Subject to Annuity.

The personal property was limited on the life of the testator's
widow subject to an annuity to be paid to his sister. It was claimed
that from the life estate should be deducted the actual amount
of principal necessary to produce annuities at the rate of five per
cent per annum. The court, however, holds that the proper
method is to treat the present values of the annuities as specific
legacies bequeathed to the annuitants deducted from the residuary
personal estate on the theory that the widow's life interest is
limited on the remainder only. In effect her interest is ascertained
to be the present value of the life estate in the entire fund less
the present value of the annuities charged upon such fund. In re
Maresi, 74 N. Y. App. Div. 76, 77 N. Y. Suppl. 76.

Life Estates.

See notes to the acts of 1885 and 1892, ante, pp. 783, 810.

Life Estates not Ascertainable.

Where a devise is made to two for life and to the survivor of
them the remainder to the surviving children of M. and remainder in
fee to the children of A. and W. if the latter have issue, the life
estates of the first takers are alone taxable since it is impossible
to tell which of the children of M. will take the second life estate;
nor can it be known into what number of shares the estate in
remainder will be divided. In re Eldridge, 29 Misc. Rep. 734, 62
N. Y. Suppl. 1026.

What is a Life Estate?

Where property is left to the widow to be used and enjoyed and
at her disposal during her life with bequests over of "that may
remain" the widow has a life estate only with the power of dis-
position and followed by valid executory devises. In re Cager,
111 N. Y. 343, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun
657.

Under N. Y. St. 1896, c. 908, as amended by N. Y. St. 1899,
c. 76, and N. Y. St. 1900, c. 658, under section 230, it is the duty
of the executors and trustees to ascertain the value of the respective
life estates and estates in remainder and having done this they

1909, c. 62.] NEW YORK. 941

should compute the transfer tax and pay the same out of the property
transferred. The result is that the life tenant loses during the
continuance of his estate the interest upon the corpus of the trust
so paid out and eventually the remainderman receives his estate
diminished by the amount of said payment. The court is not
concerned with the question of whether this works out justice as
between the life tenant and the remainderman. The legislative in-
tention is clear that the transfer tax shall be paid out of the corpus
of the trust estate and not out of the income. The court remarks
that In re Vanderbilt, 172 N. Y. 69, dealt only with the con-
tingent remainder and is therefore not strictly in point, but that
the principle announced therein is necessarily involved in life
estates created by trusts. In re Tracy, 179 N. Y. 501, 509, 72 N. E.
519, reversing 87 N. A. App. Div. 215.

Where the life tenant died between the death of the original
decedent and the appraisal under the transfer tax the life tenant's
interest should be appraised not in accordance with the term of
its actual duration, but in accordance with the provisions of the
act requiring a valuation as of the date of the death, by the use
of the annuity tables. In re Jones, 28 Misc. Rep. 356, 59 N. Y.
Suppl. 983.

Future, Contingent or Defeasible Interests.
Deduction for Postponing Payment.

Legacies of five hundred dollars payable at the end of a year
are not of the fair market or cash value of five hundred dollars,
but they are of the value of that amount less the interest until
payable. In re Peck, 9 N. Y. Suppl. 465, 24 Abb. N. Cas. 365,
2 Con. Surr. 201.

A money legacy of five hundred dollars is of the fair value of
five hundred dollars under the New York statute of 1887 and the
appraisers have no right to deduct five per cent from its face
value on the ground that that is what it is worth to the legatee
at the end of the year; so legacies of five hundred dollars each are
subject to the tax. In re Bird, 32 N. Y. St. 899, 11 N. Y. Suppl.
895, 2 Con. Surr. 376.

Of Vested Remainder.

A vested remainder after the death of the life tenant can be
appraised on the death of the testator by ascertaining the value

942 STATUTES ANNOTATED. [N. Y. St.

of the life estate and deducting that from the value of the whole
estate. In re Lange, 25 Misc. Rep. 466, 55 N. Y. Suppl. 750.

Where Remaindermen Known.

Where the testator gave his property to his wife for life with
remainder over, the persons to whom the property passes after
the death of the life tenant are known, hence the entire estate
was taxable at the death of the testator. In re Runcie, 36 Misc.
Rep. 607, 73 N. Y. Suppl. 1120.

Vested Remainder.

Where the testatrix devised property in trust, the income to
be paid to the grandsons during the life of the sons and the grand-
sons to succeed to the estate on the sons' death if they should
then be fifty years of age, the grandsons took a vested remainder
on the death of the testatrix and hence such devise was taxable.
In re Sherman, 30 Misc. Rep. 547, 63 N. Y. Suppl. 957.

Efect of Omission from Appraisal on Death of Testator.

Where a will left funds in trust to pay the income to a grandson
after he reached the age of thirty, the appraiser did not appraise
the interest of the grandson at the death of the testator. Sub-
sequently, however, after he attained the age of thirty proceedings
were brought to appraise his interest and it was claimed that the
interest was actually vested from the death of the testator; that
the order entered omitting to tax it then was in effect an adjudi-
cation that it was exempt. The court notes, however, that the
first appraiser reported that these interests were not then tax-
able for the reason that their value could not then be ascer-
tained and the ultimate legatees were indefinite and uncertain
and the doctrine of res judicata has no application for there is
not only no judgment of exemption but a specific postponement
of the consideration of the matter. In re Irwin, 36 Misc. Rep.
277, 73 N. Y. Suppl. 415.

Contingent Remainders.

See notes to the acts of 1885, 1892, and 1899, c. 76, ante, pp.
^82, 808, 822.

The policy of the state toward contingent remainders was altered
by the act of 1899, c. 76, which made the tax on contingent or defeas-
ible estates accrue forthwith at the highest rate which would be
possible on the happening of any contingency.

1909, c. 62.] NEW YORK. 943

A transfer tax can be imposed before the vesting of the contin-
gent estate. In re Post, 85 N. Y. App. Div. 611, 82 N. Y. Suppl.
1079.

Where the testator devised to her brother the use of her personal
property with the right to use as much of the principal as was
necessary for his maintenance, no transfer tax can be assessed
upon the remainder as it is impracticable to appraise it until it is
known what property will pass in remainder. In re Babcock, 81
N. Y. App. Div. 645, 81 N. Y. Suppl. 1117, affirming 37 Misc. Rep.
445, 75 N. Y. Suppl. 926.

Where a remainder is bequeathed to the issue of the life tenant
and she has no issue this remainder interest is not now taxable
since no transfer, defeasible or otherwise, has yet been made. But
if any child of the life tenant is now in existence such child is now
vested with an estate in such remainder, subject to be divested by
his death prior to his mother, and also subject to open and let in
after-born children, and the tax can now be imposed. In re
Clarke, 39 Misc. Rep. 73, 78 N. Y. Suppl. 869.

Contingency Extinguished before Death.

Where remainders in trust estates were left to such of certain
persons named as might survive the termination of the trust estates
and one of these persons named died before the termination of
the trust estate his estate was not subject to taxation. He never
took anything beneficial under the will and his estate can take
nothing. It was never intended by the law to tax a theory having
no real Substance behind it. What passed was rather a theoretical
possibility than a tangible reality. In re Curtis, 142 N. Y. 219,
36 N. E. 887, affirming 73 Hun 185, 56 N. Y. St. 113, 25 N. Y.
Suppl. 909.

Where Testator Died before Statute Enacted.

Where the testatrix died in 1883, leaving property to a life tenant
with a contingent remainder over and the life tenant died in 1894,
the court holds that the remainder is not taxable, following In re
Seaman, 147 N. Y. 69, 41 N. E. 401. In re Langdon, affirming 153
N.Y. 6, 46 N.E. 1034, 11 N.Y. App. Div. 220, 43 N.Y. Suppl. 419.

Defeasible Interest.

Under the statute of 1896, section 230, providing that "where
an estate for life or for years can be divested by the act or omission

944 STATUTES ANNOTATED. IN. Y. St.

of a legatee or devisee it shall be taxed as if there was no possibility
of such divesting," the court holds that a bequest to the sister until
her marriage or death unmarried should be taxed as a life
estate. In re Plum, 37 Misc. Rep. 466, 75 N. Y. Suppl. 940.
Where a life estate is determinable upon the remarriage of the
life tenant, on the remarriage of the life tenant the surrogate should
instruct the appraiser to deduct from the principal fund the value
of the estate of the widow during the term of her widowhood. In
re Sloane, 154 N. Y. 109, 114, 47 N. E. 978, 19 N. Y. App. Div.
411, 46 N. Y. Suppl. 264.

Inequality in Rates on Remainders.

The court suggests to the legislature that N. Y. St. 1899, c. 76,
providing for the present appraisal and taxation of remainders
causes an inequality which is an injustice on life estates. The tax
on the remainders being paid out of the corpus of the estate dimin-
ishes the income of the life tenant by the interest on the amount of
the tax; and if it is desired to make taxes on remainders pay-
able immediately it would be fairer to the life tenant to have the
tax assessed at the lowest rate on any succession provided for by
the will. In case the remainder eventually vesting should prove
taxable at a higher rate then such increased tax should be payable
at the time of its enjoyment. The court remarks that its experi-
ence is that in the majority of cases the lowest rate of tax usually
proves the final rate, and where the state imposes in the first in-
stance a higher rate of tax it becomes obligated to repay the excess
after a lifetime at six per cent interest, while it could borrow money
at half that rate. In re Brez, 172 N. Y. 609, 611, 64 N. E. 958,
reversing 69 N. Y. App. Div. 619.

Vested Remainder.

The testator died in 1887 and an appraisal was made soon after
his death. The testator devised to a life tenant and on his death
to his issue and no appraisal was made of the remainder after the
death of the life tenant. The life tenant died in 1892 leaving
is^ue. The remainder vested in these remaindermen at the date
of the death of the testator although the amount that the benefi-
ciaries would receive could not be definitely ascertained until the
death of the life tenant. Therefore the appraisal should be made

1909, c. 62.] NEW YORK. 945

as of the date of the testator's death and on the value at that time.
In re Meyer, 83 N. Y. App. Div. 381, 82 N. Y. Suppl. 329.

Remainder Assessed under Original Will.

Where under a will the wife took a life estate with remainder
over to the daughter the daughter took under the father's will
and not through the mother, and as this estate has once paid the
tax it is not subject to a second tax. In re Whitney, 124 N. Y.
Suppl. 909.

Contingent .Remainder. — Defeasible Interest.

Formerly the tax on a contingent remainder or other indeter-
minate interest was assessed only when the interest vested in
possession, but this rule was reversed by the statute of 1899,
chapter 76, and now the tax on all such interests accrues on the
death of the testator to be assessed at the highest rate possible in
view of all the contingencies.

The legislature by the amendment of 1899 intended to change
the law upon the subject and to make the transfer tax upon prop-
erty transferred in trust payable forthwith. It is not required
to be paid by the conditional transferee as it is to be paid out
of the property transferred, so that whoever may ultimately take
the property takes that which remains after the payment of the
tax. It therefore contemplates defeasible transfers as well as abso-
lute transfers. In re Vanderbilt, 172 N. Y. 69, 72, 64 N. E. 782,
modifying 68 N. Y. App. Div. 27, 74 N. Y. Suppl. 450, followed in
In re Brez, 172 N. Y. 609, 64 N. E. 958, reversing 69 N. Y. App.
Div. 619.

Effect of Trusts.

Where Decedent is only a Trustee.

No inheritance tax should be levied where the decedent is merely
a trustee. So where an executrix without authority purchases
land in her own name the property is impressed with a trust in
favor of the remaindermen, and on her death no inheritance tax
should be levied as the fact that she took title in her own name
did not make the property hers. In re Wheeler, 115 N. Y. App.
Div. 616, 100 N. Y. Suppl. 1044.

Where the testatrix in the purchase of real estate used money
which she held as executrix of the estate of another the legatees

946 STATUTES ANNOTATED. [N. Y. St.

may assert that they take this property under the will of the origi-
nal testator who was their father and not under the will of the testa-
trix. Inre Wheeler, 115 N. Y. App. Div. 616, 100 N. Y. Suppl. 1044.

The testator made deposits of money as trustee for his wife and
children, each account being in his name as trustee for a particular
person named. The testator had kept his wife and children
advised of the deposits and the deceased declared to them his pur-
pose in opening accounts and making the deposits, and often stated
to the children that the funds set apart for them would belong
to them at the age of twenty-one years.

The court holds that the trust became absolute and irrevocable
during the lifetime of the donor and the mere fact that the accounts
were not changed in form and the moneys paid over to the children
at the age of twenty-one is not a controlling circumstance to show
that the trust was merely tentative. In re Pierce, 132 N. Y. App.
Div. 465, 116 N. Y. Suppl. 816, reversing 60 Misc. 25, 112 N. Y.
Suppl. 594.

Legatee's Interest Impressed with Trust.

The testator died in 1890 giving a portion of the residue of her
property to three men as tenants in common. Subsequently by
an action for construction it was held by the court that this legacy
was really in trust for certain purposes exempt from taxation.
The court holds, however, that the right of the state to collect a
tax was not concluded by the judgment of the supreme court,
but that they might look also at the judgment in the court of appeals
in the action for construction. The court finds that the court of
appeals decided that the legatee took an absolute legacy and never
became trustee for the brother; that he obtained under the will a
legal title and that the equitable rights of the brother arose not
under the will but from facts appearing extrinsic thereto. As no
trust was imposed by the will the legacy was subject to tax although
the legatee took it impressed with a trust in favor of his brother.
In re Edson, 159 N. Y. 568, 54 N. E. 1092, affirming 38 N. Y.
App. Div. 19, 56 N. Y. Suppl. 409.

A legacy to an executor individually under a contract with him
to use the money for her brother creates a valid trust within the
exemptions of the statute and the executor would therefore not be
liable for the tax. In re Farley, 15 N. Y. St. Rep. 727.

Where the legatee was a trustee for a charity, no tax was levied
in In re Murphy, 4 Misc. 230, 25 N. Y. Suppl. 107.

1909, c. 62.] NEW YORK. 947

Debts and Expenses.

Expense of monument and care of cemetery lot as funeral ex-
penses, see pp. 895, 950.

Whether a bequest for masses is part of the funeral expenses,
see p. 897.

Authority to Consider Debts.

The early construction of the statute followed strict lines to the
effect that the appraiser has no right to hear evidence in regard
to the debts of the deceased, the funeral expenses and the expenses
of administration. In re Ludlow, 4 Misc. 594, 25 N. Y. S. 989; In
re Millward', 6 Misc. Rep. 425, 27 N. Y. Suppl. 286.

This view was based on the absence of express authority in the
statute to make such deductions, but did recognize authority in the
surrogate to make the deductions. In re Millward, 6 Misc. Rep.
425, 27 N. Y. Suppl. 286.

The appraiser's functions have, however, since been broadened
in scope by the construction of the statute, and it is now held that
an appraiser may hear evidence in regard to the debts, funeral
expenses and expenses of administration of an estate. In re
Wormser, 36 Misc. Rep. 434, 73 N. Y. Suppl. 748.

Disbursements which it is admitted were made by the executor
for debts must be allowed by the appraiser and it is error for him
to reduce these amounts arbitrarily. In re Dimon, 82 N. Y. App.
Div. 107, 81 N. Y. Suppl. 428.

Expenses of Administration Deducted.

The transfer tax is a tax not on the property of the estate but
on the succession by the beneficiaries to the fortune of the de-
ceased. Personal property does not pass directly from the deceased
to the legatee or next of kin, but all that such legatee or next of
kin takes is what may be coming to him from the estate on its
distribution after settlement. The amount represented by the
expenditures of the administrator or expense of administration
never passes to the legatee or next of kin, therefore is not subject
to the tax. The court distinguishes In re Westurn, 152 N. Y. 93.
In re Gihon, 169 N. Y. 443, 62 N. E. 561, modifying 64 N. Y. App.
Div. 504, 72 N. Y. Suppl. 1104.

Estimate Unpaid Debts and Expenses of Administration.

The court approves of the practice of estimating the unpaid
debts and expenses of administration in so far as the estate has not

948 STATUTES ANNOTATED. [N. Y. St-

been administered at the time of the appraisal, provided the report
and order of the appraisers reserve the right of those whose interests
are assessed to a rebate in case it shall appear that the debts or
expenses have been estimated too low, and a provision for a further
assessment, though perhaps this is not strictly necessary, if they
are estimated too high. In re Dimon, 82 N. Y. App. Div. 107,
81 N. Y. Suppl. 428.

Debts Secured by Mortgage.

The court holds that in appraising the residuary personal prop-
erty the principal of a bond not due signed by the decedent and
secured by a mortgage upon his real estate should not be deducted
before estimating the taxable value of the bequests. In re Maresi,
74 N. Y. App. Div. 76, 77 N. Y. Suppl. 76.

In determining that debts of the testator secured by mortgage
on his real estate should not be deducted from the personal prop-
erty, the court in In re Sutton, 3 N. Y. App. Div. 208, 212, affirmed
149 N. Y. 618, said: —

"It is of no importance to the executor or beneficiary, except for
the purpose of determining the tax, from which fund the mortgages
shall be paid; and they cannot be permitted to be paid from the
personal estate for the sole purpose of increasing the exemption of
real estate and decreasing the amount of the tax to be paid. The
testator has transferred his whole estate as a single fund for the
use and benefit of his children. In holding that for the purpose
of determining the tax the real estate owned by the testator at
the time of his death must be treated as such, we could not
extend that exemption beyond the value of the testator's interest
therein. It was such interest only that was transferred, and which
will be held for the use of the beneficiaries, and such only that can
be held to be exempt." (This case was distinguished on account
of the difference of the statute in In re Fox, 154 Mich. 5, 14, 159
Mich. 420.)

Direction to Pay Mortgages.

Where the testator owned equities in real estate subject to mort-
gages and directed the executors to pay these mortgages, the
cburt holds that this is an equitable conversion of the personal
property into real property, and that therefore the appraiser had
no right to deduct from the personal property the amount of the
mortgages upon the real estate in fixing the fair market value of the

1909, c. 62.J NEW YORK.

personal property. In re Berry, 23 Misc. Rep. 230, 51 N. Y.
Suppl. 1132, 2 Gibbons 346. The court refuses to follow In re
Hopkins, 57 Hun 9, 10 N. Y. Suppl. 264.

Debt of Non-resident Secured by Pledge.

The court holds that for the purposes of taxation the testator's
personal estate in New York amounted to $744,000, from which
should be deducted the expenses of administration, executor's
commissions and debts to the amount of $58,000, that being the
value of the bonds and of the stock of New York corporations
pledged as collateral security to the creditors in the city of New
York.

It was claimed that inasmuch as the decedent at the time of his
death was indebted to local creditors to an amount greater than
the market value of the local assets, there was no property of the
decedent within the state of New York subject to a transfer tax;
and that all the local assets of the decedent were primarily liable
for the payment of the indebtedness to local creditors to the entire
extent of such property; and that the local assets to the amount
of $58,000, specifically pledged as collateral security for the pay-
ment of the indebtedness to local creditors are liable to be entirely
used for the purpose of such payment.

Where the whole estate is within the state of New York and the
decedent is a resident of the state undoubtedly debts are to be
deducted from the value of the property, but in this case the in-
debtedness to the New York creditors is a general indebtedness
against the whole estate. Here domestic creditors have in their
hands legal title by a pledge and a right to resort for the payment
of their debts to securities belonging to a non-resident decedent

950 STATUTES ANNOTATED. [N. Y. St.

which are not taxable under the laws of this state ; and therefore
the indebtedness due such creditors is not to be offset against the
value of the property of such decedent otherwise taxable under
the transfer law of the state. In re Pullman, 46 N. Y. App. Div.
574, 62 N. Y. Suppl. 395.

Burial Lot.

The cost of a burial lot and fencing and sodding it should be
deducted before assessing the inheritance tax. In re Liss, 39
Misc. Rep. 123, 78 N. Y. Suppl. 969.

Care of Burial Lot.

A bequest of income for the maintenance of a burial plot should
be looked upon as a personal expenditure for the benefit of the
decedent and as part of the funeral expenses and therefore exempt.
In re Vinot, 7 N. Y. Suppl. 517.

A bequest of a sum in trust for keeping a burial lot in condition
and repair is reasonably a part of the funeral expenses. In re
Maverick, 135 N. Y. App. Div. 44, 119 N. Y. Suppl. 914. The
court distinguishes In re Gould, 156 N. Y. 423, 51 N. E. 287, and
In re McAvoy, 112 N. Y. App. Div. 377, 98 N. Y. Suppl. 437,
as in the Gould case the testator had made a large bequest to his
son as a reward for fafthful services, and in the McAvoy case the
bequest was to pay for masses for others and the testator

Contested Claims against Estate.

A claim in litigation should be referred to the appraiser to take
evidence and report what, if any, rebate or deduction from the
tax imposed should be made because of the claim. In re Morgan,
36 Misc. 753, 74 N. Y. Suppl. 478.

It was proper to withhold half the sum claimed by a claimant
against the estate from appraisal and taxation. But it is better
practice that the order determining the tax should contain an
appropriate recital to the effect that the determination of the
taxability of the sum claimed is suspended until the disposition
of litigation. In re Wormser, 28 Misc. 608, 59 N. Y. Suppl. 1088.

The expenses of resisting a claim under an alleged contract under
which claimant alleged that he was entitled to the whole estate
should be deducted from the value of the estate for the purposes
of the inheritance tax. In re Sanford, 66 Misc. 395, 123 N. Y.
Suppl. 284.

1909, c. 62.] NEW YORK. 951

Compromise of Will Contest.

Money paid to a niece under an agreement under which she
withdrew objections to the probate of a will cannot be deducted
as an expense of administration. The court distinguishes this
case from a case where some claim is made against the estate
which is compromised, as here the compromise did not change
or affect the estate in any way. In re Mark, 40 Misc. Rep. 507,
82 N. Y. Suppl. 803.

The expenses of a controversy among distributees as to the proper
distribution of an estate do not diminish the fund for inherit-
ance taxation. In re Sanford, 66 Misc. 395, 123 N. Y. Suppl. 284.

Commissions.

Broker's Commission.

The commissions of a broker on sale of real estate should be
paid as a necessary expense of administration. In re Rothschild,
63 Misc. 615, 118 N. Y. Suppl. 654.

Executor's Commission.

Where a will provided that no compensation or commission as
such should be paid to any living executor or trustee for any
services as executor or trustee, it was obvious that the testator
intended that his estate should not be diminished by these ordinary
expenses of administration, and it is clearly obvious that the
legacies given to the executors were not given in lieu of commissions.
The court, therefore, finds nothing to authorize the deduction
from the total assessed value of the fees and commissions of execu-
tors and trustees. In re Vanderbilt, 68 N. Y. App. Div. 27, 74
N. Y. Suppl. 450.

Commissions of Foreign Executor.

In appraising the New York property of a resident of Pennsyl-
vania, the appraiser should not deduct commissions to executors

962 STATUTES ANNOTATED. [N. Y. St.

which would be excessive under New York law in the absence of
evidence of the Pennsylvania law on this subject. In re Kennedy,
20 Misc. Rep. 531, 46 N. Y. Suppl. 906, 2 Gibbons 220.

Trustee's Commissions.

Under the act of 1896, s. 227, the executors' commissions as
trustees should be deducted in assessing the transfer tax. In re
Silliman, 175 N. Y. 513, 67 N. E. 1090, affirming 79 N. Y. App.
Div. 98, 80, N. Y. Suppl. 336, reversing 77 N. Y. Suppl. 267.

The commissions allowed by law to trustees for life tenants
should be deducted from the valuation of the interest of the life
tenants. In re Gihon, 169 N. Y. 443, 446, 62 N. E. 561, modi-
fying 64 N. Y. App. Div. 504, 72 N. Y. Suppl. 1104.

The estimated commissions of trustees to whom a fund is turned
over by the executor should not be deducted from the estate in
estimating the value for purposes of the inheritance tax. The
commissions of trustees form no part of the regular administra-
tion of the estate, but are an expense to be borne by the trust and
its beneficiaries and cannot be deducted to reduce the tax due
to the state. In re Becker, 26 Misc. Rep. 633, 57 N. Y. Suppl. 940.

Taxes.

Tax Paid from Principal.

The inheritance tax where property is bequeathed to trustees
for a life tenant with remainder over should be paid from the
corpus of the estate unless the will expressly provides that it shall
be paid from the income. In re Bass, 57 Misc. 531, 109 N. Y. Suppl.
1084.

Where a legacy is given for a specified amount the tax must be
deducted from the amount of the legacy and the balance only given
to the legatee. A testator may direct that the tax on a particular
legacy shall be paid out of his estate; nevertheless in reality the
tax is still paid out of the legacy, the effect of the direction of
the testator being merely to increase the legacy by the amount of
the tax. In re Gihon, 169 N. Y. 443, 447, 62 N. E. 561, modifying
64 N. Y. App. Div. 504, 72 N. Y. Suppl. 1104.

Direction for Payment without Deduction.

A will provided that the executors were authorized and em-
powered to pay any or all of the legacies within one year after
the decease of the testator "without any rebate or deduction

1909, c. 762.] NEW YORK. 953

whatever." The will was executed in 1884, and the court holds
that this clause can hardly have been intended to apply to a
succession or legacy tax, although it was reaffirmed by a codicil
executed after the passage of the statute. Apart from this the
court holds that the words used would not have the effect of en-
titling the legatee to the legacy free of tax even if the will had been
executed after the passage of the inheritance tax. The tax is
paid on account of the legatee and in legal effect is precisely the
same as if the legacy was to be paid over to the legatee intact,
and then the tax was to be collected from him. Strictly speaking,
therefore, the tax is not a "rebate or deduction" from the legacy.
The tax is not a tax upon the estate or legacy devised or bequeathed
but is a tax imposed upon the legatee for the privilege of succeed-
ing to the property. It is merely for the convenience of the state
to ensure certainty of collection of the duties cast upon the executors
of paying the tax. Jackson v. Tailer, 41 Misc. Rep. 36, 83 N. Y.
Suppl. 567.

Federal Inheritance Tax.

The amount paid on account of the federal inheritance tax
cannot be deducted in fixing the valuation for the purpose of the
New York transfer tax. It is not true that the federal taxes are
payable primarily out of the estate; and the court finds that the
federal tax is of exactly the same nature as the state tax and is a tax
on property and not on succession. The federal tax is on the legacy
and not on account of the estate.

The fact that this may result in great hardship does not alter
the rule but results from the rate of taxation prescribed by the fed- '
eral statutes. In re Gihon, 169 N. Y. 443, 62 N. E. 561, modify-
ing 64 N. Y. App. Div. 504, 72 N. Y. Suppl. 1104, overruling 68
N. Y. Suppl. 381, 33 Misc. 206. Contra, In re Vanderbilt, 68 N. Y.
App. Div. 27, 74 N. Y. Suppl. 450, relying on In re Gihon, 64 N. Y.
App. Div. 504, 68 N. Y. Suppl. 381, 72 N. Y. Suppl. 1104.

The United States transfer tax should not be deducted from an
estate before the assessment of the state tax upon it. The percent-
age fixed by the state for its own use cannot be diminished even
by the law of the United States. The title and possession of
property when transmitted upon the death of the owner are by
consent of the state, not the United States. ' Therefore the percent-
age fixed for its own use cannot be diminished by even subtracting
the tax fixed by the United States for war revenue. In re Becker,

954 STATUTES ANNOTATED. [N. Y. St.

26 Misc. Rep. 633, 57 N. Y. Suppl. 940; In re Irish, 28 Misc. Rep.
647, 60 N. Y. Suppl. 30; In re Curtis, 31 Misc. Rep. 83, 64 N. Y.
Suppl. 574.

(The rule is otherwise in Massachusetts. See p. 567.)

Legacy Tax of Another State.

The decedent was a resident of Pennsylvania owning stock in
New York corporations. The property in New York was in pro-
portion to the entire estate as two to five and the appraiser deducted
that proportion of the total debts, funeral and administrations
expenses, from the taxable estate in this state; but he refused to
deduct this proportionate sum from the amount of the legacy tax
paid upon the entire estate in Pennsylvania.

The court holds that the fact that the Pennsylvania tax has been
paid cannot be considered in assessing the New York tax. In re
Kennedy, 20 Misc. Rep. 531, 46 N. Y. Suppl. 906, 2 Gibbons 220.

Real Estate Taxes.

Where the. testator died January 30, 1900, the annual taxes for
the year 1900 not assessed nor a lien nor payable at that time under
the New York statute should not be deducted before the levying
of the inheritance tax. In re Maresi, 74 N. Y. App, Div. 76, 77
N. Y. Suppl. 76.

Where the testator died December 9, 1895, the tax levied and
becoming a lien on December 13, 1895, should be deducted from
the valuation of the estate for the purposes of the inheritance tax,
as the assessment had been made before that time and was binding
upon him although the precise amount of the tax had not been
ascertained until the warrants were delivered to the collectors.
In re Brundage, 31 N. Y. App. Div. 348, 52 N. Y. Suppl. 362.

The testator died June 17, 1902, after the completion under the
New York charter of the annual record of assessed valuations and
sybsequently to the time when application could be made for the
correction, cancellation or revision of any assessment, but prior
to the delivery of the assessment rolls by the board of taxes and
assessment to the board of aldermen and prior to the extension

1909, c. 62.] NEW YORK. 955

thereon of the amounts of the tax. The court holds that the case
was within the spirit of In re Babcock, 115 N. Y. 450, 22 N. E.
263, and that the taxes for 1902 on both real and personal property
should be deducted before an appraisal under the transfer tax act
as they were debts against the estate. In re Hoffman, 42 Misc.
Rep. 90, 85 N. Y. Suppl. 1082.

Real Estate Taxes Paid by Stranger.

Where a stranger paid taxes on land these payments should not
be deducted from the valuation of the property transferred as
these taxes were paid by a person not a party to the title and any
payments made by him are rather in the character of a loan than
of a payment which entitles him to a lien on the land. In re Wood,
123 N. Y. Suppl. 574.

Tax Paid by Mistake.

Where the executrix has paid a tax to the federal government
which it now seems was not a proper charge against the estate, this
should not be surcharged against the executrix where it is admitted
that the sum may be recovered back. In re Marx, 117 N. Y. App.
Div. 890, 103 N. Y. Suppl. 446, reversing 49 Misc. 280, 99 N. Y.
Suppl. 334.

Apportionment of Debts.

The court holds that the deduction to be made for debts owing
to non-resident creditors, mortuary expenses, commissions on
property without the state and other administration expenses "in
respect to such property should be in proportion which the net
New York estate, after all deductions are made for debts owing to
resident creditors. New York commissions, and New York adminis-
tration expenses, bears to the entire or gross estate wherever situ-
ated. In re Porter, 67 Misc. 19, 124 N. Y. Suppl. 676.

Local Debts Set Off against Local Property of Non-resident.

The property of a non-resident located within the state is not
subject to taxation when it appears that his indebtedness to creditors
who are residents of the state is in excess of the value of the testa-
tor's property within the state. The fact that to release the debts
the executor brought money of the decedent from out of the state
and paid the debts so that the securities in New York could be
transmitted to be administered at the residence of the decedent
cannot make any difference. In re Grosvenor, 124 N. Y. App.
Div. 331, 108 N. Y. Suppl. 926.

956 STATUTES ANNOTATED. [N. Y. St.

The decedent, a resident of the state of Illinois, was a member
of the partnership doing business in New York and in Chicago.
The New York branch was mainly occupied with manufacturing
and the Chicago branch in selling, and therefore the debts owing
to the New York creditors exceeded the value of the New York
assets; but that the firm did not owe the persons from whom it
purchased the goods is immaterial as it did owe for discounts and
loans effected, the proceeds of which were applied towards the
purchase price of the property. Therefore, as debts in New York
exhausted the value of the property here no tax could be imposed.
In re King, 172 N. Y. 616, 64 N. E. 1122, affirming 71 N. Y. App.
Div. 581, 76 N. Y. Suppl. 220.

S. 231. Determination of surrogate. From such report of appraisal and
other proof relating to any such estate before the surrogate, the surrogate shall
forthwith, as of course, determine the cash value of all estates and the amount of
tax to which the same are liable; or the surrogate may so determine the cash
value of all such estates and the amount of tax to which the same are liable,
without appointing an appraiser.

The superintendent of insurance shall, on the application of any surrogate,
determine the value of any such future or contingent estates, income or interest
therein limited, contingen , dependent or determinable upon the life or lives of
persons in being, upon the facts contained in any such appraiser's report, and
certify the same to the surrogate, and his certificate shall be conclusive evidence
that the method of computation adopted therein is correct.

The surrogate shall immediately give notice, upon the determination by him
as to the value of any estate which is taxable under this article, and of the tax
to which it is liable, to all persons known to be interested therein, and shall
immediately forward a copy of such taxing order to the state comptroller. The
surrogate shall also forward to the state comptroller copies of all orders entered
by him in relation to or affecting in any way the transfer tax on any estate, includ-
ing orders of exemption.

If, however, it appear at any stage of the proceedings that any of such persons
known to be interested in the estate is an infant or an incompetent, the surro-
gate may, if the interest of such infant or incompetent is presently involved and
is adverse to that of any of the other persons interested therein, appoint a special
guardian of such infant; but nothing in this provision shall effect the right of
an infant over fourteen years of age or of any one on behalf of an infant under
fourteen years of age to nominate and apply for the appointment of a special guar-
dian for such infant at any stage of the proceedings.

[See notes to the act of 1885, c. 483, s. 13; 1887, c. 713; 1892, c. 399, s. 13;
1896, c. 908, s. 232; 1897, c. 284, s. 7; 1899, c. 672; 1901, c. 173, s. 7; 1905,
e. 368.]

S. 232. Appeal and other proceedings. The state comptroller or any
person dissatisfied with the appraisement or assessment and determination of
tax may appeal therefrom to the surrogate within sixty days from the fixing,

1909, c. 62.] NEW YORK. 957

assessing and determination of tax by the surrogate as herein provided, upon
fiUng in the office of the surrogate a written notice of appeal, which shall state the
grounds upon which the appeal is taken; but no costs shall be allowed by the surro-
gate on such appeal.

Within two years after the entry of an order or decree of a surrogate deter-
mining the value of an estate and assessing the tax thereon, the state comptroller
may, if he believes that such appraisal, assessment or determination has been
fraudulently, collusively or erroneously made, make application t) a justice of
the supreme court of the judicial district embracing the surrogate's court in which
the order or decree has been filed, for a reappraisal thereof. The justice to whom
such application is made may there upon appoint a competent person to reappraise
such estate. Such appraiser shall possess the powers and be subject to the duties
of an appraiser under section two hundred and thirty and shall receive compensa-
tion at the rate of five dollars per day for every day actually and necessarily
employed in such appraisal. Such compensation shall be payable by the state
comptroller or county treasurer out of any funds he may have on account of any
tax imposed under the provisions of this article, upon the certificate of the jus-
tice appointing him. The report of such appraiser shall be filed with the justice
by whom he was appointed, and thereafter the same proceedings shall be taken
and had by and before such justice as are herein provided to be taken and had by
and before the surrogate. The determination and assessment of such justice
shall supersede the determination and assessment of the surrogate, and shall
be filed by such justice in the office of the state comptroller, and a certified copy
thereof transmitted to the surrogate's court of the proper county.

[See notes to the act of 1885, c. 483, s. 13; 1892, c. 399; 1896, c. 908, s. 232;
1899, c. 672; 1901, c. 173, s. 8; 1905, c. 368; 1908, c- 310.]

Appeal.
Nature.

N. Y. St. 1896, c. 908, s. 231 and s. 232, provide for the action of
the surrogate in a dual capacity. By section 231 he may act as a
taxing officer or appraiser; and under section 232 any person dis-
satisfied with the appraisement or assessment may appeal to the
surrogate. It was insisted that this practice was anomalous and
unnecessary and that an appeal could be taken from the surrogate
acting as appraiser directly to the appellate division. The court
remarks that it is somewhat unusual that a judicial officer should
sit in review of his own decision as an assessor, but finds that this
practice is proper as the surrogate is a mere taxing officer or
assessor when acting under section 231. In re Costello, 189 N. Y.
288, 82 N. E. 139, modifying 117 N. Y. App. Div. 807, 103 N. Y.
Suppl. 6.

The function of an appraiser is somewhat similar to a jury called
by the court in an equity case to aid its conscience. The whole
matter is with the surrogate and continues with him until final

958 STATUTES ANNOTATED. [N. Y. St.

determination after appeal. The purpose of the appeal from the
surrogate to the surrogate is not simply to review his former
determination, but it is proper on the appeal to receive evidence
that a certain transfer was made in contemplation of death, and
that the property transferred should be included in the transfer
tax. In re Thompson, 57 N. Y. App. Div. 317, 9 N. Y. Ann.
Cas. 290, 68 N. Y. Suppl. 18.

Pleadings.

Under New York statute of 1896, section 232, a notice of appeal
must state the grounds of the appeal. In re Stone, 56 Misc. 247,
107 N. Y. Suppl. 385.

Grounds of Appeal Specified are Exclusive.

An order fixing the transfer tax upon an estate is an entirety and
the party claiming to be aggrieved thereby in taking an appeal
should present upon that appeal every objection which he has to
the order. It would lead to endless delay and confusion if he were
permitted to take a separate appeal for each objection made to
the order of the surrogate. The specification of one or more
objections is deemed equivalent that the appellant regards the
decree in all other respects correct. In re Cook, 194 N. Y. 400,
403, 87 N. E. 786, affirming 125 N. Y. App. Div. 114, 109 N. Y.
Suppl. 417.

Where the time for appeal has gone by and subsequently a
proceeding is commenced by new heirs claiming the estate and
attempting to revoke the letters of administration already granted,
the surrogate has jurisdiction under the notice of appeal already
given to consider the new question arising; and is not excluded
from doing so on the ground that it was not specified in the notice
of appeal. In re Westurn, 152 N. Y. 93, 104, 46 N. E. 315, revers-
ing 8 N. Y. App. Div. 59.

Filing Notice of Appeal.

Under this section the appeal is taken out by filing in the office
of the surrogate a notice of appeal, and to be effective such notice
maist be filed within sixty days from the assessing of the tax. Where
the appellants did not file their notice of appeal in time it never
became effective and the surrogate never acquired jurisdiction to
hear it. In re Seymour, 128 N. Y. Suppl. 775.

1909, c. 62.] NEW YORK. 959

Service of Notice.

The admission of service of the notice of appeal by the attorney
of the state comptroller cannot be accepted as a waiver of default
in appealing, for the validity of the appeal depended, not upon ser-
vice of notice thereof upon the attorney, but upon timely filing
of the notice in the surrogate's office. In re Seymour, 128 N. Y.
Suppl. 775.

Effect of Failure to Appeal*

Failure to appeal from a notice assessing the tax will bar a
party from claiming that the valuation is incorrect. In re Racket,
14 Misc. Rep. 282, 35 N. Y. Suppl. 1051.

Appeal by City Comptroller.

The comptroller of the city of New York in 1900 was authorized
to prosecute an appeal from the decision of the surrogate although
the powers and duties in respect thereto devolved upon the state
comptroller. Such condition would authorize a substitution of the
state comptroller but until such substitution is had the appeal was
properly prosecuted by the officer who instituted it. In re Black-
stone, 171 N. Y. 682, affirming 69 N. Y. App. Div. 127.

No Appeal from Penalty Imposed.

A decree assessing taxes does not concern itself with the amount
of interest or penalty, and therefore the penalty is not a proper
ground of appeal. If the penalty is to be remitted a special appli-
cation must be made to the surrogate. In re De Graaf, 24 Misc.
Rep. 147, 53 N. Y. Suppl. 591, 2 Gibbons 516.

Questions of Fact.

The court of appeals refused to disturb the finding of the lower
court on the ground that it involved simply a question of fact as
to the effect of a certain deed. In re Thorne, 162 N. Y. 238,
56 N. E. 625, 44 N. Y. App. Div. 8, 60 N. Y. Suppl. 419.

Vacating Assessment.

General Authority of Surrogate.

A surrogate under the Code of Civil Procedure, section 2481,
should open and vacate his judgment in a tax proceeding only as
the same power would be exercised by a court of record. In re
Barnum, 129 N. Y. App. Div. 418, 114 N. Y. Suppl. 33.

960 STATUTES ANNOTATED. [N. Y. St.

The surrogate has no authority to amend an order made in a
transfer tax proceeding as he has no general powers or jurisdiction
and the only authority is to be found in the act itself. The
jurisdiction is special and specially conferred by the act. In re
Crerar, 56 N. Y. App. Div. 479, 67 N. Y. Suppl. 795, 9 Ann. Cas.
101.

The surrogate has authority in a proper case to modify his
amended order assessing a transfer tax. In re Warren, 62 Misc.
444, 116 N. Y. Suppl. 1034; In re Silliman, 175 N. Y. 513, 67 N. E.
1090, affirming 79 N. Y. App. Div. 98, 80 N. Y. Suppl. 336, revers-
ing 77 N. Y. Suppl. 267.

Where Acts without Jurisdiction.

The surrogate has power to modify his own decree where he acts
beyond his jurisdiction without notice. In re Backhouse, 185
N. Y. 544, 77 N. E. 1181, affirming 110 N. Y. App. Div. 737,

96 N. Y. Suppl. 466.

The surrogate has the power to vacate a decree made by him
without jurisdiction under the Code of Civil Procedure, section
2481, sub-division 6, even after the time for appeal has expired. He
may therefore reverse an order including in the value of the estate
certain United States bonds, as his order was to that extent a
nullity. In re Coogan^ 27 Misc. Rep. 563, 59 N. Y. Suppl. 111.

To Correct Clerical Errors.

The surrogate may set aside an order imposing a transfer tax
where evidence was furnished which is not contradicted that the
transfer tax should not have been imposed, although if there is any
question about it the surrogate instead of vacating the trial order,
should have remitted the whole matter to the official appraiser
to make the computation upon which the taxability of the property
depends. In re Cameron, 181 N. Y. 560, 74 N. E. 1115, affirming

97 N. Y. App. Div. 436, 89 N. Y. Suppl. 977.

After the surrogate had determined the cash value of the estate
subject to tax certain judgments on claims which the executor
had denied were recovered. The court holds that the power of
the surrogate to correct errors is limited to clerical errors or mistakes
which do not involve questions of law. In re Connelly, 38 Misc.
Rep. 466, 77 N. Y. Suppl. 1032..

The surrogate has power to modify his own decree, where it
appears that the legatee died before the testator. Morgan v.
Cowie, 49 N. Y. App. Div. 612.

1909, c. 62.1 NEW YORK. 961

Not to Correct Errors of Law.

The surrogate's court has no authority to amend or correct an
order assessing an inheritance tax where the order was claimed to
be erroneous on the ground that it included certain United States
bonds which were later decided to be exempt. The surrogate,
Thomas, denies an application on the ground that his decision in
In re Earle, 71 N. Y. Suppl. 1038, has been overruled by In re
Crerar, 56 N. Y. App. Div. 479, 67 N. Y. Suppl. 795. In re Von
Post, 35 Misc. 367, 71 N. Y. Suppl. 1039.

The surrogate's court under the Code of Civil Procedure,
section 2481, sub-division 6, has no authority to vacate its decree
fixing the tax on legacies simply on the ground that certain things
were included and excluded erroneously on the appraisal, as this
is not a clerical error, but an error of law within the section of
the code. In re Wallace, 28 Misc. Rep. 603, 59 N. Y. Suppl. 1084.

The surrogate has no jurisdiction to pass an order that no
transfer tax is legally payable on the securities and that the transfer
tax thereon was erroneously made. The original order remained
unreversed and unmodified and consequently had the same force
prior to this attempt on the part of the surrogate to decree it
erroneous. The court intimates that the surrogate had no power
even to modify the original order as the time for appeal had expired.
In re Schermerhorn, 38 N. Y. App. Div. 350, 57 N. Y. Suppl. 26.

Mere evidence of a sale of property after the appraisal lower than
the appraised valuation does not give the surrogate power to
modify his decree of appraisal. In re Lowry, 89 N. Y. App. Div.
226, 85 JSr. Y. Suppl. 924. See, however, In re Fulton, 30 Misc.
Rep. 70, 62 N. Y. Suppl. 995.

After Time for Appeal has Expired.

In those cases where the surrogate has authority to amend his
own decree he may do so after the expiration of the time allowed
for appeal. A decree assessing a tax made under the N. Y. St.
1899, c. 76, which was declared unconstitutional, may be vacated
by the surrogate after the time for appeal has gone by. In re
Scrimgeour, 175 N. Y. 507, 67 N. E. 1089, affirming 80 N. Y. App.
Div. 388, 80 N. Y. Suppl. 636, 78 N. Y. Suppl. 971, 39 Misc. 128.

In the Scrimgeour case, 175 N. Y. 507, the tax was imposed under
an unconstitutional provision of the statute, a fact which the blind
report of the case conceals. In re Backhouse, 185 N. Y. 544, 77
N. E. 1181, affirming 110 N. Y. App. Div. 737.

962 STATUTES ANNOTATED. [N. Y. St.

Under the Code of Civil Procedure, section 1290, the surrogate's
court has power to vacate or modify a decree in a proper case after
two years from the final judgment. In re Mather, 41 Misc. Rep.
414, 84 N. Y. Suppl. 1105.

Oral Opinion.

Where on an affidavit of the executor as to the assets the surro-
gate expresses the opinion orally that the estate is not subject
to tax, but enters no order or judgment, the state is not barred from
subsequently asking for an appraisal. In re Schmidt, 39 Misc.
Rep. 77, 78 N. Y. Suppl. 879.

Power to Order Refund.

Under section 225, the surrogate may correct an error in his
order fixing the transfer tax within two years and the tax may be
ordered refunded. In re Willet, 51 Misc. 176, 100 N. Y. Suppl.
850, affirmed 119 N. Y. App. Div. 119, 104 N. Y. Suppl. 1150.

So where by mistake the executor has omitted a debt of the
decedent from the transfer tax the surrogate may amend his decree
and order the excess refunded. In re Campbell, 50 Misc. 485, 100
N. Y. Suppl. 637. But the surrogate has no power to modify an
order made within his jurisdiction and allow a partial refund simply
because of a newly-discovered debt due by the estate after the
time for appeal has expired. In re Hamilton, 41 Misc. Rep. 268,
84 N. Y. Suppl. 44.

The surrogate may refuse to insert in an order vacating an as-
sessment a direction to the state comptroller to refund the amount
of the tax. Such an order is entirely proper, but is not essential, as
the statute itself commands the state comptroller to direct the
treasurer of the county or the comptroller of the city of New York
to refund. See section 225. In re Cameron, 181 N. Y. 560, 74
N. E. 1115, affirming 97 N. Y. App. Div. 436, 89 N. Y. Suppl.
977.

Reappraisal.

New Appraisal Unwarranted.

Where property was brought to the attention of the appraisers
and is not included in the appraisal, a new appraisal under section
230 is not authorized on the ground that the property was omitted
from the former appraisal. In re Crerar, 56 N. Y. App. Div.
479, 67 N. Y. Suppl. 795, 9 N. Y. Ann. Cas. 101.

1909, c. 62.] NEW YORK. 963

Where an appraiser reports that remaindermen were indefinite
and uncertain and that the tax could not then be determined and
this report is confirmed in 1894, the court has no power to appoint
another appraiser in 1898. The report was the final determina-
tion of the subject. In re Lawrence, 96 N. Y. App. Div. 29,
88 N. Y. Suppl. 1028.

Evidence Necessary for Rehearing.

An appeal from the decree on appraisal cannot be sustained
unless it appears that there is some definite evidence to be pro-
duced on a rehearing that would increase the valuation on stock
claimed by the comptroller to be valued too low. In re Johnson,
37 Misc. Rep. 542, 75 N. Y. Suppl. 1046.

On Motion.

A motion may be made to remit the report of an appraiser back
to the appraisers before the court has acted upon it, for the intro-
duction of additional proof. In re Kelly, 29 Misc. Rep. 169,
60 N. Y. Suppl. 1005.

This remedy is not exclusive but the taxpayer may appeal under
the New York Code of Civil Procedure, section 2570, to the appel-
late division from the order of the surrogate's court approving the
appraisal, if he believes that such appraisal . . . has been fraudu-
lentljy collusively or erroneously made. Morgan v. Warner, 162
N. Y. 612, 57 N. E. 1118, affirming 45 N. Y. App. Div. 424.

Some clear evidence of undervaluation must be produced before
a reappraisal will be ordered. Matter of Johnson, 37 Misc. 542, 75
N. Y. S. 1046.

Where no appraisal is made at all for the reason that both
appraiser and surrogate took the view which proved to be mistaken,
that the bequest was not subject to tax, this is not within the
statute and therefore a reappraisal cannot be had under this
section, which applies only to errors of fact. In re Niven, 29 Misc.
Rep. 550, 61 N. Y. Suppl. 956.

Reappraisements will not be ordered in the absence of evidence
of mistake or fraud simply because at public auction the property
was sold for a price exceeding the appraisal. In re Bruce, 59 N. Y.
Suppl. 1083.

S. 233. Composition of transfer tax upon certain estates. The state
comptroller, by and with the consent of the attorney general expressed in writing
is hereby empowered and authorized to enter into an agreement with the trustees

964

STATUTES ANNOTATED. [N. Y. St.

of any estate in which remainders or expectant estates have been of such a nature,
or so disposed and circumstanced, that the taxes therein were held not presently
payable, or where the interests of the legatees or devisees were not ascertainable
under the provisions of chapter four hundred and eighty-three of the laws of
eighteen hundred and eighty-five; chapter three hundred and ninety-nine of
the laws of eighteen hundred and ninety-two, or chapter nine hundred and eight
of the laws of eighteen hundred and ninety-six, and the several acts amendatory
thereof and supplemental thereto; and to compound such taxes upon such terms
as may be deemed equitable and expedient; and to grant discharge to said trus-
tees upon the payment of the taxes provided for in such composition, provided,
however, that no such composition shall be conclusive in favor of said trustees
as against the interest of such cestuis que trust as may possess either present rights
of enjoyment, or fixed, absolute or indefeasible rights of future enjoyment, or of
such as would possess such rights in the event of the immediate termination
of particular estates, unless they consent thereto, either personally, when com-
petent, or by guardian or committee. Composition or settlement made or
effected under the provisions of this section shall be executed in triplicate, and
one copy filed in the office of the state comptroller, one copy in the office of
the surrogate of the cou nty in which the tax was paid, and one copy delivered
to the executors, administrators or trustees who shall be parties thereto.

[See notes to the acts of 1896, c. 908, s. 230; 1897, c. 284; 1899, c. 76; 1900,
c. 379; 1901, c. 173, s. 9; 1905, c. 368, s. 233.]

S. 234. Surrogates* assistants in New York, Kings and other counties.

The state comptroller may, upon the recommendation of the surrogate, appoint,
and may at pleasure remove, assistants and clerks in the surrogate's offices of the
foil owing counties, at annual salaries to be fixed by him not to exceed the amounts
hereinafter specified: —

1. In New York county, a transfer tax assistant, four thousand dollars; a
transfer tax clerk, two thousand four hundred dollars; an assistant clerk, eighteen
hundred dollars; a recording clerk, thirteen hundred dollars; a stenographer,
eight hundred dollars; and shall be entitled to expend not more than seven
hundred and fifty dollars a year in such office for expenses necessarily incurred
in the assessment and collection of taxes under this article.

2. In Kings county, a transfer tax assistant, four thousand dollars; a transfer
tax clerk, two thousand dollars; an assistant clerk, fifteen hundred dollars; and
shall be entitled to expend not more than five hundred dollars a year for expenses
necessarily incurred in the assessment and collection of taxes under this article.

3. In Erie county, a transfer tax clerk, eighteen hundred dollars.

4. In Westchester county, a transfer tax assistant, two thousand five hundred
dollars.

5. In Albany county, a transfer tax clerk, twelve hundred dollars.

6. In Queens county, a transfer tax clerk, one thousand dollars.

7. In Onondaga county, a transfer tax clerk, twelve hundred dollars.

^ 8. In Monroe county, two transfer tax clerks, seven hundred and fifty dollars
each; and shall be entitled to expend not more than two hundred dollars a year
for expenses necessarily incurred in the assessment and collection of taxes under
this article.

9. In Dutchess county, a transfer tax clerk, nine hundred dollars.

1909, c. 62.] NEW YORK. 965

10. In Oneida county, not more than two transfer tax clerks, twelve hundred
dollars in the aggregate.

11. In Suffolk county, a transfer tax clerk, one thousand dollars.

12. In Ulser county, a transfer tax clerk, seven hundred and twenty dollars.
Such salaries and expenses shall be paid monthly by the state comptroller,

upon proper vouchers, out of any funds in his hands on account of taxes col-
lected under this article. (As amended by L. 1910, ch. 70.)

[See notes to the acts of 1885, c. 483, s. 13; 1892, c. 399, s. 17; 1896, c. 908,

s. 233; 1896, c. 952; 1898, c. 289; 1899, c. 269; 1899, c. 270; 1899, c. 389;

1899, c. 406; 1901, c. 173, s. 10; 1901, c. 288; 1902, c. 283; 1905, c. 368; 1906,
c. 699; 1908, c. 312; 1910, c. 70.]

S. 235. Proceedings by district attorneys. If, after the expiration of
eighteen months from the accrual of any tax under this article, such tax shall
remain due and unpaid, after the refusal or neglect of the persons liable therefor
to pay the same, the state comptroller shall notify the district attorney of the
county, in writing, of such failure or neglect, and such district attorney shall
apply to the surrogate's court for a citation, citing the persons liable to pay such
tax to appear before the court on the day specified, not more than three months
after the date of such citation, and show cause why the tax should not be paid.
The surrogate, upon such application, and whenever it shall appear to him that
any such tax accruing under this article has not been paid as required by law,
shall issue such citation, and the service of such citation, and the time, manner and
proof thereof, and the hearing and determination thereon and the enforcement
of the determination or order made by the surrogate shall conform to the pro-
visions of the code of civil procedure for the service of citations out of the surro-
gate's court, and the hearing and determination thereon and its enforcement so
far as the same may be applicable. The surrogate or his clerk shall, upon request
of the district attorney or the state comptroller, furnish, without fee, one or
more transcripts of such decree, which shall be docketed and filed by the county
clerk of any county of the state without fee, in the same manner and with the
same effect as provided by law for filing and docketing transcripts of decrees
of the surrogate's court. The costs awarded by any such decree after the col-
lection and payment of the tax to the state comptroller or county treasurer may
be retained by the district attorney for his own use. Such costs shall be fixed
by the surrogate in his discretion, but shall not exceed in any case where there
has not been a contest, the sum of one hundred dollars, or where there has been
a contest, the sum of two hundred and fifty dollars. Whenever the surrogate
shall certify that there was probable cause for issuing a citation and taking the
proceedings specified in this section, the state comptroller, after the same shall
have been audited by him, shall pay all expenses incurred for the service of cita-
tions and other lawful disbursements not otherwise paid, from funds in his hands
on account of such tax, or in a county in which the office of appraiser is not salaried
by a warrant upon the county treasurer of such county for the payment by him
of the same from funds in his hands on account of such tax. In proceedings
to which the state comptroller is cited as a party under sections two hundred and
twenty-eight and two hundred and thirty of this article, he is authorized to desig-
nate and retain counsel to represent him and to pay the expenses thereby incurred
out of the funds which may be in his hands on account of this tax in any case in a

966 STATUTES ANNOTATED. IN. Y. St.

county where the office of appraiser is salaried, and in any other county the state
comptroller shall by warrant direct the county treasurer to pay such expenses out
of any funds which may be in his hands on account of this tax, provided, how-
ever, that in the collection of taxes upon estates of non-resident decedents the
state comptroller shall not allow for legal services up to and including the entry
of the order of the surrogate fixing the tax a sum exceeding ten per centum of
the taxes and penalties collected.

[See notes to the acts of 1885, c. 483, ss. 16, 17; 1892, c. 399, ss. 11, 12; 1896,
c. 908, s. 235; 1901, c. 173, s. 11; 1905, c. 368; 1908, c. 310.]

Burden of Proof.

The state has the burden of proving that the transfer tax should
be imposed. In re Miller, 77 N. Y. App. Div. 473, 78 N. Y. Suppl.
930, overruling 75 N. Y. Suppl. 929.

Evidence of Legatee.

A legatee is not barred by the code of civil procedure, section
829, from testifying as to his conversations and relations with the
decedent or to show that the mutually acknowledged relation of
a parent existed. The code of civil procedure, section 829, pro-
vided that a party shall not be exempt as a witness in his own be-
half as to any communication or personal transaction with a deceased
person. In re Brundage, 31 N. Y. App. Div. 348, 52 N. Y. Suppl.
362. In re.Bentley, 31 Misc. Rep. 656, 66 N. Y. Suppl. 95.

Parties to Action to Enforce Ante-nuptial Contract.

The state comptroller was not a necessary party to an action
for the specific performance of an ante-nuptial contract. In re
Kidd, 115 N. Y. App. Div. 205, 100 N. Y. Suppl. 917, reversed
on another point in 188 N. Y. 274, 80 N. E. 924.

S. 236. Receipts from county treasurer or comptroller. One of the

duplicate receipts issued for the payment of any tax under this article, as pro-
vided by section two hundred and twenty-two, shall be countersigned by the
state treasurer if the same was issued by the state comptroller, and by the state
comptroller, if issued by any county treasurer. The officer so countersigning
the same shall charge the officer receiving the tax with the amount thereof and
affix the seal of his office to the same and return to the proper person; but no
^executor, administrator or trustee shall be entitled to a final accounting of an
estate in settlement of which a tax- is due under the provisions of this article
unless he shall produce a receipt so sealed and countersigned, or a certified copy
thereof. Any person shall, upon the payment of fifty cents to the officer issuing
such receipt, be entitled to a duplicate thereof, to be signed, sealed and counter-
signed in the same manner as the original.

1909, c. 62.] NEW YORK. 967

Any person shall, upon the payment of fifty cents, be entitled to a certificate
of the state comptroller that the tax upon the transfer of any real estate of which
any decedent died seized has been paid, such certificate to designate the real
property upon which such tax is paid, the name of the person so paying the same,
and whether in full of such tax. Such certificate may be recorded in the office
of the county clerk or register of the county where such real property is situate,
in a book to be kept by him for that purpose, which shall be labeled "transfer
tax."

[See notes to the acts of 1885, c. 483, ss. 8, 23; 1892, c. 399, ss. 3, 16; 1896,
c. 908, s. 222; 1901, c. 173, s. 11; 1905, c. 368, s. 236.]

S. 237. Fees of county treasurer. The treasurer of each county in which the
office of appraiser is not salaried shall be allowed to retain, on all taxes paid and
accounted for by him each fiscal year under this article, five per centum on the
first fifty thousand dollars, two and one-half per centum on the next fifty thousand
dollars, and one per centum on all additional sums. Such fees shall be in addi-
tion to the salaries and fees now allowed by law to such officers.

•[See notes to the acts of 1885, c. 483, s. 22; 1887, c. 713; 1892, c. 399, s. 17;
1896, c. 908, s. 237; 1898, c. 289; 1901, c. 173, s. 12; 1905, c. 368; 1908, c. 310.)

S. 238. Books and forms to be furnished by the state comptroller.

The state comptroller shall furnish to each surrogate a book, which shall be a
public record, and in which he shall enter the name of every decedent upon whose
estate an application to him has been made for the issue of letters of administra-
tion, or letters testamentary, or ancillary letters, the date and place of death of
such decedent, the estimated value of his real and personal property, the names,
places of residence and relationship to him of his heirs-at-law, the names and
places of residence of the legatees and devisees in any will of any such decedent,
the amount of each legacy and the estimated value of any real property devised
therein, and to whom devised. These entries shall be made from the data con-
tained in th« papers filed on any such application, or in any proceedmg relating
to the estate of the decedent. The surrogate shall also enter in such book the
amount of the personal property of any such decedent, as shown by the inven-
tory thereof when made and filed in his office, and the returns made by any
appraiser appointed by him under this article, and the value of annuities, life
estates, terms of years, and other property of any such decedent or given by
him in his will or otherwise, as fixed by the surrogate, and the tax assessed thereon,
and the amounts of any receipts for payment of any tax on the estate of such
decedent under this article filed with him. The state comptroller shall also
furnish to each surrogate forms for the reports to be made by such surrogate,
which shall correspond with the entries to be made in such book.

[See notes to the acts of 1885, c. 483, s. 20; 1892, c. 399, s. 18; 1896, c. 908,
s. 238; 1905, c. 368.]

S. 239. Reports of surrogate and county clerk. Each surrogate shall,
on January, April, July and October first of each year, make a report, upon the
forms furnished by the comptroller containing all the data and matters required
to be entered in such book, which shall be immediately forwarded to the state

968 STATUTES ANNOTATED. IN. Y. St.

comptroller. The county clerk of each county, except in the counties where the
registers perform the duties of the county clerk with respect to the recording
of deeds, and when in such counties the registers, shall, at the same times, make
reports containing a statement of any deed or other conveyance filed or recorded
in his office, of any property, which appears to have been made or intended to
take effect in possession or enjoyment after the death of the grantor or vendor,
with the name and place of residence of such grantor or vendor, the name and place
of residence of the grantee or vendee, and a description of the property trans-
ferred, which shall be immediately forwarded to the state comptroller.

[See notes to the acts of 1885, c. 483, s. 18; 1892, c. 399, s. 19; 1896, c. 908,
s. 239; 1901, c. 173, s. 13; 1905, c. 368.]

S. 240. Reports of county treasurer. Each county treasurer in a county
in which the office of appraiser is not salaried shall make a report, under oath,
to the state comptroller, on January, April, July and October first of each year,
of all taxes received by him under this article, stating for what estate and by whom
and when paid. The form of such report may be prescribed by the state comp-
troller. He shall, at the same time, pay the state treasurer all taxes received
by him under this article and not previously paid into the state treasury, and
for all such taxes collected by him and not paid into the state treasury within
thirty days from the times herein required, he shall pay interest at the rate of
ten per centum per annum.

[See notes to the acts of 1885, c. 483, s. 21; 1892, c. 399, s. 20; 1896, c. 908
s. 240; 1901, c. 173, s. 13; 1905, c. 368.]

S. 241. Report of state comptroller: payment of taxes. The state
comptroller shall deposit all taxes collected by him under this article in a respon-
sible bank, banking house or trust company in the city of Albany, which shall
pay the highest rate of interest to the state for such deposit, to the credit of the
state comptroller on account of the transfer tax. And every such bank, banking
house or trust company shall execute and file in his office an undertaking to the
state, in the sum, and with such sureties, as are required and approved by the
comptroller, for the safe keeping and prompt payment on legal demand therefor
of all such moneys held by or on deposit in such bank, banking house or trust
company, with interest thereon on daily balances at such rate as the comptroller
may fix. Every such undertaking shall have indorsed thereon, or annexed thereto ,
the approval of the attorney general as to its form. The state comptroller shall
on the first day of each month make a verified return to the state treasurer of all
taxes received by him under this article, stating for what estate, and by whom
and when paid; and shall credit himself with all expenditures made since his last
previous return on account of such taxes, for salary, refunds or other purposes
lawfully chargeable thereto. He shall on or before the tenth day of each month
pay to the state treasurer the balance of such taxes remaining in his hands at the
close of business on the last day of the previous month, as appears from such
returns. (Former sec. 240 a without change.)

[See notes to the acts of 1901, c. 173, s. 14; 1905, c. 368, s. 240a; 1906, c. 111-
1909, c. 62, s. 241.]

1909, c. 62.] NEW YORK. 969

S. 242. Application of taxes. All taxes levied and collected under this
article when paid into the treasury of the state shall be applicable to the expenses
of the state government and to such other purposes as the legislature shall by
law direct. (Former sec. 241 without change.)

[See notes to the acts of 1885, c. 483, s. 24; 1892, c. 399, s. 21; 1896, c. 908,
s. 241; 1901, c. 173, s. 15; 1905, c. 368; 1909, c. 62.]

S. 243 (as amended by St. 1911, c. 732, in effect July 21, 1911). Definitions.
The words "estate" and "property," as used in this article, shall be taken to
mean the property or interest therein passing or transferred to individual or cor-
porate legatees, devisees, heirs, next of kin, grantees, donees or vendees, and not
as the property or interest therein of the decedent, grantor, donor or vendor
and shall include all property or interest therein, whether situated within or with-
out this state. The words "tangible property" as used in this article shall be
taken to mean corporeal property such as real estate and goods, wares and mer-
chandise, and shall not be taken to mean money, deposits in bank, shares of stock,
bonds, notes, credits or evidences of an interest in property and evidences of debt.
The words "intangible property" as used in this article shall be taken to mean
incorporeal property, including money, deposits in bank, shares of stock, bonds,
notes, credits, evidences of an interest in property and evidences of debt. The
word "transfer," as used in this article, shall be taken to include the passing of
property or any interest therein in the possession or enjoyment, present or future,
by inheritance, descent, devise, bequest, grant, deed, bargain, sale or gift, in the
manner herein prescribed. The words "county treasurer" and "district attor-
ney," as used in this article, shall be taken to mean the treasurer or the district
attorney of the county of the surrogate having jurisdiction as provided in section
two hundred and twenty-eight of this article. The words "the intestate laws
of this state," as used in this article, shall be taken to refer to all transfers of
property, or any beneficial interest therein, effected by the statute of descent and
distribution and the transfer of any property, or any beneficial interest thefein,
effected by operation of law upon the death of a person omitting to make a valid
disposition thereof, including a husband's right as tenant by the curtesy or the
right of a husband to succeed to the personal property of his wife who dies intes-
tate leaving no descendants her surviving.

[See notes to the acts of 1892, c. 399, s. 22; 1896, c. 908, s. 242; 1898, c. 88;
1901, c. 173, s. 16; 1905, c. 368; 1909, c. 62, s. 243; 1910, c. 70.]

S. 244. Exemptions in article one not applicable. The exemptions
enumerated in section four of this chapter shall not be construed as being appli-
cable in any manner to the provisions of this article. (Former sec. 243 without
change of substance.)

[See notes to the act of 1900, c. 382; 1905, c. 368.]

S. 245. Limitation of time. The provisions of the code of civil procedure
relative to the limitation of time of enforcing a civil remedy shall not apply to
any proceeding or action taken to levy, appraise, assess, determine or enforce
the collection of any tax or penalty prescribed by this article, and this section

970 STATUTES ANNOTATED. IN. Y. St.

shall be construed as having been in effect as of date of the original enactment
of the inheritance tax law, provided, however, that as to real estate in the hands
of bona fide purchasers, the transfer tax shall be presumed to be paid and cease
to be a lien as against such purchasers after the expiration of six years from the
date of accrual. (Part of former article 13, sec. 282.)

[Seenotestotheactof 1899, c. 737; 1905, c. 368; 1909, c. 60.]

Statute of Limitations.

The testator died in 1888 and it was claimed that proceedings
begun later were barred through the operation of the code of
civil procedure, section 382, sub-division 2, wliich fixes a limi-
tation of six years upon an action to recover a statutory liability.
The court holds, however, that the statute of 1899, chapter 737,
relieved this bar and was retroactive. In re Strang, 117 N. Y.
App. Div. 796, 102 N. Y. Suppl. 1062.

N. Y. St. 1887, c. 713, s. 17, authorizing the issue of a citation
to show cause after a refusal or neglect to pay the inheritance
tax means that no proceedings can be instituted to enforce the
tax within eighteen months in view of section 4. And where a
proceeding is begun within that time no costs should be allowed
against the taxpayer. Frazer v. People, 3 N. Y. Suppl. 134, 6 Dem.
Surr. 174.

The testator died in 1893 when there was a limitation of eighteen
months for the payment of the inheritance tax. This limitation
was withdrawn by the statute of 1899, chapter 737, providing
that the limitation should be no defence to a proceeding to collect
a transfer tax.

The court holds that a proceeding begun in 1902 is not barred.
In re Moench, 39 Misc. Rep. 480, 80 N. Y. Suppl. 222.

FORMS.

The following form of return was issued by the office of the
tax commissioner under the act of 1910 to foreign executors: —

Forms.] NEW YORK. 971

SURROGATE'S COURT,
NEW YORK COUNTY.

IN THE MATTER
of the
Transfer Tax upon the Estate of
Deceased.

AFFIDAVIT FOR
APPRAISAL.

STATE OF )

COUNTY OF 1^^*

, being duly sworn deposes

and says:

I. That he resides at.

II. That said decedent died on the day of

,...., a resident of ,

State of , leaving a last will and testament

which was duly admitted to probate by the

, State of ,

on the day of

III. That deponent was appointed executor of said will, has duly
qualified and is now acting as such executor.

IV. That hereto annexed and made a part hereof is an itemized statement
marked "A," of all the property, real and personal, of which said decedent died
seized and possessed, situated within the State of New York, and an itemized
statement, marked "B," of all the personal property situated without the State
of New York.

V. That at the time of h death, decedent had no safe deposit box, no
bonds, public or private, no mortgages and no money within the State of New
York; he had no interest in any business or co-partnership carried on therein;
he owned no shares of stock in National Banks situated therein and owned no
shares of stock in corporations organized and existing under the laws of the State
of New York, physically located either within or without said State; he had no
interest in the estate of a New York resident; he had no claims against, and there
were no debts due and owing h from residents of the State of New York; he
had no deposits in banks, trust companies or savings banks in the State of New
York in h own name, jointly or in trust; he owned no jewelry, horses, carriages
or furniture; and was possessed of no other personal property of any kind whatso-
ever in said State except as set forth in Schedule "A."

VI. That the decedent at the time of h death owned no real estate situ-
ated within the State of New York.

VII. That prior to h death decedent made no transfer of property in the
State of New York by deed, grant, bargain, sale or gift in contemplation of death
or intended to- take effect at or after death; that the decedent had no power of
appointment over property, real or personal, located therein.

972 STATUTES ANNOTATED. [N. Y. St.

VIII. That the fair ^narket value of the entire personal estate of said decedent
at the time of h death, wheresoever situated, was the sum of $

That the funeral expenses of said decedent amounted to the sum of

That the debts itemized in a statement hereto annexed, marked "C," due and
owing by decedent at the time of h death, exclusive of funeral expenses, mort-
gages on real estate, inheritance taxes paid to the United States Government,
or to any Foreign or State Government, or loans secured by collateral, amount
to the sum of $

That the administration expenses incurred and to be incurred, itemized in a
statement hereto annexed, marked "D," exclusive of expenses in the preceding
paragraphs, amount to the sum of $

That the comwissions allowed me as executor amount to the sum of

IX. That annexed hereto, marked Schedule "E" and made a part hereof'
is a true copy of said decedent's last will and testament.

X. That all the parties in interest are alive, of full age and sound mind,
unless otherwise stated in the following paragraph.

XI. That all the persons who are entitled to share in the estate of said dece-
dent, their addresses, ages of life tenants, the amounts of their respective shares
and their relationship to decedent, are as follows: —

Name and Ages of Amount or

Relationship. Life Tenants. Address. Share.

Sworn before me this .
dayof

Attach

County Clerk's
Certificate.

SCHEDULE "A."
Property within the State of New York.

SCHEDULE "B."
Property outside the State of New York.

SCHEDULE "F."

List of debts owing to residents

of the State of New York.

N. C. Stat.] NORTH CAROLINA. 973

NORTH CAROLINA.

In General.

North Carolina had a collateral inheritance tax from 1847 to 1874.
A modest tax was imposed on both direct and collateral inheritances
in 1897. In 1901 the rates were substantially increased and made
progressive with a maximum of 15 per cent. This enactment was
much more radical than that adopted by any of the other states
up to that time, but almost duplicated the national inheritance tax
of 1898, which was then in force. The exemption applies to each
individual share and not to the estate as a whole.

North Carolina taxes stock in a North Carolina corporation
owned by a non-resident. It holds the corporation responsible if it
permits the transfer of such stock before the tax is paid . The statute
applies to the transfer by the corporation of bonds as well, but no
tax is being collected on bonds of North Carolina corporations
owned by non-residents.

List of Statutes.

1847. Statutes of North Carolina, c. 72, p. 139.

1848-49. " " " " c. 81.

1851. Tredell's Digested Manual, p. 259, ss. 1-7.

1855. Statutes of North Carolina, c. 37.

1855. Revised Code of North Carolina, c. 99, ss. 7-19.

1856-57. Statutes of North Carolina, c. 34.

1858-59. " " " " c. 25.

1860-61. " " " " c. 32.

1861. 2d extra session, c. 31.

1862-63. Adjourned session, c. 70.

1864-65. Statutes of North Carolina, c. 27.

1866. " " " " c. 21.

1866-67. " " " " c. 72.

1868-69. " " " " c. 108.

1869-70. " " " " c. 229.

1870-71. " " " " c. 227.

1871-72. " " " " c. 58.

1872-73. " " " " c. 144.

1873. Battle's Revisal, c. 102.

1873-74. Statutes of North Carolina, c. 134.

1883. Code of 1883, s. 3867.

974 STATUTES ANNOTATED. [N. C. St.

1897. Statutes of North Carolina, c. 168, s. 41.
1901. " " " " c. 9, p. 123, ss. 12-27.

1903. See revenue act of 1903, c. 247, ss. 6-21.

' 1905. Statutes of North Carolina, c. 588, p. 614.

1905. Revisal of 1905, vol. 2, c. 110, ss. 5111-5126.

1907. Statutes of North Carolina, c. 256, 3s. 6-21.

1908. Pell's Revisal, vol. 2, ss. 5111-5126.

1909. Statutes of North Carolina, c. 438, ss. 6-21.
1911. , " " " " c. 46, ss. 6-21.

Constitutional Limitations.

North Carolina Constitution, 1876, a. 5, s. 3.

Laws shall be passed taxing, by a uniform rule, all moneys, credits, invest-
ments in bonds, stocks, joint-stock companies, or otherwise; and, also, all real
and personal property, according to its true value in money. The general
assembly may also tax trades, professions, franchises, and incomes, provided
that no income shall be taxed when the property iroxa which the income is
derived is taxed.

Nature of Tax.

The legacy tax under N. C. St. 1869-70 is not a tax on property,
but is rather a tax imposed on a succession; on the right of the
legatee to take under the will, or of a collateral distribution in the
case of intestacy. It cannot be held that the tax is a tax on property,
merely because the amount of the tax is measured by the value of
the property. Pullen v. Commissioners , 66 N. C. 361.

The succession tax is based on two principles. First, that a suc-
cession tax is a tax upon. the right of succession to property and
not on the property itself. Second, that the right to take property
by devise or descent is not one of the natural rights of man, but is a
creature of the law. In re Morris, 138 N. C. 259, 50 S. E. 682.

History.

"The inheritance or succession tax is of very ancient origin. It
is no new invention of the legislative power for the purpose of put-
ting money in the public cofifers. Gibbon, the historian, traces its
origin to the Emperor Augustus, and says it wais suggested by him
to the senate as a means of supporting the Roman army ; that it was
imposed at the rate of 5 per cent upon all legacies or inheritance above
a certain value, but that it waLs not collected from the nearest rela-
tives upon the father's side; and that the tax was the most fruit-
ful as well as most comprehensive." 1 Gibbon's Rome, 133; Encyc.
Brit. (8th Am. ed.) 65, tit. "Taxation."

1876, a. 5.] NORTH CAROLINA. 975

"It was called vicessima hereditatum et legatorum. In this country
the tax is variously called an 'inheritance tax,* a 'legacy tax,' a
'transfer tax* and a 'succession duty.' It is defined as follows:
'A burden imposed by government upon all gifts, legacies, inheri-
tances and successions, whether of real or personal property, or
both, or any interest therein, passing to certain persons (other than
those specially excepted) by will, by intestate law, or by any deed or
instrument made inter vivos, intended to take effect at or after the
death of the grantor,* Dos Passos (2d ed.), s. 2. This method
of taxation has been long resorted to in European countries and was
introduced into Great Britain by Lord North and adopted in 1780.
Of the states of the American union, Pennsylvania was the first to
adopt it, in 1826, since which date it has been adopted as a means of
governmental support by a great many other states. As a means of
raising revenue, the method is generally commended by writers on
political economy." Mill's Political Economy, bk. 5, c. 62, s. 3.
"It is generally conceded that no tax can be less burdensome, and
interfere less with the industrial agencies of society." Smith's
Wealth of Nations, 683. In re Morris, 138 N. C. 259, 50 S. E. 682.

Power of Legislature.

The legislature has an unlimited right to tax all persons and
property within the state. Pullen v. Commissioners (1872), 66
N. C. 361. It is not necessary to the validity of the tax that the
state constitution should contain a specific delegation of power
authorizing the legislature to impose such taxation. The power of
the legislature over the state legislation is absolute unless restricted
by the constitution of the state or nation. In re Morris, 138 N. C.
259, 50 S. E. 682.

"The right to give or take property is not one of those natural
and inalienable rights which are supposed to precede all government,
and which no government can rightfully impair. There was a
time, at least as to gift by will, it did not exist; and there may be a
time again when it will seem wise and expedient to deny it. These
are the uncontested powers of the legislature upon which no article of
the constitution has laid its hands to impair them. If the legislature
may destroy this right, may it not regulate it? May it not impose
conditions upon its exercise? And the condition it has imposed in
this case is a tax. It is argued, however, that because the consti-
tution (article V, section 3) says that 'the general assembly may
also tax trades, professions, franchises and incomes,' and as this

976 STATUTES ANNOTATED. [N. C. St.

right of succession cannot be technically classed under either of
these heads, it must be implied that the legislature is forbidden to
tax such a right, on the rule of interpretation that the expression of
one thing implies the exclusion of any other. We think the impli-
cation is too slight to restrict the legislative power in the exercise
of so vital a portion of it as that of taxation, and especially so when
we can conceive of no reason of policy or justice requiring such a
restriction. It might as well be contended that since section 6 says
the legislature may exempt cemeteries, etc., enumerating several
matters of which the right in question is not one, the legislature is
thereby impliedly forbidden to exempt this right or any other pos-
sible subject of taxation whatever not mentioned in the section.
It is not by such artificial rules that constitutions are to be con-
strued." Per Rodman, J., in Pullen v. Commissioners, 66 N. C. 361.

THE EARLY STATUTES.

N. C. St. 1847, c. 72, ratified January 18, 1847, provided a tax on collateral
kindred or others than lineal descendants except the widow of the decedent,
of one (1) per cent on real estate descended or devised of the value of three
hundred ($300) dollars or more and of one (1) per cent on personal property
of two hundred ($200) dollars or more bequeathed to strangers or collaterals.

[The balance of the act provides for the collection and payment of the tax.]

Remainder Taxable. ~

N. C . St. 1847, c. 72, imposed a tax on legacies to collateral kin-
dred. The court holds that the words of the act are sufificiently
extensive to embrace a legacy in remainder. Attorney General v.
Pierce, 59 N. C. 249.

N. C. St. 1848-49, c. 81, approved January 27, 1849, makes it the duty of
executors before making distribution to apply for appraisers for the inheritance
tax.

N. C. St. 1855, c. 37, approved February 12, 1855, s. 7, provides that the
tax shall be one (1) per cent on brothers or sisters or their descendants, and
two (2) per cent on brothers or sisters of the father or mother of the deceased
or their descendants, and three (3) per cent on other collaterals.

N. C. St. 1855, was repeated in N. C. St 1856, c. 34, s. 7.

THE REVISED CODE OF 1855.
Exemptions.

N. C. Revised Code, c. 99, s. 7, contains no exemption in favor of
a college or church and therefore these distributees are liable to pay
the tax. Barringer v. Cowan, 55 N. C. 436.

1855, c. 99.] NORTH CAROLINA. 977

Property out of the State.

N. C. Revised Code, c. 99, ss. 7-12, does not impose a tax on
property of the decedent which is not in the state though given by
will or devolving by law upon one of our citizens. State v. Brevard^
62 N. C. 141.

Executors Liable.

Under N. C. Revised Code, c. 99, ss. 7-12, the executors are
liable for a tax on a legacy to one of them. State v. Brevard, 62 N.
C. 141.

When Paid. — On Settlement.

N. C. Revised Code, c. 99, s. 8, provided that the executor "shall
retain out of the legacy or distributive share of every such legatee
or next of kin" . . . "on his settlement of the estate." The words
"on his settlement" do not refer to a final settlement of the estate, but
its settlement so far as the legatee or distributee is concerned, out
of whose legacy or share the tax is to be retained and the tax on each
should be paid as soon as this legacy itself was paid. Attorney Gen-
eral V. Allen (1860), 59 N. C. 144.

Where Property Depreciates.

Where the executors have confederate money in their hands which
has become valueless the tax upon this money cannot be determined
until it is decided whether the executors will be allowed for this loss
on settlement with legatees. If the legatees get good money the
state must of course have a tax from it. State v. Brevard, 62 N. C.
141.

Non-residents.

This statute fixes the tax according to the situs of the property,
not according to the domicile of the testator. So where a Canadian
dies leaving personal property in North Carolina, the distributee
receives the property from the administrator appointed here and
must pay the North Carolina tax. Alvany v. Powell (1854), 55 N. C.
51, explained in State y. Brim, ^7 N. C. 300.

Where a testator died domiciled abroad where his personal es-
tate is, and leaves property to collateral relatives in North Carolina,
the relatives in North Carolina were not liable to the tax. State y.
Brim, 57 N. C. 300.

978 STATUTES ANNOTATED. [N. C. St.

LATER ACTS.

N. C. St. 1858, ratified February 16, 1859, c. 25, s. 27 (18), enacts the same
tax as before on real and personal estate above the value of one hundred ($100)
dollars.

N. C. St. 1860, ratified February 23, 1861, c. 32, s. 2 (7), provides that the
executors shall return in the inventory the relationship of beneficiaries.

N. C. St. 1861, c. 31, s. 54 (14), ratified September 3, 1861, repeats the tax
on collateral inheritances.

N. C. St. 1864-5, c. 27, s. 52 (16), approved December 23, 1864, makes the
taxes on brothers and sisters two (2) per cent; on brothers and sisters of father
and mother of deceased, or their children four (4) per cent; and on more remote
relations or strangers, six (6) per cent.

N. C. St. 1866, c. 21, s. 13, approved March 12, 1866, omits the exemption
of one hundred ($100) dollars.

N. C. St. 1866, c. 72, s. 16, ratified February 26, 1867, provides a tax on
brothers and sisters of a father or mother of the deceased or their issue of one
(1) per cent; and on more remote relations or strangers of one and one-half
(1 1-2) per cent.

N. C. St. 1868-69, c. 108, s. 2, ratified April 1, 1869, provides for a tax of
one (1) per cent on a brother or sister of the father or mother and on their issue,
and on a more remote relation or a stranger a tax of two (2) per cent.

N. C. St. 1869, c. 229, s. 2, ratified March 28, 1870, provides for a tax on the
brother or sister of the father or mother of the deceased or their issue of one
(1) per cent and one (1) per cent on a more remote relation or stranger, and
also provides particularly for the collection of the tax.

[As to the nature of the tax under this statute, see p. 974.]

N. C. St. 1870-71, c. 227, s. 2, ratified April 5, 1871, provides for a tax on the
brother or sister of the father or mother of the deceased or their issue of one
(1) per cent; on a more remote relation or a stranger of two and one-half {2}4)
per cent.

N. C. St. 1870-71, c. 227, is not retrospective, and could not con-
stitutionally be so. Pullen v. Commissioners, 66 N. C. 267.

N. C. St. 1871-72, c. 58, ratified January 24, 1872, s. 2, provides a tax on
brothers or sisters of the father or mother of the deceased or their issue of one
(1) per cent; and on a more remote relation or stranger of two and one-half (2>^)
per cent.

N. C. St. 1872-73, c. 144, approved March 3, 1873, s. 2, provides a tax on a
brother or sister of the father or mother of the deceased or their issue of one
(1) per cent; and on a more remote relation or a stranger of two and one-half (2^)
per cent.
^The collateral inheritance tax was dropped from the Revenue Act of 1874.
See N. C. Laws, 1873-74, c. 134.

N. C. Code of 1883, s. 3867, provides that "all public and general statutes
not contained in this Code are hereby repealed, with the exceptions and limita-
tions hereinafter mentioned. The Code contains no inheritance tax.

1911, c, 46.] NORTH CAROLINA. 979

THE RECENT STATUTES.

N. C. St. 1897, c. 168, ratified March 9, 1897, s. 41, provides an inheritance
tax of two-thirds of one per cent on direct inheritances and one and one-half
per cent on collaterals.

N. C. St. 1901, c. 9, s. 12, approved March 15, 1901, creates an inheritance
tax graduated according to relationship and amount.

N. C. St. 1903, c. 247, s. 6, provides a tax of three-quarters of one per cent on
lineals or the brother or sister, or where the person to whom the property devised
stood in the relation of a child to the decedent ; and one and one-half per cent
on descendants of brothers or sisters; three per cent to uncles and aunts and
their descendants; four per cent on a brother or sister of a grandfather or
grandmother or their descendants; five per cent on strangers and other col-
laterals with a graduated rate on five thousand dollars up to fifty thousand
dollars as in the statute of 1909.

N. C. St. 1903, c. 247, is constitutional. In re Morris, 138 N. C.
259, 50 S. E. 682.

Assessment.

It is not proper or necessary for the court on appeal to adjudicate
the amount of the tax to be levied. It is the duty of the clerk to
have an appraisement made under s. 15 of N. C. St. 1903, and to
ascertain and declare the amount of the tax to be paid. In re Morris,
138N.C.259, 50S. E.682.

The Statute Overrides the Testator's Direction to Make no
Returns.

The provisions of N. C.St. 1903, c. 247, ss. 6-21, govern and should
be followed; and the fact that the testator in his will directed his
executors not to make any returns of his property cannot be per-
mitted to have the effect of nullifying the statute. In re Morris,
138 N. C. 259, 50 S. E. 682.

N. C. St. 1905, c. 588, s. 6, approved March 6, 1905, provides an inheritance
tax graduated according to relationship and amounts.

N. C. St. 1907, c. 256, s. 6, approved March 11, 1907, provides an inheritance
tax graduated according to relationship and amount.

THE PRESENT ACT.

N. C. St. 1911, c. 46.

SCHEDULE AA.

S. 6. Rate of inheritance tax. From and after the passage of this act,
all real and personal property of whatever kind and nature 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, whether the person or

980 STATUTES ANNOTATED. IN. C. St.

persons dying seized thereof be domiciled within or out of the state, or if the
decedent was not a resident of this state at the time of his death, such property
or any part thereof within this state, or any interest therein or income there-
from which shall be transferred by deed, grant, sale or gift, made in contem-
plation of the death of the grantor, bargainor, donor or assignor, or intended
to take effect, in possession or enjoyment after such death, to any person or
persons or to bodies corporate or politic, in trust or otherwise, or by reason
whereof any person or body corporate or politic shall become beneficially entitled
in possession or expectancy to any property or the income thereof, shall be and
hereby is made subject to a tax for the benefit of the state, as follows, that is
to say: Where the whole amount of the property, real or personal, which shall
pass from a decedent to an heir at law, distributee, devisee, or legatee, by will,
by the intestate laws of this state, or by deed, grant, sale or gift made in con-
templation of death, shall exceed in value the sum of two thousand dollars, as
determined by the appraisal hereinafter provided for, the tax upon the excess
shall be as follows:

First. Where the person or persons entitled to any beneficial interest in such
property shall be the lineal issue or lineal ancestor, brother or sister of the per-
son who died possessed of such property aforesaid, or where the person to whom
such property shall be devised or bequeathed stood in the relation of child to
the person who died possessed of such property aforesaid, at the rate of seventy-
five cents for each and every hundred dollars of the clear value of such interest
in such property; and this clause shall apply to all cases where the taxes have
not been paid by the executor or administrator or other representative of the
deceased person. The clerk of the superior court shall determine whether
any person to whom property is so devised or bequeathed stands in the relation
of child to the decedent.

Second. Where the person or persons entitled to any beneficial interest in such
property shall be the descendant of a brother or sister of the person who died
possessed as aforesaid, at the rate of one dollar and fifty cents for each and every
hundred dollars of the clear value of such interest.

Third. Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the father or mother, or a descendant
of the brother or sister of the father or mother of the person who died possessed
as aforesaid, at the rate of three dollars for each and every hundred dollars
of the clear value of such interest.

Fourth. Where the person or persons entitled to any beneficial interest in
such property shall be the brother or sister of the grandfather or grandmother,
or a descendant of the brother or sister of the grandfather or grandmother of
the person who died possessed as aforesaid, at the rate of four dollars for each
and every hundred dollars of the clear value of such interest.

Fifth. Where the person or persons entitled to any beneficial interest in such
property shall be in any other degree of collateral consanguinity than is here-
inbefore stated, or shall be a stranger in blood to the person who died possessed
as^oresaid, or shall be a body politic or corporate, where the whole amount of
said legacy or distributive share of real or personal property shall exceed two
thousand dollars and shall not exceed five thousand dollars, the tax shall be at
the rate of five dollars for each and every hundred dollars of the clear value of
such interest: Provided, that all legacies or property passing by will or by laws

1911, c. 46.] NORTH CAROLINA. 981

of this state to husband or wife of the person who died possessed as aforesaid,
or for religious, charitable or educational purposes, shall be exempt from tax or
duty. Where the amount or value of said property shall exceed the sum of five
thousand dollars, but shall not exceed the sum or value of ten thousand dollars,
the rates of tax above set forth shall be multiplied by one and one-half; and
where the amount or value of said property shall exceed the sum of ten thousand
dollars, but shall not exceed the sum of twenty-five thousand dollars, such rates
of tax shall be multiplied by two ; and where the amount or value of said property
shall exceed the sum of twenty-five thousand dollars, but shall not exceed the
sum of fifty thousand dollars, such rates of tax shall be multiplied by two and
one-half; and where the amount or value of said property shall exceed the sum
of fifty thousand dollars, such rates of tax shall be multiplied by three; but
this graduated increase of rate shall only apply to the provisions of subdivision
five of this section: Protided, that when property is devised or bequeathed to
a trustee for another or others, the rate of such inheritance tax to be paid on
such devise or bequest shall be determined by the relationship of the cestui
que trust or cestuis que trustent to the testator.

Sixth. That whenever an estate subject to the tax under this act shall be
settled or divided among the heirs at law, legatees or devisees, without the quali-
fication and appointment of a personal representative, the clerk of the superior
court of the county wherein the estate is situated shall certify the same to the
corporation commission, and shall also require such heirs at law, legatees or
devisees, to report to him under oath the value of said personal estate, and he
shall ascertain the value of the real estate from the tax returns as aforesaid,
and shall report said valuation to the Corporation Commission. The clerk is
authorized and required to cite all interested parties to appear before him and
make the report herein required and pay to him the amount of the inheritance
tax due upon said property, and the clerk shall transmit the amount thereof to
the state treasurer, and the clerk shall be allowed three per cent of the tax
collected by him from the parties liable for the inheritance tax collected from an
estate upon which there is no administration. In case payment is not made
as required herein, the clerk shall certify to the sheriff the amount of tax due upon
such inheritance, and the sheriff shall collect the same as other taxes.

Property out of the state, see 977.
Tax on non-residents, see 977.

Only those especially exempted are free of tax. Barringer v.
Cowan, 55 N. C. 408.

Liability of executors on a legacy to one of them, see 977.
Tax on remainders, see 976.

S. 7. When all heirs, legatees, etc., are discharged from liability.

All heirs, legatees, devisees, administrators, executors and trustees shall only
be discharged from liability for the amount of such taxes, the settlement of
which they may be charged with, by paying the same for the use aforesaid as
hereinafter provided.

S. 8. Interest. That if said tax is not paid at the end of two years after
the death of the decedent six per cent per annum shall be charged thereon until
same is paid.

STATUTES ANNOTATED. IN. C. St.

S. 9. Executor, etc., shall deduct tax. The executor or administrator
or other trustee paying any legacy or share in the distribution of any estate
subject to said tax shall deduct therefrom at the rate prescribed, or if the legacy
or share in the estate be not money he shall demand payment of a sum to be
computed at the same rates upon the appraised value thereof for the use of the
state, and no executor or administrator shall be compelled to pay or deliver
any specific legacy or article to be distributed, subject to tax, except on the pay-
ment into his hands of a sum computed on its value as aforesaid; and in case
of neglect or refusal on the part of said legatee to pay the same such specific
legacy or article or so much thereof as shall be necessary shall be sold by such
executor or administrator at public sale, after notice to such legatee, and the
balance that may be left in the hands of the executor or administrator shall be
distributed as is or may be directed by law; and every sum of money retained
by any executor or administrator or paid into his hands on account of any
legacy or distributive share for the use of the state shall be paid by him to the
proper officer without delay.

When tax is payable, see 977.

Rights on depreciation of property in hands of executors, see
977.

S. 10. Legacy for life, etc., tax to be retained upon the whole amount.

If the legacy subject to said tax be given to any person for life or for a term
of years or for any other limited period, upon a condition or contingency, if the
same be money, the tax thereon shall be retained upon the whole amount; but
if not money, application shall be made to the court having jurisdiction of the
accounts of executors and administrators to make apportionment, if the case
requires it, of the sum to be paid by such legatee, and for such further order
relative thereto as equity shall require.

S. 11. Legacy charged upon real estate, heir or devisee to deduct
and pay to executor, etc. Whenever such legacy shall be charged upon or
payable out of real estate the heir or devisee of such real estate, before paying
the same to such legatee, shall deduct therefrom at the rates aforesaid, and pay
the amount so deducted to the executor or administrator, and the same shall
remain a charge upon such real estate until paid, and in default thereof the
same shall be enforced by the decree of the court in the same manner as the
payment of such legacy may be enforced: Provided, that all taxes imposed
by this act shall be a lien upon the personal property of the estate on which the
tax is imposed or upon the proceeds arising from the sale of such property, from
the time said tax is due and payable, and shall continue a lien until said tax is
paid and receipted for by the proper officer of the state.

S. 12. Executor or administrator to take duplicate receipts from the
clerk of the court. It shall be the duty of any executor or administrator, on
the payment of said tax, to take duplicate receipts from the clerk of the court,
one of which shall be forwarded forthwith to the auditor of the state, whose duty
it shall be to charge the clerk receiving the money with the amount and seal
with the seal of his office and countersign the receipt and transmit it to the

1911, c. 46.] NORTH CAROLINA. 983

executor or administrator, whereupon it shall be a proper voucher in the settle-
ment of the estate, but in no event shall an executor or administrator be entitled
to a credit in his account by the clerk unless the receipt is so sealed and counter-
signed by the auditor of the state.

S. 13. Foreign executor or administrator transferring stock shall
pay the tax on such transfer. Whenever any foreign executor or administra-
tor or trustee shall assign or transfer any stocks or bonds in this state standing
in the name of the decedent or in trust for a decedent, which shall be liable for
the said tax, such tax shall be paid on the transfer thereof to the clerk of the
court of the county where such transfer is made; otherwise, the corporation
permitting such transfer shall become liable to pay such tax.

Tax on non-residents, see p. 977.

S. 14. Proportion of tax to be repaid upon certain conditions. When-
ever debts shall be proven against the estate of a decedent, after the distribution
of legacies from which the inheritance tax has been deducted in compliance
with this act, and the legatee is required to refund any portion of the legacy,
a proportion of the said tax shall be repaid to him by the executor or administra-
tor if the said tax has not been paid into the state treasury, or shall be refunded
by the state treasurer if it has been so paid in.

S. 15. Appraiser to be appointed by the clerk, etc. It shall be the duty
of the clerk of the court of the county in which letters testamentary or of admin-
istration are granted to appoint an appraiser, as often as and whenever occasion
may require, to fix the valuation of estates which are or shall be subject to
inheritance tax, and it shall be the duty of said appraiser to make a fair and
conscionable appraisement of such estates; and it shall further be the duty of
such appraiser to assess and fix the cash value of all annuities and life estates
growing out of said estates, upon which annuities and life estates the inheri-
tance tax shall be immediately payable out of the estate at the rate of such
valuation : Provided, that any person or persons not satisfied with said appraise-
ment shall have the right to appeal within sixty days to the court of the proper
county on paying or giving security to pay all costs, together with whatever
tax shall be fixed by said court, and upon such appeal said court shall have
jurisdiction to determine all questions of valuation and of the liability of the
appraised estate for such tax, subject to the right of appeal to the supreme
court as in other cases. The compensation of appraisers appointed under this
act shall be at the rate of three dollars per day for each day necessarily em-
ployed in making the appraisement, together with such necessary traveling
expenses as may be incurred, a statement of which shall be properly itemized
and sworn to, subject to the final approval of the auditor of state before pay-
ment is made by the clerk of the court.

Assessment by appraiser and not by the court on appeal, see
p. 979.

S. 16. Misdemeanor for appraiser to take fee or reward from executor
or administrator. It shall be a misdemeanor for any appraiser appointed

984 STATUTES ANNOTATED. [N. C. St.

by the clerk to make any appraisement in behalf of the state to take any fee
or reward from any executor or administrator, legatee, next of kin or heir of
any decedent, and for any such offense the clerk of the court shall dismiss him
from such service, and upon conviction in the superior court he shall be fined
not exceeding five hundred dollars and imprisoned not exceeding one year, or
both, or either, at the discretion of the court.

S. 17. Clerk to enter returns made by appraisers, etc. It shall be the
duty of the clerk of the court to enter in a book to be provided at the expense
of the state, to be kept for that purpose, and which shall be a public record, the
returns made by all appraisers, under this act, opening an account in favor of
the state against the decedent's estate; and the clerk may give certificates of
payment of such tax from such record; and it shall be the duty of the clerk
of the court to transmit to the auditor of the state on the first Monday of each
month a statement of all returns made by appraisers during the preceding
month, giving the name of the estate and the clear valuation thereof, subject
to the foregoing tax, and the amount of the tax, which statement shall be
entered by the auditor in a book to be kept by him for that purpose; and when-
ever any such tax shall have remained due and unpaid for one year it shall be
lawful for the clerk of the court to apply to the court by bill or petition to
enforce the payment of the same; whereupon said court, having caused due notice
to be given to the owner or owners of the estate charged with the tax and to
such other person or persons as may be interested, shall proceed according to
equity to make such decrees or orders for the payment of the said tax out of
such estates as shall be just and proper.

S. 18. Court may order, executor, etc., to file account, etc. If the

clerk of the court shall discover that said tax has not been paid according to
law, the court shall be authorized to cite the executors or administrators of
the decedent whose estate is subject to the tax to file an account or to issue
a citation to the executors, administrators, legatees or heirs, citing them to
appear on a day certain and show cause why the said tax should not be paid,
and when personal service cannot be had, notice shall be given for four weeks,
once a week, in at least one newspaper published in said county; and if the said
tax shall be found to be due and unpaid, the said delinquent shall pay said tax,
interest and costs; and it shall be the duty of the solicitor of the district in which
the said delinquent resides to sue for the recovery and amount of such tax, and
for such services he shall be allowed a fee, to be fixed by the judge, not to exceed
five per cent of the amount recovered. The auditor of the state is authorized
and empowered, in settlement of accounts of any clerk, to allow him costs of
advertising and other reasonable fees and expenses incurred in the collection
of said tax.

Duty to file returns notwithstanding direction in will, see p. 979.

S. 19. Clerk to be agent of the state for collection of said tax. The

clerks of the courts of the several counties of this state shall be the agents of the
state for the collection of the said tax, and for services rendered in collecting and
paying over the same the said agents shall be allowed to retain for their own

1911, c. 46.] NORTH CAROLINA. 986

use such percentage as may be allowed by the auditor, not exceeding three
per centum on all taxes paid and accounted for.

S. 20. Clerk to be liable on his official bond. The said clerks of the
courts shall be liable on their official bonds to the state for the faithful perfor-
mance of the duties hereby imposed and for the regular accounting and paying
over of the amounts to be collected and received.

S. 21. Clerk to make returns and payments to the state treasurer.

It shall be the duty of the clerk of the court of each county to make returns and
payments to the state treasurer of the taxes under this act which he shall have
received, stating for what estate paid, on the first Monday of each month;
and for all taxes collected by him and not paid over to the state treasurer within
ten days after said monthly return of the same he shall pay interest at the rate
of twelve per centum pet annum until paid.

986 STATUTES ANNOTATED. [N. D. Code.

NORTH DAKOTA,

North Dakota adopted a collateral inheritance tax in 1903.
Collateral inheritances only are taxed. The rate is uniformly two
per cent on the excess over $25,000. Inheritances not taxed are
those to father, mother, husband, wife, lineal descendent, adopted
child, lineal descendent of adopted child. Stock in a North Dakota
corporation owned by a non-resident is not taxed.

Constitutional Limitations.
North Dakota Constitution, 1889, a. 11, s. 176.

Laws shall be passed taxing by uniform rule all property according to its
true value in money, but the property of the United States and the state, county
and municipal corporations, both real and personal, shall be exempt from taxa-
tion; and the legislative assembly shall by a general law exempt from taxation
property used exclusively for school, religious, cemetery or charitable purposes
and personal property to any amount not exceeding in value two hundred
dollars for each individual liable to taxation. ...

List of Statutes.

1903. Statutes of North Dakota, c. 171, approved March 10, 1903.
1905. Revised Code, c. 10, ss. 8320-8339.

THE PRESENT ACT.

North Dakota Revised Code of 1905, c. 10.

S. 8320. Rate. All property within the jurisdiction of this state, and any
interest therein, whether belonging to the inhabitants of this state or not, and
whether tangible or intangible, which shall pass by will or by the statutes of
succession or inheritance of this or any other state, or by deed, grant, sale or
gift intended to take effect in possession or in enjoyment after the death of the
grantor or donor, to any person in trust or otherwise, other than to or for
the use of the father, mother, hudband, wife, lineal descendant, adopted child, the
lineal descendant of an adopted child of a decedent or to or for charitable, educa-
tional or religious societies or institutions within this state, shall be subject to
a tax of two per centum of its valuation, above the sum of twenty-five thousand
dollars, after the payment of all debts, for the use of the state; and all admin-
istrators, executors and trustees, and any such grantee under a conveyance,
and any such donee under a gift, made during the grantor's or donor's life, shall
be respectively liable for all such taxes to be paid by them respectively,
except as herein otherwise provided, with lawful interest as hereinafter set

1905, c. 10.] NORTH DAKOTA. 987

forth, until the same shall have been paid. The tax aforesaid shall be and
remain a lien on such estate from the death of the decedent until paid. (1903,
ch. 171, s. 1.)

S. 8321. Debts deducted. The term "debts" shall include, in addition
to debts owing by decedent at the time of his death, the local or state taxes
due from the estate prior to his death, and a reasonable sum for funeral expenses,
court costs, including the costs of appraisement made for the purpose of assess-
ing the collateral succession or inheritance tax, the statutory fees of executors,
administrators or trustees, and no other sum; but said debts shall not be de-
ducted unless the same are approved and allowed, within fifteen months from
the death of decedent, as established claims against the estate, unless otherwise
ordered by the judge or court of the proper county. (1903, ch. 171, s. 2.)

S. 8322. Property subject to tax. Except as to property passing to persons*
corporations or societies exempted by section 8320 from the collateral succession
or inheritance tax, and real property located outside of the state passing in fee
from the decedent owner, the tax imposed under the provisions of this chapter
shall be assessed against and be collected from, property of every kind, which,
at the death of the decedent owner is subject to or thereafter, for the purpose
of distribution, is brought into this state for distribution purposes, or which was
owned by any decedent domiciled within the state at the time of the death of
such decedent even though the property of said decedent so domiciled was
situated outside of the state. (1903, ch. 171, s. 3.)

S. 8323. Construction. In the construction of this chapter the words
"collateral heirs" shall be held to mean all persons who are not excepted from the
provisions of the collateral succession or inheritance tax under the provisions
of this chapter, except section 8322, shall apply to all pending estates which are
not closed, and the property subjected by this chapter to the said tax is liable to
the provisions herein contained, as to the amount and lien hereof, and the
manner of enforcement and collection thereof, except as herein specifically
provided otherwise. (1903, ch. 171, s. 4.)

S. 8324. Foreign estates and deduction of debts. Whenever any property
belonging to a foreign estate, which estate, in whole or in part is liable to pay
a collateral succession or inheritance tax in this state, and said tax shall be
assessed upon the market value of said property remaining after the payment of
such debts and expenses as are chargeable to the property under the laws of
this state; in the event that the executor, administrator or trustee of such foreign
estate files with the clerk of the court having ancillary jurisdiction, and with the
state treasurer, duly certified statements exhibiting the true market value of the
entire estate of the decedent owner, and the indebtedness for which the said
estate has been adjudged liable, which statement shall be duly attested by the
judge of the court having original jurisdiction,. the beneficiaries of said estate
shall then be entitled to have deducted such proportion of the said indebted-
ness of the decedent from the value of the property as the value of the property
within this state bears to the value of the entire estate. (1903, ch. 171, s. 5.)

988 STATUTES ANNOTATED. [N. D. Code.

S. 8325. Foreign estates and direct and collateral beneficiaries. When-
ever any property, real or personal, within this state belongs to a foreign estate,
and said foreign estate is in part exempt from the collateral succession or inheri-
tance tax, and in part subject to said collateral succession or inheritance tax,
and it is within the authority or discretion of the foreign executor, adminis-
trator or trustee administering the estate to dispose of the property, not specifi-
cally devised to direct heirs or devisees in the payment of the debts owing by
decedent at the time of his death, or in the satisfaction of legacies, devises or
trusts given to direct and collateral legatees or devisees, or in payment of the
distributive shares of any direct and collateral heirs, then the property within
the jurisdiction of this state belonging to such foreign estate, shall be subject
to the collateral succession or inheritance tax imposed under the provisions
hereof, and the tax due thereon shall be assessed as provided in section 8324,
and with the same proviso respecting the deduction of the proportionate share
of the indebtedness, as herein provided. (1903, ch. 171, s. 6.)

S. 8326. Lien. It shall be the duty of the executor, administrator or
trustee, immediately upon his appointment, to make and file a separate inventory,
any will to the contrary notwithstanding, of all the real estate of the decedent
liable to such tax, and to cause the lien of the same to be entered upon the lien
book in the office of the clerk of the court in each county where each particular
part of said real estate is situated, and no conveyance of said estate or interest
therein, which is subject to such tax before or after the entering of said lien,
shall discharge the estate so conveyed from the operation thereof. (1903, ch.
171, s. 7.)

S. 8327. Appraisal. All the real estate of the decedent subject to such
tax shall, except as hereinafter provided, be appraised within thirty days next
after the appointment of an executor, administrator or trustee, and the tax
thereon, calculated upon the appraised value after deducting debts for which
the estate is liable shall be paid by the person entitled to said estate within
fifteen months from the approval by the court of such appraisement, unless a
longer period is fixed by the court, and in default thereof, the court shall order
the same, or so much thereof as may be necessary to pay such tax, to be sold.
(1903, ch. 171, s. 8.)

S. 8328. Remainders. When any person whose estate, over and above
the amount of his just debts, exceeds the sum of one thousand dollars shall
bequeath or devise any real property to or for the use of the father, mother,
husband, wife, lineal descendant, adopted child, or lineal descendant of such child,
during life or for a term of years, and the remainder to a collateral heir or to a
stranger to the blood, the court, upon the determination of such estate for life
or years, shall upon its own motion or upon the application of the state treasurer,
cause such estate to be appraised at its then actual market value, from which
shall be deducted the value of any improvements thereon, or betterments thereto,
if any, made by the remainderman during the time of the prior estate, to be
ascertained and determined by the appraisers, and the tax on the remainder
shall be paid by such remainderman within sixty days from the approval by
the court of the report of the appraisers. If such tax is not paid within said
time, the court shall then order said real estate, or so much thereof as shall be
necessary to pay such tax, to be sold. (1903, ch. 171, c. 9.)

1905, c. 10.] NORTH DAKOTA.

S. 8329. Life estate. Whenever any real estate of a decedent shall be
subject to such tax, and there be a life estate or interest for a term of years given
to a party other than named in the preceding section, and the remainder to a
collateral heir or stranger to the blood, the court shall direct the interest of the
life estate or term of years to be appraised at the actual market value thereof,
and upon the approval of such appraisement by the court, the party entitled
to such life estate, or term of years, shall within sixty days thereafter pay such
tax, and in default thereof the court shall order such interest in said estate,
or so much thereof as shall be necessary to pay such tax, to be sold. Upon the
determination of such life estate or term of years, the same provision shall
apply as to the ascertainment of the amount of the tax and the collection of
the same on the real estate in remainder as in like cases is provided in the pre-
ceding section. Whenever any personal estate of a decedent shall be subject
to such tax, and there be a life estate or interest for a term of years given to a
party other than named in the preceding section, and the remainder to a collat-
eral heir or stranger to the blood, the court shall inquire into and determine the
value of the life estate or interest for a term of years, and order and direct the
amount of the tax thereon to be paid by the prior estate and that to be paid by
the remainderman, each of whom shall pay their proportion of such tax within
sixty days from such determination, unless a longer period is fixed by the court,
and in default thereof the executor, administrator or trustee shall pay the same
out of said property, and hold the same from distribution, and invest it at
interest under the order of the court until said tax is paid, or until the interest
on the same equals the amount of such tax, which shall thereupon be paid,
(1903, ch. 171, s. 10.)

S. 8330. Executors or trustees. Whenever a decedent appoints one or
more executors or trustees, and in lieu of their allowance or commission, makes
a bequest or devise of property to them which would otherwise be liable to said
tax, or appoints them his residuary legatees, and said bequests, devises, or
residuary legacies, exceed what would be a reasonable compensation for .their
services, such excess shall be liable to such tax, and the court having jurisdic-
tion of their accounts, upon its own motion or on the application of the state
treasurer, shall fix such compensation. (1903, ch. 171, s. 11.)

S. 8331. Legacies charged upon land. Whenever any legacies subject
to said tax are charged upon or payable out ot any real estate, the heir or devisee,
before paying the same, shall deduct said tax therefrom and pay it to the executor,
administrator, trustee or state treasurer, and the same shall remain a charge
and be a lien upon said real estate until it is paid; and payment thereof shall
be enforced by the executor, administrator, trustee or state treasurer in his name
of office, in the same manner as the payment of the legacy itself could be en-
forced. (1903, ch. 171, s. 12.)

S. 8332. Payment by executor or trustee. Every executor, adminis-
trator or trustee having in charge or trust any property subject to said tax, and
which is made payable to him, shall deduct the tax therefrom, or shall collect
the tax thereon from the legatee, or person entitled to said property, and he
shall not deliver a specific legacy or property subject to said tax to any person
until he has collected the tax thereon. (1903, ch. 171, s. 13.)

9Q0 STATUTES ANNOTATED. [N. D. Code.

S. 8333. Payment to state. All taxes imposed by the provisions of this
chapter shall be payable to the state treasurer, and those which are made payable
by executors, administrators or trustees shall be paid within fifteen months
from the death of the testator or intestate, or within fifteen months from assum-
ing of the trust by such trustee, unless a longer period is fixed by the court.
All taxes not paid within the time prescribed in this chapter shall draw interest
at the rate of eight per centum per annum until paid. (1903, ch. 171, s. 14.)

S. 8334. Method of appraisement. All appraisements of real estate
subject to such tax shall be made and filed in the manner provided for appraise-
ment of personal property. When such real estate is situated in another county
the same appraisers may serve, or others may be appointed. (1903, ch. 171, s. 15.)

S. 8335. Collections. 1 1 is hereby made the duty of all executors, adminis-
trators or trustees charged with the management or settlement of any estate sub-
ject to the tax provided for in this chapter, to collect and pay to the state
treasurer the amount of the tax due from any devisee, grantee or donee of the
decedent, except in cases falling under the provisions of sections 8329 and
8330 hereof, in which cases the state treasurer shall collect the same. Appli-
cations may be made to the district court by such executor, administrator,
trustee or state treasurer to sell the real estate subject to said tax in an equit-
able action, or, if made to the court having charge of the settlement of said estate,
the proceedings shall conform as nearly as may be to those for the sale of real
estate of a decedent for the settlement of his debts. (1903, ch. 171, s. 16.)

S. 8336. Property certified to treasurer. Whenever any real estate of
a decedent shall so pass, either in possession and enjoyment or in remainder as
to the subject of such tax, the executor, administrator or trustee, within six
months after he has assumed the duties of his trust, shall file with the state
treasurer a description of such real estate, giving the name of the county where
the same is situated, the name of the decedent, the name of the person or per-
sons to wnom it so passes, whether the same passes in possession and enjoyment in
fee, for life or for a term of years, naming the term of years, and if a prior estate
is created, he shall give the name of the remainder-man. (1903, ch. 171, s. 17.)

S. 8337. Copy of appraisement. As soon as any such real estate is
appraised, it shall be the duty of the executor, administrator or trustee, if he has
not been discharged, and if he has finally been discharged, then it shall be the
duty of the clerk, to file with the state treasurer a copy of such appraisement,
stating the amount of tax to be paid and within what time ordered to be paid.
(1903, ch. 171, s. 18.)

5^8338. Settlements with executors or trustees. No final settlement
of the account of any executor, administrator or trustee shall be accepted or
allowed unless it shall show, and the court shall find, that taxes imposed by the
provisions of this chapter upon any property or interest therein belonging to
the estate to be paid by such executors, administrators or trustees, and to be

1905, c. 10.] NORTH DAKOTA. 991

settled by said account, shall have been paid, and the receipt of the state treas-
urer for such tax shall be the proper voucher for such payment. (1903, ch. 171,
s. 19.)

S. 8339. Jurisdiction of the court. The district court having either
principal or ancillary jurisdiction of the settlement of the estate of the decedent
shall have jurisdiction to hear and determine all questions in relation to said
tax that may arise affecting any devise, legacy or inheritance, or any grant or
gift, under this chapter, subject to appeal as in other cases, and the state treasurer
shall in his name of office represent the interests of the state in any such pro-
ceeding. (1903, ch. 171, s. 20.)

992 STATUTES ANNOTATED. (Ohio St.

OHIO,

In General.

Ohio imposed a collateral inheritance tax in 1893. In 1894
it was the first state to tax direct inheritances, and was also the
first state to adopt rates increasing progressively according to the
size of the estate. The act was held unconstitutional in 1895, on
account of the progressive feature, and because it was not pro-
vided that the exemption ($20,000) should be deducted from all
estates exceeding that amount. This decision has not been gener-
ally followed in other jurisdictions.

In 1904 a uniform tax of two per cent was imposed on direct
inheritances with an exemption of $300. This was repealed in 1906.
At present collateral inheritances only are taxed. The rate is
uniformly five per cent and the exemption is $200, which applies
to the estate as a whole, not to the individual shares. The inheri-
tances which are altogether exempt are those to father, mother,
husband, wife, brother, sister, niece, nephew, lineal descendant,
adopted child and its lineal descendant, wife or widow of son and
husband of daughter. Stock in an Ohio corporation owned by
a non-resident is not taxed.

List of Statutes.

1893. Statutes of Ohio, Vol. 90, p. 14.

1894. " " " " 91, p. 166. (The direct inheritance tax.)
1894. " " " " 91, p. 169. (The collateral inheritance tax.)
1896. " " " " 92, p. 374.

1900. " " " " 94, p. 101.

1903. Bates Annotated Statutes, ss. 2731-1 to 2731-17.

1904. Statutes of Ohio, Vol. 97, p. 398.

1905. Bates Annotated Statutes (5th Ed.), ss. 2731-1 to 2731-17; 2731-1 to
2731-31.

•^ 1906. Statutes of Ohio, Vol. 98, p. 229.
1787-1908. Bates Annotated Ohio Statutes (6th Ed.), Vol. 1, ss. 2731-1 to
2731-17; 2731-18 to 2731-31.

1910. Gen. Code of Ohio, Vol. 2, ss. 5331 to 5348.

Nature.] OHIO. 993

Nature of Inheritance Tax.

The fact that an inheritance tax is made a lien on property
does not render it a tax on property. State v. Ferris, 53 Ohio
St. 314, 326, 41 N. E. 579, 30 L. R. A. 218, distinguishing Estate
ofBittinger, 129 Pa. St. 338,344.

The Ohio St. 1894 is upon its face a taxation of property itself,
but the court construing the operation and effect of the statute
regards it as a tax upon the right or privilege rather than the
property. It is upon the right and privilege to receive and not
upon the right to transmit. The right to receive property is under
the control of the legislature and it has the power to regulate and
lay such burdens thereon as it may see fit. State v. Ferris, 53
Ohio St. 314, 325, 41 N. E. 579, 30 L. R. A. 218.

"Man's dominion over his property ceases at his death, where-
fore in all civilized countries the state provides how he may devolve
it to others at his death and what shall become of it when he dies
intestate.

"The right so given either to devolve or to succeed to property
is subject to the power of the state to tax, and generally is taxed.
To use a homely simile, it may be likened to the taking of toll from
the grist that is sent to the mill, and aside from considerations
of convenience it is immaterial whether the whole toll be taken as
soon as the grist is received or proportionately as the flour is de-
livered. Generally, but not necessarily, the amount of the tax
is measured by the value of the property. Our state, however,
deeming it to the interest of the public not to make the tax oppres-
sive, has imposed it upon the right of succession, and has exempted to
three thousand dollars the value of the property in determining
the amount of the tax.

"But while the tax has been likened to the toll that is taken for
the grinding of a grist, it must not be overlooked that it is the
right to devolve or to succeed to property that is taxed, and that
an additional exaction might be made as is done in some states
for the service in passing the property, sometimes, as in England,
called probate duties. So that the right of the state to and
the liability of the successor for the tax generally arises upon the
death of the owner of the property and is not dependent upon
the right of succession ripening into possession or enjoyment, and
the fact, if it be a fact, that the state may have, by measuring the
amount of the tax by the value of the property succeeded to,

994 STATUTES ANNOTATED. Ohio St.

made it impracticable or difficult to collect the tax until the right
has ripened into possession, does not change the subject of the
tax, but merely postpones its collection." Per Summers, J.
Eury V. State, 72 Ohio St. 448, 74 N. E. 650.

Power to Tax Inheritances.

The constitution is silent as to the application of revenue
received otherwise than on property, and therefore, if such taxes
can be levied and collected at all, their application is within the
sole and exclusive power and discretion of the general assembly.
Article 12, s. 2, of the constitution provides that laws shall be
passed taxing by a uniform rule all property, but this did not
confine the power of the legislature to a property tax, as under
a. 2, s. 1, of the constitution the general assembly is given legis-
lative power. This power, being unlimited, is broad enough to
include the power to tax rights, privileges and franchises. State
V. Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218.

Constitutional Limitations.
Ohio BiU of Rights.

S. 1. Right to freedom and protection of property. All men, are, by
nature, free and independent, and have certain inalienable rights, among which
are those of enjoying and defending life and liberty, acquiring, possessing, and
protecting property, and seeking and obtaining happiness and safety.

The provisions of the first section of the fourteenth amendment
to the federal constitution, which provide that no state shall "deny
to any person within its jurisdiction the equal protection of its
laws," is not broader than the second section of the Ohio bill of
rights, to the effect that government is instituted for the equal
protection and benefit of the people. State v. Ferris, 53 Ohio St.
314, 41 N. E. 579, 30 L. R. A. 218.
Ohio. Const, a. 2.

S. 26. What laws to have a uniform operation. All laws, of a general
nature, shall have a uniform operation throughout the state; nor, shall any
act, except as such as relates to public schools, be passed, to take effect upon the
approval of any other authority than the general assembly, except, as otherwise
provided in this constitution.

Ohio Const, a. 12.

S. 2. Laws shall be passed, taxing by a uniform rule, all moneys, credits,
investments in bonds, stocks, joint stock companies, or otherwise; and also all
real and personal property, according to its true value in money; but burying
grounds, public school houses, houses used exclusively for public worship, insti-

1893, p. 14.] OHIO, 995

tutions of purely public charity public property used exclusively for any public
purpose, and personal property, to an amount not exceeding in value two hun-
dred dollars, for each individual may, by general laws, be exempted from taxa-
tion; but, all such laws shall be subject to alteration or repeal; and the value of
all property, so exempted, shall, from time to time, be ascertained and published,
as may be directed by law.

Ohio Const. 1851, a. 12, s. 2. As amended November, 1905.

Laws shall be passed, taxing by a uniform rule, all moneys, credits, invest-
ments in bonds, stocks, joint stock companies, or otherwise and also all real
and personal property according to its true value in money, excepting bonds of
the state of Ohio, bonds of any city, village, hamlet, county, or township in this
state, and bonds issued in behalf of the public schools of Ohio and the means
of instruction in /;onnection therewith, which bonds shall be exempt from taxa-
tion; but burying grounds, public schoolhouses, houses used exclusively for
public worship, institutions of purely public charity, public property used exclu-
sively for any public purpose, and personal property, to an amount not exceed-
ing in value two hundred dollars, for each individual, may, by general laws, be
exempted from taxation; but all such laws shall be subject to alteration or
repeal; and the value of all property, so exempted, shall, from time to time, be
ascertained and published as may be directed by law.

This section requires uniformity and equality in the imposition
of the burdens of taxation. State v. Guilbert, 70 Ohio St. 229,
71 N. E. 636. The section permits an exemption from taxation
of personal property not exceeding $200. It was said in State v.
Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218, that this
provision of the constitution showed that an exemption up to
$200 in value would be regarded as for the equal protection and
benefit of the people. The court does not assent to this proposi-
tion, but believes that article 12, s. 2, treats wholly and only of tax-
ation of property. Article 12, s. 2, is not a grant of power, but a
regulation of a power already granted in the first section of the
second article. The court is of opinion that an excise tax which
operates uniformly throughout the state and applies equally to
all the subjects embraced within its terms does not deprive anyone
of the equal protection of the law or in any manner violate the bill
of rights nor any section of the constitution. State v. Guilbert,
70 Ohio St. 229, 253 (upholding the act of 1904).

;^ . . THE ACT OF 1893.

Origin.

This act seems to have been framed on those of the states of
Virginia and Maine, each of which exempts the lineal descendants,
and some of the collateral, and together all of the collaterals
exempted in Ohio. Dyer v. Hagerty, 5 Ohio Cir. Dec. 701, 12
Ohio Cir. Ct. 606.

996 STATUTES ANNOTATED. [Ohio St.

Ohio St. 1893, approved January 27, 1893, p. 14.

**Within the Jurisdiction of this State."

The testator, a resident of Kentucky, owned securities and
money on deposit in banks in Ohio, and the court holds that the
tax should be paid on these securities and whether the decedent
is a resident or a non-resident is immaterial, residence not being
a primary consideration to be had in view in enforcing the law.
As the court has jurisdiction over the property the tax should
be levied. In re Speers, 4 Ohio N. P. 238, 6 Low. D. 398.

Bequest for Masses. "

A bequest of $300 for three hundred masses is a beneficial
estate to the priest who will say the masses, and is therefore
liable for the collateral inheritance tax. In re Brinkman, 38
Ohio Wkly. L. Bui. 304.

Computing Exemption.

It was claimed that in addition to excluding the exemption
due to each legatee the amount of the tax due from such persons
is to be deducted and the amount payable computed upon the
balance; but the court holds that the tax is payable upon the
value of the legacy less the exemption and that the amount of
the tax is not to be deducted from the legacy and the tax com-
puted upon the balance. In re Hooper, 6 Low. D. 560, 4 Ohio
N. P. 186.

Exemption.

The exemption applies to each specific legacy. In re Thomson,
48 Ohio Wkly. L. Bui. 212.

1893, p. 14.] OHIO. 997

Various Gifts to the Same Person.

Where in separate items of a will two or more legacies or devises
are given to the same non-exempt person, it matters not whether
the property pass under one or more items of the will or whether the
property passing under more than one item be real or personal,
the tax is collectable on the aggregate of such property less two
hundred dollars, which is exempt. Under the Ohio statute in force
in 1900 which provided that all "property which shall pass . . .
shall be liable to a tax of five per centum of its value above the
sum of two thousand dollars." In re Inheritance Tax, 7 Ohio
N. P. 547, 5 Low. Dec. 555.

What Relatives Exempt.

Half-brothers are exempt from the payment of the collateral
inheritance tax in force in 1900. In re Ormsby, 7 Ohio N. P.
542, 5 Ohio S. & C. P. Dec. 553.

The following are not exempt : A brother-in-law or sister-in-law,
{Estate of McDermott, 48 Ohio Wkly. L. Bui. 211; In re Thomson,
48 Ohio Wkly. L. Bui. 212) ; stepsons {In re Hooper, 6 Low. D.
560, 4 Ohio N. P. 186) ; a stepsister {In re Thomson, 48 Wkly. L.
Bui. 212); grandnieces {In re Bates, 7 Ohio N. P. 625, 5 Ohio
S. & C. P. Dec. 547; In re Simon, 7 Ohio N. P. 667, 39 Wkly. L.
Bui. 369) ; a nephew of the wife of the decedent (In re Wolf, 48
Ohio Wkly. L. Bui. 211); nieces of the husband of testatrix {In re
Bates, 7 Ohio N. P. 625, 5 Ohio S. & C. P. Dec. 547).

Where the husband dies leaving his property to his wife abso-
lutely, and on her death the property goes back to the brothers
and sisters of the deceased husband, the inheritance tax is to be
collected, as it is a transfer of property to brothers-in-law and
sisters-in-law of the testatrix. In re Stephenson, 48 Ohio Wkly.
L. Bui. 212; In re McDermott, 48 Ohio Wkly. L. Bui. 211.

Charitable Institutions.

Charitable institutions are liable to the tax. In re Bates, 7 Ohio
N. P. 625, 5 Ohio S. & C. P. Dec. 547; In re Simon, 7 Ohio N. P.
667, 39 Wkly. L. Bui. 369.

Bequest to Smithsonian Institute Exempt.

In an opinion by the attorney general in 1897, it was held that
the collateral inheritance tax law does not apply in the case of a
bequest of a collection of specimens by a man to the Smithsonian

998 STATUTES ANNOTATED. [Ohio St.

Institution at Washington. The attorney general said that on
the face of the law the law was applicable to the bequest, but under
an older statute which exempts property of the state and of the
United States and also property used in the work of education from
taxation of all kinds, he holds that it is exempt from the inher-
itance act. In re Harris, 38 Ohio Wkly. L. Bui. 281.

Ohio St. 1893, approved January 27, 1893, p. 14.

S. 2. When any person shall bequeath or devise any property to or for the
use of father, mother, husband, wife, brother, sister, niece, nephew, lineal de-
scendant, and adopted child, the lineal descendant of any adopted child, the wife
or widow of a son, or the husband of a daughter during life or for a term of years,
and the remainder to a collateral heir, or to a stranger to the blood, the value of
the prior estate shall, within sixty days after the death of the testator, be ap-
praised in the manner hereinafter provided, and deducted, together with the
sum of ten thousand dollars, from the appraised value of such property, and the
tax on the remainder shall be payable one year frcm the death of said testator,
and, together with any interest that may accrue on the same, be and remain a
lien on said property till paid to the state.

Life Estate.

Where the will provided that the income of certain securities
during the term of the life of the beneficiary or so long as she
may remain unmarried shall be paid to her, she had a life estate
interest in these securities and this life interest is an interest in
the property taxable under Ohio Revised Statutes, section 2731-1.
The value of the estate should be determined by the actuaries'
experience tables under Ohio Revised Statutes, section 2731-12.
In re Wolf, 48 Ohio Wkly. L. Bui. 211.

When Interest is Contingent.

Under Ohio statute in force in 1897 taxing of an interest in a
contingent devise is deferred until the interest comes in. In re
Hooper, 6 Low. D. 560, 4 Ohio N. P. 186.

The will provided that the net income of property should be paid
the widow for her life, and also to pay her so much of the principal
as she may from time to time require or demand, and after her
death certain other legacies are to be paid to persons not exempt
irom the collateral inheritance tax. The court holds that as the
widow has a right to iise a part of the principal of the remainder,
the value of her estate in the same is not ascertainable, and there-
fore, the legacies over to the non-exempt persons are not taxable
at present. Had the devise to the wife been simply a life estate

1894, p. 166.J OHIO. 999

legacies over would be now taxable. In re Simon, 7 Ohio N. P.
667, 39 Wkly. L. Bui. 369.

Ohio St. 1893, p. 14, ss. 3-17, cover the assessment, collection and payment
of the tax.

Penalty.

Under the inheritance law a penalty of eight per cent is collect-
able in case of non-payment within a year of the death of the testa-
trix ; but the court refused to impose a penalty on the ground that
it was unjust where there had been no effort made to enforce the
law. As the direct inheritance tax was declared unconstitutional
it was supposed that the collateral inheritance tax would meet the
same fate. When the collateral inheritance tax was finally de-
clared valid the court held that the executors were not negligent
in failing to pay the tax before the decision of the court, and that
there was no basis for the imposition of a penalty. In re Bates,
7 Ohio N. P. 625, 5 Ohio S. & C. P. Dec. 547.

The Void Direct Inheritance Statute of 1894.

Ohio St. 1894, p. 166. Approved April 20, 1894.

S. 1. Be it enacted by the general assembly of the state of Ohio, that all
property within the jurisdiction of this state, and any interest therein, whether
belonging to inhabitants of this state or not, and whether tangible or intangible,
including annuities, which shall pass by will or by the intestate laws of this state,
or by deed, grant, sale, or gift made or intended to take effect in possession or
enjoyment after the death of the grantor, to the use of the father, mother, hus-
band, wife, brother, sister, niece, nephew, lineal descendant, adopted child, or
person recognized as an adopted child and made a legal heir under the provisions
of section 4182 of the Revised Statutes of Ohio, or the lineal descendant thereof ,
the lineal descendant of any adopted child, the wife or widow of a son, the hus-
band of a daughter of decedent, or to any one in trust for such person or persons,
shall be liable to a tax as follows, to wit: When the value of the entire property
of such decedent exceeds the sum of twenty thousand dollars and does not exceed
the sum of fifty thousand dollars, one per cent; when it exceeds fifty thousand
dollars and does not exceed one hundred thousand dollars, one and one-half per
cent; when it exceeds one hundred thousand dollars and does not exceed two
hundred thousand dollars, two per cent; when it exceeds two hundred thousand
dollars and does not exceed three hundred thousand dollars, three per cent
when it exceeds three hundred thousand dollars and does not exceed five hundred
thousand dollars, three and one-half per cent ; when it exceeds five hundred thou-
sand dollars and does not exceed one million dollars, four per cent; and when it
exceeds one million dollars, five per cent; seventy-five per cent of such tax to be
for the use of thastate and twenty-five per cent for the use of the county wherein
the same is collected; and all administrators, executors and trustees, shall be
liable for all such taxes, with lawful interest, as hereinafter provided, until the

1000 STATUTES ANNOTATED. [Ohio St.

same shall have been paid as hereinafter directed. Such taxes shall become due
and payable immediately upon the death of the decedent, and shall at once
become a lien upon said property.

Ss. 2-13 cover the assessment, collection and payment of the tax.

This was the first progressive inheritance tax passed in this
country.

Uniformity.

This statute was not obnoxious to Ohio Const, a. 2, s. 26, as
it was not intended to guarantee equal protection to all the inhabit-
ants of the state. State v. Ferris, 53 Ohio St. 314, 41 N. E. 579,
30 L. R. A. 218, affirming 9 Ohio Cir. Ct. 298.

Progressive Feature Void.

"The act is clearly one for taxation and not for regulation, as
shown by its provisions and title. The state finds no warrant in
its constitution for saying that it will make a greater rate or
charge for the privilege of succeeding to large estates than to smaller
ones, but on the contrary this is expressly prohibited by the require-
ment that laws shall be for the equal protection and benefit of the
people. This requirement applies as well to laws for regulation
as to laws for taxation.'* Per Burket, J., in State v. Ferris y 53
Ohio St. 314, 340, 41 N. E. 579, 30 L. R. A. 218, affirming 9 Ohio
Cir. Ct. 298.

This decision is clearly against the weight of authority in this
country and may well be confined in its effect to the particular
law construed. Other general statements in the opinion as to
the invalidity of progressive taxes may well be denominated dicta
unnecessary to the decision of the case.

Exemptions Unequal.

The Ohio bill of rights, s. 2, provides as follows: "All political
power is inherent in the people. Government is instituted for their
equal protection and benefit." The act of 1894 is in direct conflict
with this section of the bill of rights. "This statute is in direct
conflict with this section of the bill of rights. If government is
instituted for the equal protection and benefit of the people, it
follows that laws which are passed under a government so insti-
tuted must likewise be for the equal protection and benefit of
the people. This statute fails to protect equally the people who
exercise the right and privilege of receiving or succeeding to

1894, p. 166.] OHIO. 1001

property. The right to receive the first twenty thousand dollars
of an estate not exceeding that sum is protected from taxation,
while the right to receive the first twenty thousand dollars of an
estate exceeding that sum is taxed the sum of two hundred dollars.
This is not equal protection. Again, the right to receive fifty
thousand dollars* worth of property of an estate not exceeding that
sum is taxed five hundred dollars, while the right to receive fifty
thousand dollars of an estate exceeding that sum is seven hundred
and fifty dollars. This is not equal protection. The same may
be said of the other gradations provided for in the statute.

"The right or privilege of receiving or succeeding to property
is valuable in 'proportion to the value of the property received.
It cannot be consistently said that the right to receive twenty
thousand dollars is of no value, and that the right to receive
twenty thousand and one dollars is of the value of two hundred
dollars and one cent.

"Again, he who uses the right or privilege of receiving property
of the value of twenty thousand and one dollars, and pays therefor
a tax of two hundred dollars and one cent, is not equally benefited
for the tax paid, as he who uses the same right or privilege of
receiving property of the value of twenty thousand dollars, without
paying any tax whatever for the use of such right. The exemption
of twenty thousand dollars, and the increase of the per cent as the
value of the estate increases, renders this statute unconstitutional.

"Our constitution requires equality in our tax laws, and also
equality in their execution as near as may be. The only exemp-
tion allowed, as to taxation of property, is personal property to
the amount of two hundred dollars to each individual, and certain
other property devoted to public or charitable uses. Two hundred
dollars in value to each individual is the extent to which the legis-
lature has the power to exempt personal property from taxation.
The constitution must be regarded as consistent with itself through-
out, and as section 2 of article 12 permits an exemption from
taxation of personal property not exceeding two hundred dollars,
a construction of section 2 of the bill of rights is thereby evinced
to the effect that in taxation of subjects other than property, an
exemption up to two hundred dollars in value would be regarded
as for the equal protection and benefit of the people. The exemp-
tion must be equally for all, and the rate per cent must be the
same on all estates. There can be no discrimination in favor of
the rich or poor. All stand upon an equality under the provisions

1002 STATUTES ANNOTATED. [Ohio St.

of the constitution, and it is this equality that is the pride and
safeguard of us all." Per Burket, J., in State v. Ferris, 53 Ohio
St. 314, 41 N. E. 579, 30 L. R. A. 218. The court emphasizes
the inequalities resulting from the particular mode of exemption
and progression, rather than the inequality of progressive taxa-
tion. If the first $20,000 of every estate had been exempt, if the
next $30,000 had always been subjected to the lowest rate, if the
next higher rate had been applied only to the excess above $50,000,
and so on throughout the scale, the court might well have held
the statute valid.

Ohio St. 1896, p. 374, approved April 27, 1896, provided for refunding of money
paid in on account of the direct inheritance tax of 1894.

Amendments to the Collateral Inheritance Tax.

Ohio St. 1894, p. 169, approved April 20, 1894, amended Ohio St. 1893, p. 14,
sections 1, 2, 4, 9, 14, 15

Discriminations among collateral kindred in the Ohio St.
1894, p. 169, are upheld. **The discrimination is based upon, and
justified by, the fact that there are degrees in collateral kinship."
Hagerty v. State, 55 Ohio St. 613, 45 N. E. 1046, affirming 12
C. C. R. 606, 5 Ohio Cir. Dec. 701.

The exemption of kindred direct or collateral made in the Ohio
statute is not obnoxious to the constitution as rendering the law
unequal in its application and operation. "The exemptions seem
to be made in favor of those who may have contributed, directly
or indirectly, to the accumulation of the estate, the succession to
which is taxed as father and mother, brother and sister, and their
immediate descendants, nephew and niece, if the estate be ances-
tral ; also husband and wife and lineal descendants, if it be the joint
accumulation of a family, and an adopted child, wife or widow of
a son and husband of a daughter are rightfully included in the same
category. This would seem to be a better distinction, supported
upon stronger moral grounds, than if made only between direct
descendants and collaterals." Dyer v, Hagerty (1896), 5 Ohio
Cir. Dec. 701, 12 Ohio Cir. Ct. 606.

Sales.

^ The act provided that all property "which shall pass by will
. . . sale or gift" shall be subject to tax; and it was claimed that
this right invaded the owner's right to sell and convey property.
But the meaning of the word "sale" as used in the statute includes

1904, p. 398.] OHIO. 1003

only transactions which though in form sales are in fact gifts.
Since the act is within the legislative power granted and not within
the letter or .spirit of any limitation thereof, it is valid. Hagerty
V. State, 55 Ohio St. 613, 626, 45 N. E. 1046, affirming 12 C. C. R.
606.

Ohio St. 1900, p. 101, approved April 6, 1900, amends Ohio St. 1893, s. 1, by
exempting from taxation property passing to the state or any municipal corpora-
tion in Ohio or to public institutions of learning or other institutions of charitable
or exclusively public purposes.

Charitable corporations organized under the laws of other
states are not included in this exemption although they have
agencies in Ohio. Humphreys v. State, 70 Ohio St. 67, 101 Am.
St. 888, 70 N. E. 957, 65 L. R. A. 776, affirming 13 Low. D. 168,
1 C. C. N. S. 1, 14 Cir. D. 238.

An exemption of foreign charitable corporations is not

obnoxious to the provisions of the fourteenth amendment to the
federal constitution, s. 1, "that no state shall deny to any person
within its jurisdiction the equal protection of the laws," as it is
settled that a corporation is not a citizen within the meaning of
this clause of the federal constitution. Furthermore, the legis-
lature has the right in laying taxes to classify corporations as has
been done in this state in recent years, and can classify resident
corporations in one class and foreign corporations in another.
Humphreys v. State, 70 Ohio St. 67, 87, 101 Am. St. 888, 70 N. E.
957, 65 L. R. A. 776, affirming 13 Low. D. 168, 1 C. C. N. S. 1,
14 Cir. D. 238.

An exemption of domestic corporations and not foreign
corporations is not obnoxious to Ohio constitution or bill of rights,
s. 2, which forbids conferring privileges and immunities beyond the
power of the general assembly to alter, revoke or repeal. The con-
stitution was adopted by the people of Ohio as their charter of
rights of restraint and it is not charged with the care of non-
resident persons or corporations. Humphreys v. State, 70 Ohio
St. 67, 85, 101 Am. St. 888, 70 N. E. 957, 65 L. R. A. 776, affirming
13 Low D. 168, 1 C. C. N. S. 1, 14 Cir. D. 238.

The Direct Inheritance Act of 1904.

Ohio St. 1904, p. 398, approved April 25, 1904.

S. 1. The right to succeed to or inherit property within the jurisdiction of
this state, and any interest therein, whether belonging to inhabitants of this

1004 STATUTES ANNOTATED. [Ohio St.

state or not, and whether tangible or intangible, including annuities, which
shall pass by will or by the inheritance laws of this state, or by deed, grant, sale
or gift made or intended to take effect in possession or enjoyment after the
death of the grantor, to the use of the father, mother, husband, wife, brother,
sister, niece, nephew, lineal descendant, adopted child, or person recognized as an
adopted child and made a legal heir under the provisions of section 4182 of the
Revised Statutes of Ohio, of the lineal descendant thereof, the lineal descendant
of any adopted child, the wife or widow of a son, the husband of a daughter of a
descendant, or to any one in trust for such person or persons, shall be taxed as
follows, to wit: Upon the value of the property exceeding three thousand dollars,
succeeded to or inherited by any person, two per centum on such excess; such
tax to be borne by the person so succeeding to or inheriting the same in the
manner herein provided. And all administrators, executors and trustees, shall
be liable for all such taxes, with interest, as hereinafter provided, until the same
shall have been fully paid. Such taxes shall become due and payable immediately
upon the death of the decedent, and shall at once become a lien upon said
property.

Not Retroactive.

This act is not retroactive and applies only to rights arising on
the death occurring on or subsequently to the date of its approval.
So where the death occurred before the act was passed, but the prop-
erty was left to a life tenant who died after the passage of the
statute, and where the remainder was contingent and the persons
who would take could not be ascertained until the death of the
life tenant, it was claimed that the succession was not complete
until the property was distributed and that the succession is sub-
ject to the tax in force at the time of distribution. The court,
however, finds that the right to inherit is what is taxed, that
various provisions of the statute show that the statute was intended
to have only a prospective operation, as, for instance, that the tax
becomes due and payable immediately upon the death of the
decedent. Eury v. State, 72 Ohio St. 448, 454, 74 N. E. 650.

Where the will provides that the estate shall be held in trust
and after the death of the life tenant on the final settlement of
the estate the residue shall be paid to the persons who shall then
be the heirs-at-law of the testator, the Ohio statute of 1904 covers
the gift to the heirs where the testator died prior to its enactment,
but his estate was still for the most part undistributed at the date of
the passage of the statute. Hostetter v. State, 26 Ohio Cir. Ct. 702.

Provisions for Notice on Appraisal Valid.

This act is not unconstitutional because section 9 gives the pro-
bate court power to order an appraisement without notice, as

1904, p. 398.] OHIO. 1005

sections 8 and 11 provide for a review of all matters before the
probate court and for appeal, and these provisions give ample
remedy and provide "a day in court" for all who may consider
themselves aggrieved. Hosteller v. Slate, 26 Ohio Cir. Ct. 702.

Validity of Exemptions.

The exemptions in this act are not in conflict with the Ohio
constitution or bill of rights. State v. Guilbert, 70 Ohio St. 229,
255, 71 N. E. 636.

''An excise tax which operates uniformly throughout the state
and bears eq,ually upon all persons standing in the same category
does not deprive any of equal protection of the laws." Per Spear,
C. J., in Stale v. Guilbert, 70 Ohio St. 229, 255, 71 N. E. 636.

Ohio St. 1904, being a tax upon the right to inherit or succeed
to property and not a tax upon property, is not affected by the
limitations of Ohio constitution, article 12, section 2. "Such
right is derived from and regulated by municipal law; it arises
from the relation of the individual to the state, and is not an
inherent or constitutional right. It follows that in assessing a
tax upon such right or privilege, the state may lawfully measure
or fix the amount of the tax by referring to the value of the prop-
erty passing, and is not precluded from this power by the provision
of the constitution requiring uniformity and equality of taxation."

The only question which the court felt was open to it related to
the matter of exemptions. It was contended that the act was
not uniform in that it exempts from its operation all inheritances
which do not exceed $3,000 in value and imposes a burden on such
as are above that sum. The court says, "We think there are two
answers to this objection. The person who inherits six thousand
dollars has three thousand exempt; the person who inherits three
thousand dollars has three thousand dollars exempt. They are on a
perfect equality in that regard. The same reasoning applies where
it happens that the smaller inheritance falls below three thousand
dollars. As well might it be urged that the law which exempts
from execution homesteads of the heads of families of one thousand
dollars in value is mvalid on the ground of inequality of privilege
because one debtor's homestead may not reach one thousand dollars
in value while that of another may. It is to be borne in mind that
tha act does not create a classification of persons for the purpose
of imposing a tax on that class. It is not a tax on persons at all.
If it is felt more by some than by others, this is owing merely to

1006 STATUTES ANNOTATED. [Ohio St.

the fact of the differing circumstances which surround the different
persons. No person, nor no set of persons, is selected arbitrarily
or otherwise for the imposition of burdens or for relieving of
burdens."

Furthermore, the court holds that as the tax is an excise tax and
the authority to impose the tax is conferred by the general grant
of legislative power, that the selection of the subjects on which
the tax will be imposed must be within the legislative competency.

To say that the mere fact of inclusion in the one case and exclu-
sion in the other constitutes a reason for holding the law invalid,
is to say that no excise tax can be lawfully levied upon any privi-
lege until all privileges on which it would be possible to lay such
tax have been included within its terms. If this proposition were
established it is difficult to say why it would not invalidate all the
excise laws of the state, many of which have been subjected to
judicial scrutiny and have been sustained. State v. Guilbert, 70
Ohio St. 229, 250, 71 N. E. 636.

The validity of the Ohio statute of 1904 and the tax assessed
thereunder was brought in question by quo warranto. It was
suggested that the court was without authority to pass on the
constitutional question under these proceedings. The court
remarks that if it is true that relief could not be granted the peti-
tioner in case the act should be held invalid because he had chosen
the wrong form of action, still that fact but affords another reason
for sustaining the demurrer in the case, since the court has full
original jurisdiction in quo warranto and therefore jurisdiction to
entertain and act upon the petition. State v. Guilberty 70 Ohio St.
229, 255, 71 N. E. 636.

Repeal of the Act of 1904.

Ohio St. 1906, c. 229, 98 Ohio Laws, p. 229.

An Act to repeal an act entitled, "An Act to impose a tax upon the

right to succeed to, or inherit property," passed April 25, 1904, 97 Ohio

Laws 398-400.

S. 1. That the act entitled ' An act to impose a tax upon the right to succeed
to, or inherit property,' passed April 25, 1904, 97 Ohio Laws 398-400, be and the
same are hereby repealed, except as to estates in which the inventory has already
been filed at the date of the passage of this act. [Passed April 2, 1906.]

Valid in Part.

Where the Ohio statute of 1906 provided for the repeal of the Ohio
inheritance law "except as to estates in which the inventory has

1906, c. 229.] OHIO. 1007

already been filed at the date of the passage of this act," and
where this exemption was void, the court holds that the whole act
need not be declared unconstitutional as the title of the act does
not leave room for even suspicion that the exception was an induce-
ment to the repeal; and the two objects of the act may well be
taken separately. Friend v. Levy, 76 Ohio St. 26, 50, 80 N. E. 1036.

** Except as to Estates in which the Inventory has Already
Been Filed."

This act provides that the statute of 1904 be repealed "except
as to estates in which the inventory has already been filed at the
date of the passage of this act." The court holds that this excep-
tion in the statute is unequal, and therefore void, within the
decision in State v. Ferris, 53 Ohio St. 314. Friend v. Levy, 76 Ohio
St. 26, 49, 80 N. E. 1036.

Effect of Repeal.

Where the Ohio inheritance law of 1904 was repealed by the
statute of 1906 without any saving clause, it is to be considered,
except as to transactions passed and closed, as though it had never
existed, and therefore no inheritance tax can be collected after
the repeal. Ohio Revised Statutes, s. 79, which create a general
saving clause, do not apply as the exception in the repealing statute
clearly shows that the legislature intended that no inheritance tax
should be collected after the repeal. Friend v. Levy, 76 Ohio St.
26, 51, 80, N. E. 1036.

THE PRESENT ACT.

Ohio General Code of 1910.

S. 5331. Transfers taxable. All property within the jurisdiction of this
state, and any interests therein, whether belonging to inhabitants of this state or
not, and whether tangible or intangible, which pass by will or by the intestate
laws of this state, or by deed, grant, sale or gift, made or intended to take effect
in possession or enjoyment after the death of the grantor, to a person in trust or
otherwise, other than to or for the use of the lather, mother, husband, wife,
brother, sister, niece, nephew, lineal descendant, adopted child, or person recog-
nized as an adopted child and made a legal heir under the provisions of a
statute of this state, or the lineal descendants thereof, or the lineal descendants
of an adopted child, the wife or widow of a son, the husband of the daughter
of a decedent, shall be liable to a tax of five per cent of its value, above the
sum of two hundred dollars. Seventy-five per cent of such tax shall be for
the use of the state, and twenty-five per cent for the use of the county wherein
it is collected. All administrators executors and trustees, and any such grantee

1008 STATUTES ANNOTATED. [Ohio St.

under a conveyance made during the grantor's life, shall be liable for all such
taxes, with lawful interest as hereinafter provided, until they have been paid
as hereinafter directed. Such taxes shall become due and payable immediately
upon the death of the decedent and shall at once become a lien upon the
property, and be and remain a lien until paid. (94 v. 101, par. 1.)
[See notes to the Acts of 1893 and 1904, ante, pp. 996, 1004.]

Nature.

This act is not a tax upon property but upon the right to receive
property and to have it transferred. The statute does not impose
the tax upon property directly simply because it provides that
administrators, executors and trustees shall be liable for all such
taxes. Humphreys v. State, 70 Ohio St. 67, 84, 101 Am. St. 888,
70 N. E. 957, 65 L. R. A. 776, affirming 13 Low. D. 168, 1 C. C. N. S.
1, 14 Cir. D. 238.

S. 5332. Exemptions. The provisions of the next preceding section shall
not apply to property, or interests in property, transmitted to the state of Ohio
under the intestate laws of the state, or embraced in a bequest, devise, transfer
or conveyance to, or for the use of the state of Ohio, or to or for the use of a mu-
nicipal corporation or other political subdivision thereof for exclusively public
purposes, or public institutions of learning, or to or for the use of an institution
in this state for purpose only of public charity or other exclusively public purposes.
The property, or interests in property so transmitted or embraced in such devise,
bequest transfer or conveyance shall be exempt from all inheritance and other
taxes while used exclusively for any of such purposes. (94 v. 101, par. 1.)

[See ante, pp. 996, 1003. f *

S. 5333. Particular estates and remainders. When a person bequeaths
or devises property to or for the use of father, mother, husband, wife, brother,
sister, niece, nephew, lineal descendant, adopted child, the lineal descendant of
an adopted child, the wife or widow of a son, or the husband of a daughter
during life or for a term of years, and the remainder to a collateral heir, or to a
stranger to the blood, the value of the prior estate, shall be appraised, within
sixty days after the death of the testator, in the manner hereinafter provided,
and deducted, together with the sum of two hundred dollars, from the appraised
value of such property. (91 v. 170, par. 2.)

[See notes to the Act of 1893, ante, p. 998.]

Annuity Taxed as Received.

Where the will directed the executors to purchase bonds of such
an amount that the interest would be sufficient to pay the wife
eight thousand dollars ($8,000) a year the court says that this
Js not an annuity the present value of which can be fixed. Here
the legacy grows out of the estate each quarter and on the failure
of sufficient interest part of the principal may be taken but even
that part adheres to the estate, grows out of it and cannot be
separated from it. The estate is therefore a trust fund in the

Code of 1910.] OHIO. 1009

hands of the executors for the payment of the quarterly instal-
ments of her legacy. It is the case of trustee and beneficiary,
and not debtor and creditor.

It is therefore clear that until received by the widow each
quarter the legacy remains merged in the estate as a part thereof,
that the taxes paid by the estate are all that can be lawfully
exacted, and that she cannot be taxed on any part of her legacy
until after its receipt by her. Chisholm v. Shields, 67 Ohio St.
374, 66 N. E. 93.

S. 5334. Qifts to executors and trustees. When a decedent appoints
one or more executors or trustees, and instead of their lawful allowance makes a
bequest or devise of property to them which would otherwise be liable to such
tax, or appoints them his residuary legatees, and said bequests, devises, or
residuary legacies exceed what would be a reasonable compensation for their
services, such excess shall be liable to such tax, and the probate court having
jurisdiction of their accounts shall fix such compensation. (90 v. 15, par. 3.)

S. 5335. Payment. — Interest. — Discount. Taxes imposed by this sub-
division of this chapter shall be paid into the treasury of the county in which the
court having jurisdiction of the estate or accounts is situated, by the executors,
administrators, trustees, or other persons charged with the payment thereof.
If such taxes are not paid within one year after the death of the decedent, interest
at the rate of eight per cent shall be thereafter charged and collected thereon, and
if not paid at the expiration of eighteen months after such death, the prosecuting
attorney of the county wherein said taxes remain unpaid, shall institute the
necessary proceedings to collect the taxes in the court of common pleas of the
county, after first being notified in writing by the probate judge of tne county
of the non-payment thereof. The probate judge shall give such notice n writing.
If the taxes are paid before the expiration of one year after the death of the
decedent, a discount of one per cent per month for each full month that payment
has been made prior to the expiration of the year, shall be allowed on the amount
of such taxes. (91 v. 170, par. 4 )

S. 5336. Tax to be deducted. An administrator, executor, or trustee,
having in charge, or trust, property subject to such law, shall deduct the tax
there rom, or collect the tax thereon from the legatee or person entitled to the
property. He shall not deliver any specific legacy or property subject to such
tax to any person until he has collected the tax thereon. (90 v. 15, par. 5.)

S. 5337. Legacy charged on real estate. When a legacy subject to such
tax is charged upon or payable out of real estate, the heir or devisee, before pay-
ing it, shall deduct the tax therefrom and pay it to the executor, administrator,
or trustee, and the tax shall remain a charge upon the real estate until it is paid.
Payment thereof shall be enforced by the executor, administrator, or trustee, in
like manner as the payment of the legacy itself could be enforced. (90 v. 16,
par. 6.)

1010 STATUTES ANNOTATED. [Ohio St.

S. 6338. Tax to be retained or apportioned. If such legacy is given in
money to a person for a limited period, such administrator, executor or trustee
shall retain the tax on the whole amount. If it is not in money, he shall make an
application to the court having jurisdiction of his accounts to make an appor-
tionment, if the case require it, of the sum to be paid into his hands by such
legatee on account of the tax and for such further order as the case may require.
(90 V. 16, par. 7.)

S. 5339. Power of sale. Administrators, executors and trustees may sell
so much of the estate of the deceased as will enable them to pay said tax in like
manner as they are empowered to do for the payment of his debts. (90 v. 16,
par. 8.)

S. 6340. Inventory. — Payment. Within ten days after the filing of the
inventory of every such estate, any part of which may be subject to a tax under
the provisions of this subdivision of this chapter, the judge of the probate court,
in which such inventory is filed, shall make and deliver to the county auditor of
such county a copy of the inventory ; or, if it can be conveniently separated, a
copy of such part of the estate, with the appraisal thereof. The auditor shall
certify the value of the estate, subject to taxation hereunder and the amount of
taxes due therefrom, to the county treasurer, who shall collect such taxes, and
thereupon place twenty-five per cent thereof to the credit of the county expense
fund, and pay seventy-five per cent thereof into the state treasury, to the credit
of the general revenue fund, at the time of making his semi-annual settlement.
(91 V, 170, par. 9.)

S. 6341. Information to probate judge. When any of the real estate of a
decedent passes to another person so as to become subject to such tax, the execu-
tor, administrator or trustee of the decedent shall inform the probate judge
thereof within six months after he has assumed the duties of his trust, or if the
fact is not known to him within that time, then within one month from the time
that it does become known to him. (90 v. 16, par. 10.)

S. 6342. Refund to beneficiary. When for any reason the devisee, legatee
or heir who has paid such tax relinquishes or reconveys a portion of the property
on whi h it was paid, or it is judicially determined that the whole or part of such
tax ought not to have been paid, the tax, or the due propt rtional part thereof
shall be repaid to him by the executor, administrator or trustee. (90 v. 16,
par. 11.)

S. 6343. Appraisal. The value of such property, subject to said tax, shall
be its actual market value as found by the probate court. If the state, through
the prosecuting attorney of the proper county, or any person interested in the
succession to the property, applies to the court, it shall appoint three disinter-
ested persons, who, being first sworn, shall view and appraise such property at its
acttial market value for the purposes of. this tax, and make return thereof to the
court. The return may be accepted by the court in a like manner as the original
inventory of the estate is accepted, and if so accepted, it shall be binding upon the
person by whom this tax is to be paid, and upon the state. The fees of the
appraisers shall be fixed by the probate judge and paid out of the county treas-

Code of 1910.[ OHIO. 1011

ury upon the warrant of the county auditor. In case of an annuity or life estate,
the value thereof shall be determined by the so-called actuaries' combined
experience tables and five per cent compound interest. (90 v. 16, par. 12.)
[See notes to the Act of 1904, ante, p. 1004.]

Appeal.

Under Ohio Revised Sts. s. 2731-33 and s. 6408, where the probate
court fixes the inheritance tax, either party may appeal and the
state may appeal without filing any security under Revised Sts.,
s. 213, s. 6411 and s. 5227. Humphreys v. State, 70 Ohio St. 67,
101 Am. St. 888, 70 N. E. 957, 65 L. R. A. 776, affirming 13 Low.
D. 168, 1 C. C. N. S. 1, 14 Cir. D. 238.

S. 5344 Jurisdiction of probate court. The probate court, having either
principal or auxiliary jurisdiction of the settlement of the estate of the decedent,
shall have jurisdiction to hear and determine all questions in relation to such tax
that arises, affecting any devise, legacy or inheritance under this subdivision of
this chapter, subject to appeal as in other cases, and the prosecuting attorney
shall represent the interests of the state in such proceedings. (90 v. 17, par. 13.)

[See notes to the Act of 1904, ante, p. 1004.]

S. 5345. Reports. Each probate judge, at least once in six months, shall
render to the county auditor a statement of the property within the jurisdiction
of his court that has become subject to such tax during such period, the number
and amount of such taxes as will accrue during the next six months, so far as
they can be determined from the probate records, and the number and amount
thereof due and unpaid Each probate judge shall keep a separate record, in a
book to be provided for that purpose, of all cases arising under the provisions
of this subdivision of this chapter. (91 v. 171, par. 14.)

S. 5346.' Fees. The fees of officers having duties to perform under the provi-
sions of this subdivision of this chapter, shall be paid by the county from the
county expense fund thereof and shall be the same as allowed by law for similar
services. In ascertaining the amounts due the state, seventy-five per cent of
the cost of collection and other necessary and legitimate expenses incurred by the
county in the collection of such taxes, shall be charged to the state and deducted
from the amount of taxes to be paid into the state treasury. (91 v. 171, par. 15.)

S. 5347. Settlement of account. A final settlement of the account of an
executor, administrator or trustee shall not be accepted or allowed by the pro-
bate court unless it shows, and the judge of that court finds, that all taxes im-
posed by the provisions of this subdivision of this chapter, upon any property or
interest therein, belonging to the estate to be settled by such account, have been
paid. The receipt of the county treasurer shall be the proper voucher for such
payment. (90 v. 17, par. 16.)

S. 5348. Definition. The word "property" as used in this subdivision of
this chapter includes real and personal estate, any form of interest therein, and
annuities. (90 v. 17, par. 17.)

1012 STATUTES ANNOTATED. [Okla. St.

OKLAHOMA.

In General.

Oklahoma did not wait long after its admittance to the Union
before adopting an inheritance tax law. This law was enacted
at the 1907-8 session of the Oklahoma legislature and will not
disappoint those who have learned to look to Oklahoma for radical
and complicated legislation. The rather startling, though per-
haps not wholly surprising feature of the law, in view of what sup-
posedly conservative states have done, is that there is a progressive
feature which results in the confiscation of all in excess of certain
amounts, and not very large amounts at that. Exemptions apply
to each individual inheritance and not to the estate as a whole.
We hesitate to suggest that under a literal reading of the statute
the rate of tax continues to increase even after 100 per cent is reached.

Oklahoma taxes both stock and registered bonds of Oklahoma
corporations owned by non-residents and the corporation itself
is responsible for the tax if it transfers securities before the tax is
paid.

This remarkable statute suggests interesting possibilities. Sup-
pose a rich Illinois resident shows his appreciation of his best
friend by naming him his executor, and leaves him in addition a
handsome legacy of $2,000,000 worth of stock in an Oklahoma
corporation. The executor is not familiar with the gyrations of
inheritance tax laws, and as he wishes to receive his dividends,
he sends along the stock for transfer. Someone has borrowed
our table of logarithms and our higher mathematics are a little
rusty, but under this handicap we figure that $1,951,930 is a very
close approximation to the Oklahoma tax on this legacy.

The exhilarating feature of the situation is not that he has
only^ $48,070 of the $2,000,000 left when Oklahoma is through,
but is that a tax of 10 per cent is still due on the legacy to the
state of Illinois, and the executor is personally responsible for the
payment of the entire amount!

This act has yet to be passed upon by the Oklahoma supreme
court, — a court which, it may be noted, has already shown much
sanity. It is hard to believe that the act could be sustained even
under the remarkable constitution of this state.

1907-8, c. 81.] OKLAHOMA. 1013

List of Statutes.

1907-08. Statutes of Oklahoma, c. 81, a. 11, p. 733.

1908. Gen. Statutes of Oklahoma, a. 2, p. 1242, ss. 6044-6082.

1909. Oklahoma Compiled Laws, c. 98, a. 14, p. 1549.

Constitutional Limitations.
Oklahoma Constitution, 1907, a. 10.

S. 5. The power of taxation shall never be surrendered, suspended, or con-
tracted away. Taxes shall be uniform upon the same class of subjects.

S. 12. The legislature shall have power to provide for the levy and collection
of license, franchise, gross revenue, excise, income, collateral and direct inher-
itance, legacy, and succes&ion taxes; also graduated income taxes, graduated
collateral and direct inheritance taxes, graduated legacy and succession taxes;
also stamp, registration, production, or other specific taxes.

THE PRESENT ACT.

Okla. St. 1907-08, c. 81, a. 11. Approved May 26, 1908.

An Act providing for a tax on gifts, inheritances, bequests, legacies,
devices and successions in certain cases; and declaring an emergency.

The text of this statute is printed below from the Compiled
Laws of 1909.

The Oklahoma statute has been passed upon recently by the
district court of Oklahoma. The state officials are at present work-
ing under the interpretation of the law as laid down by the district
judge, L. M. Poe, who sustained its constitutionality and decided
certain disputed points as to the method of computation. Judge
Poe's opinion is not reported. It has been filed for record in the
office of the state auditor.

Oklahoma Compiled Laws of 1909, Art. xiv.

S. 7712. Tax on gifts, inheritances, etc. A tax shall be and Is hereby
imposed upon any transfer of any property, real, personal, or mixed, or any
interest therein, or income therefrom in trust or otherwise, to any person, asso-
ciation, or corporation, except corporations of this state organized under its laws
solely for religious, charitable, or educational purposes, which shall use the prop-
erty so transferred exclusively for the purposes of their organization within this
state in the following cases: When the transfer is by will or by the intestate
laws of this state from any person dying possessed of the property while a resi-
dent of the state. When a transfer is by will or intestate law, of property within
the state or within its jurisdiction and the decedent was a non-resident of the
state at the time of his death. When the transfer i? of property made by a resi-
dent or by a non-resident, when such non-resident's property is within this
state or within its jurisdiction, by deed, grant, bargain, sale, or gift, made in
contemplation of the death of the grantor, vendor, or donor, or intended to take

1014 STATUTES ANNOTATED. [Okla. St.

effect in possession or enjoyment at or after such death. Such tax shall be
imposed when any such person or corporation becomes beneficially entitled, in
possession or expectancy to any property or the income thereof, by any such
transfer whether made before or after the passage of this act; provided, that
property or estates which have vested in such persons or corporations before
this act takes effect shall not be subject to the tax. Whenever any person or
corporation shall exercise a power of appointment derived from any disposition
of property made either before or after the passage of this act, such appoint-
ment, when made shall be deemed a transfer taxable under the provisions of this
act in the same manner as though the property to which such appointment
relates belonged absolutely to the donee of such power and had been bequeathed
or devised by such donee by will; and whenever any person, or corporation
possessing such power of appointment so derived shall omit or fail to exercise
the same within the time provided therefor, in whole or in part, a transfer taxable
under the provisions of this act shall be deemed to take place to the extent of
such omission or failure, in the same manner as though the persons or corpora-
tions thereby becoming entitled to the possession or enjoyment of the property
to which such power related had succeeded thereto by a will of the donee of the
power faihng to exercise such power, taking effect at the time of such omission
or failure. The tax so imposed shall be upon the clear market value of such
property at the rates hereinafter prescribed, and only upon the excess of the
.exemptions hereinafter granted. (L. 1907-8, p. 733.)

S. 7713. Rate — primary — by classes. When the property or any
beneficial interest therein passes by any such transfer, where the amount of the
property shall exceed in value the exemptions hereinafter specified, the primary
rates of taxation hereinafter imposed shall apply as follows:

On the first five thousand dollars of such excess in class one; on first two
thousand dollars of such excess in classes two and three; on the first five hundred
dollars of such excess in classes four and five and shall be:

Class 1 : Where the person or persons entitled to any beneficial interest in such
property shall be the husband, wife, lineal issue, lineal ancestors of the decedent
or any child adopted as such in conformity with the laws of this state, or any
child to whom such decedent for not less than ten years prior to such transfer
stood in the mutually acknowledged relation of a parent; Provided, however,
such relationship began at or before the child's fifteenth birthday, and was
continuous for said ten years thereafter, or any lineal issue of such adopted or
mutually acknowledged child, at the rate of one per centum of the clear value
of such interest in such property.

Class 2. Where the person or persons entitled to any beneficial interest in
such property shall be the brother or sister of a descendant of a brother or sister
of the decedent, a wife or widow of a son or the husband of a daughter of the
decedent, at the rate of one and one-half per centum of the clear value of such
interest in such property.

Class 3: Where the person or persons entitled to any beneficial interest in
suth property shall be the brother or sister of the father or mother, or a descend-
ant of a brother or sister of the father or mother of the decedent, at the rate of
three per centum of the clear value of such interest in such property.

Class 4: Where the person or persons entitled to any beneficial interest in
such property shall be the brother or sister of the grandfather or grandmother

1907-8, c. 81.] OKLAHOMA. 1015

or a descendant of the brother or sister of the grandfather or grandmother of
the decedent, at the rate of four per centum of the clear value of such interest
in such property.

Class 5: Where the person or persons entitled to any beneficial interest in such
property shall be in any other degree of collateral consanguinity than is herein-
before stated, or shall be a stranger in blood to the decedent, or shall be a body
politic, or corporate, at the rate of five per centum of the clear value of such
interest in such property. (L. 1907-8, p. 734.)

S. 7714. Primary rate increased. The foregoing rates in section 7713
are for convenience termed the primary rates. Upon all in excess of five thou-
sand dollars in class one, the primary rate provided for herein shall be increased
one one-hundred twenty-fifth (l/l25) of one per centum for every one hundred
dollars increase in valuation of such excess. Upon all in excess of two thousand
dollars in classes two and three the primary rate provided for herein shall be
increased one-fiftieth of one per centum for every one hundred dollars' increase
in valuation of such excess. Upon all in excess of five hundred dollars in classes
four and five, the primary rate provided for herein shall be increased one-tenth
of one per centum for every one hundred dollars increase in valuation for such
excess. (L. 190708, p. 735.)

S. 7715. Exemptions. The following exemptions from the tax are hereby
allowed : —

All property transferred to corporations of this state organized under its
laws solely for religious, charitable, or educational purposes which shall use the
property so transferred exclusively for the purposes of their organization with-
in the state shall be exempt.

Property of the clear value of ten thousand dollars transferred to the widow
of the decedent, and five thousand dollars transferred to each of the other persons
described in the first division of section 7713, shall be exempt.

Property of the clear value of five hundred dollars, transferred to each of the
persons described in the second subdivision of section 7713, shall be exempt.

Property of the clear value of two hundred and fifty dollars, transferred to
each of the persons described in the third subdivision of section 7713, shall be
exempt.

Property of the clear value of one hundred and fifty dollars, transferred to each
of the persons described in the fourth subdivision of section 7713, shall be exempt.

Property of the clear value of one hundred dollars, transferred to each of the
persons and corporations as described in the fifth subdivision of section 7713,
shall be exempt. (L. 1907-8, p. 736.)

S. 7716. A lien — how paid. Every such tax shall be and remain a lien
upon the property transferred until paid and the person to whom the property is
so transferred and the administrators, executors, and trustees of every estate
so transferred, shall be personally liable for such tax until its payment. The
tax shall be paid to the treasurer of the county in which the county court is
situated having jurisdiction as herein provided: and said treasurer shall give
and every executor, administrator, or trustee shall take duplicate receipts from
him of such payments, one of which he shall immediately send to the state
auditor, whose duty it shall be to charge the treasurer so receiving the tax with

1016 STATUTES ANNOTATED. [Okla. St.

the amount thereof, and to seal said receipt with the seal of his office, and counter-
sign the same and return it to the executor, administrator or trustee, whereupon
it shall be a proper voucher in the settlement of his accounts; but no executor,
administrator or trustee shall be entitled to a final accounting of an estate, in
settlement of which a tax is due under the provisions of this act, unless he shall
produce a receipt so sealed and countersigned by the state auditor or a copy
thereof certified by him, or unless a bond shall have been filed, as prescribed
by section 7720. All taxes imposed by this act shall be due and payable at the
time of the transfer except as hereinafter provided. Taxes upon the transfer
of any estate, property, or interest therein, limited, conditioned, dependent, or
determinable upon the happenings of any contingency or future event, by reason
of which the fair market value thereof cannot be ascertained at the time of the
transfer, as herein provided, shall accrue and become due and payable when the
beneficiaries shall come into actual possession or enjoyment thereof. (L. 1907-8,
p. 736.)

S. 7717. Discount or interest. If such tax is paid within one year from
the accruing thereof, a discount of five per centum shall be allowed and deducted
therefrom. If such tax is not paid within eighteen months from the accruing
thereof, interest shall be charged and collected thereon at the rate of ten per
centum per annum from the time the tax accrued ; unless by reason of claims made
upon the estate, necessary litigation, or other unavoidable cause of delay, such
tax shall not be determined and paid as herein provided, until the cause of such
delay is removed, after which ten per centum shall be charged. In all cases where
a bond shall be given under the provisions of section 7720, interest shall be charged
at the rate of six per centum from the accrual of the tax, until the date of payment
thereof. (L. 1907-8, p. 737.) ^

S. 7718. Administrator may sell property to pay. Every executor,
administrator, or trustee shall have full power to sell so much of the property
of the decedent as will enable him to pay such tax in the same manner as he
might be entitled by law to do for the payment of the debts of the testator, or
intestate. Any such administrator, executor, or trustee having in charge or in
trust, any legacy or property for distribution, subject to such tax, shall deduct
the tax therefrom ; and within thirty days therefrom shall pay over the same to
the county treasurer, as herein provided. If such legacy or property be not
in money, he shall collect the tax thereon upon the appraised value thereof,
from the person entitled thereto. He shall not deliver or be compelled to
deliver any specific legacy or property subject to tax under this act, to any person
until he shall have collected the tax thereon. If any such legacy shall be charged
upon or payable out of real property, the heir, or devisee, shall deduct such tax
therefrom and pay it to the administrator, executor, or trustee, and the tax shall
remain a lien or charge on such real property until paid, and the payment thereof
shall be enforced by the executor, administrator, or trustee, in the same manner
that payment of the legacy might be enforced, or by the county attorney under
section 7730. If any such legacy shall be given in money to any such person
for a limited period, the administrator, executor, or trustee shall retain the tax
upon the whole amount, but if it be not in money, he shall make application
to the court having jurisdiction of an accounting by him to make an apportion-

1907-8, c. 81.] OKLAHOMA. - 1017

ment if the case require it, of the sum to be paid into his hands by such legatees,
and for such further order relative thereto as the case may require. (L. 1907-8,
p. 737.)

S. 7719. When debt proved after tax paid. If any debt shall be proved
against the estate of the decedent after the payment of any legacy, or distrib-
utive share thereof, from which any such tax has been deducted, or upon which
it has been paid by the person entitled to such legacy or distributive share, and
such person is required by the order of the county court having jurisdiction thereof
on notite to the state auditor to refund the amount of such debts or any part
thereof, an equitable proportion of the tax shall be repaid to him by the execu-
tor, administrator or trustee, if the tax has not been paid to the county treasurer,
or repaid by such treasurer, or state treasurer, if such tax has been paid to him.
When any amount of said tax shall have been paid erroneously into the state
treasury, it shall be lawful for the state auditor, upon satisfactory proofs pre-
sented to him of the facts, to require the amount of such erroneous or illegal
payment to be refunded to the executor, administrator, trustee, person or persons
who have paid any such tax in error, from the treasury; or the said state auditor
may order, direct and allow the treasurer of any county to refund the amount
of any illegal or erroneous payment of such tax out of the funds in his hands
or custody to the credit of such taxes, and credit him with the same in his quarterly
account rendered to the state auditor, under this act. Provided, however, that
all applications for such refunding of erroneous taxes shall be made within one
year from the payment thereof, or within one year after the reversal or modifi-
cation of the order fixing such tax. (L. 1907-8, p. 738.)

S. 7720. Deferred payment of tax — bond to secure. Any beneficiary
of any property chargeable with a tax under this act, and any executors, adminis-
trators and trustees thereof, may elect, within eighteen months from the date
of the transfer thereof as herein provided, not to pay such tax until the person
or persons, beneficially interested therein shall come into the actual possession
or enjoyment thereof. The person or persons so electing shall give a bond to
the state in a penalty of three times the amount of any such tax, with such
securities as the county court of the proper county may approve, conditioned
for the payment of such tax and interest thereon at such time or period as the
person or persons beneficially interested therein may come into the actual
possession or enjoyment of such property, which bond shall be filed in the county
court. Such bond must be executed and filed and a full return of such property
upon oath made to the county court within one year from the date of such trans-
fer thereof as herein provided, and such bond must be renewed when ordered
by the court. (L. 1907-8, p. 739.)

S. 7721. Bequest to executor in lieu of commissions — taxed — when.

If a testator bequeaths property to one or more executors or trustees in lieu of
their commissions or allowances, or makes them his legatees to any amount
exceeding the commission or allowance prescribed by law for an executor or
trustee, the excess in value of the property so bequeathed, above the amount
of commissions or allowances prescribed by law in similar cases, shall be taxable
by this act. (L. 1907-8, p. 739.)

1018 STATUTES ANNOTATED. [Okla. St.

S. 7722. Foreign administrator or trustee. — Duty. If a foreign executor,
administrator or trustee shall assign or transfer any stock or obligations in this
state standing in the name of a decedent or in trust for a decedent, liable to
any such tax, the tax shall be paid to the treasurer of the proper county or the
state auditor on the transfer thereof. No safe deposit company, bank or other
institution, person or persons holding securities or assets of a decedent, shall
deliver or transfer the same to the executors, administrator, or legal repre-
sentatives of said decedent, or upon their order or request unless notice of the time
and place of such intended transfer be served upon the state auditor at least ten
days prior to the said transfer; nor shall any such safe deposit company, bank
or other institution, person or persons deliver or transfer any securities or assets
of the estate of a non-resident decedent without retaining a sufficient portion or
amount thereof to pay any tax which may thereafter be assessed on account of
the transfer of such securities or assets under the provisions of this act, unless
the state auditor consents thereto in writing; and it shall be lawful for the
said county treasurer or state auditor personally or by representative to examine
said securities or assets at the time of such delivery or transfer. Failure to
serve such notice or to allow such examination or to retain a sufficient portion
or amount to pay such tax as herein provided, shall render said safe deposit com-
pany, trust company, bank or other institution, person or persons, liable to
the payment of the tax due upon said securities or assets in pursuance of the
provisions of this act. (L. 1907-8, p. 739.)

S. 7723. County court's jurisdiction. The county court of every county
of the state having jurisdiction to grant letters testamentary or of administra-
tion upon the estate of a decedent whose property is chargeable with any tax
under this act, or to appoint a trustee of such estate or any part thereof, or
to give ancillary letters thereon, shall have jurisdiction to hear and determine
all questions arising under the provisions of this act, and to do any act in relation
thereto authorized by law to be done by a county court in other matters or
proceedings coming within its probate jurisdiction. Every petition for ancil-
lary letters testamentary or ancillary letters of administration, made in pur-
suance oi the laws governing probate practice of a person to be cited as therein
prescribed, and a true and correct statement of all the decedent's property in
this state, and the value thereof; and upon presentation thereof the county court
shall issue a citation directed to such county treasurer, and upon the return of
the citation, the county court shall determine the amount of the tax which may
be or become due under the provision of this act, and his decree awarding the
letters may contain any provisions for the payment of such tax or the giving of
security therefor, which might be made by such county court if the county
treasurer were a creditor of deceased. (L. 1907-8, p. 740.)

S. 7724. Appraisement — court to appoint appraisers. The county
court upon the application of any interested party, including the state auditor,
county treasurer, or upon his own motion, shall as often as, and whenever occasion
may require, appoint a competent person as appraiser to fix the fair market
value at the time of transfer thereof of the property of persons whose estates shall
be subject to the payment of any tax imposed by this act.

Whenever a transfer of property is made upon which there is, or in any con-
tmgency there may be, a tax imposed, such property shall be appraised at its

1907-8, c. 81.1 OKLAHOMA. 1019

clear market value immediately upon the transfer or as soon thereafter as
practicable. The value of every future or limited estate, income, interest or
annuity dependent upon life or lives in being, shall be determined by the rule,
method and standard of mortality and value employed by the commissioner
of insurance in ascertaining the value of policies of life insurance, and annuities
for the determination of liabilities of life insurance companies except that the
rate of interest for making such computation shall be five per centum
per annum.

In estimating the value of any estate, or interest in property to the beneficial
enjoyment or possession whereof there are persons or corporations presently
entitled thereto, no allowance shall be made in respect of any contingent incum-
brance thereon, nor in respect of any contingency upon the happening of which
the estate or property or some part thereof, or interest therein, might be abridged,
defeated or diminished; Provided, however, that in the event of such incum-
brance taking effect as an actual burden upon the interest of the beneficiary,
or in the event of the abridgement, defeat or diminution of such estate or prop-
erty or interest therein as aforesaid, a return shall be made to the person properly
entitled thereto of a proportionate amount of such tax in respect to the amount
or value of the incumbrance when taking effect, or so much as will reduce the
same to the amount which would have been assessed in respect of the actual
duration or extent of the estate or interest enjoyed. Such return of tax shall be
made in the manner provided in section 7719.

Where any property shall after the passage of this act be transferred subject
to any charge, estate, or interest determinable by the death of any person, or
at any period ascertainable only by reference to death, the increase of benefit
accruing to any person or corporation upon extinction or determination of such
charge, estate or interest, shall be deemed a transfer of property taxable under
the provisions of this act in the same manner as though the person or corpora-
tion beneficially entitled thereto had then acquired such increase of benefit from
the person from whom the title to their respective estates or interests is derived.

When property is transferred in trust or otherwise, and the rights, interests
or estates of the transferees are dependent upon contingencies or conditions
whereby they may be wholly or in part created, defeated, extended or abridged,
a tax shall be imposed upon such transfer at the highest rate which, on the happen-
ing of any of the said contingencies or conditions, would be possible under the
provisions of this act, and such tax so imposed shall be due and payable forth-
with out of the property transferred, provided, however, that on the happening
of any contingency whereby the said property or any part thereof is transferred
to a person or corporation exempt from taxation under the provisions of this
act or to a person taxable at a less rate than the rate imposed and paid, such
person or corporation shall be entitled to a return of so much of the tax imposed
and paid as is the difference between the amount paid and the amount which
said person or corporation should pay under the provisions of this act with
legal interest from the time of payment. Such return of overpayment shall
be made in the manner provided by section 7719. .

Estates in expectancy which are contingent or defeasible and in which pro-
ceedings for the determination of the tax have not been taken or where the taxa-
tion thereof has been held in abeyance, shall be appraised at their full,
undiminished, clear value when the persons entitled thereto shall come into the

1020 STATUTES ANNOTATED. [Okla. St.

beneficial enjoyment or possession thereof without diminution for or on account
of any valuation theretofore made of the particular estates for purposes of taxa-
tion upon which said estates in expectancy may have been limited.

Where an estate for life or for years can be divested by the act or omission of
the legatee or devisee, it shall be taxed as if there were no possibility of such
divesting. (L. 1907-8, p. 741.)

S. 7725. Appraiser's duty — pay. Every such appraiser shall forthwith
give notice by mail to all persons known to have claim or interest in the property
to be appraised, including the county treasurer, and to such persons as the county
court may by order direct, of the time and place when he will appraise such
property. He shall, at such time and place, appraise the same at its fair market
value, as herein prescribed, and for that purpose the said appraiser is authorized
to issue subpoenas and to compel the attendance of witnesses before him and to
take the evidence of such witnesses under oath concerning such property and
the value thereof; and he shall make report thereof and of such value in writing,
to the said county court, together with the depositions of the witnesses examined,
and such other facts in relation thereto and to the said matters as the said county
court may order or require. Every appraiser shall be paid on the certificate
of the county court at the rate of two dollars per day for every day actually
and necessarily employed in such appraisal, and his actual and necessary travel-
ing expenses and the fees paid such witness, which fees shall be the same as those
now paid to witnesses subpoenaed to attend in courts of record, by the county
treasurer out of any funds he may have on his hands on account of any tax
imposed under the provisions of this act. (L. 1907-8, p. 743.)

S. 7726. Their report. The report of the appraiser shall be made in dupli-
cate, one of which duplicates shall be filed in the office of the county court and the
other in the office of the state auditor. Upon filing such report in the county
court, the county court shall forthwith give twenty days notice by mail to all
persons known to be interested in the estate, including the county treasurer, of
the time and place of the hearing in the matter of such report and the county
court from such report and other proofs relating to any such estate shall forth-
with at the time so fixed, determine the cash value of such estate and the amount
of tax to which the same is liable, or the county court without appointing an
appraiser upon giving twenty days notice by mail to all persons known to be
interested in the estate including the county treasurer, of the time and place of
hearing, may at the time so fixed hear evidence and determine the cash value
of such estate and the amount of tax to which the same is liable. If the residence
or post-office address of any person interested in any estate is unknown to the
executor, administrator, or trustee, notice of the hearing in the matters of the
report of the appraisers or notice that the county court without appointing an
appraiser will determine the cash value of an estate, shall be given to all such
persons by publication of such notice not less than three successive weeks prior
to the time fixed for such hearing or determination in such newspaper published
within the county as the court shall direct. (L. 1907-8, p. 743.)

S. 7727. Duty of insurance commissioner. The commissioner of
msurance shall on application of any county court determine the value of any
such future or contingent estates, income, or interests therein, limited, contin-
gent, dependent or determinable upon the life or lives of the person or persons

1907-8, c. 81.] OKLAHOMA. 1021

in being upon the facts contained in such appraiser's report or upon the facts
contained in the county court's finding and determination and certify the same
to the county court and his certificate shall be presumptive evidence that the
method of computation adopted therein is correct. (L. 1907-8, p. 744.)

S. 7728. Of state auditor. The state auditor or any person dissatisfied
with the appraisement or assessment and determination of such tax, may apply
for a rehearing thereof, before the county court, within sixty days from the
fixing, assessing and determination of the tax by the county court as herein pro-
vided, on filing a written notice which shall state the grounds of the applica-
tion for a rehearing. The rehearing shall be upon the records, proceedings, and
proofs had and taken on the hearings as herein provided and a new trial shall
not be had or granted unless specially ordered by the county court. (L. 1907-8,
p. 744.)

S. 7729. County court. — District Judge. The county court shall im-
mediately give notice by mail upon the determination by him as to the value
of any estate which is taxable under this act and of the tax to which it is liable
to all parties known to be interested therein including the state auditor. If,
however, it appears at this or any stage of the proceedings that any of such parties
known to be interested in the estate is an infant or an incompetent, the county
court shall if the interest of such infant or incompetent is presently involved,
and is adverse to that of the other persons interested therein appoint a special
guardian of such infant, but nothing in this provision shall affect the right of an
infant over fourteen years of age or of any one on behalf of an infant under
fourteen years of age, to nominate and apply for the appointment of a special
guardian of such infant at any stage of the proceedings.

Within one year after the entry of an order or decree of the county court
determining the value of an estate and assessing the tax thereon, the state auditor
may if he believes that such appraisal, assessment, or determination has been
fraudulently, coUusively, or erroneously made, make application to the judge
of the district court in which the said estate is administered on for a reappraisal
thereof. The district judge to whom such application is made may thereupon
appoint a competent person to reappraise such estate. Such appraiser shall
possess the powers, be subject to the duties, shall give the notice, and receive
the compensation provided by sections 7724 and 7725. Such compensation
shall be payable by the county treasurer out of any funds he may have on account
of any tax imposed under the provisions of this act upon the certificate of the
district judge appointing. The report of such appraiser shall be filed in the
district court for which he was appointed and thereafter the same proceedings
shall be taken and had by and before such district court as herein provided to be
taken and had by and before the county court.

The determination and assessment of such district court shall supersede the
determination and assessment of county court and shall be filed by such district
court in the office of the state auditor and a certified copy thereof transmitted
to the county court of the proper county. (L. 1907-8, p. 744.)

S. 7730. Tax not paid. — Procedure. If the treasurer of any county shall
have reason to believe that any tax is due and unpaid under this act after the
refusal or neglect of any person liable therefor to pay the same, he shall notify

1022 STATUTES ANNOTATED. [Okla. St

the county attorney of the county in writing of such failure or neglect; and such
county attorney if he have probable cause to believe that such tax is due and un-
paid, shall apply to the county court for a citation citing the person liable to
pay such tax to appear before the court on the day specified not more than three
months from the date of such citation and show cause why the tax should not be
paid. The judge of the county court, upon such application and whenever it
shall appear to him that any such tax, accruing under this act, has not been
paid as required by law, shall issue such citation, and the service of such cita-
tion, and the time, manner, and proof thereof, and the hearing and determination
thereof, shall conform as near as may be to the provisions of the laws governing
probate practice of this state, and whenever it shall appear that any such tax
is due and payable, and the payment thereof cannot be enforced under the
provisions of this act in said county court, the person or corporation from whom
the same is due is hereby made liable to the county of the county court having
jurisdiction over such estate or property for the amount of such tax, and it shall
be the duty of the county attorney of said county in the name of such county
to sue for and enforce the collection of such tax, and it is made the duty of said
county attorney to appear for and act on behalf of any county treasurer, who
shall be cited to appear before any county court under the provisions of this
act. (L. 1907-8, p. 745.)

S. 7731. Auditor to furnish books. The state auditor shall furnish to
each county court a book which shall be a public record, and in which he shall enter
the name of every decendent (decedent) whose estate is or may become liable
for such tax, and upon whose estate an application to him has been made for
the issue of letters of administration, or letters testamentary, or ancillary letters,
the date and place of death of such decendent (decedent) the estimated value,
of the property of such decendent (decedent), the names, places, residence and
relationship to him of his heirs at law, the names and places of residence of the
legatees and devisees in any will of any such decedent, the amount of each
legacy and the estimated value of any property devised therein and to whom
devised. These entries shall be made from the date contained in the paper
filed on any such application, or in any proceeding relating to the estate of the
decendent (decedent). The county court shall also enter in such book, the
amount of the personal property of any such decendent (decedent) as shown
by the inventory thereof, when made and filed in his office, and the returns made
by any appraiser appointed by him under this act, and the value of annuities,
life estates, terms of years, and other property of any such decedent, or given
by him in his will or otherwise, as fixed by the county court, and the tax assessed
thereon, and the amounts of any receipts for payment of tax on the estate of
such decedent, under this act filed with him. The state auditor shall also furnish
to each county, forms for the reports to be made by such county court, which
shall correspond with the entries to be made in such books. (L. 1907-8, p. 746.)

S. 7732. County judge to report. Each judge of county court shall on
Japuary, April, July, and October first, of each year, make a report in dupli-
cate, upon the forms furnished by the state auditor containing all the data and
matters required to be entered in such books, one of which shall be immediately
delivered to the county treasurer and the other transmitted to the state auditor.
(L. 1907-8, p. 747.)

1907-8, c. 81.] OKLAHOMA. 1023

S. 7733. Treasurer to report. Each county treasurer shall make a report,
under oath to the state auditor on January, April, July and October first, of each
year, of all taxes received by him under this act, stating for what estate and by
whom and when paid. The form of such report may be prescribed by the
state auditor. He shall at the same time pay the state treasurer all the taxes
received by him under this act and not previously paid into the state treasury,
and for all such taxes collected by him and not paid the state treasurer within
thirty days from the times herein required he shall pay interest at the rate of
ten per centum per annum. (L. 1907-8, p. 747.)

S. 7734. Treasurer may agree on extension. — When. The county
treasurer, with the consent of the state auditor and the attorney general, ex-
pressed in writing, is authorized to enter into an agreement with the executor,
administrator o'r trustee of any estate threein situate in which remainders or
expectant estates have been of such a nature or so disposed and circumstanced
that the taxes therein were held not presently payable or where the interests
of the legatees, or devisees are not ascertainable under the provisions of this
act, and to compound such taxes upon such terms as may be deemed equitable
and expedient and to grant discharges to said executors, administrators or
trustees upon the payment of the taxes, provided for in such composition, pro-
vided, however, that no such composition shall be conclusive in favor of said
executors, administrators or trustees as against the interests of such cestui que
trust as may possess either present rights of enjoyment, or fixed, absolute or
indefeasible rights of future enjoyment, or of such as would possess such rights
in the event of the immediate termination of particular estates, unless they con-
sent thereto either personally, when competent, or by guardian. Composition
or settlement made or effected under the provisions of this section shall be
executed in triplicate and one copy shall be filed in the office of the state auditor;
one copy in the office of the judge of the county court in which the tax was paid;
and one copy to be delivered to the executors, administrators or trustees, who s-hall
be parties thereto. (L. 1907-8, p. 747.)

S. 7735. Receipt. Any person shall upon the payment of the sum of fifty
cents, be entitled to a receipt from the county treasurer of any county, of the
state auditor, or at his option to a copy of a receipt that may have been given
by such treasurer or state auditor for the payment of any tax under this act,
under the official seal of such treasurer or state auditor, which receipt shall
designate upon what real property, if any, of which any decedent may have died
seized, such tax shall have been paid, by whom, and whether in full of such tax.
Such receipt may be recorded in the office of the register of deeds of the county
in which such property is situate in a book to be kept by him for that purpose,
which shall be labeled "transfer tax." (L. 1907-8, p. 748.)

S. 7736. Money paid to state. All taxes levied and collected under this
act, less any expenses of collection, shall be paid into the treasury of the state,
and one-half of same shall be used for the public schools of this state as other
available state common school funds, and one-half shall be applicable to the
expenses of the state government, and to such other purposes as the legislature
may by law direct. (L. 1907-8, p. 748.)

1024 STATUTES ANNOTATED. [Okla. St.

S. 7737. Construction. The words "estate" and "property" as used in
this act shall be taken to mean the real and personal property or interest therein
of the testator, intestates, grantor, bargainor, vendor or donor passing or trans-
ferred to individual legatees, devisees, heirs, next of kin, grantees, donees, vendees,
or successors, and shall include all personal property within or without the
state. The word "transfer" as used in this act shall be taken to include the
passing of property or any interest therein, in possession or enjoyment, present
or future, by inheritance, descent, devise, succession, bequest, grant, deed,
bargain, sale, gift or appointment, in the manner herein prescribed. The word
"decedent" as used in this act shall include the testator, intestate, grantor, bar-
gainer, vendor, or donor. The words "county treasurer" and "county attor-
ney" as used in this act shall be taken to mean the treasurer and county attorney
of the county of the county court having jurisdiction as provided in section
7723 of this act. (L. 1907-8, p. 748.)

Ore. St.] OREGON. 1025

OREGON,

In General.

Oregon enacted its inheritance tax in 1903, using the Illinois
statute of 1895 as a model. It has since been substantially amended.
Stock in an Oregon corporation owned by a non-resident is not
taxed unless the certificate is physically within the state, but
stock in any corporation owned by a non-resident is taxable if the
certificate is kept within the state. A corporation is responsible
if it transfers any taxable securities for a non-resident before the
tax is paid. Every estate is required to file a complete inventory.

List of Statutes.

1903. Statutes of Oregon, p. 49.
1905. " " " c. 178, 309.
1909. " *' ' p. 60, c. 15
1909. " *' ' p. 306, c. 211.

Constitutional Limitations.

Oregon Constitution, 1857, a. 1.

S. 32. No tax or duty shall be imposed without the consent of the people or
their representatives in the legislative assembly, and all taxation shall be equal
and uniform.

The Oregon Constitution of 1857, a. 1, s. 32, has no counterpart
except in the South Dakota Constitution, a. 6, c. 100, s. 17. In re
McKennan, 25 South Dakota 369, 126 N. W. 611, 618.

Oregon Constitution, 1857, a. 9.

S 1. The legislative assembly shall provide by law for a uniform and equal
rate of assessment and taxation, and shall prescribe such regulations as shall
secure a just valuation for taxation of all property, both real and personal,
excepting such only for municipal, educational, literary, scientific, religious,
or charitable purposes as may be specially exempted by law.

S. 3. No tax shall be levied, except in pursuance of law, and every law impos-
ing a tax shall state distinctly the object of the same, to which only it shall be
applied.

S 4 No money shall be drawn from the treasury but in pursuance of appro-
priations made by law.

1026 STATUTES ANNOTATED. [Ore. St.

STATUTES.

Oregon St. 1903, p. 49. Approved February 16, 1903.

An Act to tax gifts, legacies, and inheritances, and to provide for
the collection of the same
S. 1. Subject to tax. All property within the juiisdiction of this state,
and any interest therein whether belonging to the inhabitants of this state or
not, and whether tangible or intangible, which shall pass by will or by statuted
of inheritance of this or any other state, or by deed, grant, bargain, sale, or gift
made in contemplation of the death of the grantor, or bargainor, or intended to
take effect in possession or enjoyment after the death of the grantor, bargainor
or donor, to any person or persons, or to any body or bodies politic or corporate,
in trust or otherwise, or by reason whereof any person, or body politic or corpor-
ate, shall become beneficially entitled, in possession or expectation, to any prop-
erty or income thereof, shall be and is subject to a tax at the rate hereinafter,
specified in section 2 of this act, to be paid to the treasurer of the state for the use
of the state; and all heirs, egatees and devisees, administrators, executors, and
trustees, and any such grantee under a conveyance , and any such donee under a
gift, made during the grantor or donor's life, shall be respectively liable for any
and all such taxe , with interest thereon until the same shall have been paid,
as hereinafter provided: Provided, however, that devises, bequests, legacies, and
gifts to benevolent and charitable institutions incorporated within this state
and actually engaged in this state in carrying out the objects and purposes
for which so incorporated, shall be exempt from any taxation under the pro-
visions of this act.

S. 2. Rates of tax. When such inheritance, devise, bequest, legacy, gift,
or beneficial interest to any property or income therefrom shall pass to or for the
use or benefit of any father, mother, husband, wife, child, brother, sister, wife or
widow of a son, or the husband of a daughter, or any child or children adopted
as such in conformity with the laws of the state of Oregon, or to any person to
whom the decedent for not less than ten years prior to death stood in the acknow-
ledged relation of a parent, or to any lineal descendant born in lawful wedlock,
in every such case the tax shall be at the rate of one per centum upon the ap-
praised value thereof received by each person: Provided, that any estate which
may be valued at a less sum than $10,000 shall not be subject to any such duty
or tax, and the tax is to be levied in above cases only upon the excess of $5,000
received by each person. When such inheritance, devise, bequest, legacy, gift,
or the beneficial interests to any property or income therefrom shall pass to or for
the use or benefit of any uncle, aunt, niece, nephew, or any lineal descendant of the
same, in every such case the tax shall be at the rate of two per centum upon
the appraised value thereof received by each person on the excess of $2,000 so
received by each person. In all other cases the tax shall be at the rate of three per
centum upon the appraised value thereof received by each person, body politic
or corporate on all amounts over $500 and not exceeding $10,000; four per cen-
tum on all amounts over $10,000 aftd not exceeding $20,000; five per centum
on all amounts over $20,000 and not exceeding $50,000; six per centum on all
amounts over $50,000.

Ss. 3-42 provide for the assessment and collection of a tax.

1905, c. 178] OREGON. 1027

Oregon St. 1905, c. 178, p. 309, approved February 21, 1905, amends Ore-
gon St. 1903» s. 1, making its proviso read as follows: —

Provided, however, that devisees, bequests, legacies, and gifts to benevolent,
charitable or educational institutions incorporated within this state and actually
engaged in this state in carrying out the objects and purposes for which so incor-
porated, or to any person or persons to be held in trust for any such institution
in lieu thereof, shall be exempt from any taxation under the provisions of this
act.

Oregon St. 1909, c. 15, filed February 5, 1909, amends Oregon St. 1903, ss. 2
and 16.

Oregon St. 1909, c. 211, p. 306, provides a special exemption of inheritance tax
from a certain estate of "The Reed Institute," filed February 23, 1909.

The Oregon, statute had not received any construction by the
courts of Oregon up to 1910. In re McKennan, 25 South Dakota
369, 126 N. W. 611, 616.

THE PRESENT ACT.

Oregon St. 1905, c. 178, p. 309.

To TAX GIFTS, LEGACIES, AND INHERITANCES, and to provide for the col-
lection of the same.

Subject to Tax.

S. 1. All property within the jurisdiction of the state, and any interest therein,
whether belonging to the inhabitants of this state or not, and whether tangible
or intangible, which shall pass by will or by statutes of inheritance of this or any
other state, or by deed, grant, bargain, sale, or gift, made in contemplation of
the death of the grantor, or bargainor, or intended to take effect in possession
or enjoyment after the death of the grantor, bargainor, or donor, to any person or
persons, or to any body or bodies, politic or corporate, in trust or otherwise, or
by reason whereof any person, or body politic or corporate, shall become bene-
ficially entitled, in possession or expectation, to any property or income thereof,
shall be and is subject to a tax at the rate hereinafter specified in section 2 of this
act, to be paid to the treasurer of the state for the use of the state; and all heirs,
legatees, and devisees, administrators, executors, and trustees, and any such
grantee under a conveyance, and any such donee under a gift, made during the
grantor or donor's life, shall be respectively liable for any and all such taxes,
with interest thereon, until the same shall have been paid, as hereinafter provided;
provided, however, that devises, bequests, legacies, and gifts to benevolent, charit-
able or educational institutions incorporated within this state, and actually
engaged in this state in carrying out the objects and purposes for which so incor-
porated, or to any person or persons to be held in trust for any such institution in
lieu thereof, shall be exempt from any taxation under the provisions of this act.
[L 1905, p. 309.]

Rates of Tax.

S. 2. When such inheritance, devise, bequest, legacy, gift, or beneficial inter-
est to any property or income therefrom shall pass to or for the use or benefit of

1028 STATUTES ANNOTATED. [Ore. St.

any grandfather, grandmother, father, mother, husband, wife, child, brother,
sister, wife or widow of a son, or the husband of a daughter, or any child or chil-
dren adopted as such in conformity with the laws ot the state of Oregon, or to any
person to whom the decedent for not less than ten years prior to death stood in the
acknowledged relation of a parent, or to any lineal descendant born in lawful
wedlock, and in every such case the tax shall be at the rate of one per centum
on the appraised value thereof received by each person; provided, that in the above
cases any estate which may be valued at a less sum than $10,000 shall not be
subject to any such duty or tax, and the tax is to be levied in the above cases only
on the excess of $5,000 received by each person.

When such inheritance, devise, bequest, legacy, gift, or the beneficial interest
to any property or income therefrom shall pass to or for the use or benefit of any
uncle, aunt, niece, nephew, or any lineal descendant of the same, in every such
case the tax shall be at the rate of two per centum on the appraised value thereof
received by each person; provided, that in the above cases any estate which may
be valued at a less sum than $5,000 shall not be subject to any such duty or tax
and the tax is to be levied in the above cases only on the excess of $2,000 received
by each person. In all other cases the tax shall be at the rate of three per centum
on the appraised value thereof received by each person, body politic or corporate,
on the whole of all amounts received not exceeding $10,000; four per centum on
the whole of all amounts received over $10,000, and not exceeding $20,000;
five per centum on the whole of all amounts received over $20,000 and not exceed-
ing $50,000; six per centum on the whole of all amounts received over $50,000;
provided, that in the above cases any estate which may be valued at a less sum
than $500 shall not be subject to any such duty or tax, and the tax is to be levied
in the above cases only when the amount received by a person, body politic or
corporate amounts to $500 or more. [L. 1909, p. 60.]

Tax, When it Accrues and is Payable.

S. 3. All taxes imposed by this act shall take effect at and accrue upon the
death of the decedent, or donor, and shall be due and payable at the expiration of
eight months from such death, except as otherwise provided in this act; provided,
however, that taxes upon any devise, bequest, legacy, or gift, limited, conditioned,
dependent, or determinable upon the happening of any contingency or future
event, by reason of which the full and true value thereof can not be ascertained at
or before the time when the taxes become due and payable as aforesaid, shall
accrue and become due and payable when the person or corporation beneficially
entitled thereto shall come into actual possession or enjoyment thereof.
Payment, When Made.

S 4. Any administrator, executor, or trustee having in charge, or in trust,
any property for distribution, embraced in or belonging to any inheritance, devise,
bequest, legacy, or gift, subject to the tax thereon as imposed by this act, shall
deduct the tax therefrom, and within thirty days thereafter he shall pay over
the same to the state treasurer, as herein provided. If such property be not
in money, he shall collect the tax on such inheritance, devise, bequest, legacy, or
gift, upon the appraised value thereof from the person entitled thereto. He shall
not deliver, or be compelled to deliver, any property embraced in any inheritance,
devise, bequest, legacy, or gift, subject to tax under this act, to any person until
he shall have collected the tax thereon.

1905, c. 178.] OREGON. 1029

Tax, to whom Paid; Duplicate Receipts.

S. 5. The tax imposed by this act upon inheritances, devises, bequests, or
legacies, shall be payable to the state treasurer, and the treasurer shall give the
executor, administrator, trustee, or person paying such tax, a receipt, as provided
by paragraph 4, section 2410, Bellinger and Cotton's Annotated Codes and
Statutes of Oregon, whereupon it shall be a proper voucher in the settlement of
his accounts. No executor, administrator, or trustee shall be entitled to a final
account ng of an estate in the settlement of which a tax may become due under
the provisions of this act, unless he shall produce a receipt so sealed and counter-
signed, or a copy thereof, certified by the said treasurer, or unless a bond shall
have been filed, as prescribed by section 13 of this act. All taxes paid into the
state treasury under the provisions of this act shall belong to and be a part of
the inheritance tax fund of the state; provided, whenever the amount of money in
this fund exceeds $10,000, then all moneys in excess of $5,000 shall be transferred
to the general fund.

Tax a Lien.

S. 6. Every tax imposed by this act shall be a lien upon the property embraced
in any inheritance, devise, bequest, legacy, or gift, until paid, and the person to
whom such property is transferred, and the administrators, executors, and trus-
tees of every estate embracing such property shall be personally liable for such
tax until its payment, to the extent of the value of such property; and provided,
further, that all inheritance taxes shall be sued for within five years after they are
due and legally demandable, otherwise they shall be conclusively presumed to
be paid and cease to be a lien as against the estate, or any part thereof, of the
decedent.

Discount, Interest, and Penalty.

S. 7. If such tax is paid within eight months from the accruing thereof, a
discount of five per centum shall be allowed and deducted therefrom. If such
tax is not paid within eight months from the accruing thereof, interest shall be
charged and collected thereon at the rate of eight per centum per annum from
the time the tax is due and payable, unless by reason of claims upon the estate,
necessary litigation, or other unavoidable delay, such tax can not be determined
and paid as herein provided, in which case interest at the rate of six per centum
per annum shall be charged upon such tax from the time from the accruing thereo ,
until the cause of such delay is removed, after which eight per centum shall be
charged. In all cases when a bond shall be given, under the provisions of sec-
tion 13 of this act, interest shall be charged at the rate of six per centum from
the accrual of the tax until the date of the payment thereof.

Power to Sell.

S. 8. Every executor, administrator, or trustee shall have full power to se'i
so much of the property embraced in any inheritance,. devise, bequest, or legacy
as will enable him to pay the tax imposed by this act, in the same manner as he
might be entitled by law to do for the payment of the debts of a testator or
intestate.

1030 STATUTES ANNOTATED. [Ore. St.

Duty of Heir or Devisee when Legacy Payable out of Property; Legacy for
Limited Period; Duty of Administrator.

. S. 9. If any bequest or legacy shall be charged upon or payable out of any
property, the heir or devisee shall deduct such tax therefrom and pay such tax
to the administrator, executor, or trustee, and the tax shall remain a lien or charge
on such property until paid; and the payment thereof shall be enforced by the
executor, administrator, or trustee in the same manner that payment of the
bequest or legacy might be enforced; or by the prosecuting attorney under sec-
tion 27 of this act. If any bequest or legacy shall be given in money for a limited
period, the administrator, executor, or trustee shall retain the tax upon the whole
amount; but, if it be not in money, he shall make application to the court hav-
ing jurisdiction of an accounting by him to make an appointment [apportion-
ment], if the case requires, of the sum to be paid into his hands by such legatee
or beneficiary, and for such further order relative thereto as the case may require.

Refund of Tax Erroneously Paid.

S. 10. When any tax imposed by this act shall have been erroneously paid,
wholly or in part, the person paying the same shall be entitled to a refundment of
the amount so erroneously paid, and the secretary of state shall, upon satisfactory
proofs presented to him of the facts relating thereto, draw his warrant upon the
state treasurer for the amonnt thereof in favor of the person entitled thereto,
payable from the inheritance tax fund; provided, however, that all applications
for such refunding of erroneous taxes shall be made within three years from the
payment thereof.

Tax When Foreign Executor Assigns Stock, etc.

S. 11. If a foreign executor, administrator, or trustee shall assign or transfer
any stock or- obligations in this state standing in the name of the decedent, or
in trust for a decedent, liable to any such tax, the tax shall be paid to the state
treasurer on or before the transfer thereof, and no such assignment or transfer
shall be valid unless such tax is paid.

Depositaries of Securities not to Deliver Same until Notice Given to State
Treasurer; Penalty.

S. 12. No safe deposit company, trust company, bank, corporation, or other
institution, person or persons, holding securities or assets of a decedent, or cor-
poration in which said decedent, at the time of his death, owned any stock, shall
deliver or transfer the same to the executors, adiminstrators, or legal representa-
tives of said decedent, or upon their order or request, unless notice of the said
time and place of such intended transfer be served upon the state treasurer in
writing at least five days prior to the said transfer; and it shall be lawful for the
said state treasurer, personally or by representative, to examine said securities
prior to the time of such delivery or transfer. If upon such examination the state
treasurer, or his said representative, shall, for any cause, deem it advisable that
•^ such securities or assets should not be immediately delivered or transferred, he
may forthwith notify, in writing, such company, bank, institution, or person to
defer delivery or transfer thereof for a period not to exceed ten days from the date
of such notice, and thereupon it shall be the duty of the party notified to defer
such delivery until the time stated in such notice, or until the revocation thereof

1905, c. 178.] OREGON. 1031

within such ten days; failure to serve the notice first above-mentioned or allow
such examination, or to defer the delivery of such securities or assets for the time
stated in the second of said notices, shall render said safe deposit company, trust
company, corporation, bank, or other institution, person or persons, liable to
the payment of the tax due on said securities or assets, pursuant to the provi-
sions of this act.

Deferred Payment; Bond.

S. 13. Any person or corporation beneficially interested In any property charge-
able with a tax under this act, and executors, administrators, and trustees thereof,
may elect, within six months from the death of the decedent, not to pay such tax
until the person or persons beneficially interested there n shall come into actual
possession or enjoyment thereof. If it be personal property, the person or per-
sons so electing shall give a bond to the state in the penalty of three times the
amount of such tax, with such sureties as the county judge of the proper county
may approve, conditioned for the payment of such tax and interest thereon,
at such time and period as the person or persons beneficially interested therein
may come into actual possession or enjoyment of such property, which bond
shall be executed and filed, and a full return of such property upon oath made
to the county court within six months from the date of transfer, thereof, as herein
provided, and such bond must be renewed every five years.

Taxes upon Devises and Bequests in Lieu of Commissions.

S. 14. Whenever a decedent appoints one or more executors or trustees, and,
in lieu of their allowance or commission, makes a bequest or devise of property
to them, which would otherwise be liable to said tax, or appoints them his residu-
ary legatees, and said bequests, devises, or residuary legacies exceed what would
be a reasonable compensation for their services, such excess shall be liable to
such tax, and the court having jurisdiction of their accounts, upon its own motion,
or on the application of the state treasurer, shall fix such compensation.

Jurisdiction of the County Court.

S. 15. The county court of every county in this state having jurisdiction to
grant letters testamentary or of administration upon the estate of a decedent
whose property is chargeable with any tax under this act, or to give ancillary
letters thereon, or to appoint a trustee of such estate, or any part thereof, shall
have jurisdiction to hear and determine all questions arising under the provisions
of this act, and to do any act in relation thereto authorized by law to be done
by such court in other matters or proceedings coming within his jurisdiction;
and if two or more county courts shall be entitled to exercise any such jurisdic-
tion, the county court first acquiring jurisdiction hereunder shall retain the
same to the exclusion o every other county court.

Duty of County Judge; Notice to State Treasurer.

S. 16. The judge of the county court having jurisdiction of the estate of any
decedent shall, within ten days after the filing of a willpr the application for letters
of administration, or the granting of letters testamentary or of letters of admin-
istration, if in his opinion said estate is subject to a tax under any of the provi-
sions of this act, cause the county clerk to send to the treasurer of the state a

1032 STATUTES ANNOTATED. [Ore. St

certificate of the filing of such will or application, or the granting of such letters
of administration. The court shall thereupon, and as soon as practicable after
the granting of any such letters, proceed to ascertain and determine the value of
every inheritance, devise, bequest, or legacy embraced in or payable out of the
estate in which such letters are granted, and the tax due thereon. The state
treasurer shall have the same right to apply for letters of administration as that
conferred by law upon creditors. [L. 1909, p. 61.]

Duty of Executors, etc.; Filing Inventory and Appraisement.

S. 17. It shall be the duty of the executor, administrator, or trustee of every
estate, within one month from the date of his appointment, or, if a trustee, from
the acceptance of this trust, or, if necessary, such further time as the county cleric
or judge may allow, make an inventory, verified by his own oath, of all the real
and personal property of the deceased which shall come to his possession or
knowledge, any will or directions of the decedent to the contrary notwithstand-
ing, and to cause the same to be appraised, as by law required, and filed with
the clerk of the court having jurisdiction of said estate.

Extension of Time to File Appraisement.

S. 18. Whenever, by reason of the complicated nature of an estate, or by rea-
son of the confused condition of the decedent's affairs, it is impracticable for the
executor, administrator, trustee, or beneficiary of said estate to file with the clerk
of the court a full, complete, and itemized inventory of the personal assets
belonging to the estate within the time required by statute for filing invento ies
of estates of decedents, the court may, upon the application of such representa-
tive or parties in interest, extend the time for filing the appraisement for a
period not to exceed three^ months beyond the time fixed by law, or such
further time as may be necessary upon good cause shown.

Duty of Administrator, etc., to Send Inventory and Appraisement to
State Treasurer.

S. 19. Every executor or administrator, or trustee of any estate subject to
the tax herein provided, shall, at least ten days prior to the first appraisement
thereof, as provided by law, notify the state treasurer in writing of the time and
place of such appraisement, and shall file due proof of such notice with a copy
thereof with the clerk of the court having jurisdiction of such estate or trust.
Every executor, administrator, or trustee, within ten days after such appraise-
ment, or appraisement of any beneficial interest or reappraisement thereof, and
before payment and distribution to the legatees or any parties entitled to benefi-
ciary interest therein, shall make and render to the said state treasurer a copy of
the said inventory and appraisement, duly certified as such by the clerk of the
court having jurisdiction of said estate, and shall also make and file with the
said state treasurer a schedule, list, or statement, in duplicate, of the amount of
such legacy or distributive share, together with the amount of tax which has
accrued or will accrue thereon, verified by his oath or affirmation, to be adminis-
tered and certified thereon by some magistrate or officer having lawful power to
administer such oaths, in such form and manner as may be prescribed by the state
treasurer, which schedule, list, or statement shall contain the name of each and
every person entitled to any beneficiary interest therein, together with the clear

1905, c. 178.1 OREGON. 1033

value of such interest, as found and determined by the court having jurisdiction
of said estate. One of said schedules shall be kept and retained by the state
treasurer, and the other delivered by him to the secretary of state.

Court May Act on First Inventory.

S. 20. In ascertaining and determining the value of any inheritance, devise,
bequest, or legacy embraced in or payable out of any estate or trust, and the
tax due thereon, the court may act upon the inventory and appraisement of such
estate as prepared and filed by the executor, administrator, or trustee thereof,
pursuant to law, or it may require an appraisement or reappraisement as herein
provided, of the true and full value of the property embraced in any inheritance,
devise, bequest, or legacy, subject to the payment of any tax imposed by this act.

Appointment of Appraisers.

S. 21. The county court may, in any matter mentioned in sections 16, 17,
and 18, or if no inventory or appraisement has been made, or if it deem it for any
cause insufficient or inadequate, either upon its own motion or upon the appli-
cation of any interested party, including the state treasurer, and as often and
when occasion required, appoint one or more persons as appraisers to appraise
the true and full value of the property embraced in any inheritance, devise,
bequest, or legacy subject to the payment of any tax imposed by this act.

Immediate Appraisal, when.

S. 22. Every inheritance, devise, bequest, legacy, or gift, upon which a tax
is imposed under this title, shall be appraised at its full and true value immedi-
ately upon the death of the decedent, or as soon thereafter as may be practicable;
provided, however, that when such devise, bequest, legacy, or gift shall be of such
a nature that its full and true value can not be ascertained at such time, it shall
be appraised in like manner at the time when such value first becomes ascertain-
able. The value of every future or contingent or limited estate, income, interest,
or annuity dependent upon any life or lives in being shall be determined by the
rules or standard of mortality, and of value commonly used by actuaries' com-
bined experience tables, except that the rates of interest on computing the present
value of all future and contingent interest or estates shall be four per centum
per annum interest.

County Court to Fix Time and Place of Appraisement, and Clerk to
Give Notice to Witnesses.

S. 23. The county court shall by order fix the time and place when the
appraisers appointed under the provisions of section 20 of this act shall make
said appraisement. The county clerk shall forthwith give notice to the state
treasurer, and to all persons known to have a claim or interest in the property,
inheritance, devise, bequest, legacy, or gift to be appraised, and to such persons
as the probate court may by order direct, of the time and place when said ap-
praisers will make such appraisal. Such notice shall be given by mail. They
shall, at such time and place, appraise the same at its full and true value, as herein
prescribed, and for that purpose the said appraisers are authorized to issue
subpoenas and -to compel the attendance of witnesses before them, and to take
evidence of such witnesses under oath concerning such property and the value

1034 STATUTES ANNOTATED. [Ore. St.

thereof, and they shall make report thereof, and of such value in writing to the
said county court, together with the testimony of the witnesses examined, and
such other facts in relation thereto, and to the said matter as said county court
may order or require. Every appraiser shall be entitled to compensation at the
rate of $3 per day for each day actually and necessarily employed in such appraisal,
and his actual and necessary traveling expenses, and such witnesses, and the
officer or person serving any such subpoena, shall be entitled to the same fees
as those allowed witnesses or sheriffs for similar services in courts of record.
The compensation and fees claimed by any person for services performed under
this act shall be approved by the county judge, who shall certify the amount
thereof, as so approved, to the secretary of state, who shall examine the same,
and, if found correct, he shall draw his warrant upon the state treasurer for the
amount thereof in favor of the person entitled thereto, payable from the inherit-
ance tax fund.

Report of Appraisers to be Filed w?th County Court.

S. 24. The report of the appraisers shall be filed with the county court and
from such report, and other proof relating to any such estate before the county
court, the court shall forthwith, as of course, determine the full and true value
of all such estates and the amount of the tax to which the same are liable; or
the county court may so determine the full and true value of all such estates, and
the amount of tax to which the same are liable, withou ; appointing appraisers,
as herein provided.

County Court to Give Notice; When.

S. 25. The county court shall immediately give notice upon the determina-
tion of the value of any inheritance, devise, bequest, legacy, or gift, which is
taxable under this act and of the tax to which it is liable, to all parties known
to be interested therein, including the secretary of state and the state treasurer.
Such notices shall be given by mail.

Reappraisement; When.

S. 26. Within thirty days after the assessment and determination by the
county court of any tax imposed by this act, the state treasurer, or any person
interested therein, may file with the said court objections thereto in writing, and
praying for a reassessment and redetermination of such tax. Upon any objec-
tion being so filed, the county court shall appoint a time for the hearing thereof,
and cause notice of such hearing to be given by mail to the state treasurer, and
all parties interested, at least ten days before the hearing thereof; at the time
appointed in such notice, the court shall proceed to hear such objection, and any
evidence which may be offered in support thereof or opposition thereto; and if,
after such hearing, the said court finds the amount at which the property is
appraised is its market value, and the appraisement was made fairiy and in good
faith. It shall approve such appraisement; but if it finds that the appraisement
was made at a greater or less sum than the market value of the property, or that
the same was not made fairiy or in good faith, it shall, by order, set aside the
appraisement and determine such value. The state treasurer, or any one inter-
ested in the property appraised may appeal to the circuit court from the judg-
ment order and decree of the county court in the premises, and may appeal to

1905, c. 178.] OREGON. 1035

the supreme court from the order, judgment, or decree of the circuit court in the
same manner as is provided by law for appeals from judgments and orders of
the county court and circuit court. All evidence heard on such reappraisement
shall be reduced to writing and filed with the clerk of the court. All appeals
taken from the judgment or decree of the court shall be had and tried on appeal
in the same manner and with like effect as appeals in suits in equity are now
heard and tried.

Tax Due and Unpaid; Duty of Treasurer.

S. 27. If the state treasurer shall have reason to believe that any tax is due
and unpaid under this act, after the refusal or neglect of the persons liable
therefor to pay the same, he shall notify the prosecuting attorney of the county
in writing of such failure or neglect, and such prosecuting attorney, if he have
probable cause to believe that such tax is due and unpaid, shall apply to the county
court for a citation citing the persons liable to pay such tax to appear before the
court on the day specified, not more than thirty days from the date of such
citation, unless the court, for good cause shown, grants a longer time, and show
cause why the tax should not be paid. The county court, upon such application,
and whenever it shall appear to him that any such tax accruing under this act
has not been paid as required by law, shall issue such citation, and a service of
such citation, and the time, manner, and proof thereof, and the hearing and
determination thereon, shall conform as near as may be to the provisions of the
probate practice; provided, that where no provision is made for manner of such
service or proof of same, the court or judge, at the time such order or citation
is issued, shall direct the manner of giving notice and proof of the same; and
whenever it shall appear that any such tax is due and payable and the payment
thereof cannot be enforced under the provisions of this act in said county court,
the person or corporation from whom the same is due is hereby made liable to
the state for the amount of such tax, and it shall be the duty of the prosecuting
attorney of the proper county to sue for, in the name of the state, and enforce
the collection of such tax; and all taxes so collected shall be forthwith paid into
the inheritance tax fund of the state. It shall be the duty of said prosecuting
attorney to appear for and represent the state treasurer on the hearing of such
citation, or of any other hearing. Whenever the county judge shall certify that
there was probable cause for issuing a citation and taking the proceeding speci-
fied in this section, the state treasurer shall file with the secretary of state a duly
verified itemized account of all expenses incurred for the service of the citation,
and other lawful disbursements not otherwise paid, and the secretary of state
shall thereupon draw his warrant upon the state treasurer for the payment thereof,
and in favor of said treasurer payable from the inheritance tax fund.

Secretary of State to Furnish Books and Forms of Reports; Entries by
Courts.

S. 28. The secretary of state shall furnish to each county court a book, which
shall be a public record, and in which shall be entered by the judge or clerk of
said court, under the direction of said judge, the name of every decedent upon
whose estate an application has been made for the issue of letters of administra-
tion or letters testamentary, or ancillary letters; the date and place of death of
such decedent; the estimated value of the property of such decedent; names and

1036 STATUTES ANNOTATED. [Ore. St-

places of residence and relationship to decedent of the heirs at law of such dece-
dent ; the names and places of residence of the legatees, devisees, and other
beneficiaries in any will of such decedent; the amount of each legacy, and the
estimated value of any property devised therein, and to whom devised. These
entries shall be made from data contained in the papers filed on any such appli-
cation, or in any proceeding relating to the estate of the deceased. The county
judge, or the clerk of the court under his direction, shall also enter in such book
the amount of the property of any such decedent, as shown by the inventory
thereof, when made and filed in his office, and the returns made by any appraisers
appointed by him under this act, and the value of all inheritances, devises,
bequests, legacies, and gifts inherited from such decedent, or given by such
decedent in his will, or otherwise, as fixed by the probate court; and the tax
assessed thereon, and the amounts of any receipts for payment thereof filed in
said court. The secretary of state shall also furnish to each county court forms
for the reports to be made by such county judge, which shall correspond with
the entry to be made in such book. He shall also furnish, for the use of the courts
and appraisers throughout the state, tables showing the average expectancy of
life, and the value of annuities of life and term estates, and the present worth
or value of remainders and reversions, as prescribed in section 20 of this act.
The taxable value of life or term, deferred or future estates, shall be computed
at the rate of four per cent per annum interest.

Reports by County Judges and Custodian of Deeds and Records.

S. 29. Each county judge shall on the first day of January, April, July, and
October of each year, under the seal of the court, make a report, in duplicate,
upon the forms furnished by the secretary of state, containing all the data and
matters required to be entefed in such book, one of which shall be immediately
transmitted to the state treasurer, and the other to the secretary of state. The
county clerk, or recorder of conveyances, of each county having custody of
records of deeds, shall, at the same time, make reports, in duplicate, containing
a statement of any conveyance filed or recorded in his office of any property
which appears to have been made or intended to take effect in possession or
enjoyment after the death of the grantor or vendor, with the name and place
of residence of the vendor and vendee, and a description of the property
transferred, as shown by such instrument, one of which duplicates shall be
immediately transmitted to the state treasurer, and the other to the secretary
of state.

Duplicate Receipts to be Furnished by the State Treasurer.

S. 30. It shall be the duty of the state treasurer, upon the payment of the
sum of twenty-five cents, to issue to any person demanding the same, a copy
of a receipt that may have been given by such treasurer for the payment of any
tax under this act, which receipt shall designate upon what real property, if any,
pf which any decedent may have died seized, such tax shall have been paid,
by whom paid, and whether in full of such tax. Such receipts may be recorded
m the office of the officers having control and charge of the deed records of the
county in which such property is situated, in a book to be kept by him for that
purpose, which shall be labeled"transfer tax."

1905, c. 178.] OREGON. 1037

Recording Receipts by County OflScer.

S. 31. The county commissioners of each county shall provide a book for
the recording of said receipts. The officer of each county having control and
charge of the deed records of each county shali charge and collect, at the time
said receipt is presented for record, for the use of the county, the sum of twenty-
five cents for recording each receipt. The sum paid to the state treasurer for
copies of receipts shall be paid by him into the inheritance tax fund.

Compromise of Amount of Tax Due.

S. 32. Whenever an estate charged, or sought to be charged with the inherit-
ance tax, is of such a nature or is so disposed that the liability of the estate is
doubtful, or the value thereof cannot with reasonable certainty be ascertained
under the provisions of law, the state treasurer may, with the written approval
of the attorney general, which approval shall set forth the reasons therefor,
compromise with the beneficiaries or representatives of such estates, and com-
pound the tax thereon; but said settlement must be approved by the county
court having jurisdiction of the estate, and after such approval the payment
of the amount of the taxes so agreed upon shall discharge the lien against the
property of the estate.

Administrators, etc., to Furnish Additional Reports, When.

S. 33. Administrators, executors, or trustees of the estates subject to the
inheritance tax shall, when demanded by the state treasurer, send to such
treasurer certified copies of such parts of their reports as may be demanded by
him, and, upon refusal of said parties to comply with the treasurer's demand,
it is the duty of the clerk of the court to comply with such demand, and the
expense of making siich copies and transcripts shall be charged against the
estate, as are other costs in probate.

Appeals.

S. 34. Appeals may be taken to the circuit court from all final orders, judg-
ments, and decrees, entered under the provisions of this act, in the same manner
and with the same effect as other appeals are taken from final orders and judg-
ments made or rendered by the county court. All such appeals shall be had
and tried in the same manner and with like effect as appeals in suits in equity
are now heard and tried.

Penalty for Secreting or Willful Failure to Produce Will.

S. 35. Any person who shall willfully sequester or secrete any last will or
testament of a person then deceased, or who, having the custody of any such
will and testament, shall willfully fail or neglect to produce and deliver the same
to the judge of the county court having jurisdiction of its probate, or to any
executor named therein, within a reasonable time after the death of the testator
thereof, with intention to injure or defraud any person interested therein, shall
be punished by imprisonment in the county jail not more than one year or by
fine not exceeding $500.

1038 STATUTES ANNOTATED. [Ore. St.

Penalty for Administering Personal Estate without Proving Will.

S. 36. Every person who shall administer the personal estate of any person
dying after the passage of this act, or any part thereof, without proving the will
of the deceased or taking out letters of administration of such personal estate
within six calendar months after the death of the person so dying, shall be pun-
ished by imprisonment in the county jail not more than one year or by a fine
not exceeding $500.

Duty of Administrators, etc., to Notify State Treasurer of Trust Estate,
Wlien.

S. 37. Whenever any of the real estate of which any decedent may die seized
shall pass to any body politic or corporate, or to any person or persons, or in
trust for them, or tome of them, it shall be the duty of the executor, adminis-
trator, or trustee of such decedent to give information thereof in writing to the
state treasurer within three months after they undertake the execution of their
expected duties, or, if the fact be not known to them within that period, then
within one month after the same shall have come to their knowledge.

Property Outside of tlie State.

S. 38. Except as to real property located outside of the state passing in fee
from the decedent owner, the tax imposed under section 2 shall hereafter be
assessed against and be collected from property of every kind, which, at the death
of the decedent owner, is subject to, or thereafter, for the purpose of distribution,
is brought into this state and becomes subject to the jurisdicion of the courts
of this state for distributive purposes, or which was owned by any decedent
domiciled within the state at^the time of the death of such decedent, even though
the property pf said decedent so domiciled was situated outside of the state.

Taxes on Foreign Estate where Part of Property is in State.

S. 39. In case of any property belonging to a foreign estate, which estate in
whole or in part is liable to pay an inheritance tax in this state, the said tax shall
be assessed upon the market value of said property remaining after the payment
of such debts and expenses as are chargeable to the property under the laws of
this state. In the event that the executor, administrator, or trustee of such
foreign estates files with the clerk of the court having ancillary jurisdiction,
and with the state treasurer, duly certified statements exhibiting the true market
value of the entire estate of he decedent owner, and the indebtedness for which
the said estate has been adjudged liable, which statements shall be duly attested
by the judge of the court having original jurisdiction, the beneficiaries of said
estate shall then be entitled to have deducted such proportion of the said indebted-
ness of the decedent from the value of the property as the value of the property
within this state bears to the value of the entire estate.

"^Gompensation of Ofl&cers.

S. 40. Except as otherwise provided in this act, no officer shall receive any
additional compensation to that now allowed him by law, by reason of any duties
imposed upon him by the provisions of this act.

1905, c. 178.] OREGON. 1039

Payment of Disbursements by State Treasurer.

S. 41. The state treasurer shall file with the secretary of state a duly verified
itemized account of all expenses incurred and disbursements made by him in
examining or having examined any securities under section 12 of this act, or any
other expense actually incurred by him in enforcing or carrying out the pro-
visions of this act, and the secretary of state shall thereupon draw his warrant
upon the state treasurer for the payment thereof and in favor of said treasurer,
payable from the inheritance tax fund.

Penalty for Appraisers Taking Fee or Reward.

S. 42. Any appraiser appointed by this act who shall take any fee or reward
from any executor, administrator, trustee, legatee, next of kin, or heir of any
decedent, or from any other person liable to pay said tax or any portion thereof,
shall be guilty of a misdemeanor, and upon conviction in any court having juris-
diction of misdemeanors, he shall be fined not less than $250 nor more than $500,
and imprisoned not exceeding ninety days, and, in addition thereto, the county
judge shall dismiss him from such service.

Repeal.

S. 43. All laws or parts of laws inconsistent herewith be and the same are
hereby repealed.

1040

STATUTES ANNOTATED. [Pa. St.

PENNSYLVANIA.

In General.

Pennsylvania, the first state to enact an inheritance tax law,
is one of the few states that has shown sanity in legislation and
interpretation. Direct inheritances and the personal property
of non-residents are very properly let alone, and the law has been
so construed as to avoid double taxation.

The original law was enacted in Pennsylvania in 1826 and, with
very few changes, it is the law today. The law was codified in
1887 and slightly amended since. Collateral inheritances only
are taxed. The rate is uniformly five per cent and the exemption
is $250. The inheritances not taxed are those to father, mother,
husband, wife, child, inheritances between illegitimate child and
its mother, the children of a former husband or wife, adopted
children, step-child, lineal^descendant and daughter-in-law. It has
been held that inheritances to a grandparent, and a son's widow
who has remarried, are taxable.

No attempt is made to tax stock in Pennsylvania corporations
owned by a non-resident, and securities kept in the state by a
non-resident are not subject to the tax. This has been an im-
portant factor in the great growth of the safe deposit business of
the Philadelphia trust companies. There was a case where a
non-resident had an agent in Pennsylvania with very broad powers
to buy and sell securities, in which it was held that the securities
held by the agent were taxable in Pennsylvania (Lewis's Estate,
203 Pa. St. 211). It was later pointed out that this case must rest
on its own peculiar facts and does not affect the general Pennsyl-
vania doctrine that securities of a non-resident, though physically
within the state, are not subject to the inheritance tax {Shoen-
b^rger's Estate, 221 Pa. St. 112). This does not apply to tangible
personal property within the state {SmalVs Appeal, 151 Pa. St. l).
It is refreshing to find the courts in at least one state insisting
that if personal property of residents held outside of the state is

1824-1894.]

PENNSYLVANIA.

1041

to be taxed on the theory that personal property follows the
domicile of the owner, the logical consequence of the theory is
that personal property of non-residents within the state is not
taxable (C/. Coleman' s Estate, 159 Pa. St. 231).

A direct inheritance tax law passed in 1897, and imposing a
uniform tax of two per cent on personal property only, was
held unconstitutional {Cope's Estate, 191 Pa. 1). A bill for a
direct inheritance tax introduced in the legislature of 1911 was
defeated.

List of Statutes.

1824-26. Statutes of Pennsylvania, c. 72, p. 227 (Apr. 7, 1826).

1829-30.

< << a

No, 98, c. 157, s. 5 (Apr. 6, 1830).

1831-32.

' " "

No. 80, par. 36.

1833-34.

' " "

No. 52, pars. 62-69.

1834.

i It li

p. 537, s. 648.

1834.

i ,1 n

c. 52 (Feb. 24, 1834), pars. 62, 66.

1841.

t li 11

c. 49, p. 99 (Mar. 22, 1841).

1844.

1 11 II

c. 369, p. 564 (May 6, 1844).

1846.

I II It

c. 268, p. 330 (Apr. 14, 1846).

1846.

1 11 II

c. 300, p. 358 (Apr. 16, 1846).

1846.

1 11 11

c. 388, p. 484, s. 4 (Apr. 22, 1846).

1846.

1 II ((

c. 390, p. 486, s. 14 (Apr. 22, 1846).

1849.

1 II II

c. 369, ss. 10-16 (Apr. 10 1849).

1850.

1 II II

c. 7, p. 7 (Jan. 23, 1850).

1850.

1 II ,1

c. 147, p. 170 (Mar. 11, 1850).

1855.

1 II II

c. 47, p. 44.

1855.

1 It 11

c. 450, p. 425 (May 4, 1855).

1874.

I 11 II

c. 60.

1878. . '

1 II II

c. 227, pars. 8, 13.

1878.

1 II II

c. 236, p. 206 (June 12, 1878).

1887.

1 II II

c. 37, p. 79 (May 6, 1887).

1891.

1 II II

No. 50, p. 59.

1895.

I It n

c. 243, p. 325 (June 26, 1895).

1897.

1 11 ti

No. 47, p. 56.

1901.

1 11 It

c. 25, p. 59 (Mar. 25, 1901).

1903.

1 II It

c. 13, p. 12 (Mar. 5, 1903).

1905.

1 It It

c. 11, pp. 258 to 260.

1911.

1 It tt

p. 112.

1700-1853. P

urdon's Digest, p.

138, ss. 1-24.

1700-1861.

" p.

148, ss. 1-28.

1873-1878.

Annual Digest, p. 2096, s. 1.

1700-1872. B

rightley's Purdon

s Digest, p. 214, ss. 1-29.

1700-1883.

<< n

p. 259, ss. 1-30.

1858-1887.

It II

(Supplement), ss. 1-25, p. 2148.

1893-1903. -

II It

p. 113, ss. 1-4.

1700-1894.

It 11

p. 305, ss. 1-26.

1042 STATUTES ANNOTATED. [Pa. St.

Constitutional Limitations.
Pennsylvania Constitution, 1873, a. 9.

S. 1. All taxes shall be uniform, upon the same class of subjects, within the
territorial limits of the authority levying the tax, and shall be levied and col-
lected under general laws; but the general assembly may, by general laws,
exempt from taxation public property used for public purposes, actual places of
religious worship, places of burial not used or held for private or corporate profit,
and institutions of purely public charity.

S. 2. All laws exempting property from taxation, other than the property
above enumerated, shall be void.

Individual Exemptions.

Before the constitution of 1873 uniformity of taxation was not
required by the constitution, and hence the legislature would have
the power to impose and could exempt individuals from liability
for the inheritance tax. Commonwealth v. Henderson, 172 Pa. St.
135.

Uniformity. — Progressive Rate.

"The language of section 1, as to what the rule of uniformity
shall embrace, is as broad and comprehensive as it could possibly
have been made. The words, 'all taxes,* must necessarily be
construed to include property tax, inheritance tax, succession tax
and all other kinds of tax, the subjects of which are susceptible of
just and proper classification. By necessary implication, the first
clause of that section recognizes the authority of the legislature
to justly and fairly, but never arbitrarily, classify those subjects
of taxation with the view of effecting relative equality of burdens.
A pretended classification that is based solely on a difference in
quantity of precisely the same kind of property is necessarily
unjust, arbitrary and illegal. For example, a division of personal
property into three classes with the view of imposing a different
tax rate on each, — class 1 consisting of personal property exceed-
ing in value the sum of one hundred thousand dollars ($100,000),
class 2 consisting of personal property exceeding in value twenty
thousand dollars ($20,000), and not exceeding one hundred thou-
sand dollars ($100,000), and class 3 consisting of personal property
not exceeding in value twenty thousand dollars ($20,000), — would
'be so manifestly arbitrary and illegal that no one would attempt
to justify it.

The next clause of section 1 expressly authorizes the legislature
to exempt from taxation four specified classes or kinds of property.

1826, c. 72.] PENNSYLVANIA. 1043

This specific delegation of authority to exempt impliedly pro-
hibits express exemption from taxation of any other property, but
to place this matter beyond the reach of doubt, it is expressly
ordained, in section 2, that 'all laws exempting property from
taxation other than the property above enumerated shall be void.*
"These limitations on the power of the legislature mean some-
thing. They are plainly intended to secure, as far as possible,
uniformity and relative equality of taxation, by prohibiting gener-
ally the exemption of a certain part of any recognized class of
property, and subjecting the residue to a tax that should be borne
uniformly by the entire class, and by guarding against any other
device that necessarily or intentionally infringes on the estab-
lished rules of uniformity and relative equality which, as we have
seen, underlie every just system of taxation. In any view that
can reasonably be taken of these limitations, it must be manifest
to any reflecting mind that the act in question (St. 1897, c. 47)
offends against them by undertaking to wholly exempt from taxa-
tion the personal property of a very large percentage of decedents'
estates, and impose increased and unequal burdens on the residue
of the same class of property." Per Sterrett, C. J., in In re Cope,
191 Pa. St. 1, 21, 43 A. 79, 29 Pittsb. Leg. J. N. S. 379, 45 L. R. A.
316, 71 Am. St. Rep. 749, 44 Wkly. Notes Cas. 89. [It should be
noted that this decision is based on the peculiar Pennsylvania
doctrine, that an inheritance tax is a property tax, and it is not law
elsewhere. — Ed.]

History of Pennsylvania Act.

'The collateral inheritance tax was originally a legislative
invention; was raised to five per cent at a period of great em-
barrassment in the financial history of the state; has contributed
very essentially to the firm establishment of the public credit; and
has been so long approved by the people, that it is not likely ever
to be given up; but resting entirely upon statutory rules, it must
be administered according to the very spirit and letter of the
statutes." Per Woodward, C. J., in Commonwealth v. Coleman,
52 Pa. St. (2 P. F. Smith) 468.

THE EARLY STATUTES.

Pa. St. 1826, c. 72, p. 227. Approved April 7, 1826.

S. 1. From and after the first day of May next, all estates, real, personal and
mixed, of every kind whatsoever, passing from any person who may die seized
or possessed of such estate, being within this commonwealth, either by will

1044 STATUTES ANNOTATED, [Pa. St.

or under the intestate laws thereof, or any part of such estate, or estates, or inter-
est therein, transferred by deed, grant, bargain, or sale, made or intended to take
effect, in possession or enjoyment after the death of the grantor, or bargainor to
any person or persons, or to bodies politic or corporate, in trust or otherwise,
other than to, or for the use of father, mother, husband, wife, children, and
lineal descendants born in lawful wedlock, shall be, and they are hereby made
subject to a tax or duty of two dollars and fifty cents on every hundred dollars
of the clear value of such estate or estates, and at and after the same rate for any
less amount, to be paid to the use of the commonwealth, and all executors and
administrators, and their sureties shall only be discharged from liability for the
amount of any and all such duties on estates, the settlement of which they may
be charged with by having paid the same over for the use aforesaid, as herein
directed; Provided, no estate which may be valued at a less sum than $250,
shall be subject to the duty or tax.

This is the first inheritance tax enacted in this country, apart
from the early federal probate fees, and has subsisted with little
change for nearly a century to the present time.

Remainders Included.

The terms of the statute were comprehensive enough to include
every interest which could pass whether in possession or remainder.
Commonwealth v. Smith, 20 Pa. St. (8 Harris) 100.

Grandmother not Exempt.

The only persons exempted are carefully enumerated and do
not include a grandmother, who is therefore liable to pay the tax
although the act is called a collateral inheritance law. McDowell
V. Addams, 45 Pa. St. (9 Wright) 430.

Exemption Refers to Whole Estate.

" No estate which may be valued at a less sum than $250 shall be
subject to the duty or tax.'' The court holds by reference to the
language of the rest of the section that the word "estate" refers
to the estate left by the decedent and does not mean the legacy
or estate which passes by will or otherwise to the collateral heir
or person taking the same. Commonwealth v. Boyle , 2 Del. Co.
Rep. (Pa.) 335.

S. 2 provides for the duties of executors, administrators and registers.
^S. 3 provides that the county commissioners shall take an account of real
estate which may have passed from the persons dying seized thereof.
S. 4 provides that the tax shall be a lien until paid.
S. 5 provides for the oath of parties.
S. 6 requires the county treasurer to receive and pay over the tax.

1841, c. 49.] PENNSYLVANIA. 1045

Commission of County Treasurers.

Pa. St. 1829-30, c. 98, approved April 2, 1830, provides for the commission
allowed county treasurers on inheritance taxes collected of five (5) per cent up
to one thousand ($1,000) dollars, and one (1) per cent above that; and in no case
shall the commission on any one estate exceed one hundred ($100) dollars.

Probate Fee.

Pa. St. 1829-30, c. 157, s. 5, approved April 6, 1830, provides a fee for probate
and letters of administration of fifty (50) cents.

Pa. St. 1832, c. 80, pp. 36, 37, provides a very small probate and administration
fee to be collected by the register of probate.

Executors to Retain Tax. — Notice as to Real Estate.

Pa. St. 1834, c. 52, ss. 62-66, approved February 24, 1834, provides thac the
executors or administrators shall retain in their hands the money for payment
of the inheritance tax; and provides also for notice by them to the county com-
missioners of real estate subject to the tax.

Payments to State Treasurer. — Commissions.

Pa. St. 1834, p. 537, s. 648, provides for the payment of all sums exceeding
five hundred ($500) dollars by the county treasurers to the state treasurer; and
provides that the commission allowed county treasurers in any one state shall
not exceed one hundred ($100) dollars.

Collection. — Citation.

Pa. St. 1841, c. 49, approved March 22, 1841, provides for a more convenient
collection of the tax on collateral inheritances by authorizing a citation to execu-
tors or administrators failing to pay the tax; and by transferring, collecting and
paying over the tax to the registers.

Citation.

Pa. St. 1841, c. 49. Approved March 22, 1841.

S. 1. That henceforward it shall be the duty of the registers for the probate
of v/ills and granting letters of administration in the various counties of this
commonwealth, whenever any executor or administrator of a decedent, whose
estate is subject to the collateral inheritance tax, shall have neglected or omitted
to file an account for the space of one year from the period now required by law,
to issue a citation commanding the said executor or administrator to file and settle
said account, the said citation to be served by the sheriff of the county, for
which service he is to receive the same compensation now allowed by law for
similar service.

The official bond of the register of wills does not bind him
to turn over collateral inheritance taxes collected, as under the
statute of 1841, c. 49, imposing collection of the inheritance taxes
on the register, the legislature did not rely on his general official

1046 STATUTES ANNOTATED. [Pa. St.

bond as a security for the performance of this new duty, but required
a special bond for this purpose. Commonwealth v. Toms, 45 Pa. St.
(9 Wright) 408.

Receipts.

Pa. St. 1844, c. 369, p. 564, s. 3, approved May 6, 1844, provides that on pay-
ment of the inheritance tax duplicate receipts shall be given, one of which is to
be sent to the auditor general to charge the register with the amount received.

Special Refund.

Pa. St. 1846, c. 268, p. 330, provides for a special refunding of a certain over-
payment made by the administrator of $18.43.

Appraisal.

Pa. St. 1846, c. 300, p. 358, passed April 16, 1846, makes it the duty of the
local assessors to appraise property liable to the collateral inheritance tax.

Accounts of Registers.

Pa. St. 1846, c. 388, p. 483, passed April 22, 1846, provides for the publica-
tion of the accounts of the registers for the collateral inheritance tax.

Rate Made Five Per Cent.

Pa.. St. 1846, c. 390. Approved April 22, 1846.

S. 14. That all estates, real, personal and mixed, of any kind whatsoever,
subject to collateral inheritanqe tax, by the provisions of the first section of the
act of the seventh of April, one thousand eight hundred and twenty-six, entitled,
"An act relating to collateral inheritances," passing from any person who may
die seized or possessed of such estate after the first day of May next, shall there-
after be made subject to a tax or duty for the use of the commonwealth, of $5
on each and every hundred dollars of the clear value of such estate or estates,
and at the same rate for any less sum, to be assessed and collected, as now pro-
vided by law.

Not Retroactive.

The Pennsylvania act of April 22, 1846, applied only to estates
of persons dying after May 1, 1846. Commonwealth v. Smith,
20 Pa. St. (8 Harris) 100.

Application of Revenues.

Pa. St. 1849, c. 369, ratified April 10, 1849, s. 1, provides that the revenues
accruing under the act shall be applied for the purchase of the state debt.

The object of the Pennsylvania statute of 1849 was only to
give a mode of making the appraisement and fix the penalty for
default. Appeal of James, 2 Del. Co. Rep. (Pa.) 164.

1849, c. 369.] PENNSYLVANIA. 1047

Administrative Features Strengthened.

S. 10 provides that the inheritance tax shall be paid on transfer of the stock
and that any corporation permitting a transfer without payment of the tax shall
be liable for the tax.

Wife or Widow of a Son Exempted.

S. 11 added to the exemptions the wife or widow of a son of the decedent.

Appraisal.

S. 12 provides for the valuation of such property subject to the collateral
inheritance tax giving a right of appeal from the appraisal to the register's court.

Appraisal in which County.

Under this section appraisers must be appointed by the register
of the county in which letters testamentary are issued ; and in that
county all of the proceedings should be had to enforce the payment
of the tax assessed and so real estate in another county may be
assessed under these proceedings. Stinger v. CommonweaUh (2d),
26 Pa. St. (2 Casey) 429, 431.

Appraisal Does Not Determine Liability.

An appraisal under this section has for its object simply to ascer-
tain the value of the estate and not to determine whether the estate
is subject to the tax. Where the estate is not subject to be assessed
with the tax the entire proceeding is a nullity, for it is only upon
estates "that are or shall be subject to the payment of a collateral
inheritance tax" that the register has any power for the purposes
of assessment. Therefore the appraisal, although not appealed
from, is not final on the question of the liability to tax. Stinger
V. Commonwealth, 26 Pa. St. (2 Casey) 422, 426.

Increase in Value after Death of Testator not Included.

The value should be reckoned as of the death of the testator,
not including later increase at the death of the life tenant. Cowen
V. Smith, 20 Pa. St. (8 Harris) 100.

Appeal.

The administrator can appeal from the appraisement of the
real estate only and the heirs only have a right of appeal from the
; appraisal of the real estate. Cowen v. Coleman, 52 Pa. St. 468.

Payment of Tax on Remainder.

S. 1 3 provides after the deduction of the life estate the tax on remainder shall
be paid to the register of wills.

1048 STATUTES ANNOTATED. [Pa. St.

Interest.

S. 14 requires interest at twelve (12) per cent unless the tax is paid within
nine (9) months from the passage of the act.

Interest where Estate Involved in Litigation.

It was the duty of the executors to estimate the amount of
personal estate involved in litigation difficulties which could not
be settled and pay the collateral inheritance tax on the balance.
For failure to do so they are chargeable with interest at the rate
of twelve per cent per annum from a year after the death of the
testator. Appeal of Commonwealth, 34 Pa. St. (10 Casey) 204.

Retroactive.

The testator died in 1833, and this statute which provided that
twelve per cent interest, to be counted from the death of the dece-
dent, should be charged on all taxes due from the estates of persons
then dead more than one year, unless the tax was paid within nine
months of the passage of the act, applies to the estate in question.
The legislature had a right to demand payment of the tax due to
the commonwealth within a limited time, and it prescribed a
penalty for neglect or refusal to comply. Commonwealth v. Smith,
20 Pa. St. (8 Harris) 100.

Duties of Register.

S. 15 authorizes the register of wills to issue citations or give notice by publi-
cation to executors for the collection of the tax and provides that he shall keep
returns of the taxes collected.

The words "proper prothonotary's office" in this section
refer to the office in the county where assessment and appraise-
ment is made, and where the register granting letters testamentary
and of administration has jurisdiction. Stinger v. Commonwealth
(2d), 26 Pa. St. (2 Casey) 429, 431.

Pa. St. 1850, c. 7, approved January 23, 1850, extends the time for the payment
of the inheritance tax.

Remainder Interests.

Pa. St. 1850, c. 147. Approved March 11, 1850.

•^ S. 1. That in all cases where there has been, or shall be a devise, descent or

bequest to collateral relatives or strangers liable to the collateral inheritance

tax, to take effect in possession, or to come into actual enjoyment after the

expiration of one or more life estates, or a period of years, it shall and may be

lawful for the parties so circumstanced, liable for such tax, to elect to await their

1850, c. 147.1 PENNSYLVANIA. 1049

coming into the actual possession of the estates or property subject to the said
tax; and in such case shall give security to the register of the proper county for
the payment thereof on the personal estate, at such period as they or their repre-
sentatives may come into the possession, together with six per cent per annum
interest on the amount of the tax from the time the same accrued until paid:
Provided that such persons shall make a full return of such property within one
year from the date thereof, or within one year of the death of the decedent, and
within that period enter into such security to the satisfaction of the register; and
the tax on real estate shall remain a lien on the real estate on which the same is
chargeable until paid, bearing lawful interest as aforesaid; and no law heretofore
passed shall be taken or construed to make any collateral inheritance tax a lien
on any other property or estate than those chargeable with such collateral inherit-
ance tax.

Retrospective.

The Pennsylvania statute of 1826 was enlarged by the statute of
March 11, 1850, which declared that "the words 'being within this
commonwealth' shall be so construed as to relate to all persons
who have been at the time of their decease, or now may be, domi-
ciled within this commonwealth, as well as to estates: and this is
declared to be the true intent and meaning of said act."

The court remarks that more pointed words to make the act
retrospective could not have been chosen and that no clause of the
constitution forbids the legislature to extend a tax already laid
or to tax estates not taxed before. This act is plainly retro-
spective and applies to the estate of a person domiciled in Penn-
sylvania who died before the passage of the act. In re Short,
16 Pa. St. (4 Harris) 63.

The cQurt affirms Appeal of Short, 16 Pa. St. 63, to the effect that
the statute of 1850 is retrospective and prospective, and says that
it applies to a decedent who was a resident of Pennsylvania only
since 1860. In re Lines, 155 Pa. St. 378, 380, 26 A. 728, 32 Wkly.
Notes Cas. 376.

The testator died before the passage of the St. 1850, leaving his
property to non-resident collateral relations, some of the property
being within the state and some without the state. The supreme
court holds that the retroactive effect of the St. 1850 does not
render it an ex post facto law within the words of the federal con-
stitution, which apply to criminal cases only. Carpenter v. Penn-
sylvaniay 17 How. 456.
When Tax on Remainders Accrues. — Lien. — Limitations.

This statute [of 1850] made important changes in the interests of
remaindermen. The duration of the lien is no longer unlimiced and

1050 STATUTES ANNOTATED. [Pa. St.

under the third section of the supplement all collateral inheritance
taxes not sued for within twenty years after they accrue are pre-
sumed to have been paid. These statutes, however, do not change
the time when the inheritance tax accrued, but leave that time as
the death of the testator. Appeal of Mellon, 114 Pa. St. 564, 570,
8 A. 183. See Appeal of James, 2 Del. Co. Rep. (Pa.) 164.

The collateral inheritance tax under the statute of 1850 cannot
be demanded until the time for enjoyment arrives. In re Wharton
(1881), 14 Phila. (Pa.) 279.

Penalties. — Interest.

This statute provided that taxes on remaindermen which were
payable before the passage of the statute at the death of the dece-
dent might be postponed until they come into actual possession
and relieved them from the penalty, but not from the interest.
The Penn. St. 1855, P. L. 425, also released specifically from the
penalties. Appeal of Commonwealth, 127 Pa. St. 435, 438, 17 A.
1094.

Appraisal Final.

Penn. St. 1849, c. 369, s. 12, as amended by Penn. St. 1850,
c. 147, p. 170, requires the register to appoint an appraiser to
appraise the estate, and any party has a right of appeal to the
register's court. This assessment of the appraiser is final and
it does not admit of opening to take any additions to the clear
value of property once assessed. That property is vested in the
heir or devisee and cannot be reassessed for the purpose either
of increasing or diminishing the value assessed by the appraiser.
Commonwealth v. Freedley^ 21 Pa. St. (9 Harris) 33.

Special Exemption.

Pa. St. 1855, c. 47, approved February 21, 1855, specially exempts a certain
legacy to an orphan asylum from the payment of the inheritance tax.

Penalties.

Pa. St. 1855, c. 450. Approved May 4, 1855.

S. 1. That the penalty of twelve and a half per cent per annum imposed for
the non-payment of the collateral inheritance tax, shall not be carried back to a
f)eriod antecedent to the time when there should by law have been a settlement
of the estate, or such part thereof as such tax is chai geable upon; but where from
claims made upon the estate, litigation, or other unavoidable cause of delay, the
estate of any decedent or a part thereof cannot be settled up at the end of a year
from his or her decease, six per cent per annum shall be charged upon the collateral

1855, c. 450.] PENN^SYLVANIA. 1051

inheritance tax, from the end of such year until there be default as aforesaid, and
paid with the tax: Provided, that where the estate real or person withheld in
the manner aforesaid from the parties entitled thereto, subject to such tax, has
not been, or shall not be productive to the extent of six per centum per annum,
they shall not be compelled to pay a greater amount as interest to the common-
wealth than they may have realized, or shall realize from such estate during the
time the same has been or shall be withheld as aforesaid: And provided, further,
that said penalty shall not be charged on any collateral tax on any legacy or
demise, to come hereafter into actual possession and enjoyment after the expira-
tion of a previous life estate, or term of years therein, until the same shall come
into actual possession and enjoyment, whether by limitation or power of appoint-
ment ; and if such legatees or devisees shall elect to pay said tax in anticipation
of the same coming into actual possession and enjoyment, the same shall be
received at the then valuation of the legacy or devise, deducting the value of the
liffe estate or term of years.

S. 2 provides that the appraisers are to receive no fee from the executor.

S. 3 provides for returns by registers of wills.

The statute of 1855 postpones the penalty of double interest
imposed by the act of April 10, 1849, until after the period provided
by law for the settlenient of the estate, which is one year from
the date of the letters testamentary. In re Banks, 5 Pa. Co. Ct. 614.

Where the testator died in 1835, leaving a life estate and a
vested remainder, the remainder was then liable to a collateral
inheritance tax upon its clear value, after deducting all previous
estates. After the acts of 1850 and 1855, the tax could not be
collected by the state until the actual enjoyment of the estate,
but it continued a lien and should now be appraised at its value
in 1835, first deducting the value of the life estate. Interest at
the rate of six per cent is chargeable upon the appraised value
from 1835 to the vesting of the estate in possession, and must be
paid by the persons now entitled to the estate. Appeal of James,
2 Del. Co. Rep. (Pa.) 164.

Where the testator died in 1837, and the life tenant died in 1875,
the commonwealth could not compel payment of the tax until the
death of the life tenant; and therefore the twenty years* limita-
tion did not begin to run until the death of the life tenant. This
twenty years' limitation is only in favor of purchasers. Appeal of
James, 2 Del. Co. Rep. (Pa.) 164. See Appeal of Commonwealth,
127 Pa. St. 435, 438, 17 A. 1094.

Special Exemption.

The Peimsylvania statute of 1873, Public Laws 290, was a
special exemption to one Henderson from taxes on the estate of

1052 STATUTES ANNOTATED. [Pa. St

his adoptive father. The court sustains this special exemption,
as at the time when the statute was passed the Pennsylvania con-
stitution did not require uniformity of taxation. Commonwealth
V. Henderson, 172 Pa. St. 135.

Duties of State Treasurer. — Sinking Fund.

Pa. St. 1874, c. 60, approved May 9, 1874, provides for the duties of the state
treasurer and the management of the sinking fund.

Returns.

Pa. St. 1876, c. 15, approved March 31, 1876, s. 9, provides for monthly re-
turns of receipts for inheritance taxes.

Fees of Registers.

Pa. St. 1878, c. 227, s. 8, covers the fees of registers of wills.

Repeal.

Pa. St. 1878, c. 227, s. 13, repeals inconsistent acts.

Refund.

Pa. St. 1878, c. 236, approved June 12, 1878, authorizes the state treasurer
to return amount of inheritance taxes paid under mistake.

THE CODIFYING ACT OF 1887.

Pa. St. 1887, c. 37. Approved May 6, 1887.

S. 1. Be it enacted, etc.. That all estates, real, personal and mixed, of every
kind whatsoever, situated within this state, whether the person or persons dying
seised thereof be domiciled within or out of this state, and all such estates situ-
ated in another state, territory, or country, when the person, or persons, dying
seised thereof, shall have their domicile within this commonwealth, passing from
any person, who may die seized or possessed of such estates, either by will, or
under the intestate laws of thi^ state, or any part of such estate, or estates, or
interest therein, transferred by deed, grant, bargain or sale, made or intended
to take effect, in possession or enjoyment after the death of the grantor or bar-
gainor, to any person or persons, or to bodies corporate or politic, in trust or
otherwise, other than to or for the use of father, mother, husband, wife, chil-
dren and lineal descendants born in lawful wedlock, or the wife, or widow of the
son of the person dying seized or possessed thereof, shall be and they are hereby
made subject to a tax of five dollars on every hundred dollars of the clear value
of such estate or estates, and at and after the same rate for any less amount,
to be paid to the use of the commonwealth; and all owners of such estates, and
all executors and administrators and their sureties, shall only be discharged from
liability for the amount of such taxes or duties, the settlement of which they
may be charged with, by having paid the same over for the use aforesaid,
as hereinafter directed: Provided, That no estate which may be valued at a less
sum than two hundred and fifty dollars shall be subject to the duty or tax.

[See notes to the present act, post, p. 1058.]

St. 1887, c. 37.] PENNSYLVANIA. 1053

Codifies Existing Law.

The statute of 1887 is chiefly a compilation and re-enactment of
all previous laws in force on the subject of inheritance tax. This
statute simply provides for the better collection of the collateral
inheritance tax. It does not subject any other or different estates
to the tax as provided in the previous statute ; if it did it would be
unconstitutional. Cooper v. Commonwealth, 5 Pa. Co. Ct. 271.

The statute of 1887 is a mere codification of existing law and
was not intended to introduce a new subject of taxation. In re
Del Busto, 6 Pa. Co. Ct. 289; In re Stanton (Orph. Ct.), 3 Pa.
Dist. 371, 34 Wkly. Notes Cas. 391. Appeal of Commonwealth,
127 Pa. St. '435, 441.

Statutes Codified, — Changes in Existing Law.

A comparison of these acts with the act of May 6, 1887, P. L.
79, will show that the latter is a re-enactment of them as follows:

Section 1.— Acts of April 7, 1826, s. 1; April 22, 1846, s. 14; April
10, 1849, ss. 11, 13; and March 11, 1850, s. 3.

Section 2.— Act of April 10, 1849, part of s. 13.

Section 3.— Acts of April 10, 1849, s. 13; March 11, 1850, s. 1;
May 4, 1855, s. 1.

Section 4.— Acts of April 10, 1849, s. 14; May 4, 1855.

Section 5.— Acts of February 24, 1834, s. 62, etc.; April 7, 1826,
s. 11.

Section 6.— Act of February 24, 1834, s. 63.

Section 7.^Act of February 24, 1834, part of s. 62.

Section 8.— Acts of February 24, 1834, s. 65; March 22, 1841;
March 17, 1842.

Section 9.— Acts of March 22, 1841; and May 6, 1844.

Section 10.— Act of April 10, 1849, s. 10.

Section 11.— Act of February 24, 1834, s. 69.

Section 12.— Acts of April 10, 1849, s. 12; March 11, 1850.

Section 13.— Act of May 4, 1855, s. 2.

Section 14.— April 10, 1849; March 11, 1850, s. 4; May 4,
1855, s. 3.

Section 15.— Act of April 10, 1849, s. 15; March 22, 1841, ss. 1, 2.

Section 16.— Act of April 10, 1849, s. 16.

Section 17.— Act of March 22, 1841, s. 4.

Section 18.— Act of March 22, 1841.

Section 19.— Act of March 11, 1850, s. 4.

Section 20.— Act of February 24, 1834, s. 62; March 11, 1850,
s. 1; May 4, 1855, s. 3.

1054 STATUTES ANNOTATED. IPa. St.

"The changes are: ins. 3, providing that interest upon a tax
shall not begin to run against persons entitled to estates in remainder
until the right of possession accrues (see Mellon's Ap., 4 Am. 564) ;
section 12, giving the right to appeal from the appraisement of the
state appraiser to the orphans' court, instead of the register's
court, with a further right of appeal to the supreme court; section

13, increasing the punishment for taking fees by appraisers ; section

14, making the proceedings for collection of unpaid taxes take
place in the orphans' court instead of the common pleas ; section
19, requiring the register's returns to be on the first Mondays of
April, July, October, and January, instead of the first days of
March, June, September, and December; and section 20, reducing
the period of lien to five years, instead of twenty years." Per
Penrose, J., in DelBusto, 6 Pa. Co. Ct. 289.

Pa. St. 1887, c. 37, s. 2, provides for a tax on gifts to executors above a fair
commission.

Remainders.

S. 3. In all cases where there has been or shall be a devise, descent or bequest
to collateral relatives or strangers, liable to the collateral inheritance tax, to take
effect in possession, or come into actual enjoyment after the expiration of one or
more life estates, or a period of years, the tax on such estate shall not be payable
nor interest begin to run thereon, until the person or persons liable for the same
shall come into actual possession of such estate, by the termination of the estates
for life or years, and the tax shall be assessed upon the value of the estate at the
time the right of possession accrues to the owner as aforesaid: Provided, That
the owner shall have the right to pay the tax at any time prior to his coming into
possession, and, in such cases, the tax shall be assessed on the value of the estate
at the time of the payment of the tax, after deducting the value of the life estate
or estates for years: And provided further, That the tax on real estate shall
remain a lien on the real estate on which the same is chargeable until paid. And
theowner of any personal estate shall make a full return of the same to the register
of wills of the proper county within one year from the death of the decedent, and
within that time enter into security for the payment of the tax to the satisfaction
of such register; and in case of failure so to do, the tax shall be immediately
payable and collectible.

[See notes to the Act of 1850, ante p. 1049.]

Discount. — Interest. — Penalties.

S. 4. If the collateral inheritance tax shall be paid within three months after
the death of the decedent, a discount of five per centum shall be made and allowed ;
and if the said tax is not paid dt the endof one year from the death of the decedent,
interest shall then be charged at the rate of twelve per centum per annum on
such tax; but where from claims made upon the estate, litigation, or other un-
avoidable cause of delay, the estate of any decedent or a part thereof cannot be

1897, c. 47.] PENNSYLVANIA. 1055

settled up at the end of the year from his or her decease, six per eentum per
annum shall be charged upon the collateral inheritance tax, arising from the
unsettled part thereof, from the end of such year until there be default; Pro-
vided, further. That where real or personal estate withheld by reason of litigation
or other cause of delay in manner aforesaid from the parties entitled thereto,
subject to said tax, has not been, or shall not be productive to the extent of six
per centum per annum, they shall not be compelled to pay a greater amount as
interest to the commonwealth than they may have realized, or shall realize
from such estate during the time the same has been or shall be withheld as
aforesaid.

Ss. 5 to 20 cover the assessment and collection of the tax.

LATER AMENDMENTS.

Compensation of Registers.

Pa. St. 1891, c. 50, approved May 14, 1891, provides definitely for the com-
pensation to the registers of wills for services in collecting the inheritance tax,
amending Pa. St. 1887, c. 37, s. 16.

Appraisers.

Pa. St. 1895, c. 243, approved June 23, 1895, fixes the compensation of appraisers
and provides for expert appraisers when necessary.

THE INVALID ACT OF 1897.

Pa. St. 1897, c. 47, p. 56.

An Act taxing gifts, legacies and inheritances in certain cases and
providing for the collection thereof.

S. 1. Be it enacted, etc., That from and after the passage of this act all per-
sonal property of whatsoever kind and nature 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, whether the person or persons dying seized
thereof be domiciled within or out of the state, or if the decedent was not a
resident of this state at the time of his death, such property, or any part thereof,
within this state, or any interest therein or income therefrom, which shall be
transferred by deed, grant, sale or gift made in contemplation of the death of the
grantor, bargainor, donor or assignor, or intended to take effect in possession or
enjoyment after such death, to any person or persons, or to bodies corporate
or politic, in trust or otherwise, or by reason whereof any person or body politic
or corporate shall become beneficially entitled, in possession or expectancy, to
any property, or the income thereof, shall be and is hereby made subject to a tax
of two dollars on every one hundred dollars of the clear value of such personal
property, after deducting the debts of decedent and costs of administration, and
at and after the same rate for any less amount, to be paid for the use of the
commonwealth; and all heirs, legatees, devisees, administrators, executors and
trustees shall only be discharged from liability for the amount of such taxes, the
settlement of which they may be charged with, by paying the same for the use

1056 STATUTES ANNOTATED. [Pa. St.

aforesaid as hereinafter directed; Provided, That personal property to the
amount of five thousand dollars shall be exempt from the payment of this tax
in all estates: And provided further, That so much of the estates of persons here-
tofore deceased as has not been actually distributed and paid to persons entitled
thereto prior to the passage of this act shall be liable to the tax imposed by this
law, as well as the estates of persons who die hereafter.
[See notes to the Constitution of 1873, ante, p. 1042.]

Nature of Statute.

This is an act imposing taxes on personal property and has none
of the features of the intestate law or of an act regulating the dis-
position of property by will. In re Cope, 191 Pa. St. 1, 20, 43
A. 79, 29 Pittsb. Leg. J. N. S. 379, 45 L. R. A. 316, 71 Am. St. Rep.
749, 44 Wkly. Notes Cas. 89

Uniformity.

This statute is unconstitutional as not being uniform and equal in
operation, as it exempts from the tax property not exceeding five
thousand dollars in value. In re Cope, 191 Pa. St. 1, 43 A. 79,
29 Pittsb. Leg. J. N. S. 379, 45 L. R. A. 316, 71 Am. St. Rep. 749,
44 Wkly. Notes Cas. 89.

(This decision is wholly without authority in other states,
because it was based upon the Pennsylvania constitution's pro-
hibition of exemptions," and upon the discredited theory that an
inheritance tax is a tax on property. — Ed.)

Pa. St. 1897, c. 47, ss. 2-16, provide for the collection and payment of the tax.

Refunding.

Pa. St. 1899, c. 15, approved March 22, 1899, provides for the refunding of the
inheritance tax after payment where it appears that the tax was not due on
account of lineal heirs being subsequently discovered.

Refund.

Pa. St. 1901, c. 25, amends Pa. St. of June 12, 1878, which provided for a refund
of taxes erroneously paid on application within two years by extending the time
within which applications shall be made as follows: "except when the estate,
upon which such tax shall have been so erroneously paid, shall have consisted
m whole or in part of a partnership, or other interest of uncertain value, or shall
have been involved in litigation, by reason whereof there shall have been an
pver-valuation of that portion of the estate on which the tax has been assessed
and paid, which over-valuation could not have been ascertained within said
period of two years; then, and in such case, the application for repayment may
be made to the state treasurer within one year from the termination of such liti-
gation, or ascertainment of such over-valuation, or if that period has already

1911, c. 105.] PENNSYLVANIA. 1057

expired at the time of the passage of this act, then within six months after the
passage of this act, notwithstanding any limitation contained in any previous
act of assembly.

Illegitimates.

Pa St. 1901, c. 325, s. 2: The mother of an illegitimate child, her heirs and
legal representatives, and said illegitimate child or children, its or their heirs
and legal representatives, shall have capacity to take or inherit from or through
each other personal estate, as next of kin, and real estate as heirs in fee simple,
or otherwise, under the intestate laws of this commonwealth, in the same manner
and to the same extent, subject to the distinction of half bloods, as if said child
or children had been born in lawful wedlock.

This section has the effect of legitimating an illegitimate child
as to its mother, and conferring upon such child every right and
privilege enjoyed by a child born to wedded parents. Therefore
an illegitimate child need not pay a collateral inheritance tax on
the property he takes as devisee of his mother. The court quotes
Commonwealth v. Stump, 53 Pa. St. 132, where the legitimating
act was ineffective simply because it was passed after the death
of the testator. Commonwealth v. Mackey, 222 Pa. St. 613, 72 A.
250.

Care of Burial Lot.

Pa. St. 1903, c. 13, approved March 5, 1903, to go into effect January 1, 1904,
exempts from the inheritance tax bequests, and devises in trust for the purpose of
applying the entire interest or income thereof, to the care and preservation of the
family burial lot or lots of the donor in good order and repair perpetually.

Children of Former Husband or Wife Exempted.

Pa. St. 1905, c. 181, approved April 22, 1905, extends the exempt classes to
include the "children of a former husband or wife."

Adopted Children Exempted.

Pa. St. 1911, c. 105. Approved May 5, 1911.

S. 1. Be it enacted, etc., That all estates, real, personal and mixed, of every
kind whatsoever, situated within this state, whether the person or persons dying
seized thereof be domiciled within or out of this state; and all such estates situ-
ated in. another state, territory, or country, when the person or persons dying
seized thereof shall have their domicile within this commonwealth ; passing from
any adopting parent, who may die seized or possessed of such estates, either by
will or under the intestate laws of this state, or any part of such estate or estates,
or interest therein, transferred by deed, grant, bargain, or sale, made or intended
to take effect in possession or enjoyment after the death of the grantor or bargainor,
to or for the use of any legally adopted child or any legally adopted children, —
shall not be subject to the collateral inheritance tax of five dollars on every hun-
dred dollars of the clear value of such estate or estates, to the use of the
commonwealth.

1058 STATUTES ANNOTATED. [Pa. St.

THE PRESENT ACT.

Taxable Transfers.
Pa. St. 1887, c. 37.

S. 1. Be it enacted, etc., That all estates, real, personal and mixed, of every
kind whatsoever, situated within this state, whether the person or persons dying
seised thereof be domiciled within or out of this state, and all such estates situ-
ated in another state, territory or country, when the person, or persons, dying
seised thereof, shall have their domicile within this commonwealth, passing from
any person, who may die seized or possessed of such estates, either by will, or
under the intestate laws of this state, or any part of such estate, or estates, or
interest therein, transferred by deed, grant, bargain, or sale, made or intended to
take effect, in possession or enjoyment after the death of the grantor, or bargainor
to any person or persons, or to bodies corporate or politic, in trust or otherwise,
other than to or for the use of father, mother, husband, wife, children and lineal
descendants born in lawful wedlock, or the wife, or widow of the son of the per-
son dying seised or possessed thereof, shall be and they are hereby made subject
to a tax of five dollars on every hundred dollars of the clear value of such estate
or estates, and at and after the same rate for any less amount, to be paid to the
use of the commonwealth ; and all owners of such estates, and all executors and
administrators and their sureties, shall only be discharged from liability for the
amount of such taxes or duties, the settlement of which they may be charged
with, by having paid the same over for the use aforesaid, as hereinafter directed:
Provided, That no estate which may be valued at a less sum than two hundred
and fifty dollars shall be subject to the duty or tax.

This section has been amended or affected by the following
statutes: St. 1901, c. ^25, s. 2, ante, p. 1057, as to illegitimate chil-
dren; St. 1903, c. 13, ante, p. 1057, exempting bequests for the care
of the family burial lot; St. 1905, c. 181, ante, p. 1057, exempting
the children of a former husband or wife; St. 1911, c. 105, ante, p.
1057, exempting estates passing to adopted children. See notes
to the act of 1826, ante, p. 1044.

Title.

The Pennsylvania statute of 1887, P. L. 79, is entitled, "An
act to provide for the better collection of collateral inheritance
taxes." The court does not pass on whether this is a sufficient
title as to cover new taxes imposed by the statute, but intimates that
it is not. In re Bittinger, 129 Pa. St. 338.

The act of 1887 simply provides for the better collection of taxes,
and cannot change the estates liable. Appeal of Commonwealth,
. 127 Pa. St. 435, 441.

Validity.

This five per cent tax is one of the conditions of administra-
tion, and to deny the right of the state to impose it is to deny

1887, c. 37.] PENNSYLVANIA. 1059

the right of the state to regulate the adminstration of decedents'
goods. . . . The act operates on the residue of the estate after
paying debts and charges, and theoretically, that residue is always
a balance in money. The administration account always exhibits
a balance in cash, not in specific goods, whether bonds or horses;
and though an heir may take bonds or horses as cash, the account
must show, and always does show, a cash balance. That is the
fund taxed by this law, and not the bond or other chattels which
may have produced the fund. Strode v. Commonwealth^ 52 Pa.
St. 181.

Nature of Tax.

The collateral inheritance tax levied under this actjs not a tax
within the meaning of the statute exempting charities from taxa-
tion. It is not a tax upon specific property of a legatee after it
is vested in possession, but is a charge or tax upon the right to have
the property by way of succession. It is not a tax upon the prop-
erty or money bequeathed, but a diminution of the amount that
otherwise would pass under the will, and hence what the legatee
really receives is not taxed at all. It is that which is left after the
tax has been taken off. It is only imposed once, and that is before
the legacy has reached the legatee, and before it has become his
property. In re Finnen, 196 Pa. St. 72, 46 A. 269.

A Property Tax.

The collateral inheritance tax imposed by the act of 1887 upon
real estate' is a tax upon the property itself, as appears clearly
from the second proviso in the third section of the act. In re
Bittinger, 129 Pa. St. 338, 345, 18 A. 132. (It should be noted that
this decision, though still law in Pennsylvania, is opposed to the
current of authority in this country. See anie^ p. 4.)

As of Death of Testator.

The Pennsylvania statute of 1887 imposes the tax upon the death
of the testator and not as of the time when the legatees actually
receive the property. In re Lines, 155 Pa. St. 378, 385, 26 A. 728,
32 Wkly. Notes Cas. 376.

Where the brother of the intestate died two weeks before the
intestate who inherited property from the brother, the court
holds that the law cast upon the intestate her share in the brother's
estate at the moment of the brother's death, and it is wholly im-

1060 STATUTES ANNOTATED. [Pa. St.

material that the net amount is not yet fixed and could not be until
the final settlement of the administration. In this case the brother
was domiciled in the state of New York and the sister was domiciled
in Pennsylvania, and the court holds that the sister's share in her
brother's estate is subject to the collateral inheritane tax imposed
by the laws of Pennsylvania. The tax here was imposed upon
the property of a resident which was in her constructive possession
and so remained until her death. In re MilUken, 206 Pa. St. 149,
55 A. 853.

What Law Governs.

Where the testator died in 1828, leaving a life tenant who died
in 1864, the whole estate passed in 1828, and the tax on the remainder
interest is payable, at the rate under the statute in force in 1828,
of two and one-half per cent, and not under the higher rate in
force on the death of the life tenant. Commonwealth v. Eckhert,
53 Pa. St. (3 P. F. Smith) 102.

"All Estates, Real, Personal or Mixed/'
Conversion.

Where a non-resident testator directed her executors to sell and
convey real estate in Pennsylvania, and apply the proceeds toward
the payment of certain legacies given to collaterals, this is con-
verted into personal property and is not within the jurisdiction
of Pennsylvania, and therefore not subject to the Pennsylvania
collateral inheritance tax. In re Coleman, 159 Pa. St. 231, 232, 28
A. 137.

Where the testator domiciled in New York directed all his real
estate to be sold, this rendered real estate personal property, or
gave it a situs at the place of his domicile; and therefore the
fund realized from it was not subject to an inheritance tax in
Pennsylvania, although the testator appointed executors in Penn-
sylvania as to all of his estate not situated in New York. And the
Pennsylvania executors improperly paid the collateral tax on the
real estate situated in Pennsylvania. In re Schoenberger, 221 Pa.
St. 112, 118, 70 A. 579, 19 L. R. A. (N. S.) 290; In re Lamberton,
40 Pa. Super. Ct. 548.

The land of a Pennsylvania testator lying in other states which he
directed his executors to sell, and the proceeds from which he
gave to persons and objects in this state, are converted by the
direction to sell, as the fund being distributed here is subject to the

1887, c. 37.1 PENNSYLVANIA. 1061

collateral inheritance tax under the rules stated in Miller v. Com-
monwealth, 111 Pa. St. 321. In re Williamson, 153 Pa. St. 508,
521, 26 A. 246, 32 Wkly. Notes Cas. 93. In re Dalrymple,
215 Pa. St. 367, 372, 64 A. 554. Miller v. Commonwealth,
111 Pa. St. 321, 2 A. 492. The court distinguishes Appeal of
Drayton, 61 Pa. St. 172, as in that case there was a discretion
to sell.

Sale at Death of Life Tenant and Investment outside State.

The will of a resident of Pennsylvania directed that real estate
situated outside of Pennsylvania should be sold on the death of
the wife, who was made life tenant, and the proceeds invested in
mortgages in the state where the land lay. The court intimates
that the fact that the sale was postponed till the death of the
life tenant prevents the land from being regarded as personalty
at the death of the testator, and therefore subject to the inherit-
ance tax. But however this may be, the court finds that the
direction to invest the proceeds out of the state prevents
them from being brought within the state of Pennsylvania
and there distributed; and that therefore the fund never
came within the jurisdiction of Pennsylvania and so is not
subject to an inheritance tax. In re Hale, 161 Pa. St. 181,
183, 28 A. 1071.

Where the testator gives the executors only a discretion to sell certain
land, and the testator's scheme of distributing the estate did not
necessarily require a sale of this land, which was to be held by the
trustees for' a certain period, and where the trustees could convey
the lands to the beneficiaries and meet the requirements of the will,
the lands were not converted into personal property so as to
become subject to the collateral inheritance tax.

The argument that it was necessary to sell the lands to pay
debts is not convincing where it did not appear that at the date
of the will the decedent conceived such a necessity to exist. That
the real estate in other states is not now of sufficient value to pay
his debts is by no means conclusive that he did not regard it as
sufficient for that purpose when he executed his will; and that
therefore he intended that his Wisconsin lands should not be
delivered to the beneficiaries as real estate. Besides, he owned
several mining locations in Canada which he; like most men who
invest in such -property, regarded as of great value. In re Dal-
rymple, 215 Pa. St. 367, 374, 64 A. 554. Drayton's Appeal, 61
Pa. St. 172.

10^2 STATUTES ANNOTATED. [Pa. St.

Sale Postponed.

In re Hale, 161 Pa. St. 181, is quoted as a direct authority for
the proposition that where the conversion of real estate is post-
poned it does not become personal property for the purpose of
taxation, so where the testator directs real estate to be sold twenty
years after his death, there is no conversion when the tax accrued.
In re Handley, 181 Pa. St. 339, 346, 37 A. 587 reversing judgment,
3 Lack. Leg. N. 9.
Power to Sell if Necessary.

Where the Pennsylvania testator gave his executors full power
to sell real estate if necessary for any purpose of his estate, and
it became necessary to sell to pay legacies, and sale was made,
the real estate situated in other states should be charged with
the collateral inheritance tax. The power to sell if necessary to
make distribution became, under the manifest intent of the testator,
a direction to sell. The pecuniary legacies are to be paid before
the residue. The testator intended them to be paid ir cash. He
must therefore have foreseen the necessity for the sale of his
real estate, where the pecuniary legacies aggregate very much
more than the amount of the personal estate. In re Vanuxem,
212 Pa. St. 315, 61 A. 876, 1 L. R. A. N. S. 400.

Lien of Tax.

Where there is a conversion of land situated in Pennsylvania
into personal property the lien of the tax should be transferred
from the land to the fund which it produced. In re Brown, 5 Pa.
Dist. R. 286.

The English doctrine of conversion as applied to the collateral
inheritance tax on land is discussed in In re Handley, 181 Pa. St.
339, 37 A. 587, reversing judgment, 3 Lack. Leg. N. 9.

The weight of authority in this country seems to be against the
Pennsylvania doctrine of conversion. See ante, p. 139. See also
Curtis Estate, 142 N. Y. 219, 36 N. E. 887.

United States Bonds.

The Pennsylvania collateral inheritance tax is applicable to that
part of the decedent's estate which consisted of bonds of the United
States that are by federal law exempted from state taxation.
"The mistake of the learned counsel for the plaintiff in error con-
sists, we conceive, in treating this as a tax of the government
bonds, when it is really a tax upon a decedent's estate, dying with-

1887, c. 37.] PENNSYLVANIA. 1063

out lineal heirs. And it does not help the argument that the bulk
of the estate is made up of these bonds; for that estate passed
into the hands of the executor for administration, and is taxed in
his hands as an estate. The law takes every decedent's estate into
custody, and administers it for the benefit of creditors, legatees,
devisees and heirs, and delivers the residue that remains, after
discharging all obligations, to the distributees entitled to receive
it. One of the legal obligations to which every estate that is to
go to collateral kindred is subject, is this five per cent duty to
the commonwealth.

"And it is ^ not until this work of administration is performed
that the right of succession attaches. The distributees may,
indeed, consent to accept certain goods and chattels in specie with-
out conversion, as is frequently done in settlement of estates,
but such arrangement in no case affects the theory of the law that
the estate is first to be administered and then enjoyed.

"Now this five per cent tax is one of the conditions of adminis-
tration, and to deny the right of the state to impose it is to deny
the right of the state to regulate the administration of decedents*
goods. If aTi estate consist wholly of federal bonds and is indebted,
conversion of them into money is necessary to pay the debts, and
nobody would doubt that the sum that remained after payment
of debts would be subject to a deduction of five per cent for the
use of the state. But suppose the federal bonds be used to pay
the only indebtedness that exists, and a residue of estate remains
for distributees, is it not to pay the collateral inheritance tax?
Clearly it must, though it may be less than the aggregate of the
bonds. The act operates on the residue of the estate after paying
debts and charges, and, theoretically, that residue is always a
balance in money. The administration-account always exhibits
a balance in cash not in specific goods, whether bonds or horses;
and though an heir may take bonds or horses as cash, the account
must show and always does show a cash balance. That is the
fund taxed by this law and not the bonds or other chattels which
may have produced the fund. Therefore neither the prohibitory
clause of the Act of Congress of 1862, nor any of the principles
of decision against state authority to tax that which federal
authority has exempted from taxation, have any application here.
The federal government has not prohibited the states from pre-
scribing rules of inheritance and succession to estates of
decedents, and it would be a grievous mistake of legislative

1Q64 STATUTES ANNOTATED. [Pa. St.

and judicial authority to apply it with such effect." Per
Woodward, C. J., in Strode v. Commonwealth, 52 Pa. St. 181 (2
P. F. Smith).

From What Fund Payable.

The collateral inheritance tax is payable out of the legacy or
devise unless the testator otherwise directs. In re Thomson,
12 Phila. (Pa.) 36. (1878.)

Direction in Will as to Payment of Tax.

The direction in a will, "after deducting any and all necessary
expenses to divide the said net income in equal shares among"
certain persons, results in deducting the inheritance taxes from
the gross income, after which the net income is to be divided in
equal shares among the life tenants. Each legatee of income
should pay the tax from his share unless otherwise expressly
directed. In re Brown, 208 Pa. St. 161, 57 A. 360.

The provision in a will that the collateral inheritance tax shall
be paid out of the residue, but not out of the pecuniary legacies,
is not restricted to the legacies then given, but includes legacies
given in a subsequent codicil. In re Cummings, 12 Pa. Co. Ct. 45.

The will directed that the income of the testator's estate for the
first year after his death should be added to the principal, then
both principal and interest applied indiscriminately to the pay-
ment of expenses, debts and legacies. The result is that the corpus
of the estate has been preserved to the extent of the first year's
income, upon which sum no collateral inheritance tax was paid.
The court holds that the direction of the testator resulted in allow-
ing so much more of the principal to pass to the collateral heirs and
that therefore so much more is liable to the tax. In re William-
son, 11 Pa. Co. Ct. 235.

Federal Inheritance Tax.

Where the testator's will was drawn in 1895, and she died in
1900 and directed the "collateral inheritance tax" to be paid by
the executor out of the corpus of the estate, this did not charge
the estate with the federal inheritance tax of 1898. There
Was a clear disposition to charge the corpus of the estate
with the collateral inheritance tax only, which was at that
time the only legacy tax in existence. In re Baker, 21 Pa.
Super. Ct. 536.

1887, c. 37.] PENNSYLVANIA. 1065

Payment from Share not Charged with Tax.

Where a collateral inheritance tax is improperly paid on land
in Pennsylvania which the testator directed to be sold, the percent-
age of the tax cannot be deducted from the last legacy to be paid
as such legacy's proportion of the collateral inheritance tax paid
to the state, simply because the executors were appointed in
Pennsylvania and the legatee came by counsel before the court and
asked for payment in full, as happened in In re Lewis, 203 Pa. St.
211. The residuary legatees having permitted the tax to be paid,
they cannot now ask that a portion of it be deducted from the
legacy to their relief. They ought to have protected themselves
at the proper time. In re Schoenberger, 221 Pa. St. 112, 114,
118, 70 A. 679, 19 L. R. A. (N. S.) 290.

Where the executor pays the tax upon the life interest out of
the capital of the fund, the tax should be refunded to the executor
out of the income of the life estate. This is so although the legacy
was intended for the maintenance of the life tenant who had and
has no other nreans of support; and although the tax was paid by
the executor before he transferred the fund to the trustee. In re
Christian, 2 Pa. Co. Ct. 91, 18 Wkly. Notes Cas. 88.

**SiTUATED Within This State."

Interest of Non-resident in Pennsylvania Partnership.

Where a partnership was composed of two residents of Pennsyl-
vania and one of Maryland, and its property was largely situated in
Pennsylvania, the interest of the Maryland partner who devised his
share in the partnership to the other two partners is property
within the state of Pennsylvania and subject to a collateral in-
heritance tax there. This interest was tangible personal property
having an actual situs within the state receiving the benefit and
protection of its laws during the testator's lifetime, and therefore
subject to payment of the collateral inheritance tax. In re Small,
151 Pa. St. 1, 15, 25 A. 23, 30 Wkly. Notes Cas. 521, affirming
llPa. Co. Ct. 1.

Where the testator died domiciled in Cuba, leaving legacies of
property in Cuba to residents of Pennsylvania, no inheritance tax in
Pennsylvania can be collected. In re Hood, 21 Pa. St. (9 Harris) 106.

Pennsylvania statute of April 7, 1826, taxes not the person, but
the estate within this commonwealth. The statute of April 22,
1846, increases the collateral inheritance tax to five per cent.

1066 STATUTES ANNOTATED. [Pa. St.

The statute is laid on the amount of the estate being within the
commonwealth and the domicile has nothing to do with the ques-
tion, so the tax should be collected where one domiciled in France
bequeathed a legacy to a citizen of France out of personal property
situated in Pennsylvania. • Commonwealth v. Smith, 5 Pa. St.
(5 Barr) 142.

Situs of Government Bonds.

United States bonds are simply evidence of indebtedness and
have the same situs as the domicile of the owner. So where the
bonds were deposited with a safety deposit company they were,
constructively at least, in the possession of the testator. Where
the testator, a citizen of New Jersey, died having certain United
States bonds on deposit with a Pennsylvania company, the bonds
being due for redemption, there is no tax in Pennsylvania on the
fund produced by the bonds. It is clear that estates not passing
by will that is operative within the state or under the intestate
laws thereof are not within the purview of the act. The act was
never intended to apply to government bonds, but was intended
only to embrace personal property of a tangible nature actually
situated or used for business purposes within the commonwealth,
and not to mere certificates of indebtedness whose situs necessarily
follows the owner's domhcile. Appeal of Orcutt, 97 Pa. St. 179, 186.

Resident's Personalty in Another State where he Owes
Debts.

The personal estate in another state of a Pennsylvania decedent
is not subject to be taxed because his debts there exceeded its
amount, and his real estate there was not subject to the tax because
beyond the jurisdiction of Pennsylvania, in 1866. Commonwealth
v. Coleman, 52 Pa. St. 468, 473.

Pennsylvania Personalty of Non-resident.

Where the testator was not a resident of Pennsylvania and died
in 1898, leaving property in Pennsylvania which had for a long
while been in Pennsylvania in the hands of an agent for purposes
of investment and reinvestment, this personal property is within
the state of Pennsylvania, and where by agreement of the parties
the property was distributed by an administrator appointed in
Pennsylvania, the court holds that the Pennsylvania tax should
be levied. In re Lewis, 203 Pa. St. 211, 214, 52 A. 205.

1887, c. 37.] PENNSYLVANIA. 1067

In re Lewis, 203 Pa. St. 211, was said not to be a convincing
authority — one which was decided upon its own peculiar facts,
and is not to be stretched and does not alter the Pennsylvania
doctrine, that securities of a non-resident, though physically
within the state are not subject to tax. In re Schoenberger, 221
Pa. St. 112, 119, 70 A. 579, 19 L. R. A. (N. S.) 290.

Where the intestate who lived in Oklahoma died immediately
after his sister who lived in Pennsylvania, and no administration
was taken out in Oklahoma, but administration was taken out in
Pennsylvania where the only known creditor was, and where the
fund was paid by the administrator of the sister directly to the
administrator o'f the intestate in Pennsylvania, the fund was never
out of the state, and had a situs in Pennsylvania and not at the
domicile of the decedent, and is therefore subject to the Pennsyl-
vania collateral inheritance tax. In re Weaver (Orph. Ct.), 4 Pa.
Dist. R. 260.

Intangible Property in Pennsylvania of a Non-resident.

Intangible property has no situs other than the owner's domicile,
and hence bonds cannot be taxed in Pennsylvania simply because
they were kept there by a non-resident owner. In re Orcutt, 97
Pa. St. 179.

The choses in action of non-residents consisting of stocks and
bonds of Pennsylvania corporations, and cash awarded on the
settlement of the account of the administrators of the decedent's
deceased husband, are not subject to tax under the statute of 1887".
The court speaks of the practical difficulty of enforcing the tax,
as it could not be known in the jurisdiction of the ancillary admin-
istration whether the estate would be solvent or not. In re Del
Busto, 6 Pa. Co. Ct. 289.

Under the Pennsylvania statute of 1826, as construed by the
act of 1850, the choses in action of a decedent not domiciled at his
death in Pennsylvania passing to collateral heirs or legatees are
not subject to tax simply because they are rights in action against
the state or its corporations or against the inhabitants of the state.
Kintzing v. Hutchinson, Fed..Cas. 7834.

The executors of the will of a citizen of New Jersey sued a Phila-
delphia savings bank to recover the amount of the deposit of the
deceased, and the only defence was that the money was subject
to the collateral inheritance tax under the Pennsylvania statute.

The court holds that this statute has no application to the
choses in action belonging to one domiciled in another state at the

1068 STATUTES ANNOTATED. [Pa. St.

time of his death, though his representatives may have to come
here to reduce them to possession.

The court further holds that the result would be the same if
the law were otherwise, as the state and not the savings bank is
the proper party to set up this defence. Allen v. Philadelphia Sav.
Fund Soc. 14 Phila. 408, Fed. Cas. No. 234. As to the first point,
the court cites and ioWows Kintzing v. Hutchinson, Fed. Cas*
No. 7834.

Securities of a non-resident actually situated in Pennsylvania at
his death were taxed in In re Alexander (1845), 3 Clark 87 (4 Pa.
L. J.). Commonwealth v. Smith, 5 Pa. St. 142.

Real Estate outside State.

While it is conceded that the powers of the state for taxing
purposes are very great, they are necessarily limited to either
property or persons within her borders, and the state cannot im-
pose a tax on real estate situated in Maryland and charge it with
a lien for such unpaid taxes, although the devisor and the devisee
are both citizens of Pennsylvania.

All property of the citizen within the state may be taxed, and all
such property outside the state as is drawn to or follows in law
the domicile or person of the owner, such as bonds and mortgages,
etc., no matter where situated. But real estate is not drawn to
the person or domicile'of the owner for taxation or any other pur-
pose, and hence cannot be taxed outside of the jurisdiction where
it is situated. The taxation of property involves the reciprocal
duty of protection on the part of the state levying such tax. In re
Bittinger, 129 Pa. St. 338, 345. To the same effect see Common-
wealth V. Coleman, 52 Pa. St. 468.

"Persons Dying Seised Thereof.*'

The collateral inheritance tax is assessed only on property which
was the absolute property of the testator and not on that of which
she only held the power of appointment. In re Lisle, 22 Pa.
Super. Ct. 262 (1903).

Where the testator sells a promissory note of doubtful value on
condition the buyer will pay him interest as long as the testator
lives, this is not subject to the inheritance tax. In re Carman, 3
Pa. Co. Ct. 550.

The state must show not only that the persons against whom
it claims are not of the exempted class, but that the estate out
of which the tax is alleged to be payable passed to those persons

1887, c. 37.] PENNSYLVANIA. 1069

from one who died seized or possessed of the same. Under the
Pennsylvania act actual seisin and actual possession is necessary
and a person cannot be seised of an estate which is limited to take
effect only after his death. In re Swann, 12 Pa. Co. Ct. 135.

Beneficiary Societies' Payments.

The decedent died in 1885, being at his death a member of two
beneficial societies. Provision was made for the payment of sums
of money on the death of the decedent to his widow and children,
and the court holds that this money never formed part of his estate
and is therefore not subject to the inheritance tax. The court
holds that this scheme which is intended to benefit the family of
a person cannot be construed as a conspiracy to evade the law
relating to the collateral inheritance tax, although money was to
be paid on the death of the contributor. In re Vogel, 1 Pa. Co.
Ct. 352, 18 Wkly. Notes Cas. 242.

Income after Death.

Where the income of testator's estate for the first year after
his death was by the direction of his will added to the principal,
and both principal and income applied indiscriminately and without
distinction to the payment of expenses, debts and legacies, this
does not subject the income for the first year to the collateral
w inheritance tax. This tax fastens upon so much of the estate as
passes to collaterals as it stands at the death of the testator."
Income accruing subsequently comes not from the testator but
from the property held by or for the use of the legatee. In re
Williamson, 153 Pa. St. 508, 521, 26 A. 246, 32 Wkly. Notes Cas. 93.

Property Invested in Name of Another.

Where a large part of the estate in Iowa is invested in the name
of a nephew of the testator, the court holds that this money is
taxable under the law of Pennsylvania in accordance with In re
Williamson, 153 Pa. St. 508, 26 A. 246, 32 Wkly. Notes Cas. 93.
In re Miller, 182 Pa. St. 157, 162, 37 A. 1000.

Domiciled.

The court upholds a finding as to domicile in Pittsfield, where
it appears that it was the only place where the testator ever voted
or paid a personal tax, and that he continued to return there to
his home with a friend to the very time of his death, and died there,

1070 STATUTES ANNOTATED. [Pa. St.

that he declared that to be his home and made it a point to return
there and vote at the presidential elections when his business inter-
ests would permit. In re Dalrymple, 215 Pa. St. 367, 371, 64 A. 554.
Where the grantor, after making a deed in trust to assign the
property in accordance with her will, moved from Pennsylvania,
where the trustee resided, to New York, where she died, the court
holds that the change in the domicile of the grantor did not affect
the right of the state to collect the tax : that the statute grasped
the estate when one citizen created the trust with the features
described and made this the domicile or situs of the estate. As
the grantor could not take the property out of its jurisdiction by
any act of hers, so she could not make it follow her or affect it with
any incidents of the new domicile when she removed. Common-
wealth V. Kuhn, 2 Pa. Co. Ct. 248.

Double Taxation.

The fact that the state of New York, where the testator was
domiciled, had already levied an inheritance tax, did not prevent
the state of Pennsylvania from laying a tax on the same property
where it was in Pennsylvania in the hands of agents there for
investment and reinvestment, and where it was distributed by the
Pennsylvania court. In re Lewis, 203 Pa. St. 211, 217, 52 A. 205.

"Other than To or For the Use Of."

A gift by a testator to a creditor with interest falls neither within
the letter or spirit of the collateral inheritance act. What is paid
to the creditor forms no part of the "clear value" of the estate of
the debtor, nor can it be said to pass to him under the will. In re
Quin (1880), 13 Phila. (Pa.) 340.

Where an estate is given to a widow on condition she pay legacies
to collateral relatives, the gift to the collateral relatives is direct
and is subject to the inheritance tax. Appeal of Lauman, 131 Pa.
St. 346, 351, 18 A. 900.

Exempting stepchildren from the collateral inheritance tax
together with other lineal descendants is not void as improper
classification. The court remarks that it has nothing to do with
the wisdom of legislation. Commonwealth v. Randall, 225 Pa. St.
197, 73 A. 1109.

Dower.

The court holds that where a widow elects to take against her
husband's will, and subsequently accepts less than she is entitled

1887, c 37.] PENNSYLVANIA. 1071

to by statute, this fact cannot affect the inheritance tax which is
computed upon the property which vested in her by descent, and
the tax should therefore be computed upon the amount to which
she was entitled. In re Small, 11 Pa. Co. Ct. 1.

Where the widow released her claim under the intestate law and
the property was given directly to the legatees, it was all subject
to the tax. The entire interest specifically bequeathed to the
legatees was received and for all that appears is still held by them.
In re Small, 151 Pa. St. 1, 16, 25 A. 23, 30 Wkly. Notes Cas. 521.

Dower Right Exercised.

When a widow refused the provisions of the will for her and
exercised her dower right and took property bequeathed to the
collateral heirs, the collateral inheritance tax does not apply to
this sum. The court will not regard the money paid her as a
payment out of the fund passed by will to the beneficiaries under it.
The fact that the widow took less than the law allowed her makes
no difference, as she still took her dower rights. The court must
look at the true character of the transaction and in doing so cannot
permit it to be submerged in mere form. Appeal of Commonwealth ^
34 Pa. St. (10 Casey) 204.

Sums Paid in Compromise.

Where the legatees, who are all collateral relatives of the testator,
made a compromise with a son whereby they paid him a certain
sum in settlement, and in consideration thereof he withdrew his
contest and the will was admitted to probate, the collateral legatees
are not liable to pay the collateral inheritance tax on money paid
to the son. The reason is that the amount paid the son "was
never received by them as legatees, and under the act it is only
so much of the estate which actually passes to them by virtue of
the will that is liable to the tax." In re Pepper, 159 Pa. St. 508,
28 A. 353, reversing 4 Pa. Dist. R. 101.

The same result as In re Pepper, 159 Pa. St. 508, 28 A. 353, was
reached where a settlement was made by a devisee with contest-
ants claiming title adversely to the decedent as this property
thus surrendered never formed a part of the devisee's estate and
was not liable as such to the collateral inheritance tax. The
allowance or compromise of the claims of third persons simply
reduces the- estate afterwards passing to volunteers with the same
effect as if the reduction had been caused by the payment of debts

1072 STATUTES ANNOTATED. [Pa. St.

or as if the payment or surrender had been the result of a suit
terminating in favor of the claimant. In re Kerr, 159 Pa. St.
512, 513, 28 A. 354, 2 Pa. Dist. R. 535.

Where legatees claim that the writing was a valid will and the
provision for their benefit was in discharge of an obligation and
the heirs denied the validity of the writing as a will, because of
the want of testamentary capacity, and a settlement was made in
which the employes were treated as creditors and allowed a part
of their demands, this was clearly a compromise of a doubtful
right to avoid litigation, by which the heirs parted with a portion
of the estate for the purchase of peace. The employes took
nothing under the will, and the money paid them was not subject
to tax unless the whole arrangement was collusive.

The claim of the commonwealth was not affected by the fact
that the annuities provided for the sisters of the decedent were
secured to them without abatement. The contest was as to the
whole writing and not as to a part. If it was invalid, their claims
as annuitants fail with the others.

The will was refused probate, and the money paid to the legatees
was not subject to the collateral tax. So payments made to other
legatees who had no demand against the estate were also relieved
from the tax. In re Hawley, 214 Pa. St. 525, 63 A. 1021.

Where a compromise of the validity of the will was made under
which the wilt was disallowed, and the balance, after paying certain
legacies, given to the contestant, the court holds that this balance
was a part of the decedent's estate and subject to tax.

The court suggests that if an absolute sum had been fixed as the
price of the consent of the contestant to the compromise she
might perhaps claim the amount as a debt from the other parties
in interest. In re Rubincam (1881), 14 Phila. (Pa.) 306.

Where a will gives collateral relatives a life interest which they had
already bought and paid for, there is no inheritance tax. It seemed
that the provisions were due to the anxiety of the testator that
his sisters should not be disturbed in the occupancy of the home
he granted to them. In re Morris (Orph. Ct.), 1 Pa. Dist. R. 818
(1891).

C^re of Burial Lots.

A legacy in trust, the interest of which is to be devoted to the
care of two cemetery lots, is subject to the inheritance tax. Under
the statute of 1887 all bequests are subject to the tax unless they
fall within some of the classes explicitly exempted.

1887, c. 37.] PENNSYLVANIA. 1073

It was contended that this bequest was to be considered as in
the nature of funeral expenses, but the manifest intention of the
testator was to provide a fund the income of which should be
devoted to caring for the last resting place of all her relatives,
and that this involved caring for her grave was a mere incident of
the general purpose. In re Long, 22 Pa. Super. Ct. 370. (Bequests
for the care of burial lots are now exempt under St. 1903, c. 13.)

Advancements Subject to Tax.

Long prior to the death of the testator, he advanced to the
beneficiaries, on account of their legacy at different times, sums
which aggregated four thousand dollars and took from them
their bonds in corresponding amounts conditioned for the pay-
ment during his life of an annuity or yearly sum equal to the
interest at six per cent on the advancements. The court holds that
this was really a device to evade the tax and its meaning; that the
testator should receive a life incortie from his legacy, and that full
enjoyment of the principal should be hiad by the legatee only after
the testator's death. In re Conwell, 5 Pa. Co. Ct. 368, 22 Wkly.
Notes Cas. 183.

Effect of Release by Legatee.

The intestate died leaving as his only heirs his widow and one
sister. Sixteen months later the sister released all her interest to
the widow. But the court holds that this did not relieve the
property from the collateral inheritance tax, as the title was
vested in "the sister immediately on the death of the intestate.
In re Frank, 9 Pa. Co. Ct. 662.

**Widow of the Son."

A former wife of a son who has married again is not a "widow"
within the terms of the statute, and therefore the collateral inheri-
tance tax must be assessed on such widow. Commonwealth v.
Powell, 51 Pa. St. (1 P. F. Smith) 438.

"Children and Lineal Descendents Born in Lawful

Wedlock."
Special Adoption Statutes.

Pennsylvania statute. May 4, 1855, gave an adopted son the right
to inherit, but did not change the collateral inheritance tax law;

1074 STATUTES ANNOTATED. [Pa. St.

and as regards that law, he is not to be taken as a son in fact, but
he is a collateral relative. Commonwealth v. Nancrede, 32 Pa. St.
(8 Casey) 389.

Where a special act provided for the adoption of a certain illegiti-
mate child investing her with all the rights of a legitimate daughter
and heir, this does not bind the commonwealth and make
her any the less subject to the collateral inheritance tax. The
court follows Commonwealth v. Nancrede ^ 32 Pa. St. 8 Casey (Pa.)
389. In re Wayne, 2 Pa. Co. Ct. 93, 18 Wkly. Notes Cas. 10.

An act of the legislature, declaring an illegitimate son to be
the lawful heir and adopted son of his father, is an act of adop-
tion and not of legitimation, and does not exempt the estate passing
from the father to such adopted son from the collateral inheritance
tax. In re Prinvince (Orph. Ct.), 4 Pa. Dist. R. 591.

A statute giving one "the rights, powers and privileges" of a
son clearly exempted him from the payment of a collateral inherit-
ance tax, especially where the Statute further expressly provides
that the adopted son shall be subject only to such tax as would
be payable if he were the son of the adopting father.

The court distinguishes this case from Commonwealth v. Nan-
crede, 32 Pa. St. 389, where the mere fact of adoption was said not
to make the adopted son a son in fact, as in this case there was a
necessary implication of exemption, and therefore the son took
the estate exempt from the payment of a collateral inheritance
tax. Commonwealth v. Henderson, 172 Pa. St. 135, 33 A. 368,
37 Wkly. Notes Cas. 344.

Where a statute was passed decreeing that a certain child should
be capable of inheriting as if born in lawful wedlock, and was not
related to the adopting parents, his estate was subject to a col-
lateral inheritance tax. Tharp v. Commonwealth, 58 Pa. St. (8 P. F.
Smith) 500, following Commonwealth v. Nancrede, 32 Pa. St.
(8 Casey) 389. Commonwealth v. Stump (53 Pa. St. 132, 3 P. F.
Smith,) is only a dictum.

Where a statute was passed authorizing one to adopt his illegiti-
mate child to make him his heir, the court holds that this is simply
an act of adoption and not an act of legitimation. "That a legacy
given to an adopted child who stands in the place of an heir would
*be subject to this tax is too plain for argument. The reason is
that he is not a lineal descendent born in lawful wedlock. He
has not the blood." Per curiam, in Commonwealth v. Ferguson,
137 Pa. St. 595, 601, 20 A. 870, 10 L. R. A. 240 n.

1887, c. 37.1 PENNSYLVANIA. 1075

Illegitimates.

Where the intestate died, leaving only collateral relatives and an
illegitimate son who was legitimatized by the legislature after the
death of the intestate, the estate descended and vested in the
collateral heirs, and the state was entitled to collect the tax. The
moment a man dies leaving heirs, lineal or collateral, his estate
vests and is beyond the constitutional power of the legislature.
Galbraith v. Commonwealth, 14 Pa. St. (2 Harris) 258.

The court does not decide whether an estate descended to a
bastard who has been legitimated by an act of assembly is subject
to the collateral inheritance tax. Commonwealth v. Ferguson,
137 Pa. St. 595, 601, 20 A. 870, 10 L. R. A. 240 n.

The court holds, on a careful consideration of the statute of 1887
and of the whole subject, that children born prior to marriage who
have been legitimated by the subsequent marriage of their parents
are not liable to the tax. Commonwealth v. Gilkerson, 18 Pa.
Super. Ct. 516.

Where a legacy is given to the husband of the daughter evidently
as trustee for the use of his children, it is not liable to a collateral
inheritance tax. In re Morris (Orph. Ct.), 1 Pa. Dist. R. 818.

To Religious Society on Condition.

An annuity to a church on condition that a bell be rung at cer-
tain specified times is subject to the inheritance tax. It was
claimed that this is a legacy to be enjoyed only on a condition
or for a. consideration. But the court holds that this makes no
difference. Commonwealth v. Gilpin (Com. PL), 3 Pa. Dist. R. 711,
14 Pa. Co. Ct. 122.

Where a will gave to the church two thousand dollars, and in
consideration of the bequest the testator desired that it shall keep
in order and perpetuity his family burial lot, the legacy is subject
to the payment of the collateral inheritance tax. This obligation
does not exempt the legacy. The fact that the legacy is not a pure
gratuity is not material. The court follows In re Seibert, 18 Wkly.
Notes Cas. 276. In re Walter, 3 Pa. Co. Ct. 447.

Power. — Donees Classified as Relatives of Original Testator.

Where property is left to a daughter of a testator for life with
power of appointment on her death, and she appoints to her brothers
and sisters, "the state is not entitled to collect a collateral inherit-
ance tax on her appointment, as the property has gone only to

1076 STATUTES ANNOTATED. [Pa. St.

lineal descendants of the original testator. Commonwealth v.
Williams, 13 Pa. St. (1 Harris) 29.

Where a life tenant exercised the power of appointment in favor
of those who are collateral relatives of the life tenant, but lineal
descendants of the original testator, the collateral inheritance tax
cannot be levied. Where, however, the power of appointment is
exercised improperly, the estate passes as the estate of the donee
to collaterals of the donee. Commonwealth v. Sharpless, 2 Chest. Co.
Rep. (Pa.) 246.

Power under Will of Non-resident.

Where a citizen of Maryland created a life estate with a power of
appointment to a citizen of Pennsylvania, and the life tenant
exercised the power by will, the state was not entitled to an inherit-
ance tax upon the exercise of the power.

The fund was in Maryland at the testator's death, the interest
made by it was received by the appointor to her own use during her
lifetime and the appointee asks no more than to be permitted to
receive the principal from the executors free from encumbrances
or deduction as her successor. This is a plain case of a foreign
legacy received abroad which is not taxable in Pennsylvania.
Commonwealth V. Duffield, 12 Pa. St. (2 Jones) 277, Brightly N. P. 469.

How Tax on Annuity Paid.

Where a residue estate was given in trust to pay an annuity the
court holds that the intention was that the annuitant should receive
a clear annual sum named in the annuity, and therefore the tax
must fall upon the residue. In re Bispham, 6 Pa. Co. Ct. 459.

Where the will gives an annuity of three hundred ($300) dollars
to be paid out of the income or out of the principal, if necessary,
the inheritance tax should not be assessed upon the whole sum as
the bequest is contingent upon the legatee living long enough to
exhaust it all. Therefore the tax is to be assessed only upon the
annual payments as they fall due. In re Crompton, 10 Pa. Co.
Ct. 443, 48 Leg. Int. 452, 29 Wkly. Notes Cas. 36.

Where the will provides that all bequests of "money" shall be
paid without deduction for the inheritance tax, this included an
annuity payable by a devisee out of the rents of the land.
^ Pa. St. 1887 c. 7, does not apply to this case, but this section
simply provides a method of collection, and as the annuity is a
bequest in money not subject to a deduction for the tax, the burden

1887, c. 37.] PENNSYLVANIA. 1077

falls on the residuary estate, even though the bequest were payable
out of rents coming from a particular source. In re Lea, 194 Pa.
St. 524, 45 A. 337. A direction in a will that an annuitant "is to
receive not less than $1,500 a year" is not of itself enough to show
an intention to place the burden of the tax on the general estate
and relieve the annuitant from the inheritance tax. In re Hol-
brook, 3 Pa. Co. Ct. 265, 20 Wkly. Notes Cas. 69.

Annuity Payable out of Future Profits of Land.

Where a devise is made to a lineal descendant with the direc-
tion to her to pay two thousand dollars a year out of the rents
and profits -of the land devised, the words of the act of 1887
are sufficient to cover this bequest, although payable by the
devisee of the land out of its future rent. In re Lea, 194 Pa. St.
524, 45 A. 337.

In Contemplation of Death.

Where a decedent makes a deed in contemplation of death, his
executors should be made to pay the tax. Appeal of Wright^
38 Pa. St. (2 Wright) 507.

Where the decedent made an absolute deed of land and took a
bond back from the grantee to pay the income to the grantor for
his life — this is a conveyance in contemplation of death within
the terms of the Pennsylvania inheritance tax of 1826, especially
where it was made during the last sickness of the grantor.

"It is true the obligation of the bond was not inserted as a
condition or reservation in the deed ; it was in form a mere personal
obligation; but this contention does not involve a technical ques-
tion of title nor of lien ; the whole matter depends upon the single
fact whether or not the transfer was made or intended to take
effect in enjoyment at the death of the grantor. The policy of
the law will not permit the owner of an estate to defeat the plain
provisions of the collateral inheritance law by any devise which
secures to him, for life, the income, profits and enjoyment thereof;
it must be by such a conveyance as parts with the possession, the
title and the enjoyment on the grantor's lifetime." Per Clark, J.,
in Reish v. Commonwealth, 106 Pa. St. 521, 526.

A will devised land to James and John, two brothers, and pro-
vided that if James should not build on his land he might sell it
to his brother John at two thousand dollars besides what he was
to pay out -of it. James sold to John his share for thirty-five
hundred dollars, and John sold part of this for fifteen hundred

1078 STATUTES ANNOTATED. [Pa. St.

dollars. Later, at the request of John, James released him from all
claims under his father's will on condition that John should convey
all the land to James's children, they to take possession at John's
death and give him an obligation for the two thousand dollars
payable after his death.

John died unmarried and without issue, and it was held that the
share of the land which had belonged to John originally is subject
to the tax, but the portion of James is not subject to tax. Sub-
stantially it was agreed that the children of James should pur-
chase back that share after John's death by refunding to his estate
what he had paid their father for it. Their notes for two thousand
dollars have gone into the inventory of the present estate, which
is, of course, to pay the tax. Part of the consideration was that
John should convey the entire estate to his nephews and nieces.
But it cannot be said that this share was John's at the time of his
death, or that it was within the spirit of the proviso in the will.
It is not found or pretended that the object was to evade the tax
and the note given for the transfer excludes such a pretension.
Had James continued the owner under his father's will, it would have
passed to the children on his death and there would have been
no claim upon it by the state for the tax on the estate of John.
Appeal of Waugh, 78 Pa. St. (28 P. F. Smith) 436.

Where the decedent had- assigned stocks in trust to pay the dece-
dent income for life, and after that certain sums in annuities to
persons who might survive him, and reserved the right to revoke
any of the trusts or grants, this was intended to take effect in
possession after his death. It took effect neither in right nor
possession until his death because none were to take who did not
survive him, and because he might revoke the whole. Appeal of
Wright, 38 Pa. St. (2 Wright) 507.

Trust Deeds.

The testator made his will December 1, 1881, bequeathing his
estate to certain collateral relatives and for religious and charit-
able purposes. August 14, 1882, he executed a deed, assigning
all his property to trustees for their own use and benefit during
his life, and at his death to hold the same for the uses and purposes
of .^his will.

The court holds that the property is subject to a collateral
inheritance tax as the deed was not to take effect in enjoyment
until after the death of the testator. Appeal of Seibert, 110 Pa.
St. 329, 1 A. 346.

1887, c. 37.] PENNSYLVANIA. 1079

Where the testator, a resident of Pennsylvania, conveyed to a
New York trust company all his property in trust to collect the
profits and pay them to the decedent during his life, and on his
death to certain beneficiaries named, reserving in the decedent the
power to alter the deed of trust at any time, the property is liable
to the Pennsylvania collateral inheritance tax. The decedent was
not only the beneficial owner of the securities, but under the reserve
power of modification or revocation he had absolute control of the
disposition to be made of the securities upon his decease. The court
quotes with approval Du Bois's Appeal, 121 Pa. St. 386. In re
Line, 155 Pa. St. 378, 393, 26 A. 728, 32 Wkly. Notes Cas. 376.

A deed by the decedent to another in trust to pay the income
to the grantor for life and on his death to pay certain pecuniary
bequests to persons mentioned is subject to the collateral inherit-
ance tax. In re Maris, 14 Pa. Co. Ct. 171, 3 Pa. Dist. 33 (1893).

Where a non-resident executed a deed of trust to a Pennsylvania
corporation, preserving to herself a life estate with remainder over,
and the fund was kept in Pennsylvania, the court holds that the
fund is liable to a tax following In re Lewis, 203 Pa. St. 211.
Singer v. Guarantee Trust &f Safe Deposit Co., 24 Pa. Super. Ct. 270.

The testator conveyed property in trust to assign the property
as the grantor might by last will appoint, and for want of such
appointment, to her heirs, reserving no right of revocation in the
deed. The deed was signed in 1857 in Pennsylvania and subse-
quently the grantor moved to New York where she lived until her
death in 1885. The court holds that this is a deed intended to
take effect after the death of the grantor within the meaning of
the statute of 1826. Commonwealth v. Kuhn, 2 Pa. Co. Ct. 248.

Unrecorded Deed.

Where the decedent conveyed a farm to his nephew for a good
consideration and where the deed was never placed on record until
after the grantor's death, the transfer is not subject to an inherit-
ance tax in the absence of evidence of intent to convey. In re
McCormick, 15 Pa. Co. Ct. 621, 3 Pa. DIst. 838, 25 Pittsb. Leg.
Int. N. S. 91 (1894).

Delivery of Deed.

Where the beneficial owner of land for whom another is holding
the legal title as bailee directs the holder of the legal title to give
the property -to his son, and the holder of the title executes a deed,
which he gives to his son, telling him to give it to the person named

1080 STATUTES ANNOTATED. [Pa. St.

by the beneficial owner when he calls for it — this is a good delivery
of the deed, and the land cannot be held for an inheritance tax from
the estate of the beneficial owner, especially where the grantee under
the deed had entered on the land and made improvements on the
property. Stinger v. Commonwealth, 26 Pa. St. (2 Casey) 422, 428.

Deed not Delivered.

Exemption of $250 Applies to Whole Estate.

The collateral inheritance act of May 6, 1887, provides that "no
estate which may be valued at a less sum than $250 shall be sub-
ject to tax." This exemption refers to the whole estate and not to
distributive shares carved therefrom. In re Mixter (1891), 28
Wkly. Notes Cas. (Pa.) 182, 8 Lane. L. Rev. 256; 10 Pa. Co. Ct.
409. [See notes to the act of 1826, ante, p. 1044.]

Where there were seven legacies of two hundred ($200) dollars
each to certain charitable institutions, the tax should be paid on
each legacy, as the two hundred and fifty ($250) dollars' limitation
applies only where the net value of the estate to be distributed to
collaterals does not exceed two hundred and fifty ($250) dollars.
The liability to a tax is to be determined not by the amount of
the legacy, but by the clear value of the estate passing to persons
or bodies corporate not exempt from taxation. In re Howell, 10
Pa. Co. Ct. 232.

Evasion.

"No mere device intended to evade the payment of tax due
the commonwealth can be effective. Courts look beyond the
form of any arrangement by which the commonwealth is deprived
of a tax to its substance to ascertain its real purpose. An agree-
ment to set aside a will and to make distribution in accordance with
its provisions will not relieve legacies passing to collaterals from
tax. Such an agreement is evidently collusive. But money paid
m good faith in compromise of threatened litigation is not subject
to tax. Pepper' s Estate, Ib^'Pai. St. bO^', Kerr's Estate, 159 Fsl. St,
512." Per Fell, J., in In re Hawley, 214 Pa. St. 525, 527, 63 A.
1021.

1887, c. 37.] PENNSYLVANIA. 1081

Bequest in Lieu of Commissions.

S. 2 Where a testator appoints or names one, or more executors, and makes a
bequest or devise of property to them, in lieu of their commissions or allowances,
or appoints them his residuary legatees, and said bequests, devises, or residuary
legacies, exceed what would be a fair compensation for their services, such excess
shall be subject to the payment of the collateral inheritance tax; the rate of com-
pensation to be fixed by the proper courts having jurisdiction in the case.

Wlien Tax Accrues on Remainders. — Lien. — Returns.

S. 3. In all cases where there has been or shall be a devise, descent or bequest
to collateral relatives or strangers, liable to the collateral inheritance tax, to take
effect in possession, or come into actual enjoyment after the expiration of one or
more life estates, or a period of years, the tax on such estate shall not be pay-
able, nor interest' begin to run thereon, until the person or persons liable for the
same shall come into actual possession of such estate, by the termination of the
estates for life or years, and the tax shall be assessed upon the value of the estate
at the time the right of possession accrues to the owner as aforesaid: Provided,
That the owner shall have the right to pay the tax at any time prior to his
coming into possession, and in such cases, the tax shall be assessed on the value
of the estate at the time of the payment of the tax, after deducting the value of
the life estate or estates for years: And provided further. That the tax on real
estate shall remain a lien on the real estate on which the same is chargeable
until paid. And the owner of any personal estate shall make a full return of
the same to the register of wills of the proper county within one year from the,
death of the decedent, and within that time enter into security for the payment
of the tax to the satisfaction of such register; and in case of failure so to do
the tax shall be immediately payable and collectible.

[See notes to the Act of 1850, ante, p. 1049.]

**The Tax . . . shall not be Payable." — Increase in Value
of Estate after Death of Decedent.

Tlie tax on the remainder after a life estate is not payable until
the termination of the life estate, provided the security for its
payment be given. In re Budd, 12 Pa. Co. Ct. 476.

The will directed the executor to pay all the collateral inheritance
taxes on all the devises, bequests and legacies "as soon after my
decease as the same can conveniently be done." Under this pro-
vision the executor paid the tax on the entire estate at its valuation
at that time. Subsequently, the life tenant having died, the state
claimed the tax on the remainders on the ground that it was not
due until the remainders came into possession, and that the value
of the estate having increased in the meantime, the tax is payable
on its present value. The words "shall not be payable" mean only
"shall not be demandable" by the state, as the right of the re-
maindermen to pay sooner is expressly given in the proviso to the
same section ; and the tax having been paid on the value at the

1082 STATUTES ANNOTATED. [Pa. St.

death of the testator, no further tax can be now collected. In
re De Borbon, 211 Pa. St. 623, 61 A. 244.

"Until the Person Liable . . . Shall Come into Actual
Possession."

Under this section the tax on a remainder is not payable until
"the person liable for the same" shall come into actual possession.
"This cannot possibly mean any one but the remainderman, for he
is the only one to come into actual possession by the termination
of the precedent estate for life or years. The intent of the statute
is to charge the beneficiary of the estate ; and whether the phrase
used is 'person liable,' or 'person who shall come into actual
possession,' or 'owner,' it always means the same person, the
remainderman."

The executors and administrators "cannot be compelled to make
present payment of the tax on estates in remainder for the very
obvious reasons that they are not the parties primarily charged
with the payment, either present or future; they are not respon-
sible for the owner's default of return and security which makes
the future tax payable immediately, and in the present case they
cannot pay it now without taking it out of the widow's estate,
which is not liable to the tax at all." In re Coxe, 181 Pa. St. 369,
37 A. 517.

"Tax . . . Assessed ... on the Value of the Estate at the
Time the Right of Possession Accrues."

Remaindermen should be taxed when they come into possession
of real estate only on the clear value of the property at the death
of the testator, after deducting debts of the estate. Cooper v.
Commonwealth, 5 Pa. Co. Ct. 271.

"Provided that the Owner Shall Have the Right to Pay the
Tax."

The remaindermen are entitled on the death of the decedent
to pay the collateral inheritance tax on the residue of the estate
after deducting the value of the life interest or, on the termina-
tion of the life estate, pay the tax on the entire valuation. In re
Von Storch, 7 Pa. Dist. R. 204.

Life Estate.

The court holds that the will did not create a fee within the
rule in Shelley's case under the facts, therefore only a life estate

1887, c. 37.1 PENNSYLVANIA. 1083

was subject to the inheritance tax. In re Belcher, 2X1 Pa. St.
615, 61 A. 252.

Remainders contingent upon the devisees surviving the first
taker are subject to tax, although it is not imperative that the tax
be paid before the estates actually vest in possession. In re Will-
ing, 11 Phila. 119.

If the remaindermen are not ascertainable, that is no reason why
the tax should be collected from the life tenant who is exempt.
The only effect of such condition would be that the tax would not
be presently collectible at all, and the commonwealth would have
to depend on its lien on the real estate and its claim on the execu-
tors when they make distribution. In re Coxe, 181 Pa. St. 369,
378, 37 A. 517.

Remainderman Liable for Whole Tax when Life Tenant is
Exempt.

Under the Pennsylvania statutes as codified by the statute o^
1887, in estates liable to the collateral inheritance tax, the common-
wealth is entitled to a tax on the entire estate, and when the primary
estate for life or years is exempt from liability as to a lineal descend-
ant, the whole tax on the entire estate must be paid by the tenant
in remainder. In such cases the time of payment is postponed
until the estate comes into actual possession of the tenant liable.
But nevertheless, if such tenant elect in anticipation to pay at the
death of the decedent, the tax is assessable on the then valuation
of the entire estate less the value of the estates for life or years.
The act of 1887 did not change this law. Appeal of Commonwealth,
127 Pa. St. 435, 439.

Tax on Life Estate and Remainder Need not Total Five
Per Cent.

The Pennsylvania statute has never been held to mean that the
tax upon the life estate added upon the estate in remainder should
exactly equal five per cent of the principal of the legacy. In re
Christian, 2 Pa. Co. Ct. 91, 18 Wkly. Notes Cas. 88.

No Appeal by Executors.

The executors are not interested and therefore cannot appeal
from the decision of the court on the question as to whether a tax
is now due and payable or payable in the future, as the tax is pay-
able by the legatees and not by the executors. In re Handley,
181 Pa. St. 339, 37 A. 587, reversing judgment 3 Lack. Leg. N. 9.

1084 STATUTES ANNOTATED. [Pa. St.

Where Payment of Legacies Postponed.

Where a title to a certain farm vested in the devisee and no
estate for Ufe or years intervened, but he was to have the use of the
farm for ten years and at the expiration of ten years to have the
farm in fee, and where certain legacies with interest were to be paid
to the legatees after the expiration of ten years, the time of the
payment of the legacies only was postponed; and hence neither
the devise nor the bequests come within section 3 of the Pennsyl-
vania statute of 1887, so as to postpone the payment of the collateral
inheritance tax. In re Dalrymple, 215 Pa. St. 367, 373, 64 A. 554.

Increase in value after the death of the testator to the death of
the life tenant should not be included. Comm. v. Smith, 20 Pa. St.
(8 Harris) 100.

Interest. — Discount.

S. 4. If the collateral inheritance tax shall be paid within three months after
the death of the decedent, a discount of five per centum shall be made and allowed,
and if the said tax is not paid at the end of one year from the death of the decedent,
interest shall then be charged at the rate of twelve per centum per annum on such
tax; but where from claims made upon the estate, litigation, or other unavoidable
cause of delay, the estate of any decedent or a part thereof cannot be settled up
at the end of the year from his or her decease, six per centum per annum shall
be charged upon the collateral inheritance tax, arising from the unsettled part
thereof, from the end of such year until there be default; Provided further.
That where real or personal estate withheld by reason of litigation or other
cause of delay in manner aforesaid from the parties entitled thereto, subject to
said tax, has not been, or shall not be productive to the extent of six per centum
per annum, they shall not be compelled to pay a greater amount as interest to
the commonwealth than they may have realized, or shall realize from such
estate during the time the same has been or shall be withheld as aforesaid.

[See notes to the Act of 1850, ante, p. 1050. See also notes to the Act of 1855,
ante, p. 1051.]

"Where from Claims . . . Litigation, or Other Unavoidable
Cause of Delay."

It is plain that where the estate is involved in litigation in order
to collect its property the penalty is not to be recovered from
failure to pay the tax within one year. In re Miller, 182 Pa. St.
157, 161, 37 A. 1000.

"Unavoidable delay" may be a misnomer of the trustee named
in the will which was not discovered for some time. In re Banks,
5 Pa. Co. Ct. 614.

"Litigation" as set forth in the statute of 1887 as the cause of
delaying the penalty for non-payment of the inheritance tax must be

1887, c. 37.] PENNSYLVANIA. 1085

such that the amount of tax due cannot be definitely ascertained
until its determination as between the estate and adverse parties.
In re Small, 12 Pa. Co. Ct. 226.

Penalty Charged to Administrator.

The penalty under the inheritance tax law for failure to pay the
tax should be charged to the administrator. In re Palmer, 2 Del.
Co. Rep. (Pa.) 180.

An executor who neglects to pay an award on a collateral inherit-
ance tax is personally liable for the penalty incurred. In re Allen,
9 Pa. Co. Ct. 328.

Tax Deducted.

S. 5. The executor, or administrator, or other trustee, paying any legacy or
share in the distribution of any estate, subject to the collateral inheritance tax,
shall deduct therefrom at the rate of five dollars in every hundred dollars, upon
the whole legacy or sum paid ; or if not money, he shall demand payment of a
sum, to be computed at the same rate, upon the appraised value thereof, for the
use of the commonwealth; and no executor or administrator shall be compelled
to pay or deliver any specific legacy or article to be distributed, subject to tax,
except on the payment into his hands of a sum computed on its value as afore-
said; and in case of neglect or refusal on the part of said legatee to pay the
same, such specific legacy or article, or so much thereof as shall be necessary,
shall be sold by such executor or administrator at public sale, after notice to
such legatee, and the balance that may be left in the hands of the executor or
administrator shall be distributed, as is or may be directed by law; and every
sum of money retained by any executor or administrator, or paid into his hands
on account of any legacy or distributive share,, for the use of the commonwealth,
shall be paid by him without delay.

Conditional or Contingent Estates.

S. 6. If the legacy subject to collateral inheritance tax be given to any per-
son for life, or for a term of years, or for any other limited period, upon a condi-
tion or contingency, if the same be money, the tax thereon shall be retained
upon the whole amount; but if not money, application shall be made to the
orphans' court having jurisdiction of the accounts of the executors or adminis-
trators to make apportionment, if the case requires it, of the sum to be paid by
such legatees, and for such further order relative thereto as equity shall require.

Out of Real Estate.

S. 7. Whenever such legacy shall be charged upon or payable out of real
estate, the heir or devisee, before paying the same, shall deduct therefrom at
the rate aforesaid, and pay the amount so deducted to the executor; and the same
shall remain a charge upon such real estate until paid, and the payment thereof
shall be enforced by the decree of the orphans' court, in the same manner as the
payment of such legacy may be enforced.

1086 STATUTES ANNOTATED. [Pa. St.

Information as to Real Estate.

S. 8. Whenever any real estate of which any decedent may die seized shall be
subject to the collateral inheritance tax, it shall be the duty of executors and
administrators to give information thereof to the register of the county, where
administration has been granted, within six months after they undertake the
execution of their respective duties, or if the fact be not known to them within
that period, within one month after the same shall have come to their knowledge,
and it shall be the duty of the owners of such estate, immediately upon the
vesting of the estate, to give information thereof to the register having juris-
diction of the granting of administration.

Receipts.

S. 9. It shall be the duty of any executor or administrator, on the payment
of collateral inheritance tax, to take duplicate receipts from the register, one of
which shall be forwarded forthwith to the auditor general, whose duty it shall
be to charge the register receiving the money with the amount, and seal with the
seal of his office, and countersign the receipt and transmit it to the executor or
administrator, whereupon it shall be a proper voucher in the settlement of the
estate; but in no event shall an executor or administrator be entitled to a credit
in his account by the register, unless the receipt is so sealed and countersigned
by the auditor general.

Payable on Transfer.

S. 10. Whenever any foreign executor, or administrator, or trustee, shall
assign or transfer any stocks or loans in this commonwealth, standing in
the name of the decedent, or in trust for a decedent, which shall be liable for the
collateral inheritance tax, such tax shall be paid, on the transfer thereof, to
the register of the county where such transfer is made; otherwise the corpor-
ation permitting such transfer shall become liable to pay such tax.

Refund.

S. 11. Whenever debts shall be proven against the estate of a decedent,
after distribution of legacies from which the collateral inheritance tax has been
deducted, in compliance with this act, and the legatee is required to refund any
portion of a legacy, a portion of the said tax shall be repaid to him by the executor
or administrator, if the said tax has not been paid into the state or county treas-
ury, or by the county treasurer, if it has been so paid.

This section has been affected by St. 1899, c. 15, approved
March 22, 1899, which provides for the refunding of the inherit-
ance tax after payment where it appears that the tax was not due
on account of lineal heirs being subsequently discovered. This
section has been further aflfected by St. 1901, c. 25, ante, p. 1056,
extending the time for applications for a refund of taxes erroneously
paid.

1887, c. 37.] PENNSYLVANIA. 1087

Appraisal.

S. 12. It shall be the duty of the register of wills of the county, in which
letters testamentary, or of administration are granted, to appoint an appraiser
as often as and whenever occasion may require, to fix the valuation of estates
which are, or shall be, subject to collateral inher tance tax, and it shall be the
duty of such appraiser to make a fair and conscionable appraisement of such
estates, and it shall further be the duty of such appraiser to assess and fix the cash
value of all annuities and life estates growing out of said estates, upon which
annuities and life estates the collateral inheritance tax shall be immediately
payable out of the estate at the rate of such valuation: Provided, That any
person or persons not satisfied with said appraisement shall have the right to
appeal, within thirty days, to the orphans' court of the proper county or city,
on paying, or giving security to pay, all costs, together with whatever tax shall be
fixed by said court, and upon such appeal said courts shall have jurisdiction to
determine all questions of valuation, and of the liability of the appra sed estate
for such tax, subject to the right of appeal to the supreme court as in other cases.

Appraisal of Legacy of Right to Use.

Where the widow is given power to appropriate the residue to
her own use for life with the remainder over of the surplus, the
amount of it and the tax upon it can only be ascertained after her
death. In re Nieman, 131 Pa. St. 346, 351, 18 A. 900.

Deduction of Debts.

The Pennsylvania statute of 1826 imposes a tax only on what
remains for distribution after the expenses and debts are paid and
provided for. It is not on the succession to the beneficiaries and
not on the securities in which the estate was invested. Appeal oj
Orcutt, 97 Pa. St. 179.

The tax is imposed after the expenses of administration and
debts are deducted, but this does not include the expense of counsel
and litigation among persons claiming as distributees. In re Lines,
155 Pa. St. 378, 391, 26 A. 728, 32 Wkly. Notes Cas. 376.

The tax is to be assessed upon the clear value of the property
which can be ascertained only by allowing for all lawful charges,
and where the parties assent to the correctness of the estimate of
expenses the register has no discretion but to allow it unless there
was ground for a suspicion of fraud. In re Cullen, 8 Pa. Co. St. 234.

Where the land of the decedent passes to lineal descendants for
life and at their death to collateral heirs, although the real estate
descends intact to the collateral heirs, the tax must be assessed
upon the valuation of the real estate after deducting the debts
owing by the decedent at the time of his death. Appeal of Common-
wealth, 127 Pa. St. 435, 440.

1088 STATUTES ANNOTATED. [Pa. St.

Where the executor was doubtful whether seven thousand dollars
would cover the expense of final settlement of an estate, the court
ordered the amount of seven thousand dollars be retained by the
executor for contingent expenses which may be incurred in the final
settlement and that interest at six per cent be computed on five
per cent of the balance from one year after the death of the testator
until the date of the decree. In re Miller, 182 Pa. St. 157, 162,
37 A. 1000.

Claims of Mortgagors.

Under the Pennsylvania statute of 1887, debts due to a resident
of Pennsylvania by persons living in other states are taxable,
although payment is secured by mortgages on lands of the debtors
in the states in which they reside. In re Stanton (Orph. Ct.), 3 Pa.
Dist. R. 371, 34 Wkly. Notes Cas. 391.

Only One Appraisal.

Where the decedent died in 1884 and an appraiser was appointed
who by mistake omitted certain property out of the estate, there is
no remedy for that mistake except an appeal; and the second
appraisal is without authority under the statute of 1849, P. L. 571,
s. 12. In re Moneypenny, 181 Pa. St. 309, 37 A. 589.

Notice. — Appeal.

There need be no notice of the appointment of the appraiser,
of the time and place of a hearing for the parties, and of the intended
filing of the appraisement. These things may be desirable but
they are not essential as the statutes do not require them. On
the appraisement the statute gives a right of appeal which neces-
sarily implies notice, but there is no provision for a hearing except
in the orphans' court upon appeal; and hence an appeal within
thirty days of the notice of the filing of the appraisement was in
time. In re Belcher, 211 Pa. St. 615, 619, 61 A. 252.

Income after Death not Considered.

The collateral inheritance tax is imposed only upon the estate
owned by a decedent at the time of his death and not upon interest
or income subsequently arising. In re Miller, 5 Pa. Co. Ct. 522,
22 Wkly. Notes Cas. 11.

The net income arising from property is to be taken into considera-
tion on the question of its appraisal. In re Kaas, 5 Pa. Co. Ct. 583.

1887, c. 37.] PENNSYLVANIA. 1089

Apportionment. — Expense of Audit.

This appraisement should appraise each separate interest and
therefore there can be no necessity for an apportionment of the
tax as this should have been done by the appraiser. Where the
appraisal is made by the auditor, the collateral heirs are properly
chargeable with the expense of the audit resorted to as a substi-
tute for the appraisement directed by law. In re Burkhart, 25
Pa. Super. Ct. 514.

Life estates for the purposes of the tax are to be appraised at
their cash value in the same manner as annuities. This means
such a sum that if invested and put at interest it will, with a pro-
portionate part taken from the fund yearly to make out the annuity,
yield the required amount of it annually, the whole fund being
exhausted during the expectancy of life of the annuitant. Citing
with approval the Case of Handley, 3 L. L. N. 9, 181 Pa. St. 339,
37 A. 587. In re Von Storch, 7 Pa. Dist. R. 204.

Life Estate and Remainder.

Where there is a life estate and remainder and the executors pay
the tax on the whole estate on the death of the testator, there is no
requirement that the values of the life estate and remainders re-
spectively shall be appraised separately. In re De Borbon, 211
Pa. St. 623, 61 A. 244.

This section has been amended by St. 1895, c. 243, approved
June 26, 1895, which fixes the compensation of appraisers at
$2.00 per diem and traveling expenses, and provides for expert
appraisers when necessary.

This section makes it the duty of the register of wills to appoint
an appraiser, and the appraiser must be appointed by the register
of the county in which the decedent had his residence at
the time of his death, or of the county in which is the princi-
pal part of his estate. In re Dalrymple, 215 Pa. St. 367,
372, 64 A. 554.

Appraisers to Take no Fees.

S. 13. It shall be a misdemeanor in any appraiser, appointed by the register
to make any appraisement in behalf of the commonwealth, to take any fee or
reward from any executor or administrator, legatee, next of kin, or heir of any
decedent, and for any such offense the register shall dismiss him from such ser-
vice, and upon conviction in the quarter sessions, he shall be fined not exceeding
five hundred dollars, and imprisoned not exceeding one year, or both, or either
at the discretion of the court.

1090 STATUTES ANNOTATED. fPa. St.

Records.

S. 14. It shall be the duty of the register of wills to enter in a book, to be pro-
vided at the expense of the commonwealth, to be kept for that purpose, and
which shall be a public record, the returns made by all appraisers under this act,
opening an account in favor of the commonwealth against the decedent's estate,
and the register may give certificate of payment of such tax from said record;
and it shall be the duty of the register to transmit to the auditor general, on the
first day of each month, a statement of all returns made by appraisers during the
preceding month, upon which the taxes remain unpaid which statement shall be
entered by the auditor general in a book to be kept by him for that purpose.
And whenever any such tax shall have remained due and unpaid for one year,
tt shall be lawful for the register to apply to the orphans' court, by bill or petition,
to enforce the payment of the same; whereupon said court, having caused due
notice to be given to the owner of the real estate charged with the tax, and to
such other persons as may be interested, shall proceed, according to equity, to
make such decrees, or orders, for the payment of the said tax, out of such real
estate, as shall be just and proper.

Citation.

S. 15. If the register shall discover that any collateral inheritance tax has
not been paid over, according to law, the orphans' court shall be authorized to
cite the executors or administrators of the decedent, whose estate is subject to
the tax, to file an account or to issue a citation to the executors, administrators,
or heirs, citing them to appear on a certain day and show cause why the said tax
should not be paid; and when personal service cannot be had, notice shall be given
for four weeks, once a week, in at least one newspaper published in said county;
and if the said tax shall be fojind to be due and unpaid, the said delinquent shall
pay said tax and costs. And it shall be the duty of the register, or the auditor
general, to employ an attorney, of the proper county, to sue for the recovery
and amount of such tax, and the auditor general is authorized and empowered,
in settlement of accounts of any register, to allow him costs of advertising and
other reasonable fees and expenses incurred in the collection of tax.

The orphans* court has jurisdiction under this section to compel
the parties to furnish the appraiser with information necessary to
assess the tax. In re Maris, 14 Pa. Co. Cto 171, 3 Pa. Dist. 33.

Commissions for Collection.

S. 16. The registers of wills, of the several counties of this commonwealth,
upon their filing with the auditor general the bond hereinafter required shall be
the agents of the commonwealth for the collection of the collateral inheritance
tax; and for services rendered in collecting and paying over the same, the said
agents shall be allowed to retain, for their own use, such percentage as may be
allowed by the auditor general, not exceeding five per centum on all taxes paid
a;id accounted for: Provided, That this section shall noi apply to the fees of
registers elected prior to the passage of this act.

This section has been amended by St. 1891, c. 50, approved
May 14, 1891. which provides definitely for the compensation to

1887, c. 37.] PENNSYLVANIA. 1091

the registers of wills for services in collecting the inheritance tax
at 5 per cent, amending Pa. St. 1887, c. 37, s. 16.

Under Pa. St. 1876, P. L. c. 13, s. 9, registers of wills of certain
counties were required to pay into the county treasurer all com-
missions received by them from the state for the collection of
collateral inheritance taxes. The court, however, finds that Pa.
St. 1887, P. L. 79, s. 16, was intended to apply to all the counties
of a state and cannot be construed in harmony with the provisions
of the statute of 1876, and therefore repeals it.

The first act imposing upon the register of wills the duty of col-
lecting the collateral inheritance tax was the statute of 1841, P. L.
c. 99, s. 1. This statute of 1841 left it optional with the register
of wills whether he should collect the inheritance taxes or not,
but this duty was definitely imposed upon him by Pa. St. 1849,
P. L. c. 570.

Pa. St. 1876, P. L. c. 13, s. 9, was repealed by Pa. St. 1887,
P. L. c. 37, s. 16, which re-enacted the provisions of the act of
1841. Allegheny County v. Stengel, 213 Pa. St. 493, 63 A. 58.

Bond of Register.

S. 17. The said register shall give bond to the commonwealth in such penal
sum as the orphans' court of the county may direct with two or more sufficient
sureties for the faithful performance of the duties hereby imposed, and for the
regular accounting and paying over of the amounts to be collected and received,
and said bond, on its execution and approval, by the said orphans' court, to be
forwarded to the auditor general.

Collection by County Treasurer.

S. 18. Until bond and security be given, as required by the preceding section,
the said collateral inheritance tax shall be received and collected by the county
treasurer as heretofore, and in such cases all the provisions of this act, relating
to collection and payment by registers, shall apply to the county treasurer.

Returns by Register.

S. 19. It shall be the duty of the register of wills, of each county, to make
returns and payment to the state treasurer of all the collateral inheritance taxes
he shall have received, stating for what estate paid, on the first Mondays of
April, July, October and January, in each year; and for all taxes collected by him
and not paid over within one month, after his quarterly return of the same, he
shall pay interest at the rate of twelve per centum per annum until paid.

Lien. — Limitations.

S. 20. The lien of the collateral inheritance tax shall continue until the said
tax is settled and satisfied: Provided, That the said lien shall be limited to the
property chargeable therewith: And provided further. That all collateral inherit-
ance taxes shall be sued for within five years after they are due and legally demand-

1092 STATUTES ANNOTATED. [Pa. St.

able, otherwise they shall be presumed to have been paid, and cease to be a lien
as against any purchasers of real estate: And provided further. That all taxes
due and legally demandable at the date of the passage of this act, the collection
of which would be barred by the provisions hereof, shall not be barred if suit
shall be brought therefor within one year from the date of the passage of this act.

Judicial Sale on Lien.

The intestate died leaving real estate which was apportioned
among his collateral heirs after his death. Subsequently the share
of one of the heirs was sold by judicial sale to satisfy debts and
liens against the heir ; and the court holds that the lien of the whole
of the collateral inheritance tax on the whole of the land was
satisfied and discharged by this sale, inasmuch as the money
realized from the sale was more than sufficient to have paid the tax
lien, and should have been so applied. The fact that the amount
of the lien had not been ascertained cannot affect the result. Appeal
of Mellon, 114 Pa. St. 564, 574, 8 A. 183.

Where the decedent owned an undivided third of an entire tract of
land, partition of his interest could not have the effect of appor-
tioning the lien and fixing a part thereof exclusively on any one
portion of the land. Appeal of Mellon, 114 Pa. St. 564, 574, 8 A. 138.

Protection of Bona Fide Purchasers after Lapse of Time.

Where the state fails to collect the collateral inheritance tax for
a period of twenty years from the death of the decedent, a pre-
sumption of payment arises as to bona fide purchasers from those
to whom the remainder in fee descended. Appeal of Mellon, 114
Pa. St. 564, 573, 8 A. 183.

Personal Liability of Executors not Barred.

The provision of the statute of 1887, section 20, that all col-
lateral inheritance taxes should be sued for within five years after
they are due, otherwise they shall be presumed to have been paid,
does not imply that the personal liability of the executors shall not
continue, and the state is not barred from collecting the tax by
reason of the lapse of more than five years from the death of the
decedent before proceeding to enforce payment. In re Cullen,
8 Pa. Co. Ct. 234.

Repeal.

S. 21. All laws, or parts of laws, heretofore approved, relating to the collec-
tion of the collateral inheritance tax, and inconsistent herewith, be and the same
are hereby repealed.

1902.] PHILIPPINE ISLANDS.— PORTO RICO. 1093

PHILIPPINE ISLANDS.

U. S. St. July 1, 1902, providing for a civil government for the
Philippine Islands, does not appear to contain any specific provi-
sion as to inheritance taxes. It does provide, in section 5, "that
the rule of taxation in said islands shall be uniform." See Thorpe,
Vol. v, p. 3168.

PORTO RICO.

In General.

1901. Statutes of Porto Rico, Title 3, pp. 43, 94, ss. 94-111.

1902. Revised Statutes & Codes. Political Code, chapter 3, ss. 368-383.

The Enabling Act.

The Porto Rican Act for the civil government of Porto Rico
of April 12, 1900, seems to contain no provision for uniformity of
taxation or as to inheritance tax.

Statutes.

Porto Rico St. 1901, approved January 1, 1901, entitled "An act to provide
revenue for the people of Porto Rico and for other purposes,' p. 94, s. 94, provides
taxes imposed under the revised statutes of 1902, s. 94, et seq.

Porto Rico Revised St. and Codes of 1902, c. 3, s. 368, provides that ail real
property within Porto Rico whether belonging to inhabitants of Porto Rico or
not and all personal property belonging to inhabitants ol Porto Rico passing by
will or inheritance or by grant intended* to take effect in possession or enjoy-
ment after the death of the grantors, other than to or for the use of the wife,
child, grandchild, or adopted child is subject to tax with an exemption where
the property passing to any one person is valued at $200 or less. And provided
further that when the value of such property exceeds $200 that amount shall be
deducted ia estimating the taxes thereon.

Porto Rico Revised Statutes and Codes of 1902, c. 3, s. 369, imposes taxes at
the following rates. Where the inheritance does not exceed $5,000 the husband
or lineal descendants pay one per cent and all other relatives and other persons
pay three per cent Where the gift exceeds $5,000 but does not exceed $20,000
there shall be paid on the excess over $5,000 one and one half times the primary
rates. Where the gift exceeds $20,000 but does not exceed $50,000 there shall be
paid on the excess over $20,000 twice the primary rates. Where the gift exceeds
$50,000, three times the primary rates is levied on the excess.

Porto Rico Revised Statutes and Codes of 1902, c. 3, ss. 370-383, cover the
assessment and collection of the tax.

1094 STATUTES ANNOTATED. [S. C. St.

RHODE ISLAND.

In General.

Rhode Island has no inheritance tax of any kind, although
attempts were made in 1910 and 1911 to enact one.

Constitutional Limitations.
Rhode Island Constitution, 1842, a. 4, s. 15.

The general assembly shall, from time to time, provide for making new valua-
tions of property, for the assessment of taxes, in such manner as they may deem
best. A new estimate of such property shall be taken before the first direct
state tax, after the adoption of this constitution, shall be assessed.

SOUTH CAROLINA,

South Carolina has no^ inheritance tax and never had one.

Constitutional Limitations.
South Carolina Constitution, 1895, a. 10, s. 1.

The general assembly shall provide by law for a uniform and equal rate of
assessment and taxation, and shall prescribe regulations to secure a just valuation
for taxation of all property, real, personal and possessory, except mines and mining
claims, the products of which alone shall be taxed ; and also excepting such prop-
erty as may be exempted by law for municipal, educational, literary, scientific,
religious or charitable purposes; Provided, however. That the general assembly
may impose a capitation tax upon such domestic animals, as from their nature
and habits are destructive of other property: And provided, further. That the
general assembly may provide for a graduated tax on in comes, and for a graduated
license on occupations and business.

S. D. StJ SOUTH DAKOTA. 1095

SOUTH DAKOTA.

List of Statutes.

1905. Statutes of South Dakota, c. 54.

1910. Compiled Laws of South Dakota, Vol. 1, pp. 549-553.

In General.

South Dakota had no inheritance tax until the progressive statute
of 1905, which has recently been upheld on rehearing, though
at first declared void on the ground that its progressive feature
affects the rate on the whole legacy and not merely on the ex-
cess above the minimum.

The exemptions apply to individual shares, not to the estate as
a whole.

A tax is not claimed on stock of South Dakota corporations
owned by a non-resident and kept outside the state, though
there is the usual provision holding the corporation responsible
for the tax. It is not the practice to require an inventory of the
estate of a non-resident.

Constitutional Limitations.
South Dakota Constitution, 1889, a. 11, s. 2.

All taxes to be raised in this state shall be uniform on all real and personal
property, according to its value in money, to be ascertained by such rules of
appraisement and assessment as may be prescribed by the legislature by general
law, so that every person and corporation shall pay a tax in proportion to the
value of his, her or its property. And the legislature shall provide by general law
for the assessing and levying of taxes on all corporation property as near as may
be by the same methods as are provided for assessing and levying of taxes on
individual property.

A. 6, s 17, further provides that "no tax or duty shall be imposed without the
consent of the people or their representatives in the legislature, and all taxation
shall be equal and uniform."

This latter provision is contained in the constitution of no other
state except in the revenue article of the Oregon constitution 1857,
section 33. In re McKennan 25 S. D. 369. 126 N. W. 611, 618.
(reversed on rehearing, 130 N. W. 33),

1096 STATUTES ANNOTATED. [S. D. St.

South Dakota Constitution, 1889, a. 11, s. 8.

No tax shall be levied except in pursuance of a law, which shall distinctly state
the object of the same, to which the tax only shall be applied.

The statute of 1905 was entitled "An act to tax gifts, legacies and
inheritances in certain cases and to provide for the collection of
the same, and fixing penalties."

The court holds that article 11 of the constitution has no bearing
upon tax legislation of the nature under consideration. There is
certainly inherent in this method of raising revenue good reason
why the law should not apply for the application of such revenue
as this source of revenue must necessarily be one uncertain as to
its returns.

But apart from this the court is satisfied that article 11, section 8,
clearly refers to the ordinary property tax which at the time it
is levied can be levied with knowledge as to the probable amount
of revenue that will be derived therefrom and can thus be well
rendered to meet the uses to which the same shall be applied. In
re McKennan, 25 S. D. 369, 126 N. W. 611 (reversed on rehear-
ing, 130 N. W. 33), citing with approval Matter of McPherson,
104 N. Y. 315, 10 N. E. 685.

THE STATUTE OF 1905.

South Dakota St. 1905, c. 54. Approved March 6, 1905. "

An Act to tax gifts, legacies and inheritances in certain cases,
and to provide for the collection of the same, and fixing penalties.

S. 1. Transfers Taxable. — Rates. That all property, real, personal and
mixed, which shall pass by will or by the intestate laws of this state, or accord-
ing to the provision of any statute in this state, from any person who may die
seized or possessed of the same while a resident of this state, or if decedent was
not a resident of this state at the time of his death, which property, or any part
thereof, shall be within this state, or any interest therein or income therefrom
which shall be transferred by deed, grant, sale or gift made in contemplation of the
death of the grantor, or bargainor or giver, or intended to take effect in posses-
sion or enjoyment after such death, to any person or persons or to any body politic
or corporate in trust or otherwise, or by reason whereof any person or any body
politic or corporate shall become beneficially entitled, in possession or expec-
tancy,.to any property or income thereof, shall be and is subject to a tax at the
rate hereinafter specified, to be paid to the treasurer of the proper county for
the^use of the state, and all heirs, legatees and devisees, administrators, executors
and trustees shall be liable for any and all such taxes until the same shall have
been paid as hereinafter directed.

When the beneficial interests to any property or income therefrom shall pass
to or for the use of any father, mother, husband, wife, child, brother, sister, wife

1905, c. 54.] SOUTH DAKOTA. 1097

or widow of the son, or husband of the daughter, or any child or children adopted
as such in conformity with the laws of the state of South Dakota, or to any
person to whom the deceased, for not less than ten years prior to death, stood
in the acknowledged relation of a parent, or to any lineal descendant born in lawful
wedlock; in every such case the rate of tax shall be one dollar on every one
hundred dollars of the clear market value of such property received by each
person, and at and after the same rate for every less amount. Estates of the
clear market value of twenty thousand dollars or less transferred to the widow
of the deceased, and five thousand dollars to each of the other persons above
mentioned, shall be exempt.

When the beneficial interest to any property or income therefrom shall pass to
or for the use of any uncle, aunt, niece, nephew or any lineal descendant of the
same, in every such case the rate of such tax shall be two dollars on every hundred
dollars of the clear market value of such property received by each person.
Estates of the clear market value of five hundred dollars transferred to each of the
persons last above mentioned shall be exempt.

In all other cases the rate shall be as follows: On each and every one hundred
dollars of the clear market value of all property and at the same rate for any less
amount on all estates of ten thousand dollars and less, four dollars; on all estates
of over ten thousand dollars, and not exceeding twenty thousand dollars, six
dollars; on all estates over twenty thousand dollars and not exceeding fifty
thousand dollars, eight dollars; and on all estates over fifty thousand dollars, ten
dollars. Estates of the clear market value of one hundred dollars, transferred
to each of the parties mentioned in the last named class, shall be exempt.

The taxes so imposed by this act shall be upon the clear market value of such
property at the rates above prescribed for each class and only upon the excess
above the exemption herein provided.

Nature of Tax.

This act does not impose a tax upon the right to inherit or to
succeed, nor upon the right to transmit, but a tax upon the exercise
of such right — upon the transmission of property. It is clearly
a tax, and has nothing to do with and is not at all dependent for
its validity upon the right to regulate the succession of property. In
re McKennan 25 S. D. 369, 126 N. W. 611 (reversed on rehearing 130
N. W. 33), ciring Knowlton v. Moore, 178 U. S. 41, 20S. Ct. 747.

Nature of Right of Succession.

Most courts follow the old common law doctrine that the so-called
right to transmit property, or to inherit or succeed to the same,
is but a privilege granted by a statute. Only one court that
of Wisconsin, holds it to be an inherent right. Nunnemacher v.
State, 129 Wis. 190, 108 N. W. 627, 9 L. R. A. N. S. 121. (See,
however, also, ilfwo/ v. Winthrop, 162 Mass. 113, 38 N. E. 512,
26 L. R. A. 259.) In re McKennan, 25 S. D. 369, 126 N. W. 611
(reversed on rehearing 130 N. W. 33).

1098 STATUTES ANNOTATED. [S. D. St.

Validity of Exemptions.

S. D. Constitution, a. 11, ss. 5, 6, 7, provide exemptions from
taxation of public and charitable property. But the court holds
that these exemptions apply only to a tax upon property and do
not in any sense control a tax upon the transmission of property
like the inheritance tax.

The exemption in South Dakota statute 1905, c. 54, to the widow
and other heirs, is not contrary to South Dakota constitution,
article 11, section 7, limiting exemptions to certain specified prop-
erty. In re McKennan 25 S. D. 369, 126 N. W. 611, 615 (re-
versed on rehearing, 130 N. W. 33).

Valid though no Provision for Enforcement.

The South Dakota statute of 1905 is not invalid for failure
to provide any method for its enforcement. Where section one of
the act clearly creates a liability on the part of recipients of in-
herited estate to pay the amount of any tax to the county treasurer
for the use of the state, there is no reason why the county treasurer
might not maintain an ordinary action, based upon the liability
that thus is created to pay, against the beneficiaries to recover the
tax for the use of the state, /w rg McKennan (S. D. 1911), 130 N. W.
33 (reversing judgment Qn rehearing, 25 S. D. 369, 126 N. W. 611).

Progressive Tax Upheld.

The progressive tax under South Dakota statute of 1905, where
the increased rate applies to the whole legacy in a large estate, is
valid. The court holds that this is logically, legally and con-
stitutionally in the came category as classification based on the
net increased amount of a higher over a lower class.

The court in an elaborate opinion upholds the constitutionality
of the South Dakota statute of 1905, chapter 54, and the court
quotes at length the history of inheritance tax legislation with
reference to the requirement of uniformity, and finds that the
classification in the statute of 1905 does not violate the require-
ment of equality and uniformity. In re McKennan (S. D. 1911),
130 N. W. 33 (reversing judgment on rehearing, 25 S. D. 369, 126
I^. W. 611).

The Original Opinion Reversed on Rehearing.

The court construes the clause requiring all taxation to be equal
and uniform as meaning that the burden imposed shall fall alike

1905, c. 54.] SOUTH DAKOTA. 1099

on all persons who are in substantially the same situation ; and the
court finds that the progressive feature of the South Dakota
statute is unconstitutional and void.

The court notices the two arguments — the recipient of the large
amount is able to pay a larger rate of tax, and that it is against
public policy to allow large estates to be held together by trans-
mission after the death of the owners — but it finds that there are
two methods of progression provided for in the statutes of the
several states: one found in South Dakota (St. 1905, c. 54) wherein
the higher rate in the case of transmission of a greater devise or
bequest is levied upon the whole value of the property transmitted ;
the other, like that found in the Wisconsin statute, where the
increased rate applies only to the excess in value of property trans-
mitted over the amount subject to the next lower rate. The court
remarks that if any difference is to be made in the rate of taxation
between a large legacy and a small legacy on the theory that the
increased ability to pay is greater in the case of the large beneficiary
than of the smaller, that it cannot be said that the increased ability
to pay of a devisee receiving $20,000 over that of one receiving
$10,000 comes from the receipt of his first $10,000. The increased
ability to pay does come solely from the receipt of the second
$10,000. "It is ridiculous to say that a man who receives a devise
or legacy of a thousand and one dollars is as well able to pay a
tax of $594.06 as is a man who receives ten thousand dollars to
pay $396. We have never discovered any method of making one
dollar pay $198.06."

If the progressive tax is based on the theory that it is against
public policy to allow large estates to be held together by trans-
mission after the death of the owners, which is the theory that
seems the more reasonable to the court, the court replies that "if
one person receives $20,000 and another $10,000, it was no greater
privilege for the first to receive his first $10,000 than for the second.
The increased privilege is all found in receiving of the extra $10,000
and it is the exercise of this extra privilege, the transmission of
the extra $10,000, that should receive the extra burden of taxa-
tion."

"It must be conceded that if the legislature can fix rates of
taxation it can increase such rates, and upon grounds of public
policy it might place a limit in the value above which all trans-
missions would go to the state." Per Whiting, P. J., in /n re McKen-
nan, 25 S. D. 369, 126 N. W. 611, 618 (reversed on rehearing, 130
N. W. 33).

1100 STATUTES ANNOTATED. [S. D. St.

Life Estates. — Remainders.

S. 2. When any person shall bequeath or devise any property or interest
therein or income therefrom to mother, father, husband, wife, brother, sister,
the widow of a son or a lineal descendant during life or for a term of years, or
the remainder to the collateral heir of the decedent or to a stranger in blood
or body corporate at their decease, or on the expiration of such term the said
life estate or estate for a term of years shall not be subject to any tax, and the
property so passing shall be appraised immediately after the death at what was
the fair market value thereof at the time of the death of the decedent in the
manner hereinafter provided, and after deducting therefrom the value of said
life estate or term of years the tax prescribed by this act on the remainder shall
be immediately due and payable to the treasurer of the proper county, and
together with the interest thereon shall be and remain a lien on said property
until paid. Provided, that the person or persons or body politic or corporate
beneficially interested in the property chargeable with said tax may elect not
to pay the same until they shall come into the actual possession or enjoyment of
such property, and in that case said person or persons or body politic or corporate
shall execute a bond to the state of South Dakota in a penalty three times greater
than the amount of said tax, with such surety as the judge of the county court
of the proper county may approve, conditioned for the payment of said tax and
interest thereon at such time or period as they or their representatives may
come into the actual possession or enjoyment of said property; said bond shall
be filed in the office of the clerk of the county court of the proper county. Pro-
vided, further, that such person shall make a full, verified return of such property,
and file the same in the office of the clerk of the county court of the proper
county within one year froni the death of the decedent and within that period
enter into such security, and renew the same every five years.

When Tax Accrues. — Interest.

S. 3. All taxes imposed by this act, unless otherwise herein provided for,
shall be due and payable at the death of the decedent, and interest at the rate of
six per cent per annum shall be charged and collected thereon for such times as
said tax is not paid. Provided, that if said tax is paid within twelve months
from the accruing thereof, interest shall not be charged or collected thereon, but
a discount of five per cent shall be allowed and deducted from said tax, and
in all cases where the executors, administrators or trustees do not pay such tax
within one year from the death of the decedent they shall be required to give
a bond in the form and to the effect prescribed in section two of this act for the
payment of said tax, together with interest.

Enforcing Payment.

S. 4. Any administrator, executor or trustee having in charge or trust any
legacies or property for distribution subject to the said tax shall deduct the
tax therefrom, or if the legacy or property be not money he shall collect a tax
thereon upon the appraised value thereof from the legatee or person entitled
to ?uch property, and he shall not deliver or be compelled to deliver any specific
legacy or property subject to tax to any person until he shall have collected the
tax thereon, and whenever any such legacy shall be charged upon or payable
out of real estate the heir or devisee before paying the same shall deduct said

1905, c. 54.] SOUTH DAKOTA. 1101

tax therefrom and pay the same to the executor, administrator or trustee, and the
same shall remain a charge on said real estate until paid, and the payment thereof
shall be enforced by the executor, administrator or trustee in the same manner
that the payment of such legacy might be enforced; if, however, such legacy
be given in money to any person for a limited period he shall retain the tax
upon the whole amount, but if it be not in money he shall make application to
the court having jurisdiction of his accounts to make an apportionment if the
case requires it, of the sum to be paid into his hands by said legatees and for
such further order relative thereto as the case may require.

Power of Sale.

S. 5. All executors, administrators and trustees shall have full power to
sell so much of the property of the decedent as will enable them to pay said tax
in the same manner as they may be enabled by law to do for the payment of
debts of their testators and intestates, and the amount of said tax shall be paid
as hereinafter directed.

Payment.

S. 6. Every sum of money retained by any executor, administrator or trustee
or paid into his hands for any tax on any property shall be paid by him within
thirty days thereafter to the treasurer of the proper county, and said treasurer
shall give, and every executor, administrator or trustee shall take, duplicate
receipts from him of such payment, one of which receipts he shall immediately
send to the treasurer of state, whose duty ft shall be to charge the treasurer so
receiving said tax with the amount thereof, and said treasurer of state shall
seal said receipt with the seal of his office and countersign the same and return
it to said executor, administrator or trustee, whereupon it shall be a proper voucher
in the settlement of his accounts, but said executor, administrator or trustee shall
not be entitled to credit in his accounts or be discharged from liability for such
tax unless he shall produce a receipt so sealed and countersigned by the treasurer
of state, or a copy thereof, duly certified by such treasurer.

Nodce to County Treasurer.

S. 7. Whenever any of the real estate of which any decedent may die seized
shall pass to any body politic, corporate or to any person or persons, or in trust
for them, or some of them, it shall be the duty of the executor, administrator or
trustee of such decedent to gave information thereof in writing to the treasurer
of the county where said real estate is situate within six months after undertaking
the execution of their respective duties, or if the fact be not known to them within
that period, then within one month after the same shall come to their knowledge.

Refund on Proof of Debts.

S. 8. Whenever debts shall be proven against the estate of the decedent
after the payment of legacies or distribution of property, from which said tax has
been deducted, or upon which it has been paid and a refund is made by the
legatee, devisee, heir or next of kin, a proportion of the tax so paid shall be
repaid to him by the executor, administrator or trustee if said tax has not been
paid to the county treasurer or to the treasurer of the state, and by them if it
has been so paid.

1102 STATUTES ANNOTATED. [S. D. St.

Transfer by Foreign Executor.

S. 9. Whenever any foreign executor or administrator shall assign or trans-
fer any stock or loans in this state standing in the name of a decedent, or any
trustees for a decedent, which shall be liable to said tax, said tax shall be paid to
the treasurer of the proper county on the transfer thereof, otherwise the party
making or permitting such transfer shall become liable to pay such tax.

Refund of Tax Paid under a Mistalce.

S. 10. When any amo unt of said tax shall have been paid erroneously to
the treasurer of said state, it shall be lawful for him, on satisfactory proof ren-
dered to him by the county treasurer of said erroneous payment, to refund and
pay to the executor, administrator or person or persons who have paid such
tax in error the amount of such tax so paid. Provided, that all such applica-
tions for the repayment of such tax shall be made within two years from the
date of said payment.

Appraisal.

S. 11. In order to fix the value of property of persons whose estates shall be
subject to the payment of such tax, the county judge, on application of any
interested party or officer, or upon his own motion, shall appoint some com-
petent person as appraiser, as often as and whenever occasion may require,
whose duty shall be forthwith to give such notice by mail to all persons known
to have or claim an interest in said property, and to such persons as the county
judge may by order direct, of the time and place at which he will appraise such
property, and at such time and place to appraise the same at a fair market value,
and for that purpose the appraiser is authorized, by leave of the county judge,
to use subpoena for and to compel the attendance of witnesses before him and
to take the evidence of such witnesses under oath concerning such property
and the value thereof, and he shall make a report thereof and of such value in
writing, together with depositions of the witnesses examined and such other
facts in relation thereto and of such matters as said judge may by order require
to be filed in the office of the clerk of the county court, and from this report
the said county judge shall forthwith assess and fix the then cash value of all
estates, annuities and life estates or term of years growing out of said estate,
and the tax to which the same is liable, and shall immediately cause notice by
mail to be given to all parties known to be interested therein. Any person or
persons dissatisfied with the appraisement or assessment may appeal there-
from, as provided for appeals from the county court, within sixty days after
the making and filing of such appraisement or assessment, upon giving approved
security for the payment of all costs, together with whatever taxes shall be
ultimately adjudged. The said appraiser shall be paid by the county treasurer
out of any funds he may have in his hands, upon the certificate of the county
judge at the rate of three dollars for every day actually and necessarily employed
on making said appraisement, with his actual and necessary traveling expenses
a$ allowed and fixed by the judge of the county court.

Misconduct of Appraisers.

S. 12. Any appraiser appointed by virtue of this act who shall take any fee
or reward from any executor, administrator, trustee, legatee, next of kin or heir

1905, c. 54.] SOUTH DAKOTA. 1103

of any decedent, or from any other person liable to pay said tax or any portion
thereof, shall be guilty of a misdemeanor and upon conviction thereof in any
court of competent iurisdiction shall be fined not less than two hundred and
fifty dollars or more than five hundred dollars and imprisoned not exceeding
ninety days, and in addition thereto he shall be dismissed from such service.

Jurisdiction of County Court.

S. 13. The county court in the county in which the real property is situate
of a decedent who was not a resident of the state, or of the county in which
the decedent was a resident at the time of his death, shall have jurisdiction
to hear and determine all questions in relation to the tax arising under the
provisions of this act.

Citation.

S. 14. If it shall appear that any tax accruing under this act has not been
paid according to law, a citation shall be issued, citing the person interested
in the property liable to the tax to appear before the court on a day certain,
not more than three months after the date of such citation, and show cause why
such tax should not be paid. The process, practice and pleading and the hear-
ing and determination thereof and the judgment in said court in such cases
shall conform to the practice in other probate cases, and the fees and costs in
such cases shall be the same as in probate cases in the county courts in this state

Notice to State's Attorney.

S. 15. Whenever the treasurer of any county shall have reason to believe
that any tax is due and unpaid under this act, after the refusal of the person
interested in the party liable to said tax to pay the same, he shall notify the state's
attorney of the proper county, in writing, of failure to pay such tax, and the
state's attorney so notified, if he have probable cause to believe a tax is due and
unpaid, shall prosecute the proceedings in the proper court as provided in section
fourteen of this act for the enforcement and collection of such tax, and in such
case said court shall allow as costs in said case, to be paid as said tax is paid,
such fees to said attorney as he may deem reasonable.

Statement of Property Taxable.

S. 16. The judge and clerk of the county court of each county shall, every
three months, make a statement in writing to the county treasurer of his county
as to the property from which or the party from whom he has reason to believe
a tax under this act is due and unpaid.

County Court Record.

S. 17. The clerk of the county court of each county shall procure a book,
in which he shall enter the returns made by appraisers, the cash values of annui-
ties, life estates, and terms of years and other property as fixed by the county
court, together with the tax assessed thereon and the amount of any receipts
for payments thereon filed with him, which book shall be a public record.

Receipts.

S. 18. Any, person or body politic or corporate shall, upon the payment of
the sum of fifty cents, be entitled to a receipt from the county treasurer, or a

1104 STATUTES ANNOTATED. [S. D. St.

copy of the receipt, at his option, that may have been given by said treasurer
for the payment of any tax under this act, which receipt shall designate on
what real property, if any, of which deceased may have died seized said tax
has been paid, and by whom paid, and whether or not it is in full of said tax, and
said receipt may be recorded in the office of the clerk of the county court of
the county in which the property may be situate in the book provided for by
section seventeen.

Lien. — Limitations.

S. 19. The lien of the collateral inheritance tax shall continue until the
said tax is settled and satisfied. Provided, that said lien shall be limited to the
property chargeable therewith. And, provided further, that all inheritance
taxes shall be sued for within six years after they are due and legally demand-
able, otherwise they shall be presumed to be paid and cease to be a lien as
against purchasers of said real estate only.

Expenses of Summons.

S. 20. Whenever the county judge of any county shall certify that there was
probable cause for issuing a summons, and taking the proceedings specified in
sections fourteen and fifteen of this act, the state treasurer shall pay or allow
to the treasurer of any county all expenses incurred for service of summons and
his other lawful disbursements that have not yet been paid.

Payment to State Treasurer.

S. 21. The treasurer of each county shall collect and pay the state treasurer
all taxes that may be due and payable under this act, who shall give him a
receipt therefor, of which collection and payment he shall make a report under
oath to the county auditor on the first Monday in March and September of each
year, stating for what estate paid, and in such form and containing such particu-
lars as the county auditor may prescribe, and for all said taxes collected by him
and not paid to the state treasurer by the first day of October and April of each
year, he shall pay interest at the rate of six per cent per annum.

Suggestions for New Statute.

The court suggests that an inheritance statute, if it is to provide
for taxation upon the transmission of property in contemplation of
death, should clearly and distinctly provide for personal liability
for such taxes on the part of the grantee; for a lien upon the
property to secure such tax, such lien to rest on the property when
the same is held by the grantee or any other party, not an innocent
purchaser for value and without notice; and for an action, in a
court of competent jurisdiction, to recover judgment and enforce
the lien. In re McKennan, 25" S. D. 369, 126 N. W. 611 (reversed
on rehearing, 130 N. W. 33).

Tenn. St.] TENNESSEE. 1105

TENNESSEE.

In General. *

Tennessee adopted a collateral inheritance tax in 1891 and
extended the tax to direct inheritances in 1909. The exemption
applies to the entire estate, not to the individual shares.

Tennessee is not attempting to collect a tax on stock in a Ten-
nessee corporation owned by a non-resident when the shares are
physically out of the state, although there is a clause holding the
corporation responsible if it transfers stock for a foreign executor
or administrator before the tax is paid, and the language of the
statute does not differ materially from that in many states which
tax such stock. The collateral inheritance tax was producing
about $50,000 annually. The addition of direct inheritances
should materially increase this.

History of Inheritance Taxes.

"In considering these grave questions, a short history of succes-
sion and inheritance taxes may not be inappropriate. Such taxes
were recognized by the Roman law;. 1 Gibbons, Decline and Fall
of the Roman Empire, pp. 163, 164. They were adopted in Eng-
land in 1780, and have been much extended since that date. Dowell,
Hist. Tax'n, p. 148; Act 20, Geo. III., c. 28; 45 Geo. III., c. 28;
16 & 17 Vict., c. 51; Greeny. Croft, 2 H. Bl. 30; Hill v. Atkinson,
2 Mer. 45. Such taxes are now in force generally in the countries
of Europe. Review of Reviews, Feb., 1893. In the United States
they were enacted in Pennsylvania in 1826; Maryland, 1844;
Delaware, 1869; West Virginia, 1887; and still more recently in
Connecticut, New Jersey, Ohio, Maine, Massachusetts, in 1891;
Tennessee, in 1891 (chapter 25, now repealed by chapter 174,
acts 1893). They were adopted in North Carolina in 1846, but
repealed in 1883; were enacted in Virginia in 1844, repealed in
1855, re-enacted in 1863, and repealed in 1884. In New Hampshire,
Wisconsin, Minnesota and Vermont, such laws have been passed,
but held unconstitutional on various grounds." Per Wilkes, J.,
in State v. Alston, 94 Tenn. 674, 30 S. W. 750, 751, 28 L. R. A. 178.

1106- STATUTES ANNOTATED. [Tenn. St,

List of Statutes.

1891. Statutes of Tennessee, c. 25, s. 6, extra session.

1893. " " " c. 89, s. 7.

1893. " " " c. 174.

1897-1903. Supplement to Code, pp. 107-110.

1899. Statutes of Tennessee, c. 213, p. 457.

1899. " " " c. 432, p. 1010.

1901. " " " c. 128.

1901. " " " c. 387.

1903. " " " c. 257.

1903. " " " c. 341.

1903. " " " c. 561.

1909. " " " c. 479, s.

Constitutional Limitations.

Tennessee Constitution 1870, a. 2, s. 28.

... All property shall be taxed according to its value, that value to be ascer-
tained in such manner as the legislature shall direct, so that taxes shall be equal
and uniform throughout the state. . . .

THE STATUTE OF 1891.

Tenn. St. 1891, c. 25. Approved September 21, 1891.

S. 6. Be it further enacted. That 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 his death, which property, or any part thereof, shall
be transferred by de'ed, grant, sale, or gift, made or intended to take effect in
possession or enjoyment after the death of the grantor, or bargainor, to any per-
son or persons, or to any body politic or corporate, in trust or otherwise, or by
reason whereof any person or body politic or corporate shall become beneficially
entitled, in possession or expectancy, to any property, or the income thereof,
other than to or for the use of his or her father, mother, husband, wife, child,
brother, sister, the wife or widow of a son, or the husband of a. daughter, or any
child or children adopted as such in conformity with the laws of the state of
Tennessee, by reason whereof any such person or persons or corporation shall
become beneficially entitled, in possession or expectancy, to any such property,
or to the income, shall be and is subject to a tax of $5.00 on every $100.00 of the
clear market value of such property, and after the same rate for any less amount,
in lieu of all other taxes except ad valorem, to be paid to the clerk of the county
court for the use of the state, which shall be reported to the state comptroller
as other state revenue; and all administrators, guardians, executors and trustees
shall be liable for any and all such taxes until the same shall have been paid.

This is the first inheritance law in Tennessee and it was repealed
by chapter 174 of the acts of 1893. Zickler v. Union Bank & Trust
Co., 104 Tenn. 277, 57 S. W. 341.

1893, c. 174.] TENNESSEE. . 1107

THE INHERITANCE TAX ACT OF 1893.

Tenn. St. 1893, c. 174. Approved April 10. 1893.

S. 1. Taxable Transfers. Be it enacted by the general assembly of the
state of Tennessee, That all estates — real, personal and mixed — of every kind
whatsoever, situated within this state, whether the person or persons dying
seized thereof be domiciled within or out of this state, passing from any person
who may die seized or possessed of such estates, either by will or under the intes-
tate laws of this state, or any part of such estate or estates, or interest therein,
transferred by deed, grant, bargain, gift, or sale, made in contemplation of death,
or intended to take effect in possession or enjoyment after the death of the
grantor or bargainor to any person or persons or to bodies corporate or politic, in
trust or otherwise, other than to or for the use of the father, mother, husband,
wife, children, and lineal descendants born in lawful wedlock of the person dying
seized and possessed thereof, shall be and they are hereby, made subject to a
duty or tax of five dollars on every hundred dollars of the clear value of such
estate or estates so passing, and at and after the same rate for any less amount,
to be paid to the use of the state; and all owners of such estates and all execu-
tors and administrators and their sureties shall only be discharged from lia-
bility for the amount of such taxes or duties the settlement of which they may
be charged with, by having paid the same over for the use of the state as here-
inafter directed ; Provided, That no estate which may be valued at a less sum
than two hundred and fifty dollars shall be subject to this duty or tax; And
provided, further. That the term children shall not be construed to apply, to
adopted children.

This act is almost identical in terms with the Pennsylvania statute.
English V. Crenshaw, i20 Tenn. 531, 110 S. W. 210.

Constitutionality.

Tennessee statute of 1893, chapter 174, and chapter 89, section 7,
are upheld as not restricting the devolution of property or dis-
criminating between direct descendants and collaterals* and as being
uniform. The right to tax the succession or inheritance of prop-
erty is a creature of statute law. "As the right to succeed depends
upon the law of the state, it follows that the state may regu-
late that right as public necessity or policy may dictate, and
may subject it to such burdens and reasonable conditions as may
best subserve the purposes of the state." State v. Alston, 94
Tenn. 674, 30 S. W. 750.

Nature of Tax.

The succession tax is not a tax upon the property but upon the
right or privilege of acquiring it by succession. It is a condition
upon which the person may take the estate. "It is a retention by
the state of a part of a deceased person's property which the state

1108 STATUTES ANNOTATED. [Tenn. St.

may take to meet its necessities and which, in certain cases, it may
take in toto, as in the cases of escheated property." Per Wilkes,
J., in State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178.

The right of any person to succeed to property of a deceased per-
son is a creature of statute law and is not a natural right. State v.
Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178.

The words ''clear value'' mean the net value after the payment of
all debts and expenses of administration and in the cases where the
will is contested the expenses for attorney's fees incurred by
the executor must be treated as expenses of administration. It
is the duty of the executor and clerk of the county court to make
an estimate of such fees and expenses and to tentatively allow for
them and thus approximate the amount of the tax to be paid,
and this amount should be paid subject to revision upon final
statement and settlement of account under section 11 of the act.
Provision is made for a refund where the executor may have paid
too much tax. Shelton v. Campbell, 109 Tenn. 690, 72 S. W. 112.

The clear net value of the estate of a citizen of Tennessee is
subject to the tax. Att. Gen. Op. in Tenn. Tax Digest of 1907, p. 93.
United States bonds are not exempt from the inheritance tax.
Att. Gen. Op. in Tenn. Tax Digest of 1907, p. 93.

A contest over the will was compromised by an agreement. The
contest against the will "was withdrawn and the jury thereupon
found in favor of the will. The contest was made by the collateral
heirs, and the compromise provided that the widow, who was the
sole devisee, should deed one-half of the property devised to
the collateral heirs, and this was done. The court holds that the
collateral heirs do not derive their title under the will but from
the deed of the widow; that they therefore do not take by inherit-
ance, will, deed, grant, gift or otherwise from the testator and
hence, under the provisions of the Tennessee statute, no inheritance
or succession tax attaches to the property in transfer.

The counsel suggested that by fraud and collusion the state
might be entirely defeated of its tax, but the court replies that
there is no semblance of proof in the record that this compromise
was not made in the utmost good faith and not as a mere subter-
fuge to evade the payment of the tax. English v. Crenshaw, 120
Tienn. 521, 110 S. W. 210. The court relies upon In re Kerr,
159 Pa. St. 512, 28 A. 354, and upon In re Hawley, 214 Pa. St.
525, 63 A. 1021, construing a Pennsylvania statute almost identical
with that in Tennessee.

1893, c. 174.] TENNESSEE. 1109

**To any Person."

The intestate died a citizen of Kentucky having personal prop-
erty in Tennessee. Under the laws of Kentucky his mother was
the sole distributee, while under the laws of Tennessee his brother
would take one-half of the estate. Under Tenn. St. 1893, c. 174,
s. 1, this property is not subject to tax, as it is settled that if one
dies domiciled in a foreign state leaving personal property in this
state the laws of the domicile of the deceased will determine who are
entitled to the surplus after the payment of debts. As under the
law of Kentucky which governs the succession the property goes
to the mother and not to any collateral kindred, the statute does
not apply. Fidelity & Deposit Co. v. Crenshaw, 120 Tenn. 606,
110 S. W. 1017.

Deduction of Debts.

Where a non-resident testator dies leaving stock in a Tennessee
corporation and indebtedness due creditors in the state of Ten-
nessee, the Tennessee indebtedness cannot be deducted from the
valuation of the Tennessee property unless the executor can show
that the debts due Tennessee creditors were discharged with
Tennessee assets. The court infers that the individual indebted-
ness to the Tennessee creditor was paid with Mississippi assets,
since the appraiser found that the entire value of the estate in
Tennessee was $34,000, and that amount still remained intact for
distribution when the appraisement was made. Memphis Trust
Co. V. Speed, 114 Tenn. 677, 88 S. W. 321.

Partnership Debt.

Where a testator died owing debts in Tennessee and also having
liabilities as a member of a partnership, the court has no concern
in the matter of the amount of the tax with the partnership debt
since that was discharged with firm assets. Memphis Trust Co. v.
Speed, 114 Tenn. 677, 88 S. W. 321.

Practice on Exemptions.

InEnglishv. Crenshaw, 120 Tenn. 531, 110 S. W. 210, the question
of an exemption under the inheritance tax law came up by a suit
by the county court clerk against the administrator for the purpose
of recovering the tax in the circuit court..

The proceeds of a life insurance policy, payable to the
executors of the insured and passing upon his death to his brothers
and sisters, are subject to the tax. Att. Gen. Op.

1110 STATUTES ANNOTATED. [Tenn. St

Eflfect of Election by Non-resident Beneficiary.

Section 1 provides that executors are only discharged from lia-
bility by payment of the taxes. Section 10 provides that the tax
shall be paid on transfer.

The testator died living in Missouri and owning stock in a Ten-
nessee corporation and the will gave the testator's wife one-half of
the residue. The widow elected under this provision of the will to
take the stock in the Tennessee corporation and the court holds
that the executor had a right upon the election of the widow to
transfer to her the stock in the Tennessee corporation in payment
of her one-half interest, provided, of course, it was taken at a fair
valuation as compared with the balance of the residuary estate
wherever situated, and therefore no tax accrued. It was argued
that under this residuary clause, which in terms did not confer any
right of election, the wife had no right to make a selection of specific
property left in the residuary estate. The court relies upon the
Matter of James, 144 N. Y. 6, 38 N. E. 961, where the whole matter
was discussed. Memphis Trust Co, v. Speedy 114 Tenn. 677, 88
S. W. 321.

S. 2. Bequest to Executors. Where a testator names or appoints one
or more executors, and makes a bequest or devise of property to them in lieu
of their commissions or allowance, or appoints them his residuary legatees, and
said bequests, devises, or residuary legacies exceed what would be a fair com-
pensation for their services, such excess shall be subject to the payment of the
collateral inheritance tax or duty, the rate of compensation to be fixed by the
proper officers or courts having jurisdiction in the case.

S. 3. When tax on remainders accrues. Be it enacted, That in all cases
where there shall be a devise, bequest, or descent of an estate, real or personal,
to collateral relatives or strangers, liable to the collateral inheritance and suc-
cession tax, to take effect in possession or to come into actual enjoyment after
the expiration of one or morejife estates, or a period of years, the tax on such
estate shall not be payable, normt^est begin to run thereon, until the person or
persons liable for the same shall come into actual possession of such estate by
the termination of the estates for lifV or years; and the tax shall be assessed
upon the value of the estate at the time the right of possession accrues to the
owner as aforesaid; provided, That the owner shall have the right to pay the
tax any time prior to his coming into possession; and in such cases the tax shall
be assessed on the value of the estate at the time of the payment of the tax,
afler deducting the value of the life estate or estates for years; And provided
further, That the tax on all real estate shall be and remain a lien on the real
estate on which the same is chargeable until paid. And the owner of any per-
sonal estate subject to the tax provided by this act shall make a full report and
return of the same to the clerk of the county court of the proper county within

1893, c. 174.] TENNESSEE. HU

one year from the death of the decedent, and within that time enter into security
for the payment of the tax to the satisfaction of such clerk; and in case of failure
so to do, the tax shall be immediately payable and collectible.

The tax bears interest from the date when it is payable, one year
from the death of the decedent, notwithstanding the pendency of
litigation, the scarcity of funds and other causes. Shelton v.
Campbell 109 Tenn. 690, 72 S. W. 112.

**Until the Person or Persons Liable for the Same shall Come
into Actual Possession of Such Estate.*'

The tax on the remainder after the life tenancy does not mature
until the death of the life tenant ; and the tax on the second remainder
after the death of the second life tenant does not mature until
the death of the second life tenant. Bailey v. Drane, 96 Tenn.
(12 Pickle) 16, 33 S. W. 573.

This section does not contemplate that persons holding contin-
gent interests shall make the report and give security within the
year from the death of the decedent. Harrison v. Johnston,
109 Tenn. 245, 70 S. W. 414.

Merger of Life Estate. Tenn. St. 1893, c. 174, s. 3, provides a
collateral inheritance tax on certain remainders. Two remainder-
men after a life interest to the wife of the testator conveyed their
interests to the wife, but the court holds that a conveyance by these
two parties does not withdraw the estate from the operation of the
inheritance tax law and defeat its collection. It was claimed that
by the conveyance the estate of the wife became merged into a
fee and that therefore there was nothing left for the remainders.
The only question remaining is whether, in view of the transfer
made, the period for the collection of the tax has been acceler-
ated so as to make it collectible at once, and if so, from whom
shall it be collected and upon what basis.

The statute provides that the remainder is taxable only when it
comes into possession and beneficial enjoyment. The court con-
cludes that when the life tenant became the owner of the remainder
interests in the property, being already the life tenant, the two
estates thereby merged into one and the remainder vested in
possession to all intents and purposes and for all beneficial uses,
and she might at once dispose of the whole estate in fee. She
became thus entitled to the possession as fee simple owner of the
estate and to the beneficial use of it as a whole and, by virtue of
these transactions, a tax upon the remainder interest became at

1112 STATUTES ANNOTATED. [Tenn. St.

once payable upon an assessment at its value at that time.
The state, as the effect of the transactions between the parties,
became at once entitled to an inheritance tax upon the full value
of the remainder interest as fixed by the appraisement.

The court was divided on the question as to who should pay
the tax. The majority is of opinion that the whole of it should be
paid by the life tenant on the ground that the life tenancy and
remainder by virtue of these transfers became vested in the same
person, and there was a merger of the two estates into one fee
simple estate in her, and that she is taxable upon the value of the
remainder which entered into the merger. Harrison v. Johnston,
109 Tenn. 245, 70 S. W. 414, 417.

S. 4. Interest. — Discount. Be it further enacted, That if the collateral
inheritance tax shall be paid within three months after the death of the decedent,
a discount of five per centum on the amount of the tax shall be made and allowed;
and, if said tax is not paid at the end of one year from the death of the decedent,
at which time it shall be due, interest shall then be charged at the rate of six per
centum per annum on such tax.

The fact that proceedings are pending to test the validity of the will
cannot postpone the maturity of the tax when it appears that in
either event, testacy or intestacy, the tax will be payable at the same
rate, as in the present case, and interest is chargeable from one year
after the testator's death. Shelton v. Campbell, 109 Tenn. 690,
72 S. W. 112.

S. 6. Tax to be deducted. Be it further enacted, That the executor or
administrator or other trustee paying any legacy or share in the distribution of
any estate subject to the collateral inheritance tax, as provided by this act,
shall deduct therefrom at the rate of five dollars in every hundred dollars upon
the whole legacy or sum paid; or, if not money, he shall demand payment of a
sum to be computed at the same rate upon the appraised value thereof, for the
use of the state; and no executor or administrator shall be compelled to pay
or deliver any specific legacy or article to be distributed, subject to tax, except
on the payment into his hands of a sum computed on its value, as aforesaid;
and, in case of neglect or refusal on the part of said legatee or distributee to pay
the same, such specific legacy or article, or so much thereof as shall be necessary,
shall be sold by such executor or administrator at public sale for cash, after
notice to such legatee or distributee, and after ten days' advertisement, as in
case of ordinary administrator's sales; and the balance that may be left in the
hands of the executor or administrator, after reserving the tax, shall be dis-
tVibuted to the legatee or distributee as is or may be directed by law; and every
sum of money retained by any executor or administrator, or paid into his hands
on account of any legacy or distributive share, for the use of the state, shall be
paid by him without delay to the county court clerk of the county in which his
accounts are being administered.

1893, c. 174.] TENNESSEE. 1113

S. 6. Conditional estates. If the legacy subject to the collateral inherit-
ance tax be given to any person for life or for a term of years, or for any other
limited period, upon a condition or contingency, if the same be money, the tax
thereon shall be retained upon the whole amount; but, if not money, application
shall be made to the county court having jurisdiction of the accounts of the
executors or administrators to make apportionment, if the case requires it, of
the sum to be paid by such legatees, and for such further order relative thereto
as equity shall require. Such application shall be made by the executor of such
estate after at least five days' notice to the parties concerned.

This section relates only to legacies having each of two
peculiarities, to legacies which are for life, for years or for
some other limited period of time, and which are also dependent
"upon a condition or contingency." Bailey v. Drane, 96 Tenn.
(12 Pickle) 16, 33S.,W. 573.

S. 7. Legacy charged on real estate. Wherever a legacy subject to the
tax or duty hereby provided, shall be charged upon or payable out of real estate,
the heir or devisee, before paying the same, shall deduct therefrom at the rate
aforesaid, and pay the amount so deducted to the executor, and the same shall
remain a charge and lien upon such real estate until paid, and the payment thereof
shall be enforced by decree of the county court in the same manner that liens on
real estate are now enforced in the chancery courts of this state, and the clerk
of the county court officially shall be the complainant in such suit.

S. 8. Information as to real estate. Whenever any real estate of which
any decedent may die seized shall be subject to the collateral inheritance tax, it
shall be the duty of executors and administrators to give information thereof
to the clerk of the county court where administration has been granted within
six months after they undertake the execution of their respective duties, or,
if the fact be not known to them within that period, within one month after
the same shall have come to their knowledge; and it shall be the duty of the
owner of such estate immediately upon the vesting of the estate, to give informa-
tion thereof to such clerk of the court having jurisdiction of the granting of
administration.

S. 9. Payment. ■ — Receipts. It shall be the duty of any executor or adminis-
trator receiving or collecting collateral inheritance tax, to pay the same to the
clerk of the county court granting the administration, and where his accounts
should be administered, and to take duplicate receipts from such clerk for the
same, one of which shall be forwarded forthwith to the comptroller of the treas-
ury, whose duty it shall be to charge the clerk receiving the money, with the amount,
and countersign the receipt and return it to the executor or administrator, where-
upon it shall be a proper voucher in the settlement of the estate; but in no
event shall an executor or administrator be entitled to a credit in the settlement
of his accounts with the county court clerk, or in the chancery court, if his ac-
counts be there settled, unless the receipt is so countersigned by the comptroller..

1114 STATUTES ANNOTATED. [Tenn. St.

S. 10. Payment on transfer. Be it further enacted, That whenever any
foreign executor or administrator or trustee, shall assign or transfer any stocks
or loans in this state standing in the name of the decedent or in trust for a decedent
which shall be liable for the collateral inheritance tax, such tax shall be paid, on
the transfer thereof, to the clerk of the county court where such transfer is made,
otherwise the corporation or person permitting such transfer shall become liable
to pay such tax.

S, 11. Refund to pay debts. Whenever debts shall be proven against the
estate of a decedent after distribution of shares or legacies from which the col-
lateral inheritance tax has been deducted, in compliance with this act, and the
legatee or distributee is required to refund any portion of a legacy or share, a
corresponding portion of said tax shall be repaid to him by the executor or admin-
istrator if the said tax has not been paid to the clerk, and if it has been so paid
to the clerk, then it shall be repaid out of the state treasury upon the comp-
troller's warrant, to be drawn by him in favor of the person entitled thereto,
upon the county clerk certifying, under his seal of office, that the same is justly
due on account of the provisions of this section of this act.

S. 12. Appraiser. It shall be the duty of the clerk of the county court in
which letters testamentary or of administration are granted to appoint an ap-
praiser as often as and whenever occasion may require, to fix the valuation of
estates which are or shall be subject to collateral inheritance tax; and it shall
be the duty of such appraiser to make a fair and conscionable appraisement of
such estates; and it shall further be the duty of such appraiser to assess and fix
the cash value of all annuities and life estate growing out of said estates, upon
which annuities and life estates, the collateral inheritance tax shall be imme-
diately payable, out of the estate, at the rate of such valuation, but shall bear
no interest till the lapse of twelve months from the death of the decedent ; and
in fixing the value of such annuities and life estate the computation shall be made
by the Carlyle Life Tables, whenever the use of life tables is necessary or appli-
cable. Said appraisements shall be reduced to writing, in the nature of a report,
and shall be by the appraiser filed with the clerk appointing him; Provided,
That any interested person not satisfied with said appraisement shall have the
right, at any time within thirty days after such appraisement is filed with the clerk,
to file exceptions thereto, in writing, on giving security to pay all costs, together
with whatever tax shall be fixed by the county court, and thereupon to have
the county court tOL hear said exceptions; and upon such exceptions being filed,
the county court sKall have jurisdiction to determine all questions of valuation
and of the liability of the appraised estate for such tax, subject to the right of
appeal to the circuit court (or court of like jurisdiction), as in other cases. If an
appeal should be prosecuted to the circuit court, such cause shall there be heard
de novo.

S. 13. Appraisers to accept no fees from parties. It shall be a mis-
cfemeanor in any appraiser appointed by the county clerk to make any appraise-
ment in behalf of the state, to take any fee or reward from any executor,
administrator, legatee, next of kin, or heir of any decedent; and for any such
offense the clerk shall dismiss him from such service, and, upon conviction he
shall be fined not exceeding five hundred dollars and imprisoned in the county

1893, c. 174.] TENNESSEE. 1115

jail not exceeding one year, one or both; and the court shall have the power
to assess the imprisonment if the jury does not do so, as well as a fine, within
the limit of the power of the court.

S. 14. Records. Be it further enacted, That it shall be the duty of the
county court clerks to enter in a book to be provided at the expense of the state,
to be kept for that purpose and which shall be a public record, the returns made
by all appraisers under this act, opening an account in favor of the state against
the decedent's estate, and the county court clerk may give certificate of payment
of such tax from said record ; and it shall be the duty of said clerk to transmit
to the comptroller, on the first day of each month, a statement of all reports or
returns made by appraisers during the preceding month, which statement shall
be entered by the comptroller in a book to be kept by him for that purpose; and
whenever any such tax on real estate shall have remained due and unpaid for
one year, it shall be the duty of the county clerk, in his official name as clerk,
to apply to the county court, by bill or petition, to enforce the payment of the
same, whereupon, after process is duly served or notice duly given to the owner
of the real estate charged with the tax and to such other persons as may be
interested, after the manner of the practice of the chancery courts, the county
court shall proceed, according to equity, to make such decrees and orders for the
enforcement of the lien and the payment of said tax out of such real estate as
shall be just and proper, the county court being hereby invested with jurisdiction
for said purposes; and any sales of real estate made hereunder shall be made on a
credit of not less than six nor more than twenty-four months, barring the right
of redemption as in chancery sales. If no one bids an amount at such sales suffi-
cient to cover the taxes due and costs, the clerk of the county court, by himself
or agent, shall bid the land in for the state, bidding an amount deemed sufficient
to cover said taxes due and costs, and in this event, upon confirmation of the
report of sale, a writ of possession may be issued to place the state or its agents
in possession of such real estate, and so as to any other purchaser. If the state
so become the purchaser of real estate, the cost of the cause shall be paid by the
state, the comptroller drawing his warrant therefor in favor of such clerk upon
the clerk certifying such cost bill to the comptroller; Provided, however. That
if said clerk knows of any good and sufficient reason why the payment of such
tax has been delayed, he shall not be compelled to file such bill immediately upon
said tax becoming due, but may, in his discretion, postpone the bringing of such
suit to such time as he deems proper, within the limits of this act; Provided
further. That if the court adjudges such tax to be due and a charge upon the real
estate, it shall tax up, as a part of the costs a reasonable attorney's fee for the
clerk's solicitor or attorney in the case, to be collected out of the land as the said
tax and other costs. Appeals from final decrees in suits under this section shall
lie to the circuit court, where an additional attorney's fee for services in that
court shall be taxed up as costs (if the said tax be found due and a lien on the
land) in favor of the attorney general of the circuit, who shall attend to such
suits in the circuit court, such fee to be fixed by the court. In the trial of suits
under this seaion in the county court, the proof may be heard orally or by
deposition, but on appeal the cause shall be heard on the record brought up.

Tenn. St. 1893, c. 174, ss. 14-16, provides that the county court
clerk may employ an attorney whose reasonable fee shall be taxed

1116 STATUTES ANNOTATED. [Tenn. St.

Up as costs, and the court holds that such costs allowed a district
attorney should be turned into the state treasury, as he can receive
no compensation apart from this salary under Tenn. St. 1897, c. 41.
Harrison v. Johnston, 109 Tenn. 245, 70 S. W. 414.

S. 15. Proceedings for collection. Be it further enacted, That if the clerk
of the county court shall discover that any collateral inheritance tax has not been
paid over according to law, he shall cause notice to be served upon the executors,
administrators, legatees, or distributees, as the case may be, of the decedent
whose estate is subject to the tax, notifying them to appear before the county
court on a certain day, which need not be the first day of the term, and show
cause why the said tax should not be paid; and, when personal service cannot
be had, notice shall be given for four weeks, once a week, in a newspaper published
or circulating in the county, and the matter shall be heard by said court, on written
or oral testimony; and. if the tax should be found due and unpaid, the said
delinquent shall pay the tax and cost, and the said court shall enter such judg-
ment and orders to this end as may be needful to enforce the collection of the
tax and costs. Such notice shall be served at least five days before the time
set therein for appearance, and, if by publication, the last publication shall be
at least five days before the time of appearance, or the clerk may enforce the
collection of such delinquent tax by bill filed in his name as clerk, in the county
court, to be proceeded with after the manner of chancery suits, and if he so
proceeds by bill, he may obtain writs of attachment against the property of the
delinquents, if there be grounds for attachments, as now provided by law, or
writs of injunction, if there be grounds for the same; and the county courts are
invested with full jurisdiction to hear and determine such suits as if a court of
equity for this purpose. But in such cases the testimony before the county
court may be either oral or in writing. From final judgments, decrees, or orders
in the county courts in suits or proceedings provided by this section, appeals
shall lie to the circuit court, in which court the cause shall be heard de novo, if
commenced by notice in the county court; but, if commenced by bill, it shall
be heard only upon the record; provided, however. That if the delinquent be the
appellant he shall give bond upon appeal, not only for the costs, but also to pay
the tax due if he is cast in the suit. In said appeals the attorney general of the
circuit shall attend to the suits for the clerk or state in the circuit court; and his
fee and that of the clerk's attorneys in the county court, if the delinquent held
liable, shall be taxed up as costs by the respective courts substantially as pro-
vided in section fourteen of this act.

The chancery court in Tennessee has jurisdiction of a suit to
recover an inheritance tax if there is no demurrer although the
county court has primary jurisdiction. Fidelity &f Deposit Co. v.
Crenshaw, 120 Tenn. 606, 110 S. W. 1017.

S. 16. Fees for collection. Be it further enacted, That the clerks of the
county courts of the several counties of the state shall be the agents of the state
for the collection of the collateral inheritance and succession tax, or duty pro-
vided for by this act, and for their services rendered in collecting and paying over

1893, c. 174.] TENNESSEE. 1117

the same, they shall be allowed to retain five percentum on all such taxes paid
over and accounted for; and it shall be the duty of said clerks, whenever neces-
sary, to employ an attorney to aid them in collecting, by suits, the said collateral
inheritance tax, the fees of such attorneys to be taxed up by the court as costs
against the delinquent, if he shall be held liable, such fees to be reasonable.
Any such suits are, on the one side, to run in the official name of the clerk, and
may be reviewed in the name of his successor in office; but he is not required to
give any bonds for costs in bringing suits, or on appeals; and if suits are decided
against him, judgment shall be given against the state for costs, and the state
shall pay the same, unless the court should be of the opinion that the suit brought,
or the appeal prosecuted by the said clerk, was malicious or frivolous, in which
event the court shall tax the cost against the clerk individually; and when the
costs, expenses, and attorneys' fees cannot be collected out of the delinquent,
when adjudged against him, or when the costs are adjudged against the state,
the comptroller is authorized and empowered, in settlement of accounts of such
clerks, to allow him to retain such costs and reasonable attorneys* fees incurred
in the collection of such taxes. The fact that the clerk is a party to such suits,
shall not render him incompetent to issue writs, subpoenas, notices, etc., in such
suits, and for the same he shall be entitled to receive the same fees now allowed
by law for such services, and also the usual fees for making our transcripts on
appeals.

The Tenn. St. 1893, c. 174, makes it the duty o( the county clerk
to collect the taxes and provides that he may employ an attorney
whose fee shall be taxed as costs. Where the county clerk em-
ployed the state revenue agent to sue for the tax, action was
brought in the chancery court and tried there without objection,
this agent was entitled in his capacity as attorney to a fee of five
per cent of the tax, which was in addition to his salary as reveriue
agent. Shelton v. Campbell, 109 Tenn. 690, 72 S. W. 112.

The fact that the original suit for the settlement of an estate
is still pending in the chancery court, and the statute provides that
the inheritance tax may be collected in such cases in such suits,
does not prevent jurisdiction by the county court under section 22
of the Tenn. St. 1893, c. 174. Harrison v. Johnston, 109 Tenn.
245. 70 S. W. 414.

S. 17. Clerks to give bonds. The clerks of the several county courts of
the state shall, within sixty days after the passage of this act, enter into bonds
before their respective county courts, payable to the state, with two or more
sufficient sureties, to be approved by the said courts, for the faithful performance
of the duties imposed by this act, and for the regular accounting and paying over
of the amount to be collected hereunder and said bonds, when executed and
approved, to be forwarded to the comptroller, and filed in his office. Such bonds
in counties of thirty thousand inhabitants and over, by the federal census of
1890, shall bfe in the penal sum of two thousand five hundred dollars; Provided,
however, That when any clerk of the county court is, after the passage of this

1118 STATUTES ANNOTATED. [Tenn. St.

act, inducted into office, the bond now required by law to be given by him to
account for all revenues collected by him for the state shall cover and be liable
for the taxes received and collected by him by virtue of this act; and if that bond
be executed and approved, no other or special bond need be given by him to
account for revenues collected hereunder. No clerk holding office at the date
of the passage of this act, shall receive or collect the taxes provided for herein,
until he has entered into the bond provided for by this section.

S. 18. Returns. It shall be the duty of the clerk of the county court to
make return and payment to the treasurer of the state, in the usual method, of
all the collateral inheritance taxes he shall have received for the previous quarter,
stating for what estates paid, on the first day of April, July, October, and January
in each year; and for all such taxes collected by him and not paid over within
one month after his quarterly returns of the same is or should be made, he shall
pay interest by way of penalty, at the rate of twelve per centum per annum until
paid.

S. 19. Lien. — Limitations. The lien of the collateral inheritance tax
shall continue until the tax is settled and satisfied; Provided, That the said lien
shall be limited to the property chargeable therewith; And provided further, That
all collateral inheritance tax shall be sued for within five years after they are due
and legally demandable, otherwise they shall be presumed to have been paid,
and cease to be a lien as against any purchasers of real estate.

S. 20. Attorney general to prosecute. In suits arising under this act
■which may be carried to the supreme court, the attorney general of the state
shall represent the clerk of the county court and the state in that court.

S. 21. Bonds. The bonds of all executors and administrators qualifying
after the passage of this act, and which are now required to be given by law, shall
be liable for the faithful discharge by them of all duties imposed upon them
by this act, including the faithful paying over by them of all collateral inherit-
ance taxes that may come to their hands; and any trustee whose duties are
similar to those of an executor, or who has the dividing or disposing of an estate
of a decedent, is included in this act under the term executor.

S. 22. fax to be paid before estate settled. In all cases where an estate
is being wound up or administered in a chancery court, it shall be the duty of that
court to see that the collateral inheritance tax is paid to the clerk of the county
court, if such estate be liable for such tax, and to see that such tax is paid or
retained before a legacy or share or an estate is paid or turned over to the owner;
and if any such tax is received by the clerk and master, it shall be ordered paid
by him to the county court clerk; and upon such payment being made by a clerk
and master he shall take duplicate receipts from the county court clerk and
transmit one of them to the comptroller, who shall countersign it and return it,
arid it shall only be a good voucher to the clerk and master upon its being so
countersigned.

S. 23. Appraisers' duties. The appraiser provided for by this act shall be
sworn by the county court clerk to faithfully and impartially perform his duty.

1893, c. 89.] TENNESSEE. 1119

and to make due returns, In writing, of his action in the premises, with a written
statement appended of the length of time spent by him in appraising the par-
ticular property, and the necessary expense, by items, incurred by him traveling
to and from the property, if there be such expense; and for his services the
appraiser shall receive two dollars per day for the time necessarily spent in such
service, and his actual traveling expenses in addition, to be paid him by said
clerk out of any collateral inheritance tax coming to his hands, and for which the
clerk shall receive credit; Provided, Said clerk shall have the right to audit any
such cost bill of an appraiser, and to reduce the amount of the same if satisfied
it is incorrect, and it shall be his duty to do so.

S. 24. Not retroactive. This act shall only apply to the estates of persons
dying after its passage, and not to the estate of any person dying prior to its
passage.

S. 25. Repeal. Be it further enacted, That section 6 of chapter 25 of the
acts of the extraordinary session of 1891, providing for an inheritance and
succession tax in certain cases, and all other acts in conflict with this act, be,
and the same are hereby, repealed. And it is provided that when any tax may
have been collected, but not paid into the state treasury under said section
hereby specially repealed, the same shall be refunded to the parties from whom
collected, to be used and disposed of as if said section had not been enacted.

THE REVENUE STATUTES.

Tenn. St. 1893, c. 89, s. 7. Approved April 10, 1893.

S. 7. Be it further enacted. That all property which shall pass by will or by
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 his death, which property, or any part thereof, shall be trans-
ferred by deed, grant, sale, or gift, made or intended to take effect, in possession
of enjoyment, after the death of the grantor or bargainor, to any person or person
or to any body politic or corporate, in trust or otherwise, or by reason whereof
any person or body politic or corporate shall become beneficially entitled, in
possession or expectancy, to any property, or the income thereof, other than to
or for the use of his or her father, mother, husband; wife, child, grandchild,
brother, sister, the wife or widow of a son, or husband of a daughter, or any child
or children adopted as such in conformity with the laws of the state of Tennessee,
by reason whereof any such person or persons or corporation shall become benefi-
cially entitled, in possession or expectancy, to any such property or to the income,
shall be and is subject to a tax of $5 on every $100 on the clear market value of
such property, and after the same rate for any less amount, in lieu of ail other
taxes, except ad valorem, to be paid to the clerk of the county court for the use of
the state, which shall be reported to the state comptroller, as other state revenue;
and all administrators, guardians, executors, and trustees shall be liable for any
and all such taxes until the same shall have been paid.

Validity of Classification by Relationship.

A distinction between direct descendants and collateral kindred
and strangers has abundant reason upon which to sustain it, for

1120 STATUTES ANNOTATED. [Tenn. St.

the moral claim of collaterals and strangers is less than of kindred
in direct line and the privilege is therefore greater. Tenn. St. 1893,
c. 89, s. 7, is not unconstitutional because it discriminates between
direct descendants and collateral kindred and strangers. State
V. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178; Bailey y.
Drane, 96 Tenn 16; Debardelaben v. State, 99 Tenn. 649, 42 S.
W. 684; State v. Brewing Co., 20 Pickle 732, 737.

Validity of Exemptions.

The exemption of estates under $250 in value is not unconsti-
tutional as it is within the province of the legislature to declare
what privileges shall be taxed and what exemptions may be allowed ;
and the exemption of small estates is neither arbitrary nor devoid
of reason inasmuch as the expenses of administration are propor-
tionally much greater in small than in larger estates. In this case
an estate worth $249 escapes taxation, but one of $250 or over is
subject to tax. State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28
L. R. A. 178.

Remainders.

Under Tenn. St. 1893, c. 89, and c. 174, a remainder to collateral
kindred whose propert)^ or estates are declared to be liable for
taxes is subject to taxes although the prior estate is exempt. Each
recipient must stand upon his or her own relationship to the per-
son from whom the property comes without reference to the
liability or non-liability of the person taking the property
before or after him. Bailey v. Drane, 96 Tenn. (12 Pickle) 16,
33 S. W. 573.

Revenue Statute Prevails.

Tenn. St. 1893, c. 174, includes all estates passing in certain
enumerated modes except those expressly excluded. Estates pass-
ing to brothers of the decedent are not excluded; hence they are
included. However, the Tenn. St. 1893, c. 89, is shown by the jour-
nals of the house and senate to have been approved and taken
effect at a later hour of the same day, April 10, 1893, and expressly
excepts estates received by the brothers and sisters of a decedent
from liability for the tax. This provision being subsequent in
pomt of time is the prevailing law and controlling. Bailey v. Drane,
96 Tenn. (12 Pickle) 16, 33 S. W. 573.

1893, c. 89.1 TENNESSEE. 1121

Not Repealed by Revenue Law.

This act is a special law in the sense and meaning that it is
intended to apply only to the subject of a collateral inheritance
tax and no other species or subject of taxation; and being so, it is
not repealed by the general revenue statute of 1895, but is revived by
it. Zicklerv. UnionBank & Trust Co., 104 Tenn. 277, 57 S. W. 341 , 344.

Effect of Repeal of Revenue Law.

The fact that the general revenue law of 1895 repealed by impli-
cation the general revenue law of 1893, c. 89, s. 7, as to collateral
inheritances, did not render inoperative the statute of 1893, c. 174.
but on the contrary revived it. Zickler v. Union Bank &f Trust Co..
104 Tenn. 277, 57 S. W. 341.

The revenue acts have provided that an inheritance tax shall
be collected as provided in St. 1893, c. 174, "and acts amendatory
thereof," except that the words "and acts amendatory thereof"
were omitted from the act of 1899. See St. 1899, c. 432, s. 1 ; St.
1901, c. 128, s. 1; St. 1903, c. 257, s. 1; St. 1907, c. 541, s. 1; St.
1909, c. 593, s. 1.

Effect of Revenue Acts.

Tenn. St. 1893, c. 174, is a complete system of taxation on the
subject of inheritance taxes and s. 25 expressly repeals the statute
of 1891. On the same day the legislature passed a general revenue
law, Tenn. St. 1893, c. 89, s. 7, imposing a collateral inheritance tax
copied almost literally from the statute of 1891, except that the
word "grandfather" is added to the exception in section 7 of the
inheritance act of 1893. In the general revenue acts of 1895 and
1897 no mention was made of a collateral inheritance tax and the
contention was made, therefore, that the general revenue act of 1895
repealed all the provisions of the general revenue act of 1893, c.
89, s. 7.

It has become in Tennessee a legislative custom to re-draft and
re-enact a new general revenue law at each session of the legislature
instead of amending the old law embracing generally the entire
subject of privilege taxation; so the general revenue law of 1895
is a general law upon the subject of privilege taxation on certain
occupations, and it was intended to take the place of the general
revenue law of 1893; and whatever was omitted in the new law
was intended to be discarded. This implied repeal of the revenue
act of 1893 -revives chapter 174 of the statutes of 1893. Zickler
v. UnionBank & Trust Co., 104 Tenn. 277, 57 S. W. 341.

1122 STATUTES ANNOTATED. [Tenn. St.

AMENDMENTS.

Tenn. St. 1899, c. 213, p. 457, amends Tenn. St. Shannon's Compiled Statutes,
s. 4025, by adding thereto the words "and if there be no widow or next of kin.
then such right of action shall survive to his personal representative, for the
benefit of his estate, to pay his debts, burial expenses, and the expenses of
administration."

Tenn. St. 1899, c. 432, p. 1010, s. 1, provides that there shall be levied and
collected a collateral inheritance tax as provided for in the statute of 1893, c. 174.

Tenn. St. 1901, c. 128, s. 1, provides that there shall be levied and collected a
collateral inheritance tax as provided for in the statute of 1893, c. 174, and
acts amendatory thereof.

Tenn. St. 1901, c. 387, was a special act refunding to a certain administrator
a tax paid on a legacy from a deceased person who died in November, 1893,
when no inheritance tax was collectible in property inherited by brothers and
sisters.

Tenn. St. 1903, c. 257, s. 1, provides that there shall be levied and collected
a collateral inheritance tax as provided for in the Tenn. St. 1893, c. 174, and
acts amendatory thereof.

Charities Exempt,

Tenn. St. 1903, c. 341, approved April 15, 1903, amends the statute of 1893,
c. 174, by adding to section 1 of the act the following: — Provided, that in all
cases where suits have been instituted for the collection of the collateral inheritance
tax, the institution or institutions relieved of said taxes by this act shall pay the
costs which would have bee^ a part of the judgment of the court trying the
case, if this act had not been passed, and provided further, that nothing in this
act shall be so construed as to interfere with the judgments of courts already
rendered with regard to cost, the purpose of this act being to exempt the insti-
tutions above referred to from the tax proper, and not from the cost already
incurred by the state in attempting to collect said taxes.

Tenn. St. 1903, c. 561, amends Tenn. St. 1893, c. 174, s. 1: —
Be it enacted by the general assembly of the state of Tennessee, That all
estates, real, personal and mixed of every kind whatsoever, situated in this
state, passing from any person who may die seized or possessed of such estates
either by will, deed, grant, bargain, gift or sale made in contemplation of death,
or intended to take effect in possession or enjoyment after death of the testator,
grantor or bargainor, to any religious, charitable, scientific, literary or educa-
tional institution, be and the same are hereby exempted from the collateral
inheritance tax now imposed by chapter 174 of the act of 1893, and all sub-
sequent laws and all bequests and devises to any such institutions upon which
collateral inheritance tax has not yet been paid, are hereby released from said tax
and such institutions.

* Tenn. St. 1903, c. 561,. s. 2. Be it further enacted, that all laws upon the
subject of collateral inheritance tax including the revenue and assessment bills
to be passed at the present session of the legislature in so far as they conflict
with this act be and the same are hereby repealed and this act take effect from
and after its passage, the public welfare requiring it.

1909, c. 497.] TENNESSEE. 1123

THE DIRECT INHERITANCE ACT OF 1909.

Tenn. St. 1909, c. 479. Approved May 1, 1909.

S. 20. Be it further enacted, That inheritances not taxed under the present
laws shall pay a tax as follows : —

All inheritances of $5,000 and over, but less than $20,000, a tax of one per
centum of their value.

All inheritances of $20,000 and over, a tax of one and one-fourth per centum
of their value, to be collected by the county court clerk of each county.

•'Inheritances."

It was claimed that the word "inheritances" is to be limited
to cases of intestacy. The court observes that if this were so the
statute might be void as class legislation; and that the revenue
statutes should receive a "fair construction to effect the end for
which they were intended." A succession tax is not a burden
imposed upon property, but is a privilege tax upon the right of
taking from another.

The court notes that the civil law definition of the word "inherit-
ances" is "the succession to all rights of the deceased," and is
of two kinds, by will and by the operation of law.

The court concludes that it is inconceivable that the legislature
intended by the term "inheritance" to confine this tax to those tak-
ing as heirs or next of kin. Knox v. Emerson (Tenn. 1910),
131 S. W. 972.

Proceedings.

The court notices that no specific mode is designated for the col-
lection of the tax as the court says that the legislature properly
assumed that the collection had been covered elsewhere.

The statute of 1893, c. 174, embraced within itself a complete
system of taxation ; under section 15 the duty and method of col-
lecting the tax is provided, and this remedy is properly applied
under the statute of 1909. In a proceeding under the Tennessee
statute of 1909, which is but a supplement of the statute of 1893,
the attorney of the county court clerk is entitled to a fee to be paid
by the taxpayer. Knox v. Emerson, Tenn. (1910), 131 S. W. 972.

THE PRESENT ACT.

The inheritance taxes have never been codified. The existing
law is the inheritance tax act of 1893 with the amendments noted
above.

1124 STATUTES ANNOTATED. [Texas St.

TEXAS.

In General.

Texas adopted a collateral inheritance tax in 1907. Inherit-
ances to father, mother, husband, wife and lineal descendant
are exempt. The exemption applies to each individual share,
not to the estate as a whole.

Texas is not now claiming a tax on stock of a Texas corporation
owned by a non-resident, and there is no provision for collecting
such a tax through the corporation, such as is usually found. The
language of the statute, however, does not differ materially from
that of many of the states that claim such a tax.

Constitutional Limitations.

Texas Constitution, 1876, a. 8, s. 1.

Taxation shall be equal and uniform. All property in this state, whether
owned by natural persons or corporations, other than municipal, shall be taxed
in proportion to its value, which shall be ascertained as may be provided by
law. ...

THE PRESENT ACT.

Texas St. 1907, c. 21, p. 496. Approved May 16, 1907.
An Act to tax property passing by will or by descent or by
GRANT OR GIFT; taking effect on the death of the grantor or donor.

S. 1. Taxable transfers. All property within the jurisdiction of this state,
real or personal, corporeal or incorporeal, and any interest therein, whether
belonging to inhabitants of this state or not, which shall pass, absolutely or in
trust, by will, or by the laws of descent of this or any other state, or by deed,
grant, sale or gift, made or intended to take effect in possession or enjoyment
after the death of the grantor or donor, shall upon passing to or for the use of
any person except the father, mother, husband, wife or direct lineal descendants
of the testator, intestate, grantor or donor, or any public corporation or charit-
able, educational or religious organization within this state when such bequest,
gift or devise is to be used for charitable, educational or religious purposes within
this state, be subject to a tax for the benefit of the state, as follows: —

(1) If passing to or for the use of a lineal ascendant or a brother or sister,
or a lineal descendant of a brother or sister, the tax shall be two per cent on any
value in excess of two thousand dollars, and not exceeding ten thousand dollars;
two and one-half per cent of any value in excess of ten thousand dollars, and not
exceeding twenty-five thousand dollars; three per cent on any value in excess of
twenty-five thousand dollars, and not exceeding fifty thousand dollars; three

1907, c. 21.] TEXAS. 1125

and one-half per cent on any value in excess of fifty thousand dollars, and not
exceeding one hundred thousand dollars; four per cent on any value in excess
of one hundred thousand dollars, and not exceeding five hundred thousand dollars;
and five per cent on any value in excess of five hundred thousand dollars.

(2) If passing to or for use of an uncle or aunt, or a lineal descendant of an
uncle or aunt of the decedent, the tax shall be three per cent on any value in excess
of one thousand dollars, and not exceeding ten thousand dollars; four per cent
on any value in excess of ten thousand dollars, and not exceeding twenty-five
thousand dollars; five per cent on any value in excess of twenty-five thousand
dollars, and not exceeding fifty thousand dollars; six per cent on any value in
excess of fifty thousand dollars and not exceeding one hundred thousand dollars;
seven per cent on any value in excess of one hundred thousand dollars, and not
exceeding five hundred thousand dollars, and eight per cent on any value in
excess of five hundred thousand dollars.

(3) If passing to or for the use of any other person, natural or artificial, the
tax shall be four per cent of any value in excess of five hundred dollars, and not
exceeding ten thousand dollars; five and one-half per cent on any value in excess
of ten thousand dollars, and not exceeding twenty-five thousand dollars; seven
per cent on any value in excess of twenty-five thousand dollars and not exceeding
fifty thousand dollars; eight and one-half per cent on any value in excess of
fifty thousand dollars, and not exceeding one hundred thousand dollars; ten per
cent on any value in excess of one hundred thousand dollars and not exceeding
five hundred thousand dollars, and twelve per cent on any value in excess of five
hundred thousand dollars,

S. 2. Particular estates and remainders. If the property passing as
aforesaid shall be divided into two or more estates, as an estate for years or for
life and a remainder, the tax shall be levied on each estate or interest separately
according to the value of the same at the death of the decedent The value of
estates for years, estates for life, remainders and annuities shall be determined
by the "Actuaries' Combined Experience Tables," at four per cent compound
interest,

S. 3. Bequest to executor. If a testator bequeaths or devises to his
executor or trustee, property in lieu of the latter's commission, the value of such
property in excess of reasonable compensation, as determined by the county
judge on his own motion, or on the application of any officer on behalf of the
state, shall be subject to taxation under this act.

S. 4. Inventory. Every executor, administrator and trustees of the estate
of a decedent leaving property subject to taxation under this act, whether such
property passes by will or by the laws of descent or otherwise, shall, within three
months after his appointment, make and file an inventory thereof in the county
court having jurisdiction of the estate of the decedent. Any executor, adminis-
trator or trustee refusing or neglecting to comply with the provisions of this
section shall be liable to a penalty not exceeding one thousand dollars, to be
recovered in an action brought in behalf of the state by the district or county
attorney upon notice from the judge of the county court.

S. 5. Where application for probate not made. If within three months
after the death of a decedent leaving property subject to taxation under this act

1126 STATUTES ANNOTATED. [Tex. St.

no application for letters testamentary or of administration shall be made, it shall
be the duty of the county court to appoint an administrator. It shall be the duty
of the county attorney to report to the judge of the county court all such estates,
whether the property subject to taxation passes by will or by laws of descent or
otherwise. For each decedent's estate thus reported the county attorney shall
receive a compensation of ten per cent of the tax payable, but not to exceed twenty
dollars in any one estate. Such payment shall be made by the collector of taxes
on the certificate of the county judge, out of the taxes paid him on property
belonging to such estate.

S. 6. Appraisal. Said tax shall be assessed upon the actual or market value
of the property. The judge of the county court having jurisdiction of the estate
of the decedent shall, as often as and whenever occasion may require, appoint
two competent disinterested persons as appraisers to fix the value of property
subject to said tax. The appraisers, being first sworn, shall forthwith give
notice to all persons known to have a claim or interest in the property to be ap-
praised, including the executor, administrator or trustee, and the collector of
taxes on the county, of the time and place when they will appraise the same.
At such time and place they shall appraise such property at its actual or market
value at the time of the death of the decedent, and shall thereupon make report
thereof in writing to said county judge, who shall file such report. Each appraiser
shall be paid, on the certificate of the county judge, two dollars for each day
employed in such appraisal, together with his actual necessary expenses incurred
therein, which payments shall be made by the collector of taxes out of any moneys
in his hands received under this act; provided, however that upon the agree-
ment of the parties interested to dispense with the appointment of appraisers the
county judge shall himself appraise the property and make and file a report
thereof. If the same decedent shall leave property subject to this tax to more
than one person, a separate appraisal and report shall be made for the property
of each person.

S. 7. Assessment. — Lien. Immediately upon the filing of the report of
the appraisement, the county judge shall calculate and determine the amount
of tax due on such property under this act, and shall in writing certify such amount
to the collector of taxes, to the executor, administrator or trustee, and to the person
to whom or for whose use the property passes. Said tax shall be a lien upon such
property from the death of the decedent until paid, and shall bear interest from
such death until paid, unless payment shall be made within six months after
such death, in which case no interest shall be charged.

S. 8. Deduction of tax. If such property be in the form of money,
the executor, administrator or trustee shall deduct the amount of the tax there-
from before paying it to the party entitled thereto; if it be not in the form of
money, he shall withhold the property until the payment by such party of the
amount of the tax; in any case theexecutor, administrator or trustee shall be
Hable for the amount of the tax and shall have the right, in case of neglect or
refusal after due notice of the party entitled to the property to pay such amount
to sell, at public sale, after due notice to such party, the property, or so much
thereof as may be necessary. Out of the sum realized on such sale, the executor,

1907, c. 21.] TEXAS. 1127

administrator or trustee shall deduct the amount of the tax and the expenses
of the sale, and shall pay the balance to the party entitled thereto.

S. 9. Legacy charged on real estate. Whenever any legacy subject to
said tax shall be charged upon or payable out of real estate, the heir or devisee,
before paying the legacy, shall deduct the amount of the tax therefrom, and pay
the amount so deducted to the executor, administrator or trustee; the amount of
the tax shall remain a charge on such real estate until paid, and the payment
thereof shall be enforced by the executor or trustee in the same manner as the
payment of the legacy itself could be enforced.

S. 10. Payment. All taxes received under this act by any executor, adminis-
trator or trustee, shall be paid by him within thirty days thereafter to the
collector of taxes of the county whose county court has jurisdiction of the estate
of the decedent. Upon such payment, the collector shall make duplicate receipts
thereof; he shall deliver one to the party making payment, the other he shall
send to the comptroller of public accounts, who shall charge the collector with
the amount thereof, and shall countersign and affix his seal of office to such
receipt and transmit same to the party making payment.

S. 11. Action to recover. In case such tax shall not be paid to the col-
lector of taxes within six months after the county judge has notified the amount
thereof as hereinbefore provided, the collector shall commence an action to
recover the amount of such tax against the executor, administrator or trustee,
and the party to whom or for whose use the property has passed; provided, that
the county judge may by certificate to the collector extend such time of payment
whenever the circumstances of the case require.

S. 12. Payment to state treasurer. The collector of taxes of each county
shall, on or before the fifteenth day of each month, pay to the state treasurer
all taxes received by him under this act before the first day of that month, deduct-
ing therefrom all lawful disbursements made by him under this act, and also
his compensation at the rate of one per cent of all taxes collected under this act.

S. 13. Deposit by state treasurer. The moneys received by the state
treasurer under this act shall be deposited in the state treasury to the credit of
the fund now there existing and known as the general revenue fund.

S. 14. Refund to pay debts. Whenever any debts shall be proven against
the estate of a decedent after the distribution of property on which the tax has
been paid, and a refund is made by the distributee, a due proportion of the
tax so paid shall be repaid to him by the executor, administrator or trustee,
if still in his hands, or by the collector of taxes if it has been paid to him. The
collector shall pay such sums upon the order of the county judge out of any money
in his possession under this act; and the comptroller of public accounts shall
credit the collector with all sums so paid out by him.

S. 15. Allowance of final account. No final account of an executor,
administrator or trustee shall be allowed by the county judge unless such account
; shows, and said judge finds, that all taxes imposed under this act on any property

1128 STATUTES ANNOTATED. [Tex. St.

or interest passing through his hands as such have been paid; and the receipt
of the collector of taxes for such taxes shall be the proper voucher for such
payment.

S. 16. When administrator dispensed with. If for any reason adminis-
tration of the estate of a decedent leaving property subject to taxation under
this act, shall not be necessary in this state, except in order to carry out the
provisions of this act, it shall be in the discretion of the county judge upon the
filing of a satisfactory inventory of the taxable property by the trustee or owner,
to dispense with the appointment of an administrator. Upon the filing of such
inventory, the appraisement and other proceedings required by this act shall be
had as in other cases.

Utah St.l UTAH. 1129

UTAH.

In General.

Utah since 1901 has taxed all inheritances at the uniform rate
of five per cent on the excess of the entire estate over $10,000.

The state of Utah has officially notified the state of Connecticut
that it does not tax stock of Utah corporations owned by non-resi-
dents if the stock is kept outside the state; but nevertheless the
state of Utah is collecting the tax.

List of Statutes.

1901. Statutes of Utah, c. 62, p. 61.
1903. " " " c. 93, p. 77.

1905. " " " c. 119, p. 198.

1907. Compiled Laws of Utah, ss. 1220 x - 1220 x 31.

Constitutional Limitations.

Utah Constitution, 1851, a. 13, s. 3, as amended in 1900.

The legislature shall provide by law a uniform and equal rate of assessment and
taxation on all property in the state, according to its value i n money, and shall
prescribe by general law such regulations as shall secure a just valuation for
taxation of all property, so that every person and corporation shall pay a tax
in proportion to the value of his, her or its property.

STATUTES.

Utah St. 1901, c. 62. Approved March 14, 1901.

An Act to tax gifts, legacies and inheritances in certain cases, and to
provide for the collection of the tax.

This title does not indicate as claimed that the tax is imposed
only upon the separate portions of the decedent's estate exceeding
ten thousand dollars transmitted by gift, legacy or inheritance.
Dixon V. Ricketts, 26 Utah 215, 72 P. 947.

Utah St. 1901, c. 62. Approved March 14, 1901.

S. 1, All property in excess of ten thousand dollars subject to inheritance
tax. All property within the jurisdiction of this state and any interest therein,
whether belonging to the inhabitants of this state or not, and whether tangible
or intangible, which shall pass by will or by the statutes of inheritance of this
or any other-state, or by deed, grant, sale or gift made or intended to take effect
in possession or in enjoyment after the death of the grantor or donor, to any

1130 STATUTES ANNOTATED. [Utah

person in trust or otherwise, shall be subject to a tax of five per centum of its
value above the sum of ten thousand dollars; after the payment of all debts, for
the use of the state; and all administrators, executors and trustees, and any
such grantee under a conveyance, and any such donee under a gift made during
the grantor's or donor's life, shall be respectively liable for all such taxes to be
paid by them respectively, except as herein otherwise provided, with law.ul
interest as hereinafter set forth until the same shall have been paid. The tax
aforesaid shall be and remain a lien on such estate from the death of the decedent
until paid.

Origin.

Section 1 of the inheritance tax law of 1901 is a transcript of the
Iowa statute and the Iowa construction must be followed. Dixon
V. Ricketts, 26 U. 215, 72 P. 947.

Constitutional.

Utah St. 1901, c. 62, is constitutional and is not void under con-
stitutional provisions requiring uniformity and equality of taxa-
tion. Dixon V. Ricketts, 26 Utah 215, 72 P. 947.

Tax on Whole Estate.

Utah St. 1901, c. 62, s. 1 and s. 13, show that it was the Intention
of the legislature to impose the tax upon the right of devolution and
succession in respect to the whole estate of the decedent above the
value of ten thousand dollars ; and the indebtedness of the estate
transmitted to successors and not upon the property itself or any
distributive share. It is apparent from section 1 that this was the
intention of the act, for it is not conceivable how the payment of
the debts, the amount of which and ten thousand dollars fixes the
limit of the exemption from tax, can apply to anything other than
the whole of the decedent's estate upon which the indebtedness is
a charge. Dixon v. Ricketts, 26 Utah 215, 72 P. 947.

Liabilities.

The inheritance tax, while not a debt of the testator, was properly
charged to the beneficiaries. In re Lotzgesell (Wash. 1911), 113
Pac. 1105.

«Ss. 2-12 cover the taxation of estates for life or for years and remainders and
the levying, collection and payment of the tax.

S. 13. No settlement allowed until tax paid. No final settlement of the
account of any executor, administrator, or trustee shall be accepted or allowed

Comp. Laws.] UTAH.

1131

unless It shall show, and the court shall find, that all taxes imposed by the pro-
visions of this act upon any property or interest therein belonging to the estate
to be paid by such executors, administrators or trustees, and to be settled by said
account, shall have been paid, and the receipt of the state treasurer for such tax
shall be the proper voucher for such payment.

Utah St. 1901, c. 62, approved March 14, 1901, s. 14, gives the district court
jurisdiction on all questions in relation to the tax.

Utah St. 1903, c. 93, approved March 12, 1903, amended Utah St. 1901, c. 62,
ss. 1 and 11.

Utah St. 1905, c. 119, approved March 17, 1905, is an entirely new act in
substitution for Utah St. 1901, c. 62.

THE PRESENT ACT.

Compiled Laws of Utah.

1220x. All property in excess of $10,000 subject to inheritance tax.

All property within the jurisdiction of this state and any interest therein whether
belonging to the inhabitants of this state or not, and whether tangible or intangi-
ble, which shall pass by will or by the statutes of inheritance of this or any other
state, or by deed, grant, sale, or gift made or intended to take effect in possession
or enjoyment after the death of the grantor or donor, to any person in trust or
otherwise, shall be subject to a tax of five per cent of its market value above the
sum of $10,000, after the payment of all debts, for the use of the state; and all
administrators, executors, and trustees, and any such grantee under conveyance,
and such donee under a gift made during the grantor's or donor's life, shall be
respectively liable for all such taxes to be paid by them respectively, except as
herein otherwise provided, with lawful interest as hereinafter set forth, until
the same shall have been paid. The tax aforesaid shall be and remain a lien on
such estate from the death of the decedent until paid. In determining the
amount of tax to be paid under the provisions of this section, after the payment
of all debts the sum of $10,000 shall be deducted from the entire estate and the
tax shall be computed and paid on the entire remainder; and the court shall
determine the amount of tax to be paid by the several devisees, legatees, grantees,
or donees of the decedent. ('01, p. 61; '03, p. 77; '05, p. 198.)
[See notes to the Act of 1901, ante, p. 1130.]

1220x1. Term "debts'* defined. The term "debts," as used in this
chapter, shall include, in addition to debts owing by decedent at the time of
his death, the local or state taxes due from the estate prior to his death, a reason-
able sum for funeral expenses, the court costs, the cost of appraisement made
for the purpose of assessing the inheritance tax, the statutory fees of executors,
administrators, or trustees, and no other sum; but said debts shall not be
deducted unless the same are approved and allowed, within fifteen months from
the death of decedent, as established claims against the estate, unless otherwise
ordered by the judge of the proper county. ('05, p. 198.)

1220x2. Appraisers to be appointed. In each county the court shall
annually appoint three competent residents and freeholders of said county, to

1132 STATUTES ANNOTATED. [Utah

act as appraisers of all property within its jurisdiction, which is charged or sought
to be charged with an inheritance tax. Said appraisers shall serve for one year,
until their successors are appointed and qualified. They shall each take an
oath to faithfully and impartially perform the duties of the office, but shall not
be required to give bond. They shall be subject to removal at any time at the
discretion of the court, and the court, or judge thereof in vacation, may also
in its discretion, either before or after the appointment of the regular appraisers,
appoint other appraisers to act in any given case. Vacancies occurring otherwise
than by expiration of term shall be filled by the appointment of the court, or by
a judge in vacation. ('05, p. 198.)

1220x3. Appraisers must not take fee from heir, etc. Any appraiser
appointed by this title who shall take any fee or reward from any executor, admin-
istrator, trustee, legatee, next of kin or heir of any decedent, or from any other
person liable to pay said tax or any portion thereof, shall be guilty of a mis-
demeanor, and, upon conviction in any court having jurisdiction of misdemeanors,
he shall be fined not less than $250 nor more than $500, and imprisoned not
exceeding ninety days, and in addition thereto the judge shall dismiss him from
such service. ('05, p. 199.)

1220z 4. Commission to appraisers. When an estate is opened in which
there is property which may be subject to the inheritance tax, the clerk shall
forthwith issue a commission to the appraisers, who shall fix a time and place
for appraisement. ('05, p. 199.)

1220x5. Duties to appraisers. It shall be the duty of all appraisers
appointed under the provisions of this title to forthwith give notice to the state
treasurer and other persons known to be interested in the property to be ap-
praised, of the time and place at which they will appraise such property, which
time shall not be less than ten days from the date of such notice. The notice
shall be served in the same manner as is prescribed for the commencement of civil
actions, and if not practicable to serve the notice provided for by statute, they
shall apply to the court or a judge in vacation for an order as to notice, and
upon service of such notice and the making of such appraisement, the said notice,
return thereon, and appraisement shall be filed with the clerk, and a copy of
such appraisement shall be filed by the clerk with the state treasurer. ('05, p.
199.)

1220x6. Objections to appraisements, Hearing on. The state treas-
urer or any person interested .in the estate appraised may, within twenty days
thereafter, file objections to said appraisement, on the hearing of wh ch as an
action in equity, either party may produce evidence competent, or material to
the matters therein involved. If, upon such hearing, the court finds the amount
at which the property is appraised is at its value on the market in the ordinary
course of trade, and the appraisement was fairly and in good faith made, it shall
approve such appraisement; but if jt finds that the appraisement was made at
a greater or less sum than the value of the property in the ordinary course of
trade, or that the same was not fairly or in good faith made, it shall set aside
the appraisement, appoint new appraisers, and so proceed until a fair and good
appraisement of the property is made at its value in the market in the ordinary

Comp. Laws.] UTAH. 1133

course of trade. The state treasurer, or any one interested in the property
appraised, may appeal to the supreme court from the order of the district court
approving or setting aside any appraisement to which exceptions have been filed.
Notice of appeal shall be served within thirty days from the date of the order
appealed from, and the appeal shall be perfected in the time now provided for
appeals in equitable actions. In case of appeal the appellant, if he is not the
state treasurer, shall give bond to be approved by the clerk of the court, to pay
the tax, which bond shall provide that the said appellant and sureties shall pay
the tax for which the property may be liable, with cost of appeal. If upon the
hearing of objections to the appraisement, the court finds that the property is not
subject to the tax, the court shall upon expiration of time for appeal when no
appeal has been taken order the clerk to enter upon the lien book a cancella-
tion of any claim or lien for taxes. If at the end of twenty days from the filing
of the appraisement with the clerk, no objections are filed, the appraisement shall
stand approved. ('05, p. 199.)

1220x7. Action on cases now pending. In all cases where the property
of an estate has been subject to or liable for the payment of the tax provided in
this title, or where such property has heretofore been appraised and the tax not
yet paid, and the notice required in this title was not given, it shall be the duty of
the court, immediately upon the taking effect of this title, to enforce such tax,
or to set aside any appraisement heretofore made, and order a reappraisement
of the same to be made as in this title provided, anything in the law contrary
notwithstanding. ('05, p. 200.)

1220x8. Time of appraisement and payment of tax. All the property
of the decedent subject to such tax shall, except as hereinafter provided, be
appraised within thirty days next after the appointment of an executor, adminis-
trator, or trustee, at its market value in the ordinary course of trade, and the
tax thereon, calculated upon the appraised market value after deducting debts
for which the estate is liable, shall be paid by the persons entitled to said estate
within fifteen months from the death of the testator or intestate, unless a longer
period is fixed by the court, and, in default thereof, the court shall order the
same, or so much thereof as may be necessary to pay such tax, to be sold. ('01,
p. 62; '05, p. 200.)

1220x9. Estates for life or term of years. Whenever any reai estate
of a decedent shall be subject to such tax, and there be a life estate or interest
for a term of years given to one party or parties, and the remainder to another
party or parties, the court shall direct the interest of the life estate, or term
of years, to be appraised at its market value in the ordinary course of trade, and,
upon the approval of such appraisement by the court, the party entitled to
such life estate, or term of years, shall, within sixty days thereafter, pay such
tax, and in default thereof the court shall order such interest in said estate, or so
much thereof as shall be necessary to pay such tax, to be sold. Upon the deter-
mination of such life estate, or term of years, the court shall, upon its own
motion, or upon the application of the state treasurer, cause such estate to be
appraised at its then market value in the ordinary course of trade, from which
shall be deducted the value of any improvements thereon, or betterments thereto,
if any, made by the remainder man during the time of the prior estate, to be

1134 STATUTES ANNOTATED. [Utah

ascertained and determined by the appraisers, and the tax on the remainder shall
be paid by such remainder man within sixty days from the approval by the court
of the appraisers. If such tax is not paid within said time, the court shall then
order said real estate, or so much thereof as shall be necessary to pay such tax,
to be sold. Whenever any personal estate of a decedent shall be subject to
such tax and there be a life estate or interest for a term of years given to one
party or parties, and the remainder to another party or parties, the court shall
inquire into and determine the market value in the ordinary course of trade,
of the life estate or interest for the term of years, and order and direct the amount
of the tax thereon to be paid by the prior estate and that to be paid by the
remainder man, each of whom shall pay his proportion of the tax within sixty
days from such determination, unless a longer period is fixed by the court, and,
in default thereof, the executor, administrator, or trustee shall pay the same
out of said property and hold the same from distribution, and invest it at interest
under the order of the court until said tax is paid, or until the interest on the
same equals the amount of such tax, which shall thereupon be paid. ('01, p.
62; '05, p. 200.)

1220x10. Where bequest is in lieu of compensation to executor.

Whenever a decedent appoints one or more executors or trustees and in lieu
of his or their allowance or commission makes a bequest or devise of property
to him or them, which would otherwise be liable to said tax, or appoints them
as residuary legatees, and said bequests, devises, or residuary legacies exceed
what would be a reasonable compensation for his or their services, such excess
shall be liable to such tax, and the court having jurisdiction of his or their accounts,
upon its own motion or on application of the state treasurer, shall fix such com-
pensation. ('01, p. 63; '05, p. 201.)

1220x11. Where legacy is a charge upon real estate. Whenever any
legacies subject to said tax are charged upon or payable out of any real estate,
the heir or devisee, before paying the same, shall deduct said tax therefrom
and pay it to the executor, administrator, trustee, or state treasurer, and the
same shall remain a charge and be a lien upon said real estate until it is paid;
and payment thereof shall be enforced by the executor, administrator, trustee,
or state treasurer in his name of office, in the same manner as the payment of the
legacy itself could be enforced. ('01, p. 63; '05, p. 201.)

1220x12. Executor, etc., to collect tax. Every executor, administrator,
or trustee having in charge or trust any property subject to said tax, and which is
made payable to him, shall deduct the tax therefrom, or shall collect the tax
thereon from the legatee or person entitled to said property, and he shall not
deliver any specific legacy or property subject to said tax to any person until
he has collected the tax thereon. ('01, p. 63; '05, p. 202.)

^ 1220x13. Taxes payable to state treasurer within fifteen months.

All taxes imposed by this title shall be payable to the state treasurer, and those
which are made payable by executors, administrators, or trustees shall be paid
within fifteen months from the death of the testator or intestate, unless a longer
period is fixed by the court, or a judge thereof in vacation. All taxes not paid

Comp. Laws.] UTAH. 1135

within fifteen months from death of the testator or intestate shall draw interest
at the rate of eight per cent per annum until paid. ('01, p. 63; '05, p. 202.)

1220x14. Executor, etc., to collect tax in certain cases, other cases
state treasurer. It is hereby made the duty of all executors, administrators,
or trustees charged with the management or settlement of any estate subject
to the tax provided for in this title, to collect and pay to the state treasurer the
amount of the tax due from any devisee, legatee, grantee, or donee of the dece-
dent, except in cases falling under the provisions of sections 1220x8, 1220x9,
in which cases the state treasurer shall collect the same. Applications may be
made to the district court by such executor, administrator, trustee, or state
treasurer to sell the real estate subject to said tax in an equitable action, or, if
made to the court having charge of the settlement of the estate, the proceedings
shall conform as nearly as may be to those for the sale of real estate of decedent
for the settlement of his debts. ('01, p. 63; '05, p. 202.)

1220x15. No settlement allowed until tax paid. No final settlement
of the account of any executor, administrator, or trustee shall be accepted or
allowed unless it shall show, and the court shall find, that all taxes imposed
by the provisions of this title upon any property or interest therein belonging
to the estate to be paid by such executors, administrators, or trustees, and to
be settled by said account, shall have been paid, and the receipt of the state
treasurer for such tax shall be the proper voucher for such payment. ('01, p.
64; '05, p. 202.)

[See notes to the Act of 1901, ante, p. 1029.]

1220x16. District court to have jurisdiction. The district court having
either principal or ancillary jurisdiction of the settlement of the estate of the
decedent shall have jurisdiction to hear and determine all questions in relation
to said tax that may arise affecting any devise, legacy or inheritance, orany grant
or gift, under this title, subject to appeal as in other cases, and the state treasurer
shall in his name of office represent the interests of the state in any proceedings.
('01, p. 64; '05, p. 202.)

1220x17. State treasurer may demand information from executors,
etc. Before issuing his receipt for the tax, the state treasurer may demand
from executors, administrators, or trustees, such information as may be neces-
sary to verify the correctness of the amount of the tax and interest, and, when
demanded, they shall send such treasurer certified copies of such parts of their
reports as he may demand, and upon the refusal of said parties to comply with
the demand of the state treasurer, it is the duty of the clerk of the court to
comply with such demand, and the expenses of making such copies and trans-
cripts shall be charged against the estate, as are other costs in probate. ('05, p.
203.)

1220x18. Inheritance tax and Hen book to be kept by clerk. The

clerk of the district court in and for each county, where an inheritance tax is
charged or sought to be charged, shall provide and keep a suitable book, sub-
stantially bound and suitably ruled, to be known as the inheritance tax and lien
book, in which shall be kept a full and accurate record of all proceedings in cases

1136 STATUTES ANNOTATED. [Utah

where property is charged or sought to be charged with the payment of an inherit-
ance tax under the laws of this state, to be printed and ruled so as to show upon
one page: —

1. The name, place of residence, and date of death of the decedent;

2. Whether the decedent died testate, or intestate, and if testate, the record
and page where the will was probated and recorded;

3. The name and postoffice address of the executor, administrator, trustee,
or grantee, with date of appointment or transfer;

4. The names, postoffice addresses, and relationship, if known, of all the heirs,
devisees, and grantees;

5. The appraised valuation of the personal property;

6. The amount of inheritance tax due upon said personal property;

7. A record of payment with amount and date;

8. Date of filing objections and names of objectors;

9. Blank for index and reference to all proceedings, and for memorandum
entries of the court or judge in relation thereto.

Upon the opposite page of such record shall be printed : —

1. Real estate from (naming decedent) which is subject to the lien prescribed
by the statute for inheritance tax;

2. A full and accurate description of such real estate, by forty-acre or fractional
tracts, or by lots, or other complete individual description;

3. The appraised valuation as reported by the appraisers, with a reference
to the record of their report, as to each piece of such real estate;

4. The amount of inheritance tax due upon each such piece;

5. A record of payments, with dates and amounts;

6. Date of filing objections, and names of objectors;

7. Blank for index and reference and to all rpoceedings, and for memorandum
entries of court or judge in relation thereto. ('05, p. 203.)

1220x19. Executor, etc., to report facts. — Entry of real estate in lien
book. Upon the appointment and qualification of each executor, administrator,
and testamentary trustee, the clerk issuing the letters shall at the same time
deliver to him a blank form upon which he shall be required to make detailed
report of the following facts: —

1. Name and last residence of the decedent;

2. Date of death;

3. Whether or not he left a will;

4. Name and postoffice of executor, administrator, or trustee;

5. Name and postoffice of surviving wife or husband, if any;

6. If testate, name and postoffice of each beneficiary under the will;

7. Relationship of each beneficiary to the testator;

8. If intestate, name and postoffice of each heir at law;

9. Relationship of each heir at law to the decedent;

10. Inventory of all real estate of the decedent, giving amount and descrip-
ticfn of each tract.

Within ten days after his qualification, each executor, administrator, and testa-
mentary trustee shall make and return to the clerk, under oath, a full and detailed
report as indicated in the preceding section, any will to the contrary notwith-

Comp. Laws.] UTAH. 1137

standing, and upon his failure to do so, the clerk shall forthwith report his delin-
quency to the district court if in session, or to a judge of said court if in vacation,
for such order as may be necessary to enforce an observance of this section.
If it appears from the inventory or report so filed that the real estate, or any part
of it, is subject to an inheritance tax, it shall be the duty of the executor or
administrator to cause the lien of the same to be entered upon the lien book in
the office of the clerk of the court in each county where each particular tract of
said real estate is situated, and no conveyance of said real estate or interest
therein, which is subject to such tax before or after entering of said lien, shall
discharge the real estate so conveyed from the operation thereof, and no final
settlement of the account of any executor, administrator, or trustee shall be ex-
cepted or allowed unless a strict compliance with the provisions of this section
has been had by such person. ('01, p. 61; '05, p. 204.)

1220x20. Extension of time for appraisement. Whenever, by reason
of the complicated nature of an estate, or by reason of the confused condition
of the decedent's affairs, it is impracticable for the executor, administrator, or
trustee or beneficiary of said estate to file with the clerk of the court a full, com-
plete, and itemized inventory of the personal assets belonging tothe estate, within
the time required by statute for filing inventories of the estate, the court may,
upon the application of such representatives or parties in interest, extend the
time for the making of the inheritance appraisement for a period not to exceed
three months beyond the time fixed by law. ('05, p. 205.)

1220x21. Clerk to enter in inheritance tax and lien book. — Index.

The clerk shall from time to time enter upon the inheritance tax and lien books
the title of all estates subject to the inheritance tax, as shown by the inventories
or lists of heirs filed in his office, or as reported to him by the district attorney
or the state treasurer, and shall enter in said book as against each estate or title,
at the appropriate place, all such information relating to the situation and condi-
tion of the estate as he may be able to obtain from the papers filed in his office,
or from the district attorney or the state treasurer, as may be necessary to col-
lection and enforcement of the tax. He shall also immediately index all liens
entered upon the inheritance tax and lien book in the book kept in his office for
that purpose. ('05, p. 205.)

1220x22. Complete record by clerk. In all cases entered upon the in-
heritance tax and lien book, the clerk shall make a complete record in the proper
probate record, of all the proceedings, orders, reports, inventories, appraisements
and all other matters and proceedings therein. ('05, p. 205.)

1220x23. Duties of clerk. It shall be the duty of each clerk of the district
court to make examination from time to time of all reports filed with him by
administrator, executors, and trustees, pursuant to law; also to make examina-
tion of all foreign wills offered for probate or recorded within his county, as well
as of the record of deeds and conveyances in the recorder's office of said county,
and if from such examination, or from information or knowledge coming to him
from any other source, he finds or believes that any property within his county,
or within the-jurisdiction of the district court of said county, has, since May 14,
1901, passed by will or by the intestate laws of this or any other state, or by deed,

1138 STATUTES ANNOTATED. [Utah

grant, sale, or gift made or intended to take effect, in possession or in enjoyment
after the death of the testator, donor, or grantor, to any person within this
state, he shall make report thereof in writing to the state treasurer, embodying
in such reportthe name and residence of the decedent, date of death, name and
address of administrator, executor, or trustee; the description of any property
liable to a tax and the county in which it is located, and name and relationship
of all beneficiaries or heirs. Any citizen of the state having knowledge of property
liable to such tax, against which no proceeding for enforcing collection thereof
is pending, may report the same to the clerk, and it shall be the duty of such
officer to investigate the case, and if he has reason to believe the information
to be true, he shall forthwith institute such proceedings substantially as above
indicated. ('05, p. 205.)

1220x24. Duties of court and district attorney. On the first or second
day of each regular term, the court shall require the clerk to present for its
inspection, the inheritance tax and lien book hereinbefore provided for, together
with all reports of administrators, executors, and trustees which have been filed
pursuant to this title since the last preceding term. The district attorney shall
also attend and make report to the court concerning the progress of all cases
pending for the collection of such taxes, together with any other facts which,
in his judgment, may aid the court in enforcing the general observance of the
inheritance tax law. If from information obtained from the records or reports,
or from any other source, the court has reason to believe that there is property
within its jurisdiction liable to the payment of an inheritance tax, against which
proceedings for collection are not already pending, it shall enter an order of record,
directing the district attorney to institute such proceedings forthwith. Should
any estate, or the name of any grantee or grantees, be placed upon the book
at the suggestion of the district attorney or the state treasurer in which the papers
already on filein the clerk's office do not disclose that any inheritance tax is due
or payable, the district attorney shall forthwith give to all parties in interest
such notice as the court or judge may prescribe, requiring them to appear on a
day to be fixed by the said court or judge, and show cause why the property
should not be appraised and subjected to said tax. If upon hearing at the time
so fixed, the court is satisfied that any property of the decedent, or any property
devised, granted, or donated by him, is subject to the tax, the same proceedings
shall be had as in other cases, so far as applicable. ('05, p. 206.)

1220x25. Costs, by whom paid. In all cases where any property so
passes as to be liable to taxation under the inheritance law, all costs of the pro-
ceedings had for determining the amount of such tax or for determining whether
the property of the entire estate is sufficient in amount as to render that part
passing to heirs subject to the tax, shall be chargeable to such estate, and to
discharge the lien upon such property all costs, as well as the taxes, must be paid.
In all other cases the costs are to be paid as ordered by the court, and when a
decision adverse to the state has been rendered, with an order that the state pay
the costs, it is the duty of the clerk of the court in which such action was pend-
iAg to certify the amount of such costs to the state treasurer, who shall, if said
costs be correctly certified, and the case has been finally terminated, present the
claim to the state board of examiners, to audit, and said claim being allowed by
said board, the state auditor is directed to issue a warrant on the state treasurer
in payment of such costs. ('05, p. 207.)

Comp. Laws.] UTAH. 1139

1220x26. Safe deposit company or bank to give notice before trans-
fexring securities. No safe deposit company, bank, or other institution,
person, or persons holding securities or assets of the decedent shall deliver or trans-
fer the same to the executor or administrator or legal representative of said
decedent unless notice of the time and place of such intended transfer be served
upon the state treasurer at least five days prior to the transfer thereof, or unless
the tax for which such securities or assets are liable under this title shall be first
paid. It shall be lawful for, and the duty of, the state treasurer personally, or
by any person by him duly authorized, to examine such securities or assets at
the time of such delivery or transfer. Failure to serve such notice upon the state
treasurer, or to allow such examination on the delivery of such securities or assets
to such executor, administrator, or legal representative before said tax is paid
shall render such safe deposit company, trust company, bank, or other institution,
person, or persons liable for the payment of the taxes due upon such securities
or assets as provided in this title. ('05, p. 207.)

1220x27. In case of foreign estate. Whenever any property belonging
to a foreign estate, which estate, in whole or in part, is liable to pay an inheritance
tax in this state, the said tax shall be assessed upon the market value of said
property remaining after the payment of such debts and expenses as are charge-
able to the property under the laws of this state; in the event that the executor,
administrator, or trustee of such foreign estate files with the clerk of the court
having ancillary jurisdiction and with the state treasurer, duly certified state-
ments exhibiting the true market value of the entire estate of the decedent owner,
and the indebtedness for which the said estate has been adjudged liable, which
statements shall be duly attested by the judge of the court having original juris-
diction, the beneficiaries of said estate shall then be entitled to have deducted
such proportion of the said indebtedness of the decedent from the value of the
property as the value of the property within this state bears to the value of the
entire estate. ('05, p. 207.)

1220x28. Id. Whenever any property, real or personal, within this state,
belongs to a foreign estate, said foreign estate passes in part exempt from the
inheritance tax, and in part subject to said inheritance tax, and it is within the
authority or discretion of the foreign executor, administrator, or trustee adminis-
tering the estate to dispose of the property not specifically devised to direct
heirs or devisees in the payment of the debts owing by the decedent at the time
of his death or in the satisfaction of legacies, devisees, or trusts given to direct
and collateral legatees or devisees, or in payment of the distributive shares of
any direct and collateral heirs, then the property within the jurisdiction of the
state, belonging to such foreign estate, shall be subject to the inheritance tax
imposed by this title, and the tax due thereon shall be assessed as provided in
the next preceding section of this title, and with the same proviso respecting the
deduction of the proportionate share of the indebtedness, as therein provided.
('05, p. 208.)

1220x29. Id. — Tax on corporate stock. If a foreign executor, administrator
or trustee shall assign or transfer any corporate stock or obligations in this state
standing in t-he name of a decedent, or in trust for a decedent, liable to such tax,
the tax shall be paid to the state treasurer on or before the transfer thereof;

1140 STATUTES ANNOTATED. [Utah

otherwise the corporation permitting its stock to be so transferred shall be liable
to pay such tax, and it is the duty of the state treasurer to enforce the payment
thereof. ('05, p. 208.)

1220x30. State treasurer may compromise certain cases. Whenever
an estate charged, or sought to be charged, with the inheritance tax, is of such
a nature or is so disposed that the liability of the estate is doubtful, or the value
thereof cannot with reasonable certainty be ascertained under the provisions
of law, the state treasurer may, with the approval of the attorney general, which
approval shall set forth the reasons therefor, compromise with the beneficiaries
or representatives of such estates, and compound the tax thereon; but said
settlement must be approved by the district court or judge of the proper court,
and after such approval, the payment of the amount of the taxes so agreed upon
shall discharge the lien against the property of the estate. ('05, p. 208.)

1220x31. Title applies to pending cases. This title shall apply to all
pending estates which are not closed, and the property subjected by this title
to the said tax is liable to the provisions incorporated in this title. ('05, p.
208.)

Vt. St.I VERMONT. 1141

VERMONT.

List of Statutes.

1862. Statutes of Vermont, c. 126, s. 20.

1866. " " " No.21,s. 1.

1874. " " " No. 80.

Revised Laws, s. 4524.

1892. Statutes of Vermont, No. 47.

1894. " ' " " s. 5373.

1896. " " " No. 46.

1904. " " " No. 30.

1906. Public Statutes, c. 38, ss. 821-901.

1906. " " s. 6313

1906. " " s. 6319 repealing.
1904, No. 30, and 1896, No. 46.

1908. Statutes of Vermont, No. 31, ss. 1-3, pp. 27-28.

1910. " " " No. 55.

1910. " " " No. 56.

In General.

Vermont has long had a system of probate fees but its first collat-
eral inheritance tax was enacted in 1896 and substantially amended
in 1904. (For constitutionality see Hickok's Estate, 78 Vt. 259.) Its
main features are very similar to the New Hampshire statute. The
tax is on collateral inheritances only, the rate is uniformly five per
cent, and no amount is exempt. No tax is levied on an inheritance
to father, mother, husband, wife, lineal descendant, stepchild,
adopted child, child of stepchild or of adopted child, wife or
widow of son, husband of daughter. Public Sts. c. 38, ss.
821-901, as amended by acts of 1908, No. 31, approved January
28, 1909.

A bill for a graduated direct inheritance tax passed the House
of Representatives during the 1910-1911 session, but it failed to
pass the Senate.

Vermont taxes stock in a Vermont corporation or national bank
owned by a non-resident and, like New Hampshire, taxes registered
bonds as well. It goes even a step further and makes a claim for
an inheritance tax where a deceased non-resident owns stock in a
corporation not incorporated under the laws of Vermont, provided

1142 STATUTES ANNOTATED. [Vt. St-

such foreign corporation has its principal office in Vermont. Cor-
porations and individuals transferring or delivering securities, and
banks that pay deposits of non-residents, are made responsible
for the tax.

It is the practice of the tax authorities to require an inventory
of the entire property of the deceased, and a copy of the will before
permitting a Vermont corporation to transfer securities owned by
a deceased non-resident.

If any inheritance tax has been paid by either a resident or non-
resident to any other state or government, except the United States,
on account of the transfer of securities, bank deposits or other assets,
the Vermont tax is limited to an amount sufficient to make the
total tax five per cent.

Vermont does not tax the bank deposits of a Vermont resident
in another state and this would seem to apply to securities outside
the state as well. Joyslin's Estate, 76 Vt. 88.

Constitutional Limitations.

Vermont Constitution, 1793, as amended, seems to contain no
restriction on the taxing power in regard to uniformity or as to
inheritance tax.

See Thorpe, American. Constitutions, p. 3762 et seq.

The constitution of Vermont, established July 9, 1793, was
amended by bill of rights, article IX, "That every member of
society hath a right to be protected in the enjoyment of life, liberty
and property, and therefore is bound to contribute his proportion
towards the expence of that protection, and yield his personal ser-
vice, when necessary, or an equivalent thereto, but no part of any
person's property can be justly taken from him, or applied to pub-
lic uses, without his own consent, or that of the representative
body of freemen."

See notes to the Act of 1896, post, p. 1143.

Probate Fees.

Vt. St. 1862, c. 126, s. 20, imposes a fee for the probate or admin-
istration where the estates do not exceed $150, one dollar; in all
Other estates, two dollars; and other fees for other pioceedings in
probate. Probate fees in Vermont are also covered in Vt. St. 1866,
No. 21, s. 1; and Vt. St. 1874, No. 80; and Revised Laws, s. 4524;
Vt. St. 1892, No. 47; and Vt. St. 1894, s. 5373.

1896, c. 46.] VERMONT. 1143

THE COLLATERAL INHERITANCE ACT OF 1896.

Vt. St. 1896, c. 46. Approved November 24, 1896.

S. 1. All property within the jurisdiction of this state, and any interest therein,
whether belonging to inhabitants of this state or not, and whether tangible or
intangible, which shall pass by will or by the intestate laws of this state, or by
deed, grant, sale, or gift made or intended to take effect in possession or enjoy-
ment after the death of the grantor, to any person in trust or otherwise, other
than to or for the use of the father, mother, husband, wife, lineal descendant,
adopted child, the lineal descendant of any adopted child, the wife or widow of
a son, or the husband of the daughter of a decedent, or to or for charitable, edu-
cational or religious societies or institutions, the property of which is exempt by
law from taxation, shall be subject to a tax of five per centum of its value, for the
use of the state, and all administrators, executors, and trustees, and any such
grantee under a conveyance made during the grantor's life shall be liable for all
such taxes, with lawful interest as hereinafter provided, until the same shall have
been paid as hereinafter directed; provided, however, that no estate shall be
subject to the provisions of this act, unless the value of the same, after pay-
ment of debts and expenses of administration including money paid out under
order of the probate court for the purchase of burial stones, shall exceed the sum
of two thousand dollars.

Equality of Tax.

The Vermont constitution provides that every member of society
is bound to contribute "his proportion" towards the expense of the
protection which the state affords him. and it was claimed that this
excludes all methods of taxation that are not uniform, equal and
proportionate, and that the collateral inheritance tax lacked uni-
formity. The court holds, however, that the question is what
constitutes equality of apportionment within the meaning of this
provision, and in ascertaining this the basis of the act in question
must be considered, and that the statute is not a tax upon property
but a tax upon the transmission of property, which is not a natural
right, but a privilege accorded by the state. And the court decides
that the constitutional requirement of proportional contributions
was not intended to restrict the state to methods of taxation that
operate equally upon all its inhabitants, regardless of the variety
and measure of the advantages derived from its protection and regu-
lation. A member of the body politic has from the state not only
the protection of his property, but the privilege of taking property
by descent and by will. It seems clear that privileges of this
character as well as property are to be considered in determining
the just proportion of the individual. In re Hickok, 78 Vt. 259,
62 A. 724.

1144 STATUTES ANNOTATED. [Vt. St.

Situs of Debts. — Nature of Tax.

It was agreed that the Vermont statute of 1896, c. 46, is a tax
upon the right to succeed to estate left vacant by death and is
imposed by the sovereignty in virtue of its authority to enforce
contribution from those who become vested with property by its
grace and power. This sovereignty is clearly the one which has the
right to say who shall succeed and that is the sovereignty in which
the assets are located, which in the case of debts is placed where
the debtor resides.

The testatrix died a resident of Vermont, leaving debts due to
her from non-residents of Vermont ; and the court holds that these
debts are not to be included in fixing the amount of the estate sub-
ject to an inheritance tax under this statute.

The act applies to "all property within the jurisdiction of this
state." The court remarks that this must mean within its pro-
bate jurisdiction and that therefore the debts were not within the
jurisdiction, for immediately upon the death of the creditor they
became assets in the jurisdiction where the debtor resided. This
is well settled in Vermont. Furthermore the statute applies only
to property which "passed by will or by the intestate laws of this
state." And the court remarks that this property did not
pass by virtue of the Vermont law at all, for that law had
no force in the domicile of the debtors ; it passed by force and
virtue of the law of those jurisdictions. In re Joyslin, 76 Vt.
'88, 56 A. 281.

The court remarks that it is aware that other courts have reached
an opposite conclusion and cites Frothingham v. Shaw, 175 Mass. 59,
State V. Dalrymple, 70 Md. 294, 17 A. 82, 3 L. R. A. 372, In re Swift,
137 N. Y. 77, 64 Hun 639, 32 N. E. 1096, 18 L. R. A. 709, 19 N. Y.
Suppl. 292. (This decision stands as an anomaly in the law. See
ante, p. 172. It was avoided by the act of 1904, post, p. 1145.)

Exemptions. — Construction.

It is a well established general rule that exemptions from taxation
are strictly construed, and that no claim of exemption can be sus-
tained unless within the express letter or necessary scope of the
exempting clause. In re Hickok, 78 Vt. 259, 62 A. 724.

Exemptions. —Validity.

It was suggested that the law is invalid because of the inequality
arising from the exemption of estates not exceeding two thousand

1904, c. 30.] VERMONT.

1145

dollars in value, but the Vermont constitution does not pre-
vent the making of exemptions. In re Hickok, 78 Vt. 259 265
62 A. 724.

Vt. St. 1896, c. 46, ss. 2-16, cover the appraisal of the estate and the determina-
tion and collection of the tax.

THE AMENDMENT OF 1904.

Vt. St. 1904, c. 30, 8. 1. Every person other than the father, mother, hus
band, wife, lineal descendant, adopted child, lineal descendant of an adopted
child, the wife or widow of a son, the husband of the daughter of a decedent
or a city or town for cemetery purposes; and every charitable, educational or
religious society or institution other than such as are created and existing under
and by virtue of the laws of this state and having its principal office herein, that
shall receive in trust or otherwise any legacy or distributive share comprised of
or arising from property or any interest therein passing by will, the law of descent
or the decree of a court in this state, from any deceased person who owned such
property at the date of his decease shall, except as herein otherwise provided, be
subject to a tax for the use of the state equal to five per cent of the value in money
of such legacy or distributive share.

"The Decree of a Court in This State."

After the decision in In re Joyslin, 76 Vt. 88, 56 A. 281, the legis-
lature passed Vermont statute of 1904, c. 30, which changed the
phraseology of the earlier act, which included only property which
passed by will or by the intestate laws of the state, to include also
property which shall pass by "the decree of the court of this state."

Where the record does not show that any administration was had
in the foreign jurisdiction, and that the several sums due from for-
eign debtors were collected by the administrator appointed in Ver-
mont, and the proceeds brought here, where they formed a part
of the assets which passed by the final decree of the probate court,
such assets are subject to tax.

It was argued that in Vermont statute 1904, c. 30, s. 81 ("shall
also apply to all persons who deceased prior to the enactment
hereof") the word "persons" had reference to those who re-
ceived the property, not those from whom it passes. But the court
refused the suggestion, saying it would lead to an absurd result.
In view of the settled law that the inheritance tax is not a tax on
property, but on the transmission of property, it can make no
difference with the tax whether the legatee or distributee be alive
or dead. In re Howard, 80 Vt. 489, 495, 68 A. 513

Vt. St. 1904, c. 30, s. 2. Every person other than such as are exempted in
the preceding section from the payment of the taxes imposed by this act who shall

1146 STATUTES ANNOTATED. [Vt. St.

acquire title to real estate or any interest therein by voluntary conveyance or
deed of gift made or intended to take effect in possession or enjoyment upon or
after the death of the grantor, or who shall by voluntary conveyance or by gift
acquire title to personal estate or any interest therein made or intended to take
effect and possession or enjoyment upon or after the death of the grantor or
donor, shall pay to the state a tax of five per centum of the value in money of
such real or personal estate or the interest therein conveyed. Such tax shall
be a first lien on the real or personal estate thus conveyed or given until such
tax shall have been paid in full.

Vt. St. 1904, c. 30, ss. 3 and 4, provide for the deduction of taxes lawfully paid
to other states.

Vt. St. 1904, c. 30, s. 5, exempts bequests to maintain burial lots.

Vt. St. 1904, c. 30, ss. 6-54, provide for the fixing of the tax and its collection.

S. 81. Application to estates in litigation. The first seventy-nine sec-
tions of this act in so far as they shall pertain to a tax imposed by this act upon
a person, corporation, society or institution that shall in any manner hereinbefore
provided receive property or any interest therein passing from a deceased person,
shall also apply to all persons who deceased prior to the enactment hereof but
whose estates shall not have been at the date of such enactment decreed or dis-
tributed; provided, however, that if any part of an estate has been lawfully paid
or decreed prior to the enactment hereof such part so paid or decreed shall not
be affected by this act, and further provided that said last named section shall
not in any manner apply to an act done or performed prior to the enactment
hereof for which a penalty u therein provided.

Effect on Prior Law.

The testator died June 1, 1904, and Vermont statute 1904,
c. 30, took effect December 9, 1904. It was claimed that the estate
was not affected by the statute of 1904, but the court says that so
far as the provisions of the two acts are the same or similar, the
later act is to be construed as a continuance of the other, and all
acts or parts of acts inconsistent with the provisions of the later
act were repealed. But such repeal was not to affect the validity
of a tax accrued or accruing at the time of the enactment thereof.

But the court says that since the law of 1896 did not include
debts due from non-residents, the tax here in controversy was not
accrued nor was it accruing before the provisions of the new act,
including such debts, took effect, and therefore the estate was sub-
ject to the statute of 1904. In re Howard, 80 Vt. 489, 68 A. 513.

^ THE PUBLIC STATUTES AND AMENDMENTS.

Vt. Public St. of 1906, c. 38, codifies the existing law.
Vt. Public St. 1906, s. 6319, repealed Vt. St. 1896, No. 46, and
1904, No. 30.

1906. c. 38.1 VERMONT. II47

Vt. St. 1908, No. 31, approved January 28, 1909, amends Public
St. ss. 822, 824, 857.

Vt. St. 1908, No. 31, s. 4, provides that no reductions in the
account of debts and expenses of administration shall be made
except such debts and expenses have been allowed by the court
having jurisdiction of the estate.

Vt. St. 1910, No. 55, approved January 28, 1911, amends Public
St. ss. 822, 876, 878, 879.

Vt. St. 1910, No. 56, approved January 27, 1911, amends Public
St. s. 833.

THE PRESENT ACT.

Public Statutes of 1906, c. 38, as Amended.

S. 821. Definitions. The word "legatee," when used in this chapter, shall
extend to and include any devisee or distributee named in a will; the word
"legacy," all devises and bequests; and the words "share" or "distributive share,"
all real or personal property or any interest therein passing under the laws of
descent or the intestate laws of this state, or any other state or government;
provided that such construction shall not be required, if the same would thereby
be repugnant to the manifest intention of the general assembly.

S. 822. Taxable transfers. Every person other than the father, mother,
husband, wife, lineal descendant, the wife or widow of a son, the husband of a
daughter, a stepchild, a child adopted as such during his minority in conformity
with the laws of this state, a child of a stepchild or of such adopted child, bishop
in his ecclesiastical capacity for religious uses within this state, or a city or town
for cemetery purposes; and every charitable, educational or religious society
or institution other than one created and existing under and by virtue of the
laws of this state and having its principal office herein, that shall receive in trust
or otherwise a legacy or distributive share consisting of or arising from property
or an interest therein passing by will, the law of descent or the decree of a court
in this state, from a deceased person who owned such property at the date of his
decease, shall, except as otherwise provided in this chapter, pay to the state a
tax of five per cent of the value in money of such legacy or distributive share.
(As amended by St. 1908, c. 31, s. 1, and St. 1910, c. 55, s. 1.)

[See notes to the Acts of 1896 and 1904, ante, pp. 1143, 1145.]

S. 823. Transfers to take effect on death. Every person, unless one of
a class exempted in the preceding section, who acquires title to real or personal
estate or any interest therein by voluntary conveyance or gift made or intended
to take effect in possession or enjoyment upon or after the death of the grantor
or donor, shall pay to the state a tax of five per cent of the value in money of
such real or personal estate, or the interest therein conveyed. Such tax shall
be a first lien on the real or personal estate thus conveyed or given, until such
tax is paid in full.

1148 STATUTES ANNOTATED. [Vt. St.

Foreign Taxes Deducted.

S. 824. General provisions. If a transfer or other similar tax has been law-
fully paid to another state or to a government other than the United States,
for or on account of an assignment or transfer of stocks, obligations, securities
or other evidences of indebtedness, or for or on account of the collection, delivery
or assignment of securities, deposits or other assets, and such stocks, obligations,
securities, other evidences of indebtedness, deposits or assets, or the proceeds
thereof, shall in whole or in part be included in any legacy or distributive share
decreed subsequent to the ninth day of December, 1904^ by a probate court of
this state to a legatee or heir liable to the tax imposed by section eight hundred
twenty-two, such legatee or heir shall be liable to pay to this state under the
provisions of said section only such part of the tax therein imposed as will make
the entire tax both within and without this state, based on such portion of a
legacy or distributive share taxed in such other state or government, equal to
five per cent of the total value thereof, to be determined as provided in this
chapter. (As amended by St. 1908, c. 31.)

Discount.

The tax was assessed in the state of New York on certain New
York property and the estate paid the tax within six months, and
therefore obtained a rebate of five per cent. The court holds that
the estate can deduct before paying the Vermont tax only what had
been actually paid in New York and not the New York tax as
assessed. In re Meadon, 81 Vt. 490, 70 A. 1064.

S. 825. Official receipt required. No rebate from the full amount of the
tax required by the third preceding section shall be allowed by the probate
court under the provisions of the preceding section, unless an official receipt or
other competent evidence, showing the amount so paid to such other state or
government, the date of payment, the rate, the valuation of the property upon
which such tax was computed and a brief description thereof, is presented to
the probate court.

[This section refers to section 824.]

S. 826. Bequests to Maintain Burial Lots Exempt. Towns, cities,
villages, trustees, officials therein and official boards, corporations, associations
and persons that receive a legacy in trust or otherwise, the use, income or prin-
cipal sum of which is to be used for the sole purpose of purchasing, maintain-
ing, caring for or beautifying a burial lot owned by the decedent, or wherein
he or any of his kin shall be interred, or for the sole purpose of erecting, caring
for or maintaining a monument or other structure thereon, shall be exempt
from the payment of taxes imposed by this chapter.

Taxes, How Made Payable.

S. 827. Administrator, etc., to .deduct. An administrator, executor or
trustee having in charge or in trust a legacy or distributive share passing to a
legatee or heir liable to a tax imposed by this chapter, shall, before paying or
delivering the same to such legatee or heir, deduct the tax therefrom or collect it
from such legatee or heir.

1906, c. 38.] VERMONT. 1149

S. 828. Sale of legacy for tax. In case the tax cannot be deducted there-
from and the legatee or heir neglects or refuses to pay such tax, the probate
court may, in the same manner as administrators and executors are licensed to
sell real and personal estate for the payment of debts, license such administrator,
executor or trustee to sell a part or all of a legacy or distributive share belong-
ing to a person liable to a tax imposed by this chapter, for the payment of such
tax.

S. 829. Legacy delivered when tax is paid; lien. An administrator,
executor or trustee shall not deliver any specific legacy, property or the proceeds
thereof to any legatee or heir liable to such tax, until such tax has been deducted
or collected as aforesaid. Conveyances, mortgages, attachments, sales or assign-
ments of such legacy, share, the proceeds thereof, or any interest therein, shall be
subject to the taxes imposed by this chapter; and such taxes shall be a lien
on such legacies, distributive shares and the proceeds thereof, until the same are
fully paid.

S. 830. Liability for tax; collection; report. A person having in charge
or in trust as administrator, executor or trustee, a legacy or distributive share
passing to a person in the manner mentioned in section eight hundred and twenty-
two, shall be liable for the taxes imposed by this chapter, with interest as here-
inafter provided, until the same are fully paid. The administrator, executor
or trustee shall collect the tax due the state from a person to whom real estate
passes in the manner mentioned in such section from the decedent of whose
estate he is administrator, executor or trustee; but if such administrator, execu-
tor or trustee is unable to collect such tax before his final account is allowed, he
shall make a full and detailed report to the commissioner of state taxes, showing
the names of the persons liable to such unpaid tax and a description of the real
estate on account of which such tax is due.

Legacy, When Made a Charge upon Property.

S. 831. Tax to be deducted from legacy; lien; payment. When a
legacy passing to a legatee liable to such tax is charged upon or payable out
of any real or personal estate devised to any person, said person shall, before
paying such legacy, deduct such tax therefrom and pay it to the administrator,
executor or trustee of the estate of which such real and personal estate is a part.
Such tax shall be a lien upon such real or personal estate, until the same is paid.
Payment thereof may be enforced by the administrator, executor or trustee in
the manner provided in the third preceding section.

Probate Court Proceedings.

S. 832. Final settlement of account of an administrator, etc. A final
settlement of the account of an administrator, executor or trustee shall not be
allowed by a probate court, unless such account shall show and said court shall
find that ihe taxes imposed by the provisions of this chapter are paid, and that
one of the triplicate receipts issued by the state treasurer therefor is filed in said
probate court.

S. 833. Jurisdiction of probate court. 1. The probate court having
either principal or ancillary jurisdiction of the settlement of the estate of a

1150 STATUTES ANNOTATED. [Vt. St.

decedent shall, except as otherwise provided in this chapter, hear and determine
all questions relating to the taxes hereby imposed and t'he value of all legacies
and distributive shares upon which such taxes are computed.

2. In case it shall be made to appear to a probate court that the amount
of a tax heretofore or hereafter fixed by it is less than or in excess of the amount
imposed by the provisions of this chapter, it may in its discretion upon applica-
tion of said commissioner or of the administrator or executor of the estate mak-
ing such payment, and upon reasonable notice in writing thereto, determine
the amount which should have been thus imposed and accordingly modify or
amend its decree therefore made. (As amended by St. 1910, c. 56.)

Appeals.

S. 834. Who may appeal. A legatee, heir or beneficiary affected by a decree
of the probate court respecting the taxes imposed by this chapter, the adminis-
trator, executor or trustee of an estate of which a legacy or distributive share pass-
ing to a person liable to the taxes imposed is a part, and the commissioner of
state taxes in behalf of the state, may appeal to the county court from such orders
and decrees of said probate court.

Proceedings in Supreme Court.

S. 835. Probate court to certify finding and decree. Whenever the
legal construction of a part of this chapter is in dispute and the facts relating
thereto have been determined by the probate court wherein the estate is being
administered, the judge of such court shall, if no appeal is taken, upon the written
application of the administrator, executor or trustee of such estate and the
commissioner of state taxes, filed therein before the time for an appeal has ex-
pired, certify to the supreme cburt such part of its finding and decree as relates
to such construction, together with the contentions of the parties relating thereto,
which shall be filed with such application.

S. 836. Certificate; hearing; judgment. Such certificate shall be placed
on file in the office of the clerk of the county wherein such probate district is
located, on or before twenty-five days from the date of such finding or decree;
and thereupon the supreme court shall have jurisdiction of all questions of law
presented thereby; and the same shall be heard and determined, as if the cause
had been passed to said court upon the pro forma judgment of a county cour
to which such cause might have been appealed. The final decision and judgment
therein shall be certified to the probate court in the same manner and with the
same legal effect as provided in section two thousand nine hundred and eighty-
eight.

Costs.

S. 837. Orders. In proceedings therein, involving questions of taxation under
thp provisions of this chapter, the county or supreme court shall, upon final
hearing, make such orders respecting' the payment of costs as, in the opinion
of said court, are just and equitable. The auditor of accounts shall draw an
order for the costs to be paid by the state, upon receipt of a bill thereof signed
by the person taxing the

1906, c. 38.] VERMONT. 1151

Valuation by Probate Court.

S. 838. Determination upon application; notice. The probate court
having jurisdiction of an estate may, at any time, or upon the application of the
commissioner of state taxes or a legatee, heir, administrator, executor or trustee
of such estate, determine, so far as possible, the value of all legacies and dis-
tributive shares passing to persons who are liable to the tax imposed by this
chapter, and the amount of taxes due therefrom. Notice of such application
and of the time and place of the hearing shall be given in the same manner as in
case of the settlement of accounts by administrators and executors.

S. 839. Notice as to findings and decrees. Said probate court shall notify
the commissioner of state taxes in writing, upon blanks to be furnished by him
for that purpose,.of its findings and decrees respecting the matter specified in the
preceding section, and the date on which such decree was made.

S. 840. How determined. The value of a legacy or distributive share men-
tioned in section eight hundred and twenty-two, except as otherwise provided in
this chapter, shall be its actual market value in money at the expiration of one
year from the death of the decedent; but if such legacy or share is sooner paid or
delivered, the valuation thereof shall be determined as of the date at which the
person entitled to the same comes into or is entitled to the possession or the ben-
eficial use thereof.

S. 841. Same. The value of property passing by voluntary conveyance or
gift mentioned in section eight hundred and twenty-three, except as otherwise
provided in this chapter, shall be its market value in money at the date the per-
son entitled to the same comes into or is entitled to the possession or the bene-
I ficial use thereof.

Valuation by Appraisers.

S. 842. 'Appraisers. Upon the written application signed by the com-
missioner of state taxes, or by a legatee or heir liable to a tax on account of a
legacy or distributive share passing to him in the manner designated in section
eight hundred and twenty-two, or by the administrator, executor or trustee of
an estate of which such legacy or share is a part, or by the grantee or donee of
property passing in the manner designated in section eight hundred and twenty-
three, the probate court wherein such estate is being administered or for the
district where a part of the property passing in the manner designated in section
eight hundred and twenty-three is situated, if no letters of administration have
been granted upon the estate of the grantor or donor therein mentioned, or for
any district wherein a corporation mentioned in section eight hundred and
seventy-six, or a savings bank or trust company or any corporation having
securities or assets mentioned in section eight hundred and seventy-eight has its
principal place of business in this state, or within which a person holding such
assets or securities resides, may, in its discretion, appoint not more than three
disinterested persons, to determine, upon hearing or otherwise, the value of
all or a part of the real estate or personal property, or of an interest therein,
ing to a person liable to a tax imposed by this chapter.

1152 STATUTES ANNOTATED. [Vt. St.

S. 843. Warrant to appraisers. Said probate court shall issue a warrant
to said appraisers and shall therein designate what part of such real and per-
sonal property, or interest therein, shall be appraised by them, and shall therein
fix the time within which such warrant shall be returnable to said court.

S. 844. Oath; notice. Said appraisers shall, before entering upon the per-
formance of their duties, be duly sworn and shall give such notice to the parties
as said probate court orders.

S. 845. Authority. An appraiser shall have the same authority to compel
the- attendance of witnesses, and to administer oaths thereto, that judges of
probate have.

S. 846. Returns; proceedings. Said appraisers shall make returns of their
findings to the probate court within the time mentioned in such warrant; and
said probate court may, in its discretion, accept or reject a part or all of such
findings. If such report is rejected, the probate court may appoint new ap-
praisers to determine such valuation, or it may determine such valuation upon
hearing.

S. 847. Fees. The fees of said appraisers shall be fixed by the probate court
and shall be paid by the administrator, executor or trustee of the estate, if the
property so appraised is a part or all of an estate in which letters of administra-
tion have been granted within this state. In case no letters of administration
have been granted, the fees of said appraisers, when fixed as aforesaid, shall be
paid by an order drawn by the auditor of accounts.

Valuation by Agreement.

S. 848. How made. Whenever it is necessary under the provisions of this
chapter to establish the value of property or an interest therein, the commis-
sioner of state taxes may agree upon such valuation with the administrator,
executor or trustee of an estate of which such property is a part. This section
shall apply to any agreement made with a foreign administrator, executor or
trustee.

S. 849. Agreement to be in writing, when. In cases where the valuation.
of a part or all of the property mentioned in the preceding section or for any
interest therein has been established by agreement pursuant to the preceding
section, the commissioner of state taxes and said administrator, executor or
trustee shall cause such agreement to be written, and specify therein the various
items of property and the value of each item.

S. 850. Agreement to be filed where. One copy of the agreement specified
in the preceding section shall be filed in the office of the commissioner of state
taxes, one with the state treasurer, and one in the probate court, if any, having
jurisdiction of such estate within this state. In case a foreign administrator,
ej^ecutor or trustee is a party to such agreement, one copy thereof shall be deliv-
ered to him.

S. 851. Agreement may be set aside. The probate court shall have power
to affirm or set aside the agreement mentioned in the three preceding sections,

1906, c. 38.1 VERMONT. 1153

in all estates within its jurisdiction; and the state treasurer may, in his discretion,
set aside any such agreed statement of valuation to which a foreign adminis-
trator, executor or trustee is a party, if he is satisfied that the interests of the
state so require.

S. 852. Same. If the agreed statement of valuation hereinbefore mentioned
is set aside for any cause, the value of such propertv shall be determined as
hereinbefore otherwise provid

Valuation of Life Estate.

S. 853. How determined. When it becomes necessary for the purpose of
computing a tax imposed by this chapter to determine the value at the time such
tax accrues of an interest in property arising from the bequest or devise of the
use or income thereof for the term of an individual life or lives, or involving the
contingency of the duration of such life or lives, it shall be determined according
to the "American Experience Table of Mortality," with interest at the rate of
three and one-half per cent per annum.

S. 854. Same. When it becomes necessary for the purpose of computing
a tax imposed by this chapter to determine the value at the time such tax accrues
of an annuity or ah interest in property arising from the bequest or devise for the
use or income thereof for a term of years or for a period in which the life duration
or life contingency is not involved, the value shall be determined by discount
tables computed at the rate of three and one-half per cent per annum.

S. 855. Duties to probate court. In making the computation specified in
the two preceding sections, the probate court shall determine the amount of
such yearly income, whether for life or for a term of years, or the probable aver-
age annual value of the use or income of such estate for life or for a term of years.

S. 856. Duties of commissioner of state taxes. The commissioner of-
state taxes shall procure suitable tables for the purposes of this chapter and
may cause the same or a part thereof to be printed in convenient form with
propei explanation for the use of the probate courts within this state, and such
tables shall be used in computing the value of yearly incomes or life estates men-
tioned in this chapter. The auditor of accounts shall draw his order to defray
the expenses incurred under this section.

S. 857. Whenever a person bequeaths or devises the use of property for the
term of a natural life or lives, or for a term of years, or gives or conveys such use
in the manner provided in section eight hundred twenty-three, to or for the use
of any person, society, institution or corporation exempt from the payment of a
tax imposed by this chapter, and bequeaths, devises, gives or conveys the re-
mainder to a person, society, institution or corporation subject to the taxes
hereinbefore imposed, the value of the prior estate shall, in the manner herein-
before provided, be deducted from the appraised value of such property; and
the person entitled to such remainder shall be liable to the tax imposed by this
chapter. Such tax shall become due and payable at the same time that a tax
would become due and payable, if the entire property, instead of a remainder
therein, had passed to the person receiving such remainder. (As amended by
St. 1908, c. 31.)

1154 STATUTES ANNOTATED. [Vt. St.

Legacy to an Executor.

S. 858. Liable to tax, when. When a decedent appoints one or more execu-
tors or trustees and, in lieu of their compensation, makes a bequest or devise of
property to them which would otherwise be liable to a tax imposed by this chap-
ter, or appoints them his residuary legatees, and such bequests, devises or residu-
ary legacies exceed what would be a reasonable compensation for their services,
such excess shall be liable to the taxes imposed by this chapter. The probate
court having jurisdiction of their accounts shall determine what would have been
such reasonable compensation, and the amount of such excess, if any.

Receipts on Payment of Taxes.

S. 859. State treasurer to issue; filing. The state treasurer shall, upon
receiving the amount of a tax under the provisions of this chapter, issue receipts
in triplicate to the person paying the tax, who shall forthwith file one copy thereof
with the auditor of accounts, one with the commissioner of state taxes and one
with the probate court wherein the estate is administered; provided that the
person paying such tax upon property passing in any other manner than that
described in section eight hundred and twenty-two may retain one copy of sucn
receipt instead of filing the same with the probate court.

Method of Refunding Taxes.

S. 860. Duties of commissioner of state taxes. Whenever the state treas-
urer has received money on account of a tax imposed by this chapter in excess
of the amount finally fixed by a court having jurisdiction thereof, or in excess
of the amount otherwise determined under the provisions of this chapter, the
commissioner of state taxeajnay certify the amount of such excess and the name
of the person entitled thereto to the auditor of accounts, who shall thereupon
draw an order for such excess, in favor of the person designated in such certificate.
Said commissioner shall execute such certificate in quadruplicate and shall
deliver one copy thereof to the person entitled to such rebate, file one with the
state treasurer and one with the auditor of accounts and retain one for his own
files.

Time of Payment of Taxes.

S. 861. Generally. Taxes imposed by this chapter, unless otherwise pro-
vided, shall be payable to the state treasurer on or before the expiration of two
years from the date of the death of the decedent.

S. 862. On legacies or distributive shares. When legacies or distributive
shares are delivered or paid within such two years to a legatee or heir, the taxes
due on account of such legacies or shares shall be paid to the state treasurer at
the time such legacies or shares are paid or delivered.

^ S. 863. Probate court may extend. A probate court administering an
estate may extend the time within' which a tax imposed by this chapter shall be
due and payable, whenever the circumstances of the case so require.

S. 864. Same. If, for any reason, said probate court shall, at any time, be
unable to determine the value of a part or all of such legacies or snares, or the

1906, c. 38.] VERMONT. 1155

amount of a part or all of a tax due the state thereon, it shall, from time to time,
extend the time within which such taxes shall become due and payable.

S. 865. Same. Whenever the probate court extends the time for assessment
and payment of a tax imposed by this chapter, it shall make a record thereof and
shall forthwith file with the commissioner of state taxes a statement showing the
date to which such extension is made and what legacies or shares are thereby
affected.

S. 866. On transfers. Taxes due under the provisions of section eight hundred
and twenty-three shall be payable on or before the expiration of three months
from the date of the death of the grantor or donor therein mentioned, unless
the grantee or donee sooner enters into possession of the property acquired in
the manner therein mentioned; in which case, the tax shall thereupon become
payable.

Inventory of Property.

S. 867. Duty of grantee or donee. A person who as grantee or donee comes
into the possession or enjoyment of property in the manner specified in section
eight hundred and twenty-three shall forthwith file with the commissioner of state
taxes a just and true inventory under oath of all such property, giving a descrip-
tion of the property included in such conveyances, deeds and gifts.

S. 868. Penalty. A person who neglects or refuses to file the inventory
provided in the preceding section shall be subject to a penalty of not more than
ten per cent nor less than five per cent of the value of the property which so
comes into his possession or enjoyment, to be recovered in an action on this statute
brought in the name of the state by the commissioner of state taxes.

Interest on Taxes.

S. »69. When. Taxes not paid to the state treasurer when due under the
provisions of this chapter, unless the time for payment thereof has been extended
by the probate court pursuant to the provisions of this chapter, shall bear inter-
est from the date at which the same become payable until the same are paid.

Reports to Commissioner of State Taxes.

S. 870. Duties of register of probate. In estates wherein property may
be decreed to a legatee or heir liable to a tax imposed by this chapter, the register
of the probate court having jurisdiction thereof shall, at the time of granting
letters of administration therein, upon blanks to be furnished by the commissioner
of state taxes, report the name of the decedent, the date of his death, the name
and address of the administrator or executor, and the relationship, if any, and the
names of all known legatees or heirs liable to the taxes imposed by this chapter.

S. 87 1 . Same. Whenever the probate court fixes a date for the determination
of the amount due to the state on account of a tax imposed by this chapter, or
for the determination of the value of a legacy or share passing to a legatee or heir
liable to such- tax, or for the determination of any matter pertaining to a tax
imposed by this chapter, the register of probate shall, upon blanks furnished for

1156 STATUTES ANNOTATED. [Vt. St.

that purpose by the commissioner of state taxes, forthwith mail to said com*
missioner a statement showing the name of the estate, the date of such hearing,
the nature thereof, whether or not the property out of which such legacy or share
is to be decreed is in money or its equivalent, and, if in other property, a brief
description thereof as shown by the files of said court. If such hearing is con-
tinued, notice thereof shall be given in person or by mail to said commissioner.

Estates Not Administered upon.

S. 872. Administrator, how appointed. If, upon the decease of a person
leaving an estate passing in whole or in part to legatees or heirs liable to the taxes
imposed by this chapter, no will disposing of such estate is offered for probate
within the time prescribed by law and no application for administration is made
within four months from the date of such decease, the commissioner of state
taxes shall apply to the probate court for the appointment of an administrator
of such estate.

S. 873. Duties of probate court. A judge or register of probate shall forth-
with notify the commissioner of state taxes, upon blanks to be furnished by him,
of estates mentioned in the preceding section, known to them or either of them,
in which no will or application for administration is presented within the time
specified.

Certified Copies of Wills and Inventories.

S. 874. To be furnished commissioner of state taxes. An adminibtrator,
executor, trustee or other legal representative of a decedent, appointed by a
probate court within this state or by a foreign court or government, shall, when
required in writing by the commissioner of state taxes, withm a reasonable
time after receiving such requisition and without expense to the state, furnish
said commissioner a certified copy of any part or all of any record, or of the
will, inventory or other document required to be filed in the court wherein the
estate of which he is such administrator, executor, trustee or legal representative
is being administered.

S. 875. Failure to furnish; penalty, etc. An administrator, executor,
trustee or legal representative mentioned in the preceding section, appointed
by a probate court in this state, shall forfeit to the state five dollars for each
day's neglect or refusal to provide the certified copies therein specified, within a
reasonable time after receiving requisition therefor; and if a foreign administrator,
executor, trustee or legal representative neglects or refuses to furnish the copies
therein required, no certificate shall be given by the commissioner of state taxes
under the provisions of section eight hundred and eighty-two, until such certified
copies are furnished and a reasonable time has thereafter elapsed.

S, 876. Deduction of tax on estate of non-resident. I. If a foreign
administrator, executor or trustee assigns or transfers any stock or obligation
in a domestic corporation, or in a foreign corporation having its principal place of
business located in this state, or in a national bank located in this state, owned
by a deceased non-resident at the time of his death and passing by will or the
laws of descent of the state or government wherein such administrator, executor
or trustee receives his appointment, to or for the use of any person other than the

1906, c. 38.1 VERMONT.

1157

father, mother, husband, wife, lineal descendant, stepchild, child adopted as
aforesaid, child of a stepchild or of such adopted child, the wife or widow of a
son, the husband of a daughter, a bishop in his ecclesiastical capacity for religious
uses within this state, a town or oity in this state for cemetery purposes, or to or
for the use of a charitable, educational or religious society or institution created
and existing under the laws of this state, such administrator, executor or trustee
shall pay to the state a tax equal to five per cent of the value in money, at the
date of such assignment or transfer, of such part or all of such stocks or obliga-
tions so passing by will or the laws of descent.

II. If such taxes are not paid on or before the date of such assignment or
transfer, they shall be a lien on such stock or obligation until the same are paid.

•III. In determining the amount of any tax imposed by this section, no deduc-
tions on account 'of debts or expenses of administration shall be made unless
such debts or expenses have been allowed by the probate, surrogate or other
court having original jurisdiction of said estate.

IV. The words "stock" and "obligation" as used in this section, shall be
construed to include the proceeds thereof. (As amended by St. 1908, c. 31;
St. 1910, c. 55.)

S. 877. Transfer of stock before payment of tax prohibited. A domestic
corporation, or a foreign corporation having its principal place of business in
this state, or a national bank located in this state, which records a transfer of a
share of its stock or of its obligation, made by a foreign administrator, executor
or trustee, or which issues a new certificate for a share of its stock or of the trans-
fer of an obligation aforesaid at the instance of a foreign administrator, executor
or trustee, before the taxes imposed by the preceding section are paid, shall be
liable for such tax in an action upon this statute brought in the name of the
state by the commissioner of state taxes.

S. 878. Estate of non-resident. I. If a foreign administrator, executor
or trustee of a non-resident decedent, or a legatee or heir of such decedent, or an
assignee of suth administrator, executor, trustee, legatee or heir, collects, receives
or assigns securities or assets, being in this state at the time of the death of such
non-resident decedent, and belonging to him at his decease, which shall pass in
whole or in part by will or the laws of the state or government wherein such
foreign administrator, executor or trustee has received his appointment, to or
for the use of any person other than the father, mother, husband, wife, lineal
descendant, stepchild, child adopted as aforesaid, child of a stepchild or of such
adopted child, the wife or widow of a son, the husband of a daughter, a bishop
in his ecclesiastical capacity for religious uses within this state, or a town or city
in this state for cemetery purposes, or to or for the use of a charitable, educa-
tional or religious society or institution created and existing under the laws
of this state, such foreign administrator, executor or trustee, the assignee of such
securities or assets, or any legatee or heir of such non-resident decedent, shall
pay to the state a tax equal to five per cent of the value in money, at the date
of the delivery, collection or assignment of such part pr all of such securities or
assets so passing by will or the laws of descent.

II. If such-taxes are not paid on or before the date of such delivery, collec-
tion, or assignment they shall be a lien on such securities or assets until such
taxes are paid.

1158 STATUTES ANNOTATED. [Vt. St.

III. In determining the amount of any tax imposed by this section, no deduc-
tions on account of debts or expenses of administration shall be made, unless
such debts or expenses have been allowed by the probate, surrogate or other
court having original jurisdiction of said estate. (As amended by St, 1908,
c. 31, and St. 1910, c. 55.)

Delivery of Property of Non-resident.

S. 879. The securities or assets mentioned in the preceding section shall
not be delivered or transferred by a person or corporation to a foreign adminis-
trator, executor or trustee of a non-resident decedent, nor to a legatee or heir
of such decedent, nor to an assignee of such administrator, executor, trustee,
legatee or heir, before the taxes, if any, imposed by the preceding section are paill,
or the certificate mentioned in section eight hundred eighty-two is issued by
said commissioner. Said commissioner, or person designated by him in writing,
may at all reasonable times examine such securities or assets. (As amended
by St. 1910, c. 55.)

S. 880. Failure to give notice; liability. Failure to mail or deliver such
notice as provided in the preceding section shall render the person or corpora-
tion required to report such delivery or transfer liable in an action upon this statute,
brought in the name of the state by the commissioner of state taxes, for all taxes
imposed by the second preceding section.

S. 881. Deposits not to be paid or transferred before payment of tax.

No savings bank, savings institution, trust company or savings bank and trust
company shall pay a part or all of a deposit, or any interest or dividend thereon,
to an administrator or executor, under the provisions of section four thousand
six hundred and thirty-seven, nor transfer the same to the account of any per-
son upon its records, unless the certificate mentioned in the following section has
been delivered thereto.

S. 882. Waiver of liability. A certificate signed by the commissioner of
state taxes certifying that an administrator, executor, trustee, legatee, heir or
assignee is not liable to the taxes imposed by sections eight hundred and seventy-
six and eight hundred and seventy-eight, or certifying that such taxes are paid,
shall operate as a waiver or discharge of all liability to the state on the part of
any person or corporation mentioned in the six preceding sections.

Reports by Savings Banks and Trust Companies.

S. 883. Notice of death of non-resident depositor, etc. A savings bank,
savings institution, trust company, or savings bank and trust company shall
notify the commissioner of state taxes, upon blanks to be furnished by him,
of the decease of any non-resident depositor and the name and residence of any
foreign administrator, executor or trustee as soon as the same is known thereto.

* S. 884. Payment of an account prohibited without consent of com-
missioner of state taxes. If a savings bank, savings institution, trust com-
pany, or savings bank and trust company has notice of the death of a depositor
residing within this state at the time of his decease, or has reasonable grounds
for believing him to be dead, it shall not, without the consent in writing of the

1906, c. 38.1 VERMONT. 1159

commissioner of state taxes, pay or transfer upon its records a part or all of a
deposit or account standing in the name of such decedent, for which an order,
assignment or other instrument in writing signed by such decedent has been
given, other than checks given in the ordinary course of business. Notice in
writing shall be forthwith given by such corporation to said commissioner, set-
ting forth the character of such order, assignment or other instrument, and the
name and residence of the payee or assignee therein named.

S. 885. Liability. A savings bank, savings institution, trust company, or
savings bank and trust company, that wilfully violates a provision of the first,
second and fourth preceding sections, shall be liable to the state, in an action on
this statute, brought m the name of the state by the commissioner of state taxes,
for all taxes imposed by sections eight hundred and seventy-six and eight hundred
and seventy-eight upon a person liable to the same. But no such action shall
be commenced without the consent of the governor.

Equity Proceedings.

S. 886. Cotninissioner may institute. Whenever the commissioner of
state taxes claims that a tax is due on account of a transfer of property in the
manner described in section eight hundred and twenty-three, eight hundred and
seventy-six, eight hundred and seventy-eight or eight hundred and eighty-
four, he may, in the name of the state, petition the court of chancery in any
county to determine the amount of any or all taxes due, as provided in such sec-
tions, and to establish such taxes as a lien upon the property passing or being
transferred in the manner therein mentioned.

S. 887. Service, how made. Service of the petition mentioned in the
preceding section may be made in the manner provided by law; and service
thereof upon a foreign administrator, executor, trustee, legatee or assignee may
be made by delivering a copy of such petition to the custodian of the property
in this state therein named.

S. 888. Proceedings. A court of chancery or a chancellor shall, subject to
the right of appeal to the supreme court, hear and determine such cause at a stated
term of said court or during vacation, and may grant temporary and permanent
injunctions restraining any or all persons or corporations mentioned in the sec-
tions named in the second preceding section, from making any transfer or other
disposition of the property named therein, until all taxes imposed by this chapter
and found to be due on account of the passing of such property in the manner
therein mentioned are paid, and shall make all necessary orders and decrees to
carry out the provisions of this chapter.

Bonds and Recognizances.

S. 889. State not required to give. In cases or appeals involving ques-
tions arising under the provisions of this chapter, the state shall not be required
to give a bond or recognizance for costs or for an appeal, nor an injunction bond.

Proceedings in Probate Court.

S. 890. Jurisdiction and powers. A probate court, upon application of
the commissioner of state taxes, may summon and examine, upon oath, respect-

1160 STATUTES ANNOTATED. [Vt. St.

ing any matter pertaining to a tax or penalty imposed by this chapter, an officer,
stockholder, member or agent of a corporation mentioned in section eight hundred
and seventy-six, eight hundred and eighty-one, eight hundred and eighty-three
or eight hundred and eighty-four, or of any corporation or banking institution
having its principal place of business in the probate district wherein such pro-
bate court has jurisdiction; a custodian of the securities or assets, or the pro-
ceeds thereof, mentioned in section eight hundred and seventy-eight, residing or
having its principal place of business in such probate district; an administrator,
executor, trustee, legatee, heir or assignee mentioned in the last named section,
entitled to receive or who has received any part or all of such securities or assets,
or the proceeds thereof, held by such custodian; a member or officer of a society
or institution, and a person entitled to receive or who has received a part or all
of such securities, assets or proceeds thereof mentioned in section eight hundred
seventy-eight from a custodian thereof residing or having its principal place of
business in such probate district, or who is entitled to receive or has received,
by assignment or otherwise, a part or all of a deposit mentioned in section eight
hundred and eighty-one or eight hundred and eighty-four, from a banking insti-
tution having its principal place of business in such probate district; and the
grantee or donee of property, or an interest therein, passing in the manner set
forth in section eight hundred and twenty-three, within such probate district.

S. 891. Summons to witnesses. If a probate court has issued a summons
for a person mentioned in the preceding section, or has examined a person therein
named concerning any matter pertaining to a tax or penalty imposed by this
chapter, said court shall thereupon have jurisdiction to summon and so examine
any and all persons therein named, notwithstanding the residence of such person,
the location of the principal place of business of a corporation specified in the
preceding section, or the location of property therein specified, is in some town
or city without the probate district within which said court has original jurisdic-
tion to issue such summons and conduct such examination.

S. 892. Issuance of letters of administration. If, upon the examination
specified in the two preceding sections, the probate court wherein such examina-
tion is had, determines that, in order to aid in the collection of a tax imposed by
this chapter, an administrator should be appointed to administer upon the
estate whereof property within its original jurisdiction, passing to a person liable
to a tax imposed by this chapter, is the whole or a part, said probate court shall
take jurisdiction of such estate and shall thereupon issue letters of administration.

S. 893. Same; proceedings. Whenever letters of administration are issued
upon an estate mentioned in the preceding section, the probate court issuing
such letters shall have jurisdiction of all property within this state belonging
thereto. The same proceedings shall be had in such estate as provided by law
for the settlement of an estate wherein no will is probated.

S. 894. Production of books, records and documents. The probate
court shall have authority to require, by summons or otherwise, the production
of books of account, records or documents kept or possessed by a corporation
or person mentioned in the third and fourth preceding sections, concerning
matters as to which information shall be required to carry out the provisions
of this chapter.

1906, c. 38.] VERMONT. 1161

S. 895. Summons, generally. A probate court shall have power to summon
a person not hereinbefore specifically mentioned to appear before said court to
give evidence therein respecting any matter or thing hereinbefore mentioned
which shall be the subject of investigation; and said court may also require such
person to produce in court any book of account, record or document pertinent
to such investigation.

S. 896. Witness fees. Persons except those liable to pay a tax imposed by
this chapter shall be allowed the same per diem and travel fees as witnesses
in county court, to be paid by the state on the certificate of the commissioner
of state taxes.

S. 897. Penalty. A person or officer designated in section eight hundred and
ninety, eight hundred and ninety-one or eight hundred and ninety-five who
refuses or neglects to appear before the probate court in obedience to the sum-
mons therein mentioned, or refuses to be sworn as hereinbefore provided, or
neglects or refuses to produce the books, records or documents mentioned in
sections eight hundred and ninety-four and eight hundred and ninety-five, or
refuses to testify concerning any matter respecting which he shall be lawfully
examined, shall be fined not more than five thousand dollars nor less than five
hundred dollars.

Reports by Listers.

S. 898. How made. Listers in the several towns shall annually, within ten
days after the date on which the grand list is required by law to be filed by them
with the town clerk, report to the commissioner of state taxes, upon blanks to
be furnished by him, the names of persons who acquired, within the year end-
ing with the first day of April in the year in which such report is made, real or
personal estate situate in such town, or an interest therein, passing from a
deceased person by the laws of descent or in the manner specified in section
eight hundred and twenty-three.

Miscellaneous.

S. 899. False swearing. A person who wilfully swears falsely to a return,
report or statement, or upon an examination hereinbefore mentioned, shall be
guilty of perjury.

S. 900. Application of chapter. The foregoing sections of this chapter,
in so far as they pertain to a tax imposed upon a person, corporation, society
or institution that shall, in any manner hereinbefore provided, receive property
or any interest therein passing from a deceased person, shall also apply to the
estates of all persons who deceased prior to December ninth, nineteen hundred
and four, but whose estates were not then decreed or distributed; but if any part
of such an estate has been lawfully paid or decreed prior to such date, such part
shall not be affected by this chapter; nor shall this chapter apply to an act done
prior to such date for which a penalty is hereinbefore provided.

S. 901. Exception. This chapter shall not, except as otherwise provided,
affect the liability of any person, corporation, society or institution to pay taxes
already accrued under the provisions of number forty-six of the acts of eighteen
hundred and ninety- six, nor any proceedings affecting the same.

1162 STATUTES ANNOTATED. [Va. St.

VIRGINIA.

In General.

Virginia adopted a collateral inheritance tax in 1844. Its last
legislation was in 1910, and this state now has the distinction of
possessing the shortest inheritance tax law of any state. The tax
is on collateral inheritances only, the rate is uniformly five per cent
and there is no amount exempted. The tax is not levied on an in-
heritance to grandparents, father, mother, husband, wife, brother,
sister or lineal descendant. Stock of Virginia corporations owned
by non-residents is not taxable.

Constitutional Limitations.

The Virginia constitution of 1850, article IV, s. 22, prescribed as
follows: — -

"Taxation shall be equal and uniform throughout the common- •
wealth, and all property other than slaves shall be taxed in propor-
tion to its value, which shall be ascertained in such manner as may
be prescribed by law."

Virginia Constitution, 1902, a. 13.

S. 168. All property, except as hereinafter provided, shall be taxed; all
taxes, whether state, local or municipal, shall be uniform upon the same class of
subjects within the territory limits of the authority levying the tax, and shall
be levied and collected under general laws.

S. 169. Except as hereinafter provided, all assessments of real estate and
tangible personal property shall be at their fair market value, to be ascertained
as prescribed by law. The general assembly may allow a lower rate of taxation
to be imposed for a period of years by a city or town upon land added to its
corporate limits, than is imposed on similar property within its limits at the time
soch land is added. Nothing in this constitution shall prevent the general
assembly, after the first day of January, nineteen hundred and thirteen, from
segregating for the purposes of taxation, the several kinds or classes of property,
so as to specify and determine upon what subjects, state taxes, and upon what
subjects, local taxes may be levied.

Va. St.]

1843-44.

Statutes

1842-43.

1843-44.

1848-49.

1849.

Code

1849.

1852.

1852-53.

Statutes

iooo— O'l.

1853-54.

1855-56.

1859-60.

1860.

Code

1860.

1861-62.

Statutes

1863.

Code

1863.

1863-64.

.Statutes

1864-65.

1865-66.

1866-67.

1869-70.

1870-71.

1871-72.

1873.

Code

1873.

((

1874.

1874-75.

Statutes

1874-75.

of Virginia,

VIRGINIA.

t of Sta

itute

c. 1, s.

c. 2, s.

c, 1, s.

c. 1, s.

c. 2, s.

c. 3, s.

c. 1, s.

c. 35, s.

10.

c. 35, s.

42.

c. 39, s.

12.

c. 40, s.

c. 17, s.

17.

c. 17, s.

20.

c. 8, s.

16.

c. 2, s.

15.

c. 2, s.

19.

c. 9, s.

30.

c. 1, s.

38.

c. 35, s.

38.

c. 39, s.

11.

c. 1, s.

18.

c. 1, S.

15.

c. 1, S.

23.

c. 1.

c. 39, s.

33.

c. 1, s.

20.

c. 3, s.

18.

c. 64, s.

3,p

c. 45, s.

18.

c. 226, s.

13.

c. 193, s.

c. 385, s.

c. 33, s.

19.

c. 35, s.

c. 36, s.

c. 240, s.

21.

c. 240, s.

22.

c. 206, s.

20.

c. 239, s.

12.

1163

861.

1164

STATUTES ANNOTATED.

[Va. St.

1874-75.
1875-76.
1875-76.
1875-76.

1881-82.

1883-84.

1895-96.

1897-98.

1903.

1904.

Statutes of Virginia, c. 239, s.
c. 161.

13.

12.
13.

12.

12.
44.

c. 162, s. 12.

c. 162, s. 13.

c. 119, s.

c. 389.

c. 450, s.

c. 513.

c. 334.

c. 539.

c. 562.

c. 148, s.

c. 148, s.
Pollard's Code of Virginia, Vol 2, p. 2219, Clause 44, s. 457.
Constitution of Virginia. See Pollard's Code of Virginia, Vol. 1, s.
183, of Constitution, Clause G.
1910. Pollard's Virginia Code, Supplement, Vol. 3, p. 530, s. 44.
1910. Statutes of Virginia, c. 148, p. 229.

The history of the Virginia legislation is traced as follows: —

Session Laws of 1843-44, p. 9, s. 1.

Code of 1849, c. 39, s. 6.

The omission from the revenue law of the tax in 1855-56 operated
as a repeal of the statute. The law was again enacted in March
28, 1863, s. 15.

The tax was omitted from the general tax law until 1867, when
it was again enacted by the session laws 1866-67, c. 64, s. 3. Miller
V. Commonwealth, 27 Gratt. (Va.) 110.

THE EARLY STATUTES.

Va. St. 1687 imposed a fee of two hundred pounds of tobacco and casque on
the issuance of probates and letters of administration. [Burke, History of
Virginia, Vol. II, p. 200. See West on Inheritance tax, p. 104.]

Va. St. 1843-44, c. 1. Passed January 26, 1844.

S. 6. Be it further enacted. That all estates inherited by, or devised or
bequeathed to any other person or persons (or incorporated bodies) than a
father, mother, brother, sister, husband, wife, child or lineal descendant, shall
be subject to a tax of two per centum, on every hundred dollars of the clear
valiie of such estate, to be ascertained, collected and accounted for in the mode
which shall be prescribed by law.

Va. St. 1843-44, c. 3. Passed February 6, 1844.

An Act prescribing the mode of ascertaining and collecting the
TAX ON collateral INHERITANCES, devises and bequests, and amending
the act passed March 28, 1843, prescribing the mode of ascertaining certain
subjects of taxation.

1843-44, c. 3.] VIRGINIA. 1165

S. 1. Be it enacted by the general assembly, That from and after the first,
day of March next, all estates, real, personal and mixed, of every kind whatso-
ever, passing from any person who may die seized or possessed of such estate,
being within this commonwealth, either by will or under the intestate laws thereof,
to any person or persons, or to bodies politic and corporate, in trust or otherwise,
other than to or for the use of a father, mother, husband, wife, brother, sister,
children, or lineal descendants, born in lawful wedlock, shall be and they are
hereby made subject to a tax or duty imposed by law, on every hundred dollars
of the clear value of such estate or estates, and at and after the same rate for
any less amount, to be paid to the use of the commonwealth; and all executors,
and administrators, and their sureties, shall only be discharged from liability
for the amount of any or all such duties or taxes on estates, the settlement of
which they may' be charged with, by having paid the same over for the use
aforesaid, as herein directed: Provided, That no estate which may be valued
at a less sum than two hundred and fifty dollars, shall be subject to the duty or
tax.

S. 3 makes it the duty of clerks of courts to make an inventory of all real
estate which may have passed from deceased persons and attach this list to
the annual lists of transfers required to be furnished and the same shall con-
stitute a lien upon estates until paid and discharged.

Va. St. 1848-49, c. 1. Passed March 2, 1849.

S. 1 imposes a tax of two per cent on all estates inherited, bequeathed or
devised mentioned in the collateral inheritance tax law.

Va. Code 1849, c. 35.

S. 10 provides that the clerk of probate court should report all probates and
administrations.

S. 42. Where any real estate of a decedent, of greater value than two hundred
and fifty dollars, shall, by descent or devise, pass to any other person, or for any
other use than to or for the use of the decedent's father or other relations enum-
erated in the tenth section, the commissioner shall, in addition to the annual land
tax imposed upon real estate, charge thereon such specific tax as may be im-
posed by law in the case of such devise or descent.

Va. Code 1849, c. 39.

S. 6. Where any estate within this commonwealth of any decedent shall
pass under his will, or the laws regulating descents and distributions to any
other person or for any other use, than to or for the use of the father, mother,
husband, wife, brother, sister or lineal descendant of such decedent, the estate
so passing, if of greater value than two hundred and fifty dollars, shall be subject
to a tax of a certain per cent.

Ss. 7-12 cover the collection of the tax.

S. 11 provides that the clerk on receiving the payment of the tax shall issue a
receipt for which the representative of the estate shall, pay fifty cents.

Va. Code 1849, c. 40.

S. 3 provides that the taxes prescribed by c. 39, s. 1, on the estate of a dece-
dent shall be two per cent of such estate.

1166 STATUTES ANNOTATED. [Va. St.

Va. St. 1852, c. 17.

S. 16 provides that the inheritance tax shall be two per cent of the estate.
S. 20, passed June 5, 1852, repeals Virginia Code, chapter 40.

Va. St. 1853-54, c. 2, s. 15. Passed March 2, 1854.

The tax on the estate of a decedent, prescribed by the 39th chapter of the Code
of Virginia, shall be two per centum of such estate.

The Virginia collateral inheritance tax of 1854 is not a tax on
property. The property tax which the framers of the constitution
were contemplating in the twenty-second section was the ordinary
annually recurring tax for the support of government laid upon all
property whatsoever. Eyre v. Jacob, 14 Gratt. (Va.) 422, 430,
73 Am. Dec. 367.

Effect of Omission to Fix Rates.

Where the testator died in June, 1855, the inheritance tax was
due according to the rate prescribed by the act of March 2, 1854,
notwithstanding the legislature had omitted to fix any rate in the
tax law of March 18, 1856. The failure of the legislature to fix a
rate in 1856 without any repeal of the previous laws prescribing
the tax and fixing its rate, could not operate as a release of a tax
accrued in 1855.

The provisions of the code and of the act of March 2, 1854, are
permanent provisions and must remain in force until they are
expressly repealed or replaced by other provisions intended to be
substituted. Eyre v. Jacob, 14 Gratt. (Va.) 422, 439, 73 Am. Dec.
367.

Va. St. 1853-54, c. 2. Approved March 2, 1854.
S. 19 repeals the Code of Virginia, c. 40.

Repeal by Implication.

The court holds that the Virginia statute of March 18, 1856,
imposing taxes, is a perfect tax law imposing all taxes intended to
be imposed for the support of the government, but it omitted the
tax on collateral inheritances for the purpose of discontinuing it,
and therefore it repealed by implication the fifteenth section of
Ihe act of 1853-54. Fox v. Commonwealth, 16 Gratt. (Va.) 1.

Va. St. 1859, c. 1. Passed March 30, 1860.

S. 9. Where any real estate of a decedent shall under his will or by descent
pass to any other person, or for any other use than to or for the use of the father,

1859, C.I.] VIRGINIA. 1167

mother, husband, wife, brother, sister or lineal descendant of such decedent,
the clerk of the court in which such will is recorded, and the clerk of the court
of the county or corporation in which any real estate is situate, upon ascertain-
ing the fact, shall report the same to the commissioner for the district in which such
real estate may be.

S. 38. Where any real estate of a decedent, of a greater value than two hundred
and fifty dollars, shall, by descent or devise, pass to any other person, or for any
other use than to or for the use of the decedent's father or other relations, enum-
erated in the ninth section of this act, the commissioner shall, in addition to the
annual land tax imposed upon such real estate, charge thereon a specific tax of
two per centum on said estate.

Va. Code 1860^ c. 35.

S. 9. Where any real estate of a decedent shall under his will or by descent
pass to any other person, or for any other use than to or for the use of the father,
mother, husband, wife, brother, sister or lineal descendant of such decedent, the
clerk of the court in which such will is recorded, and the clerk of the court of
the county or corporation in which any such real estate is situate, upon ascertain-
ing the fact, shall report the same to the commissioner for the district in which
such real estate may be.

S. 38. Where ^ny real estate of a decedent, of a greater value than two hun-
dred and fifty dollars, shall, by descent or devise, pass to any other person, or
for any other use than to or for the use of the decedent's father or other relations,
enumerated in the ninth section of this act, the commissioner shall, in addition
to the annual land tax im posed upon such real estate, charge thereon a specific
tax of two per centum on said estate.

Va. Code 1860, c. 39.

S. 5. Where any estate within this commonwealth of any decedent shall
pass under his will, or the laws regulating descents and distributions, to any other
pe rson, or for any other use, than to or for the use of the father, mother, husband,
wife, brother, sister or lineal descendant of said decedent, the estate so passing,
if of greater value than two hundred and fifty dollars, shall be subject to a tax
of a certain per centum.

S. 11 imposes a penalty on any personal representative failing to pay the
inheritance tax.

Va. St. 1861, c. 1. Passed April 3, 1861.

S. 12. On the estate of a decedent, which passes under his will, or by descent
to any other person, or for any other use than to or for the use of the father,
mother, husband, wife, brother, sister, nephew, niece or lineal descendant of such
decedent, there shall be a tax of two per centum of such estate.

Va. St. 1863, c. 1. Passed March 28, 1863.

S. 15. On the estate of a decedent, which passes, under his will or by descent
to any other person, or for any other use than to or for the use of the father,
mother, husband, wife, brother, sister, nephew, niece, or lineal descendant of
such decedent, there shall be a tax of three per centum of such estate.

1168 STATUTES ANNOTATED. [Va. St.

Va. St. 1863-64. Passed March 3, 1864.

C. 1 suspends until January 31, 1865, the operation of the revenue statute of
March 28, 1863.

Va. St. 1865-66, c. 1. Passed February 15, 1866.

S. 20. If any estate of a decedent shall, under his will or by descent, pass
to any person other than to his lineal descendants, or his father, mother, hus-
band, wife, brother, sister, nephew or niece, or to or for their use, the clerk of
the court in which the will is recorded, and the clerk of the court of the county
or corporation in which such estate is situate, or in which the persons, or any
of them taking the same, reside, upon ascertaining the fact, shall report the
same to the proper commissioner of the revenue. On such estate the commis-
sioner shall, in addition to the annual tax, charge a specific tax to the person or
persons taking under the will or by descent as aforesaid.

Va. St. 1865-66, c. 3. Passed February 28, 1866.

S. 3. Upon any estate of a decedent, which shall pass by his will, or upon his
intestacy, to any other than to his lineal descendants, or his father, mother,
husband, wife, brother, sister, nephew or niece, two per centum upon the value
or amount thereof.

The collateral inheritance tax was imposed in Virginia in 1849,
was abolished in 1855 and was reimposed in 1863. In re Howard,
5 Dem. Surr. 483, 493.

Va. St. 1866-7, c. 64. Passed April 20, 1867.

S. 3. Upon any estate of a decedent, which shall pass by his will, or upon his
intestacy, to any person other than his lineal descendants, or his father, mother,
husband, wife, brother, sister, nephew, or niece, four per centum upon the value
or amount thereof.

Va. St. 1869-70, c. 45. In force April, 8 1870.

S. 18. If any estate of a decedent shall, under his will or by descent, pass
to any person other than to his lineal descendants, or his father, mother, hus-
band, wife, brother, sister, nephew, or niece, or to or for their use, the clerk of the
court in which the will is recorded, and the clerk of the court of the county or
corporation in which such estate is situate, reside, upon ascertaining the fact,
shall report the same to the proper commissioner of the revenue. On such estate
the commissioner shall, in addition to the annual tax, charge a specific tax to the
persoa or persons taking under the will or by descent, as aforesaid.

Va, St. 1869-70, c. 226. Approved July 9, 1870.

S. 3. Upon any estate of a decedent which shall pass by his will, or upon his
intestacy, to any person other than his lineal descendants, or his father, mother,
husband, wife, brother, sister, nephew, or niece, six per centum upon the value
or amount thereof.

1870-76.] VIRGINIA. 1169

Va. St. 1870-71, c. 193.

S. 3 imposes a tax of six per cent excepting on lineals or the father, mother,
husband, wife, brother, sister, nephew or niece.

Va. St. 1871-72, c. 385. Approved April 5, 1872.

S. 3 imposes a tax of six per cent except on lineals, or the father, mother,
husband, wife, brother, sister, nephew or niece.

Va. Code 1873, c. 33.

S. 19 provides for a report by the clerk of the court to the proper authorities
of cases where the inheritance tax is due.

Va. Code 1873', c. 35.

S. 3. Upon any estate of a decedent, which shall pass by his will, or upon
his intestacy, to any person other than his lineal descendant, or his father, mother,
husband, wife, brother, sister, nephew, or niece, the tax thereon shall be six
per centum upon the value or amount thereof.

Va. Code 1873, c. 36.

S. 1. Where any estate within this commonwealth, of any decedent, shall
pass under his will, or the laws regulating descents and distributions, to any
other person, or for any other use than to or for the use of the father, mother,
wife, brother, sister, nephew or niece, or lineal descendant of such decedent,
the estate so passing, if of greater value than two hundred and fifty dollars,
shall be subject to a tax of a certain per centum.

S. 7 imposes on personal representatives liability for failing to pay the inherit-
ance tax.

Va. St. 1874, c. 240. Approved April 30, 1874.

S. 21 requires clerks of court to report cases where the inheritance tax is due.

S. 22 imposes a tax of six per cent excepting lineal descendants or the father,
mother, husband, wife or sister of the decedent. This statute also contains a
provision that property conveyed by voluntary deed to evade the collateral
inheritance tax shall be assessed and taxed in all respect as collateral inheritances.

Va. St. 1874-75, c. 206. Approved March 16, 1874.

S. 20 imposes a duty on clerks of court to report all cases subject to the in-
heritance tax.

Va. St. 1874-75, c. 239. Approved March 31, 1875.

S. 12 imposes a tax of six per cent on any transfer to others than lineals, or
the father, mother, husband, wife or sister.

Va. St. 1875-76, c. 161. Approved March 27, 1876.

S, 1 amends the statute of March 16, 1875, section 20, as to the report of the
clerks of court of estates subject to inheritance tax.

1170 STATUTES ANNOTATED. [Va. St.

Va. St. 1875-76, c. 162. Approved March 27, 1876.

S. 12 provides a tax of six per cent on all persons other than lineals, or the
father, mother, husband, wife, or sister of the decedent; and also provides for
a tax on voluntary conveyances to evade the tax.

Va. St. 1881-82, c. 119. Approved April 22, 1882.

S. 12 provides a tax of six per cent except to lineals, or the father, mother,
husband, wife, or sister; and provides also a tax on deeds made to evade the tax.

Repeal.

Va. St. 1883-84, c. 389, in force March 11, 1884, repeals the collateral inherit-
ance tax law and provides that all penalties hereafter incurred under it are
remitted and all taxes hereafter claimed to be due are hereby remitted.

Va. St. 1883-84, c. 513, approved March 18, 1884, provides wherever a tax
has been assessed under the Code of 1873, c. 36, ss. 2 and 7, which has not been
paid or wherever any such tax has been paid since January 1, 1883, the party
taxed may apply to the proper court to have the tax corrected as an erroneous
assessment and to have the tax refunded, excepting the cost of collection.
Such applications shall be made within twelve months of the passage of the act.

Va. St. 1896, c. 334, p. 367, approved February 14, 1896, levied a tax of five
per cent on lineals.

Va. St. 1897-98, c. 539, approved February 28, 1898, amends Va. St. 1896, to
read as follows : —

S. 1. That where any estate, within this commonwealth of any decedent
shall pass under his will, or the laws regulating descents and distributions, to any
other person, or for any other use than to or for the use of the grandfather and
grandmother, father, mother, husband, wife, brother, sister, or lineal descendant
of such decedent, the estate so passing shall be subject to a tax of five per centum
on every hundred dollars' value thereof; provided, that such tax shall not be
imposed upon any property used exclusively for state, county, municipal, benevo-
lent, charitable, educational, or religious purposes.

S. 2. This act shall be in force from its passage.

Va. St. 1898, c. 539, p. 569, approved February 28, 1898, amends Va. St. 1896,
s. 1, by providing an exemption on property used exclusively for state, county,
municipal, benevolent, charitable, educational or religious purposes.

Va. St. 1897-98, c. 562, approved February 28, 1898, is an act especially
exempting certain charitable bequests in the will of a certain decedent.

Va. St. 1903, c. 148, s. 44, provides a tax on collateral inheritances of five per
cent.

Va. St. 1910, c. 148, approved March 14, 1910, amends Va. St. April 16, 1903,
s. 44.

Probate Fees.

Va. St. 1842-43, c. 1, s. 6, imposes a fee on the probate of a will and a grant
of administration of fifty cents.

Va. St. 1842-43, c. 2, s. 9, makes it the duty of clerks of court to furnish a list
for the issuance of all wills and administrations.

Va. St. 1843-44, c. 1, s. 7, provides a tax of fiftv per cent on every probate or
administration.

1843-1903.] VIRGINIA. 1171

Va. St. 1843-44, c. 2. Passed February 6, 1844.

S. 2, provides that the payment of the probate or administration tax is a pre-
requisite to granting probate or administration.

Va. St. 1848-49, c. 1, s. 3, imposes a tax of fifty per cent upon every probate
or administration.

Va. St. 1852, c. 17, s. 17, increases the tax on probate and administrations to
seventy-five cents.

Va. St. 1852-53, c. 8, s. 16, imposes a tax on every will or administration, -
of seventy-five cents by which the tax is to be assessed under the Virginia Code
chapter 39.

Va. St. 1852-53, c. 8, s. 16, provides a tax for probate and administration of
seventy-five cents.

Va. St. 1858-54, c. 2, s. 16, provides a fee for probate and administration of
seventy-five cents.

Va. St. 1855-56, c. 9, s. 30, makes the tax on probate and administration one
dollar.

Va. St. 1859-60, c. 3, s. 44, provides a tax on every probate and administration
of one dollar.

Va. St. 1861-62, c. 1, s. 18, increased the rate of probate and administration
to one dollar and fifty cents.

Va. St. 1863, passed March 28, 1863, c. 1, s. 23, imposes a tax of two dollars
and fifty cents on the probate of every will or grant of administration not then
exempt by law.

Va. St. 1864-65, c. 39, passed March 3, 1865, s. 33, imposes on the probate of
every will or administration a tax of one dollar.

Va. St. 1865-66, c. 3, s. 18, imposes a tax of one dollar on every probate or
administration not exempt by law.

Va. St. 1869-70, c. 226, s. 13, imposes a tax of one dollar on every probate or
administration where the estate does not exceed one thousand dollars, and for
every additional one hundred dollars an additional tax of ten cents.

Va. St. 1874-75, c. 239, approved March 31, 1875, s. 13, imposes a tax on pro-
bates and administration of one dollar where the estate does not exceed a thousand
dollars, and for every additional one hundred dollars an additional tax of ten
cents, except where the estate is committed to a sheriflF to be administered.
(This exception of estates committed to a sheriff occurs in all these statutes.)

Va. St. 1875-76, c. 162, approved March 27, 1876, s. 13, imposes a tax of one
dollar on every probate and administration where the estate does not exceed one
thousand dollars, and for every additional one hundred dollars or fraction an
additional tax of ten cents.

Va. St. 1881-82, c. 119, approved April 22, 1882, s. 13, imposes a tax of one
dollar on probates and administrations not exempt by law where the estate shall
not exceed a thousand dollars, and for every additional one hundred dollars an
additional tax of ten cents.

Va. St. 1883-84, c. 450, s. 12, imposes a tax of one dollar on every probate and
administration where the estate does not exceed a thousand dollars, and for
every additional one hundred dollars an additional tax of ten cents.

Va. St.. 1903, c. 148, approved April 16, 1903, s. 12, provides a tax on pro-
bates and administration of one dollar where the estate does not exceed a thou-
sand dollars, and for every additional one hundred dollars an additional tax
of ten cents.

1172 STATUTES ANNOTATED. [Va. Code.

THE PRESENT ACT.

Va. Code.

S. 44. (As amended by St. 1910, c. 148, approved March 14, 1910.) (a) Tax
on collateral inheritance. Where any estate in this commonwealth of any de-
cedent shall pass under his will, or the laws regulating descents and distributions,
to any other person or for any other use than to or for the use of the grandfather
and grandmother, father, mother, husband, wife, brother, sister or lineal
descendant of such decedent, the estate so passing shall be subject to a tax at
the rate of five per centum on every hundred dollars' value thereof: provided, that
such tax shall not be imposed upon any property bequeathed or devised where
such bequest or devise is exclusively for state, county, municipal, benevolent,
charitable, educational, or religious purposes.

{b) The personal representative of such decedent shall pay the whole of such
tax, except on real estate, to sell which or to receive the rents and profits of which
he is not authorized by the will, and the sureties on his official bond shall be bound
for the payment thereof.

(c) Where there is no personal estate, or the personal representative is not
authorized to sell or receive the rents and profits of the real estate, the tax shall
be paid by the devisee or devisees, or those to whom the estate may descend by
operation of law; and the tax shall be a lien on such real estate, and the treasurer
may rent or levy upon and sell so much of said real estate as shall be sufficient to
pay the tax and expenses of sale, etc.

(d) Such payment shall be made to the treasurer of the county or city in
which certificate was granted such personal representative for obtaining probate
of the will or letters of administration.

(e) The corporation or hustings court of a city, the circuit court of a county,
or city, the chancery court of the city of Richmond, the law and chancery court
of the city of Norfolk, or the clerk of the circuit court of a county or city, before
whom a will is probated or administration is granted shall determine the collateral
inheritance tax, if any, to be paid on the estate passing by will or administra-
tion, and shall enter of record in the order book of the court or clerk, as the
case may be, by whom such tax shall be paid and the amount to be paid. The
clerk of the court shall certify a copy of such order to the treasurer of his county
or city and to the auditor of public accounts, for which services the clerk shall be
paid a fee of two dollars and fifty cents by the personal representative of the
estate. The auditor of public accounts shall charge the treasurer with the tax,
and the treasurer shall pay the same into the treasury as soon as collected, less
a commission of five per centum. Every personal representative or other party
or officer failing in any respect to comply with this section shall forfeit one hundred
dollars.

(/) Any personal representative, devisee or person to whom the estate may
descend by operation of law, failing to pay such tax before the estate on which
it is chargeable is paid or delivered over (whether he be applied to for the tax
or n(Jt) shall be liable to damages thereon at the rate of ten per centum per annum
for the time such estate is paid or delivered over until the tax is paid, which
damages may be recovered, with the tax, on motion of the commonwealth, and
in the name of the commonwealth against him in the circuit court for the county
or in the corporation court of the city wherein such tax was assessed, except that

Va. Code.] VIRGINIA. 1173

in the city of Richmond, the motion shall be in the chancery court. Such estate
shall be deemed paid or delivered at the end of a year from the decedent's death,
unless and except so far as it may appear that the legatee or distributee has ne ther
received such estate, nor is entitled then to demand it.

Not a Property Tax.

The collateral inheritance tax is not a tax on property. Wythe-
ville V. Johnson, 108 Va. 589, 62 S. E. 328, 18 L. R. A. (N. S.) 960.
Schoolfield v. Lynchburg, 78 Va. 366, 372.

Uniformity.

It was argued that the inheritance tax lacked uniformity because
it was not fixed at a sum certain, the same to all, but varied accord-
ing to the value of the estate taken. The court holds that the legis-
lature may define the class to which this tax shall be restricted,
taking care to render it uniform with all those who constitute
the class. Eyre v. Jacob, 14 Gratt. (Va.) 422, 73 Am. Dec. 367.

As the Virginia statute of 1854 is not a property tax the ad
valorem principle cannot be applied to it and therefore it is not
within the provision of the twenty-second section nor of the twenty-
third section of the Virginia constitution, the twenty-second sec-
tion declaring that all other property than slaves shall be taxed in
proportion to its value, the twenty-third section regulating the taxa-
tion of slaves.

Judge Lee, in delivering the opinion of the court, said : —

"I do not perceive wherein the inequality and want of uniformity
complaiped of can be said to consist. . . . The tax is equal
and uniform throughout the state as far as it is susceptible of the
application of the rule. It is the same everywhere upon the suc-
cession to estates of equal value of whatever subjects they may con-
sist." Eyre v. Jacob, 1858, 14 Gratt. 422.

Classification by Relationship Valid.

That the inheritance tax is confined to collateral inheritances and
devises presents no difficulty. The discretion of the legislature
to make this discrimination must be regarded as having been prop-
erly exercised. Eyre v. Jacob, 14 Gratt. (Va.) 422, 431, 73 Am.
Dec. 367.

Absolute Power of State over Descents.

"That -the general assembly of Virginia in the absence of a con-
stitutional prohibition does possess the power to tax a civil right

1174 STATUTES ANNOTATED. [Va. Code.

or privilege like this is beyond all question. This is fully embraced
within its general and comprehensive power upon the subject to
which allusion has already been made. But it may be deduced
from the very nature of the subject itself. The right to take prop-
erty by devise or descent is the creature of the law and secured and
protected by its authority. The legislature might, if it saw proper,
restrict the succession to a decedent's estate, either by devise or
descent to a particular class of his kindred, say to his lineal descend-
ants and ascendants; it might impose terms and conditions upon
which collateral relations may be permitted to take it; or it may
tomorrow, if it pleases, absolutely repeal the statute of wills and
that of descents and distributions and declare that upon the death
of a party his property shall be applied to the payment of his
debts and the residue appropriated to public uses. Possessing this
sweeping power over the whole subject, it is difficult to see upon
what ground its right to appropriate a modicum of the estate, call
it a tax or what you will, as the condition upon which those who take
the estate shall be permitted to enjoy it, can be successfully ques-
tioned." Per Lee, J., in Eyre v. Jacob, 14 Gratt. (Va.) 422, 430,
73 Am. Dec. 367.

Power in Legislature and not in Municipal Corporations.

The collateral inheritance tax is not, in a proper legal sense, a
tax upon property, but is a premium demanded for the privilege of
transmitting an estate, and the imposition of such a tax is a power
inherent in the legislature in the absence of express constitutional
prohibition. The legislature has the power to confer on municipal
corporations the right to levy an inheritance tax, but such power
cannot be inferred from the legislative authority unless such
appears to be the clear legislative intent. Schoolfield v. Lynchburg,
78 Va. 366, 372.

The testator died June 21, 1907. On August 2, 1907, the town
council of the town of her domicile passed an ordinance levying a
collateral inheritance tax for the use of the town and declared that
the ordinance should take effect from January 1, 1907. The au-
thority to towns under the Virginia code of 1904, section 1043,
to levy taxes allows the tax to be levied "upon any property therein,
and upon such other subject as may at that time be assessed with
state taxes against persons residing therein." The town charter
provides that the council "may raise taxes annually by assessments
in said town on all subjects taxable by the state."

Va. Code.] VIRGINIA. 1175

The court holds, however, that the section of the code and the
town charter apply only to the ordinary annually recurring tax on
property and other subjects of taxation, and not to sporadic sub-
jects which, though connected with the transmission and enjoy-
ment of property, are casual in their nature and not recurrent.
The court notes further that a collateral inheritance tax is not in
any proper sense a tax on property. Wytheville v. Johnson, 108
Va. 589, 62 S. E. 328, 18 L. R. A. N. S. 960.

The authority given to a town to levy taxes upon any property in
said town cannot be held to confer the power to levy an inheritance
tax as this is, not a property tax. But this provision applies only
to subjects such as are assessed annually with state taxes. School-
field V.Lynchburg, 78 Va. 366, 373.

Practice.

The levy by the sheriff for the collection of inheritance tax was
attacked by injunction and the attorney general did not contro-
vert the propriety of the proceeding in Eyre v. Jacob, 14 Gratt.
(Va.) 422, 73 Am. Dec. 367.

A general exemption from taxation of the property of certain
charitable institutions does not include an exemption from a
devise or bequest of property to such institution. Miller v. Common-
wealth, 27 Gratt. (Va.) 110, 118.

Corporations Included under Persons.

The omission in the Virginia statute of 1867, c. 64, s. 3, of the
words "bodies politic and corporate," and of the words "to any
other use than to and for the use of the father," etc., cannot be
taken as an indication of an intention of the legislature to exempt
corporations from this tax. If the word "person" in the act
embraces corporations, then these words were useless and unnec-
essary and were properly omitted, and the court finds that "per-
son" here covers corporations. Miller v. Commonwealth, 27 Gratt.
(Va.) 110, 116.

1176 STATUTES ANNOTATED. [Wash. St.

WASHINGTON,

In General.

Washington adopted an inheritance tax in 1901, with important
amendments in 1905 and 1907. The exemption under direct in-
heritances applies to the estate as a whole, not to individual shares,
and if the Washington portion of the estate of a non-resident is
less than this amount the estate is not taxed.

Washington taxes stock of a Washington corporation owned by
a non-resident. A corporation that transfers stock or a safe
deposit company that delivers over securities without notifying
the state treasurer is responsible for the tax.

Washington has not hitherto made any claim for inheritance
taxes where a deceased non-resident owns stock in a foreign cor-
poration owning property within the state of Washington, but the
tax commission proposes ^o undertake the collection of such a tax
in the near future. It is not the practice to require an inventory
of the entire estate before permitting the corporation to transfer
stock owned by a deceased non-resident.

The twenty-five per cent tax on inheritances to non-resident
aliens, which the courts had declared invalid as in conflict with
certain treaties, was repealed in 1911.

Constitutional Limitations.

Washington Constitution 1889, a. 7.

S. 1. All property in the state, not exempt under the laws of the United States,
or under this constitution, shall be taxed in proportion to its value, to be ascer-
tained as provided by law. . . .

S. 2. The legislature shall provide by law a uniform and equal rate of assess-
ment and taxation on all property in the state, according to its value in money,
and shall prescribe such regulations by general law as shall secure a just valuation
for taxation of all property, so that every person and corporation shall pay a
tax in proportion to the value of his, her or its property: Provided.That a deduc-
tion of debts from credits may be authorized. . . .

1901, c. 55.] WASHINGTON. 1177

List of Statutes.

1901. Statutes of Washington, c. 55, p. 67.

1899-1903. Supplement to BalUnger's Code, p. 114, s. 1655.

1905. Statutes of Washington, c. 93, p. 199.

1905. " " " c. 114, p. 222.

1905. " " " c. 115, p. 225, s. 2, clause 3.

1907. c. 217, pp. 499-506

1907. Revenue Laws, ss. 204-221.

1910. Remington & Bellinger's Annotated Codes & Statutes, vol. 2, c. 7,

ss. 9182, 9199.

1911. Statutes of Washington, c. 19, p. 60.

Power of Legislature.

It was urged that the state constitution grants to the legislature
special and delegated powers, and legislative enactments, to be
valid, must come within such grant of powers. But the court finds
that the legislature in the absence of constitutional prohibition
has the power to impose conditions by way of a tax upon legacies
and successions. State v. Clark, 30 Wash. 439, 71 P. 20.

THE ACT OF 1901.

Wash. St. 1901, c. 55. Approved March 6, 1901.

An Act relating to the taxation of inheritances and providing for
w disposition of same.

It was claimed that the title was not broad enough to sustain
the pr6vision which imposes a tax upon property passing by will.
The court observes that the word "inheritance" is no doubt properly
confined to property passing by descent or by operation of law.
But by popular use this word has become applicable to cases of
testacy and the court is therefore of opinion that the title of the act
is broad enough to sustain the provision imposing a tax on the right
of succession by will. In re White, 42 Wash. 360, 84 P. 831.

S. 1. All property within the jurisdiction of this state, and any interest
therein, whether belonging to the inhabitants of this state or not, and whether
tangible or intangible, which shall pass by will or by the statutes of inheritance
of this or any other state, or by deed, grant, sale or gift made or intended to
take effect in possession or in enjoyment after the death of the grantor or donor
to any person in trust or otherwise, shall, for the use of the state, be subject to
a tax as provided for in section two of this act, after the payment of all debts
owing by the decedent at the time of his death, the local and state taxes due from
the estate prior to his death, and a reasonable sum for funeral expenses, court

1178 STATUTES ANNOTATED. [Wash. St.

costs, including cost of appraisement made for the purpose of assessing the
inheritance tax, the statutory fees of executors, administrators or trustees, and
no other sum, but said debts shall not be deducted unless the same are allowed
or established within the time provided by law, unless otherwise ordered by the
judge or court of the proper county and all administrators, executors and trustees,
and any such grantee under a conveyance, and any such donee under a gift, made
during the grantor's or donor's life, shall be respectively liable for all such taxes
to be paid by them, with lawful interest until the same shall have been paid.
The inheritance tax shall be and remain a lien on such estate from the death
of the decedent until paid.

Nature of Succession and of Tax.

The court finds that the right to inherit or to take on the death
of the owner is a creature of law and not a natural right, and that
an inheritance tax is not a tax on property but one on succession.
State V. Clark, 30 Wash. 439, 71 P. 20.

Validity of Exemption.

It was claimed that an exemption of ten thousand dollars in
value from estates going to lineals, which exemption was not ex-
tended to collaterals or strangers, violated the rule of equality
in taxation. But the court observes that the rule invoked does
not forbid a liberal classification for the purposes of taxation.
The classification made here is manifestly reasonable and there is
no inequality among the ihembers of the same class. State v. Clark,
30 Wash. 439, 71 P. 20, 23.

Decree of Foreign Court.

The testator was a resident of Maine and died there leaving
property both in Maine and in Washington. The Maine court
ordered distribution of the estate of the testator within the state
of Maine to collateral heirs and strangers in full, and this was
done leaving the entire estate in Washington to pass to lineals.

The Washington court holds that it must presume that the
authority of the Maine court was rightfully exercised and cannot
hold the executor here or other legatees responsible for the errors of
that court. The fact that the same persons acted as executors in
both states and the fact that the executors were beneficiaries
under the will can make no difference.

* The Washington court has no right or power to review the judg-
ment of the court of Maine. The executor in Washington had no
opportunity to collect the inheritance tax from the collateral heirs
and strangers to the blood, and this court will not compel

1901, c. 55.] WASHINGTON. 1179

him to pay such tax out of his own funds or out of the
funds belonging to other heirs or legatees. In re Clark, 37 Wash
671, 80 P. 267.

S. 2. The inheritance tax shall be and is to be levied on all estates subject
to the operation of this act on all sums above the first $10,000.00 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, and to six per cent where such estates pass to col-
lateral heirs beyond the third degree or to strangers to the blood. On all sums
above the first fifty thousand dollars and not exceeding the first one hundred
thousand dollars, four and one-half per centum to collateral heirs to and includ-
ing the third degree, and nine per centum to collateral heirs beyond the third
degree or to strangers to the blood. And on all sums in excess of the first one
hundred thousand dollars the tax shall be six per centum to collateral heirs to
and including the third degree, and twelve per centum to collateral heirs beyond
the third degree or to strangers to the blood.

S. 3. Except as to the limitations prescribed in section 2 from the inheritance
tax and real property located outside the state passing in fee from the decedent
owner, the tax imposed under section two shall hereafter be assessed against and
be collected from property of every kind, which, at the death of the decedent owner
is subject to, or thereafter, for the purpose of distribution, is brought into this
state and becomes subject to the jurisdiction of the courts of this state for dis-
tribution purposes, or which was owned by any decedent domiciled within the
state at the time of the death of such decedent, even though the property of
said decedent so domiciled was situated outside of the state.

S. 4. In case of any property belonging to a foreign estate, which estate, in
whole or in part, is liable to pay a collateral inheritance tax in this state, the said
tax shall be assessed upon the market value of said property remaining after the
payment of such debts and expenses as are chargeable to the property under
the laws of this state. In the event that the executor, administrator or trustee
of such foreign estate files with the clerk of the court having ancillary jurisdiction
and with the state treasurer duly certified statements exhibiting the true market
value of the entire estate of the decedent owner, and the indebtedness for which
the said estate has been adjudged liable, which statements shall be duly attested
by the judge of the court having original jurisdiction, the beneficiaries of said
estate shall then be entitled to have deducted such proportion of the said in-
debtedness of the decedent from the value of the property as the value of the
property within this state bears to the value of the entire estate.

Ss. 5, 6, and 7 provide for the inventory and appraisal.
S. 8 covers the assessment of the tax on life estates and estates for years.
S. 9 covers the tax on legacies to executors above compensation for their
services.

Ss. 10-18 cover the assessment, collection and payment of the tax.

1180 STATUTES ANNOTATED. (Wash. St.

AMENDMENTS.

Wash. St. 1905, c. 93. Approved March 9, 1905.

An Act to exempt bequests and devises, when made for certain chari-
table purposes, from the payment of any tax or sum under any inheritance
tax law, and remitting any such tax claimed to be due on any such bequest
or inheritance.

S. 1. All bequests and devises of property within this state when the same is
for one of the following charitable purposes, namely: The relief of aged, im-
potent (indigent) and poor people; maintenance of the sick or maimed or the
support or education of orphans or indigent children shall be exempt from the
payment of any tax or sum under any inheritance tax law; and any property in
this state which has been devised or bequeathed for such charitable purposes,
and upon which a state inheritance tax is claimed or is owing, is hereby declared
to be exempt from the payment of such tax, and the same is hereby remitted.

Wash. St. 1905, c. 114, approved March 9, 1905, amends Wash. St. 1901,
ss. 13 and 15.

Wash. St. 1905, c. 115, approved March 9, 1905, s. 2, clause 3, gives the state
tax commission authority over the enforcement of the direct and collateral
inheritance law and the collection of taxes provided for therein.

Wash. St. 1907, c. 217, approved March 16, 1907, amends Wash. St. 1901,
ss. 1, 2, 4, 7, 9, 10, 12, 14, 17, 18 and repeals s. 5, and amends ss. 1 and 2 of the
amendatory act of 1905.

Wash. St. 1907, c. 217. Approved March 16, 1907.

S. 2. That section two (2)>of said act be and the same is hereby amended
to read as follows: Sec. 2. The inheritance tax shall be and is to be levied on
all estates subject to the operation of this act on all sums above the first $10,000.00,
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, and to six per cent where such estates pass to
collateral heirs beyond the third degree, or to strangers to the blood. On all
sums above the first fifty thousand dollars and not exceeding the first one hundred
thousand dollars, four and one-half per centum to collateral heirs, to and includ-
ing the third degree, and nine per centum to collateral heirs, beyond the third
degree, or to strangers to the blood. And on all sums in excess of the first one
hundred thousand dollars, the tax shall be six per centum to collateral heirs to
and including the third degree, and twelve per centum to collateral heirs beyond
the third degree or to strangers to the blood: 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 levied
and collected.

Alien Tax Invalid as to Certain Treaties.

Wash. St. 1907, c. 217, s. 2, imposed an inheritance tax of twenty-
five per cent on collaterals or strangers who are aliens not residing

1901, c. 55.] WASHINGTON. 1181

in the United States, and a tax of only three per cent on property
passing to citizens of the United States. This provision is void
as contravening the words of the treaty between the United States
and Norway and Sweden of 1827, article 17, which provides that
inheritances passing from one country to the other "shall be
exempt from all duty called droit de detraction on the part of the
government of the two states respectively," and that the heirs
shall have the right to receive the succession without having
occasion to take out letters of naturalization.

The treaty between Norway and Sweden and the United States of
1827 uses the words "goods and effects" to designate the property
the treaty is' applicable to, but the court holds that these words
include real estate, following Adams v. Akerlund, 168 111. 632,
48 N. E. 454, and University v. Miller, 14 N. C. 207.

The treaty of 1827 further provided for succession by "heirs,"
and the court notes that this word has a technical common law
meaning restricting it to those who take by inheritance only, while
by the civil law it applies to all persons who are called to the suc-
cession whether by act of the party or by operation of law. As
the word is used in this treaty by countries in one of which the
common law prevails and the other of which the civil law prevails,
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, and hence the word "heirs" includes those who receive
by will as well as those who receive by operation of law. In re
Stixrud, 58 Wash. 339, 109 P. 343, 349.

Alien Tax. — Validity under State Constitution.

The question whether the Washington statute of 1907, c. 217,
s. 2, is unconstitutional in view of the provisions of the Washing-
ton state constitution, in so far as it placed a higher tax on aliens
than it did on residents, was not decided in In re Stixrud, 58
Wash. 339, 109 P. 343.

Wash. St. 1911, c. 19, abolished the twenty-five per cent tax on non-resident
aliens.

THE PRESENT ACT.
Wash. St, 1901, c. 55, as amended.

S. 1. Property subject to inheritance tax. All property within the
jurisdiction of this state, and any interest therein, whether belonging to the
inhabitants of this state or not, and whether tangible or intangible, which shall
pass by will or by the statutes of inheritance of this or any other state, or by deed,

1182 STATUTES ANNOTATED. [Wash. St.

grant, sale or gift made in contemplation of the death of the grantor or donor,
or by deed, grant, sale or gift made or intended to take effect in possession or in
enjoyment after the death of the grantor or donor to any person in trust
or otherwise, shall, for the use of the state, be subject to a tax as provided
for in section two of this act, after the payment of all debts owing by the decedent
at the time of his death, the local and state taxes due from the estate prior to
his death, and a reasonable sum for funeral expenses, court costs, including cost
of appraisement made for the purpose of assessing the inheritance tax, the statu-
tory fees of executors, administrators or trustees, and no other sum, but said
debts shall not be deducted unless the same are allowed or established within the
time provided by law, unless otherwise ordered by the judge or court of the proper
county, and all administrators, executors and trustees, and any such grantee
under a conveyance, and any such donee under a gift, made during the grantor's
or donor's life, shall be respectively liable for all such taxes to be paid by them,
with lawful interest until the same shall have been paid. The inheritance tax
shall be and remain a lien on such estate from the death of the decedent until
paid. (L. '07, s. 1, p. 499.)

[See notes to the Act of 1901, ante, p. 1178.]

S. 2. Rate of levy. The inheritance tax shall be and is to be levied on
all estates subject to the operation of this act on all sums above the first $10,000.00,
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,
or three per centum, where such estate passes to collateral heirs to and including
the third degree of relationship, and to six per cent where such estates pass to
collateral heirs beyond the thir^ degree, or to strangers to the blood. On all sums
above the first fifty thousand dollars and not exceeding the first one hundred
thousand dollars, four and one-half per centum to collateral heirs, to and includ-
ing the third degree, and nine per centum to collateral heirs, beyond the third
degree, or to strangers to the blood. And on all sums in excess of the first one
hundred thousand dollars, the tax shall be six per centum to collateral heirs to and
including the third degree, and twelve per centum to collateral heirs beyond the
third degree or to strangers to the blood: 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 levied
and collected. (L. '07, s. 2, p. 500.)

[The Washington legislature has by the statute of 1911, c. 19, repealed the
inheritance tax ot twenty-five per cent on estates passing to foreign heirs and left
the tax on the same basis as though the heirs were citizens of the United States.]

S. 3. Property outside state. Except as to the limitations prescribed
in section two from the inheritance tax and real property located outside the state
passing in fee from the decedent owner, the tax imposed under section two shae
hereafter be assessed against and be collected from property of every kind, whichl
at the death of the decedent owner is subject to, or thereafter, for the purpose of
distribution, is brought into this state and becomes subject to the jurisdiction
of the courts of this state for distribution purposes, or which was owned bv any
decedent domiciled within the state at the time of the death of such decedent.

1901, c. 55.] WASHINGTON. • 1183

even though the property of said decedent so domiciled was situated outside of
the state. (L. '01, s. 3, p. 68; P. C, s. 8744.)

S. 4. Valuation of foreign estate. In case of any property belonging to
a foreign estate, which estate, in whole or in part, is liable to pay a collateral in-
heritance tax in this state, the said tax shall be assessed upon the market value of
said property remaining after the payment of such debts and expenses as are
chargeable to the property under the laws of this state. In the event that the
executor, administrator or trustee of such foreign estate files with the clerk of
the court having ancillary jurisdiction and with the state board of tax com-
missioners duly certified statements exhibiting the true market value of the entire
state of the decedent owner, and the indebtedness for which the said estate has
been adjudged liable, which statements shall be duly attested by the judge of the
court having original jurisdiction, the beneficiaries of said estate shall then be
entitled to have deducted such proportion of the said indebtedness of the decedent
from the value of the property, as the value of the property within thisestate
bears to the value of the entire estate. (L '07, s. 3, p. 501.)

[S. 5 repealed by St. 1907, c. 217.]

S. 6. Payment of tax. — Sale of delinquent. All the real estate of the
decedent subject to such tax shall, except as hereinafter provided, be appraised
within the time provided by law for the appraisement of decedent's estates, and
the tax thereon, calculated upon the appraised value after deducting debts for
which the estate is liable, shall be paid by the person entitled to said estate within
fifteen months from the approval by the court of such appraisement, unless a
longer period is fixed by the court, and in default thereof the court may order
the same, or so much thereof as may be necessary to pay such tax, to be sold.
(L. '01, s. 6, p. 70.)

S. 7. by estates in remainder. When any person shall devise any

real property to or for the use of the father, mother, husband, wife, lineal descend-
ant, adopted child, or lineal descendant of such child, during life or for a term
of years, and the remainder to a collateral heir or to a stranger to the blood, the
court, upon the determination of such estate for life or years, shall upon its own
motion or upon the application of the state board of tax commissioners, cause
such estate to be appraised at its then actual market value from which shall be
deducted the value of any improvements thereon or betterments thereto, made
by the remainder man during the time of the prior estate, to be ascertained and
determined by the appraiser and the tax on the remainder shall be paid by such
remainder man within six months from the approval of the court of the report
of the appraisers. If such tax is not paid within said time, the court may then
order said real estate, or so much thereof as may be necessary to pay said tax, to
be sold. (L. '07, s. 4, p. 501.)

S. 8. by estates for life. Whenever any real estate of a decedent

shall be subject to such tax, and there be a life estate or interest for a term of years
given to a party other than the father, mother, husband, wife, lineal descendant,
adopted child, or lineal descendant of such child, and the remainder to a col-
lateral heir or stranger to the blood, the court shall direct the interest of the life
estate or term of years to be appraised at the actual value thereof according to
the rules or standards of mortality and of value commonly used in actuaries'

1184 • STATUTES ANNOTATED. [Wash. St.

combined experience tables. The state treasurer is directed to obtain and pub-
lish for the use of the courts and appraisers throughout the state tables showing
the average expectancy of life, and the value of annuities of life and term estates,
and the present worth or value of remainders and reversions. The taxable value
of life or term, deferred or future estates, shall be computed at the rate of four per
cent per annum interest. Whenever it is desired to remove the lien of the in-
heritance tax on remainders, reversions or deferred estates, parties owning the
beneficial interest may pay at any time the said tax on the present worth of such
interest determined according to the rules herein fixed. Upon the approval of
such appraisement by the court, the party entitled to such life estate or term of
years shall within sixty days thereafter pay the tax on such life or term estate,
and in default thereof the court may order such interest in such estate or so much
thereof as shall be necessary to pay such tax, to be sold. Upon the determina-
tion of such life estate or term of years, unless the tax on the remainder shall have
been previously paid, as provided in this section, the same provision shall apply
as to the ascertainment of the amount of the tax and the collection of the same on
the real estate in remainder as in like cases is provided in the preceding section.
Whenever any personal estate of a decedent shall be subject to such tax, and there
be a life estate or interest for a term of years given, the court shall inquire into
and determine the value of the life estate or interest for the terms of years, and
order and direct the amount of the tax thereon to be paid by the prior estate, and
that to be paid by the remainder man, each of whom shall pay their proportion
of such tax within six months from such determination, unless a longer period
is fixed by the court, and in default thereof the executor, administrator or trustee
shall pay the tax out of said property, as the court may direct. (L. '01, s. 8, p.
70.)

S. 9. Executor shall pay if devisee or legatee. Whenever a decedent
appoints one or more executors or trustees and in lieu of their allowance or com-
mission, makes a bequest or devise of property to them which would otherwise
be liable to said tax, or appoints them his residuary legatees, and said bequests,
devises, or residuary legacies exceed what would be a reasonable compensation
for their services, such excess shall be liable to such tax, and the court having
jurisdiction of their accounts, upon its own motion, or on the application of the
state board of tax commissioners, shall fix such compensation. (L. '07, s. 5,
p. 502.)

S. 10. When heir or devisee shall pay tax on legacy. Whenever any
legacies subject to said tax are charged upon or payable out of any real estate,
the heir or devisee, before paying the legacies, shall deduct said tax therefrom and
pay it to the executor, administrator, trustee or state treasurer, and the same
shall remain a charge and be a lien upon said real estate until it is paid; and pay-
ment thereof shall be enforced by the executor, administrator, trustee or state
board of tax commissioners, in the same manner as the payment of the legacy
itself could be enforced. (L. '07, s. 6, p. 502.)

S. 11. Fiduciaries shall pay tax. " Every executor, administrator or trustee
having in charge or trust any property subject to said tax, and which is made
payable by him, shall deduct the tax therefrom, or shall collect the tax thereon
from the legatee or person entitled to said property, and he shall not deliver any

1901, c. 55.] WASHINGTON.

1185

specified legacy or property subject to said tax to any person until he has collected
the tax thereon. (L. '01, s. 11, p. 72.)

S. 12. Taxes payable to state treasurer. — Interest. All taxes imposed
by this act shall be payable tb the state treasurer, who shall issue his receipt
therefor in duplicate, one of which shall be filed with the state board of tax com-
missioners, and those taxes which are made payable by executors, administrators
or trustees, shall be paid within fifteen months from the death of the testator or
intestate, or within fifteen months from assuming the trust by such trustee,
unless a longer period is fixed by the court. All taxes not paid within the time
prescribed in this section shall draw interest at the legal rate until paid (L '07
s. 7, p. 502.) ■ '

S. 13. Procedure in appraisement. — Appeal. The superior court,
having jurisdiction', shall appoint three suitable, disinterested persons to appraise
the state and effects of deceased persons for inheritance tax purposes, and unless
otherwise provided by order of the court, the appraisers appointed under the pro-
bate law to appraise the estate and effects of deceased persons, shall be and con-
stitute the appraisers under the provisions of this act. It shall be the duty of
all such appraisers to forthwith give notice to the state board of tax commissioners,
of the time and place at which they will appraise such property, which time shall
not be less than twenty days from the date of such notice. The notice shall be
served in the same manner as is prescribed for the commencement of civil actions,
unless a different one is ordered by the court or judge, and the notice, with the
proof of the service thereof, shall be returned to the court with the appraisement.
The state board of tax commissioners or any person interested in the estate
appraised, may file exceptions to the appraisement, which shall be heard and deter-
mined by the court having jurisdiction in probate of the estate involved. If,
upon the hearing, the court finds the amount at which the property is appraised
is its market value and the appraisement was fairly and in good faith made, it
shall approve such appraisement; but if it finds that the appraisement was made,
at a greater or less sum than the market value of the property, or that the same
was not fairly or in good faith made, it shall set aside the appraisement and
determine such value. The state board of tax commissioners, or any one inter-
ested in the property appraised, may appeal to the supreme court from the order
of the superior court in the premises. (L. '07, s. 12, p. 504.)

S. 14. Tax on corporate stock. — How paid. If a foreign executor,
administrator or trustee shall assign any corporate stock, or obligations in this
state standing in the name of a decedent, or in trust for a decedent, liable to
such tax, the tax shall be paid to the state treasurer on or before the transfer
thereof, otherwise, the corporation permitting its stock to be so transferred on
its books shall be liable to pay such tax. No safe deposit company, bank or other
institution, person or persons, holding any securities, property or assets of any
non-resident decedent, shall deliver or transfer the same to any non-resident
executor, administrator or representative of such decedent, until after a notice
in writing of the time and place of such transfer shall have been duly given the
state board of tax commissioners at least ten (10) days prior thereto, and the tax
imposed by this act paid thereon, and every such safe deposit company, bank
or other institution, person or persons, shall be liable for the payment of such
tax. (L. '07, s. 8, p. 503.)

1186 STATUTES ANNOTATED. [Wash. St.

S. 15. List of heirs. Upon the filing of any petition for letters of adminis-
tration or for the probate of any will, it shall be the duty of the petitioner to fur-
nish the clerk of the court with a list of the heirs, legatees or devisees of the
estate, and the relationship which each bears to the decedent, together with a
statement of the location, nature and probable value of the entire estate, and an
estimate of the amount or value of each distributive share. The clerk of the court
shall immediately forward a true copy of such list to the state board of tax com-
missioners, also notifying said board of the date of such filing, together with
the name, and, if known, the place of residence of the deceased, the name, and,
if known, the place of residence of the petitioner, and, if known, the name and place
of residence of the attorney for petitioner, such list and notice to be in such form
as the state board of tax commissioners may prescribe. (L. '07, s. 13, p. 505.)

S. 16. Extension of time if estate complicated. Whenever, by reason
of the complicated nature of an estate, or by reason of the confused condition of
the decedent's affairs, it is [impracticable] for the executor, administrator, trustee
or beneficiary of said estate to file with the clerk of the court a full, complete and
itemized inventory of the personal assets belonging to the estate, within the time
required by statute for filing inventories of the estate, the court may, upon the
application of such representatives or parties in interest, extend the time for
the filing of the appraisement for a period not to exceed three months beyond
the time fixed by law. (L. '01, s. 16, p. 74; P. C, s. 8757.)

S. 17. Compounding tax if value of estate doubtful. Whenever an
estate charged, or sought to be charged with the inheritance tax, is of such a nature,
or is so disposed, that the liability of the estate is doubtful, or the value thereof
cannot, with reasonable certainty, be ascertained under the provisions of law, the
state board of tax commissioners may compromise with the beneficiaries or repre-
sentatives of such estates, and compound the tax thereon; but said settlement
must be approved by the superior court having jurisdiction of the estate, and
after such approval, the payment of the amount of the taxes so agreed upon shall
discharge the lien against the property of the estate. (L. '07, s. 9, p. 503.)

S. 18. State board of tax commissioners to supervise collection of
tax. — Records. Administrators, executors and trustees of the estates subject
to the inheritance tax shall, when demanded by the state board of tax commis-
sioners, send such board certified copies of such parts of their reports as may be
demanded by it or any member thereof, and upon refusal of said parties to comply
with such demand, it is the duty of the clerk of the court to furnish such copies,
and the expense of making the same shall be charged against the estate as are
other costs in probate. And it shall be the duty of the state board of tax com-
missioners to exercise general supervision of the collection of the inheritance taxes
provided in this act, and in the discharge of such duty the state board of tax
commissioners, or any member thereof, may institute and prosecute such suits
o^ proceedings in the courcs pf the state as may be necessary and proper, appear-
ing therein for such purpose; and it shall be the duty of the several county
attorneys to render assistance therein when called upon by such board so to do.
The said board shall keep a record in which shall be entered a memoranda of all
the proceedings had in each case, and shall also keep an itemized account show-

1901. c. 55.] WASHINGTON. 1187

jng the amount of such taxes collected, in detail, charging the state treasurer
therewith. (L. '07, s. 10, p. 503.)

Certain charitable bequests exempted. All bequests and devises of
property within this state when the same is for one of the following charitable
purposes, namely: The relief of aged, impotent [indigent] and poor people;
maintenance of the sick or maimed or the support or education of orphans or
indigent children shall be exempt from the payment of any tax or sum under
any inheritance tax law; and any property in this state which has been devised
or bequeathed for such charitable purposes, and upon which a state inheritance
tax is claimed or is owing, is hereby declared to be exempt from the payment
of such tax, and the same is hereby remitted. (L. '05, s. 1, p. 199; P. C, s. 8759k.)

►

1188 STATUTES ANNOTATED. [W. Va. St.

WEST VIRGINIA.

In General.

West Virginia adopted a collateral inheritance tax in 1887 and
extended it to direct inheritances in 1907. The exemptions apply
to the individual shares, not to the estate as a whole.

As to the position of stocks in a West Virginia corporation owned
by a non-resident, the tax commissioner says : —

"The legislature of 1909 attempted to pass a law whereby such
inheritance tax could be collected on stock in West Virginia cor-
porations owned by deceased non-residents, but so far no taxes
have been collected under this statute. The collection of the same
has been resisted with a claim that the statute does not fix a tax
on such stock."

The statute contains a retaliative provision designed to reduce
double taxation of non-resident securities similar to that in Con-
necticut, though not limited to registered bonds. It provides
that the state shall tax stock and bonds of a West Virginia cor-
poration kept outside the state if owned by residents of states
which so tax stocks and bonds of their own corporations if owned
by West Virginia residents.

The following property of all non-residents is specifically mad-e
taxable: all real estate and tangible property including money
on deposit within the state; all intangible personal property in-
cluding bonds, securities, shares of stock and choses in action, the
evidence of ownership of which is actually within the state.

Double taxation of personal property belonging to a resident
of the state but kept outside the state is avoided by a provision
similar to that in Massachusetts, that if such property has been
taxed in other states West Virginia will not tax it unless the out-
side tax is less than the West Virginia tax, and then West Virginia
^collects only the difference.

A corporation is responsible for the tax if it transfers securities
before the tax is paid, if it had reasonable cause to know that the
property was subject to the tax. It is not the practice to require
an inventory of the estate of a non-resident.

1887, c. 31.1 WEST VIRGINIA.

1189

Constitutional Limitations.

West Virginia Constitution 1872, a. 10, s. 1.

Taxation shall be equal and uniform throughout the state, and all property,
both real and personal, shall be taxed in proportion to its value, to be ascertained
as directed by law. No one species of property, from which a tax may be col-
lected, shall be taxed higher than any other species of property of equal value;
but property used for educational, literary, scientific, religious or charitable
purposes; all cemeteries and public property may, by law, be exempted from
taxation. The legislature shall have power to tax, by uniform and equal laws,
all privileges and franchises of persons and corporations.

List of Statutes.

1887. Statutes of West Virginia, c. 31.

1891. ' c. 116.

1904. ' " c. 6, pp. 108-117.

1907. " " " " c. 55.

1909. " " " " c. 63.

1887. Warth's Code of West Virginia, pp. 244-247, s. 51a, els. 1-19.

1891. Ditto (3d edition), pp. 244-246, s. 51a, cIs. 1-19.

1899. Ditto (4th edition), c. 32, pp. 266-268, s. 51a, els. 1-19.

1906. Code of West Virginia, c. 33, ss. 1064-1089.

1907. West Virginia Code Annotated (Supplement), c. 33, ss. 1064-1065.
1909. Ditto, c. 33. ss. 1064, 1065, 1065a, 1065b and 1069.

Statutes.

W. Va. St. 1887, c. 31. Passed February 24, 1887; in efTect ninety days there-
after.
S. 1. All estates, real, personal and mixed, money, public and private securi-
ties for money of every kind, passing from any person who may die seized or pos-
sessed thereof, being in this state, or any part of such estate or estates, money
or securities, or interest therein transferred by the intestate laws of this state, by
will, deed, grant, bargain, gift or sale, made or intended to take effect in posses-
sion after the death of the grantor, bargainor, devisor or donor, to any person
or persons, bodies politic or corporate, in trust or otherwise, other than to or
for the use of the father, mother, wife, children and lineal descendants of the
grantor, bargainor, devisor, donor or intestate, shall be subject to a tax of two
and a half per centum on every hundred dollars of the clear value of such estates,
money or securities; and all personal representatives shaH only be discharged
from liability for the amount of such tax, the payment of which they may be
charged with, by paying the same for the use of this state, as hereinafter directed;
Provided, That no estate which may be valued at a less sum than one thousand
dollars, shall be subject to the tax imposed by this section.

Ss. 2-19 cover the assessment and collection of the tax.

W. Va. St. 1891, c. 116, amends W. Va. St. 1887 by including the husband in the
exempt classes.

1190 STATUTES ANNOTATED. [W. Va. St.

West Va. St. 1904, c. 6, re-enacts the W. Va. Code, c. 33. The statute pro-
vides a tax of three per cent on transfers to brothers or sisters, five per cent
to the grandfather or grandmother, and seven and one half per cent to any
other person excepting father, mother, husband, wife and child or lineal descend-
ants, or bequests for public purposes or for educational, literary, scientific, reli-
gious or charitable purposes.

W. Va. St. 1907, 0. 55, in effect May 22, 1907, amends W. Va. Code, c. 33, ss.
1 and 2.

W. Va. St. 1907, c. 55, approved February 27, 1907, in effect ninety days
from passage, amends and re-enacts W. Va. Code, c. 33, ss. 1 and 2, by providing
a tax except for educational, literary, scientific, religious, charitable, or public
purposes on the transfer by will or inheritance or by transfer in contemplation
of death or intended to take effect in possession at or after death, or certain
transfers by joint tenancy or by power of appointment.

S. 2 provides that the amount of the tax shall be one per cent on lineals, three
per cent on a brother or sister, five per cent to a grandfather or grandmother,
and seven and one half per cent to any other person or corporation, with an
exemption to any father, mother, husband, wife, child or lineal descendants
when the gift is less than twenty thousand dollars.

W. Va. St. 1909, in effect May 23, 1909, c. 63, amends W. Va. Code, c. 33, ss-
1, 2, and 6.

THE PRESENT ACT.

An Act enacting chapter thirty-three of the Code of West Vir-
ginia RELATING TO TAXES ON COLLATERAL INHERITANCES, devises,
distributive shares and legacies, as amended and re-enacted by the legislature
of 1907 and the legislature of 1909.

[Original act passed August 8, 1904; in effect 90 days from its passage.
Amended by Senate Bill No. 178, Acts of the Legislature of 1907, passed Feb. 22,
1907, and in effect 90 days from passage. Further amended by Chapter
63, Acts of the Legislature of 1909, passed Feb. 26, and in effect 90 days
from its passage.]

S. 1. Transfers taxable. A tax, payable into the treasury of the state, shall
be imposed upon the transfer, in trust or otherwise, of any property, or interest
therein, real, personal or mixed, if such transfer be

(o) by will or by the laws of this state regulating descents and distributions
from any person who is a resident of the state at the time of his death and who
shall die seized or possessed of the property;

(&) by will or by laws regulating descents and distributions, of property within
the state, or within its jurisdiction, and the decedent was a non-resident of the
state. at the time of his death;

(c) by a resident, or be [sic] of property within the state, or within its jurisdic-
tion, by a non-resident, by deed, grant, bargain, sale or gift made in contem-
plation of the death of the grantor, vendor, bargainer or donor, or intended
to take effect in possession or enjoyment at or after such death.

(d) If any person shall transfer any property which he owns or shall cause
any property, to which he is absolutely entitled, to be transferred to, or vested

1887. c. 31.] WEST VIRGINIA. 1191

in, himself and any other person jointly, so that the title therein, or in some part
thereof, vest no survivorship in such other person, a transfer shall be deemed to
occur and to be taxable under the provisions of this act upon the vesting of
such title.

(e) Whenever a person shall exercise by will a power of appointment derived
from any disposition of property, such appointment, when made, shall be deemed
a transfer taxable under the provisions hereof.

S. 2. Rates. When the property or any beneficial interest therein passes
by any such transfer where the amount of the property shall exceed in value the
exemption hereinafter specified, and shall not exceed in value twenty-five thousand
dollars, the tax hereby imposed shall be: —

(a) Where the person or persons entitled to any beneficial interest in such prop-
erty shall be the "Wife, husband, child, lineal descendant or lineal ancestor of the
decedent, at the rate of one per centum of the market value of such interest in
such property.

(b) Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the decedent (and the term brother or
sister shall not include a brother or sister of the half blood), at the rate of three
per centum of the market value of such interest in such property.

(c) Where the person or persons entitled to any beneficial interest in such
property shall be further removed in relationship from the decedent than wife
husband, child, lineal descendant, lineal ancestor, brother or sister, at the rate
of five per centum of the market value of such interest in such property.

S. 2a. Progressive rates. The foregoing rates in section two are for con-
venience termed the primary rates. When the amount of the market value
of such property or interest exceeds twenty-five thousand dollars, the rate of
tax upon such excess shall be as follows: —

(a) Upon all in excess of twenty-five thousand dollars up to fifty thousand
dollars one and one-half times the primary rates.

(6) Upon all in excess of fifty thousand dollars and up to one hundred thousand
dollars, two times the primary rates.

(c) Upon all in excess of one hundred thousand dollars and up to five hundred
thousand dollars, two and one-half times the primary rates.

(d) Upon all in excess of five hundred thousand dollars, three times the primary
rates.

S. 2b. Exemptions. The following exemptions from the tax are hereby
allowed : —

(a) All property transferred to a person or corporation in trust or use solely
for educational, literary, scientific, religious or charitable purposes, or to the
state or any county or municipal corporation thereof for public purposes, pro-
vided the property so transferred is used for the purposes herein mentioned in
this state, shall be exempt.

(b) Property of the market value of fifteen thousand dollars transferred to the
widow of the decedent, and ten thousand dollars transferred to each of the
other persons described in sub-division (a) of section two shall be exempt.

S. 3. Market value. The market value of property is its actual market
value after deducting debts and incumbrances for which the same is liable, and

1192 STATUTES ANNOTATED. [W. Va. St.

to the payment of which it shall actually be subjected. In fixing such market
value, allowances shall not be made for debts incurred by the decedent, or incum-
brances made by him, unless such debts or incumbrances were incurred or created
in good faith for an adequate consideration, nor for any debt in respect whereof
there is a right to reimbursement from any other estate or person, unless such
reimbursement from any other estate or person cannot be obtained.

S. 4. Bequest in payment of debt or to executor. Every devise or
bequest ostensibly in payment of a debt of the testator shall be taxable upon
the excess in value of the property devised or bequeathed, otherwise liable to
such tax, over and above the true amount of such debt. Every devise or bequest
to an executor or trustee, purporting to be in compensation for services shall be
taxable upon so much of the value of the property devised or bequeathed, other-
wise liable to such tax, as is in excess of a reasonable compensation for such

S. 5. Particular estates and remainders. Whenever the transfer of
any property shall be subject to tax hereunder and only a life estate, or an inter-
est for a term of years, or a contingent interest to be transferred to one person
and the remainder or reversionary interest to another, the state tax commissioner
on the application of any person in interest, or upon his own motion, may
after due notice to the persons interested, apportion such taxes among such
persons and assess to each of them his proper share of such taxes, and shall make
his certificates accordingly, which shall be forwarded and disposed of in the same
manner as other certificates by him herein provided for. The portion of any such
taxes apportioned to any person entitled in remainder or reversion shall be
payable at once, and such person shall be required to pay them in the same
manner, and within the same^ime, as if his interest had vested in possession.

[That portion of this law imposing an inheritance tax of one per cent on the
value of property in excess of $20,000 passing to the father, mother, husband,
wife, or lineal descendant of the person making the transfer, is in effect from
May 22, 1907, until May 27, 1909. By act of the legislature of 1909, taking
effect May 27, 1909, property of the value of $15,000 passing to the widow of
decedent, and $10,000 passing to husband, child, lineal descendant or lineal
ancestor of decedent is exempt from the inheritance tax of one per cent. J

S. 6. Property taxable in another state. A transfer of personal property
of a resident of the state which is not therein or within the jurisdiction thereof,
at the time of his death, shall not be taxable, under the provisions of this act if
such transfer or the property be legally subject in another state or country to a
tax of a like character and amount to that hereby imposed, and if such tax be
actually paid or guaranteed or secured, in accordance with law in such other state
or country, if legally subject in another state or country to a tax of like character,
but of less amount than that hereby imposed, and such a tax be actually paid,
05 guaranteed or secured, as aforesaid, the transfer of such property shall be
taxable under this act to the extent of the difference between the tax thus actually
paid, guaranteed or secured, and the amount for which such transfer would
otherwise be liable hereunder, or within the jurisdiction thereof. The provision
of this act shall apply to the following property belonging to deceased persons.

1887, c. 31.] WEST VIRGINIA. 1193

non-residents of this state, which shall pass by will or inheritance under the law
of any other state or country, and such property shall be subject to the tax
prescribed in this section. All real estate and tangible personal property,
including money on deposit within this state; all intangible personal property,
including bonds, securities, shares of stock and choses in action the evidence of
ownership to which shall be actually within this state; shares of the capital stock
or bonds of all corporations organized and existing under the laws of this state, the
certificate of which stocks or bonds shall be within this state, where the laws of
the state or country where such decedent resided, shall, at the time of his death
impose a succession, inheritance, transfer, or similar tax upon the shares of the
capital stock or bond of all corporations organized or existing under the laws
of such state or country, held under such conditions at their decease by residents
of this state.

S. 7. Lien. — Liabilities. All such taxes upon any transfer, and the inter-
est that may accrue on such transfer shall, until paid, be and remain a charge
and lien upon the property transferred, superior to any lien created after such
transfer, and no title shall vest or be transferred as to any such property, except
subject to the lien for such taxes, and no such property shall be paid, trans-
ferred or delivered, in whole qr in part, until the payment into the treasury of the
state of the amount of such tax as by the certificate of the state tax commis-
sioner may be shown to have been assessed, as hereinafter provided. The
person to whom the property is transferred, if he shall receive the same before
the tax thereon is paid, and the executors, administrators and trustees having
charge of every estate so transferred, shall be personally liable for such tax and
interest until its payment, and no statute of limitations shall be a defence to an
action for the recovery thereof.

^ S. 8. Suspending payment. Whenever it shall be necessary in the settle-
ment of any estate to retain property or funds for the purpose of paying any lia-
bility, the amount or validity of which is not determined, the payment of the
whole or a proportionate part of the tax may be suspended to await the disposi-
tion of such claim.

S. 9. When due. — Interest. In the case of such a suspension the tax shall
be payable when the time of the suspension expires. In all other cases the tax
shall be payable as soon as the amount thereof is assessed by the state tax com-
missioner, as herein provided. Interest shall be charged and collected upon all
taxes imposed by this act from the time when the same become payable, at the
rate of four per cent per annum.

S. 10. Property liable. — Power of sale. Every executor, administrator,
trustee, guardian, committee or other fiduciary having charge of an estate, any
part of which is subject to such tax, and every person to whom property is trans-
ferred which is subject to such tax, but is not in charge of any such fiduciary,
shall pay the same upon the market value of all the property subject to tax,
whether there are or are not devises or bequests of successive interests in the
same property, and whether such successive interests, if any, are defeasible or
indefeasible, absolute or contingent. Such payment shall be made out of said
estate in the same manner as other debts may be paid. Any such fiduciary

1194 STATUTES ANNOTATED. [W. Va. St.

may sell personal property for mat purpose when necessary, and the circuit
court may authorize him to sell real estate for the payment thereof in the same
manner as it may authorize the sale of real estate for the payment of debts.

S. 11. Payment on transfer. — Liabilities. Whenever any foreign
executor, administrator or trustee shall assign or transfer in this state any stock,
bond or other security liable to any such tax, standing in the name of, or in trust
for a decedent, he shall have the tax assessed on such transfer by the state tax
commissioner, and shall pay the tax into the state treasury on the transfer thereof;
otherwise any person having authority to make or permit such transfer, who shall
make or permit it, shall be liable to pay the tax if he then had knowledge, or rea-
sonable cause to believe, that the property was liable to tax.

S. 12. Reports. Whenever the county court of any county, or the clerk
thereof, shall have reason to believe that a transfer subject to taxation hereunder
has been made, whether such belief be based on any application for the probate of a
will, the appointment of any fiduciary or the admission to record of a deed or
other writing intended to take effect in possession or enjoyment, at or after the
death of the maker thereof, or appearing to be in contemplation of his death,
or be based on any information otherwise derived, such clerk shall report the
same to the state tax commissioner. Such a report shall be made quarterly
as soon as possible after the first day of January, April, July and October in each
year, and shall relate to all such matters as were not covered by any previous
reports. A special report may be made by the clerk at any time. If there be
no reason to believe that any such transfer has been made since the date of the
last preceding report, that fact shall be stated in such quarterly report, but if
there be reason to believe that such a transfer has been made, such quarterly
or special report shall show the nature thereof, the name of the decedent, devisor,
grantor, vendor, bargainer, or donor; the name or other description, and the
address of the person or corporation to or for whose use or benefit any property
may be transferred, and the relationship, if any, between such person and the
person from whom the property is transferred, as far as the court or clerk may
have any information respecting such matters; the nature of the property trans-
ferred, with such general description and approximate valuation as the court
or clerk may be able to give. Any other person, whether interested in such prop-
erty or not, may make a like report to the state tax commissioner. Every such
report, whether by the clerk or by any other person, shall be filed by the com-
missioner, and retained in his office until the tax be paid on the transfers therein
mentioned, or it shall be ascertained that they are not subject to tax, and shall then
be destroyed; and at all times such report shall be confidential and privileged,
and its contents shall not be inspected or made known by any one, except by the
state tax commissioner as to any report made by a clerk, when there shall be a
question whether such clerk has complied with the provisions of this chapter.

S. 13. Statement by executors. With the inventory of every estate the
executor, administrator or trustee shaL file a statement showing, jo the best of
his judgment, whether any transfer of any property mentioned in such inven-
tory is taxable hereunder, and if any be so taxable, setting forth the same matters
mentioned in the preceding section, with as much accuracy as possible; and if
the estate be one, no inventory of which is required to be filed, such statement

1887. c. 31.] WEST VIRGINIA. 1195

shall nevertheless be filed in the same office, and within the same time, in which
an inventory is in other cases required to be filed.

S. 14. Assessment. The state tax commissioner shall as soon as may be,
from the statements and reports made by the clerk and the personal represen-
tative or trustee or other person as aforesaid, from the inventory of the estate,
if there be one, and from such other information as he may be able to procure,
ascertain whether any transfer of any property be subject to a tax under the
provisions of this chapter, and if it be subject to tax, shall ascertain and assess
the amount of the tax to which it is subject. If in his opinion no transfer of
any part of such property is taxable hereunder, he shall certify that fact in
writing made in duplicate. One of said certificates shall be forwarded by him
to the clerk of the county court, who is required to make report under section
twelve hereof, and the other certificate shall be forwarded to the administrator,
executor or trustee having such property in charge, or to the grantee, vendee, bar-
gainee or donee thereof. If in his opinion the transfer of any of the property so
transferred is taxable under the provisions of this act, he shall in like manner
certify a description of the property, or of the part thereof so liable, and of the
amount of tax with which it is assessed, and shall make duplicate certificates
showing those facts, one of which he shall forward to the said clerk and one to
said administrator, trustee, grantee, vendee, bargainee or donee.

S. 15. If any transfer be not reported to the state tax commissioner by the
clerk of the county court or the executor, administrator, trustee, grantee, vendee,
bargainee or donee, or other person, the said tax commissioner may proceed,
upon such information as he can obtain, to inquire and determine whether any
such transfer is subject to tax under this act, and what tax, if any, should be
assessed, and shall proceed as to any such transfer and the property passing
thereby, in all respects, as if the same had been reported to him as required by
this chapter.

S. 16. Certificate to be recorded. The executor, administrator, trustee,
devisee, vendee, grantee, bargainee or donee shall cause the certificate, so re-
ceived from the state tax commissioner, to be recorded by the clerk of the county
court. Such certificate shall be recorded in the book wherein inventories and
accounts of fiduciaries are recorded; but it shall be in compliance with this sec-
tion if such a certificate be laid before a commissioner of accounts of said court
at the first settlement thereafter of the account of any fiduciary, and be made
a part of the report of such commissioner of accounts and be recorded with it.

S. 17. Additional assessment. Notwithstanding any such certificates
may have been made and recorded, if it afterward appear to the state tax com-
missioner that the transfer of the property mentioned in such certificate, or any
part thereof, is subject to any tax and in addition to that mentioned in such cer-
tificate, or that it is taxable in a case where such certificate showed that it was
not liable to such tax, he shall assess the proper tax thereon in addition to any
tax which may have been theretofore assessed, and shall forthwith certify the
amount of the same in duplicate, and forward one of such certificates to each
of the persons to whom his original certificate was required to be forwarded.
The certificate, so forwarded to the clerk of the county, shall by him be

1196 STATUTES ANNOTATED. [W. Va. St.

forthwith recorded in the book in which deeds of trust and mortgages are recorded,
and from the time of its admission to record shall constitute a lien on the prop-
erty on which tax is assessed, for the amount of such taxes, and any interest
accruing thereon, until the same are paid, except as against purchasers for value
before such admission to record, without notice of such additional liability and
as against those who may claim under such purchaser, having purchased for
valuable consideration without notice of such liability.

S. 18. Payment. As soon as the amount of any tax upon any transfer
shall be certified by the state tax commissioner, the person liable for such tax
shall pay the amount thereof to the credit of the treasury of West Virginia, in
the manner provided for the payment of other moneys into such treasury, except
that the certificate of the bank in which the same may be deposited shall be in
duplicate, and shall describe the property upon the transfer of which the tax is
assessed and that one of such duplicate certificates of deposit shall be forwarded
to the state tax commissioner. The said state tax commissioner shall at once
certify, in duplicate, that all the taxes upon such transfer under the provisions
of this act have been paid, and shall forward such certificates, one to the person
making the payment and the other to the clerk of the county court, who shall
record the same in the book in which releases are recorded. From the date
when any such certificate of payment, or any such certificate that the property is
not liable to such taxes, is admitted to record, the property mentioned in such
certificate shall be free from any lien or claim for any such taxes, except as pro-
vided in the preceding section.

S. 19. Proceedings to collect. If any such taxes, hereinbefore provided
for, shall not be paid within sixty days from the time they become payable, or if
there be an appeal with respect to the same or payment thereof be prevented by
litigation or other unavoidable cause, within sixty days after the decision of such
appeal or the end of such litigation or other cause of delay, the state tax commis-
sioner shall on behalf of the state, and with the assistance of the prosecuting attor-
ney of the county, proceed in the circuit court, by appropriate proceedings to
enforce the lien of such taxes upon any property subject to such lien, and to
obtain the sale thereof, or of so much thereof as may be necessary to satisfy such
lien, and relief shall be given by such circuit court accordingly. In addition to
any other remedy for the collection of any tax upon such transfer, the same
may be recovered in an action of assumpsit on behalf of the state of West Virginia
against any person liable for such tax, and the state tax commissioner is author-
ized to bring such action in any circuit court or before any justice having juris-
diction, and the prosecuting attorney shall assist in the prosecution thereof.
The state tax commissioner may compromise and settle the amount of any such
tax when there is a controversy as to the relationship between the former owner
of the property and the person to whom it is transferred.

^S. 20. Appeal. Within thirty days after the state tax commissioner shall
have forwarded a certificate of the ainount of tax assessed upon the transfer of
any property, any person interested in such transfer or in such property, may
apply to the circuit court of any county, in which such property or the greater
part thereof may be, for an appeal from the assessment so made. Such applica-
tion shall be by petition in writing, stating the names and addresses of all

1887, c. 31.] WEST VIRGINIA. 1197

persons interested, showing the grounds upon which the appellant claims to be
aggrieved, and an appeal shall be allowed thereon forthwith, and, until the same
shall have been heard and decided, proceedings for the collection of such taxes
may be stayed by order of said court for good cause shown, and upon such con-
ditions as it may direct. Such appeal shall have precedence over other civil
cases, except those relating to taxes claimed by the state, and shall be heard and
decided as soon as may be. Before any such hearing reasonable notice thereof
shall be given to all other persons interested, and the state tax commissioner and
prosecuting attorney, who, with the said commissioner, shall defend the inter-
ests of the state. Upon such hearing the court shall consider all certificates
relating to such taxes, and all other pertinent evidence that may be offered by
either party. If it be of the opinion that the assessment appealed from was
correct, it shall affirm the same; if it be of the opinion that the transfer was not
subject to any such taxes, it shall set aside the said assessment and enter an
order exonerating the property from taxes. If it be of the opinion that the trans-
fer was subject to such taxation, but that the amount of taxes assessed was
erroneous, it shall correct the assessment thereof by increasing, or decreasing
the amount thereof, as it may think just, and shall enter judgment accordingly.
A copy of the judgment upon any such appeal shall be certified in duplicate, and
forwarded and recorded as is herein provided with respect to the certificate of
the state tax commissioner.

S. 21. Fees. For his services in recording such certificate or copy of judg-
ment, the clerk of the county court shall be entitled to a fee of fifty cents, to be
taxed to and paid by the person to whom such property shall be transferred.

S. 22. Accounts of fiduciary. In the settlement of his accounts any
fiduciary making payment of the amount assessed upon any such transfer, as
shown by any such certificate or judgment, may have credit for such payment
upon filing the certificate of the state tax commissioner that such taxes have been
paid, but no fina| settlement shall be made of the account of any fiduciary liable
for such taxes until he shall have filed such certificate of payment.

S. 23. Compromise. The state tax commissioner may compromise and
settle the amount of such taxes whenever controversy may arise as to the owner-
ship between the former owner of the property and the person to whom the same
may have passed.

S. 24. Liabilities on bonds of fiduciaries. Every fiduciary, and the
sureties on his bond, shall be liable upon such bond for all moneys such fiduciary
may receive for taxes under this chapter, and for the proceeds of all sales of real
estate received by him under the provisions hereof; and if any such fiduciary
fail to perform any of the duties imposed on him by this chapter, he and his
sureties shall be liable upon his bond for any damages resulting from such failure,
the court under whose order he qualified may revoke his authority, and he and
his sureties shall be liable to the same proceedings as if his authority has been
revoked for any other cause.

S. 25. Misdemeanors. Any clerk or other person failing to discharge any
duty imposed upon him by this act shall be guUty of a misde meanor, and be

1198 STATUTES ANNOTATED. [W. Va. St.

fined in the discretion of the court, not less than ten nor more than five hundred
dollars.

S. 26. Furnishing information to tax commissioner. Every person
having in his possession or control any book or paper containing any information
respecting property transferred as aforesaid, shall at the request of the state
tax commissioner exhibit the same to him or to the prosecuting attorney of
the county, and any person in interest shall make written answer under oath
to any questions which the said state tax commissioner may put in writing
concerning such property. Any person failing to comply with the provisions
of this section shall be guilty of a misdemeanor, and upon conviction thereof
shall be, in the discretion of the court, fined not less than ten nor more than
five hundred dollars. All acts and parts of acts inconsistent herewith are hereby
repealed.

Wis. St.] WISCONSIN. 1199

WISCONSIN,

In General.

Wisconsin's iirst inheritance tax law, passed in 1868, amounted
to little more than a sliding scale of probate fees, and after various
amendments was declared unconstitutional. A genuine inheritance
tax, enacted in 1899, was declared unconstitutional because the
exemption applied to the estate as a whole, not to the individual
shares. Finally in 1903 the legislature passed an act which satis-
fied the constitutional requirements. This is the present act with
important amendments in 1911. The acts of 1911 confined exemp-
tions to the first twenty-five thousand dollars and extended the
liability for transfer of stock of a non-resident to any foreign or
domestic corporation doing business in the state. The amendments
strengthened other administrative provisions of the statute and
also gave the attorney general power to compromise certain tax
claims. Consent to transfers must now be obtained from the
court instead of from the attorney general or public adminis-
trator.

The exemption applies to each individual share, not to the estate
as a whole. If the Wisconsin portion of an inheritance is less than
the exempted amount, Wisconsin imposes no tax.

Wisconsin taxes stock in a Wisconsin corporation owned by a
non-resident in a foreign corporation owning property in Wisconsin
also taxable. On this point the attorney general says: 'This
question has never been before our supreme court, and this de-
partment has not had occasion as yet to deal with a case squarely
in point."

A corporation or individual that transfers or delivers any securi-
ties or assets of a non-resident without first notifying the attorney
general, and then receiving his permission to do so, is responsible
for the tax. It is not the practice to require a complete inventory
of a non-resident's estate. The tax is producing not far from
$200,000 annually.

1200 STATUTES ANNOTATED. IWis. Sc.

List of Statutes.

1868.

Statutes of Wisconsin, c. 121, s. 4.

1871.

Revised Statutes, c. 117, pars. 59-62, 69.

1872.

General Laws, c. 40.

1877.

Statutes of Wisconsin, c. 98.

1878'

Revised Statutes, par. 2483.

1880.

Statutes of Wisconsin, c. 262.

1889.

c. 176.

1899.

c. 355.

1901.

c. 245,

1903.

c. 44.

1903.

c. 249.

1903.

c. 297.

1905.

c. 96.

1907.

c. 500.

1907.

c. 660, St. 3813A.

1909.

c. 38.

1909.

c. 504.

1899-1906. Wisconsin Statutes (Supplement), Sees. 1087-1 to 1087-24.

1911.

Statutes of Wisconsin, c. 450.

1911.

c. 530.

1899-1906. Wisconsin Statutes, sees. 1087-1 to 1087-24.

Constitutional Limitations.

Wisconsin Constitution, 1848, a. 8, s. 1.

The rule of taxation shall be uniform, and taxes shall be levied upon such |
property as the legislature shall prescribe.

It was claimed that the Wisconsin constitution limits the power
of taxation to property only and that the inheritance tax is an excise
levied upon a right or privilege and hence unconstitutional within
this section. The court quotes at length from debates in the
constitutional convention and upon the practical construction of
the provision by the legislature since the passage of the constitution
and finds that this section 1, article 8., is a section governing the
taxation of property alone and not intended to prohibit the taxa-
tion of privileges or occupations. Nunnemacher v. State, 129 Wis.
190, 204-220, 108 N. W. 627, 9 L. R. A. N. S. 121.

The clause, "the rule of taxation shall be uniform," if applicable
to excise taxation at all, means no more than the general equality
clauses of the constitution, and hence, uniformity of taxation or
even equality of taxation as applied to excise taxes must necessarily
mean taxation which does not discriminate, but which operate

1868, c. 121.] WISCONSIN. 1201

alike on all persons similarly situated. In other words, proper
classification may be made and a different rate applied to each class.
Nunnemacher v. State, 129 Wis. 190, 221, 108 N. W. 627, 9 L. R.
A. N. S. 121.

Wis. Const. 1848, a. 8, s. 5.

The legislature shall provide for an annual tax sufficient to defray the esti-
mated expenses of the state for each year; and whenever the expenses of any year
shall exceed the income, the legislature shall provide for levying a tax for the
ensuing year sufficient, with other sources of income, to pay the deficiency, as
well as the estimated expenses of such ensuing year.

The Wisconsin statute of 1903 does not violate this section. This
section expressly recognizes the fact that the state may have other
sources of income aside from the direct tax upon property and that
the section is simply intended as a regulation covering the levying
of a direct tax upon property if such a tax be necessary. Nunne-
macher V. State, 129 Wis. 190, 223, 108 N. W. 627, 9 L. R. A. N. S.
121.

The Amendment of 1908.

It is noted by Timlin, J., dissenting, that the constitution of Wis-
consin was amended in 1908, by adding to Article 8, s. 1, "taxes may
also be imposed on incomes, privileges and occupations, which
taxes may be graduated and progressive, and reasonable exemp-
tions may be provided." Beats v. State, 139 Wis. 544, 557, 121
N. W. 347.

Wis. Const. 1848, a. 1, s. 9.

Every person is entitled to a certain remedy in the laws, for all injuries or
wrongs which he may receive in his person, property, or character; he ought
to obtain justice freely, and without being obliged to purchase it; completely
and without denial, promptly and without delay; conformably to the laws.

The Unconstitutional Statute of 1868 and Amendments.

Wis. St. 1868, c. 121. Approved March 5, 1868, in effect December 1, 1868.

S. 3. The provisions of this act shall not apply to counties or county judges
wherein the county judge or county court has civil jurisdiction.

S. 4. It shall be the duty of each executor, administrator or guardian, to pay
or cause to be paid, to the county treasurer for the use and benefit of the county
in which the estate of the deceased, or minor, is situate, the following sum accord-
ing to the value of the estate and property as, shown by the inventory and ap-
praisal, that is to say: twenty dollars when the value of the estate shall exceed
one thousand dollars, and shall not exceed the value of two thousand dollars;

1202 STATUTES ANNOTATED. [Wis. St.

thirty dollars when the estate shall exceed the value of two thousand dollars,
and shall not exceed the value of five thousand dollars; forty dollars when the
value of the estate shall exceed five thousand dollars, and shall not exceed the
value of eight thousand dollars; fifty dollars when the value of the estate shall
exceed eight thousand dollars, and shall not exceed the value of ten thousand
dollars; and seventy-five dollars in all cases when the value of the property shall
exceed ten thousand dollars; said sum of money to be paid to the county treasurer
of the proper county upon the return and approval of the inventory and appraise-
ment to the county court; and the county court is hereby prohibited from allow-
ing the account of any such executor, administrator or guardian until satisfactory
proof shall be produced to said county court of the payment of the sum of money
required by the provisions of this section.

Wis. St. 1872, c. 40, approved March 7, 1872, repealed Wis. St. 1868, c. 121,
s. 4.

Wis. St. 1877, c. 98, approved February 28, 1877, entitled: "An act regulating
the salary of the county judge of Milwaukee County," provided in section 4 that
the provisions of Wis. St. 1868, c. 121, s. 4, shall apply to Milwaukee county.
The act took effect January 1, 1878.

Wis. St. 1880, c. 262, provides for the payment of fees on the settlement of
estates in the county of Milwaukee, amending the revised statutes of 1878,
s. 2483.

Wis. St. 1889, c. 176, approved March 25, 1889, entitled: "An act to provide for
the payment of certain amounts into the county treasury by executors, adminis-
trators and guardians, in lieu of fees in all counties whose population exceeds
one hundred and fifty thousand."

S. 1. Every executor, administrator or guardian appointed by the county
court of any county whose population exceeds one hundred and fifty thousand
shall, in all cases of the administration of estates, and of guardianship here-
after commenced in said court, and in all cases now pending in said court in
which the inventory has not been returned and approved according to law, pay
to the county treasurer of such county for the use thereof, a sum equal to one-
half of one per cent of the appraised value of such estate or property of a ward,
as shown by the inventory and appraisal, or established in accordance with
chapter 262, of the laws of 1880; provided, however, that when the value of auy
estate or property of ward shall exceed five hundred thousand dollars the execu-
tor, administrator or guardian, shall pay to the county treasurer as aforesaid one-
half of one per cent of the five hundred thousand dollars, and one-tenth of one
per cent of the value of said estate or property over and above said sum of five
hundred thousand dollars. "Provided, further, that estates of three thousand
dollars or less, shall be exempt from the payment of probate fees." Such sums
shall be paid at the time of the return and approval of the inventory, or when-
ever the county judge shall have ascertained the amount of the estate, as pro-
vided in chapter 262, of the laws of 1880. And no account of any executor,
adniinistrator or guardian, shall be allo\ved without proof of the payment thereof
and the same shall constitute a part of the expense of administration and guar-
dianship. In fixing the value of any estate or property of ward for the purpose
of this section, the amount of existing specific liens shall be deducted from the
gross valuation of such estate or property.

1889, c. 176.] WISCONSIN 1203

THE VOID ACT OF 1889.

Wis. St. 1889, c. 176. Approved March 25, 1889, published March 28, 1889.

An Act to provide for the payment of certain amounts into the county
treasury by executors, administrators and guardians, in lieu of fees in all
counties whqge population exceed one hundred and fifty thousand.

S. 1. Every executor, administrator or guardian appointed by the county
court of any county whose population exceeds one hundred and fifty thousand
shall, in all cases of the administration of estates and of guardianship here-after
commenced in said court, and in all cases now pending in said court in which the
inventory has not been returned and approved according to law, pay to the county
treasurer of such county for the use thereof, a sum equal to one-half of one
per cent oi the' appraised value of such estate or property of a ward, as shown
by the inventory and appraisal, or established in accordance with chapter 262,
of the laws of 1880; provided, however, that when the value of any estate or
property of ward shall exceed five hundred thousand dollars the executor, admin-
istrator or guardian shall pay to the county treasurer as aforesaid one-half of
one per cent of the five hundred thousand dollars, and one-tenth of one per
cent of the value of said estate or property over and above said Sum of five
hundred thousand dollars. "Provided, further, that estates of three thousand
dollars or less, shall be exempt from the payment of probate fees." Such sums
shall be paid at the time of the return and approval of the inventory, or whenever
the county judge shall have ascertained the amount of the estate, as provided in
chapter 262 of the laws of 1880. And no account of any executor, administrator
or guardian, shall be allowed without proof of the payment thereof, and the
same shall constitute a part of the expense of administration and guardianship.
In fixing the value of any estate or property of ward for the purposes of this
section, the amount of existing specific liens shall be deducted from the gro&s
valuation of such estate or property.

A Tax.

This statute provides for the payment by estates in counties
having a population of over one hundred and fifty thousand of
certain fees. The law cDuld apply to only one county in the
state. It was claimed that it was "in lieu of fees" of the judge
or register for administration of the estate, as might be inferred
from the title of the act. The exaction, however, is not in lieu of
fees, as the amount collected is in no way dependent upon the
amount and value of such service, but depends entirely upon the
valuation oi appraisal of the estate, and, if regarded as a probate
fee, may be so large as to shock the good sense of everybody. This
is not a probate fee, but a charge imposed by the legislature as a
condition precedent of allowing the county court to proceed with
the administration of the estate. Such charge is necessarily a
buiden so imposed upon such administrators or such estates or

1204 STATUTES ANNOTATED. [Wis. St.

both to raise money for public purposes. This brings it within
the well-recognized definitions of a tax. State v. Mann, 76 Wis.
469, 474, 45 N. W. 526, 46 N. W. 51.

Not Sustained as Tax for a Salary of Judges.

The Wisconsin constitution provides that "the legislature shall
impose a tax on all civil suits commenced or prosecuted in the
municipal, inferior or circuits courts, which shall constitute a fund
to be applied toward the payment of the salary of the judges."

Wis. St. 1889, c. 176, cannot be sustained under this section, as
the fund thereby raised is not restricted to the payment of the
salary of judges. State v. Mann, 76 Wis. 469, 477, 45 N. W. 526,
46 N. W. 51.

Tax on Whole Estate and not on Succession.

This act is not a tax upon a succession, but upon the whole estate
at its appraised valuation regardless of whether it is solvent or
insolvent. In the case of an insolvent estate nothing would be left
after the payment of debts for transmission and in most estates
there are likely to be sufficient debts to reduce the amount of such
transmission far below the amount of such valuation. Besides, the
amount of such tax is graduated by the amount of such appraisal
and is to be paid by the executors at the time of filing the appraisal
notwithstanding they may only be interested as such officials and
never succeed to any of such estate. Manifestly the burden im-
posed is not a succession tax, but a tax upon the whole estate
regardless of whether it is solvent or insolvent. State v. Mann,
76 Wis. 469, 478, 45 N. W. 526, 46 N. W. 51.

Void as Limited to Certain Estates in one County.

The act is unconstitutional as it provides for the imposition of
a tax on certain estates only in counties having more than a certain
population and the tax in question really applies only to one county
and is further limited to a certain class of estates in that county.
State V. Mann, 76 Wis. 469, 45 N. W. 526, 46 N. W. 51.

Double Taxation if a Property Tax.

«This act cannot be sustained as a tax upon the estate as this
would be double taxation where an estate is already assessed for
the same year as of the first day of May. State v. Mann, 76 Wis.
469, 478, 45 N. W. 526, 46 N. W. 51.

1899, c. 355.1 WISCONSIN. 1205

Whether Void as a Probate Fee.

The court notices State v. Gorman, 40 Minn. 232, which decides
the statute cited in that case was in violation of a provision of the
Minnesota constitution similar to that of Wisconsin which declares
that "every person . . . ought to obtain justice freely and with-
out being obliged to purchase it." The Wisconsin statute of 1889
purports to close the door of the county court against adminis-
trators and the estate unless they first advance and pay the amount
exacted. This looks very much like purchasing the privilege of
going into the county court for the settlement of the estate, but
the court finds it unnecessary to determine that question. State v.
Mann, 76 Wis. 469, 480, 45 N. W. 526, 46 N. W. 51.

THE VOID ACT OF 1899.

Wis. St. 1899, c. 355. Approved May 4, 1899, in force July 1, 1899.

An Act for a tax on gifts, inheritances, bequests and legacies in certain
cases.

S. 1. A tax shall be and is hereby imposed upon any transfer of any personal
property, of the value of ten thousand dollars or over, or of any interest therein,
or income therefrom, in trust or otherwise, to any persons or corporations, except
any corporation organized for any religious, charitable or educational purpose,
which uses the property so transferred to it solely for the purposes of its organi-
zation, in the following cases: —

(1) When the transfer is by will or by the intestate laws of this state from
any person dying possessed of the property while a resident of the state.

(2) When the transfer is by will or intestate law, of property within the state,
and the decedent was a non-resident of the state at the time of his death.

(3) When the transfer is of property made by a resident, or by a non-resident
when such non-resident's property is within this state, by bargain, sale or gift
made in contemplation of the death of the vendor or donor, or intended to take
effect, in possession or enjoyment at or after such death.

(4) Such tax shall be imposed when any such beneficiary entitled in possession
or expectancy, to any personal property, or the income thereof by any such
transfer, whether made before or after the passage of this act.

(5) The tax so imposed shall be at the rate of five per centum upon the clear
market value of such property, except as otherwise prescribed in the next section.

S. 2. When the property, or any beneficial interest therein, passes by any such
transfer to or for the use of any father, mother, husband, wife, child, brother,
sister, wife or widow of a son, or the husband of a daughter, or any child or
children adopted as such in conformity with the laws of this state, of the dece-
dent, grantor, donor or vendor or to any person to- whom any such decedent,
grantor, donor or vendor, for not less than ten years prior to such transfer, stood
in the mutuaUy acknowledged relation of a parent, or to any lineal descendant,
of such decedent, grantor, donor or vendor, born in lawful wedlock, such transfer

1206 STATUTES ANNOTATED. [Wis. St.

of property shall not be taxable under this act, unless it is of the value of ten
thousand dollars or more, in which case it shall be taxable under this act at the
rate of one per centum upon the clear market value of such property.

S. 19. The words "estate" and "property," as used in this act, shall be taken
to mean the personal property or interest therein of the testator, intestate, grantor,
bargainor or vendor, passing or transferred to those not herein especially exempted
from the provisions of this act, and not as the property or interest therein passing
or transferred to individual legatees, devisees, heirs, next of kin, grantees, donees
or vendees, and shall include all personal property or interest therein, whether
situated within or without this state, over which this state has any juris-
diction for the purpose of taxation. The word "transfer," as used in this act,
shall be taken to include the passing of property or any interest therein in pos-
session or enjoyment, present or future, by inheritance, descent, bequest, grant,
deed, bargain, sale or gift, in the manner herem prescribed. The words "county
treasurer" and "district attorney" as used in this act, shall be taken to mean
the treasurer and district attorney of the county of the county court having
jurisdiction, as provided in section 10 of this act. Provided, that no language
in this act shall be construed as imposing any tax upon the transfer of real prop-
erty. In case of any transfer of any shares of the capital stock of any corpora-
tion which owns real estate, the proportionate market value of its real estate
taxed as such, shall be deducted from the appraised value of any such shares so
transferred and taxed as herein provided.

Modeled after New York Act.

This act is in all essential respects a literal copy of the New-
York law of 1892 with the important exceptions that in the New
York law all transfers to collateral kindred and strangers of the
value of five hundied dollars or over are taxed, while in the Wis-
consin law such transfers are not taxed unless they equal or exceed
ten thousand dollars; and in New York the tax is imposed upon
transfers of both real and personal property, while in Wisconsin it
is confined to personal property alone. Black v. State, 113 Wis.
205, 211, 89 N. W. 522, 90 Am. St. Rep. 853.

Construction of New York Act Followed.

The construction placed upon the New York law before it was
adopted in Wisconsin must, so far as the provisions are identical
or substantially so, be followed in Wisconsin. Black v. Slate,
113 Wis. 205, 211, 89 N. W. 522, 90 Am. St. Rep. 853.

The court remarks that the New York decisions on this inherit-
ance tax have not decided the question whether the New York
statute of 1892 in any respect violates the rule of equaHty or in-
fringes upon the fourteenth amendment of the constitution of the
United States. Black v. State, 113 Wis. 205, 213, 89 N. W. 522, 90
Am. St. Rep. 853.

1889, c. 355.] WISCONSIN.

1207

The succession tax is a tax on the privilege of receiving
property, not a tax upon property. Black v. State, 113 Wis 205
217, 89 N. W. 522, 90 Am. St. Rep. 853.

Exemptions Applied to Entire Property.

Following the construction placed by the New York courts on
the New York statute it should be held to apply the limitations of
the act to the aggregate value of the entire property or estate
transferred and not to the share of each individual beneficiary.
Black V. State, 113 Wis. 205, 213, 89 N. W. 522, 90 Am. St Reo
853.

Classification Void.

There are two questions as to the validity of Wis. St. 1899,
c. 355 ; first, whether the exemption of all estates under ten thous-
and dollars is reasonable; and second, is the attempted classification
a legal and rational one? The court believes that the exemption
of ten thousand dollars in unduly large, but feels that this is a
legislative question and declines to hold the statute void for that
reason. As to the second question of classification, the court
admits the validity of a progressive rate, but remarks as follows:
"But while classification is proper, there must always be uniformity
within the class. If persons under the same circumstances and
conditions are treated differently, there is arbitrary discrimination,
and not classification.

"It is claimed that such is the effect of the present law, and we
can see no escape from the conclusion. People in the same class are
subject to different rules, some being exempt and some being taxed.
This results from the peculiar provisions of section 19 of the law,
which defines 'estate' and 'property' as construed by the New
York courts before we borrowed the law. As already pointed out,
under this provision the $10,000 limitation or exemption is based
on the size of the whole property devised or granted, and not upon
the amount received by each individual legatee or grantee. Thus
it results that one collateral relative, receiving a legacy of $2,000
from one testator whose estate amounts to but $9,500, pays no
tax, while another collateral relative in the same degree, receiving
a legacy of $2,000 from another testator whose estate amounts
to $10,500, is obliged to pay a tax. Here is unlawful discrimination,
pure and simple. No rational distinction or difference can be
drawn between the two legatees simply because the estates from
which their legacies come are of slightly different size. They are

1208 STATUTES ANNOTATED. [Wis. St.

both within the same class, surrounded by the same conditions
and receiving the same benefits. One pays a tax, and the other
does not. This is not the equal protection of the laws." Per Win-
slow, J., in Black v. State, 113 Wis. 205, 218, 89 N. W. 522, 90 Am.
St. Rep. 853.

Requirement of Uniformity.

The court does not decide whether an inheritance tax is subject
to the constitutional provision that the rule of taxation shall be
uniform. "Considering the clause without undue refinement of
reasoning, it is difhcult to see why it does not apply to an inheritance
or succession tax. It is true such a tax is called an excise in the
decisions. An excise is a duty levied on articles of sale or manu-
facture, upon licenses to pursue certain trades or deal on certain
commodities, upon official privileges, etc. Cooley, Taxation (2d
ed.), 4. But when such duty is levied upon a trade, occupation or
privilege as a means of producing revenue alone, and not in exer-
cise of the police power, it is, to all intents and purposes, an exer-
cise of the taxing power, and no good reason is perceived why such
taxation is not included within the taxation referred to in the con-
stitution in the clause quoted. The argument against this position
is that the words immediately following this clause, namely, "and
taxes shall be levied upon such property as the legislature shall
prescribe," indicate that it is a taxation of property alone which
the section covers. Per Winslow, J., in Black v. State, 113 Wis. 205,
218, 89 N. W. 522, 90 Am. St. Rep. 853.

Whether or not the inheritance tax is included within the word
"taxation" as used in the Wisconsin constitution, article 8, section 1,
the court remarks that there is still the fourteenth amendment to the
federal constitution to be considered, there is still the principle
that all men are equal before the law; that life, liberty and property
are secure to all alike.

The court quotes Wisconsin constitution, a. 1, s. 1: —

"All men are born equally free and independent, and have cer-
tain inherent rights; among these are life, liberty and the pursuit
of happiness ; to secure these rights, governments are instituted among
men deriving their just powers from the consent of the governed."
Bl^ck V. State, 113 Wis. 205, 218, 89 N. W. 522, 90 Am. St. Rep. 853.

Power of Legislature to Abolish Descent.

The language used in Eyre v. Jacob, 14 Gratt. 430, to the effect
that the legislature may "absolutely repeal the statute of wills

1903, c. 44.] WISCONSIN.

1209

and that of descents and distributions, and declare that upon the
death of a party his property shall be applied to the payment of his
aebts and the residue appropriated to public uses," is charac-
terized as a pure dictum and the language used solely by way of
argument. The idea expressed has been referred to several times by
other courts as in Mager v. Grima, 8 How. 490; Magoun v. Illinois
Trust & Savings Bank, 170 U. S. 283; State v. Hamlin, 86 Me. 495,
25 L. R. A. 632, 41 Am. St. Rep. 569 n. The court intimates no
favorable opinion upon the proposition laid down by the Virginia
court. Black v. State, 113 Wis. 205, 216, 89 N. W. 522, 90 Am.
St. Rep. 853.

The Act of 1901.

Wis. St. 1901, c. 245, approved April 27, 1901, amends Wis. St.
1899, c. 355, ss. 1, 2, 4, 5, 6, 11, 13, 19. The act contained a clause
saving all rights accrued or accruing under the previous act.

THE STATUTE OF 1903.

Wis. St. 1903, c. 44. Approved March 27, 1903.

An act for a tax on gifts, inheritances, bequests, legacies, devises and
successions in certain cases.

S. 1. Tax imposed on property of any kind transferred. A tax shall
be and is hereby imposed upon any transfer of any property, real, personal or
mixed, or any interest therein, or income therefrom in trust or otherwise, to any
person, association, or corporation, except corporations of this state organized
under its laws solely for religious, charitable or educational purposes, which shall
use the property so transferred exclusively for the purposes of their organization
within the state in the following cases: —

(1) While a resident of state. When the transfer is by will or by the
intestate laws of this state from any person dying possessed of the property while
a resident of the state.

(2) Property within state. When a transfer is by will or intestate law
of property within the state or within its jurisdiction and the decedent was a
non-resident of the state at the time of his death.

(3) Non-residents' property within state. When the transfer is of
property made by a resident or by a non-resident when such non-resident's
property is within this state, or within its jurisdiction, by deed, grant, bargain,
sale or gift, made in contemplation of the death of the grantor vendor or donor,
or intended to take effect in possession or enjoyment at or after such death.

(4) Transfer before or after passage of act. Such tax shall be imposed
when any such person or corporation becomes beneficially entitled, in possession
or expectancy to any property or the income thereof, by any such transfer

1210 STATUTES ANNOTATED. [Wis. St.

whether made before or after the passage of this act, provided that property or
estates which have vested in such persons or corporations before this act takes
effect shall not be subject to the tax.

(5) Transfer under power of appointment. Whenever any person or
corporation shall exercise a power of appointment derived from any disposition
of property made either before or after the passage of this act, such appointment
when made shall be deemed a transfer taxable under the provisions of this act
in the same manner as though the property to which such appointment relates
belonged absolutely to the donee of such power and had been bequeathed or
devised by such donee by will ; and whenever any person or corporation possess-
ing such a power of appointment so derived shall omit or fail to exercise the
same within the time provided therefor, in whole or in part a transfer taxable
under the provisions of this act shall be deemed to take place to the extent of such
omission or failure, in the same manner as though the persons or corporations
thereby becoming entitled to the possession or enjoyment of the property to
which such power related had succeeded thereto by a will of the donee of the
power failing to exercise such power, taking effect at the time of such omission
or failure.

(6) Basis of tax. The tax so imposed shall be upon the clear market value
of such property at the rate hereinafter prescribed and only upon the excess
of the exemptions hereinafter granted.

Nature.

The inheritance tax is a tax upon the transfer, transaction or
right to receive propert>^. The theory is that it is not one on
property, but on the right of succession. State v. Bullen, 143 Wis.
512, 518, 128 N. W. 109.

The court sustains the theory oj an inheritance tax not on the
power to prohibit succession, but upon the power to reasonably
regulate by tax. Nunnemacher v. State, 129 Wis. 190, 203, 108 N.
W. 6, 27, 9 L. R. A. N. S. 121.

Not a Property Tax. — Uniformity.

It was claimed that because the court held in the Nunnemacher
case, 129 Wis. 190, 108 N. W. 627, 9 L. R. A. N. S. 121, that the
right to inherit a devised property was a natural right, therefore
it was a property right, and hence an inheritance tax must logi-
cally be held to be a tax upon a property right and subject to
the provision that it must be absolutely uniform. The court
sa^s that the conclusion does not follow; that taxes frequently
are levied upon transactions or occupations which are matters of
natural right, and that these matters are mere privilege taxes.
Beats V. State, 139 Wis. 544, 556, 121 N. W. 347.

1903, c. 44.] WISCONSIN. 1211

Modeled on New York Act.

As the Wisconsin inheritance tax law of 1903 was borrowed from
New York, therefore the judicial construction given it there is
significant in interpreting it in Wisconsin. State v. Bullen 143
Wis. 512, 520, 128 N. W. 109.

Exemptions and Classification by Relationship Upheld.

Classification between Hneals and collateral relatives and strangers
does not violate the rule of uniformity nor the principle of equal
protection of the laws; and reasonable exemption of small estates
also may be allowed without violating uniformity. Nunnemacher
V. State, 129'Wis. 190, 221, 108 N. W. 627, 9 L. R. A. N. S. 121,
qxxotmg Black v. State, 113 Wis. 205, 90 Am. St. Rep. 853.

As to the progressive feature of the statute of 1903, the court
says that this feature has been upheld by the supreme court of
the United States in the decision in Magoun v. Illinois Trust
& Savings Bank, 170 U. S. 283, 18 Sup. Ct. 594, and Knowlton
V. Moore, 178 U. S. 41, 20 Sup. Ct. 747, and remarks that the
decision of that court is conclusive as to the fourteenth amendment
to the federal constitution, and as the general equality guarantees
of the Wisconsin constitution are substantially equivalent to the
equal protection of the laws guaranteed by the fourteenth amend-
ment, the court is contented to follow the decisions of the United
States supreme court and hold that the progressive feature does not
violate the constitution. Nunnemacher v. State, 129 Wis. 190, 222,
108 N. W. 627, 9 L. R. A. N. S. 121.

The court re-examines and afiirms the case of Nunnemacher v.
State, 129 Wis. 190, as to the constitutionality of the inheritance law
in Beats v. State, 139 Wis. 544, 552, 121 N. W. 347.

The meaning of the words **in contemplation of death/'
as used in the statute, must be inferred and ascertained from the
context of the act and the object sought to be accomplished by the
law. It is manifest that they were intended to cover transfers of
parties who were prompted to make them by reason of the expecta-
tion of death, and which, in view of that event, accomplish transfers
of the property of decedents in the nature of a testamentary dis-
position. It is therefore obvious that they are not used as referring
to that expectation of death generally entertained by every person.
The words are evidently intended to refer to an expectation of death
which arises from such a bodily or mental condition as prompts
persons to dispose of their property and bestow it on those whom

1212 STATUTES ANNOTATED. [Wis. St.

they regard as entitled to their bounty. This accords with the
general objects and purposes of the law, namely, the imposition of
a tax on the devolution of property involved in the demise of the
owner." . . .

"The claim that the words can include only gifts causa mortis
attributes to them too restricted a meaning. A transfer valid as
a gift inter vivos ^ if made under circumstances which impress it
with the distinguishing characteristics of being prompted by an
apprehension of impending death, occasioned by a bodily or mental
state which has a basis for the apprehension that death is imminent,
would be a transfer made in contemplation of death within the
meaning of the law." Per Siebecker, J., in State v. Pabst, 139
Wis. 561, 589, 121 N. W. 3^1.

**In Contemplation of Death." — Evidence.

On the question of whether a deed was made in contemplation
of death, evidence was introduced as to the cause of his death —
diabetes. The decedent's declaration three years before his death
that in recognition of the valuable aid of his sons in building up
his estate he intended to dispose of part of his estate to them
was put in as evidence. But the court remarks that it is signifi-
cant that he did not do so then or in the immediately succeeding
years. The court remarks that considering his condition, the
execution of the deed of gift and the will simultaneously indicates
that he was disposing of his property to those whom he regarded as
natural objects of his bounty rather than that he was transferring
it to them as compensation for worthy and valuable service rendered
by them. He knew his condition and was aware of the outcome to
be inferred from his symptoms. The deed of gift was made about
six months before his death and the court finds that the evidence
abundantly sustains the conclusion of the trial court that the deed
of gift was made in contemplation of death. State v. Pabst, 139
Wis. 561, 593, 121 N. W. 351.

The death certificate of the decedent's attending physician was
proper evidence under Wisconsin statutes where it was introduced
as evidence of its contents on the issue of whether the deed made was
made in contemplation of death, in State v. Pabst, 139 Wis, 561,
591, 121 N. W. 351.

Situs of Personal Property.

The New York statute of which the Wisconsin statute is a copy
received the construction in New York that in respect to personal

1903, c. 44.] WISCONSIN.

1213

property not within the state at the time of the resident decedent's
death, the court will apply the maxim Mobilia sequuntur personam.
The effect of this rule is to make the legal situs of the property
at the domicile of the decedent.

It seems to be the New York and Massachusetts rule that personal
property for the purpose of taxation has its situs at the domicile
of the owner and the court follows the rule of Frothingham v. Shaw,
175 Mass. 59, 78 Am. St. Rep. 475, 55 N. E. 623; Estate of Cornell
170 N. Y, 423, 63 N. E. 445. The court remarks that In re Joyslin,
76 Vt. 88, 56 A. 281, appears to be out of harmony with the New
York and Massachusetts rule.

So where a resident of Wisconsin, while in another state, trans-
fers property which is then in the foreign state and which never has
been in the state of Wisconsin, the situs of the property for the pur-
pose of the tax is the state of Wisconsin and it is subject to the
Wisconsin inheritance tax. State v. Bullen, 143 Wis. 512, 523,
128 N. W. 109.

Life Insurance.

Where a life insurance policy was made payable to the wife of
the decedent and she joined with him in conveying it to a trust
company in trust in contemplation of death, though without giving
up her rights in it, therefore this property remained the property
of the wife, and was not a part of the estate of the decedent, and
therefore was not subject to the inheritance tax. State v. Bullen,
143 Wis, 512, 523, 128 N. W. 109.

S. 2. Primary rates where not in excess of $25,000. When the property
or any beneficial interest therein passes by any such transfer where the amount
of the property shall exceed in value the exemption hereinafter specified, and
shall not exceed in value twenty-five thousand dollars the tax hereby imposed
shall be: —

(1) One per centum, where. Where the person or persons entitled to any
beneficial interest in such property shall be the husband, wife, lineal issue, lineal
ancestor of the decedent or any child adopted as such in conformity with the laws
of this state, or any child to whom such decedent for not less than ten years
prior to such transfer stood in the mutually acknowledged relation of a parent,
provided, however, such relationship began at or before the child's fifteenth
birthday, and was continuous for said ten years thereafter, or any lineal issue of
such adopted or mutually acknowledged child, at the rate of one per centum of
the clear value of such interest in such property.

1214 STATUTES ANNOTATED. [Wis. St.

or the husband of a daughter of the decedent, at the rate of one and one-half
per centum of the clear value of such interest in such property.

(3) Three per centum, where. Where the person or persons entitled to
any beneficial interest in such property shall be the brother or sister of the father
or mother or a descendant of a brother or sister of the father or mother of the
decedent, at the rate of three per centum of the clear value of such interest in
such property.

(4) Four per centum, where. Where the person or persons entitled to any
beneficial interest in such property shall be the brother or sister of the grand-
father or grandmother or a descendant of the brother or sister of the grandfather
or grandmother of the decedent, at the rate of four per centum of the clear value
of such interest in such prpperty.

(5) Five per centum, where. Where the person or persons entitled to any
beneficial interest in such property shall be in any other degree of collateral
consanguinity than is hereinbefore stated, or shall be a stranger in blood to the
decedent, or shall be a body politic or corporate, at the rate of five per centum
of the clear value of such interest in such property.

S. 3. Other rates: where in excess of $25,000. The foregoing rates in
section .two are for convenience termed the primary rates. When the amount
of the clear value of such property or interest exceeds twenty-five thousand dollars
the rates of tax upon such excess shall be as follows: —

(1) Rate where amount $25,000 to $50,000. Upon all in excess of twenty-
five thousand dollars and up to fifty thousand dollars one and one-half times the
primary rates.

(2) Rate where amount $50,000 to $100,000. Upon all in excess of fifty
thousand dollars and up to one hundred thousand dollars, two times the primary
rates.

(3) Rate where am ount $100,000 to $500,000. Upon all in excess of one
hundred thousand dollars and up to five hundred thousand dollars, two and
one-half times the primary rates.

(4) Rate where amount over $500,000. Upon all in excess of five hundred
thousand dollars, three times the primary rates.

Exemptions Valid.

It was argued that section 2 provides for the taxation of the
transfer of estates not exceeding in value twenty-five thousand
dollars and in section 3 provides in effect that the transfer of the
first twenty-five thousand dollars in an estate exceeding that sum
shall not be taxed, and that only the transfer of an amount exceed-
ing twenty-five thousand dollars shall be subject to taxation. If
thi^ were true the law would be manifestly unconstitutional.
The court finds that the language of other sections of the statute
forbids such a construction of sections 2 and 3. It is very significant
that section 4, which provides for the exemptions, is a general sec-

1903, c. 44.] WISCONSIN. 1215

tion, fixing the exemptions to be allowed in all estates both great
and small, and is intended to cover the whole subject of exemptions.
It is manifestly unreasonable to suppose that the legislature
imagined when they provided this careful and complete code of
exemptions that they had already made an enormous exemption of
twenty-five thousand dollars in favor of all beneficiaries who were
fortunate enough to receive more than that sum. But the first
section of the act is quite conclusive, as it provides that a tax shall
be imposed upon any transfer of any property or any interest
therein except the exemptions. Beals v. State, 139 Wis. 544, 554,
121 N. W. 347.

S. 6. Discount, rate of interest on deferred payments. If such tax is
paid within one year from the accruing thereof, a discount of five per centum
shall be allowed and deducted therefrom. If such tax is not paid within eighteen
months from the accruing thereof interest shall be charged and collected thereon
at the rate of ten per centum per annum from the time the tax accrued; unless
by reason of claims made upon the estate, necessary litigation or other unavoid-
able cause of delay, such tax shall not be determined and paid as herein provided,
in which case interest at the rate of six per centum per annum shall be charged
upon such tax from the accrual thereof until the cause of such delay is removed,
after which ten per centum shall be charged. In all cases when a bond shall
be given under the provisions of section 9 of this act, interest shall be charged
at the rate of six per centum from the accrual of the tax, until the date of pay-
ment thereof.

The penalty of ten per cent should not be imposed for a three
years' delay when it was uncertain during that time whether or
not the transfer by a deed of gift was subject to taxation as to the
amount of stock included in it and the value of the stock transferred.
State V. Pabst, 139 Wis. 561, 595. 121 N. W. 351.

S. 12. Jurisdiction of county court: petition for ancillary letters.

The county court of every county of the state having jurisdiction to grant letters
testamentary or of administration upon the estate of a decedent whose property
is chargeable with any tax under this act, or to appoint a trustee of such estate
or any part thereof, or to give ancillary letters thereon, shall have jurisdiction
to hear and determine all questions arising under the provisions of this act, and
to do any act in relation thereto authorized by law to be done by a county court
in other matters or proceedings coming within its jurisdiction, and if two or more
county courts shall be entitled to exercise any such jurisdiction, the county court
first acquiring jurisdiction hereunder, shall retain the same to the exclusion of
every other county court. Every petition for ancillary letters testamentary or
ancillary letters of administration made in pursuance of the laws governing
probate practice of a person to be cited as therein prescribed, and a true and
correct statement of all the decedent's property in this state, and the value

1216 STATUTES ANNOTATED. [Wis. St.

thereof; and upon presentation thereof the county court shall issue a citation
directed to such county treasurer; and upon the return of the citation, the
county court shall determine the amount of the tax which may be or become
due under the provisions of this act, and his decree awarding the letters may
contain any provisions for the payment of such tax or the giving of security there-
for which might be made by such county court if the county treasurer were a
creditor of deceased.

It was claimed that this act is unconstitutional because it com-
mits the appraisal of property and the fixing of the amount of the
tax to the county court, and these are claimed to be administrative
and not judicial duties. The court replies that this is not so, that
the court simply determines in a judicial way certain facts necessary
to be ascertained to determine how much the tax fixed by the law
amounts to in a given case. These duties are judicial in their
character and very properly entrusted to the county court in which
the estate is being administered. Nunnemacher v. State, 129 Wis.
190, 223, 108 N. W. 627, 9 L. R. A. N. S. 121.

Sections 12 and 15 do not give to the county court the authority
to order the corporation in which the decedent was a stockholder
to produce its private books, papers and documents for inspection
to enable the court to determine the value of the estate of the
decedent and the amount of the tax to which the same is liable.
The court finds that such supposed entries and statements made in
the books, papers and documents of the corporation by its officers
or agents have no more probative force as evidence in court, in the
controversy between the executors and the state of Wisconsin,
than oral declarations to the same effect, made by the same officers
and agents, would have had. Such entries and statements were
obviously mere hearsay made by third parties without the sanction
of an oath. There is nothing in the statute authorizing the county
court, whether acting as a judicial tribunal or as an appraiser, to
compel a third party to produce his private books, papers and
documents, and certainly the county court has no such power in
the absence of statutory authority. A writ of prohibition against
the proceedings in the county court was granted. State v. Car-
penter, 129 Wis. 180, 108 N. W. 641, 8 L. R. A. N. S. 788.

Refunding.

*Under the terms of Wisconsin statutes of 1898, section 3200,
one who has paid an inheritance tax under protest may bring
action, although he has not appealed from the order of the county
court fixing the tax and assessing the same. It is claimed that the

1903, c. 44.] WISCONSIN. 1217

order of the county court rendered the assessment of the tax res
judicata. Although the court acts on these matters in a judicial
manner they are really but steps in the enforcement of the tax law
of the state rather than a judgment in a judicial controversy.
Beals V. State, 139 Wis. 544, 552, 121 N. W. 347.

S. 13. Transfer subject to contingent trusts. (5) When property is
transferred in trust or otherwise, and the rights, interests or estates of the trans-
ferees are dependent upon contingencies or conditions whereby they may be wholly
or in part created, defeated, extended or abridged, a tax shall be imposed upon
such transfer at the highest rate which, on the happening of any of the said
contingencies or conditions would be possible under the provisions of this act,
and such tax so imposed shall be due and payable forthwith out of the property
transferred, provided, however, that on the happening of any contingency whereby
the said property or any part thereof is transferred to a person or corporation
exempt from taxation under the provisions of this act or to a person taxable at
a less rate than the rate imposed and paid, such person or corporation shall be en-
titled to a return of so much of the tax imposed and paid as is the difference be-
tween the amount paid and the amount which said person or corporation should
pay under the provisions of this act with legal interest from the time of payment.
Such return of overpayment shall be made in the manner provided by section 8
of this act.

Tax on Contingent Estates Upheld.

It was claimed that Wisconsin statute of 1903, c. 44, as amended
by the statute of 1903, c. 249, is invalid as it attempts to impose
a tax on transfers limited to vest on contingencies which may never
happen, or to persons not in being or ascertainable, and making
the tax due and payable forthwith out of the property transferred,
by compelling parties to pay such tax on defeasible estates which
they may never own and in contemplating the payment of penal-
ties before any opportunity is offered to pay the tax. The court
replies that the law does not operate to enforce the assessment and
payment of the tax on interests or estates not vested, or on those
whose value cannot be ascertained by reason of the uncertainties
of contingencies. Payment of the tax on such transfers is expressly
postponed until the beneficiary comes into the actual possession or
enjoyment thereof.

The claim that the present owners of defeasible estates are com-
pelled to pay the tax on the whole estate is not well founded, for
provision is made for reimbursing them should it happen that
such estates and interests should be abridged, defeated or dimin-
ished. Section 13, subdivision 3. State v. Pabst, 139 Wis. 561, 857,
121 N. W. 351.

1218 STATUTES ANNOTATED. [Wis. St.

Contingent Interests.

The will provided that if E. S. should have no issue of the age
of ten years living at the time of the death of the life tenant, then
the interest on the estate transferred to her should remain in trust
and only the income should be paid to her until she should have a
child of the age of ten years. If no child of hers shall attain this
age, then she is to receive only the income of estate.

The conditions of this transfer are governed by the provisions of
section 13, subdivision 5, because her rights are depend.ent upon
contingencies which may extend and change her interest in the es-
tate from a life estate to one in fee.

Wis. statute of 1903, c. 44, section 13, subdivision 5, as amended
by statute of 1903, c. 249, section 2, provides that such a transfer
shall be taxed at the lowest possible rate under the conditions on
which it passes at the time of transfer, and that the tax shall be
due and payable forthwith out of the property so transferred. She
was properly taxed the same rate as would be imposed if her
brothers and sisters should eventually be entitled. In the event
that the beneficiary shall enjoy no more than la life interest she
will be entitled to be reimbursed in the manner above indicated
out of the corpus of the share so transferred to her. State v. Pabst,
39 of Wis. 561, 589, 121 N. W. 351.

Annuity Deducted.

Where a will provides that beneficiaries may take property and
its income subject to annual payments to the widow unless she
exercise an option to take a portion of the estate in lieu thereof,
and to similar payments for the support of the child during minor-
ity, there is nothing in these conditions which postpones their right
to the property or income thereof from the time of death. The
law provides means of calculating the value of the interest of the
widow and the child and hence the fair market value of the re-
mainder of the estate and the other interests was ascertainable.
State V. Pabst, 139 Wis. 561, 588, 121 N. W. 351.

S. 15. Reportof appraiser: county court to give notice. (1) The report
of the appraiser shall be made in duplicate, one of which duplicates shall be
filed in the office of the county court and the other in the office of the secretary
of state. Upon filing such report in the county court, the county court shall forth-
with give twenty days' notice by mail to all persons known to be interested in
the estate, including the county treasurer, of the time and place for the hearing
in the matter of such report and the county court from such report and other
proofs relating to any such estate shall forthwith at the time so fixed, determine

1903, Amend.] WISCONSIN. 1219

the cash value of such estate and the amount of tax to which the same is liable,
or the county court without appointing an appraiser upon giving twenty days,
notice by mail to all persons known to be interested in the estate including the
county treasurer, of the time and place of hearing, may at the time so fixed
hear evidence and determine the cash value of such estate and the amount of
tax to which the same is liable. If the residence or post-office address of any
person interested in any estate is unknown to the executor, administrator or
trustee, notice of the hearing in the matter of the report of the appraiser or
notice that the county court without appointing an appraiser will determine the
cash value of an estate shall be given to all such persons by publication of such
notice not less than three successive weeks prior to the time fixed for such hear-
ing or determination in such newspaper published within the county as the
court shall direct.

Valuation of Stock.

Certain stock was valued at $1,150 per share and the county court
valued it at $1,408.45 per share, the face value being $1,000 per
share. The law requires that the tax should be assessed on the
clear market value of the property. It appeared that there had
been no sales of the stock in the market, but that the decedent
had dealt with the stock on the basis of its book value, and the
transfers shown were apparently made in reliance on the book value.
Evidence was introduced showing the dividends declared and paid
for a period of years before the death of the testator, and the value
of the corporation assets during that time. In the deed of gift
the decedent declared the book value of 2,840 shares of stock
to be four million dollars.

The court finds that the facts regarding the business of the cor-
poration and its property furnish a basis for valuation, and are
sufftcient to sustain the conclusion of the trial court. State v.
Pahst, 139 Wis. 561, 594, 121 N. W. 351.

THE AMENDMENTS OF 1903.

Wis. St. 1903, c. 249, published May 16, 1903, amends Wis. St. 1903, c. 44,
ss. 1 and 13. (See post, p. 1220, the Present Act.)

Wis. St. 1903, c. 297, provides for the refund of inheritance taxes received
by the state under the void acts of 1899 and 1901, provided that petitions for the
repayment of these taxes should be filed with the county court within two years
after the act was passed.

RECENT AMENDMENTS.

Wis. St. 1905, c. 96, amends Wis. St. 1903, c. 44, s. 1, by exempting gifts to
municipal corporations for strictly municipal purposes.

Wis. St. 1905, c. 96, s. 2, includes in the exemption property transferred to
municipal corporations for strictly municipal purposes.

1220 STATUTES ANNOTATED. [Wis. St.

Wis. St. 1905, c. 96, s. 3. This statute is made retroactive and extends the
exemption to any transfer of property heretofore made to any municipal cor-
poration within the state for strictly municipal purposes.

Wis. St. 1907, c. 600, approved July 9, 1907, covers the appointment of special
counsel by the attorney general.

Wis. St. 1909, c. 38, approved April 10, 1907, published April 14, 1909, amends
Wis. St. s. 3871, relating to computations of life estates.

Wis. St. 1907, c. 660, approved July 16, 1907 (s. 3813a), provides that a special
administrator may be appointed on the estate of a resident deceased person and
prima facie inventory, appraisal and heirship determination had thereunder for
the purpose of having inheritance taxes determined and paid; and of having
prima facie certificate of real estate issued in cases where it appears the estate
may come under the provisions of the inheritance tax laws.

Wis. St. 1909, c. 504, approved June 16. 1909, in force from and after July 1,
1909, amends Wis. St. ss. 1087-5,6, 7, 8, 11, 12, 13, 14, 15; repeals and re-enacts
s. 17; repeals s. 18: amends ss. 19, 20, 21, 22, 23, 24; and also amends s. 3818.

Wis. St. 1911, c. 450, in effect June 27, 1911, added section 1087-18, conferring
certain duties on the tax commission.

Wis. St. 1911, c. 530, in effect July 5, 1911, amended ss. 1087-4, 11, 12,
15 subd. 5, 9, and created s. 1087-llm.

THE PRESENT ACT.
Wis. St., 88. 1087-1 to 1087-24 inclusive, 162, 3813a, 3818 and 3871a.
Tax on Transfers: Exceptions.

S. 1087-1. (Sec. 1, ch. 44, and sec. 1, ch. 249, 1903, and sec. 1, ch. 96, 1905.)
A tax shall be and is hereby imposed upon any transfer of property real, personal
or mixed, or any interest therein, or income therefrom in trust or otherwise,
to any person, association, or corporation, except county, town or municipal
corporations within the state, for strictly county, town or municipal purposes,
and corporations of this state organized under its laws solely for religious, charit-
able or educational purposes, which shall use the property so transferred exclu-
sively for the purposes of their organization within the state in the following cases:

(1) By a resident of state. * When the transfer is by will or by the intestate
laws of this state from any person dying possessed of the property while a resident
of the state.

(2) Non-resident's property within state. When a transfer is by will
or intestate law, of property within the state or within its jurisdiction and the
decedent was a non-resident of the state at the time of his death.

(3) In contemplation of deatli. When the transfer is of property made
by a resident or by a non-resident when such non-resident's property is within
this state, or within its jurisdiction, by deed, grant, bargain, sale or gift, made
iij contemplation of the death of the grantor, vendor or donor, or intended to
take effect in possession or enjoyment at or after such death.

(4) Imposed when beneficially transferred. Such tax shall be imposed
when any such person or corporation becomes beneficially entitled, in possession,
or expectancy, to any property or the income thereof, by any such transfer whether

s. 1087-1.1 WISCONSIN. 1221

made before or after the passage of this act; provided, that property or estates
which have vested in such persons or corporat ons before this act takes effect,
shall not be subject to the tax; and provided further, that contingent interests
created by the will of any person who died prior to the passage of this act shall
not be taxes.

(5) Transfer under power of appointment. Whenever any person or
corporation shall exercise a power of appointment derived from any disposition
of property made either before or after the passage of this act, such appointment
when made shall be deemed a transfer taxable under the provisions of this act in
the same manner as though the property to which such appointment relates
belonged absolutely to the donee of such power and had been bequeathed or
devised by such donee by will ; and whenever any person or corporation possess-
ing such a power of appointment so derived shall omit or fail to exercise the
same within the time provided therefor, in whole or in part, a transfer taxable
under the provisions of this act shall be deemed to take place to the extent of such
omission or failure, in the same manner as though the persons or corporations
thereby becoming entitled to the possession or enjoyment of the property to which
such power related had succeeded thereto by a will of the donee of the power
failing to exercise such power, taking effect at the time of such omission or failure.

(6) On clear market value. The tax so imposed shall be upon the clear
market value of such property at the rate hereinafter prescribed and only upon
the excess of the exemptions hereinafter granted.

[As to validity, see notes to the acts of 1868, 1889, 1899, 1901, 1903, ante,
pp. 1203, 1207, 1210.]

Right of Descent Protected.

The court holds that the right to take property by inheritance or by
will is a natural right protected by the constitution, which cannot be
wholly taken away or substantially impaired by the legislature.

The court remarks that it is fully aware that the contrary propo-
sition has been stated by the great majority of the courts of this
country, including the supreme court of the United States, in Magoun
V. Illinois Trust & Savings Bank, 170 U. S. 283, 18 S. Ct. 594.
The court quotes from Eyre v. Jacob, 14 Gratt. 422, and Pullen v.
CommWs, 66 N. C. 267, in which latter case the following language
was used: "Property itself, as well as the succession to it, is the
creature of positive law. The legislative power declares what ob-
jects in nature may be held as property; it provides by what forms
and on what conditions it may be transmitted from one person to an-
other; it confines the right of inheriting to certain persons whom it
defines as heirs; and on the failure of such it takes the property
to the state as an escheat. The right to give or take property is
not one of those natural and inalienable rights which are supposed
to precede all government and which no government can right-
fully impair."

1222 STATUTES ANNOTATED. [Wis. St.

The court remarks that the unanimity with which the proposi-
tion is stated is only equaled by the paucity of reasoning by which
it is supported, and says that the declaration of the court of North
Carolina seems to have reached the logical goal toward which the
other cases only tend, namely, the denial of all natural rights of
property. It comes perilously near the doctrine that might
makes right.

The court quotes from Mr. Justice Brown, United States v. Per-
kins, 163 U. S. 625, 16 Sup. Ct. 1073, where he says: "The general
consent of the most enlightened nations has from the earliest his-
torical period recognized a natural right in children to inherit the
property of their parents."

The court notices the difference between our theory of govern-
ment that political rights flow from the people and the mediaeval
theory that political rights flow from the crown, and remarks that
this difference makes the European cases of no value in this country.
The court remarks after discussion : —

"So clear does it seem to us from the historical point of view
that the right to take property by inheritance or will has existed
in some form among civilized nations from the time when the
memory of man runneth not to the contrary, and so conclusive
seems the argument that these rights are a part of the inherent
rights which governments, under our conception, are established to
conserve, that we feel entirely justified in rejecting the dictum so
frequently asserted by such a vast array of courts that these rights
are purely statutory and may be wholly taken away by the
legislature.

"It is true that these rights are subject to reasonable regulation
by the legislature, lines of descent may be prescribed, the persons
who can take as heirs or devisees may be limited, collateral relatives
may doubtless be included or cut off, the manner of the execution of
wills may be prescribed, and there may be much room for legisla-
tive action in determining how much property shall be exempted
entirely from the power to will, so that dependents may not be
entirely cut off. These are all matters within the field of regula-
tion. The fact that these powers exist and have been universally
exercised affords no ground for claiming that the legislature may
abolish both inheritances and wills, turn every fee-simple title
into a mere estate for life, and thus, in effect, confiscate the prop-
erty of the people once every generation.'*

The court quotes with approval Minot v. Winthrop, 162 Mass.

s. 1087-21 WISCONSIN. 1223

113, 26 L. R. A. 259, 38 N. E. 512, to the effect "that the legis-
lature cannot so far restrict the right to transmit property by will
or by descent as to amount to an appropriation of property gen-
erally; 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 become
vested in the commonwealth by escheat." Nunnemacher v. State,
120 Wis. 190, 198, 108 N. W. 627, 9 L. R. A. N. S. 121. See notes
to the act of 1903, ante, p. 1210.

Primary Rates; Where not in Excess of $25,000.

S. 1087-2. (Sec. 2, ch. 44, 1903.) When the property or any beneficial interest
therein passes by any such transfer where the amount of the property shall exceed
in value the exemption hereinafter specified, and shall not exceed in value twenty-
five thousand dollars the tax hereby imposed shall be : —

(1) One per centum, where. Where the person or persons entitled to any
beneficial interest in such property shall be the husband, wife, lineal issue, lineal
ancestor of the decedent or any child adopted as such in conformity with the
laws of this state, or any child to whom such decedent for not less than ten years
prior to such transfer stood in the mutually acknowledged relation of a parent,
provided, however, such relationship began at or before the child's fifteenth
birthday, and was continuous for said ten years thereafter, or any lineal issue
of such adopted or mutually acknowledged child, at the rate of one per centum
of the clear value of such interest in such property.

(2) One and one-half per centum, where. Where the person or
persons entitled to any beneficial interest in such property shall be the
brother or sister or a descendant of a brother or sister of the decedeftt,
a wife or widow of a son, or the husband of a daughter of the de-
cedent, at the rate of one and one-half per centum of the clear value
of such interest in such property.

(3) Three per centum, where. Where the person or persons entitled to
any beneficial interest in such property shall be the brother or sister of the father
or mother of the decedent, at the rate of three per centum of the clear value of
such interest in such property.

(4) Four per centum, where. Where the person or persons entitled to
any beneficial interest in such property shall be the brother or sister of the grand-
father or grandmother or a descendant of the brother or sister of the grandfather
or grandmother of the decedent, at the rate of four per centum of the clear value
of such interest in such property.

[See notes to the Act of 1903, ante, p. 1214.]

1224 STATUTES ANNOTATED. [Wis. St.

Other Rates: Where in Excess of $25,000.

S. 1087-3. (Sec. 3, ch. 44, 1903.) The foregoing rates in section two (1087-2)
are for convenience termed the primary rates.

When the amount of the clear value of such property or interest exceeds
twenty-five thousand dollars, the rates of tax upon such excess shall be as
follows: —

(1) Rate where amount $25,000 to $50,000. Upon all in excess of twenty-
five thousand dollars and up to fifty thousand dollars, one and one-half times
the primary rates.

(2) Rate where amount $50,000 to $100,000. Upon all in excess of fifty
thousand dollars and up to one hundred thousand dollars, two times the primary
rates.

(3) Rate where amount $100,000 to $500,000. Upon all in excess of one hun-
dred thousand dollars and up to five hundred thousand dollars, two and one-half
times the primary rates.

(4) Rate where amount over $500,000. Upon all in excess of five hun-
dred thousand dollars, three times the primary rates.

[See notes to the Act of 1903, ante, p. 1214.]

Exemptions.

S. 1087-4. The following exemptions from the tax, to be taken out of the
first twenty-five thousand dollars, are hereby allowed : —

(1) All property transferred to municipal corporations within the state for
strictly county, town, or municipal purposes, or to corporations of this state organ-
ized under its laws, sole'y for religious, charitable, or educational purposes,
which shall use the property sq transferred, exclusively for the purposes of their
organization, within the state, shall be exempt.

. . . The inheritance tax laws shall not be held applicable to any transfer
of property heretofore made to any county, town, or municipal corporation
within the state, for strictly municipal purposes.

(2) Property of the clear value of ten thousand dollars transferred to the
widow of the decedent, and two thousand dollars transferred to each of the
other persons described in the first subdivision of section . . . 1087-2 shall be
exempt.

(3) Property of the clear value of five hundred dollars transferred to each of
the persons described in the third subdivision of section . . . 1087-2 shall be
exempt.

' (4) Property of the clear value of two hundred and fifty dollars transfered
to each of the persons described in the third subdivision of section 1087-2 shall
be exempt.

(5) Property of the clear value of one hundred and fifty dollars transferred
to each of the persons described in the fourth subdivision of section . . . 1087-2
shall be exempt.

(§) Property of the clear value of one hundred dollars transferred to each of
the persons and corporations described in the fifth subdivision of section . . .
1087-2 shall be exempt.

(As amended by St. 1911, c. 530.)

[See notes to the Act of 1903, ante, p. 1214.]

s. 1087-7.1 WISCONSIN. 1225

Tax to be a Lien on Property; Where Paid; When Due.

S. 1087-5. (Sec. 5, ch. 44, 1903, and Sec. 1, ch. 504, 1909.) (1) Every such
tax shall be and remain, a lien upon the property transferred until paid and the
person to whom the property is transferred and the administrators, executors,
and trustees of every estate so transferred, shall be personally liable for such
tax until its payment.

(2) County Treasurer makes Duplicate Receipts. The tax shall be paid
to the treasurer of the county in which the county court is situated having juris-
diction as herein provided ; and said treasurer shall make duplicate receipts .

of such payment, one of which he shall immediately send to the . . . state treas-
urer, whose duty it shall be to charge the county treasurer so leceivmg tax,
with the amount thereof, and ... the other receipt shall be delivered to the
executor, administrator, or trustee, whereupon it shall be a proper voucher in
the settlement of his accounts.

(3) Final Accounting on filing Receipt. Buc no executor, administrator,
or trustee shall be entitled to a final accounting of an estate, in settlement of
which a tax is due under the provisions of this act, unless he shall produce . . ,
such receipt (s) ... or a certified copy thereof ... or unless a bond shall
have been filed as prescribed by section 1087-9. . . .

(4) Tax due at time of transfer. All taxes imposed by this act shall be due
and payable at the time of the transfer, except as hereinafter provided. Taxes
upon the transfer of any estate, property, or interest therein, limited, conditioned,
dependent, or determinable upon the happening of any contingency or future
event, by reason of which the fair market value thereof cannot be ascertained
at the time of transfer, as herein provided, shall accrue and become due and
payable when the beneficiary shall come into actual possession or enjoyment
thereof.

Discount or Penalty, When.

S. 1087-6. (Sec. 6, ch. 44, 1903, and Sec. 2, ch. 504, 1909.) If such tax is
paid within one year from the accruing thereof, a discount of five per centum
shall be allowed and deducted therefrom. If such tax is not paid within eighteen
months from the accruing thereof, interest shall be charged and collected thereon
at the rate of ten per centum per annum from the time the tax accrued; unless
by reason of claims made upon the estate, necessary litigation or other unavoid-
able cause of delay, such tax shall not be determined and paid as herein provided,
in which case interest at the rate of six per centum per annum shall be charged
upon such tax from the accrual thereof until the cause of such delay is removed,
after which ten per centum shall be charged. In all cases when a bond shall be
given under the provisions of section 1087-9, . . . interest shall be charged at
the rate of six per centum from the accrual of the tax, until the date of pay-
ment thereof.

[See notes to the Act of 1903, ante, p. 1215.1

Powers of Executors, etc.; Where Legacy not in Money.

S. 1087-7. (Sec. 7, ch. 44, 1903, and Sec. 3, ch. 504, 1909.) Every execu-
tor, administrator, or trustee shall have full power to sell so much of the property
of the decedent as will enable him to pay such tax in the same manner as he might

1226 STATUTES ANNOTATED. [Wis. St.

be entitled by law to do for the payment of the debts of the testator or intestate.
Any such administrator, executor, or trustee having in charge or in trust any
legacy or property for distribution, subject to such tax, shall deduct the tax there-
from ; and within thirty days therefrom shall pay over the same to the county treas-
urer, as herein provided. If such legacy or property be not in money, he shall
collect the tax thereon upon the appraised value thereof, from the person entitled
thereto. He shall not deliver or be compelled to deliver any specific legacy or
property subject to tax under this act, to any person until he shall have collected
the tax thereon. If any such legacy shall be charged upon or payable out of
real property, the heir or devisee shall deduct such tax therefrom and pay it to
the administrator, executor, or trustee, and the tax shall remain a lien or charge
on such real property until paid, and the payment thereof shall be enforced by
the executor, administrator, or trustee in the same manner that payment
of the legacy might be enforced, or by the district attorney under section 1087-
16. . . . If any such legacy shall be given in money to any such person for a
limited period, the administrator, executor, or trustee shall retain the tax upon
the whole amount, but if it be not in money, he shall make application to the
court having jurisdiction of an accounting by him to make an apportionment
if the case require it, of the sum to be paid into his hands by such legatees, and
for such further order relative thereto as the case may require.

Subsequent Debts; State Treasurer may Refund Tax.

S. 1087-8. (Sec. 8, ch. 44, 1903, and Sec. 4, ch. 504, 1909.) (1) If any
debt shall be proved against the estate of the decedent after the payment of
any legacy or distributive share thereof, from which any such tax has been
deducted, or upon which it has been paid by the person entitled to such legacy or
distributive share, and such person is required by the order of the county court
having jurisdiction thereof on notice to the . . . state treasurer to refund the
amount of such debts or any part thereof, an equitable proportion of the tax
shall be repaid to such person ... by the executor, administrator, . . . trustee,
... or officer to whom said tax has been paid.

(2) How refund of tax made. When any amount of said tax shall have
been paid erroneously into the state treasury, it shall be lawful for the . . .
state treasurer upon . . . receiving a transcript from the county court record
showing the facts to refund ... the amount of such erroneous or illegal pay-
ment to . . . the executor, administrator, trustee, person, or persons who have
paid any such tax in error, from the treasury; or the said . . . state treasurer
may order, direct, and allow the treasurer of any county to refund the amount
of any illegal or erroneous payment of such tax out of the funds in his hands
or custody to the credit of such taxes, and credit him with the same in his quarterly
account rendered to the . . . state treasurer under this act. Provided, however,
that all applications for such refunding of erroneous taxes shall be made within
one year from the payment thereof, or within one year after the reversal or
modification of the order fixing such tax.

Bond for Payment of Legacies not in Possession.

S. 1087-9. (Sec. 9, ch. 44, 1903.) Any beneficiary of any property chargeable
with a tax under this act, and any executors, administrators and trustees thereof,
may elect, within eighteen months from the date of the transfer thereof as herein

8. 1087-9.] WISCONSIN. 1227

provided, not to pay such tax until the person or persons beneficially interested
therein shall come into the actual possession or enjoyment thereof. The person
or persons so electing shall give a bond to the state in a penalty of three times
the amount of any such tax, with such sureties as the county court of the proper
county may approve, conditioned for the payment of such tax and interest
thereon, at such time or period as the person or persons beneficially interested
therein may come into the actual possession or enjoyment of such property,
which bond shall be filed in the county court. Such bond must be executed
and filed and a full return of such property upon oath made to the county court
within one year from the date of such transfer thereof as herein provided, and
such bond must be renewed every five years

Bequests to Executors for Services.

S. 1087-10. (Sec. 10, ch. 44, 1903.) If a testator bequeaths property to one
or more executors or trustees in lieu of their commissions or allowances, or makes
them his legatees to an amount exceeding the commissions or allowances pre-
scribed by law for an executor or trustee, the excess in value of the property so
bequeathed, above the amount of commissions or allowances prescribed by law
in similar cases, shall be taxable by this act.

Transfer of Stock by Foreign Executors.

S. 1087-11. (1) If a foreign executor, administrator, or trustee shall assign
or transfer any stock or obligations in this state, standing in the name of a dece-
dent or in trust for a decedent, liable to any such tax, the tax shall be paid to
the treasurer of the proper county or the state treasurer on the transfer thereof.

(2) No safe deposit company, bank, or other institution, person or persons,
holding securities or assets of a non-resident decedent, nor any foreign or domestic
corporation doing business within this state in which a non-resident decedeat
held stock at his decease, shall deliver or transfer the same to the executors,
administrators, or legal representatives of said decedent, or upon their order
or request, unless notice of the time and place of such intended transfer be
served upon the attorney general at least ten days prior to the said transfer;
nor shall any such safe deposit company, bank, or other institution, person or
persons, nor any such foreign or domestic corporation, deliver or transfer any
securities or assets of the estate of a non-resident decedent without retaining a
sufficient portion or amount thereof to pay any tax which may thereafter be
assessed on account of the transfer of such securities or assets under the pro-
visions of . . . the inheritance tax laws, without an order from the proper
court authorizing such transfer; and it shall be lawful for the attorney general or
public administrator personally or by representative, to examine said securities
or assets at . . . any time . . . before such delivery or transfer. Failure to
serve such notice or to allow such examination or to retain a suflScient portion
or amount to pay such tax as herein provided, shall render said safe deposit
company, trust company, bank, or other institution, person or persons, or such
foreign or domestic corporation, liable to the payment of the tax due upon said
securities or- assets in the pursuance of the provisions of . . . the inheritance
tax laws. (As amended by St. 1911, c. 530.)

1228 STATUTES ANNOTATED. [Wis. St.

Compromise of Tax.

S. 1087-1 Im. All claims for taxes, under the inheritance tax laws, on account
of any transfer by any non-resident decedent, which accrued prior to the passage
of this act, may be compounded, settled, and adjusted by the attorney general,
subject to the approval of the governor and tax commission, upon such terms
as may by them be deemed equitable and for the best interests of the state.
(Added by St. 1911. c. 530.)

Jurisdiction. — Ancillary Letters.

S. 1087-12. (1) The county court of every county of the state having juris-
diction to grant letters testamentary or of administration upon the estate of a
decedent whose property is chargeable with any tax under . . . the inheritance
tax laws, or to appoint a trustee of such estate or any part thereof, or to give
ancillary letters thereon, shall have jurisdiction to hear and determine all ques-
tions arising under the provisions of . . . the inheritance tax laws and to do
any act in relation thereto authorized by law to be done by a county court in
other matters or proceedings coming within its jurisdiction; and if two or more
county courts shall be entitled to exercise any such jurisdiction, the county
court first acquiring jurisdiction hereunder, shall retain the same to the exclusion
of every other county court.

(2) Every petition for ancillary letters testamentary or of administration
shall include the public administrator as a person to be notified, and a true and
correct statement of all the decedent's property in this state with the value
thereof; upon presentation thereof, the county court shall cause the order for
hearing to be served personally upon the public administrator; and upon the
hearing, the county court shall determine the amount of the inheritance tax
which may be or become due", and the decree awarding the letters may con-
tain provisions for the payment of such tax or the giving of security therefor.

S. 3. (3) The county court and the judge thereof at the seat of govern-
ment shall have jurisdiction to hear and determine, as other matters not apper-
taining to its regular probate business, all questions relating to the determination
and adjustment of inheritance taxes in the estates of non-resident decedents in
which it does not otherwise appear necessary for regular administration to
be had therein. And in such estates the public administrator may be appointed
as special administrator for the purposes of such adjustment. The county
treasurer shall retain for the use of the county out of all such taxes paid and
accounted for, only one per cent, and the balance, less the statutory expenses
of collection and adjustment as fixed by the court, shall be paid into the state
treasury; provided, however, that the minimum fee to which the county
shall be entitled shall be five dollars in each case and that in no case shall the
maximum fee exceed five hundred dollars. (As amended by St. 1911, c. 530.)

[See notes to the Act of 1903, ante, p. 1216.]

Sp^ial Appraiser may be Appointed.

S. 1087-13. (Sec. 13, ch. 44, 1903, Sec. 2, ch. 249, 1903, and Sec. 7, ch. 504.
1909.) (1) The county court upon the application of any interested party
including the attorney general and public administrator ... or upon ... its
own motion, shall as often as, and whenever occasion may require appoint a

s. 1087-13.] WISCONSIN. 1229

competent person as special appraiser to fix the fair market value at the time
of the transfer thereof of the property of persons whose estate shall be subject
to the payment of any tax imposed by this act.

(2) Appraisal at clear market value; annuities, how computed.
Whenever a transfer of property is made upon which there is, or in any contin-
gency there may be, a tax imposed, such property shall be appraised at its clear
market value immediately upon the transfer or as soon thereafter as practicable.
The value of every future or limited estate, income, interest, or annuity depend-
ent upon any life or lives in being, shall be determined by the rule, method, and
standard of mortality and value employed by the commissioner of insurance in
ascertaining the value of policies of life insurance and annuities for the deter-
mination of liabilities of life insurance companies except that the rate of interest
for making such computations shall be five per centum per annum. . . .

[See notes to the Act of 1903, ante, p. 1216.]

(3) Contingent incumbrances. In estimating the value of any estate or
interest in property to the beneficial enjoyment or possession whereof there are
persons or corporations presently entitled thereto, no allowance shall be made
in respect of any contingent incumbrance thereon, nor in respect of any contin-
gency upon the happening of which the estate or property or some part thereof,
or interest therein, might be abridged, defeated, or diminished; provided, how-
ever, that in the event of such incumbrance taking effect as an actual burden
upon the interest of the beneficiary or in the event of the abridgement, defeat,
or diminution of such estate or property or interest therein as aforesaid, a return
shall be made to the person properly entitled thereto of a proportionate amount
of such tax in respect of the amount or value of the incumbrance when taking
effect or so much as will reduce the same to the amount which would have been
assessed in respect of the actual duration or extent of the estate or interest
enjoyed. Such return of tax shall be made in the manner provided in section
. . . 1087-8.

(4) Tax when subject to charge determinable by death. Where any
property shall after the passage of this act be transferred subject to any charge,
estate, or interest determinable by the death of any person or at any period
ascertainable only by reference to death, the increase of benefit accruing to
any person or corporation upon the extinction or determination of such charge*
estate or interest shall be deemed a transfer of property taxable under the pro-
visions of this act in the same manner as though the person or corporation benefi-
cially entitled thereto had then acquired such increase of benefit from the
person from whom the title to their respective estates or interests is derived.

[See notes to the Act of 1903, ante, p. 1218.]

(5) Contingent trusts taxed primarily at lowest rate. When property
is transferred in trust or otherwise, and the rights, interests, or estates of the
transferees are dependent upon contingencies or conditions whereby they may
be wholly or in part created, defeated, extended, or abridged, a tax shall be
imposed upon such transfer at the lowest rate which on the happening of any of the
said contingencies or conditions would be possible under the provisions of this
act, and such tax so imposed shall be due and payable forth with out of the
property transferred; provided, however, that on the happening of any con-
tingency or condition whereby the said property or any part thereof is trans-

1230 STATUTES ANNOTATED. [Wis. St-

ferred to a person or corporation, which under the provisions of this act is
required to pay a tax at a higher rate than the tax imposed, then such transferee
shall pay the difference between the tax imposed and the tax at the higher rate,
and the amount of such increased tax shall be enforced and collected as pro-
vided in this act.

[See notes to the Act of 1903, ante, p. 1218.]

(6) Contingent or defeasible estates in expectancy. Estates in expec-
tancy which are contingent or defeasible and in which proceedings for determina-
tion of the tax have not been taken or where the taxation thereof has been held
in abeyance shall be appraised at their full undiminished clear value when the
persons entitled thereto shall come into the beneficial enjoyment or possession
thereof without diminution for or on account of any valuation theretofore made
of the particular estates for purposes of taxation upon which said estates in
expectancy may have been limited. Where an estate for life or for years can be
divested by the act or omission of the legatee or devisee, it shall be taxed as if
there were no possibility of such divesting.

[See notes to the Act of 1903, ante, p. 1217.]

Notice by and Duty of Special Appraiser; Compensation.

S. 1087-14. (Sec. 14, ch. 44, 1903, and Sec. 8, ch. 504, 1909.) Every such
appraiser shall forthwith give notice by mail to all persons known to have a
claim -or interest in the property to be appraised, including the public adminis-
trator . . . and to such persons as the county court may by order direct, of
the time and place when he will appraise such property. He shall, at such time
and place, appraise the same at its fair market value, as herein prescribed, and
for that purpose the said appraiser is authorized to issue subpoenas and to compel
the attendance of witnesses before him and to take the evidence of such witnesses
under oath concerning such property and the value thereof; and he shall make
report thereof and of such value in writing, to the said county court, together
with the depositions of the witnesses examined, and such other facts in relation
thereto and to the said matter as the said county court may order or require.
Every appraiser shall be paid on the certificate of the county court at the rate of
three dollars per day for every day actually and necessarily employed in such
appraisal, and his actual and necessary traveling expenses and the fees paid
such witnesses, which fees shall be the same as those now paid to witnesses
subpoenaed to attend in courts of record, by the county treasurer out of any
funds he may have in his hands on account of any tax imposed under the pro-
visions of this act.

Report of Special Appraiser; Notice for Hearing.

S. 1087-15. (Sec. 15, ch. 44, 1903, and Sec. 9, ch. 504, 1909.) (1) The report
of the special appraiser shall be made in duplicate, one of which duplicates shall
be filed in the office of the county court and the other in the office of the attorney
general. . . Upon filing such report, . . . the county court shall forthwith give
twenty days' notice by mail to all persons known to be interested in the estate,
including the attorney general and public administrator ... of the time and
place for the hearing in the matter of such report, and the county court, from
such report and other proofs relating to any such estate, shall forthwith at the

s. 1087-15.] WISCONSIN. 1231

time so fixed, determine the cash value of such estate and the amount of tax to
which the same is liable.

(2) Or hearing by court without appointing special appraiser. Or the

county court without appointing such. . . appraiser upon giving twenty days'
notice by mail to all persons known to be interested in the estate, including the
attorney general and public administrator ... of the time and place of hearing,
may at the time so fixed hear evidence and determine the cash value of such
estate and the amount of tax to which the same is liable. If the residence or
post-office address of any person interested in any estate is unknown to the
executor, administrator, or trustee, notice of the hearing in the matter of the
report of the appraiser or notice that the county court without appointing such
. . . appraiser will determine the cash value of an estate, shall be given to all
such persons by publication of such notice not less than three successive weeks
prior to the time fixed for such hearing or determination in such newspaper
published within the county as the court shall direct.

(3) Additional third appraiser to represent county and state at original
appraisal. If the county court without appointing such special appraiser
decide to hear evidence as to the cash value of the estate for inheritance tax
purposes, the court may, at the time of the appointment of the regular appraisers
of the estate, on its own motion, designate an additional third appraiser to repre-
sent the county and state, and such additional appraiser shall report the inven-
tory and appraisal of said property with the other appraisers; or, in case of
failure to agree, in a separate report, and be entitled to compensation of three
dollars per day for each day necessarily employed in such appraisal and his
mileage, which fees shall be paid on the certificate of the county judge by the
county treasurer out of any of the state's inheritance tax funds he may have
in his possession.

(4) Commissioner of insurance to value future estates, etc. The

commissioner of insurance shall on application of any county court determine
the value pi any such future or contingent estates, income, or interests therein,
limited, contingent, dependent, or determinable upon the life or lives of the
person or persons in being upon the facts contained in such special appraiser's
report or upon the facts contained in the county court's finding and determina-
tion and certify the same to the county court, and his certificate shall be pre-
sumptive evidence that the method of computation adopted therein is correct.

(5) Order Determining Tax; Form; Notice. Upon the determination
by the county court as to the value of any estate which is taxable under
. . . the inheritance tax laws and of the tax to which it is liable, notice
shall be given to all persons known to be interested, including the county
treasurer and the state treasurer by delivering personally or mailing to each
a copy of the order of determination. Such order shall include a statement
of (1) the date of the death of the decedent, (2) the net value of the real
and personal property to be transferred, (3) the proportions and amounts
of all such property of such decedent, (4) the names and relationship of
the persons entitled to receive the same, (5) the rates and amounts of
inheritance- tax to which each of such amounts and proportions are liable, (6)
the total amount of tax to be paid, and (7) a statement as to penalty for delay,

1232 STATUTES ANNOTATED. [Wis. St.

if any, and shall be substantially in the form to be prescribed and furnished to
county courts by the attorney general. And no final judgment shall be entered
in such estates until due proof is filed with the court showing that a copy of such
order has been delivered or mailed to the state treasurer.
(As amended by St. 1911, c. 630.)

(6) Guardian ad litem for infants and incompetents. If, however, it
appears at this or any stage of the proceedings that any of such parties known
to be interested in the estate is an infant or an incompetent, who is not already
represented by a guardian ad litem, the county court shall if the interest of such
infant or incompetent is presently involved and is adverse to that of the other
persons interested therein appoint a . . . guardian ad litem for . . . such
infant, but nothing in this provision shall affect the right of an infant over
fourteen years of age or of any one on behalf of an infant under fourteen years
of age to nominate and apply for the appointment of a . . . guardian ad litem
of such infant at any . . . stage of the proceedings.

(7) Rehearing within sixty days upon record. . . . The . . . attorney
general or any person dissatisfied with the appraisement or assessment and deter-
mination of such tax may apply for a rehearing thereof before the county court
within sixty days from the fixing, assessing, and determination of the tax by
the county court as herein provided on filing a written notice which shall state
the grounds of the application for a rehearing. The rehearing shall be upon the
records, proceedings, and proofs had and taken on the hearings as herein pro-
vided and a new trial shall not be had or granted unless specially ordered by the
county court.

(8) Re- appraisement in circuit court within two years. Within two
years after the entry of an order or decree of the county court determining the
value of an estate and assessing the tax thereon, the . . . attorney general, may,
if he believes that such appraisal, assessment, or determination has been fraudu-
lently, coUusively, or erroneously made, make application to the circuit judge
of the judicial circuit in which the former owner of such estate resided for a
re-appraisal thereof. The circuit judge to whom such application is made may
thereupon appoint a competent person to re-appraise such estate. Such ap-
praiser shall possess the powers, be subject to the duties, shall give the notice
and receive the compensation provided by sections . . . 1087-13 and . . .
1087-14. . . . Such compensation shall be payable by the county treasurer
out ot any funds he may have on account of any tax imposed under the pro-
visions of this act upon the certificate of the circuit judge. . . . The report of
such appraiser shall be filed in the circuit court . . . and thereafter the same
proceedings shall be taken and had by and before such circuit court as herein
provided to be taken and had by and before the county court. The determina-
tion and assessment of such circuit court shall supersede the determination and
assessment of the county court and shall be filed ... in the office of the state
treasurer . . . and a certified copy . . . transmitted to the county court of
the proper county.

Duties of County Treasurer, County Judge and District Attorney, Where
Tax is Unpaid.

S. 1087-16. (Sec. 16, ch. 44, 1903.) (1) If the treasurer of any county shall
have reason to believe that any tax is due and unpaid under this act after the

s. 1087-16.] WISCONSIN. 1233

refusal or neglect of any person liable therefor to pay the same, he shall notify
the district attorney of the county in writing of such failure or neglect and such
district attorney if he have probable cause to believe that such tax is due and
unpaid, shall apply to the county court for a citation citing the person liable to
pay such tax to appear before the court on the day specified not more than
three months from the date of such citation and show cause why the tax should
not be paid.

County court may issue citation, etc. The judge of the county court
upon such application and whenever it shall appear to him that any such tax.
accruing under this act, has not been paid as required by law, shall issue such
citation and the service of such citation and the time, manner and proof thereof
and the hearing and determination thereof, shall conform as near as may be
to the provisions, of the laws governing probate practice of this state, and when-
ever it shall appear that any such tax is due and payable and the payment thereof
cannot be enforced under the provisions of this act in said county court, the
person or corporation from whom the same is due is hereby made liable to the
county of the county court having jurisdiction over such estate or property for
the amount of such tax, and it shall be the duty of the district attorney of said
county in the name of such county to sue for and enforce the collection of such
tax, and it is made the duty of said district attorney to appear for and act on
behalf of any county treasurer, who shall be cited to appear before any county
court under the provisions of this act.

Public Administrator may Administer Estates after Sixty Days.

S. 1087-17. (Sec. 17, ch. 44, 1903, and Sec. 10, ch. 504, 1909.) (1) Where
no application for administration on the estate of any deceased person is made
within sixty days after the demise of such person, and such estate appears to
come under the provisions of the inheritance tax laws, the public administrator
of the proper county shall make application for and shall be entitled to such
general or special administration of such estate as may be necessary for the pur-
pose of the adjustment and payment of the inheritance tax provided by law and
shall administer the same as other estates are administered.

(2) Where transfer made in contemplation of death. Where it appears
that the estate of a deceased person subject to the inheritance tax laws was
transferred in contemplation of the death of the grantor without the adjustment
and payment of the inheritance taxes and no application for such adjustment is
made within sixty days after the demise of such grantor, the public adminis-
trator of the proper county shall make application for and shall be entitled to
such general or special administration as may be necessary for the purpose of
the adjustment and payment of the inheritance taxes provided by law and shall
administer such estate the same as other estates are administered as though
such estate had not been transferred by the grantor.

(3) Public administrator to appear for county and state; compensa-
tion; general supervision of attorney general. It shall be the duty of the
public administrator, under the general supervision of the attorney general and
with the assistance of the district attorney, when required by the attorney general
or county judge, to investigate the estates of deceased persons within his county
and to appear for and act in behalf of the county and state in the county court

1234 STATUTES ANNOTATED. [Wis. St.

in such estates as the court may in its discretion deem necessary, and for such
services the public administrator shall be entitled to five per centum of the gross
inheritance tax as determined in each such estate, to be paid by the county
treasurer out of the inheritance tax funds upon an order of the county judge,
provided that the minimum fee for each such estate shall not be less than three
dollars and the maximum fee not more than twenty-five dollars.

(4) In counties of over 200,000, public administrator or assistant
district attorney. In counties containing a population of over two hundred
thousand, an assistant district attorney, compensated as otherwise provided by
law, may by order of the county court be designated to take the place of and per-
form all the duties of the public administrator relating to the inheritance tax laws,
except as provided in subdivisions 1 and 2 of this section. Whenever the assis-
tant district attorney is designated as public administrator he shall receive the
same fees as the public administrator in other counties, provided, however, that
all such fees collected by him as public administrator shall be turned into the
county treasury.

S. 1087-18 of the statutes was repealed. (Sec. 18, ch. 44, 1903, repealed by
Sec. 11, ch. 504, 1909.)

Powers of Tax Commission.

S. 1087-18. (1) It shall be the duty of the tax commission to investigate
and cause to be investigated the administration of the inheritance tax laws, and
such particular estates to which the inheritance tax laws apply, throughout the
various counties of the state, and to cause to be made and filed in its offices re-
ports of such investigation together with specific information and facts as to par-
ticular estates that may seem to require especial consideration and attention by
the legal department of the state.

(2) Under its general authority as set forth in section 1087-37, the commission
shall appoint, and fix compensation of at a sum not exceeding three thousand
dollars annually, besides expenses, as inheritance tax investigator who shall
have charge of the inheritance tax work under the supervision of the tax commis-
sion, and who shall be provided with such further assistance from time to time
from the regular force of the tax commission office as may be necessary and
expedient. Such inheritance tax investigator shall devote his time to the work
of inheritance tax investigations, and he shall personally make such investiga-
tions at the different county courts from time to time as deemed advisable. He
shall file with the commission triplicate reports on the first day of January,
April, July, and October each year, together with such additional triplicate
reports of particular estates from time to time as seem to require the special
attention of the legal department. One copy of such reports shall be filed with
the commission, one copy shall be submitted to the attorney general by the
commission with such recommendation thereon as it may deem advisable for the
due administration of the inheritance tax laws, and one copy may in the dis-
cretion of the commission be submitted by it to the county judge or public
administrator of the county reported on with such recommendation as the
commission may deem wise and expedient.

(3) The commission and its inheritance tax investigator, in the conduct of
mheritance tax affairs, shall have the same and similar powers and authority
for gathering information and making investigations as is conferred by law on

s. 1087-18.] WISCONSIN. 1235

the commission in the performance of its other duties. The commission shall
biennially report to the legislature at the opening of the sessions the general
result of its laborsand investigations in inheritance tax matters during the previous
biennial period, together with specific reports of the several counties where the
administration of the inheritance tax laws has been lax and unsatisfactory, with
such recomn endations for action thereon by the legislature as may be deemed
advisable and proper.

(4) The commission and its inheritance tax investigator shall also gather infor-
mation and make investigations and reports concerning the estates of non-resi-
dent decedents witnin the provisions of the inheritance tax laws, and shall espe-
cially investigate the probate and other records for such probable estates without
the state and report thereon from time to time to the legal department of the state
and to the public administrator of the proper county court for appr priate legal
action.

(5) It shall be the duty of the legal department of the state to carry out and
enforce the recommendations and directions of the tax commission in all matters
pertaining to the conduct of inheritance tax affairs; and in every estate in which
the amount of inheritance tax collectible shall exceed or probably exceed the
sum of one thousand dollars, there shall be no compounding, composition, or
settlement of the taxes under the authority conferred by section 1087-21, or other-
wise, until the tax commission or its inheritance tax investigator shall have
investigated such estate and made a report thereon, nor until the commission
consents to such compounding, compromise, or settlement.

(6) The inheritance tax investigator herein provided for shall be in the exempt
class of the civil service. (Added by St. 1911, c. 450.)

S. 1087-19. Each county treasurer shall make a report under oath, to the
state treasurer, on January, April, July, and October first of each year, of all
taxes received by him under . . . the inheritance tax laws, stating for what
estate and by whom and when paid. The form of such report may be prescribed
by the state treasurer. He shall at the same time pay the state treasurer all the
taxes received by him under . . . the inheritance tax laws and not previously
paid into the state treasury, and for all such taxes collected by him and not
paid into the state treasury, within . . . five days from the times herein required,
he shall pay interest at the rate of ten per centum per annum.

(As amended by St. 1911, c. 530.)

Seven and One-Half Per Cent to be Retained by County.

S. 1087-20. (Sec. 20, ch. 44, 1903, and Sec. 12a, ch. 504, 1909.) The county
treasurer shall retain tor the use of the county, out of all taxes paid and accounted
for by him each year under this act . . . seven and one-half per cent ... on
all sums so collected by or paid to said treasurer.

Composition or Settlement of Tax in Expectant Estates.

S. 1087-21. (Sec. 21, ch. 44, 1903, and Sec. 13, ch. 504, 1909,) The public
administrator . . . with the consent of the state treasurer . . . and the attor-
ney general, expressed in writing, is authorized to enter into an agreement with
the executor, administrator, or trustee of any estate therein situate, in which
remainders or expectant estates have been of such a nature or so disposed and
circumstanced that the taxes therein were held not presently payable or where

1236 STATUTES ANNOTATED. [Wis. St.

the interests of the legatees or devisees are not ascertainable under the provi-
sions of this act, and to compound such taxes upon such terms as may be deemed
equitable and expedient and to grant discharges to said executors, administrators,
or trustees upon the payment of the taxes provided for in such composition,
provided, however, that no such composition shall be conclusive in favor of
said executors, administrators, or trustees as against the interests of such cestui
que trust as may possess either present rights of enjoyment or fixed, absolute,
or indefeasible rights of future enjoyment, or of such as would possess such rights
in the event of the immediate termination of particular estates, unless they con-
sent thereto either personally when competent or by guardian. Composition
or settlement made or affected under the provisions of this section shall be exe-
cuted in triplicate and one copy shall be filed in the office of the state treas-
urer; . . . one copy in the office of the judge of the county court in which the
tax was paid; and one copy to be delivered to the executors, administrators, or
trustees, who shall be parties thereto.

Transfer Receipts May be Recorded.

S. 1087-22. (Sec. 22, ch. 44, 1903, and Sec. 14, ch. 504, 1909.) Any person
shall, upon the payment of the sum of fifty cents, be entitled to a receipt from
the county treasurer of any county, or the state treasurer, . . . or at his option
to a receipt that may have been given by such county treasurer or . . . state
treasurer for the payment of any tax under this act, under the official seal of such
county treasurer, or state treasurer, . . . which receipt shall designate upon
whose estate . . . such tax shall have been paid, by whom, and whether in full
of such tax. Such receipt may be recorded in the office of the register of deeds
of the county in which such estate ... is situate in a book to be kept by him for
that purpose, which shall be labeled "transfer tax."

Tax how Applied; Deductions.

S. 1087-23. (Sec. 23, ch. 44, 1903, and Sec. 15, ch. 504, 1909.) All taxes levied
and collected under this act, less any expenses of collection, the percentage
to be retained by the county, and the deduction authorized under this act, shall
be paid into the treasury of the state for the use of the state, and shall be appli-
cable to the expenses of the state government and to such other purposes as the
legislature may by law direct.

Terms Defined.

S. 1087-24. (Sec. 24, 1903, and Sec. lb, ch. 504, 1909.) The word "estate"
and "property" as used in this act shall be taken to mean the real and personal
property or interest therein of the testator, intestate, grantor, bargainor, vendor,
or donor passing or transferred to individual legatees, devisees, heirs, next of
km, grantees, donees, vendees, or successors, and shall include all personal prop-
erty within or without the state. The word "transfer" as used in this act shall
be taken to include the passing of property or any interest therein, in possession
or .enjoyment, present or future, by. inheritance, descent, devise, succession,
bequest, grant, deed, bargain sale, gift, or appointment in the manner herein
prescribed. The word "decedent" as used in this act shall include the tes-
tator, intestate, grantor, bargainor, vendor, or donor. The words "county
treasurer," "public administrator" "and district attorney" as used in this act

8. 3813a.] WISCONSIN. 1237

shall be taken to mean the treasurer, public administrator and district attorney
of the county of the county court having jurisdiction as provided in section .
1087-12.

Public Administrators; Appointment, Oath, Bond, Etc.

S. 3818. (As amended by Sec. 17, ch. 504, 1909.) The county court of each
of the counties in this state . . . shall appoint some suitable person who when
hereafter appointed shall be an attorney, when available, to be known as the
public administrator, who shall, before entering upon the duties of such trust, be
sworn to a faithful discharge thereof and shall give bond, with sufficient sureties,
to the judge of said court in a sum not less than five thousand dollars, with con-
dition substantially like the conditions of other administrators' bonds and that
he will faithfully^ perform his duties provided by law; which bond shall be ap-
proved by the county court and with the oath filed and recorded therein. Addi-
tional bonds may be required by the court in its discretion. The expense of
surety upon such bonds shall be paid by the county treasurer out of any inherit-
ance tax funds in his hands belonging to the state, on the order of the county
judge. The term of such public administrator shall continue until terminated
by the appointment of his successor by the county court at its discretion. .

Attorney General to Enforce Inheritance Tax Laws.

S. 162. (As amended by ch. 500, 1907.) The attorney general may appoint a
deputy attorney general and three assistants, to be designated respectively as
first assistant attorney general, second assistant attorney general and third
assistant attorney general. . . . The said appointees shall perform such duties
as the attorney general may prescribe. The attorney general shall designate
one of said appointees, whose special duty it shall be to attend to all matters
pertaining to the enforcement of the statute in respect to the collection of the
inheritance tax. . . .

Special Administrators to Discharge Records Undischarged by Decedents,
Determine Inheritance Taxes, etc.

S 3813a. ' (As amended by ch. 85, 1903, and s. 36, ch. 660, 1907.) Whenever
it shall appear, by affidavit or verified petition, to the county court that an in-
habitant of such county has died leaving no debts unpaid or that his estate has been
fully settled and the executor or administrator thereof has been discharged,
and that any mortgage or judgment in favor of such deceased person remains
undischarged of record or any other act remains unperformed on the part of
such person the performance of which affects or is of importance to petitioner or
any other person the court may appoint a special administrator for the purpose
of releasing and discharging such mortgage or judgment of record or performing
such other acts as may be deemed necessary in the premises. Upon the presenta-
tion of such petition or affidavit the court shall determine whether notice of the
hearing thereon shall be given, and if such notice is ordered the order shall direct
the manner and time of giving the same. If the court shall deem notice of such
hearing unnecessary it may proceed to hear the matter without notice. If the
court shall appoint a special administrator it shall in all cases, where money or
property may come into his hands, require him to give a bond to the judge
of said court in such sum, with such conditions and with such surety or sureties
as said court shall direct. The order appointing such administrator shall require

1238 STATUTES ANNOTATED. [Wis. St.

him to make to said court, without delay, a full report of his acts as such.
Upon the filing of such report such further proceedings shall be had and such
further order made in said matter by said court as it shall deem necessary.
Such special administrator shall exercise no powers except those specifically
granted by the order of said court. When he shall have fully performed the
act or acts mentioned in the order appointing him, his powers as such shall cease.
The court may at any time require the administrator to make a report of his acts
as such or revoke and vacate his appointment whenever it shall deem best.

Special administration for inheritance taxes: certificate of descent.

Such special administrator may be so appointed and such special administration
may be had and a prima facie inventory, appraisal and heirship determination
had thereunder, for the purpose of having inheritance taxes determined and paid
and of having prima facie certificate of descent of real estate issued pursuant to
section 2276a in cases where it appears the estate may come under the provisions
of the inheritance tax laws and where it does not otherwise appear necessary
for regular administration to be had therein.

Computations of Life Estates, Annuities, etc.: American Table: Rate
5 Per Cent.

S. 3871a. (Ch. 420, 1907, and ch. 38, 1909.) The present value of every estate,
annuity or interest of beneficiaries for all purposes in every estate and in all
courts . . . shall ... be computed ... in accordance with the American
experience table of mortality, and interest at the rate of five per cent per annum.
The commissioner of insurance shall compute the present value of the estates
or interests of the several beneficiaries when the necessary statement of facts is
submitted to him upon requesf or order of any court or judge having jurisdiction.
The said statement of facts shall be submitted to said commissioner of insurance
in such form as he may prescribe. Provided, however, that when it is imprac-
ticable to use the American experience table of mortality, the commissioner of
insurance may use the Northampton table. ... In all cases the sum of the
present value of the several parts, estates, or interests of the several beneficiaries
shall equal the net value of the entire estate. . . .

The commissioner of insurance shall cause to be printed authorized annuity
tables based on the American experience table of mortality, and five per cent
interest, together with instructions for their use in accordance with the fore-
going provisions and shall furnish copies thereof to any judge making application
therefor.

American Experience Table and Rule for Making Simple Computations
Submitted by Commissioner of Insurance pursuant to Sect. 3871a.

Find the interest at five per cent for one year upon the sum, to the income
of which the person is entitled; then multiply this interest by the present value
of one dollar per year for life, as given opposite the person's age in the table.
The product is the present value of the interest of such person in said sum.

Example. Suppose a widow's age is thirty-seven, and she is entitled to a life
interest in real, estate worth $3,000. Five per cent interest on this amount is
$150. The present value of one dollar per year for life at age 37 is $14,191. There-
fore the present value of $150 per year would be 150 times $14,191 or $2,128.65.

s. 3871a.

WISCONSIN.

1239

If the widow is entitled to a dower interest only, then one-third of the value is
taken, and computation made in the same way.

To lind the present value of a remainder, deduct the present value of the
annuity as determined above from the net value of the estate. Thus, if the
value of the estate is $3,000 and the present value of the annuity is $2,128.65
the remainder would be worth $871.35.

Present Value of an Annuity of One Dollar Per Year, for Single Life

5 Per Cent.

AMERICAN EXPERIENCE TABLE.

Age.

Present Value.

Age.

Present Value.

Age.

Present Value.

16.505

13.716

5.9802

16.461

13.544

5.6942

16.415

13.365

5.4129

16.366

13.179

5.1359

16.316

12.985

4.8628

16.263

12.783

4.5926

16.207

12.574

4.3248

16.149

12.357

4.0586

16.088

12.133

3.7939

16.024

11.901

3.5311

15.957

11.662

3.2702

15.886

11.416

3.0135

15.813

11.164

2.7606

15.736

10.905

2.5105

15.655

10.640

2.2607

. 15.570

10.370

2.0098

15.482

10.095

1.7606

15.389

9.8145

1.5175

15.292

9.5299

1.2861

15.191

9.2413

1.0670

15.084

8.9493

0.85453

14.973

8.6545

0.64497

14.857

8.3574

0.44851

14.735

8.0588

0.28761

14.608

7.7590

0.13605

14.475

7.4588

14.336

7.1592

14.191

6.8607

14.039

6.5642

13.881

6.2705

Wis. Dept.^f Ins. 5-l-'09.

1240

STATUTES ANNOTATED.

[Wis. St.

Form of Order Determining Tax Prescribed by Attorney General
Pursuant to Subdivision 5, Section 1087-15.

STATE OF WISCONSIN COUNTY COURT.

In the matter of the estate of deceased —

probate. At the Term 19

The matter of determining the cash value of said estate and the amount of
Inheritance Tax to which the same is liable, coming on to be heard at this time
pursuant —

(*a) To an order herein dated the day of 19 . . ,

providing that notice be given to all persons interested, including the Public
Administrator and Attorney General, by sending to each by mail notice thereof
at least twenty days before said term ; and due proof having been filed that due
notice has been given as required by law and such order; or

(*b) To stipulation or due waiver of notice by or in behalf of all interested
parties herein, including the Public Administrator and Attorney General: —

And Public Administrator appearing for

County and the State of Wisconsin and

And it further appearing that the report of

the has heretofore been duly filed herein, and

that said deceased died on or about the day of 19 . . ;

And having taken testimony and considered the inventory, appraisal, report
and the whole record herein, and having heard all parties desiring a hearing, and
being fully advised in the premises, —

The Court Finds and Determines, That all the property of said decedent
both real and personal, which ts to be conveyed and transferred under the final
judgment herein, and the cash and clear market value of such property is as
follows: —

Value of Real Property [Net] .
Value of Personal Property [Net]

Total Real and Personal iNet] $

And the Court further finds and determines. That the proportions and amounts
of all such property of decedent to be transferred, the names and relationship
of the persons entitled to receive the same, the rates and amounts of Inheritance
Tax to which each of such amounts and proportions are liable upon its transfer,
are as follows: —

Name

Relationship

Value
Assigned

Exemptions

Rate

Amount
of Tax

s. 3871a.] WISCONSIN.

1241

Wherefore it is Ordered, That the be, and he hereby is

authorized and directed to forthwith pay and deliver to the County Treasurer

the sum Dollars as and for the Inheritance Tax to

which the property of said deceased is liable in the proportions and amounts
as above set forth upon the transfer and assignment of the same to the persons
entitled thereto and that he take a receipt therefor, and charge the same to the
shares as respectively taxed.

(statement as to penalty for delay, if any.)

It is further Ordered, That upon filing such receipt, the amount so paid be

property credited to such in his accounts

in the settlement and distribution of said estate.

And it is further Ordered, That notice hereof be forthwith given to all parties

known to be interested, including the County Treasurer and State Treasurer,

by delivering personally or mailing to each a copy of this order.

Dated 190. . . By the Court,

Judge.

Note: It is important that the order of determination should be promptly served
upon both the county and state treasurer, and final judgment should not be entered
until proof of such service is on file.

1242 STATUTES ANNOTATED. [Wyo. St.

WYOMING,

In General.

Wyoming adopted an inheritance tax in 1903, which was modified
in 1909. Wyoming is not now collecting a tax on stock of a Wyoming
corporation owned by a non-resident if the stock certificate is kept
outside the state, though it apparently was doing so in 1908, and
the statute contains the usual piovision holding the corporation
responsible for the collection of the tax.

Constitutional Limitations.

Wyo. Const. 1889, a. 1, s. 28.

No tax shall be imposed without the consent of the people or their authorized
representatives. All taxation shall be equal and uniform.

Wyo. Const. 1889, a. 15, s. 11.

All property, except as in this constitution otherwise provided, shall be uniformly
assessed for taxation, and the legislature shall prescribe such regulations as
shall secure a just valuation for taxation of all property, real and personal.

Wyo. Const. 1889, a. 15, s. 13.

No tax shall be levied, except in pursuance of law, and every law imposing a
tax shall state distinctly the object of the same, to which only it shall be applied.

List of Statutes. '

1903. Statutes of Wyoming, c. 80.

1909. " " " c. 18 (amending ss. 17, 18, 19, 21, of 1903, c. 80).

1910. Compiled Statutes of Wyoming, c. 169, ss. 2455-2473.

STATUTES.

Wyo. St. 1903, c. 80. Approved February 21, 1903.

An Act to tax gifts, legacies and inheritances in certain cases,
and to provide for the collection of the same.

S. 1. All property, real, personal &nd mixed, 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 decedent was not a resident of
this state at the time of his death, which property or any part thereof shall be
within this state or any interest therein or income therefrom, which shall be

1903, c. 80.] WYOMING.

1243

transferred by deed, grant, sale or gift made in contemplation of the death of
the grantor or bargainor or intended to take effect, in possession or enjoyment
after such death, to any person or persons or to any body politic or corporate in
trust or otherwise, or by reason whereof any person or body politic or corporate
shall become beneficially entitled in possession or expectation, to any property
or income thereof, shall be and is subject to a tax at the rate hereinafter speci-
fied to be paid to the treasurer of the proper county for the use of the state, and
all heirs, legatees and devisees, administrators, executors, and trustees shall be
liable for any and all such taxes until the same shall have been paid as herein-
after directed. When the beneficial interests to any property or income there-
from shall pass to or for the use of any father, mother, husband, wife, child,
brother, sister, wife or widow of the son or the husband of the daughter or any
child or children, adopted as such in conformity with the laws of the state of
Wyoming, or to any person to whom the deceased, for not less than ten years
prior to death, stood in the acknowledged relation of a parent, or to any lineal
descendant born in lawful wedlock, in every such case the rate of tax shall be
two dollars on every hundred dollars of the clear market value of such property
received by each person, and at and after the same rate for every less amount.
Provided, That the sum of ten thousand dollars of any such estate shall not be
subject to any such duty or taxes, and that only the amount in excess of ten
thousand dollars shall be subject to the above duty or tax. In all other cases
the rate shall be as follows: On each and every hundred dollars of the clear
market value of all property five dollars and at the same rate for any less amount;
Provided, That an estate in the above case which may be valued at a less sum
than five hundred dollars shall not be subject to any such duty or tax.

S. 2. When any person shall bequeath or devise any property or interest
therein or income therefrom to mother, father, husband, wife, brother, sister,
the widow of the son, husband of the daughter or a lineal descendant during the
life or for a term of years and remainder to the collateral heir of the descendant,
or the stranger in blood or to the body politic or corporate at their decease,
or on the expiration of such term, the said life estate or estates for a term of
years shall not be subject to any tax and the property so passing shall be ap-
praised immediately after the death at what was the fair market value thereof
at the time of the death of the decedent in the manner hereinafter provided, and
after deducting therefrom the value of said life estate, or term of years, the tax
prescribed by this act on the remainder shall be immediately due and payable
to the treasurer of the proper county, and, together with the interest thereon
shall be and remain a lien on said property until the same is paid; Provided,
That the person or persons or body politic or corporate beneficially interested
in the property chargeable with said tax elect not to pay the same until they shall
come into the actual possession or enjoyment of such property, then, in that
case said person or persons or body politic or corporate shall give a bond to the
people of the state of Wyoming, in a penalty three times the amount of the tax
arising upon such estate with such sureties as the district judge may approve,
conditioned for the payment of the said tax, and interest thereon, at such time
or period as they or their representatives may come into the actual possession or
enjoyment of said property, which bond shall be filed in the oflSce of the county
clerk of the proper county; Provided, further. That such person shall make a
full, verified return of said property to said district judge, and file the same

1244 STATUTES ANNOTATED. [Wyo. St.

in his office within one year from the death of the decedent, and within that period
enter into such securities and renew the same each five years.

Ss. 3-20 provide for the collection of the tax.

S. 21. The provisions of the chapter shall not apply to bona fide residents of
this state when they shall possess the relation of either husband or wife or chil-
dren of the deceased, and where the valuation of the property does not exceed
the sum of twenty-five thousand dollars to each such legatee.

Wyo. St. 1909, c. 18, amends Wyo. St. 1903, c. 80, ss. 18 and 19, and repeals
ss. 17 and 21.

THE PRESENT ACT.

Compiled Statutes 1910, c. 169.

S. 2455. Property subject to. All property, real, personal and mixed,
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
decedent was not a resident of this state at the time of his death, which property
or any part thereof shall be within this state or any interest therein or income
therefrom, which shall be transferred by deed, grant, sale or gift made in con-
templation of the death of the grantor or bargainor or intended to take effect,
in possession or enjoyment after such death, to any person or persons or to any
body politic or corporate in trust or otherwise, or by reason whereof any person
or body politic or corporate shall become beneficially entitled in possession or
expectation, to any property or income thereof, shall be and is subject to a tax
at the rate hereinafter specified to be paid to the treasurer of the proper county
for the use of the state, and all heirs, legatees and devisees, administrators,
executors and trustees shall be liable for any and all such taxes until the same
shall have been paid as hereinafter directed. When the beneficial interests to
any property or income therefrom shall pass to or for the use of any father,
mother, husband, wife, child, brother, sister, wife or widow of the son or the
husband of the daughter or any child or children adopted as such in conformity
with the laws of the state of Wyoming, or to any person to whom the deceased,
for not less than ten years prior to death, stood in the acknowledged relation of
a parent, or to any lineal descendant born in lawful wedlock, in every such case
the rate of tax shall be two dollars on every hundred dollars of the clear market
value of such property received by each person, and at and after the same rate
for every less amount; Provided, That the sum of ten thousand dollars of any such
estate shall not be subject to any such duty or taxes, and that only the amount
in excess of ten thousand dollars shall be subject to the above duty or tax. In
all other cases the rate shall be as follows: On each and every hundred dollars
of the clear market value of all property five dollars and at the same rate for any
less amount; Provided, That an estate in the above case which may be valued
at a less sum than five hundred dollars shall not be subject to any such duty or
tax. [L. 1903, c. 80, s. 1.]

S. 2456. Life estate. — Not taxable. When any person shall bequeath
or devise any property or interest therein or income therefrom to mother, father,
husband, wife, brother, sister, the widow of the son, husband of the daughter,
or a lineal descendant during the life or for a term of years and remainder to the
collateral heir of the descendant, or the stranger in blood or to the body politic

1910, c. 169.] WYOMING. 1245

or corporate at their decease, or on the expiration of such term the said life estate
or estates for a term of years shall not be subject to any tax and the property so
passing shall be appraised immediately after the death at what was the fair
market value thereof at the time of the death of the decedent in the manner
hereinafter provided, and after deducting therefrom the value of said life estate,
or term of years, the ta- prescribed by this chapter on the remainder shall be im-
mediately due and payable to the treasurer of the proper county, and, together
with the interest thereon shall be and remain a lien on said property until the
same is paid: Provided, That the person or persons or body politic or corporate
beneficially interested in the property chargeable with said tax elect not to pay
the same until they shall come into the actual possession or enjoyment of such
property, then, in that case said person or persons or body politic or corporate
shall give a bond to the people of the state of Wyoming, in a penalty three times
the amount of the tax arising upon such estate with such sureties as the district
judge may approve, conditioned for the payment of the said tax, and interest
thereon, at such time or period as they or their representatives may come into
the actual possession or enjoyment of said property, which bond shall be filed in
the office of the county clerk of the proper county; Provided, further, That
such person shall make a full, verified return of said property to said district judge,
and file the same in his office within one year from the death of the decedent,
and within that period enter into such securities and renew the same each five
years. [L. 1903, c. 80, s. 2.J

S. 2457. Tax payable. — When. All taxes imposed by this chapter, unless
otherwise herein provided for, shall be due and payable at the death of the
decedent, and interest at the rate of six per cent per annum shall be charged
and collected thereon for such time as said taxes are not paid; Provided, That if
said tax is paid within six months from the accruing thereof, interest shall not be
charged or collected thereon, but a discount of five per cent shall be allowed
and deducted from said tax, and in all cases where the executors, administrators
or trustees do not pay such tax within one year from the death of the decedent,
they shall be required to give a bond in the form and to the effect prescribed
in 3. 2456 for the payment of said tax, together with interest. [L. 1903, c. 80,
S.3.]

S. 2458. Duty of person administering estate. Any administrator,
executor or trustee having any charge or trust in legacies or property for dis-
tribution subject to the said tax shall deduct the tax therefrom, or if the legacy
or property be not money he shall collect the tax thereon upon the appraised value
thereof from the legatee or person entitled to such property, and he shall not
deliver or be compelled to deliver any specific legacy or property subject to tax
to any person until he shall have collected the tax thereon, and whenever any
such legacy shall be charged upon or payable out of real estate, the executor,
administrator or trustee, before paying the same shall deduct said tax there-
from and pay the same to the county treasurer for the use of the state, and the
same shall remain a charge on such real estate until paid, and the payment
thereof shall be enforced by the executor, administrator or trustee in the same
manner that the said payment of said legacies might be enforced; if, howevCT,
such legacy he given in money to any person for a limited period, he shall retain
the tax upon the whole amount, but if it be not in money, he shall make apoli-
cation to the court having jurisdiction of his accounts to make an apportion-

1246 STATUTES ANNOTATED. [Wyo. St.

ment if the case requires it of the sum to be paid into his hands by such legatees,
and for such further order relative thereto as the case may require. [L. 1903,
c. 80, s. 4.]

S. 2459. Sale of property to pay tax. All executors, administrators, and
trustees shall have full power to sell so much of the property of the decedent as
will enable them to pay said tax, in the same manner as they may be enabled
to do by law, for the payment of debts for their testators and intestates, and the
amount of said tax shall be paid as hereinafter directed. [L. 1903, c. 80, s. 5.]

S. 2460. Tax payable to treasurer — Receipt for. Every sum of money
retained by any executor, administrator or trustee, or paid into his hands for any
tax on any property, shall be paid by him within thirty days thereafter to the
treasurer of the proper county, and the said treasurer, or treasurers shall give,
and every executor, administrator or trustee shall take, duplicate receipts from
him of said payments, one of which receipts he shall immediately send to the
state treasurer, whose duty it shall be to charge the treasurer so receiving the
tax with the amount thereof, and shall seal said receipt with the seal of his office
and countersign the same and return it to the executor, administrator or trustee,
whereupon it shall be a proper voucher in the settlement of his accounts, but
the executor, administrator or trustee shall not be entitled to credit in his accounts
or be discharged from liability for such tax unless he shall produce a receipt so
sealed and countersigned by the treasurer and a copy thereof certified by him.
[L. 1903, c. 80, s. 6.1

[Affected by amendment in 1909. See ss. 2471-2473.]

S. 2461. Duty of administrator regarding realty. Whenever any of
the real estate of which any decedent may die seized shall pass to any body politic
or corporate, or to any persori^or persons, or in trust for them, or some of them,
it shall be the duty of the executor, administrator or trustee of such decedent
to give information thereof in writing to the treasurer of the county where said
real estate is situated, within six months after they undertake the execution of
their duties, or if the fact be not known to them within that period, then within
one month after the same shall have come to their knowledge. [L. 1903, c. 80,
s. 7.]

S. 2462. Refunding tax in case of debts. Whenever debts shall be proved
against the estate of the decedent after distribution of legacies from which the
inheritance tax has been deducted in compliance with this chapter, and the
legatee is required to refund any portion of the legacy, a due proportion of the
said tax shall be repaid to him by the executor or administrator, if the said tax
has not been paid into the state or county treasury, or by the county treasurer
if it has been so paid. [L. 1903, c. 80, s. 8.]

S. 2463. Transfer of stocks. Whenever any foreign executor or adminis-
trator shall assign or transfer any stocks or loans in this state standing in the
name of decedent, or in trust for decedent, which shall be liable to the said tax,
si^ch tax shall be paid to the treasury or treasurer of the proper county on the
transfer thereof; otherwise the corporation making such transfer shall become
liable to pay such taxes. [L. 1903, c. 80, s. 9.]

S. 2464. Refunding tax erroneously paid. When any amount of said
tax shall have been paid erroneously to the state treasurer it shall be lawful

1910, c. 169.] WYOMING. 1247

for him on satisfactory proof rendered to him by said county treasurer of said
erroneous payments to refund and pay to the executor, administrator or trustee,
person or persons, who may have paid any such tax in error, the amount of such
tax so paid; Provided, That all applications for the repayment of said tax shall
be made within two years from the date of said payment. [L. 1903, c. 80, s. lO.J

S. 2465. Appraisement of property. In order to fix the value of property
of persons whose estate shall be subject to the payment of said tax, the district
judge, on the application of any persons interested in the estate, including the
state, or upon his own motion, shall appoint some competent person as appraiser
as often as, or whenever occasion may require, whose duty it shall be forthwith
to give notice by mail to all persons known to have or claim an interest in such
property, and to such persons as the district judge may by order direct, of the
time and place at which he will appraise such property, and at such time and
place to appraise the same at a fair market value, and for that purpose the
appraiser is authorized by leave of the district judge to use subpoenas for and to
compel the attendance of witnesses before him, and to take the evidence of such
witnesses under oath concerning such property and the value thereof, and he
shall make a report thereof and of such value in writing to the district court with
the depositions of the witnesses examined and such other facts in relation thereto
as the district court may by order require to be filed in the office of the clerk of
said district court, and from this report the said district court shall forthwith
make an order and fix the then cash value of all estate, annuities and life estates
or terms of years growing out of said estate, and the tax to which the same is
liable, and shall immediately give notice by mail to all parties known to be
interested therein. Any person or persons dissatisfied with the appraisement
or assessment may appeal therefrom to the district court of the proper county
within sixty days after the making and filing of such appraisement or assessment,
on giving good and sufficient security to the satisfaction of the district judge to
pay all costs together with whatever taxes that shall be fixed by the district
court. The said appraiser shall be paid by the county treasurer out of any
funds he n;ay have in his hands on account of said tax, on the certificate of the
district judge at the rate of three dollars per day for every day actually and
necessarily employed in said appraisement together with his actual, and neces
sary traveling expenses, and the witnesses subpoenaed by said appraiser shall
be paid such fees as now provided by law. [L. 1903, c. 80, s. 11.]

S. 2466. Penalty for misfeasance of appraiser. Any appraiser appointed
by this chapter who shall take any fees or reward from any executor, administra-
tor, trustee, legatee, next of kin or heir of any decedent, or from any other person
liable to pay said tax, or any portion thereof, shall be guilty of a misdemeanor,
and upon conviction in any court having jurisdiction of misdemeanor he shall
be fined not less than two hundred and fifty dollars, nor more than five hundred
dollars, and imprisoned not exceeding ninety days, and in addition thereto the
district judge shall dismiss him from such service. [L. 1903, c. 80, s. 12.]

S. 2467. Court having jurisdiction of realty. The district court in the
county in which the real property is situated, of the decedent who was not a
resident of the state, or in the county of which the deceased was a resident at
the time of his death, shall have jurisdiction to hear and determine all questions
in relation to the tax arising under the provisions of this chapter, and the dis-

1248 STATUTES ANNOTATED. [Wyo. St.

trict court first acquiring jurisdiction hereunder shall retain the same to the
exclusion of every other. [L. 1903, c. 80, s. 13.]

S. 2468. Duty of court when tax is not paid. If it shall appear to the
district court that any tax accruing under this chapter has not been paid accord-
ing to law, it shall issue a summons summoning the persons interested in the
property liable to the tax to appear before the court on a day certain not more
than three months after the date of such summons, to show cause why said tax
should not be paid. The process, practice and pleadings and the hearing and
determination thereof, and the judgment in said court in such cases, shall be
the same as those now provided or which may hereafter be provided in probate
cases in the district courts in this state, and the fees and costs in such case
shall be the same as in probate cases in the district courts of this state. [L.
1903, c. 80, s. 14.]

S. 2469. Duty of treasurer when tax is not paid. Whenever the treasurer
of any county shall have reason to believe that any tax is due and unpaid under
this chapter, after the refusal or neglect of the persons interested in the property
liable to pay said tax to pay the same, he shall notify the county attorney of the
proper county, in writing, of such refusal to pay said tax, and the count attorney
so notified, if he has proper cause to believe a tax is due and unpaid, shall prose-
cute the proceeding in the district court in the proper county, as provided in
6. 2468 for the enforcement and collection of such tax, and in such case said court
shall allow as costs in the said case such fees to said attorney as it may deem
reasonable. [L. 1903, c. 80, s. 15.]

S. 2470. Duty clerk of court. The clerk of the district court of each county
shall every three months make a statement in writing to the county treasurer
of the county of the property irom which, or the party from whom he has reason
to believe a tax under this chapter is due and unpaid. [L. 1903, c. 80, s. 16.]

S. 2471. Records to be kept. The county commissioners of each county
shall furnish to each county clerk a book in which he shall enter the returns
made by appraisers for cash value of annuities, life estates and terms of years and
other property fixed by the district court in his county and the tax assessed
thereon, and the amounts of any receipts for payment thereof filed with him,
which book shall be kept in the office of the county clerk as a public record.
[L. 1903, c. 80, s. 18; L. 1909, c. 18, s. 2.]

S. 2472. Treasurer to county to retain. The county treasurer of each
county shall keep all money collected under the provisions of this chapter in a
separate and special fund to be expended under the direction of the county
commissioners of each county, for the sole purpose of the permanent improvement
of the county road, such road shall not be built within the corporate limits of
any city or village, but may begin at the limit of any city or village and extending
therefrom in the direction most traveled by the public; to be determined upon
by the said county commissioners; Provided, That such improvements may be
mgide from the limit of any city of the metropolitan or first class and through a
city of the second class or village, where the road so determined upon to be im-
proved is a main road between the county and such city of the metropolitan or
first class. All contracts for such permanent improvements shall be let by the
said board, by competitive bids after the plans and specifications therefor drawn

1910, c. 169.] WYOMING. 1249

by the county surveyor or engineer have been filed with the county clerk of
each respective county. All bids for the construction of such roads shall be
deposited with the county clerk of the respective counties and opened by him
in the presence of the county commissioners, then filed with the county clerk.
All such permanent roadbeds shall not be less than twelve feet, nor more than
sixteen feet in width and shall be constructed of the most durable and approved
material and the remaining part of said road shall be constructed at one side
of the said permanent part and be used as a dirt road; Provided, That it shall
be lawful for the county commissioners of any county having a population of
not more than thirty thousand, to use said fund in the manner herein provided
for the improvement of any grade, bridge, cut, fill, or dirt road leading into any
city or village within said county; Provided, That all money hereafter paid by the
various county treasurers to the state treasurer, under the provisions of this
chapter shall be, upon proper vouchers signed by the county clerk and county
treasurer, paid back to the said county from which said tax was received and
said money when so refunded by the state treasurer shall be placed in the special
fund heretofore mentioned in each county and shall be expended in like manner
and for like purposes as herein above specified. [L. 1903, c. 80, s. 19; L. 1909,
c. 18, s. 3.]

S. 2473. Duplicate receipts. Any person or body politic or corporate shall,
upon the payment of the sum of fifty cents, be entitled to a receipt from the
county treasurer of any county or the copy of the receipt at his option, that may
have been given by said treasurer for the payment of any tax under this chapter,
to be sealed with the seal of his office, which receipt shall designate on what
real property, if any, of which any deceased may have died seized, said tax has
been paid and by whom paid, and whether or not it is in full of said tax, and said
receipt may be recorded in the clerk's office of said county in which the property
may be situated in the book to be kept by said clerk for such purpose. The lien
of the inheritance tax provided herein shall continue until the said tax is settled
and satisfied; Provided, That said lien shall be limited to the property chargeable
therewith; and Provided further, That all inheritance taxes shall be sued for
within five years after they are due and legally demandable; otherwise they shall
be presumed to have been paid, and such lien shall be removed. [L. 1903. c. 80,
s. 20.]

1250 STATUTES ANNOTATED. [U. S. St.

UNITED STATES,

In General.

The financial necessities of two wars caused the enactment by
our federal government of legacy taxes and the decisions of our
highest court on these statutes served to entrench firmly the
central government in this powerful means of obtaining revenue.
The act of 1898 was attacked on the fundamental ground that
congress had no authority to levy such a tax in the states, but it
was sustained, and its progressive features were also approved.
There is no federal inheritance tax at present.

List of Statutes.

1797. 1 U. S. St. 527.

1797. 1 U. S. St. 536.

1802. 2 U. S. St. 148.

1862. 12 U. S. St. 483.

1862. 12 U. S. St. 485.

1864. 13 U. S. St. 285.

1864. 13 U. S. St. 287. -

1864. 13 U. S. St. 288.

1864. 13 U. S. St. 289.

1864. 13 U. S. St. 299.

1864. 13 U. S. St. 300. •

1864. 13 U. S. St. 303.

1865. 13 U. S. St. 481.

1865. 13 U. S. St. 140.

1866. 13 U. S. St. 141.

1867. 14 U. S. St. 475.
1870. 16 U. S. St. 261.
1872. 17 U. S. St. 256.
1872. 17 U. S. St. 402.

1894. 28 U. S. St. 509, c. 349.

1898. 30 U. S. St. 448.

1898. 30 U. S. St. 464.

1901. 31 U. S. St. 946.

1901. 31 U. S. St. 948.
4902. 32 U. S. St. 97-.

1902. 32 U. S. St. 406.

1857-1869. Brightly's Digest, a. 13, p. 366, s. 306.

1873-1874. Revised Statutes of the U. S., c. 10, p. 679, ss. 3438-3439.

1892-1899. Revised Statutes of the U. S., p. 679, ss. 3438-3440.

History.] UNITED STATES.

1251

1892-1899. Supplement to Revised Statutes of the U. S., v. 2, pp. 798-799
1901. United States Compiled Statutes, t. 35, c. 11a, ss. 8, 30. 9 10 11 dd
279-282. , «. lu, 11, pp.

1901. United States Compiled Statutes, c. 10, ss. 3438-3440 c 11a ss
29-31, pp. 2307-2308.

1905. Supplement to United States Compiled Statutes, 1901, pp. 447-451.

1906. Commission to Revise and Codify Laws of the U. S., v. 1, s. 4601.

1907. Supplement to Revised Statutes, 1901, pp. 649-652.'
1909. 1901, pp. 876-879.

History of Legislation.

The court traces the history of the European legislation in
KnowUon v. Moore, 178 U. S. 41, 48, 49, 20 S. Ct. 747, 44 L. Ed. 969.

Congress imposed a legacy tax in 1797, by the act of July 6,
1797, c. 11, 1 Stat. 527, which act was repealed June 30, 1802,
2 Stat. 148, c. 17. In this statute, as in the English legacy duty
statute of 1780, the mode of collection provided was by stamp
duties laid on the receipts evidencing the payment of the legacies
or distributive shares in personal property, and the amount was, like
the English legacy tax, charged upon the legacies and not upon the
residue of the personal estate.

A legacy tax was again enacted by the statute of 1862, 12 Stat.
433, 485, sections 111 and 112 of chapter 119.

This statute, like the act of 1797, was a tax imposed on legacies
or distributive shares of personal property, but contained a new
form of death duty. By section 194 a probate duty, proportioned
to the amount of the estate and to be paid by way of stamps, was
levied. The result of the act of 1862 was to cause the death
duties irnposed by congress to greatly resemble those then existing
in England; that is, first, a legacy tax, chargeable against each
legacy or distributive share, and a probate duty chargeable against
the mass of the estate. Thus it came to pass that the system of
death duties prevailing in England and that adopted by congress
were substantially identical, and of a threefold nature, that is, a
probate duty charged upon the whole estate, a legacy duty charged
upon each legacy or distributive share of personalty, and a succes-
sion duty charged against each interest in real property. The fact
that the framers had in mind the English law was conclusively
demonstrated by section 127, wherein the succession or real estate
inheritance tax was defined in substantially similar terms to that
contained in the English Succession Diity Act. The parallel
was observed by this court in Sholey v. Rew, 23 Wall. 331, 349.
KnowUon v. Moore, 178 U. S. 41, 50, 20 S. Ct. 747, 44 L. Ed. 969.

1252 STATUTES ANNOTATED. [U. S. St.

The court after considering ancient and modern deatH duties
concludes as follows: "Although different modes of assessing such
duties prevail, and although they have different accidental names,
such as probate duties, stamp duties, taxes on the transaction,
or the act of passing of an estate or a succession, legacy taxes,
estate taxes or privilege taxes, nevertheless tax laws of this nature
in all countries rest in their essence upon the principle that death
is the generating source from which the particular taxing power
takes its being and that it is the power to transmit, or the trans-
mission from the dead to the living, on which such taxes are more
immediately rested." Knowlton v. Moore^ 178 U. S. 41, 56, 20
S. Gt. 747, 44 L. Ed. 969.

Early Probate Fees.

1 U. S. St. 527 (July 6, 1797, c. 11) imposes a stamp duty on "any receipt
or other discharge for or on account of any legacy left by any will or other testa-
mentary instrument, or for any share or part of a personal estate divided by
force of any statute of distributions, the amount whereof shall be above the
value of $50, and shall not exceed the value of $100, twenty-five cents; where the
amount thereof shall exceed the value of $100 and shall not exceed $500, fifty
cents; and for every further sum of $500, the additional sum of one dollar."

The statute further provided an exemption on legacies or distributive shares
to the wife, children or grandchildren of the deceased person and provided in
section 6 that every receipt for a legacy or distributive share should express
the true sum received under penalty.

1 U. S. St. 536 (Statute of December 15, 1797) postpones the commencement
of the stamp duties of the act of July 6, 1797, until after June 30, 1798.

2 U. S. St. 148 (April 6, 1802) repeals the stamp duties of the act of 1797,
repeal to take effect July 1, 1802.

12 U. S. St. 483 (Revenue Act July 1, 1862) Schedule B, Stamp duties) pro-
vides a duty for probate or administration where the estate does not exceed
$2,500, fifty cents; $2,500 to $5000, one dollar; $5000 to $20,000, two dollars;
$20,000 to $50,000, five dollars; $50,000 to $100,000, ten dollars; $100,000 to
$150,000, twenty dollars; every additional $50,000 or fractional part thereof,
ten dollars.

13 U. S. St. p. 300 (Statute of June 30, 1864), provided a stamp duty on pro-
bate or administration where an estate does not exceed $2,000, one dollar; on
estates exceeding $2,000 for every additional thousand dollars or fractional part
thereof in excess of $2,000, fifty cents.

14. U. S. St. 475 (Statute of March 2, 1867, s. 9) amends statute of June 30,
1864, by exempting from the stamp tax any estate which does not exceed in
value one thousand dollars.

17 U. S. St. 256 (Statute of June 6, 1872, c. 315, s. 36) repealed the stamp
duties under Schedule B of the statute of June 30, 1864, and acts amendatory
thereof, excepting only the tax of two cents on bank checks, drafts or orders.
This covered the probate and administration tax and went into effect October
1, 1872.

1862.8.111.] UNITED STATES. 1253

THE ACT OF 1862.

12 U. S. St. 485, 8. 111.

And be it further enacted, That any person or persons having in charge or trust,
as administrators, executors, or trustees of any legacies or distributive shares
arising from personal property, of any kind whatsoever, where the whole amount
of such personal property, as aforesaid, shall exceed the sum of one thousand
dollars in actual value, passing from any person who may die after the passage
of this act possessed of such property, either by will or by the intestate laws of
any state or territory, or any part of such property or interest therein, transferred
by deed, grant, bargain, sale, or gift, made or intended to take effect in posses-
sion or enjoyment after the death of the grantor, or bargainor, to any person or
persons, or to any body or bodies politic or corporate, in trust or otherwise, shall
be, and hereby are, made subject to a duty or tax, to be paid to the United
States, as follows, that is to say : —

First. Where the person or persons entitled to any beneficial interest in such
property shall be the lineal issue or lineal ancestor, brother or sister, to the person
who died possessed of such property, as aforesaid, at and after the rate of seventy-
five v^ents for each and every hundred dollars of the clear value of such interest
in such property.

Second. Where the person or persons entitled to any beneficial interest in
such property shall be a descendant of a brother or sister of the person who died
possessed, as aforesaid, at and after the rate of one dollar and fifty cents for
each and every hundred dollars of the clear value of such interest.

Third. Where the person or persons entitled to any beneficial interest in such
property shall be a brother or sister of the father or mother, or a descendant
of a brother or sister of the father or mother of the person who died possessed,
as aforesaid, at and after the rate of three dollars for each and every hundred
dollars of the clear value of such interest.

Fourth. Where the person or persons entitled to any beneficial interest in such
property shall be a brother or sister of the grandfather or grandmother, or a
descendant of the brother or sister of the grandfather or grandmother of the
person who died possessed, as aforesaid, at and after the rate of four dollars for
each and every hundred dollars of the clear value of such interest.

Fifth. Where the person or persons entitled to any beneficial interest in such
property shall be in any other degree of collateral consanguinity than is herein-
before stated, or shall be a stranger in blood to the person who died possessed,
as aforesaid, or shall be a body politic or corporate, at and after the rate of five
dollars for each and every hundred dollars of the clear value of such interest:
Provided, That all legacies or property passing by will, or by the laws of any
state or territory, to husband or wife of the person who died possessed, as afore-
said, shall be exempt from tax or duty.

[See notes to the Act of 1864, post, p. 1255.1

"Arising from Personal Property" Does not Include a Legacy
Payable out of Real Estate.

The testator made certain pecuniary legacies to be paid out
of the proceeds of certain lands which she directed her executors

1254 STATUTES ANNOTATED. [U. S. St.

to sell. It was claimed that these legacies are chargeable with a
duty under the United States statute of 1862, section 111 (12
Stat. 489), as "arising from personal property." The court says
that the statute is "too clear and explicit to include this case, Which
is a legacy arising from real estate." United States v. Watts, 1
Bond, 580, Fed. Cas. 16, 653^

Executor Liable.

In a suit by the United States against a beneficiary under a trust
to recover the interest on an unpaid legacy, the court holds that
the statute of 1862, sections 111 and 112, imposed a tax only on
an executor or trustee and not on the legatee or cestui que trust.
The executor is made subject to the tax and is to pay the tax
and not the legatee. United States v. Allen, 9 Ben. 154, Fed.
Cas. 14, 430.

THE ACT OF 1864.
13 U. S. St. 285, 8. 124 (Statute of June 30, 1864).

S. 124. Transfers taxable. — Rates. And be it further enacted, That any
person or persons having in charge or trust, as administrators, executors, or trus-
tees, any legacies or distributive shares arising from personal property, where
the whole amount of such personal property, as aforesaid, shall exceed the sum
of one thousand dollars in actual value, passing, after the passage of this act,
from any person possessed of such property, either by will or by the intestate
laws of any state or territory, or any personal property or interest therein, trans-
ferred by deed, grant, bargain, sale, or gift, made or intended to take effect in
possession or enjoyment after the death of the grantor or bargainor, to any per-
son or persons, or to any body or bodies politic or corporate, in trust or otherwise,
shall be, and hereby are, made subject to a duty or tax, to be paid to the United
States, as follows, that is to say: —

First. Where the person or persons entitled to any beneficial interest in such
property shall be the lineal issue or lineal ancestor, brother or sister, to the
person who died possessed of such property, as aforesaid, at the rate of one dollar
for each and every hundred dollars of the clear value of such interest in such prop-
erty.

Second. Where the person or persons entitled to any beneficial interest in such
property shall be a descendant of a brother or sister of the person who died
possessed, as aforesaid, at the rate of two dollars for each and every hundred
dollars of the clear value of such interest.

Third. Where the person or persons entitled to any beneficial interest in such
property shall be a brother or sister of the father or mother, or a descendant of a
brother or sister of the father or mother, of the person who died possessed as
aforesaid, at the rate of four dollars for each and every hundred dollars of the
clear value of such interest.

Fourth. Where the person or persons entitled to any beneficial interest in such
property shall be a brother or sister of the grandfather or grandmother, or a

1864.] UNITED STATES. 1255

descendant of the brother or sister of the grandfather or grandmother, of the
person who died possessed as aforesaid, at the rate of five dollars for each and every
hundred dollars of the clear value of such interest.

Fifth. Where the person or persons entitled to any beneficial interest in such
property shall be in any other degree of collateral consanguinity than is herein-
before stated, or shall be a stranger in blood to the person who died possessed,
as aforesaid, or shall be a body politic or corporate at the rate of six dollars for
each and every hundred dollars of the clear value of such interest: Provided,
That all legacies or property passing by will, or by the laws of any state or terri-
tory, to husband or wife of the person who died possessed, as aforesaid, shall be
exempt from tax or duty.

Constitutional.

The succession tax under U. S. St. 1864, June 30, and 1866,
July 13, was constitutional as an impost or excise. Scholey v.
Rew, 90 U. S. (23 Wall.) 331.

History. — A Legacy Tax.

This act was modeled upon the English statutes which have
been held to be legacy taxes. Knowlton v. Moore, 178 U. S. 41,
69, 20 S. Ct. 747, 44 L. Ed. 969.

An Excise Tax.

This is not a direct tax, but instead of that is plainly an excise
tax authorized by the United States Constitution, section 8,
article 1. The succes sion or devolution of real estate is the subject-
matter of the tax or duty.

"Successor is employed in the act as the correlative to prede-
cessor, and the succession or devolution of the real estate is the
subject-matter of the tax or duty, or, in other words, it is the
right to become the successor of real estate upon the death of the
predecessor, whether the devolution or disposition of the same
is effected by will, deed, or laws of descent, from a grantor, testator,
ancestor, or other person from whom the interest of the successor
has been or shall be derived; nor is the question affected in the
least by the fact that the tax or duty is made a lien upon the land,
as the lien is merely an appropriate regulation to secure the collec-
tion of the exaction." Per Clifford, J., in Scholey v. Rew, 90
U. S. (23 Wall.) 331, 347.

Trust for Grantor.

Where- the testator in 1864 had transferred property to trustees
by deed in trust to collect the interest and pay it to himself, and his

1256 STATUTES ANNOTATED. [U. S. St.

wife until the death of the survivor, the court holds that the
grantor did not "die possessed of" the property within the mean-
ing of the statute of 1864 when he died in 1866, and therefore
no inheritance tax could be collected. United States v. Lever-
ich, 9 Fed. 586.

Advances.

The United States statute of 1864 covers an advance made by
a father to his son, as it is a gift made without valuable or ade-
quate consideration. The fact that the son was named in his
father's will does not give him any vested or contingent estate, but
is a bare possibility not assignable, and can therefore not be made
the basis for a consideration. United States v. Banks, 17 Fed. 322.

Not Applicable to Aliens.

This statute clearly applies only to the estates of those persons
whose domicile at the time of their death is within the United States.
Therefore, where the testatrix was at the time of her death in 1869
a citizen of and residing in France, and gave American securities to
her son, also a resident of France, no inheritance tax can be col-
lected. United States v. Hunnewell, 13 Fed. 617.

Where the testator abandoned his residence in this country and
moved to Europe, where he died, his will is not subject to the
statute of 1864. United States v. Morris, 27 Fed. 341.

Consideration. — Assistance.

A deed by a mother to her sons conveying to them a tract of
land "in consideration of love and affection and in further con-
sideration of the assistance they have rendered me since the death
of my husband," the court remarks that the succession tax cannot
be defeated by reciting a nominal consideration which would be
deemed valuable in the technical sense of that term. But the
court says that in the absence of further evidence the deed does
show consideration sufficient to defeat the operation of the internal
revenue act of June 30, 1864. United States v. Hart, 4 Fed. 292.

Devise in Accordance with Contract.

The husband bought and paid for a house and lot which he had
conveyed to his wife on the understanding that she should make
her will devising the property to him in case she died before he
died. Pursuant to this understanding she made her will and died

1864.] UNITED STATES. 1257

February 20, 1866, and the court holds that the inheritance tax
should be assessed on her estate. The legal title to the property
and the ownership were in her when she died. "The fact that the
will was made on account of an agreement to that effect by the wife
when she took her title, rendered it none the less an instrument
creating a beneficial interest in the husband on her death, and that,
under the statute, is the succession to be taxed. Ransom v.
United States, Fed. Cas. 11, 574.

Charged on Each Legacy.

The United States inheritance tax of 1864 should be charged to
a specific legatee and in case the executor finds it difficult to deduct
the same out of such a legacy the law would doubtless afford an
adequate remedy.

U. S. St. 1862 (12 U. S. St. at Large, c. 119, s. 112) was super-
seded by U. S. St. June 30, 1864, which omitted from the statute
of 1862 the words "to be allowed for such payment by the person
or persons entitled to the beneficial interest in respect of which such
tax or duty was paid." The statute of 1866 provides that any
tax paid "shall be deducted from the particular legacy or distribu-
tive share on account of which the same is charged."

Under the statute of 1864, notwithstanding the omission of the
language above quoted, the duties paid in respect of any particular
legacies are as between the executors and the legatees in the
settlement of the estate, to be deducted from the legacies in respect
of which they have been paid, or charged to the legatees respec-
tively who are entitled to such legacies, and the amendment of 1866
was simply declaratory to avoid any doubt. Goddard v. Goddard,
9 R. L 293, 297.

Legatee not Personally Liable.

U. S. St. 1864 cancels that of 1862 and created no personal
liability on the part of the legatee. United States v. Pennsylvania
Co., 27 Fed. 539.

Liability Confined to One in Possession.

Under the United States statute of 1864 suit can only be brought
against the individual in possession. United States v. Truck, 27
Fed. 541. United States v. Kelley, 27 Fed. 542.

Payable from Income of Life Tenant.

Succession duties under the United States inheritance tax of
1864 on life tenants fall on the income of the fund even where the

1258 STATUTES ANNOTATED. [U. S. St.

property is left by will in trust "to receive and collect the income
and after deducting all needful and proper costs, charges and ex-
penses, to pay the residue of said income" to the cestui for life.

The court holds that the costs, charges and expenses spoken of
by the will which was drafted before the passage of the inheritance
tax are such as are incidental to the management of the trust prop-
erty, and the receipt, collection and disbursement of the income
cannot in any sense include the payment of the tax by law imposed
upon the life tenants and beneficial interests in the property.
Sohier v. Eldredge, 103 Mass. 345.

Cestui and not Trustee is Liable.

Under the United States statute of 1864 a person liable to pay
a tax on a succession for the "successor" is the party beneficially
interested in real estate and not the executor or trustee in whom
the title may rest. The tax is payable by the successor himself
and not by his trustee if he have one. United States v. Tappan,
10 Ben. 284, Fed. Cas. 16, 431.

Remainders.

Under United States statute of 1862 and statute of 1864 the
executive officers treated vested interests although unaccompanied
with the right of immediate possession or enjoyment as at once
taxable. This construction was in effect repudiated by United
States statute of July 13, 1866, and was treated as unsound by the
reasoning of the opinion in Clapp v. Mason, 94 U. S. 589. Vander-
bilt V. Eidman, 196 U. S. 480, 25 S. Ct. 331, 49 L. Ed. 563.

Sum Paid in Compromise.

The testa toi died in 1869 leaving a will providing among other
things a fund for a school , and the sole heir attacked this provision
on the ground that it was invalid under Virginia statutes. A settle-
ment of fifty thousand dollars was made with him in consideration
of his assigning to the school all his rights for the benefit of the
same parties and upon the same trusts mentioned in the will.

The court holds that this was neither "a distributive share in
an intestate's estate," nor "a legacy" ; that the sum of fifty thousand
dollars was paid as a compromise; that the heir never claimed a
legacy, but insisted that the will was void and that he was entitled
to the whole as heir and that as there was no such legacy the tax
on the fifty thousand dollars was not a tax on a legacy and was

1864.] UNITED STATES. 1259

therefore illegally imposed. Page v. Rives, Fed. Cas. 10 666
1 Hughes 297.

Lien. — Collection.

13 U. S. St. 285 (Statute of June 30, 1864), s. 125, covers the lien of the tax and
makes various administrative provisions for its assessment and collection.

No Personal Liability.

One who buys land subject to the lien of the United States
inheritance tax of 1864 incurs no personal liability on account of
the tax. The lien can be enforced against the land, but no personal
judgment cafi be rendered against him therefor. One can be made
personally liable for the United States inheritance tax only to the
extent of his interest in the estate. Wilhelmi v. Wade, 65 Mo. 39.

Penalties.

U. S. St. 1864, c. 173, s. 14, prescribes a penalty of fifty per cent for
refusal or neglect to make a list or return; but this refers to the
annual and monthly lists and returns to be made by parties taxable.
But the penal ty for failure to return and give notice of a succession
tax is provided for in section 148, which provides a penalty of ten per
cent. Wright v. Blakeslee, 101 U. S. 174, 178, 25 L. Ed. 1048,
Fed. Cas. 18073, 13 Blat. 421.

P Real Estate.

13 U. S. St. 285 (Statute of June 30, 1864), ss. 126-132, carefully define suc-
cessions in real estate subject to tax.

Effect of Partition.

The succession tax is not a tax upon land. The fact that par-
tition proceedings were held, under which the plaintiff's equitable
interest in certain real estate was satisfied by an assignment to
him of personal property, does not relieve him from the payment
of a succession tax on his share of the estate for the obvious reason
that he received the full value of the real estate in other property
assigned to him belonging to the same estate. Scholey v. Rew,
90 U.S. (23 Wall.) 331, 349.

Retroactive on Remainders.

The testatrix died in 1847, leaving her property to her husband
for life, and on his death to his children. The husband died
August 10, 1866, and the tax was assessed upon one of his chil-

1260 STATUTES ANNOTATED. [U. S. St.

dren taking on his death. This life interest to the child on the
death of the father is subject to the inheritance tax under the U.
S. St. 1864, June 30, as it is a "devolution" under that statute.
Blake V. McCartney, 4 Cliff 101, Fed. Cas. No. 1498.

13 U. S. St. 285 (Statute of June 30, 1864), s. 133.

And be it further enacted, That there shall be levied and paid to the United
States in respect of every such succession as aforesaid, according to the value
thereof, the following duties, that is to say: —

Where the successor shall be the lineal issue or lineal ancestor of the predecessor,
a duty at the rate of one dollar per centum upon such value.

Where the successor shall be a brother or sister, or a descendant of a brother
or sister of the predecessor, a duty at the rate of two dollars per centum upon
such value.

Where the successor shall be a brother or sister of the father or mother, or a
descendant of a brother or sister of the father or mother of the predecessor, a
duty at the rate of four dollars per centum upon such value.

Where the successor shall be a brother or sister of the grandfather or grand-
mother, or a descendant of the brother or sister of the grandfather or grand-
mother of the predecessor, a duty at the rate of five dollars per centum upon
such value.

Where the successor shall be in any other degree of collateral consanguinity
to the predecessor than is hereinbefore described, or shall be a stranger in blood
to him, a duty at the rate of six dollars per centum upon such value.

13 U. S. St. 285 (Statute of June 30, 1864), ss. 134-150, provide for the assess-
ment, payment and collection (Si the tax.

Repeal.

13 U. S. St., p. 303 (Statute of June 30, 1864), repealed the statute of July 1,
1862, as to probate and inheritance taxes.

Saving Clause. .

Where the testator died in 1863, the government's claim accrued
under the act of 1862 at the death of the testator, and was therefore
not repealed by the statute of 1864, which expressly saved all taxes
which had then accrued, and the statute of 1870, which again saves
all taxes which had accrued. The testator left property to his
wife, who died in 1876, and the court holds that the tax under the
statute of 1862 should be assessed on this remainder. United
States V. Townsend, 8 Fed. 306.

WijJow Exempted.

13 U. S. St. 481 (Statute March 3, 1865) amended the statute of June 30,
1864, s. 133, by adding thereto an exemption of any succession "vesting before
or subsequent to the passage of this act, where the successor shall be the wife
of the predecessor."

1866.J UNITED STATES. 1261

THE ACT OF 1866.

14 U. S. St. p. 140, 141 (Statute of July 13, 1866) amends the statute of June
30, 1864, ss. 124, 125, 137, 138, 145, 147, 148, 152, and repeals s. 150.

Where Estate Insolvent.

The plaintiff brought suit to recover the amount of the internal
revenue tax he paid in 1872 to the United States collector on the
ground that he as lessee of the real estate was obliged to pay the
tax to avoid eviction and that the payment inured to the benefit
of the succession. As the succession was insolvent there was
no inheritance or legacy for the heirs, and it was not liable to an
internal revenue tax, and therefore no recovery could be had.
Johnson v. Dunbar, 28 La. Ann. 271.

Demand Necessary.

The United States statute of 1866 imposes no liability until a
neglect or refusal to pay "after demand." United States v. Pennsyl-
vania Co., 27 Fed. 539.

Minor Children. 14 U. S. St., p. 140, amends statute of June 30, 1864, by
exempting any legacy or share of personal property to a minor child "unless such
legacy or share shall exceed the sum of one thousand dollars, in which case the
excess only above that sum shall be liable to such taxation."

When Accrues. 14 U. S. St., p. 140 (Statute of July 13, 1866), amends the
statute of June 30, 1864, s. 125, by inserting after the words "that the tax or duty
aforesaid, "the following: "shall bedueand payable whenever the party interested
in such legacy or distributive share or property or interest aforesaid shall become
entitled to the possession or enjoyment thereof, or to the beneficial interest in
the profits accruing therefrom, and the same." The administrative provisions of
the statute are further strengthened.

Remainders Accelerated.

One James Long in 1803, by deed of settlement conveyed certain
real estate in Maryland to his daughter for life, and after her
death to her children and to the descendants of any deceased
child. The daughter married and had children who were living
at the time of the assessment of the tax, the parties having divided
the property by amicable agreement.

The court holds that there can be no question that the deed of
James Long was such a past disposition of real estate as conferred a
succession upon the parties in remainder. "It was a past disposition
of real estate where persons became beneficially entitled upon the

1262 STATUTES ANNOTATED. [U. S. St.

death of a person dying after the passage of the act. This consti-
tutes a succession."

The court holds that this is one of those cases where the title
to a succession has been accelerated by the extinction of prior
interests by agreement of parties, and that the tax is payable upon
the whole value of the remainder interests. Brune v. Smith,
Fed. Cas. 2053.

Massachusetts Act for Recording Receipts.

Mass. St. 1868, c. 132, provided that registers of deeds should record evi-
dences of payment of the federal inheritance tax.

Mass. St. 1868, appeared in Public Statutes, c. 24, s. 18.

Mass. Public Statutes, c. 24, s. 18, provides that the registers of deeds shall
record receipts of United States collectors of internal revenue for succession
taxes.

THE REPEAL OF 1870.
U. S. St. 1870, c. 255 (16 U. S. St., p. 261). Approved July 14, 1870.

S. 17. And be it further enacted. That sections one hundred and twenty, one
hundred and twenty-one, one hundred and twenty-two, and one hundred and
twenty-three of the act of June thirty, eighteen nundred and sixty-four, entitled,
"An act to provide internal revenue to support the government, to pay interest
on the public debt, and for other purposes," as amended by the act of July
thirteen, eighteen hundred and sixty-six, and the act of March two, eighteen
hundred and sixty-seven, shall be construed to impose the taxes therein men-
tioned to the first day of August, eighteen hundred and seventy, but after that
date no further taxes shall be levied or assessed under said sections; and all acts
and parts of acts relating to the taxes herein repealed, and that all the provisions
of said acts, shall continue in full force for levying and collecting all taxes prop-
erly assessed or liable to be assessed, or accruing under the provisions of former
acts, or drawbacks, the right to which has already accrued or which may here-
after accrue under said acts, and for maintaining and continuing liens, fines,
penalties, and forfeitures incurred under and by virtue thereof. And this act
shall not be construed to affect any act done, right accrued, or penalty incurred
under former acts, but every such right is hereby saved. And for carrying out
and completing all proceedings which have been already commenced or that may
be commenced to enforce such fines, penalties, and forfeitures, or criminal pro-
ceedings under said acts, and for the punishment of crimes of which any party
shall be or has been found guilty.

Remainder Interests.

Where the testator dies before the repeal, leaving a life tenant
who dies after the repeal, no tax can be assessed on the remainder
interests. The repealing act contained a saving proviso and it
was insisted that the tax accrued on the death of the testator.

The court finds under section 137, that the right does not accrue
until the duty can be demanded, that is, when it is made payable,

1870.] UNITED STATES. 1263

in other words, at the end of thirty days, after becoming entitled
to possession , and therefore the saving clause did not cover the case,
and therefore the tax was not assessable. Clapp v. Mason 94
U. S. 589, 24 L. Ed. 212, affirming Fed. Cas. 9233.

The same result was reached in the following cases: United
States V. Brice, 8 Fed. 381; United States v. Hazard, 8 Fed. 380;
United States v. Rankin, 3 McCrary 113, 8 Fed. 872.

Where Estate not Settled.

The testator died in November, 1866, and his estate was not
settled until January, 1873, and the court holds that as the tax
could not be demanded before the repeal of the inheritance act
the tax cannot be collected. United States v. Kelley, 28 Fed. 845.

Payment on Reaching Certain Age.

Where the testator died July 17, 1870, leaving a legacy to his
son payable "within three months after he shall arrive at the age
of twenty-one years" and the legatee arrived at that age in 1872,
no legacy tax could be collected on the authority of Mason v.
Sargent, 104 U. S. 689. Sturges v. United States, 117 U. S. 363.

To the same effect see United States v. New York Ins. & Trust
Co. (9 Ben. 413, Fed. Cas. 15,873). See, however, Hellman v.
United States (15 Blatch. 131), Fed. Cas. 6341, affirming Fed.
Cas. 15, 343.

Legacies Payable After Repeal.

The testator died February 23, 1870, before, but less than one
year befoie the repeal of the federal inheritance tax. The statute
of July 14, 1870, repealed the tax on and after the first day of
October, saving all taxes properly assessed or accruing under
the provisions of former acts the right to which has already
accrued and which may hereafter accrue under said acts.

The court holds that legacies under this act accrued at the
death of the testator and had therefore accrued within this sec-
tion 17, although they are payable at the earliest in a year after the
death of the testator undei Massachusetts law. May v. Slack,
Fed. Cas. 9336.

Alien Estopped to Claim Devise to him Void.

Where the devisee of real estate is an alien and has received the
value of the real estate in partition proceedings he is estopped to

1264 STATUTES ANNOTATED. [U. S. St.

deny liability for the succession tax on the ground that the devise
to him as an alien was void. Scholey v. Rew, 90 U. S. (23 Wall.) 331.

17 U. S. St., p. 402 (Statuteof December 24, 1872, s. 2), provided for the collec-
tion of the taxes on legacies and successions.

The Income Tax.

28 U. S. St., c. 53 (Statute of August 27, 1894, c. 349, s. 28), provides that
in estimating the gains, profits and income for the purpose of the income tax
money and the value of all personal property acquired by gift or inheritance
shall be included. [This statute was declared unconstitutional by the Supreme
Court in Pollock v. Farmers' Loan &f Trust Co., 157 U. S. 429. 15 U. S. Sup.
Ct. 73.1

THE ACT OF 1898.

30 U. S. St., p. 464. (Statute June 13, 1898). Approved and to take effect

June 13, 1898.

S. 29. Transfers taxable. — Rates. That any person or persons having
in charge or trust, as administrators, executors, or trustees, any legacies or dis-
tributive shares arising from personal property, where the whole amount of
such personal property as aforesaid, shall exceed the sum of ten thousand dollars
in actual value, passing, after the passage of this act, from any person possessed
of such property, either by will or by the intestate laws of any state or territory,
or any personal property or interest therein, transferred by deed, grant, bargain,
sale, or gift, made or intended to take effect in possession or enjoyment after
the death of the grantor or bargainor, to any person or persons, or to any body
or bodies, politic or corporate, in trust or otherwise, shall be, and hereby are
made subject to a duty or tax, to be paid to the United States, as follows: that is
to say: Where the whole amount of said personal property shall exceed in value
ten thousand and shall not exceed in value the sum of twenty-five thousand
dollars the tax shall be.

First. Where the person or persons entitled to any beneficial interest in such
property shall be the lineal issue or lineal ancestor, brother or sister to the per-
son who died possessed of such property, as aforesaid, at the rate of seventy-
five cents for each and every hundred dollars of the clear value of such interest
in such property.

Second. Where the person or persons entitled to any beneficial interest in
such property shall be the descendant of a brother or sister of the person who
died possessed, as aforesaid, at the rate of one dollar and fifty cents for each
and every hundred dollars of the clear value of such interest.

Third. Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the father or mother, or a descendant
of a brother or sister of the father or mother, of the person who died possessed
as aforesaid, at the rate of three dollars for each, and every hundred dollars
of the clear value of such interest.

Fourth. Where the person or persons entitled to any beneficial interest in such
property shall be the brother or sister of the grandfather or grandmother, or a

1898.1 UNITED STATES. 1265

descendant of the brother or sister of the grandfather or grandmother, of the
person who died possessed as aforesaid, at the rate of four dollars for each and
every hundred dollars of the clear value of such interest.

Fifth. Where the person or persons entitled to any beneficial interest in such
property shall be in any other degree of collateral consanguinity than is herein-
before stated, or shall be a stranger in blood to the person who died possessed, as
aforesaid, or shall be a body politic or corporate, at the rate of five dollars for
each and every hundred dollars of the clear value of such interest: Provided,
That all legacies or property passing by will, or by the laws of any state or terri-
tory, to husband or wife of the person died possessed, as aforesaid, shall be
exempt from tax or duty.

Where the amount or value of said property shall exceed the sum of twenty-
five thousand dojlars, but shall not exceed the sum or value of one hundred thou-
sand dollars, the rates of duty or tax above set forth shall be multiplied by one
and one-half; and where the amount or value of said property shall exceed the
sum of one hundred thousand dollars, but shall not exceed the sum of five hundred
thousand dollars, such rates of duty shall be multiplied by two; and where
the amount or value of said property shall exceed the sum of five hundred thou-
sand dollars, but shall not exceed the sum of one million dollars, such rates of
duty shall be multiplied by two and one-half; and where the amount or value
of said property shall exceed the sum of one million dollars, such rates of duty
shall be multiplied by three.

A Legacy Tax. — History.

The United States statute of 1898 is upon legacies or distributive
shares and not upon the whole estate, as is shown further by the
history of legislation in this country. This statute was modeled
upon the statute of 1864, which was modeled upon the English
statutes, which were decided to be legacy taxes. Knowlton v.
Moore, 17-8 U. S. 41, 69, 20 S. Ct. 747, 44 L. Ed. 969.

An Excise and not a Direct Tax.

The United States statute of 1898 is not a direct tax, and subject
therefore to apportionment. The tax has at all times been con-
sidered as the antithesis of a direct tax, and as a duty or excise
because of the particular occasion which gives rise to its levy.
Knowlton v. Moore, 178 U. S. 41, 81, 20 S. Ct. 747, 44 L. Ed. 969.

Validity.

General Power of Congress.

It was claimed that as the tiansmission of property by death is
exclusively subject to the regulating authority of the several states,
therefore the levy by congress of a tax on inheritances of any kmd
is beyond the power of congress and is interference by the national

1266 STATUTES ANNOTATED. [U. S. St.

government with a matter which falls alone within the reach of state
legislation. The court states, however, that transmission of prop-
erty is a usual subject of taxation, and that the taxing power of
congress extends to all usual objects of taxation subject to the limita-
tions in the constitution.

The court points out that it is a fallacy to assume that the tax
on the transmission or receipt of property occasioned by death is
imposed on the exclusive power of the state to regulate the devo-
lution of property upon death. The subject of taxation is the
transmission or receipt, not the right existing to regulate. Knowl-
ton V. Moore, 178 U. S. 41, 59, 20 S. Ct. 747, 44 L. Ed. 969.

The court points out that under the American constitutional
system both the national and the state governments, moving in
their respective orbits, have a common authority to tax many and
diverse objects, but this does not cause the exercise of its lawful
attributes by one to be a curtailment of the powers of government
of the other. KnowUon v. Moore, 178 U. S. 41, 60, 20 S. Ct. 747,
44 L. Ed. 969.

Power to Tax Municipalities.

The federal congress has the power to impose a succession tax
upon a bequest to a municipal corporation of a state for a corporate
and public purpose and 4J. S. St. June 13, 1898, 30 Stat. 448, as
amended March 2, 1901, 31 Stat. 946,gives this authority. Snyder y.
Bettman, 190 U. S. 249, Fuller, White and Peckham, JJ., dissenting.

Gifts to States or Municipalities.

As congress has the power to tax successions, and the states have
the power, and such power of the states extends to bequests to the
United States, it follows that congress has the same power to tax
the transmission of property by legacy to states or their muni-
cipalities, and that the exercise of that power in neither case con-
flicts with the proposition that neither the federal nor the state
government can tax the property or agencies of the other, since the
txaes imposed are not upon the property but upon the right to
succeed to property. Snyder v. Bettman, 190 U. S. 249.

"The power to tax inheritances does not arise solely from the
power to regulate the descent of property, but from the general
authority to impose taxes upon all property within the jurisdiction
of the taxing power. It has usually happened that the power
has been exercised by the same government which regulates the
succession to the property taxed ; but this power is not destroyed

1898.] UNITED STATES. 1267

by the dual character of our government, or by the fact that under
our constitution the devolution of property is determined by the
laws of the several states." It was claimed that the authority to
lay a succession tax arose solely from the power to regulate the
descent of property. But the court replies that this proposition
proves too much, that a denial of the right to regulate successions
goes to the whole power of the government to impose a succession
tax. Snyder v. Bettman, 190 U. S. 249, 252.

Progressive Rate Upheld.

It was claimed that the progressive rate feature of the United
States of 1898 was so repugnant to fundamental principles of
equality and justice that the law should be held void, even
though it transgresses no express limitation in the constitution.

The court remarks, "The review which we have made exhibits
the fact that taxes imposed with reference to the ability of the
person upon whom the burden is placed to bear the same have
been levied from the foundation of the government. So, also,
some authoritative thinkers, and a number of economic writers,
contend that a progressive tax is more just and equal than a pro-
portional one. In the absence of constitutional limitation, the
question whether it is or is not is legislative and not judicial. The
grave consequences which it is asserted must arise in the future
if the right to levy a progressive tax be recognized involves in its
ultimate aspect the mere assertion that free and representative
government is a failure, and that the grossest abuses of power are
foreshadowed unless the courts usurp a purely legislative function.
If a case should ever arise, where an arbitrary and confiscatory
exaction is imposed bearing the guise of a progressive or any other
form of tax, it will be time enough to consider whether the judicial
power can afford a remedy by applying inherent and fundamental
principles for the protection of the individual, even though there
be no express authority in the constitution to do so. That the
law which we have construed affords no ground for the contention
that the tax imposed is arbitrary and confiscatory, is obvious."
Per White, J., in KnowUon v. Mocre, 178 U. S. 41, 109, 20 S. Ct.
747, 44 L. Ed. 969.

Uniformity.

The United States constitution, article 1, section 8, provides that
"duties, imposts and excises shall be uniform throughout the United
States." The court finds, considering the history of the clause and

1268 STATUTES ANNOTATED. [U. S. St.

the antecedent legislation, that "uniform" is confined to geo-
graphical uniformity. KnowUon v. Moore, 178 U. S. 41, 108, 20 S.
Ct. 747, 44 L. Ed. 969.

Transfers Affected.
Transactions on Consideration.

The words in the United States statute of 1898 ''deed, grant, bar-
gain, sale or gift" refer to transfers without consideration and
operative by way of gift and not transactions made in the ordinary
course of business upon a valuable consideration. So where a son
was in partnership with his father under a contract which provided
in part that on the father's death his interest in the partnership
should belong to the son, this is not a transfer taxable under the
United States statute of 1898, as the son has vested rights under
the partnership agreement during the life of the testator. Blair v.
Herold, 150 Fed. 199, affirmed in 86 C. C. A. 64, 158 Fed. 804.

Compromise.

Where there is a contest over a will and under the Massachusetts
statute the contest is settled by a compromise agreement for dis-
tribution and the will is never probated, the compromise is for the
purpose of the inheritance, tax the will under which the property
passed. McCoy v. Gill, 156 Fed. 985, C. C. A.

Property of Alien.

The court holds that United States statute of 1898 does not apply
to intangible personal property of a non-resident alien who never
had a domicile in the United States and died abroad, such personal
property being within the United States and having passed to his
son, also an alien domiciled abroad, as sole legatee and next-of-kin
of the deceased, partly under a will executed abroad and partly
under the intestate laws of Spain. There is no question of the
power of the legislature to tax the personal property of non-resi-
dents, but the question is of its intent to do so by the particular
act in question. As the property in this case did not pass under
any will executed in any state or territory of the United States or
by the intestate laws of any such state or territory, the case is not
within the literal words of the act unless the word "state" is used
in a sense broad enough to include a foreign state or territory.

The court finds that the English cases reach the conclusion that
under the general act imposing a duty upon legacies the law of

1898.] UNITED STATES. 1269

the domicile of the testator controls. If he be domiciled abroad,
whether an alien or a British subject, his legacies are exempt
whether the property be in England at the time of his death or be
subsequently sent there by his executors for local administration
and distribution. Eidman v. Martinez, 184 U. S. 578, 581, 22 S.
Ct. 515, 46 L. Ed. 697.

The court holds that property situated in this country belonging
to a non-resident decedent is not subject to the federal inheritance
tax of 1898, although the will was executed in New York in 1890,
during a temporary sojourn there. The court relies upon United
States V. Hunnewell, 13 Fed. Rep. 617. Moore v. Ruckgaber, 184
U. S. 593, 22 S. Ct. 521, 46 L. Ed. 705, affirming 104 Fed. 947, 31
Civ. Proc. 310.

It was suggested in the argument of Frederickson v. Louisiana
that the government of the United States is incompetent to regu-
late testamentary dispositions or laws of inheritance of foreigners
in reference to property within the states. The court observes that
the question is one of great magnitude and declines to consider it.
Frederickson v. State, 23 How. (U. S.) 445.

Limited to Wills Executed in this Country.

The words confining the application of the act to property passing
"either by will or by the intestate laws of any state or territory" —
the words, "passing by will," are limited to wills executed in "any
state or territory." Eidman v. Martinez, 184 U. S. 578, 590, 22 S.
Ct. 515, 46 L. Ed. 697, citing United States y . Hunnewell, 13 Fed. 617.

The attorney general had declined to rule on this question. See
23 Op. Att. Gen. 221 (September 7, 1900).

District of Columbia.

The United States statute of 1898 embraces the District of Co-
lumbia. KnowUon v. Moore, 178 U. S. 41, 20 S. Ct. 747, 44 L. Ed.
969.

BENEFICIARIES AFFECTED.
Annuity.

The testator provided that the trustee under a trust created by
him should pay from the trust including accumulations of income
as well as the corpus at the rate of $14,000 per year to certain per-
sons named ; and the court holds that this is a bequest of an annuity
and so is taxable and not as a bequest of income under the statute

1270 STATUTES ANNOTATED. [U. S. St

of 1898, section 29. Peck v. Kinney, 128 Fed. 313, reversed 143 Fed.
76, 74 C. C. A. 270.

Where the testator gave property in trust to pay to the bene-
ficiary $15,000 a year for life out of the whole income of the trust
estate, the specific payments only are taxable as they become due
under the United States statute of 1898 as amended in 1902; as
the statute provides that legacies are taxable only as they come to
the possession of the beneficiary. Disston v. McClain, 147 Fed. 114,
77 C. C. A. 340, reversing 143 Fed. 191.

To One on Reaching a Certain Age.

A legacy to a daughter when she is eighteen years old is contin-
gent and not subject to the United States tax of 1898, section 29.
Heherton v. McClain, 135 Fed. 226.

The same result was reached in Herold v. Shanley, 146 Fed. 20,
76 C. C. A. 478, affirming 141 Fed. 423 (N. J.).

Life Tenant a Legatee.

Where a trust fund is created to pay the income to F. and upon
his death the principal to be disposed of as part of the residue,
two. estates are created which pass under the statute — the life
estate and the remainder. The life tenant is to be regarded as a
legatee for the purpose of- the payment of the tax upon the life
estate under the United States statute of 1898. Fitzgerald v. Rhode
Island Hospital Trust Co., 24 R. L 59, 52 Atl. 814.

Lineal Issue. — Adopted Child.

Under the United States statute of 1898 an adopted child under
the law of her state, although she was to all intents and purposes
the child and legal heir of the testator, is still not a "lineal issue."
Kerr v. Goldshorough, 150 Fed. 289, 80 C. C. A. 177.

Son-in-law.

A legacy to a son-in-law is subject to the inheritance tax under
the statute of 1898, section 29, as he is not a blood relation. King
V. Eidman, 128 Fed. 815.

Trustee not a "Person Possessed."

Under the United States statute of 1898, section 29, a trustee,
who at the time of the passage of the act held personal property
upon a trust under a will to be distributed on a future date under
the will is not "a person possessed" of such property. Personal

1898.] UNITED STATES. 1271

estate passing under the intestate laws passes from the intestate
himself and never from the administrator. McClain v. Pennsylva-
nia Co, for Insurance and Annuities, 108 Fed. 618, 47 C. C. A. 529.

Remainders not Taxable Till They Fall into Possession.

The supreme court decides that future interests, whether vested
or contingent, were not taxable until they fell into possession, fol-
lowing the construction placed on numerous state statutes and the
earlier federal acts.

Sections 29 and 30 of United States statute of 1898 do not im-
pose any tax jupon a vested future interest before the period when
possession or enjoyment had attached. The practice under the
act of 1898 was to tax only beneficial interests where the right to
possess or enjoy had accrued. It was thought that the amendment
of March 2, 1901, 31 Stat. 946, changed this situation. The amend-
ments which the tax officials decided made vested interests subject
to taxation were that the tax or duty should be due and payable
within one year after the death of the decedent ; and that the ex-
ecutor, administrator or trustee should make the return of the estate
in his control within thirty days after taking charge.

The court holds, however, that these amendments did not jus-
tify the construction congress intended, oecause death duties
to become due whithin one year as to legacies and distribu-
tive shares were not capable of being immediately possessed
or enjoyed, and were therefore not subject to taxation under
the original act.

The testator died September 12, 1899, leaving a will by which he
placed the residue of his property in trust for the use of his son in a
spendthrift trust until he arrives at the age of twenty-one and there-
after to pay the income to him until he arrives at the age of thirty,
which would occur after 1902, when he shall be put in full posses-
sion of one-half the trust estate, the income from the balance to
be paid to the son until he shall reach the age of thirty-five, when
the balance of the trust estate shall be placed in his hands.

There is no authority under the United States statute of 1898 for
taxing the interest of the son conditioned on his attaining the ages
of thirty and thirty-five years respectively. It is therefore unnec-
essary to determine whether such interest was technically a vested
remainder or a contingent remainder. Siich an interest was de-
clared to be contingent in In re Tracy, 179 N. Y. 501. Vanderbilt
y.Eidman, 196 U. S. 480, 501, 25 S. Ct. 331, 49 L. Ed. 563.

1272 STATUTES ANNOTATED. , [U. S. St.

RATES.

Rate Determined by Size of Legacy.

The court points out the gross inequalities which would result
from a construction of the United States statute of 1898 that the
rate of tax is determined by the size of the estate rather than the
size of the legacy. The result would be that two persons receiving
the same legacy from estates of different sizes would pay a different
tax, and the court is bound to avoid a construction which would
occasion great inequality and injustice if possible. This appears
clear also from a comparison with the statute of 1864, and from the
text of the act itself. This is also clear from the title which describes
as subject to taxation "legacies and distributive shares of personal
property," and also appears by the opening words of section 29,
describing the tax as being upon "any interest which may have been
transferred by," etc. The provisions for collection of the tax con-
tained in section 30 of the act confirm the construction that the
passing of each legacy or distributive share, and not the entire per-
sonal estate, forms the subject of the tax. KnowUon v. Moore,
178 U. S. 41, 67, 20 S. Ct. 747, 44 L. Ed. 969.

Exemptions.

Construction of Exemptions^

"It is an old and familiar rule of the English courts, applicable
to all forms of taxation, and particularly special taxes, that the
sovereign is bound to express its intention to tax in clear and unam-
biguous language, and that a liberal construction be given to words
of exception confining the operation of duty" ... "though
the rule regarding exemptions from general laws imposing taxes
may be different." Per Brown, J., in Eidman v. Martinez, 184 U. S.
578, 583, 22 S. Ct. 515, 46 L. Ed. 697.

Legacies exceeding $10,000.

The tax is upon such legacies and distributive shares arising from
personal property as exceed ten thousand dollars in actual value,
and net upon the gross amount of the estate. 22 Op. Att. Gen. 298
(January 5, 1899).

Federal Bonds.

The United States statute of 1898 is valid and the legacy tax
can be imposed even although the legacies are composed of federal
bonds. The court holds that the exempting clauses in the statutes

1898.] UNITED STATES. 1273

and on the face of the bonds do not mean that "a state or the United
States may not tax inheritances and legacies, regardless of the
character of the property of which they are composed. That some
of the holders of United States bonds may have paid franchise taxes
to the states, and others may have paid state or federal inheritance
and legacy taxes, has nothing to do with the contract between the
United States and the bondholders. The United States will have
complied with their contract when they pay to the original holders
of their bonds, or to their assigns, the interest when due, in full, and
the principal, when due, in full." Per Shiras, J., in Murdoch v.
Ward, 178 Ur S. 139, 148, 20 S. Ct. 775, 44 L. Ed. 1009.

30 U. S. St., p. 464 (Statute of June 13, 1898). Approved and to take effect
June 13, 1898.
S. 30. Collection. That the tax or duty aforesaid shall be a lien and charge
upon the property of every person who may die as aforesaid for twenty years,
or until the same shall, within that period, be fully paid to and discharged by
the United States; and every executor, administrator, or trustee, before pay-
ment and distribution to the legatees, or any parties entitled to beneficial interest
therein, shall pay to the collector or deputy collector of the district of which
the deceased person was a resident the amount of the duty or tax assessed upon
such legacy or distributive share, and shall also make and render to the said col-
lector or deputy collector a schedule, list, or statement, in duplicate, of the
amount of such legacy or distributive share, together with the amount of duty
which has accrued, or shall accrue, thereon, verified by his oath or affirmation
to be administered and certified thereon by some magistrate or officer having
lawful power to administer such oaths, in such form and manner as may be
prescribed by the Commissioner of Internal Revenue, which schedule, list, or state-
ment shall, contain the names of each and every person entitled to any beneficial
interest therein, together with the clear value of such interest, the duplicate
of which schedule, list, or statement shall be by him immediately delivered, and
the tax thereon paid to such collector; and upon such payment and delivery of
such schedule, list, or statement said collector or deputy collector shall grant to
such person paying such duty or tax a receipt or receipts for the same in duplicate
which shall be prepared as hereinafter provided. Such receipt or receipts, duly
signed and delivered by such collector or deputy collector, shall be sufficient
evidence to entitle such executor, administrator, or trustee to be credited and al-
lowed such payment by every tribunal which, by the laws of any state or terri-
tory, is, or may be, empowered to decide upon and settle the accounts of execu-
tors and administrators. And in case such executor, administrator, or trustee
shall refuse or neglect to pay the aforesaid duty or tax to the collector or deputy
collector, as aforesaid, within the time hereinbefore provided, or shall neglect
or refuse to deliver to said collector or deputy collector the duplicate of the
schedule, list, or statement of such legacies, property, or personal estate, under
oath, as aforesaid, or shall neglect or refuse to deliver the schedule, list, or state-
ment, of such legacies, property, or personal estate, under oath, as aforesaid,
or shall deliver to said collector or deputy collector a false schedule or state-

1274 STATUTES ANNOTATED. [U. S. St.

merit of such legacies, property, or personal estate, or give the names and rela-
tionship of the persons entitled to beneficial interests therein untruly, or shall
not truly and correctly set forth and state therein the clear value of such bene-
ficial interest, or where no administration upon such property or personal estate
shall have been granted or allowed under existing laws, the collector or deputy
collector shall make out such lists and valuation as in other cases of neglect or
refusal, and shall assess the duty thereon; and the collector shall commence
appropriate proceedings before any court of the United States, in the name of
the United States, against such person or persons as may have the actual or
constructive custody or possession of such property or personal estate, or any
part thereof, and shall subject such property or personal estate, or any portion
o!f the same, to be sold upon the judgment of decree of such court, and from the
proceeds of such sale the amount of such tax or duty, together with all costs
and expenses of every description to be allowed by such court, shall be first
paid, and the balance, if any, deposited according to the order of such court, to
be paid under its direction to such person or persons as shall establish title to
the same. The deed or deeds, or any proper conveyance of such property or per-
sonal estate, or any portion thereof, so sold under such judgment or decree,
executed by the officer lawfully charged with carrying the same into effect,
shall vest in the purchaser thereof all the title of the delinquent to the property or
personal estate sold under and by virtue of such judgment or decree, and shall
release every other portion of such property or personal estate from the lien
or charge thereon created by this act. And every person or persons who shall
have in his possession, charge, or custody any record, file, or paper containing,
or supposed to contain, any information concerning such property or personal
estate, as aforesaid, passing from any person who may die, as aforesaid, shall
exhibit the same at the request of the collector or deputy collector of the dis-
trict, and to any law officer of the United States, in the performance of his duty
under this act, his deputy or agent, who may desire to examine the same. And if
any such person, having in his possession, charge, or custody any such records,
files, or papers, shall refuse or neglect to exhibit the same on request, as aforesaid
he shall forfeit and pay the sum of five hundred dollars; Provided, That in all
legal controversies where such deed or title shall be the subject of judicial investi-
gation, the recital in said deed shall be prima facie evidence of its truth, and that
the requirements of the law had been complied with by the officers of the govern-
ment.

APPRAISAL.
Appraisal of Life Interest after Death of Life Tenant.

Where a life tenant had died before the assessment of the tax on
his interest mortality tables should not be used in assessing the
value of the interest. Kahn v. Herold, 147 Fed. 575, affirmed in
86 C. C. A. 598, 159 Fed. 608, 163 Fed. 947.

Remainder after Death or Remarriage.

To appraise an interest after the death or remarriage of the
widow mortuary tables should not be used. While the probability

1901.] UNITED STATES. 1275

of death may be estimated from these tables, there are no statistics
available from which the probability of remarriage may even be
conjectured. Herold v. Shanley, 146 Fed. 20, 76 C. C. A. 478, affirm-
ing 141 Fed. 423 (N. J.).

Purchase money mortgages constitute a debt of the estate to
be deducted from the residuary legacy in assessing the inheritance
tax. Brown v. Kinney, 128 Fed. 310, reversed on another point in
137 Fed. 1018.

THE AMENDMENT OF 1901.

31 U. S. St., p., 946 (Statute of March 2, 1901, s. 10).

S. 10. That section twenty-nine of said act is hereby amended by adding
at the end of said section the following: "Provided, That nothing in this section
shall be construed to apply to bequests or legacies for uses of a religious, literary,
charitable, or educational character, or for the encouragement of art, or to legacies
or bequests to societies for the prevention of cruelty to children, including all
bequests or legacies of such character on which the tax imposed had not been
paid or collected on the first day of March, nineteen hundred and one: And pro-
vided further. That the provisions of this act and of the act hereby amended shall
not be held to apply to any estate where the testator or intestate died before
June thirteenth, eighteen hundred and ninety-eight," so that said section as
amended shall read as follows: —

S. 11. That section thirty of said act is hereby amended so as to read as fol-
lows : —

"S. 30. That the tax or duty aforesaid shall be due and payable in one year
after the death of the testator and shall be a lien and charge upon the property
of every person who may die as aforesaid for twenty years, or until the same
shall, within that period, be fully paid to and discharged by the United States;
and every executor, administrator, or trustee having in charge or trust any
legacy or distributive share, as aforesaid, shall give notice thereof, in writing,
to the collector or deputy collector of the district where the deceased grantor or
bargainor last resided within thirty days after he shall have taken charge of
such trust, and every executor, administrator, or trustee, before payment and
distribution to the legatees, or any parties entitled to beneficial interest therein,
shall pay to the collector or deputy collector of the district of which the deceased
person was a resident, or in which the property was located in case of non-resi-
dents, the amount of the duty or tax assessed upon such legacy or distributive
share, and shall also make and render to the said collector or deputy collector a
schedule, list, or statement, in duplicate, oi the amount of such legacy or distribu-
tive share, together with the amount of duty which has accrued, or shall accrue,
thereon, verified by his oath or affirmation, to be administered and certified
thereon by some magistrate or officer having lawful power to administer such
oaths, in such form and manner as may be prescribed by the Commissioner of
Internal Revenue, which schedule, list, or statement shall contain the names
of each and- every person entitled to any beneficial interest therein, together
with the clear value of such interest, the duplicate of which schedule, list, or
statement shall be by him immediately delivered, and the tax thereon paid to

1276 STATUTES ANNOTATED. [U. S. St.

such collector; and upon such payment and delivery of such schedule, list, or
statement said collector or deputy collector shall grant to such person paying
such duty or tax a receipt or receipts for the same in duplicate, which shall be
prepared as hereinafter provided. Such receipt or receipts, duly signed and de-
livered by such collector or deputy collector, shall be sufficient evidence to entitle
such executor, administrator, or trustee to be credited and allow such pay-
ment by every tribunal which, by the laws of any state or territory, is, or may be,
empowered to decide upon and settle the accounts of executors and adminis-
trators. And in case such executor, administrator, or trustee shall refuse or
neglect to pay the aforesaid duty or tax to the collector or deputy collector, as
aforesaid, within the time hereinbefore provided, or shall neglect or refuse to deliver
to said collector or deputy collector the duplicate of the schedule, list, or state-
ment of such legacies, property, or personal estate, under oath, as aforesaid, or
shall neglect or refuse to deliver the schedule, list, or statement of such legacies,
property, or personal estate, under oath, as aforesaid, or shall deliver to said
collector or deputy collector a false schedule or statement of such legacies, prop-
erty, or personal estate, or give the names and relationship of the persons entitled
to beneficial interests therein untruly, or shall not truly and correctly set forth
and state therein the clear value of such beneficial interest or where no adminis-
tration upon such property or personal estate shall have been granted or allowed
under existing laws, the collector or deputy collector shall make out such lists
and valuation as in other cases of neglect or refusal, and shall assess the duty
thereon; and the collector shall commence appropriate proceedings before any
court of the United States, in the name of the United States, against such person
or persons as may have the actual or constructive custody or possession of such
property or personal estate, or any part thereof, and shall subject such property
or personal estate, or any portion of the same, to be sold upon the judgment or
decree of such court, and from the proceeds of such sale the amount of such tax
or duty, together with all costs and expenses of every description to be allowed by
such court, shall be first paid, and the balance, if any, deposited according to
the order of such court, to be paid under its direction to such person or persons
as shall establish title to the same. The deed or deeds, or any proper conveyance
of such property or personal estate, or any portion thereof, so sold under such
judgment or decree, executed by the officer lawfully charged with carrying the
same into effect, shall vest in the purchaser thereof all the title of the delinquent
to the property or personal estate sold under and by virtue of such judgment
or decree, and shall release every other portion of such property or personal
estate from the lien or charge thereon created by this act. And every person
or persons who shall have in his possession, charge, or custody any record, file,
or paper containing, or supposed to contain, any information concerning such
property or personal estate, as aforesaid, passing from any person who may die,
as aforesaid, shall exhibit the same at the request of the collector or deputy
collector of the district, and to any law officer of the United States, in the per-
formance of his duty under this act, his deputy or agent, who may desire to ex-
amine the same. And if any such person, having in his possession, charge, or cus-
tody, any such records, files, or papers, shall refuse or neglect to exhibit the
same on request, as aforesaid, he shall forfeit and pay the sum of five hundred
dollars: Provided, That in all legal controversies where such deed or title shall
be the subject of judicial investigations, the recital in said deed shall be prima

1901.] UNITED STATES. 1277

jade evidence of its truth, and that the requirements of the law had been com-
plied with by the officers of the government. And provided further, That in case
of wilful neglect, refusal, or false statement by such executor, administrator, or
trustee, as aforesaid, he shall be liable to a penalty of not exceeding one thousand
dollars, to be recovered with costs of suit. Any tax paid under the provisions
of sections twenty-nine and thirty shall be deducted from the particular legacy
or distributive share on account of which the same is charged."

REPEAL OF 1902.

32 U. S. St. (Statute of April 12, 1902, s. 7) repeals the legacy taxes.

S. 8. That all taxes or duties imposed by section twenty-nine of the Act of
June thirteenth, eighteen hundred and ninety-eight, and amendments thereof,
prior to the taking effect of this act, shall be subject, as to lien, charge, collec-
tion and otherwise, to the provisions of section thirty of said Act of June thir-
teenth, eighteen hundred and ninety-eight, and amendments thereof, which are
hereby continued in force, as follows: —

When Tax is **Imposed."

Where Testator Died within One Year before Repeal.

Where the testator died March 15, 1902, leaving a will which was
probated May 3, 1902, and where the legacies were not paid before
1905, the court holds that they are subject to the statute of 1898;
that the tax was imposed on an immediate right of possession or
enjoyment during the operation of the statute of 1898 in such sense
as to be within the intent of the saving clause of the repealing statute.

The court concludes that upon the passing by death of a vested
right to the immediate possession or enjoyment of a legacy or dis-
tributive share there was imposed the tax or duty exacted upbn
every such right of succession which was saved by the saving clause
of the repealing act.

The fact that under the statute of 1898 the tax was not due and
payable for a year after the death of the testator does not free the
estate from the tax. Hertz v. Woodman, 218 U. S. 205, 30 S. Ct. 621.

This case would seem to supersede the following cases, which
appear to hold that no tax can be levied where the testator died
within one year before the repeal of the inheritance tax: United
States v. Marion Trust Co., 205 U. S. 539, 27 S. Ct. 794, 51 L. Ed.
119, affirming 142 Fed. 120, 73 C. C. A. 610, 135 Fed. 866, 127 Fed.
386. McCoach v. Bamberger, 161 Fed. 90, affirming 142 Fed. 120,
73 C. C. A. 610. See Tilghman v. Eidman, 131 Fed. 651. affirmed
in 203 U. S. 580, 27 S. Ct. 779.

1278 STATUTES ANNOTATED. [U. S. St.

fore subject to the inheritance tax. The tax was "imposed" by the
statute itself at the time of vesting without reference to the time
of payment or to its assessment. Westhus v. St. Louis Union Trust
Co., 164 Fed. 795, 90 C. C. A., 441 168 Fed. 617.

Where Estate Unsettled.

The testator died in 1900, but owing to a dispute among heirs and
to the pendency of unsettled claims the estate was not distributed
until after the passage of the repealing act; and pending adminis-
tration no effort was made by the government to assess the tax
upon the estate. Under these circumstances no tax or duty had
been "imposed" under the act of 1898 before the repealing statute,
and therefore the legacy is not subject to tax. United States v.
Marion Trust Co., 143 Fed. 301, 74 C. C. A. 439, affirmed in 205
U. S. 539, 27 S. Ct. 794, 51 L. Ed. 1191.

Income not Due.

Where legatees were entitled under a will to receive the income only
when they reached certain ages after July 1, 1902, when the statute
of 1898 was repealed, such income is not subject to tax. Union
Trust Co. of San Francisco v. Lynch, 148 Fed. 49, affirmed 164 Fed.
161.

REFUNDING.

32 U. S. St., p. 406 (Statute of June 27, 1902).

An Act to provide for refunding taxes paid upon legacies and be-
quests for uses of a religious, charitable, or educational character, for the
encouragement of art, and so forth, under the Act of June thirteenth,
eighteen hundred and ninety-eight, and for other purposes.

S. 1. Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled. That the Secretary of the Treasury,
under appropriate rules and regulations to be prescribed by him, be, and he is
hereby, authorized and directed to pay, out of any money in the treasury not
otherwise appropriated, to the corporations, associations, societies, or individuals
as trustees or executors, such sums of money as have been paid by them as taxes
upon bequests or legacies for uses of a religious, literary, charitable, or educa-
tional character, or for the encouragement of art, or legacies or bequests to
societies for the prevention of cruelty to children, under the provisions of section
twenty-nine of the Act entitled "An Act to provide ways and means to meet war
expenditures, and for other purposes," approved June thirteenth, eighteen hun-
dred and ninety-eight.

S. 3. That in all cases where an executor, administrator, or trustee shall
have paid, or shall hereafter pay, any tax upon any legacy or distributive share of

1902.] UNITED STATES. 1279

personal property under the provisions of the Act approved June thirteenth,
eighteen hundred and ninety-eight, entitled "An Act to provide ways and means
to meet war expenditures, and for other purposes," and amendments thereof, the
secretary of the treasury be, and he is hereby, authorized and directed to refund,
out of any money in the treasury not otherwise appropriated, upon proper
application being made to the Commissioner of Internal Revenue, under such
rules and regulations as may be prescribed, so much of said tax as may have been
collected on contingent beneficial interests which shall not have become vested
prior to July first, nineteen hundred and two. And no tax shall hereafter be
assessed or imposed, under said act approved June thirteenth, eighteen hundred
and ninety-eight, upon or in respect of any contingent beneficial interest which
shall not become absolutely vested in possession or enjoyment prior to said July
first, nineteen hundred and two.

On Contingent Beneficial Interests.

This statute was declaratory of the construction of the act of 1898
as amended in 1901 placed upon it by the court that remainder
interests are not taxable until possession is taken. Vanderhilt v.
Eidman, 196 U. S. 480, 25 S. Ct. 331, 49 L. Ed. 563.

The testator died January 5, 1901, after making a will which
left property to the trustees in trust to pay the income to the daugh-
ters of the testator for life, and on her death leaving to the issue,
and in default of issue to the testator's heirs; the interests created
are vested and subject to tax. Chouteau v. Allen, 95 C. C. A. 582,
170 Fed. 412, relying upon Westhus v. Union Trust Company, 164
Fed. 795, 168 Fed. 617.

Where property is placed in trust to pay to the widow a certain
annual income and pay the balance to the children, the corpus to
be divided among the children, the children have a vested estate
in the testator's residuary estate but not in the portion of the estate
set apart for the benefit of the widow for her life. Title Guarantee
& Trust Co. V. Ward, 164 Fed. 459. See Brown v. Kinney, 128 Fed.
310, reversed 137 Fed. 1018, 70 C. C. A. 679, on the authority
of Vanderhilt v. Eidman, 196 U. S. 480, 25 S. Ct. 331, 49 L. Ed. 563.

Payment in Ignorance.

Where a tax was paid by executors in ignorance of the fact that
the life tenancy upon which the tax they were paying had been
assessed had been terminated by the death of the life tenant before
the assessment was made — this is not a voluntary payment; as
to constitute a voluntary payment it mXist be made with full
knowledge of all the facts and circumstances. Kahn v. Herold,
147 Fed. 575, affirmed in 86 C. C. A. 598, 159 Fed. 608, 163 Fed. 947.

1280 STATUTES ANNOTATED. [U. S. St.

Limitations.

United States Revised Statutes, section 3228, limiting the time
for presenting claims for refund of revenue taxes has no application
to a claim for the refunding of inheritance taxes illegally collected
under the statute of 1898. Thacher v. United States, 149 Fed 902.

Interest.

Interest may be allowed in a suit to recover legacy taxes paid,
as it is not in form an action against the United States. Kinney v,
Conant, 166 Fed. 720, 92 C. C. A. 410.

Practice on Refunding.

The tax was paid on demand under written protest, giving the
grounds for refusal the case arising under the United StatesRevenue
Act, the testator being domiciled in New York State. On denial
of a petition for refunding, action was brought in the U. S.
Circuit Court. Knowlton v. Moore, 178 U. S. 41, 47, 20 S. Ct. 747,
44 L. Ed. 969.

High V. Coyne, 178 U. S. Ill, follows Knowlton v. Moore, 178 U. S.
41, and holds that the interpretation of the statute which was held
to be unsound in Knowlton v. Moore was adopted and enforced by
the officers charged with the administration of the law. The ends
of justice, therefore, require that the interpretation of the statute
should not be foreclosed by the decree of the court, although there
is nothing in the record to enable the court to say that the statute
was by the collector mistakingly construed. High v. Coyne, 178
U. S. 111. Fidelity Insurance Co. v. McCl,ain, 178 U. S. 113.

Where it appears by the record that the tax actually levied and
paid on legacies under the United States inheritance law were
computed upon the mistaken assumption that the amount of the
estate of the testatrix was the measure of the tax and not the amount
of the respective legacies, the taxpayer is entitled to be repaid the
excess this imposed upon his legacy. Sherman v. United States,
178 U. S. 150. 152.

TABLES,

States with an Inheritance Tax Law. States which Tax

Direct Inheritances. States which Tax

Collateral Inheritances.

c^„«.^ . Inheritance Direct Collateral

**^**®* tax law? inht. tax? inht. tax?

Alabama No No No

Arizona No No No

Arkansas . Yes Yes Yes

California Yes Yes Yes

Colorado Yes Yes Yes

Connecticut : Yes Yes Yes

Delaware Yes No Yes

District of Columbia No No No

Florida No No No

Georgia No No No

Hawaii Yes Yes Yes

Idaho Yes Yes Yes

Illinois Yes Yes Yes

Indiana No No No

Iowa . . . Yes No Yes

Kansas* Yes Yes Yes

Kentucky Yes No Yes

Louisiana Yes Yes Yes

Maine Yes Yes Yes

Maryland Yes No Yes

Massachusetts Yes Yes Yes

Michigan Yes Yes Yes

Minnesota Yes Yes Yes

Mississippi No No No

Missouri Yes No Yes

Montana Yes Yes Yes

Nebraska Yes Yes Yes

Nevada No No No

New Hampshire . Yes No Yes

New Jersey Yes No Yes

1282 TABLES.

Inheritance

State. tax law?

New Mexico No

New York Yes

North Carolina Yes

North Dakota Yes

Ohio Yes

Oklahoma Yes

Oregon Yes

Pennsylvania Yes

Porto Rico Yes

Rhode Island No

South Carolina No

South Dakota Yes

Tennessee Yes

Texas Yes

Utah Yes

Vermont Yes

Virginia Yes

Washington Yes

West Virginia Yes

Wisconsin Yes

Wyoming Yes

Direct
inht. tax?

Collateral
inht. tax?

Yes

• Yes

Yes

RATES AND EXEMPTIONS.

1283

RATES AND EXEMPTIONS,

Direct Inheritances.

Collateral Inheritances.

Rate

Exemption

Rate

Exemption

Alabama 1 . .

Not taxed

Arizona. . . .

Not taxed

Arkansas*

$5,000

2-6%

$1,000-2,000

California. .

1-5%

10,000-24,000

2y2-25%

500-2,000

Colorado. . .

10,000

3-10%

500

Conn.* a. . .

10,000

500

Delaware . .

. .

Not taxed

1-5%

500

Dist.ofCol.

Not taxed

Florida ....

Not taxed

. .

Not taxed

Georgia. . . .

Not taxed

. .

Not taxed

Hawaii ....

1,000

500

Idaho

1-3%

4,000-10,000

lH-15%

500-2,000

Illinois ....

1-2%

20,000

2-10%

500-2,000

Indiana. . . .

Not taxed

Iowa* b . . .

Not taxed

1,000

Kansas ....

1-5%

5,000

3-15%

0-1,000

Kentucky . .

Not taxed

500

Louisiana c.

^ 2%

10,000

Nothing

Maine ....

1-2%

500-10,000

4-7%

500

Maryland*

. .

Not taxed

500

Mass

1-2%

1,000-10,000

3-5%

1,000

Michigan . .

2,000

100

Minn

i^H%

3,000-10,000

3-15%

100-1,000

Mississippi

Not taxed

. .

Not taxed

Missouri

Not taxed

Nothing

Montana* .

7,500

500

Nebraska . .

10,000

2-6%

500-2,000

Nevada

Not taxed

. .

Not taxed

New Hamp.

, .

Not taxed

Nothing

New Jersey

. .

Not taxed

500

New Mex. .

Not taxed

•

Not taxed

New York .

1-4%

5,000

5-8%

1,000

N. Caro. d .

H7o

2,000

lJ^-15%

2,000

1284

TABLES.

Direct Inheritances.

Collateral

Inheritances.

N. Dakota

Not taxed

25,000

Ohio*

Not taxed

200

Oklahoma e

5,000-10,000

l>^-5%

100-500

Oregon / . .

5,000

2-6%

500-2,000

Penn

Not taxed

250

Porto Rico

1-3%

200

3-9%

200

R. Island . .

. ,

Not taxed

S. Carolina.

, ,

Not taxed

. .

Not taxed

S. Dakota .

5,000-20,000

2-10%

100-500

Tennessee*

1-1M%

5,000

250

Texas

Not taxed

2-12%

500-2,000

Utah* ....

10,000

Vermont . .

. .

Not taxed

Nothing

Virginia . . .

. .

Not taxed

Nothing

Washington*

10,000

3-12%

Nothing

W. Virginia

1-3%

10,000-15,000

3-15%

Nothing

Wisconsin . .

1-3%

2,000-10,000

lJ^-15%

100-500

Wyoming*

10,000

500

* The exemption in the states marked with an asterisk has been construed to
apply to the estate as a whole rather than to individual shares.

a. Connecticut — For non-residents, exemption varies according to portion
of estate within the state.

h. Iowa taxes non-resident aliens 10-20%.

c. Louisiana exempts property that bore its just proportion of taxes during
owner's life.

d. North Carolina — Exempts husband or wife.

e. Oklahoma — The tax increases progressively so that a litera-1 construction
would result in confiscation of all in excess of certain amounts in large estates.

/. Oregon — Exempts entire estate if less than $10,000; direct; $500 to $5,000
collateral.

CORPORATION TAX.

1285

States which tax Stock of Domestic Corporations owned
by Non-residents. States which tax Stock owned
by Non-residents of Foreign Corporations
owning property within State.^

Alabama

Arizona

Arkansas

California t .......

Coloradot**

Connecticut t

Delaware

Florida

Georgia

Idahot

lUinoisJ

Indiana

lowaj

Kansastf *

Kentuckyt

Louisiana

Mainet^

Maryland

MassachusettsJ . . .

Michigan t**

Minnesotal

Mississippi

Missourit

Montanal

NebraskaJ

Nevada

New Hampshire t**

New Jerseyt

New Mexico

Are shares

of non-residents

in local corp.

subject to tax?

Yes

No§

Yes

Not

No§

Yes

Is tax claimed on

stock of foreign

Corp. owning

prop, in state?

No
No

Yes
No
Yes
No

Yes

No
No
No
No
No
Yes

Yes

1286

TABLES.

New York *

North Carolina t
North Dakota .

Ohio

Oklahomat** . .

Oregont

Pennsylvania t .
Rhode Island . . .
South Carolina .
South Dakota t •

Tennessee {

Texas

Utaht

VermontJ** . . .

Virginia

Washington t . .
West Virginia t .

Wisconsin t

Wyoming t . . . .

Are shares

of non-residents

in local corp.

subject to tax?

Is tax claimed on

stock of foreign

Corp. owning

prop, in state?

Yes

Not

Yes

♦

Not

No§

Not

Yes

♦

Yes

.♦

Yes

Not

* This question does not seem to have been raised or passed upon in the states
marked with an asterisk.

t Under substantially similar laws, other states are taxing such stock. In the
states so marked, however, no claim is made for such a tax, or else there is no
effective method provided for collecting it.

§ In the states so marked it was apparently the opinion of their tax officials
in 1910 that they were. not entitled to collect such a tax, and we do not know
that the law is now being construed differently. Their laws, however, are
practically identical with the laws of states which claim this tax and moreover
contain a provision for enforcing its collection.

t In states so marked a corporation transferring stock or delivering securities
is held responsible itself, if the inheritance tax has not been paid.

** These states also tax registered bonds of local corporations owned by non-
residents.

^ The New York courts have laid down the rule that the location of the prop-
erty of, the corporation cannot be the basis for jurisdiction to tax succession in its
stock. In re Palmer, 183 N. Y. 238, 241, 76 N. E. 16, affirming 102 N. Y. App.
Div. 616, 92 N. Y. Suppl. 1137.

2 Maine does not tax stock owned by non-residents in Maine corporations
which have less than $1,000 of property in the state of Maine.

•New York classifies personal property as "tangible" or "intangible."

LIST OF CORPORATIONS. 1287

LIST OF CORPORATIONS.

The following is a list of the more important corporations
whose securities are listed on the various stock exchanges, showing
the state or states in which they are incorporated. Those marked
with an asterisk (*) are not corporations, but joint stock companies
or voluntary associations.

State where incorp.
Name of Company. or organized.

Adams Express Co N. Y. *

Adventure Consolidated Copper Co Mich.

Algomah Mining Co Mich.

Allis-Chalmers Co.. N. J.

AUouez Mining Co Mich.

Amalgamated Copper Co N.J.

American Agricultural Chemical Co. (The) Conn.

American Beet Sugar Co N.J.

American Brake Shoe & Foundry Co N. J.

American Can Co N. J.

American Car & Foundry Co N. J.

American Cotton Oil Co. (The) N. J.

American Express Co N. Y.*

American Hide & Leather Co N. J.

American Ice Securities Co N. J.

American Light & Traction Co N.J.

American Linseed Co N. J.

American Locomotive Co N. Y.

American Malt Corp N.J.

American Pneumatic Service Co Del.

American Radiator Co N.J.

American Sewer Pipe Co N.J.

American Shipbuilding Co N.J.

American Smelters Securities Co N.J,

American Smelting & Refining Co N.J.

American Snuff Co • N . J .

American Steel Foundries Co ...N.J.

American Sugar Refining Co. (The) N.J.

1288 TABLES.

American Telephone & Telegraph Co N. Y.

American Tobacco Co. (The) N.J.

American Type Founders Co N.J.

American Woolen Co N.J.

American Writing Paper Co N.J.

American Zinc, Lead & Smelting Co Me.

Amoskeag Manufacturing Co N. H.

Anaconda Copper Mining Co Mont.

Ann Arbor Railroad Co Mich.

Arizona Commercial Copper Co Me.

Arnold Mining Co Mich.

Associated Merchants Co Conn,

Associated Oil Co Cal.

Atchison, Topeka & Santa Fe Railway Co. (The) Kan.

Atlantic Coast Line Railroad Co Va.

Atlantic, Gulf & West Indies Steamship Lines Me.

Atlantic Mining Co Mich.

Baltimore & Ohio Railroad Co. (The) Md., Va.

Batopilas Mining Co. (The) N, Y.

Bethlehem Steel Corp : N.J.

Bonanza Development Co Colo.

Boston & Albany Railroad Co Mass., N. Y.

Boston & Corbin Copper & Silver Mining Co Me.

Boston & Lowell Railroad Co Mass.

Boston & Maine Railroad Co Mass., N. H., Me.

Boston & Northern Street Railway Co Mass.

Boston & Providence Railroad Corp Mass.

Boston Elevated Railway Co Mass.

Boston, Revere Beach & Lynn Railroad Co Mass.

Brill (J. G.) Co. (The) Pa.

Brooklyn Rapid Transit Co N. Y.

Brooklyn Union Gas. Co. (The) N. Y.

Buffalo, Rochester & Pittsburgh Railway Co N. Y., Pa.

Butte-Ballaklava Copper Co Ariz.

Butte CoaHtion Mining Co N. J.

Butterick Co. (The) N. Y.

Calumet & Arizona Mining Co Ariz.

Calumet & Hecla Mining Co. . . .• Mich.

Cambria Steel Co Pa.

Canada Southern Railway Co Dom. of Canada

Canadian Pacific Railway Co Dom. of Canada

LIST OF CORPORATIONS. 1289

Capital Traction Co. (The) Dist. of Columbia

Centennial Copper Mining Co Mich

Central Coal & Coke Co .Mo.

Central of Georgia Railway Co Ga.

Central Leather Co j^ j

Central Pacific Railway Co Utah

Central Railroad of New Jersey N. J.

Central & South American Telegraph Co N. Y.

Central Vermont Railway Co Vt.

Chesapeake & Ohio Railway Co. (The) Va.

Chicago & Alton Railroad Co 111.

Chicago & Eastern Illinois Railroad Co 111.

Chicago & Northwestern Railway Co 111., Wis., Mich.

Chicago, Burlington & Quincy Railroad Co 111.

Chicago Great Western Railroad Co 111.

Chicago Junction Railways & Union Stock Yards Co.

(The) N.J.

Chicago, Milwaukee & St. Paul Railway Co Wis.

Chicago Pneumatic Tool Co N. J.

Chicago Railways Co III.

Chicago, St. Paul, Minneapolis & Omaha Railway Co. . Wis.

Chicago Subway Co N. J.

Chicago Telephone Co 111.

Cincinnati, Hamilton & Dayton Railway Co. (The) . . . Ohio
Cleveland, Cincinnati, Chicago & St. Louis Railway Co.

Ohio & Ind.

Colorado Fuel & Iron Co. (The) Colo.

Colorado & Southern Railway Co. (The) Colo.

Columbus & Hocking Coal & Iron Co Ohio

Commonwealth Edison Co III.

Concord & Montreal Railroad Co. (B. &.M.) N. H.

Connecticut & Passumpsic Rivers Railroad Co.

(B. &M.) Vt.

Connecticut River Railroad Co. (B. & M.) Mass., N. H.

Consolidated Gas Co N. Y.

Consolidated Mercur Gold Mines Co N. J.

Consolidation Coal Co. (The) Md.

Copper Range Consolidated Co N. J.

Corn Products Refining Co N. J.

Cramp & Sons Ship & Engine Building Co. (The Wm.) Pa.
Crex Carpet Co ^^^-

1290 TABLES.

Crucible Steel Co. of America N. J.

Cuban-American Sugar Co. (The) N.J.

Cumberland Telephone & Telegraph Co Ky.

Daly West Mining Co Col.

Delaware & Hudson Co. (The) N. Y.

Delaware, Lackawanna & Western Railroad Co. (The) . Pa.

Denver & Rio Grande Railroad Co Col.&Utah

Detroit United Railway Co Mich.

Diamond Match Co. (The) 111.

Distillers Securities Corp N. J.

Dominion Coal Cos., Ltd Nova Scotia

Dominion Iron & Steel Co., Ltd Nova Scotia

Draper Co Me.

Duluth, South Shore & Atlantic Railway Co Mich., Wis.

Duluth-Superior Traction Co. (The) Conn.

Du Pont (E. I.) De Nemours Powder Co N. J.

East Boston Co Mass.

East Butte Copper Mining Co. (The) Ariz.

Eastern Steamship Co Me.

Eastman Kodak Co N.J.

Exiison Electric Illuminating Co. (The) Mass.

Electric Storage Battery Co. (The) N.J.

Elgin National Watch Co 111.

Erie Railroad Co N. Y.

Federal Mining & Smelting Co Del.

Fitchburg Railroad Co Mass., N. H., Vt. & N. Y.

Franklin Mining Co Mich.

Galveston-Houston Electric Co Me.

General Asphalt Co. • N.J.

General Chemical Co N. Y.

General Electric Co N. Y.

General Motors Co N.J.

Giroux Consolidated Mines Co Del.

Goldfield Consolidated Mines Co. (The) Wyo

Granby Consolidated Mim'ng, Smelting & Power Co.,

Ltd. (The) Brit. Col.

Gre^t Northern Iron Ore Properties Minn.*

Great Northern Railway Co Minn.

Greene Cananea Copper Co Minn.

Hancock Consolidated Mining Co Mich.

Havana Electric Railway Co N. J.

LIST OF CORPORATIONS. 1291

Helvetia Copper Co. (The) Ariz.

Hocking Valley Railway Co. (The) Ohio

Illinois Brick Co ; . . HI,

Illinois Central Railroad Co 111.

Independent Brewing Co Pa.

Indiana Mining Co Mich.

IngersoU-Rand Co N. J.

Inspiration Copper Co Me.

Interborough-Metropolitan Co N. Y.

Interborough Rapid Transit Co N. Y.

International & Great Northern Railroad Co Texas

International Buttonhole Machine Co. Me.

International Harvester Co N.J.

International Mercantile Marine Co N.J.

International Nickel Co N.J.

International Paper Co N. Y.

International Power Co N.J.

International Smelting & Refining Co N.J. ,

International Steam Pump Co N. J.

Iowa Central Railway Co 111.

Island Creek Coal Co Me.

Isle Royale Copper Co N.J.

Kansas City, Fort Scott & Memphis Railway Co. (The) Kan.

Kansas City, Mexico & Orient Railway Co. (The) Kan.

Kansas City Railway & Light Co N. J.

Kansas City Southern Railway Co. (The) Mo.

Kerr Lake Mining Co N. Y.

Keweenaw Copper Co Mich.

Lackawanna Steel Co • N. Y.

Laclede Gas Light Co. (The) Mo.

Lake Copper Co Mich.

Lake Erie & Western Railroad Co 111.

Lake Shore & Mich. Southern Railway Co.

111., Ohio, Mich., Ind., Pa., N. Y.

Lake Superior Corp. (The) N . J .

La Salle Copper Co M^^^-

Lehigh Coal & Navigation Co. (The) Pa.

Lehigh Valley Railroad Co Pa.

Long Island Railroad Co. (The) • N. Y.

Louisville & Nashville Railroad Co . Ky. ^

Mackay Companies (The) Mass.

1292 TABLES.

Maine Central Railroad Co Me.

Manhattan Railway Co N. Y.

Manufacturers Light & Heat Co. (The) Pa.

Mass. Consolidated Mining Co. (The) Mich.

Massachusetts Electric Companies Mass.*

Massachusetts Gas Companies Mass.*

Mayflower Mining Co Mich.

Mergenthaler Linotype Co N. Y.

Metropolitan West Side Elevated Railway Co. (The) . .111.

Mexican Light & Power Co., Ltd. (The) Dom. of Canada

Mexican Telephone & Telegraph Co Me.

Mexico Consolidated Mining & Smelting Co Me.

Miami Copper Co Del.

Michigan Central Railroad Co Mich.

Michigan Copper Mining Co Mich.

Michigan State Telephone Co Mich.

MinneapoHs & St. Louis Railroad Co Minn., la.

Minneapolis General Electric Co. (The) N. J.

Minneapolis, St. Paul & Sault Ste. Marie Railway Co.

Minn., Wis. & Mich.

Missouri, Kansas 8^ T^xas Railway Co Kan.

Missouri Pacific Railway Co. (The) Mo., Kan., Neb.

Mohawk Mining Co - Mich.

Montreal Light, Heat & Power Co. (The) Quebec

Montreal Street Railway Co Quebec

Nashville, Chattanooga & St. Louis Railway Co Tenn.

National Biscuit Co N.J.

National Carbon Co N.J.

National EnameHng & Stamping Co N.J.

National Fire Proofing Co Pa.

National Lead Co N.J.

National Railways of Mexico Mex.

Nevada Consolidated Copper Co Me.

New Arcadian Copper Co Mich.

New England Cotton Yarn Co. (The) Mass.

New England Telephone & Telegraph Co N. Y.

New York Air Brake Co. (The) N.J.

New York Central & Hudson River Railroad Co N. Y.

New York, Chicago & St. Louis Railroad Co. (The)

N. Y., Ohio, Ind., Pa.
New York Dock Co N. Y.

LIST OF CORPORATIONS. 1293

New York, New Haven & Hartford Railroad Co. Conn., Mass., R. I.

New York, Ontario & Western Railway Co N. Y.

New York, Susquehanna & Western Railroad Co N. J., Pa.

Nipissing Mines Co Me.

Norfolk & Western Railway Co Va.

North American Co. (The) N.J.

North Butte Mining Co Minn.

North Lake Mining Co Mich.

Northern Central Railway Co. (The) Pa., Md.

Northern Ohio Traction & Light Co Ohio

Northern Pacific Railway Co Wis.

Northern Securities Co N.J.

Northern Texas Electric Co Me.

Ojibway Mining Co Mich.

Old Colony Copper Co Mich.

Old Colony Railroad Co Mass.

Old Dominion Copper Mining & Smelting Co Me.

Osceola Consolidated Mining Co Mich.

Otis Elevator Co N. J.

Pacific Coast Co. (The) N. J.

Pacific Mail Steamship Co N. Y.

Pacific Telephone & Telegraph Co. (The) Cal.

Parrot Silver & Copper Co Mont.

Pennsylvania Railroad Co. (The) Pa.

Pennsylvania Steel Co N.J.

People's Gas Light & Coke Co 111.

Peoria & Eastern Railway Co Ill-

Pere Marquette Railroad Co Mich., Ind.

Philadelphia Co Pa.

Philadelphia Electric Co N.J.

Philadelphia Rapid Transit Co Pa.

Pittsburgh Brewing Co Pa-

Pittsburgh, Cincinnati, Chicago & St. Louis Railway

Co. (The) Pa., W. Va., Ohio, Ind., 111.

Pittsburgh Coal Co N. J.

Pittsburgh, Fort Wayne & Chicago Railway Co.

Ohio, Ind., 111. & Pa.

Pittsburgh Plate Glass Co Pa-
Pressed Steel Car Co N. J.

Pullman Co. (The) ^'^'

Quicksilver Mining Co N. Y.

1294 TABLES.

Quincy Mining Co. Mich.

Railway Steel-Spring Co N.J.

Ray Consolidated Copper Co Me.

Reading Co Pa.

Reece Button-Hole Machine Co Me.

Reece Folding Machine Co. Me.

Republic Iron & Steel Co N.J.

Rock Island Co. (The) N. J.

Rotary Ring Spinning Co Del.

Rutland Railroad Co Vt., N. Y.

St. Joseph & Grand Island Railway Co. (The) Kan., Neb.

St. Louis & San Francisco Railroad Co Mo.

St. Louis Southwestern Railway Co Mo.

St. Mary's Mineral Land Co N. J.

San Pedro, Los Angeles & Salt Lake Railroad Co Utah

Santa Fe Gold & Copper Mining Co N.J.

Sao Paulo Tramway Light & Power Co., Ltd. (The) . .Ont.

Savannah Electric Co Ga.

Sears, Roebuck & Co N. Y.

Shannon Copper Co Del.

Shattuck Arizona Copper Co Minn.

Sloss Sheffield Steel & Iron Co N. J.

South Utah Mines & Smelters Me.

Southern Pacific Co Ky.

Southern Railway Co Va.

Standard Oil Co N. J.

Superior & Boston Copper Co Ariz.

Superior & Pittsburgh Copper Co Minn.

Superior Copper Co Mich.

Swift & Co 111.

Tamarack Mining Co Mich.

Tennessee Coal, Iron & Railroad Co Tenn.

Tennessee Copper Co. N. J.

Texas Co. (The) Texas

Texas & Pacific Railway Co. (The) U. S.

Texas Pacific Land Trust Texas*

Third Avenue Railroad Co. (The) N. Y.

Toledo Railways & Light Co. . ! Ohio

Toledo, St. Louis & Western Railroad Co Ind.

Tonopah Mining Co., Nevada (The) Del.

Torrington Co Me.

LIST OF CORPORATIONS. 1295

Twin City Rapid Transit Co N.J.

Union Bag & Paper Co. (The) N.J.

Union Pacific Railroad Co Utah

Union Traction Co. (Phila.) Pa.

United Boxboard Co N. J.

United Cigar Manufacturers' Co ...N. Y.

United Dry Goods Companies Del.

United Fruit Co N.J.

United Gas Improvement Co. (The) Pa.

United Railways Investment Co N.J.

United Shoe Machinery Corp N.J.

United States Cast Iron Pipe & Foundry Co N.J.

United States Express Co N. Y.*

United States Realty & Improvement Co N.J.

United States Reduction & Refining Co N.J.

United States Rubber Co N.J.

United States Smelting Refining & Mining Co Me.

United States Steel Corp N. J.

Utah-Apex Mining Co Me.

Utah Consolidated Mining Co N.J.

Utah Copper Co N. J.

Vandalia Railroad Co Ind., 111.

Victoria Copper Mining Co Mich.

Virginia-Carolina Chemical Co '. N.J.

Virginia Iron, Coal & Coke Co • Va.

Virginian Railway Co Va.

Wabash Pittsburgh Terminal Railway Co. (The) . . Pa., Ohio, W. Va.

Wabash Railroad Co Ill-, Ind., Mich., Mo., Ohio

Wells Fargo & Co Col.

West End Street Railway Co Mass.

Western Electric Co Ill-
Western Maryland Railroad Co Md.

Western New York & Pennsylvania Railway Co Pa., N. Y.

Western Telephone & Telegraph Co N. J.

Western Union Telegraph Co N. Y.

Westinghouse Electric & Manufacturing Co Pa.

Wheeling & Lake Erie Railroad Co Ohio

Winona Copper Co ^ich.

Wisconsin Central Railway Co .• Wis.

Wolverine Copper Mining Co Mich.

Wyandot Copper Co.. • Mich.

INDEX.

[References are to pages.]

ACCELERATION,

effect of, 234.
ACCOUNTS,

payments of tax should appear in
executor's', 242.
ACCRUAL OF TAX,

See When Tax Accrues.
ACTIONS,

of contract against beneficiary,

290.
See further. Practice. .
ACTS OF CONGRESS,

See United States.
ADMINISTRATOR,

See Executor and Administrator
ADOPTION,

liability on, 242.

mutually acknowledged relation
of parent, 243.
ADVANCEMENTS,

taxable, 113.
AGENTS,

situs of"property in hands of agent,

158.
property of non-resident in hands
of agent, 155.
ALABAMA,

in general, 303.
constitution, 1901, § 219; 303.
statutes, list of, 303.
the early statutes, 303.
ALASKA,

in general, 305.
ALIENS,

discrimination against, 49, 237,

504.
Federal Act of 1898 does not

apply to, 165.
"goods .and effects" include real
estate in certain treaty, 51.

ALMSHOUSE,
defined, 216.
AMENDATORY STATUTES,

See Statutes.
AMERICAN BAPTIST HOME
MISSIONARY SOCIETY,
exempt, 210.
ANCILLARY ADMINISTRATION,

necessity of, 284.
ANIMALS,

exemption of monument to horse,
219.
ANNUITIES,

appraisal of, 260.
ceasing on testator's death, 187.
conditional annuity, 187.
direction in a will that an annuitant
"is to receive not less than," 236.
for care, 187.
included in direction as to "money,"

236.
liabilities where annuity to execu-
tor, 238.
liabilities where residue in trust to

pay annuity, 237.
taxation of, 186.
ANNUITY TABLE,

American experience tables, 1239.
combined experience tables, 480,

482.
reference to mortality tables valid,
43.
ANTE-NUPTIAL CONTRACT,

taxation of. 111.
ANTIQUARIAN SOCIETY,

exemption of, 220.
APPEAL,

extension of the time for, 286.
from appraisal, 264.
from assessment, 284.

1298

INDEX.

[References

APPEAL,— contimied.

hearing must be limited to the

errors noticed in appeal, 286.
on failure to appraise, 264.
repeal of statute after appeal taken,

82.
service of notice, admission of, 286.
validity of allowing appeal to

parties and not to state, 285.

APPRAISAL,
annuities, 260.

annuity tables, 480, 482, 1239.
appeal, 264.

on failure to appraise, 264.
as of what date, 252.

future interests are appraised, 253.
Boston and Albany Railroad stock,

170.
Boston and Maine Railroad stock,

170.
choses in action, 258.
"clear market value," 257.
constitutionality of assigning to

probate courts the duty of ap-
praisal, 38.
construction of will, 251.
death of life tenant before appraisal,

262.
debtor, bequest to, 258.
each interest separately appraised,

252.
general law, effect of, 249.
good will, 259.
inactive securities, 259.
jurisdiction by what court, 248.
liability, effect on, 264.
life estates, 261.
marriage, change of interest on,

254.
notice, 251.

omitted property brought to the
^ attention of the appraisers, 255. '
patent medicine company, 259.
power to order production of papers,

263.

are to pages.]

APPRAISAL,— continued.
practice, 257.

rule in the absence of specific
provision, 258.

statute providing no method for
ascertaining value of life es-
tate, 262.
reappraisal, 254.
remainders, 262.

after remarriage, 263.
residue, 252.

sale above the appraised value, 252.
test of value, 256.
trade secrets, 259.
value received by beneficiary, the

test, 258.
"value," "appraised value," and

"actual market value," 257.
as to property properly included

in, see Real Estate, Personal

Property, and other appropriate

titles.

APPRAISERS,

appointment, 249.

in what county, 250.

when appointed, 250.
function of appraiser, 286.
not judicial officers, 249.
removal, 250.
report, 252.

report and security, 254.
remitting report to appraiser, 255.
ARIZONA,

in general, 305.

proposed constitution of 1911, 305.

ARKANSAS,
in general, 306.
appraisal, 309.

constitution 1874, a. 16, § 5, 306.
estates, 309.
executors, gifts to, 309.
interest, 309.
inventory, 309.

jurisdiction of probate court, 310.
liabilities, 308.

INDEX.

1299

[References

ARKANSAS— continued.
lien, 308.
limitations, 308.
payment — deduction of tax, 309.

tax to be paid before accounts
settled — vouchers, 310.

proceedings for collection, 310.
rates, 308.
remainders, 309.
repeal, 310
statutes, list of, 306.

St. 1901^ c. 156, 307.

St. 1909, c. 303, 308.

the present act, 308.
transfers taxable, 308.
trustees, gifts to, 309.
when tax accrues, 309.

ART MUSEUM,
exemption of, 216.

ASSESSMENT,

ancillary administration in case of

non-resident, 284.
appeal, 284.

effect of admission of service of

notice of appeal, 286.
executors cannot appeal from

assessment, 285.
extension of the time for appeal,

286.
hearing on appeal must be limited
to the errors noticed in appeal,
286.
validity of allowing appeal to
parties and not to state, 285.
decree proper where statute mis-
construed by taxing officials, 288.
evidence, 284.

burden of proof, 284.
executors' appeal, 285.
exemption, order of, 283.
jurisdiction of probate courts ex-
clusive, 280.
a proper function of probate

court, 279.
of probate courts over estates
of non-resident decedents, 283.

are to pages.]

ASSESSMENT,— continued.

affected by right of action by

beneficiary, 280.
in equity on distribution, 280.
in what proceedings assessment is

proper, 282.
power to fix liabilities and appor-
tion tax, 281.
implied power to hold provision
of will void, 283.
oral statement by court, 283.
taxes due in the future, 282.
tax proportioned to mount re-
ceived, 61.
vacate assessment, power to, 287.
for newly discovered debt, 288.
when assessment postponed, 282.
Classification for assessment, see
Constitutionality.
ASSIGNMENT,

by legatee, 183.
ASSOCIATIONS,

exemptions to unincorporated asso-
ciations, 221.
joint stock association, 151.
real estate trust association, 182.
ASSUMPSIT,

See Collection of Tax, Practice.
ASYLUM,

for the blind, 216.
See further, 216 et seq.
ATTORNEY,

attorney's fees in will contest, 271.
AUDIT,

expense of, 269.
AUSTRALIA,
tax in, 15.
AUSTRIA,

tax in, 15.
AVOIDING TAX,
advancements, 113.
assignments by beneficiaries, 124.
brokers holding stock in their own

name, 124.
collusive arrangement illegal, 123.
compromise of interests under will,
125.

1300

INDEX.

[References

AVOIDING TAX,— continued.
consideration, 110 et seq.
creation of corporation leaving life

estate in decedent, 125.
disclaimer by beneficiary, 126, 184.
disclaimer by executor, 127.
duty to point out property to tax

officials, 123.
executor paying legacy with his own

money, 127.
homestead set off, 98.
insurance or beneficial societies, 94.
intent to evade tax, 100.
joint ownership, 128.
marshaling local assets and debts,

161, 267.
premature distribution after taking

assets out of jurisdiction, 129.
quick transfer of stock in foreign

corporation, 128.
removal of property before taxa-
tion, 160.
transfers in contemplation of death,

99.
various gifts to same person, 128.

BANKS,

joint deposits, 89.
situs of deposits in, 174.

BAPTIST EDUCATION SOCIETY'
religious, 210

BASTARDS,

liability, effect of legitimization,
246.

BELGIUM,
tax in, 15.

BENEFICIAL INTERESTS,

See Estates.

BENEFICIARIES,
assignment by, 183.
brothers-in-law of wife of original

owner, 197.
classified by amount, 57.
classified by relationship, 53.
classified by residence — aliens —

effect of treaties, 49.

are to pages.]

BENEFICIARIES,— cow/««Med
collaterals, —

descendants of, 239.
distinction between direct de-
scendants and collateral kin-
dred and strangers, valid, 54.
son or daughter-in-law, 240.
where relative was both nephew
and stepson, 240.
disclaimer by, 184.
exemptions, individual, 210
heirs, —

defined in treaty, 51.

expenses of heirs contesting will,

271.
liabilities where no next of kin
are known, 239.
jurisdiction where beneficiary alone

is within the jurisdiction, 160.
liability of, 241.

specific legatee, liability of, 242.
municipal corporations, 211.
rate reckoned by beneficial inter-
ests rather than by estate, 224.
state, 211.

stepchildren properly classed with
lineals, 55.
liabilities, 240.

liability where relative was both
nephew and stepson, 240.
United States, 211.
See Adoption, Aliens, Exemptions,
Persons Liable.

BENEFICIARY SOCIETY,

interest in, 94.

BENEVOLENT CORPORATIONS,

exemption of, 216.

See Exemptions.
BEQUEST,

See Beneficiary, Will.
BIBLE SOCIETIES,

exemption of, 218.
BISHOP,

exemption of, 217.
BLACKSTONE,

quoted, 28.

INDEX.

1301

BLIND ASYLUM,

exempt as almshouse, 216.
BONDS,

exemption of government bonds,

212.
exempting clauses in government

bonds, 213.
rights to unsigned bonds, 157.
situs, 176.

BOSTON & ALBANY RAILROAD,
in what states chartered, how ap-
praised, 170.

BOSTON & MAINE RAILROAD,
in what staces chartered, how ap-
praised, 170.

BROKERS,

commissions, 272.

holding stock in their own name»

124.
stock pledged with brokers, 143.

BURDEN OF PROOF,
See Evidence.

BURIAL PLACES,
See Cemetery.

CALIFORNIA,
in general, 311.
actions to recover tax, 342.
administrators, see executors,
adopted child, 314.
appeal the sole remedy, 316.
appraisal, 339.

appraisers, 339, 346.

increase or decrease of estate,

332.
when value of inheritance or
bequest is uncertain — ap-
praisement — expense of same,
327.
assessment, —

proceedings for, 343.
court order necessary, 332.
attorney for state comptroller, 344.

for county treasurer, 344,
classification by relationship, 322.

IReferences are to pages.]

CALIFORNIA,

collection,

•continued.

actions to recover tax, 342.
citation, 342.
procedure on, 329.
incorrect computations, 331.
proceedings for, 343.
receipt, form of, 331.
rules of practice of the controller's
office under the act of 1905, 331.
community property, 321.
constitution, 1879, a. 13, § 1, 311.
constitutiona Hty, —
in general, 313.
classification by relationship

valid, 318.
exemption to resident nieces and

nephews, 318.
local law, 318.
courts, —
jurisdiction of superior court, 328,

311.
moot questions not decided, 316.
definitions, 345.
discount, 336.

embezzlement by executor, 322.
executors, bequests to, 336.

duty of administrators on trans-
fer of stock, 338.
where the executor misappropri-
ates, 322.
exemptions, —
in general, 335.
computing tax and exemptions,

324, 332.
construction, 324.
rule for deduction of exemptions,

324.
to residents, 318.
"estates" of less than $500, 314.
property not in excess of $25,000

in value, 322.
in act of 1905, 323.
expenses, 344.
fees,— r

treasurer's commissions and ap-
praisers' fees, 332.
county treasurer, 332. ?^4.

1302

INDEX.

[References

CALIFORNIA,— con/JWMed.
homestead, 320.
illegitimate children, statute void

as to, 312.
interest, 336, 337.
jurisdiction of courts, 341.
lien, 319, 333.
life estates, 336.
lineal descendant, 314.
local law, 318.
"market value," 322.
moot questions not decided, 316.
nature of tax, 320.
non-residents, where discriminating

against, 320.
officers, — attorneys for county
treasurer, 344.
duties of county treasurer, 344.
fees of appraisers, 332.
fees of treasurer, 332, 344.
payment, in general, 337.

administrators to deduct amount

of tax, 326, 337.
decree of distribution ordering a

deduction, 326.
on partial distribution, 332. ^
insufficient or excessive payment,

332.
taxes payable at death, 336.
use of proceeds of tax, 345.
tax to be paid to county treasurer,
receipt must be countersigned
by state controller, 326.
penalty, 337, 345.
power of sale, 337.
property, subject to tax, 333.

"which shall pass by will or by

the intestate laws," 320.
subject to inheritance or transfer
tax, 319.
quiet title, actions to, 342.
rates, primary, 322, 334.
progressive, 335.
^condary, 323.
refund, method of recovery of
excess, 332.
to pay debts, 338.
remainders, 336.

are to pages.]

CALIFORNIA,— continued.
statutes,
list of, 312.

compiled laws of California, 1^53,
c. 127, a. 5, §§ 1, 2, 3, p. 678;
312.
1893, c. 168, 312.

title of act of 1893, 312.
1905, c. 314, 319.
1911, c. 394, 346.
1911, c. 395, 333.
present act, 333.
recent, 332.
repeal, 346.

effect on taxes already due,

330.
ol "collateral inheritance tax

law," 330.
retroactive, 317.
trustees, bequests to, 336.
use of proceeds of tax, 345.
when tax accrues, 336.
CAUSA MORTIS,

See Gifts.
CEMETERIES,

care of cemetery lots, 277.
expense of lot, 276.
CERTAINTY,

necessary, 34.
CESTUI QUE TRUST,

See Trusts.
CHARITABLE AND RELIGIOUS
CORPORATIONS & OTHER
OBJECTS,
See Exemptions.
CHARITY,
exempt, 217.

favored in construing exemptions,
197.
CHILDREN,

of deceased beneficiary, 239.
See Adoption.
CHILDREN'S AID SOCIETY,

exempt, 218.
CHOSES IN ACTION,
appraisal, 258.
claim against estate of another, 136,

INDEX.

1303

[References

CHOSES IN ACTION— continued,
situs, — in general, 172.
bank deposits, 174.
bonds, 176.
claim against estate of another,

177.
contracts to sell land, 179.
distinction between tangible and

intangible personalty, 177.
insurance, 179.
mortgages on real estate, 180.
the Massachusetts mortgage, 181.
the New York rule as to mort-
gages on real estate, 181.
partnership interests, 182.
interest in real estate trust, 182.
when tax accrues on interest in
estate of another, 234.
CHURCHES,

New Hampshire Baptist Conven-
tion exempt, 209.
See Exemptions.
CITY,

See Municipal Corporations.
CLAIMS,

See Choses in Action.
CLASSES AND CLASSIFICATION,

See Constitutionality.
CLEAR VALUE, 257.
COLLATERAL,

See Pledge.
COLLATERAL HEIRS,
See Beneficiaries.

classification by relationship, see
Constitutionality.
COLLECTION,

actions of contract against benefi-
ciary, 290.
bond of register, effect of, 291.
fees of collecting officers, 291.
jurisdiction, — collection a proper
function of probate courts, 289.
concurrent jurisdiction to recover,

290.
validity of assigning to probate
courts the duty of collection,
38.

are to pages.]

COLLECTION— continued.
limitations, 291.

retroactive statute of limitation,

292.
when proceedings premature, 291.
officers for collection, 290.
practice, 293.

absence of special machinery for

collection, 38, 289.
tax officials joined in litigation
between other parties, 293.
repeal prevents subsequent recovery

of taxes due, 82.
subrogation of corporation paying
taxes on transfer of its stock,
293.
words "proper county" refer to
what, 291.
COLLEGES,

exemption of, 219.
COLLUSION,

See Avoiding Tax.
COLORADO,
in general, 347.
appraisers 356.

to receive no reward from parties
interested, 358.
assessment, when remainder as-
sessed, 353.
beneficiaries, a tax on, 350.
collection, process for, 358.

information as to real estate, 354.
prosecutions, 359.
reports, 359.
returns, 359.
compromise with "heirs," 351.
constitution 1876, a. 10, 347.
constitutionality, uniformity, 349.

succession not a natural right, 349.
costs and expenses, 359.
exemptions, 352.

apply to the amount taken by

each beneficiary, 350.
an implied exemption from taxa-
tion should be allowed to state
institutions, 350.
fees of county treasurer, 360.
foreign fiduciaries, 355.

1304

INDEX.

[References

COLORADO,— contintied.
interest, 353.

jurisdiction of county courts, 358.
liens, 360.
nature of tax, 349.

not a local or special law, 349.
payment and receipts, 354.

by county treasurer, 359.

deduction of tax, 354.
power of sale, 354.
rates, 352.
receipts, 360.
refund, 355.
statutes, — list of, 347.

present act, 352.

retroactive, 352.

title, — one subject, 348.

uniformity, 349.

1901, c. 94, 347.

1902, c. 3, 351.

1902, c. 3 (as amended), 352.
1907, c. 214, 352.
1909, c. 193, 352.

when tax accrues, 353.
COMITY,

See What Law Governs. "
COMMISSIONS,

See Broker, Executors, Trustees, etc.
COMMODITY,

inheritance taxed as a "com-
modity," 8.
COMMUNITY PROPERTY,

as affected by debts, 266.

rights in, 97.
COMPENSATION,

See Consideration.
COMPROMISE,

of interests under will, 89, 125.
CONCEALMENT,

See Avoiding Tax.
CONFISCATION,

See Constitutionality.
CONFLICT OF LAWS,

See What Law Governs.
CONGRESS,

See United States.

are to pages.]

CONNECTICUT,

in general, 361.

administrator, appointment of on

petition of treasurer, 373.
annuity, 372.

assessment; notice to treasurer
and others; reassessment; ap-
peal, 371.
collection, — possession postponed
till tax paid, 370.
sale of estate to pay tax, 372.
when treasurer may have admin-
istrator appointed, 373.
computation of tax, 366.
constitutionality of act of 1897,
363.
constitutional limitations, none,
362.
debts and expenses deducted, 365.
executor, —

foreign executors; transfer of
property notice to tax com-
missioner, penalty, 370.
liability, 369.

removable when negligent, 371.
exemptions, —

brother and sister exempt under

the act of 1893, 363.
gifts for art exempted in 1901,

367.
ten thousand dollars exempt, 364.

validity of, 364.
under present act, 369.
interest, 369.

inventory of property of non-resi-
dents, 366.
jurisdiction, 373
life estate, 372.
nature of tax, 364.
non-residents ; notice to state treas-
urer and to tax commis-
sioner; appeal, 370.
classes of property of non-resi-
dents to which this tax applies,
370.
inventory of property of, 366.
tax extended to, 367.

INDEX.

1305

[References
CONNECTICVT,— continued.

payment, — tax to be paid to treas-
urer of state, extension of time
for, 371.
penalty, on transfer to foreign execu-
tor, 370.
possession not to be given until

payment of tax, 370.
power of appointment, 374.
probate court, jurisdiction, 373.

duty of, 371.
property taxable, 365.

real and personal property, —
property of non-residents, 365.
property within the jurisdiction
of the state, 365.
rate by classes, 369.
tatutes,— list of, 362.
present act, 368.
repeal of acts of 1889 and 1893,

367.
what estates affected by statutes,

373.
1889, c. 180, 362.
1897, c. 201, 9, 901; 364.
1899, c. 180, p. 106, 362.
general statutes of 1902 as

amended, 368.
1903, c. 63, I 1, 367.
1907,.c. 179, p. 729, 367.
1909, c. 218, 368.
transfers taxable, 369.
by classes, 369.
to foreign executor, 370.
will proved without this state, how
proved in this state, 368.

CONSIDERATION,

in general, 110.

advancements, 113.

ante-nuptial contract. 111.

conveyance for consideration where
possession is postponed till the
death of the grantor, 106.

deed made under contract to sell,
111.

services, -113.

support, 115.

are to pages.]

CONSIDERATION —continued.

transfer by will for consideration,

111.
will under contract to leave by will
112.

CONSTITUTIONALITY,

absence of special machinery for

collection, 38, 289.
aliens, 49.
appeal by parties and not by state,

285.
appropriation to special fund, 37.
assigning to probate courts the
duty of appraisal and collection,
38.
authority to classify persons and

property, 58.
certainty necessary, 34.
classification by amount, see Rates,
classification by amount of whole

estate, 62.
classification by relationship, —
in general, 53.

distinction between direct de-
scendants and collateral kindred
and strangers is valid, 54.
distinction among life tenancies
based on relationship of re-
maindermen, 53.
exempting stepchildren, 55.
if tax is a property tax, 55.
transfers where life estate is re-
served to grantor, 55.
classification by residence, —
corporations, 49.

individuals, aliens, effect of trea-
ties, 49.
confiscatory legislation, 36.

inheritance taxes may eat up an
entire estate and possibly bank-
rupt the executor, 64.
confiscatory rates, 63.
constitution inapplicable to condi-
tions prior to its enactment, 75.
constitutional limitation in rate, 41.
contract, impairment of, 40.
"equality," 46.

1306

INDEX.

[References

CONSTITUTIONALITY— co»/?MMe<i.

exemptions, 193.

based on estates of beneficiaries

or of decedents, 198.
validity of tax on whole estate
which exceeds the exemption,
195.

jurisdiction of probate courts to
appraise and collect, 38.

justice to be free, 41.

local laws, 42.

location of assets in state insuffi-
cient, 75.

municipalities, power of, 30.

notice to collecting officers unneces-
sary, 67.

notice to parties of proceedings, 66.

of retrocative legislation, see Stat-
utes.

poll tax prohibited, 41.

power derived from taxing power
or from power to regulate descent,
23.

power of congress, 29.

power of state to regulate or pro-
hibit devolution on death, 24.

proceedings to test validity, 38.

progressive rates, 57.

public purpose, 36.

reference to other statutes and to
mortality tables valid, 43.

restrictions of local or special laws
applicable, 42.

revenue legislation to originate in
house of representatives, 44.

special laws, 42.

state constitutions, 40.

state legislatures, power to impose
tax, 22.

statutes upheld and avoided, 34.

statutes void in part only, 35.

tax proportioned to amount re-
ceived, 61.

title to be expressed, 42.

unconstitutional statute, effect of
21.

are to pages.]

CONSTITUTIONALITY,— con/mwerf-
uniformity, —

authority to levy inheritance tax
makes uniformity unnecessary,
46.
geographical uniformity, 48.
meaning of "equality" molded

to new conditions, 46.
proportional tax required, 47.
requirement of uniformity not
applicable to inheritancetax,45.
uniformity within specified
classes, 46.
void as in addition to annual prop-
erty tax, 42.
where tax must cover both realty

and personalty, 42.
who may attack validity, 39.
See Double Taxation.
CONSTRUCTION,

of exemptions, 32, 196.
not implied, 197.
of persons exempt under general

law, 203.
effect of general tax exemption,
202.
of will in appraisal proceedings, 251.
See Statutes.
CONTEMPLATION OF DEATH,

See Deeds.
CONTINGENT AND FUTURE
ESTATES,
See Remainders.
CONTINGENT ANNUITIES

See Annuities.
CONTRACT,

deed made under contract to sell,

111.
impairment of contract, 40.
situs of contracts to sell land, 179.
will under contract to leave by
will, 112.
CONVERSION,
in general, 139.

effect of conversion on lien, 140.
Pennsylvania rule, 140.
what law governs, 18, 141.

INDEX.

1307

[References

CONVEYANCES OR TRANSFERS,

See Deeds.
COOPER UNION,

a special exemption, 217.
CORPORATION,

Boston & Albany railroad company,
170.

Boston & Maine railroad, 170.

chartered in more than one state,
170.

classified by state of incorporation,
49.

creation of corporation leaving life
estate in decedent, 125.

distingushed from joint stock asso-
ciation, 151.

domestic stock owned by non-resi-
dent, 158.,

effect of use made of funds in
determining situs, 208.

exemption of corporation chartered
in more than one state, 208.
gift to foreign corporation for
domestic use, 208.

foreign corporations, 207.
non-resident's stock in, 160.
resident owner of stock in foreign
companies, 168.

liabilities wh6re bequest to cor-
poration to be created, 238.

ownership of property in state as
basis for taxation, 151.

"persons" includes, 207.

property in other states of domestic
corporation, 169.

quick transfer of stock in foreign
corporation, 128.

share of stock in a corporation may
be defined as a right, 159.

subrogation of corporation paying
taxes on transfer of its stock, 293.

testing status of corporation,—
when exempt by general law, 204.

where decedent transfers property
to corporation and retains life
interes't in its stock, 106.

See Bonds.

are to pages.]
COURTS,

appraisal by what court, 248.
appraisers appointed in what coun-
ty, 250.
collection a proper function of pro-
bate courts, 289.
exemption of fund in hands of, 215
jurisdiction, —
concuirent, 290.
construction of will in appraisal

proceedings, 251.
for assessment, see Assessment,
implied power to hold provision

of will void, 283.
of probate courts over estates of

non-resident decedents, 283.
to order production of papers,
263.
order of probate court as protec-
tion, 237.
effect of order of court on liabil-
ities, 237.
oral statement by court not an

assessment, 283.
words "proper county" refer to
county first acquiring jurisdic-
tion, 291.
COUSIN,

See Beneficiaries.
CREDITOR,

bequest to creditor taxed, 101.
direction to fulfill prior obligation
of decedent, 101.

CRUELTY,

exemption of society for prevention
of cruelty, 219.

CURATIVE ACT.

considered, 78.

CURTESY,

taxable, 95, 96.

DAUGHTER-IN-LAW,
liability, 240.

DEATH,

interests under deed dependent on
death. 86.

1308

INDEX.

[References

DEATH ,— continued.

law at death of decedent governs

tax, 20.
possession under deed postponed till

death, 106.
tax occurs at death of testator, 231.
transfers in contemplation of death,

see Deeds.
DEBTOR,

appraisal of bequest to, 258.
DEBTS AND EXPENSES,
action to construd will, 271.
attorney's fees, 271.
cemetery lot and tomb, 276.

care of cemetery lots, 277.
commissions of broker, 272.

of foreign executor, 269.

executor's commissions increased
by increase in value of estate,
270.

trustee's commissions, 272.

where will forbids commissions to
executors or trustees, 270.
community property, 266.
controversy among distributees,

272.
debts of decedent, 265.
disbursements which it is admitted

were made must be allowed, 266.
embezzlement by executor, 271.
estimate where the parties assent to

the correctness of the, 269.
exemptions reckoned without de-
duction for tax or expenses, 201.
expenses of administration, 269.

audit, 269.

executors in defending will, 271.

of heirs contesting will, 271.

resisting adverse claim, 272.
federal inheritance tax, 273.
foreign inheritance taxes, 274.
funeral expenses, 276.
marshaling assets to pay debts, 267.
masses, 277.
newly discovered debt as ground

for modifying assessment, 288.
partnership debts, 266.

are to pages.]

DEBTS AND EXPENSES,-cow/?«werf.
practice where expenses of settle-
ment unknown, 270.
affecting real estate, 266.
secured by real estate, 266.
stranger paying taxes on land, 269.
subrogation of creditors, 273.
tax paid improperly, 269.
taxes on real estate, 268.
trustees, estimated commissions of,
273.
DEDUCTION,

See Payment.
DEEDS,

deed dependent on will, 88.
delivery of deed, 123.

deeds signed and not delivered,
108, 130.
interests under deed dependent on

death, 86.
power immaterial whether created

by will or by deed, 121.
recording lacking, 108.
trust deed, 88.
what law governs, 86.

deed inter vivos, 21.
in contemplation of death, —
burden on heirs to show good

faith, 101.
conveyance for consideration
where possession is postponed
till the death of the grantor,
106.
corporation where decedent trans-
fers property to and retains life
interest in its stock, 106.
death impending, 102.
delivery lacking, 108.
executed before statute enacted,
108.
before valid statute enacted,
101.
executors, liability of, 109.
grantor retaining control, 104.

retaining no control, 105.
heirs of grantee not bound by

his statements, 101.
illness, 102

INDEX.

1309

[References
DEE DS, — continued.

in contemplation of death continued.
life estate reserved to grantor, 103.
property burdensome to grantor,

107.
purpose to reduce estate to affect
widow's election as to dower,
108.
question of fact, 101.
recording lacking, 108.
revocation, power of, 106.
will contemporaneous with deed,
102.
DEFEASIBLE INTERESTS,

taxable, 189.
DEFINITIONS,

actual market value, 257.
almshouse, 216.
appraised value, 257.
bishop, 217.

clear market value, 257.
collaterals does not include descend-
ants of collaterals, 239.
contemplation of death, 99.
death duty, 1.
'"detraction tax," 51.
domicile, etc., 3.
"goods and effects" include real

estate, 51.
"heirs" defined in treaty, 51.
"increase," 695.
individuals does not include trustees,

236.
inhabitants, 52.
inheritance tax, 1.
institution, 221.
legacy tax, 2.
lineal descendants, 239.
litigation, 230.

money includes annuity, 236.
"on his settlement," 232.
"person" may include several, 183.
"persons" includes corporations,

207.
"personal goods," 52.
"proper county," 291.
residence; 3.
sale, 88.

are to pages.]

DEFINITIONS,— con/xntterf.
share of stock, 159.
strangers, 237.
succession tax, 2.
unavoidable delay, 229.
"value," 257.
"widow of a son," 243.
DELAWARE,
in general, 375.
appeal, 378.
appraisal, 378.
collection, —

bond of executor or administrator

liable, 380.
duty of executor or administra-
tor to collect tax, 379.
duty to examine records — pro-
ceedings, 380.
executor or administrator to file
statement within two months,
380.
constitution 1897, a. 1, 375

1897, a. 8, 375.
executor, land of, 380.
exemptions, 377.

jurisdiction of orphans' court, 379.
legacy charged on land, 379.
lien, 379.
payment, 377.

to register of wills, 381.
when no executor or administra-
tor, tax to be paid to register
of wills, 380.
penalty, 377.
rates, 377.
receipts, 381.
records, 380.
register of wills, — duty, commission,

penalties, 381.
statutes, former, 376.
list of, 375.
present act, 377.
1909, c. 225; 377.
transfers taxable, 377.
trust, prpperty held in, 379.
DELAY,

unavoidable cause of, 229.
See futher, Interest.

1310

INDEX.

DENMARK,

tax in, 15.
DEPOSIT COMPANY,

validity of statute as to delivery
of box, 128.
DEPOSITS,

See Banks.
DESCENDANTS,

See Beneficiaries.
DEVISE,

See Wills.
DEVISEE,

See Beneficiaries, Wills.
DISCLAIMER,

by beneficiaries, 126, 184.

by executor, 127.
DISCOUNT,

effect of, 227.

exemptions reckoned with discount
for delay in payment, 201.
DISCRIMINATION,

See Constitutionality.
DISTRIBUTION,

See When Tax Accrues.
DISTRICT OF COLUMBIA,

in general, 382.

federal tax applies to, 1269.
DOMICILE,

defined, 3.

disputed domicile, 146.

effect of change of, 17.

extraterritorial effect of judgment
as to domicile, 19.

findings as to domicile, 18.

law of domicile of decedent governs
tax, 17.
DOUBLE TAXATION,

at domicile of owner and at situs
of property, 146.

disputed domicile, 146.

foreign inheritance tax, 274.

lapsed legacy, 148.

Louisiana rule against levying tax

^ on property which had already

borne its share of taxation, 149.

question presented is not one of

general equities, 147.
reciprocal provisions, 147.

[References are to pages.]

DOWER,

purpose to reduce estate to affect
widow's election as to dower, 108.
taxable, 95.
when widow's dower became vested,

where widow took less than the
law allowed her, 96.

DRINKING FOUNTAIN,
exemption of gift for, 219.

DUE PROCESS OF LAW,
See Constitutionality.

ECCLESIASTICAL CORPORA-
TIONS,
See Exemptions.

EDUCATIONAL CORPORATIONS,
See Exemptions.

EGYPT,
tax in, 14.

ELECTION,
See Powers.

EMBEZZLEMENT,
by executor, 184, 271.

ENGLAND,
tax in, 13, 15.

EQUALITY,

See Constitutionality.

EQUITABLE CONVERSION,
See Conversion.

EQUITY,

assessment in equity on distribu-
tion, 280.

ESTATE,

all interests embraced unless

specially exempted, 183.
appraisal where change of interest

on marriage, 254.
assignment by legatee, 183.
bequest to creditor, 191.
bequest to debtor, 191.
contingent remainders, 188.
defeasiablc or unascertainable inter-
ests, 189.

INDEX.

1311

[References
ESTATE, — continued.
disclaimer, 184.
direction to fulfill prior obligation

of decedent, 191.
embezzlement by executor, 184.
exemptions when legacy payable in

instalments, 201.
interest in estate of another, 234.
mere postponement of payment of

legacies, 232.
merger of remainder, 234.
on intestacy, 184.
principal or income of life estates,

185.
"to any person" may include

several, 183.
trusts, interests under, 190.
See Annuities, Life Estates, Re-
mainders, Non-Resident Dece-
dents.
ESTOPPEL,

against refunding, 300.
EVASION OF TAX,
See Avoiding Tax.
EVIDENCE,

appraisal, 256 et seq.

assessment, 284.

burden on heirs to show good faith,

101.
heirs of grantee not bound by his

statements, 101.
that deed is made in contemplation
of death, 101 et seq.
EXCISE TAX,

inheritance tax is, 4.
EXECUTION OF WILL,

See Will.
EXECUTIVE PRACTICE,
in construing statutes, 32.
EXECUTORS,

appeal from assessment, 285.
commissions increased by increase
in value of estate, 270.
of foreign executor, 269.
where will forbids commissions
to'executors, 270.
embezzlement by, 184, 271.

are to pages.]

EXECUTORS,— con/mttei.
liability of, 241.

annuity to executor, 238.

for interest, 230.

deed in contemplation of death,

100.
for penalty, 240.
tax paid improperly, 269.
paying legacy with his own money,

127.
payments of tax should appear in

executor's account, 242.
the fact that the executor or ad-
ministrator is required by the
statute to pay the tax does not
affect its nature, 199.
EXEMPTIONS,
almshouse, 216.
amendment extending exemptions,

79.
American Baptist Home Mission-
ary Society, 210.
amounts reckoned with discount for
delay in payment, 201.
without deduction for tax or

expenses, 201.
on estates of beneficiaries or of

decedents, 198.
on whole estate or on portion
within state, 199.
animals, monument to, 219.
art museum, 216.
Baptist Education Society, 210.
bishop, 217.
bonds, government, 212.

exempting clauses in, 213.
charities, 197, 217.
churches and dependent societies,

218.
college, 219.
constitutionality, 193.

validity of tax on whole estate
which exceeds the exemption,
195.
there is no difference in principle
between an exemption given to
direct inheritances and a pro-
gressive tax, 58.

1312

INDEX.

[References

EXEM VriONS— continued.
construction, 32, 196.

old English rule, 196.
corporation chartered in more than
one state, 208.

testing status of corporation —

when exempt by general law,

204.

county for charitable purposes, 218.

cruelty, prevention of, 219.

drinking fountain and monument

to horse, 219.
educational, 219.
federal taxation of bequest to state

or municipality, 211.
fixing amount is a legislative func-
tion, 194.
foreign corporations, 207.

gift to foreign corporation for do-
mestic use, 208.
general tax exemption, effect of, 202.

persons exempt, under, 203.

property otherwise taxed, 205.
historical and antiquarian society,

220.
homes, 221.

Home Missionary Society, 209.
hospitals, 221.

implied exemptions, none, 197.
instalments, when legacy payable

in, 201.
"institution," 221.
library, 219, 222.
masons, 222.
masses, 277.

missionary societies, 222.
municipal corporations or public

institutions, 214.
nature, exemption is matter of grace,

196.
New Hampshire Baptist convention,

209.
New York yearly meeting of

Friends, 210.
order of exemption, 283.
'persons" includes corporations,

207.
powers, interests under, 206.

are to pages. 1

EXEM PTIONS,— continued.
prevention of cruelty, 219.
progressive rates, in case of, 201.
real as well as personal property

considered, 200.
religious societies, —

American Baptist Home Mission-
ary Society, 210.
Baptist Education Society, 210.
churches and dependent societies,

218.
Friends Society treated as re-
ligious, 210.
missionary societies, exemption,

222.
Union for Ministerial Education

exempt, 210.
Young Men's Christian Associa-
tion not religious, 223.
remainder may be liable though

prior estate exempt, 206.
retroactive, 74.
special exem ptions, 210, 654.

of Cooper Union, 217.
temperance societies, 222.
town in another state, 215.
trust for charity, 223.

fund in hands of court, 215.
university, 219.
Union for Ministerial Education,

210.
United States not exempt as domes-
tic corporation, 203.
state taxation of bequest to, 211.
use made of funds, eflfect of, 208.
Woman's Foreign Missionary Soci-
ety, 209.
Woman's Relief Corps, 223.
Young Men's Christian Associa-
tion, 223.
not religious, 219.
treated as library, 222.
EXPENSES,

See Debts and Expenses.
FEDERAL INHERITANCE TAX,

See United States.
FEES,

of collecting officers, 291.

INDEX.

1313

[References
FLORIDA,

in general, 382,

constitution 1885, a. 9, 382.
FOREIGN CORPORATIONS,

See Corporations.
FOREIGN EXECUTORS,

See Executors.
FOREIGNERS,

See Non-Residents.
FORFEITURE,

inheritance tax not, 8.
FORMS,

See titles of various states.
FRANCE,

tax in, 15.
FRAUDULENT CONVEYANCE,

effect of, 136.
FRIENDS,

the New York yearly meeting of
Friends exempt, 210.
FUNERAL EXPENSES,

See Debts and Expenses.
FUTURE ESTATES,

See Remainders.

GEORGIA,

in general, 382.

constitution 1877, a. 7, § 2, par. 1,
382.
GERMANY,

tax in, 15.
GIFT,

causa mortis, law governing, 21.

contemplation of death, see Deeds.

on condition legacies paid, 136.

inter vivos, 76.

"sale" construed as, 88.
GOOD FAITH,

See Avoiding Tax, Deeds.
GOOD WILL,

appraisal of, 259.

taxable, 136.
GOODS AND EFFECTS,

includes real estate in certain treaty,
51.
GOVERNMENT BONDS,

See Exemptions.

are to pages.]

GRADUATED TAX,
See Rates.

HAWAII,

in general, 383.

actions, 391.

appraisal, 386, 388.

appraisers to take no reward from

parties, 389.
collection, —
citation, 389.
special attorneys, 390.
treasurer to collect taxes, 390.
definitions, 391.
estates, 385.
executors, gift to, 385.
exemptions, 384, 385.
expenses, 390.

foreign executor, transfer by, 387.
history of legislation, 383.
interest, 386.
jurisdiction of court, 389.
payments, 387.

deduction of tax from gifts, 386.
penalties, 386.

on officers, 390.
power of sale, 387.
rate, 384.
receipts, 387, 390.
record, 389.

refund to pay debts, 387.
remainders, 385.
statutes, list of, 383.
the present act, 384.
repeal of Revised Laws, 391.
1905, No. 102, as amended, 384.
1911, Act 130,392.
transfers taxable, 384.
treasurer, duties of, 38C
trustees, gift to, 385.
when tax accrues, 386.
HEIRS,

See Beneficiaries.
HISTORICAL SOCIETY,

exemption of, 220.
HISTORY,

early history, 13.
federal legislation, 15.

1314

INDEX.

[References

HISTORY,— continued.

now employed in nearly all en-
lightened countries, 15.

state statutes copied from other
states, 14.

the present situation, 15.
HOLLAND,

tax in, 15.
HOMES,

exemptions of, 221.
HOME MISSIONARY SOCIETY,

not exempt, 209.
HOMESTEAD,

taxable, 98.
HOSPITALS,

exempt, 221.
HUSBAND AND WIFE,

ante-nuptial contract. 111.

statutory rights of surviving spouse,
95.

See Curtesy, Dower.

IDAHO,

in general, 393.
appraisal, 399.

acceptance of bribe by appraiser,
399.
constitution 1889, a. 7, § 2, a. 8,

§ 5, 393.
collection of delinquent tax, 400.
by administrator, 397.
county attorney to institute

proceedings, 400.
expenses of collecting tax, 401.
from non-resident administrator,

398.
record of estate, entries, report

of probate judge, 401.
sale of property to pay tax, 397.
settlements and reports of county
treasurer, 401.
contingent estates, tax on, 396.

suits to enforce collection, 402.
definitions, 400,

estates, tax on future and contin-
gent, 396.
executor, tax on gift to, 396.
exemptions, 395.

are to pages.]

I DAHO, — contimied.
interest, 397.
officers, failure of, to perform

duties, 402.
payment, time of, extension, 397.

by administrator, 398.
power, appointment deemed a tax-
able transfer, 394.
probate court, jurisdiction over

estate of non-resident, 400.
quiet title, suit to, 402.
rate of tax, 394.

progressive, 395.
receipts for taxes paid, 401.
refund of excess tax, 398.
revised codes, title 10, c. 5, 394.
statutes, list of, 393.

present act, 394.
transfers taxable, 394.
ILLEGITIMATE CHILDREN,

liabilities, 246.
ILLINOIS,

in general, 404.

appeal, any person may, 425

appraisal, 422, 433.

appeal, 425.

fair market value, 422.

life interests, 429.

remainders, 419.

value of life estate deducted, 419.
appraiser, — penalty for receiving
reward, 434.

report of appraiser, 423.
assessment, — appeal, 425.

on petition of owner, 436.
attorneys for collection, 433.
"beneficial interests," 416.
bond, 430.

of remaindermen, 429.
charitable bequests, 427.
"clear market value," 416.
collection, — attorneys, 433.

duty to give information, 431.

proceedings for, 434.

state's attorney to enforce pay-
ment, 434.
compromise of tax, 437.

INDEX.

1315

[References
ILLI NO I S, — continued.

constitution 1870, a. 9, §1, 405.
constitutionality, —

exemption to life tenants with
remainder to collaterals, 417,
418.
progressive feature and classifi-
cation by relationship upheld,
409.
contingent interests, 436.
conversion, not applicable, 411.
copies, certified, 438.
deed in contemplation of death, 413.
defeasible interests, 436.
definitions, transfer, 438.
discount, 420.
domicile, 412.
dower, 411.
estates, 417-
executor, duties of, 430.

duty to give information, 431.
foreign , transferring stocks, 43 1 .
liability of, 431.
exemptions, — in general, 417, 428.
charitable, 426, 427.
churches, etc., 437.
confined to domestic corpora-
tions, 427.
to life tenants with remainder
to collaterals is valid, 417, 418.
"to •. . . wife . . .during the
life," 418.
expenses, 435.

deducted, 410.
fees, 433, 434, 438.

of county treasurer, 435.
foreign executors, transfer by, 431.
guardians ad litem, 437.
husband and wife, wife renouncing,

418.
interest, 420, 430.
inventory, 424.

jurisdiction of county court, 423.
over property of non-residents^-
434.
lien, 429, 436.
life estates, 417.
appraisal of, 429.

are to pages.]

ILLINOIS,— continued.
limitations, 436.

marshaling assets to pay debts, 411.
nature of inheritance tax, 407.
non-residents, jurisdiction of county

court over property of, 434.
payments, 431.

deduction of tax from shares of
beneficiaries, 421.
practice, amendment of petition,

423.
property subject to tax, 428.
rates, 408, 428.

real estate, foreign, not taxed, 411.
land in another state not taxed
although directed to be sold,
411.
receipts, 431, 435.
records, 435.
refunding, 424.

excess of tax paid, 432.
to pay debts, 431.
remainders, 417.

"at their decease," 419.

land of, 419, 429.

"entitled ... in expectation,"

415.
property so passing shall be ap-
praised immediately after the
death, 419.
provided that the . . . persons
. . . interested elect not to
pay the same until they come
into actual possession, 419.
"to the collateral heir," 418.
value of life estate deducted on
appraisal, 419.
reports, 435.

"resident of this state," 412.
situs of personal property, 412.
statutes, — construed as prospective
only, 427.
early probate duties, 405.
follows New York act in language

and construction, 406.
list of, 405.
present act, 428.
repeal of prior laws, 438.

1316

INDEX.

[References

ILLINOIS, — continued.

St. 1895, p. 301, 408.

1901, p. 268, 426.

1901, p. 269, 424.

transfers taxable, 408.

^ defined, 438.

trustee, duty to give information,
431.
liability of, 431.
when tax accrues, 420.

all taxes shall be due and payable
at the death of the decedent,
420.
unless otherwise provided for,
420.

IMPROVEMENTS,

liability of co-tenant for, 132.
INCOME,

See Principal and Income.
INCREASE,

defined, 695.
INDIANA,

constitution, 1851, a. 10, § 1, 439.

the present situation, 439.
INDIVIDUALS,

not include trustees, 236.
INFORMATION,

See Collection.
INHABITANTS,

defined, 52.

INHERITANCE TAX,

defined, 1.
INSOLVENCY,

of estate, 185.

INSTITUTION,

defined, 221.

exemption, 221.
INSURANCE,

interest in insurance or benefi-
cial society^ 94.

situs, 179.

INTANGIBLE PROPERRY,

See Property.

INTER VIVOS,
See Deeds, Gifts.

are to pages.l
INTEREST,

burden of, showing cause of delay,
229.

discount, 227.

effect of agreement, 228.

excuses for delay, 228.

where legatees died and no repre-
sentative was appointed, 230.

from what date computed, 228.

in absence of express provision, 227.

intent to evade tax, 100.

liabilities of executor or adminis-
trator, 230.

on refunding, 299.

pendency of litigation, 229.

what law governs, 227.

INTESTACY,
interests on, 184.

INVENTORY,

clause in repealing act saving only

estates where inventory already

filed, 83.
necessity, 247.
no duty to point out property to

tax officials, 123.
of property outside state, 247.

INVESTMENT,

taxation of money for, 138.

IOWA,

in general, 440.

accounts, probate accounts not set-
tled till tax paid, 465.
actions, 465.
adopted child, 448.
alien non-residents, 457.
annuity tables, 479.
appraisal, 450, 461, 462.

annuity tables used, 464.

interests in personal property,
463.

method of appraisement, notice,
hearing appeal, 451.

objections and appeal from, 461.

remainders in real estate, 462, 463"

second, 450.

"value," 449.

INDEX.

1317

[References
low h,— continued.
appraisers, 460.

commission to, 460.
fees, 457.
notice by, 460.
art galleries, exempt, 457.
avoiding tax, by disclaimer, 447.
removing property from state
without paying tax, 464.
beneficiaries, — death of devisee,
447.
"to any person," 447.
unknown, 473.
bonds, form and amount, 464.
cemetery associations, 458.
charge, legacies charged on real

estate, 466.
charitable societies, 448.
classes exempted, 447.
collection, — actions, 465.

information to be furnished, 466.
petition by state treasurer for

administration, 459.
tax to be deducted by executors,

etc., 465,
transfers forbidden till tax paid,
471.
compromise of tax, 454, 472.
consideration, 446.
constitution 1857, a. 1, § 6, 441.

1857, a. 3, § 30, 441.
constitutionality, 441.
contract, effect of statute on agree-
ment depended on death, 442.
corporations, reports by, 471.
costs, 470.

county attorney, fees, 469.
debts, 459.

deducted, 453.
deed, 446.

to take effect after the death, 446.
definitions, —

"actual market value," 449, 451.
appraised value, 449, 451.
collateral heirs, 456, 474.
person, 474.
"value," 449.

are to pages.]

IOWA, — continued.

disclaimer, effect of renunciation

by beneficiary, 147.
educational societies, 448.
estates in expectancy, 473.
executors, bequests to, 466.
duty of, to pay tax, 465.
no non-resident appointed, 459.
power of sale, 465.
report by, 467.
exemptions, 444, 459.

above the sum of one thousand
dollars after the payment of
all debts, 449.
art galleries, 457.
cemetery, 458.
charitable, 448.
educational, 448.
hospitals, 457.
public libraries, 457.
religious, 448, 458.
stepchild or descendants, 457. "
explanatory notes and examples,

481.
fees for collection, 469, 470.
foreign estate, assessment of tax,

472.
funeral expenses, 454.
hospital exempt, 457.
intangible property, 445.
interest, 466.

inventories, extending time for, 468
jurisdiction of district court, 466.
liabilities, 458.
libraries, 457.
lien, 450, 458.

life estates, annuity tables used 464.
nature of statute, 441.
non-resident, —

foreign estates and direct and

collateral beneficiaries, 456.
foreign estates and deduction of

debts, 456.
foreign estate, indebtedness, 472.
not appointed executor, etc., 460.
payment, 466.

when persons entitled are un-
known, 473.

1318

INDEX.

[References

IOWA, — continued.
property, —

all property within the jurisdic-
tion, situs of tangible personal
property, 444.
effect of collateral adjudication

of title, 456.
"property of every kind," 455.
removing property from state,

464.
subject to tax, 455.
within the jurisdiction, situs of
intangible personal property,
445.
rate, 444, 458.
record, 466.

by clerk, 468, 469.
by state treasurer, 474.
refund, 457, 473.
religious societies, 448.
service exempt, 458.
"■ remainders, —

annuity tables used, 464.
appraisal of, 462, 463.
bond, when tax payable, 463.
estates in expectancy, defeasible,
contingent, 473.
reports by clerks, 469.

by domestic corporations, 471.
by executors, 467.
by person entitled, 468.
to court, 470.
rules and regulations, 474, 475.
appointment of appraisers, 477.
books and blanks, 478.
construction, 478.
costs, 478.

duties of appraisers, 477.
duties of the clerk, 476.
duty of county attorney, 477.
duty of court, 478.
lien book, 475.
record, 478.

Import by administrators; etc.,
476.
statute, —

constructipn, 456.

effect of the act of 1898, 452.

are to pages.]

IOWA, — continued.

statutes, —
list of, 440.
present act, 458.
repeal, 474.
retroactive, 442.
when law became effective, 442.
when law effective on agreement

dependent on death, 442.
1896, c. 28, § 1, 444.
1900, c. 51, 453.
1906, c. 54, 457.
1906, c. 55, 457.
1909, c. 92, 458.
1911, c. 68, 458.

stepchildren, 457.

tables for determining the valua-
tion or present worth of life and
term estates or annuities and re-
mainders or reversionary inter-
ests, 479.

tangible property, 444.

transfers taxable, 444, 458.

trustees, bequest to, 466.

no non-resident appointed, 459.

when tax accrues, levied on death,
444.

ITALY,

tax in, 15.

JOINT OWNERSHIP,

property held jointly as means of

avoiding tax, 128.
share of co-tenant, — liability for

improvements, 132.
taxation of joint deposit, 89.

JOINT STOCK ASSOCIATION,
distinguished from corporation, 151.
taxation of stock in, 137.

JUDICIAL SALE,

effect of, on liens, 295.

JURISDICTION,

See Courts.

JUSTICE,

to be free, 41.

INDEX.

1319

[References
KANSAS,

in general, 483.

administration at instance of com-
mission, 490.
appraisal, — transmission, 488.

value of property, how deter-
mined, 489.
assessment, —

amount determined by com-
mission, 489.

how tax assessed, 486.
charge, — legacy charged on real

estate, 487.
collection, proceedings for, 490.

report of county treasurer, 491.

sale of real estate to pay tax,
488.
commission determine amount of

tax due, 489.
constitution 1859, a. 11, § 1, 483.
constitutional limitations, 483.
county treasurer, — fees, 491.

report of, 491.
decedent, defined, 491.
definitions of terms, 491.

"decedent," 491.

"estate," 491.

"property," 491.

"transfer," 491.
deposit when bequest or grant is

contingent, 486.
estate, defined, 491.
executors, —

account, final, not allowed unless
tax paid, 490.

bequests in lieu of compensation,
487.

duty of, 487.

final account, 490.
fees, per cent retained by county

treasurer, 491.
future interests, payment on, 487.
inventory, failing to file, 488.

record of; transmission, 488.
jurisdiction of probate court, 489.
legacy a charge on real estate, 487.
non-resident, assets of estate of

not delivered until, 488.

are to pages.]

KANSAS, — continued.

payment of tax on stock transferred
by foreign executor, etc., 488.

of taxes imposed by this act, 485.

on future interests, 487.

provision in will for tax, 487.

tax paid to state treasury, 491.
penalty, failing to file inventor>-,

488.
probate court, jurisdiction of, 489.
proceedings for recovery of taxes,

490.
property, — defined, 491.

out of state, or of non-resident
within state, 485.
real estate, sale of, to pay tax, 488.
repayment of tax, 489.
statutes, —

application of statute, 491.

general statutes of 1909, §§ 9265
to 9291, 484.

list of, 483.

1909, c. 248, 484.

the present act, 484.
transfer, defined, 491.

legacies and successions subject
to taxation, 484.
trustees, bequests in lieu of com-
pensation, 487.

final account, 490.
will, provision in, for payment,

487.
KENTUCKY,
in general, 492.
appraisal, 500.

appraiser, misdemeanor of, 501.
collection, proceedings, 503.
constitution 1890, 492.
constitutionality, —

uniform and equal, 494.

source of power to tax inherit-
ances, 494.
debtor, legacy to debtor of testator.

4ft7.
discount, 498.

executors, gifts to, in lieu of com-
missions, 498.

1320

INDEX.

IReferences

KENTUCKY, — continued.

exemptions, 497.

devise for public school not

exempt, 497.
he first five hundred dollars shall
not be subject to such duty or
tax, 496.

history, 493.

interest, 498.

jurisdiction of county court, 502.

lien on proceeds of sale, 499.

nature, 493, 494.

particular estates and remainders,
497.

payment on transfer, 500.
receipts, 500.
tax to be deducted, 499.

penalty, 499.

power of sale, 500.

proceedings, 503.

property, all property, 496.

rate, 495.

refunding to pay debts, 500.

remainders, 497.

statutes, likeness to Maine statute,
493.
list of, 492.
the present act, 495.

summons, 502.

transfers taxable, 495.

trustees, gifts to, in lieu of com-
missions, 498.

what law applies when remainder
void, 493.

when tax accrues, 498.

will, where will is made in pursu-
ance of contract, 496.

LANDLORD AND TENANT,

leasehold interests, 134.

lessee's interest, 137.
LAPSE,

double taxation in case of, 146.
LEGACY,

See Will.
LEGACY TAX,

defined, 2.

legacy and succession tax distin-
guished, 2.

are to pages.]

LEGATEES,

See Beneficiaries.
LEGISLATURE,

power of, 22.
LEGITIMATION,

effect of, 246.

See Adoption, Bastards.
LIABILITY,

See Persons Liable.
LIBRARY,

educational, 219.

exempt, 222.
LIEN,

effect of conversion on, 140.
judicial sale, 295.
partition, 295.

on whole property where life ten-
ancy and remainder exists, 294.

no personal liability on purchaser,
296.

priority as against mortgage, 294.

real estate, 294.
LIFE ESTATES,

appraisal, 261.

death of life tenant before ap-
praisal, 262.

decedent reserving life interest in
stock of corporation, 106.

distinction among life tenancies
based on relationship of remain-
dermen, 53.

liability as between life tenant and
remaindermen, 238.

lien on whole property where life
tenancy and remainder exists,
294.

life estate in remainder, 234.

principal or income of life estates,
185.

reserved to decedent in stock, 125.

reserved to grantor by deed, 103.

statute providing no method for
ascertaining value of life estate,
262.

transfers where life estate is re-
served to grantor may be classi-
fied separately, 55.

what is a life inteiest, 184.

INDEX.

1321

[References
LIFE ESTATES, — continued.
what life estates taxable, 185.
when tax accrues on life estate in
remainder, 234.

LIMITATIONS,
eflfect of, 291.
on refunding, 300.
retroactive statute as to limitation,
292.

LINEAL DESCENDANTS,

defined, 239.

property distinguished from col-
laterals, 54.

where relative was both nephew and
stepson, 240.

classification by relationship, see
Constitutionality.

See Beneficiaries.

LITIGATION,
defined, 230.

LOCAL LAWS,

restrictions against local laws appli-
cable, 42.

LOUISIANA,
in general, 504.
absentees, 527.
adopted children, 522.
aliens, discrimination against, 504.

alien tax, 505.

effect of federal treaties, 509.

federal treaties, 512.

history of, 505.

not retroactive, 507.

repeal of, 511.

the alien tax statute of 1828 and
its repeal in 1830, 505.

the alien tax statute of 1842, 506.

the statute of 1850, 510.

the invalid alien statute of 1894,
511.

to whom applicable, 508.

validity, 507.
annuity tables, use of, 528.
appraisal, of insurance contract,

522.

are to pages.]

LOUISIANA, — continued.
assessment of tax, 524.

liability determined by share of

each heir, 518.
where no will found, 526.
attorneys to collect tax, 528.
beneficiaries, duties and liabilities
of, 524.
restrictions on, 526.
collection, attorneys for, 528.

legacy not to be delivered till tax
paid, 525.
community property, share in not

taxable, 518.
constitution 1845, a. 127, 514.
1898, 514.

not applicable to taxes levied
before the constitution went
into effect, 514.
constitutionality, invalid as revenue
legislation introduced in the
Senate, 512.
contract rights uncertain, 522.
double taxation prevented, 518.
treaties, effect of, 509.
costs, 528.

creditors' rights preserved, 526.
debts deducted, 521.

excepted, 518.
double taxation, — this tax shall not
be enforced when the property
shall have borne its just propor-
tion of taxes, 518.
executors, duties of, 524.
exemptions, 523.

burden of proving, 527.
an inheritance to descendants
of less value than $10,000, 523.
non-taxable property not ex-
empt, 515.
of property already taxed, 518.
property which has borne its

just proportion of taxes, 523.
sale does not affect exemption,
523.
fees for collection, 520.
foreign real estate, 522.
insurance contract, tax on, 522.

1322

INDEX.

[References are to pages.]
continued. MAINE,

527.

each

LOUISIANA,

interest, 528.
inventory, 524.

jurisdiction ot district court,
liabilities on transfer, 527.

value based on share of
heir, 518.
mortality tables, use of, 528.
nature of succession tax, 515.
officers, 527.
parties, 526.

payment of tax on special or par-
ticular gifts, 525.
power of sale, 524.
property taxable, 518.
purpose, 516.
rate, 521.

restrictions on beneficiaries, 526.
revenue legislation introduced in

senate, 512.
sale, 525.

statute, — application, all succes-
sions not finally closed, 528.

list of, 505.

1828, c. 95, 505.

1842, c. 154, § 4, p. 434, 506.

1855, c. 315, § 7, p. 399,
510.

1904, c. 45, p. 102, 516.

1906, c. 109, 521.

retroactive, 516.

the present act, 521.

the present act a substitute and
not a repeal of the statute of
1904, 520.

title sufficient, 516.

to what estates the act applies,
528.
transfers taxable, 521.

liabilities on, 527,
treaties, effect of, 509.
usufruct not taxable, 518.
will, — assessment where no will
found, 526.

probate of, 525.

search for, 525.

in general, 530.

accounts, no final settlement of,
shall be allowed until all taxes
have been paid, 539.
action, of debt for tax, 538.
appeal, 540.
appraisal, fees for, 540.

how value of property shall be

fixed, 540.
value of prior estate, how deter-
mined and how taxed, 537.
assessment, petition for, 537.
collection, —

certain actions in behalf of the
state may be brought in any
county, 541.
debt for tax, 538.
proceedings by the attorney

general, 544.
proceedings when estate liable to
pay inheritance tax is not
before probate court within six
months, 542.
property shall not be delivered
to legatee until tax is paid, 538.
registers of probate shall annu-
ally deliver to attorney general
list of estates appearing to be
liable to collateral inheritance
tax — proceedings thereon, 541
reports by city and town clerks,

543.
sale of real estate to pay tax, 539.
whenever any real estate passes
to another person and subject
to tax, state assessors shall be
informed, 539.
when legacy is in money for a
limited period executor shall
retain tax on whole amount,
otherwise judge of probate
shall make an apportionment,
539.
construction, how words shall be
construed, 541.

INDEX.

1323

[References
MAINE, — continued.

constitution 1875, a. 1, § 1, 531.
a. 9, §7,531.
a. 9, §8, 531.
constitutionality, — classification by
relationship valid, 533.
due process of law, 532.
uniformity, 532.

valid as applied to non-residents,
533.
corporations, incorporated in two
or more states, 543.
liable for transfer of their stock,

543.
tax on stock, etc., limited to
corporations having $1,000 of
property in Maine, 543.
descent, right of, is merely statu-
tory, 531.
due process of law, 532.
executors, — excess of reasonable
compensation to executors for
services when residuary lega-
tees, shall be taxed, 537.
failure to pay tax renders admin-
istrator liable, 538.
exemptions, 536.

above the sum of five hundred
dollars, 534.
fees of judges and registers of pro-
bate, 540.
hearing, 540.

history of succession taxes, 531.
inventory or copy thereof of any
estate subject to tax shall be
furnished attorney general,
539.
penalty for neglect or refusal to
file inventory of estate, 542.
jurisdiction, — court of probate shall
have jurisdiction to determine
all questions relating to tax, 540.
lien, 537.

all taxes payable upon real estate
shall remain a charge thereon
until paid, 538.
nature, not a property tax, 532.

are to pages.]

MAINE, — continued.

non-resident, — fiduciaries and cor-
porations liable for tax on
transfer of stock of non-resi-
dents, 543.
liability of, 542.
validity of statute as to, 533.

notice, 540.

payment to state treasurer, 544.

property of a deceased resident of
this state subject to taxation in
another state not liable to taxa-
tion in this state — property of
non-resident decedent, 542.

rates, 536.

refund, — whenever any property
shall be refunded by legatee tax
shall be paid back, 539.

statute adoDted from New York,
532.
list of, 531.

not retroactive, 534, 544.
1893, c. 146, 532.
the amendments of 1895, 535.
later amendments, 535.
revised statutes, c. 8, § 69, 535.

c. 83, § 15, 541.
the present act, 536.

transfers taxable, 536.

trustees, bequest to, 537.

when tax payable, 537.

MARKET AND FAIR MARKET
VALUE,
See Appraisal.

MARSHALING ASSETS,
to pay debts, 267.

marshaling local assets of non-
resident, 161.
masses as expenses, 277.

MARYLAND,
in general, 545.
action against legatee, 556.
appraisers of real estate, 556,

warrant and oath of, 557.

vacancy among, 557.

in different counties, 557.

1324

INDEX.

[References

MARYLAND, — continued.

appraisement to be deemed true
value, 557.

"clear value," on death, 555.
assessment, — absence of provisions
for ascertainment of tax is not
fatal, 555.

tax on appraised value, 556.
beneficiaries, 553.

clerks, accounting and fees of, 560.
collection, —

absence of provisions for, 555.

action against legatee, 556.

information as to real estate, 560.

proceedings for recovery, 561.

revocation of administration on
failure to pay tax, 559.

where parties entitled do not
administer, 560.
constitution 1864, declaration of

rights, 545.
constitutionality, 549.
debt, situs of, 555.
definitions, "being within this state,"
553.

"clear value," 555.
estates, particular, and remainders,

558.
executors and administrators, —

administrator de bonis, 559.

bonds of, etc., liable for tax, 559.

tax on commissions of, 546.
exemptions, 654.
history of legislation, 546.
inventory, proceedings on, 557.

of real estate, 557.
jurisdiction of court, 551.
legislature, power of, 554.
lien, 557.
life estates, 558.
payment, 557.

deduction of tax, 556.

sale of real estate, 557.

when tax payable, 556.
powers, 555.

of sale, 556.

are to pages.]

MARYLAND, — continued.

property of non-residents, 553.

power of legislature over, 554.

within this state, 553.
rate, 554.

receipts, duplicate, 560.
registers, accounting and fees of,
560.

compensation of, 560.
release, by statute, 552.
remainders, 558.

slave, manumission of, taxable, 550.
transfers taxable, 554.
trust, laid on trustee and not

cestui, 556.
summons, — proceedings, inherit-
ance statutes, 549.
statutes, — list of, 545.

present act, 554.

release by statute retroactive,
552.
validity of, 552.

retroactive, 546, 547.

St. 1844, 549.

code 1860, a. 81, § 137, 551.

code 1878, a. 11, § 117, 552.

code 1888, a. 81, § 102, 553.

public general laws (1904), a. 81,
§ 117, 554.

St. 1904, c. 222, 548.
when tax accrues, 605.

MASSACHUSETTS,
in general, 562.
account, allowance of, 597.

final of fiduciary, 601.

must show payment, 582.
actions to recover, 600.
annuity of fluctuating value, 567.

tax on, 576.
appraisal, 579.

appeal, 605.

at death of testator, 580.

corporations incorporated in more
than one state, 590.

equity of redemption, 580.

federal tax deducted, 567.

fees of, 586.

INDEX«

1325

(References

MASSACHUSETTS. — continued.
appraisal, continued.

income received after death, 572.

life estate, 580.

method of valuation, 592.

rules for valuation, 605.

value of property liable to tax

to be determined by the tax

commissioner, etc., 595.

assessment of tax on real estate, 601.

beneficiaries, property left intestate

under- will, 573.

city or town, 590.
bonds, situs of, 569.
choses in action, situs of, 588.
collection, —

access restricted to papers filed,
601.

actions for, 600.

administrators shall be liable for
taxes until paid, 574.

by sale of real estate, 594.

decree of distribution no de-
fence to action, 597.

deposit in lieu of tax, 592.

executor, etc., holding property
subject to tax shall deduct the
tax or collect it from the lega-
tee, etc., 593.

if a legacy is payable out of real
estate the devisee shall pay the
tax to the executor, etc., 593.

if a will is not offered for probate
within four months the pro-
bate court to appoint an ad-
ministrator, etc., 597.

if succession taxes have been paid
in other states, 605.

information to tax commissioner,
594.

limitations, 582.

no final account allowed until
taxes paid, 597.

proceedings for recovery, 597.

state treasurer to administer
estates in certain cases, 581,

state treasurer to be notified of
transfer of real estate, 579.

are to pages.]

MASSACHUSETTS, — continued.
collection, continued.

suits for collection of tax, —

when to be brought, 582.
tax commissioner shall certify
amount of tax due to the
treasurer and receiver general,
etc., 596.
the tax commissioner to be a
party to petitions by foreign
executors, 595.
compounding tax, 585.
consideration, for full consideration
in money or money's worth, 589.
constitution 1780, pt. 2, c. 1, $ 1,

a. 4, 563.
constitutionality, —

classification by relationship, 573.
double taxation, 571.
of act of 1891, 566.
corporations incorporated in two
states, 570, 590.
stock in companies in two or

more states, 590.
tax payable on transfer of stock,
594.
debts, aflftdavit of, 604.
foreign legacy taxes, 605.
instructions as to, 604.
local taxes, 604.
mortgage notes, 604.
definitions, — "by deed," 572.
by will or by the laws of the

commonwealth, 672.
"institutions," 57S.
person, 582.
property, 582.
"tangible property," 571.
descent, right of succession cannot

be abolished, 564.
distribution, effect of, on liabilities,

697.
double taxation, 571.
estates, — particular estates and re-
mainders, 575.
tax on future interests, 693.

1326

INDEX.

[References

MASSACHUSETTS, — continued.
executor, final account, 601.

property bequeathed to an execu-
tor, etc., in lieu of compensa-
tion, 593.
gifts to executors or trustees in

lieu of commissions, 576.
liability for taxes, 574.
exemptions, 566, 586, 587.

confined to domestic corporations,

574.
"institutions," 573.
library, 573.
non-taxable property not exempt,

569.
property exempt by law from

taxation, 573.
religious societies, 590.
unless the value shall exceed the
sum of ten thousand dollars,
575.
Young Men's Christian Associa-
tion, 590.
federal tax deducted, 567.
fees of appraisers, 586.
foreign taxes, evidence of payment,

605.
forfeitures, 601.
forms, 602.
history, 565.
income received after the testator's

death, 572.
institutions exempt, 573.
interest, 576, 591.
inventory, 578, 594, 602-604.
filed with state treasurer, 579.
register to furnish inventory,
etc., to tax commissioner, 594.
jurisdiction, — decree of distribu-
tion, no defence to action to
collect, 597.
of probate court, 581.
probate court to hear and deter-
mine all questions, etc., 596.
library, exemption, 573.
lien, 576, 591.

on real estate, 585.

are to pages.]

MASSACHUSETTS, — continued.
life estate, appraisal of, 580.
limitations, 582.
marshaling assets, 567.
mortgage, — appraisal of interests
under, 580.
as debts, 604.
situs of, 569*
municipal corporations, to or for

the use of a city or town, 590.
nature of tax, 566.
non-resident, license for transfer of
property of, 595.
statute applicable to, 572.
tangible property of, 571.
payment, deducted from principal,
577.
deduction of tax from legacies

charged on real estate, 578.
direction in will to pay tax from

residue, 586.
if certification for immediate

payment is desired, 605.
in cases of assignment or trans-
fer of stock the tax shall be
paid to the treasurer and re-
ceiver general, 594.
legacy payable out of real estate,

593.
no tax chargeable upon money
applied in payment of succes-
sion tax in certain cases, 593.
tax deducted by executor, etc.,

577.
tax deducted or apportioned in

certain cases, 578.
to whom tax payable, 576.
when payable, 591.
penalties, 601.
power, 583, 598.
interest under, 580.
law applicable to exercise of
power of appointment by will,
571.
practice, 602.

probate court, jurisdiction of, 581,
596.

INDEX.

1327

[References
MASSACHUSETTS, — continued.
property, — situs of mortgage inter-
ests, 569.
situs of stocks and bonds, 569.
tangible, 571.
trust, interest in, 571.
whether belonging to inhabi-
tants of the commonwealth
or not, 571.
within the jurisdiction, 568, 588.
rates, 566, 587.

highest rate to apply where in-
formation is not furnished, 600.
refund, 579, 595.
remainder, 575, 577, 580, 593.
tax on, 584, 585.
when tax accrues on, 605.
sale, — probate court may authorize
sale of real estate in certain
cases, 594. ,

of real estate, 578.
situs of mortgage interests, 569.

of stocks and bonds, 569.
statutes, —

amendments to the act of 1891,

583.
applicable only where death

occurs after passage, 571.
early probate fees, 565.
how construed, 598.
list of, 564.

not to apply in certain cases, 598.
present act, 587.
recording receipts for federal

tax, 1262.
St. 1836-53, supplement to re-
vised statutes, c. 355, 365.
St. 1891, c. 425, 566.
St. 1902, c. 473, § 1, 584.
St. 1909, c. 490, pt. 4, 590.

not affecting other legislation

of 1909, 598.
application of, 600.
stock, situs of, 569.
"tangible property," 571,
transfer, license for, 595,

taxable, 566, 587.
trust, interest in. 571.

are to pages.]

MASSACHUSETTS, — continued.
trustee, final account, 601.
gifts to, in lieu of commissions,

576.
property bequeathed to, in lieu
of compensation, 593.
when payable, 591.
when tax accrues, 576, 605.

upon future interests, 605.
will, property left intestate under,
573.
which shall pass by will does not
include agreement of compro-
mise, 589.
Young Men's Christian Association,
590.
MASSES,

bequest for, 277.
MERGER,

of remainder, 234.
MICHIGAN,
in general, 606.
appeal from appraisal, 627.
appraisal, 626.
appeal, 627.
fees of appraisers, 626.
instructions for, 636.
no deduction for mortgajje in-
debtedness, 616.
proceedings, 626.
rehearing, 627.
report, 627.
collection, deduction of tax. 619.
instructions, 639.
proceedings for, 62$.
provisions for, sufficient, 612.
tax deducted from legacy, 623.
when bond required in case of
deferred payments, 624.
constitution 1850, a. 14, 606.
constitutionality, application of pro-
ceeds, 612.
double taxation upheld, 610.
duties imposed on probate court,

612.
how to test the validity of the

statute, 607.
provisions for collection, 612.
of act of 1903. 616.

1328

INDEX.

[References

MICHIGAN, — continued.

definitions, county treasurer, 635.

estate, 613, 635.

property, 613, 635.

prosecuting attorney, 635.

transfer, 613, 635.
discount, 639.

interest, 623.
double taxation, 610,
estate, 613.
exemptions, 611, 617, 622.

instructions for, 636.

valid, 612.
executors, — transfers by foreign ex-
ecutors, etc., 625.

when bequest to executors, etc.,
subject to tax, 625.
fees, 639.

of county treasurer, 629.
forms, abstract of taxable inherit-
ances, 630.

instructions as to, 639.

instructions as to use of blanks,
. 638.
interest, 623, 639.
judge of probate, 635.
jurisdiction of probate court, 626»
liabilities, 622.
lien, 617, 622.
limitations, 611.
mortgage, not deducted, 616.
nature, tax is on the entire estate

of decedent, 614.
non-resident's interests in Michi-
gan land, 618.

land contracts of non-residents,
610.

mortgage on Michigan land, 611.

stock actually within the state,
610.
payment, 617, 622.

application of proceeds, 635.

application of proceeds void, 612.
pow^r of sale, 619, 623.
practice, 635.
probate court, duties of, valid, 612.

are to pages.]

MICHIGAN, — continued.
"property," 613.

not confined to property which
the state has selected for taxa-
tion, 613.
rates, 609, 615.
receipts, 617, 629, 639.
records, 629.
refund, 624, 639.
remainders, 610.
report, 633, 639.

examiners, 634.
statutes, — based on the early New
York statute construction, 609.
list of, 606.
not retroactive, 610.
the present act, 621.
St. 1893, c. 205, 607.
St. 1899, c. 188, 608, 621.
title of, 608.
validity, 609.
St. 1903, c. 195, 615.
St. 1909, c. 298, 621.
recent amendments, 620.
"transfers," 613.
transfers taxable, 609, 615, 621.
trustess, bequest to, taxable, 625.
when tax accrues, 622.

MINNESOTA,
in general, 640.
appeal, from assessment, 669.
appraisal, 662.

expenses of administration de-
ducted, 659.

notice of, 669.

omission of means for, 658.

proceedings, 668.

time of, 656, 668.

trustees' fees not deducted, 659.

valuation, 658.
appraisers, 668.

report, 669.

fees of, 668.
assessment, — the court is to assess
only present tax, 656.

objections to, 669.

INDEX.

1329

[References
MINNESOTA, — continued.

attorney general, assistant, 674.

seal of, 674.
avoiding tax by transfer to cor-
poration, 643.
collection, — citation, 670.
deduction of tax, 655.

by administrator, 664,
proceedings on transfers, 665.
proceedings to obtain informa-
tion, 672.
tax deducted on payment, 656.
warrant to county treasurers, 673.
compromise of tax, 671.
conditional, — when tax accrues on
conditional gift, 657.
conditional interests, 658.
constitution 1893, first amendment,
645.
a. 1, 641.
a. 6, 641.
constitutionality, classification by
relationship void, 648.
distinction between exemptions

to lineals and collaterals, 648.
equality, 653.
exemptions of persons exempt by

general law, 647.
exemption of realty void, 647.
exemptions void, 649.
how to test the validity of the

statute, 642.
omission of means for valuation
of life estates is not fatal, 658.
progressive feature upheld, 653.
tax should be only on excess above

exemption, 647.
unconstitutional statute, effect

of, 642.
validity of act of 1905 is settled,

655.
act of 1902 void in its entirety,
650.
corporation, — avoiding tax by
transfer to, 643.
duty of company holding securi-
ties, 667.
transfers of, 666.

are to pages.]

MINNESOTA, — continued.
exemptions, 651, 661.

all gifts to each individual should
be consolidated in reckoning
exemptions, 651.

constitutionality of, 649.

construction of, 652.

lineals and collaterals disting-
uished, 648.

of persons exempt by general
law, 647.

of realty void, 647.
income, rate of tax on, 655.

when tax accrues, 656.
interest, 665.

jurisdiction of probate court, 659.
liabilities, 664, 665.
lien, 664.

nature of tax, 642.
non-resident, transfers of, 665.

notice, 668.
payment, 664.
power of sale, 665.

taxable, 660.
probate court, jurisdiction, etc.,

641.
proceedings, 668.

property, legacy charged on, 665.
rates, 650, 651, 661.

rate of tax on income, 655.

construction of, 652.

void under statute of 1902, 650.
recoids, 671.
refund, 665.

proceedings for, 673.
remainders, when tax accrues on,

656.
seal of attorney general, 674.
statutes, —

construction, 642.

legislation of 1911, 660.

list of, 640.

not retroactive, 651.

present act, 660.

St. 1875, c. 37, 643.

St. 1897, c. 293, 646.

St. 1901, c. 255, 648.

St. 1902, c. 3, 650.

1330

INDEX.

[References

MINNESOTA, — continued.
St. 1905, c. 168, 641.
St. 1905, c. 288, 651.
testing validity, 642.
unconstitutional, effect of, 642.
transfers taxable, 650, 651, 660.
when tax accrues, 655, 662.

on gift conditional on reaching

certain age, 657.
on income, 656.

tax on remainders accrues at
death of testator, 656.
MISSIONARY SOCIETIES,

Home Missionary Society not ex-
empt, 209.
Woman's Foreign Missionary Soci-

not exempt, 209.
See Exemptions.
MISSISSIPPI,
in general, 675.
constitution 1890, a. 4, 675.
constitutional limitations, 675.
MISSOURI,

in general, 676.

administrators or trustees not re-
quired to deliver specific legacy
or other property until tax is
paid, etc., 686.
appraisal, report of appraiser to be

filed in probate court, 688.
appraisers, — probate court to ap-
point competent person as ap-
praiser to fix valuation of
estates subject to payment of
tax, 688.
appraiser taking any fee or re-
ward from executors, etc.,
guilty of misdemeanor, 689.
assessment based on report, 688.
collection, — duty of attorney gen-
eral, 690.
duty of executor or trustee to
notify probate court when real
» estate of decedent is subject to

tax, 687.
duty of executor or trustee when
legacy or property subject to
tax is given for limited
period, 687.

are to pages.]

MISSOURI, — continued.
collection, continued.

duty of state auditor when he
believes the value of an estate
has been fraudently or errone-
ously determined, 689.

collector entitled to certain per
centum, in addition to other
fees, 691.

necessary proceedings to cite per-
sons to appear before probate
court to show cause why tax
should not be paid, duty of col-
lector and prosecuting attor-
ney, 691.

state auditor to furnish books and
forms for reports to probate
judge, entries, etc., 690.

when and to whom collector shall
account, 685.
constitution 1875, a. 10, 677.

Missouri revised statutes 1899,
vol. 1 (Missouri constitution,
a. 4), 676.

constitution 1909, a. 10, 677.
constitutionality, — application of
proceeds valid, 683.

appropriations, order of, 676.

classification by relationship up-
held, 678.

constitutional limitations, 676.

how to attack the statute, 677.

not void as an appropriation, 682.

progressive rate condemned, 678.

public purpose, 680.

scholarship fund not a public pur-
pose, 680.

taxes for public purposes only
must be uniform, 677.

taxes in proportion to value, 677.

uniform though confined to col-
lateral inheritances, 682.

void as a property tax, 679.
corporation, transfer of stock, 688.
estates, when and how tax is paid

on remainders, reversions or other

estates in expectancy, real or per-
sonal. 686.

INDEX.

1331

[References

MISSOURI, — continued.

executors, property bequeathed to
executors or trustees in lieu of
commissions, excess above fair
compensation subject to tax, 686.
exemptions, — property exempt from
taxation, 677.
valid, 683.
void, 677.
liabilities, — estates subject to pay-
ment of collateral inheritance
tax, 6S4.
transfers of stocks or loans in this
state liable to tax made by
foreign executors, adminis-
trators or trustees — tax when
and where paid and who liable
for failure to pay, 688.
nature, inheritance tax is a "tax,"
677.
not a property tax, 682.
payment, money to be deposited
by state treasurer — how used,
685.
tax coming into hands of execu-
tor, etc., shall be paid to
county collector, 687.
when state treasurer shall de-
posit moneys received to credit
of "educational fund," 685.
receipts, 687.

collector shall issue receipt under
official seal to any person upon
payment of twenty-five cents,
showing real estate upon which
tax is paid, etc., 691.
refunding, when, how and by whom
proportion of tax is repaid to
legatee, etc., 687.
remainders, tax on, 686.
probate court given jurisdiction to
hear all questions arising as to
tax, 690.
probate judge shall make reports to
county collector and state auditor,
when, 690.

are to pages.]

MISSOURI, — continued.
statutes, —

amendments, 683.

how to attack the statute, 677.

list of, 677.

present act, 684.

St. 1895, p. 278, 678.

St. 1895, p. 278, 8. 1, 678.

St. 1895, p. 278, 680.

act of 1897, 681.

St. 1899, p. 328, 681.

the valid statute of 1899, 681.

the void statutes of 1895 and
1897, 678.
trustees, bequests to, 686.
when tax accrues, when tax due

and payable, 684.
MISTAKE,

refunding of taxes paid under, 298
stranger paying taxes, 269.
MONEY,

including annuity, 236.
MONTANA,
in general, 692.

administrators de bonis non, 702.
appraisal, 701.

notice of, 703.
appraisement of contingent or de-
terminable estates, 699.
appraisement of estate, 702.
appraiser, misconduct of, 703
assessment, how to attack, 696.
collection, — by suit, 704.

citation to compel payment, 704.

costs of, 705.

power of sale to pay tax, 701.

proceedings upon failure of execu-
tor to pay tax, 701.

proceedings upon failure to ad-
minister estates, 704.
constitution 1899, a. 12, 692.

measure by valuation of prop-
erty upheld, 695.

retroactive, 697.
constitutional limitations, 692.
contingent estates, 699.
county treasurer, 705.

1332

INDEX.

[References

MONTANA, — continued.
definitions, "increase," 695.
estates to which applicable, 706.
executor, devise or bequest to, in
lieu of fees, 700.
liability of executors' bond, 701.
power of executor to sell prop-

rety to pay tax, 701.
to deduct tax from legacy, 700.
executors, foreign, 702.
exemptions, 699.

upheld, 695.
"increase" defined, 695.
interest, 700.

jurisdiction of courts, 704.
nature of tax, 694.

right to receive property is taxed,
694.
non-resident, power over estate of,

698.
payment, — distribution of tax, 706.
duty of executor to deduct tax

from legacy, 700.
to county treasurer, 701.
penalty for non-payment, 700.
power over estate of non-resident,

698.
property, — inheritance tax, prop-
erty subject to, 697.
tax shall be levied and collected
upon the increase of all prop-
erty, 695.
rates, 699.
real estate, 695.
receipts, 701.
record of, 705.

record of clerk of court, 705.
refund, — reduction of tax upon re-
fund to pay debts, 702.
of erroneous collection, 702.
reports, — clerk's quarterly state-
ment, 705.
statutes, — inconsistent act«s re-
* pealed, 706.
list of, 692.
modeled after, 693.
retroactive feature upheld, 697.
revised codes of 1907, 697.

are to pages.]

MONTANA, — continued.
statute of 1897, 693.
the present act, 697.
when tax accrues, estate to which

applicable, 706.
when tax due, 700.
MONUMENT,

exemption of gift for monument to

horse, 219.
MORTALITY TABLES,

See Annuity Tables.
MORTGAGE,

priority of lien for tax as against

mortgage, 294.
real estate subject to mortgage, 132.
situs of mortgages on real estate,

180.
situs of the Massachusetts mort-
gage, 181.
the New York rule as to situs, 181.
MORTIS CAUSA,

See Gifts.
MUNICIPAL CORPORATIONS,
to county for charitable purposes,

218.
exemption of, 214.
exemption of bequest to town in

another state, 215.
federal taxation of bequest to, 211.
power of municipalities, 30.

NATURE OF TAX,

advantages, 10.

economically sound, 9.

excise tax, 4.

how often property becomes sub-
ject to tax, 10.

not a "detraction tax," 51.

not upon the property itself, 160.

not a penalty or forfeiture, 8.

not a poll tax, 4L

not a property tax, 4.

privilege taxed as a "commodity," 8.

rate determined by size of benefi-
cial interest, 224.

revenue act, 4.

right of inheritance not a natural
right, 11.

INDEX.

1333

[References
NATURE OF TAX, — continued.
right to receive rather than right

to transmit is taxed, 7.
tax upon succession, 252.
that the executor or administrator

is required by the statute to pay

the tax does not effect its nature,

199.
transfers inter vivos, 6.
whether based on estate or on

beneficiaries, 198.
NEBRASKA, -
in general, 707.
appraisement, 714.
apprasier, — malfeasance, 715.
collection, — taxes not paid — pro-
cedure, 715, 716.
constitution 1875, a. 9, 707.
constitutionality, certainty, 710.

limitations, 707.

of double taxation, 710.

uniformity, 710.
double taxation upheld, 710.
estates for life, remainder, 712.
executor, foreign, transfer by, 714.

payment of tax- voucher on settle-
ment, 714.
executors, administrators, duties,
713.

sale pf property, 714.
foreign executor, — transfer of

stocks or loans, 714.
interest, 713.

jurisdiction over questions, 715.
lien, 717.
nature, tax is on each beneficiary,

710.
nature ot tax, 710.
non-resident, stock of non-resident
trustee, 711.

payment, 711.
payment, — funds, road improve-
ments, 716.

voucher on settlement, 714.
property taxable, 712.
purpose of tax, 716.
rate, 709, 712.
receipts, 717.

are to pages.}

NEBRASKA, — continued.
records, 716.
refund of tax, 711.
refunding, erroneous taxes, 714.

tax for debts, 714.
remainder, 712.
report, 716.

St. 1901, c. 54, p. 414, 708.
St. 1905, c. 117, s. 1,709.
statutes, — amendment of 1905,
719.
amendments in 1907, 711.
compiled statutes, 1905, 712.
list of, 707.
the present act, 712.
transfers taxable, 709.
trust, stock of non-resident trus-
tee, 711.
trust estates, 714.
when tax accrues, 712, 713.
NEPHEWS,

liability where relative was both

nephew and stepson, 240.
See Beneficiaries.
NETHERLANDS,

tax in, 15.
NEVADA,

constitution 1864, a. 10, 717.
NEW HAMPSHIRE,
in general, 718.
abatement, 738.
accounts, not allowed till tax paid,

740.
annuities, 735.
appeal, 739.
appraisal, 731, 738.
assessment, appeal, 739.
of tax abatement, 738.
charitable societies, 725.
collection, — actions to record tax,
732.
application for administration by

state treasurer, 739.
attorney for collections, 732.
books and blanks provided by

state treasurer, 741.
conditions of delivering assets to
foreign executor, 741.

1334

INDEX.

[References are to pages.]

NEW HAMPSHIRE, — continued.
collection, continued,

delivery of securities to foreign

executor, 732.
information as to real estate, 738.
by administrators, etc., to b

furnished, 737.
by executor, 731.
to state treasurer, 737,
notice, 741.
parties, notice to, 741.
parties to petition by foreign

administrator, 732.
power of sale, 737.
probate accounts not allowed till

tax paid, 740.
production of books, papers, etc.,

740.
register to send copies of will, etc.,
to state treasurer, 731.
compromise of tax, 733.
constitution 1783, bill of rights,
a. 12, 718.
1792, pt. 2, a. 5, 718.
1903, a. 6, 719.

classification by relationship up-
held, 719.
double taxation upheld, 725.
constitutional limitations, 718.
object of statute immaterial, 721.
power to tax, nature right of sue

cession, 721.
progressive tax, 719.
tax need not be proportional, 719.
tax not proportional and hence

void, 721.
validity of act of 1905, 723.
corporations organized in more

than one state, 723.
double taxation, valid, 725.
estates, life estates, annuities, re-
mainder, valuation, 735.
executor, — bond by, 733. .

bond by executor who is residu-
ary legatee, 733.
conditions of delivering assets to
foreign, 741.

NEW WAMVSRIRE, — continued,
executor, continued.
foreign, duty to take out ancil-
lary administration, 724.
gifts to executors, etc., in lieu
of compensation, 735.
exemptions, 734.
educational, 725.
not retroactive, 730.
of charitable, etc., societies, 730.
legacy to church as trustee, 727.
use determines exemption, 727.
Young Women's Christian Asso-
ciation, 726.
expenses, foreign legacy taxes as,

728.
foreign executor, — delivery of se-
curities to, 732.
liabilities on transfer of stock by,

740.
should take out ancillary admin-
istration, 724.
See Executor,
foreign legacy taxes, 728.
history, 720.
inventory, 738.
liabilities on transfer of stock by

foreign executor, 740,
lien, 732.

payment, — deduction of tax in case
of particular estates and re-
mainders, 736.
tax on legacy charged on real

estate to be deducted, 736.
tax to be deducted, 736.
whether inheritance taxes are a
charge against the estate or
against individuals, 727.
power of sale, 737.
property, situs of interest in savings.

bank deposits, 724.
refunding, 731.
remainders, 732, 735.
savings banks, situs of deposit, 724.
tatutes, — adopted from Massa-
chusetts, 722.
list of, 720.
not retroactive, 730.

INDEX.

1335

[References
NEW HAMPSHIRE, — continued.
statutes, continued.
present act, 734.
St. 1878, c. 74, 720.
St. 1905, c. 40, 722.
St. 1911, c. 42, 734.
to what estates act of 1911
applicable, 734.
situs of interest in savings bank

deposits, 724.
transfers taxable, 734.
trustee, legacy to church as trustee,

727.
when tax accrues, 736.
Young Women's Christian Associa-
tion, exemption of, 726.
NEW HAMPSHIRE BAPTIST CON-
VENTION,
exempt, 209.
NEW JERSEY,
in general, 742.
accounts, should show payment of

tax, 750.
annuities, appraisal of, 753.
annuity tables, 767.
appeal, failure to, 753.
record on, 754.
from appraisal, 768.
appraisal, 752.
appeal, 768.

failure to appeal not a bar, 753.
mortality tables, 767.
valuation of annuities, 753.
valuation on death, 752.
appraisers — misconduct — com-
pensation, 769.
collection, — attorney general to
prosecute unpaid taxes, 770.
citation, 769.

comptroller empowered to exam-
ine papers, records, etc., 768.
comptroller notified by register

to surrogate, 768.
counsel for state comptroller, 755.
information as to property liable

to tax, 770.
information as to real estate, 766.
investigation by state comptroller,
767.

are to pages,]

NEW JERSEY, — continued.
compromise of tax, 764.
constitution, amendment of, 1844

743.
constitutionality, 746.

as to stock of non-resident, 756.
double taxation upheld, 746.
invalidity of part not to affect
other sections, 771.
debtor, gift of bonds to, is taxable,

749.
definitions, — "estate," 770.
"property," 770.
"transfer," 770.
discount, 765.

domicil, a resident of the state, 747.
double taxation valid, 746.
estates, future indetei minate inter-
ests are taxable, 744.
particular estate and remainder,
763.
executor, — accounts should show
inheritance tax payments, 750.
duties of, 764.
foreign executor or administrator,

751.
gift to, in lieu of commissions,

765.
liability for interest and penalty,

750.
transfer by foreign executor, 767.
when executor should pay tax,
750.
exemptions, 745, 755, 762.

burden on legatee to prove, 759.
college with a theological de-
partment is not a religious
institution, 761.
confined to domestic corporations

759.
education is charitable, 759.
foreign religious corporations not
exempt under the act of 1906,
762.
New York yearly meeting of

Friends exempt, 762.
public monuments or memorials

exempted, 771.
religious institutions, 761.

1336

INDEX .

[References are to pages.]

NEW JERSEY, — continued.
exemptions, continued.
strictly construed, 759.
Vineland historical antiquarian
society is not charitable —
powers and not practice deci-
sive of liability, 760.
foreign executor, 751, 767.
history, 745.

interest, liability of executor, 750.
jurisdiction, — of courts, 757.
of ordinary court, 769.
of orphan's court, 754.
taxation not dependent on pro-
bate in New Jersey, 749.
lien, 765.

marshaling assets, 748.
mortality tables, 767.
nature, "inheritance, distribution,

bequest and devise," 748.
non-resident, — property of, 758,
767.
New Jersey stocks of non-resi-
dents, 756.
tax on, 748.
ordinary, jurisdiction of, 7697
payment, 766.

deduction of tax, 765.
disposition of receipts, 757.
power of sale, 766.
when executor should pay, 750.
penalty, 765.

for false statements or reports,

770.
liability of executor, 750.
when not enforced, 765.
power of appointment, 749.
property of non-resident, 758.
which shall be within this state,
747.
rate, 745, 762.
receipts, 766.
records, 766.
\ept by comptroller, 770.
on appeal, 754.
refund, 767.

erroneous payments, 768.
to pay debts, 751.

NEW JERSEY, — continued.
remainder, 755, 763.

taxable, 744.
statute, — construction, 745.

distinguished from the New York

act, 746.
list of, 743.
present act, 762.
repeal, effect of saving clause in,

754.
repealer, action heretofore not

impaired, 771.
St. 1894, c. 210, p. 318, 745.

title of, amended, 757.
St. 1898, c. 62, 761.
St. 1906, c. 228, 755.
St. 1906, c. 288, 757.
St. 1909, c. 228, 762.
St. 1909, c. 288, 758.
St. 1910, c. 28, 771.
transfers taxable, 745, 762.
when tax accrues in various cases,

764.
when tax due, 765.
NEW MEXICO,

See Tables, 1281.
NEW YORK,

in general, 772.
f Accrual of Tax.

See When Tax Accrues.
^Adopted Children,

adopted children, 779, 797, 807.
adoption, 909.

children of adopted child, 911.
mutually acknowledged relation of
a parent, 797, 910.
adults, 910.
blood relations, 910.
burden of proof, 914.
evidence, 913.

formal adoption unnecessary, 910.
how designated in family, 912.
illegitimates, 911.
living with foster parent, 911.
parent living, 910.
See further, Exemptions.
^Advancements,

money advanced to legatee, 844.

INDEX.

1337

[References

NEW YORK, — continued.
^Annuity,

agreement to pay, 878.
^Annuity Tables,
absence of, 783.
^Ante-nuptial Contract,

taxable, 844.
f Appeal,

from order as to interest or penalty,

915.
See Appraisal, Assessment.
^Appraisal,
annuities, 939.

legacy subject to, 940.
appeal, 956, 957.

by city comptroller, 959.
effect of failure to appeal, 959.
grounds of appeal specified are

exclusive, 958.
nature, 957.
no appeal from penalty imposed,

959.
notice of 814, 958.
appraisers, appointment of, 812,
819, 924.
application to appoint, 925.
appointment compelled by man-
damus, 925.
jurisdiction of comptroller and

surrogate to appoint, 925.
when may appoint, 813
removal of, 926.
care, legacy for, 939.
claims of estate, 931.
against beneficiary, 932.
against legatee, 932.
against unsettled estate of an-
other decedent, 932.
against worthless legatee, 932.
construction of will, 931.
contingent remainders, etc., see

Remainders,
death of the testator, 929.

before statute enacted, 943.
defeasible interest, 943.
disclaimer by executor, 929.

are to pages.l

^EVJ YORK, — continued.
^Appraisal, continued.

evidence necessary for rehearing,
963.

opinions, 935.

securities owned, 930.
executor, duty of, to obtain, 928.
expenses of litigation, 813.
experts, 935.
future, contingent or defeasible

interests, 941.
good will, 933.
inactive securities, 934.
joint interests, 933.
joint stock association owning real

estate, 935.
life estate, 940.

what is a, 940.

valuation of, where no rules speci-
fied, 783.

not ascertainable, 940.
marriage, estate determinable on,

783.
notice, 928.

to comptroller, 786, 928.

to heirs, 928.

to parties, 788.

service of, 959.
omission from appraisal on death

of testator, effect of, 942.
payment, deduction for postponing,

941.
pleadings, 958.

postponement where value of prop-
erty unknown, 930.

when litigation over title, 930.
practice under act of 1885, 786.

under act of 1887, 798.
proceedings by appraiser, 926.
property of taxable beneficiaries
only included, 929.

report to subject after discovered
property, 930.
questions of fact, 959.
reappraisal, 813, 962.

when unwarranted, 962.

on motion, 963.

1338

INDEX.

[References

NEW YORK, — continued.
^Appraisal, continued.
remainder, 941, 942, 944,

actual duration of life estate as

affecting valuation of, 796.
appraisal of remainder interests
at death not binding on state,
820.
contingent interests, 788.
contingent remainders, 942.

defeasible interest, 945.
contingency extinguished before

death, 943.
remainder assessed under original

will, 945.
where remaindermen known, 942.
retrospective effect of act, 826.
sales, 935.

special guardian, 813.
surrogate, determination by, 814.
test of value, 933.
uncertain interests, 812.
yalue at date of change of title,

783.
will, construction of, 931.
See Debts and Expenses.
See Marshaling Assets.
^Assessment,
appeal, 956.
omitted property, 790.
vacating assessment, 959.

after time for appeal has expired,

961.
general authority of surrogate,

959.
not to correct errors of law, 961.
to correct clerical errors, 960.
where acts without jurisdiction,
960.
^Assignment,
by legatee, 840.
rate on, 905.
^Association,

joint stock, owning real estate, 849.
debt against, 861.
^Avoiding Tax,
in general, 838.
account placed in wife's name, 839.

are to pages.]

NEW YORK, — continued.
^Avoiding Tax, continued

assignment by legatee, payment by
executor out of his own funds, 840.

bequest void, 840.

disclaimer by executor, 839.

disclaimer by legatee, 839.

leaving stock with broker, 838.
^Bank Deposit,

See Deposit.
^Banks,

liabilities on transfer, 922.

See Deposits.
^Bishop,

exemption of gift to, 808, 898.
^Bonds,

exemption of municipal, 896.

federal, see United States.

of non-residents, 857.

of non-resident issued by domestic
corporation, 804.
^Broker,

commission, 951.

deposit by non-resident with, 866.
CfBurden of Proof,

on assessment, 966.

on exemptions, 914.
^Burial Lot,

exemption, 895, 950.
^Causa Mortis,

See Gifts.
^Cemetery,

exemption, 985, 950.
^Charity,

See Exemptions.
^Children,

See Adopted Children.
fChoses in Action,

claim against estate of non-resident,
845. 875.

loans of non-resident, 875.

non-resident's claim against estate
of another, 858.

See Appraisal.
^Claims.

See Choses in Action.
^Clerks,

appointment of, 924.

INDEX.

1339

[References

NEW YORK, — continued.
^Collateral,

stock held as, 845.
^Collection,

books and forms to be furnished
by the state comptroller, 967
collection by executors, adminis-
trators and trustees, 916.
fees, 798.
proceedings for collection, affidavit
to commence proceedings, 814.
burden of proof, 966.
by district attorneys, 965.
evidence of legatee, 966.
oral opinion, 962.
parties to action to enforce ante-
nuptial contract, 966.
reports of county treasurer, 968.
of state comptroller, payment of

taxes, 968.
of surrogate and county clerk,
967.
^Commissions,

taxes upon devises and bequests in
lieu of commissions, 921.
^Composition,

of transfer tax upon certain estates,
963. ,
^Comptroller,

notice to, 786.
^Conflict of Laws,

See What Law Governs.
^Consideration,
bequest for, 843.
for transfer, 878.
^Constitution,

1894, a. 3, § 20, 775.
act of 1885, 776.
act of 1892, 805.
act of 1896, 817.
act of 1903, 827.
present act, 837.
f Constitutionality,

classification by relationship, 837.
contingent estates on, 823.
contract, impairment of, 838.

are to pages.]

NEW YORK, — continued.
^Constitutionality, continued.

contract obligation not impaired

by tax on power, 821.
discrimination among life estates,
837.
who may object to discrimina-
tion in rate, 837.
double taxation, 855, 863.
faith and credit to judgment of

another state, 855
power on, 884.
retroactive, 823.
^Contingent Estates or Interests,

See Remainders.
^Contract,

ante-nuptial, 844.
impairment of, 838.
to leave by will, 842.
^Conversion,
in general, 853.
direction to pay mortgages out of

personalty, 853.
direction to sell real estate, 853.
interest of testator in estate, the
property of which was directed
to be sold, 854.
tax on power of appointment, 854.
^Cooper Union,

exemption of, 824.
^Corporations,

foreign corporations, 779.

not exempt, 794, 799.
liability of certain corporations to

tax on transfer of stock, 922.
railroad in several states, 870.
stock given but not transferred,

846.
stock in domestic corporations

owned by non-residents, 873.
stock in a foreign corporation, 923.
qCourt,

order of distribution no defence to
executor, 917.
^Creditor,

bequest to, 841.
^Curtesy,

in general, 875.

1340

INDEX.

[References

NEW YORK, — continued.
^Curtesy, continued.

dower and statutory rights of sur-
viving spouse, 875.

included under"intestate laws," 969.

statutory exemptions, 876.
^Debtor,

bequest to, 850,
flDebts and Expenses,

in general, 947.

apportionment of debts, 955.

authority to consider debts, 947

broker's commission, 951.

burial lot, 950.

care of burial lot, 950.

commissions, 951

commissions of foreign executor,
951.

compromise of will contest, 951.

contested claims against estate, 950.

debts of a testator, 811.

debt of non-resident secured by
pledge, 949.

debts secured by mortgage, 948.

direction to pay mortgages, 948.

estimate unpaid debts and expenses
of administration, 947.

executor's commission, 951.

expenses of administration deducted,
947.

local debts set off against local
property of non-residents, 955.

trustees' commissions, 952.
^Deeds,

delivery, 881.

in contemplation of death, see Gift.

in trust, 881.

recording, 881.

what law governs, 835.
^Definitions,

"contemplation of death," 877.

county treasurer, 969.

district attorney, 969.

estate, 969.

"husband of a daughter," 908

intangible property, 969.

intestate laws, 969.

"lineal descendant," 914.

are to pages.]

NEW YORK, — continued.
^Definitions, continued.

property, 969.

tangible property, 969.

transfer, 969.

statutory, 815, 831, 969.

"widow of a son," 911.
^Deposits,

bank of non-resident, 804, 861.

broker, with, 866.

direction to invest in real estate, 854

in savings bank, 863.

in trust company, 864.

securities of non-resident, 867.

special, 863.
^Disclaimer,

appraisal where executor disclaims
property, 929.

by executor, 839.

by legatee, 839.

rate on, 905.
^Discount,

discount, 819, 915.

for delay in payment, 908.
<9fDomicile,

adjudication of in different states,
855.

of donee of power, 836, 888.
^Double Taxation,

constitutionality, 855.
^ Dower,

deducted, 876.

legacy in lieu of dower, 876.
^Educational,

See Exemptions,
f Equitable Interests, 846.

particular estates and remainders,
795.

See Trusts.
^Evasion of Tax,

See Avoiding Tax.
^Evidence,

of declarations of testator, 966.

heirs not bound by declaration of
beneficiary, 880.
^Executor,

commission, 951.

INDEX.

1341

[References
NEW YORK, — continued.
^Executor, continued.

distribution to beneficiaries under

decree of court is no defence, 917.
duty on appraisal, 928.
liability, 916.

relying on void order, 916.
lien, 917.
^Exemptions,

adopted children, 779, 909.
considered, 775.
when operative, 799.
See Adopted Children,
almshouse, — entrance fee, 900.
amount exempted, —

"estate less than five hundred
dollars shall not be subject to
tax," 781.
"estate Ajvhich may be valued at
a less sum than five hundred
dollars," 795.
five hundred dollars, over, 801.
in excess of the value of five

thousand dollars, 906.
unless it is personal property of
the value of ten thousand dol-
lars or more, 807.
bishop, 808, 898.
burden of proof, 914.
cemetery lot, 895, 950.
charity, 901.
construction of exemption statutes,

899.
Cooper Union, 824.
corporation to be created, 900.
foreign not exempt, 794, 799.
incorporation in several states,

900.
test of exemption of corporation,
899.
descendants of brothers and sisters,

779.
educational, 825.
failure to claim exemption, 899.
fund in hands of court, 896.
general exemption, what is, 780.
effect of, 969.
general law not applicable, 824.

are to pages.]

^^"^ YORK, — continued.

^Exemptions, continued.

general exemption, —

property exempt under general

law, 778.
"societies, corporations and in-
stitutions now exempted by
law," 780.
government bonds, 896.
homes, 901.
hospitals, 901.

husband of a daughter, 779, 908.
libraries, 901.
masses, 897.

missionary societies, 902.
monument, 895.

municipal corporations, 795, 895.
museums, 902.

practice to settle exemptions, 924.
petition for exemption, 924.
notice to comptroller, 924.
order of exemption, 924.
prevention of cruelty, 902.
publication societies, 903.
real estate, legacy to lineals of
proceeds 805.
where only the real estate of a
corporation is exempt, 781.
religious, 825.

foreign religious corporations not

exempted, 808.
religious ceremonies, 897.
religious use, 898.
to any religious, educational, char-
itable, etc., corporations, 898.
retroactive, 799, 898.
societies exempt, 780.

particular, 900.
statutory provisions, 775, 790, 794,
807, 818.
under present act, 894.
temperance, 903.
test, value of estate the, under the

act of 1896, 906.
trust for exempt society, 899.
United States, 779, 800, 895.
bonds, 778

1342

INDEX.

[References

NEW YORK, — continued.
^Exemptions, continued.

Young Men's Christian Associa-
tion, 903.
^Expenses,

See Debts and Expenses.
fFees,

of officials, 798.
of county treasurer, 967.
^Foreign Corporations,

See Corporations.
^Forms,

copy of, 970.

furnished by state comptroller, 967.
^Fraudulent Conveyance,

tax on annulment of, 849.
^Gifts,

before transfer of stock, 846.
causa mortis, 794.

take eftect at death, 915.
what law governs, 803.
inter vivos, 805.
in contemplation of death, 877.
as property a burden, 879.
consideration — transfer to erect
monument, 8.
relinquish child, 879.
decedent critically ill, 878.
deeds not delivered, 881.
deeds unrecorded and undelivered

881.
deed signed by decedent under
contract but not delivered, 881.
definition, 877.
deposit in trust, 884.
facts, withholding evidence of

bad faith, 880.
for convenience, 879.
gifts inter vivos, 877.
good faith the test, 877.
heirs not bound by statement of

beneficiary, 880.
payment of annuity, 878.
remainders taking effect on the

death of the donor, 883.
support, 879.

in trust until majority, 881.
use reserved to grantor, 882.

are to pages.]

NEW YORK, — continued.
^Good Will,

appraisal of, 933.

taxable, 850.
^Graduated Rate,

See Rates.
^History,

of legislation, 832.
^Homes,

exemption, 901.
fHospitals,

exemption, 901.
^Husband and Wife,

curtesy, dower and statutory rights,
875.
f Husband of a Daughter,

exemption of, 908.
^Illegitimates,

exemption of, 911.
^Income,

payment from, 784.
^Insurance,

as property, 851.

of non-resident, 868.

insurance policies which testator
had assigned, 844.
^Intangible Property.

defined, 969.
^Interest and Penalties,

appeal from order as to, 915.

delay, 915.

unavoidable cause of delay, 785.

ignorance of law no reason for
remitting penalty, 915.

litigation as ground for remitting
penalty, 915.

on refund, 920.

statutes as to, 784, 797, 819, 915.

to what estates applicable, 785.
^Intestate Laws,

include curtesy, etc., 875.
f Joint Interests,

appraisal of, 933.

joint deposit, 846.

joint stock association owning real
estate, 849.

joint tenants, allowance for im-
provements, 848.

INDEX.

1343

[References

NEW YORK, — continued.
^Jurisdiction,

non-resident, over property of, 857.
property of in two counties, 811.
over exemptions, 924.
over property for taxation, see

Property,
over which this state has any juris-
diction for the purposes of taxa-
tion, 815.
of surrogate's courts, 789, 923.

exclusive, 811.
power to order refund, 812.
to declare will void, 789.
"proper county," 785.
where no property in state when
statute was passed, 802.
^Landlord and Tenant,

co-tenancy — allowance for im-
provements, 848,
leashold interest taxable, 850.
perpetual leases, 849.
^Libraries,

exemption, 901.
fLien,

of tax and payment thereof, 808,

818, 824, 916.
on mortgaged real estate, 917.
on real estate to be sold, 917.
on real estate devised for life with
remainder over, 918.
^Life Estate,

determinable on marriage, 783.
in remainder, 810.
valuation of, 783.
^Limitations,

by act of 1899, 824.
on refunding, 921.
under present act, 969.
^Mandamus,

to compel refund, 920.
^Marriage,

valuation of estate determinable on,
783.
^Marshaling Assets, 936.

administrator no right to elect, 937.
executor presumed to elect, 938.

are to pages.]

NEW YORK, — continued.
^Marshaling Assets, continued.

right of executor to elect to pay
certain legacies with New York
assets, 936.
the act of 1908, 939.
^Masses,

exemption of gift for, 897.
^Missionary Societies,

See Exemption.
^Mistake,

subrogation on payment under, 919.
tax paid by, 955.
^Mortgages,

direction to pay from personalty, 853.
mortgaged real estate, 847.
of non-residents on New York real
estate, 870.
^Mortis Causa,

See Gifts.
^Municipal Corporations,
bonds of, 896.
exempt, 795, 895.
^Museums,

See Exemption.
^Mutually Acknowledged Relation of
a Parent,
See Adopted Children.
^National Banks,

liabilities on transfer, 922.
See Deposits.
^Nature of Tax,
nature, 792, 832.
tax on successions, 775.
on contingent estates, 823.
on power, 884.
property tax on non-residents, 792.
QNext of Kin,

rate where none appear, 904.
flNon- Residents,
bonds, 857.
of non-residents issued by domes-
tic corporation, 804.
claim against estate of another, 858.
covers both testate and intestate

non-residents, 793.
debt to non-resident by association
with an office in New York, 861.

1344

INDEX.

[References

NEW YORK, — continued.
^Non-Residents, continued.

deposit in bank by non-resident,
804, 861.
in savings bank, 863.
in trust company, 864.
with broker, 866.
funds for investment, 868.
insurance policies, 868.
lo^ns from and to non-resident, 875.
mortgages held by non-residents

on New York real estate, 870.
property of non-residents, 776, 792,

857.
property in two counties, 811.
personal estate in New York of

non-residents, 857.
railroad in several states, 870.
real estate taxable, 793.

New York real estate of, 857.
securities on deposit, 867.
special deposit, 863.
stock in domestic corporations

owned by non-residents, 873.
stock ot non-resident, 804.
where only ground for taxation that
stock certificates are in state, 868.
^Notice,

See Appeal, Appraisal, Assessment.
^Object of Tax,

for the use of the state, 781, 968.
^Officers,

See Appraisal, Assessment, Collec-
tion, etc
^Partnership,

partner's claim against partner-
ship, 850.
partnership profits, 850.
^Payment,

application of taxes, 968.
direction in will, 784.
from principal or income of life
estate, 784, 952.
* use of receipts, 798.
when tax due, 914.
See When Tax Accrues.
^Penalty,
See Interest.

are to pages.l

NEW YORK, — continued.
^Pledge,

stock held as collateral, 845.
^Powers,

contract obligation not impaired
by tax, 821.

created by will before the existence
of the inheritance tax, 887.

debt against non-resident secured
by, 845.

direction to pay loan, 892.

effect of power of conversion, 854.

election to take under original will
rather than under appointment,
891.

exemption of, 821, 908.

exercise of power created before
the passage of the statute, 805.

failure to exercise power, 893.

governed by law in effect at the
exercise of the power, 885.

nature and validity of tax, 821, 884.

no defence that tax paid under
original bequest creating power,
894.

property subject to a power, 891.

relationship to donee of power, the
test, 886.

retroactive, 821.

statute ineffective over interests in
default of exercise of power, 893.

tax assessed on present value of
property appointed, 885..

vested remainders, 892.

what law governs, 776.

when interests depend on power,892.

"whenever any person shall exer-
cise a power of appointment, ' ' 884.

where donee has absolute estate,
892.

where donee is a non-resident, 888.

where exercise of power is like will,
889.

where original testator is a non-resi-
dent, 888.

where power created by grant be-
fore the existence of the inherit-
ance tax, 886.

INDEX.

1345

[References

NEW YORK, — continued,
^Practice,

See Collection.
^Principal,

payment from, 784.
tax payable from, 952.
^Progressive Rate,

See Rates.
^Property.

foreign property of resident, 800.
not limited to property subject to

general taxation, 847.
personalty taxable, 850.
"property within the state," 802.
"property," "tangible property,"
and "intangible property" de-
fined, 969.
situs of property, 855.

claim against estate of non-
resident, 856.
legal title in non-resident trustee,

856.
personal property of resident,
856.
See Real Estate,
^Purpose of Tax,

for state use, 781, 968.
^Railroads,

See Corporations.
^Rates,

in general, 775, 790, 903.
assignment by legatee, 905.
discrimination in, 837.
graduated under act of 1910, 830.
how progressive rate reckoned, 831.
inequality in rates on remainders,

944.
renunciation by legatee, 905.
where no next of kin appear, 904.
where one was both stepson and
nephew, 905.
qReal Estate,
in general, 847.
considered, 908.
direction to pay mortgages out of

personalty, 848.
mortgages of non-residents on New
York real estate, 870.

are to pages.]

NEW YORK, -continued.
^Real Estate, continued.

mortgaged real estate, 847.

of non-residents, 793.

on annulment of fraudulent convey-
ance, 849.

outside the state, 778, 849.

proceeds of, 805.

receipts from county treasurer or
comptroller, 966.
^Refunding,

appeal not a prerequisite, 919.

interest, 920.

limitations, 921.

mandamus, 920.

mistake of law, 919.

payment under unconstitutional
statute, 920.

power to order refund, 812, 962.

relief denied to perjurer, 921.

tax erroneously paid, 918.

temporary payment, 920.

what law governs, 919.
^Relationship,

any lineal descendant, 914.

classification by, see Constitutional-
ity.

where one was both stepson and
nephew, 905.
"husband of a daughter," 908.
"widow of a son," 911.

See Adopted Children, Exemptions.
^Religious,

See Exemptions.
9 Remainders,

in general, 782, 795, 914.

act applying to, 827.

appraisal of at death not binding
on state, 820.

contingent, in general, 776, 782,
819, 825, 914.
effect of amendment of 1899, 824.
purpose of amendment of 1899,822.
retroactive on, 776.

interest in remainder from the
death of the life tenant, 810.

unascertainable interests, remain-
ders not ascertained, 796.

1346

INDEX.

[References

NEW YORK, — continued,
^Remainders, continued.
unanswerable interests,

awaiting disposition of will con-
test, 810.
when tax accrues on, 809,
valuation of remainder based on ac-
tual duration of the life estate,796.
vested, 796.
See Appraisal.
^Renunciation,

See Disclaimer.
^Repeal,

See Statutes.
^Reports,

See Collection.
^Retroactive,

See Statutes.
^Safety Deposit Company,
liabilities on transfer, 922.
See Deposits.
^Situs of Property,

See Choses in Action, Property.
^Statutes,

construction of, 836.
limitations, 970.
list of, 773.

present act, 832.
repeal, of act of 1887, 798.

leaving law continuous, 792, 800,

806.
saving clause, 799, 816.
retroactive, appraisal, 826.
as to assessment, 793.
contingent interests, 776.
exemption, 799, 898.
interests under deed, 793.
powers, 805.
remainders, 803.
the act of 1892 is not, 801.
void as, 823.
St. 1885, c. 483,775.
§ 1, 775.
J 2, 781.
§ 3- 5, 784.
§ 6-10,785.
§ 11-13, 786.
§ 14-16, 789.

are to pages.]

NEW YORK, — continued.
f Statutes, continued.
1885, c. 483.
§ 17-23, 790.
imperfections, 776.
St. 1887, c. 713, 790.
§ 1, 790.
§ 2, 795.
§ 3, 797.
§ 4-11, 797.
§ 12, 13, 798.
§ 14-18, 797.
§ 19, 798.
§ 20-21, 797.
§ 22, 798.
§ 23, 797.
§ 24, 25, 798.

continuation of theactof 1885,792.
imperfections of act of 1887, 791.
purpose of amendment to tax
property of non-residents, 792.
1889, c. 307, 799.

1889, c. 479, 799.

1890, c. 553, 799.

1891, c. 34, 799.

1891, c. 215, §§1,2,800.

1892, c. 167, 801.
1892, c. 168, 801.
1892, c. 169, 801.

1892, c. 399, 801.
§ 1, 801.

§ 2, 807.

§ 3, 808.

§ 4, 810.

§ 5-10, 811.

§ 11, 812.

§ 12-15, 814.

§ 16-22, 815.

§ 23, 24, 816.

§ 25, 817.

construction of, 806, 817.

continuous with prior legislation,

806.
not retroactive, 806.
purpose of, 806
when took effect, 806.
St. 1892, c. 443, 801.

1893, c. 199, 817

INDEX.

1347

[References
NEW YORK, — continued.
^Statutes, continued.
St. 1893, c. 704, 817.

1894, c. 767, 817.

1895, c. 191, 817.
1895, c. 378, 817
1895, c. 515, 817.
1895, c. 556, 817.

1895, c. 861, 817.

1896, c. 160, 817.
1896, c. 952, 817.
1896, c.'809, 817.
§ 220, 817.

§ 221, 222, 818.

§ 223-242, 819.

constitutional, 817.

1896, c. 908, § 226 repealed, 828.

1896, c. 953, 821.

1897, c. 375, 821.

1898, c. 88, 822.

1898, c. 289, 822.

1899, c. 76,822.
1897, c. 284, 820, 821.
1899, c. 269, 824.
1899, c. 270, 824.
1899 c. 389, 824.
1899, c. 406, 824.
1899, c. 672, 824.

1899, c. 737, 824.

1900, c. 379, 824.
1900, c. 382, 825.
1900, c. 658, 825.

1900, c. 723, 825.

1901, c. 173, 825.
1901, c. 288, 827.
1901, c. 458, 827.
1901, c. 493, 827.

1901, c. 609, 827.

1902, c. 101, 827.
1902, c. 283, 827.

1902, c. 496, 827.

1903, c. 412, 827.

1904, c. 758, 828.

1905, c. 368, 828.

1906, c. Ill, 828.

1906, c. 567, 828.
190e, c. 699, 828.

1907, c. 204, 828.

are to pages.]

NEW YORK, — continued.
^Statutes, continued.
St. 1907, c. 323, 828.

1907, c. 709, 828.

1908, c. 310, 828.

1908, c. 312, 828.

1909, c. 62,828.
§ 222, 914.

§ 223, 915.
§ 224, 916.
§ 225, 918.
§ 226, 921.
§ 227, 922.
§ 228, 923.
§ 229, 924.
§ 230, 926.
§ 231, 956.
§ 232, 956.
§ 233, 963.
§ 234, 964.
§ 235, 965.
§ 236, 966.
§ 237, 967.
§ 238, 967.
§ 239, 967.
§ 240, 968.
§ 241, 968.
§ 242, 969.
§ 243, 969.
§ 244, 969.
§ 245, 969.

1909, c. 596, 828.

1910, c. 270, 829.
1910, c. 600, 829.

1910, c. 706, 829.
§ 220, 829.

§ 221, 830.
§ 243, 831.

1911, c. 732,840.
§ 220, 840.

8 221, 894.
§ 221a, 903.
^Stenographers,

appointment of, 924.
^Stockbrokers,
See Brokers.
^Stock Exchange.

seat in as property, 851.

1348

INDEX.

[References

NEW YORK, — continued.
^Surrogate,

appraisal by, 956.

assistants in New York, Kings and
and other counties, 964.

jurisdiction, 789, 811.

to vacate assessment, 959.
^Survivors,

when tax accrues on, 809.
^Tangible Property,

defined, 969.
^Taxes,

in general, 952.

as debts, see Debts.

direction for payment without de-
duction for tax, 952.

entire legacy if any taxable, 908.

federal inheritance tax, 953.

income, tax payable from, 784.

legacy tax of another state, 954.

mistake, tax paid by, 955.

principal, tax paid from, 784, 952.

real estate taxes, 954.
paid by stranger, 955
^Transfers Taxable,

in general, 775, 790, 801, 817, 829,
840.

contract to leave by will, 842.

definition, 969.

direction to pay debt or other
obligation, 841.
^Treaty,

application of treaty covering "de-
traction tax," 792.
^Trust Companies,

liabilities on transfer, 922.

See Deposits.
^Trusts and Trustees,

commissions of trustee, 952.

deposit in, 884.

effect of trusts, 945.

equitable interests, 846.

legai title in trustee in another
state, 856.

legatee's interest impressed with
trust, 946.

when trust deed takes effect, 946.

are to pages.]

NEW YORK, — continued.
f Trusts and Trustees, continued.
where decedent is only a trustee,
945.
f Unascertained Interests,

See Remainders.
^United States,
bequest to, 779.
bonds, 778, 815.

exempt, 896.
exemption to, 800, 895.
^Use of the State,
considered, 781.
^What Law Governs,
in general, 834.
appraisal at what date, 783.
deed, law at date of, 835.
domicile, 836.

adjudication of in different states,
855.
gifts causa mortis, 803.
power, tax on, 885, 886.

law of date of original will
governs, 776.
time, 834.

repeal, see Statutes,
retroactive, see Statutes.
^When Tax Accrues,
in general, 914.
contingent estates, 822.
gifts causa mortis take effect at

death, 915.
"intended to take effect at or after

such death," 803.
interests unascertained, 809.
to survivors on death of life tenant,

809.
"whether made before or after the
passage of this act," 803.
^Will,

bequest for consideration, 843.
contract to leave by, 842.
■ effect of direction in, 784.

jurisdiction to declare will void, 789.
construed on appraisal, 931.
^Young Men's Christian Association,
exemption, 903.

INDEX.

1349

[References

NEXT OF KIN,

liabilities where no next of kin are

known, 239.
NON-RESIDENT DECEDENTS,
liabilities on bequest to corporation

to be created, 238.
marshaling local assets of non-
resident, 161.
personalty of non-resident, 153.
premature distribution after taking

assets out of jurisdiction, 129.
property in hands of agent, 155, 158.
realty of non-resident, 151.
removal of property before taxation,

160.
rights to unsigned bonds, 157.
stock in foreign corporation, 160.
share of stock in a corporation

defined, 159.
stock pledged by non-resident, 143.
taxation of money for investment,

138.
the English rule, 154.
the New Jersey rule as to domestic

stock of non-resident, 159.
three plans of taxation, 154.
where beneficiary alone is within

the jurisdiction, 160.
whether exemptions calculated on

whole estate or on portion within

state, 199.
NORTH CAROLINA,
in general, 973.

appraisal, clerk to enter returns
made by appraisers, etc., 984.

misdemeanor for appraiser to
take fee or reward from execu-
tor or administrator, 983.

where property depreciates, 977.
appraiser to be appointed by the

clerk, etc., 983.
assessment, 979.

clerk to be liable on his official
bond, 985.

clerk to make returns and pay-
ments to state treasurer, 985.

clerk to be agent of the state for
collection of said tax, 984.

are to pages.]

NORTH CAROLINA, — continued.
assessment, continued.

returns necessary though will

directs otherwise, 979.
when paid, on settlement, 977.
constitution, 1876, a. 5, § 3, 974.
constitutionality, power of legisla-
ture, 975.
executor, — court may order execu-
tor, etc., to file account, etc.,
984.
duties on payment, 982.
foreign, to pay tax on transfer of
stock, 983.
liable, 977.
exemption, 976, 979.
history, 974.
interest, 981.
legislature, power of, 975.
liability, when all heirs, legatees,

etc., are discharged from, 981.
nature of tax, 974.
non-residents, 977.
payment, executor, etc., shall de-
duct tax, 982.
executor or administrator to take
duplicate receipts from the
clerk of the court, 982.
foreign executor or administrator
transferring stock shall pay the
tax on such transfer, 983.
legacy charged upon real estate,
heir or devisee to deduct and
pay to executor, 982.
legacy for life, etc., tax to be
retained upon the whole
amount, 982.
to state treasurer, 985.
property, of non-residents, 977.

out of the state, 977.
rate, 979.

refund, proportion of tax to be
repaid upon certain conditions,
983.
remainder taxable, 976.
statutes, — early statutes, 976
later acts, 978.
list of, 973.

1350

INDEX.

[References

NORTH CAROLINA, — continued.

statutes, continued.
present act, 979.
recent statutes, 979.
revised code of 1855, 976.

transfers taxable, 979.

will, the statute overrides the testa-
tor's direction to make no returns,
979.

NORTH DAKOTA,

in general, 986.

accounts, settlements with execu-
tors or trustees, 990.
appraisal, 988.

copy of, 990.

method of, 990.
collections, 990.

constitution 1889, a. 11, § 176, 986.
debts deducted, 987.
executors, 989.

accounts of, 990.
foreign estates and deduction of

debts, 987.
foreign estates and direct and col-
lateral beneficiaries, 988.
jurisdiction of the court, 991. "
legacies charged upon land, 989.
lien, 988.
life estate, 989.

non-resident, settlement of estate
of, 987.

tax on estate of, 988.
payment by executor or trustee, 989.

to state, 990.
property certified to treasurer, 990.

subject to tax, 987.
rate, 986.

real estate, legacies charged on, 989.
remainders, 988.
statute, — construction, 987.

list of, 986.

present act, 986.

revised code of 1905, c. 10, 986.
transfers taxable, 986.
trustees, 989.

settlement of accounts of, 990.

are to pages.]

NOTICE,

of appraisal, 251.

to collecting officers unnecessary,

67.
to parties of proceedings, 66.

NORWAY,
tax in, 15.

OFFICERS,

effect of the official bond of register,

291.
fees of collecting officers, 291.
officers for collection, 290.

OHIO,

in general, 992.

account, settlement of, 1011.

annuity taxed as received, 1008.

appeal, 1011.

appraisal, 1010.

notice on, 1004.
assessment, appeal, 1011.

when interest is contingent, 998.
collection, information to probate

judge, 1010.
constitution, a. 2, 994.
a. 12, 994.
a. 12, § 2, 995.
bill of rights, 994.
constitutionality, act of 1906, vaild
in part, 1006.
discriminations among collateral

kindred, 1002.
except as to estates in which the
inventory has already been
filed, 1007.
exemptions unequal, 1000.
power to tax inheritances, 994.
progressive feature void, 1000.
provisions for notice on appraisal

valid, 1004.
right to freedom and protection

of property, 994.
tax no invasion of right of sale,

1002.
uniformity, 1000.
what laws to have a uniform oper-
ation, 994.

INDEX.

1351

[References

OHIO, — continued.

contingent interests, assessment of,

998.
definition, "property," 1011.

sales, 1002.
discount, 1009.
estate, — life estate, 998.

particular estates and remainders,
1008.
executors, gifts to, 1009.
exemption, 996, 1008.

bequest to Smithsonian Institute,
exempt, 997.

charitable institutions, 997.

computing, 996.

inequality of, 1000.

of domestic corporations, 1003.

of foreign charitable corporations,
1003.

various gifts to the same person,
997.

what relatives exempt, 997.
validity of, 1005.
fees, 1011.

history of legislation, 995.
interest, 1009.
inventory, 1007, 1010.
jurisdiction of probate court, 1011.
life estate, 998.
masses, bequest for, 996.
nature, 993, 1008.
non-resident, tax on property of,

996.
payment, 1009, 1010.

tax to be deducted, 1009.

tax to be retained or appor-
tioned, 1010.
penalty, 999.
power of sale, 1010.
"property," 1011.

within the jurisdiction of this
state, 996.
rate, 1007.
real estate, legacy charged on, 1009.

effect of repeal, 1007.
refund to beneficiary, 1010.
remainders, 1008.

are to pages.]

OHIO, — continued.
repeal, effect of, 1007.

validity of repeal, excepting cer-
tain estates, 1007.
reports, 1011.
sales, 1002.
statutes, —
amendments, 1002.
effect of repeal, 1007.

validity of repeal excepting cer-
tain estates, 1007.
list of, 992.
origin, 995.
present act, 1007.
retroactive, 1004.
St. 1893, 995, 996, 998.
St. 1894, p. 166, 999.
St. 1904, 9, 398, 1003.

repeal of the act of 1904, 1006.
St. 1906, c. 200, 1006.
general code of 1910, 1007.
transfers taxable, 1007.

OKLAHOMA,
in general, 1012.

appraisal, duty of insurance com-
missioner, 1020.

state auditor application for
rehearing, 1021.
appraiser's duty, pay, 1020

court to appoint appraisers, 1018.

their report, 1020.
assessment, county court, district

judge, 1021.
collection, auditor to furnish books,
1022.

county judge to report, 1022.

tax not paid, procedure, 1021.
compounding tax, treasurer may

agree on extension, when, 1023.
constitution 1S07, a. 10, 1013.
definitions, 1024.

estate, 1024.

property, 1024.

transfer, 1024.
discount, 1016.
estate, defined, 1024.

1352

INDEX.

iReferences

OKLAHOMA, — continued.

executor, bequest to executor in

lieu of commissions, taxed, when,
1017.

foreign administrator or trustee,
duty, 1018.
exemptions, 1015.
foreign executor, 1018.
interest, 1016.

jurisdiction of county court, 1018.
lien, how paid, 1015.
payment, — deferred payment of tax,
bond to secure, 1017.

money paid to state, 1023.

treasurer to report, 1023.
power of sale, administrator may

sell property to pay, 1016.
property, defined, 1024.
rate, primary, by classes, 1014.

primary rate increased, 1015.
receipt, 1023.
refunding, when debt proved after

tax paid, 1017.
statutes,— list of, 1013.

present act, 1013.

fat. 1907-8, c. 81, a. 11, 1013.

compiled laws of 1909, 1013.
"transfer," defined, 1024.

taxable, 1013.

OREGON,

in general, 1025.
appeals, 1037.

appraisal, — county court to fix time

and place of appraisement and

clerk to give notice to witnesses,

1033.

county court to give notice,

when, 1034.
extension of time to file appraise-
ment, 1032.
filing, 1032.

immediate appraisal, when, 1033.
reappraisement, when, 1034.
report of appraisers to be filed
with county court, 1034.
appraisers, appointment of, 1033.
penalty for appraisers taking fee
or reward, 1039.

are to pages.]

OREGON, — continued.

avoiding tax, penalty for adminis-
tering personal estate without
proving will, 1038.
assessment, court may act on first

inventory, 1033.

charge, — payment of tax when

legacy charged on property, 1030.

collection, — administrators, etc., to

furnish additional reports,

when, 1037.

duplicate receipts to be furnished

by the state treasurer, 1036.
duty of administrators, etc., to
notify state treasurer of trust
estate, when, 1038.
duty of administrator, etc., to
send inventory and appraise-
ment to state treasurer, 1032.
duty of county judge; notice to

state treasurer, 1031.
penalty for secreting or willful

failure to produce will, 1037.
penalty for suppressing will, 1038.
recording receipts by county

officer, 1037.
reports by county judges and
custodian of deeds and records,
1036.
secretary of state to furnish books
and forms of reports, entries
by courts, 1035.
tax due and unpaid, duty of
treasurer, 1035.
compromise of amount of tax due,

1037.
constitution 1857, a. 1, 1025.

a. 9, 1025.
discount, 1029.

executors, duty of, filing inventory
and appraisement, 1032.
foreign, payment of tax on trans-
fer, 1030.
taxes upon devises and bequests
in lieu of commissions, 1031.
fees, compensation of officers, 1038.
foreign estate where part of prop-
erty is in state, 1038.

INDEX.

1353

[References

OREGON, — continued.
interest, 1029.

inventory, court may act on first,
1033.
filing, 1032.
jurisdiction of the county court,

1031.
lien, 1029.

depositaries of securities not to

deliver same until notice given

to state treasurer; penalty,

1030. -

non-resident, tax on property of,

1038.
officers, fees of, 1038.
payment, — deferred payment ; bond,
1031.
depositaries of securities to hold

same, 1030.
duty of heir or devisee when
legacy payable out of property ;
legacy for limited period ; duty
of administrator, 1030.
of disbursements by state treas-
urer, 1039.
to whom paid; duplicate re-
ceipts, 1029.
when foreign executor assigns
stock, etc., 1030.
when made, 1028.
penalty, 1029.
power to sell, 1029.
property outside of the state, 1038.

subject to tax, 1026, 1027.
rates of tax, 1026, 1027.
receipts, 1029, 1036.

recording, 1037.
refund of tax erroneously paid,

1030.
repeal, 1039.

safe deposit company, not to de-
liver securities, until tax paid,
1030.
statutes, — list of, 1025.
present act, 1027.
repeal, 1039.
st.-1903, p. 49, 1026.
St. 1905, c. 178, p. 309, 1027.

are to pages.]

OREGON, — continued.
transfers taxable, 1026.
trustee, bequest to, 1031.
when tax accrues, 1028.
will, penalty for suppressing, 1038.

PARTIES,

in collection proceedings, 290.
PARTITION PROCEEDINGS,
effect of, 138.

effect of partition on lien, 295.
PARTNERSHIP,

loan to partnership, 138.
partnership debts, 266.
profits of partnership, 138.
situs partnership interests, 182.
PAYMENT OF TAX,
form of receipts, 297.
pecuniary legacies, 297.
subrogation of corporation paying
taxes, 293.
PECUNIARY LEGACY,

payment of, 297.
PENALTY,

from what date computed, 228.
liability for, 241.
tax not a penalty or forfeiture, 8.
what law governs, 227.
PENNSYLVANIA,
in general, 1040.
adopted children, 1057.

special adoption statutes, 1073.
advancements subject to tax, 1073.
annuity, how tax on annuity paid,
1076.
payable out of future profits of
land, 1077.
appraisal, —

appeal, 1047, 1088.
apportionment, expense of audit,

1089.
claims of mortgagors, 1088.
deduction of debts, 1087.
does not determine liability,

1047.
final, 1050.

name by executors, 1083.

1354

INDEX.

PENNSYLVANIA,

appraisal, continued.

income after death not consid-
ered, 1088.
increase in value after death of

testator not included, 1047.
in which county, 1047.
legacy of right to use, 1087.
life estate and remainder, 1089.
notice, 1088.
only one, 1088.

tax assessed on the value of the
estate at the time the right of
possession accrues, 1082.
tax shall not be payable, increase
in value of estate after death
of decedent, 1081.
application of revenues, 1046.
appraisal, 1046, 1047, 1078.
appeal from, 1047, 1087.
appraisers, 1055.

to take no fees, 1089.
avoiding tax, beneficiary societies'

payments, 1069.
beneficiary society, payment by,

1069.
cemetery, care of burial lots, 1057,

1072.
charge, on real estate, 1085.
citation, 1045, 1090.
commissions for, 1090.
duties of register, 1048.
information as to real estate,

1086.
liability under land of register,

1045.
notice as to real estate, 1045.
the words "proper prothonotary's
office," 1048.
collection, administrative features
strengthened, 1047.
by county treasurer, 1091.
compromise, sums paid in, 1071.
condition, gift on, 1075.
gift to widows, 1070.
conditional or contingent estates,

1085.
consideration, legacy for, 1075.

[References are to pages.]
continued. PENNSYLVANIA, — continued.

constitution, 1873, a. 9, 1042.
constitutionality, classifying step-
children with lineals, 1070.
progressive rate, 1042.
property tax, 1059.
uniformity, 1042, 1056.
validity, 1058.
conversion, 1060.

land of a Pennsylvania testator,

1060.
lien of tax, 1062.
power to sell if necessary, 1062.
sale at death of life tenant and
investment outside state, 1061.
sale postponed, 1062.
where a non-resident testator

directed sale, 1060.
where the testator gives the
executors only a discretion,
1061.
creditor, gift to, 1070.
deed, delivery of, 1079.

in contemplation of death, 1077.

not delivered, 1080.

unrecorded, 1079.

in trust, 1078.

"litigation," 1084.

"persons dying seized thereof,"

1068.
"situated within this state," 1065.
disclaimer, release by legatee, 1073.
discount, 1054, 1084.
domicile, 1069.
double taxation, 1070.
dower, 1070.

right exercised, 1071.
evasion, 1080.

executors, bequest in lieu of com-
missions, 1081.
no appeal by, 1083.
personal liability of executors not
barred by limitations, 1092.
exemption, adopted children, 1057.
children of former husband or

wife exempted, 1057.
care of burial lots, 1057, 1072.

INDEX.

1355

[References
PENNSYLVANIA, — continued.
exemption, continued.

of $250 applies to whole estate,

1080.
refers to whole estate, 1044.
grandmother not exempt, 1044.
individual, 1042.
to religious society on condition,

1075.
special, 1050, 1051.
stepchildren, 1070.
United States bonds, 1062.
widow of a son, 1073.
wife or widow of a son exempted.
1047.
fees, commission of county treasur-
ers, 1045.
compensation of registers, 1055.
county teasurers, 1045.
of registers, 1052.
probate fee, 1045.
history of Pennsylvania act, 1043.
illegitimates, 1057, 1075.
income after death, 1069.
interest, 1048, 1050, 1054, 1084.
delay, 1084.

where estate involved in litiga-
tion, 1048.
lien, 1049, 1081, 1091.

effect of partition on, 1092.
judicial sale on lien, 1092.
on conversion, 1062.
life estate, 1082, 1089.
limitations, 1049, 1091.
limitation, on remainders, 1051.
personal liability of executors,

1092.
protection of bona fide purchasers
after lapse of time, 1092.
nature of statute, 1056.
nature of tax, 1059.
non-resident, intangible property
in Pennsylvania of a non-resi-
dent, 1067.
interest of non-resident in Penn-
sylvania Partnership, 1065.
Pennsylvania personalty of non-
resident, 1066.
power under will of, 1076.

are to pages.]

PENNSYLVANIA, — continued.
partition, effect of, on lien, 1092.
payment, direction in will as to,
1064.
duties of state treasurer, sinking

fund, 1052.
executors to retain tax, 1045.
from what fund payable, 1064.
payment from share not charged

with tax, 1065.
on transfer, 1086.
out of real estate, 1085
returns, 1052.
tax deducted, 1085.
to state treasurer, 1045.
where payment of legacies post-
poned, 1084.
penalties, 1054, 1050.

charged to administrator, 1085.
power, donees classified as relatives
of original testator, 1075.
under will of non-resident, 1076.
property, resident's personalty in
another state where he owes
debts, 1066.
situs of government bonds, 1066.
property tax, 1059.
rate made five per cent, 1046.
progressive, 1042.
tax on life estate and remainder
need not total five per cent,
1083.
real estate outside state, 1068.
receipts, 1046, 1086.
records, 1090.
refund, 1052, 1056, 1086.

special, 1046.
register of wills, accounts of, 1046.
register, bond of, 1091.
fees of, 1055.
official bond of, 1045.
returns by, 1091.
release, effect of release by legatee,

10^3.
repeal, 1052, 1092.
returns, 1081.

remainder, 1044, 1048, 1054, 1089.
assessed as of time right of pos-
session accrues, 1082.

1356

INDEX.

[References

PENNSYLVANIA, — continued.
remainder, —

payment of tax on, 1047.
provided that the owner shall
have the right to pay the tax,
1082.
tax on life estate and remainder
need not total five per cent,
1083.
until the person liable shall come

into actual possession, 1082.
remaindermen liable for whole
tax when life tenant is exempt,
1083.
when tax accrues, 1049, 1081.
situs of government bonds, 1066.
statutes, — amendments, 1055.
early statutes, 1043.
list of, 1041.
present act, 1058.
repeal, 1052, 1092.
retroactive, 1046, 1048, 1049.
statutes codified, change in ex-
existing law, 1053.
title, 1058.
St. 1826, c. 72, p. 227, 1043.
St. 1841, c. 49, 1045.
St. 1846, c. 390, 1046.
act of 1849, the object of, 1046.
St. 1850, c. 147, 1048.
St. 1855, c. 450, 1050.
St. 1887, c. 37 1052, 1058.

codifies existing law, 1053.
St. 1897, c. 47, p. 56, 1055.
St. 1911, c. 105, 1057.
stepchildren, properly classed as

lineals, 1070.
transfers, taxable, 1058.

in contemplation of death, 1077.
trust deeds, 1078.
trust, property invested in name of

another, 1069.
United States, bonds not exempt,
1062.
federal inheritance tax not in-
cluded in direction in will,
1064.
what law governs, 1060.

are to pages.]

PENNSYLVANIA, — continued.

when tax accrues, as of death of
testator, 1059.
on remainders, 1049, 1087.
widow of the son, 1073.
will, direction in will as to payment
of tax, 1064.

PERSON,

includes corporations, 207.
may include several, 183.

PERSONAL PROPERTY,
"personal goods" defined, 52.
See Property.

PERSONS LIABLE,
adoption, 242.
aliens, 237.

annuity to executor, 238.
appraisal has no effect on liability,

264.
as between life tenant and remain-

deiman, 238.
bastards, effect of legitimization,

246.
charge of tax subsequently enacted,

236.
children of deceased beneficiary,

239.
corporation to be created, 238.
descendants of collaterals, 239,
direction as to money includes

annuity, 236.
direction in a will that an annuitant

"is to receive not less than $1500

a year," 236.
executors or beneficiaries, 241.
individuals not include trustees,

236.
lineal descendants, 239.
loss of tax paid unnecessarily falls

on residue, 246.
mutually acknowledged relation of

parent, 243.
■ order of probate court as protection,

237.
payments of tax should appear in

executor's account, 242.
penalty, 241.

INDEX.

1357

[References

PERSONS LIABLE, — continued.

purchaser of land subject to lien
of tax, 296.

residue in trust to pay annuity, 237.

son of daughter-in-law, 240.

specific legatee, 242.

stepchildren, 240.

strangers, 237.

tax officials joined in litigation be-
tween other parties, 293.

under direction of will, or of court,
235.

where no next of kin are known,
239.

where relative was both nephew
and stepson, 240.

where tax paid improperly, 269.

"widow of a son," 243.
PHILIPPINE ISLANDS,

in general, 1093.
PLEDGE,

stock pledged by non-resident, 143.

stock pledged with brokers, 143.

title when collateral redeemed, 143.
POLITICAL ECONOMY,

ability or faculty to pay as test, 11.

arguments classified, 11.

arguments in favor of and against
the tax, 10.

how often property becomes sub-
ject to tax, 10.

progressive rates in, 60.

strongest argument for the tax, 11.

tax sound as regards, 9.
POLL TAX,

inheritance tax not a poll tax, 41.
PORTO RICO,

in general, 1093.

progressive rate, 1042.

the enabling act, 1093.

statutes, 1093.
POWERS,

in general, 116.

exemptions of interests under
powers, 206.

of revocation reserved in deed, 106.

immaterial whether power created
by will or by deed, 121.

are to pages.]

POWERS, — continued.

a legislative function to fix exemp-
tions, 194.

what law governs, 19, 117.

when tax on retroactive, 70.

when power is created before pas-
sage of statute, 118.

where appointment is to same per-
sons named in original instru-
ment, 121.
PRACTICE,

actions of contract against benefi-
ciary, 290.

in what proceedings assessment is
proper, 282.

on collection, 293.

on refunding, 298.

proceedings to test validity, 38.

proper decree where statute mis-
construed by taxing officials, 288,

when proceedings premature, 291.

where expenses of settlement un-
known, 270.

who may attack validity, 39.

See Appraisal, Assessment, Collec-
tion.
PREVENTION OF CRUELTY.

exemption, 219.
PRINCIPAL AND INCOME,

income after death, 137.

income due after repeal of tax, 82.

liabilities as between life tenant and
remainderman, 238.

of life estates, 185.

primary and secondary rate as
applied to, 226.
PROGRESSIVE RATE,

See Rates.
PROPER COUNTY,

defined, 291.
PROPERTY,

charge on future rents, 136.

claim against estate of another, 136.

conversion in general, 139.

corporations chartered in more than
one state, 170.

distinction between tangible and in-
tangible, 177.

1358

INDEX.

[References

PROPERTY, — continued.

exemptions, real as well as personal
property considered in reckoning,
200.

foreign personal estate of resident,
167.

foreign real estate of resident, 168.

fraudulent conveyance, 136.

gift on condition legacies paid, 136.

good will, 136.

income after death, 137.

insolvent estate, 135.

lessee's interest, 137.

loan to partnership, 138.

manumission of slave, 141.

money for investment, 138.

non-resident trustee holding prop-
erty for resident, 169.

property in other states of domestic
coroporation considered, 169.

personalty of non-resident, 153.

profits of partnership, 138.

resident owner of stock in foreign
companies, 168.

seat in stock exchange, 138.

stock in joint stock association, 137.

tangible assets, 167.

PROPERTY TAX,

inheritance tax is not, 4.

tax on right to acquire property

inter vivo^ as, 6.
void as in addition to annual prop-
erty tax, 42.
PROPORTIONAL TAX,
required, 47.

PUBLIC LIBRARIES,

See Exemptions.
PUBLIC OFFICERS,

See Officers.

PUBLIC PURPOSES,

necessary for validity, 36.
validity of appropriations to special
fund, 37.

QUAKERS,

society of Friends treated as re-
ligious, 210.

are to pages.]

RATES,

confiscatory, 63.

constitutional limitation in, 41.

primary and secondary, as applied

to income, 226.
progressive, —

ability or faculty to pay as test,

11.
confiscatory rates, 63.
computation of progressive rates,

225.
exemptions in case of progressive

rates, 201.
from the aspect of political econ

omy, 60.
history and principles, 58.
increased rate applied to excess

only, 60.
inheritance taxes may eat up an
entire estate and possibly bank-
rupt the executor, 64.
primary and secondary rates as

applied to income, 226.
the Pennsylvania doctrine, 62,
there is no difference in principle
between an exemption given to
direct inheritances and a pro-
gressive tax, 58.
validity in general, 57.
validity admitted, 62.
reckoned by beneficial interests

rather than by estate, 224.
remainder or contingent interests,

224.
what law governs, 224.
REAL ESTATE,

debts as affecting, 266.

debts secured by real estate, 266.

delivery of deed, 133.

effect of decree as to title, 133.

foreign real estate of resident, 168.

general taxes on, 268.

"goods and effects," including, 61.

leasehold interests, 134.

lien on, 294.

of non-residnet, 151.

subject to mortgage, 132.

partition proceedings, 133.

INDEX.

1359

[References
REAL ESTATE, — continued.

share of co-tenant — liability for

improvements, 132.
stranger paying taxes on, 269.
REAL ESTATE TRUST ASSOCIA-
TION.
situs of interest in, 182.
RECEIPT,

form of, 297.
RECIPROCAL PROVISIONS,

to avoid double taxation, 147.
RECORDING.

See Deeds.
REFUND OF TAX,
defences, 300.
estoppel, 300.
interest, 299.
on ground of newly discovered debt,

288.
proceedings, 298.
what law governs, 298.
when, 298.
RELATIONSHIP,

classification by, 53.
RELATIVES,

See Persons Liable.
RELIGIOUS CORPORATIONS,

See Exemptions.
REMAINDERS, CONTINGENT &
FUTURE ESTATES,
in general, 187, 262.
appraisal of remainder after mar-
riage, 263.
as of what date future interests
are appraised, 253.
contingent remainders, 188.
effect on remainders of saving

clause in repeal, 83.
liability between life tenant and

remainderman, 238.
lien in case of remainder, 294,
rates on, remainder or contingent

interests, 224.
remainders, 187.

remainder interests vested before
passage of statute, 76.

are to pages.]

REMAINDERS, ETC.,— continued.
remainder may be liable though

prior estate exempt, 206.
report and security for contingent

interests, 254.
vested remainders, 188.
when tax accrues, on future inter-
ests, 232.
if the remaindermen are not
ascertainable, 233.
where the children of the testator
took vested interests subject to
open, 77.
REPEAL,

See Statutes.
RESIDENCE AND RESIDENTS,
defined, 3.

See Non- Resident Decedents.
RESIDUARY ESTATE,
appraisal of, 252.
liabilities where residue in trust to

pay annuity, 237.
loss of tax paid unnecessarily falls
on residue, 246.
RETROACTIVE STATUTES,

See Statutes.
REVENUES,

inheritance tax is revenue act, 4.
revenue legislation to originate in
house of representatives, 44.
REVERSIONS AND EXPECTAN-
CIES,
See Remainders.
REVOCATION,

power of, reserved in deed, 106.
RHODE ISLAND,

constitution, 1842, a. 4, { 15, 1094.
ROMAN LAW,
history, 13, 14.

SAFE DEPOSIT COMPANY,

validity of statute as to delivery
of box, 128.

SALE,

defined, 88.

effect of judicial sale on lien, 295.

1360

INDEX.

[References

SALE, — continued.

no personal liability on purchaser

of land subject to lien, 296.
sale above price fixed on appraisal,

255.
above the appraised value as evi-
dence on appraisal, 252.
SAVINGS BANK DEPOSITS,

See Deposits.
SAVING CLAUSE IN REPEAL,

See Statutes.
SECURITIES,

See Choses in Action, Corpora-
tions.
SERVICES,

deed for, 113.
SETTLEMENT,

defined, 232.
SHARES OF STOCK,

See Choses in Action, Corpora-
tions.
SISTER,

See Beneficiaries.
SITUS,

double taxation at domicile of
owner and at situs of property,
146.
jurisdiction based solely on the
situs of personal property in the
state, 155.
See Choses in Action, Non-Resi-
dent Decedents.
SLAVE,

manumission of slave, 141.
SON-IN-LAW,
liability, 240.
SOUTH CAROLINA,
in general, 1094.

constitution, 1895, a. 10, § 1, 1094.
SOUTH DAKAOTA,
in general, 1095.
appraisal, 1102.

appraisers, misconduct of, 1102.
collection, — citation, 1103.
county court record, 1103.
enforcing payment, 1100.
expenses of summons, 1104.
notice to county treasurer, 1101.

are to pages.]

SOUTH DAKOTA, — continued.
collection, continued.

notice to state's attorney, 1103.
statement of property taxable,
1103.
constitution, 1889, a. 11, § 2, 1095.
1889, a. 11, § 8, 1096.
progressive tax, 1098.
constitutional, —

valid though no provision for

enforcement, 1098.
validity of exemptions, 1098.
executor, transfer by foreign, 1102.
exemptions, validity of, 1098.
interest, 1100.

jurisdiction of county court, 1103.
lien, 1104.
life estates, 1100.
limitations, 1004.
nature of right of succession, 1097.
nature of tax, 1097.
payment, 1101.

to state treasurer, 1104.
power of sale, 1101.
progressive tax upheld, 1098.
rates, 1096.
receipts, 1103.

refund of tax paid under a mistake,
1102.
on proof of debts, 1101.
remainders, 1100.
statutes, list of, 1095.

suggestions for new, 1104.
1905, c. 54, 1096.
transfers taxable, 1096.
when tax accrues, 1100.
SPECIAL ACTS,

restrictions against special laws ap-
plicable, 42.
SPECIAL EXEMPTIONS,

See Exemptions.
SPECIFIC LEGATEE,

liability of, 242.
STATE,

federal taxation of bequest to, 211.
must be given same right of appeal

given parties, 285.
state taxation of bequest to United
States, 211.

INDEX.

1361

STATUTE,

amendment does not affect validity
of tax already imposed, 80.
extending exemptions, 79.
effect of, 33.
without repeal, 80.
construction of statute copied from
another jurisdiction, 33.
executive practice, 32.
prospective, 69.

rule of reasonable construction, 32.
strict,.32.
curative act, 78.
history 19.

of federal legislation, 15.
now employed in nearly all en-
lightened countries, 15.
present situation, 15.
repeal,-^

amendment without repeal, 80.
effect of repeal after appeal taken,

82.
income due after repeal, 82.
implied repeal by new complete

act or revenue law, 81.
repealing act a continuation of

earlier act, 80.
repeal prevents subsequent re-
covery of taxes due, 82.
saving clause, 82.
' clause saving only estates where
inventory already filed, 83.
effect of saving clause on re-
mainders, 83.
under California constitution pro-
hibiting surrender of public
rights, 81.
retroactive, —

amendment does not affect valid-
ity of tax already imposed, 80.
amendment extending exemp-
tions, 79.
construction inapplicable to con-
ditions prior to its enact-
ment, 75.
construed as prospective, 69.
curative act, 78.
decisions of the supreme court, 72.

IReferences are to pages.)

STATUTE, — continued.

retroactive, continued.

deed executed before statute en-
acted, 108.
deed made before valid statute

enacted, 101.
effect of a subsequent treaty, 76.
effect of premature distribution,

73.
estate not finally closed, 71.
exemptions, 74.

gifts in ter vivos, 76.
increase in value, tax on, 74.
limitations, statute of, 292.
location of assets in state in-
sufficient, 75.
powers, 69.
power created before passage

of statute, 118.
property distributed, 73.
remainder interests vested be-
fore passage of statute, 76.
statute applying retroactively
to estates in the proccbsi of
administration, 70.
after title has passed, 73.
trustee's commissions, 21.
where the children of the testa-
tor took vested interests sub-
ject to open, 77.
what law governs, 79.
state statutes, copied from other

states, 14.
unconstitutional statute, effect of,
21.
validity, see Constitutionality.
See for particular statutes, names
of states.

STATUTE OF LIMITATIONS,
See Limitations.

STATUTORY EXEMPTIONS,
See Exemptions.

STATUTORY LIENS,
See Liens.

STEPCHILDREN,
See Beneficiaries.

1362

INDEX.

[References

STOCK,

See Corporations.
STOCKBROKERS,

See Brokers.
STOCK EXCHANGE,

taxation of seat in, 138.
STRANGERS TO THE BLOOD,
classification by relationship, see

Constitutionality,
defined, 237.

properly distinguished from lineals,
54.
SUBROGATION,

corporation paying taxes, 2d3.
creditors where tax paid from prop-
erty subject to debts, 273.
where beneficiary advances money
to pay tax, 298.
SUCCESSION AND LEGACY
TAXES,
succession tax, 2.

legacy and succession tax disting-
uished, 2.
SUPPORT,

deed for, 115.
SURROGATE,

See New York.
SWEDEN,

tax in, 15.
SWITZERLAND,

tax in, 15.
TABLES,

anmlity, 480, 482, 1239.

reference to, 43.
list of corporations, 1287.
rates and exemptions, 1283.
states which tax stock of domestic
corporations owned by non-resi-
dents; states which tax stock
owned . by non-residents of for-
eign corporations owning prop-
erty within state, 1285.
states with an inheritance tax law;
states which tax direct inherit-
ances; states which tax collateral
inheritances. 1281.

are to pages.]

TANGIBLE AND INTANGIBLE

PROPERTY,
See Property.
TAXES,

charge of tax subsequently en-
acted, 236.
general taxes on real estate, 268.
liability where tax paid improperly,

269.
stranger paying taxes on land, 269.
TEMPERANCE SOCIETIES,

exemption, 222.
TENANT FOR LIFE,

See Life Estate.
TENANT IN REMAINDER,

See Remainders.
TENNESSEE,
in general, 1105.
acceleration, 1111.
appraisal, —

clear value, 1108.

deduction of debts, 1109.
appraiser, 1114.

duties, 1118.

to accept no fees from parties,
1114.
avoiding tax, by compromise, 1108.
bonds, 1118.
charge, — legacy charged on real

estate, 1113.
clerks to give bonds, 1117.
collection, — attorney general to
prosecute, 1118.

fees for, 1116.

information as to real estate, 1113.

proceedings, 1116, 1123.
compromise of will, 1108.
conditional estates, 1113.
constitution 1870, a. 2, § 28, 1106.
constitutionality, 1107.

validity of classification by rela-
tionship, 1119. t

validity of exemptions, 1120.
debts, deduction of, 1109.
definitions, —

"clear value," 1108.
"inheritances," 1123.

INDEX.

1363

[References

TENNESSEE, — continued.
discount, 1112.
election, of widow, 1110.
executors, bequest to, 1110.

bonds, 1118.
exemptions, 1107.

charities, 1122.

practice on, 1109.

United States bonds, 1108.

validity of, 1120.
heirs, — what law governs, 1109.
history ot inheritances taxes, 1105.
inheritances defined, 1123.
insurance, — proceeds of a life in-
surance policy taxable, 1109.
interest, 1111, 1112.
lien, 1118.

life estate, merger of, 1111.
limitations, 1118.
marshalling assets, —

effect of election by non-resident
beneficiary, 1110.
nature of right of succession, 1108.

of tax, 1107.
partnership debt, 1109.
payment, 1113.

on transfer, 1114.

tax to be deducted, 1112.

tax to be paid before estate
settled, 1118.
property, — insurance, 1109.
rate, 1107.

real estate, legacy charged on, 1113.
receipts, 1113.
records, 1115.
refund to pay debts, 1114.
remainders, 1120.

when tax on accrues, 1110, 1111.
returns, 1118.
statutes, —

amendments, 1122.

effect of revenue acts, 1121.

list of, 1106.

present act, 1123.

repeal, 1119.

effect of repeal by revenue law,

1121.
not "repealed by revenue law,
1121.

are to pages.]

TENNESSEE, — continued.
statutes, continued.
retroactive, 1119.
revenue statutes, 1119.
revenue statute prevails, 1120.
St. 1891, c. 25, 1106.
St. 1893, c. 89, § 7, 1119.
St. 1893, c. 174, 1107.
St. 1909, c. 479, 1123.
transfers taxable, 1107.
United States, —

bonds not exempt, 1 108.
what law governs, —

persons taking by descent, 1109.
when tax accrues, —

on remainders, 1110, 1111.
pendency of contest over will,
1112.
will, compromise of, 1108.
TERM OF YEARS,

See Landlord and Tenant.
TEXAS,

in general, 1124.

account, allowance of, 1127.

appraisal, 1126.

assessment, 1126.

charge, — legacy charged on real

estate, 1127.
collection, — action to recover, 1127.
allowance of final account, 1127.
when administrator dispensed

with, 1128.
where application for probate
not made, 1125.
constitution, 1876, a. 8, § 1, 1124.
estates, — particular estates and re-
mainders, 1125.
executor, bequest to, 1125.
exemptions, 1124.
interest, 1126.
inventory, 1125.
lien, 1126.
payment, 1127.

deduction of tax, 1126.
deposit by state treasurer, 1127.
payment to state treasurer, 1127.
rate, 1124.

real estate, legacy charged on, 1127.
refund to pay debts, 1127.

1364

INDEX.

[References
TEXAS, — continued.
remainders, 1125.
statutes, —

St. 1907, c. 21, p. 496, 1124.
the present act, 1124.
taxable transfers, 1124.

TITLE,

of decedent, —

before possession taken of certifi-
cates of stock given, 130.

deeds signed and not delivered,
130.

effect of decree as to title, 133.

effect of fraudulent conveyance,
136.

property already bought by lega-
tee, 130.

prope*ty standing in name of
another, 131.

title of statute to be expressed, 42

See Pledge.

TOMB,

expense of, 276.

TRADE SECRETS,
appraisal of, 259.

TRANSFERS,
causa mortis, 85.

community property, rights in, 97.
compromise of interests under will,

89.
curtesy or dower, statutory rights

of surviving spouse, 95.
homestead, 98.
in contemplation of death, —

considered, 99.

definition, 99.

intent to evade tax, 100.
See further. Deeds,
inter vivos, 85.

right to acquire property inter
vivos a natural right, 6.
interest in insurance or beneficial

society, 94.
joint deposit, 89.
sale, 88.
See Deeds, Wills, etc.

are to pages.]
TREATY,

effect of a subsequent treaty, 76.
effect on discrimination against

aliens, 49,
"goods and effects" include real

estate, 51.
heirs defined in, 51.
"inhabitants," 53.
New York statute of 1887 is not a

"detraction tax," 51.
"personal goods," 52.

TRUST COMPANY,

See Banks, Joint Interests, etc.
TRUSTS AND TRUSTEES,
charity, 223.
deed, 88.
direction to individuals does not

include trustees, 236.
extrinsic to will, 223.
fund in hands of court in trust, 215.
imposed by extrinsic evidence, 88.
interests under, taxed, 190.
law governing trustee's commis-
sions, 21.

property in hands of trustee, 21.
non-resident trustee holding prop-
erty for resident, 169.
situs of interest in real estate trust

association, 182.
title to property standing in name

of another, 131.
trustees' commissions, 272.

estimated commissions of, 273.

where will forbids commissions
to, 270.

UNASCERTAINABLE INTERESTS,
when taxable, 189.
See f uther. Remainders.

UNAVOIDABLE DELAY,
defined, 229.

UNIFORMITY,

See Constitutionality.

UNION FOR MINISTERIAL EDU-
CATION,
religious, 210.

INDEX.

1365

[References
UNITED STATES,

federal inheritance tax, 273.

federal taxation of bequest to
state or municipality, 211.

history of federal legislation, 14.

not exempt as domestic corpora-
tion, 203.

power of congress to impose tax, 29.

state taxation of bequest to, 211.

tax need not include realty and
personalty, 42.

UNITED STATES STATUTES,
in general, 1250.

acceleration of remainders, 1261.
adopted child, 1270.
advances, 1256.

alien estopped to claim devise to
him void, 1263.
limited to wills executed in this

country, 1269.
not applicable to, 1256.
property of, 1268.
annuity, 1269.
appraisal, 1274.

of life interest after death of life

tenant, 1274.
remainder after death or remar-
riage, 1274.
assesstnent, where estate insolvent,

1261.
beneficiaries, 1269.
charge, on each legacy, 1257.
collection, 1273.

under act of 1864, 1259.
sum paid in, 1258.
compromise, 1268.
consideration, — assistance, 1256.
constitutionality, 1255.

estoppel to claim demise void,

1263.
general power of congress, 1265.
gifts to states or municipalities,

1266.
power to tax municiaplities, 1266.
progressive rate upheld, 1267.
uniformity, 1267.

are to pages.]

UNITED STATES STAT.,— cont'd.
contingent beneficial interests, 1279.

to one on reaching a certain age,
1270.
contract, devise in accordance with,

1256.
demand necessary, 1261.
District of Columbia, 1269.
executor liable, 1254.
exemptions, 1272.

construction of, 1272.

federal bonds, 1272.

in act of 1898, 1264.

legacies exceeding $10,000, 1272.

minor children, 1261.

widow exempted, 1260.
history, 1251, 1255, 1265.
income, —

effect of repeal on, 1278.

payable from income, 1257.

income tax^ 1264.
interest, 1280.
liabilities, —

cestui rather than trustee, 1258.

confined to one in possession,
1257.

legatee not personally liable, 1257.

no personal liability, 1259.

payable from income of life
tenant, 1257.

tax paid for benefit of another,
1261.
lien, 1259.
life tenant a legatee, 1270.

payable from income, 1257.
limitations, 1280.
mortgage, how treated, 1275.
municipal corporations, —

gifts to, taxable, 1266.

power to tax, 1266.
nature, —

an excise tax, 1255.

an excise and not a direct tax,
1265.

a legacy tax, 1255, 1265.
partition, effect of, 1259.
payment in ignorance, 1279.
penalties, 1259.

1366

INDEX.

[References

UNITED STATES STAT.,— cont'd.
progressive tax, valid, 1267.
property, —

"arising from personal property"
does not include a legacy pay-
able out of real estate, 1253.
of lien, 1268.
trust for decedent, 1255.
purchase money mortgages, 1275.
rates, 1254, 1264, 1272.

determined by size of legacy,

1272.
progressive, upheld, 1267.
real estate, 1259.
refunding, 1278.

practice on, 1280.
remainders, 1258.
accelerated, 1261.
not taxable till they fall into pos-
session, 1271.
effect of repeal on, 1262.
retroactive on, 1259.
repeal, effect of, 1262, 1277.
son-in-law, 1270.
states, gifts to, taxable, 1266.
statutes, — ^

early probate fees, 1252.
income tax, 1264.
list of, 1250.

Massachusetts act for record-
ing receipts, 1262.
repeal of act of 1862, 1260.
effect of, 1262, 1277.
saving clause, 1260.
retroactive on remainders, 1259.

12 U. S. St. 485, § 111, 1253.

13 U. S. St. 285, § 124 (Statute
of June 30, 1864), 1254.

13 U. S. St. 285, § 133, 1260.

14 U. S. St. 140, 141 (Act of
1866), 1261.

U. S. St. 1870, c. 255 (repeal),

1262.
30 U. S. St., p. 464 (1898),, 1264.

30 U. S. St., p. 464, § 30, 1273.

31 U. S. St., p. 946 (1901), 1275.

32 U. S. St. 406, § 8 (repeal of
1902), 1277, 1278.

are to pages.]

UNITED STATES STAT.,— cont'd.
transfers taxable, 1254, 1264.
transactions on consideration,
1268.
trust, —

cestui and not trustee is liable,

1258.
for grantor, 1255.
trustee not a "person possessed,"
1270.
uniformity of act of 1898, 1267.
what law governs, —

legacies payable after repeal, 1263.
payment on reaching certain age

after repeal, 1263.
where estates not settled before
repeal, 1263.
when accrues, 1261.
income not due, 1278.
where estate unsettled, 1278.
where testator died within one
year before repeal, 1277.
widow, exempt, 1260.
wills, —

limited to wills executed in this

country, 1269.
under contract to leave by will,
1256.

UNIVERSITY,

exemption of, 219.

UTAH,

in general, 1129.
account, —

no settlement allowed until tax

paid, 1130.
not settled till tax paid, 1135.
ppraisal, —
action on cases now pending,

1133.
extension of time for appraise-
ment, 1137.
objections to appraisements,

hearing on, 1132.
time of appraisement and pay-
ment of tax, 1133.
appraisers, — commissions to, 1132.
duties of, 1132.

INDEX

1367

[References

UTAH, — continued.
appraisers, continued.

must not take fee from heir, etc.,

1132.
to be appointed, 1131.
assessment, —

in case of foreign estate, 1139.
on whole estate, 1130.
stock of non-resident, 1139.
charge, — where legacy is a charge

upon real estate, 1134.
clerk, dulies of, 1137.

duties of court and district attor-
ney, 1138.
collection, —

clerk to enter in inheritance tax

and lien book, 1137.
entry of real estate in lien book,

1136.
executor, etc., to collect tax, 1134.
to collect tax in certain cases,
other cases state treasurer,
1135.
to report facts, 1136.
inheritance tax and lien book to

be kept by clerk, 1135.
no settlement allowed until tax

paid, 1135.
safe deposit company or bank to
give notice before transferring
securities, 1139.
state treasurer may demand in-
formation from executors, etc.,
1135.
constitution 1851, a. 13, § 3, 1129.
constitutionality, 1130.
costs, by whom paid, 1138.
"debts," 1131.
definitions, —

"debts," 1131.
estate, tax on whole, 1130.

estates for life or term of years,
1133.
executor, where bequest is in lieu

of compensation, 1134.
exemption, extent of, 1131.
interest, rate, 1135.

are to pages.]

UTAH , — continued.

jurisdiction, district court to have,

1135.
liabilities, 1130.
lien, 1131.

entered and indexed, 1137.
life estates, 1133.
non-resident, —

assessment of estate of, 1139.

tax on corporate stock, 1139.
payment, —

state treasurer may compromise
certain cases, 1140.

taxes payable to state treasurer
within fifteen months, 1134.
record by clerk, 1137.
safe deposit company, to give notice

before transfer, 1139.
statutes, —

applies to pending cases, 1140.

construction, 1130.

list of, 1129.

origin, 1130.

present act, 1131.

St. 1901, c. 62, 1129.
transfers taxable, —

all property in excess of $10,000
subject to inheritance tax; 1131.
when tax accrues, 1134.

VALUE,

See Appraisal.

VENDORS AND PURCHASERS,

See Sale.

VERMONT,

in general, 1141.

account, final settlement of, of an

administrator, etc., 1149.
appeals, 1150.

who may appeal, 1150.
appraisal, —

commissioner of state taxes

duties of, 1153.
foreign taxes deducted, 1148.

oificial receipt required, 1148.
life estate, 1153.

1368

INDEX.

[References

VERMONT, — continued.
appraisal, continued.

valuation by agreement, 1152.
how made, 1152.
agreement to be in writing,
when, 1152.
to be filed, where, 1152.
may be set aside, 1152.
valuation by appraisers, 1151.
appraisers, 1151.
warrant to appraisers, 1152.
oath; notice, 1152.
authority, 1152.
returns; proceedings, 1152.
fees, 1152.
valuation by probate court, 1151.
determination upon applica-

cation; notice, 1151.
notice as to finding and de-
crees, 1151.
how determined, 1151.
cemetery lots, exemption of be-
quests to maintain, 1148.
charge, — when legacy, made a

charge upon property, 1149.
chose in action, situs of, 1144. ^
collection, 1149.

bonds and recognizances, 1159.
certified copies of wills and in-
ventories, 1156.
to be furnished commissioner of

state taxes, 1156.
failure to furnish; penalty, etc.,

1156.
estate of non-resident, 1157.
estates not administered upon,
1156.
administrator, how appointed,

1156.
duties of probate court, 1156.
p.obate court proceedings, 1149,
1159.
issuance of letters of adminis-

•tration, 1160.
juridisction and powers, 1159.
penalty, 1161.

production of books, records
and documents, 1160.

are to pages.

VERMONT, — continued.
collection, continued.

probate court proceedings, —
summons, generally, 1161.
summons to witnesses, 1160.
witness fees, 1161.
proceedings in supreme court,
1150.
probate court to testify finding

and decree, 1150.
certificate; hearing; judgment,
1150.
reports of listers, 1161.
reports by savings bank and trust
companies, 1158.
notice of death of non-resident

depositor, etc., 1158.
payment of account prohibited
without consent of commis-
sioner of state taxes, 1158.
liability, 1159.
transfer of stock before payment
of tax prohibited, 1157.
constitutionality, 1142.
equality of tax, 1143.
exemptions, 1144.
costs, 1150.
definitions, 1147.

"decree of a court in this state,"

1145.
"distributive share," 1147.
"legacy," 1147.
"legatee," 1147.
"share," 1147.
discount on foreign tax, 1148.
equity proceedings, 1159.

commissioner may institute, 1159.
service, how made, 1159.
proceedings, 1150.
estates in litigation, application to,

1146.
executor, legacy to, 1154.
exemptions, 1147.

bequests to maintain burial lots

exempt, 1148.
onstruction, 1144.
validity, 1144.
false swearing, 1161.

INDEX.

1369

[References

VERMONT, — continued.
interest, 1155.
inventories, copies of, 1156.
inventory of property, 1155.
duty of grantee or donee, 1155.
penalty, 1155.
jurisdiction of probate court, 1149,

1159.
liability for tax, 1149.
lien, 1149.

life estate, appraisal, 1153.
nature of tax, 1144, 1145.
non-resident, collection of tax on,
1157.
deduction of tax on estate of,

1156.
deduction of property of non-
resident, 1158.
■ failurfe to give notice; liabil-
ity, 1158.
deposits not to be paid or
transferred before payment
of tax, 1158.
waiver of liability, 1158.
payment, 1148.

administrator, etc., to deduct,

1148.
deduction of tax on estate of non-
resident, 1156.
legacy delivered when tax is

paid, 1149.
sale of legacy for tax, 1149.
probate fees, 1142.
rate, 1147.

receipts on payment of taxes, 1154.
refunding taxes, method of, 1154.
report, 1149.

to commissioner of state taxes,

1155.
duties of register of probate,
1155.
savings banks, liabilities, 1158, 1159.
situs of debts, 1144.
state, not required to give bond,

1159.
statutes, —

application of statute, 1161.
application to estates in litigation,
1146.

are to pages.]

VERMONT, — continued.
statutes, continued.
effect on prior law, 1146.
list of, 1141.
present act, 1147.
St. 1896, c. 46, 1143.
St. 1904, c. 30, § 1, 1145.
public Statutes of 1906, c. 38, as
amended, 1146, 1147.
transfers taxable, 1147.

to take effect on death, 1147.
trust company, —

liabilities, 1158, 1159.
when tax accrues, —

time of payment of taxes, 1154.
generally, 1154.
on legacies or distributive

shares, 1154.
probate court may extend,

1154.
on transfers, 1155.
wills, copies of, 1156.
witness fees, 1160.
witnesses, summons to, 1160.
VESTED ESTATES,

See Remainders.
VIRGINIA,

in general, 1162.
collection, — practice, 1175.
constitution 1902, a. 13, 1162.
constitutionality, —

absolute power of state over

descents, 1173.
classification by relationship valid,

1173.
power in legislature and not in

municipal corporations, 1174.
uniformity, 1173.
corporations, — whether exempt as

"persons," 1175.
exemptions, —

corporations included under per-
sons, 1175.
effect of exemption from general
taxation, 1175.
history of the Virginia legislation,

1164.
municipal corporations, — no power
to impose tax, 1174.

1370

INDEX.

[References

VIRGINIA, — continued.
nature of tax, 1166.

not a property tax, 1173.
rate, —

effect of omission to fix rates, 1166.
statut es, —

early statutes, 1164.

effect of omission of rate, 1166.

list of, 1163.

present act, 1172.

probate fees, 1170.

recent acts, 1170.

repeal in 1884, 1170.

repeal by implication, 1166.

uniformity, 1173.

St. 1843-44, c. 1,1164.

St. 1843-44, c. 3, 1164.

St. 1S48-49, c. 1, 1165.

code 1849, c. 35, 1165.

code 1849, c. 39, 1165.

code 1849, c. 40, 1165.

St. 1852, c. 17, 1166.

St. 1853-54, c. 2, 1166.

St. 1853-54, c. 2, § 15, 1166.

St. 1859, c. 1, 1166.

code 1860, €.35, 1167.

code 1860, c. 39, 1167.

St. 1861, c. 1, 1167.

St. 1863, c. 1, 1167.

St. 1863-64, 1168.

St. 1865-66, c. 1, 1168.

St. 1865-66, c. 3, 1168.

St. 1866-67, c. 64, 1168.

St. 1869-70, c. 45, 1168.

St. 1869-70, c. 226, 1168.

St. 1870-71, c. 193, 1169.

St. 1871-72,c. 385, 1169.

code 1873, c. 33, 1169.

code 1873, c. 35, 1169.

code 1873, c. 36, 1169.

St. 1874, c. 240, 1169.

St. 1874-75, c. 206, 1169.
St. 1874-75, c. 239, 1169.
St. 1875-76, c. 161, 1169.
St. 1875-76, c. 162, 1170.
St. 1881-82, c. 119, 1170.

are to pages.]

WASHINGTON,
in general, 1176.
aliens, tax on, 1182.

validity of tax on, 1180.
appeal, on appraisal, 1185.
appraisal, —

extension of time if estate com-
plicated, 1186.
procedure in appraisement, — ap-
peal, 1185.
collection, — list of heirs, 1186.
State board of tax commissioners
to supervise collection of tax;
records, 1186.
compounding tax if value of estate

doubtful, 1186.
conflict of laws, —

decree of foreign court, 1178.
constitution 1889, a. 7, 1176.
constitutionality, —

alien tax invalid as to certain
treaties, 1180.
validity under state constitu-
tion, 1181.
of exemptions, 1178.
power of legislature, 1177.
right of descent a creature of law,
1178.
corporation, — liability on transfer

of stock, 1185.
executor, —

fiduciaries shall pay tax, 1184.
executor shall pay if devisee or
legatee, 1184.
exemptions, —

certain charitable bequests ex-
empted, 1187.
validity of, 1178.
interest, when payable, 1185.
inventory, time for filing, 1186.
lien, 1182.
nature of tax, 1178.
non-resident, — effect of decree of
foreign court, 1178.
valuation of foreign estate, 1183.
payment, —

by estates in remainder, 1183.
by estates for life, 1183.

INDEX.

1371

[References are to pages.]

WASHINGTON, — continued.
payme/it, continued.

sale of delinquent, 1183.

tax on corporate stock, how
paid, 1185.

taxes payable to state treasurer,
1185.

when heir or devisee shall pay
tax on legacy, 1184.
property outside state, 1182.

subject to inheritance tax, 1181.
rate of levy^ 1182.
statutes, —

amendments, 1180.

list of, 1177.

present act, 1181.
title, 1177.

St. 1901, c. 55, 1177.

St. 1901, c. 55, as amended, 1181.

St. 1905, c. 93, 1180.

St. 1907, c. 217, 1180.
transfers taxable, 1181.
trustee, liability for tax, 1184.
WEST VIRGINIA,
in general, 1188.
accounts of fiduciary, 1197.
appeal, from assessment, 1196.
appraisal, — market value, 1191.
assessment, 1195.

additional assessment, 1195.

appeal, 1196.
bonds, — liabilities on bonds of

fiduciaries, 1197.
clerk, — fees 1197.
collection, —

accounts of fiduciary, 1197.

certificate to be recorded, 1195.

furnishing information to tax
commissioner, 1198.

misdemeanors, 1197.

proceedings to collect, 1196.

reports, 1194.

statement by executors, 1194.
compromise, 1197.
constitution 1872, a. 10, § 1, 1189.
debtor, bequest in payment of debt,

1192.

WEST VIRGINIA,— continued.
estates, —

particular estates and remainders,
1192.
executor, —

bequest to, 1192.

liability on bond of, 1197.

statement by, 1194.
exemptions, 1191.
fees, 1197.
interest, 1193.
liabilities, 1193, 1194.
lien, 1193.
payment, 1196.

on transfer, 1194.

suspending payment, 1193.

when due, 1193.
powerof sale, 1193,
property liable, 1193.

taxable m another state, 1192.
rates, 1191.

progressive, 1191.
remainder, tax on, 1192.
statutes, list of, 1189.

present act, 1190.

St. 1887, c. 31, 1189.
transfers taxable, 1190.
trustee, liability on bond of, 1197.
WHAT LAW GOVERNS,
amendment, 79.
appraisal, 252.

future interests, 253.

rule in the absence of specific pro-
vision for, 258.

where statute provides no method
for appraising life estate, 262.
collection, in absence of special ma-
chinery', 289.
conversion, 18, 141.
deed, 36.
deed inter vivos, 21.

causa mortis, 21.
domicile, disputed, 146.

extraterritorial effect of judgment
as to, 19.

law of domicile of decedent,
change of domicile, 17.

findings as to domicile, 18.

1372

INDEX.

[References

WHAT LAW GOVERNS— continued.
foreign inheritance tax, 274.
general law as affecting appraisal,

249.
gifts causa mortis, 21.
interest and penalties, 227.
place, 17.
power of appointment, 19, 117.

when power is created before
passage of statute, 118.
rates, 224.
refunding, 298.
repeal, 70.
time, —

law at death of decedent, 20.
trustee, property in hands of, 21.

commissions, 21.
unconstitutional statute, effect of,

21.
See Statutes, Amendment, Repeal.

WHEN TAX ACCRUES,

at death of testator, 231.

future interests, 232.

increase in value, 74.

interest in estate of another, 234.

life estate in remainder, 234. ^

postponement of payment of lega-
cies, 232.

remainder, merger of, 234.

remaindermen not ascertainable,
233.

statute applying retroactively to
estates in the process of adminis-
tration, 70.

tax payable "on his settlement,"
232.

WIDOW,

"widow of a son" includes what,
243.

WILL,

charge of tax subsequently enacted,
236.

compromise of interests under, 89,
125.

construction of, in appraisal pro-
ceedings, 251.

deed dependent on will, 88.

are to pages.]

WILL, — continued.

direction as to legacies to indi-
viduals not include trustee, 236.

effect of direction that annuitant is
to receive "not less than," 236.

expenses of action to construe will,
271.

expenses of will contest, 271.

immaterial whether power created
by deed or will, 121.

jurisdiction to hold will void im-
plied from power to assess tax,
283.

legacy charged on future rents, 135.

liabilities of, under direction, 235.

place of execution of, 166.

transfer by, for consideration. 111.

various gifts to same person, 128.

will contemporaneous with deed as
showing that deed in contempla-
tion of death, 102.

will under contract to leave by will,
112.

WISCONSIN,

in general, 1199.
account,

final accounting on filing receipt,
1225.
administrator, —

duties of public, 1233.
public administrators; appoint-
ment, oath, bond, etc., 1237.
annuities, 1229.

present value of an annuity of
one dollar per year, for single
life, 5 per cent, 1239.
annuity deducted, 1218.
valuation of, 1238.
appraisal, —

additional third appraiser to rep-
resent county and state at
original appraisal, 1231.
appraisal at clear market value,

1229.
commissioner of insurance to
value future estates, etc., 1231.

INDEX.

1373

[References

WISCONSIN, — continued.
appraisal, continued.

computations of life estates, an-
nuities, etc.; American table;
rate 5 per cent, 1238.

contingent uncumbrances, 1229.

contingent or defeasible estates
in expectancy, 1230.

contingent trusts taxed primarily
at lowest rate, 1229.

hearing by court without appoint-
ing special appraiser, 1231.

notice by and duty of special ap-
praiser, compensation, 1230.

order determining tax; form;
notice, 1231.

re-appraisement in circuit court
within two years, 1232.

rehearing within sixty days upon
record, 1232.

report of appraiser; county court
to give notice, 1218.

report of special appraiser; notice
for hearing, 1230.

special appraiser may be ap-
pointed, 1228.

tax when subject to charge de-
terminable by death, 1229.

valuation, of stock, 1219.
assessment, —

form of order, 1240.

guardian ad litem for infants and
incompetents, 1232.

order determining tax, 1231.

rehearing, 1232.
collection, —

attorney general to enforce in-
heritance tax laws, 1238.

county court may issue citation,
etc., 1233.

duties of county treasurer, county
judge and district attorney,
where tax is unpaid, 1232.

in counties of over 200,000 public
administrator or assistant dis-
trict attorney, 1234.

public administrator may ad-
. minister estates after sbcty
days, 1233.

are to pages.]

WISCONSIN, — continued.
collection, continued.

public administrator to appear
for county and state; com-
pensation; general supervision
of attorney general, 1233.

special administration for in-
heritance taxes; certificate of
descent, 1238.

special administrators to dis-
charge records undischarged

. by descendants, determine in-
heritance taxes, etc., 1237.

where transfer made in con-
templation of dpath, 1233.
compromise of tax, 1288.

composition or settlement of tax
in expectant estates, 1235.
constitution 1848, a. 1, §9, 1201.

1848, a. 8, § 1, 1200.

1848. a. 8, § 5, 1201.

the amendment of 1908, 120b
constitutionality, —

classification by relationship up-
held, 1211.

classification void, 1207.

double taxation if a property tax,
1204.

exemptions, 1211.

not sustained as tax for a salary
of judges, 1204.

of provisions leaving assessment
to county court, 1216.

of tax on contingent estates,
1217.

power of legislature to abolish
descent, 1208.

progressive rates, 1211.

requirement of uniformity, 1208.

right of descent protected, 1221.

sustained under power of regula-
tion, 1210.

uniformity, 1210.

validity of exemptions, 1214.

void as limited to certain estates
in one county, 1204.

whether void as a probate fee,
1205.

1374

INDEX.

[References

WISCONSIN, — continued.

contemplation of death defined,

1211.
contingent interests, 1218.
tax on, 1217.

tax on contingent estates upheld,
1217.
definitions, —

contemplation of death, 1211.
terms defined, 1236.
descent, —

power of legislature over, 1208.
right of, protected, 1221.
discount, 1215.
when, 1225.
double taxation, — considered, 1204.
executor, — powers of executors, etc. ,
where legacy not in money, 1225.
executors, bequests to, for services,

1227.
exemptions, 1220, 1224.

applied to entire property, 1207.
valid, 1211, 1214.
forms, —

form of order determining tax
prescribed by attorney gen-
eral pursuant to subdivision 5,
§ 1087-15, 1240.
history, — modeled after New York

act, 1206.
income, —

American experience table and
rule for making simple com-
putations submitted by com-
missioner of insurance pursu-
ant to § 3871a, 1238.
incompetents, —

guardian ad litem for, 1232.
infants, —

guardian ad litem for, 1232.
insurance, —

life insurance, 1213.
interest, rate of, on deferred pay-
ments, 1215.
jurisdiction, — ancillary letters, 1228.
of county court, petition for an-
cillary letters, 1215.

are to pages.]

WISCONSIN, — continued.

lien, — tax to be a lien on property,

1225.
life estates, appraisal of, 1238.
nature, 1210.
a tax, 1203.

not a property tax, 1210.
tax on whole estate and not on

succession, 1204.
the succession tax is a tax on the
privilege of receiving property,
1207.
non-resident, —

transfer by executor of, 1227.
payment, 1225.

bond for payment of legacies not

in possession, 1226.
seven and one-half per cent to be

retained by county, 1235.
tax, how applied; deductions,
1236.
penalty, 1225.

for delay, 1215.
power, transfer under, 1221.
property, —

situs of personal property, 1212.
double taxation, 1204.
rate, —

contingent trusts, 1229.

on annuities and life estates, 1238.

progressive, 1211.

other rates; where in excess of

$25,000, 1214, 1224.
primary rates where not in ex-
cess of $25,000, 1213, 1223.
receipts, 1225.

transfer receipts may be re-
corded, 1236.
refunding, 1216.
refund, —

for subsequent debts; state treas-
urer may refund tax, 1226.
how refund of tax made, 1226.
' remainders, —

bond for legacies not in posses-
sion, 1226.
compromise of tax on, 1235.
tax commission, powers of, 1234.

INDEX.

1375

[References

WISCONSIN, — continued.

situs of personal property, 1212.
statutes, —

construction modeled on New
York act, 1211.
of New York act followed,
1206.
list of, 1200.
present act, 1220.
recent amendments, 1219.
St. 1868, c. 121, 1201.
St. 1889, c. 176, 1202.
St. 1899, c. 355, 1205.
the act of 1901, 1209.
St. 1903, c. 44, 1209.
transfers taxable, —
basis of tax, 1210.
contingent trusts subject to, 1217.
imposed when beneficially trans-
ferred, 1220.
in contemplation of death, 1220.
evidence, 1212.
the meaning of the words "in
contemplation of death,"
1211.
non-resident's property within

state, 1209, 1220.
of stock by foreign executors,

1227.
on clear market value, 1221.
property within state, 1209.
property of any kind transferred,

1209.
by a resident of state, 1220.
tax on transfers; exceptions,

1220.
transfer before or after passage

of act, 1209.
transfer under power of appoint-
ment, 1210, 1221.
while a resident of state, 1209.
when tax accrues, —

tax due at time of transfer, 1225.

are to pages.]

WOMAN'S RELIEF CORPS,
exemption, 223.

WYOMING,

in general, 1242.
appraisal, 1247.

penalty for misfeasance of ap-
praiser, 1247.
collection, —

duty of court when tax is not

paid, 1248.
duty of treasurer when tax is not

paid, 1248.
duty of clerk of court, 1248.
records to be kept, 1248.
constitutional limitations, 1242.
const. 1889, a. 1, § 28, 1242.
const. 1889, a. 15, § 11, 1242.
const. 1889, a. 15, § 13, 1242.
jurisdiction, —

court having jurisdiction of realty
1247.
life estate, not taxable, 1244.
non-resident, —

transfer of stock by foreign
executor, 1246.

'payment, —

tax payable, when, 1245.

duty of person administering es- •
tate, 1245.

sale of property to pay tax, 1246.

tax payable to treasurer, re-
ceipt for, 1246.

duty of administrator regarding
realty, 1246.

treasurer to county to retain,
1248.
receipts, 1249.

duplicate receipts, 1249.
refunding tax in case of debts, 1246.

tax erroneously paid, 1246.

statutes, —
list of, 1242.
St. 1903. c. 80. 1242.

1376 INDEX.

[References are to pages.]

WYOMING, — continued. YOUNG MEN'S CHRISTIAN AS-

statutes, continued. SOCIATION,

the present act, 1244. , . , ^,^

compiled statutes 1910, c. 169. educational, 219.

1244. exemption of, 223.

transfer of stocks, 1246. not religious, 219.

when tax accrues, 1245. treated as library, 222.

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Full text of "The inheritance tax law, containing all American decisions and existing statutes"

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