The War Tax Law of 1898 does not apply to intangible personal
property located in this country and passing by the will of an
alien domiciled abroad, to a daughter who is also an alien
domiciled abroad, although the will was executed in this country
during a temporary sojourn here.
As the tax is not imposed upon the property, but upon the
succession to the property, the law of the country in which the
succession takes place determines the liability to taxation.
The law does not apply to property passing under a will, if it
would not apply in case the testator had died intestate, and as in
this case the property would have passed under the intestate laws
of France, the succession is not subject to a tax here, although
the will was executed in this country.
This was also an action brought in the Circuit Court for the
Southern District of New York by Ruckgaber, as executor of the last
will and testament of Louisa Augusta Ripley-Pinede, against the
collector of internal revenue to recover an inheritance tax paid to
the defendant upon certain personal property in the City of New
York.
The material facts, as set forth in the certificate, are briefly
as follows:
The testatrix, Louisa Augusta Ripley-Pinede, died at Zurich,
Switzerland, on September 25, 1898, being at that time a
nonresident of the United States and having, for at least eight
years immediately preceding her death, been domiciled in, and a
permanent resident of, the Republic of France. She left a will
dated November 6, 1890, which was made in New York and in
conformity to the laws of that state, where the testatrix was then
sojourning, whereby she bequeathed all her personal property in the
United States to her daughter, Carmelia von Groll, who was then,
and is now, also a nonresident of the United States, domiciled in
Germany. Said will was probated
Page 184 U. S. 594
in the Surrogate's Court of Kings County, New York, on February
17, 1899, and letters testamentary were thereupon issued to the
defendant in error, a resident of said county and state, who alone
qualified as executor.
At the time of her death, the testatrix owned a claim in account
current against one Carl Goepel and one Max Ruckgaber, Jr.,
constituting the firm of Schulz & Ruckgaber, both of whom
resided in the County of Kings and State of New York. She was also
the owner of a share of stock in the Tribune Association, a New
York corporation. The testatrix was also the owner of bonds and
coupons of divers American corporations hereinafter particularly
described. Said chose in action, stock, bonds, and certificate
constituted all the personal property of every kind in the United
States of America referred to in the said will. The value of the
said property of the testatrix at the date of her death, September
25, 1898, as fixed and determined by appraisers duly appointed, was
$105,670.70. On or about the 15th day of June, 1899, upon the
written demand of the collector of internal revenue for the First
District of New York, and under protest, the executor did make and
render in duplicate to the said collector a return of legacies
arising from personal property of every kind whatsoever, being in
charge or trust of said executor, passing from Louisa Augusta
Ripley-Pinede to her said daughter by her will as aforesaid.
The following questions of law which arose out of the foregoing
facts were certified to this Court:
"1. Can the said personal property of the nonresident testatrix,
Louisa Augusta Ripley-Pinede, actually located within the United
States at the time of her death, September 25, 1898, be deemed to
have a situs in the United States for the purpose of levying a tax
or duty upon the transmission or receipt thereof under sections 29,
30, and 31 of the Act of Congress entitled 'An Act to Provide Ways
and Means to Meet War Expenditures, and for Other Purposes,'
approved June 13, 1898?"
"2. Was the transmission or receipt of the said personal
property of the nonresident testatrix, Louisa Augusta
Ripley-Pinede, which was actually located in the United States at
the time of her death, September 25, 1898, subject to taxation
Page 184 U. S. 595
under sections 29, 30, and 31 of the Act of Congress entitled
'An Act to Provide Ways and Means to Meet War Expenditures, and for
Other Purposes,' approved June 13, 1898?"
MR. JUSTICE BROWN delivered the opinion of the Court.
This case differs from the one just decided only in the fact
that the will of the nonresident testatrix was executed in New
York, November 6, 1890, during a temporary sojourn there, although,
as in the preceding case, the testatrix was domiciled abroad and
bequeathed her personal property in New York to a daughter who was
married and also lived abroad.
There can be no doubt whatever that, if Madame Pinede had died
intestate, the personal property would not have passed by the law
"of any state or territory" (using the words of the act), but by
the laws of France. The question, then, is whether the condition is
changed if the property pass under a will executed in this country.
In
United States v. Hunnewell, 13 F. 617, cited in the
preceding case, the will was executed in France, but the decision
of Mr. Justice Gray, holding that the tax was not payable, was not
put upon the ground that the will was executed in a foreign
country, but upon the broader ground that the legacy duty was
payable only upon the estate of persons domiciled within the United
States. In delivering the opinion he observed:
"Section 124 [of the similar act of 1864] imposes a duty on
legacies or distributive shares arising from personal property
'passing from any person possessed of such property, either by will
or by the intestate laws of any state or territory;' it does not
make the duty payable when 'the person possessed of such property'
dies testate, if it would not be payable if such person died
intestate, and if Madame de la Valette had died intestate, her son
would not have taken a distributive share 'by the intestate laws
of
Page 184 U. S. 596
any state or territory,' but, if at all, by the law of France,
the domicil of his mother at the time of the death. And section
125, by requiring the executor or administrator to pay the amount
of this duty 'to the collector or deputy collector of the district
of which the deceased person was a resident,' leads to the same
conclusion."
The real question, then, is, as said by Mr. Justice Gray,
whether the act makes the duty payable when the person possessed of
such property dies testate if it would not be payable if such
person died intestate, although the actual question involved in
this cause differs from the one there involved in the fact that, in
the
Hunnewell case, the will was executed abroad, while in
the present case, it was executed in this country.
Bearing in mind the fact that the tax in this case is not upon
the property itself, but upon the transmission or devolution of
such property, the question again recurs, as it did in the
preceding case, whether the succession took effect in France or in
New York. We are aided in the solution of this problem by the
language of section 2694 of the New York Code of Civil Procedure,
also cited in the preceding case, which is as follows:
"Except where special provision is otherwise made by law, the
validity and effect of the testamentary disposition of any other
[than real] property situated within the state, and the ownership
and disposition of such property where it is not disposed of by
will, are regulated by the laws of the state or country of which
the decedent was a resident at the time of his death."
Now as, if Madame Pinede had died without leaving a will, her
property would have passed under the intestate laws of France and
been exempt from this tax, it follows under the
Hunnewell
case that it is equally exempt though it passed by will.
The will of Madame Pinede is confined to her personal property
in this country, and the record does not show whether she was
possessed of other property in France or in any foreign country. If
she had, that property would either pass by will executed there or
under the intestate laws of her domicil. For reasons stated in the
prior opinion, we do not think Congress contemplated by this act
that the estates of deceased persons should be split up for the
purposes of distribution or taxation,
Page 184 U. S. 597
but that, so far as regards personal property, the law of the
domicil should prevail.
A question somewhat to the converse of this arose in
In re
Romaine, 127 N.Y. 80, which was a proceeding to compel payment
of an inheritance tax by the administrator of the estate of
Romaine, who had died intestate in Virginia, leaving a brother and
sister resident in New York as his next of kin. The act of 1887
subjected to an inheritance tax
"all property which shall pass by will or by the intestate laws
of this state from any person who may died seised 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. The
question was whether the property of Romaine, who died in Virginia
intestate, was subject to the tax. After deciding that the tax
applied to two classes -- namely, resident and nonresident
decedents -- the court observed:"
"But does it apply to all persons belonging to these two
classes? It is not denied that it applies to all resident decedents
and to all nonresident testators, but it is contended that it does
not apply to nonresident intestates, because property 'which shall
pass . . . by the intestate laws of this state' is expressly
mentioned to the implied exclusion of property passing by the
intestate laws of other states. This is the position of the
appellant, whose learned counsel claims that the act in its present
form was designed to meet cases of succession by will, but not of
succession by intestacy unless the intestate was a resident of this
state. It is difficult, however, to see why the legislature should
discriminate simply for the purposes of taxation between the
property of a nonresident decedent who made a will and of one who
did not. It is not probable that there was an intention to tax the
estates of nonresident testators and to exempt those of nonresident
intestates, because there is no foundation for such a distinction .
. . Property of the same kind, situated in the same place,
receiving the same protection from the law, and administered upon
in the same way, would naturally be required to contribute toward
the expense of government upon the same basis, regardless of
whether its last owner died testate or intestate."
By parity of reasoning, we think it follows that no
discrimination was intended to be made between nonresidents who
died testate, even though the will were made in this country, and
those who died intestate, and as we have held in the preceding case
that the law does not apply to nonresidents who died intestate, or
testate under a will executed abroad, we think it follows that it
does not apply to deceased persons domiciled abroad who left
property by will executed in this country.
The questions certified must therefore be answered in the
negative.
MR. JUSTICE WHITE and MR. JUSTICE McKENNA concurred in the
result.
