The word "possession" is more or less ambiguous, and is
interchangeably used to describe both actual and constructive
possession, and not decided in this case whether the contents of a
safe deposit box are in possession of the renter or of the Deposit
Company.
The state has power to regulate the incidents of distribution of
property within the state belonging to decedents, and can prescribe
times and conditions for delivery thereof by safe deposit
companies, and a statute operating to seal safe deposit boxes for a
reasonable period after the death of the renter is not an
unconstitutional deprivation of property without due process of
law, and so
held as to § 9 of the Inheritance Tax Law
of Illinois of 1909.
Such a statute does not impair the obligation of the charter of
a safe deposit company if it provides the conditions under which
delivery shall be made to the proper parties within a reasonable
period.
The prohibition in the Fourth Amendment against unreasonable
searches and seizures does not apply to the states.
Lloyd v.
Dollison, 194 U. S. 445.
Contracts for joint rental of safe deposit boxes are made in the
light of the state's power to legislate for the protection of the
estate of any joint renter, and a statute preventing withdrawal of
contents for a reasonable period does not impair the contract
between the deposit company and the renters.
The renter of a safe deposit box cannot object to a state
statute affecting his right to open the box after death of a joint
renter which was in force when the rental contract was made.
250 Ill. 584 affirmed.
By the Act of July 1, 1909, the Illinois Legislature passed an
inheritance tax law like that considered in
Magoun v. Illinois
Trust & Saving Bank, 170 U. S. 283. The
ninth section of the statute provides in substance:
That no safe deposit company, corporation, or person
Page 232 U. S. 59
having in possession or under control securities or assets
belonging to or standing in the name of a decedent, or in the joint
name of the decedent and another person, or in the name of a
partnership of which he was a member, shall deliver such assets to
the legal representative of the deceased or to the survivor of the
joint holders, or to the partnership of which he was a member,
without ten days' notice to the Attorney General and Treasurer of
the state, who were authorized to examine the securities at the
time of the delivery. It was further provided that no delivery
should be made unless such holder should retain a sufficient
portion of the assets to pay the state tax thereafter assessed,
unless such state officers gave consent in writing. Failure to give
the notice or to retain such amount rendered the deposit company,
corporation, or person liable for the tax and to a penalty of
$1,000.
On March 15, 1910, the National Safe Deposit Company filed in
the Circuit Court of Cook County, Illinois, a bill against the
Treasurer and Attorney General alleging that the company was
incorporated in 1881 to do a safe deposit business and that, in
pursuance of its charter, it had erected a building with large
vaults into which 13,291 safe deposit boxes had been built and
9,702 rented -- 317 to partnerships and 4,104 were held jointly by
more than one person. That prior, to July 1, 1909, it had made
yearly contracts for the rental of said boxes, most of which were
still of force. The rent contracts recited that, in consideration
of $___ paid, the company "had rented to _____ safe No. ___ in the
vaults of this company for the term of one year," and that its
liability was limited to the exercise of ordinary diligence in
preventing the opening of the safe by any person other than the
renter or his duly authorized representative.
"No one except the renter, or his deputy, to be designated in
writing on the books of the company, or, in case of death, his
legal representative, to have access to the safe. . . . No renter
will be
Page 232 U. S. 60
permitted to enter the vaults except in the presence of the
vault keeper. In case of loss of key or combination, the lock will
be changed at the expense of the renter. . . ."
The bill alleged that the safes could be opened only by two
keys, or two combinations, one of which keys or combinations was
held by or known only to the renter, the other being held or known
only by the company's agents. So that it required the joint act of
the customer and the company to secure access to the contents, the
company having no right or means of access to the box itself, nor
did it possess any knowledge or information as to the ownership of
the securities deposited therein.
The bill further alleged that, notwithstanding these facts, the
defendants insisted that the Deposit Company had such possession or
control of the contents as to make it incumbent upon it to prevent
access thereto by all persons for ten days after the death of the
sole or joint renter; that this deprived the Deposit Company of the
right to do the business for which it had been chartered, made it
break its contract that it would allow no one except the renter or
his agent or representative to have access to the boxes; interfered
with its business by depriving the representative and survivor of
their right to use the box and contents; imposed upon the Deposit
Company the risk of determining who was the owner of the contents
of the box, and imposed the duty of acting as a tax collecting
agent for the state. The bill also alleged that the company had
been threatened with suits by depositors if it yielded to the
command of such void act. In order to prevent a multiplicity of
suits, and to avoid the heavy statutory penalties, the company
prayed that the defendants be enjoined from enforcing the statute
against it.
The defendants' demurrer was sustained. That ruling was affirmed
by the Supreme Court of Illinois, three judges dissenting (250 Ill.
584). The case was then brought here by writ of error.
Page 232 U. S. 66
MR. JUSTICE LAMAR, after making the foregoing statement of
facts, delivered the opinion of the Court.
The Illinois Inheritance Tax Law operates to seal safe
Page 232 U. S. 67
deposit boxes for at least ten days after the death of the
renter. In view of the uncertainty as to who might own the contents
of boxes standing in the joint name of the deceased and others, the
statute sealed their boxes also for a like period. The act further
provided that in neither case could the securities be removed
except after notice to officers designated by the state, and even
then the company was required to retain possession of enough of the
assets to pay the state's tax. The Deposit Company insists that
this statute violated the Fourteenth Amendment for that, without
due process of law, it imposed upon the company a duty as to
property over which it had no control, required it to assume the
risk of determining who was the true owner, and forced upon it the
obligations and liabilities of a tax collecting agent of the state.
In the court below and on the argument here, the validity of the
section under review was said to depend upon the relation between
the company and the renter, it being argued for the state that the
contract was one of bailment where, on the death of the bailor, the
Deposit Company, as bailee, was bound to surrender the securities
to the owner or person having a right thereto, one of whom, in each
case, was the state to the extent of its tax. On the other hand,
the complainant insisted that, if there was no possession in fact,
there could be no possession in law, and that, if no possession
existed, it was beyond the power even of the legislature to charge
the company with liabilities that could only arise out of a
possession actually existing.
This is one of that class of cases which illustrate the fact
that, both in common speech and in legal terminology, there is no
word more ambiguous in its meaning than possession. It is
interchangeably used to describe actual possession and constructive
possession, which often so shade into one another that it is
difficult to say where one ends and the other begins.
Union
Trust Co. v. Wilson, 198 U. S. 537.
Custody may be in the servant and possession
Page 232 U. S. 68
in the master, or title and right of control may be in one and
the property within the protection of the house of another, as in
Bottom v. Clarke, 7 Cush. 489, where such possession of a
locked trunk was held not to include possession of the contents. So
that, as pointed out by Pollock and Wright in their work on the
subject, controversies arising out of mixed possession have
inevitably led to many subtle refinements in order to determine the
rights of conflicting claimants or to lay the proper charge of
ownership in prosecutions for larceny of goods belonging to one in
the custody of another or found by the defendant.
In the present case, however, the federal question presented by
the record does not call for a decision as to the exact relation
between the parties during the life of the renter -- whether there
was a strict bailment; whether the renter was in possession of the
box with the Deposit Company as guard over the contents; whether
the property was in the custody of the company with the renter
having a license to enter the building and remove the securities;
or whether, as held in
People ex Rel. Glynn v. Mercantile Safe
Deposit Co. (143 N.Y.S. 849), construing a similar statute of
New York, the relation was that which exists between tenants and
landlord of an office building who keeps under his control the
general means of access to the building and offices therein, but as
to which offices and their contents, the rights of the tenants are
exclusive. The Illinois Supreme Court held that the relation
created by the Deposit Company's contract was that of bailor and
bailee. That construction by the state court is controlling unless,
as claimed by the complainant, it makes the statute violate the
Fourteenth Amendment as being an arbitrary attempt to create
liabilities arising out of possession where there was no possession
in fact.
Certainly the person who rented the box was not in actual
possession of its contents. For the valuables were
Page 232 U. S. 69
in a safe built into the company's vault, and therefore in a
sense "under the protection of the house." The owner could not
obtain access to the box without being admitted to the vault, nor
could he open the box without the use of the company's master key.
Both in law and by the express provisions of the contract, the
company stood in such relation to the property as to make it liable
if, during the lifetime of the owner, it negligently permitted
unauthorized persons to remove the contents, even though it might
be under color of legal process.
Roberts v. Stuyvesant Safe
Deposit Co., 123 N.Y. 57;
Mayer v. Brensinger, 180
Ill. 110. After his death, it would be likewise liable if it
permitted unauthorized persons, be they heirs, legal
representatives, or joint renters, to take the property of the
decedent. In the exercise of its power to provide for the
distribution of his property, the state could make it unlawful,
except on conditions named, for his personal representative to
receive, or the holder to deliver, effects belonging, or apparently
belonging, in whole or in part, to the deceased. As the state could
provide for the appointment of administrators for the distribution
to heirs or legatees of all the property of the deceased and for
the payment of a tax on the transfer, it could, of course,
legislate as to the incidents attending the collection of the tax
and the time when the administrator or executor could take
possession. If, before representatives were appointed, anyone
having the goods in possession or control delivered them to an
unauthorized person, he would be held liable as an executor
de
son tort. The fixing by this statute of the time and condition
on which delivery might be made by a deposit company was also, in
effect, a limitation on the right of the heir or representatives to
take possession. If they had no right to receive except on
compliance with the statutory conditions, neither could the Safe
Deposit Company, as bailee or custodian, surrender the contents
except upon like compliance with statutory conditions.
Page 232 U. S. 70
The contention that the company could not be arbitrarily charged
with the duty of supervising the delivery and determining to whom
the securities belonged is answered by the fact that, in law and by
contract, it had such control as to make it liable for allowing
unauthorized persons to take possession. Both by the nature of its
business and the terms of its contract, it had assumed the
obligation cast upon those having possession of property claimed by
different persons. If the parties could not agree as to who owned
the securities, the company had the same remedy by bill of
interpleader that was afforded all others confronted with similar
conditions. There was certainly nothing arbitrary or unreasonable
in compelling one who had received such control of property from
another to surrender it after his death only to those having the
right thereto. Nor was there any deprivation of property, nor any
arbitrary imposition of a liability, in requiring the company to
retain assets sufficient to pay the tax that might be due to the
state. There are many instances in which, by statute, the amount of
the tax due by one is to be reported and paid by another -- as in
the case of banks required to pay the tax on the shares of a
stockholder.
National Bank v.
Commonwealth, 9 Wall. 363. These conclusions answer
the other constitutional objections, and make it unnecessary to
deal with each of them separately at length.
It is contended that the statute impaired the complainant's
charter power to do a safe deposit business. But it no more
interferes with the right of the company to do that business than
it does with the right of a private person to contract to take
possession or control of securities belonging to another. But,
having regard to the radical change wrought by the death of the
owner and the subsequent duty to make delivery to one authorized by
law to receive possession, the statute points out when and on what
conditions such delivery may be made to the personal
Page 232 U. S. 71
representative, surviving partners, or persons jointly
interested.
The objection that the act, in directing the state officers to
inspect the contents of the box, operates as an unreasonable search
and seizure raises no federal question, since the prohibition on
that subject in the Fourth Amendment does not apply to the states.
Ohio ex Rel. Lloyd v. Dollison, 194
U. S. 447.
The claim that the statute compels the company to break its
contract with joint renters and deprives the latter, for ten days,
of access to the box and the right to use it or remove the contents
is without merit. The company, joint renters, or firms each made
the contract in the light of the state's power to legislate for the
protection of the estate of any one of the joint renters or
partners that might die during the term. As it now appears that all
of the rentals were from year to year, and that all had expired
before final hearing and were renewed after the passage of the law,
it can also be said that all such contracts of joint rental are
made in the light of the provisions of this particular statute. The
boxes were leased with the knowledge that the state had so
legislated as not only to protect the interests of one dying after
the rental, but also to secure the payment of the state tax out of
whatever might be found in the box belonging to the deceased. The
inconvenience was one of the not unreasonable incidents of the
joint relationship.
Judgment affirmed.
