CHAPTER IV.

ESTATES OF RESIDENT AND NON-RESIDENT DECEDENTS.

§ 1. General rules as to domicile and situs.

2. Conflict under these statutes.

3. Resident decedents, their heirs and legatees.

4. Non-resident decedents, their heirs and legatees:

(a) The English rule of mobilia sequuntur personam. (b) Application of the rule in America.

(c) The rule as applied to tangible and intangible property.

(d) Where succession takes place for purpose of taxa

tion.

5. Foreign legacies.

6. Rules where non-resident's debts exceed value of estate.

§ 1. General rules as to domicile and situs.-Perhaps some of the most complicated questions, arising under these laws, are those concerning the liability, for the payment of succession or legacy taxes, of estates or property, within the taxing State, belonging to non-resident or alien decedents and passing to their heirs, devisees or legatees by will or intestate law, and the liability of resident decedents, to pay the tax, where the property is situated abroad or in a foreign State. The law upon this subject is as yet but partly developed in this country.

Generally, with respect to personal property taxes, it is not necessary that the person and property should both be within the jurisdiction of the taxing State, but, in order to be taxable, it is sufficient

if either is, and it is said that the State, at its option, may impose the tax upon tangible property within its borders, irrespective of the residence or allegiance

of the owner.1

These principles may be said, with some exceptions, to be applicable to collateral inheritance, legacy or succession taxes, and jurisdiction is conferred either by the fact of property or person being within the State or both.2

The legislature has the power, as we have already seen, to impose these taxes, not only where they affect citizens, but also where non-residents or aliens claim by inheritance or will, property actually located within the State, and also personal property situated elsewhere but owned by a resident.*

Under general tax laws so far as non-residents are concerned it is held that such taxes are not a charge against the owner personally, but must be enforced against the property itself, and the State would seem to have no jurisdiction to assess the owner personally.

§ 2. Conflict under these statutes.-But perhaps

1 Cooley on Taxation, 2d ed. 55, 56.

2 Com. App. (Bittinger's Est.), 129 Pa. St. 338; s. c. 18 Atl. Rep. 132; In re Short's Est. 16 Pa. St. 67; St. v. Dalrymple, 70 Md. 294; S. C. 17 Atl. Rep. 82.

' Chapter II, sec. 16.

* St. v. Dalrymple, supra; Alvaney v. Powell, 2 Jones' Eq. 51; Thompson v. Advocate-Gen. 12 C. & F. 1; In re Cigala, L. R. 7 Chanc. Div. 356.

❝ Cooley on Taxation, 2d ed. 21; citing People v. Supervisors, 11 N. Y. 563; Hilton v. Fonda, 86 Id. 339. As to when property sent here for investment by foreigners is exempt from taxation after owner's death, see Estate of Smith, 17 N. Y. St. Rep. 783.

no subject has afforded more ground for contention and conflict, in the courts of England and America, than the one concerning the liability of personal property of non-resident or alien decedents, within the taxing State.1

And the question has generally been, whether the domicile of the owner, or the situs of the property, should be taken as the governing principle or basis for ascertaining the liability to such taxes, some courts adopting the domicile and others the situs as the ground of such liability.

This conflict will be found to have become more or less complicated by several considerations, among others

(a) By the application to a greater or less extent of the maxim mobilia sequuntur personam. This rule has been applied fully in the English courts under the legacy act, and in a restricted sense under the succession act.

(b) By the distinction made, under this maxim, in certain American courts, especially in Pennsylvania, between tangible and intangible property, which will be hereafter considered.

(c) And on the other hand, by the application, in many States, of doctrines of public policy, so as to tax non-resident or alien estates equally with those belonging to residents, and thus prevent discrimination between the two classes.2

(d) By questions of construction naturally

1 See Layton on Succession and Legacy Duties, introduction to 5th edition.

2 State v. Dalrymple, Alvany v. Powell, supra, are the leading

cases.

arising in different courts in construing different

statutes.

The principles enunciated by the courts under these statutes, concerning the liability of the estates of resident and non-resident or alien decedents, will be treated in the order following:

§3. Resident decedents, their heirs or legatees.While, under property tax laws, it is not the general rule to tax the personalty of a resident of the taxing State, the actual situs of which is in a foreign State or country; this would seem to be constantly done under legacy or succession tax laws, and here the fiction of mobilia sequuntur personam fully applies, as the property is usually drawn or remitted to the owner's domicile for administration and distribution, unless detained at the situs by creditors.2

Hence, there would seem to be no question, among any of the authorities, that such personal property of a deceased resident, wherever situated, and the real or leasehold estate within the State of his domicile passing to persons subject to the tax, and whether such personal property be of a tangible or intangi ble nature, are taxable under these laws. This rule, under the fiction of law, applies both against resident and non-resident legatees or devisees of such a decedent, as to personalty, wherever it be situated.3

1

Hoyt v. Commissioners, 23 N. Y. 224; People v. Smith, 88 Id. 576; People v. Gardner, 51 Barb. 352; People ex rel. Darrow v. Coleman, 119 N. Y. 137.

2 Kintzing v. Hutchinson, 34 Leg. Int. 365; Bruce v. Bruce, 2 Bos. & P. 229; In re Short's Est. 16 Pa. St. 66; McKeen v. Northampton County, 49 Id. 519; and cases cited, sec. 1, supra.

Tyson v. St. 28 Md. 577; Mager v. Grima, 8 Howard, 490;

The only exception to this rule seems to be, as has been said, where the real estate of the decedent is situated in a foreign country. Being thus beyond the jurisdiction of the State of domicile, such real property cannot be reached under these laws for the purpose of taxation, even though devised to a resident of the taxing State.1

Any law in the nature of a direct tax having this object in view would, it seems, infringe upon constitutional grounds and be unenforceable by the

Eyre v. Jacob, 14 Grat. 422; St. v. Dalrymple, 17 Atl. 82; S. C. 70 Md. 294; Com's. App. (Bittinger's Est.), 129 Pa. St. 338; s. c. 18 Atl. 132; In re Short's Est. supra; Orcutt's App. 97 Pa. St. 184; Com. v. Smith, 5 Id. 143; Alexander's App. 3 P. L. J. (Clark), 87; U. S. v. Hunnewell, 13 Fed. Rep. 617; Stokes v. Ducroz, Layton's Leg. & Succ. Duties, 7th ed. 20; Chatfield v.. Berchtoldt, L. R. 7th Ch. App. 192; In re Ewin, 1 C. & J. 151; Atty.-Gen. v. Napier, 6 Exch. 217; Forbes v. Steven, L. R. 10 Eq. 178; Custance v. Bradshaw, 4 Hare, 315; In re Coales, 7 M. & W. 390; Arnold v. Arnold, 2 Myl. & Cr. 256; In re Cigala, 1878, L. R. 7 Chanc. Div. 351; Matter of Enston, 113 N. Y. 181; see, also, Cooley on Taxation, 2d ed. 44, 56; Alvaney v. Powell, 2 Jones' Eq. 51; St. v. Brevard, Phillip's Eq. Rep. 141; Com. v. Brenner, 2 Leg. Gaz. (Pa.), 413; People v. Commissioners, 51 Hun, 312.

In Dallinger v. Rapello, 14 Fed. Rep. 32, it was held, that the personal property of a deceased inhabitant was not taxable within the State, after the appointment of an executor, and before distribution, where the property was not within the State, and neither the executor nor any person in interest had a domicile there. The decision, however, was on the construction of the statute, and not upon the point of State power. See Cooley on Taxation, 2d ed. p. 55, note.

1 Cases cited, supra; Miller v. Com. 111 Pa. St. 321; Lorillard v. People, 6 Dem. 268; Drayton's App. 61 Pa. St. 172; Com. v. Coleman, 52 Id. 468; Hood's Est. 21 Id. 106; Kintzing v. Hutchinson, U. S. Circ. Ct. 34 Leg. Int. 365; Matter of Wolfe, 19 N. Y. St. Rep. 263; Estate of Dewey, N. Y. Law Jour. Oct. 21, 1889.