power to sell upon default in the performance of a condition, the transaction is a pledge, and not a mortgage.

The law of Connecticut appears to be to the same effect. In Robertson v. Wilcox, 36 Conn. 426 (1870), the highest court of that state, at page 430, said:

"A pledge of property does not carry with it the title to the thing pledged. The title remains as before. All that passes to the pledgee is the right of possession, coupled with a special interest in the property, in order to protect the right."

The method of computing the tax in the above case is instructive. The court thus states the process:

"Morse left no real estate whatever, either within or without New Jersey. His gross estate amounted to $64,523.85, and by the will went entirely to collaterals or those unrelated to the testator. The estate consisted largely of certain securities, viz., corporate stock and four bonds appraised in the aggregate at $63,285.50. All of these securities had been pledged by Morse in his lifetime, accompanied by a power of attorney in blank, to the Phoenix National Bank of Hartford, Connecticut, to secure his promissory note of $37,500 upon which there was due $5.21 of interest, together with all of the principal amount, at the time of his death. It does not appear that this note had been called prior to the death of Morse or that the pledgee had caused any of the securities to be transferred to it or that any demand had been made upon him prior to death for the payment of the note.

"Among the securities so pledged were New Jersey stocks appraised in aggregate at $28,249.

"The Comptroller appraised the New Jersey stocks at the figures above mentioned, and the decedent's interest in the New Jersey stocks at the sum of $11,507. This amount was obtained by pro-rating the amount of the loan together with such portion of the general deductions as the other

assets were insufficient to meet, over all of the stocks pledged. The value of the equity in the New Jersey stocks was arrived at by applying to the equity in all of the stocks the fraction represented by the value of the New Jersey stocks over the value of all the securities pledged.

"Treating the gross estate for the purpose of taxation as the value of the equity in all of the stocks, plus the value of the other assets the Comptroller arrived at the proportion demanded by the method of computation prescribed for nonresident estates in section 12 of the Act (namely, the ratio of the New Jersey property to the total property wherever situate), which proportion was found to be 42.6 per cent. The tax was then calculated in the manner prescribed in that section and found to be $527.55.

"The Comptroller refused to consent to the transfer of the New Jersey stocks to executor of the decedent, unless such tax upon the decedent's equity therein was paid, and accordingly it was paid.

"The amount of the tax, i. e., the method of computation, is not challenged, and with that we are not concerned."

It is believed that the New Jersey court states a sounder doctrine than that of the Pullman and Ames cases and that it will be sustained in New York.

But in any event when redeemed by the executor the title relates back to the date of death.

Matter of Hurcomb, 36 Misc. 755; 74 Supp. 475.

Where the court said:

"While the debt secured by the pledge of collateral is unliquidated, and the extent of the equity is unascertainable, as was the case in the Matter of Pullman, it may well be that the taxation of any equity therein would be postponed until the transaction had been completed and the value of the decedent's interest therein determined. But after the transaction had been closed, and the interest of

the estate therein fixed by redemption of the collateralto paraphrase the language of Justice Patterson- those securities are no longer liable to be resorted to by creditors; the title to them has reverted to the estate of the pledgor, and they are in a situation to be taxed as property of the estate. They can no longer be required to pay the debts to which they were pledged as collateral, and there is no longer a necessity for protecting the creditor's security, his relation to the matter having terminated."

The pledged property cannot be redeemed with the proceeds of tangible assets which are taxable within the state and thus free exempt property from the lien, but the debt must be deemed to be paid with the pledged property for purposes of taxation.

Matter of Burden, 47 Misc. 329; 95 Supp. 972.

And the surplus value of the pledged assets is property within the state for purposes of taxation.

Matter of Bennett, N. Y. L. J., Oct. 24, 1906; aff. 120 App. Div. 904; 105 Supp. 1107.

5. Other Choses in Action.

a. BANK DEPOSITS.

Money deposited in banks is taxable at the place of deposit.

Matter of Burr (prior to 1911), 16 Misc. 89; 30 Supp. 811.

Re Rogers' Estate, 149 Mich. 305; 112 N. W. 931.

Re Speers, 4 Ohio N. P. 238.

And also at domicile of decedent, even though it involves double taxation.

Mann v. Carter, 74 N. H. 345; 68 A. 130.

In discussing the theory of such taxation (prior to 1911) the New York Court of Appeals said:

"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 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 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.”

Matter of Houdayer, 150 N. Y. 37; 44 N. E. 718.

The rule is applied even though depositor holds a certificate of deposit at his non-resident domicile.

Matter of Hewitt, 90 Supp. 1100; aff. 181 N. Y. 547.

b. DEBTS.

When due from residents to a non-resident decedent, debts are property within the state for purposes of inheritance taxation.

People ex rel. Graff v. Probate Court, 128 Minn. 371; 150 N. W. 1094.

Blackstone v. Miller, 188 U. S. 189.

Matter of Page, N. Y. Law Journal, April 13, 1912.

Matter of Daly, 100 App. Div. 373; 91 Supp. 858; aff. 182 N. Y. 524; 74 N. E. 1116.

In the Daly case the court said:

"The continous tendency of the courts of this State has been to embrace within the Transfer Tax Law directly or indirectly all property of every species found herein upon the death of the decedent. That policy and rule has never been departed from or infringed upon, save by the application of what the court regarded as an inexorable rule of law, which upon thorough examination turns out to be a fiction. When that fact appeared, and the statute is the subject of construction wherein it is made to appear, it becomes controlling not only as an adjudication of the highest court of the land, but also as an adjudication of the construction adopted by the courts of this state. It is not so much a difference of construction as it is of reason producing it, and when the reason for a given construction is shown to fail, and the policy of the statute is clear, the adjudication of the United States court becomes supreme and is made the law of the land with respect to the particular questions involved.

"Under these circumstances, we think its rule must obtain, and so obtaining it necessarily follows that debts due within this state from solvent debtors, which are converted into money herein, and must of necessity be enforced in this jurisdiction, or not at all, become property within the meaning of the Transfer Tax Law, and as such are taxable."

On the other hand it has been held that the situs of a debt is the domicile of the creditor.

Citizens Bank v. Sharp, 53 Md. 521.

Kintzing v. Hutchinson, Fed. Cas. 7384.

As a matter of fact it is both for purposes of inheritance taxation.

c. LIFE INSURANCE.

A policy of life insurance held by a nonresident in a local company is not property within the state subject to the inheritance tax.