The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1909-05-21
DECLARES TAX
IS C0L[ECT|BLE
,Erom wednesday,s AavertIser.l

tFrom Wednesdays Advertlser.)
Attorney General Hemenway com
pleted his brief yesterday, defending
the position of the Territory in connec-
ton with the point raised by Attorneys
Holmes, Stanley & Olson, counsel for
the ancillary administrator in the mat
ter of the estate of Mary Dame Hall,
in which the contention is made that
the inheritance tax is not applicable
on 100000 worth of stock in the h
o. Hall & Son, Ltd, distributed under
the will of Mrs. Hall. who died abroad
"The question at issue upon the facts
in this matter" says the Attorney
General in his brief, els whether or
not an inheritance tax is due the Ter
ritory upon the transfer by the VIII
of a nonresident decedent on shares
of stock in certain domestic corpora
tions. The decision of this question
depends upon the construction of See
ton l of Act 102 of the laws of l90S-
"Obviously, as stated for counsel for
the ancillary administrator the exact
question is whether shares Of stock
owned by nonresident decedent are
property within this Territory, and
therefore subject to the tax imposed
by the statute.
''This question has not, heretofore,
been before the courts of this jurisdic-
ton but such tax has frequently been
assessed against and paid by other es.
tates without question, the Territory
taking the position that such property,
i.e., shares of stock in domestic corpora
tons, is property within the Territory
and taxable. This view is sustained
by courts of other Jurisdictions in con-
STRUNG laws so closely similar in phr So
ology to the Hawaiian statute as TO be
practically identical.
Territory's Position.
"Counsel for the ancillary admins
traitor base their argument upon the
fiction of law that the situs of personal
property is at the domicle of its own
err, and therefore the property of this
estate is not taxable because it is not
within the Territory In support Of
this argument, attention is called to
certain authorities which undoubtedly
lay down the general rule of law that
the situs of shares of stock is at the
domicile of the owner. But the same
contention has been made in other juris-
die tions in cases arising under inheri-
lance tax laws and these decided to
have no application to the issue before
the court.
"The Territory submits that since n
corporation is but n creature of statute
and owns property as such only by
permission of the law, the right or in
terest of shareholders in such property
or against the corporation is itself prop
erty within the Territory in so far al
to be subject to all requirements sf
law pertaining to the sovereignty OF
the Territory, and especially so when
by virtue of statute alone, such proper
ty passes on the death Of its owner to
some other person.
The Attorney General cites similar
case under the laws Of New Jersey,
the statute reading CAN property
which shall pass by will or by the in.
testate laws of this state from any per
son who may die seized or possessed
of the same while being n resident OF
the state and all property which shah
be within the state-shall be subject to
tax of five dollars.
The decision of the court is quoted
stating that "we have no hesitation,
therefore in concluding that the express
object of the New Jersey statute was
that all property within this state, re-
CARELESS of the domicile of its former
owner, should be subject to the inheri-
lance tax provided by its first section
The question thus presented is whether
the proprietary right that stakeholder
has in n New Jersey corporation is for
governmental purposes, property within
this state if he chance to reside here,
but it is property not within this state
of he chance to reside elsewhere. -
Court Supports View.
CATER stating that the question was
one of first impression before the New
Jersey court, and after reciting the his
tory of succession taxes" continues the
Attorney General, "the doctrine was
well established that the right of ths
testamentary disposition of property
and of succession or inheritance were
creatures of the law upon the
exercise and operation of which, the
law making body could constitutionally
impose terms and conditions.
"Since the rule is well established, !"
concludes the brief, "that where there
are no local decisions respecting the
construction to be given the local in
hcritance tax law, it is submitted that
the construction placed upon similar
laws elsewhere is to be given great
weight, and that the unanimity of opin-
ion shown by the foregoing decisions il
very nearly conclusive here. The Ter
rtory therefore submits that the prop
erty of this estate is within the Terri
tory, and, therefore, the right of sue
cession to its ownership, conferred by
local statute, is taxable under the Local
inheritance tax law
A.