The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1909-08-21
INHERITANCE
Tx LAW VALID
The Supreme Court Renders
Opinion in Mary Dame
Hall Case.

The Inheritance tax case was de-
cided yesterday by the Supreme Court
in favor of the Territory, the CON
stitutionaIity of the Act being upheld.
The case upon which the decision is
rendered is that of the estate of Mary
Dame Hall, which came before the Su-
preme Court on appeal from the de-
cree of Circuit Judge Robinson, rem
dered some weeks ago.
Had the court held the law uncon-
stitutional, it would have meant not
only the loss of large revenue to the
Territory in the future, but also that
large amounts in inheritance taxes
which have already been collected
would have to be refunded. Attorney
General Hemenway, consequently, is
very much pleased at his victory in the
matter. The amount involved in the
case at issue was $1,000, which will
now have to be paid into the treasury
of the Territory.
Following is the opinion of the
court:
The inheritance tax statute claws
of 1905, Act 1922 does not violate the
United States Constitution.
Under the inheritance tax statute
shares of stock in domestic corpora
lions. owned by a nonresident dece-
dent, are property within this Terri
tory and subject to the provisions of
the act.
Opinion of the Court by Wilder, J.
Mary Dame Hall died testate in New
Jersey leaving large amount of prop
erty. Her will having been admitted
to probate in that state letters'of an
cillarv administration with the will an
nexed were granted to S. N. Damon
bv Circuit Judge of the First Circuit
to administer upon a certain amount
Of cash in this Territory and shares
of stock in number of domestic cor
porations. upon the transfer of which
nropertv under the will an inheritance
tax was assessed.
The administrator having appealed
from the decree assessing the tax, two
questions are presented for considera-
ton. namely, ~ whether the inheri-
lance tax statute (Act 102, S. L. 1900,
is unconstitutional in that it is con-
trarv to the fifth and fourteenth
amendments to the constitution, and,
if not, (2) whether shares of stock IN
domestic corporations owned by non
resident decedent are subject to the
provisions of the statute.
The first point is that the statute is
nneonstitutional because it provides for
a classification which is claimed to De
arbitrary and discriminative, the cias-
sifeation being that in the case OF GER
tain relatives the tax is two per cent.
on the value of the property received
in excess of $1,000, while in all other
cases the tax is FIVE per cent. on the
value of the property IN excess OF
$500. In our opinion the classification
is reasonable one and the act IS
valid. See Magoun V. Ill. Trust q
Savings Bank. 40 Z. S. 2S3; Campbell
V. California. U. S. 81; Board of Edu-
cation V. Illinois. 20S U. S. 553; Bill
lings V. Illinois, 1SS Z. S. 81:
The second and main contention is
that shares of stock in domestic cor
porations owned by a nonresident dece-
dent are not property within this Ter
ritorv and consequently not subject to
the provisions of the statute. Section
/ of the act provides that "All prop
erty which shall pass by will or by
the intestate laws of this Territory,
from any persons who may die selzed
or possessed of the same while resi-
dent of this Territory, or which, beng
within this Territory, shall so pass
from any person who may so die while
not resident of this Territory shall
be subject to the tax.
The question. in brief, is whether
the shares referred to are property
within this Territory. That the shares
are property is of course clear and is
conceded. Counsel for the appellant
also comedies the power of the legis-
lature to provide for tax on a success
sion to such shares of stock but in
sists that it has not done so. The
fiction that personal property has its
situs at the domicil of its owner is not
relied on, as it is conceded that the
| act covers personal property of nom
resident which is tangible and is physi-
| callv situated within the Territory 1t
| is argued that shares of stock are in
| tangible property and have no physical
situs whatever in the absence of a
provision to the contrary in the act
| In section "a of the act 'property
| is defined to mean ''the real and per
sonal property or interest therein of
the testator, intestate, grantor, bar
gainor, vendor Or donor passing OF
transferred to individuals, legatees, dew
isees, heirs, next of kin, grantees
donees, vendees, or successors and shall
include all personal property within OF
without the Territory. This defni.
ton includes intangible as well as
tangible property.
In in re Bronson, 80 N. Y. l, it was
held that the transfer of shares OF
stock in corporations Incorporated un
| der the laws of that State held by g
| nonresident decedent was subject tt
taxation under the New York statute
which provided for tax on the trans
fer of property within the State wher
| the decedent was a nonresident at the
time of his death. The reasoning by
which that conclusion was reached wa:
that share Of stock was but an IN
divided interest in the property of thu
corporation, and that it had tangibl,
and visible existence in the State wher,
the corporation existed and had it
property. That case has been followed
IN number of later decisions
In State V. Dalrmyple, 20 Nd. 294,
L. r. A. 372. the court had no hesitation
in holding that the statute of that Stat,
imposing q tax upon the transfer o