Source: https://en.m.wikisource.org/wiki/City_Bank_Farmers%27_Trust_Co._v._Schnader/Opinion_of_the_Court
Timestamp: 2019-04-20 07:18:24+00:00

Document:
The Pennsylvania inheritance tax law imposes a tax upon the transfer by will or intestate laws of personal property within the commonwealth when the decedent is a nonresident at the time of his death.  Thomas B. Clarke, a resident of New York, loaned paintings to a museum in Pennsylvania and died testate while they were on exhibition there. His will was admitted to probate in New York, and letters testamentary issued to appellant to which, as trustee, the residuary clause transferred the pictures. The appellees, acting respectively as Attorney General and secretary of revenue of Pennsylvania, proceeded to appraise and assess the pictures for the purpose of collecting the inheritance tax.
Appellant, maintaining that when the owner died the paintings had no actual situs within Pennsylvania because only temporarily there, brought this suit to enjoin enforcement on the ground that, if the statute be construed to tax the transfer by the death of the nonresident owner, it is repugnant to the due process clause of the Fourteenth Amendment. As the transfer cannot be subjected to taxes imposed by more than one state (Frick v. Pennsylvania, 268 U.S. 473, 488-492, 45 S.Ct. 603, 69 L.Ed. 1058, 42 A.L.R. 316; Safe Deposit & T. Co. v. Virginia, 280 U.S. 83, 93, 50 S.Ct. 59, 74 L.Ed. 180, 67 A.L.R. 386; Farmers' Loan & Trust Co. v. Minnesota, 280 U.S. 204, 210, 50 S.Ct. 98, 74 L.Ed. 371, 65 A.L.R. 1000; First National Bank v. Maine, 284 U.S. 312, 326, 327, 52 S.Ct. 174, 76 L.Ed. 313, 77 A.L.R. 1401), appellant framed its complaint to call for a decision whether Pennsylvania or New York is entitled to the tax. The New York tax commission as amicus curiae filed briefs below and also in this court supporting the claim that the transfer is subject to the New York tax.
The significant features of the transaction are these: Prior to the loan, the pictures that went to make up the collection had an actual situs in New York. The loan was not made for a short and definite period, and it was subject to the right of the owner to have the pictures returned to New York at any time. He did not call for their return, but with his consent they were kept in Pennsylvania and there exhibited until he died two years and ten months after the loan. With the exception of the 4 pictures temporarily sent to Virginia, none was taken from Pennsylvania. For nearly two years next preceding his death Clarke was willing-indeed, he authorized the director-to sell the collection to any one who would buy at the specified price and donate them to the Pennsylvania museum. And during the last six months of his life he was willing to sell to any purchaser that would give them to any institution similar to the Pennsylvania museum. It does not appear that Clarke ever intended to have the pictures returned to New York at any definite date or upon the happening of any event or at all. Until his death he permitted the pictures to be kept and used in the Pennsylvania museum merely subject to his right at any time to order them taken to New York or elsewhere.
In respect of situs for taxation, the collection of portraits is quite unlike vessels and railway rolling stock that in fulfilling the purpose for which they are created move from place to place and into different states. Cf. Hays v. Pacific Mail Steamship Company, 17 How. 596, 599, 15 L.Ed. 254; Pullman's Palace-Car Co. v. Pennsylvania, 141 U.S. 18, 23, 11 S.Ct. 876, 35 L.Ed. 613; Johnson Oil Refining Co. v. Oklahoma, 290 U.S. 158, 161, 54 S.Ct. 152, 78 L.Ed. 238. Before the loan was made, the pictures had an actual situs in New York, so as to be within the taxing power of that state, though it cannot be said that they were there permanently located in the sense of that phrase when used in respect of land, buildings, or other items of fixed real property. The location of the portraits in Pennsylvania was not merely transient, transitory, or temporary, but it was fixed in an established abiding place in which they remained for a long time. Undoubtedly, they became subject to the taxing power of the state. Cf. Brown v. Houston, 114 U.S. 622, 632, 633, 5 S.Ct. 1091, 29 L.Ed. 257; Pittsburgh, etc., Coal Co. v. Bates, 156 U.S. 577, 589, 15 S.Ct. 415, 39 L.Ed. 538; Kelley v. Rhoads, 188 U.S. 1, 7, 23 S.Ct. 259, 47 L.Ed. 359; General Oil Co. v. Crain, 209 U.S. 211, 230, 28 S.Ct. 475, 52 L.Ed. 754. By sending them into Pennsylvania and by his omission to have them returned to New York and his lack of definite intention ever so to do, Clarke failed to maintain an actual situs in New York and created one for them in Pennsylvania. The principle applied in Frick v. Pennsylvania, supra, pages 490-494 of 268 U.S., 45 S.Ct. 603, and in Blodgett v. Silberman, 277 U.S. 1, 18, 48 S.Ct. 410, 72 L.Ed. 749, governs this case.

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