Source: https://supreme.justia.com/cases/federal/us/284/312/
Timestamp: 2019-04-21 08:52:35+00:00

Document:
3. A transfer from the dead to the living of any specific property is an event single in character, and is effected under the laws, and occurs within the limits, of a particular state, and it is unreasonable, and incompatible with a sound construction of the due process clause of the Fourteenth Amendment, to hold that jurisdiction to tax that event may be distributed among a number of states. P 284 U. S. 327.
5. Ownership of shares by the stockholder and ownership of the capital by the corporation are not identical. The former is an individual interest giving the stockholder a right to a proportional part of the dividends and the effects of the corporation when dissolved, after payment of its debts. And this interest is an incorporeal property right which attaches to the person of the owner in the his domicile. P. 284 U. S. 330.
7. Power of state of incorporation to tax stock transfers and issue of new certificate distinguished. P. 284 U. S. 330.
8. The question whether shares of stock, as well as other intangibles, may be so used in a state other than that of the owner's domicile as to give them a situs there for tax purposes analogous to the actual situs of tangible property is not here presented. P. 284 U. S. 331.
A review of these decisions would serve no useful purpose. While, in some of them, a restatement of the doctrine of Blackstone v. Miller was unnecessary to a determination of the points presented for consideration, and in others the facts might be distinguished from those of the present case, nevertheless the authority of the Blackstone case was accepted by all. Frick v. Pennsylvania, 268 U. S. 473, was one of the latest to approve that case and give countenance to the general doctrine that intangible property (unlike tangible property) might be subjected to a death transfer tax in more than one state, but this and all other instances of such approval, whether express or tacit, with the overthrow of the foundation upon which they rested, have ceased to have other than historic interest.
See also Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194, 199 U. S. 204; Rhode Island Hospital Trust Co. v. Doughton, 270 U. S. 69, 270 U. S. 80.
This case was followed by Baldwin v. Missouri, 281 U. S. 586. There, the testator, domiciled in Illinois at the time of her death, had credits for cash deposited in banks located in Missouri, and certain bonds of the United States and promissory notes; all physically within that state. Some of the notes, executed by residents of Missouri, were secured on lands in that state. Applying the principles of the Farmers Loan Company case, we held that the situs of these credits, bonds, and notes was at the domicile of the testator, and there passed from the dead to the living; that they were not within Missouri for taxation purposes, and that the transfer was not subject to the power of that state.
Beidler v. South Carolina Tax Comm'n, 282 U. S. 1, presented still another phase of the subject. There it appeared that a resident of Illinois died in that state. At the time of his death, a South Carolina corporation was indebted to him in a large sum upon an open unsecured account entered upon the books of the corporation kept in South Carolina. Again applying the principles of the Farmers Loan Company case, we held that the transfer by death of this debt was taxable only by the state of the domicile.
Farmers Loan Co. v. Minnesota, supra, at pp. 280 U. S. 211-212; Baldwin v. Missouri, supra; Beidler v. South Carolina Tax Commission, supra.
This ancient maxim had its origin when personal property consisted in the main of articles appertaining to the person of the owner, such as gold, silver, jewels, and apparel, and, less immediately, animals and products of the farm and shop. Such property was usually under the direct supervision of the owner, and was often carried about by him on his journeys. Under these circumstances, the maxim furnished the natural and reasonable rule. In modern times, due to the vast increase in the extent and variety of tangible personal property not immediately connected with the person of the owner, the rule has gradually yielded to the law of the place where the property is kept and used. Pullman's Palace-Car Co. v. Pennsylvania, 141 U. S. 18, 141 U. S. 22; Eidman v. Martinez, 184 U. S. 578, 184 U. S. 581; Union Refrigerator Transit Co. v. Kentucky, supra, 199 U. S. 206. But in respect of intangible property, the rule is still convenient and useful, if not always necessary, and it has been adhered to as peculiarly applicable to that class of property. Blodgett v. Silberman, supra, 277 U. S. 9-10; Farmers Loan Co. v. Minnesota, supra, 280 U. S. 211; Union Refrigerator Transit Co. v. Kentucky, supra, 1 199 U. S. 206.
the stockholder and ownership of the capital by the corporation are not identical. The former is an individual interest giving the stockholder a right to a proportional part of the dividends, and the effects of the corporation when dissolved, after payment of its debts. Delaware Railroad Tax, 18 Wall. 206, 85 U. S. 229-230; Rhode Island Trust Co. v. Doughton, 270 U. S. 69, 270 U. S. 81; Eisner v. Macomber, 252 U. S. 189, 252 U. S. 213-214. And this interest is an incorporeal property right which attaches to the person of the owner in the state of his domicile. The fact that the property of the corporation is situated in another state affords no ground for the imposition by that state of a death tax upon the transfer of the stock. Rhode Island Trust Co. v. Doughton, supra. And we are unable to find in the further fact of incorporation under the laws of such state adequate reason for a different conclusion.
We do not overlook the possibility that shares of stock, as well as other intangibles, may be so used in a state other than that of the owner's domicile as to give them a situs analogous to the actual situs of tangible personal property. See Farmers Loan Company case, supra, at p. 280 U. S. 213. That question heretofore has been reserved, and it still is reserved to be disposed of when, if ever, it properly shall be presented for our consideration.
Recognizing that responsibility must rest primarily on those who undertake to blaze a new path in the law, to say how far it shall go, and notwithstanding the decisions of this Court in Safe Deposit & Trust Co. v. Virginia, 280 U. S. 83; Farmers Loan & Trust Co. v. Minnesota, 280 U. S. 204; Baldwin v. Missouri, 281 U. S. 586; Beidler v. South Carolina Tax Comm'n, 282 U. S. 1, I am not persuaded that either logic, expediency, or generalizations about the undesirability of double taxation justify our adding to the cases recently overruled the long list of those which, without a dissenting voice, have supported taxation like the present. No decision of this Court requires that result. See Baldwin v. Missouri, supra, p. 281 U. S. 596.
Affirmance of this judgment involves no declaration that the tax may be imposed by three or more states instead of two, and, under the decisions of this Court, there is no ground for supposing that it could be. See Rhode Island Trust Co. v. Doughton, 270 U. S. 69. Even if it be assumed that some protection from multiple taxation, which the Constitution has failed to provide, is desirable, and that this Court is free to supply it, that result would seem more likely to be attained, without injustice to the states, by familiar types of reciprocal state legislation than by stretching the due process clause to cover this case. See 28 Columbia L.Rev. 806; 43 Harvard L.Rev. 641. We can have no assurance that resort to the Fourteenth Amendment, as the ill adapted instrument of such a reform, will not create more difficulties and injustices than it will remove. See 30 Columbia L.Rev. 405, 406.

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