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Matched Legal Cases: ['§ 602', '§ 524', '§ 550', '§ 48', '§ 48', '§ 447']

Curry Vs Mccanless - Citation 96842 - Court Judgment | LegalCrystal
Curry Vs. Mccanless - Court Judgment
LegalCrystal Citation legalcrystal.com/96842
Case Number 307 U.S. 357
Appellant Curry
Respondent Mccanless
curry v. mccanless - 307 u.s. 357 (1939) u.s. supreme court curry v. mccanless, 307 u.s. 357 (1939) curry v. mccanless no. 339 argued january 9, 1939 reargued april 28, 1939 decided may 29, 1939 307 u.s. 357 appeal from the supreme court of tennessee syllabus 1. decedent, domiciled in tennessee, transferred to a trustee in alabama certain stocks and bonds on specific trusts. the net income was to be paid to her during her lifetime and, upon her death, the property was to be held in trust for specified beneficiaries. she reserved, however, certain powers over the trustee and the handling of the trust, and the power to dispose of the estate as she might direct by will. until her death, the trust was administered by.....
Curry v. McCanless - 307 U.S. 357 (1939)
U.S. Supreme Court Curry v. McCanless, 307 U.S. 357 (1939)
tax on the transfer of the intangibles held by the Alabama trustee, but passing under the will of the decedent, domiciled in Tennessee. Pp. 307 U. S. 360 , 372- 307 U. S. 373 .
2. The opinion considers the grounds for the doctrine that power to tax tangible property is confined to the State in which the property is located. P. 307 U. S. 363 .
When we speak of the jurisdiction to tax land or chattels as being exclusively in the State where they are physically located, we mean no more than that the benefit and protection of laws enabling the owner to enjoy the fruits of his ownership and the power to reach effectively the interests protected, for the purpose of subjecting them to payment of a tax, are so narrowly restricted to the State in whose territory the physical property is located as to set practical limits to taxation by others. P. 307 U. S. 364 .
3. Rights in intangible property are but relationships between persons, which the law recognizes by attaching to them certain sanctions enforceable in courts. The power of government over them and the protection which it gives them cannot be exerted through control of a physical thing, but can be made effective only through control over and protection afforded to those persons whose relationships are the origin of the rights. As sources of actual or potential wealth -- which is an appropriate measure of any tax imposed on ownership or its exercise -- they cannot be dissociated from the persons from whose relationships they are derived. P. 307 U. S. 366 .
4. From the beginning of our constitutional system, control over the person at the place of his domicile and his duty there, common to all citizens, to contribute to the support of government have been deemed to afford an adequate constitutional basis for imposing on him a tax on the use and enjoyment of rights in intangibles measured by their value. P. 307 U. S. 366 .
5. In cases where the owner of intangibles confines his activity to the place of his domicile, it has been found convenient to substitute a rule for a reason by saying that his intangibles are taxed at their situs, and not elsewhere, or, perhaps less artificially, by invoking the maxim mobilia sequuntur personam. P. 307 U. S. 367 .
even a workable substitute for the reasons which may exist in any particular case to support the constitutional power of each State concerned to tax. P. 307 U. S. 367 .
7. The domicile is not deprived, by the taxpayer's activities elsewhere, of its constitutional jurisdiction to tax, and consequently there are many circumstances in which more than one State may have jurisdiction to impose a tax and measure it by some or all of the taxpayer's intangibles. P. 307 U. S. 368 .
8. Since Alabama may lawfully tax the property in the trustee's hands, the Court perceives no ground for saying that the Fourteenth Amendment forbids that State to tax the transfer of it or an interest in it to another merely because the transfer was effected by decedent's testamentary act in another State. P. 307 U. S. 370 .
9. Exercise of the decedent's power to dispose of the intangibles was a taxable event in Tennessee. P. 307 U. S. 371 .
10. In effecting her purposes, the testatrix brought some of the legal interests which she created within the control of one State by selecting a trustee there, and others within the control of the other State by making her domicile there. She necessarily invoked the aid of the law of both States, and her legatees, before they can secure and enjoy the benefits of succession, must invoke the law of both. P. 307 U. S. 372 .
11. The prohibition of the Fourteenth Amendment against the taxation of property not within the taxing "jurisdiction" of a State is not to be extended by ascribing to intangibles in every case a locus for taxation in a single State despite the control over them or their transmission by any other State and its legitimate interest in taxing the one or the other. The Court can find nothing in the history of the Fourteenth Amendment, and no support in reason, principle, or authority, for saying that it prohibits either State, in the circumstances of this case, from laying the tax. Pp. 307 U. S. 373 , 307 U. S. 372 .
The doctrine, of recent origin, that the Fourteenth Amendment precludes the taxation of any interest in the same intangible in more than one state has received support to the limited extent that it was applied in Farmers' Loan & Trust Co. v. Minnesota, 280 U. S. 204 ; Baldwin v. Missouri, 281 U. S. 586 ; First National Bank v. Maine, 284 U. S. 312 . Still more recently, this Court has declined to give it completely logical application. [ Footnote 1 ] It has never been pressed to the extreme now urged upon us, and we think that neither reason nor authority requires its acceptance in the circumstances of the present case.
That rights in tangibles -- land and chattels -- are to be regarded in many respects as localized at the place where the tangible itself is located for purposes of the jurisdiction of a court to make disposition of putative rights in them, for purposes of conflict of laws, and for purposes of taxation, is a doctrine generally accepted both in the common law and other legal systems, before the adoption of the Fourteenth Amendment and since. [ Footnote 2 ]
Originating, it has been thought, in the tendency of the mind to identify rights with their physical subjects, see Salmond, Jurisprudence (2nd ed.) 398, its survival and the consequent cleavage between the rules of law applicable to tangibles and those relating to intangibles are attributable to the exclusive dominion exerted over the tangibles themselves by the government within whose territorial limits they are found. Green v. Van Buskirk, 7 Wall. 139, 74 U. S. 150 ; Pennoyer v. Neff, 95 U. S. 714 ; Arndt v. Griggs, 134 U. S. 316 , 134 U. S. 320 -321. See McDonald v. Mabee, 243 U. S. 90 , 243 U. S. 91 ; cf. Harris v. Balk, 198 U. S. 215 , 198 U. S. 222 ; Frick v. Pennsylvania, supra, 268 U. S. 497 . The power of government and its agencies to possess and to exclude others from possessing tangibles, and thus to exclude them from enjoying rights in tangibles located within its territory, affords adequate basis for an exclusive taxing jurisdiction. When we speak of the jurisdiction to tax land or chattels as being exclusively in the state where they are physically located, we mean no more than that the benefit and protection of laws enabling the owner to enjoy the fruits of his ownership and the power to reach effectively the interests protected, for the purpose of subjecting them to payment of a tax, are so narrowly restricted to the state in whose territory the physical property is located as to set practical limits to taxation by others. Other states have been said to be without jurisdiction, and so without constitutional power, to tax tangibles if, because of their location elsewhere, those states can afford no substantial protection to the rights taxed, and cannot effectively lay hold of any interest in the
property in order to compel payment of the tax. See Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 , 199 U. S. 202 ; Frick v. Pennsylvania, 268 U. S. 473 , 268 U. S. 489 et seq. [ Footnote 3 ]
rights are but relationships between persons, natural or corporate, which the law recognizes by attaching to them certain sanctions enforceable in courts. The power of government over them and the protection which it gives them cannot be exerted through control of a physical thing. They can be made effective only through control over, and protection afforded to, those persons whose relationships are the origin of the rights. See Chicago, R.I. & P. R. Co. v. Sturm, 174 U. S. 710 , 174 U. S. 716 ; Harris v. Balk, 198 U. S. 215 , 198 U. S. 222 . Obviously, as sources of actual or potential wealth -- which is an appropriate measure of any tax imposed on ownership or its exercise -- they cannot be dissociated from the persons from whose relationships they are derived. These are not in any sense fictions. They are indisputable realities.
McCulloch v. Maryland, 4 Wheat. 316, 17 U. S. 429 . But this does not mean that the sovereign power of the state does not extend over intangibles of a domiciled resident because they have no physical location within its territory, or that its power to tax is lost because we may choose to say they are located elsewhere. A jurisdiction which does not depend on physical presence within the state is not lost by declaring that it is absent. From the beginning of our constitutional system, control over the person at the place of his domicile and his duty there, common to all citizens, to contribute to the support of government have been deemed to afford an adequate constitutional basis for imposing on him a tax on the use and enjoyment of rights in intangibles measured by their value. Until this moment, that jurisdiction has not been thought to depend on any factor other than the domicile
of the owner within the taxing state, or to compel the attribution to intangibles of a physical presence within its territory, as though they were chattels, in order to support the tax. Carpenter v. Pennsylvania, 17 How. 456; Kirtland v. Hotchkiss, 100 U. S. 491 ; Hawley v. Malden, 232 U. S. 1 ; Bullen v. Wisconsin, 240 U. S. 625 ; Cream of Wheat Co. v. County of Grand Forks, 253 U. S. 325 ; Blodgett v. Silberman, 277 U. S. 1 ; Farmers' Loan & Trust Co. v. Minnesota, supra; Baldwin v. Missouri, supra; Beidler v. South Carolina Tax Comm'n, 282 U. S. 1 ; First National Bank v. Maine, supra; Virginia v. Imperial Coal Sales Co., 293 U. S. 15 ; Schuylkill Trust Co. v. Pennsylvania, 302 U. S. 506 .
In cases where the owner of intangibles confines his activity to the place of his domicile, it has been found convenient to substitute a rule for a reason, cf. New York ex rel. Cohn v. Graves, 300 U. S. 308 , 300 U. S. 313 ; First Bank Stock Corp. v. Minnesota, 301 U. S. 234 , 301 U. S. 241 , by saying that his intangibles are taxed at their situs, and not elsewhere, or, perhaps less artificially, by invoking the maxim mobilia sequuntur personam, Blodgett v. Silberman, supra; Baldwin v. Missouri, supra, which means only that it is the identity or association of intangibles with the person of their owner at his domicile which gives jurisdiction to tax. But when the taxpayer extends his activities with respect to his intangibles, so as to avail himself of the protection and benefit of the laws of another state, in such a way as to bring his person or property within the reach of the tax gatherer there, the reason for a single place of taxation no longer obtains, and the rule is not even a workable substitute for the reasons which may exist in any particular case to support the constitutional power of each state concerned to tax. Whether we regard the right of a state to tax as founded on power over the object taxed, as declared by Chief Justice Marshall in McCulloch v. Maryland, supra,
through dominion over tangibles or over persons whose relationships are the source of intangible rights, or on the benefit and protection conferred by the taxing sovereignty, or both, it is undeniable that the state of domicile is not deprived, by the taxpayer's activities elsewhere, of its constitutional jurisdiction to tax, and consequently that there are many circumstances in which more than one state may have jurisdiction to impose a tax and measure it by some or all of the taxpayer's intangibles. Shares of corporate stock may be taxed at the domicile of the shareholder and also at that of the corporation which the taxing state has created and controls, and income may be taxed both by the state where it is earned and by the state of the recipient's domicile. [ Footnote 4 ] Protection, benefit, and power over the subject matter are not confined to either state. The taxpayer who is domiciled in one state but carries on business in another is subject to a tax there measured by the value of the intangibles used in his business. New Orleans v. Stempel, 175 U. S. 309 ; Bristol v. Washington County, 177 U. S. 133 ; State Board of Assessors v. Comptoir National, 191 U. S. 388 ; Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 ; Liverpool & London & Globe Ins. Co. v. Board, 221 U. S. 346 ; Wheeling Steel Corp. v. Fox, 298 U. S. 193 ; cf. Blodgett v. Silberman, supra; Baldwin v. Missouri, supra. But taxation of a corporation by a state where it does business, measured by the value of the intangibles used in its business there, does not preclude the state of incorporation from imposing a tax measured by all its intangibles. Cream of Wheat Co. v. County of Grand Forks, supra, 253 U. S. 329 ; [ Footnote 5 ] see Fidelity & Columbia Trust Co. v. Louisville, 245 U. S. 54 .
Even if we could rightly regard these various and distinct legal interests, springing from distinct relationships, as a composite unitary interest and ascribe to it a single location in space, it is difficult to see how it could be said to be more in one state than in the other, and upon what articulate principle the Fourteenth Amendment could be thought to have withdrawn from either state the taxing jurisdiction which it undoubtedly possessed before the adoption of the Amendment by conferring on one state at the expense of the other, exclusive jurisdiction to tax. See Paddell v. City of New York, 211 U. S. 446 , 211 U. S. 448 . If the "due process" of the Fifth Amendment does not require us to fix a single exclusive place of taxation of intangibles for the benefit of their foreign owner, who is
entitled to its protection, Burnet v. Brooks, 288 U. S. 378 ; cf. Russian Volunteer Fleet v. United States, 282 U. S. 481 , 282 U. S. 489 , the Fourteenth can hardly be thought to make us do so here, for the due process clause of each amendment is directed at the protection of the individual, and he is entitled to its immunity as much against the state as against the national government.
If taxation is but a means of distributing the cost of government among those who are subject to its control and who enjoy the protection of its laws, see New York ex rel. Cohn v. Graves, supra, 300 U. S. 313 ; First Bank Stock Corp. v. Minnesota, supra, 301 U. S. 241 , legal ownership of the intangibles in Alabama by the Alabama trustee would seem to afford adequate basis for imposing on him a tax measured by their value. We can find no more ground for saying that the Fourteenth Amendment relieves it, or the property which it holds and administers in Alabama, from bearing that burden than for saying that they are constitutionally immune from paying any other expense which normally attaches to the administration of a trust in that state. This Court has never denied the constitutional power of the trustee's domicile to subject them to property taxation. Safe Deposit & Trust Co. v. Virginia, 280 U. S. 83 ; see cases collected in 30 Columbia Law Rev. 530; 2 Cooley, Taxation (8th ed.) § 602. And since Alabama may lawfully tax the property in the trustee's hands, we perceive no ground for saying that the Fourteenth Amendment forbids the state to tax the transfer of it or an interest in it to another merely because the transfer was effected by decedent's testamentary act in another state.
For purposes of taxation, a general power of appointment, of which the testatrix here was both donor and donee, has hitherto been regarded by this Court as equivalent to ownership of the property subject to the power. Chanler v. Kelsey, 205 U. S. 466 ; Bullen v. Wisconsin, supra, 240 U. S. 630 ; Chase National Bank v. United States, 278 U. S. 327 , 278 U. S. 338 ; see Gray, Rule Against Perpetuities (3d ed.1916), § 524. [ Footnote 6 ] Whether the appointee derives title from the donor, under the common law theory, or from the donee by virtue of the exercise of the power, is here immaterial. In either event, the trustee's title under the will was derived from decedent, domiciled in Tennessee. Cf. Wachovia Bank & Trust Co. v. Doughton, 272 U. S. 567 . There is no conflict here between the laws of the two states affecting the transmission of the trust property. The title of the trustee under the original Alabama trust came to an end upon the exercise of the testatrix's power of appointment, and, although the trustee after her death still had title to the securities, it was in by a new title as legatee under her will, and a new beneficial interest was created, both derived through the exercise of her power of disposition. The resulting situation was no different from what it would have been if she had bequeathed the
circumstances of this case, from laying the tax. On the contrary, this Court, in sustaining the tax at the place of domicile in a case like the present, has declared that both the decedent's domicile and that of the trustee are free to tax. Bullen v. Wisconsin, supra, 240 U. S. 631 ; cf. Keeney v. Comptroller of New York, 222 U. S. 525 , 222 U. S. 537 ; Guaranty Trust Co. v. Blodgett, 287 U. S. 509 . That has remained the law of this Court until the present moment, and we see no reason for discarding it now. We find it impossible to say that taxation of intangibles can be reduced in every case to the mere mechanical operation of locating at a single place, and there taxing, every legal interest growing out of all the complex legal relationships which may be entered into between persons. This is the case because, in point of actuality, those interests may be too diverse in their relationships to various taxing jurisdictions to admit of unitary treatment without discarding modes of taxation long accepted and applied before the Fourteenth Amendment was adopted, and still recognized by this Court as valid. See Paddell v. New York, supra, 211 U. S. 448 . The Fourteenth Amendment cannot be carried out with such mechanical nicety without infringing powers which we think have not yet been withdrawn from the states. We have recently declined to press to a logical extreme the doctrine that the Fourteenth Amendment may be invoked to compel the taxation of intangibles by only a single state by attributing to them a situs within that state. [ Footnote 7 ] We think it cannot be pressed so far here.
multiple legal interests to which they may give rise and despite the control over them or their transmission by any other state and its legitimate interest in taxing the one or the other. While fictions are sometimes invented in order to realize the judicial conception of justice, we cannot define the constitutional guaranty in terms of a fiction so unrelated to reality without creating as many tax injustices as we would avoid, and without exercising a power to remake constitutional provisions which the Constitution has not given to the courts. See Bristol v. Washington County, supra, 177 U. S. 145 ; Kidd v. Alabama, 188 U. S. 730 , 188 U. S. 732 , quoted with approval in Hawley v. Malden, supra, 232 U. S. 13 ; Bullen v. Wisconsin, supra, 240 U. S. 630 ; Fidelity & Columbia Trust Co. v. Louisville, supra, 245 U. S. 58 ; Cream of Wheat Co. v. County of Grand Forks, supra, 253 U. S. 330 .
See, in the case of income taxation, Lawrence v. State Tax Comm'n, 286 U. S. 276 ; New York ex rel. Cohn v. Graves, 300 U. S. 308 ; Guaranty Trust Co. v. Virginia, 305 U. S. 19 ; cf. Senior v. Braden, 295 U. S. 422 , 295 U. S. 431 -432. And, in the case of taxation of shares of stock, see Corry v. Baltimore, 196 U. S. 466 ; First Bank Stock Corp. v. Minnesota, 301 U. S. 234 , 301 U. S. 239 -240; Schuylkill Trust Co. v. Pennsylvania, 302 U. S. 506 , 302 U. S. 514 -516.
Green v. Van Buskirk, 5 Wall. 307; 74 U. S. 7 Wall. 139; Pennoyer v. Neff, 95 U. S. 714 ; Arndt v. Griggs, 134 U. S. 316 ; Fall v. Eastin, 215 U. S. 1 ; Olmsted v. Olmsted, 216 U. S. 386 ; United States v. Guaranty Trust Co., 293 U. S. 340 , 293 U. S. 345 -346; Paddell v. City of New York, 211 U. S. 446 ; St. Louis v. Ferry Co., 11 Wall. 423, 78 U. S. 430 ; Frick v. Pennsylvania, 268 U. S. 473 ; see Story, Conflict of Laws (8th ed.), §§ 550, 551; Dicey, Conflict of Laws (5th ed.), pp. 418 et seq., 583 et seq., 606 et seq.; 1 Beale, Conflict of Laws, § 48.1 et seq.; American Law Institute, Restatement of Conflict of Laws, §§ 48, 49; 2 Cooley, Taxation (4th ed.), §§ 447, 451.
But there are many legal interests other than conventional ownership which may be created with respect to land of such a character that they may be constitutionally subjected to taxation in states other than that, where the land is situated. No one has doubted the constitutional power of a state to tax its domiciled residents on their shares of stock in a foreign corporation whose only property is real estate located elsewhere, Darnell v. Indiana, 226 U. S. 390 ; Hawley v. Malden, 232 U. S. 1 ; cf. Kidd v. Alabama, 188 U. S. 730 ; Corry v. Baltimore, 196 U. S. 466 ; Cream of Wheat Co. v. County of Grand Forks, 253 U. S. 325 , 253 U. S. 329 ; Schuylkill Trust Co. v. Pennsylvania, 302 U. S. 506 , 302 U. S. 514 -516, or to tax a valuable contract for the purchase of land or chattels located in another state, see Citizens National Bank v. Durr, 257 U. S. 99 , 257 U. S. 108 ; cf. Gish v. Shaver, 140 Ky. 647, 650, 131 S.W. 515; Golden v. Munsinger, 91 Kan. 820, 823, 139 P. 379; Marquette v. Michigan Iron & Land Co., 132 Mich. 130, 92 N.W. 934, or to tax a mortgage of real estate located without the state, even though the land affords the only source of payment, see Kirtland v. Hotchkiss, 100 U. S. 491 ; cf. Savings & Loan Society v. Multnomah County, 169 U. S. 421 ; Bristol v. Washington County, 177 U. S. 133 ; Paddell v. New York, 211 U. S. 446 . Each of these legal interests finds its only economic source in the value of the land, and the rights which are elsewhere subjected to the tax can be brought to their ultimate fruition only through some means of control of the land itself. But the means of control may be subjected to taxation in the state of its owner whether it be a share of stock or a contract or a mortgage. There is no want of jurisdiction to tax these interests where they are owned in the sense that the state lacks power to appropriate them to the payment of the tax. No court has condemned such action as so capricious, arbitrary, or oppressive as to bring it within the prohibition of the Fourteenth Amendment, for it is universally recognized that these interests are of themselves in some measure clothed with the legal incidents of property enjoyed by their owner, in the state where he resides, through the benefit and protection of its laws.
No comparable right or power resided in the beneficiaries upon whom a tax was sought to be levied in Safe Deposit & Trust Co. v. Virginia, 280 U. S. 83 , 280 U. S. 91 .
The suit was brought in a chancery court of Tennessee under the declaratory judgments act of that State. [ Footnote 2/1 ] Complainants
were the Nashville Trust Company, a Tennessee corporation appointed by the will of Mrs. Grace C. Scales as executor for Tennessee, and the Title Guarantee Loan & Trust Company, which will be referred to as the Birmingham trust company, an Alabama corporation appointed as executor for that State. Defendants were the Commissioner of Finance and Taxation of Tennessee, and the members of the Alabama Tax Commission. The bill prayed that the court determine what portions of the estate are taxable by Tennessee and what portions are taxable by Alabama. The Tennessee commissioner filed answer praying declaration and decree that the securities held in Alabama are subject to the inheritance tax law of Tennessee. [ Footnote 2/2 ] The members of the Alabama commission filed their answer and a cross-bill praying decree in favor of that State and against the Birmingham trust company for the tax claimed under the laws of Alabama. [ Footnote 2/3 ]
An amendment to the answer of the members of the Alabama Tax Commission alleges, and by stipulation the other parties admit, that from the trust indenture it fully appears that the title, possession, and control of the securities passed completely to the Birmingham trust company and that such was the status of the securities at the time of the death of Mrs. Scales. That amendment also alleges, and the stipulation admits, that she never exercised the right reserved to her to remove the trustee, and that the trust property could not have been removed from Alabama except upon an order of a circuit court and in compliance with the statutes of that State. [ Footnote 2/4 ]
The Tennessee commissioner and the members of the Alabama commission respectively claim the right to impose an inheritance or death succession tax based upon the value of all the property held in the trust at the time of the death of Mrs. Scales. Rightly, the parties agreed and the state courts assumed that, consistently with the due process clause of the Fourteenth Amendment, both States may not impose transfer taxes in respect of the same property. Frick v. Pennsylvania, 268 U. S. 473 , 268 U. S. 489 -494; Farmers' Loan & Trust Co. v. Minnesota, 280 U. S. 204 , 280 U. S. 210 -212; Baldwin v. Missouri, 281 U. S. 586 , 281 U. S. 591 ; Beidler v. South Carolina Tax Comm'n, 282 U. S. 1 , 282 U. S. 7 -8; First National Bank v. Maine, 284 U. S. 312 , 284 U. S. 328 ; City Bank Farmers' Trust Co. v. Schnader, 293 U. S. 112 , 293 U. S. 116 -117. See Burnet v. Brooks, 288 U. S. 378 , 288 U. S. 401 -402; Senior v. Braden, 295 U. S. 422 , 295 U. S. 432 ; Wheeling Steel Corp. v. Fox, 298 U. S. 193 , 298 U. S. 209 -210; New York ex rel. Whitney v. Graves, 299 U. S. 366 , 299 U. S. 372 ; New York ex rel. Cohn v. Graves, 300 U. S. 308 , 300 U. S. 314 -315; Worcester County Trust Co. v. Riley, 302 U. S. 292 , 302 U. S. 297 -298. No distinction is suggested between the securities covered by the relinquishment, January 11, 1929, of the right reserved to encroach upon and to direct transfer from the corpus and the small part to which the relinquishment did not extend. And, as the parties and the state courts have treated all alike, this Court may decide upon title and taxability as if the relinquishment covered all.
Wilson v. Anderson, 186 Pa. 531, 537, 40 A. 1096; Hellman v. McWilliams, 70 Cal. 449, 453, 11 P. 659; Strong v. Weir, 47 S.C. 307, 323, 25 S.E. 157. Unquestionably it presently vested full legal and equitable title in the trustee and beneficiaries, subject to be divested only by the exertion by Mrs. Scales of her power of appointment by will. Coolidge v. Long, 282 U. S. 582 , 282 U. S. 597 ; Marvin v. Smith, 46 N.Y. 571, 575; Carroll v. Smith, 99 Md. 653, 658 et seq., 59 A. 131; Boone v. Davis, 64 Miss. 133, 140, 8 So. 202. That power did not amount to an estate or interest in the trust property. United States v. Field, 255 U. S. 257 , 255 U. S. 263 ; Porter v. Commissioner, 288 U. S. 436 , 288 U. S. 441 . All doubt as to that is precluded by the clause of the indenture which provides that, in the absence of disposition by her will, the property shall continue to be held in trust for purposes there specified.
The reserved authority to direct investment contemplates action as trustee, and not control as owner. Reinecke v. Trust Co., 278 U. S. 339 , 278 U. S. 346 -347. The authority to remove the trustee and to appoint a successor detracts nothing from the plenary grant of title. See Bowditch v. Banuelos, 1 Gray, Mass. 220, 230. When read, as it must be, in connection with the provisions of the Alabama statute above referred to, that provision of the indenture does not reserve power to remove that trust securities from the Alabama.
concerning title. Tyler v. United States, 281 U. S. 497 , 281 U. S. 503 .
It follows that, save her right to income, Mrs. Scales, after her relinquishment, January 11, 1929, and, at the time of her death, had no estate or interest in the securities held by the trustee. There is no basis for application of the fiction mobilia sequuntur personam. Wachovia Bank & Trust Co. v. Doughton, 272 U. S. 567 , 272 U. S. 575 ; Brooke v. Norfolk, 277 U. S. 27 , 277 U. S. 29 ; Safe Deposit & Trust Co. v. Virginia, 280 U. S. 83 , 280 U. S. 92 , 280 U. S. 94 ; McMurtry v. State, 111 Conn. 594, 151 A. 252; In re Estate of Bowditch, 189 Cal. 377, 208 P. 282; Matter of Canda's Estate, 197 App.Div. 597, 189 N.Y.S. 917. Cf. Bullen v. Wisconsin, 240 U. S. 625 . Tennessee may not impose the inheritance tax claimed in this suit by its Commissioner of Finance and Taxation.
Intangibles, like tangibles, may be so held and used outside the the domicil of the owner as to become taxable in the State where kept. See, e.g., New Orleans v. Stempel, 175 U. S. 309 ; Bristol v. Washington County, 177 U. S. 133 , 177 U. S. 143 et seq.; State Board of Assessors v. Comptoir National, 191 U. S. 388 ; Scottish Union & Nat. Ins. Co. v. Bowland, 196 U. S. 611 , 196 U. S. 619 -620; Metropolitan Life Ins. Co. v. New Orleans, 205 U. S. 395 , 205 U. S. 402 ; Liverpool & London & Globe Ins. Co. v. Board of Orleans Assessors, 221 U. S. 346 , 221 U. S. 353 . The general rule of mobilia sequuntur personam must yield to the established fact of legal ownership, actual presence, and control in a State other than that of the domicil of the owner. The phrase "business situs," as used to support jurisdiction of a State
other than that of the domicil of the owner to impose taxes on intangible personal property is a metaphorical expression of vague signification; its meaning is not limited to investment or actual use as an integral part of a business or activity, but may extend to the execution of trusts such as those created by the indenture and imposed on the trustee in this case. De Ganay v. Lederer, 250 U. S. 376 , 250 U. S. 381 -382; New York ex rel. Whitney v. Graves, supra, 299 U. S. 372 et seq.; Wheeling Steel Corp. v. Fox, supra, 298 U. S. 211 ; First Bank Stock Corp. v. Minnesota, 301 U. S. 234 .
The stock certificates, bonds, or other documents evidencing the intangibles constituting the trust property were never held in Tennessee. Neither their issue or validity nor the enforcement or transfer, inter vivos or from the dead to the living, of any right attested or supported by them was at all dependent on the laws of that State. [ Footnote 2/5 ] From the beginning, the trust estate has been under the protection of, and necessarily the trusts have been and are being executed under, the laws of Alabama, unaffected by those of any other State. See Hutchison v. Ross, 262 N.Y. 381, 394, 187 N.E. 65; Sewall v. Wilmer, 132 Mass. 131, 137.
Alabama General Revenue Act, approved July 10, 1935, Art. XII, c. 2 (Acts 1935, p. 434 et seq. ): Section 347.1: