Court Opinion

ID: 5219154
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:29:51.559698+00
Date Added: 2024-06-11T08:27:29.345333
License: Public Domain

Miller, J. (dissenting):
The precise question involved on this appeal is whether promissory notes kept for safekeeping in a safe deposit box in this State, *332made by a non-resident, and owned 'by a non-resident decedent, are subject to taxation under section 220 of the Tax Law (Gen. Laws chap. 24 [Laws of 1896, chap. 908], as amd. by Laws of 1905, chap. 368; re-enacted by.Laws of 1908, chap. 310, and Consol. Laws, chap. 60; Laws of 1909, chap. 62),* which, so far as material, is as follows:
“ A tax shall be and is hereby imposed upon the transfer of any property, real or personal, of the value ox five hundred dollars or over, or of any interest therein * * * in the following cases : * * *
“ 2. When the transfer is by will or intestate law, of property within the State, and the decedent was a nonresident of the State at the time of his death.”
This court in this department has passed on the question in favor of the right to impose the tax. (Matter of Wall, 105 App. Div. 643.) Irrespective of my individual opinion I should be willing to follow that decision but for what I regard to be a controlling decision of. the United States Supreme Court. (Buck v. Beach, 206 U. S. 392.) That case involved the right of the State of Indiana to tax notes, physically present in said State, but which were given and payable in Ohio by residents of the latter State to a resident of Mew York. It was held that the State of Indiana had no power to impose the tax, and that the enforcement of it would be the taking of property without due process of law. That case is not to be distinguished by the fact that the statutory definition of “ personal property” (See Stat. Const. Law [Gen. Laws, chap. 1; Laws of 1892, chap. 677], § 4; re-enacted by Gen. Const. Law [Consol. Laws, chap. 22; ■ Laws of 1909, chap. 27], § 39) includes promissory notes, as distinguished from the debts evidenced by them, because the decision of the State court that there was statutory authority of the State of Indiana for the imposition of the tax was conclusive upon the United States Supreme Court. Independently of the statutory definition of personal property, it is reasonably certain that the Legislature of this State intended by the Transfer Tax Law to reach every transfer which the State had the power to tax, to apply the maxim mobilia sequuntar personam in the case of resident decedents and to reject it in the case of non-resident decedents. So the question is not one of construction but of power. *333• It is not always easy to determine the actual situs for purposes of taxation of intangible property. The decisions on the subject are not altogether harmonious. Distinctions have been drawn, notably between specialty and simple contract debts, which it might be difficult logically to support, except possibly upon archaic notions as to the effect of a seal. I do not discuss the question, because it involves a Federal question, and the decision in Buck v. Beach forecloses debate in this court upon the point that promissory notes, as distinct from the debts evidenced by them, are not property in the sense that they are subject to taxation as such in the State in which they are physically present.
That case is to be distinguished from this, if at all, upon the ground that it involved a property tax, whereas this involves a transfer or succession tax. In the course of his opinion in that case, Mr. Justice Beckham did refer to the fact that there was a distinction between property and succession taxes, and say that the inheritance tax cases were not in point, from which it is inferred that, had the case involved a succession tax, a different result would have been reached. But in the last analysis it will be found that there is no rational distinction, so far as the question before us is concerned, between a property tax and a succession tax upon the transfer of the personal property of a non-resident decedent.
While rejecting the maxim mobilia sequmitur personam in the case of non-resident decedents, the law of this State is that the universal succession occurs in the State of the domicile. The right of succession then in this case was conferred by the State of Connecticut. The State of Mew York may tax the exercise of that right perforce only of its power to do so. If the State has jurisdiction of the property so that ancillary administration here may be necessary to reduce it to possession, it may demand a tax as a condition of allowing the enjoyment of a right which, as a matter of comity, it admits was conferred, and is governed by the laws of another State, but in order to interpose between a right granted by another State and the enjoyment of that right, it is absolutely essential that it have jurisdiction of the property affected. The case is thus brought squarely within the decision in Buck v. Beach (supra). If the State has not jurisdiction, of the property so as to enable it to impose a property tax, it cannot have jurisdiction *334to impose a tax as a condition of allowing a transfer of it according to the laws .of another State. The transfer in such case is beyond the power of this State, and will occur irrespective of the attitude of this State.
While I accept without re-examination as the premise of my argument the principle of Buck v. Beach, it. may not be amiss' to call attention to the practical side of the question. It results from the two theories of imposing inheritance taxes that a right of succession may legally be taxed twice, once in the State of the decedent’s domicile, and again in the State where the property has a situs for the purjioses of taxation, but it has not yet been held that the right may be taxed still a third time in a State where the evidence of a debt happens to be. If the debtor in this case refuses to pay, ancillary administration in the State of Illinois may be necessary. The debt exists apart from the instrument, because a recovery might be had without producing the instrument. If the State of New York should seize the piece of paper, non constat the debt could be established by other evidence. The decedent’s successor will not have to ask the aid of this State or claim the protection of its laws. Surely, within the principle of Blackstone v. Miller (188 U. S. 189), the State of Illinois has a right to impose a tax on the transfer of these notes, a cogent, if not a conclusive, reason for thinking that the State of New York has no such right; for though double taxation is permissible, it has not yet been held that even intangible property can have a situs for purposes of taxation in more than one State apart from the domicile of the owner. If the debtor resided in this State, it would undoubtedly claim and have the means of enforcing payment of a tax, a practical reason for not undertaking to impose a tax which it might be unable to collect. The right of the State to impose transfer taxes on the entire estate of resident decedents and on the property within the State of non-resident decedents necessarily depends on inconsistent theories, but there should be some consistency in the application of those theories.
Scott, J., concurred.
Order affirmed, with ten dollars costs and disbursements.

 Since amd. by Laws of 1910, chap. 706.— [Rep.