Court Opinion

ID: 4140191
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:56:10.587866+00
Date Added: 2024-06-11T14:33:30.755636
License: Public Domain

OFFICE   OF THE ATTORNEY     GENERAL _ OF TEXAS

gonorab1.e Gee. EL shepperd
coag3t2olltir of Publio looounts
m&R,      Taxan
pIIsr sir:

                                           at&of’ B des%h. The trullt
                                         , amaw Ln Tami, rttaokti an6
                                    atocico 8ria bond8 kr eorpor#iiona
                              E than Tmum, Unitad tstatqr Umvmrxaenf
                              ‘bonds, nrunioQal bwiA# OS olti.8       ouQ-
                              ountr) bonda, an& a debt 6&e the s~tak
                           utsida OS I’(IZ(LIJ. Thi rwt:r2cster      or
                           xoept acme of the Twarr reouritier)        wwa
                        ofmseloa    of R bmk in wt Pork ror oonuetl-

              wh.3~ th8 bhet0nOe      tax rOp0rt   rap   the chde8   a.
Jonss estate was filed recently,   ths stocka wad bon&? of eor-
poratlons organl%e& in mteter other thm To%&4 United t3tatss
Uovermwnt BoMs, Fw3em1~ Land Bmlc bonda, a&oipal       bon& of
cities  outside of Texas, forsign oountry bar&a, on6 thhe debt
due the estate by 6.dubtar reaidfui; outetao of Texmi wafo
OrPitted fran the ~rpert.
                                                                               555   i.

gomrable    Qco. K. Sheppsrd - Pa&o 2

            Your dqmrtunt      haa taken the riolr that Chsrlm Hf.
Jonas* rntlrb     5 par cent intcirat ia the Korgsn Jone~ satats
is subj4ot to in.&wrItanoe tax, rqywdless       of tha QomIoIle OS
tbtl corporation whlah Issued tba bonds     and stooks, and co-
gsr6lers   or  tko physIoa1 Aoobtion   of tha certllIoatsa  or other
svidanous of ownership, UUQ you roqueet our 0&85on whsther
t&l8 poeition    1~ sorrtli9t.
             The rd.mhg      la witiportlmnl        portion   or   Art1010
7117, v. a* c. 3.8
             *all projmrty within th* jurIs6Iutioa     or thin
      st8to.   real or personal.   oocpornts  of incorporats,
      and any intsrrat thuxoln, . . . . whetbar balonIckrg
      ?a lRhRbltRnts Of thi8 f.itat*or Eo       rsonr who axe
      not inbsbitanto     ra&ardlasL Of whe tr @r such proper
      is l0o*ted ni do     or without thIr state,   whIoh ash3
      ~88 abrolutsly     or in tru&t by will or by the lam
      of do8oant or dlotributlon      . . . l &m&l, upfm pa+
      ofnc; to or ror the wo of any por80u, corpoxatlon,
      or ar8ooIattoa, ba mbjeot to I tax. . . . u
            The question    of Jur5sbiotioR    to tax pa%&rty,         both
tangible    anil intnn&blo, h8r been tha aubJa@t of #uoh &tm-
ous8iw     by tho oouxts, md irm t5aa to tba tic prdros       00
wh%oh auoh Jurladlotiim   mya baa.8 hate been ohmgod.     WmUy,
la ourxy 1. MoCanlos8 (1939) 307 Lr. s* 357, 63 L. Bd. 1339,
59 3. Ot. 900, 123 A. L. il. i62, jurisdlotlon   to tax lanfl,
tenglbla parumlty     and lntaneibls    rsonalty was pleoed
rpuerely on ths prataation or banaf r t throry of taxation es
oorrelated with the oontrol of the laws of the psrtioular
statu ovur th0 thine ox prr8on taxed.
             In Curry   T. &ooCrnlom,   dooedunt,     a rosidant     of Ton-
nwmm,. tranrrerred oartain   stoek8 anC bonde to ‘an Alabama
trust oorporation by truet Sndeatun, rssclrving the inoarrul
for Use,  tnu powrrr to rimovo the tru#Eae and substltuts   sn-
Other, the power to dirooc sale and investment of tha trwt
  ropwty,   crnd the powsr to dispose Of the truet Bststs by hmr
Past will. anC tcrstamant.    tint51 d%%%dmt’%death the srldencnr
Or the intmeiblwa     wwrelosetafi 51i iU.sbsnui sod thti trust oar-
poratfw    edmb5aterud   tkio trust  tn that stat%.   nt her death,
dsoctdent urrrrclaisd the reevrved power or +smt&wntorg dispo~+
tiOA,   kad bequenthed the LnrPt &TQ&W?tY    to thu Sami trustsct,
                        J
but ohangQ(LW&i original trust indmtura a8 to awunte              end eatutaa.
Deodsnt S'urther aypolntcra T~a~888Qa and Alabaa@ trust c~mpanioa
&cutorU      as to the propaftioawhioh ahe might own anb havetbe
right to Cuapoao of by will          k ths rtrrpwatlva   atate&.  The exQw-
tore brou&t      suit i&the ohanaery eowt of Tenneaau agalnati the
to% oftiolal8      or Rlabama  tad Te.mes8eeDraglng for a Qaalaretorg
ju~nt      to  4eteiaUs    the  portl(3ae  of   the artate taxabl+ by the
napaotfvo     atat88.
          m0 8th WU.Xk th88RUathat the dU8 p~008~ 0~8U88,
au t40wbrutta by pcerloua0asea in the aupw* Court (rarmr8

tazlng thu trumfer and that ON or t&e ethw ha& to be aaloatd
sr tha lltua of.th8 intan&blra. Tha &%pruae Court, tn u1
oplnlon by 36#u             held Ohat botkA1abppI and Tonnaasor had
~urlaaioblQn,       utlL5wl       bg PUB pxQcrrr, to l8pQre a cloa6h 68x
OR traRarar or 6h4 tnt4la&1b198. airtrbi001Qn            60 68x W&8*@aa
M the p;poteotiMor budit theory. Hawmrar,tan(blblo                  an4 in-
tanglbla porsaralty           uery 4iotlngulahad 0.0 the gxound that in
the oeae or the forrscrr oontrol oopld b8 8xwtad 0181: am3 pro-
to o tiQnlisorQra to the pbpalealalJag,           uhm.8 * the oaae 0r
the latter      the   aourt aaid   (307 U. 6. at 369)~:
          “Vw?g U!ferbnL couddoratlona,              both   th~oretloal
     .a& praotlomi,app4 to tblv tautlon              or lntas&blerr,
     that  &a, rights whloh are not rrlabo4 to phyalraf
      thinji. Swh rlghtr UF* but relatlctaaU~a batwean
     pa~~ona, na6ural or uo+arat%,u&&oh the 1mu ,raooq-
     nine8 by attaohix~g     to t&a,nroortala maotiono canfotea-
     lb & in owrta.        Tha gowar of ~ovammant Qvlr thea
     and rho proteotfon whioh lt slvaa thoa ouaad~~,bo
     rxartml throw       oQxitro1 of a phyalwl    thing. They
     ma ba made effrotivc        only thxoggh oontrol QVW and
     pxot@otlon  affor4od to thoaa pereoaa whoa% relation-
     f&i&t@ are tha origin     of t&m ri@ha    . . . .
            *     . l   . .

             *& ir e, fo r r esa o na  o f her a wn   the teatstrir,
     althou@ &mleLleB ia Tonnsaaer               en a l~joy&g bhe
     benerita Qt it8 1~8~8, found it 84vantegcow                to orsat
     a trust     of lutanglblua       Ln ldd+ama by veaLlag legal
           01th    to the $ra$a&dblea end limiteb pOwern Ot oon-
          trol   over them In ~lsbsnra.   But she alw provi&trd
          t&it by resort to her powar ‘to dl~rpoau @f proprilrty
          by nlll,    conferred ;?DOU hur by the li:w of tha &ml.-
          atle, tii~ truss% cou.l.8 br;bem.inated mih the proptrrty
          pit88 uafir tka will. she thus oreated      Lwo cuts of
          lag81    rolatloP&hlpa reaultiry;tii dlatlnat. lnteqlble
          .i&hto, the QDB oabodiad in tha lee1       ornwrrhip by
          the Alabama trustee of the intangfblrs,       the other
          omboalbd iA the opuitabla right Of tha abObd8nt ta
          oontrol     the notion or the truatee alth rriepeot to
           the trust    property and to oompd it to pay over to
          her the irlooes aura      her iirc, and in her power
           to Qlspoao of the property at Qoath.
                     " . . . .
                     “&he naoss*erlLy       invoked the crld or the law Or'
          both atates,          ani¶ hor logateoe,      before   thay 0~1 aoIour8
          Ona    @55Qy    thb    benefit8    Of   8UOOb88iQR~    0Wt   bVOk6   ths
          law Of bat&."
                  It la evldant   that the L.cgal ownership of t&e AI.80
    bai!ka truakt,  we0 baffiolant    to Jurtlry  th8 impQrition of,a
    train   that atata.~ ~bven under the old ,idra Qf loealielng      of
    ixsta~&bl#lr, it met be oonosd~Q, an did Butlar in hi8 din&ant,
    that Alabaa     ha& thr $irisdiotlon    to tar on the bsaia of
    *buaineaa   aitua.w

               A si.mlhar rituatlok *au prsafmta~ in Qravbs vc islllott,
    307 u. 6. 383, 83 L. &CL 1356, $9 ii. ct. 913, and the Jiirlsdio-
    tiM Of the St6k     *rhiQh W&8 talc slitUe Of thtt tl%Qt, tO,taZ
    wan beyond gwatl~n.     50 ala0 la rr dam of prfaprty taxi 3928
    Dttpoalc an& Tru8t Co. VI Ylrc;.icls, 280 LT. S. 83, 74 L+ &I. 76,
        Y. ct. 59, 67 X. 3.. it. 386, &a al8.0: 18 Taxen Law Acavkw
    $6.
                     The QsOtWtion,         btnofit alid OORtTOl theory Of taXa-
    tlou of htwglblea   was reafrirawd by tiha Lupraew Court in
    &t&o TQX Coliwisaion of Utah v. ~xldrlch, 316 U. j. 174, $6 l..
    id. 1358, 62 3. dt. 1008.

                 $0 here, Chrrrlae 11. Jowe*     lntc;rest  in thy Wrgan
    Jwirro truet   is   taxab1s under aithar theory. Thhe truut 0~s
    its exiatanocr    to  th-i law3 of t&r:stat6    0P T~omm.   T6x6a law

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