Court Opinion

ID: 3608294
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:53:10.044077+00
Date Added: 2024-06-11T13:59:22.701668
License: Public Domain

I cannot concur in the opinion that the bonds of foreign corporations, which formed a part of the non-resident decedent's estate, were subject to appraisal for taxation purposes under the "Transfer Tax Act," because they happened to be, at the time of his decease, deposited within this state. Holding, as we do, and must, in conformity with authority and reason, that the property represented by the bonds is the debt which follows the creditor's person, I am unable to perceive how they can be dissociated from that *Page 32 
indebtedness. Nor do I perceive any good reason for taking a view which permits of double taxation. The claim for the comptroller is that, both by the terms of the act and by force of the Statutory Construction Law of the state (Chap. 677, Laws of 1892, § 4), these bonds could have a situs here, where found at their owner's death. The argument is that, inasmuch as personal property is defined to include written instruments by which any debt or official obligation is created, or evidenced, bonds are expressly made property of a tangible nature, having a situs
where physically present. There are, however, several considerations which militate strongly against our reading into the "Transfer Tax Act" the provision of the general Statutory Construction Act. In the first place, it was passed prior to the Statutory Construction Act, and, itself, gave a definition to the word "property" as used in the act, which ought to control; especially so, as it permits of a construction which is consistent with rules of law and with a greater dignity of purpose on the part of the state in its efforts to raise revenue. In the second place, we should not assume that the legislature had any intention, through the Statutory Construction Act, to change a settled rule of law, which regards the debt as the creditor's property, having its situs at his domicile. And nothing seems to compel such an assumption with respect to an act, which contains within itself a complete system for the taxation of transfers of property, in cases of testacy and of intestacy. Why shall we unnecessarily impute to the legislative body an intention to include for the purpose of this tax that which is only the evidence of property, when the property itself is beyond the reach of state laws? I think such a construction to be unreasonable and oppressive. We cannot afford, however desirable it may be to increase the revenues of the state at the least sacrifice of its inhabitants, to put a construction upon its laws, which will make them appear to be unwise, if not unconscionable. Mr. Justice PATTERSON, who spoke for the majority of the members of the Appellate Division in this case, in his able opinion, amply conceded that the bonds, *Page 33 
as evidences of indebtedness, could have no situs different from the domicile of their owner and clearly showed that to be an incontrovertible proposition, borne out by cases in the United States Supreme Court and in this court. In the Enston Case
(113 N Y, at p. 181), ANDREWS, J., speaking of bonds of foreign corporations, which were owned by a non-resident decedent, but were in the hands of her agent within the state, said: "They were not, in a legal sense, property within this state, and they were not, under the general laws or the policy of the state, taxable here. On the contrary, they were, by the general policy of the state, exempted from taxation here."
It is unnecessary to review the authorities upon the evident proposition that these bonds could have no situs different from the domicile of their owner. In the Bronson case, I had occasion to express views which I shall not repeat here. It seems to me that the policy of the law is satisfied, when it has reached for taxation purposes those many and varied objects of possession, which have a tangible and visible existence, and, in the words of Judge COMSTOCK, in the Hoyt Case (23 N.Y., at p. 240), "are capable of a situs away from the owner or his domicile." That the bonds and obligations of a foreign corporation held by a non-resident, but happening to be in this state, might be included by the legislature for taxation purposes — that it may ignore their legal existence elsewhere — I need not now deny; but, without some clear warrant in the terms of the law, is any wise policy subserved by construing language, certainly admitting of a doubt, in such wise as to justify state officers in assessing the paper evidence of the indebtedness, in order to exact the tribute of a tax? If depositories and depositaries in this state are availed of by a non-resident for the temporary custody of his bonds, can it be said that he has placed his property in the debt within the dominion of this state? Clearly not. The bond is not property as distinguished from the debt it evidences. It may be destroyed and the creditor loses no right to recover the debt. *Page 34 
The state has no jurisdiction over a right of succession which accrues under the laws of the foreign state. That is something in which this state has no interest, and with which it is not concerned. The legal title to these bonds vested in the personal representatives of the decedent by force of foreign laws, and we have held that an executor's title will be recognized by the laws of this state without any grant of letters by its courts. (Toronto Gen. Trust Co. v. C., B.  Q.R.R. Co., 123 N.Y. 45.) As before suggested, when the state undertakes to reach those objects of property of the non-resident decedent, which have a tangible and visible existence within this state, and imposes a tax upon the right to succeed to their ownership, its right to do so is not without support in reason and authority. For it to undertake to collect from the estate of a non-resident decedent a tax based upon and measured by such possessions as the bonds of foreign corporations, which happen, at the time of his death, to be within this state, may be justified upon the principle that might is right, but not, in my opinion, by sound public policy.
There is a reasonable basis for taxing the transfer by will, or under the intestate laws, of the personal estate of the resident decedent, whether within or without the state. Being subject to its jurisdiction, and having had the privileges and protection of its laws in the accumulation and enjoyment of his property, the exertion of the legislative authority, in imposing a tax on the right to the succession of whatever composed the personal estate and constituted the wealth of the resident within its borders, rests upon some appreciable legal principle. If the claim of the comptroller is upheld, I cannot but regard it, to use Mr. Justice FIELD's language in the Foreign Held Bonds Case (15 Wall. 300), as, "in fact, a forced contribution levied upon property held in other states, where it is subjected, or may be subjected, to taxation upon an estimate of its full value."
Is it at all necessary, for the purposes of justice, that the legal situs of such property, as is now in question, should be deemed other than at its owner's domicile? If so, I am unable to *Page 35 
perceive it, and I do not think that the court should commit the state to any policy that is not justifiable in the law and based upon the highest principles of government.
I think that the order appealed from should be reversed.
O'BRIEN, J., concurs with VANN, J.; ANDREWS, Ch. J., BARTLETT and MARTIN, JJ., concur in result of opinion of VANN, J.; HAIGHT, J., concurs with GRAY, J.
Ordered accordingly.