Chanler v. Kelsey

Mr. Justice Holmes,

with whom was Mr. Justice Moody, dissenting.

I have the misfortune to differ from the majority of my brethren in this case, and although the argument which seemed and still' seems to me unanswerable was presented and has not prevailed, I think that the principles involved are of sufficient importance to justify a statement of the reasons for my dissent. A state succession tax stands on different grounds from a similar tax by the United States or a general state tax upon transfers. It is more unlimited in its possible extent, if not altogether unlimited, and therefore it is necessary that the boundaries1 of the power to levy such taxes should be accurately understood and defined.

I always have believed that a state inheritance tax was an exercise of the power of regulating the devolution of property by inheritance or will upon the death of the ówner,—a power *480which belongs to the States; and I have been fortified in my belief by the utterances of this court from the time of Chief .Justice Taney to the present day. Mager v. Grima, 8 How. 490, 493; United States v. Perkins, 163 U. S. 625, 627, 628; Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 288; Plummer v. Coler, 178 U. S. 115, 124, 126, 137; Billings v. Illinois, 188 U. S. 97, 104; Campbell v. California, 200 U. S. 87, 94; Cahen v. Brewster, 203 U. S. 543, 550. See also Matter of Sherman, 153 N. Y. 1, 4. For that reason the power is more unlimited than the power of a State to tax transfers generally, or the power of the United States to levy an inheritance tax. The distinction between state and United. States inheritance taxes was recognized in Knowlton v. Moore, 178 U. S. 41, 58, and whatever may be thought of the decision in Snyder v. Bettman, 190 U. S. 249, I do not understand it to import a denial of the distinction, reaffirmed by the dissenting members of the court. 190 U. S. 256.

If then a given state tax must be held to be a succession tax in order to maintain its validity, or if in fact it is held tó be a succession tax by the state court of which it is the province to decide that matter, it follows that such' a tax cannot be levied except where there is a succession, and when some element or step necessary to complete it still is wanting when the tax law goes into effect. If some elepient is wanting at that time, the succession depends, for taking effect, on the continuance of the permission to succeed or grant of the right on the part of the State; and, as the grant may.be withdrawn, it may. be qualified by a tax. But if there is no succession, or if the succession has fully vested; or has passed beyond dependence upon the continuing of the State’s permission or grant, an attempt to levy a tax under the power to regulate succession would be an attempt to appropriate property in a way which ■ the Fourteenth Amendment has been construed to forbid» No matter what other taxes might be levied, a succession tax could not be, and so it has been decided in New York. Matter of Pell, 171 N. Y. 48, 55; Matter of Seaman, 147 N. Y. 69.

*481It is not denied that the tax under consideration is a succession tax. The Court of Appeals treated it as such in the present case. It said: “If the power had been exercised by-deed a different question would have arisen, but it was exercised by will and owing to the full and complete control by the legislature of the making, the form and the substance of wills, it can impose a charge or tax for doing anything by will.” Matter of Delano, 176 N. Y. 486, 494, reversing S. C., 82 App. Div. 147. That it was such a tax and valid for that reason was decided in Matter of Dows, 167 N. Y. 227, affirmed by this court. Orr v. Gilman, 183 U. S. 278, adopting the New York view, 183 U. S. 289. And these decisions and some of the other decisions of this court cited above were relied upon by the Court of Appeals. 176 N. Y. 492. See further Matter of Vanderbilt, 50 App. Div. 246; aff’d 163 N. Y. 597; Matter of Lansing, 182 N. Y. 238, 248. Probably the tax would be invalid for other local reasons besides those mentioned in Matter of Dows, but for the construction which it has received. Matter of Pell, 171 N. Y. 48, 60.

This being then a succession tax, I should have thought it plain that there was no • succession for it to operate upon. More precisely, even if otherwise any element of succession could have been found, a matter that I think would need explanation, the execution of the power did not depend in any way upon the continued cooperation of the laws of New York by way of permission or grant. I am not concerned to criticise the statement of the Court of Appeals that in substance it is the execution of the power that gives to the grantee the property passing under it. It is enough if it is remembered that the instrument executing the power derives none of its efficiency in that respect from the present laws of New York. It is true that the instrument happens to be a will, and that it could not have operated as a will except by the grant of the privilege from the State at the time when Mrs. Delano died. But what would execute the power depended, in the first place, upon the deed creating it, and if that deed did not *482require a will but only an instrument otherwise sufficiently characterized, it did not matter whether the instrument was also good as a will or not. Ela v. Edwards, 16 Gray, 91, 100.

What the deeds which I am considering required was “an instrument in its nature testamentary to be acknowledged by her (Mrs. Delano) as a deed in the presence of two witnesses or published by her as a will.” The language was chosen carefully, I presume, in view of the incapacities of married women at that time. By the terms used a will was unnecessary. It was enough if Mrs. Delano sealed and acknowledged an instrument in its nature testamentary in the presence of two witnesses, whether it was good as a will or not. Strong v. Wilkins, 1 Barb. Ch. 9, 13; Heath v. Withington, 6 Cush. 497. This she did. In Orr v. Gilman, 183 U. S. 278, the power was created by will,'and, what is more obviously material, it required a will for its execution, and so might be held to invoke and submit itself to the law in force when the execution should take place. Therefore that case has no bearing upon this. The ground upon which this tax is imposed is, I repeat, the right of the State to regulate or, if it sees fit, to destroy inheritances. If it might not have appropriated the whole it cannot appropriate any part by the law before us. And I also repeat that it has no bearing upon the matter that by a different law the State might have derived an equal revenue from, these donees in the form of a tax. I do- not understand it to be suggested that the State without compensation could have appropriated the remaindei^after Mrs. Delano’s life, which Mr. Astor parted with in 1844 and shortly following years. If it could not have done so I am unable to see on what ground this tax is. not void. The English decisions throw no light upon the question before us because they are concerned only with the construction of statutes which, however construed, are law.

Mr. Justice Moody concurs in this dissent.