This is a writ of error to the Surrogate's Court of the county of New York. It is brought to review a decree of the court, sustained by the Appellate Division of the Supreme Court, 69 App. Div. 127, and by the Court of Appeals, 171 N.Y. 682, levying a tax on the transfer by will of certain property of Timothy B. Blackstone, the testator, who died domiciled in Illinois. The property consisted of a debt of $10,692.24, due to the deceased by a firm, and of the net sum of $4,843,456.72, held on a deposit account by the United States Trust Company of New York. The objection was taken seasonably upon the record that the transfer of this property could not be taxed in New York consistently with the Constitution of the United States.
The deposit in question represented the proceeds of railroad stock sold to a syndicate and handed to the Trust Company, which, by arrangement with the testator, held the proceeds subject to his order, paying interest in the meantime. Five days' notice of withdrawal was required, and if a draft was made upon the company, it gave its check upon one of its banks
In view of the state decisions it must be assumed that the New York statute is intended to reach the transfer of this property if it can be reached. New Orleans v. Stempel, 175 U.S. 309, 316; Morley v. Lake Shore & Michigan Southern Ry. Co., 146 U.S. 162, 166. We also must take it to have been found that the property was not in transitu in such a sense as to withdraw it from the power of the State, if otherwise the right to tax the transfer belonged to the State. The property was delayed within the jurisdiction of New York an indefinite time, which had lasted for more than a year, so that this finding at least was justified. Kelley v. Rhoads, ante, p. 1, and Diamond Match Co. v. Village of Ontonagon, ante, p. 84, present term. Both parties agree with the plain words of the law that the tax is a tax upon the transfer, not upon the deposit, and we need spend no time upon that. Therefore the naked question is whether the State has a right to tax the transfer by will of such deposit.
To come closer to the point, no one doubts that succession to a tangible chattel may be taxed wherever the property is found, and none the less that the law of the situs accepts its rules of succession from the law of the domicil, or that by the law of the domicil the chattel is part of a universitas and is taken into account again in the succession tax there. Eidman v. Martinez, 184 U.S. 578, 586, 587, 592. See Mager v. Grima, 8 How. 490, 493; Coe v. Errol, 116 U.S. 517, 524; Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18, 22; Magoun v. Illinois Trust & Savings Bank, 170 U.S. 283; New Orleans v. Stempel, 175 U.S. 309; Bristol v. Washington County, 177 U.S. 133; and for state decisions Matter of Estate of Romaine, 127 N.Y. 80; Callahan v. Woodbridge, 171 Massachusetts, 593; Greves v. Shaw, 173 Massachusetts, 205; Allen v. National State Bank, 92 Maryland, 509.
No doubt this power on the part of two States to tax on different
The question then is narrowed to whether a distinction is to be taken between tangible chattels and the deposit in this case. There is no doubt that courts in New York and elsewhere have been loath to recognize a distinction for taxing purposes between what commonly is called money in the bank and actual coin in the pocket. The practical similarity more or less has obliterated the legal difference. Matter of Houdayer, 150 N.Y. 37; New Orleans v. Stempel, 175 U.S. 309, 316; City National Bank v. Charles Baker Co., 180 Massachusetts, 40, 42. In view of these cases, and the decision in the present case, which followed them, a not very successful attempt was made to show that by reason of the facts which we have mentioned, and others, the deposit here was unlike an ordinary deposit in a bank. We shall not stop to discuss this aspect of the case, because we prefer to decide it upon a broader view.
If the transfer of the deposit necessarily depends upon and involves the law of New York for its exercise, or, in other words, if the transfer is subject to the power of the State of New York, then New York may subject the transfer to a tax. United States v. Perkins, 163 U.S. 625, 628, 629; McCulloch v. Maryland, 4 Wheat. 316, 429. But it is plain that the transfer does depend upon the law of New York, not because of any theoretical speculation concerning the whereabouts of the debt, but because of the practical fact of its power over the person of the debtor. The principle has been recognized by this court with regard to garnishments of a domestic debtor of an absent defendant. Chicago, Rock Island & Pacific Ry. Co. v. Sturm, 174 U.S. 710. See Wyman v. Halstead, 109 U.S. 654. What gives the debt validity ? Nothing but the fact that the law of the place where the debtor is will make him pay. It does not
Power over the person of the debtor confers jurisdiction, we repeat. And this being so we perceive no better reason for denying the right of New York to impose a succession tax on debts owed by its citizens than upon tangible chattels found within the State at the time of the death. The maxim mobilia sequuntur personam has no more truth in the one case than in the other. When logic and the policy of a State conflict with a fiction due to historical tradition, the fiction must give way.
There is no conflict between our views and the point decided in the case reported under the name of State Tax on Foreign Held Bonds, 15 Wall. 300. The taxation in that case was on the interest on bonds held out of the State. Bonds and negotiable instruments are more than merely evidences of debt. The debt is inseparable from the paper which declares and constitutes it, by a tradition which comes down from more archaic conditions. Bacon v. Hooker, 177 Massachusetts, 335, 337. Therefore, considering only the place of the property, it was held that bonds held out of the State could not be reached. The decision has been cut down to its precise point by later cases. Savings & Loan Society v. Multnomah County, 169 U.S. 421, 428; New Orleans v. Stempel, 175 U.S. 309, 319, 320.
In the case at bar the law imposing the tax was in force before the deposit was made, and did not impair the obligation of the contract, if a tax otherwise lawful ever can be said to have that effect. Pinney v. Nelson, 183 U.S. 144, 147. The fact
MR. JUSTICE WHITE dissents.