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In answer to which the executors replied that they were willing to do so, but that it was announced to them by the president of the school board of the parish that he intended to claim in behalf of said board a tax under the inheritance tax law of the state on the funds in their hands "and the shares coming to said movers." The executors also alleged the unconstitutionality of the tax and prayed that the school board of the parish, through its president, Andrew H. Wilson, be made a party to the proceedings. Wilson appeared and averred that the taxes were due the state, and not to the school board, and were collectible by the state tax collector, and "that this suit and the matters at issue herein should be litigated contradictorily with the state tax collector for the district in which the deceased resided when he departed this life."

The tax collector appeared. The agents and attorneys in fact of the legatees answered the demand of the school board to be paid the tax that $10,000 of the estate was in United States bonds, and not subject to taxation by the state, and averred that an inheritance tax was not due "to said board

for the reason that said act has no application to the property under this succession or the legacies due to said movers in the motion aforesaid; that to give it such application would be to make said act retroactive and devest the vested rights of the said movers in said rule, which would be in violation of the Constitution of this state, and especially article 166 thereof, and in

It will be observed that when Levy died, May 26, 1904, and when the will was probated, May 30, 1904, there was no inheritance tax in Louisiana. The act in controversy was passed June 28, 1904.

In support of the attack made upon the law, it is contended that an inheritance tax is not a tax on property, but on the right or privilege of inheriting, and that the right in the case at bar had been exercised at the moment of the testator's death under the then-existing law, and "to pass a law exacting such a tax and make it retroactive so as to devest a right previously acquired under then-existing laws is a deprivation of property already acquired, without due process of law, prohibited by the 14th Amendment of the Constitution of the United States."

To sustain their propositions the plaintiffs in error cite certain articles of the Louisiana Civil Code. And it is urged as indubitable that, under the law of Louisiana, a succession is acquired by the legal heir immediately after the death of the deceased, and, by the express terms of the heirs, to instituted heirs, and universal legaCode, this rule applies to testamentary heirs, to instituted heirs, and universal legaof the succession by plaintiffs in error was tees. In other words, that the acquisition at the very moment of Levy's death, and, therefore, necessarily before the act imposing inheritance taxes was passed. To sustain their view plaintiffs in error cite a solely for the support of the public schools, a tax upon all inheritances, legacies, and donations; provided, no direct inheritance or donation to an ascendant or descendant, below $10,000 in amount or value, shall be so taxed; a special inheritance tax of 3 per cent on direct inheritances or donations to ascollateral inheritances and donations to collaterals or strangers; provided, bequests to educational, religious, or charitable institutions shall be exempt from this tax; and provided, further, that this tax shall not be enforced when the property donated or inherited shall have borne its just proportion of taxes prior to the time of such donation

violation of the Constitution of the United States of America, and especially § 9 of article 1, and the 5th and 14th Amendments thereof, and in violation of the laws of the state and of the land; that it would be a deprivation of property without due processcendants or descendants, and 10 per cent for of law and a denial of the equal protection of the laws, in violation of the 5th and 14th Amendments of the Constitution of the United States of America."

Judgment was rendered in favor of the tax collector, condemning the executors to pay the tax, less the amount of United States bonds, and less the charitable and religious bequests. The judgment was affirmed by the supreme court of the state.

The law imposes a tax of 3 per cent "on direct inheritances and donations to ascend

ants or descendants," and 10 per cent upon donations or inheritances to collaterals or strangers. It is provided that the tax is "to be collected on all successions not finally closed and administered upon, and all successions hereafter opened."+

+Section 1. Be it enacted by the general assembly of the state of Louisiana, That there is now, and shall hereafter be, levied,

or inheritance; this tax to be collected on all successions not finally closed and administered upon, and all successions hereafter opened.

the legal heir, who is called by law to the Article 940. A succession is acquired by inheritance, immediately after the death of the deceased person to whom he succeeds.

This rule applies also to testamentary heirs, to instituted heirs, and universal legatees, but not to particular legatees.

Article 941. The right mentioned in the preceding article is acquired by the heir, by the operation of the law alone, before he has taken any step to put himself in posses

number of cases decided prior to the decision of the case at bar, and the case of Tulane University v. Board of Assessors, 115 La. 1026, 40 So. 445, decided since the decision in the case at bar. Having established, as it is contended, that by operation of law the property is transmitted immediately from the testator to the heirs, it is also contended that from the very definition of an inheritance tax none could be imposed on plaintiffs in error as legatees of Levy.

For definitions of an inheritance tax plaintiffs in error adduce United States v. Perkins, 163 U. S. 625, 41 L. ed. 287, 16 Sup. Ct. Rep. 1073; Magoun v. Illinois Trust & Sav. Bank, 170 U. S. 283, 42 L. ed. 1037, 18 Sup. Ct. Rep. 594; Knowlton v. Moore, 178 U. S. 41, 44 L. ed. 969, 20 Sup. Ct. Rep. 747. The tax was defined in the Perkins Case to be "not a tax upon the property itself, but upon its transmission by will or descent;" and in the Magoun Case, "not one on property, but one on the succession." In Knowlton v. Moore it was said that such taxes "rest in their essence upon the principle that death is the generating source from which the particular taxing power takes its being, and that it is the power to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested." But these definitions were intended only to distinguish the tax from one on property, and it was not intended to be decided that the tax must attach at the instant of the death of a testator or intestate. In other words, we defined the nature of the tax; we did not prescribe the time of its imposition. To have done the latter would have been to prescribe a rule of succession of estates, and usurp a power we did not and do not possess. There is nothing, therefore, in those cases which restrains the power of the state as to the time of the imposition of the tax. It may select the moment of death, sion, or has expressed any will to accept it.

Thus, children, idiots, those who are ignorant of the death of the deceased, are not the less considered as being seised of the succession, though they may be merely seised of right, and not in fact.

Article 942. The heir being considered seised of the succession from the moment of its being opened, the right of possession which the deceased had continues in the person of the heir as if there had been no interruption, and independent of the fact of possession.

Article 944. The heir being considered as having succeeded to the deceased from the instant of his death, the first effect of this right is that the heir transmits the succession to his own heirs, with the right of ac

or it may exercise its power during any of the time it holds the property from the legatee. "It is not," we said in the Perkins Case, "until it has yielded its contribution to the state that it becomes the property of the legatee." See also Carpenter v. Pennsylvania, 17 How. 456, 15 L. ed. 127.

We must turn back, therefore, to the law of Louisiana for the solution of the questions presented in the case at bar. But we are not required to reconcile the Louisiana decisions. We accept that in the case at bar as a correct interpretation of the Code of the state. Nor may we regard Tulane University v. Board of Assessors as irreconcilable with it. That case was brought to enjoin the collection of state and city taxes which had been assessed against the succession of A. C. Hutchinson. The plaintiff university was the universal legatee of Hutchinson, and its property was exempt from taxation under the Constitution of the state. It is true the court said that the Code of the state "leaves no room whatever for doubt or surmises as to the fact of the property of a deceased person being transmitted directly and immediately to the legal heir, or, in the absence of forced heirs, to the universal legatee, without any intermediate stage, when it would be vested in the successive representative or in the legal abstract called 'succession.""

But the decision in the case at bar was not overruled, but distinguished as follows: "The case of Levy's Succession, 115 La. 377, 39 So. 37, was decided from considerations peculiar to an inheritance tax, and which can have no application in the instant case. This inheritance tax was held to be due notwithstanding that, under the provisions of the Code, the ownership of the property passed to the heirs. The maxim, Le mort saisit le vif, was expressly recognized." Both decisions, therefore, must be consid ered as correct interpretations of the Code of the state. It is not our province to procepting or renouncing, although he himself have not accepted it, even in case he was ignorant that the succession was opened in his favor.

Article 945. The second effect of this right is to authorize the heir to institute all the actions, even possessory ones, which the deceased had a right to institute, and to prosecute those already commenced. For the heir, in everything, represents the deceased, and is of full right in his place, as well for his rights as his obligations.

Article 1609. When, at the decease of the testator, there are no heirs to whom a proportion of his property is reserved by law, the universal legatee, by the death of the testator, is seised of right of the effects of the succession without being bound to demand the delivery thereof.

nounce one more decisive than the other, or to pronounce a contradiction between them, which the court which delivered both of them has declared does not exist. We must assume that the Tulane Case approved the view expressed in the case at bar of the rights of legatees, as follows: "Furthermore, we have said, the legatees acquired no vested right to the property bequeathed which could enable them to successfully defend their inheritance against the demand of the state for the inheritance tax. It was property within the limits of the state, which the state could tax, for purposes mentioned, until it had passed out of the succession of the testator."

Plaintiffs in error also contended that the statute denied them the equal protection of the laws. This contention is based on the following provision of the statute: "This tax to be collected on all successions not finally closed and administered upon, and on all successions hereafter opened."

Successions which have been closed, it is said, are exempt from the tax, and a discrimination is made between heirs whose 27 S. C.-12.

rights have become fixed and vested on the same day. Counsel say: "The closing of the succession cannot affect the question as to when the right of the heirs vested; and cannot be a cause for differentiation among the heirs; and such a classification is purely arbitrary. Besides, such a classification rests on the theory that the tax is one on property, when in fact it is one on the right of inheritance." But, as we understand, the supreme court made the validity of the tax depend upon the very fact which counsel attack as an improper basis of classification. The court decided that the property bequeathed was property the state could tax, "until it had passed out of the succession of the testator." It was certainly not improper classification to make the tax depend upon a fact without which it would havė been invalid. In other words, those who are subject to be taxed cannot complain that they are denied the equal protection of the laws because those who cannot legally be taxed are not taxed.

Judgment affirmed.

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it are conflicting. Re Westlund, 99 Fed. 399; Re St. Louis Ice Mfg. & Storage Co. 147 Fed. 752; Re North Carolina Car Co. [semble], 127 Fed. 178, where the right of the assignee to priority was denied; Re Brown, 4 Ben. 142, Fed. Cas. No. 1,974 [act of 1867, 14 Stat. at L. 517, chap. 176]; Re Harmon, 128 Fed. 170, where, on facts slightly but not essentially different, the right of the assignee to priority was affirmed.

The bankruptcy law (act July 1, 1898, 30 Stat. at L. pp. 544, 563, chap. 541, U. S. Comp. Stat. 1901, p. 3447), in § 1, defines "debt" as including "any debt, demand, or claim, provable in bankruptcy." Section 64,

Submitted December 20, 1906. Decided under which priority is claimed in this case,

January 7, 1907.

N A CERTIFICATE from the United ON States Circuit Court of Appeals for the Sixth Circuit presenting the question whether assigned claims for wages are entitled to priority of payment under the bankrupt act.

Answered in the affirmative.

is, in the parts material to the determination of the question, as follows:

"Sec. 64. Debts which have priority.

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b. The debts to have priority, ex

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cept as herein provided, and to be paid in full, out of bankrupt estates and the order of payment, shall be (4) wages due to workmen, clerks, or servants which The facts are stated in the opinion. have been earned within three months beMessrs. Charles F. Benjamin and Rutherfore the date of the commencement of proford Lapsley for Shropshire, Woodliff, & Co. Messrs. George D. Lancaster, John P. Till-ceedings, not to exceed three hundred dol

man, J. H. Beal, and Williams & Lancaster for Bush et al.

Mr. Justice Moody delivered the opinion

of the court:

The appellees are trustees of the bankrupt estate of the Southern Car & Foundry Company. The appellants, before the commencement of the proceedings in bankruptcy, acquired by purchase and assignment a large number of claims for wages of workmen and servants, none exceeding $300 in amount, and all earned within three months before the date of the commencement of the proceedings in bankruptcy. The district court for the eastern district of Tennessee rendered a judgment disallowing priority to these claims, because, when filed, they were not "due to workmen, clerks, or servants." On appeal to the circuit court of appeals for the sixth circuit that court duly certified here for instructions the following ques

tion:

lars to each claimant;

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The precise inquiry is whether the right of prior payment thus conferred is attached to the person or to the claim of the wageearner; if to the person, it is available only to him; if to the claim, it passes with the transfer to the assignee. In support of the proposition that the right is personal to the wage-earner, and enforceable only by him, it is argued that it is not wages earned within the prescribed time which are given priority, but wages "due to workmen, clerks, or servants;" that when the claim is assigned to another it is no longer

"due to workmen, clerks, or servants," but to the assignee; and therefore, when pretics which the law makes essential to prisented by him, lacks one of the characterisority. In this argument it is assumed that the time of the presentment of the claim the wages must be "due" to the earner at

commencement of the proceedings in bankfor proof, or, at least, at the time of the "Is an assignee of a claim for wages ruptcy. Without that assumption the arearned within three months before the com-gument fails to support the conclusion. earned within three months before the com- But the statute lends no countenance to mencement of proceedings in bankruptcy against the bankrupt debtor entitled to pri- this assumption. It nowhere expressly or ority of payment, under § 64 (4) of the bankrupt act [30 Stat. at L. 563, chap. 541, U. S. Comp. Stat. 1901, p. 3447], when the assignment occurred prior to the commencement of such bankruptcy proceedings?"

The question certified has never been passed upon by any circuit court of appeals, and in the district courts the decisions upon

by fair implication says that the wages must be due to the earner at the time of the presentment of the claim, or of the beginning of the proceedings, and we find no warrant for supplying such a restriction. Regarding, then, the plain words of the statute, and no more, they seem to be merely descriptive of the nature of the debt to

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fendant in an action to enforce the statutory liability of a shareholder in a national bank, with a direction to enter judgment for plaintiff. Affirmed.

which priority is given. When one has in- | judgment of the Circuit Court for the curred a debt for wages due to workmen, Southern District of Ohio in favor of declerks, or servants, that debt, within the limits of time and amount prescribed by the act, is entitled to priority of payment. The priority is attached to the debt, and not to the person of the creditor; to the claim, and not to the claimant. The act does not enumerate classes of creditors and confer upon them the privilege of priority in payment, but, on the other hand, enumerates classes of debts as "the debts to have priority."

See same case below, 69 C. C. A. 609, 137 Fed. 461.

Statement by Mr. Justice Day:

This case was begun in the United States circuit court by John Hulitt as receiver of the First National Bank of Hillsboro, Ohio, against the Ohio Valley National Bank, to recover the amount of an assessment upon certain shares of the stock of the Hillsboro Bank, which had become insolvent, which assessment was directed by the Comptroller of the Currency in accordance with the provisions of the national bank act. The case was tried upon an agreed statement of facts, from which it appears that on March 18, 1893, one Overton S. Price, for a loan of $10,000, gave his promissory note of that date to the Ohio Valley Bank, due ninety days after date, payable to his own order and indorsed by him, and deposited as collateral security for the note, among other securities, fifty shares of stock of the said

In this case the Southern Car & Foundry Company had incurred certain debts for wages due to workmen, clerks, or servants, which were earned within three months before the date of the commencement of proceedings in bankruptcy. These debts were exactly within the description of those to which the bankruptcy act gives priority of payment, and they did not cease to be within that description by their assignment to another. The character of the debts was fixed when they were incurred, and could not be changed by an assignment. They were precisely of one of the classes of debts which the statute says are "debts to have priority." The question certified is answered in the First National Bank of Hillsboro, Ohio. affirmative, and it is so ordered.

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The pledgee of national bank stock as collateral security for a note, with power of public or private sale for the liquidation of the pledge, becomes the beneficial owner of such stock, and, as such, subject to the liability of a stockholder under U. S. Rev. Stat. § 5151, U. S. Comp. Stat. 1901, p. 3465, where, after the death of the pledgeor, it causes the stock to be registered in the name of an employee with no beneficial interest, and afterwards indorses upon the note the supposed value of the stock as of the date of the credit, and presents the note, as reduced by the amount of such valuation, to the pledgeor's administrator, who allows the claim in this form.*

[No. 108.]

Argued November 16, 1906. Decided January 7, 1907.

The note had a power of sale attached to it, signed by Price, and authorizing the holder to sell or collect any portion of the collateral, at public or private sale, on the nonperformance of the promise, and at any time thereafter, without advertising or otherwise giving Price notice, and providing that, in case of public sale, the holder might purchase without liability to account for more than the net proceeds of the sale.

On December 25, 1893, Price died, leaving the note due and unpaid, and no payments have been made thereon except as herein

after stated.

On June 18, 1894, the bank made a transfer of the pledged stock of the First National Bank of Hillsboro, and also of certain other stock in the Dominion National Bank of Bristol, Virginia, to one Henry Otjen, an employee of the bank, and pecuniarily irresponsible.

The shares were transferred on the books of the banks and new certificates issued in the name of Otjen and delivered to him on July 7, 1894. Otjen in1 dorsed the certificates in blank. No money passed in consideration of the transfer, and none was expected, nor was any credit given or indorsed on the note by reason thereof.

The transfer was made upon under

IN ERROR to the United Staten Circuit standing and agreement between Otjen and

to review a judgment which reversed a the bank that Utjen should hold the stock

*Ed. Note.-For cases in point, see Cent. Dig. vol. 6, Banks and Banking, § 70.

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