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Cuba, over which the sovereignty of Spain, the treaty and the de jure relation of the Isle was relinquished.
of Pines is wholly unnecessary, and cannot I accept the doctrine which the opinion of be indulged in without disregarding the very the court announces, following Jones v. principle upon which the decision is placed; United States, 137 U. S. 202, 34 L. ed. 691, that is, the conclusive effect of executive and 11 Sup. Ct. Rep. 80, that “who is the sover- legislative action. In other words, to me it eign de jure or de facto of a territory is not seems that the opinion whilst recognizing a judicial but a political question, the deter- | the force of the executive and legislative acmination of which by the legislative and ex- tion, necessarily disregards it. This follows, ecutive departments of any government con- because the views which are expressed on clusively binds the judges as well as all the subject of the meaning of the treaty other officers, citizens, and subjects of that amount substantially to declaring that the government.” That the legislative and ex- past action of the executive and legislative ecutive departments have conclusively set- departments of the government on the subtled the present status of the Isle of Pines ject have been wrong, and that any future as de facto a part of Cuba, and have left attempt by those departments to proceed open for future determination the de jure upon the hypothesis that the de jure status claim, if any, of the United States to the is- of the island is unsettled will be a violation land, as the court now declares, is to me of the treaty as now unnecessarily interpretbeyond possible contention. Thus, by the ed. amendment to the act of 1891, which was enacted to determine the de facto position Mr. Justice Holmes concurs. of the island and to furnish a rule for the guidance of the executive authority in dealing in the future with the island, it was expressly provided “that the Isle WINTHROP ASTOR CHANLER, Thomas of Pines shall be omitted from the pro
T. Sherman, as Committee for John Armposed constitutional boundaries of Cuba, the
strong Chanler, et al., Plffs. in Err.,
v. title thereto being left to future adjustment by treaty.” So, also, when the island of OTTO KELSEY, Comptroller of the State
of New York. Cuba was turned over to the Cuban government by the military authority of the Unit- Constitutional law-dưe process of law,
ed States, that government was expressly
state inheritance tax. notified by such authority, under the direc
1. Property is not taken without due tion of the President, that whilst the de process of law, in violation of U. S. Const. facto position of the Isle of Pines as a part 14th Amend., by imposing a transfer tax, of Cuba was not disturbed, it must be under- under the authority of the amendment of stood that its de jure relation was reserved the general transfer-tax law by N. Y. Laws for future determination by treaty between 1897, chap. 284, upon the exercise by will Cuba and the United States. And this noti- of the power of appointment conferred by fication and relation was in terms accepted such statute. *
a deed executed prior to the passage of by the President of the Republic of Cuba.
Constitutional law-impairing contract obIf the opinion now announced stopped with
ligations-state inheritance tax. these conclusive expressions I should, of
2. The reduction of the estate resulting course, have nothing to say. But it does not from the imposition of a transfer tax, under do so. Although declaring that the de facto the authority of the amendment of the position of the Isle of Pines as resulting general transfer-tax law by N. Y. Laws from legislative and executive action is bind- 1897, chap. 284, upon the exercise by will ing upon courts, and although referring to of a power of appointment conferred by a the conclusive settlement of that de facto deed executed prior to the passage of the status, and the reservation by the legisla- statute, does not render such statute retive and executive departments of the deter- pugnant to U. S. Const. art. 1, § 10, as im
pairing contract obligations. mination of the de jure status for future action, the opinion asserts that it is open and
[No. 240.] proper for the court to express an opinion upon the de jure status, that is, to decide Argued March 14, 1907. Decided April 15, upon the effect of the treaty. In doing so
1907. it is declared that all the world knew that the Isle of Pines was an integral part of IN ERROR to the Surrogates? Court of the
of the sion of opinion as to the rightful construc. New York to review a judgment entered tion of the treaty. To my mind any and all pursuant to the remittitur from the Court expression of opinion concerning the effect of of Appeals of that State, which had affirmed
*Ed. Note. For cases in point, see vol. 10, Cent. Dig. Constitutional Law, $ 892.
an order of the Appellate Division of the as she may think fit, and upon such limitaSupreme Court in and for the First Judicial tions, by way of trust or otherwise, as, in Department, which had in turn affirmed her discretion, may be lawfully devised.'' the order of the Surrogates' Court assess. These deeds were absolutely irrevocable, took ing a transfer tax upon the exercise by will effect upon delivery, and were not made in of a power of appointment. Affirmed. contemplation of the death of the grantor.
Laura A. Delano died June 15, 1902, in Statement by Mr. Justice Day:
Geneva, Switzerland, leaving no descendants. This is a writ of error to the surrogates' By her last will and testament, duly admitcourt of the county of New York, state of ted to probate in the county of New York on New York, but its real purpose is to review October 14, 1902, she exercised the power of a decision of the court of appeals of the appointment conferred in the deeds from her state, sustaining an order of the surrogates' father in favor of the plaintiffs in error. court, which imposed a transfer tax upon One of the plaintiffs in error, Arthur As. certain estates arising under appointment tor Carey, a grandson of William B. Astor, by Laura Astor Delano, deceased. 176 N. Y. and an appointee to whom Mrs. Delano had 486, 64 L.R.A. 279, 68 N. E. 871.
appointed the property originally conveyed Laura Astor Delano was the daughter of by the deeds of 1848 and 1849, took an apWilliam B. Astor. Upon the occasion of her peal from the order of the surrogates' court marriage, in 1844, to Frank H. Delano, Mr. refusing to dismiss the petition to the apAstor executed a deed in the nature of a pellate division of the supreme court, where marriage settlement, conveying certain real it was held that the act under which the tax and personal property to trustees in trust was imposed, as applied to this case, was to pay the income to said Laura Delano for unconstitutional. Re Delano, 82 App. Div. life, with remainder to her issue in fee, or, 147, 81 N. Y. Supp. 762. The state compin default of issue, to her heirs in fee; and troller appealed to the court of appeals giving her power, in her discretion, to ap- from the decision of the appellate division. point the remainder “amongst her said issue That court sustained the right to impose or heirs, in such manner and proportions as the transfer tax upon the interests appointshe may appoint by instrument in its nature ed by Mrs. Delano under the powers created testamentary, to be acknowledged by her as by the deeds above referred to. Subsequent a deed, and in the presence of two witnesses, decisions were made pro forma and a final or published by her as a will."
order on the last remittitur of the court of In the years 1848, 1849, and 1865 William appeals was made in the surrogates' court, B. Astor made other deeds, by way of addi- and the case brought here by all the plaintion to the original marriage settlement, tiffs in error. substantially similar in their terms. That of 1848 conveyed certain real estate to Mrs. Mr. Lucius H. Beers for plaintiffs in Delano for life, with power of appointment error. as to said premises, or any part thereof, “to
Mr. David B. Hill for defendant in error. and among her said issue, brothers, sister Alida, or their issue, in such manner and Mr. Justice Day delivered the opinion of proportions as she may appoint by instru- the court: ment in its nature testamentary, to be ac- The tax in controversy was imposed under knowledged by her as a deed in the presence an amendment of the general transfer-tax of two witnesses, or acknowledged by her as law of the state of New York, chapter 284, a will.” The deed of 1849 conveyed to trus-Laws of 1897, which provides as follows: tees certificates for $50,000 of the public “Whenever any person or corporation debt of Ohio; "to hold the same in trust for shall exercise a power of appointment dethe benefit of Laura Astor Delano during rived from any disposition of property made her life, and at her death to transfer and either before or after the passage of this act, convey the capital of the said stock to her such appointment, when made, shall be issue; but, in case she left no issue, then to deemed a transfer, taxable under the provi. her surviving brothers and sister Alida and sions of this act, in the same manner as to the issue of any of them who died leaving though the property to which such appointissue; and said instrument contained a ment relates belonged absolutely to the donee power of appointment to Laura Astor De- of such power, and had been bequeathed or lano as follows: "Provided, however, that it devised by such donee by will; and whenever shall be lawful for the said Laura, by any in any person or corporation possessing such a strument executed duly as a will of personal power of appointment so derived shall omit estate, to dispose of the said capital unto or fail to exercise the same within the and amongst her issue, brothers, sister and time provided therefor, in whole or in
, their issue, in such shares and proportions | part, a transfer taxable under the provisions of this act shall be deemed to take place to be that the donee had no interest in the es. the extent of such omissions or failure, in tate as owner, but it took her act of appointthe same manner as though the persons or ment to finally transfer the estate to some corporations thereby becoming entitled to of the class and take it from others. the possession or enjoyment of the property Notwithstanding the common-law rule to' which such power related had succeeded that estates created by the execution of a thereto by a will of the donee of the power power take effect as if created by the origifailing to exercise such power, taking effect nal deed, for some purposes the execution at the time of such omission or failure." of the power is considered the source of title.
The validity of this tax was attacked in It is so within the purpose of the registrathe courts of New York upon objections per- tion acts. A person deriving title under an taining to both the Federal and state Con- appointment is considered as claiming under stitutions. The latter are not open here, the donee within the meaning of a covenant
. and we shall consider the case only so far as for quiet enjoyment. 2 Sugden, Powers, 3d .
2 it relates to the objections made to the va- ed. 19. lidity of this statute by reason of alleged “So, on an issue to try whether the plainviolations of the Federal Constitution. tiff was entitled by two writings, or any These are: First, that by the imposition of other, purporting a will of J. S., and the the tax the property of the beneficiaries is evidence was of a feossment to the use of taken without due process of law, in viola- such person as J. S. should appoint by his tion of the 14th Amendment; and, second, will, in which case it was contended that that such taxation violates the obligation of the devisees were in by the feoffment, and a contract within the protection of g 10 of not by the will, the court held that this was article 1 of the Federal Constitution. only fictione juris, for that they were not
The objection that the property is taken in without the will, and therefore that was without due process of law is based upon the the principal part of the title, and such argument that the estate in remainder was proof was good enough and pursuant to the derived from the deeds of William B. Astor, issue, and a verdict was accordingly given and not under the power of appointment re- for the plaintiff.” Sugden on Powers, vol. ceived from those deeds by Mrs. Laura A. 2, p. 19, citing Bartlet v. Ramsden, 1 Keble, Delano. In support of this contention, com- 570. mon-law authorities are cited to the propo- So, in the present case, the plaintiffs in sition that an estate created by the execu- error are not in without the exercise of the tion of a power takes effect in the same power by the will of Mrs. Delano. manner as if it had been created by the By statute in England, for the purposes of deed which raised the power; that the bene- taxation, it has been provided that the donee ficiary takes, not under the execution of the of the power shall be regarded, in case of a power by the donee, but by authority and general power, as the one from whom the under grant from the grantor, in like man- estate came. In Atty. Gen. v. Upton, L. R. ner as if the power and the instrument 1 Exch. 224, the court of exchequer had unwhich created it had been incorporated into der consideration the succession duty act one instrument. 4 Kent, Com. 327; 2 (16, 17 Vict. chap. 51), and it was held Washb. Real Prop. 320. The argument is that the appointee under a general power of that the estate which arose by the exercise appointment, taking effect on the death hapof the power came from William B. Astor, pening since the commencement of the act, and not from Laura A. Delano, and was takes succession from the donee of the powvested long before the passage of the amender. The testator, Admiral Fanshawe, by ment of 1897, under the authority of which will devised certain lands to the use of his the tax was imposed, and to tax the exercise wife, Caroline Fanshawe, for life, remainof the power therefore takes property with-der to such use as she should by deed or will out due process of law.
appoint, and, in default of appointment, for However technically correct it may be to the use and benefit of testator's nephews, say that the estate came from the donor, C. F. and J. F. Fanshawe, and their issue. and not from the donee, of the power, it is She by deed appointed to the use that trusself-evident that it was only upon the exer- tees should, after her death, receive an ancise of the power that the estate in the nuity during the lives of the wife of the tes. plaintiffs in error became complete. With tator's nephew, and of the children of the out the exercise of the power of appointment nephew by her, in trust for the separate use the estates in remainder would have gone of the wife, Elizabeth Fanshawe. Section 4 to all in the class named in the deeds of of the act, which is there construed, provides William B. Astor. By the exercise of this that any person having a general power of power some were devested of their estates appointment, under any disposition of propand the same were vested in others. It may erty, taking effect upon the death of any
person dying after the time. appointed for plete by the exercise of a power subsequent the commencement of the act, shall, in the to its enactment. event of his making any appointment there
The exercise of the power bestowing propunder, be deemed to be entitled, at the time erty in the present case was made by will. of his exercising such power, to the property And we need not consider the case, expressly or interest thereby appointed as a succession reserved by the court of appeals in its opinderived from the donor of the power. All ion, as to the result if it had been exercised the judges agreed that under § 4 of the act by deed. the nephew's wife took the annuity as a suc- That the will was effectual to transfer the cession from the testator's widow, and not estate was ruled by the court of appeals, and from the testator himself; that, therefore, its decision on this question is binding here, a duty of 10 per cent was payable. Bram- as was held in Orr v. Gilman, 183 U. S. well, B., was of opinion that the duty was 278, 46 L. ed. 196, 22 Sup. Ct. Rep. 213, also payable under § 2, which provides that which came here for a review of a decision of "every past or future disposition of proper the court of appeals of New York, renty, by reason whereof any person has ordered in Re Dows, 167 N. Y. 227, 52 L.R. shall become beneficially entitled to any A. 433, 88 Am. St. Rep. 509, 60 N. E. 439,property . . shall be deemed to have a case which arose under the same statute of conferred, or to confer, on the person en- 1897. In that case the testator devised real titled by reason of any such disposition estate in trust to pay the income to his son
a succession.” In speaking of this sec- for life, and, upon his death, to vest absotion the Baron said:
lutely and at once in his children and the is“Now, will these annuitants take by rea- sue of his deceased children, as his son son of the will of Admiral Fanshawe? We should appoint by will. If, however, the son must look, not at the causa remota, but at should die intestate, the estate was to vest the causa proxima, and that is the disposi- absolutely and at once in his children then tion of Caroline Fanshawe. Again, the act living, and the issue of the deceased children. says that the term 'predecessor''shall denote The son exercised the power of appointment the settlor, disponer, testator, obligor, an by his last will, probated in 1899. The cestor, or other person from whom the intercourt of appeals held that the property was est of the successor is or shall be derived.' subject to the taxation imposed by the act of From whom, then, is the interest derived ? 1897 ; that such tax was on the right of sucAs I said in Re Barker, 7 Hurlst. & N. 116, cession, and not on the property. It became these are ordinary English words, and ought important in that case to determine whether to be construed by lawyers as ordinary Eng. the property passed by virtue of the will of lishmen would construe them. Now, not one
the donor, David Dows, Senior, and then beman in a hundred would say that this inter- came vested in the grandchildren, or only est was derived from Admiral Fanshawe nor became vested in them when the power of from any other person than the donee of the appointment was exercised by the will of power. I do not mean to deny or attempt David Dows, Junior.
This court held that the answer to this to cast any doubt on the rule of law that an appointee takes his estate from the donor question must, of course, be furnished by the
183 U. S. of the power, but I say that it is a rule not court of appeals in that case. applicable to the construction of this stat- | 282, 46 L. ed. 199, 22 Sup. Ct. Rep. 213. In ute, and it is not true, as is supposed, York had the exclusive right to construe in
other words, the court of appeals of New that there is any decision of the House of struments of title in that state, and deterLords to the contrary.”
mine for itself the creation and vesting of The learned Baron seems to have gone estates through wills under the laws of the farther, as to $ 2, than his brethren were
state. “The court of appeals held that it willing to. Atty. Gen. v. Mitchell, L. R. 6
was the execution of the power of appointQ. B. Div. 548. His observations are, never
ment which subjected grantees under it to theless, suggestive.
the transfer tax. This conclusion is binding While the entire bench recognized the
upon this court in so far as it involves a common-law rule that the estate is taken to construction of the will and of the statute.” come from the donor of the power, it en 183 U. S. 288, 46 L. ed. 202, 22 Sup. Ct. Rep. forced the statutory change as to a subse- 217. In the present case the New York quent exercise of the power treating the es-court of appeals has spoken in no uncertain tate as coming from the donee, by whose act language upon the subject: it was appointed to the beneficiary.
“As the tax is imposed upon the exercise The statute of New York in question acts of the power, it is unimportant how the equally upon all persons similarly situated. power was created. The existence of the It affects an estate which only became com- power is the important fact, for what may be done under it is not affected by its origin. been to violate any contract right of the If created by deed its efficiency is the same parties. It is said that this is so, because, as if it had been created in the same form instead of disposing of the entire estate, by will. No more and no less could be done 95 per cent of the property included in the by virtue of it in the one case than in the power has been transferred and 5 per cent other. Its effective agency to produce the taken by the state; but as there was a valid
; result intended is neither strengthened nor exercise of the taxing power of the state, we weakened by the nature of the instrument think the imposition of such a tax violated used by the donor of the power to create it. no contract because it resulted in the reducThe power, however or whenever created, tion of the estate. authorized the donee by her will to devest Certainly the remainder-men had no concertain defeasible estates, and to vest them tract with the donor or with the state. For absolutely in one person. If this authority whether the remainder-men received aliquot
had been conferred by will instead of by parts of the entire estate or the same was deed, the right to act would have been pre- devested in whole or in part for the benefit cisely the same, and the power would have of others in the class, depended upon the neither gained nor lost in force.
exercise of the power by the donee. The "As we said through Judge Cullen in the state was not deprived of its sovereign right Dows Case: 'Whatever be the technical to exercise the taxing power upon the maksource of title of a grantee under a pow-ing of a will in the future by which the er of appointment, it cannot be denied that estate was given to the appointees. in reality and substance it is the execution We find no error in the judgment of the of the power that gives to the grantee the Surrogates' Court entered on the remittitur property passing under it.' This accords from the Court of Appeals, and the same is with the statutory definition of a power as affirmed. applied to real estate, for it includes an authority to create or revoke an estate therein. Mr. Justice Holmes, dissenting: Real Property Law, § 111. [Laws 1896, I have the misfortune to differ from the chap. 547, p. 577.] Such was the effect of majority of my brethren in this case, and the exercise of the power under considera- although the argument which seemed and tion, for it both revoked and created estates still seems to me unanswerable was presentin the real property and the interests in the ed and has not prevailed, I think that the personal property. No tax is laid on the principles involved are of sufficient imporpower, or on the property, or on the original tance to justify a statement of the reasons disposition by deed, but simply upon the ex- of my dissent. A state succession tax stands ercise of the power by will, as an effective on different grounds from a similar tax by transfer for the purposes of the act.” 176 the United States or a general state tax up
| N. Y. 493, 494, 64 L.R.A. 282, 68 N. E. 872, on transfers. It is more unlimited in its 873.
possible extent, if not altogether unlimited, As in Orr v. Gilman, supra, we must ac- and therefore it is necessary that the boundcept this decision of the New York court of aries of the power to levy such taxes should appeals holding that it is the exercise of the be accurately understood and defined. power which is the essential thing to trans- I have always believed that a state inheritfer the estates upon which the tax is im- ance tax was an exercise of the power of posed. That power was exercised under the regulating the devolution of property by will of Laura Delano, a right which was con- inheritance or will upon the death of the ferred upon her under the laws of the state owner,-a power which belongs to the of New York, and for the exercise of which states; and I have been fortified in my bethe statute was competent to impose the tax lief by the utterances of this court from the in the exercise of the sovereign power of the time of Chief Justice Taney to the present legislature over the right to make a dis-day. Mager v. Grima, 8 How. 490, 493,
v position of property by will. United States 12 L. ed. 1168, 1170; United States v. v. Perkins, 163 U. S. 625-628, 41 L. ed. 287, Perkins, 163 U. S. 625, 627, 628, 41 L. 288, 16 Sup. Ct. Rep. 1073; Magoun v. Illi- ed. 287, 288, 16 Sup. Ct. Rep. 1073; Magoun nois Trust & Sav. Bank, 170 U. S. 283, 288, v. Illinois Trust & Sav. Bank, 170 U. S. 42 L, ed. 1037, 1040, 18 Sup. Ct. Rep. 594. 283, 288, 42 L. ed. 1037, 1040, 18 Sup.
We cannot say that property has been ct. Rep. 594; Plummer v. Coler, 178 U. S. taken without due process of law, within the 115, 124, 126, 137, 44 L. ed. 998, 1004, protection of the 14th Amendment, by the 1009, 20 Sup. Ct. Rep. 829; Billings v. Illimanner in which the court of appeals has nois, 188 U. S. 97, 104, 47 L. ed. 400, 403, 23 construed and enforced this statute. Orr Sup. Ct. Rep. 272; Campbell v. California, v. Gilman, supra.
200 U. S. 87, 94, 50 L. ed. 382, 387, 26 Sup. Nor do we perceive that the effect has Ct. Rep. 182; Cahen v. Brewster, 203 U. S.