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as a citizen of Louisiana domiciled abroad is subject to the tax. Furthermore, the case of a citizen or subject of the respective countries residing at home and disposing of property there in favor of a citizen or subject of the other was not in contemplation of the treaty. So the tax should be collected on the estate of a citizen of Louisiana leaving property to a citizen of Wurtemberg. Frederickson v. State, 23 How. (U. S.) 445.

It was contended that the act of 1842 must be construed according to its own terms and that the discrepancy between its language excepting those who are not citizens of any state in the union and the La. St. 1850 which excepts only those who are not citizens of any other state or territory means that heirs who are citizens of the United States and heirs who are domiciled in Louisiana are exempt from taxes. The court, however, by reference to the French version of the statute and the original exemplification finds that the word "other" has been inadvertently omitted in the English text and from this view of the statute the court concludes that the tax attaches not only to property falling to alien heirs who are non-residents, but also to property falling to citizens of Louisiana residing abroad. The only exceptions to non-resident heirs are citizens of any other state or territory of the United States than the state of Louisiana. This exemption was probably intended to satisfy the second section of the fourth article of the constitution of the United States. The object of the law was not only to increase the revenues of the state, but to discourage absenteeism. State v. Poydras, 9 La. Ann. 165.

"Personal Goods." "Inhabitants." The treaty of 1795 between the United States and Spain provides that the citizens and subjects of each party shall have power to dispose of their "personal goods" within the jurisdiction of the other, and their representatives being subjects of the other party shall succeed to their said personal goods and dispose of the same at their will, paying such dues only as the inhabitants of the country wherein the goods are shall be subject to pay in like cases. The court finds that the words "personal goods" include movable property only and not real estate or immovable property. The word "inhabitants" was intended to have as broad a signification as would be needed to insure to the citizens of each country full protection which it was intended to secure. The general assembly did not have in view the imposition of a succession tax upon the citizens of Louisiana living away from the state. The treaty would have no effect if the act was extended to Spanish heirs or legatees living in their own country. La. St. 1894 was not, however, aimed at any portion of the people of Louisiana and therefore Spanish heirs and legatees have the same rights that they do to exemption. Succession of Sala, 50 La. Ann. 1009, 24 S. 674.

Per Taney, C. J., in Mager v. Grima, 8 How. 490. To the same effect see Arnaud v. Arnaud, 3 La. 336.

Succession of Prevost, 12 La. Ann. 577. This judgment was affirmed in Prevost v. Greneaux, 19 How. 1.

CHAPTER XIII.

CLASSIFICATION BY RELATIONSHIP.

§ 62. In General.

§ 63. Transfers where Life Estate is Reserved to Grantor.

Sec. 62. In General.

It is well settled that classification for purposes of the inheritance tax by degrees of relationship to the testator is valid and does not violate constitutional requirements of equality or uniformity.1 So confining the tax to collaterals and strangers, discrimination among collaterals,3 or taxing lineals at a higher rate than collaterals, in generally upheld.1

The classification need not follow the lines of inheritance. There is no necessary connection between inheritance and taxation, and in making laws relating to these two subjects the legislature is not required to consider them together. In determining the model. in which the estate of an intestate shall be distributed, the legislature did not in any respect impair its right to distribute the burden of taxation or to determine the classes by which that burden shall be borne.5

Distinction among Life Tenancies based on Relationship of Remaindermen. The Illinois statute of 1895 provided that a life estate should be taxable when the remainder was to lineal descendants and not taxable where the remainder was to collateral descendants or strangers. It was claimed that this was void as unreasonable classification; that life tenants constitute but a single class, as the incidents of such an estate are the same irrespective of the ultimate vesting of the remainder. The court holds, however, that this was entirely within the discretion of the state legislature; that the power of the state to impose conditions upon the transfer or devolution of estates is complete where no discrimination is exercised in the creation of a class. "Crossing the lines of the classes created by the statute discriminations may be exhibited, but within the classes there is equality." This is not an arbitrary or warranted discrimination between life tenants. A life estate with the fee descending in lineal life might well be more desirable than a life

estate with remainder to collateral heirs or strangers to the blood. The exemption may be regarded as a concession to beneficiaries of the first class while the last of their line to hold and enjoy the property.

1 Kochersperger v. Drake, 167 Ill. 122, 47 N. E. 321, 41 L. R. A. 446. Booth v. Commonwealth, 130 Ky. 88, 113 S. W. 61. In re Fox, 154 Mich. 5, 13. State v. Switzler, 143 Mo. 287, 333, 45 S. W. 245, 40 L. R. A. 280, 65 Am. St. Rep. 653. In re Patterson, 130 N. Y. Suppl. 970, 127 N. Y. Suppl. 284. In re Opinion of Justices, (N. H. 1911), 79 A. 490. Nunnemacher v. State, 129 Wis. 190, 221, 108 N. W. 627, 9 L. R.A. (N. S.) 121. State v. Clark, 30 Wash. 439, 71 P. 20; Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 287, 42 L. Ed. 1037, 18 U. S. Sup. Ct. 594.

A distinction between direct descendants and collateral kindred and strangers has abundant reason upon which to sustain it, for the moral claim of collaterals and strangers is less than of kindred in direct line and the privilege is therefore greater. Tenn. St. 1893, c. 89, s. 7, is not unconstitutional because it discriminates between direct descendants and collateral kindred and strangers. State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178. As to persons liable to tax see further, post, s. 303 et seq.

2 State v. Hamlin, 86 Me. 495, 502, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632. Minot v. Winthrop, 162 Mass. 113, 123, 26 L. R. A. 259. State v. Henderson, 160 Mo. 190, 216, 60 S. W. 1093. Hagerty v. State, 55 Ohio St. 613, 45 N. E. 1046, affirming 5 Ohio Cir. Dec. 701, 12 Ohio Cir. Ct. 606, relying upon State v. Ferris, 53 Ohio St. 314. Eyre v. Jacob, 14 Gratt. (Va.) 422, 431, 73 Am. Dec. 367.

New Hampshire. The New Hampshire constitution requires that an inheritance tax must be proportional and constitute only the just share of those upon whom it is imposed. It cannot lawfully make discriminations and cast a burden upon one class of beneficiaries and exempt all other classes from its operation; and it cannot, therefore, for purposes of taxation, exempt legacies and successions to lineal descendants and include only those to collaterals and others than those specified. "Such a tax is founded upon pure inequality, and is simply extortion in the name of taxation; and it can therefore never be sustained in this jurisdiction so long as equality and justice continue to be the basis of constitutional taxation." Per Blodgett, J., in Curry v. Spencer, 61 N. H. 624, 632, 60 Am. St. Rep. 337.

This decision is now generally discredited and is no longer law, even in New Hampshire, where a constitutional amendment subsequently gave the legislature authority to levy an inheritance tax. Under this amendment the act of 1905 was held constitutional. The court distinguishes Curry v. Spencer, 61 N. H. 624, as the right then in question was the right to the privileges of the probate court for the purposes of administration; and if one estate was entitled to be there settled without payment of fee, all were. The right under the act of 1905, however, is a right to the passing of property, and the court says that there are good reasons why the passing of property to near relatives or the gift of it to charitable purposes or directly to the public should not be subject to an exaction by the state. Reasonable exemptions of property have not been considered to effect the validity of the tax upon other property, and the exemp

tions in this statute do not render the assessment unreasonable. Thompson v. Kidder, 74 N. H. 89, 97, 65 A. 392.

'In re Wilmerding's Estate, 117 Cal. 281, 49 P. 181. (Upholding distinction between the surviving brothers and sisters of the testator and the children of deceased brothers and sisters.) "The discrimination is based upon, and justified by, the fact that there are degrees in collateral kinship."

Hagerty v. State, 55 Ohio St. 613, 45 N. E. 1046, affirming 12 C. C. R. 606, 5 Ohio Cir. Dec. 701.

The fourteenth amendment to the federal constitution does not render invalid the California statute of 1893 as amended in 1899, because it subjected to an inheritance tax brothers and sisters of a decedent and did not subject to such burden such strangers to the blood as the wife or widow of a son or the husband of a daughter. The court says that the discretion of the state in this matter can only be affected by the fourteenth amendment when the discretion is so obviously arbitrary and unreasonable as to be beyond the pale of governmental authority.

The court holds it is not arbitrary to put in one class for the purpose of inheritance all blood relatives to a designated degree except brothers and sisters and to place all other and more remote relatives including brothers and sisters in a second class along with strangers to the blood. Campbell v. California, 200 U. S. 87, 95, 26 S. Ct. 182, 50 L. Ed. 382.

Exempting stepchildren from the collateral inheritance tax together with other lineal descendants is not void as improper classification. The court remarks that it has nothing to do with the wisdom of legislation. Commonwealth v. Randall, 225 Pa. St. 197, 73 A. 1109.

"There is a natural reason for taxing the privilege of the latter [collaterals] of receiving the property at a higher rate than that of the former [lineals], and the amendment of 1894 to the Minnesota constitution authorizes such graduation of the tax. Drew v. Tifft, 79 Minn. 175, 81 N. W. 839, 47 L. R. A. 525, 79 Am. St. Rep. 446.

'In re Wilmerding's Estate, 117 Cal. 281, 49 P. 181.

Billings v. People, 188 U. S. 97, 104, 23 S. Ct. 272, 47 L. Ed. 400, affirming 189 Ill. 472, 482, 59 L. R. A. 807.

A tax on lineals imposed only on the value of property transferred in excess of five thousand dollars where all transfers of five thousand dollars and less to lineals are exempt from the act, while the tax on collaterals is upon the entire transfer of property if its value exceeds five thousand dollars, is a clear inequality and discrimination between collateral and lineal descendants which renders the statute unconstitutional. State v. Bazille, 87 Minn. 500, 92 N. W. 415, 94 Am. St. Rep. 718.

If the Michigan act is a property tax it is void as violating the provisions of the constitution requiring uniformity, as it provides for a different rate for direct descendants from that on collaterals. Chambe v. Durfee, 100 Mich. 112, 58 N. W.661.

Sec. 63. Transfers where Life Estate is Reserved to Grantor. It is a good classification to single out for taxation transfers where the life estate is reserved to the grantor, leaving all other transfers exempt.

"We think that there are sufficient reasons to support the classification made by the statute; at least that the classification cannot be said to be devoid of reasonable ground on which to rest. Inheritance tax laws have been very generally adopted throughout the states of the union. A substantial part of the revenue necessary to support their governments is now derived from that source. A not wholly unnatural desire exists among owners of property to avoid the imposition of inheritance taxes upon the estates they may leave, so that such estates may pass to the objects of their bounty unimpaired. It is a matter of common knowledge that for this purpose trusts or other conveyances are made whereby the grantor reserves to himself the beneficial enjoyment of his estate during life. Were it not for the provision of the statute which is challenged, it is clear that in many cases the estate on the death of the grantor would pass free from tax to the same persons who would take it had the grantor made a will or died intestate. It is true that an ingenious mind may devise other means of avoiding an inheritance tax- but the one commonly used is a transfer with reservation of a life estate. We think this fact justified the legislature in singling out this class of transfers as subject to a special tax."

Per Cullen, C. J., in In re Keeney, 194 N. Y. 281, 286, 87 N. E. 428, affirming 128 N. Y. App. Div. 893. Taxation based on relationship of remaindermen, see ante, s. 62.

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