Amicus Curiae Brief — First Nat. Bank of Boston v. Maine

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‘Supreme Court of the United: States

, OCTOBER TERM, 1931.

No. 171.

FIRST NATIONAL BANK OF BOSTON, Executor of the Estate of

Edward H. Haskell, Deceased,

2 Appellant,

against

STATE OF MAINE.

Appellec.

ON APPEAL FROM THF*SUPREME JUDICIAL COURT OF THE STATE

OF MAINE.

MOTION AND BRIEF OF RUSSELL L. BRADFORD, AS

AMICUS’ CURIAE, AND ON BEHALF OF THE CITY

BANK FARMERS TRUST COMPANY.

‘ -RUSSELL L. BRADFORD,

. Amicus Curiac,

22 Ixchange lace,

New York, N. ¥.* &

Taytor, Buanc, Capron & Marst. j bad

Of Counsel.

PRINTED IN THE. UNITED STATES BY Benjy. H. Tyrre&t, Inc.. — St., New Yor«.

TABLE OF CONTENTS.

: | & PAGE *

Motion for leave to file brief ............ “ese a

ae eee ere rrr a

Brief. statement of facts in case nepresomted by

GURIONE CUTUNE occ sccciescssceansctacseseees a

The Issue .:.... ict err (aseneneanes ine 2

‘Point I:

Corporate stocks should stand upon the same

footing as other intangible personalty, and cer-

tainly should not be thé only form of property.

: to bear the burden of double or multiple taxa-

eer eee eee rer errr 3

Articles in Law Reviews—Appendix.

ac eh OO ed 2 aE A aN OR

-Tas Le or Caszs, *

mes f ; . > . ‘ PAGE

Baker v. Baker, Eccles & Co., 242 U.S. 394 ...... 5

Baldwin v. Misgouri, 281 U;S. 586 ............ ‘a é 5, 13

Beidler v. South Carolina Tax Com. 282 U.S. a, oo

Blodgett v. Silberman, , SS Baer reves £8

Brooke v. City of Norfolk, 277 U.S. 27 ..:......: , s-

Corry v- Baltimore, 196 U.S. 466 cuene en ane ae 9, 10, 11

Daniel Reeves, Ine: v. Anderson, 43 Fed. (2) 679... 12

Delaware Railroad Tax Case, 85 U. S. 229 ....... i

Eisner v. Macomber, 252 U.S. 189 ...... pues = "13

Farmers’ Loan & Trust Co. v. Minnesota, 280 U.S.

7 PO hin 64 vores hme 50 eR Seis be ++ 4, 5, 6, 7, 11, 12, 14

Fidelity ete. Co. v. Louisville, 245 U.S. 54....... «4,5

; Frick v Pennsylvania, zoe]. S. 473 ..... eee ee 8,9, 18

Kirtland v. Motehkiss, 100 U. 8. 491 — ae » 49

Rhode Island Hospital Trust Co. v. Doughton, 270°

8 RR ern Ser rr .... 4,9, 10, 13

Safe Deposit & Trust Co. of Baltimore v. Virginia,

ois ania k ands Weeden «x toss 4,5.

State Tax on Foreign-Held. Bonds, 15 Wall 300.. il

Susquehanna Power Co. v. State Tax Com. of Md., |

' 283 U. S. 297 re :

~ Tappan v. Merchants’ Nat’l. Bank, 19 Wall. 490... 10

Union Refrigerator Co. v. Kentucky, 199 U.S. 194 3,12

_ Supreme Court of the United States,

OCTOBER TERM, 1931.

No. 171. On.

F ee es

KS J

a >

First Nationa Bank oF Boston, Ex- | ' | =

ecutor of the Estate of Edward H. ;

i - Haskell, Deceased,

» Appellant,

against

State oF Marne, g

Appellee. EY

MOTION FOR LEAVE TO FILE BRIEF AS AMICUS

CURIAE.

May Ir PLEASE THE Covsm

f: : The undersigned.as counsel for City Bank Farmers

! - Trust. Company, as Executor, respectfully moves this

:- Honorable Court for leave to file the accompanying —

: in this case as amicus curiae.

RUSSELL i BRADFORD, .

Counsel for City Bank Farmers

' Trust Company, As Executor,

os Amicus Curiae.

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‘ First Nationa Bank oF Boston, |.

Supreme Court of the United States, —

- OCTOBER TERM, 1931. _

No. 171. ” 7 \

— s

Executor of the Estate of .Edward

‘H. Haskell, Deceased,

: Appellant,

against

StaTE oF Marne, |

- Appellee.

1 ae

ON APPEAL FROM THE SUPREME JUDICIAL COURT OF THE

STATE OF MAINE.

_ BRIEF OF AMICUS CURIAE.

This brief, by permission of the Court and with the

consent of counsel for the respective parties, is filed by

the undersigned as amicus curiae, and on behalf of the»

City Bank Farmers Trust Company of New York as

Executor of the Last Will and Testament of Virgil P.

. Kline, Deceased, and also on its behalf as executor of ‘

other estates, wherein the question here’ presented is

involved.

F acts.

The facts in the case in suit are set. out ‘in the tran-

. script of record, and in the opinion of the Supreme

Judicial Court of Maine (R. ns as well as in the brief

of the appellant. .

EEN SRE NAITO JD LICE TE EI RENIN S/T NRG

¥ : . > . BOIS ak ted Ta TENCE ey re RAN

ET eC eT Ey

ROOM eRe ER RRL

A Brief Reme of the Facts in Respect of One of tn

Cases Represented by the Undersigned.

Virgil P. Kline died a resident of the State of Okla-

homa, leaving a Last Will and Testament wherein he

named and nominated the Cit’ Bank Farmers Trust

Company as Executor thereof. The greater portion of

the estate of said, Virgil P. Kline consisted of stocks of

corporations organized under the laws of the State of

Ohio, the certificates of stocks of which said corpora-—

tions, however, were physically located in the City of New

York: In due course the Oklahoma inheritance tax was

paid upon all the intangible personalty owned by the de-

cedent including shares of Ohio carporations. The State

of Ohio also,demanded an inheritance tax upon the value

of the shares of the Ohio corporations.

‘An appeal from the tax determined by the State of

Ohio in this respect was taken to the courts of Ohio and

the issue here presented ig now pending in the Supreme |

Court:of Ohio, the lower courts having upheld as legal |

and constitutional the tax sought to be collected by the

State of eons

The Issue.

jected to two or more taxes by the several states, and

more particularly presents the question whether shares

of corporate stocks (common or preferred) are: so dif-

ferent in their characteristics from other intangibles as

to render them subject to a different rule of law.

The argument of this brief in support of the appel-

lant’s.contention that the State of Maine may not under

the Fourteenth Amendment -appropriately impose a

The issue presented in the case in suit while a very _

narrow one is nevertheless a very important one. It

presents the question of whether property may be sub- ©

. :

~ 3 r

transfer inheritance tax upon stocks of a Maine corpora-

. .tion owned by a nonresident decedent and transferred at

death pursuant to the laws of another-State, will be

addressed to the following :.

POINT I. -

Corporate stocks should stand upon the same foot-

ing as other intangible personalty, and certainly should

not be the‘only form of property to bear the burden of.

‘double or multiple taxation. © -

The question of the taxation of property has. not been

always free from perplexity and, at times, confusion.

This has been true in respect of direct or property taxes,

as well as in respect of excises or indirect taxes. The

legality of taxation revolves around the issue of situs of

the property sought to be taxed, and around a considera-

tion of power. Situs has its antecedent in the concept

location. The question of power to tax is inherent in the

question of situs. Tax laws in respect-of real property ~

have always been settled. Real property bears a tax only

to the jurisdiction wherein it is located. It may be taken

as fyndamentally true that the question of the power to

.tax.real property.depends upon the fact of situs or loca-

tion, and therefore’ ihe power does not exist as to real

property located outside the taxing jurisdiction. This

is true in respect of all kinds of taxes.

The law in respect of the taxation of tangible per-

sonalty for property taxes has now been definitely settled

(Union Refrigerator Co. v.. Kentucky, 199 U. S. 194) agit. ~

| has been for the purpose of death duties (Frick v. Penn-

, sylvania, 268 U. S. 473). We think the authorities are

4 e

clear to the effect that if there be no situs within the *

taxing jurisdiction, there is no power to tax. 3

The rule as to intangibles, certainly so far as notes, E

‘bonds, cash, choses in action, ete. are concerned, we think, —

is now definitely settled (Farmers’ Loan & Trust Co. v.:

Minnesota, 280 U. S: 204; Baldwin v. Missguri, 281 U. S.

586; Beidler v. South. Peroline Tax Commission, 282

U.S. 1; Blodgett v. Silberman, 277 U. 8. 1; Rhode Island

Trust Co. v. Doughton, 270 U. S. 69, in respect of death

duties and inheritance taxes; and Kirtland v. Hotchkiss, .

100 U.S. 491; Fidelity, etc. Co. v. Louisville, 245 U.S. 54;

Brooke v.City of Norfolk, 277 U.S. 27, and Safe Deposit

é Trust Co. of Baltimore v. Virginia, 280 U. S. 83, in

respect of property taxes). But this issue thus settled

by the decisions is not based upon the actuality of situs,

but upon the invocation of the ancient maxim of mobilia

sequuntyr personam.

w The application of the maxim (whether a rule of law

” not) may be considered as necessary to convenience,

and this is so basically because intangibles technically

cannot be said to have a location or situs (See Farmers’

Loan & Trust. Company v. Minnesota, supra, p. 211). In

this aspect a situs must be attributed to such intangibles

for purposes of: taxation as well as for the purpose of

determining property rights. Without such. attribution i

there would be confusion in respect of property rights &

ard devolution as well as taxes. The same property or 2

asset tight be taxable in at least four different localities :

_(See Farmers Loan and Trust Co. v. Minnesota, supra, at | :

pp. 209-210). The rate of tax, quadrupled, could be suffi- | :

ciently high to absorb the property. Combined, the taxes,

could, indeed, exceed the value of the thing taxed. Which

jurisdiction then should have priority? ;

-° This Court has decided that intangibles have a situs

for tax purposes (as they have for devolution) at the

doniicile of the owner (Blodgeti-v. Silberman, supra. But

, é

cf. Baker v. Baker, Eccles & Co., 242 U. 8. 394 (1917)).

Certainly, for tax purposes, if the intangibles have not

acquired a ‘‘situs for taxation other than at the domicile

‘of their owner’’ when ‘‘they have become integral parts

of some local business’’ (Beidler v. South Carolina Tax

Commission, 282 U.S. 1, 8 (19309 intangibles, for ad va-

lorem personal property taxes, may be subject to tax only

at the domicile of the owner (Kirtland. v. Hotchkiss,

supra; Fidelity, etc. Co. v. Louisville, supra) ; and this is

true also in respect of a trustee-ownier (Brooke v. City of .

Norfolk, 277 U.S. 27 (1928) ; Safe Deposit & Trust Co. v.

Virginia, 280 U. S. 83 (1929)); and similarly for inheri-

tance taxes or death duties (Farmers’ Loan & Trust

Company v. Minnesota, supra; Baldwin v. Missouri,

supra; Beidler v. South Carolina Tax Commission, .

supra). | |

- The question of the effect. of a separate business situs

of oa the problem of multiple taxation was

reserved in Farmers’ Loan & Trust Co. v. Minnesota. In

Beidler v. South Carolina: Tax Commission, sitpra, Mr.

Chief Justice Hughes at p. 8 said: |

‘‘In Fermers Loan & Trust Company v. Min-

nesota, supra, this Court reserved the question of °

business situs, saying: ‘New Orleans v. Stempel,

175 U. S. 309, Bristol v. Washington County, 177

U. S. 133, Liverpool & L. & G. Ins. Co, v. Orleans

Assessors, 221 U. S. 346, recognize the.‘principle

that choses in action may acquire a situs for taxa- ~

_ tion other than at the domicile of their owner if

they have become integral parts of some local

business. The present record gives no occasion

for ug to inquire whether such securities ean be

taxed a second time at the owner’s domicile’:’’

For ad valorem personal property taxes it therefore

' may be said that’if the intangibles have acquired a busi-

ness situs separate from the domicile of the owner, it is .

«a reserved question whether such intangibles could be

_ taxed again ‘‘at the owner’s domicile’’. But in respect

of death duties (excises) suck intangibles may be taxed

at the domicile of the owner upon the transfer thereof

by death. (See Blodgett v. Silberman, supra, at pp. 10-

11). |

In Farmers’ Loan & Trust Co. v. Minnesota, supra, at

p. 211, the Court said :—

st agar mea

s We BA LOB Lind AP LOC LM

_ **While debts have no actual terriforial situs ©

_we have ruled that a State may properly apply the

rule mobilia sequuntur personam and treat them as

localized at the creditor’s domicile for taxation

purposes. Tangibles with permanent situs there-

in, and their testamentary transfer, may be taxed

only by the State where they are found. And, we —

think, the general reasons declared sufficient to

inhibit taxation of them by two States apply under

present circumstances with no less force to in-

zg ' tangibles with taxable situs imposed by due appli-

4 ; cation of the legal fictton.’’ (Italics ours.)

» ° v

We therefore may take it as settled that the power of

5 the taxing authority to tax property is limited to the

taxation of property within its jurisdiction; and that to

tax an event or excisable occasion the taxing authority

- must have control or jurisdiction over the event or act.

This is true without-Variation in. respect of real prop-

erty and tangible personalty. It.is true in respect of

intangibles, such as motes, bonds, cash, choses in action,

. ete., as we have seen above. The basic thought underly-

ing this principle likewise should have.its application to

stocks. That stocks are ‘‘intangibles’’ is obvious. (See.

Blodgett v. Silberman, supra, at p. 17).

There is no sound distinction to be drawn between .

- bonds, notes, other choses in action, and stocks. True,

the issue of whether stocks may bear a multiple tax by

different taxing authorities assessing a tax ‘‘on different

ean % EL eee ONG

and inconsistent principles’’ has not the-definite crystal-_

lization of court decisions that bonds, notes and other

cheses in action have. Nevertheless stocks are as much

a part of the wealth ef the country as are bonds or debts.

-The same underlying factors of present day business

‘conditions apply equally to this class of intangibles as

they do to other classes of intangibles.

As Mr. Justice McReynolds said :—,

‘‘Primitive conditions have passed; business

_—

a“

is now transacted on. a national scale. A very §

- large part of the country’s wealth is invested in

negotiable securities whose protection against dis-

crimination, unjust and oppressive taxation, is

matter of the greatest moment.’’ (Farmers Loan

¢ _ Company v. aaa supra, at pp. 211-.

212

As much of the wealth of this country is invested in

stocks of corporate business, commercial and industrial

concerns as is invested in bonds, notés or debts. Corpo-

rate enterprise in financing and re-financing sometimes

do so by the issue of preferred’ stock (whether redeem- .

able or not) and at other times by the issuance of bonds.

It frequently is a matter of indifference which. method

is used,—a matter of indifference to the corporation as

well a8 to the purchaser of the stock or the bonds. So

far as the contributor to the corporation (that is the

purchaser) is concernéd,-his wealth and the value of his

asset is the same whether it be reflected in a paper instru- _ .

ment called ‘‘ preferred stock”” or a paper instrument

called a ‘‘bond”’’.

- But if the characteristics of stock as an intangible are

so different from those of bonds as intangibles, then

- corporate re-financing by the-use of stocks would subject

the holders thereof to a possible double or multiple tax

as contradistinguished from the situation that would ob-

tain if there were an issue of bonds. Are the characteris-.

. : ww

tics so definitely different? We suggest that the. differ-

ence between the power of the State in granting the cor-

porate franchise to control the situs of stock and the

power of the State granting the corporate franchise to

contraql the situs of the bonds issued by that corporation

. is too shadowy to predicate thereupon a’separate distinct

rule of taxation rendering the one subject to double or

multiple taxation and the other to a single tax.

Modern times, and economic ‘conditions are repellant

to such a separation for the purposes of taxation.

Much of the wealth of this country, certainly much

of the business, commercial and industrial pursuits of

this country, are conducted through corporate organiza-

tion. The capital employed by the corporation, whether

acquired by sale of preferred or common shares of the

corporation or by sale of Bonds or notes of the corpo-

ration come from all quarters of the nation,—indeed,

from all the world.

The trend of the times is against drawing distinctions

. between forms of ‘‘intangibles’’ as much so as drawing

distinctions between forms of ‘‘tangibles’’.

_ If the principle that intangible propérty in the pres-

ent day and in the light of present economic conditions,

and the’ worldwide interrelation of business: and com-

merce, should have the same protection from double

taxation that tangible property has, then it follows nec-

-essarily that this principle, to have any yractical force

and benefit, should comprehend all intangibles ‘and_ not

just some species of intangibles. The practical bene-

ficial effect of the principle would be nullified if one par-

-ticular species of intangibles (a species in which much

‘of the wealth of.the nation is invested) was left outside

open to attack by the tax laws of several of the States.

| While there is dicta, the implication from which sug- |

gests that. stocks may be taxable at the domicile of the —

corporation and, indeed, by two or more taxing jurisdic-

; tions (Frick v. Pennsylvania, supra, at p. 497, and Rhode

Island Hospital Trust Co. v. Doughton, supra, at p. 81),

‘there is a definite decision (see Rhode Island Hospital

Trust Co. v. Doughton case) that a state wherein the cor-

poration has its property, if it be neither the state of in-

corporation nor the state of, domicile of the owner of the

property, may not impose an excise upon the transfer of

the stock upon the death of the owner. , Yet practically

and broadly (sheer ‘technicalities aside) that state in all

* probability should have even a greater right to impose a

tax than the state of incorporation.

The state of incorporation has a full right to impose

such taxes as it thinks appropriate upon the corporation.

Any quid ‘pro quo due the state for the services of the

state and protectidn rendered by the state of incorpora-

tion should be, and in most cases is, exacted by that state

from the corporation. The state may even go so far as

to impose an ad valorem personal property tax upon the

stock of that egrporation even though owned by nonresi-

dents, if the tax so imposed is in lieu of all other taxes

upon the corporation. (Cf. Susquehanna Power Co. v.

State Tax Commission of Maryland, 283 U.S. 297). This

_ would be so in the case of a tax upon stocks of a corpora-

tion (whether owned by residents or nonresidents) in lieu

of tax@s upon the corporation itself; in other words, a

= franchise tax or a tax in effect upon the property of the

| corporation, but in form one upon the stock. (Susque-

_ hanna Power Co. v. State Tax Commission, supra, at p.

299). . Corry v. Baltimore, 196 U. S. 466, ave think shouldg

be read in the light of the Susquehanna Power Co: v.

State. Tax Commission of Maryland decision.

But reason stops with the control of the state over

the corporation. True, the state of incorporation may .

_ define the rights of the shares in such corporation, but

similarly the state of incorporation may define the rights

inhering in bond’ issued, within, but sold without, the

jurisdiction of that state. ‘

If we accept the principle that the taxation ‘of in-

tangibles is confined to a single taxing authority, as we

must of tangibles ‘and immovables, it follows that the

only’ question to be answered with respect to stocks is

what taxing ‘authority shall be deemed to have jurisdic-

‘tion.-- The state;wherein the corporation owns its prop-

erty or conducts its business as contradistinguished from

the state of incorporation, is eliminated by virtue of the

decision in Rhode Island Hospital Trust Co. v. Doughton,

_ supra. ©

The taxes involved in the Corry case an in ‘the

Susquehanna Power Co. case were property taxes, and

had to do with the:jurisdiction of the state over ‘the Gor-_

poration, and through the corporation, over-the stock

thereof. Even so, stock may be transferred without the

state. As between transferror and transferee, the trans-

fer is valid and complete without the-intercession or use

of the functions’of any of the rules or laws of the state

of incorporation. (The mere question of registration is-

‘<¢an immaterial circumstance’’). It may be that for

personal property taxes (direct taxes) thé state of in-

‘ corporation appropriately may subject the stock owned .

by a nonresident to tax. (See Tappan'v. Merchants’ N a-

tional Bank, 19 Wall. 490—but consider the provisions

of R. 8. 5219 applying to the taxation of national banks

or the stocks thereof a

We think in view of the quite obvious desirability

of ‘not burdening property or wealth with duplicate and

multiple taxation that to permit corporate stock, even

for. property taxes, to be taxed at the state of incorpo- |

ration would be regrettable. But the basis of jurisdiction

r an ad valorem personal property tax or for-a cor-: |

porate franchise tax could have no pertinency to a tax

upon ‘‘succession’’ or ‘‘transfer’’ of sfock owned by a

tl x

nonresident /of the taxing state and transferred under

' the laws of another state.

The citations of Corry v. Baltimore, supra, and Sus-.

quehanna v. State Tax Commission of Maryland, supra,

are beside the point when consideration is given to. the

incidence. of the tax in death duty’cases. The ‘‘succes-

sion’’ or ‘‘transfer’’ in Massachusetts does not take ef-

fect in Maine, and is not governed by the laws*of Maine.

The exeisable occasion is the ‘‘transfer,’’ i. e., the ‘‘suc-

cession’’. Can two distinct laws govern? If the succés-

sion, whieh 3 is the basis, the incidence, of the tax, does not

occur in Maine, then Maine may not tax whaf is not in its

jurisdiction. It is not stock that is being here taxed, but

the ‘‘transfer?’ by succession. The transfer may be eX-

cised only by the state whose laws fasten upon the Cains

taxed, which is the ‘‘transfer’’ upon death.

In this day ownership of stock in a corporation or of

bonds issued by a Sara are not confined merely to

those domiciled within the state of iicorporation. The

ownership of stock and of bonds is scattered everywhere.

'. Of course, in respect of bonds, this Court has held in

State Tax on Foreign-Held Bonds, 15 V7 all. 300, that the

' state having.jurisdiction of the debtor could not impose

an ad valorem personal property tax on the bond issued,

but that the bond was.cognizable for taxation. only in the

state of the creditor, that is the bondholder. This Court

has now held similarly in respect of death duties (The

Farmers’ Loan and Trust Company v. Minnesota,

supra). .

The rules applying. to this species of intangibles

- should apply with equal force to stocks. Both are in-

‘tangibles, and both. represent the dsset or wealth of the

owner. Public policy compels to this conclusion; the

trend of the cases indicate it; and economic needs in the

_present day of world-wide business demand it. ,

Bb ty Sey Roe ts eG a8

A ye

ethiepiiaisnsaett

‘

Two Taxes by Two Different States Upon One

Succession Violates the Fourteenth Amendment.

The Constifution of the United States must be con-.

strued in the light of present day conditions:in the con-

sideration of the application of the laws to it. It is not

a fixed and inflexible rule, incapable of elasticity or of be-

ing susceptible of adaptation to changing conditions and

the development in modern thought and science. As

Judge Learned Hand said in Daniel Reeves, Inc. v. An-

_ derson, 43 Fed. (2d) 679, at p. 682 :—

_ ‘Were the Fifth honesidlnans a remorseless

pattern which all legislation must fit, the argu-:

ment might even so be troublesome; might indeed

be conclusive. + But constitutional limitations are |

not indifferent to the occasions of the statutes they

affect. They represent a mood rather than a com-

-mand, that sense of moderation, of fair play; of

mutual ferbearance, without which states become

the prey of,faction. .They are not the rules of a .

game; their’ meaning is lost when they are treated

as though they were.’ |

The development of modern business, new economic

conditions, was one of the bases of the thought of this

Court in Union Refrigerator Transit Co. v. Kentucky,

supra, in holding that the fiction of situs. of movables no

longer had its application i in respect of tangible person-

alty. Yet the doctrine had come down through many gen-

erations that all personal property followed the owner.

As mechanical and scientific inventions brought peoples

of one quarter of this country into immediate contact

with peoples of other quarters, and business ceased to be

taansacted as a local enterprise but became nation, and

even world, wide, this Court held (The Farmers’ Loan

and Trust Company v: Minnesota) that intangibles (cer-

tainly such as those involved in that case) deserved as __

much protection from duplicate and multiple taxation as

tangible personalty. _

In neither the Frick case nor the Rhode Island Trust

Co. case was the question directly presented to the Court

of the right of the state in:which the corporation was or-

ganized to impose a transfer inheritance tax in respect of

property transferred under and by the laws of another

state. The subject of the tax here, as in those cases, was

the ‘‘transfer’’ or the ‘succession’. The ‘‘transfer”’

does not take effect in or because of the laws of. Maine— —

. but under the laws of Massachusetts. The Rhode Island

Trust Co. case refused to admit identity of ownership by

the corporation and the stockholder. (See also Delaware

ftailroad Tax Case, 85 U. S. [18 Wall. 206] at pp. 229-30: |

Eisner v. Macomber, 252 U. S. 189 at pp. 213-214). The

shareholder has only rights in law as has a bond owner..

The one thing that controls or should control is what

state has jurisdiction over the transfer by death of in-

tangible property. The ‘‘transfer”’ or “*succession’’ can-

not occur under the laws of two states. Strictly and

accurately speaking the taxable occasion is the ‘‘trans-

fer’’. The tax must fasten upon that event, and that

event must be within the jurisdiction of, that is controlled

by, the state seeking to impose the tax. A tax imposed by

any other state would be in violation 6f the ‘‘due process

of law’’ clause of the Fourteenth Amendment.

The ‘‘due process of law’’ clause of the Fourteenth

Amendment is not ‘‘given a’ much more extended and

. artificial signification’’ (dissenting opinion of Mr. Jus-

tice Holmes in Baldwin v. Missouri, at Pp. 998) in con-

struing it to cover corporate stocks than could be consid-

ered it was given in covering state and municipal bonds. |

‘““Due process of law’’ has no precise (and therefore cir-

cumscribed) meaning. Its very generality ‘is its strength

and its important service in our constitutional system.

_The Constitution, drafted in an age of intense person-

alism and individualism, as applied to conditions and

thought then existing, is yet sufficiently flexible and elas-

tic to adapt itself to this day and time—to this complex

financial and mechanical age. It is a living thing, and its

‘, meaning and its force must look always to the present

and the future.

We think the ‘‘due process of law’’ clause of the Tine:

teenth Amendment means that the power of a state to

impose a tax shall be confined to that property, those per-

sons, acts and businesses, within its borders‘and over

which it has control. We think that a tax upon the ‘‘trans-

fer’’ or ‘‘succession’’ may be imposed only by the state

the laws of which govern the succession. An excise upon

that event by any other state would be unconstitutional.

It would seem to us that the real issue is not whether

there shall be two death duties imposed upon the trans-

_ fer of corporate stocks, but should be whether the state

of incorporation or the state of domicile shall impose the

single constitutionally allowable tax.

Since the decision of this Court in Farmers Loan

d Trust Co. v.-Minnesota and the cases degjded in

consequence thereof, the law reviews have frequently |

discussed the effect and purport of these decisions. A

partial list of the many references in the. legal periodi-

cals having to do with the taxability, for death duty pur-

poses of corporate stocks, is set out for the convenience

of the Court in an appendix to this brief.

POINT II.

The Siete of the Supreme Judicial Court of Maine

should be reversed.

Respectfully submitted,

RUSSELL L. BRADFORD,

Amicus Curiae

22 Exchange Place,

New York, N. h A

TAYLOR, Btanc, Capron & Marsu,

of Counsel.

‘APPENDIX.

Iist of Articles in Law Reviews.

Extra- Territorial Transfer Taxes on Intangible Prop-

erty of a Non-Resident Decedent, 30 Columbia Law Re-

view 404, 405, March, 1930.

Inheritance Taxes—Taxation by State of Property

. Not Within its J urisdiction, 64 U. S. Law Review, 158,

160-1, March, 1930.

Jurisdiction to Tax a 43 Harvard Law Re-

view, 792, 797, March, 1930. .

Constitutional Law—Taxation of titanate Prop-

erty, R. D. Ray, 15 Cornell Law Quarterly, wi 464,

A Pil, 1930. . |

Inheritance Taxes on Shares of Non-residents at Cor-

_ porate Domicile, Harry Rockwell, 8 N. C. Law Review

318, 321-3, April, 1930.

The Taxable Situs of Intangibles, J..M. Wisdom, 4

Tulane Law Review 469, 475-6, April, 1930.

Taxation, Power of Obligor State to Tax Inheritance,

28 Mich. Law Review 916, 917, April, 1930.

Application of Ohio Inheritance Tax to Intangibles

of Non-resident’ Decedents, T. G. Gutting, 4 University

Cincinnati Law Review, 398, 405-6, May, 1930.

Constitutional Law, Jurisdiction to Tax, 18 George-

town Law Journal 364, 372-3, May, 1930.

The 14th Amendment in its Relation to State Tax-

ation of Intangibles, 18 Cal. Law Review 345, 357-8, May,

1930. ©

‘Taxation, Constitutional Law, Situs. of Bonds, 5

Washington Law Review 132, June, 1930.

Taxation, Jurisdiction to Tax Sliaaiien 3 So. Cal.

La Review 428, 435, June, 1930.

“a |

- Jurisdiction to Tax Intangibles, Multiple Taxation .

Being Avoided, Morris Anapolsky, 10 Boston ew

‘Law Review, 423, 427-9, June, 1930.

Double Taxation and State Inheritance Taxes, Lyle

W. Ohlander, 8 Nat’l Income Tax Magazine 253, July,

1930. , %

Death Taxes, —_— Statutory and Judicial Solutions

of Multiple Taxation, L. Brady, 16 American Bar Asso-

ciation Journal 532, 533, August, 1930. |

Power of the States to Tax Intangibles or their Trans-

fer, J. C. Peppin, 18 Cal. Law Review 638, 661-71, Sep-

tember, 1930. —

Taxation, Jurisdiction to Tax Intangibles, 29 Mich.

Law Review, 93, 97-8, November, 1930.

- Double. Inheritance Taxation of Intangibles, 40 Yale

Law Journal, 99,°104-5, November, 1930.

Tendencies in the Taxation of Intangibles, Chas.

Lowndes 17 Va. Law Review 146, 159, December, 1930.

Inheritance Taxation, Jurisdiction to Tax Intangibles,

15 Minn. Law Review 254, January, 1931.

Ohio Inheritance Tax in Relation to Bank Deposits

and Stock Ownership of Non-resident: Decedents, T. G. '

Gutting, 5 University of Cincitinati Law Review 245, 246, -

March, 1931.

Recent Developments in the Law of Inheritanée Tax-

ation, Lyle W. Ohlander, 9 Tax Magazine 283-4, etal

1931. ;

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