While, under former decisions of this Court, the nature of
inheritance taxes has been defined, those decisions do not
prescribe the time of their imposition. To have done so would have
been to usurp a legislative power not possessed by this Court. A
state may exercise its power to impose an inheritance tax at any
time during which it holds the property from the legatee, and the
Louisiana
Page 203 U. S. 544
inheritance tax law is not void as a deprivation of property
without use process of law within the meaning of the Fourteenth
Amendment as to legatees of decedents dying prior to its enactment,
but whose estate were still undistributed.
A statute imposing a succession tax is not void as against
estates not closed, as denying equal protection of the laws,
because it does not affect estates which had been actually closed
at the time of its enactment.
When the state court which has delivered two decisions declares
that the later does not overrule, but distinguishes, the earlier,
which it states was decided on considerations having no application
to the later one, both decisions must be considered as correct
interpretations of the statute construed, and it is not the
province of this Court to pronounce them contradictory or one to be
more decisive than the other.
The facts are stated in the opinion.
Page 203 U. S. 546
MR. JUSTICE McKENNA delivered the opinion of the Court.
The case involves the validity, under the Constitution of the
United States, of a burden imposed under the inheritance tax law of
the State of Louisiana, passed June 28, 1904.
Mathias Levy, a resident of New Orleans, died in that city May
26, 1904. He was unmarried, and left no ascendants, and was
therefore without forced heirs. He left a last will and testament
of the date of December 23, 1903, in which he named executors and
made sundry particular bequests to charitable institutions. He
bequeathed the balance of his estate, in equal shares, to his two
nieces, Camille Cahen and
Page 203 U. S. 547
Julie Kahn, constituting them thereby his universal legatees and
instituted heirs.
The will was duly probated in the Civil District Court for the
Parish of Orleans May 30, 1904. An inventory of his estate was
taken June 9, 1904, and a supplementary inventory August 3, 1904.
The inventories showed the total appraised value of the estate to
be $64,676.05. Of this amount, after deducting the debts and
charges of the estate and particular legacies, there was left, as
the portion going to the universal legatees, $42,927.94.
The final accounting and tableau of distribution was filed
August 3, 1904, and approved and homologated by judgment August 16,
and the funds ordered to be distributed.
October 16, a motion was made for a rule on the executors to
show cause why they should not pay over the legacies as ordered. 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
Page 203 U. S. 548
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 divest 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 violation of the Constitution of the United States of America,
and especially section 9 of article 1, and the Fifth and Fourteenth
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
process of law and a denial of the equal protection of the laws, in
violation of the Fifth and Fourteenth 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 three percent "on direct inheritances
and donations to ascendants or descendants," and ten percent 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." [
Footnote 1]
Page 203 U. S. 549
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 divest a right previously acquired under then-existing laws is a
deprivation of property already acquired, without due process of
law, prohibited by the Fourteenth Amendment of the Constitution of
the United States."
To sustain their propositions. the plaintiffs in error cite
certain articles of the Louisiana Civil Code. [
Footnote 2] And it is urged
Page 203 U. S. 550
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 Code, this rule applies
to testamentary heirs, to instituted heirs, and universal legatees.
In other words, that the acquisition of the succession by
plaintiffs in error was 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 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, 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;
Magoun v. Illinois Trust & Savings
Bank, 170 U. S. 283;
Knowlton v. Moore, 178 U. S. 41. 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
Page 203 U. S. 551
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, 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.
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
Succession of Levy 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
Page 203 U. S. 552
passed to the heirs. The maxim
Le mort saisit le vif
was expressly recognized."
Both decisions therefore must be considered as correct
interpretations of the code of the state. It is not our province to
pronounce 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 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 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 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 have been invalid. In
Page 203 U. S. 553
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.
[
Footnote 1]
"SECTION 1. Be it enacted by the General Assembly of the State
of Louisiana that there is now and shall hereafter be levied,
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
three percent on direct inheritances or donations to ascendants or
descendants, and ten percent for collateral 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 or
inheritance; this tax to be collected on all successions not
finally closed and administered upon, and all successions hereafter
opened."
[
Footnote 2]
"ARTICLE 940. A succession is acquired by the legal heir, who is
called by law to the 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 possession, 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 accepting 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."