A naturalized citizen of the United States, residing in Iowa,
died there intestate, leaving property which passed under its laws
to collaterals, some of whom were naturalized citizens residing in
other states of the Union, and others natives and subjects of
Sweden, residing there. Under the Iowa law, the inheritance taxes
upon the portion of the estate accruing to the nonresidents were
higher in rate than those upon the portions accruing to the
residents.
Held following
Petersen v. Iowa, ante,
245 U. S. 170,
that such discrimination was not violative of either Article VI, or
Article II (the favored nation clause), of the treaty with Sweden
of April 3, 1783, 8 Stat. 60, renewed and revived by later
treaties.
168 Ia. 511 affirmed.
The case is stated in the opinion.
MR. CHIEF JUSTICE WHITE delivered the opinion of the Court.
John Peterson, a native of Sweden, but a naturalized citizen of
the United States and a resident of Iowa, there died unmarried and
intestate. His property in the state passed under the laws of Iowa
to his heirs who were his
Page 245 U. S. 177
nephews and nieces or their representatives, some of whom were
naturalized citizens of the United States residing in states other
than Iowa and the remainder were natives and citizens of the
Kingdom of Sweden and there resided. The property in Iowa was
administered under the laws of that state, and the administrator
paid upon the portion of the estate accruing to the nonresident
alien heirs the death duties provided by the law of Iowa, which
were higher than those provided by that law upon the portion
accruing to the resident heirs. (ยง 1467, 1907 Supplement to the
Code of Iowa). This controversy arose from a contest over the right
of the state to make that charge and the duty of the administrator
to pay it, the contention being that the duties, insofar as they
discriminated against the nonresident alien heirs, were void
because in conflict with a treaty between the United States and the
King of Sweden (Treaty of April 3, 1783, 8 Stat. 60, renewed by
Article 12 of the Treaty of September 4, 1816, 8 Stat. 240, and
revived by Article 17 of the Treaty of July 4, 1827, 8 Stat. 354).
The case is here to review the judgment of the court below holding
that contention to be unsound. 168 Ia. 511.
Two clauses of the treaty are relied upon: Article VI, which it
is asserted directly prohibited the discriminating charge, and
Article II, which by the favored nation clause accomplished a like
result. Article VI is in the margin,
*
Page 245 U. S. 178
and from its text it plainly appears that it embraces only
citizens or subjects of Sweden and their property in Iowa, and
therefore, as we have just pointed out in
Petersen v. Iowa,
ante, 245 U. S. 170, has
no relation whatever to the right of the state to deal by death
duties with its own citizens and their property within the state.
And from the same case it also appears that the favored nation
clause has also no application, since that clause in the treaty
relied upon, as was the case in the Treaty of Denmark which came
under consideration in the previous case, is applicable only "in
respect to commerce and navigation."
For the reasons stated in the
Petersen case and in
this, it follows that the judgment must be, and it is,
Affirmed.
*
"Article VI. The subjects of the contracting parties in the
respective states may freely dispose of their goods and effects
either by testament, donation, or otherwise, in favour of such
persons as they think proper, and their heirs in whatever place
they shall reside, shall receive the succession even
ab
intestato, either in person or by their attorney, without
having occasion to take out letters of naturalization. These
inheritances, as well as the capitals and effects, which the
subjects of the two parties, in changing their dwelling, shall be
desirous of removing from the place of their abode, shall be
exempted from all duty called '
droit de detraction,' on
the part of the government of the two states respectively. But it
is at the same time agreed that nothing contained in this article
shall in any manner derogate from the ordinances published in
Sweden against emigrations, or which may hereafter be published,
which shall remain in full force and vigour. The United States on
their part, or any of them, shall be at liberty to make respecting
this matter such laws as they think proper."