1. Where a stockholder dies domiciled in a state other than that
in which the corporation was created and has its property, the
state of his domicile has power to tax the succession to the shares
by will or inheritance, but the state of the corporation cannot do
so.
2. A resident of Massachusetts died there owning shares in a
Maine corporation, most of the property of which was in Maine. A
Massachusetts tax was assessed and paid on legacies and
distributive shares made up largely of the proceeds of the stock. A
like tax was assessed in Maine, from which the amount of the
Massachusetts tax was deducted.
Held, that the tax by
Maine was invalid under the due process clause of the Fourteenth
Amendment. P.
284 U. S. 326
et seq.
3. A transfer from the dead to the living of any specific
property is an event single in character, and is effected under the
laws, and occurs within the limits, of a particular state, and it
is unreasonable, and incompatible with a sound construction of the
due process clause of the Fourteenth Amendment, to hold that
jurisdiction to tax that event may be distributed among a number of
states. P
284 U. S.
327.
4. The considerations that justify application of the maxim
mobilia sequuntur personam to death transfer taxes imposed
in respect of bonds, certificates of indebtedness, notes, credits,
and bank deposits apply, with substantially the same force, in
respect of shares of corporate stock.
Id.
5. Ownership of shares by the stockholder and ownership of the
capital by the corporation are not identical. The former is an
individual interest giving the stockholder a right to a
proportional part of the dividends and the effects of the
corporation when dissolved, after payment of its debts. And this
interest is an incorporeal property right which attaches to the
person of the owner in the his domicile. P.
284 U. S.
330.
6. The fact that the property of the corporation is situated in
another state affords no ground for the imposition by that a death
tax upon the transfer of the stock; nor does the further fact of
incorporation under the laws of that state.
Id.
Page 284 U. S. 313
7. Power of state of incorporation to tax stock transfers and
issue of new certificate distinguished. P.
284 U. S.
330.
8. The question whether shares of stock, as well as other
intangibles, may be so used in a state other than that of the
owner's domicile as to give them a situs there for tax purposes
analogous to the actual situs of tangible property is not here
presented. P.
284 U. S.
331.
130 Me. 123, 154 A. 103, reversed.
Appeal from a judgment sustaining a succession tax. An action in
debt brought by the state to collect the tax was referred upon an
agreed statement of facts to the Supreme Judicial Court.
Page 284 U. S. 320
MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
The question presented for our determination by this appeal is
whether the State of Maine has power, under the Fourteenth
Amendment, to impose a tax upon a transfer by death of shares of
stock in a Maine corporation forming part of the estate of a
decedent who, at the time of his death, was domiciled in the
Commonwealth of Massachusetts.
The facts which give rise to the question follow. In 1924,
Edward H. Haskell died testate, a resident of Massachusetts. The
greater part of his property consisted of shares of stock in the
Great Northern Paper Company, a Maine corporation having most of
its property in that state. His will was probated in Massachusetts,
where the stock, as a part of his estate, had been made liable to
an inheritance tax of like character to the inheritance tax in
force in Maine. The Massachusetts tax amounted to over $32,000, and
was paid on legacies and distributive shares made up in greater
part of the proceeds of the paper company stock. Ancillary
administration was taken out in a Maine probate court, and an
inheritance tax amounting to over $62,000 was
Page 284 U. S. 321
assessed under the Maine statutes
* on the property
passing by the will. Upon this amount, the tax paid to
Massachusetts was allowed as a credit, and an action of debt was
brought to recover the balance. Upon an agreed statement embodying
the foregoing facts, the case was referred for final decision to
the Supreme Judicial Court of the State of Maine, sitting as a law
court. That court rendered judgment for the state, holding that the
shares of stock were
"within its jurisdiction, and there subject to an inheritance
tax, even though the owner was a nonresident decedent, regardless
of whether the certificates of stock were at the time of the death
in the state of the domicile or in the taxing state,"
and that the Fourteenth Amendment thereby was not infringed. 130
Me. 123, 154 A. 103, 108.
Beginning with
Blackstone v. Miller, 188 U.
S. 189, decisions of this Court rendered before
Farmers Loan Co. v. Minnesota, 280 U.
S. 204, it may be conceded, would preclude a successful
challenge to the judgment of the state court. In the first-named
case, it was held that a deposit in a New York trust company to the
credit of Blackstone, who died domiciled in Illinois, was
subject
Page 284 U. S. 322
to a transfer tax imposed by New York, notwithstanding the fact
that the whole succession, including the deposit, had been
similarly taxed in Illinois. That decision was overruled by the
Farmers Loan Company case, and with it, of course, all
intermediate decisions so far as they were based on
Blackstone
v. Miller.
A review of these decisions would serve no useful purpose.
While, in some of them, a restatement of the doctrine of
Blackstone v. Miller was unnecessary to a determination of
the points presented for consideration, and in others the facts
might be distinguished from those of the present case, nevertheless
the authority of the
Blackstone case was accepted by all.
Frick v. Pennsylvania, 268 U. S. 473, was
one of the latest to approve that case and give countenance to the
general doctrine that intangible property (unlike tangible
property) might be subjected to a death transfer tax in more than
one state, but this and all other instances of such approval,
whether express or tacit, with the overthrow of the foundation upon
which they rested, have ceased to have other than historic
interest.
It was by the
Frick case, however, that the rule became
definitely fixed that, as to tangible personal property, the power
to tax is exclusively in the state where the property has an actual
situs, and this, as will be seen later, has an important bearing on
the present case. Mr. Frick, domiciled in Pennsylvania, died
testate owning tangible personal property having an actual situs in
New York and Massachusetts. His will was probated in Pennsylvania,
and a transfer tax was imposed under a Pennsylvania statute which
provided for such a tax on all property of a resident decedent,
whether within or without the state. Ancillary letters were granted
in New York and Massachusetts. We decided, pp.
268 U. S.
488-492, that the Pennsylvania tax, insofar as it was
imposed upon the transfer of tangible personalty having an actual
situs in other states, was in contravention of the due process
clause of the Fourteenth Amendment. Upon a review of former
decisions, it was held: (1) that the exaction of a tax beyond
Page 284 U. S. 323
the power of the state to impose was a taking of property in
violation of the due process clause; (2) that, while the tax laws
of a state may reach every object which is under its jurisdiction,
they cannot be given extraterritorial operation, and (3) that, as
respects tangible personal property having an actual situs in a
particular state, the power to subject it to state taxation rests
exclusively in that state, regardless of the owner's domicile.
The tax there under consideration was not a property tax, but
one laid on the transfer of property on the death of the owner,
and, as to that, the court said (p.
268 U. S.
492):
"But, to impose either tax, the state must have jurisdiction
over the thing that is taxed, and to impose either without such
jurisdiction is mere extortion, and in contravention of due process
of law."
See also Union Refrigerator Transit Co. v. Kentucky,
199 U. S. 194,
199 U. S. 204;
Rhode Island Hospital Trust Co. v. Doughton, 270 U. S.
69,
270 U. S.
80.
The decision of this Court in the
Farmers Loan Company
case was foreshadowed by its decision in
Safe Deposit & T.
Co. v. Virginia, 280 U. S. 83.
There, it was held that intangibles, such as stocks and bonds, in
the hands of the legal holder of the title in the state of his
residence may not be taxed at the domicile of the equitable owner
in another state, and, in respect of taxation of the same
securities by two states, we said (p.
280 U. S.
94):
"It would be unfortunate, perhaps amazing, if a legal fiction
originally invented to prevent personalty from escaping just
taxation should compel us to accept the irrational view that the
same securities were within two states at the same instant, and,
because of this, to uphold a double and oppressive assessment."
A little later at the same term, the
Farmers Loan
Company case was decided.
280 U. S. 280 U.S.
204. The facts are recited at page
280 U. S. 208.
Henry R. Taylor, domiciled in New York, died testate leaving
negotiable bonds and certificates of indebtedness issued by the
State of Minnesota and two of her municipalities. Some of them were
registered;
Page 284 U. S. 324
none was connected with business carried on by or for the
decedent in Minnesota. His will was probated and his estate
administered in New York, and a tax exacted by that state on the
testamentary transfer. Minnesota assessed an inheritance tax upon
the same transfer, which was upheld by her supreme court. This
Court, applying the maxim
mobilia sequuntur personam, held
that the situs for taxation was in New York, and that the tax was
there properly imposed. The contention on behalf of the state was
that the obligations were debts of Minnesota and her municipal
corporations, subject to her control, that her laws gave them
validity, protected them, and provided means for enforcing payment,
and that, accordingly, they had a situs for taxation also in that
state.
This Court agreed that
Blackstone v Miller and certain
approving opinions lent support to the view that, ordinarily,
choses in action might be subjected to taxation both at the
domicile of the debtor and that of the creditor, and that two
states might tax on different and more or less inconsistent
principles the same testamentary transfer of such property without
conflict with the Fourteenth Amendment. But it was said that the
tendency of that view was to disturb good relations among the
states; that the practical effect of it had been bad, and that a
preponderance of the states had endeavored to avoid the evil by
resort to reciprocal exemption laws. Upon these and other
considerations which we shall not stop to particularize, the case
was overruled as no longer constituting a correct exposition of
existing law. The view that two states have power to tax the same
transfer on different and inconsistent principles was distinctly
rejected, and the general reasons which support the rule that
tangibles and their testamentary transfer may be taxed only by the
state where they are found were held to be sufficient to inhibit
the taxation by two states of intangibles with a
Page 284 U. S. 325
taxable situs imposed by due application of the
mobilia
maxim.
After saying that choses in action, no less than tangible
personalty, demand protection against multiple taxation, the Court,
at p.
280 U. S. 212,
concluded:
"Taxation is an intensely practical matter, and laws in respect
of it should be construed and applied with a view of avoiding, so
far as possible, unjust and oppressive consequences. We have
determined that, in general, intangibles may be properly taxed at
the domicile of their owner, and we can find no sufficient reason
for saying that they are not entitled to enjoy an immunity against
taxation at more than one place similar to that accorded to
tangibles. The difference between the two things, although obvious
enough, seems insufficient to justify the harsh and oppressive
discrimination against intangibles contended for on behalf of
Minnesota."
Notwithstanding the registration of certain of the bonds, and
notwithstanding the contention that Minnesota protects the debt,
compels its payment, and permits its transfer, we concluded that
the testamentary transfer was properly taxable in New York, but not
also in Minnesota.
This case was followed by
Baldwin v. Missouri,
281 U. S. 586.
There, the testator, domiciled in Illinois at the time of her
death, had credits for cash deposited in banks located in Missouri,
and certain bonds of the United States and promissory notes; all
physically within that state. Some of the notes, executed by
residents of Missouri, were secured on lands in that state.
Applying the principles of the
Farmers Loan Company case,
we held that the situs of these credits, bonds, and notes was at
the domicile of the testator, and there passed from the dead to the
living; that they were not within Missouri for taxation purposes,
and that the transfer was not subject to the power of that
state.
Page 284 U. S. 326
Beidler v. South Carolina Tax Comm'n, 282 U. S.
1, presented still another phase of the subject. There
it appeared that a resident of Illinois died in that state. At the
time of his death, a South Carolina corporation was indebted to him
in a large sum upon an open unsecured account entered upon the
books of the corporation kept in South Carolina. Again applying the
principles of the
Farmers Loan Company case, we held that
the transfer by death of this debt was taxable only by the state of
the domicile.
It long has been settled law that real property cannot be taxed,
or made the basis of an inheritance tax, except by the state in
which it is located. More recently, it became settled that the same
rule applies with respect to tangible personal property. And it now
is established by the three cases last cited that certain specific
kinds of intangibles -- namely, bonds, notes, and credits -- are
subject to the imposition of an inheritance tax only by the
domiciliary state, and this notwithstanding the bonds are
registered in another state, and the notes secured upon lands
located in another state, resort to whose laws may be necessary to
secure payment.
The rule of immunity from taxation by more than one state,
deducible from the decisions in respect of these various and
distinct kinds of property, is broader than the applications thus
far made of it. In its application to death taxes, the rule rests
for its justification upon the fundamental conception that the
transmission from the dead to the living of a particular thing,
whether corporeal or incorporeal, is an event which cannot take
place in two or more states at one and the same time. In respect of
tangible property, the opposite view must be rejected as connoting
a physical impossibility; in the case of intangible property, it
must be rejected as involving an inherent and logical
self-contradiction. Due regard for the processes of correct
thinking compels the
Page 284 U. S. 327
conclusion that a determination fixing the local situs of a
thing for the purpose of transferring it in one state carries with
it an implicit denial that there is a local situs in another state
for the purpose of transferring the same thing there. The contrary
conclusion as to intangible property has led to nothing but
confusion and injustice by bringing about the anomalous and grossly
unfair result that one kind of personal property cannot, for the
purpose of imposing a transfer tax, be within the jurisdiction of
more than one state at the same time, while another kind, quite as
much within the protecting reach of the Fourteenth Amendment, may
be at the same moment within the taxable jurisdiction of as many as
four states, and by each subjected to a tax upon its transfer by
death -- an event which takes place, and in the nature of things
can take place, in one of the states only.
A transfer from the dead to the living of any specific property
is an event single in character, and is effected under the laws,
and occurs within the limits, of a particular state, and it is
unreasonable and incompatible with a sound construction of the due
process of law clause of the Fourteenth Amendment to hold that
jurisdiction to tax that event may be distributed among a number of
states.
It is true, there are such differences between bonds and stocks
as might justify their being placed in separate categories for some
purposes. But plainly they may not be so placed for the purpose of
subjecting a transfer by death of the former to a tax by one state
only, and a similar transfer of the latter to a tax by two or more
states. Both are intangibles and both generally have been
recognized as resting in contract, or, technically, as "choses in
action."
Hawley v. Malden, 232 U. S.
1,
232 U. S. 12;
Blodgett v. Silberman, 277 U. S. 1,
277 U. S. 14. The
reciprocal inheritance statutes now in force in a preponderating
number of the
Page 284 U. S. 328
states of the Union make no distinction between the various
classes of intangible personal property. The New York statute, for
example, under that term includes
"deposits in banks, mortgages, debts, receivables, shares of
stock, bonds, notes, credits, evidences of an interest in property,
evidences of debt and choses in action generally."
Gen.Laws N.Y.1930, c. 710, ยง 1. This impressive recognition of
the substantial identity of the enumerated intangibles, for
purposes of death taxation, is entitled to weight.
A distinction between bonds and stocks for the essentially
practical purposes of taxation is more fanciful than real.
Certainly, for such purposes, the differences are not greater than
the differences between tangible and intangible property, or
between bonds and credits. When things so dissimilar as bonds and
household furniture may not be subjected to contrary rules in
respect of the number of states which may tax them, there is a
manifest incongruity in declaring that bonds and stocks,
possessing, for the most part, the same or like characteristics,
may be subjected to contrary rules in that regard.
We conclude that shares of stock, like the other intangibles,
constitutionally can be subjected to a death transfer tax by one
state only.
The question remains: in which state, among two or more claiming
the power to impose the tax, does the taxable event occur? In the
case of tangible personalty, the solution is simple: the transfer
-- that is, the taxable event -- occurs in that state where the
property has an actual situs, and it is taxable there and not
elsewhere. In the case of intangibles, the problem is not so
readily solved, since intangibles ordinarily have no actual situs.
But it must be solved unless gross discrimination between the two
classes of property is to be sanctioned, and this Court has solved
it in respect of the intangibles heretofore dealt with by applying
the
maxim mobilia sequuntur personam.
Page 284 U. S. 329
Farmers Loan Co. v. Minnesota, supra, at pp.
280 U. S.
211-212;
Baldwin v. Missouri, supra; Beidler v.
South Carolina Tax Commission, supra.
This ancient maxim had its origin when personal property
consisted in the main of articles appertaining to the person of the
owner, such as gold, silver, jewels, and apparel, and, less
immediately, animals and products of the farm and shop. Such
property was usually under the direct supervision of the owner, and
was often carried about by him on his journeys. Under these
circumstances, the maxim furnished the natural and reasonable rule.
In modern times, due to the vast increase in the extent and variety
of tangible personal property not immediately connected with the
person of the owner, the rule has gradually yielded to the law of
the place where the property is kept and used.
Pullman's
Palace-Car Co. v. Pennsylvania, 141 U. S.
18,
141 U. S. 22;
Eidman v. Martinez, 184 U. S. 578,
184 U. S. 581;
Union Refrigerator Transit Co. v. Kentucky, supra,
199 U. S. 206.
But in respect of intangible property, the rule is still convenient
and useful, if not always necessary, and it has been adhered to as
peculiarly applicable to that class of property.
Blodgett v.
Silberman, supra, 277 U. S. 9-10;
Farmers Loan Co. v. Minnesota, supra, 280 U. S. 211;
Union Refrigerator Transit Co. v. Kentucky, supra, 1
199 U. S.
206.
The considerations which justify the application of the fiction
embodied in the maxim to death transfer taxes imposed in respect of
bonds, certificates of indebtedness, notes, credits, and bank
deposits, apply, with substantially the same force, in respect of
corporate shares of stock. And since death duties rest upon the
power of the state imposing them to control the privilege of
succession, the reasons which sanction the selection of the
domiciliary state in the various cases first named sanction the
same selection in the case last named. In each case, there is
wanting, on the part of a state other than that of the domicile,
any real taxable relationship to the event which is the subject of
the tax. Ownership of shares by
Page 284 U. S. 330
the stockholder and ownership of the capital by the corporation
are not identical. The former is an individual interest giving the
stockholder a right to a proportional part of the dividends, and
the effects of the corporation when dissolved, after payment of its
debts.
Delaware Railroad
Tax, 18 Wall. 206,
85 U. S.
229-230;
Rhode Island Trust Co. v. Doughton,
270 U. S. 69,
270 U. S. 81;
Eisner v. Macomber, 252 U. S. 189,
252 U. S.
213-214. And this interest is an incorporeal property
right which attaches to the person of the owner in the state of his
domicile. The fact that the property of the corporation is situated
in another state affords no ground for the imposition by that state
of a death tax upon the transfer of the stock.
Rhode Island
Trust Co. v. Doughton, supra. And we are unable to find in the
further fact of incorporation under the laws of such state adequate
reason for a different conclusion.
Undoubtedly the state of incorporation may tax the transfer of
the stock of a nonresident decedent and the issue of a new
certificate to take the place of the old, under the power generally
to impose taxes of that character. But plainly such a tax is not a
death duty which flows from the power to control the succession; it
is a stock transfer tax which flows from the power of the state to
control and condition the operations of the corporation which it
creates. A formal transfer of the stock upon the books of the
corporation, and the issue of new certificates, bear a relation to
the succession differing little, if at all, in substantial effect
from that borne by the registration of the state bonds, involved in
the
Farmers Loan Company case, or the necessity of
invoking the law of Missouri in respect of notes secured on
Missouri lands, involved in the
Baldwin case. Practical
considerations of wisdom, convenience, and justice alike dictate
the desirability of a uniform general rule confining the
jurisdiction to impose death transfer taxes as to intangibles
Page 284 U. S. 331
to the state of the domicile, and these considerations are
greatly fortified by the fact that a large majority of the states
have adopted that rule by their reciprocal inheritance tax
statutes. In some states, indeed, the rule has been declared
independently of such reciprocal statutes. The requirements of due
process of law accord with this view.
We do not overlook the possibility that shares of stock, as well
as other intangibles, may be so used in a state other than that of
the owner's domicile as to give them a situs analogous to the
actual situs of tangible personal property.
See Farmers Loan
Company case, supra, at p.
280 U. S. 213.
That question heretofore has been reserved, and it still is
reserved to be disposed of when, if ever, it properly shall be
presented for our consideration.
We hold that the exaction of the tax here assailed was not
within the power of the state under the Fourteenth Amendment, and,
accordingly, the judgment below must be reversed and the cause
remanded for further proceedings not inconsistent with this
opinion.
Judgment reversed.
* Section 1, chap. 69, rev. St. Maine, 1916, provides:
"All property within the jurisdiction of this state, and any
interest therein, whether belonging to inhabitants of this state or
not, and whether tangible or intangible, which shall pass by will,
by the intestate laws of this state, . . . shall be subject to an
inheritance tax for the use of the state as hereinafter provided. .
. ."
Section 25 of the same chapter in substance provides that, in
case of transfers of stock owned by a nonresident decedent in a
Maine corporation, the tax shall be paid to the Attorney General at
the time of the transfer.
Section 37, c. 51, Rev. St. Maine, 1916, provides:
"No transfer shall affect the right of the corporation to pay
any dividend due upon the stock, or to treat the holder of record
as the holder in fact until such transfer is recorded upon the
books of the corporation or a new certificate is issued to the
person to whom it has been so transferred."
MR. JUSTICE STONE (dissenting).
Recognizing that responsibility must rest primarily on those who
undertake to blaze a new path in the law, to say how far it shall
go, and notwithstanding the decisions of this Court in
Safe
Deposit & Trust Co. v. Virginia, 280 U. S.
83;
Farmers Loan & Trust Co. v. Minnesota,
280 U. S. 204;
Baldwin v. Missouri, 281 U. S. 586;
Beidler v. South Carolina Tax Comm'n, 282 U. S.
1, I am not persuaded that either logic, expediency, or
generalizations about the undesirability of double taxation justify
our adding to the cases recently overruled the long list of those
which, without a dissenting voice, have supported taxation like the
present. No decision of this Court requires that result.
See
Baldwin v. Missouri, supra, p.
281 U. S.
596.
Page 284 U. S. 332
Such want of logic as there may be in taxing the transfer of
stock of a nonresident at the home of the corporation results from
ascribing a situs to the shareholder's intangible interests which,
because of their very want of physical characteristics, can have no
situs, and again in saying that the rights, powers, and privileges
incident to stock ownership and transfer which are actually enjoyed
in two taxing jurisdictions, have situs in one and not in the
other. Situs of an intangible, for taxing purposes, as the
decisions of this Court, including the present one, abundantly
demonstrate, is not a dominating reality, but a convenient fiction
which may be judicially employed or discarded, according to the
result desired.
The decedent, if we disregard the fiction and its attendant
maxims, acquired rights and privileges with respect to a
corporation created by Maine and under its control. The nature and
extent of his interest are defined by the laws of Maine, and his
power to secure the complete transfer of it is dependent upon them.
These characteristics of corporate shares, distinguishing them in
several respects from unsecured obligations to pay money, have long
been explicitly recognized by this Court as the source of state
power to tax nonresident stockholders, and as sufficient ground for
its exercise.
See Frick v. Pennsylvania, 268 U.
S. 473,
268 U. S. 497;
Baker v. Baker, Eccles & Co., 242 U.
S. 394,
242 U. S. 401;
Hawley v. Malden, 232 U. S. 1,
232 U. S. 12;
Rhode Island Hospital Trust Co. v. Doughton, 270 U. S.
69,
270 U. S. 81.
See also Corry v. Baltimore, 196 U.
S. 466.
Compare Citizens' National Bank v.
Durr, 257 U. S. 99;
Cream of Wheat Co. v. Grand Forks, 253 U.
S. 325. This Court has recently said, in
Frick v.
Pennsylvania, supra:
"The decedent owned many stocks in corporations of states, other
than Pennsylvania, which subjected their transfer on death to a tax
and prescribed means of enforcement which practically gave those
states the status
Page 284 U. S. 333
of lienors in possession. As those states had created the
corporations issuing the stocks, they had power to impose the tax
and to enforce it by such means, irrespective of the decedent's
domicile, and the actual situs of the stock certificates.
Pennsylvania's jurisdiction over the stocks necessarily was
subordinate to that power. Therefore. to bring them into the
administration in that state, it was essential that the tax be
paid. . . . We think it plain that such value as the stocks had in
excess of the tax is all that could be regarded as within the range
of Pennsylvania's taxing power."
The withdrawal from appellee of authority to impose the present
tax, in terms which would sweep away all power to impose any form
of tax with respect to the shares of a domestic corporation if
owned by nonresidents, would seem to be a far greater departure
from sound and accepted principles, and one having far more serious
consequences, than would the disregard of wholly artificial notions
of the situs of intangibles.
The present tax is not double in the sense that it is added to
that imposed by Massachusetts, since the Maine statute directs that
the latter be deducted from the former. But, as the stockholder
could secure complete protection and effect a complete transfer of
his interest only by invoking the laws of both states, I am aware
of no principle of constitutional interpretation which would enable
us to say that taxation by both states, reaching the same economic
interest with respect to which he was sought and secured the
benefits of the laws of both, is so arbitrary or oppressive as to
merit condemnation as a denial of due process of law. Only by
recourse to a form of words saying that there is no taxable subject
within the state by reason of the fictitious attribution to the
intangible interest of the stockholder of a location elsewhere is
it possible to stigmatize the tax as arbitrary.
Page 284 U. S. 334
Affirmance of this judgment involves no declaration that the tax
may be imposed by three or more states instead of two, and, under
the decisions of this Court, there is no ground for supposing that
it could be.
See Rhode Island Trust Co. v. Doughton,
270 U. S. 69. Even
if it be assumed that some protection from multiple taxation, which
the Constitution has failed to provide, is desirable, and that this
Court is free to supply it, that result would seem more likely to
be attained, without injustice to the states, by familiar types of
reciprocal state legislation than by stretching the due process
clause to cover this case.
See 28 Columbia L.Rev. 806; 43
Harvard L.Rev. 641. We can have no assurance that resort to the
Fourteenth Amendment, as the ill adapted instrument of such a
reform, will not create more difficulties and injustices than it
will remove.
See 30 Columbia L.Rev. 405, 406.
The present denial to Maine of power to tax transfers of shares
of a nonresident stockholder in its own corporation, in the face of
the now accepted doctrine that a transfer of his chattels located
there and equally under its control,
Frick v. Pennsylvania,
supra, and that his rights as
cestui que trust in a
trust of property within the state,
Safe Deposit & Trust
Co. v. Virginia, supra, may be taxed there and not elsewhere,
makes no such harmonious addition to a logical pattern of state
taxing power as would warrant overturning an established system of
taxation. The capital objection to it is that the due process
clause is made the basis for withholding from a state the power to
tax interests subject to its control and benefited by its laws;
such control and benefit are together the ultimate and indubitable
justification of all taxation.
I think the judgment should be affirmed.
MR. JUSTICE HOLMES and MR. JUSTICE BRANDEIS concur in this
opinion.