1. The power to regulate the transmission, administration, and
distribution of tangible personal property rests exclusively in the
State in which the property has an actual situs, regardless of the
domicile of the owner. P.
293 U. S.
118.
2. A resident of New York owning paintings there lent them for
exhibition in Pennsylvania, where they remained for a number of
years until his death. During the interval, they were subject to be
returned at any time upon his request, but it did not appear that
he ever intended to have them returned, and he was willing to sell
them to any purchaser who would donate them to the museum in
Pennsylvania or any similar institution.
Held: that the
paintings acquired a situs in Pennsylvania, and their transfer by
law was consequently subject to the Pennsylvania inheritance tax.
P.
293 U. S.
119.
Affirmed.
Appeal from a decree of the District Court of three judges
dismissing a bill to enjoin the assessment and collection of an
inheritance tax. For an earlier phase of the case,
see
291 U. S. 291 U.S.
24.
Page 293 U. S. 116
MR. JUSTICE BUTLER delivered the opinion of the Court.
The Pennsylvania inheritance tax law imposes a tax upon the
transfer by will or intestate laws of personal property within the
commonwealth when the decedent is a nonresident at the time of his
death.
* Thomas B.
Clarke, a resident of New York, loaned paintings to a museum in
Pennsylvania and died testate while they were on exhibition there.
His will was admitted to probate in New York, and letters
testamentary issued to appellant to which, as trustee, the
residuary clause transferred the pictures. The appellees, acting
respectively as Attorney General and Secretary of Revenue of
Pennsylvania, proceeded to appraise and assess the pictures for the
purpose of collecting the inheritance tax.
Appellant, maintaining that, when the owner died, the paintings
had no actual situs within Pennsylvania because only temporarily
there, brought this suit to enjoin enforcement on the ground that,
if the statute be construed to tax the transfer by the death of the
nonresident owner, it is repugnant to the due process clause of the
Fourteenth Amendment. As the transfer cannot be subjected to taxes
imposed by more than one state (
Frick
v.
Page 293 U. S. 117
Pennsylvania, 268 U. S. 473,
268 U. S.
488-492;
Safe Deposit & T. Co. v. Virginia,
280 U. S. 83,
280 U. S. 93;
Farmers' Loan & Trust Co. v. Minnesota, 280 U.
S. 204,
280 U. S. 210;
First National Bank v. Maine, 284 U.
S. 312,
284 U. S.
326-327), appellant framed its complaint to call for a
decision whether Pennsylvania or New York is entitled to the tax.
The New York Tax Commission, as
amicus curiae, filed
briefs below and also in this Court supporting the claim that the
transfer is subject to the New York tax.
The district court, consisting of three judges, § 266, Jud.Code,
dismissed the suit on the ground that appellant had an adequate
remedy at law. This Court reversed and remanded the case with
instructions to reinstate the bill and proceed to a hearing upon
the merits.
City Bank Farmers' Trust Co. v. Schnader,
291 U. S. 24. Then
the case was submitted and tried on the facts alleged in the bill
and answer and additional ones that were stipulated by the parties.
Upon the circumstances detailed in its findings, the court
concluded that 79 portraits belonging to Clarke that were included
in the collection on exhibition in the Pennsylvania museum at the
time of his death then had an actual situs in that state, and held
the transfer subject to the Pennsylvania inheritance tax.
The material substance of the findings follows:
In March, 1928, Clarke, at the request of the director of the
Pennsylvania museum, loaned to it the 79 pictures, together with 85
others owned by a corporation of which he was sole stockholder. At
the time of the loan, they were, and long had been kept, in New
York City. Five were at his residence, ten were on exhibition, and
the remaining 64 were in storage. When the pictures were sent to
Pennsylvania, Clarke surrendered his lease for the storage space,
and thereafter did nothing to secure another place in which to put
them. But suitable space was always readily available in New
York.
Page 293 U. S. 118
The arrangement with the museum was oral; no consideration was
to be paid, and it was understood that, at any time, on Clarke's
request, the pictures would be returned to him. In the spring of
1929, Clarke wrote the director, at the latter's solicitation, that
he would sell the entire collection at a stated price to anyone who
would present it to the museum, it being understood that he would
allow the pictures to remain at the museum for a reasonable time
for the director to find such a donor. In May, 1930, he stated that
this arrangement would terminate June 17, 1930. But, at the
director's request, he permitted the pictures to remain upon the
understanding that, whenever he so requested, they would be
returned to him in New York. Thereafter, he was willing to sell the
collection as a whole for presentation to the Pennsylvania museum
or to a substantially similar institution.
Clarke made no definite plans or request for the return to New
York of the paintings. None was ever removed from the museum except
four which, at his request, were sent to Virginia in April, 1929,
for exhibition, and were returned in May. When he died, January 18,
1931, all the paintings were at the museum.
The museum was not conducted for profit. It secured through
voluntary loans from nonresidents a substantial portion of the
works of art which it displayed. None of these was regarded or
intended as a permanent loan. It is customary for public museums to
secure pictures for exhibition in this manner. The period elapsing
until Clarke's death was shorter than the usual period of such
loans.
The power to regulate the transmission, administration, and
distribution of tangible personal property rests exclusively in the
state in which the property has an actual situs, regardless of the
domicile of the owner. If, at the time of his death, the actual
situs of Clarke's pictures was in Pennsylvania, they were wholly
under the jurisdiction
Page 293 U. S. 119
of that state. The fact that, being a resident of New York, he,
by will probated in that state, disposed of the pictures detracted
nothing from the exclusive jurisdiction of Pennsylvania to tax the
transfer effected by his death. New York laws had no bearing other
than that attributable to their implied adoption by Pennsylvania.
Assuming actual situs in Pennsylvania, the paintings there on
exhibition when the owner died are not to be distinguished, so far
as concerns the imposition of the inheritance tax, from land
located within that state.
Frick v. Pennsylvania, supra,
268 U. S.
489-493.
We regard as unimportant and negligible Clarke's suggestions
that the pictures be returned because, on each occasion, he acceded
to opposing suggestions of the director and continued his consent
that they remain temporarily at the museum subject to his orders.
Mere floating intention that, some time in the future, the pictures
would be returned to New York was not sufficient to retain them
within the jurisdiction of that state and to keep them without the
jurisdiction of Pennsylvania.
Cf. Story, Conflict of Laws,
8th ed., § 46. And obviously without weight are the facts that
Clarke made the loan without pay, gave up the warehouse in which he
had kept some of the pictures, and died without providing a place
for them in New York.
The significant features of the transaction are these: prior to
the loan, the pictures that went to make up the collection had an
actual situs in New York. The loan was not made for a short and
definite period, and it was subject to the right of the owner to
have the pictures returned to New York at any time. He did not call
for their return, but, with his consent, they were kept in
Pennsylvania and there exhibited until he died two years and ten
months after the loan. With the exception of the four pictures
temporarily sent to Virginia, none was taken from Pennsylvania. For
nearly two years next preceding
Page 293 U. S. 120
his death, Clarke was willing -- indeed, he authorized the
director -- to sell the collection to anyone who would buy at the
specified price and donate them to the Pennsylvania museum. And,
during the last six months of his life, he was willing to sell to
any purchaser that would give them to any institution similar to
the Pennsylvania museum. It does not appear that Clarke ever
intended to have the pictures returned to New York at any definite
date, or upon the happening of any event, or at all. Until his
death, he permitted the pictures to be kept and used in the
Pennsylvania museum, merely subject to his right at any time to
order them taken to New York or elsewhere.
In respect of situs for taxation, the collection of portraits is
quite unlike vessels and railway rolling stock that, in fulfilling
the purpose for which they are created, move from place to place
and into different states.
Cf. 58 U. S. Pacific
Mail Steamship Co., 17 How. 596,
58 U. S. 599;
Pullman's Palace-Car Co. v. Pennsylvania, 141 U. S.
18,
141 U. S. 23;
Johnson Oil Refining Co. v. Oklahoma, 290 U.
S. 158,
290 U. S. 161.
Before the loan was made, the pictures had an actual situs in New
York, so as to be within the taxing power of that state, though it
cannot be said that they were there permanently located in the
sense of that phrase when used in respect of land, buildings, or
other items of fixed real property. The location of the portraits
in Pennsylvania was not merely transient, transitory, or temporary,
but it was fixed in an established abiding place in which they
remained for a long time. Undoubtedly they became subject to the
taxing power of the state.
Cf. Brown v. Houston,
114 U. S. 622,
114 U. S.
632-633;
Pittsburgh & Southern Coal Co. v.
Bates, 156 U. S. 577,
156 U. S. 589;
Kelley v. Rhoads, 188 U. S. 1,
188 U. S. 7;
General Oil Co. v. Crain, 209 U.
S. 211,
209 U. S. 230.
By sending them into Pennsylvania and by his omission to have them
returned to New York and his lack of definite intention ever so to
do, Clarke failed to
Page 293 U. S. 121
maintain an actual situs in New York, and created one for them
in Pennsylvania. The principle applied in
Frick v.
Pennsylvania, supra, 268 U. S.
490-494, and in
Blodgett v. Silberman,
277 U. S. 1,
277 U. S. 18,
governs this case.
Affirmed.
* Section 1 of the Act of June 20, 1919, P.L. 521, as last
amended by the Act of June 22, 1931, P.L. 690, 72 PS § 2301,
provides in part as follows:
"Section 1. Be it enacted, etc., That a tax shall be, and is
hereby, imposed upon the transfer of any property, real or
personal, or of any interest therein or income therefrom in trust
or otherwise, to persons or corporations in the following
cases:"
"
* * * *"
"(b) When the transfer is by will or intestate laws of real
property within this Commonwealth, or of goods, wares, or
merchandise within this Commonwealth, or of shares of stock of
corporations of this Commonwealth or of national banking
associations located in this Commonwealth, and the decedent was a
nonresident of the Commonwealth at the time of his death."