US SUPREME COURT DECISIONS

The right to take property by will or descent is derived from and regulated by municipal law; and, in assessing a tax upon such right or privilege, the state may lawfully measure or fix the amount of the tax by referring to the value of the property passing, and the incidental fact that such property is composed in whole or in part of federal securities, does not invalidate the state tax or the law under which it is imposed.

The relation of the individual citizen and resident to the state in which he resides is such that his right, as the owner of property, to direct its descent by will or permit its descent to be regulated by statute, and his right as legatee, devisee or heir to receive the property of his testator or ancestor, are rights derived from and regulated by the state, and no sound distinction can be drawn between the power of the state in imposing taxes upon franchises of corporations, composed of individual persons, and in imposing taxes upon the right or privilege of individuals to avail themselves of the right to grant and to receive property under the statutes regulating the descent of the property of decedents.

Joseph Plummer, a citizen and resident of New York, died October 28, 1898, leaving a last will whereby he bequeathed to Harry Plummer, his executor, $40,000 in United States bonds, issued under the Funding Act of 1870, in trust, to hold the same during the lifetime of Ella Plummer Brown, daughter of the testator, and to pay the income thereof to her during her life, and at her death to divide the same between and amongst her issue then living.

The value of this life interest was computed by the appraisers at the sum of $16,120, and a tax of $161.20 was imposed thereon by the Surrogate of the County of New York. From this appraisal and the order imposing the tax, an appeal was taken to the Surrogate's Court of the County and State of New York, where the following stipulation was filed:

"It is stipulated and agreed by and between the attorneys for the respective parties to the above-entitled proceedings that

Page 178 U. S. 116

the forty thousand dollars in amount at par of bonds of the United States of America, of which the said Joseph Plummer died possessed, and upon the interest in which of Ella Plummer Brown a tax of $161.20 was fixed, assessed, and determined by the order appealed from consist of four percent bonds issued in the year 1877 and due in the year 1907, under and by virtue of and pursuant to the statute of the United States, passed July 14, 1870, entitled 'An Act to Authorize the Refunding of the National Debt,' which authorized the Secretary of the Treasury, among other things, to issue various classes of bonds in the sums therein mentioned, including"

"a sum or sums not exceeding in the aggregate one thousand million dollars of like bonds, . . . payable at the pleasure of the United States after thirty years from the date of their issue, and bearing interest at the rate of four percent per annum; all of which said several classes of bonds and the interest thereon shall be exempt from the payment of all taxes or duties of the United States, as well as from taxation in any form by or under state, municipal, or local authority, and the said bonds shall have set forth and expressed upon their face the above-specified conditions,"

"and that, pursuant to said statute, there is set forth on the face of each of said bonds the following clause, that is to say:"

"The principal and interest are exempt from the payment of all taxes or duties of the United States, as well as from taxation in any form by or under state, municipal, or local authority."

On December 22, 1899, the surrogate's court affirmed the appraisal and the order imposing a tax. Thereupon Harry Plummer, executor, appealed to the appellate division of the Supreme Court of the State of New York, which court, on January 5, 1900, affirmed the order of the surrogate and the decree of the surrogate's court. From this decree of the appellate division of the supreme court an appeal was taken to the Court of Appeals of the State of New York, where, on January 8, 1900, the proceedings and order of the surrogate and the decree of the appellate division were affirmed.

In the notice of appeal to the surrogate's court and in that of the appeal to the Court of Appeals, the grounds of appeal were stated to be the invalidity of the statute of New York purporting chanrobles.com-red

Page 178 U. S. 117

to impose a tax upon a transfer by legacy of bonds of the United States, and the invalidity of the statute of the State of New York and of the authority exercised thereunder by the appraiser and the surrogate, insofar as United States bonds were concerned. And the appellant specially set up and claimed a title, right, privilege, and immunity under the Constitution of the United States, and under the statute of the United States in respect to the exemption of said bonds from state taxation in any form.

On January 9, 1900, a writ of error was sued out from this Court. sued out from this Court.