US SUPREME COURT DECISIONS

Congress is bound to express its intention to tax in clear and unambiguous language, and a liberal construction should be given to words of exception confining the operation of the duty.

The war tax law of 1898 imposing a tax upon legacies or distributive shares arising from personal property passing "from any person possessed of such property, either by will or by the intestate laws of any state or Territory," does not apply to the intangible personal property in this country, of an alien domiciled abroad, whose property passed to his son, also an alien domiciled abroad, partly by will and partly by the intestate laws of such foreign country.

The act does not make the duty payable, when the person possessed of such property dies testate, if it would not be payable, if such person bad died intestate, and the words "passing by will" are limited to wills executed in a state or territory under whose laws the property would pass, if the owner had died intestate.

This case came up upon certain questions of law arising in an action brought in the Circuit Court for the Southern District of New York by Martinez, as ancillary administrator with the will annexed of the estate of Salvador Elizalde, against the collector of internal revenue, for the refund of an inheritance tax paid to the defendant upon certain personal property in the City of New York.

The facts out of which the questions arose are as follows:

Salvador Elizalde, a nonresident alien, a subject of the King of Spain, who had never resided within the United States, died in Paris, France, on April 27, 1899, leaving a will in the Spanish language, executed in Paris, in the year 1891, pursuant to the laws of Spain. This will was filed and protocolized in the office of the Spanish counsel in Paris, and thereby, under the laws of Spain and the consular convention or treaty between Spain and France, Arturo Elizalde, the sole legatee under said will, became entitled to the possession and administration of all the chanrobles.com-red

Page 184 U. S. 579

personal property of the decedent. Said Arturo Elizalde is the only son and sole next of kin of the decedent, and is a nonresident alien and a Spanish subject. He has resided all his life in Spain and France, and has never resided in the United States. Said will purports to give all of the personal property of the decedent to his said son, but, by the laws of Spain, only one-third of the property passed by the will, and the remaining two-thirds passed to said son by and under the Spanish intestate law.

The decedent left certain federal, municipal, and corporate bonds, of the par value of $225,400, in the custody of his agents in the City of New York, and they were within the third collection district of New York at the date of his death.

After the filing of said will in Paris, Arturo Elizalde entered upon the administration of the decedent's personal estate, and appointed the defendant in error, Miguel R. Martinez, his attorney for the purpose of receiving ancillary letters of administration with the will annexed in the State of New York, and such letters were issued to him by the surrogate of New York county. After receiving such letters, said Martinez took possession of said bonds.

The United States Commissioner of Internal Revenue, under the alleged authority of the twenty-ninth and thirtieth sections of the Act of Congress of June 13, 1898, entitled "An Act to Provide Ways and Means to Meet War Expenditures and for Other Purposes," assessed an internal revenue tax of $4,293.76 upon a legacy and distributive share arising from personal property in the hands of the administrator, defendant in error, who paid said tax to United States collector of internal revenue for the Third District of New York, plaintiff in error, under protest and upon compulsion of the collector's threat of distraint and sale, and made the statutory application for its refund to the Commissioner of Internal Revenue, who rejected the application. The administrator then brought this action in the Circuit Court of the United States for the Southern District of New York against the collector to recover the amount of the tax.

The collector demurred; the demurrer was overruled, and a chanrobles.com-red

Page 184 U. S. 580

final judgment entered against the collector for the amount claimed, with interest and costs. The collector then brought the action into the circuit court of appeals, which certified to this Court the following questions of law arising out of the foregoing facts:

"1. Is any tax or duty imposed by the twenty-ninth and thirtieth sections of the Act of Congress of June 13, 1898, entitled 'An Act to Provide Ways and Means to Meet War Expenditures and for Other Purposes,' upon the passing of any legacy arising out of the personal property of a nonresident alien who has never resided or had a domicil within the United States, and who dies without the United States in the year 1899, leaving a will made and executed at his foreign domicil, pursuant to the laws thereof, by which he gives all his property to a nonresident alien legatee, and who leaves certain personal property within the State of New York exceeding $10,000 in value?"

"2. Is any tax or duty imposed by the twenty-ninth and thirtieth sections of the Act of Congress of June 13, 1898, entitled 'An Act to Provide Ways and Means to Meet War Expenditures and for Other Purposes,' upon the passing of any distributive share arising out of the personal property of a nonresident alien who has never resided or had a domicil within the United States, and who dies without the United States, in the year 1899, intestate, and by the law of his foreign domicil all of his personal property passes to his son, also a nonresident alien, and who leaves certain personal property within the State of New York, exceeding $10,000 in value?"