Sometimes the case is presented of stock in a foreign corporation, kept or deposited within the state, but owned by a nonresident. When the question of the taxability of such stock first came before the New York court of appeals, it was affirmed that the legal situs of that species of property represented by certificates of corporate stock is where the corporation exists or where the shareholder has his domicile, and hence that stocks and bonds of a foreign corporation, belonging to a nonresident testator and at the time of his death deposited in New York, were not subject to the inheritance tax of that state." But this is no longer the law in New York, for it has since been decided that where a nonresident placed stock in a foreign corporation with a New York trust company to be sold, and after the sale allowed the proceeds to remain in the hands of this company under an agreement that it should hold the fund in trust, paying interest thereon, and deliver the fund to him on two days' notice, such property was within the state and subject to the transfer tax upon his death."

property, but evidences of the rights of the holder in the property, of the corporation situated in the foreign state.

75 Estate of James, 144 N. Y. 6, 38 N. E. 961. This decision was followed in Matter of Bishop, 82 App. Div. 112, 81 N. Y. Supp. 474, where it is held that, as stocks in a foreign corporation owned by a nonresident are not taxable in New York, there is no reason why the executor should make inventories of them or exhibit the condition of the estate as respects them.

76 Estate of Blackstone, 69 App. Div. 127, 74 N. Y. Supp. 508, affirmed, 171 N. Y. 682, 64 N. E. 1118, 188 U. S. 206, 47 L. Ed. 439, 23 Sup. Ct. Rep. 277.

17

§ 195.

Under Treaty With Italy-"Most Favored Nation" Clause.

§ 196. Under Treaty With Spain.

§ 197. Under Treaty With Norway and Sweden.

§ 190. In Absence of Treaty Regulations.-Between the United States and some of the nations of the world are treaty provisions affecting, in some degree, the transmission of property situated in this country to alien heirs, devisees, and legatees, and the taxation of the same. In the absence of any treaty restrictions, however, it is clear that a state, in the exercise of its power to regulate the manner and terms upon which property, real or personal, within its dominion shall be transmitted by will or succession to aliens, may impose an inheritance tax on such transmissions. There can be no valid objection to such a tax, whether imposed upon citizens and alicas alike or upon aliens exclusively. This was determined, in the case of an early Louisiana statute, by the supreme court of that state and also by the supreme court of the United States.1

1 Section 24, ante. There is nothing in the Louisiana act of 1894 making the payment of the succession or inheritance tax by foreigners a condition precedent to a right of inheritance; the law permits the foreigner to inherit, but, having inherited, charges him with the tax: Succession of Sala, 50 La. Ann. 1099, 24 South. 674.

An alien who has claimed the benefit of a devise, and continues to enjoy its use, is estopped to set up alienage as a ground for recovering back the tax paid on the succession: Scholey v. Rew, 90 U. S. (23 Wall.) 331, 23 L. Ed. 99.

A state is entitled to the tax imposed upon legacies to aliens, although the statute imposing it is, after the death of the testator, repealed. But such statute is, unless the intention of the legislature clearly appears otherwise, prospective merely, and does not apply to the estate of a decedent who died before its enactment. Likewise, a treaty, conflicting to some extent with the statute, is not operative as to an estate whose owner died prior to the making of the treaty.*

§ 191. Under Treaties, in General.-It seems to be conceded that the acquisition of property in this country by aliens is, to some extent, a proper subject for treaty regulation; and that when the United States has entered into a treaty with another nation, according to citizens of the latter privileges enjoyed by citizens of the former in the matter of acquiring, holding and transmitting property, and providing that they shall not be required to pay inheritance or succession taxes which citizens of the United States are not compelled. to pay, the treaty will be regarded as the supreme law, and state statutes conflicting with it should yield." Some treaties are express and clear on the question of inheritance taxation; others leave room for interpretation and conjecture."

§ 192. Under Treaty With France. The treaty of 1853 between the United States and France declares that Frenchmen shall not be subjected to inheritance

2 Arnaud v. His Executor, 3 La. 336; Quessart v. Canouge, 3 La. 560.

3 Succession of Deyraud, 9 Rob. (La.) 357; Succession of Oyon, 6 Rob. (La.) 504, 41 Am. Dec. 274.

Prevost v. Greneaux, 60 U. S. (19 How.) 1, 15 L. Ed. 572; Succession of Schaffer, 13 La. Ann. 113.

5 See succeeding paragraphs of this chapter.

• Extracts from various treaties are set forth in Succession of Rixner, 48 La. Ann. 552, 32 L. R. A. 177, 19 South. 597.

taxes different from those paid by citizens of the United States, or to taxes which shall not be equally imposed. Since the adoption of that treaty, the Louisiana statute imposing a succession on aliens exclusively has been, as to citizens of France, inoperative. The treaty, it was said in an early decision, must be obeyed as the supreme law. The latest utterance of the Louisiana court on the question is this:

"While the legislature of this state may have the right of prohibiting Frenchmen from possessing personal or real property by the same title and in the same manner as citizens of the United States, it has not yet thought proper to exercise that right. On the contrary, it has permitted them, up to the present time, in that respect, to stand on the same plane with our own citizens. Occupying that station, the provisions of the treaty with France declare that in no case shall they be subjected to taxes, on transfer, inheritance or any other, different from those paid by our own citizens themselves, or to taxes which shall not be equally imposed."'"

This treaty with France had no retrospective operation so as to prevent the state of Louisiana from enforcing a succession tax against a citizen of France who claimed as heir of a decedent who died prior to the time when the treaty was made. The treaty did not go into effect until August 11, 1853, and hence had no effect upon the estate of one who died July 22, 1853.10

§ 193. Under Treaty With Bavaria.-The Louisiana court has given the same effect to a similar treaty 7 Succession of Dufour, 10 La. Ann. 391; Succession of Amat, 18 La. Ann. 403; State v. Poydros, 9 La. Ann. 165.

8 Succession of Rabasse, 49 La. Ann. 1405, 22 South. 767.

9 Prevost v. Greneaux, 60 U. S. (19 How.) 1, 15 L. Ed. 572, affirming 12 La. Ann. 577.

10 Succession of Schaffer, 13 La. Ann. 113.

with Bavaria, the consular convention of 1845 entered into between United States and that country, and has held that subjects of Bavaria, like citizens of France, are exempt from the ten per cent tax imposed by the Louisiana statute on successions going to aliens."

§ 194. Under Treaty With Wurttemberg. The Louisiana statute which, to use its exact language, provides that "each and every person, not being domiciliated in this state, and not being a citizen of any other state or territory in the Union, shall pay a tax of ten per cent on all sums actually received from a succession of a deceased person,' came before the supreme court of the United States in the case of a subject of Wurttemberg, and it was pointed out that the statute did not make any discrimination between citizens of the state and aliens in the same circumstances, a citizen of Louisiana domiciled abroad being subject to the tax. It was further decided that the statute did not conflict with the provision in the treaty with Wurttemberg that "the citizens or subjects of each of the contracting parties shall have power to dispose of their personal property within the states of the other, by testament, and their legatees, being citizens or subjects of the other contracting parties, shall succeed to their personal property, and may take possession thereof, paying such duties only as the inhabitants of the country, where said property lies, shall be liable to pay in like cases." The court was of the opinion that the treaty did not regulate the testamentary dispositions of citizens or subjects of the contracting powers, in reference to property within the country of their origin or citizenship.1

12

The application of the New York transfer tax to a subject of Wurttemberg has been before the supreme

11 Succession of Crusius, 19 La. Ann. 369.

12 Frederickson v. Louisiana, 64 U. S. (23 How.) 445, 16 L. Ed. 577.