tion, which intention, unless clearly expressed, may not readily be inferred in view of the varying nature of the property, the character of the gift as specific or otherwise, and other evidentiary matters proper to consider.

8

§ 209. Executors or Administrators. For the convenience of the state, and in order to insure certainty of payment, the executor or administrator is required by most statutes to deduct the inheritance tax from legacies or distributive shares, or collect it from the legatees or distributees, before delivering to them their legacies or distributive shares in the estate; and, if he fails to do so, he himself becomes liable for the taxes thus left unpaid or uncollected. The personal representative pays the tax, not on account of the estate, but on account of the legatee or distributee, whom the government is unwilling solely to trust.

§ 210. Effect of Settlement of Accounts and Distribution. Before the final account of an executor or administrator can be said to show that the estate is in condition to be closed, it should appear therefrom that the inheritance tax has been paid.10 Distribution of the estate cannot properly be made until the tax is paid. So long as the tax remains unpaid, the liability

Kingsbury v. Bazeley, 75 N. H. 13, 139 Am. St. Rep. 664, 20 Ann. Cas. 1355, 70 Atl. 916.

9 McMahon v. Jones, 14 Abb. N. C. 406; Estate of Vanderbilt, 2 Con. 319, 10 N. Y. Supp. 239; Estate of Wolfe, 66 Hun, 389, 29 Abb. N. C. 340, 21 N. Y. Supp. 515, 522; Estate of Hackett, 14 Misc. Rep. 282, 35 N. Y. Supp. 1051; Jackson v. Tailer, 41 Misc. Rep. 36, 83 N. Y. Supp. 567; Estate of Wolfe, 89 App. Div. 349, 85 N. Y. Supp. 949, affirmed, 179 N. Y. 599, 72 N. E. 1152; Hunter v. Husted, 45 N. C. 141.

An executor is not liable, as such, for a collateral tax to the state upon a devise of land to himself, though he is liable as an individual: State v. Brevard, 62 N. C. 141.

10 Estate or Lauder, 6 Cal. App. 744, 93 Pac. 202; Becker v. Nye, 8 Cal. App. 129, 96 Pac. 333.

of the personal representative and the distributees is not affected by the action of the probate court in allowing the accounts of such representative and ordering distribution of the estate. Liability for the tax cannot be evaded, and the rights of the state to its revenue ignored, by procuring, in advance of the payment of the tax, the settlement of the final account of the executor or administrator and the distribution of the estate to the heirs, devisees, and legatees. The fact that the probate court has jurisdiction and the parties act in good faith is immaterial. The state is entitled to insist that the estate be settled according to law.11

§ 211. Transferees or Assignees.-The inheritance tax is not defeated by a transfer of the property, but the transferee is not liable personally beyond the amount of the property coming into his hands.1 A conveyance or transfer to take effect on the death of the grantor, made with intent to evade the tax, is not invalid for that reason, nor is the tax defeated,

11 Montgomery v. Gilbertson, 134 Iowa, 291, 10 L. R. A., N. S., 986, 111 N. W. 964; Attorney General v. Stone, 209 Mass. 186, 95 N. E. 395; Attorney General v. Rafferty, 209 Mass. 321, 95 N. E. 747; Estate of Cumming, 142 App. Div. 377, 127 N. Y. Supp. 109.

In the above Iowa case it is held that the turning over, without authority of the court, by executors, within a few days after their appointment, without any publication of notice of such appointment, to the father of minor legatees, who had no authority to receive them, legacies belonging to the minors, does not prevent the operation upon them of an inheritance tax under a law which had, prior to that time, been declared invalid, but which was amended so as to validate it before the distribution was approved by the court.

12 Estate of Bushnell, 73 App. Div. 325, 77 N. Y. Supp. 4, affirmed, 172 N. Y. 649, 65 N. E. 1115.

A purchaser of land, upon which the succession tax imposed by the act of Congress of 1864 was due, incurred no personal liability; but he took title subject to the lien of the tax: Wilhelmi v. Wade, 65 Mo. 39.

since the fund or property is liable to taxation in the hands of the grantee, donee, or transferee.1

The succession tax is measured by the legal relation which the legatee bears to the testator, and is not affected by the relation which the assignee of legatee bears to him.1

§ 212. On Transfer of Stocks and Deposits.-The statutes usually guard against evasion of the inheritance tax on certain stocks, securities, and contents of safe deposit boxes, by providing that the transfer or delivery thereof shall not be made without giving notice to the fiscal officers of the state or making provision for payment of the tax; and, in case the transfer or delivery is made without complying with the law, then the persons responsible for the violation of the law are liable for the tax.

13 State Street Trust Co. v. Stevens, 209 Mass. 373, 95 N. E. 851. 14 Estate of Cook, 187 N. Y. 253, 79 N. E. 991.

CHAPTER XIV.

LIEN OF TAX.

§ 215. Statutory Provisions, in General.

§ 216. Scope and Extent of Lien.

§ 217. Priority of Liens.

§ 218. Judicial Sale or Equitable Conversion of Property.

§ 215. Statutory Provisions, in General.-For the better protection of the government, inheritance taxes are made a lien upon the property transferred or transmitted. The statutory provisions of the several states on this point vary considerably, as might be expected, but the recent California statute is perhaps typical. It reads thus: "Such taxes shall be and remain a lien upon the property passed or transferred until paid, and the person to whom the property passes or is transferred, and all administrators, executors, and trustees of every estate so transferred or passed, shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed; provided, that unless sued for within five years after they are due and legally demandable, such taxes shall cease to be a lien as against any bona fide purchaser of real property; and provided that no such lien shall cease within five years from the date of the passage of this act."

§ 216. Scope and Extent of Lien.-The scope of the lien was recently before the supreme court of New York, when it was held that a purchaser of real property was not justified in rejecting the title solely because the transfer tax was a lien thereon. The property contracted to be sold was a part of the general estate of the testator, and was not specifically devised,

1 See California statute, post. As to the lien of the tax imposed by the acts of Congress of 1864 and 1874, see United States v. Hazard, 8 Fed. 380; United States v. Truck, 27 Fed. 541.

nor was it expressly charged with the payment of any legacy. The sale was for the purpose of marshaling assets to pay debts, expenses of the estate, and distribution of legacies according to the terms of the will. "It is true," said the court, "that section 224 of the tax law provides that every such tax shall be a lien upon the property transferred until paid, and makes both the person to whom the property is transferred and the executor or administrator or trustee through whose hands it comes personally liable for its payment. The legislature could not have intended by this language to make the transfer tax a lien upon the specific property of the decedent which would come to the hands of the executor or administrator for administration. Manifestly the lien provided by this section attaches only to the fund to be distributed, or the particular property when it passes by specific bequest or devise. The legislature must have realized that it was necessary for executors and administrators to marshal the assets of their estates for the purpose of paying debts and expenses, and to obtain funds for the payment of legacies. If a lien were to attach on property as it came to their hands, it would be impressed upon personalty as well as realty, and it would be impossible for them to sell bonds or stocks or personal property free of lien, as well as to transfer any real property directed by the will to be converted into personalty. An intent thus to hamper the marshaling of the assets of the estate cannot be inferred.

"The statute is amply satisfied in view of the fact that the tax is upon the right to succession, and not upon the property of the decedent, by holding that the lien attaches upon the fund realized after the assets of the estate have been marshaled or the property is ready for distribution in kind. This interpretation is borne out by other provisions of the section, which direct an executor or administrator to deduct the tax