Pierce Butler

“ The fact that each son was liable to be divested of the remainder by his own death before that of the survivor of the grantors does not render the succession incomplete. The vesting of actual possession and enjoyment depended upon an event which must inevitably happen by the efflux of time, and nothing but his failure to survive the settlors could prevent it. Blanchard v. Blanchard, supra; Moore v. Lyons, 25 Wend. (N. Y.) 119, 144. Succession is effected as completely by a transfer of a life estate to one and remainder over to another as by a transfer in fee. ”

“ Excises laid in respect of the privilege of transmitting property rights at death, and those laid on the correlative privilege of acquiring the same rights, are common. The phrases 'transfer,' 'estate,' and 'succession' taxes, and 'death duties,' are somewhat indiscriminately used to designate the two wholly different forms of tax. It will tend to clarity to employ the more usual phraseology and refer hereafter to the excise on the privilege of transmission as a transfer tax, and that on the privilege of reception as a succession tax. ”

“ Section 127 provided that 'every past or future disposition of real estate by will, deed, or laws of descent, by reason whereof any person shall become beneficially entitled, in possession or expectancy, to any real estate, of the income thereof, upon the death of any person dying after the passing of this act,' should constitute the person so taking a successor and make him liable to a tax. ”

“ Prior to its enactment, a father conveyed property to trustees to pay the income to his daughter for life, with remainder to her issue in fee, or, in default of issue, to her heirs in fee, and gave her power by will to appoint the remainder among her issue or heirs is such manner and proportions as she might determine. She died in 1902, and by her will exercised the power. The tax law deemed such appointment a transfer, and made it taxable. It was attacked as repugnant to the due process clause of the Fourteenth Amendment and the contract clause. ”

“ The power of taxation is a fundamental and imperious necessity of all government, not to be restricted by mere legal fictions.Whe ther that power has been properly exercised in the present instance must be determined by the actual results brought about by the death, rather than by a consideration of the artificial rules which delimit the title, rights, and powers of tenants by the entirety at common law. ”

“ An act of 1897 imposed a succession tax, and under its provisions the authorities sought to collect from the appointees under the daugher's will. The argument made on behalf of the beneficiaries was that the gift was completed when Astor made his deeds. It will be noted that the remainders were in that case vested, subject to be divested by the daughter's exercise of the power. The argument was strongly pressed that, in the case of a power of appointment, title passes under the creating instrument, and does not pass from the donee by virtue of his act of appointment. ”

“ Testator's daughter was entitled to the income of the trust for life, and on her death the principal was to be paid to her children. It was held that no tax was due until the termination of the life trust, for until then the children had neither possession nor enjoyment. ”

“ The court held that no case had been made for the reformation of the deed, and refused relief. The trust property remained in the control and under the administration of the trustees. Coolidge v. Loring, 235 Mass. 220, 126 N. E. 276.
The appellants, nevertheless, assert that, while the children may have required the state's aid at the time of the delivery of the deed of trust, they never again had occasion to rely on the state's assistance; that the transfer to and into the beneficiaries was then complete; that they needed to do nothing more to become possessed of and enjoy their property ”

“ The recent case of Saltonstall v. Saltonstall, 276 U.S. 260, 48 S.C.t. 225, 72 L. Ed. 565, furnishes a good illustration of incomplete succession. There the remainder was liable at any time during the settlor's life to be divested through the exertion of the power of alteration and revocation that was reserved in the instrument creating the trust. The decision sustaining a transfer tax went upon the ground that 'the gift taxed is * * * one which never passed to the beneficiaries beyond recall until the death of the donor. ”

“ That power is not an interest in the property which can be transferred to another, or sold on execution, or devised by will. * * * Nor is the power a chose in action.'
The reasoning in the Reinecke Case shows that such an argument would have been of no avail. ”

“ The power of taxation overrides any agreement of an employee to serve for a specific sum.'
With respect to a tax upon income, it was said in Murray v. Charleston, 96 U.S. 432, 446, 21 L. Ed. 760:
'A tax on income derived from contracts, if it does not prevent the receipt of the income, cannot be said to vary or lessen the debtor's obligation imposed by the contracts.'
In Clement National Bank v. Vermont, 231 U.S. 120, 34 S.C.t. 31, 38, 58 L. Ed. ”

“ There is, in this aspect, no logical distinction between the two kinds of excise.
In Chase National Bank v. United States, 278 U.S. 327, 49 S.C.t. 126, 129, 73 L. Ed. 405, 63 A. L. R. 388, where the beneficiaries' interests were admittedly vested, the Court reiterated the principle stated in Saltonstall v. Saltonstall, that the test of constitutionality is the incidence of the tax on the shifting of economic benefit, and not on the passage of mere technical legal title. ”

“ Section 1. 'All property within the jurisdiction of the commonwealth * * * which shall pass by * * * deed, grant or gift, except in cases of a bona fide purchase for full consideration in money or money's worth * * * made or intended to take effect in possession or enjoyment after his (grantor's) death * * * to any person, absolutely or in trust * * * shall be subject to a tax. ”

“ Northern Trust Co., 278 U.S. 339, 49 S.C.t. 123, 125, 73 L. Ed. 410, 66 A. L. R. 397, a testator who died in 1922 had, in the period between 1903 and 1919, while not in contemplation of death, executed seven trust indentures. Two of these provided that the income should be paid to the settlor for life; and, after his death, to named persons, with remainders over. These deeds reserved a power of revocation to the settlor alone. ”

“ State v. Probate Court, 102 Minn. 268, 113 N. W. 888, is not only distinguishable on its facts, as later held by the same court (State v. Brooks, 232 N. W. 331, 334) , but the constitutional question here raised was not discussed.
In a well-considered case, involving precisely the same question as Cahen v. Brewster, supra, the tax was sustained. Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39 . R . A. 170.
It cannot, therefore, be said, as appellants contend, that there is any considerable body of state decisions in their favor. ”

“ Slocum, 264 U.S. 61, 62, 44 S.C.t. 293, 68 L. Ed. 564. The other is laid on the right to become beneficially entitled to property on the death of its former owner. Keeney v. Comptroller of State of New York, 222 U.S. 525, 533, 32 S.C.t. 105, 56 L. Ed. 299, 38 L. R. A. (N. S.) 1139; Nichols v. Coolidge, 274 U.S. at page 541, 47 S.C.t. 710, 71 L. Ed. 1184, 52 A. L. R. 1081.
The latter type of excise has existed in Massachusetts for years, and the courts of that commonwealth have consistently construed the statutes as they did in this case. ”