gold and jewels which could be easily carried by the owner from place to place or secreted in spots known only to himself. In modern times since the great increase in amount and variety of personal property not immediately connected with the person of the owner, the rule has yielded more and more to the lex situs. the law of the place where the property is kept and used.

v. Pennsylvania, 141 U. S. 18, 35 L. ed. 613, 3 Inters. Com. Rep. 595.

Wherever convenience appears to demand that personalty be situated there it is deemed to be situated.

Story, Conf. L. § 380.

The bonds and stocks of the domestic railroad corporations standing in the name of the decedent and owned by him at the time of his death were "property within the state."

Such corporations are the creatures of statute. They can have no legal existence out of the boundaries of the sovereignty by which they are created; they must have their domicil and residence in the place of their creation. Ang. & A. Corp. 11th ed. § 104, and cases

Green v. Van Buskirk, 72 U. S. 5 Wall. 307, 18 L. ed. 599, 74 U. S. 7 Wall. 139, 19 L. ed. 109: Hervey v. Rhode Island Locomotice Works, 93 U. S. 664, 23 L. ed. 1003; Harkness v. Russell, 118 U. S. 663, 30 L. ed. 285; Walworth v. Harris, 129 U. S. 355, 32 L. ed. 712; Story, Conf. L. § 550; Whart. Conf. L. §§ 297-311. For the purposes of taxation personal prop-cited; Plimpton v. Bigelow, 93 N. Y. 598. erty may be separated from its owner, and he And their existence, powers, capacities, and may be taxed on its account at the place where mode of exercising them must depend upon it is, although not the place of his own dom-the law of their creation and upon their obicil, and even if he is not a citizen of the state which imposes the tax.

Lane County v. Oregon, 74 U. S. 7 Wall. 71, 19 L. ed. 101; Cleveland, P. & A. R. Co. v. Pennsylvania ("State Tar on Foreign-held Bonds"), 82 U. S. 15 Wall. 300, 21 L. ed. 179; Union P. R. Co. v. Peniston, 85 U. S. 18 Wall. 529, 21 L. ed. 787, 791: Tappan v. Merchants' Nat. Bank, 86 U. S. 19 Wall. 490, 22 L. ed. 189; State Railroad Tax Cases, 92 U. S. 575, 23 L. ed. 663; Brown v. Houston, 114 C. S. 622. 29 L. ed. 257; Coe v. Errol, 116 U. S. 517, 29 L. ed. 715; Marye v. Baltimore & O. R. Co. 127 U. S. 117, 32 L. ed. 94; People, Jefferson, v. Smith, 88 N. Y. 580; People, Westbrook, v. Trustees of Ogdensburgh, 48′ N. Y. 390; Williams v. Wayne County Supers. 78 N. Y. 561; Re Boardman v. Tompkins County Supers. 85 N. Y. 359; Re Romaine's Estate, 127 N. Y. 80, 12 L. R. A. 401; People, Hoyt, v. Conmissioners of Taxes, 23 N. Y. 226.

The court may give the shares of stock held by individual stockholders a special or particular situs for the purposes of taxation, and may provide special modes for the collection of the tax levied thereon; and it is often convenient, as well as perfectly just, to take that course.

jects.

Ang. & A. Corp. 11th ed. 111, and cases

cited.

Hence the holdings of cwners of stock in such corporations, its transfer of ownership, the imposition of any tax thereon, the lien and payment of such tax, are all under the regulation of the legislature; for the corporations are its own creations, "whose rights and obligations it may limit, define, and control."

Re Prime's Estate, 136 N. Y. 360, 18 L. R. A. 713.

The physical presence of the paper writings representing registered bonds or certificates of stock was not necessary for the purposes of taxation.

Plimpton v. Bigelow, supra; Jermain v. Lake Shore & M. S. R. Co. 91 N. Y. 492; Burr v. Wilcox, 22 N. Y. 556; Re Enston's Will, 113 N. Y. 181, 3 L. R. A. 464; Cook, Stock & Stockholders, 3d ed. § 15.

The legislature has attached as a condition precedent for the privilege of succession to property within the state, of nonresidents, that the tax known as the transfer tax shall be paid-not on the property itself, but on the privilege; and the person in whom the estate of the nonCooley, Taxn. 2d ed. 23; American Coal Co. resident decedent vests, who comes to this state v. Allegany County Comrs. 59 Md. 185; Balti to secure possession of his property, comes here more v. Baltimore City Pass. R. Co. 57 Md. 31. possessed only of the legal title to the property, The fiction upon which the rule is based ex-less the tax; for eo instante at the moment of empting property of a nonresident decedents actually within the taxing state did not originally relate to questions of taxation but was based merely upon questions of comity be tween states or nations. It never had any application to creditors of the deceased in the state where the property actually was situated, and should not exist against a state tax which the citizen is compelled to pay.

the death of the decedent the state of New York "appropriates for its own use a portion of the property and only allows the balance to pass;" and the right of succession is not conferred by the laws of the state where the decedent resided and died except as to such balance.

491, 12 L. ed. 1169; Frederickson v. Louisiana, 64 U. S. 23 How. 447, 16 L. ed. 578; Wallace v. Myers, 38 Fed. Rep. 185, 4 L. R. A. 171; Pollock v. Farmers' Loan & T. Co. 157 U. S. 578, 39 L. ed. 818; State v. Dalrymple, 70 Md. 294, 3 L. R. A. 272.

Re Swift's Estate, 137 N. Y. 77, 18 L. R. A. 709; Re Merriam's Estate, 141 N. Y. 479; Re Hoffman's Estate, 143 N. Y. 329; Re Cullum's Thomson v. Advocate General, 12 Clark & F. Will, 145 N. Y. 593; Re Hamilton's Estate, 148 28; Bruce v. Bruce, 2 Bos. & P. 229, note; Cat-N. Y. 310; Mager v. Grima, 49 U. S. 8 How. lin v. Hull, 21 Vt. 158; People, Hoyt, v. Commissioners of Taxes, 23 N. Y. 232; Whart. Private International Law, 11-13, 297; Green v. Van Buskirk, 74 U. S. 7 Wall. 150, 19 L. ed. 113; Hervey v. Rhode Island Locomotive | Works, 93 U. S. 664, 23 L. ed. 1003; Lewis v. v. Woodfolk, 2 Baxt. 25: Doe, Birtichistle, v. Vardill, 5 Barn. & C. 438; Alvany v. Porcell, 2 Jones, Eq. 51; State v. Dalrymple, 70 Md. 294, 3 L. R. A. 272; Pullman's Palace Car Co. |

Mr. Howard Mansfield, for respondents: The facts must make an undoubted case of application of the act to the bonds and stocks

in question before the tax can be imposed as to either.

Re Enston's Will, 113 N. Y. 174, 3 L. R. A. 464: Re Swift's Estate, 137 N. Y. 77, 18 L. R. A. 709; Re James, 144 N. Y. 6.

There should be no question that the bonds are exempt from the tax.

The purpose of the act is plainly limited by the language employed to the property of a nonresident within the state at the time of his death, and ought not by any refinements of reasoning to be extended in scope.

Re James, supra.

Bonds of railroad corporations are property; but being debts are property in the hands of the holders only, and not property of the company.

Kirtland v. Hotchkiss, 100 U. S. 491, 25 L. ed. 558; Cleveland, P. & A. R. Co. v. Peniston ("State Tax on Foreign-held Bonds”), 82 U. S. 15 Wall. 300, 21 L. ed. 179; Re Swift's Estate, 137 N. Y. 85, 18 L. R. A. 709; Re James, 144 N. Y. 12; People, Manhattan R. Co., v. Barker, 146 N. Y. 304.

The prohibition in 9 of the act against the assignment or transfer by a foreign executor, administrator, or trustee of stock or obligations of a decedent is expressly limited to such stock or obligations as are "within this state" and "liable to any tax."

Re Enston's Will, 113 N. Y. 180, 3 L. R. A.464. Nor is there any sound legal theory on which the stocks can be consistently declared subject to the transfer tax.

The relations between the stockholder and the corporation give him no such legal position as that of a joint owner of its property.

Queen v. Arnaud, 9 Q. B. 806; Hyatt v. Allen, 56 N. Y. 553; Plimpton v. Bigelow, 93 N. Y. 592; Burrall v. Bushwick, R. Co. 75 N. Y. 216; Jermain v. Lake Shore & M. S. R. Co. 91 N. Y. 492.

Nor can the further theory be maintained that the property of a domestic corporation is necessarily within the jurisdiction of this state and has the protection of its laws and administration, since corporations formed under our laws may carry on their business and own their property wholly in other states or in foreign countries.

Gen. Corp. Law, 14.

The legal situs of the stocks of these domestic corporations owned by the resident decedent must, for purposes of taxation, be held to be where the shareholder had his domicil.

People, Jefferson, v. Smith, 88 N. Y. 576; People, Edison Electric Light Co., v. Campbell, 138 N. Y. 543, 20 L. R. A. 453; San Francisco v. Mackey, 22 Fed. Rep. 602; People, Hoyt, v. Commissioners of Taxes, 23 N. Y. 228.

Gray, J., delivered the opinion of the

court:

The decedent was domiciled in the state of Connecticut, where he died in 1893, leaving, by his will, his residuary estate to his two sons also residents of that state. A part of the residuary estate consisted in shares of the capital stock and in the bonds of corporations incorporated under the laws of this state, and which were in the testator's possession at his domicil. They had been handed over to the residuary legatees, prior to the institution by the comptroller of the city of New York of this proceeding to appraise them for the purposes of taxation under the transfer tax act (chap. 399, Laws 1892). It was held by the appellate division of the supreme court, reversing the decree of the surrogate's court in the county of New York, that the executors were not liable to pay a transfer tax upon the basis of the stocks and bonds in question. The claim of the comptroller is that, both by the terms of that act and by force of the statutory construction law of the state, and upon the theory that these bonds and shares represent interests in corporations incorporated under the laws of this state, they were, although not physically within the state, properly assessed for the purposes of such taxation. The act under which this tax was sought to be collected was passed in 1892 (Sess. Laws, chap. 399), and is known as the "Transfer Tax Act." By 1, a tax is imposed upon the transfer of any real or personal property of the value of $500 or over, in the following cases, ciz.: "When the transfer is by will or by the intestate laws of this state from a resident decedent; or when the transfer is by will or intestate law of property within the state and the decedent was a nonresident at the time of his death." The important words to be noticed in this section, which imposes the tax, are, in the case of a nonresident decedent,

property within the state." Their importance is evident, inasmuch as the attempt of the state to collect a tax, where the decedent was not subject to its jurisdiction, is limited to that which possesses the legal attributes and characteristics of property here. In that connection, reference may be made to 22 of the act, which defines the word "property," as used in the act, as meaning all property, or interest therein, "over which this state has any jurisdiction for the purposes of taxation." In the endeavor to ascertain the intention of the legis lature with respect to what should be assessable for the purposes of taxation as property under this act, we need go no further than the act itself, which, in imposing the tax, undertakes. in addition, to give a definition to property the transfer of which by will, or by the intestate The weight of authority within and without laws of the state, creates the liability to taxa the state is decisively against the application of tion. It seems unimportant to consider that the transfer tax law to stocks of a domestic section of the statutory construction law which corporation owned by a nonresident decedent. gives a definition to the term "personal propAlexander's Estate, 4 Pa. L. J. 448; Comerty" (Laws 1892, chap. 677, §4), if, indeed, monwealth's Appeal, 11 W. N. C. 492; Del Busto's Estate, 23 W. N. C. 111; Bacon's Estate, 3 Del. County Rep. 603; Coleman's Estate, 159 Pa. 231; Citizens' Nat. Bank v. Sharp, 53 Md. 531; People, Jefferson, v. Smith, supra; Re James's Estate, 144 N. Y. 12; Re Merriam's Estate, 141 N. Y. 479; Re Enston's Will, 113 . Y. 174, 3 L. R. A. 464.

applicable. The act contains within itself a complete system for the taxation of transfers of property in cases of testacy and of intestacy, and also controlling definitions for such words used in its sections as, in the judgment of the legislature, might seem to require definition. The section of the statutory construction act, in terms, is only applicable, as I think, to a

statute where its general object, or the context of the language construed, or other provisions of law, do not indicate that a different meaning is intended.

Y. 181. 3 L. R. A. 464: It is not a general but a special tax, reaching only to special cases and affecting only a special class of persons." And, as he also observed, in substance, Whatever may be argued in support of the there must be a clear warrant in the law for right to subject the bonds of domestic corpora- the imposition of the tax. In the Swift Case, tions to appraisement for taxation purposes 137 N. Y. 77, 18 L. R. A. 709, it was decided under this act, when physically within the that the personal property of a resident state, upon some theory that they are some decedent, wheresoever situate, within or withthing more than the evidences of a debt, and out the state, is subject to the tax. The act of constitute a peculiar and appreciable species of 1885 was under discussion, and the general property, within the recognition of the law as theory of the inheritance tax law was considwell as of the business community, such argu-ered; and it was held to be a fundamental rement is certainly unavailing in this case, where quirement that there should be jurisdiction the bonds themselves were at their owner's for over the subject taxed, or an actual dominion eign domicil. They did not represent "prop-over the subject of taxation at the time the tax erty within the state" in any conceivable sense. is imposed. In the Phipps Case, 77 Hun, 325, What property they represented consisted in the which was affirmed here upon the opinion of debt of their maker, and that species of prop- the general term (143 N. Y. 641), the question erty, unquestionably, must be considered to be, was whether the right to an unpaid legacy left as a chose in action, the holder's and owner's, to a nonresident decedent in the will of a resi and to be inseparable from his personalty.dent decedent was property within this state, The Supreme Court of the United States held in and, as such, assessable for purposes of taxathe Foreign-held Bonds Case, 82 U. S. 15 Wall. tion under the act of 1887. It was held that 300, 21 L. ed. 179, where the state of Pennsyl- it was not such property, upon the principle vania assumed to tax the interest payable upon that the residence of the debtor does not fix bonds issued by a Pennsylvania corporation, the situs of the debt, but the domicil of the secured by a mortgage upon its property, and creditor. It was there observed that a mere held by a nonresident, that the tax was in chose in action, a right to recover a sum of valid. It will be profitable to quote some of money, has never, as yet, been given the the language of the opinion in that case, the attribute of tangibility.' By the act of 1887 soundness of which has never been ques- (chap. 713), the legislature had amended the tioned: "But debts owing by corporations, inheritance tax law, as it existed under the act like debts owing by individuals, are not prop- of 1885, so as to impose a succession tax with erty of the debtors in any sense. They are ob- respect to the property of nonresident deceligations of the debtors, and only possess value dents, which should be within this state. In in the hands of the creditors. With them they the James Case, 144 N. Y. 6, we had occasion are property, and in their hands they may be to consider the operation of that act. taxed. To call debts property of the debtors Englishman, who died abroad, left property is simply to misuse terms. All the property deposited within this state, consisting in stocks there can be, in the nature of things, in debts and bonds of corporations of this and of other of corporations, belongs to the creditors, to states. The question was considered whether, whom they are payable, and follows their in view of these words in the act "which prop domicil, wherever that may be. Their debts erty shall be within this state," it was its incan have no locality separate from the parties tendment to reach, for purposes of taxation, to whom they are due. The principle might any personal property that was not within the be stated in many different ways, and supported state, either in fact or because of the domicil by citations from numerous adjudications, but here of its owner. We thought not, and that no number of authorities and no forms of ex-it would be highly improper to impute to the pression could add anything to its obvious truth, which is recognized upon its simple statement." It seems difficult to furnish an argument in support of the view that the debt owing to a creditor is the property which follows him everywhere, and not the written or printed obligation expressing the indebtedness, that is not presumed in the foregoing opinion. In our consideration of the question, we should not lose sight of the fact that the state, through the transfer tax act, is exerting its taxing power only over that as to which it had jurisdiction for the purposes of taxation; and we should not be confused, in that consideration, by statutes or decisions which bear upon the exercise of that power over residents within its territorial limits.

The Inheritance Tax Act," or, as it is known to-day, the "Transfer Tax Act,” imposes a tax upon the right of succession. Re Swift's Estate, 137 N. Y. 77, 18 L. R. A. 709; Re Merriam's Estate, 141 N. Y. 479; Re Hoff man's Estate, 143 N. Y. 329. It was said of it by Judge Andrews, in the Enston Case, 113 N. |

An

legislature an intention to tax that over which there was no jurisdiction. It is obvious that the state has no jurisdiction over a right of succession which accrues under the laws of the foreign state. That is something in which this state has no interest, and with which it is not concerned. The legal title to these bonds, or the debts they represent, vested in the personal representatives of the decedent by force of foreign laws. The decedent was a creditor to whom the obligors in the various bonds were indebted, the extent and terms of whose obligation were evidenced by those bonds. The legal situs of the indebtedness was at the creditor's domicil, and, as the actual situs of the bonds themselves was also there, upon no theory can it be held that the provisions of the transfer tax act could reach them in its operation. The logical result of the proposition which has been established, that the tax is upon the right of succession to property, is, in my opinion, to confine the operation of this law, where nonresidents' estates are concerned, to cases of property having a tangible and vis

ible existence, and being the actual subject of the ownership.

members, as shareholders, are subject to the operation of those laws, with respect to any limitation upon their property rights, and with respect to the right to assess their property interests for purposes of taxation.

It results from these views that the order appealed from must be reversed to the extent that it reversed the order of the surrogate affirming an assessment upon the estate of the decedent based upon an appraisal of the shares of stock of domestic corporations, and the determination of the surrogate in that respect is affirmed. In other respects the order appealed from is affirmed, and the matter is remitted to the surrogate's court, to be proceeded with in conformity with our opinion. Under the circumstances, no costs are awarded to either party.

Andrews, Ch. J., and Bartlett, Haight, and Martin, JJ., concur.

Vann, J., dissenting:

Henry Bronson, for many years a resident of New Haven, Connecticut, died in that city on the 26th of November, 1893, leaving a will, which was admitted to probate in the state of Connecticut, but was never proved or filed in the state of New York. By this will, after making some gifts to his grandchildren, he gave the bulk of his estate to his two sons, now his executors, both of whom are nonresidents of this state. At the time of his death he owned bonds of the value of $18,200, and stocks of the value of $437,393.25, all issued by corporations organized under the laws of the state of New York. Said securities, as written instruments, were not within this state when the decedent died, but were in the state of Connecticut, where he had his domicil. They had never been kept in the state of New York, either for safety or any other purpose; and, before the initiation of these proceedings, they had been formally transferred by the executors to themselves, as residuary legatees. Upon the report of the appraiser, who included both bonds and stocks in his appraisal, the surrogate decided that they were subject to a transfer tax, and made the usual order, which was affirmed by him on appeal; but his determination was reversed by the appellate division, and the case is now here upon appeal from their order of reversal.

But, with reference to the shares of capital stock owned by the decedent, I think we are compelled to differ with the appellate division. The attitude of a holder of shares of capital stock is quite other than that of a holder of bonds towards the corporation which issued them. While the bondholders are simply creditors, whose concern with the corporation is limited to the fulfilment of its particular obligation, the shareholders are persons who are interested in the operation of the corporate property and franchises, and their shares actually represent undivided interests in the corporate enterprise. The corporation has the legal title to all the properties acquired and appurtenant, but it holds them for the pecuniary benefit of those persons who hold the capital stock. They appoint the persons to manage its affairs. They have the right to share in surplus earnings, and, after dissolution, they have the right to have the assets reduced to money, and to have them ratably distributed. Each share represents a distinct interest in the whole of the corporate property. As said in Jermain v. Lake Shore & M. S. R. Co. 91 N. Y. 492, it "represents the interest which the shareholder has in the capital and net earnings of the corporation;" or, as Parke, B., put it, in Bradley v. Holdsworth, 3 Mees. & W., at page 422, it is a right to have a share of the net produce of all the property of the company." Corporate shares must be regarded as "property," within the broad meaning of that term. Certificates of stock, in the hands of their holder, represent the number of shares which the corporation acknowledges that he is entitled to. In legal contemplation, the property of the shareholder is either where the corporation exists or at his domicil, accordingly as it is considered to consist in his contractual rights, or in his proprietary interest in the corporation. In the case of bonds, they represent but a property in the debt, and that follows the creditor's person. Hence it cannot be said, if the property represented by a share of stock has its legal situs either where the corporation exists or at the holder's domicil, as we have said in the Enston and James Cases (Re Enston's Will, 113 N. Y. 181, 3 L. R. A. 464; Re James, 144 N. Y. 12), that the state is without jurisdiction over it for taxation purposes. As perTwo questions are presented for decision, sonalty, the legal situs does follow the person viz.: (1) Whether capital invested by a nonresof the owner; but the property is in his right ident, or by his assignor, in corporations orto share in the net produce, and, eventually, in ganized and doing business in this state, for the net residuum of the corporate assets, result- which certificates of stock in such corporations ing from liquidation. That right as a chose were issued to him, is subject to a succession in action must necessarily follow the share-tax under our laws, when such certificates, alholder's person; but that does not exclude the though standing in his name as registered on idea that the property as to which the right re- the books at the date of his death, were habitlates, and which is, in effect, a distinct inter- ually kept by him in the state where he resided; est in the corporate property, is not within the (2) whether capital lent to such corporations jurisdiction of the state for the purpose of as- by a nonresident, or his assignor, for which sessment upon its transfer through the opera bonds were issued to him, is taxable under tion of any law, or of the act of its owner. like circumstances. The attempt to tax a debt of the corporation to a nonresident of the state, as being property within the state, is one thing, and the imposition of a tax upon the transfer of any interest in or right to the corporate property itself is ther thing. The corporation is the creaof state laws, and those who become its

In order to determine these questions, it is necessary to construe certain sections of a statute passed in 1892, entitled "An Act in Relation to Taxable Transfers of Property." Laws 1892, chap. 399. The first legislation upon the subject in this state was in 1885, when an act was passed "to tax gifts, legacies, and collat

fer is by will or intestate law of property within the state, and the decedent was a nonresident of the state at the time of his death." Sec. 1. Two classes of cases are thus provided for: (1) The property of residents, pass

to where the property may be; (2) the property of nonresidents, passing under the laws of another state, when the property is within this state. What is meant by the phrase "prop

eral inheritances in certain cases." Laws 1885, be remedied, the difficulty of applying the chap. 483. This statute was so crude in struct- remedy, and the changes made in order to ure and doubtful in meaning as to cause much force a construction in harmony with the litigation, which led to its amendment by the growth of legislative purpose, may be of matelegislature, even before the first questions that rial aid in reaching the correct conclusion. arose had been passed upon by the courts. The object of the statute, as indicated by the Laws 1887, chap. 713; Re Enston's Will, 113 title, is no longer simply "to tax gifts, legacies, N. Y. 174, 3 L. R. A. 464; Re Romaine's Es- and collateral inheritances," but to bring under tate, 127 N. Y. 80, 12 L. R. A. 401. Other taxation all "taxable transfers of property.' amendments followed in quick succession This broad purpose pervades the entire act, as (Laws 1889, chap. 307; Laws 1889, chap. 409; | a careful reading of its provisions will show. Laws 1890, chap. 553; Laws 1891, chap. 215; The statute provides that, subject to certain Laws 1892, chap. 169), until finally, owing in exceptions, "a tax shall be . . imposed part to conservative construction by the upon the transfer of any property, real or percourts, and in part to the growth of public sen-sonal, or of any interest therein, or timent upon the subject, the statute was thor-income therefrom, when the transfer oughly revised, so as to meet the difficulties en- is by will or by the intestate laws of this state" countered in its enforcement, and the result of property of a resident, or "when the transwas the act now before us for consideration. That act, as we have already declared, "was passed with knowledge of our decisions and in view of our construction, and was obviously intended in some respects to compel on our part different conclusions." Re Hoffman's Es-ing under the laws of this state, without regard tate, 143 N. Y. 327, 331. The history of legislation upon the subject shows a constant advance in the grasp of the statute, as nearly every amendment reached out further and took in more, until at last the intention of the legis-erty within the state" is a question so difficult lation was limited only by its power, for its that we are unable to unite in declaring its command was to include all property or in- meaning, but are compelled to decide it by terest therein, whether situated within or the vote of a majority. The question, in without this state, over which this state has concrete form, is whether the stocks and bonds any jurisdiction for the purposes of taxation." under consideration, or the interests they repLaws 1892, chap. 399, § 22. This sweeping resent, are "property within the state." Light intention on the part of the legislature doubt is thrown upon the subject by 9, formerly less, had its origin in the fact that personal § 11, but radically changed, which provides property, as a general thing, when its great that "if a foreign executor, administrator, or value is taken into account, escapes taxation | trustee shall assign or transfer any stock or obduring the lifetime of its owner. Real estate, owing to its fixed location, presents a problem of slight difficulty to the legislator in his effort to provide means for the support of govern ment, for it cannot escape the view of either the assessor or collector, and the result is that stocks and obligations" as are not expressly it pays an undue proportion of the annual tax exempted, owing to the limited value of the levy. Personal property, however, especially entire estate and the close relationship to the dewhen it exists, practically, in such a form that, cedent of the persons to whom it passes. Sec. to the extent of millions of dollars, it can be 2. What did the legislature mean by "stock carried in one's pocket, has long perplexed the or obligations in this state standing in the name legislator and the statesman, owing to its adroit of the decedent?" This is the same question ness and success in avoiding taxation. In 1891 in another form as that previously asked, but the governor, in his annual message to the legis- the change from general to specific words of lature, made pointed allusions to the difficulty description in the statute has much significance. of reaching personal property, and recom- The same section commands depositaries, both mended such legislation as I am now about to corporate and personal, "holding securities or consider, in order that, as stated by him, "per- assets of a decedent,” not to “deliver or transsonal estate can, at least, be subjected to one fer the same to the executors, administrators, tax, although it may never have been able to or legal representatives of said decedent, unless be reached during the life of the decedent." notice of the time and place of the inDos Passos. Collateral Inheritance Taxes, 2d tended transfer" is given to the proper authored. § 5. It is evident from this that the exec-ities, and a failure to give the notice renders utive regarded the laws then existing as too narrow, and that he thought public policy required statutes of broader scope. The legislature, apparently, was of the same mind, for, not long after, the act was passed which it is now our duty to construe.

While the courts should carefully gather the intention of the legislature, so far as may be, from the language of the statute, they should also bear in mind the facts which led to the enactment in its present form; for the evil to

ligations in this state standing in the name of a decedent, or in trust for a decedent, liable to any such tax, the tax shall be paid to" an officer designated, "on the transfer thereof." The phrase "liable to any such tax" refers to such

the depositary personally liable "to the payment of the tax." The word "assets," as thus used, is the most comprehensive that could be used to expand the meaning of the statute.

There is but one more section that has a direct bearing upon the question in hand, and that is the 22d, which relates to "definitions," and is of especial importance, not only because it is new, but because it emphasizes the purpose of the statute. It provides that "the words 'estate' and 'property,' as used in this