under the same obligation to obey as if they were citizens. Such a contract is valid or invalid as our laws declare. When the law commands that if they, or any other persons, whether residents or not, make a certain contract here they must pay a certain tax for the privilege, the command is personal, addressed to them as persons then within the state."

Jurisdiction to exact a license fee, therefore, depends upon the place where the licensed act is done. Thus a license fee may be exacted from a foreigner for making a sale within the state; 189 for operating a railroad within the state; 190 or for using sleepingcars within the state.191 So an excise tax may be laid upon the payment of a dividend to a nonresident shareholder,192 or upon the receipt of insurance premiums from residents of the state; 193 and such a tax may be laid upon the performance within the state of a contract of sale made in another state.194

Though the international jurisdiction of a state to levy an excise tax is complete, its exercise may often be limited by the Constitution of the United States.195 A consideration of such limitations is, however, beyond the scope of the present article.

VIII. INHERITANCE TAX

One of the most important privileges granted by the law is that of succeeding to the property of a deceased person. Since at the moment before death the successor has no interest whatever in the property, and the moment after death an interest has vested in him, there must have been the creation or shifting of a legal interest, not the continuance of a preexisting one; and this requires an act of the law. For furnishing this law of succession, the sovereign may levy an excise tax, or, as it is often called, a death duty.196

139 Harrison v. Vicksburg, 3 Sm. & M. (Miss.) 581 (1844); People v. Reardon, 184 N. Y. 431, 77 N. E. 970 (1906).

190 Maine v. Grand Trunk Ry. Co., 142 U. S. 217 (1891).

191 Pullman Southern Car Co. v. Gaines, 3 Tenn. Ch. 587 (1877).

192 Oliver v. Washington Mills, 11 Allen (Mass.) 268 (1865).

193 Equitable Life Society v. Pennsylvania, 238 U. S. 143 (1915).

194 Shriver v. Pittsburg, 66 Pa. 446 (1870).

195 See, for instance, Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196 (1885); Sault Ste. Marie v. International Transit Co., 234 U. S. 333 (1914).

196 Kochersperger v. Drake, 167 Ill. 122, 47 N. E. 321 (1897).

In England,197 these taxes are of two sorts. There is a duty laid upon the succession, called in one act a legacy duty, in the later act a succession duty. There is also a duty laid upon the administration of the estate, called formerly a probate duty, and in the later act an estate duty.

In America, in general, there is no duty laid upon administration of estates; but the succession is very generally taxed, usually under the name of an inheritance tax, but sometimes, as in New York, under the name of a transfer tax.

The inheritance of land passes and can only pass in accordance with the law of the situs; and the sovereign of the situs alone performs a service for which an excise tax may be exacted. It is therefore universally held that no inheritance tax can be laid upon the transfer of land outside the territorial limits of the taxing state.198 On all immovable property within the state the inheritance tax may be laid,199 including equitable interests in such property. 200 In the case of mortgaged land, a tax may be laid upon the transfer of interest of either mortgagor or mortgagee, assessed at the value of the interest only.201

For the purpose of this discussion "land" means immovables, irrespective of the view taken of them by the land law of the situs; and includes a chattel real. Thus where an estate for joint lives in English land passed to the executor, upon the death of the foreign owner, legacy duty was held to be due upon it in England.202

Where a will directs that land be sold and the proceeds held as a trust fund, equity for some purposes regards the land as converted into personalty. Where a will contains such a direction as to foreign land, may the inheritance be taxed at the domicile, 197 For an admirable monograph on the English law on this topic, see DICEY, CONFLICT OF LAWS, 2 ed., 746-71.

198 Westerfeldt's Succession, 122 La. 836, 48 So. 281 (1909); In re Swift, 137 N. Y. 77, 32 N. E. 1096 (1893); Lorillard v. People, 6 Dem. (N. Y.) 268 (1887); Commonwealth v. Coleman, 52 Pa. 468 (1866); Drayton's Appeal, 61 Pa. 172 (1869); Bittinger's Estate, 129 Pa. 338, 18 Atl. 132 (1889).

199 McCurdy v. McCurdy, 197 Mass. 248, 83 N. E. 881 (1908); Matter of Burden, 47 Misc. 329, 95 N. Y. Supp. 972 (1905).

200 Kinney v. Treasurer & Receiver General, 207 Mass. 368, 93 N. E. 586 (1911). 201 McCurdy v. McCurdy, 197 Mass. 248, 83 N. E. 881 (1908); Kinney v. Treasurer & Receiver General, 207 Mass. 368, 93 N. E. 586 (1911). But in Hatfield's Estate, 43 Pa. Co. Ct. 510 (1915), it was held that an inheritance tax cannot be levied on a mortgage of land within the state belonging to a nonresident.

202 Chatfield v. Berchtoldt, L. R. 7 Ch. 192 (1872).

on the ground that as personalty it passes by the law of the domicile? In most jurisdictions it is held that no tax may be laid on the land; the reason usually given being that the doctrine of equitable conversion prevails only in equity, while the levying of a tax is a legal, not an equitable, process.203 This reason is perhaps sufficient; but it would be enough to say that the doctrine of equitable conversion, though it treats the land as personalty, does not and cannot make it any the less immovable, and does not and cannot in any way affect its transfer by the law of the situs.

In Pennsylvania, however, a different view has been taken. The equitable conversion of foreign land of a Pennsylvania decedent by a direction that the executor sell and pay over the proceeds makes the inheritance taxable in Pennsylvania.204 While a mere power given to the executor to sell the foreign land does not equitably convert it, so as to make it liable to tax at the domicile, 205 if the executor is directed to sell the land and out of the proceeds to pay debts or legacies, it is held that an inheritance tax may be exacted at the domicile of the decedent 206 unless it becomes unnecessary to exercise the power because the personal property is sufficient.207 Conversely where such directions as to Pennsylvania land are given in a foreign will no inheritance tax can be collected in Pennsylvania.208 No satisfactory reason for this exceptional doctrine has been offered.

Even in Pennsylvania this doctrine is confined to cases where the sale was directed for the payment of debts or legacies, or at least for some use within the state. When the will directed the executor to sell foreign land and invest the proceeds in another state, to be held as a trust fund, the court held that the transfer could not be taxed in Pennsylvania.209

203 Connell v. Crosby, 210 Ill. 380, 71 N. E. 350 (1904); McCurdy . McCurdy, 197 Mass. 248, 83 N. E. 881 (1908); Matter of Swift, 137 N. Y. 77, 32 N. E. 1096 (1893).

204 Miller's Estate, 182 Pa. 157, 37 Atl. 1000 (1897); Dalrymple's Estate, 215 Pa. 367, 64 Atl. 554 (1906).

205 Drayton's Appeal, 61 Pa. 172 (1869).

206 Miller v. Commonwealth, 111 Pa. 321, 2 Atl. 492 (1885); Williamson's Estate, 153 Pa. 508, 26 Atl. 246 (1893); Vanuxern's Estate, 212 Pa. 315, 61 Atl. 876 (1905). 207 Marr's Estate, 240 Pa. 38, 87 Atl. 621 (1913); Crozer's Estate, 253 Pa. 15, 101 Atl. 801 (1916).

208 In re Shoenberger, 221 Pa. 112, 70 Atl. 579 (1908); Lamberton's Estate, 40 Pa. Super. Ct. 548 (1909).

209 Hale's Estate, 161 Pa. 181, 28 Atl. 1071 (1894)

In the case of inheritance from a partner, the transferred interest in land held by the firm is regarded as personalty; the inheritance is therefore taxable at the domicile of the deceased partner, although the land is in another jurisdiction.210 This is not, properly speaking, a case of equitable conversion. The legal ownership of the land is really held on a dry trust for the unincorporated association; and the real interest of the partner is to an unascertained balance, which is in truth a personal interest.

It is within the power of a sovereign to tax the succession to chattels within his territory, and this is done by most of the inheritance tax laws in this country; the succession to chattels within the state is taxable although the deceased died domiciled elsewhere.211 And this is true also of the English succession duty.21 In order for the succession to pass by the law of the situs the property must be within the jurisdiction at the moment of the owner's death; property of a decedent domiciled abroad which is brought into the state and there, for whatever reason, given to the executor after the death cannot be taxed.21 213

The principles already examined as to the situs of things apply to the inheritance tax; thus bonds, notes, and deposits of money within the state, belonging to a foreign decedent, are taxable.214 Stock in corporations chartered in the state,215 and of national

210 Forbes v. Steven, L. R. 10 Eq. 178 (1870); Re Stokes, 62 L. T. R. 176 (1890). 211 Western Assurance Co. v. Halliday, 127 Fed. 830 (1903); People v. Griffith, 245 Ill. 532, 92 N. E. 313 (1910); State v. Dalrymple, 70 Md. 294, 17 Atl. 82 (1889); Dixon v. Russell, 78 N. J. L. 296, 73 Atl. 51 (1909). See, however, under an earlier act, Neilson v. Russell, 76 N. J. L. 655, 71 Atl. 286 (1908); Matter of Swift, 137 N. Y. 77, 32 N. E. 1096 (1893); Matter of Romaine, 127 N. Y. 80, 27 N. E. 759 (1891). See, however, under an earlier act, Matter of Euston, 113 N. Y. 174, 21 N. E. 87 (1889); Matter of Embury, 19 App. Div. 214, 45 N. Y. Supp. 881 (1897); Alvany v. Powell, 2 Jones Eq. (55 N. C.) 51 (1854); In re Speers, 4 Ohio N. P. 238 (1897); Commonwealth v. Smith, 5 Pa. St. 142 (1847); Lewis's Estate, 203 Pa. 211, 52 Atl. 205 (1902). "Not a convincing authority." Brown, J., in Schoenberger's Estate, 221 Pa. 112, 70 Atl. 579 (1908).

212 Attorney-General v. Campbell, L. R. 5 H. L. 524 (1872).

213 McCurdy v. McCurdy, 197 Mass. 248, 83 N. E. 881 (1908); Attorney-General v. Forbes, 2 Cl. & F. 48 (1834); Hay v. Fairlie, 1 Russ. 117 (1826); Arnold v. Arnold, 2 Myl. & Cr. 256 (1836).

214 Hoyt v. Keegan, 167 N. W. 521 (Ia.) (1918); In re Rogers, 149 Mich. 305, 112 N. W. 931 (1907); Matter of Houdayer, 150 N. Y. 37, 44 N. E. 718 (1896); Matter of Burden, 47 N. Y. Misc. 329, 95 N. Y. Supp. 972 (1905).

215 People v. Griffith, 245 Ill. 532, 92 N. E. 313 (1910); Greves v. Shaw, 173 Mass. 205, 53 N. E. 372 (1899); Gardiner v. Carter, 74 N. H. 507, 69 Atl. 939 (1908); Dixon

banks located in the state,216 are taxable, though the decedent was nonresident; and a tax on a share of a deceased nonresident partner may be levied where the business was carried on, that being its business situs.217 On the other hand, where a seat in the stock exchange is regarded as intangible property having a business situs, a seat in the New York exchange belonging to a nonresident who at the time of his death had ceased to carry on business in New York was held not taxable.218 Stock in a foreign corporation, however, belonging to a nonresident decedent is not taxable, though the certificate was in the state at the owner's death.219

For this purpose a chose in action is regarded as situated with the creditor; and a debt due from a resident debtor to a nonresident decedent is therefore not subject to the inheritance tax.220

While the power to levy the tax at the situs of the property is clear, the legislature does not necessarily impose a tax which would lie upon all property within the jurisdiction. The English legacy duty (differing in this respect from the later succession duty) was held not to be payable out of property within the jurisdiction belonging to a nonresident decedent,221 and the same interpretation has been placed upon the federal inheritance tax.222

While, as has been said, the sovereign of the situs has entire

v. Russell, 78 N. J. L. 296, 73 Atl. 51 (1909); Matter of Bronson, 150 N. Y. 1, 44 N. E. 707 (1896); Matter of Fitch, 39 App. Div. 609, 57 N. Y. Supp. 786 (1899); Matter of Leavitt, 4 N. Y. Supp. 179 (1889); Small's Estate, 151 Pa. 1, 25 Atl. 23 (1892).

216 Greves v. Shaw, 173 Mass. 205, 53 N. E. 372 (1899); Matter of Cushing, 40 N. Y. Misc. 505, 82 N. Y. Supp. 795 (1903).

217 Stamp Duties Commissioner v. Salting, [1907] A. C. 449.

218 In re Ogden's Estate (Misc.), 170 N. Y. Supp. 630 (1918).

219 Matter of James, 144 N. Y. 6, 38 N. E. 961 (1894); and see People v. Griffith, 245 Ill. 532, 92 N. E. 313 (1910).

220 Allen v. Philadelphia Sav. Fund Soc., 1 Fed. Cas. 234, 14 Phila. 408, 7 W. N. C. 231 (1879); Kintzing v. Hutchinson, Fed. Cas. No. 7,834, 7 W. N. C. 226 (1877); Gilbertson v. Oliver, 129 Ia. 568, 105 N. W. 1002 (1906); Matter of Gordon, 186 N. Y. 471, 79 N. E. 722 (1906); Matter of Horn, 39 N. Y. Misc. 133, 78 N. Y. Supp. 979 (1902); Orcutt's Appeal, 97 Pa. 179 (1881); Del Busto's Estate, 6 Pa. Co. Ct. 289 (1888). See, however, Alexander's Estate, 3 Clark (Pa.), 87, 4 Pa. L. J. 448 (1845). Contra, In re Commercial Bank, L. R. 5 Ch. 314 (1870); Attorney-General v. Newman, 1 Ont. L. R. 511 (1901).

221 Thomson v. Advocate-General, 12 Cl. & F. 1 (1842); Wallace v. Attorney-General, L. R. I Ch. 1 (1865); In re Bruce, 2 Cr. & J. 436 (1832).

222 Eidman v. Martinez, 184 U. S. 578 (1902); Ruckgaber v. Moore, 104 Fed. 947 (1900).