282 U.S.

582
51 S.Ct. 306
75 L.Ed. 562

COOLIDGE et al.
v.
LONG, Commissioner of Corporations and Taxation of
Massachusetts.
Nos. 33, 34.
Argued Dec. 8-9, 1930.
Decided Feb. 24, 1931.

[Syllabus from pages 582-584 intentionally omitted]

Messrs. Robert G. Dodge and Harold S. Davis, both of Boston, Mass., for
appellants.
[Argument of Counsel from pages 584-589 intentionally omitted]
Messrs. James S. Eastham, of Lawrence, Mass., and Joseph E. Warner, of
Boston, Mass., for appellee.
[Argument of Counsel from pages 589-593 intentionally omitted]
Mr. Justice BUTLER delivered the opinion of the Court.

Each of these appeals brings here for review a decree of the probate court of
Norfolk county, Mass., entered in accordance with a rescript from the Supreme
Judicial Court of the commonwealth. 167 N. E. 757, 758. In each appellants
presented to the probate court an application for the abatement of an inheritance
tax assessed under section 1, c. 65, General Laws. There was drawn in question
the validity of the statute on the ground of its being repugnant to the contract
clause of the Federal Constitution and the due process and equal protection
clauses of the Fourteenth Amendment. The probate court reserved for the
consideration of the Supreme Judicial Court all questions of law and the matter
of what decrees should be entered. That court held the statute valid, and
sustained the taxes.

The opinion states the facts as follows:

2

'The petitioners (appellants here) are trustees under a deed and declaration of
trust executed on July 29, 1907, by J. Randolph Coolidge and Julia Coolidge
and the petitioners.

'By that deed a large amount of real and personal estate was transferred to the
trustees by the settlors voluntarily and not as a bona fide purchase for full
consideration in money or in money's worth. The trustees were given extensive
powers of management, investment and reinvestment with the right to
determine finally what receipts and payments should be credited to income or
principal. The part of the trust fund furnished by J. Randolph Coolidge was
four-sevenths, and the part furnished by Julia Coolidge was three-sevenths.

'By the terms of the trust the income was to be paid in these proportions to each
of the settlors during their joint lives and then the entire income to the survivor,
and, upon the death of the survivor, the principal was to be divided equally
among their five sons, provided that, if any of the sons should predecease the
survivor of the settlors, his share should go to those entitled to take his intestate
property under the statute of distributions in force at the death of such survivor,
with a further provision to the effect that in no event should a widow of such
deceased son take as distributee more than half of such share.

'There was in the declaration of trust no power of revocation or modification or

termination prior to the death of the survivor of the settlors. Coolidge v. Loring,
235 Mass. 220 (126 N. E. 276).

'By instrument executed on April 6, 1917, the settlors assigned their interest in
the trust to the five sons, all of whom eventually survived the termination of the
trust.

'Julia Coolidge died in January, 1921, and J. Randolph Coolidge on November

10, 1925, both being residents of this Commonwealth.

'The defendant determined that the petitioners were subject to excise taxes
under G. L. c. 65, 1, as amended, upon the four-sevenths and upon the threesevenths of the trust estate furnished respectively by each settlor as of
November 10, 1925.'

When the declaration of trust was excuted, on statute was in effect under which

the succession to the trust property could have been subjected to this tax. The
statutes then in force provided for the imposition of an excise only where the
succession was to collateral relatives and strangers. The first relevant statute
was approved June 27, 1907 (St. 1907, c. 563), and took effect September 1,
about five weeks after the date of the declaration of the trust. It did not apply to
property passing by deed, grant, sale, or gift made prior to its effective date. But
by section 3, c. 678, St. 1912, it was made applicable 'to all property passing by
deed, grant or gift * * * made or intended to take effect in possession or
enjoyment after the death of the grantor or donor, if such death occurs
subsequent to the passage hereof.' And see section 1, c. 563, St. 1914.
10

Chapter 65, General Laws, effective since January 1, 1921, provides:

11

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. * * *'

12

Section 36. 'This chapter shall apply only to property or interests therein passing
or accruing upon the death of persons dying on or after May fourth, nineteen
hundred and twenty. * * *'

13

The Supreme Judicial Court sustained the exaction as an excise. It held that
possession or enjoyment upon the death of the survivor of the settlors was a
taxable commodity under the statute enacted after the creation of the trust.

14

The trust deeds are contracts within the meaning of the contract clause of the
Federal Constitution. They were fully executed before the taking effect of the
state law under which the excise is claimed. The commonwealth was without
authority by subsequent legislation, whether enacted under the guise of its
power to tax or otherwise, to alter their effect or to impair or destroy rights
which had vested under them. Appleby v. City of New York, 271 U. S. 364, 46
S. Ct. 569, 70 L. Ed. 992; Fletcher v. Peck, 6 Cranch, 87, 136, 3 L. Ed. 162;
Dartmouth College v. Woodward, 4 Wheat. 518, 624, 656, 4 L. Ed. 629;
Farrington v. Tennessee, 95 U. S. 679, 683, 24 L. Ed. 558; Carondelet Canal
Co. v. Louisiana, 233 U. S. 362, 373, 378, 34 S. Ct. 627, 58 L. Ed. 1001.

15

This Court has held that the Revenue Act of 1924, 319-324 (26 USCA
1131 note to 1133 note, 1134, 1135 note, 1136 note), in so far as it undertook to
impose a tax on gifts fully consummated before its provisions came before

Congress (Blodgett v. Holden, 275 U. S. 142, 48 S. Ct. 105, 72 L. Ed. 206) or

before its passage (Untermyer v. Anderson, 276 U. S. 440, 48 S. Ct. 353, 72 L.
Ed. 645), was arbitrary and repugnant to the due process clause of the Fifth
Amendment. In Nichols v. Coolidge, 274 U. S. 531, 47 S. Ct. 710, 71 L. Ed.
1184, 52 A. L. R. 1081, we considered the trust deed of Mrs. Coolidge that is
now before us. The question in that case was whether the value of the property
so conveyed prior to the enactment should be included in her estate for the
purpose of ascertaining the federal estate tax thereon. We said (page 542 of 274
U. S., 47 S. Ct. 710, 714):
16

'This court has recognized that a statute purporting to tax may be so arbitrary
and capricious as to amount to confiscation and offend the Fifth Amendment.
Brushaber v. Union Pacific R. R., 240 U. S. 1, 24, 36 S. Ct. 236, 60 L. Ed. 493,
L. R. A. 1917D, 414, Ann. Cas. 1917B, 713; Barclay & Co. v. Edwards, 267
U. S. 442, 450, 45 S. Ct. 135, 348, 69 L. Ed. 703. See, also, Knowlton v.
Moore, 178 U. S. 41, 77, 20 S. Ct. 747, 44 L. Ed. 969. And we must conclude
that section 402(c) of the statute here under consideration, in so far as it
requires that there shall be included in the gross estate the value of property
transferred by a decedent prior to its passage merely because the conveyance
was intended to take effect in possession or enjoyment at or after his death, is
arbitrary, capricious and amounts to confiscation.'

17

See Levy v. Wardell, 258 U. S. 542, 544, 42 S. Ct. 395, 66 L. Ed. 758. The
states are similarly restrained by the due process clause of the Fourteenth
Amendment.

18

In its opinion, the state court suggests that the federal estate tax was upon
property of the deceased transferred at his death, and that it was levied upon a
subject 'quite different from the succession to property by a beneficiary, which
is the subject of the present excise.' Undoubtedly the state has power to lay
such an excise upon property so passing after the taking effect of the taxing act.
The fundamental question here is whether rights had so vested prior to the
taking effect of the tax statute that there was thereafter no occasion in respect of
which the excise might constitutionally be imposed. The state court held that
the succession was not complete until the death of the survivor of the grantors,
and that therefore the tax is valid. It is well understood that, when the
jurisdiction of this court is invoked to determine whether a state law impairs the
rights of the litigant under a prior contract, or whether the state is depriving him
of his property without due process of law in violation of the Fourteenth
Amendment, and the question turns upon the existence or terms of a contract,
this court is bound to determine for itself whether there is a contract and to
ascertain its true meaning and effect. That rule is necessary in order that this

court may properly enforce these provisions of the Constitution. Railroad

Commission v. Eastern Texas R. R., 264 U. S. 79, 86, 44 S. Ct. 247, 68 L. Ed.
569, and cases cited.
19

By the deed of each grantor one-fifth of the remainder was immediately vested
in each of the sons, subject to be divested only by his death before the death of
the survivor of the settlors. It was a grant in praesenti, to be possessed and
enjoyed by the sons upon the death of such survivor. Blanchard v. Blanchard, 1
Allen (Mass.) 223; Clarke v. Fay, 205 Mass. 228, 91 N. E. 328, 27 L. R. A. (N.
S.) 454; McArthur v. Scott, 113 U. S. 340, 379, 5 S. Ct. 652, 28 L. Ed. 1015,
and cases cited. And see United States v. Fidelity Trust Co., 222 U. S. 158, 32
S. Ct. 59, 56 L. Ed. 137; Henry v. United States, 251 U. S. 393, 40 S. Ct. 185,
64 L. Ed. 322. The provision for the payment of income to the settlors during
their lives did not operate to postpone the vesting in the sons of the right of
possession or enjoyment. The settlors divested themselves of all control over
the principal; they had no power to revoke or modify the trust. Coolidge v.
Loring, supra, page 223 of 235 Mass., 126 N. E. 276. Upon the happening of
the event specified without more, the trustees were bound to hand over the
property to the beneficiaries. Neither the death of Mrs. Coolidge nor of her
husband was a generating source of any right in the remaindermen. Knowlton v.
Moore, 178 U. S. 41, 56, 20 S. Ct. 747, 44 L. Ed. 969. Nothing moed from her
or him or from the estates of either when she or he died. There was no
transmission then. The rights of the remaindermen, including possession and
enjoyment upon the termination of the trusts, were derived solely from the
deeds. The situation would have been precisely the same if the possibility of
divestment had been made to cease upon the death of a third person instead of
upon the death of the survivor of the settlors. The succession, when the time
came, did not depend upon any permission or grant of the commonwealth.
While the sons, if occasion should arise, might by appropriate suit require the
trustees to account, it is to be borne in mind that the property was never in the
custody of the law or of any court. Resort might be had to the law to enforce the
rights that had vested. But the commonwealth was powerless to condition
possession or enjoyment of what had been conveyed to them by the deeds.
Barnitz v. Beverly, 163 U. S. 118, 16 S. Ct. 1042, 41 L. Ed. 93, and cases cited.

20

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. Reinecke v. Trust Co., 278 U. S. 339, 347, 348, 49 S. Ct.
123, 73 L. Ed. 410, 66 A. L. R. 397. The recent case of Saltonstall v.
Saltonstall, 276 U. S. 260, 48 S. Ct. 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. * * * A power of appointment reserved by the donor leaves
the transfer, as to him, incomplete and subject to tax. * * * The beneficiary's
acquisition of the property is equally incomplete whether the power be reserved
to the donor or another.' Page 271 of 276 U. S., 48 S. Ct. 225, 227. See, also,
Chase Nat. Bank v. United States, 278 U. S. 327, 335, 338, 49 S. Ct. 126, 73 L.
Ed. 405, 63 A. L. R. 388.
21

No act of Congress has been held by this court to impose a tax upon possession
and enjoyment, the right to which had fully vested prior to the enactment.

22

Tyler v. United States, 281 U. S. 497, 50 S. Ct. 356, 74 L. Ed. 991, 69 A. L. R.

758, held constitutional sections 201 and 202 of the Revenue Acts of 1916, 39
Stat. 756, 777, 778, and of 1921, 401, 402, 42 Stat. 227, 277, 278, which
included in the gross estate the value of an interest held by decedent and any
other person as tenants by the entirety. In each case, the estate was created after
the passage of the applicable act; and none of the property constituting it had
prior to its creation ever belonged to the surviving spouse. The court held that
the acts did not impose a direct tax, because, putting aside a common-law
fiction, and having regard to substance, the death of one of the parties was in
fact the generating source of important and definite accessions to the property
rights of the other. It held that the provisions were intended to prevent an
avoidance of the estate tax by the creation of such tenancies, and were
obviously neither arbitrary nor capricious, and so not violative of the Fifth
Amendment.

23

Clapp v. Mason, 94 U. S. 589, 24 L. Ed. 212, and Mason v. Sargent, 104 U. S.

689, 26 L. Ed. 894, arose under the Succession Tax Act of June 30, 1864, 124
et seq., 13 Stat. 285. Vanderbilt v. Eidman, 196 U. S. 480, 25 S. Ct. 331, 49 L.
Ed. 563, and Hertzv. Woodman, 218 U. S. 205, 30 S. Ct. 621, 54 L. Ed. 1001,
arose under a similar act of June 13, 1898, 29 and 30, 30 Stat. 464. In all
these cases, the property vested in interest after the acts took effect, and the
decisions went on the ground that the right to impose the excises did not accrue
until the subsequent vesting in possession and enjoyment. Under these acts, the
mere passage of title was not sufficient; possession and enjoyment were also

required. Wright v. Blakeslee, 101 U. S. 174, 177, 25 L. Ed. 1048, went upon
the ground that, up to the moment of the life tenant's death, 'her children had no
interest in the land except a bare contingent remainder expectant upon her
death and their surviving her. At her death it came to them as an estate in fee in
possession absolute.'
24

This court has not sustained any state law imposing an excise upon mere entry
into possession and enjoyment of property, where the right to such possession
and enjoyment upon the happening of a specified event had fully vested before
the enactment.

25

In Cahen v. Brewster, 203 U. S. 543, 27 S. Ct. 174, 51 L. Ed. 310, 8 Ann. Cas.
215, the testator died May 26, 1904, the will was probated May 30, and a
special inheritance tax law was passed June 28. It imposed a tax upon all
inheritances and legacies, and provided that the tax should not be enforced
when the property had borne its just proportion of taxes prior to the time of the
inheritance, and that the tax should be collected on all successions not finally
closed. The enactment was assailed as repugnant to the due process and equal
protection clauses of the Fourteenth Amendment. This court held that the state,
without unconstitutional deprivation, could exercise its power to impose
inheritance taxes at any time while it holds the property from the legatee, page
551 of 203 U. S., 27 S. Ct. 174; and, dealing with the contention that taxing
successions not closed, and exemption those that had been closed, operated to
deny equal protection, the court said (page 552 of 203 U. S., 27 S. Ct. 174,
177): 'It was certainly not improper classification to make the tax depend upon
a fact without which it would not have been valid.' As the court said in United
States v. Jones, 236 U. S. 106, 112, 35 S. Ct. 261, 263, 59 L. Ed. 488, Ann.
Cas. 1916A, 316, 'It hardly needs statement that personal property does not pass
directly from a decedent to legatees or distributees, but goes primarily to the
executor or administrator, who is to apply it, so far as may be necessary, in
paying debts of the deceased and expenses of administration, and is then to
pass the residue, if any, to legatees or distributees.' See, also, Carpenter v.
Pennsylvania, 17 How, 456, 462, 15 L. Ed. 127.

26

In Moffitt v. Kelly, 218 U. S. 400, 31 S. Ct. 79, 54 L. Ed. 1086, 30 L. R. A. (N.

S.) 1179, Moffitt married in California in 1863, and resided there with his wife
until his death in 1906. By his will, he gave to her and their children as if he had
died intestate. A state law passed in 1905 imposed a tax upon property so
descending. The state court sustained the tax upon the wife's share in the
community property. This court held that the nature and character of her right
was a local question, and that the tax was not violative of the contract clause of
the Constitution or the due process or equal protection clause of the Fourteenth

Amendment. In United States v. Robbins, 269 U. S. 315, 326, 46 S. Ct. 148,

149, 70 L. Ed. 285, this court considered the character of the wife's estate
during the existence of the community, and said: 'We can see no sufficient
reason to doubt that the settled opinion of the Supreme Court of California, at
least with reference to the time before the later statutes, is that the wife had a
mere expectancy while living with her husband. The latest decision that we
have seen dealing directly with the matter explicitly takes that view, says that it
is a rule of property that has been settled for more than 60 years. * * *' See,
also, Poe v. Seaborn, 282 U. S. 101, 116, 51 Ct . 58, 75 L. Ed. 239. Cf.
Nickel v. Cole, 256 U. S. 222, 225, 41 S. Ct. 467, 65 L. Ed. 900.
27

Chanler v. Kelsey, 205 U. S. 466, 27 S. Ct. 550, 51 L. Ed. 882, arose under the
New York inheritance tax law of 1897 (Laws N. Y. 1897, c. 284). 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. This
court held that without such appointment the estates in remainder would have
gone to all in the class named in the deeds, that, by the exercise of the power,
some were divested of their estates and the same were vested in others, and that
it was only on the exercise of the power that the estates of the appointees
became complete. And it sustained the tax. Justice Holmes and Moody,
dissenting, insisted that the succession was complete when the father's deeds
took effect, and that 'the execution of the power did not depend in any way upon
the continued cooperation of the laws of New York by way of permission or
grant.' Page 481 of 205 U. S., 27 S. Ct. 550, 555.

28

The overwhelming weight of authority sustains the conclusion that the

succession in the present case was complete when the deed took effect.

29

In Matter of Pell, 171 N. Y. 48, 63 N. E. 789, 57 L. R. A. 540, 89 Am. St. Rep.

791, the testator's will gave a life estate in his property to his widow, with
remainders over at her death to his nephews and nieces and the issue of any
deceased nephew or niece, together with a share to his sister. He died in 1863.
The life tenant died December 20, 1899, and at that time all the estates in
remainder came into actual possession and enjoyment of the beneficiaries. The
Act of March 14, 1899 (chapter 76, Laws of that year), provided:

30

'All estates upon remainder * * * which vested prior to June thirtieth, eighteen

hundred and eighty-five, but which will not come into actual possession or
enjoyment of the person * * * beneficially interested therein until after the
passage of this act shall be appraised and taxed as soon as the person * * *
beneficially interested therein shall be entitled to the actual possession or
enjoyment thereof.'
31

The court said (page 55 of 171 N. Y., 63 N. E. 789, 791):

32

'This court and the Supreme Court of the United States have held in numerous
cases that the transfer tax is not imposed upon property, but upon the right to
succession. It therefore follows that where there was a complete vesting of a
residuary estate before the enactment of the transfer tax statute, it cannot be
reached by that form of taxation. In the case before us it is an undisputed fact
that these remainders had vested in 1863, and the only contingency leading to
their divesting was the death of a remainderman in the lifetime of the life
tenant, in which event the children of the one so dying would be substituted. If
these estates in remainder were vested prior to the enactment of the transfer tax
act, there could be in no legal sense a transfer of the property at the time of
possession and enjoyment. This being so to impose a tax based on the
succession would be to diminish the value of these vested estates, to impair the
obligation of a contract, and take private property for public use without
compensation.'

33

Matter of Craig, 97 App. Div. 289, 89 N. Y. S. 971 (affirmed 181 N. Y. 551,

74 N. E. 1116). involved a similar state of facts. The court said (page 296 of 97
App. Div., 89 N. Y. S. 971, 975):

34

'The underlying principle which supports the tax is that such right (the right of
succession) is not a natural one, but is in fact a privilege only, and that the
authority conferring the privilege may impose conditons upon its exercise. But
when the privilege has ripened into a right it is too late to impose conditions of
the character in question, and when the right is conferred by a lawfully
executed grant or contract it is property, and not a privilege, and as such is
protected from legislative encroachment by constitutional guaranties.'

35

In Hunt v. Wicht, 174 Cal. 205, 162 P. 639, L. R. A. 1917C, 961, the court held
that a deed delivered by grantor to a third person in escrow, to be delivered to
grantee on the death of the grantor, passed a present title to the grantee, the
grantor retaining only a life estate; and that the Legislature was without power
subsequently to impose a succession tax accruing at the termination of the
grantor's life estate simply because the grantee was during the intervening life

estate without immediate possession of the property conveyed. The court said
(page 209 of 174 Cal., 162 P. 639, 641): 'It is the vesting in interest that
constitutes the succession, and the question of liability to such a tax must be
determined by the law in force at that time. * * * What we have said appears
perfectly clear on principle, and is sustained by practically all of the authorities
in other states where the question has arisen.'
36

In Lacey v. State Treasurer, 152 Iowa, 477, 132 N. W. 843, a contract created a
vested interest in real estate, subject only to postponement of the right of
possession and enjoyment until the death of the grantor. The court held that
there was a transfer of a present interest, and that its character was not affected
by a condition therein that might subsequently reduce the share of each grantee.
It was also held (pages 483, 484 of 152 Iowa, 132 N. W. 843, 846):

37

'Even though the remainder is so far conditional that it may have to be opened
up to let in after-born children, and on the other hand, may be divested by death
without issue of the person named, nevertheless it constitutes a vested interest,
not subject to a subsequent collateral inheritance tax statute, passed before the
termination of the life estate. In re Seaman, 147 N. Y. 69, 41 N. E. 401. Any
attempted litigation imposing a collateral inheritance tax upon interests in
remainder, which have become vested by the taking effect of the will creating
them, would be unconstitutional. In re Pell, 171 N. Y. 48, 63 N. E. 789, 57 L.
R. A. 540, 89 Am. St. Rep. 791.'

38

In re Houston's Estate, 276 Pa. 330, 120 A. 267, a deed irrevocably conveyed
property in trust to pay income to the settlor for life and at her death to a
remainderman. The statute then in force imposed a 5 per cent. tax on transfers
intended to take effect in possession or enjoyment at or after death. The life
tenant died after the taking effect of legislation, which increased the rate to 10
per. cent. The court held the estate passing to the emainderman taxable at 5 per
cent., and not at the higher rate fixed by the later statute. The opinion of the
orphans' court, adopted by the Supreme Court, said (page 331 of 276 Pa., 120
A. 267, 268):

39

'Nor can it be successfully argued that the tax is not on the transfer of title to
the property, but on the transfer of enjoyment, for, as it seems to us, the act
means by this the right of enjoyment, and this was vested under the deed. If the
tax is imposed when enjoyment is perfected by actual possession, and this
theory is carried to its logical conclusion, it would seem that, if during the
administration of an estate, delays occur, as they necessarily must, and if before
actual distribution is made the rate of taxation is changed, a legacy would be
taxed at the changed rate, which would appear to be a reductio ad absurdum.'

40

In State ex rel. v. Probate Court, 102 Minn. 268, 113 N. W. 888, an owner of
much property organized a corporation and, his wife joining, conveyed
practically all to the corporation. It issued its shares to him, and he gave onethird to her. Then they transferred the stock to their four children, who leased
two-thirds to the father for his life and one-third tothe mother for her life. The
father died in 1905 after the taking effect of an inheritance tax law enacted in
that year. The court held that the leases vested in each parent a life estate in the
stock, and reserved to the children estates in reversion which were beyond the
control of the life tenants; and that the interests of the children vested when the
leases were made, came into possession upon the termination of the life estates,
and that the inheritance tax could not be collected thereon. See, also,
Commonwealth v. Wellford, 114 Va. 372, 79 S. E. 917, 44 L. R. A. (N. S.)
419.

41

We conclude that the succession was complete when the trust deeds of Mr. and
Mrs. Coolidge took effect, and that the enforcement of the statute imposing the
excise in question would be repugnant to the contract clause of the Constitution
and the due process clause of the Fourteenth Amendment. We need not
consider whether it would also conflict with the equal protection clause.

42

Reversed.

43

Mr. Justice ROBERTS (dissenting).

44

The Supreme Judicial Court of Massachusetts has construed and applied the
statute as one taxing the taking of possession of property by a remainderman
whose interest, acquired before the death of the donor, vested in possession and
enjoyment, and free of a contingent gift over, on the donor's death. That court
said:

45

'The * * * statute * * * is designed to include within its sweep all methods of

succession to property to take effect in possession or enjoyment after the death
of the grantor or donor. * * * Whenever property is conveyed upon such
limitation that it will vest in interest, possession or enjoyment by reason of the
death of the grantor or donor, such succession falls within the descriptive words
of the statute.

46

'The succession to any of these attributes of property occurring as the result of

the death of the grantor or donor constitutes the taxable commodity.'
And also said:

47

'The 'tax authorized by these statutes is a tax upon 'succession' which includes
the 'privileges enjoyed by the beneficiary of succeeding to the possession and
enjoyment of property." * * *

48

'The present tax is not laid on the donor, but on the beneficiary; the gift taxed is
not one long since completed, but one which never passed to the beneficiaries
beyond recall until the death of the donor. * * * So long as the privilege of
succession has not been fully exercised it may be reached by the tax. * * *'

49

We are bound by the state court's determination as to the meaning of the

statute, Nickel v. Cole, 256 U. S. 222, 41 S. Ct. 467, 65 L. Ed. 900; Saltonstall
v. Saltonstall, 276 U. S. 260, 48 S. Ct. 225, 72 L. Ed. 565; and its application,
Stebbins v. Riley, 268 U. S. 137, 45 S. Ct. 424, 69 L. Ed. 884, 44 A. L. R.
1454; Cahen v. Brewster, 203 U. S. 545, 27 S. Ct. 174, 51 L. Ed. 310, 8 Ann.
Cas. 215; Saltonstall v. Saltonstall, supra.

50

The application of the statute, thus defined, is held by this Court to be a denial
of due process, and an impairment of the obligation of a contract, on the sole
ground that the remainder vested before the adoption of the taxing statute,
although the enjoyment in possession of the property, and the termination of
the possibility of the contingent gift over, both followed its enactment.1

51

This is to deny to the commonwealth the power to distinguish, in laying its tax,
between the vesting of a defeasible future interest which carries to the
beneficiary no assurance of future possession or enjoyment and the later vesting
of that interest by death in possession and enjoyment of the tangible property,
without possibility of being divested. It is to assert that the succession is so
complete upon the mere creation of the future interest that the state must tax the
future estate when that interest comes into being, or thereafter abstain entirely
from taxing it.

52

This position seems to me untenable. It is founded on the premise that the only
privilege enjoyed by the holder of a future interest in property is the dry legal
abstraction of owning that particular interest-that, if it vested years ago, to tax
the owner later on the occasion of his coming into actual possession, control,
and enjoyment of the property is in fact to tax him presently for the exercise of
a privilege long since enjoyed.

53

In weighing the argument, it is essential that the nature of the challenged tax be
kept clearly in mind.

54

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.2

55

Since no one has the natural right either to own property or to transfer it to
others at his death, but derives the power so to do solely from the state, the
sovereign may tax the owner for the privilege of transmission conferred by law.
United States v. Perkins, 163 U. S. 625, 628, 16 S. Ct. 1073, 41 L. Ed. 27. The
right to receive and enjoy that which was formerly owned by another is
similarly derived, and upon like principles the sovereign may tax the taker for
the privilege accorded. Mager v. Grima, 8 How. 490, 494, 12 L. Ed. 1168;
Plummer v. Coler, 178 U. S. 115, 130-132, 20 S. Ct. 829, 44 L. Ed. 998. So
distinct are these privileges that either or both may be taxed as respects the
same property. Stebbins v. Riley, supra: Saltonstall v. Saltonstall, supra.

56

The one is collected on the transfer of his estate by a decedent; it taxes not that
to which some person succeeds upon a death, but that which ceased by reason
of death. Nichols v. Coolidge, 274 U. S. 531, 537, 47 S. Ct. 710, 71 L. Ed.
1184, 52 A. L. R. 1081; Edwards v. Slocum, 264 U. S. 61, 62, 44 S. Ct. 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. Ct. 105, 56 L. Ed. 299, 38 L. R. A. (N. S.)
1139; Nichols v. Coolidge, 274 U. S. at page 541, 47 S. Ct. 710, 71 L. Ed.
1184, 52 A. L. R. 1081.

57

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.3

58

Though the settlor's children took a vested interest by the delivery of the deed
of trust in 1907, it was subject to be divested, as to any child, by his death prior
to that of the survivor of the settlors. Until the parents died, it could not be
known whether a child ever would possess or enjoy the trust property. Until
then he had none of the rights of an owner in fee. He could not obtain
possession; that was in the trustees. He could neither spend the income nor
direct its expenditure; the provisions of the deed of trust governed these
matters.

59

In 1917 the parents conveyed their life estates to the children. The latter,
conceiving that this entitled them, as sole owners, to the possession and
enjoyment of the property, demanded of the trustees delivery of the corpus.
This was refused. The settlors then filed a bill to reform the trust instrument so
that it should provide that, by surrender of the parents' life interests to the
children, the trust should terminate. They alleged that it was the true intent of
the parties that the contingent remainders in the next of kin of the children
should not vest if the interest of the settlors was released previous to the death
of the survivor, and that appropriate language to express this intent had by
mistake been omitted from the deed. 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.

60

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; that merely to sit still and await
the deaths of their parents did not constitute the doing of anything; that the
vesting of their remainder interests in 1907 covers and includes its
consequence, namely, their acquirement of tangible property and the enjoyment
thereof at their parents' death. In short, appellants insist that the beneficiaries
did not have to look to the laws of Massachusetts for the right of possession or
enjoyment; and that consequently an alleged taxing of the succession on the
occasion of their acquiring such possession and enjoyment is but a thinly veiled
attempt retroactively to tax the acquisition of an interest which vested in 1907.

61

But it is obvious that the children did rely on the law of Massachusetts for their
right to receive the trust property from the trustees; and it might well have been
they would have had to resort to her courts to obtain possession. All the law
applicable to the administration of trusts, regulating the acts of trustees, giving
remedies for trustees' defaults, providing for their compensation, and requiring
the full execution of their fiduciary duties, was available to appellants. Without
it their future interest, by way of remainder, might have been the merest
shadow.

62

In spite of this, it is said that the succession is one and entire; that it must be
taxed at its inception or not at all; that it is wholly out of the ordinary to tax it
on the occasion of its fruition in possession; and that this court has held the
attempt so to do violative of the Constitution. The converse of these
propositions is true. This Court has repeatedly approved the selection of the

event of possession and enjoyment as the proper occasion for the imposition of
an excise; and every applicable decision of the Court sustains the validity of the
tax and supports the judgment of the Supreme Judicial Court of Massachusetts.
63

First. In laying succession taxes, the United States has chosen as the occasion
therefor, not the acquirement of a mere technical legal interest in property, but
the coming into actual possession and enjoyment; and this fact has been
recognized by this Court.

64

By the act of June 30, 1864, 124 (13 Stat. 285), a tax was imposed on legacies
and distributive shares arising from personal property '* * * passing, after the
passage of this act, from any person possessed of such property, either by will
or by the intestate laws * * * or any personal property or interest therein,
transferred by deed, grant, bargain, sale, or gift, made or intended to take effect
in possession or enjoyment after the death of the grantor or bargainor. * * *'

65

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.

66

In Clapp v. Mason, 94 U. S. 589, 24 L. Ed. 212, a testator, who died in 1867,

devised real estate to his widow for life, with remainder to her children. She
died in 1872, and the children's interests then took effect in enjoyment. The tax
was assessed in 1873. It was paid under protest because the act of June 30,
1864, had been repealed by Act of July 14, 1870 (16 Stat. 256) on all legacies
and successions after August 1, 1870. In an action against the collector to
recover the amount paid, he defened on the ground that the tax accrued on
creation of the remainder in 1867. The devisees in remainder contended that it
did not accrue until they came into possession, which was subsequent to the
repeal of the taxing act. This Court held that the occasion of the tax was not the
vesting of the remainder, but the coming into possession by the successor. The
corollary seems clear enough that, if a remainderman had died during the life
estate, the statute would not have justified a tax upon him measured by the clear
value of the property in which he owned only a future interest.

67

The case was followed in Mason v. Sargent, 104 U. S. 689, 26 L. Ed. 894,
which involved a trust of personal property created by the same will. 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.4
68

By Act of June 13, 1898, c. 448, 29 (30 Stat. 448, 464), an excise was
imposed relating, first, to legacies or distributive shares passing by death and
arising from personal property, and secondly, to any personal property or
interest therein transferred by deed, grant, bargain, sale, or gift to take effect in
possession or enjoyment after the death of the grantor or bargainor, in favor of
any person or persons, in trust or otherwise. In Vanderbilt v. Eidman, 196 U. S.
480, 492, 25 S. Ct. 331, 334, 49 L. Ed. 563, this Court said:

69

'As to this second class, the statute specifically makes the liability for taxation
depend, not upon the mere vesting, in a technical sense, of title to the gift, but
upon the actual possession or enjoyment thereof. By any fair construction the
limitation * * * expressed as to one class must be applied to the other, unless it
be found that the statute, whilst treating the two as one and the same for the
purpose of the imposition of the death duty, has yet subjected them to different
rules.'

70

After analyzing the words of the statute in order to arrive at its intent, the court
said:

71

'In view of the express provisions of the statute as to possession or enjoyment

and beneficial interest and clear value, and of the absence of any express
language exhibiting an intention to tax a mere technically vested interest in a
case where the right to possession or enjoyment was subordinated to an un
certain contingency, it would, we think, be doing violence to the statute to
construe it as taxing such an interest before the period when possession or
enjoyment had attached.' While there was no question of retroactivity in that
case, for the reason that the statute antedated the creation of the trust, there was
an attempt to tax vested interests subject to be divested prior to the time when it
could be ascertained whether they would ever take effect in actual possession
or enjoyment, and this the Court held could not be done in view of the language
of the statute.5

72

In Hertz v. Woodman, 218 U. S. 205, 30 S. Ct. 621, 54 L. Ed. 1001, Vanderbilt

v. Eidman was followed. There a repealing act had been passed between the
time of a decedent's death and the time for payment of a legacy under his will in
accordance with the rules of administration. The Court held that, as the legatee
had become fully entitled to possession prior to the passage of the repealer, he

was liable for the tax. The dissenting justices, while not differing from the
majority in the view that the tax was laid upon the coming into beneficial
enjoyment and possession, were of opinion that until actual payment of the
legacy the tax was not due, and therefore the repealing act had abolished it
prior to the time fixed for its incidence upon the succession.
73

The foregoing cases are cited, not because they involve any constitutional
questions, but because they answer in no uncertain terms the appellants'
insistent argument that here the succession consists of but a single item-the
creation of a future interest-and that upon the coming into being of that interest
the succession is so complete as to prohibit the sovereign's imposing its excise
as of the occasion of enjoyment and possession by the successor. They
constitute a complete demonstration of the fallacy of the argument that a
privilege tax which ignores the creation of the mere technical future interest
and reaches the possession and enjoyment of property pursuant to such interest
is unheard of or in any wise out of the ordinary.

74

Second. The sanction of this Court has been given to the collection of a like
excise by the United States, under a statute similar to that here in question, and
in circumstances like those in the case at bar.

75

A testator who died in 1846 devised real estate to his daughter for life, with
remainder in fee to her son should he survie h er. The daughter died in 1865.
The collector's demand that the remainderman make return of his remainder for
taxation under the act of 1864, above cited, was refused. The tax was assessed
with penalty; payment was made under protest; and suit brought to recover the
amount paid. Judgment for the collector was affirmed as to the tax, but, on
grounds here immaterial, was reversed as to the penalty. Wright v. Blakeslee,
101 U. S. 174, 25 L. Ed. 1048.6

76

The remainder was contingent, but it was urged that it was a form of future
estate known to the law, which had vested in the son in 1846 and must be taxed,
if at all, as of that date. But this court was clear that the tax was laid on the
event which occurred in 1865, quoting the words of the act to show that there
was a 'past' 'disposition of real estate by will' 'by reason whereof' the life
tenant's children became 'beneficially entitled, in possession,' to the property
devised 'upon the death of (a) person dying after the passing of this act.' The
brief for appellant shows he argued that the phrase 'past disposition' must be
construed only to cover the case of a deed or will executed prior to the passage
of the law, but legally operative thereafter, in order to avoid a retroactive effect
of the statute and interference with vested rights. He also insisted that the
construction placed upon the act by the collector brought about an arbitrary

result. So little did this Court regard the argument that it does not even notice it
in its opinion. The Fifth Amendment obviously applied in that case, if the
Fourteenth applies in the present.
77

Third. In cases involving the application of state laws imposing succession

taxes, in circumstances such as are here found, this Court has overruled the
contentions here made, and sustained the tax. The facts involved in some of
these cases were more favorable to the appellants' contentions than those in the
case at bar.

78

In Cahen v. Brewster, 203 U. S. 543, 27 S. Ct. 174, 51 L. Ed. 310, 8 Ann. Cas.
215, the decedent, a resident of Louisiana, died May 26, 1904; his will was
probated May 30; a final accounting was made, and tableau of distribution
sibmitted to the probate court on August 3. These were approved and
distribution ordered by a judgment of August 16. On October 16 the universal
legatees petitioned the probate court for the delivery of the residuary estate to
them. The executors answered that a tax was due on the legacies which they
were bound to withhold. On June 28, 1904, a statute had been passed which
imposed a tax applicable to all successions not finally closed at the date of its
passage and all that should thereafter be opened. There were no forced heirs,
and, under the statutes of Louisiana, the universal legatees were vested by law
at the moment of death with full title to the property without taking any step
whatever to put themselves into possession, without demanding delivery, or
signifying their assent to accept the property bequeathed. The statutes are
quoted in the margin, 203 U. S. 549, 27 S. Ct. 175, 51 L. Ed. 310, 8 Ann. Cas.
215.

79

The petitioners argued that the taxing act as applied to them was violative of
the Fourteenth Amendment because retroactive and arbitrary. The Supreme
Court of Louisiana sustained the tax. This Court affirmed, holding that the state
was at liberty to decide at what point it would impose the tax, provided such
imposition was prior to the legatees' actual possession of the property.7

80

Appellants' attempt to distinguish this caseis unconvincing. They say that it

merely decided that the state had the power to lay the tax so long as the
property was under the control of its courts for administration. They overlook
the fact that in the instant case the possession of the trustees of the Coolidge
trust did not cease until the death of the survivor of the settlors. During all that
time the trust property was under the control of the Massachusetts courts. Not
until those trustees had settled their trust and made distribution in accordance
with the law of Massachusetts could the remaindermen come into possession
and enjoyment of the property. And obviously the operation of the law of

Massachusetts as to credits for expenses and commissions, and as to the duties

of the trustees, and as to delivery of the trust property, might all be invoked
before the beneficiaries could get actual possession and enjoyment.
81

It is certainly an immaterial difference that in the one case the fiduciaries were
called executors and in the other trustees. Both were subject to the law of the
state, which defined and protected the rights of beneficiaries in both cases. The
Coolidge children could not obtain possession or control of the corpus despite
their parents' release of all interest in it. The trustees still had duties to perform.
Coolidge v. Loring, supra. Cahen v. Brewster presents a more extreme case
than this, because it involved no such contingency of divestment as is here
involved; the executors there having completed their administration, the act of
physical delivery only remained to the performed by them.8

82

In Chanler v. Kelsey, 205 U. S. 466, 27 S. Ct. 550, 51 L. Ed. 882, one Astor, in
1844, 1848, 1849, and 1865, made deeds to trustees, which provided that the
income should go to his daughter Laura for life, with remainder to her issue in
fee, or, in default thereof, to her heirs in fee, with power of appointment
amongst her issue in such amounts and proportions as she should-by instrument
in its nature testamentary, to be acknowledged by her as a deed in the presence
of two witnesses, or published by her as a will-appoint. She died in 1902, and
by will exercised the power. 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. That this is sound law
is undisputed. On this doctrine the beneficiaries founded their argument, that to
tax the succession upon the occasion of their coming into possession and
enjoyment was to tax something which had in fact occurred years before at the
date of the delivery of the deeds by Astor. This is the same argument appellants
now urge upon facts which present no significant legal difference from those in
the Chanler Case. The Court of Appeals of New York (In re Delano's Estate,
176 N. Y. 486, 68 N. E. 871, 64 L. R. A. 279) held the tax not offensive to any
constitutional principle. This Court affirmed. In so doing, it disregarded the
technical situation, and looked to the substance of the matter.9 At page 473 of
205 U. S., 27 S. Ct. 550, 552, it used the following language:

83

'However technically correct it may be to say that the estate ame from the
donor, and not from the donee, of the power, it is self-evident that it was only

upon the exercise of the power that the estate in the plaintiffs in error became
complete. Without the exercise of the power of appointment the estates in
remainder would have gone to all in the class named in the deeds of William B.
Astor. By the exercise of this power some were divested of their estates and the
same were vested in others. It may be that the donee had no interest in the
estate as owner, but it took her act of appointment to finally transfer the estate
to some of the class and take it from others.'10
84

In Moffitt v. Kelly, 218 U. S. 400, 31 S. Ct. 79, 80, 54 L. Ed. 1086, 30 L. R. A.

(N. S.) 1179, the facts were these:

85

Moffitt married in California in 1863 and resided there with his wife until his
death in 1906. By his will he gave his estate to his wife and children as if he
had died intestate The probate court held that his widow's interest in the marital
community was within the provisions of a law passed in 1905 taxing all
devolutions of property by will or intestacy. The question was, therefore,
whether a surviving wife was liable for a tax, which, as applied, could only be
incident to her coming into untrammeled possession and enjoyment of what she
had technically owned prior to the passage of the taxing statute. The Supreme
Court of California held the tax valid against her insistence that this was a
violation of the contract clause, the due process clause, and the equal protection
clause, of the Federal Constitution. This Court sustained the judgment, and
said:

86

'But in every conceivable aspect, this proposition must rest upon one or both of
two theories: either that the nature and character of the right or interest was
such that the state could not tax it without violating the Constitution of the
United States, or that, if it could be generically taxed without violating that
instrument, for some particular reason the otherwise valid state power of
taxation could not be exerted without violating the Constitution of the United
States. The first conception is at once disposed of by saying that it is
elementary that the Constitution of the United States does not, generally
speaking, control the power of the states to select and classify subjects of
taxation, and hence, even although the wife's right in the communityproperty
was a vested right which could not be impaired by subsequent legislation it was
nevertheless, within the power of the state, without violating the Constitution of
the United States, in selecting objects of taxation, to select the vesting in omp
lete possession and enjoyment by wives of their shares in community property,
consequent upon the death of their husbands, and the resulting cessation of
their power to control the same and enjoy the fruits thereof. And this also
disposes of the second conception, since, if the state had the power, so far as
the Constitution of the United States was concerned, to select the vesting of

such right to possession and enjoyment as a subject of taxation, clearly the mere
fact that the wife had a preexiting right to the property created no exemption
from taxation if the selection for taxation would be otherwise legal. It follows,
therefore, that the mere statement of the contention demonstrates the mistaken
conception upon which, in the nature of things, it rests.
87

'It is said, however, that the reasoning just stated, while it may be abstractly
sound, is here inapplicable because the thing complained of in this case is that
the state of California has imposed an inheritance tax upon the share of the wife
in the community, and thereby taxed her as an heir of her husband, when, if the
laws existing at the time of the celebration of the marriage be properly
construed, and be held to be contractual, she took her share of the property on
her husband's death, not as an heir to property of which he was the owner, but
by virtue of a right of ownership vested in her prior to the death of the husband,
although the right to possess and enjoy such property was deferred, and arose
only on his death. But, for the purpose of enforcing the Constitution of the
United States, we are not concerned with the mere designation affixed to the
tax which the court below upheld, or whether the thing or subject taxed may or
may not have been mistakenly brought within the state taxing law. We say so
because, in determining whether the imposition of the tax complained of
violated the Constitution of the United States, we are solely confined to
considering whether the state had the lawful power, without violating the
Constitution of the United States, to levy a tax upon the subject or thing taxed.
This being true, as it clearly results from what we have said that the vesting of
the wife's right of possession and enjoyment, arising upon the death of her
husband, was subject to be taxed by the state, so far as the Constitution of the
United States was concerned, it follows that whether the tax imposed was
designated or levied as an inheritance tax or any other is a matter with which
we have no concern.'

88

Whatever may be said of the nature of the wife's interest in community

property, this decision assumes the wife's vested interest in her half thereof; and
that its free and unincumbered enjoyment only was postponed to the husband's
death. There can be no difference in legal effect between that situation and one
presented by the division of the total interests in a given property into a life
tenancy and a remainder.

89

The authority of the cases just noted has not heretofore been questioned in this
court, and for years they have stood unqualified in the vindication of the
constitutional validity of just such a tax as is now under attack.

90

Fourth. In all its decisions touching death duties, whether on successions or on

transfers, this Court has enunciated principles which sustain the validity of the
tax.
91

The most recent expression with respect to a succession tax concerned the very
laws of Massachusetts the application of which is here called in question.

92

In Saltonstall v. Saltonstall, 276 U. S. 260, 48 S. Ct. 225, 72 L. Ed. 565, one

Brooks, on various dates between 1905 and 1907, executed deeds to trustees,
which provided that the income should be paid to the settlor for life, or, if he
elected, should be accumulated, and that upon his and his wife's deaths the
income should be paid to his children in spendthrift trust, with gifts over. The
instruments reserved to the grantor certain powers of management of the trust,
and also provided that their terms might be changed by him with the
concurrence of one truste. Brooks died in 1920, having three times changed the
trusts-the last time in 1919. At the time the deeds were executed, there was no
statute taxing the succession to children of a decedent. But prior to Brooks'
death the act of 1907, which is involved in the present case, had been passed,
and had been amended by an act of 1909 taxing the acquisition of possession
and enjoyment of property by virtue of the exercise of a power of appointment
or by reason of the failure to exercise it. The Supreme Judicial Court of
Massachusetts held that the power of revocation reserved to Brooks was
equivalent to the creation of a power of appointment in him, and that, since the
beneficiaries could not be certain of taking until his death, the gift was one
made or intended to take effect in possession or enjoyment after his death; and
that the tax was on the succession, which includes the 'privileges enjoyed by
the beneficiary of succeeding to the possession and enjoyment of property.'
There, as here, it was claimed that the beneficiaries had vested interests subject
to be divested by a future event (in that case, the exercise of the power), which
never happened, and they argued that the tax law was retroactive in its
operation if applied to their interests, and hence violated the due process clause,
the equal protection clause, and probably article 1, 10, of the Constitution.
There, as here, it was insisted that the remaindermen needed nothing from the
commonwealth of Massachusetts subsequent to the vesting of their remainders.

93

After pointing out that the excise was not on the privilege of transmission, as
was the federal estate tax dealt with in Nichols v. Coolidge, but was upon the
privilege of succession, which might constitutionally be subjected to a tax by
the state, whether occasioned by death or effected by deed, and after calling
attention to the fact that the tax was imposed not on the donor, but on the
beneficiary, this Court said:

94

'* * * The gift taxed is not one long since completed, but one which never

passed to the beneficiaries beyond recall until the death of the donor; and the
value of the gift at that operative moment, rather than at some later date, is the
basis of the tax.'
The Court further stated that:
95

'So long as the privilege of succession has not been fully exercised it may be
reached by the tax.'
Again the Court said:

96

'* * * In determining whether it has been so exercised technical distinctions

between vested remainders and other interests are of little avail, for the shifting
of the economic benefits and burdens of property, which is the subject of a
succession tax, may even in the case of a vested remainder be restricted or
suspended by other legal devices.'

97

One of such other 'legal devices' is a provision 'divesting' a remainder which is

'vested.'

98

As the above quotation shows, the essential question in all such cases is
whether the succession has become complete by actual possession and
enjoyment prior to the passage of the taxing act.

99

Notwithstanding the distinction between a transfer tax and a succession tax, the
decisions under the federal estate tax statutes (transfer tax laws) are convincing
on the matter of substantiality as against technicality. The Court has uniformly
disregarded the technical aspect of a transfer and looked at the reality and
substance of the transaction. There is, in this aspect, no logical distinction
between the two kinds of excise.

100 In Chase National Bank v. United States, 278 U. S. 327, 49 S. Ct. 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. Thus it
said:
101 'Termination of the power of control at the time of death inures to the benefit of
him who owns the property subject to the power and thus brings about, at

death, the completio of that shifting of the economic benefits of property which
is the real subject of the tax, just as effectively as would its exercise, which
latter may be subjected to a privilege tax. Chanler v. Kelsey, 205 U. S. 466, 27
S. Ct. 550, 51 L. Ed. 882.'
102 In Tyler v. United States, 281 U. S. 497, 50 S. Ct. 356, 358, 74 L. Ed. 991, 69
A. L. R. 758, the Court considered the estate tax provisions of the Revenue
Acts of 1916 and 1921. Both acts contained a provision that upon the death of
one of two tenants by the entireties there should be included in the amount of
the decedent's estate, for the purpose of measuring the tax, the value of the
joint estate property, 'except such part thereof as may be shown to have
originally belonged to' the surviving joint tenant, 'and never to have belonged to
the decedent.' Under this provision, the United States assessed a tax against the
estates of Pennsylvania and Maryland decedents. Collection was resisted on the
ground that, by the common law of those states, tenants by the entireties are
seised of the whole and of every part of the joint estate, and that the survivor
had a vested estate long prior to the passage of the acts.
103 It was conceded that at the death of one nothing descends to the survivor; the
latter has, in the eye of the law, no more and no less than he or she had beforetechnically speaking, there is no succession.
104 But Congress expressed a purpose to tax the passage of something from the
decedent at death; just as here the Massachusetts Legislature showed its intent
to tax the acquisition of something which accrued to the beneficiaries at the
death of the settlor. In the instant case the so-called vested estate of the
beneficiaries was subject to be divested by their death prior to that of the
survivor of the grantors. In the Tyler Case the estate was absolutely vested; not
only so, but it was in law as large qua the survivor after the death of his
cotenant as it had been when both were alive; it could not be divested by the act
of either party; it could not be taken in execution of a judgment against either
party; the survivor needed to make no demand upon any one for possession.
105 The taxpayers argued in the Tyler Case, on precisely the same ground as
appellants now urge, that the survivor's interest had vested long prior to the
adoption of the Revenue Acts; that no transfer of title or interest in property
occurred on the death of one of the tenants by the entireties, and consequently
the tax was arbitrary and in violation of the Fifth Amendment, because the
subject or event on which the tax must be predicated was wanting. But the
Court had no difficulty in holding that what happened at the death of one of the
tenants was a transfer from the decedent of something which was the legitimate
subject of an excise. The Court said (page 503 of 281 U. S., 50 S. Ct. 356, 359):

106 'The question here, then, is not whether there has been, in the strick sense of
that word, a 'transfer' of the property by the death of the decedent, or a receipt
of it by right of succession, but whether the death has brought into being or
ripened for the survivor, property rights of such character as to make
appropriate the imposition of a tax upon that result (which Congress may call a
transfer tax, a death duty or anything else it sees fit), to be measured, in whole
or in part, by the value of such rights.'
107 Language more closely descriptive of the situation presented in the present case
could not be employed. Again the Court said (pages 503, 504 of 281 U. S., 50
S. Ct. 356, 359): 'According to the amiable fiction of the common law, adhered
to in Pennsylvania and Maryland, husband and wife are but one person, and the
point made is that, by the death of one party to this unit, no interest in property
held by them as tenants by the entirety passes to the other. This view when
applied to a taxing act, seems quite unsubstantial. 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. See Nicol v.
Ames, 173 U. S. 509, 516, 19 S. Ct. 522, 43 L. Ed. 786; Saltonstall v.
Saltonstall, supra, page 271 of 276 U. S., 48 S. Ct. 225.
108 'Taxation, as it many times has been said, is eminently practical, and a practical
mind, considering results, would have some difficulty in accepting the
conclusion that the death of one of the tenants in each of these cases did not
have the effect of passing to the survivor substantial rights, in respect of the
property, theretofore never enjoyed by such survivor. Before the death of the
husband (to take the Tyler Case, No. 428) the wife had the right to possess and
use the whole property, but so, also, had her husband; she could not dispose of
the property except with her husband's concurrence; her rights were hedged
about at all points by the equal rights of her husband. At his death, however,
and because of it, she, for the first time, became entitled to exclusive
possession, use and enjoyment; she ceased to hold the property subject to
qualifications imposed by the law relating to tenancy by the entirety, and
became entitled to hold and enjoy it absolutely as her own; and then, and then
only, she acquired the power, not theretofore possessed, of disposing of the
property by an exercise of hre sole will. Thus the death of one of the parties to
the tenancy became the 'generating source' of important and definite accessions
to the property rights of the other. These circumstances, together with the fact,
the existence of which the statute requires, that no part of the property
originally had belonged to the wife, are sufficient, in our opinion, to make valid

the inclusion of the property in the gross estate which forms the primary base
for the measurement of the tax. And in that view the resulting tax attributable
to such property is plainly indirect.'
109 Every word of the above quotation applies with as great force to the
beneficiaries of the Coolidge trust as it applied in that case to the surviving
tenant.
110 In Reinecke v. Northern Trust Co., 278 U. S. 339, 49 S. Ct. 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. The remaining five
provided for life incomes to certain persons, terminable five years after the
settlor's death, or upon the death of the life tenants, whichever should first
happen, with remainders over. Powers of amendment were reserved in these,
not to the settlor alone, but jointly to the settlor and certain beneficiaries. One
of the seven trusts was modified in a matter immaterial to the decision, and the
others were not modified or revoked. In calculating the amount of the federal
estate tax, the United States sought to include the property embraced in all
seven of the trusts. It was held that as to the two trusts in which the settlor had
unrestricted power of revocation the transfer was not complete until his death.
As to the five trusts in which the settlor did not have such power in himself
alone, but had power of amendment jointly with beneficiaries, it was decided
that the property had for all practical purposes passed completely from his
control. It was pointed out that the reservation of powers of management in the
settlor, as distinguished from the right to revoke or change the beneficiaries of
the trust, was insignificant, and that the essential test was the passage of the
economic benefit or enjoyment of the property. Thus it was said:
111 'Nor did the reserved powers of management of the trusts save o d ecedent any
control over the economic benefits or the enjoyment of the property. He would
equally have reserved all these powers and others had he made himself the
trustee, but the transfer would not for that reason have been incomplete. The
shifting of the economic interest in the trust property which was the subject of
the tax was thus complete as soon as the trust was made. His power to recall the
property and of control over it for his own benefit then ceased and as the trusts
were not made in contemplation of death, the reserved powers do not serve to
distinguish them from any other gift inter vivos not subject to the tax.'
112 Repeatedly throughout the opinion the passage of the control, possession, and

enjoyment of the property is referred to as the touchstone of the incidence of

the tax. If that be the test when the privilege of the transferor is under
investigation, no reason is apparent why the same yardstick should not be used
when we are considering acquisition of rights by the beneficiary.
113 Thus the Reinecke Case is a full authority for the disregard of mere legal
interests as distinguished from substantial rights of control or enjoyment.
Technically speaking, the remainders to the beneficiaries in that case were
vested subject only to be divested by the exercise of a power of revocation
reserved to the grantor. It has been argued in the instant case that the vested
estates created by the deed of 1907 never were divested; that the event which
could work a divestiture never occurred. That was equally true in the Reinecke
Case.
114 It might well have been argued in the Reinecke Case that the right of revocation
reserved by the grantor did not constitute an interest in the property; was not a
property right, and therefore, the grantor having parted with all legal interest,
his estate could not be taxed as upon the transfer of any property or any interest
recognized by the law. Such an argument would have been technically sound
under Jones v. Clifton, 101 U. S. 225, 230, 25 L. Ed. 908, where it was said of
such a power:
115 'The title to the land and policies passed by the deeds; a power only was
reserved. 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.'
116 The reasoning in the Reinecke Case shows that such an argument would have
been of no avail. No more ought the argument of appellants, based upon the socalled vesting of the future interest at the execution of the deed, prevail in this
case.
117 It is said that the death of the settlors has no necessary relation to the benefits
received by the remaindermen; that any other event might as well have been
chosen as the occasion for the commutation of the children's future interests
into interests in fee simple in possession; and that this in itself makes the tax
arbitrary and unreasonable because the incident which occasions its imposition
is irrelevant. This Court has negatived this contention. In Keeney v.
Comptroller of State of New York, supra, it was said:
118 'There can be no arbitrary and unreasonable discrimination. But when there is a

difference, it need not be great or conspicuous in order to warrant classification.

In the present instance, and so far as the 14th Amendment is concerned, the
state could put transfers intended to take effect at the death of the grantor in a
class with transfers by descent, will, or gifts in contemplation of the death of the
donor, without, at the same time, taxing transfers intended to take effect on the
death of some person other than the grantor, or on the happening of a certain or
contingent event.'
And in the same case it was said:
119 'Where the grantor makes a transfer of property to take effect on the death of a
third person, it might * * * be taxed as a devolution or succession.'11
120 And in Chase National Bank v. United States, supra, the same principle was
announced at page 338 of 278 U. S., 49 S. Ct. 129.12
121 Appellants rely on Nichols v. Coolidge, supra; Blodgett v. Holden, 275 U. S.
142, 48 S. Ct. 105, 72 L. Ed. 206; Untermyer v. Anderson, 276 U. S. 440, 48 S.
Ct. 353, 72 L. Ed. 645; Chase National Bank v. United States, supra; and
Reinecke v. Northern Trust Co., supra, as in principle supporting their position.
The Reinecke Case and the Chase National Bank Case have already been
analyzed. It is evident from what has been said that appellants can derive no
comfort from those decisions.
122 Of course the test to be applied in cases arising under the federal estate tax law
is whether the transferor has parted with every vestige of control over the
beneficial enjoyment and possession of the property, and not whether the
beneficiary has received it. Nichols v. Coolidge dealt, under the federal estate
tax law, with the same trust involved in this case, and the inquiry there
necessarily was whether prior to the passage of the estate tax act the grantors
had so fully divested themselves of all right of control and enjoyment of the
property that nothing remained to pass out of them at death. The facts were held
to make an affirmative answer imperative. Here, on the other hand, we inquire,
not whether the grantor has parted with title, control, and enjoyment, but
whether the grantee has fully acquired them prior to the passage of the law.
123 In Blodgett v. Holden and Untermyer v. Anderson the Court had under
consideration a transfer tax laid on the donor in respect of gifts made inter
vivos. The gifts in those cases were complete prior to the passage of the taxing
statute, and, as in Nichols v. Coolidge, technical title, power to recall, and
beneficial use and enjoyment had all passed from the donor prior to the

legislative attempt to tax the gift. These circumstances demonstrate that neither
case is an authority for holding a succession tax invalid if levied on the
occasion of the acquisition of possession and enjoyment of property by the
donee.
124 Finally, appellants cite Matter of Pell, 171 N. Y. 48, 63 N. E. 789, 57 L. R. A.
540, 89 Am. St. Rep. 791, and certain cases in state courts which have followed
it. That case adopts the views urged by appellants. It was followed in Hunt v.
Wicht, 174 Cal. 205, 162 P. 639, L. R. A. 1917C, 961.
125 In re Houston's Estate, 276 Pa. 330, 120 A. 267, involved no constitutional
question. The statute in that case was construed to apply only to interests
thereafter created.
126 In Lacey v. State Treasurer, 152 Iowa, 477, 132 N. W. 843, and
Commonwealth v. Wellford, 114 Va. 372, 76 S. E. 917, 44 L. R. A. (N. S.)
419, the statutes were construed as affecting only interests thereafter arising,
though in both there were dicta to the effect that a contrary construction would
render them unconstitutional. The dictum in the Lacey Case is repugnant to the
later decision in Brown v. Gulliford, 181 Iowa, 897, 165 N. W. 182.
127 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.
128 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.
129 It cannot, therefore, be said, as appellants contend, that there is any
considerable body of state decisions in their favor.
130 The reasoning of the state court cases which have held the tax invalid is flatly
contrary to the decisions of this Court in the cases above discussed; and, in
view of that fact, it should not prevail here.
131 The Massachusetts court described the tax as one on the succession, and we
have dealt with it on that basis; but it is neither necessary to sustain it nor
permissible to defeat it by applying to it any particular descriptive language.
See Macallen Co. v. Massachusetts, 279 U. S. 620, 625, 626, 49 S. Ct. 432, 73

L. Ed. 874; Educational Films Corp. v. Ward, 282 U. S. 379, 51 S. Ct. 170, 75
L. Ed. 400, decided January 12, 1931; Moffitt v. Kelly, supra; Tyler v. United
States, supra. A state's power to tax property is plenary. The power to tax it as a
whole necessarily embraces the power to tax any of its incidents, or the use or
enjoyment of them-provided only that the taxable occasion does not antedate
the taxing statute so as to render it invalid because retroactive. If the property
itself may constitutionally be taxed, obviously it is competent to tax the use of
it, Billings v. United States, 232 U. S. 261, 34 S. Ct. 421, 58 L. Ed. 596; Hylton
v. United States, 3 Dall. 171, 1 L. Ed. 556; or a sale of it, Thomas v. United
States, 192 U. S. 363, 370, 24 S. Ct. 305, 48 L. Ed. 481; Nicol v. Ames, 173 U.
S. 509, 19 S. Ct. 522, 43 L. Ed. 786; or the gift of it, Bromley v. McCaughn,
280 U. S. 124, 50 S. Ct. 46, 74 L. Ed. 226. And, if the gift of it may be taxed, it
is difficult to see upon what constitutional grounds the power to tax the receipt
of it, whether as the result of inheritance or otherwise, may be denied to a state,
whatever name may be given the tax, and even though the right to receive it, as
distinguished from its actual receipt at a future date, antedated the statute.
Receipt in possession and enjoyment is as much a taxable occasion as the
enjoyment of any other incident of property. A levy upon the taking possession
of property acquired by inheritance is one of the most ancient forms of tax
known to the law. It existed on the European Continent and in England prior to
the adoption of our Constitution.13
132 A tax laid upon the succession after the future interest has been created and the
right accrued, but before the actual enjoyment in possession of the property, is
no more a denial of due process than a tax laid upon income accrued prior to
the adoption of the taxing statute but received after its passage. The
constitutionality of the latter form of tax is now beyond question. Brushaber v.
U. P. R. R. 240 U. S. 1, 20, 36 S. Ct. 236, 60 L. Ed. 493, L. R. A. 1917D, 414,
Ann. Cas. 1917B, 713; Lynch v. Hornby, 247 U. S. 339, 343, 38 S. Ct. 543, 62
L. Ed. 1149; Taft v. Bowers, 278 U. S. 470, 483, 484, 49 S. Ct. 199, 73 L. Ed.
460, 64 A. L. R. 362; Cooper v. United States, 280 U. S. 409, 411, 50 S. Ct.
164, 74 L. Ed. 516.
133 The contention that taxation of a property right or an incident of ownership
previously created by a deed or contract impairs the obligation of the contract is
not new. But it must be denied both on reason and on authority. The present tax
has no reference to the contract or its obligation save to recognize and observe
the existence of both. It would serve no useful purpose at this late day to
elaborate the doctrine, long since settled, that, to be obnoxious to the contract
clause, a statute must act upon the contract so as to interfere with the right of
enforcement. All of the cases cited as supporting the conclusion of the Court
deal with such a situation. None of them even remotely ear on the question

here raised whether a tax levied in respect of the future enjoyment of property
which chanced to be acquired under an earlier contract impairs the contract.
That question, often raised, has always been answered here in the negative.
In Orr v. Gilman, supra, it was claimed that a succession tax law enacted after
134 the original deed granting a power of appointment, and construed as taxing the
beneficiary of the power, violated article 1, 10, of the Constitution. The
argument was rejected.
135 A similar contention made in Chanler v. Kelsey, supra, was disposed of in these
words:
136 'Nor do we perceive that the effect has been to violate any contract right of the
parties. It is said that this is so, because, instead of disposing of the entire
estate, 95 per cent of the property included in the power has been transferred
and 5 per cent taken by the state; but as there was a valid exercise of the taxing
power of the state, we think the imposition of such a tax violated no contract
because it resulted in the reduction of the estate.'
137 Justice White, in Moffitt v. Kelly, supra, said of a similar contention:
138 '1. The Alleged Violation of the Contract Clause.-Considered merely
subjectively, the contention is that the rights vested in the wife as a partner in
the community existing by virtue of the constitution and laws of the state of
California governing at the time of the marriage were contractual rights of such
a character that they could not be essentially changed or modified by
subsequent legislation without impairing the obligations of the contract, and
thereby violating the Constitution of the United States. But even although this
theoretical proposition be fully conceded, for the sake of the argument, it is
apparent that it is here a mere abstraction, and is therefore irrelevant to the case
to be decided. We say this because there is no assertion of the giving effect to
any law enacted subsequent to the contracting of the marriage which purports to
essentially modify the rights of the wife in and to the community, as those
rights existed at the time the marriage was celebrated. This is so because the
state law the enforcement of which it is asserted will impair the obligation of
the contract is merely a law imposing a tax.' 218 U. S. pages 402, 403, 31 S. Ct.
79, 54 L. Ed. 1086, 30 L. R. A. (N. S.) 1179.
139 The foregoing cases constitute only one application of a principle which has
been repeatedly applied, not only to rights derived under deeds in their aspect as
contracts, but to rights derived pursuant to all sorts of contracts. It was said in

North Missouri Railroad v. Maguire, 20 Wall. 46, 61, 22 L. Ed. 287:

140 'Authorities from numerous sources are cited by the plaintiffs, but none of them
show that a lawful tax on a new subject, or an increased tax on an old one,
interferes with a contract or impairs its obligation, within the meaning of the
Constitution, even though such taxation may affect particular contracts, as it
may increase the debt of one person and lessen the security of another, or may
impose additional burdens upon one class and release the burdens of another,
still the tax must be paid unless prohibited by the Constitution, nor can it be
said that it impairs the obligation of any existing contract in its true legal sense.'
141 With respect to deeds and grants, this Court said in Providence Bank v.
Billings, 4 Pet. 514, 562, 7 L. Ed. 939:
142 'Land, for example, has, in many, perhaps in all the states, been granted by
government since the adoption of the constitution. This grant is a contract, the
object of which is that the profits issuing from it shall enure to the benefit of the
grantee. Yet the power of taxation may be carried so far as to absorb these
profits. Does this impair the obligation of the contract? The idea is rejected by
all; and the proposition appears so extravagant, that it is difficult to admit any
resemblance in the cases.'
143 In Kehrer v. Stewart, 197 U. S. 60, 25 S. Ct. 403, 406, 49 L. Ed. 663, it was
contended that a statute levying a tax upon all agents of packing houses doing
business in the state, of $200, in each county where such business was carried
on, impaired the obligation of the contract which an agent and entered into with
a packing house. With respect to this contention this Court said:
144 'The argument that the tax impairs the obligation of a contract between the
petitioner and Nelson Morris & Company is hardly worthy of serious
consideration. The power of taxation overrides any agreement of an employee
to serve for a specific sum.'
145 With respect to a tax upon income, it was said in Murray v. Charleston, 96 U.
S. 432, 446, 21 L. Ed. 760:
146 '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.'
147 In Clement National Bank v. Vermont, 231 U. S. 120, 34 S. Ct. 31, 38, 58 L.

147 In Clement National Bank v. Vermont, 231 U. S. 120, 34 S. Ct. 31, 38, 58 L.
Ed. 147, the claim was that a state statute which levied a tax on bank deposits
collectible from the depositor, and which had to be deducted by the bank from
the interest paid to the depositor, impaired the obligations of the prior contracts
of depositors with the bank. This Court overruled the objection, saying:
148 'But this is clearly untenable. The statute did not act upon such contracts; it
imposed a tax upon the property of depositors in the exercise of a power subject
to which the deposits were made.'
149 In Lake Superior Mines v. Lord, 271 U. S. 577, 46 S. Ct. 627, 628, 70 L. Ed.
1093, the obligation of an outstanding contract for the receipt of royalties in
minerals mined was held not to be impaired by a later state statute taxing the
proceeds of the contract. The Court said:
150 'Titles to all the lands and leases were obtained subject to the state's power to
tax. If the statute now in controversy is within that power, it cannot impair the
obligation of appellants' contracts; if beyond, it is, of course, invalid.
Accordingly, there is no occasion further to discuss the application of article 1,
10.'
151 In short, it is evident from the authorities cited, and many more which might be
quoted, that the power to tax property, or a right or a status, or a privilege,
acquired or enjoyed by virtue of a contract, is no wise him dered or impeded by
the fact of the existend of the contract whether it antedates or follows the
effective date of the taxing act. No exercise of a governmental power, whether
it be that of taxation, police, or eminent domain, though it make less valuable
the fruits of a private contract, can be said to impair the obligation thereof.
152 I think the judgment should be affirmed.
153 Mr. Justice HOLMES, Mr. Justice BRANDEIS, and Mr. Justice STONE
concur in this opinion.

The importance of the question is shown by the fact that forty-one states and
territories have statutes containing provisions substantially similar to those of
the Massachusetts acts involved in this appeal: Alaska, chapter 60, S. L. 1919;
Arizona, Chapters 26, 26A, S. L. 1922; Arkansas, Act No. 106, p. 526, Laws
1929; California, chapter 821, Laws 1921, 2; Chapter 844, Laws 1929, 2;
Colorado, chapter 144, S. L. 1921, 2; chapter 114, S. L. 1927, 2;

Connecticut, chapter 190, P. A. 1923, 1; chapter 299, P. A. 1929, 2(d);

Delaware, chapter 6, 146, R. C. 1915; 29 Del. Laws, chapter 7, Laws 1917;
36 Del. Laws, chapter 7, Laws 1929; Hawaii, chapter 96, Rev. Laws 1915,
1323; Act 223, S. L. 1917; Act 195, S. L. 1923; Idaho, chapter 148, Comp. St.
1919 3371; chapter 243, S. L. 1929; Illinois, Laws 1909, p. 311; Smith-Hurd,
1929, chapter 120, 375, p. 2436; Indiana, chapter 65, Acts 1929, p. 186; Iowa,
chapter 351, 7307, Code 1927; Kansas, 79-1501 et seq., Rev. St. 1923;
Kentucky, Art. 19, 4281a-1 (Carroll, Ky. Stat. 1930); Maine, chapter 266,
Laws 1917; chapter 187, Laws 1919; Michigan, Act No. 188, Laws 1899; Act
No. 380, P. A. 1925; Minnesota, section 2292 et seq., 1927 Minn. Stat.
(Mason), vol. 1; Mississippi, chapter 134, Laws 1924, 5(f); Missouri, art. 21,
558 et seq., Rev. St. 1919; Montana, chapter 57, 10377.1, C. C. P. (Rev.
Codes Supp. 1927); Nebraska, article 22, 77-2201), Comp. Stat. 1929; New
Hampshire, chapter 73, Pub. Laws, 1926; New Jersey, chapter 228, Laws 1909;
chapter 144, Laws 1929; New York, chapter 60, 249-b, Consol. Laws 1930;
North Carolina, chapter 101, P. L. 1925; chapter 80, P. L. 1927; North Dakota,
chapter 267, Laws 1927; Ohio, 5331, 5332, Gen. Code; Oklahoma, chapter
84, art. 18, 9856, Comp. St. 1921; Oregon, chapter 6, 10-601, Ann. Code
1930; Pennsylvania, Act May 6, 1887, P. L. 79; Act June 20, 1919, P. L. 521;
Rhode Island, chapter 1339, P. L. 1916; chapter 2311, P. L. 1923; chapter 1355,
P. L. 1929; South Carolina, Acts 1922, p. 800; Acts 1925, p. 201; South Dakota,
chapter 11, 6827, Comp. Laws 1929; Tennessee, chapter 46, P. A. 1919;
chapter 64, P. A. 1925; Texas, chapter 5, art. 7117, 1928 Complete Stat.; Utah,
section 3185, Comp. Laws 1917; chapter 64, Laws 1919; Virginia, section 44,
Code (Appendix) 1924; chapter 45, Acts 1928, p. 35; Tax Code (Appendix
1930) c. 9, 98; Washington, section 7051, Pierce 1929 Code; West Virginia,
chapter 33, Barnes Code 1923; chapter 57, Acts 1929; Wisconsin, Stat. 72.01
et seq. 1923; chapter 237, Stat. 1925; Wyoming, chapter 78, S. L. 1925.
2

Both transfer and succession taxes have been imposed by the United States, the
former by the existing estate tax law, the latter by the act of 1864 (chapter 173,
124, 127, 13 Stat. 285, 287) and the act of 1898 (chapter 448, 29, 30 Stat.
464).

St. 1891, c. 425; St. 1907, c. 563; Minot v. Winthrop, 162 Mass. 113, 38 N. E.
512, 26 L. R. A. 259; Callahan v. Woodbridge, 171 Mass. 595, 51 N. E. 176;
Crocker v. Shaw, 174 Mass. 266, 54 N. E. 549; Attorney General v. Stone, 209
Mass. 186, 95 N. E. 395; Magee v. Commissioner of Corporations, 256 Mass.
512, 153 N. E. 1.

See, also, United States v. Hazard (C. C.) 8 F 38 0; United States v. Rankin (C.
C.) 8 F. 872.

See, also, Brown v. Kinney (C. C. A.) 137 F. 1018; Ward v. Sage (C. C. A.)
185 F. 7; Rosenfeld v. Scott (C. C. A.) 245 F. 646.

A similar result had been reached in like circumstances in Blake v. McCartney,

Fed. Cas. No. 1498, 4 Cliff. 101, where apparently no attack was made on the
constitutionality of the tax.

Carpenter v. Pennsylvania, 17 How. 456, 15 L. Ed. 127, dealt with a similar

situation, and the tax was sustained. It was decided prior to the adoption of the
Fourteenth Amendment; but in Orr v. Gilman, 183 U. S. 278, 286, 22 S. Ct.
213, 46 L. Ed. 196, it was said that the grounds on which it went were pertinent
under the amendment.

In Stauffer's Succession, 119 La. 66, 43 So. 928, it was held that, where the
executors had actually delivered the property to the legatee prior to the passage
of the act, the tax could not be collected, because the seisin in right had merged
into a seisin in fact, and that to apply the statute would be to give it a retroactive
effect; and reference was made to the Cahen Case.

See, also, to the same effect, Orr v. Gilman, supra.

10

Taxes have been sustained where a statute passed after the creation of a future
interest imposed a tax on the occasion of the acquisition of possession and
enjoyment due to the failure to exercise a power of appointment, the exercise of
which would have divested such future interest. Saltonstall v. Saltonstall, 276
U. S. 260, 48 S. Ct. 225, 72 L. Ed. 565, infra; Minot v. Treasurer, 207 Mass.
588, 93 N. E. 973, 33 L. R. A. (N. S.) 236; Manning v. Board, 46 R. I. 400, 127
A. 865; Montague v. State, 163 Wis. 58, 157 N. W. 508; State v. Brooks
(Minn.) 232 N. W. 331. Such cases are authority against appellants' contention.
The 'estate' or 'interest' of the beneficiary is just as truly vested in such a case as
here; it is equally true that he has to do nothing but wait to come into
possession and enjoyment. In both instances some future event, either a
voluntary act of the donor or the holder of the power, or an event certain to
happen, but uncertain as to the time of its happening, may deprive him of the
possibility of possession and enjoyment. See contra, In re Lansing, 182 N. Y.
238, 74 N. E. 882; In re Chapman, 133 App. Div. 337, 117 N. Y. S. 679. The
courts of New York thus hold that possession and enjoyment due to the exercise
of a power of appointment is taxable, though the legal estate springs from the
original instrument which antedated the taxing statute, while that due to
nonexercise of the power is not.

11

See, also, Blake v. McCartney, Fed. Cas. No. 1498, 4 Cliff. 101, where, under a
bequest in trust effective in 1847, two successive life estates were created, the
second of which too ef fect in possession in 1867, and it was held the

beneficiary was liable for tax under the act of 1864. The court said: 'The
argument for the plaintiff is, that the tax can only be imposed by virtue of the
section in question, where the death of the predecessor is the cause of the
successor's being entitled to possession of the real estate, and not where it is
merely the occasion, as in this case; but the proposition finds no support in the
language of the provision, and the rule in the exchequer court of England is
well settled the other way.'
12

See Boston Safe Dep. & T. Co. v. Commissioner (Mass.) 166 N. E. 729.

13

Nielsen v. Johnson, 279 U. S. 47, 53, 49 S. Ct. 223, 73 L. Ed. 607; Gleason and
Otis, 'Inheritance Taxation' (4th Ed.) 243. As shown by Digby, 'History of the
Law of Real Property' (5th Ed.) p. 40, feudal 'relief' was a payment made by an
heir for the privilege of admission as tenant of the land in his ancestor's place.