another person, and therefore the bequest of freedom is a legacy on which the executor is liable to pay a tax on the appraised value of the slave. The court bases its decision on the theory that a large part of the personal property in the state consists of slaves, which should pay their share of the taxes.?

'State v. Dorsey, 6 Gill (Md.) 388.

2Spencer v. Negro Dennis, 8 Gill (Md.) 314.

CHAPTER XXVI.

PLEDGE OR COLLATERAL.

189. When Collateral Redeemed.

$190. Stock Pledged with Brokers.

191. Stock Pledged by Non-Resident.

Sec. 189. When Collateral Redeemed.

Where a resident of New York had pledged stock as collateral for a loan, and the executor paid the loan and redeemed the stock, the title to the stock has reverted to the estate of the pledgor and it is in a situation to be taxed as property of the estate.

In re Hurcomb, 36 Misc. Rep. 755, 74 N. Y. Suppl. 475.

Sec. 190. Stock Pledged with Brokers.

Where the stock was purchased by a stock broker for a customer with her own money, and they held the stock as collateral with other stock deposited with them, the court holds that the customer was merely the pledgee of the stock, the brokers being the owners of the property subject to a right to redeem upon paying the entire amount of the debt, and therefore the stock should not be included in the transfer of the estate of the customer. A subsequent sale of the stock by the brokers for the satisfaction of their lien extinguishes whatever right or title the decedent had, and demonstrated that instead of being the owner of the property the estate was indebted in a large sum to the brokers.

In re Havemeyer, 32 Misc. Rep. 416, 66 N. Y. Suppl. 722.

Sec. 191. Stock Pledged by Non-Resident.

The testator was a non-resident of New York and had a speculative stock account with brokers in the city of New York, and on the day of his death owed them large sums of money on stocks and bonds purchased by them for him with their own money. The court holds that the deceased was under contract with the brokers to apply certain pledged securities to the payment of the debt and the executrix performed that contract. The executrix argued

that having paid a portion of the debt with pledged non-taxable securities, which are not under the transfer law tax considered as "property" in this state, she has a right to treat such portion of the debt as still existing for the purpose of offsetting against it property otherwise taxable. But the court holds that the executrix cannot argue that the balance of the debt, after applying taxable property pledged which has actually been paid with nontaxable securities pledged for that purpose, should be carried as a debt to credit and offset against clearly taxable property. And while for the purposes of taxation non-taxable property is not to be treated as taxable property, yet it was part of the estate of the deceased which passed to the executrix, and she chose to cause its sale and application to the debt of the deceased; and therefore the balance of the taxable property in the state of New York consisting of real estate and personal property is subject to the tax.1

The testator, a resident of Illinois, at his death was the owner of bonds and stocks actually within the state of New York of corporations organized under the laws of New York state; and he also owned other personal property in New York, the aggregate value of all this property being about $774,000. At the time of his death he was indebted to various persons in New York in the sum of something over $800,000. That indebtedness was secured by a pledge of bonds actually located with the state worth $20,000 and partly by a pledge of stock of various corporations incorporated under the laws of states other than the state of New York, the market value of such stocks being in excess of the amount of the whole indebtedness. The court holds that for the purposes of taxation the testator's personal estate in New York amounted to $744,000, from which should be deducted the expenses of administration, executor's commissions and debts to the amount of $58,000, that being the value of the bonds and of the stock of New York corporations pledged as collateral security to the creditors in the city of New York. It was claimed that inasmuch as the decedent at the time of his death was indebted to local creditors to an amount greater than the market value of the local assets, there was no property of the decedent within the state of New York subject to a transfer tax; and that all the local assets of the decedent were primarily liable for the payment of the indebtedness to local creditors to the entire extent of such property; and that the local assets to the amount of $58,000 specifically pledged as collateral security for the payment of the indebtedness to local

creditors are liable to be entirely used for the purpose of such payment.

Where the whole estate is within the state of New York and the decedent is a resident of the state, undoubtedly debts are to be deducted from the value of the property, but in this case the indebtedness to the New York creditors is a general indebtedness against the whole estate. Here domestic creditors have in their hands legal title by a pledge and a right to resort for the payment of their debts to securities belonging to a non-resident decedent which are not taxable under the laws of this state; and therefore the indebtedness due such creditors is not to be offset against the value of the property of such decedent otherwise taxable under the transfer law of the state.2

1 In re Burden, 47 Misc. 329, 95 N. Y. Suppl. 972.

2 In re Pullman, 46 N. Y. App. Div. 574, 62 N. Y. Suppl. 395.

CHAPTER XXVII.

DOUBLE TAXATION.

§ 192. Disputed Domicile.

§ 193.

§ 194.

Double Taxation at Domicile of Owner and at Situs of Property.
Reciprocal Provisions.

§ 195. Lapsed Legacy.

§ 196. The Louisiana Rule.

Sec. 192. Disputed Domicile.

Where the proper state court administers the estate of a decedent as that of a resident, and its decree is by state law binding on all claimants against the estate, a final decree by such a court after payment of the tax is a bar to proceedings in the courts of another state on the theory that the decedent resided there. But where the first decree does not purport to be binding on all claimants, it is perfectly possible that the courts of two states may each decide the decedent to be a resident of that state, in which case each state will assess on the whole property on that basis.2

1

1 Tilt v. Kelsey, 207 U. S. 43, 28 S. Ct. 1, 52 L. Ed. 95.

2 The fact that the California courts decided that a certain decedent was a resident of California and administered his estate and assessed a tax on that basis does not bar the New York courts. It is not res judicata as to them, as the California decree was by California law binding only on "heirs, legatees or devisees," and did not purport to adjudicate taxes. In re Cummings, 142 App. Div. 377, 127 N. Y. Suppl. 109, reversing 63 Misc. 621, 118 N. Y. Suppl. 684.

Where there is a question whether a married woman is domiciled within the state of New Jersey or of New York, the fact that the will was never probated in New Jersey, but the probate was taken out in New York, does not deprive the state of New Jersey of jurisdiction to levy an inheritance tax upon it. The authority of the surrogate does not depend upon the probate of the will, which speaks from the death of the testatrix. In re Hartman, 70 N. J. Eq. 664, 668, 62 A. 560.

Certain facts proving domicile are considered ante, s. 19, n. 3.

The extra-territorial effect of a judgment as to domicile is considered ante, s. 21.

Sec. 193.

Double Taxation at Domicile of Owner and at Situs of Property.

Double taxation, both in the state where the property is situated and in the state of its owner's domicile, has been so often