"When a specific foreign legatee of a foreign testator can obtain satisfaction of his legacy in a foreign jurisdiction, the executor cannot be compelled to pay such a legacy out of the assets within our jurisdiction. This is the necessary result of the practical and obvious distinction between testacy and intestacy as applied to this subject of taxation. If a specific legatee needs not the intervention of our laws or courts to obtain what comes to him under a foreign will through foreign assets in a foreign jurisdiction, our laws cannot coerce an executor into paying his legacy out of funds within our jurisdiction for the sole purpose of exacting a tax. But in a case of intestacy the rule is essentially different, because the distributee takes an undivided interest in the whole estate; and if part of it happens to be within our jurisdiction, he can only get his share of what is here under our laws and through our courts. This is the theory upon which the nephews and nieces of the intestate in the case at bar are clearly taxable under our statute." 4

The same result was reached in a case of testacy in a recent New Jersey case. Where no such election is made, the local tax must be estimated by treating the local assets as chargeable with a proportionate share of taxable legacies in the proportion that local property bears to the whole estate.

Under the Massachusetts statute the court holds that the executors cannot use stock in Massachusetts corporations for the payment of debts or legacies to the exemption of the property in New Hampshire and so relieve it from liability to a tax imposed by Massachusetts law. The rights of all parties, including the rights of the commonwealth to its tax, vest at the death of the testator. The executors "cannot by independent action, in attempting to marshal assets according to their personal wishes, enlarge or diminish the rights of legatees or of the commonwealth. . . . The debts, the legacies in Massachusetts exempt from taxation and the expenses of administration are chargeable upon the general assets, as well those in New Hampshire as those in Massachusetts, and only a proportional part of the property in Massachusetts should be used in paying them. The balance is subject to the payment of a tax under the statute."7

In a recent Washington case the testator was a resident of Maine and died there, leaving property both in Maine and in Washington. The Maine court ordered distribution of the estate of the testator within the state of Maine to collateral heirs and

strangers in full, and this was done, leaving the entire estate in Washington to pass to lineals.

The Washington court holds that it must presume that the authority of the Maine court was rightfully exercised and cannot hold the executor here or other legatees responsible for the errors of that court. The fact that the same persons acted as executors in both states, and that the executors were beneficiaries under the will, can make no difference.

The Washington court has no right or power to review the judgment of the court of Maine. The executor in Washington had no opportunity to collect the inheritance tax from the collateral heirs and strangers to the blood, and this court will not compel him to pay such tax out of his own funds or out of the funds belonging to other heirs or legatees.

1 Memphis Trust Co. v. Speed, 114 Tenn. 677, 88 S. W.321.

The decedent was a resident of the state of Illinois, and was a member of the partnership doing business in New York and in Chicago. The New York branch was mainly occupied with manufacturing and the Chicago branch in selling, and therefore the debts owing to the New York creditors exceeded the value of the New York assets; but that the firm did not owe the persons from whom it purchased the goods is immaterial, as it did owe for discounts and loans effected, the proceeds of which were applied towards the purchase price of the property. Therefore, as debts in New York exhausted the value of the property here no tax could be imposed. In re King, 172 N. Y. 616, 64 N. E. 1122, affirming 71 N. Y. App. Div. 581, 76 N. Y. Suppl. 220.

"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, as the indebtedness to the New York creditors is a general indebtedness against the whole estate. But in this case 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. In re Pullman, 46 N. Y. App. Div. 574, 62 N. Y. Suppl. 395. See further, ante, s. 191.

In re James, 144 N. Y. 6, 11, 38 N. E. 961, affirming 77 Hun 211, 27 N. Y. Suppl. 288, 6 Misc. 206. In re Whiting, 69 Misc. 526, 127 N. Y. Suppl. 960, 139 App. Div. 905, 124 N. Y. Suppl. 1134. See, however, the Act of 1911. The decedent was a resident of New Jersey, leaving personal property in New York and also in New Jersey. The executor paid taxable legacies out of the New Jersey assets and distributed the New York assets among people of the one per cent class who were not taxable at all, because the New York assets are less than ten thousand dollars in amount. The court holds that it was the legal right of the executor to elect to pay the taxable legacies out of the New Jersey assets and to distribute the New York assets to persons who under our law are exempt from any tax whatever. "It was his plain duty to exercise this right in the

interests of parties claiming under the will as legatees; and he owed no duty to the state of New York to do anything different. He had this right of election until he had actually appropriated the New York assets to the payment of debts and legacies. There was no warrant of law to justify the appraiser in assuriing that the taxable legacies would be paid pro rata out of both funds. The natural inference was that the assets would be marshaled in such a way as to require the smallest payınent of tax, and, if the intent of the executor was material to produce a different result, the burden of proving the fact rested upon the state, and the executor should have been questioned upon the subject by the appraiser before the report was made." Per Thomas, S., in In re McEwan, 51 Misc. 455, 101 N. Y. Suppl. 733.

The property of which an English testator died possessed in Great Britain is largely in excess of the amount given by him in legacies and some portion of these legacies has already been paid from the English estate, and the executor has declared his determination of appropriating that part of the testator's property to their payment so that the American estate shall constitute the residuary estate disposed of by the will in favor of the testator's brothers. "This he may rightly do and thus save the estate from the payment of the succession tax imposed by our laws. The fact of such an appropriation will, of course, appear upon his accounting. If the executor determines to pay the legacies from the English estate, the American estate is thereby freed from the burden of the special tax, the imposition of which depends upon the fact of a succession by the legatee to some property which is within the state. If the American estate is appropriated to persons who are within the excepted degrees of relationship to the testator, the right to claim the tax from the executor is gone. It does not lie with the officers of the state to say, in such a case, which part of the testator's property shall be appropriated to the payment of the legacies. The law is not arbitrary in its application. It is simply absolute in its requirements, when the precise case arises which it was framed to meet; and where, as here, the case is not presented of an appropriation of any part of the American estate in payment of the legacies to the foreign legatees, this special tax law cannot and should not apply. To this view we are all the more disposed because to hold otherwise might be to subject this estate to taxation both in Great Britain and in this state. Such a result of a double taxation is one which the courts should incline to avoid, whenever it is possible, within reason, to do so." Per Gray, J., in In re James, 144 N. Y. 6, 11, 38 N. E. 961, affirming 77 Hun 211, 27 N. Y. Suppl. 288, 6 Misc. 206. Under the statute of 1908, chapter 310, the executors have no right to marshal assets by electing to appropriate New York assets to the payment of legacies exempt or taxable at the minimum rate, leaving the payment of legacies at a higher rate from assets outside the state. The executor claimed that when he selected the securities in New York to pay the two legacies in question such securities became in effect as much "specifically bequeathed" as if named directly in the will. But the court holds that the will fixed the character of the legacies as general legacies and that the act of the executor could not change this character. In re Porter, 67 Misc. 19, 124 N. Y. Suppl. 676.

The testator died living in Missouri and owning stock in a Tennessee corporation and the will gave the testator's wife one-half of the residue. The widow elected under this provision of the will to take the stock in the Tennessee corporation and the court holds that the executor had a right upon the election

of the widow to transfer to her the stock in the Tennessee corporation in payment of her one-half interest, provided, of course, it was taken at a fair valuation as compared with the balance of the residuary estate wherever situated. It was argued that under this residuary clause which in terms did not confer any right of election the wife had no right to make a selection of specific property left in the residuary estate. The court relies upon the Matter of James, 144 N. Y. 6, 38 N. E. 961, where the whole matter was discussed. Memphis Trust Co. v. Speed, 114 Tenn. 677, 88 S. W. 321.

Per Werner, J., in In re Ramsdill, 190 N. Y. 492, 496, 83 N. E. 584, reversing 119 N. Y. App. Div. 890.

Tilford v. Dickinson, 79 N. J. L. 302, 75 A. 574, reversed on another point in (N. J. 1911,) 79 A. 1119.

In re McEwan, 51 Misc. Rep. 455, 101 N. Y. Suppl. 733. Wieting v. Morrow, (Iowa, 1911,) 132 N. W. 193.

Per Knowlton, C. J., in Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700. In re Clark, 37 Wash. 671, 80 P. 267.

[See further, post, s. 354.]

Sec. 205. Federal Act of 1898.-Aliens.

The federal act of 1898 does not apply to intangible personal property of a non-resident alien who never had a domicile in the United States and died abroad, such personal property being within the United States and having passed to his son, also an alien domiciled abroad, as sole legatee and next of kin of the deceased, partly under a will executed abroad and partly under the intestate laws of Spain. There is no question of the power of the legislature to tax the personal property of non-residents, but the question is of its intent to do so by the particular act in question. As the property in this case did not pass under any will executed in any state or territory of the United States, or by the intestate laws of any such state or territory, the case is not within the literal words of the act unless the word "state" is used in a sense broad enough to include a foreign.

state or territory.

The court finds that the English cases reach the conclusion that under the general act imposing a duty upon legacies, the law of the domicile of the testator controls. If he be domiciled abroad, whether an alien or a British subject, his legacies are exempt whether the property be in England at the time of his death or be subsequently sent there by his executors for local administration and distribution.

The words in the act of 1898, confining the application of the act to property passing "either by will or by the intestate laws of

any state or territory," limits its effect to wills executed in "any state or territory" under which property passes.

Eidman v. Martinez, 184 U. S. 578, 590, 22 S. Ct. 515, 46 L. Ed. 697, relying upon United States v. Hunnewell, 13 Fed. 617. Moore v. Ruckgaber, 184 U. S. 593, 22 S. Ct. 521, 46 L. Ed. 705, affirming 104 Fed. 947, 31 Civ. Proc. 310 (although will was executed in this country).

Sec. 206. Effect of Place of Execution of Will.

Property situated in this country belonging to a non-resident decedent is not subject to the federal inheritance tax of 1898, although the will was executed in New York in 1890, during a temporary sojourn there.

Moore v. Ruckgaber, 184 U. S. 593, 22 S. Ct. 521, 46 L. Ed. 705, affirming 104 Fed. 947, 31 Civ. Proc. 310. The court relies upon United States v. Hunnewell, 13 Fed. Rep. 617.