Opinion
(December Term, 1858.)
Where a testator or intestate had his domicil abroad, and his personal estate was there also, it was Held that a tax under the 99th chapter, 7th section of the Rev. Code, was not demandable off of collaterals succeeding to the same, although resident in this State.
CAUSE removed from the Court of Equity of Mecklenburg County.
K. P. Battle, for the State.
Wilson, for the defendant.
Thomas Hoover, a citizen of Mississippi, died in that State in 1856, leaving a will, by which he disposed of a large amount of real and personal property lying beyond the limits of this State, much of which property was devised and bequeathed to collateral relations residing in North Carolina. The defendant, Brim, was appointed sole executor of the will, which was proved by him in the State of Mississippi, and under which he qualified and took upon himself the burden of administering the same.
The bill is filed against the executor in the name of the State of North Carolina, praying a decree for the payment of the tax due upon collaterals. Rev. Code, ch. 99. sec. 7.
To this bill there was a demurrer, and a joinder in demurrer; and the cause being set down for argument, was transmitted to this Court by consent.
The claim of the State to the tax, specified in the present case, is so manifestly unfounded, that we have no hesitation in sustaining the demurrer and dismissing the bill. In the case of Alvany v. Powell, 2 Jones' Eq. 51, it was assumed that the tax on legacies to collateral kindred or strangers, and on distributive shares, claimed by collateral next of kin, could apply only where the testator or intestate was domiciled abroad, leaving at his death personal property in this State, or had his domicil here, owning personal estate, situate in other States or countries. In England, it seems to have been settled by the case of Thompson v. The Lord Advocate, 12 Clark and Finnelly, 1, that the domicil of the deceased determined the right of the government to the tax under a statute similar to ours, while we decided that the situs of the property in this State was the true foundation for the claim to the tax. It never has been contended, either in England or in this State, that if the testator or intestate had his domicil abroad, and his personal estate were there also, any tax could be demanded of the legatee or next of kin, though they might be resident in the kingdom or State. The only true foundation of the right and power of taxation, is the support of the Government by which persons and their property are protected. The Government must be maintained and supported, otherwise neither persons nor property can be protected and secured. Hence, it follows that persons and property residing or being within the limits of the Government are the only proper subjects of taxation. In raising revenue from the devolution of personal property upon collateral relations, either by will or by the statute of distributions, it is a mere matter of expediency whether the domicil of the decedent, or the situs of the property be adopted as the rule; but, if there be neither domicil of the testator or intestate, nor situs of his property within the country, no Government of which we have any knowledge has attempted to impose a tax upon the legatee or next of kin merely because of his or their residence within it. After the legacy or distributive share has been received, it then becomes a part of the property of one of the citizens of the State, and then it may be taxed in common with any other property of the like kind. A very slight examination of the provisions of the 99th chapter of the Rev. Code will suffice to show that our Legislature did not intend to depart from the just principle of taxation of which we have spoken. The first section mentions citizens of the State and owners of property situate in the State, as being the sources from which the revenue is to be derived. In the 7th section, a tax is imposed upon legacies to collateral relations and to strangers upon distributive shares devolving upon collateral next of kin; and the three succeeding sections specifies the manner in which it is to be collected and paid into the public treasury. It is to be retained out of the estate of the decedent by the executor or administrator, and paid by him to the clerk of the Court of Pleas and Quarter Sessions of the county wherein the will was proved or administration granted. Remedies are then provided for obtaining the taxes from delinquent clerks; and a mode is pointed out for having the value of the specific articles ascertained. All this proves conclusively that there must be the domicil of the deceased, or the situs of his personal property, to give the county court jurisdiction to take probate of his will, or grant letters of administration upon the bona notabilia. If there be neither, as in the present case, then there are no means provided for collecting taxes, or in other words, there are no taxes imposed to be collected.
The demurrer must be sustained and the bill dismissed. As the cause is disposed of upon its merits, we have not deemed it necessary to examine critically the form of the bill, nor to decide whether, if objected to, it could be sustained in its present form. The usual course in similar cases, is to file an information in the name of the Attorney General or other proper officer for and on behalf of the State, and, as a general rule, it is best to follow ancient and approved precedents.
PER CURIAM, Demurrer sustained.