U.S. Supreme Court STATE OF TEXAS v. STATE OF FLORIDA, 306 U.S. 398 (1939)

[Page 306 U.S. 398, 402]

Howland Green Wilks, both alleged to be residents of New York. The bill of complaint alleges that Edward H. R. Green died at Lake Placid, New York, on June 8, 1936, leaving surviving him his wife and sister as his only heir and next of kin; that he left a gross estate of approximately $44,348, 500, and a net estate valued at $42,348,500, comprising real estate and tangible personal property located in Taxas, New York, Florida and Massachusetts, of an aggregate value of approximately $6,500,000, and intangible personal property consisting principally of stocks, bonds and securities, the paper evidences of most of which were located in New York.

The bill of complaint alleges that decedent, at the time of his death, was domiciled in Texas, but that Florida, New York, and Massachusetts each asserts, through its taxing officials, that decedent was at the time of his death domiciled within it. It alleges in detail that Texas and each of the defendant states maintains and enforces a system of taxation upon the inheritance or succession of the estates of decedents domiciled within the state at death, under which laws real estate and tangible personal property located within the state and all intangibles, regardless of their situs, are subjected to the tax; that each of the four states asserts and proposes to exercise the right to tax the estate of decedent on the assumption that decedent was domiciled within it at the time of his death; and that certain judicial proceedings have been instituted in each of the four states for the administration of decedent's estate or some parts of it. [Footnote 1] It is further alleged that

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wherever located and would now be taking appropriate action but for these proceedings; and that the net estate is not sufficient to pay the aggregate amount of the taxes claimed by them and by the federal government. [Footnote 2] He has

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time to time, the case is hardly unique nor are analogues to it unlikely to appear in the future. As a result, this Court is asked to determine the conflicting claims of different states of the Union to a share of the estate of individuals who, as a matter of hard fact, at different periods and contemporaneously invoked and enjoyed such benefits as the existence of state governments confer. It is asked to do so by applying an old doctrine of limited validity to modern circumstances whereby, through the elusive search for an often non-existent fact called domicile, only one state to the exclusion of all others would be allowed to levy a tax. The inherent difficulties of this problem have been widely recognized. 2 The old formulas are simply inadequate to the new situation. On the other hand, it is not for this Court in these cases of multiple residences to evolve new taxing policies based on more equitable considerations than the all-or- nothing consequence of the old domiciliary rule.

I am not unaware of the dilemma presented by such a situation as the Dorrance litigation. [Footnote 3] The circumstances attending the Green estate do not preclude like possibilities. But merely because no other means than litigation have as yet been evolved to adjust the conflicting

[Page 306 U.S. 398, 432]

their natural interest to seek a single, inclusive disposition of the elusive issue of domicile by having the original jurisdiction of this Court invoked.

It is hardly an answer that this Court can protect itself against feigned controversies. The difficulty is that in these modern multiple residence situations the issue of domicile is too often an inherently feigned issue. Two state courts can very legitimately find two different domiciles, in that two equally competent tribunals utilizing the same outward facts in the alembic of the same common law concept of domicile may easily distil contradictory conclusions. Merely to avoid such a conflict is not enough to give jurisdiction. [Footnote 4] The variant that this case presents is the allegation that if the claims of all four states prevail the estate would be more than eaten up and Texas would lose her potential right. This added requirement-the absorption of the entire estate by having numerous states stake out claims-is too readily supplied.

[Page 306 U.S. 398, 433]

in a single suit all states which even remotely might assert domiciliary claims against a decedent and where one state court might with as much reason as another find domicile within its state. Certainly when the claim of the moving state is so obviously without basis as this Court has now found in the case of Texas, the linchpin of jurisdiction is gone and the other states should be remitted to appropriate remedies outside this Court. Such a disposition would be a real safeguard against the construction of a suit to give this Court jurisdiction over matters which as such, this Court has already held, are not within our province. [Footnote 5] To find that the decedent could not, on self-serving grounds, elect to make his home in Texas 'where he in fact had no residence' and yet to retain the bill and dispose of it on its merits amounts, in effect, to a declaration of rights on behalf of the estate which could not be adjudicated otherwise than through the screen of a controversy between states.

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tion that its procedure for tax levy and collection has been set in operation. [Footnote 6] These circumstances are, therefore, not comparable to the issues in a conventional interpleader suit brought to forestall conflicting actions. Initiation of litigation is, of course, not a prerequisite to an ordinary interpleader. This only serves to emphasize the inappropriateness of utilizing a remedy invented to settle private controversies of limited scope to the resolution of conflicting governmental interests.

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potential abuses to which the doctrine is not unlikely to give rise.

I am authorized to say that Mr. Justice BLACK concurs in these views and in the conclusion that the bill should be dismissed. Footnotes

Footnote 1 The allegations are that on July 28, 1936, decedent's wife was appointed temporary administratrix of decedent's estate in Texas on an allegation that Green had died intestate and was domiciled at death in Texas; that on August 1, 1936, a proceeding was begun by decedent's sister in the Surrogate's Court of Essex County, New York, for the probate of decedent's will and for her confirmation as the executrix named in the will, in which proceeding she alleged that decedent, a non-resident of New York, had died there, leaving personal property located in the state, and in which proceeding a temporary administrator was appointed and decedent's wife and the New York Tax Commissioner entered their appearances; that on August 31, 1936, decedent's wife commenced an action in the United States District Court for northern Texas against decedent's sister to determine the rights of the former in the estate of decedent by reason of an alleged antenuptial agreement which purported to exclude the wife from any interest in decedent's property; that on October 21, 1936, on application of the Massachusetts Commissioner of Corporations and Taxation, a special administrator of the estate of decedent was appointed by a Massachusetts probate court to take possession of and conserve decedent's property in that commonwealth; and that on January 4, 1937, the County Judges' Court of Dade County, Florida, appointed decedent's widow administratrix of the estate of her husband located in Florida.

Footnote 2 The Special Master has found as follows: The net estate, after payment of debts and administration expenses other than death taxes, will amount to $36,137,335; and the tangible property taxable in the state of its situs is as follows:

Texas $ 2,220.00 Florida 222,276.00 New York 1,583,221.00 Massachusetts 2,498,707.00

Decedent's intangibles at the time of his death had a value of $35, 831,303. The paper evidences of decedent's intangibles were located outside of the states of Texas, Florida, and Massachusetts. 'The aggregate value of the shares of stock in and obligations of corporations and associations organized or having a principal place of business in Texas, Massachusetts and Florida, respectively, and of the obligations of persons residing in said States and of the obligations of said States and political subdivisions thereof, together with the value of the real estate and tangible property in Texas, Massachusetts and Florida, respectively, is less than the amount of the tax claimed by each of said States and the amount of such tax claimed by Texas, Massachusetts, and Florida, respectively, greatly exceeds the value of the property subject to the jurisdiction of their respective Courts and from which the tax might be collected in any proceeding in said Courts.' The Special Master found that the death taxes due to the United States, and due to each state, if its contentions be sustained, are as follows:

United States $ 17,520,987 Texas 4,685,057 Florida 4,663,857 New York 5,910,301 Massachusetts 4,947,008 Total $37,727,213

This exceeds the total net estate by the sum of $1,589,877. In addition the State of New York asserts a claim for unpaid personal income taxes of $920,827.

[Footnote 1] The spirit in which interstate litigation should be approached has been thus expressed by Mr. Chief Justice Fuller in State of Louisiana v. Texas, 176 U.S. 1, 15, 20 S.Ct. 251, 256: 'But it is apparent that the jurisdiction is of so delicate and grave a character that it was not contemplated that it would be exercised save when the necessity was absolute and the matter in itself properly justiciable.'

[Footnote 2] Interstate Commission on Conflicting Taxation, Conflicting Taxation ( 1935) 88 et seq.; Compare League of Nations Documents, E.F.S. 16. A. 16. 1921; E.F.S. 73. F. 19. 1923; C. 368. M. 115. 1925. II; C. 216. M. 85. 1927. II; C. 345. M. 102. 1928. II; C. 562. M. 178. 1928. II; C. 345. M. 134, 1929. II; C. 585. M. 263. 1930. II; C. 791. M. 385. 1931. IIA; C. 618. M. 291. 1933. IIA; C. 118. M. 57. 1936. IIA.

Footnote 3 In re Dorrance's Estate, 309 Pa. 151, 163 A. 303, certiorari denied, sub nom., Dorrance v. Pennsylvania, 287 U.S. 660, 53 S.Ct. 222; Id. 288 U.S. 617, 53 S.Ct. 507; New Jersey v. Pennsylvania, 287 U.S. 580, 53 S.Ct. 313; In re Dorrance, 113 N.J.Eq. 266, 166 A. 177; Id., 115 N.J.Eq. 268, 170 A. 601; Id., 116 N. J.Eq. 204, 172 A. 503, affirmed sub nom., Dorrance v. Thayer-Martin, 176 A. 902, 13 N.J.Misc. 168, affirmed, 116 N.J.L. 362, 184 A. 743, certiorari denied, 298 U.S. 678, 56 S.Ct. 949; Hill v. Martin, , 56 S.Ct. 278.

Footnote 4 The principle is thus formulated in the present case: 'That two or more states may each constitutionally assess death taxes on a decedent's intangibles upon a judicial determination that the decedent was domiciled within it in proceedings binding upon the representatives of the estate, but to which the other states are not parties, is an established principle of our federal jurisprudence.' 59 S.Ct. 569. The decision of the Court therefore binds the states upon an issue of state law which this Court could not consider upon appeal from the state courts, and on which this Court would be bound to follow state law in all other proceedings instituted in the federal courts.

Footnote 5 See note 4, supra.

Footnote 6 'As yet, no one of the States has assessed and levied any death tax against the estate, and, if the matter were left to the ordinary procedure for the assessment of such taxes in the various States, it is highly improbable that determinations would be made in all of the States that Green was domiciled therein. In New York State, the only administrative official who has authority to determine whether or not the estate tax is assessable on the theory that Green was a resident of the State is the Surrogate of one of the counties and thus far no Surrogate has acted in this respect.' Brief for the State of New York, p. 2.