183 U.S.

278
22 S.Ct. 213
46 L.Ed. 196

ALEXANDER E. ORR and Others, Plffs. in Err.,

v.
THEODORE P. GILMAN, Comptroller of the State of New
York, and Bird S. Coler, Comptroller of the City of New York.
No. 351.
Argued November 25, 26, 1901.
Decided January 6, 1902.

David Dows, Sr., a citizen and resident of the city and state of New York,
died March 30, 1890, leaving a last will and testament, which was duly
admitted to probate by the surrogate's court of New York county on April
14, 1890. The will provided that the legal title to the property mentioned
and described in the 6th clause thereof should vest in the executors' names
as trustees during the lifetime of testator's son, David Dows, Jr., with
power to manage and control the same, and with the duty to pay the net
income therefrom the said David Dows, Jr. The will further provided that
upon the death of David Dows, Jr., the property should vest absolutely
and at once in such of his children him surviving and the issue of his
deceased children as he should by his last will and testament designate and
appoint, and in such manner and upon such terms as he might legally
impose. In and by the 8th clause or paragraph of his said will, David
Dows, Sr., devised and bequeathed the legal title to his residuary estate to
his executors as trustees, to hold and manage the same, one-eighth part in
trust during the lifetime of testator's widow and one eighth in trust for
each of testator's seven childrenone of whom was the said David Dows,
Jr. It was made the duty of the trustees to pay over the net income to the
respective persons named during their respective lives, and it was
provided that, upon the death of each of said persons, the said one-eighth
part of the residuary estate, with any accumulations and profits, should
vest absolutely and at once in such of his or her children, or the issue of
such children, as he or she might by his or her last will and testament
designate and appoint, and in such manner and upon such terms as he or
she may legally impose. It was provided in both the 6th and 8th clauses
that if the legatee for life shall die intestate. then the property should vest

absolutely and at once in his or her children surviving, share and share
alike.
David Dows, Jr., died January 13, 1899, leaving a last will and testament,
which was duly admitted to probate by the surrogate's court of
Westchester county, New York, by the 3d paragraph or clause whereof, in
the exercise of the power of appointment given him in his father's will, he
provided that the property mentioned and described in the said 6th and 8th
clauses of the will of David Dows, Sr., should vest upon his death in his
three children, David, Robert, and Kemeth, in a manner therein described.
On October 31, 1900, Bird S. Coler, comptroller of the city of New York,
and Theodore P. Gilman, comptroller of the state of New York, filed a
petition in the surrogate's court of New York county, in which, after
reciting the foregoing facts, they alleged that the transfer of funds and
property of which David Dows, Jr., had the life use, and over which he
had exercised the power of appointment given him in his father's will, was
taxable, and they therefore prayed for the appointment of a transfer-tax
appraiser, in order that the transfer tax might be duly assessed and
imposed. Thereupon Charles K. Lexow was so appointed, and on January
31, 1901, after having given notice to the said comptrollers and to the
executors and trustees of the last will of David Dows, Sr., and to the
executors of the last will of David Dows, Jr., and to the guardians of the
minor children of David Dows, Jr., the appraiser filed in the surrogate's
office a report of his valuation of the interests of the three sons of David
Dows, Jr., under the respective wills of their father and grandfather.
Certain exceptions to this report were filed on behalf of the executors and
guardians, the nature of which will hereafter appear. Thereafter, on
February 15, 1901, the surrogate, on the basis of the report of the said
appraiser, assessed a transfer tax of upwards of $7,000 against each of the
respective interests of the three sons of David Dows, Jr. The exceptions to
the appraiser's report and to the assessment were, on March 6, 1901, after
argument by counsel, overruled; and the surrogate entered the following
order and judgment:
'It is ordered, adjudged, and decreed that said report and order so appealed
from be and they are hereby affirmed, and that the date when the transfers
now taxed were effected was January 13, 1899, that date being fixed
because it was the date of the death of David Dows, Jr., the donee of the
power contained in the will of David Dows, Sr.'
An appeal was taken from the order and decree of the surrogate to the
appellate division of the supreme court of New York, and by that court, on

March 22, 1901, the order of the surrogate was affirmed. On appeal duly
taken, the court of appeals of the and the record of the proceedings were
remitted the order and judgment of the appellate division of the supreme
court, and the judgment of the said court of appeals and the reocrd of the
proceedings were remitted into the surrogate's court of New York, to be
enforced according to law, and the judgment of the court of appeals was
on May 28, 1901, made the judgment and order of the surrogate's court.
And on June 13, 1901, a writ of error to that judgment was allowed, and
the cause was brought to this court.
Messrs. Horace E. Deming and Julius Henry Cohen for plaintiffs in error.
Messrs. Jabish Holmes, Jr., and Edgar J. Levey for defendants in error.
Statement by Mr. Justice Shiras:
This is the case of a so-called transfer tax imposed under the laws of the
state of New York. The various contentions of the plaintiffs in error,
attacking the validity of the tax, were overruled by the courts of the state,
and the cause is now before us on the general proposition that by the
proceedings the plaintiffs in error, or those whom they represent as
trustees and guardians, have been deprived of the equal protection of the
laws of the state of New York, their privileges and immunities as citizens
of the United States have been abridged, and their property taken without
due process of law, in violation of the 14th Amendment to the
Constitution of the United States, and likewise, as to a portion of the
property affected, in violation of 10 of article 1 of the Constitution of the
United States.
The first question presented arises out of subdivision 5 of 220 of the tax
law of the state of New York, which reads as follows:
'5. Whenever any person or corporation shall exercise a power of
appointment derived from any disposition of property, made either before
or after the passage of this act, such appointment, when made, shall be
deemed a transfer taxable, under the provisions of this act, in the same
manner as though the property to which such appointment relates
belonged absolutely to the donee of such power, and had been bequcathed
or devised by such donee by will; and whenever any person or corporation
possessing such a power of appointment so derived shall omit or fail to
exercise the same within the time provided therefor, in whole or in part, a
transfer taxable under the provisions of this act shall be deemed to take
place to the extent of such omissions or failure, in the same manner as
though the persons or corporations thereby becoming entitled to the

possession or enjoyment of the property to which such power related had

succeeded thereto by a will of the donee of the power failing to exercise
such power, taking effect at the time of such omission or failure.' [Laws of
1897, chap. 284.]
This enactment became a law on April 16, 1897. David Dows, Sr., died
March 30, 1890, leaving a will containing a power of appointment to his
son, David Dows, Jr., which will was duly admitted to probate by the
surrogate's court on April 14, 1890. David Dows, Jr., died on January 13,
1899, leaving a will in which he exercised the power of appointment given
him in the will of his father, and apportioned the property which was the
subject of the power among his three sons, who are represented in this
litigation by the plaintiff in error.
It is claimed that under the law of the state of New York as it stood at the
time of his death, in 1890, David Dows, Sr., had a legal right to transfer,
by will, his property, or any interest therein, to his grandchildren, without
any diminution or impairment then imposed by the law of the state upon
the exercise of that right; that his said grandchildren acquired vested rights
in the property so transferred; and that the subsequent law, whose terms
have been above transcribed, operates to diminish and impair those vested
rights. In other words, it is claimed that it is not competent for the state,
by a subsequent enactment, to exact a price or charge for a privilege
lawfully exercised in 1890, and to thus take from the grandchildren a
portion of the very property the full right to which had vested in them
many years before.
We here meet, in the first place, the question of the construction of the
will of David Dows, Sr. Under and by virtue of that will did the property
whose transfer is taxed pass to and become vested in the grandchildren, or
did the property not become vested in them until and by virtue of the will
of David Dows, Jr., exercising the power of appointment? The answer to
be given to this question must, of course, be that furnished us by the court
of appeals in this case (Re Dows, 167 N. Y. 227, 52 L. R. A. 433, 60 N. E.
439):
'Whatever be the technical source of title of a grantee under a power of
appointment, it cannot be denied that, in reality and substance, it is the
execution of the power that gives to the grantee the property passing under
it. The will of Dows, Sr., gave his son a power of appointment to be
exercised only in a particular manner, to wit, by last will and testament. If,
as said by the Supreme Court of the United States, the right to take
property by devise is not an inherent or natural right, but a privilege

accorded by the state, which it may tax or charge for, it follows that the
rights of a testator to make a will or testamentary instrument is equally a
privilege, and equally subject to the taxing power of the state. When
David Dows, Sr., devised this property to the appointees under the will of
his son, he necessarily subjected it to the charge that the state might
impose on the privilege accorded to the son of making a will. That charge
is the same in character as if it had been laid on the inheritance of the
estate of the son himself; that is, for the privilege of succeeding to
property under a will.'
It will be perceived that in putting this construction upon the will of David
Dows, Sr., the court of appeals not merely construed the words of the will,
but, by implication, applied to the case the provisions of the subdivision 5
of 220 under which the transfer tax in question was imposed, and thus
construed that tax law, and affirmed its validity.
While it is settled law that this court will follow the construction put by
the state courts upon wills devising property situated within the state, and
while it is also true that we adopt the construction of its own statutes by
the state courts, a question may remain whether the statute, as so
construed, imports a violation of any of the rights secured by applicable
provisions of the Constitution of the United States. And such is the
contention here.
This court has no authority to revise the statutes of New York upon any
grounds of justice, policy, or consistency to its own Constitution. Such
questions are concluded by the decision of the legislative and judicial
authorities of the state.
In Carpenter v. Pennsylvania, 17 How. 456, 15 L. ed. 127, the question
arose as to the validity, in its Federal aspect, of a law of the state of
Pennsylvania imposing an inheritance tax on personal property which had
passed into the possession of an executor before the passage of the act,
and which was held by him for the purpose of distribution among the
legatees, who were collateral relatives to the decedent. The act was held
valid by the supreme court of the state, and was brought up to this court
by a writ of error, where it was contended that such an act was in its
nature an ex post facto law, which took the property of an individual to the
use of the state, because of a fact which had occurred prior to the passage
of the law; and also that the law, in its retroactive effect, impaired the
obligation of a contract, in that it was alleged to absolve the executor from
his contract, implied in law, to pay over the legacies to those entitled to
them, just to the extent that the law required him to pay to the state. The

opinion of the court, delivered by Mr. Justice Campbell, was in part as

follows:

'The validity of the act as affecting successions to open after its enactment is
not contested; nor is the authority of the state to levy taxes upon personal
property belonging to its citizens, but situated beyond its limits, denied. But the
complaint is that the application of the act of 1826 by that of 1850 to a
succession already in the course of settlement, and which had been appropriated
by the last will of decedent, involved an arbitrary change of the existing laws of
inheritance to the extent of this tax, in the sequestration of that amount for the
uses of the state; that the rights of the residuary legatees were vested at the
death of the testator, and from that time those persons were nonresidents, and
the property taxed was also beyond the state; and that the state has employed its
power over the executor and the property within its borders to accomplish a
measure of wrong and injustice; that the act contains the imposition of a
forfeiture or penalty, and is ex post facto.

'It is in some sense true that the rights of donees under a will are vested at the
death of the testator, and that the acts of administration which follow are
conservatory means directed by the state to ascertain those rights, and to
accomplish an effective translation of the dominion of the decedent to the
objects of his bounty; and the legislation adopted with any other aim than this
would justify criticism, and perhaps censure. But, until the period for
distribution arrives, the law of the decedent's domicil attaches to the property,
and all other jurisdictions refer to the place of the domicil as that where the
distribution should be made. The will of the testator is proven there, and his
executor receives his authority to collect the property by the recognition of the
legal tribunals of that place. The personal estate, so far as it has a determinate
owner, belongs to the executor thus constituted. The rights of the donee are
subordinate to the conditions, formalities, and administrative control prescribed
by the state in the interests of public order, and are only irrevocably established
upon its abdication of this control at the period of distribution. If the state,
during this period of administration and control by its tribunals and their
appointees, think fit to impose a tax upon the property, there is no obstacle in
the Constitution and laws of the United States to prevent it. Ennis v. Smith, 14
How. 400, 14 L. ed. 472. . . .

'The act of 1850, in enlarging the operation of the act of 1826 and by extending
the language of that act beyond its legal import, is retrospective in its form; but
its practical agency is to subject to assessment property liable to taxation, to
answer an existing exigency of the state, and to be collected in the course of

future administration; and the language retrospective is of no importance,

except to describe the property to be included in the assessment. And, as the
supreme court [of Pennsylvania] has well said, 'in establishing its peculiar
interpretation, it (the legislature) has only done indirectly what it was
competent to do directly.' But if the act of 1850 involved a change in the law of
succession, and could be regarded as a civil regulation for the division of the
estates of unmarried persons having no lineal heirs, and not as a fiscal
imposition, this court could not pronounce it to be an ex post facto law within
the 10th section of the 1st article of the Constitution. The debates in the Federal
convention upon the Constitution show that the terms 'cx post facto laws' were
understood in a restricted sense relating to criminal cases only, and that the
description of Blackstone of such laws was referred to for their meaning. 3
Madison Papers, 1399, 1450, 1579. This signification was adopted in this court
shortly after its organization, in opinions carefully prepared, and has been
repeatedly announced since that time. Calder v. Bull, 3 Dall. 386, 1 L. ed. 648;
Flctcher v. Peck, 6 Cranch, 87, 3 L. ed. 162; 8 Pet. 88, 8 L. ed. 876, 11 Pet.
421, 9 L. ed. 774.'
4

It is true that this case was decided before the adoption of the 14th
Amendment, but we think it correctly defines the limits of jurisdiction between
the state and Federal governments, in respect to the control of the estates of
decedents, both as they were regarded before, and have been regarded since, the
adoption of the 14th Amendment. It has never been held that it was the purpose
or function of that amendment to change the systems and policies of the states
in regard to the devolution of estates, or to the extent of the taxing power over
them.

In Re Kemmler, 136 U. S. 436, 34 L. ed. 519, 10 Sup. Ct. Rep. 930, it was
stated by the present Chief Justice that

'The 14th Amendment did not radically change the whole theory of the relations
of the state and Federal governments to each other, and of both governments to
the people. The same person may be at the same time a citizen of the United
States and a citizen of a state. Protection to life, liberty, and property rests
primarily with the states; and the amendment furnishes an additional guaranty
against any encroachment by the states upon those fundamental rights which
belong to citizenship, and which the state governments were created to secure.
The privileges and immunities of citizens of the United States, as distinguished
from the privileges and immunities of citizens of the states, are indeed
protected by it; but those are privileges and immunities arising out of the nature
and essential character of the national government, and granted or secured by
the Constitution of the United States. United States v. Cruikshank 92 U. S. 542,

23 L. ed. 588; Slaughter House Cases, 16 Wall. 36, 21 L. ed. 394.'

7

It was said in De Vaughn v. Hutchinson (165 U. S. 566, 41 L. ed. 827, 17 Sup.

Ct. Rep. 461), that 'it is a principle firmly established that to the law of the state
in which the land is situated we must look for the rules which govern its
descent, alienation, and transfer, and for the effect and construction of wills and
other conveyances.'

In Clarke v. Clarke, 178 U. S. 186, 44 L. ed. 1028, 20 Sup. Ct. Rep. 873, the
proposition was again announced as one requiring only to be stated, that the law
of a state in which land is situated controls and governs its transmission by will,
or its passage in case of intestacy; and that in this court the local law of a state
is the law of that state, as announced by its court of last resort.

In Magoun v. Illinois Trust & Sav. Bank, 170 U. S. 283, 42 L. ed. 1037, 17 Sup.
Ct. Rep. 594, the validity of a law of the state of Illinois imposing a legacy and
inheritance tax, the rate progressing by the amount of the beneficial interest
acquired, was assailed in the courts of Illinois as being in violation of the
Constitution of that state requiring equal and uniform taxation. The state court
having decided that the progressive feature did not violate the Constitution of
that state, the case came to this court upon the contention that the establishment
of a progressive rate was a denial both of due process of law and of the equal
protection of the laws, within the meaning of the 14th Amendment to the
Constitution. But these contentions were held by this court to be untenable.

10

See, likewise, Knowlton v. Moore, 178 U. S. 41, 44 L. ed. 969, 20 Sup. Ct.
Rep. 747, and Plummer v. Coler, 178 U. S. 115, 44 L. ed. 998, 20 Sup. Ct. Rep.
774, wherein were considered the nature of inheritance-tax laws and the extent
of the powers of the states and of Congress in imposing and regulating them.

11

In the light of the principles thus established we are unable to see in this
legislation of the state of New York, as construed by its highest court, any
infringement of the salutary provisions of the 14th Amendment. There are
involved no arbitrary or unequal regulations prescribing different rates of
taxation on property or persons in the same condition. The provisions of the
law extend alike to all estates that descend or devolve upon the death of those
who once owned them. The moneys raised by the taxation are applied to the
lawful uses of the state, in which the legatees have the same interests with the
other citizens. Nor is it claimed that the amount or rate of the taxation is
excessive to the extent of confiscation.

12

But it is further urged that the tax law of the state of New York, 221,
expressly exempts from taxation or charge all real estate passing to lineal
descendants by descent or devise, and all such descendants so taking title to real
estate from ancestors; and it is said that under the interpretation of this law by
the courts of the state of New York all property which was real estate at the
time of the death of the person owning it continues, as to the lineal descendants,
to be real estate, and is therefore exempt from taxation, though such
descendants may not enter into possession and enjoyment of the property until
years after the death of the ancestor who owned it, and the property in the
meantime has been converted into cash or securities.

13

It is true that the property described in the 6th paragraph of the will of David
Dows, Sr., was real estate, but under the powers conferred in the will of David
Dows, Sr., the trustees had converted the real estate, and held the proceeds as
personal property, before the death of David Dows, Jr., and it was this personal
property which became vested in the grandchildren under the exercise of the
power of appointment. The court of appeals held that it was the execution of
the power of appointment which subjected grantees under it to the transfer tax.
This conclusion is binding upon this court in so far as it involves a construction
of the will and of the statute. Nor are we able to perceive that thereby the
plaintiffs in error were deprived of any rights under the Federal Constitution.
The rule of law laid down by the New York courts is applicable to all alike, and
even if the view of the court of appeals respecting the question was wrong, it
was an error which we have no power to review.

14

Another objection made to the judgment of the court of appeals affirming the
surrogate's order is that the tax imposed upon transfers made under a power of
appointment is a tax upon property, and not on the right of succession; and that,
as a portion of the fund was invested in incorporated companies liable to
taxation on their own capital, and in certain bonds of the state of New York,
and in bonds of the city of New York exempt by statute from taxation, such
exemption formed part of the contract under which said securities were
purchased, and the tax imposed and the proceedings to enforce it were in
violation of 10 of article 1 of the Constitution of the United States forbidding
the states to pass laws impairing the obligation of contracts.

15

The court of appeals overruled the proposition that the transfer tax in question
was a tax upon property, and not upon the right of succession, and held that
when David Dows, Sr., devised this property to the appointees under the will of
his son, he necessarily subjected it to the charge that the state might impose on
the privilege accorded to the son of making a will, and that the charge is the

same in character as if it had been laid on the inheritance of the estate of the son
himself; that is, for the privilege of succeeding to property under a will.
16

In reaching this conclusion the court of appeals cited not only various New
York cases, but several decisions of this court, the principles of which were
thought to be applicable. Magoun v. Illinois Trust & Sav. Bank, 170 U. S. 283,
42 L. ed. 1037, 18 Sup. Ct. Rep. 594; Plummer v. Coler, 178 U. S. 115, 44 L.
ed. 998, 20 Sup. Ct. Rep. 774; Knowlton v. Moore, 178 U. S. 41, 44 L. ed. 969,
20 Sup. Ct. Rep. 747; Murdock v. Ward, 178 U. S. 139, 44 L. ed. 1009, 20 Sup.
Ct. Rep. 775.

17

We think it unnecessary to enter upon another discussion of a subject so

recently considered in the cases just cited, and that it is sufficient to say that, in
our opinion, the court of appeals did not err when it held that a transfer or
succession tax, not being a direct tax upon property, but a charge upon a
privilege exercised or enjoyed under the law of the state, does not, when
imposed in cases where the property passing consists of securities exempt by
statute, impair the obligation of a contract within the meaning of the
Constitution of the United States.

18

A further contention is made that the legatees or devisees of the remainders

created by the will of David Dows, Jr., are not legally subject to taxation until
the precedent estates terminate and the remainders vest in possession.

19

The court of appeals held that the doctrine invoked had no application to the
remainders given to the sons of David Dows, Jr.; that they are absolute, and not
subject to be devested, or to fail in any contingency whatever; that by statute
they are alienable, devisable, descendible, and if the property were real estate,
they could be sold on execution against their owners; that by the aid of the
table of annuities, upon the faith of which large sums are constantly distributed
by the courts, the present value of these remainders is capable of ready
computation; and that therefore they are subject to present taxation.

20

These views of the court of appeals must be accepted by us as accurate

statements of the law of the state; and though it is claimed in the brief of
counsel for the plaintiffs in error that such a construction of the transfer-tax law
brings it into conflict with the 14th Amendment of the Constitution of the
United States, we are unable to approve such a contention. The subject dealt
with is one of state law expounded by state courts. The laws and the
construction put upon them apply equally to all persons in a like situation, and
cannot be regarded as conflicting with the provisions of the Federal

Constitution. Magoun v. Illinois Trust & Sav. Bank, 170 U. S. 283, 42 L. ed.
1037, 18 Sup. Ct. Rep. 594.
21

Other contentions made in the brief of counsel for the plaintiffs in error seem,
so far as our jurisdiction is concerned, to be phases of those heretofore
considered, and thereby disposed of.

22

The judgment of the Court of Appeals of the state of New York affirming the
judgment of the Surrogate's Court of New York county is affirmed.

23

Mr. Justice Harlan concurs in the result.