MATTER OF JAMES

GRAY, J.

At the time of his death in Africa, in April, 1890, the testator was a citizen of the Kingdom of Great Britain and was there domiciled. By his last will, which he had made at the place of his domicile, he disposed of a very large estate. He left property in Great Britain, which was valued at $477,630, and property in this country, which was valued at $2,303,472.53. He gave legacies to collateral relatives and to charities which, in the aggregate, amounted to $236,810. The residue of his estate was given to his executors, upon trusts for the benefit of his two brothers. The charitable bequests were to foreign corporations and the persons, to whom legacies were given, were residents of Great Britain, with the exception of two; who resided in this country, though where does not appear. He left no debts here. His will was proved in England in June, 1890, and, afterwards, as the result of an action brought in the courts of this state by the executors, was established here and letters testamentary were issued thereon to John Arthur Jones; one of the executors named and also a resident of Great Britain. He applied to the surrogate of the county of New York for the appointment of an appraiser; for the purpose of an appraisement, under the law of this state imposing a tax upon gifts, legacies and collateral inheritances. Besides the facts which have been stated, it appeared that by the will all of the legacies were to be paid within three months of the testator's death, free of duty; that a portion of the amount given in legacies had already been paid in Great Britain, out of the estate there, together with the duties imposed on legacies by the law of that country and that the property in this country consisted, among other things, in the stock and bonds of corporations of this and of other states; which securities were deposited in this state at the time of testator's death. The surrogate, finding that the value of the estate here amounted to .82825 per cent of testator's whole estate, decided that the legacies given by the will were liable to taxation, under the law, on the basis of that percentage and he, also, held that, in valuing the assets of the estate here, there should be included the stock and bonds of the foreign corporations. Upon appeal to the General Term of the Supreme Court, the decree of the surrogate was reversed in those respects and the rulings referred to present the questions for our consideration, upon this appeal.

The act in force at the time, which imposed a tax on gifts, legacies and collateral inheritances, is contained in chapter 713 of the Laws of 1887. By the first section, it was provided that "all property which shall pass by will, or by the intestate laws of this state, from any person who may die seized or possessed of the same while a resident of this state, or if such decedent was not a resident of this state at the time of death, which property, or any part thereof, shall be within this state, * * * shall be and is subject to a tax of five dollars on every hundred dollars of clear market value of such property, etc."

The change in the existing law, which the passage of this act effected, was to impose a succession tax, with respect to the property of non-resident decedents, which should be within this state. As the law stood before, under the act of 1885, it could not be gathered from its language that the legislature intended to impose a tax upon property in this state passing from non-resident decedents and the act of 1887 was, undoubtedly, passed in order to comprehend such cases. ( Matter of Enston, 113 N.Y. 174.) Under its provisions, the question of the residence of the deceased owner, and of the legatee, or of the collateral kindred, is, of course, of no materiality. It is the property of the decedent which is sought to be subjected to the tax. The right of the state to impose the tax is based upon its dominion over what property is situated within its territory. If the property consisted in personalty, its legal situs, although it, in fact, existed elsewhere than in the state, would follow the domicile of its owner and thus, if he were a resident of the state, become subject to taxation there. Another clear inference from the language of the amending statute, is, in our judgment, that the tax is laid only in the case where property of the non-resident decedent within the state passes to the legatee's collateral relative, or stranger in blood. Having, by the previous act of 1885, imposed a succession tax with respect to the property of residents of the state, the legislature added by amendment a further provision, which imposed the same tax with respect to any property of non-residents, that should be within the state and that should pass to persons or corporations, not excepted by the statute. That is to say, the property of non-resident decedents was not subjected absolutely to the tax, except where it, in fact, passed to the person, or corporation. In the present case, the property, which the testator died possessed of in Great Britain, is largely in excess of the amount given by him in legacies. Some portion of them 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.

This conclusion would seem to render further discussion unnecessary; but, in view of the importance of the ruling of the courts below upon the question of whether stocks of foreign corporations should be included in the valuation of testator's estate, it may be proper to express our judgment further. We do not think it was the intendment of the act of 1887 to reach, for purposes of taxation, any personal property that was not within the state, either in fact, or because of the domicile here of its owner. The reading of the act does not authorize us to construe it as an effort to tax that over which there was no jurisdiction and it would be highly improper to impute to the legislature such an intention. The stocks of foreign corporations, which formed part of this estate, were not property in the legal sense. The share certificates, which the testator held, represented the interests which he possessed in the corporations which issued them, and the legal situs of that species of personal property is where the corporation exists, or where the shareholder has his domicile. We so held in the Enston case ( supra) and the act of 1887 furnishes no evidence of any intention to change the policy of the law; which has regarded the stocks of foreign corporations as being taxable only in the place of the owner's residence, or in that of the corporation's. In the Romaine case ( 127 N.Y. 80), nothing was decided to the contrary of this view. The property of the non-resident decedent, in that case, which was held to be liable to taxation, was stated to be a mortgage upon real estate in the city of New York; deposits in savings banks in that city and stocks and bonds of different corporations, but whether domestic, or foreign, it was not made to appear. The appellant, in substance, argues that the provision for a tax on "property * * * within this state," which the act of 1887 contains, shows that the legislature intended to include as property, for purposes of taxation, in the estate of a non-resident decedent, evidences of property like certificates of stocks; but, without discussing the power of the legislature to do any such thing, we think that he is straining construction and importing a sense in the word "property," which the law has not attached. Both in the Swift case ( 137 N.Y. 77) and in the Merriam case (141 id. 479), the testator was a resident of the state and we held that certain personal chattels without the state, in the one case, and the stocks of foreign corporations, in the other case, should be included in the appraisement of the estate for purposes of taxation. The decision in each case, of course, rested upon the theory that the legal situs of the personalty could be regarded as at the owner's domicile.

The object of the act of 1887 was to bring within this scheme of taxation any property within the state, left by non-resident decedents. That is its obvious office and we are not disposed to give, as against the executor, any stricter construction of this act, which imposes a special burden of taxation, than what its fair and ordinary reading compels. Neither the context, nor the object which the act was apparently designed to accomplish in amendment of the previous act of 1885, requires that its words should be construed in a sense different from the ordinary one; that when property within this state passes from non-resident decedents, in certain cases, it shall be subject to the tax specified in the act.

The order of the General Term should be affirmed, with costs.

All concur.

Order affirmed.