Argument for Plaintiffs in Error.

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inheritance tax law is not void as a deprivation of property without due process of law within the meaning of the Fourteenth Amendment as to legatees of decedents dying prior to its enactment but whose estates were still undistributed.

A statute imposing a succession tax is not void as against estates not closed, as denying equal protection of the laws, because it does not affect estates which had been actually closed at the time of its enactment. When the state court which has delivered two decisions declares that the later does not overrule, but distinguishes, the earlier, which it states was decided on considerations having no application to the later one, both decisions must be considered as correct interpretations of the statute construed, and it is not the province of this court to pronounce them contradictory or one to be more decisive than the other.

THE facts are stated in the opinion.

Mr. Charles Rosen and Mr. Gustave Lemle for the plaintiffs in error:

That an inheritance tax is not a tax on property, but on the privilege or right of inheriting, is no longer open to question. Magoun v. Illinois Trust & Sav. Bank, 170 U. S. 283; Knowlton v. Moore, 178 U. S. 41; Plummer v. Coler, 178 U. S. 115; 27 Am. & Eng. Ency. of Law, 338.

That the rights of these heirs and legatees vested at the moment of the death of the ancestor is also beyond dispute. Black on Constitutional Prohibitions (1887), 239; Cooley, Const. Lim., 6th ed., 439; Prof. McGehee, Due Process of Law (1906), 142, 144; Calvitt v. Mulhollam, 12 Rob. (La.) 258; Womack v. Womack, 2 La. Ann. 339; Adams v. Hill, 5 La. Ann. 114; Glassock v. Clark, 33 La. Ann. 584; Ware v. Jones, 19 La. Ann. 428; Page v. Gas Light Co., 7 Rob. (La.) 184; Addison v. Bank, 15 Louisiana, 527; Succession of Prevost, 12 La. Ann. 577; Armand Heirs v. Executors, 3 Louisiana, 336.

As to the universal legatees, the inheritance of property by them took place at the moment of their testator's death. This privilege or right of inheritance was not exercised subsequently; and, there being no inheritance after the tax was levied, no tax is due.

The prohibition that formerly applied, under the Fifth Amendment, only to the United States, now applies with

203 U.S.

Argument for Plaintiffs in Error.

equal force, under the Fourteenth Amendment, to the States. They, no more than the United States, can, under the guise of taxation, or other legislation, take private property for public purposes without compensation, or pass retroactive laws that divest vested rights.

This law is not merely retroactive. Remedial legislation that is retrospective is unobjectionable. Retroactive legislation that does not divest vested rights is not in violation of the Federal Constitution. But retroactive legislation that divests vested rights, that interferes with rights already acquired, that imposes a tax for the privilege of inherison where such privilege has been long since exercised, and, therefore, requires payment of such tax merely because it has the physical power to do so by reason of the fact that the owner is, from some delay or other accidental cause, not yet in possession, is a clear taking of property, a clear deprivation of property, without due process of law. Cooley, Const. Lim., 6th ed., 436; Norman v. Heist, 5 W. & S. 171; Beall v. Beall, 8 Georgia, 210; Case of Pell, 171 N. Y. 48; Case of Lansing, 182 N. Y. 238.

The Supreme Court of Louisiana, in holding that as the inheritance was property within the limits of the State, the State could tax it, for the purpose mentioned, until it had passed out of the succession of the testator, erred.

Confusing the tax on the right to inherit with a tax on property, although the property was still within the State, the right of inheritance or succession did not still remain to be exercised.

The clause in question is a denial of the equal protection of the laws.

So far as the tax discriminates between descendants and collaterals, there is no objection. This was expressly decided in the Magoun case, but after having first made a class of collaterals or strangers, it taxes some and exempts others-and these, too, inheriting under the same conditions, by the same title, on the same day. This is not classification, and is a denial of the equal protection of the laws.

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Arbitrary selection can never be justified by calling it classification. The equal protection demanded by the Fourteenth Amendment forbids this. Railroad Co. v. Ellis, 165 U. S. 150; Barbier v. Connolly, 113 U. S. 27, 31; Cotting v. Kansas City Stock Yards, 183 U. S. 108; Yick Wo v. Hopkins, 118 U. S. 356, 369; Railroad & Tel. Co. v. Bd. of Equalizers, 83 Fed. Rep. 302; Connelly case, 184 U. S. 540.

Mr. F. C. Zacharie for defendants in error:

This court will not review or reverse the decision of the court of Louisiana on any question as to the construction of laws. of that State, even though this court might differ in that regard from the opinion and decision of the highest court of that State, in construing its own constitution and laws. 22 Ency. of Pl. & Pr., 326, and cases cited in note 3.

The inheritance or succession tax provided for by the Louisiana constitution, and the act 45 of 1904, passed in pursuance of the power conferred by that instrument, are in nowise in contravention of the provisions of the Constitution of the United States, and the judgment and decree of the Supreme Court of Louisiana should be affirmed and the claim of plaintiffs in error be rejected at their cost. Carpenter v. Pennsylvania, 17 How. 456; Orr v. Gilman et al., 183 U. S. 278.

MR. JUSTICE MCKENNA delivered the opinion of the court.

The case involves the validity, under the Constitution of the United States, of a burden imposed under the inheritance tax law of the State of Louisiana, passed June 28, 1904.

Mathias Levy, a resident of New Orleans, died in that city May 26, 1904. He was unmarried and left no ascendants, and was, therefore, without forced heirs. He left a last will and testament of the date of December 23, 1903, in which he named executors and made sundry particular bequests to charitable institutions. He bequeathed the balance of his estate, in equal shares, to his two nieces, Camille Cahen and

Julie Cahen, constituting them thereby his universal legatees and instituted heirs.

The will was duly probated in the Civil District Court for the Parish of Orleans, May 30, 1904. An inventory of his estate was taken June 9, 1904, and a supplementary inventory August 3, 1904. The inventories showed the total appraised value of the estate to be $64,676.05. Of this amount, after deducting the debts and charges of the estate and particular legacies, there was left, as the portion going to the universal legatees, $42,927.94.

The final accounting and tableau of distribution was filed August 3, 1904, and approved and homologated by judgment August 16, and the funds ordered to be distributed.

October 16 a motion was made for a rule on the executors to show cause why they should not pay over the legacies as ordered. In answer to which the executors replied that they were willing to do so, but that it was announced to them by the president of the school board of the parish that he intended to claim in behalf of said board a tax under the inheritance tax law of the State on the funds in their hands "and the shares coming to said movers." The executors also alleged the unconstitutionality of the tax and prayed that the school board of the parish, through its president, Andrew H. Wilson, be made a party to the proceedings. Wilson appeared and averred that the taxes were due the State and not to the school board, and were collectible by the state tax collector, and "that this suit and the matters at issue herein should be litigated contradictorily with the state tax collector for the district in which the deceased resided when he departed this life."

The tax collector appeared. The agents and attorneys in fact of the legatees answered the demand of the school board to be paid the tax that $10,000 of the estate was in United States bonds, and not subject to taxation by the State, and averred that an inheritance tax was not due "to said board for the reason that said act has no application to the property

under this succession or the legacies due to said movers in the motion aforesaid; that to give it such application would be to make said act retroactive and divest the vested rights of the said movers in said rule, which would be in violation of the constitution of this State, and especially article 166 thereof, and in violation of the Constitution of the United States of America, and especially section 9 of article I, and the Fifth and Fourteenth Amendments thereof, and in violation of the laws of the State and of the land; that it would be a deprivation of property without due process of law and a denial of the equal protection of the laws, in violation of the Fifth and Fourteenth Amendments of the Constitution of the United States of America."

Judgment was rendered in favor of the tax collector, condemning the executors to pay the tax, less the amount of United States bonds, and less the charitable and religious bequests. The judgment was affirmed by the Supreme Court of the State.

The law imposes a tax of three per cent "on direct inheritances and donations to ascendants or descendants," and ten per cent upon donations or inheritances to collaterals or strangers. It is provided that the tax is "to be collected on all successions not finally closed and administered upon, and all successions hereafter opened." 1

1 SECTION 1. Be it enacted by the General Assembly of the State of Louisiana; That there is now, and shall hereafter be levied, solely for the support of the public schools, a tax upon all inheritances, legacies, and donations; provided, no direct inheritance, or donation, to an ascendant or descendant, below ten thousand dollars in amount or value, shall be so taxed; a special inheritance tax, of three per cent on direct inheritances and donations to ascendants or descendants and ten per cent for collateral inheritances and donations to collaterals or strangers; provided bequests to educational, religious or charitable institutions shall be exempt from this tax and provided further that this tax shall not be enforced when the property donated or inherited shall have borne its just proportion of taxes prior to the time of such donation or inheritance; this tax to be collected on all successions not finally closed and administered upon and on all successions hereafter opened.