Hughes, McReynolds, Butler, Stone, Roberts, Black, Reed, Frankfurter
MR. JUSTICE STONE delivered the opinion of the Court.
This original suit, in the nature of a bill of interpleader, brought to determine the true domicile of decedent as the basis of rival claims of four states for death taxes upon his estate, raises two principal questions: Whether this Court has jurisdiction of the cause and, if so, whether the report of the Special Master, finding that decedent at the time of his death was domiciled in Massachusetts, should be confirmed.
On March 15, 1937, this Court granted the motion of the State of Texas for leave to file its bill of complaint against the States of Florida and New York and the Commonwealth of Massachusetts, and against decedent's wife, Mabel Harlow Green, and his sister, Hetty Sylvia Ann
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 Texas, 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.*fn1 It is further alleged that
none of the four states and no officer or representative of any state, except as already noted, has become a party to any of those proceedings, and that no state or its officer or representative will appear or become a party to any such proceedings instituted in any other state to fix or assess death taxes on decedent's estate, and that no judgment in any such proceeding will be binding on any state not a party to it; that each of the four states claims a lien for taxes and the right to collect a tax, based on decedent's alleged domicile within it, upon the tangibles located in the state and upon all decedent's intangibles wherever located, the total of such claims amounting to a sum far greater than the net value of the estate; that the amount of decedent's property located in Texas is negligible in amount and insufficient to pay its tax; and in the event that the states should obtain adjudications in their own or other courts in pending proceedings, or others instituted for the purpose of collecting the tax on the ground that decedent was domiciled elsewhere than in Texas, Texas would be deprived of its lawful tax. The bill prays that the Court determine whether decedent's domicile,
for purposes of taxation, was in either of the defendant states and that particularly it determine and adjudicate that his domicile was in Texas and that it alone has the right to assess and collect death taxes on decedent's intangibles.
The several defendant states, answering, admit that decedent's estate is insufficient to satisfy the total amount of the taxes claimed. All deny that Green was domiciled in Texas, and by way of counterclaim and cross-bill against the other defendants, each asserts that he was domiciled in it and that it is entitled to collect death taxes upon all of decedent's intangible property and upon all his tangibles within the state. The answer of decedent's wife admitted that he was domiciled in Texas and asserted that by Texas law she owned, as community property, one-half of substantially all of decedent's estate acquired by him after their marriage, free and clear of all death taxes. Pursuant to stipulation showing that she had released all interest in decedent's estate, the suit was dismissed as to her by order of the Court on January 17, 1938. 302 U.S. 662. The answer of defendant Wilks, decedent's sister, denies that Green was domiciled in Texas and asks the Court to determine in which of the defendant states he was domiciled for purposes of taxation.
On June 1, 1937, this Court appointed a Special Master, 301 U.S. 671, to take evidence, to make findings of fact and state conclusions of law, and to submit them to this Court, together with his recommendations for a decree. The Special Master has reported his findings, with certain evidentiary facts, and his finding that decedent at the time of his death was domiciled in the Commonwealth of Massachusetts, this latter conclusion being supported by elaborate subsidiary findings. The case is now before us on exceptions to the Special Master's conclusions of fact and subsidiary findings that decedent's domicile was in Massachusetts at the time of his death.
While the exceptions do not challenge the jurisdiction of the Court, the novel character of the questions presented and the duty which rests upon this Court to see to it that the exercise of its powers be confined within the limits prescribed by the Constitution make it incumbent upon us to inquire of our own motion whether the case is one within its jurisdiction. Minnesota v. Hitchcock, 185 U.S. 373, 382. By the Judiciary Article of the Constitution, the judicial power extends to controversies between states, and this Court is given original jurisdiction of cases in which a state shall be a party. Art. III, § 2. The present suit is between states, and the other jurisdictional requirements being satisfied, the individual parties whose presence is necessary or proper for the determination of the case or controversy between the states are properly made parties defendant. Cf. United States v. West Virginia, 295 U.S. 463, 470. So that our constitutional authority to hear the case and grant relief turns on the question whether the issue framed by the pleadings constitutes a justiciable "case" or "controversy" within the meaning of the Constitutional provision, and whether the facts alleged and found afford an adequate basis for relief according to accepted doctrines of the common law or equity systems of jurisprudence, which are guides to decision of cases within the original jurisdiction of this Court. See Robinson v. Campbell, 3 Wheat. 212, 222, 223; Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. 460, 462; Irvine v. Marshall, 20 How. 558, 564, 565; Payne v. Hook, 7 Wall. 425, 430.
Before the Constitution was adopted a familiar basis for the exercise of the extraordinary powers of courts of equity was the avoidance of the risk of loss ensuing from the demands in separate suits of rival claimants to the same debt or legal duty. Alnete v. Bettam, Cary, 65 (1560); Hackett v. Webb and Willey, Finch 257 (1676);
see 9 Viner Abr., 419-440; 1 Spence, The Equitable Jurisdiction of the Court of Chancery, 659; Maclennan, Law of Interpleader, 5 et seq. Since, without the interposition of equity, each claimant in pursuing his remedy in an independent suit might succeed and thus subject the debtor or the fund pursued to multiple liability, equity gave a remedy by way of bill of interpleader, upon the prosecution of which it required the rival claimants to litigate in a single suit their ownership of the asserted claim. A plaintiff need not await actual institution of independent suits; it is enough if he shows that conflicting claims are asserted and that the consequent risk of loss is substantial. Evans v. Wright, 13 W. R. 468; Michigan Trust Co. v. McNamara, 165 Mich. 200; 130 N. W. 653; Webster v. Hall, 60 N. H. 7; Thompson v. Ebbets, Hopk. Ch. 272 (N. Y.); Dorn v. Fox, 61 N. Y. 264; Yarborough v. Thompson, 3 Sm. & M. (11 Miss.) 291, 294; 4 Pomeroy, Equity Jurisprudence (4th ed.) §§ 1319-1329, 1458-1482; Maclennan, supra, 119.
The peculiarity of the strict bill of interpleader was that the plaintiff asserted no interest in the debt or fund, the amount of which he placed at the disposal of the court and asked that the rival claimants be required to settle in the equity suit the ownership of the claim among themselves. But as the sole ground for equitable relief is the danger of injury because of the risk of multiple suits when the liability is single, Farley v. Blood, 30 N. H. 354, 361; Bedell v. Hoffman, 2 Paige 199, 200; Mohawk & Hudson R. Co. v. Clute, 4 Paige 384, 392; Atkinson v. Manks, 1 Cowen (N. Y.) 691, 703; Story, Equity Pleadings (10th ed.) §§ 291, 292, and as plaintiffs who are not mere stakeholders may be exposed to that risk, equity extended its jurisdiction to such cases by the bill in the nature of interpleader. The essential of the bill in the nature of interpleader is that it calls upon the court to exercise its jurisdiction to guard against the risks of loss
from the prosecution in independent suits of rival claims where the plaintiff himself claims an interest in the property or fund which is subjected to the risk. The object and ground of the jurisdiction are to guard against the consequent depletion of the fund at the expense of the plaintiff's interest in it and to protect him and the other parties to the suit from the jeopardy resulting from the prosecution of numerous demands, to only one of which the fund is subject. While in point of law or fact only one party is entitled to succeed, there is danger that recovery may be allowed in more than one suit. Equity avoids the danger by requiring the rival claimants to litigate before it the decisive issue, and will not withhold its aid where the plaintiff's interest is either not denied or he does not assert any claim adverse to that of the other parties, other than the single claim, determination of which is decisive of the rights of all. Pacific National Bank v. Mixter, 124 U.S. 721; Providence Sav. Life Assur. Soc. v. Loeb, 115 F. 357; Sherman National Bank v. Shubert Theatrical Co., 238 F. 225, aff'd, 247 F. 256; Illingworth v. Rowe, 52 N. J. Eq. 360; 28 A. 456; Carter v. Cryer, 68 N. J. Eq. 24; 59 A. 233; 2 Story, Equity Jurisprudence (14th ed.) § 1140; Story, Equity Pleadings (10th ed.) § 297b; Chafee, Cases on Equitable Remedies, 75 et seq.; 3 Daniell, Chancery Pleading and Practice (6th Amer. Ed.) 1572; Maclennan, supra, 338 et seq.
When, by appropriate procedure, a court possessing equity powers is in such circumstances asked to prevent the loss which might otherwise result from the independent prosecution of rival but mutually exclusive claims, a justiciable issue is presented for adjudication which, because it is a recognized subject of the equity procedure which we have inherited from England, is a "case" or "controversy," within the meaning of the Constitutional provision; and when the case is one prosecuted between states, which are the rival claimants, and the risk of loss
is shown to be real and substantial, the case is within the original jurisdiction of this Court conferred by the Judiciary Article. See Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249, 261 et seq., and cases cited.
Here it is conceded by the pleadings and upon brief and argument that the sole legal basis asserted by the four states for the imposition of death taxes on decedent's intangibles is his domicile at death in the taxing state. There is no question presented of a situs of decedent's intangibles differing, for tax purposes, from the place of his domicile, such as was considered in New Orleans v. Stempel, 175 U.S. 309; Safe Deposit & Trust Co. v. Virginia, 280 U.S. 83; Beidler v. South Carolina Tax Comm'n, 282 U.S. 1, 8; First National Bank v. Maine, 284 U.S. 312, 331; Wheeling Steel Corp. v. Fox, 298 U.S. 193, 210; First Bank Stock Corp. v. Minnesota, 301 U.S. 234, 237, 238; Long v. Stokes, 174 Tenn. 1; 118 S. W. 2d 228, probable jurisdiction noted, Nov. 14, 1938; Graves v. Elliott, 274 N. Y. 10; 8 N. E. 2d 42, certiorari granted November 14, 1938, 305 U.S. 667. And no determination made here as to domicile can hereafter foreclose the determination of such questions by any court of competent jurisdiction in which they may arise. By the law of each state a decedent can have only a single domicile for purposes of death taxes, and determination of the place of domicile of decedent will determine which of the four states is entitled to impose the tax on intangibles so far as they have no situs different from the place of domicile. No relief is sought to restrain collection of the tax or to interfere with the determination of its amount by appropriate state procedure.
The Special Master has found that each of the four states in good faith asserts that the decedent was domiciled within it at his death; that prior to the commencement of these proceedings each state in good faith was preparing to enforce a lien on decedent's intangibles
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.*fn2 He has
also found, as averred in the pleadings, that none of the four states has become or will consent to become a party to any proceedings for determining the right to collect the tax in any other state; that the right of Texas to assert its tax lien and to prosecute its claim for taxes with success is in jeopardy and that it is without adequate remedy save in this Court.
The risk that decedent's estate might constitutionally be subjected to conflicting tax assessments in excess of its total value and that the right of complainant or some other state to collect the tax might thus be defeated was a real one, due both to the jurisdictional peculiarities of our dual federal and state judicial systems and to the special circumstances of this 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. Thormann v. Frame, 176 U.S. 350; Overby v. Gordon, 177 U.S. 214; Burbank v. Ernst, 232 U.S. 162; Baker v. Baker, Eccles & Co., 242 U.S. 394; Iowa v. Slimmer, 248 U.S. 115, 120, 121; Worcester County Trust Co. v. Riley, 302 U.S. 292, 299. And a judgment thus obtained is binding on the parties to it and constitutionally entitled to full faith and credit in the courts of every other state. Milwaukee County v. White Co., 296 U.S. 268. The equity jurisdiction being founded on avoidance of the risk of loss resulting from the threatened prosecution of multiple claims, the risk must be appraised in the light of the circumstances as they are in good faith alleged and shown to exist at the time when the suit was brought. Cf. Clark v. Wooster, 119 U.S. 322; Rice & Adams Corp. v. Lathrop, 278 U.S. 509; Maclennan, supra, 132 et seq. In this case, as will presently be noted, the relations of decedent to each of the
demanding states were such as to afford substantial basis for the claim that he was domiciled within it, with fair probability that the claim would be accepted and favorably acted upon if there were no participation by the other states in the litigation. See New Jersey v. Pennsylvania, 287 U.S. 580; Hill v. Martin, 296 U.S. 393; Dorrance's Estate, 309 Pa. 151; 163 A. 303, certiorari denied, 287 U.S. 660, 288 U.S. 617; In re Dorrance, 115 N. J. Eq. 268; 170 A. 601; Dorrance v. Martin, 116 N. J. Law 362; 184 A. 743, certiorari denied, 298 U.S. 678. Cf. Matter of Trowbridge, 266 N. Y. 283; 194 N. E. 756. In addition the facts most essential to establishing that attitude and relationship of person to place which constitute domicile were in this case obscured by numerous self-serving statements of decedent as to his domicile, which, because made for the purpose of avoiding liability for state income and personal property taxes levied on the basis of domicile, tended to conceal rather than reveal the true relationship in this case. Taken as a whole the case is exceptional in its circumstances and in the principles of law applicable to them, all uniting to impose a risk of loss upon the state lawfully entitled to collect the tax.
We think that the Special Master's finding of jeopardy is sustained; that a justiciable "case" between the states is presented; and that a cause of action cognizable in equity is alleged and proved. The fact that no relief by way of injunction is sought or is recommended by the Special Master does not militate against this conclusion. While in most causes in equity the principal relief sought is that afforded by injunction, there are others in which the irreparable injury which is the indispensable basis for the exercise of equity powers is prevented by a mere adjudication of rights which is binding on the parties. This has long been the settled practice of this Court in cases of boundary disputes between states. Louisiana v. Mississippi,
U.S. 1; Arkansas v. Tennessee, 246 U.S. 158; Georgia v. South Carolina, 257 U.S. 516; Oklahoma v. Texas, 272 U.S. 21; Michigan v. Wisconsin, 272 U.S. 398; New Jersey v. Delaware, 291 U.S. 361. In the case of bills of peace, bills of interpleader and bills in the nature of interpleader, the gist of the relief sought is the avoidance of the burden of unnecessary litigation or the risk of loss by the establishment of multiple liability when only a single obligation is owing. These risks are avoided by adjudication in a single litigation binding on the parties.
While courts of equity in such suits may and frequently do give incidental relief by injunction to secure the full benefits of the adjudication and to terminate the litigation in a single suit, they are not bound to do so and their adjudication of the conflicting claims is not any the less effective as res judicata because not supplemented by injunction. We do not doubt that when the equity powers of the Court have been invoked it has power in its discretion to give such incidental relief by way of injunction as will make its determination the effective means of avoiding risk of loss to any of the parties by reason of the asserted multiple tax liability. But the plenary effect of its decision as res judicata, and considerations of convenience in the levying of the tax by the usual state procedure, make it unnecessary and undesirable that the Court should proceed beyond adjudication. The fact that the Court, for reasons of policy or convenience, does not exercise the power which it possesses and which has been traditionally exercised in like cases between private suitors does not deprive the suit of its character as a case or controversy cognizable by the Court in an original suit. See Fidelity National Bank & Trust Co. v. Swope, 274 U.S. 123, 132, 133, 134; Nashville, C. & St. L. Ry. v. Wallace, supra.
The Special Master took voluminous testimony in each of the four states, recording every available fact having any bearing on the issue of decedent's domicile. After an exhaustive study of the evidence the Special Master has prepared elaborate subsidiary findings in which he has stated what he considers to be the essential facts of decedent's life which, taken together, were the controlling factors in his arriving at ...