The opinion of the court was delivered by: FORMAN
Walter Ross McShea died on December 3, 1930. His will was admitted to probate as that of a resident, by the register of wills of Philadelphia county, Pa., on December 19, 1930, and letters testamentary were issued to plaintiff Edwin C. Nevin, and Mary J. D. McShea, since deceased.
The register on May 16, 1933, acting as a taxing officer for the state of Pennsylvania, assessed resident inheritance and estate taxes in the sum of $53,990.04, which plaintiffs, about June 1, 1933, appealed to the orphans' court of Philadelphia county for the purpose, as they claim, "of having a judicial declaration of domicil in consequence of the claim by the taxing authorities of the State of New Jersey that the domicil of the testator at the time of his death was in that State." The court found the decedent to have been a resident of Pennsylvania, and affirmed the assessment of the register.
Plaintiffs appealed that determination to the orphans' court, sitting en banc, alleging in their exceptions that the decedent was legally domiciled in the state of New Jersey, and that the transfer of his estate should not therefore be taxed as that of a resident of the state of Pennsylvania. The reviewing court on January 26, 1934, affirmed the findings and decree of the court below, and plaintiffs on January 30, 1934, declining to review the matter further, paid the commonwealth of Pennsylvania the sum of $53,990.04 in full settlement of its claim for resident inheritance and estate taxes.
No appeal from said assessment as provided for by the statutes of the state of New Jersey was taken by plaintiffs. Instead, they filed a bill of complaint in this court on January 30, 1934 (amended on April 13, 1934), seeking temporary and permanent injunctions against defendants in their official capacities restraining them from (a) completing the appraisement, assessment, and collection of the tax; (b) "refusing" to issue tax waivers; (c) enforcing the provisions of any law for the collection of the tax; and (d) prosecuting or bringing any action at law or in equity against plaintiffs for the collection of the tax.
Defendants moved to dismiss the bill on several grounds, and District Judge Avis, on the hearing of the motion and plaintiffs' order to show cause why a temporary injunction should not issue, held that he was without jurisdiction to act in the matter, since the proceedings were controlled by section 266 of the Judicial Code, as amended, 28 U.S.C.A. § 380, which requires the presence of three judges on the hearings for interlocutory and permanent injunctions.
On March 26, 1936, this court denied defendants' motion to dismiss, allowed an anterlocutory injunction, and ordered that defendants file answer to the amended bill, all without porejudice, however, to defendants' right to raise their grounds for dismissal in the answer. The matter is now before the court on final hearing, on amended bill, answer (including grounds for dismissal), and a stipulated record.
More nearly illustrative of this type of case are Worcester County Trust Co. v. Riley, 302 U.S. 292, 58 S. Ct. 185, 82 L. Ed. , and Dorrance v. Martin, D.C., 12 F.Supp. 746, Id., 296 U.S. 393, 56 S. Ct. 278, 80 L. Ed. 293. In the Worcester County Case it was alleged that California and Massachusetts were claiming to be the state of decedent's domicil, and, accordingly, were about to assess inheritance taxes. The petitioner came into court under the Interpleader Act, joining the taxing officials of the two states as defendants, and praying that the respondent officials of the two states interplead their respective claims for the tax. The court determined that there is no invasion of constitutional rights when there is a mere possibility of a conflict of decisions among the states. It therefore found that no constitutional problem was involved, and that the suit was against the state, which the Eleventh Amendment forbids.
In the Dorrance Case, Pennsylvania and New Jersey each claimed to be the state of decedent's domicil. The New Jersey Tax Commissioner made an assessment notwithstanding the fact that the Supreme Court of Pennsylvania had determined that the decedent was domiciled there and a succession tax had been paid. An appeal was taken from the New Jersey Tax Commissioner to the prerogative court, which affirmed the assessment. Another appeal was taken, resulting in an affirmance by the Supreme Court of New Jersey. An injunction was then sought in the United States District Court against the collection of succession taxes by New Jersey. The Supreme Court of the United States affirmed the statutory three-judge court's refusal to grant the injunction due to the prohibition of section 265 of the Judicial Code, 28 U.S.C.A. § 378, which prevents any federal court from granting an injunction to stay proceedings in any court of a state.
It is contended that New Jersey in refusing to be bound by the Pennsylvania decree determining domicil and the assessment of inheritance taxes is violating the full faith and credit clause of the Constitution. Article 4, § 1. Where a constitutional infringement appears, suits to restrain the action of state officers may be prosecuted. Worcester County Trust Co. v. Riley, 302 U.S. 292, 296, 297, 58 S. Ct. 185, 186, 82 L. Ed. . It thus appears that the primary question is whether a constitutional infringement is presented.
The precise inquiry this court must determine is whether the adjudication of domicil and of liability for succession taxes in favor of Pennsylvania is binding upon the state of New Jersey. The case of Tilt v. Kelsey, 207 U.S. 43, 28 S. Ct. 1, 52 L. Ed. 95, is cited as authority for the proposition that it is. Therein there was a complete distribution of the estate in New Jersey and a decree discharing the executors and barring all creditors. Afterwards, the state of New York asserted its right to a transfer tax. It was argued that the New Jersey decree must be given full faith and credit, and consequently New York could not tax. The court held that the full faith and credit clause meant that the decree must be given the same effect in other states as it is given in New Jersey, and since the New Jersey decree was binding upon the executors and distributees it was likewise binding upon all the world, and accordingly New York was bound by the New Jersey decree, and, hence, New York could not tax.
The case of Baker v. Baker, Eccles & Co., 242 U.S. 394, at pages 401, 402, 37 S. Ct. 152, 155, 61 L. Ed. 386, without making specific reference to Tilt v. Kelsey, supra, indicates in the following language that the full faith and credit clause of the Constitution no longer means that a judgment is entitled to the same ...