The following opinion was filed February 12, 1924:
Vinje, C. J.
The question to be solved is whether this state can lawfully impose an inheritance tax on the transfer of shares of stock, owned and possessed by a nonresident, in a corporation organized and having its principal place of business in another state, but having property and being licensed to do business in this state.
[91]*91Before proceeding to answer the question it is deemed desirable to state some fundamental and well established principles of law that will serve to delimit the field of inquiry and to act as landmarks pointing out the path that leads to the correct answer. No attempt .will be made to establish the soundness of these principles because they have been firmly incorporated into the jurisprudence of our state by numerous and unbroken decisions, and are, with few, if any, exceptions, the accepted law in state and federal courts alike. By a close adherence to fundamental principles, long and circuitous routes that often lead astray may be avoided, and in the light of such principles arguments that seem laden with an obscure potency dissipate like mists before the morning sun. Among such principles involved are these:
(1) An inheritance or succession tax is a tax on the right to receive property from a decedent. It attaches to a person and not to property or to an interest in property, though it is imposed and enforced through a control of the transfer of the property. The only other relation that the property has to it is that its value measures the amount of the tax. Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627; Montague v. State, 163 Wis. 58, 157 N. W. 508.
(2) The property of a corporation is its property and not that of the stockholders. There is a fundamental difference between the capital of a corporation and its capital stock. The former belongs to the corporation; the latter, when issued, to the stockholders. The former may be either real or personal property; the latter, when issued, is always personal property. See cases and statutes cited infra.
(3) The state must have jurisdiction of the subject matter of the tax. Such subject matter is the transfer of title to property from a decedent to another. If the state has nothing to do with such transfer it has no jurisdiction to impose an inheritance tax. Its right to impose the tax springs from its right to prescribe reasonable conditions for permitting and making the transfer. Our state cannot deny [92]*92the right of transfer altogether, because the right to inherit is held to be a natural right subject only to reasonable restrictions. Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627. If the property transferred is in this state, it can tax the right to its succession because it controls and has jurisdiction of the property to be transferred. Or, when a resident of this state dies possessed of property, the state can impose a tax because it has jurisdiction of the estate of the deceased. Sec. 72.01, Stats. 1923. But if the decedent was not a resident of the state at the time of his death and the person receiving it is a nonresident and the property to be transferred is without the state, then there is no right to tax because the subject matter is beyond the jurisdiction of the court. Either the property transferred must be within the state or the decedent must have died a resident thereof or some recourse to the courts or laws of our state must be necessary to secure the transfer in order to confer jurisdiction to impose a valid tax. Sec. 72.01, Stats. 1923.
Applying the facts of the present case to the above stated principles of judicial and statutory law, we find (1) that the property to be transferred was not within the state: it was in New Jersey; (2) that the decedent was not a resident of this state at the time of her death but of New Jersey, and the persons to whom transfers were made were nonresidents; (3) that no recourse to the laws of this state was necessary to secure the transfer of the property. New York, the home of the corporation, could authorize the transfer of the stock. Under such circumstances it has uniformly been held that the state acquires no jurisdiction to tax. Matter of Bronson, 150 N. Y. 1, 8, 44 N. E. 707; McMullen’s Estate, 199 App. Div. 393, 192 N. Y. Supp. 49, affirmed in 236 N. Y. 518, 142 N. E. 266, on the ground that there was no transfer of property within the state; Welch v. Treasurer, 223 Mass. 87, 111 N. E. 774; Tyler v. Dane Co. 289 Fed. 843; Oaksman v. Small, 282 Ill. 360, 118 N. E. 775; State ex rel. Peterson v. Dunlap, 28 Idaho, 784, 156 Pac. 1141; In re Estates of Harkness, 83 Okl. 107, 204 [93]*93Pac. 911; sub. (1) to (3), sec. 72.01, Stats. 1923; Gleason & Otis, Inheritance Tax (2d ed.) 74, 320.
The opinion might well close here were it not for some contentions made by the state that deserve more detailed consideration.
The attorney general, in arguing that an affirmative answer to the question is the only correct one that can be given, relies principally upon two statutory provisions, both of which he claims are constitutional enactments. The first is sub. (3) of sec. 72.11, Stats. 1923, which provides that
“Where stocks, bonds, mortgages, or other securities of corporations organized under the laws of this state or of foreign corporations owning property or doing business in this state shall have been transferred by a nonresident decedent, the tax shall be upon such proportion of the value thereof as the property of such corporation in this state bears to the total property of the corporation issuing such stocks, bonds, mortgages, or other securities.”
The. second is sec. 226.02, Stats. 1923, formerly sec. 1770&, providing the conditions upon which foreign corporations may do business within this state.
Our present inheritance law was first enacted in 1903 and has since been amended in various matters. Sub. (3) quoted above was an amendment made in 1913. It will be noticed that it is essentially a declaration of a rule of computation in certain cases, and not a declaration of a liability to an inheritance tax. The declaration of liability is found in sec. 72.01 and in the first three subdivisions thereof. They read, omitting exception;
“A tax shall be and is hereby imposed upon any transfer of property, real, personal or mixed, or any interest therein, or income therefrom in trust or otherwise, to any person, association or corporation . . . within the state, ... in the following cases except as hereinafter provided:
“(1) While a resident of state. When the transfer is by will or by the intestate laws of this state from any person dying possessed of the property while a resident of the state.
[94]*94“(2) Nonresidenfs property within the state. When a transfer is by will or intestate law, of property within the state or within its jurisdiction and the decedent was a nonresident of the state at the time of his death.
“(3) Transfers in contemplation of death.
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The following opinion was filed February 12, 1924:
Vinje, C. J.
The question to be solved is whether this state can lawfully impose an inheritance tax on the transfer of shares of stock, owned and possessed by a nonresident, in a corporation organized and having its principal place of business in another state, but having property and being licensed to do business in this state.
[91]*91Before proceeding to answer the question it is deemed desirable to state some fundamental and well established principles of law that will serve to delimit the field of inquiry and to act as landmarks pointing out the path that leads to the correct answer. No attempt .will be made to establish the soundness of these principles because they have been firmly incorporated into the jurisprudence of our state by numerous and unbroken decisions, and are, with few, if any, exceptions, the accepted law in state and federal courts alike. By a close adherence to fundamental principles, long and circuitous routes that often lead astray may be avoided, and in the light of such principles arguments that seem laden with an obscure potency dissipate like mists before the morning sun. Among such principles involved are these:
(1) An inheritance or succession tax is a tax on the right to receive property from a decedent. It attaches to a person and not to property or to an interest in property, though it is imposed and enforced through a control of the transfer of the property. The only other relation that the property has to it is that its value measures the amount of the tax. Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627; Montague v. State, 163 Wis. 58, 157 N. W. 508.
(2) The property of a corporation is its property and not that of the stockholders. There is a fundamental difference between the capital of a corporation and its capital stock. The former belongs to the corporation; the latter, when issued, to the stockholders. The former may be either real or personal property; the latter, when issued, is always personal property. See cases and statutes cited infra.
(3) The state must have jurisdiction of the subject matter of the tax. Such subject matter is the transfer of title to property from a decedent to another. If the state has nothing to do with such transfer it has no jurisdiction to impose an inheritance tax. Its right to impose the tax springs from its right to prescribe reasonable conditions for permitting and making the transfer. Our state cannot deny [92]*92the right of transfer altogether, because the right to inherit is held to be a natural right subject only to reasonable restrictions. Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627. If the property transferred is in this state, it can tax the right to its succession because it controls and has jurisdiction of the property to be transferred. Or, when a resident of this state dies possessed of property, the state can impose a tax because it has jurisdiction of the estate of the deceased. Sec. 72.01, Stats. 1923. But if the decedent was not a resident of the state at the time of his death and the person receiving it is a nonresident and the property to be transferred is without the state, then there is no right to tax because the subject matter is beyond the jurisdiction of the court. Either the property transferred must be within the state or the decedent must have died a resident thereof or some recourse to the courts or laws of our state must be necessary to secure the transfer in order to confer jurisdiction to impose a valid tax. Sec. 72.01, Stats. 1923.
Applying the facts of the present case to the above stated principles of judicial and statutory law, we find (1) that the property to be transferred was not within the state: it was in New Jersey; (2) that the decedent was not a resident of this state at the time of her death but of New Jersey, and the persons to whom transfers were made were nonresidents; (3) that no recourse to the laws of this state was necessary to secure the transfer of the property. New York, the home of the corporation, could authorize the transfer of the stock. Under such circumstances it has uniformly been held that the state acquires no jurisdiction to tax. Matter of Bronson, 150 N. Y. 1, 8, 44 N. E. 707; McMullen’s Estate, 199 App. Div. 393, 192 N. Y. Supp. 49, affirmed in 236 N. Y. 518, 142 N. E. 266, on the ground that there was no transfer of property within the state; Welch v. Treasurer, 223 Mass. 87, 111 N. E. 774; Tyler v. Dane Co. 289 Fed. 843; Oaksman v. Small, 282 Ill. 360, 118 N. E. 775; State ex rel. Peterson v. Dunlap, 28 Idaho, 784, 156 Pac. 1141; In re Estates of Harkness, 83 Okl. 107, 204 [93]*93Pac. 911; sub. (1) to (3), sec. 72.01, Stats. 1923; Gleason & Otis, Inheritance Tax (2d ed.) 74, 320.
The opinion might well close here were it not for some contentions made by the state that deserve more detailed consideration.
The attorney general, in arguing that an affirmative answer to the question is the only correct one that can be given, relies principally upon two statutory provisions, both of which he claims are constitutional enactments. The first is sub. (3) of sec. 72.11, Stats. 1923, which provides that
“Where stocks, bonds, mortgages, or other securities of corporations organized under the laws of this state or of foreign corporations owning property or doing business in this state shall have been transferred by a nonresident decedent, the tax shall be upon such proportion of the value thereof as the property of such corporation in this state bears to the total property of the corporation issuing such stocks, bonds, mortgages, or other securities.”
The. second is sec. 226.02, Stats. 1923, formerly sec. 1770&, providing the conditions upon which foreign corporations may do business within this state.
Our present inheritance law was first enacted in 1903 and has since been amended in various matters. Sub. (3) quoted above was an amendment made in 1913. It will be noticed that it is essentially a declaration of a rule of computation in certain cases, and not a declaration of a liability to an inheritance tax. The declaration of liability is found in sec. 72.01 and in the first three subdivisions thereof. They read, omitting exception;
“A tax shall be and is hereby imposed upon any transfer of property, real, personal or mixed, or any interest therein, or income therefrom in trust or otherwise, to any person, association or corporation . . . within the state, ... in the following cases except as hereinafter provided:
“(1) While a resident of state. When the transfer is by will or by the intestate laws of this state from any person dying possessed of the property while a resident of the state.
[94]*94“(2) Nonresidenfs property within the state. When a transfer is by will or intestate law, of property within the state or within its jurisdiction and the decedent was a nonresident of the state at the time of his death.
“(3) Transfers in contemplation of death. When the transfer is of property made by a resident or by a nonresident when such nonresident’s property is within this state, or within its jurisdiction, by deed, grant, bargain, sale or gift, made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death.”
It requires no careful scrutiny of these provisions declaring when a tax shall be imposed to disclose that,they do not include the imposition of a tax upon the transfer of stock held and possessed by a nonresident decedent in a foreign corporation having property and being licensed to do business in this state, unless the property of the corporation is held to be the property of the stockholders. But this court has never so held. Button v. Hoffman, 61 Wis. 20, 20 N. W. 667; Van Dyke v. Milwaukee, 159 Wis. 460, 150 N. W. 509. In the latter case it was held that dividends declared after the passage of the income tax law out of profits of the corporation made before the passage of the act were taxable because the profits of the corporation did not become the property of the stockholders till distributed as dividends. See, also, Miller v. Payne, 150 Wis. 354, 136 N. W. 811; Will of Pabst, 146 Wis. 330, 131 N. W. 739. The supreme court of the United States has never so held. It has declared that the property of the shareholders in their respective shares is distinct from the corporate property, franchises, and capital stock. Hawley v. Malden, 232 U. S. 1, 34 Sup. Ct. 201; Eisner v. Macomber, 252 U. S. 189, 40 Sup. Ct. 189. In Des Moines Nat. Bank v. Fairweather, 263 U. S. 103, 44 Sup. Ct. 23, the court had occasion to point out the difference between corporate assets of the corporation and shares. It held the former belonged to the corporation as an artificial entity and the latter to the stockholders.
[95]*95Sec. 182.05, Stats. 1923, provides that “the capital stock of every corporation, divided into shares, shall be deemed personal property.” Such has been and still is the settled law of this state, and it is beyond the power of the court to alter it even if it so desired. The shares of stock in question could be transferred on the books of the corporation in New York, and neither our courts nor our laws would have to be invoked to effect the transfer. They have naught to say in the matter. How then can the state say to plaintiffs, as it must in order to impose a valid tax; “In return for my permitting the transfer of this property to you I require you to pay me a certain part thereof.” The answer to such question would be; “Thanks, I do not need your permission, and I am not. obliged to pay you when you confer no benefit and render no service.”
The argument that the decedent had an equitable interest in the property of the corporation located within the state is beside the question, for, as already stated, an inheritance tax is not a tax upon property or an interest in property whether legal or equitable, but a tax upon the right to succeed to property left by a decedent; and we have already pointed out how under our statutes the state acquires jurisdiction to invoke the right to tax. For the reasons stated we will not discuss or distinguish a large number of cases cited by the state showing to what extent courts have gone to reach by taxation property or interests in property.
The other statute relied upon by the attorney general is sec.'226.02, Stats. 1923, formerly sec. 1770&, prescribing the conditions upon which foreign corporations may do business in this state. The argument is that by accepting the conditions of that section they have agreed to obey and abide by our laws, and therefore cannot question their validity. Assuming but not deciding that a corporation can bind its stockholders, no lengthy discussion is necessary to refute the fallacy of this claim. The foreign corporations by agreeing to abide by the conditions of sec. 226.02 agree to abide [96]*96.by and obey our valid laws, not our .void and unconstitutional laws. If we required them to do the latter, the federal supreme court would speedily say we could not lawfully do so. Terral v. Burke Const. Co. 257 U. S. 529, 42 Sup. Ct. 188, 66 Lawy. Ed. 352, 21 A. L. R. 186. It there held that a state cannot exact as a condition for doing business within the state obedience to' a state law that is repugnant to constitutional provisions. This court has frequently said that an unconstitutional law is no law at all. It has no force or efficacy and cannot be obeyed. The argument that since the tax upon nonresidents is the same as upon residents the law is therefore a valid and fair one is of no weight, because the fact that an illegal tax upon a nonresident is no greater than a legal tax upon a resident does not justify the former. Were such an argument a valid one we could tax the whole world.
Unless a clear distinction is kept in mind between the capital of a corporation and its capital stock, and between the property of the corporation and the property of the stockholders as evidenced by their shares of stock, it is easy to get the property of the plaintiffs into this state, certainly to get an equitable interest in property located within our borders. But such confusion of terms brings us nowhere, because even under such construction our laws are not invoked to do anything in the way of a transfer, and hence we are without jurisdiction to impose a valid tax.
We heartily concur in the state’s desire to avoid multiple taxation, but it must be secured, if at all, by constitutional means. And unless concurred in by other states every additional method a state discovers to impose a legal tax adds to multiple taxation. But it is a question of power, not of policy.
So much of sec. 72.11 as prescribes the rate of taxation upon stocks held in foreign corporations under conditions existing in this case is held unconstitutional.
As noted in the statement of facts, there is joined to the [97]*97original action an appeal from the order of the county court directing the tax to be paid, and the state urges us to overrule Beals v. State, 139 Wis. 544, 121 N. W. 347, in so far as it holds that the ascertainment of the inheritance tax by the county court is not a judicial act subject to review by appeal, and to sustain the demurrer to the original action on the ground that the remedy lies by appeal from the order. Certain it is, that since the decision in the Beals Case a number of cases have come here upon appeal either directly or indirectly from the action of the county court in ascertaining the inheritance tax. Among such may be mentioned State v. Thompson, 154 Wis. 320, 142 N. W. 647; Smith v. State, 161 Wis. 588, 155 N. W. 109; Estate of Ebeling, 169 Wis. 432, 172 N. W. 734; and Estate of Stephenson, 171 Wis. 452, 177 N. W. 579.. As far as the mere computation of the tax is concerned or the valuation of the property when ascertained that it is taxable is concerned, the action of the county court may well be said to be ministerial. ,But in looking back at the cases mentioned and others it will be found that usually the question arises as to whether or not certain property is taxable, especially, in the case of gifts. In view of the long continued practice of entertaining such appeals, the speedy and inexpensive remedy by appeal as compared with an original action to recover taxes paid under protest, and especially in view of what was said in State v. Porter, 178 Wis. 556, 190 N. W. 473, we reach the conclusion that the Beals Case should be overruled in so far as it holds that no appeal lies from an order of the county court fixing the amount of an inheritance tax. And the remedy by appeal is recommended as the more speedy and inexpensive one. At the time the Beals Case was decided it was not so easy to foresee all the judicial elements that might and often do enter into the ascertainment of an inheritance tax, and a lack of knowledge which experience has now supplied was no doubt the reason for the decision.
However, the fact that we now hold that there is a rem[98]*98edy by appeal does not destroy the original action. The remedies, for the present at least, may be held to be concurrent. It would work needless hardship to the present plaintiffs to 'have to begin all over again to collect from the state what they were unjustly called upon to pay. Since complete relief can be had in the original action, we do not deem it necessary to do more than reverse the order appealed from.
By the Court. — The demurrer to the complaint is overruled, and judgment is ordered entered, for plaintiffs as prayed for in the complaint.