Opinion of the Court.

339 U.S.

The Supreme Court of California held void under state law certain testamentary gifts to the United States and directed that the property be distributed to the statutory heirs of each decedent. 33 Cal. 2d 638, 647, 204 P. 2d 330, 335. On appeal to this Court, affirmed, p. 95.

Melvin Richter argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney General Morison, Joseph W. Bishop, Jr. and Paul A. Sweeney.

J. Harold Decker argued the cause for appellees. With him on the brief for appellees in No. 188 was J. P. Patterson.

Casper A. Ornbaun and Everett H. Roan filed a brief for Burnison; and Frank J. Fontes was of counsel for Katz, appellees in No. 171.

MR. JUSTICE REED delivered the opinion of the Court.

These appeals involve the power of the California Supreme Court to declare invalid testamentary dispositions to the United States by two California residents. The bequest to the United States in No. 171 included only personal property; in No. 188 the United States was designated to receive both real property and United States bonds. The situs of all the property is assumed to be California. After appropriate procedural steps, the California Supreme Court held void these testamentary gifts and directed that they be distributed to the statutory heirs of each decedent. The two cases were consolidated for argument below and will be considered here in one opinion.

1 Estate of Burnison, 33 Cal. 2d 638, 204 P. 2d 330; Estate of Sanborn, 33 Cal. 2d 647, 204 P. 2d 335.

87

Opinion of the Court.

3

The California court construed § 27 of the California Probate Code to prevent a California domiciliary from making an unrestricted testamentary gift to the United States, although such a gift may be made to California, its counties and municipal corporations. The court arrived at this interpretation despite the contention of the United States that it would raise serious constitutional questions. The construction of the California Code by the California Supreme Court is, of course, binding on us. It leaves us, however, with the federal constitutional questions that the United States urged the California court to avoid.

2 Probate Code of California, § 27:

"Who may take by will. A testamentary disposition may be made to the state, to counties, to municipal corporations, to natural persons capable by law of taking the property, to unincorporated religious, benevolent or fraternal societies or associations or lodges or branches thereof, and to corporations formed for religious, scientific, literary, or solely educational or hospital or sanatorium purposes, or primarily for the public preservation of forests and natural scenery, or to maintain public libraries, museums or art galleries, or for similar public purposes. No other corporation can take under a will, unless expressly authorized by statute."

3 One judge dissented on the authority of Estate of Hendrix, 77 Cal. App. 2d 647, 651-53, 176 P. 2d 398, 400-402. The Hendrix will bequeathed property to the United States Veterans' Administration for the aid, comfort and assistance of disabled veterans. The California District Court of Appeal, at 651, declared that this was really a bequest to the United States, a corporation, and that its agency, the designated beneficiary, was expressly authorized by California Probate Code § 27 to take property under a will. Thus the bequest was valid. In its opinion in the present case, the Supreme Court held that this language had been unnecessary to the decision and refused to extend it to the gifts now under consideration. It thought that the Hendrix gift was good as one for charitable purposes to a legally constituted institution. The Supreme Court thought a gift to the United States "without qualification as to administration or purpose," 33 Cal. 2d 646, 204 P. 2d 335, did not come under the classifications of associations or corporations in § 27.

Opinion of the Court.

339 U.S.

In these appeals the United States makes two contentions. It urges that the California Code, as interpreted, violates the Supremacy Clause of the Constitution in that it infringes upon the "inherent sovereign power" of the United States to receive testamentary gifts. Alternatively it argues that the Code effects an unconstitutional discrimination against the National Government, since a testamentary gift may be made by a Californian to California, but may not be made to the United States.

We have no doubt that the receipt of gifts, testamentary and nontestamentary, is within the ambit of federal powers. Uninterrupted usage from the foundation of the Government has sanctioned it. The first question here, therefore, is whether the power to receive testamentary gifts reaches so far as to forbid a state to deny a testator the right to will his property to the United States.

4

To answer this question affirmatively would require us to overrule United States v. Fox, 94 U. S. 315, decided at the 1876 Term by a unanimous Court and frequently cited with approval. A devise of New York realty to the United States had been held void by the Court of Appeals under a New York statute that declared land in New York could be devised only to natural persons and such corporations as New York had expressly authorized to take by devise. Although it was not specifically urged that the Supremacy Clause precludes a state's interference with the power of the United States to receive testamentary gifts, this point was necessarily involved in the United States' argument that the New York prohibition violated an essential attribute of national sovereignty-the right to acquire property by all methods known to the law. In affirming, this Court held

Matter of Will of Fox, 52 N. Y. 530.

87

Opinion of the Court.

that the power to control devises of property was in the State, and that therefore a person must "devise his lands in that State within the limitations of the statute or he cannot devise them at all." 5

In asking us to overrule the Fox case, the United States contends that since it has the power to accept testamentary gifts, the Supremacy Clause bars a state from stopping this stream of federal revenue at its source. The argument is that every authorized activity of the United States represents an exercise of its governmental power,* and that therefore the power to receive property through a will is a governmental power. Since a state cannot interpose "an obstacle to the effective operation of a federal constitutional power," the Government argues a state cannot interfere with this power to receive. This argument fails to recognize that the state acts upon the power of its domiciliary to give and not on the United States' power to receive. As a legal concept a transfer of property may be looked upon as a single transaction or it may be separated into a series of steps. The approach chosen may determine legal consequences. Where powers flow so distinctly from different sources as do the power to will and the power to receive, we think the validity of each step is to be treated separately.

8

The United States would have no semblance of a claim here were it not for wills probated under California law. The Fox case is only one of a long line of cases which have consistently held that part of the residue of sovereignty retained by the states, a residue insured by the Tenth

5 United States v. Fox, 94 U. S. 315, 321.

• Graves v. New York ex rel. O'Keefe, 306 U. S. 466, 477; Pittman v. Home Owners' Loan Corp., 308 U. S. 21, 32; Federal Land Bank v. Bismarck Lumber Co., 314 U. S. 95, 102.

7 United States v. Belmont, 301 U. S. 324, 331-32.

8 Gregory v. Helvering, 293 U. S. 465.

339 U.S.

Opinion of the Court.

Amendment, is the power to determine the manner of testamentary transfer of a domiciliary's property and the power to determine who may be made beneficiaries.10 It would be anomalous to hold that, because of an amorphous doctrine of national sovereignty, federal constitutional law reached into a California statute and made impotent that state's restrictions on the designation of beneficiaries.

The United States' argument leads to the conclusion that no obstruction whatever may be put in the way of the United States' power to receive by will. Thus the United States could claim rights under the will of a testator whom the state had declared incompetent, or under a will that had not been witnessed and attested according to the laws of the state. The United States could take to the complete exclusion of a surviving spouse, notwithstanding the state law.

The case of United States v. Perkins, 163 U. S. 625, makes clear that obstacles may be put by states to the passage of property by will to the United States. There the New York Court of Appeals had upheld the application of the New York inheritance tax to personalty bequeathed the United States. Although there is no doubt that where the United States acts in its sovereign capacity, it is free from state taxes on that activity," this Court, in affirming, said:

9

"Certainly, if it be true that the right of testamentary disposition is purely statutory, the State has a right

United States v. Sprague, 282 U. S. 716, 733; United States v. Darby, 312 U. S. 100, 123.

10 Mager v. Grima, 8 How. 490, 493-94; United States v. Fox, 94 U. S. 315, 321; United States v. Perkins, 163 U. S. 625, 627, 628; Plummer v. Coler, 178 U. S. 115, 137; Maxwell v. Bugbee, 250 U. S. 525, 536; Lyeth v. Hoey, 305 U. S. 188, 193; Irving Trust Co. v. Day, 314 U. S. 556, 562; Demorest v. City Bank Co., 321 U. S. 36, 48. 11 Mayo v. United States, 319 U. S. 441.