81 N.Y.S. 428 | N.Y. App. Div. | 1903
It appears that Stephen C. Dimon died on the 12th day of January, 1893, and that the appellant, who is his nephew, took either by will or inheritance one-sixth interest in his personal and real property. The other five-sixths went to the decedent’s brothers and sisters, and its transfer to them is not taxable. The order appointing the 'appraiser to determine the value of the interest transferred to the appellant for the purpose of assessing the transfer tax was made on the 5th day of December, 1894; but the appraisal was deferred by consent, owing to the fact that the estate was largely involved in litigation. The report of the appraiser was filed on the . 9th day of January, 1902, and he finds the total value of the decedent’s estate was $12,775.99, and that the total value of his real estate was $28,500. The appraisal in this regard is acquiesced in by all. The controversy is over the amount that should be deducted for the expenses of administration and commissions of the administrator. It was shown by affidavits, and undisputed, that the administrator has paid out and disbursed for undertaker’s bill, tombstone, doctor’s bills, and legal services and disbursements in the administration proceedings and in two actions brought against him as administrator, and one brought by him in that capacity and for his commissions, the sum of $11,091.47. The appraiser, instead of allowing and deducting this amount, fixed the commissions of the administrator at $196.98, and the amount of debts, including undertaker’s bills, tombstone, doctor’s bills, and legal services, $3,077.01, making a total of $3,273.99, which, deducted from the total value of the personal estate, left the value of the net personal estate $9,502. The appellant’s interest in the personal estate was fixed at $1,583.66, being one-sixth of this amount, which, together with one-sixth of the value of the real estate, aggregates $6,333.36, and upon this sum the transfer tax of 5 per cent., amounting to $316.69, has been assessed. The record does not show any judicial accounting allowing or disallowing these disbursements made by the administrator. The amounts paid for legal services and for disbursements in the various litigations are shown separately, and they are supported by the affidavit of the attorney for the administrator, showing that they were necessarily incurred, and that they are reasonable in amount, and these facts are not controverted by affidavit or other proof. The actions against the administrator either involved the whole or a large part of the estate. It was his duty to defend them, and through the efforts of his counsel the defense was successful. The "action brought by him was also for the benefit of the estate, and resulted in the recovery of several thousand dollars. It is contended that "the actual disbursement of these amounts by the administrator, and the proof by affidavit that they were necessary and reasonable, are not controlling, owing to the fact that the expenses appear to be disproportionate to the value of the estate. It is conceded that the statute contemplates that the transfer tax shall not be imposed upon the estate, but only upon the interest which will ultimately pass to the transferees. This necessarily requires a deduction of all debts and expenses of administration before the correct amount of the transfer tax can be ascertained. Matter of Gihon, 169 N. Y. 443, 62 N. E. 561; Matter of Rice, 56 App. Div. 253, 61 N. Y. Supp. 911, 68 N.
In so far as the estate has not been administered at the time of the appraisal, we understand it to be the practice to estimate the unpaid debts and expenses of administration, and we deem that practice unobjectionable, provided the report and order reserve the right of those whose interests are assessed to a rebate in case it shall appear by the decree settling the accounts that the debts or expenses have been estimated too low, and a provision for a further assessment—• although perhaps this is not strictly necessary—if estimated too high.
The order should be reversed, with $10 costs and disbursements, ■ and a new appraisal ordered. All concur.