77 N.Y.S. 4 | N.Y. App. Div. | 1902
The property upon which the tax has been imposed consists of eighty shares of the stock of the National Bank of Commerce in the city of New York, and fifty shares of stock of the Delaware and Hhdson Canal Company. The material provisions of the will are as follows: “ (1) I give to my mother, Mary A. Bushnell, the use for her life of all my property, with power to reinvest the same. (2) After her use of my property shall have ceased, I leave it all excepting my personal effects, to my niece, Emily Cheney * * * to be hers and her heirs forever.”
The mother of the testatrix is still alive, and the niece, Emily Cheney, now Emily Cheney Learned, has not yet come into possession of the property. The testatrix resided and died in Connecticut, and her will was there admitted to probate. The executrices both reside there also, and the certificates of stock were in the possession of the testatrix without the State at the time of her death.
The appellants ask for a reversal of the order upon the ground that there is no proof that the Delaware and Hudson Canal Company is a domestic corporation. They do not contend that it is not
For these reasons we think the appellants are not in a position to avail themselves of that objection now, but if there were any question about the fact they would be afforded relief by reversal or otherwise.
It is settled by authority that the capital stock of a domestic •corporation is subject to taxation in this State under the Transfer Tax Law (Laws of 1896, chap. 908, art. 10, as amd.) even though the owner be a non-resident and the stock be in his possession without the State at the time of his death. , (Matter of Bronson, 150 N. Y. 1; Matter of Fitch, 160 id. 87.)
Ordinarily a life estate in personalty (not specifically bequeathed) does not entitle the life tenant, as a matter of right, to the possession, and the executors must exercise ordinary prudence in determining whether they will turn over the corpus upon a mere receipt acknowledging the interest of the remainderman or whether they will require security or retain the fund and pay over the income. (Redf. Law & Pr. Surr. Ct. [5th ed.] 618, 619; Matter of McDougall, 141 N. Y. 21; Matter of Talmage, 32 App. Div. 10; affd., 160 N. Y. 704; Matter of Ungrich, 48 App. Div. 594; affd., 166 N. Y. 618; Matter of Roffo, 51 App. Div. 35.) It may be that the life tenant in this case is entitled to the possession of the stock or the proceeds
Emily Cheney Learned took a vested indefeasible interest in this-property at the time of the death of the testatrix. There has, therefore, been a transfer to her within the contemplation of the Transfer Tax Law and the interest thus transferred was then taxable. (Matter.of Dows, 167 N. Y. 227.)
Both the life tenant and remainderman took their respective interests in the property as a matter of sovereign favor. Neither is the life tenant in a position to complain that the principal of which she is entitled to the use is diminished by the tax nor can the remainderman resist the imposition of the tax upon the ground that he may never come into possession of the property. The law affords remedies to protect the rights of remaindermen. The theory of the statute is that the tax is to be paid by the executors out of the property transferred (Transfer Tax Law, §§ 222, 224), and the. statute would not be construed as making the transferee liable personally beyond the amount of the property coming into his hands.
It follows that the order should be affirmed, with ten dollars costs- and disbursements.
Patterson, Ingraham and Hatch, JJ., concurred ; McLaughlin* J., dissented.
Order affirmed, with ten dollars costs and disbursements.