46 A.D. 574 | N.Y. App. Div. | 1900
Lead Opinion
The principal question arising on these appeals relates to the right of the proper authorities of the State of New York to determine and fix the amount of a tax, under the Transfer Tax Law
The first report of the appraiser was not approved by the surro
The argument of the learned counsel for the appellants proceeds upon the assumption that the indebtedness of Mr. Pullman to creditors in New York is to be considered from the point of view of the locality of that indebtedness, and that inasmuch as such debts are in excess of the market value of the taxable assets situate in this State, there was no property actually in the State which would pass under the will to any beneficiary in accordance with the terms and interpretation of the Transfer Tax Law. It is claimed that, under the provisions of that law and the decisions of the courts of this State, debts are to be offset against assets in ascertaining what property of a decedent is liable to the transfer tax. Where the whole estate is within the State of New York and the decedent is a resi
But, in this case, the indebtedness to the creditors in New York ' is a general indebtedness. It appears by the affidavit of one of the executors that that indebtedness is payable on demand. It is an indebtedness against»the whole'estate, and not, irrespective of the question of pledge, one for which any particular assets, no matter where situated, would be liable. The question presented is a practical one and not to be decided upon any mere theory or assumption that local creditors with security in their hands, on the failure of the foreign executors to pay the debts, will relinquish the security and look to what are called local assets for the payment of their claims in the general course of administration under ancillary letters to be issued hereafter in this' State. The situation is simply this: 'There is taxable property of a non-resident decedent in this State for the shares and bonds are subject to taxation. (Matter of Bronson, 150 N. Y. 1.) Prima facie, there is a tax due and payable to the State of New York, and the State has a lien upon the property until the tax is paid. (Laws of 1892, chap. 399, "§ 3, re-enacted by Laws of 1896, chap. 908, § 222.)
The surrogate had authority to appoint an appraiser and to fix the tax. (Matter of Westurn, 152 N. Y. 93.) There is nothing before the court to show that any claims of creditors will ever be ■presented, but, on the contrary, the presumption is that the creditors in New York will pursue'the ordinary course of making their demands upon the foreign executors, and in the event of the debts not being paid, resort to the securities they hold. It is true that Such collateral securities are not a primary fund for the payment of their debts, and it is also true that an ancillary administrator with the will annexed would be under an obligation to pay domestic creditors before he remitted the assets here to the foreign executors, if such creditors presented their claims for payment. But the provisions of the law respecting the application of assets within
We think the conclusion reached by the learned surrogate was right and that where domestic creditors have in their hands the legal' title and the right to resort for the payment of their debts to securities belonging to a non-resident decedent -which are not' taxable under the laws of this State, the indebtedness due such creditors is not to be offset against the value of property of such decedent otherwise taxable under the Transfer Tax Law of the State. The-question raised by the appellants West and Fluhrer as to their specific legacies is disposed of adversely to their contention by what was decided in The Matter of Hoffman (143 N. Y. 327). . But as' to the $58,430;of bonds and stocks of domestic corporations held in pledge we think the order is incorrect. Thesé securities are liable to be resorted to by the creditors. In pledge the title to them is Lithe pledgee and they are not in a situation to be taxed now as property of the estate of Mr. Pullman. All of their amount may be required to pay the debts to which these bonds and stocks are collateral and the creditors’ security should not be diminished at this time.
The order appealed from should be modified by deducting the $58,430 from the assessment, and as modified affirmed, without costs to either party.
O’Brien, Ingraham and McLaughlin, JJ., concurred; Van: Brunt, P. J., dissented.
Dissenting Opinion
I dissent from the conclusion arrived at by Mr. Justice Patterson. I am of the opinion that the question is to be considered as; though ancillary testamentary letters had been takén out. If such.
Order modified as directed m opinion, and as modified affirmed, without costs.