In re the Appraisal of the Estate of Cook, 99 N.Y.S. 1049

In re the Appraisal of the Estate of Cook

99 N.Y.S. 1049 | N.Y. App. Div. | 1906

Lead Opinion

Mash, J.:

In the case of Matter of Wolfe (89 App. Div. 349 ; affd., 179 N. Y. 599) the executors, to whom the testator made a bequest of $20,000, taxable to them at five per cent, in good faith, voluntarily renounced and released the bequest, so that the money bequeathed to them fell into the residuary for the benefit of the testator’s children and grandchildren. It was held that the tax imposed should be at the same rate as if the legacy had been originally given to the residuary legatees.

Here the widow and daughter in good faith filed objections to the probate of the will, the principal ground of which was that the tes. tato'r did not possess testamentary capacity. The parties agreed to a compromise by which the residuary of the estate over the sum of $97,000 should pass to Mrs. Cook upon the final distribution of the estate. In other words, the residuary legatees, for the purpose of securing probate of the will, by which they would receive the pay*721ment to them of general legacies bequeathed to them, amounting to $180,000, voluntarily renounced all of the residuary of the estate except the sum of $97,000. The transaction was not in any sense a sale and transfer of the residuary of the estate, as such, so that the assignee would stand in the shoes of the residuary legatees and, therefore, be liable to pay the tax; but a compromise, entered into in good faith to insure the receipt by the residuary legatees of their general legacies bequeathed to them by the will, and in addition $97,000 of the residuary of the estate. It cannot make any difference, so far as the amount of the transfer tax is concerned, whether the compromise is made effectual by an assignment and transfer or by a formal appearance and renunciation in Surrogate’s Court. In the latter case the right of succession would pass to Mrs. Cook and her daughter; by the formal assignment it passes upon final distribution to Mrs. Cook. As said in Matter of Wolfe, the tax is. not imposed upon the legacy nor upon the property but upon the succession to the property. In legal effect the compromise to the extent that it changed -the course of succession takes the place of probate, and becomes part of the decree on final distribution of the estate.

I am unable to distinguish the case here in principle from that of Matter of Wolfe.

That part of the order of the Surrogate’s Court which imposed a tax of five per cent upon the residuary of the estate should be reversed.

The legacy to Frederick Cook MacDonell, son of the adopted daughter of Frederick Cook, is taxable at five per cent, for the reason that he cannot be regarded as a lineal descendant of the testator.

The appraisal of the estate is supported by the evidence. In Matter of Curtice (111 App. Div. 230 ; 97 N. Y. Snpp. 444) the stock of the decedent was a minority holding.in a private corporation, controlled by the family to which decedent belonged, and no general public ownership of it, which is the distinguishing feature of that case from cases where the stock is held by the general public.

That part of the order of the Surrogate’s Court fixing the taxable transfer tax upon the residuary of the estate at five per cent should be modified by fixing said tax upon the residuary at one per cent, and in all other respects the order should be affirmed, without costs to either party.

*722Proceeding remitted to the Surrogate’s Court for disposition accordingly.

All concurred, except Spring and Kruse, JJ., who dissented in an opinion by Kruse, J.

Dissenting Opinion

Kruse, J. (dissenting):

1 think the order appealed from is right and should be affirmed in its entirety. The case of Matter of Wolfe (89 App. Div. 349 ; affd., 179 N. Y. 599), relied on as authority for assessing the transfer tax upon the residuary estate at the rate of one per cent, instead of five per cent as was done in this case,- cannot be so regarded. In that case the, executors renounced and released a bequest made to them personally, so that the money bequeathed to them became a part, of the residuary estate distributable to the residuary legatees named in the will, and it was there held that the residuary legatees took directly from the testator. In this case the residuary legatees all transferred their interest in the residuum of the estate to the appellant widow. She was not named as a residuary legatee by the testator, and had no interest therein under the will, except what she acquired by this assignment.

Granted that the tax is not imposed upon the legacy, nor upon the property, but upon the succession to the property, it is the transfer from the testator to his immediate legatee which is subject to taxation, and where the latter transfers-his interest to some one else the rate of taxation is to be fixed according to the class to which the original legatee belongs, and not his assignee, although the assignee may stand in a closer relation to the testator and belong to a class whose rate of taxation would be less than the original legatee.

I think the residuum of this estate, acquired by the widow by this assignment from these remote relatives of the testator, was properly taxed at the rate of five per cent, and that the other questions were properly disposed of by the surrogate.

The order appealed from should be affirmed, with dosts payable out of the estate.

Spring, J., concurred.

Order modified in accordance with the opinion of Mash, J., and as so modified affirmed, without costs of this appeal to any party.