119 A.D. 119 | N.Y. App. Div. | 1907
Surrogate :
. This is a motion by the executor of Bobert B. Willets,. deceased, to modify an order of the surrogate of Westchester county, dated April 30, 1904, assessing and fixing a transfer tax upon the estate of said Willets, and to • direct the State Comptroller to refund a portion of the transfer tax heretofore paid, • , ■ From the moving papers it appears that Bobert ,B. Willets died • on August 22, 1903, leaving a .last will.and testament which was duly admitted "to probate by the surrogate of Westchester county ; ; and letters testamentary théreunder were granted .to this petitioner. Upon his application an appraiser was "appointed to appraise the estate for the purpose of assessing and fixing the transfer tax. The appraiser filed his report bn April 29, 1904; and on the'following, day it was confirmed and by decree of the Surrogate’s Court the transfer tax was assessed and fixed upon the estate, at $4,026.60, which was paid by the executor. ., - .
In the appraiser’s report, as thus confirmed, was" an item ■ of • $33,000, being the appraised value of an undivided onedifth interest, in a house and lot in New York city, owned by the decedent’s . father (also named Bobert B, Willets) at the time of his death in 1879. ' ' "
By the will of-the elder Willets; after certain "specific trusts had been established, and it was provided that the remainder of his estate both real and personal, should be,equally divided among his five "children, one. of whom was Bobert B. Willets, the younger." The- . wifi, also contained the recital: “ It is my will that in all cases of ■ the death of any of my children before distribution, leaving issue . .then living, such issue shall represent- the parent and receive what shall remain of his, her or their portion.” - >
The children of the elder Willets agreed that his. widow should occupy the house and lot mentioned as her home" and "residence so long as she should live ; and this agreement was carried out, the widow occupying the .premises until her .death on February 9,1903.
" A few -months thereafter, and on August twenty-second, as already stated, Bobert B. Willets, the younger, died . and at that time no distribution had been made of that portion of the elder Willets’ estate represented by the said house and lot.
Kearly a year after the order fixing the transfer tax had been made, and on March 16, 1905, the house and lot was sold under a power of. sale contained .in the will, of the elder Willets for ■ $235,000; and on March twenty-seventh following an action was begun in the Supreme Court by his sole surviving executor to construe his will for the purpose of determining, among other things, whether the title to the house and lot vested in the younger Willets prior to his death so as to become a part of his estate, or whether, upon his death, prior to distribution, the title passed from the father directly to the issue of the younger Willets without vesting, in the latter. To this action the State Comptroller was not a party.
It was tried before Mr. Justice Keogh at a Special Term and, upon December 31, 1905, judgment was rendered therein by which it was determined as matter of fact that “ the true intent and meaning of the will of said Robert R. Willets, the elder, concerning the proceeds of said house and premises is that in case of the. death of either of his five children before the distribution of said proceeds, leaving issue then living, .that in all such cases such issue shall represent the parent and receive his, her or their portion.” The court also found as conclusion of law “ that the true intent and meaning of the said will of Robert R. Willets, the elder, concerning said proceeds of said premises is that in the case of the respective shares of his children, the said Cornelia W.- Carle, William H. . Willets and Robert R. Willets, Jr., who severally died after the testator’s death and before the distribution of' said procéeds, is that the said respective shares shall be paid by the plaintiff directly to the respective issue of the said deceased children.”
After this judgment had been rendered, and on March Y, 1906, this" motion was made to modify, as already indicated, the order of
Section 225 of the Tax Law-in force during the period covered by the matters now before me (Laws, of 1901, chap. 173),
As. the order assessing and-fixing the transfer tax was made April. 30, 19.04, and-the present motion to modify it was made on March 7, 190.6, returnable on" the: twenty-fourth of that month, the application is concededly within the two-year, period specified by the statute.
Under -the facts stated, which are without contradiction, I - must be controlled by .the decision of the learned justice at Special Term who construed the. will of the elder Willets to the effect that t-Iie undivided-otierfiftli interest in the house and -lot situated in the city , of New York passed directly from the elder Willets. to the children of the younger .Willets, and.did not at any time vest in the- latter
■ The State Comptroller contends, however^ that the' surrogate lias no power to modify the order of April thirtieth, as the error there contained in assessing and fixing a transfer tax upon the undivided one-fifth interest in the house'and'lot was not an error of fact, but one of law, which could only be corrected by an appeal from the order itself. - (Matter of Niven, 29 Misc. Rep. 550; Morgan v. Cowie, 49 App. Div. 612.)
I am of the opinion, however, that it can hardly be said that the-error was solely one of law. (Matter of O'Berry, 91 App. Div. 3.) • It is true that the item of $33,000, representing the value of an Undivided one-fifth interest in the property mentioned, was included in the estate of the younger Willets through an erroneous legal construction of the will of his father, but the error was one of fact in including in that estate, property which the testator did not own. The ownership of property is a fact and a mistake in that respect is one of fact. If the ownership is established and a mistake is made - as to the taxability of the transfer, then the error would be one of law. Both the transfer tax appraiser and the surrogate assumed as a fact that the testator owned this property. Mo question as to title was raised or litigated or was' specifically passed upon. Ownership . was assumed,, and this fact, tíien assumed as the* basis for fixing the tax complained of has, since’the making of the order, been found to be erroneous through the judgment of the Supreme Court.
The facts here presented are in legal effect the same as those passed upon by the courts in Matter of Silliman (38 Misc. Rep. 226; revd., 79 App. Div. 98; affd., without opinion, 175 N. Y. 513); and that case, in my -opinion, is authority for holding that I have' the power to modify the order in the respect prayed for.
The learned' attorney for .the State Comptroller, in citing the Silliman Case (supra) upon his brief, quotes at length from the
In the Silliman case the executors therein, in 1901., paid to the Comptroller á transfer tax previously assessed' and fixed 'upon the estate of their testator by the Surrogate’s Court, in fixing which rio deduction was made from, the estate for the commissions to.which, the trustees under the will were entitled,, the'-fax on those commissions amounting-to.'$lj,072..74.. Subsequent to the payment-of the transfer tax; the Court of Appeals, in. an entirely different matter (Matter of Gihon, 169 N. Y. 443), decided that the expenses of administration, including the trustees’ and -executors? commissions, did not pass to the legatees or next of Mri arid, therefore, that such commissions should not be included'-in the estate for the purpose,of fixing the transfer tax. After this decision had been rend bred, the executors of Silliman moved tb modify the. prior order- assessing and fixing the transfer tax by striking therefrom the amount assessed arid fixed as a transfer tax upon the commissions. This motion was denied by the surrogate before whom it Was made, but his decisioh, as already indicated, was reversed by the Appellate Division. Mr. Justice Bartlett, in the course of his.opinion,(saying-: “It would seem, therefore, that the previous assessment .of the tax, so far as it included such- commissions; was: without jurisdiction, and that the Surrogate’s Court possessed power to modify its prior decree so as to exclude such commissions from consideration, as any part of the sum upon which the tax .was "to be assessed. -(Matter of Coogan, 27 Misc. Rep. 563 ; affd. by the Appellate Division, sub nom. People ex rel. Coogan v. Morgan, 45 App. Div. 628, and by the Court of Appeals, 162 N. Y. 613. See, also, Morgan v. Cowie, 49 App. Div. 612.).
In Matter of Coogan (supra),a transfer tax w.as assessed and fixed'upon United States bonds and other personal-property of a testator. It was snbsequéntly held- by the Court of- Appeals,, in. a different matter, that- United States bonds were exempt from taxation under the Transfer Tax Law as it then stood (Matter of Sherman, 153 N. Y. 1; Matter of Whiting, 150 id. 27), and thereupon a proceeding was instituted to modify the taxing order and to compel. ■ a refunding of the tax paid. It was held at Special Term (Chester, J., Matter of Coogan, 27 Misc. Rep. 564).that “the surrogate had no jurisdiction to assess a tax on the transfer of- these bonds, and the tax was not merely an- erroneous one, but illegal for want of any jurisdiction to impose it.” It. was further decided (head note) that the surrogate had power “ to modify his order and direct the tax to be refunded, as its original imposition-- was without jurisdiction.”
'• To the same effect is Matter of Lansing (81 Misc. Rep. 148); ■ Matter of Sorimgeour (175 N. Y. 507, affg. 80 App. Div. 388, affg. 39 Misc. Rep. 128), and Matter of O'Berry (91 App. Div. 3 ; affd., 179 N. Y. 285); and, although I have»carefully examined all the cases cited by the learned counsel for the State Comptroller in opposition to this motion, I have failed to find therein anything, which negatives the conclusion at which I have arrived.
Ordinarily, where, a determination is set aside on the ground of
It follows, therefore, that the order assessing and fixing thé transfer tax was erroneous in part, and should be modified by striking . from it the tax assessed and fixed upon the transfer of the undivided one-fifth interest in the. house and lot mentioned, and that the tax paid upon its transfer should be refunded, with interest.
Motion granted, with costs.
Laws óf 1896, Chap. 908, § 235, as'nmd. by Laws of 1901, chap, 173. This statute KaS been since amended by chapter 368 of the Laws of 1905..—-[Bee, . .