188 A.D. 788 | N.Y. App. Div. | 1919
The decedent Anna Cochrane Boshart died April 5, 1917, a resident of Grand Forks, N. D. She was the vendor in a and contract made March 15, 1911, by which she contracted
I think the surrogate was right in the decision he reached.
By section 220 of the Tax Law (Consol. Laws, chap. 60 [Laws of 1909, chap. 62], as amd. by Laws of 1916, chap. 323)
By section 243
If decedent’s interest in the property which is the subject of the land contract or her interest under that contract is tangible property in this State within the above definition, then it is taxable; otherwise not. Prior to the making of the contract decedent owned this land and if she continued to own
The surrogate has applied the rule of equitable conversion and his opinion reviews the authorities and the statutes in support of his view. • I need not cover the ground which he has well covered. But there are other aspects of the question which he has not considered. It appears that the will was not executed in such form as to pass title to real estate in this State. It does pass title to the land contract and the debt represented thereby. The nephew, Joseph E. Bowman, a resident of this State, inherited the fee under our statutes of descent. The title he thus received was subject to the land contract and in assessing the value of the interest transferred to him the land contract must be treated very much as a mortgage on the property would be treated. This nephew, as the surrogate finds, will receive from the proceeds of the land contract, which has since been paid in full, the sum of $515.84. The surviving husband, John Boshart, will receive $4,108.51, and seventeen other legatees named in the will will receive each a small sum. But the sum the nephew receives will be received not because he has the fee of the land but because as legatee he gets that sum out of the proceeds of the debt due the testator at the time of her death under this land contract. So it seems to me the land must be treated as if it was subject to a mortgage of $5,106.93, which amount is also the value of the land as stipulated. Thus the transfer of the fee to the nephew transferred nothing of taxable value.
It is stated in respondent’s brief that the vendee has paid over to the executor the full amount owing under the land contract and received a deed from the executor. I assume that this had not occurred at the time this proceeding was before the surrogate, but the fact does not appear, although if it had occurred it may have been considered as immaterial. It may be pertinent, however, upon the question as to whether the vendee, not having paid anything on the principal before the decedent’s death, the possible failure to complete his purchase on the part of the vendee might be considered in valuing the interest which the nephew received with his title.
The only other question to which attention need be called is as to the effect upon the rule of equitable conversion of the
As I understand the law, notwithstanding the vendee’s default, his right to complete his payments and require a deed had never been terminated prior to the death of decedent. Under these circumstances it seems to me that as he could have compelled specific performance, for the purpose of taxable transfer it should be held that the interest of the vendor under the land contract was personal property and that the fee of the land which passed to the nephew had only a nominal value.
The order is affirmed, with costs.
All concurred.
Order affirmed, with costs.
Since amd. by Laws of 1919, chap. 626.— [Rep.
Amd. by Laws of 1911, chap. 732, and Laws of 1916, chap. 551. Since amd. by Laws of 1919, chap. 626.— [Rep.