147 Misc. 782 | N.Y. Sur. Ct. | 1933
This is an appeal by the State Tax Commission from an order made and entered herein on the 24th day of January, 1933, finally-fixing the tax on the contingent remainder interests passing under the will of Edwin M. Brown,^deceased,[which were suspended from taxation in a pro forma order of this court made and entered on November 23, 1915, on the report of William C. Clark, appraiser, filed November 20, 1915.
The grounds of the appeal are “ That the said order of the Surrogate's Court, made and entered January 24th, 1933, finally fixing the tax on the contingent remainder interests, which were suspended from taxation in the pro forma order entered the 23rd day of November, 1915, is erroneous, for the reason that in computing the value of the contingent remainder interests, the value of the intervening life estate was deducted in violation of and contrary to the provisions of section 230 of the Tax Law, which provides that in estimating the value of any estates in expectancy, which are contingent or defeasible and where the taxation thereof has been held in abeyance, shall be appraised at their full, undiminished value, when the persons entitled thereto shall come into the beneficial enjoyment or possession thereof, without diminution for or on account of any valuation theretofore made of the particular estates for purposes of taxation, upon which said estates in expectancy may have been limited.”
Edwin M. Brown died on February 22, 1915, leaving a will admitted to probate in this court on May 25, 1915. The will provides, briefly, as follows:
1. Payment of debts, funeral and testamentary expenses.
2. Gives real estate in Harrison, with furnishings, personal effects and any money on deposit “ to my credit ” in any bank or trust company to wife, Emma L. Brown.
3. Residue of estate given to wife for life with provision that if income is insufficient for proper support and maintenance, she is given power to use so much of the principal of the residuary estate, in addition to the income, as she may deem to be necessary for her support and maintenance.
4. Upon death of wife, residue of estate, or so much thereof as shall then remain, is bequeathed as follows: Presbyterian Church of Harrison, $10,000; Home for Incurables, Bronx, New York, $7;500; Rye Greenwood Union Cemetery, $220; George Brown Fleming, Mary Brown Fleming, John Orr Fleming, and Charles
5. If insufficient property remains to pay aforesaid legacies, they are to abate proportionately.
6. Residue of estate to trustees of Presbytery of Westchester, Incorporated, for poor, indigent and worn-out ministers.
The report of the appraiser shows that decedent left personal property in the sum of $64,180.04, and no real property. The value of the life estate of Emma L. Brown, widow, was fixed at $23,054, of which amount $5,000 was allowed as an exemption by the appraiser, and the balance, of $18,054, taxed in the one per cent class. The following statement appears in the report: “ That under the decision in Matter of Granfield (79 Misc. 374) the petitioner herein has the only interest which is subject to appraisal and none of such other above-named parties need be notified as none of such parties have any interest therein at the present time to be appraised, excepting the Comptroller, this petitioner having by the terms of the wdll a fife estate with absolute power to use the principal in her sole discretion for her own support and maintenance.”
Upon this report a pro forma order was entered on November 23, 1915, assessing a transfer tax against the "widow in the sum of $180.54. No mention was made in this order of the tax upon the remainder interests.
A notice of motion for an order assessing and fixing the transfer tax upon the remainder of $34,639 was made by Frank A. Kister, as attorney for Ida F. Marinor, executrix, and filed in this court on December 5, 1932, returnable on December 6, 1932. On January 24, 1933, an order was entered fixing the tax upon the persons taking said remainder upon notice to Thomas P. McLaughlin, of counsel for the State Tax Commission. From this order the State Tax Commission appeals.
The Transfer Tax Law in effect at the date of the death of this decedent in 1915, relating to this matter, is found in section 230 of chapter 62 of the Laws of 1909, as amended by chapter 800 of the Laws of 1911, which provides in part as follows: “ When property is transferred in trust or otherwise, and the rights, interest or estates of the transferees are dependent upon contingencies or
“ Estates in expectancy which are contingent or defeasible and in which proceedings for the determination of the tax have not been taken or where the taxation thereof has been held in abeyance, shall be appraised at their full, on diminished value when the persons entitled thereto shall come into the beneficial enjoyment or possession thereof, without diminution for or on account of any valuation theretofore made of the particular estates for purposes of taxation, upon which said estates in expectancy may have been limited.” (Italics are mine.)
None of the cases cited in the brief of the respondent is in point. The executrix, in her moving papers, asked “ for an order fixing and assessing the transfer tax upon the untaxed remainder of $34,639, and for such other further or different relief as may be just and equitable in the premises.”
The remaindermen were served with a copy of the motion papers, as appears by the affidavit of service filed with the papers.
The motion by the executrix is improper: Section 230 of the Tax
The order entered was not a modifying order, as required by the above-quoted section. This question of procedure, however, is not before me on this appeal.
The contention of the respondent that no appeal lies to the surrogate from the order fixing transfer tax entered January 24, 1933, is untenable. At the time of the entry of the pro forma order, of November 23, 1915, all that was before the appraiser and the surrogate at that time was the value of the life estate, and it is only for the value of that estate that the order was conclusive. There was no necessity then for fixing the value of the remainder, and the surrogate had no authority to pass upon that question. (Matter of Bucki, 172 App. Div. 455, 457, citing Matter of Mason, 120 id. 738; affd., sub nom. Matter of Naylor, 189 N. Y. 556; Matter of Seligmann, 170 App. Div. 837.)
The court, in making the order of January 24, 1933, was acting in a ministerial capacity as an assessing officer only. The remainder interests should be appraised at full value. (Tax Law, § 230; Matter of Bucki, supra.)
The appeal of the State Tax Commission is sustained.
Submit order in accordance herewith.