172 Misc. 413 | N.Y. Sur. Ct. | 1939
The executor of deceased asks for an order modifying a pro forma order of this court dated August 8, 1937. He seeks to exclude from the taxable estate the value of certain property which had been irrevocably transferred by deceased in trust long antecedent her death. The effect of the exclusion of course would be to reduce the tax materially.
The State Tax Commission takes the position that the action of the appraiser in including this fund as taxable was a judicial act and that in consequence the failure of the executor to appeal from the pro forma order within the time limited for an appeal bars any remedy. The State Tax Commission asserts that the remedy available under section 249-aa of the Tax Law is a limitation upon the general power of the surrogate granted by subdivision 6 of section 20 of the Surrogate’s Court Act and that there is here shown no basis for exercise of jurisdiction to modify the order since there is here no “ fraud, newly discovered evidence, clerical error, or other sufficient cause.”
In Matter of Scrimgeour (80 App. Div. 388; affd., 175 N. Y, 507) it was held that the then Tax Law was broad enough to confer jurisdiction on the surrogate to vacate an order imposing a tax under a statute held unconstitutional.
In Matter of Coogan (27 Misc. 563; affd., sub nom. People ex rel. Coogan v. Morgan, 45 App. Div., 628; affd., 162 N. Y. 613) it Was held that the surrogate had power to modify an order which had pro forma assessed a tax on a body of property which included government bonds not subject to tax. It Was held that such inclusion was an error of fact and that the tax was “ not merely an erroneous one, but illegal for want of any jurisdiction to impose it.”
Concededly the property here sought to be excluded was never within the authority of the State or of the court to tax. (Matter of Sandford, 160 Misc. 898; modfd. on another point and affd., 250 App. Div. 310; affd., 277 N. Y. 323.)
The State Tax Commission relies particularly upon the authority of People ex rel. International Salt Co. v. Graves (267 N. Y. 149) and People ex rel. Bankers Trust Co. v. Graves (270 id. 316). These cases are distinguishable because in each of them the property taxed was specifically covered by the statute ■ which was under consideration. The statute was held to be unconstitutional in its
There is no moral right on the part of the State to have a tax on property not taxable. There is no justification for the court adopting a strict rule against a taxpayer. The settled law is to the contrary. The enactment of section 249-aa in text similar to the former section 225 of the Transfer Tax Law is an adoption by the Legislature of the construction given to section 225 by the cases here cited. Under such concept of the law this court has power to make the modification requested. It should be made if the court has'power to make it. Assuming that it has the power the court grants the application.
Submit, on notice, order accordingly.