170 Misc. 696 | N.Y. Sur. Ct. | 1939
When the account originally filed by the administratrix was under scrutiny certain objectants sought direction from the court that the operations of a corporation wholly ■ owned by deceased be disclosed. An account of- the doings of that • corporation was in due course ordered and in addition the further ■transactions of the administratrix as such were brought down to ■ date. As a result the court now has before it the original account, ■•the supplementary schedules of that account and the schedules of -the operations of the wholly owned corporation.
The disposition of the proceeding under section 206-a of the, Surrogate’s Court Act left for consideration the objections to the accounts filed for the true estate and for the wholly owned corporation. Among objectants was the undertaker. In the course of the proceedings an adjustment of the undertaker’s claim was reached, and payment made to it with the result that no further ruling is ¡ required on its objections.
Among the objectants is a person claiming to be a creditor by reason of a claim based upon a promissory note said to have been executed by deceased on September 30,1926. The note is outlawed concededly unless payment of interest thereon has tolled the statute. The proof in support of this claim of interest payment is too unsatisfactory to warrant credit by the court. In the case of a debt already barred the rules are strict in requiring explicit proof that the payments claimed to revive the debt, were made with the purpose of recognizing and revitalizing the claim. Such proof is wholly lacking in this case. While the note is that of deceased the defense of the Statute of Limitations thereto bars any allowance. Accordingly the objections of Hugh McClatchey are dismissed.
Objections were made by Sylvia and Marion Zamichiele. These were disposed of by consent of all interested parties by allowing the claim as a general claim against the estate. Another claimant attended personally and by consent of the parties was deemed to have filed objections. She sought to establish her claim by her own oral testimony of transactions with deceased. On objection such testimony was excluded and the claim was necessarily disallowed.
The creditor who had succeeded in obtaining refund to him of money collected by the administratrix though not constituting estate assets interposed various objections to the account and
To the amended schedules filed by the accounting party objections were interposed by the comptroller of the city of New York and by the Commissioner of the State Unemployment Insurance Fund. Each objectant seeks to establish that he is entitled to have his conceded claims paid before those of the other objectant are honored. Each has a claim (the comptroller for sales taxes, the Commissioner for contributions to the Insurance Fund) based on transactions in the lifetime of deceased. Each has also a claim arising from transactions occurring in the business of deceased during the time of its continuance by the administratrix. The unpaid balance due the comptroller for the latter transactions
For pre-death transactions there is due to the comptroller, for sales taxes, the sum of $849.88, and to the Commissioner, for contributions to the Unemployment Insurance Fund, the sum of $90.73. Each objectant contends that absolute priority should be accorded his claim. This question is to be resolved solely in accordance with section 212 of the Surrogate's Court Act. The Labor Law is not applicable to unpaid personal obligations of deceased incurred during his lifetime and later asserted against his estate.
Contributions to the State Unemployment Insurance Fund are taxes imposed on employers. The amounts thereof are governed by the employer’s payrolls. (Chamberlin, Inc., v. Andrews, 271 N. Y. 1, 9, 10; affd., 299 U. S. 515: rehearing denied, 301 id. 714.) Though taxes as “ forced contributions ” from taxpayers are ordinarily to be distinguished from debts (City of Rochester v. Bloss, 185 N. Y. 42, 47), this distinction does not hold so far as the estates of deceased persons are concerned. Subdivision 2 of section 212 expressly classifies “ taxes assessed on property of the deceased previous to his death ” as among the “ debts of the deceased ” which the fiduciary is commanded to proceed with diligence to pay. This must be kept in mind in considering the definition of the term “ debts ” which is given in subdivision 3 of section 314 of the Surrogate’s Court Act. Since, therefore, the term debts does not exclude a tax, the court holds that the tax now due to the State Unemployment Insurance Fund is a debt due to New York State and that it is, therefore, entitled to the preference accorded such debts by subdivision 1 of section 212 of the Surrogate’s Court Act.
The nature of the city sales tax has been considered by the Court of Appeals at some length. (Matter of Atlas Television Co., 273 N. Y. 51.) There an “ assignment was made for the benefit of creditors. The city of New York filed a claim for ‘ taxes imposed
In New York Steam Corp. v. City of New York (268 N. Y. 137) there was under consideration a local law of 1933 enacted pursuant to authority conferred on the city by the State. The local law imposed an “ excise tax or license fee.” The proceeds of this excise taxation were earmarked for the relief of the unemployed. The court said (p. 145): “ The State has here empowered its agent, the city of New York, during a fixed period, to experiment in taxation for a State purpose.”
A tax analogous to the city sales tax has been held to have its source not in the local law but in the enabling act of the State. (John Hancock Mut. Life Ins. Co. v. Pink, 276 N. Y. 421, 426.) In every sense, save verbal, the unpaid city sales tax is a debt due to the State and not to the city. When paid to the city it is paid to the agent of the State and it is used for the purpose of enabling the State to perform one of its primary functions. Consequently, where, as here, such a tax becomes due in respect of transactions performed by deceased in his lifetime it is a debt due to the State of New York within the meaning of subdivision 1 of section 212 of the Surrogate’s Court Act. As such a debt it is on a parity with the contributions due to the Commissioner of the Unemployment Insurance Fund. It follows that the objections whereby comptroller and Commissioner respectively undertake to get a preference each as against the other must be and in all respects are overruled. The respective debts are on a parity.
Submit, on notice, decree settling the account accordingly.