In re the Estate of Phelps

100 Misc. 87 | N.Y. Sur. Ct. | 1917

Fowler, S.

This is an application to exempt from taxation the transfer of 1,637 shares of stock of the National City Bank of New York. These shares of stock constituted part of the assets of the estate of William Walter Phelps, who was a resident of New Jersey and who died in 1894. Shortly after his death an agreement was entered into between the trustees named in his will and the residuary legatees, by which the trustees were authorized to continue the investments of the estate or to make such other investments as they deemed advisable, to sell the securities belonging to the estate at such times as seemed most advantageous and to divide the proceeds among the legatees. Sheffield Phelps was one of the residuary legatees. He died in the summer of 1902, a resident of New Jersey. At that time part of the principal of the estate of William Walter Phelps, which was still in the hands of the trustees, consisted of shares of stock of the National City Bank of New York. Subsequently the trustees decided to distribute in kind certain assets of the estate, and in accordance with this decision they prepared to transfer to the executors of the estate of Sheffield Phelps 1,637 shares of stock of the National City Bank as his share of the assets. The bank refused to transfer these shares except upon the consent of the state comptroller or the order of this court determining that their transfer was not subject to a tax. The state comptroller opposes this application.

The tax law in force at the date of decedent's death provided for the imposition of a tax upon the transfer by a non-resident of property located in this state, and shares of stock in a domestic corporation constituted such property. In the matter under consideration, however, the decedent at the time of his death did not own any shares of stock of the National City Bank; these shares were held by the trustees under the will of William Walter Phelps for the benefit of the residuary legatees. His interest in the estate was a right to an accounting, not a right to any specific part of the assets of the estate. It was not an interest in any particular stock, but an interest in the proceeds of the sale of such stock when such proceeds were being distributed among the legatees. It was, therefore, merely a chose in action against a non-resident, and as the decedent was a non-resident it was not subject to a tax under the Tax Law of this state. Matter of Heilbuth, 85 Misc. Rep. 275.

The application to declare the transfer of the 1,637 shares of stock of the National City Bank exempt from taxation is granted.

Application granted.