189 A.D. 865 | N.Y. App. Div. | 1919
The action is brought to recover an inheritance tax upon the estate of John H. Harbeck, deceased, and to enforce a lien upon the distributed shares of the estate in the hands of the defendants.
The stipulated facts follow: John H. Harbeck died in the city of New York on November 8, 1910, leaving a last will and testament and four codicils thereto. The testator had acquired a residence and domicile in the city of Boulder, county of Boulder, Colo., in or about the year 1897. He left Boulder for the last time about ¿ month prior to his death, which occurred at the Hotel Plaza, in the city of New York, where he and his wife, the defendant Kate A. Harbeck, were stopping while en route abroad. His fatal illness was contracted while securing steamship passage for Europe. It was his purpose to acquire a residence and domicile in Paris, and he had left Colorado with that intention.
On March 28, 1911, the will and codicils of the testator were admitted to probate by the Surrogate’s Court of the county of New York. Letters testamentary were issued to the widow, Kate A. Harbeck, who was named in the will as executrix. The petition by her for probate and the accounting proceedings alleged that she was a resident of Boulder, Colo., and that the testator at the time of his death was likewise a resident of Boulder. In the proceedings had to determine the transfer tax due the State of New York it was found that the deceased was a resident of the State of Colorado. The tax was assessed as upon the estate of a non-resident, and paid to the State of New York upon that basis. On or about July 8, 1913, Kate A. Harbeck rendered an account of all her proceedings as such executrix to the Surrogate’s Court of the county of New York, and thereupon such proceedings were had that on March 10, 1914, a decree
The Inheritance Tax Law of Colorado, in force at the time of the death of the testator in 1910, was a part of chapter 3 of the Session Laws of 1902 (as amd. by Laws of 1907, chap. 214, and Laws of 1909, chap. 193) of said State and entitled: “ An Act in relation to public revenue, and repealing all previous acts or parts of acts in conflict therewith.” Pursuant to said Inheritance Tax Law, as further amended and revised in 1913 (Laws of 1913, chap. 136), and on or about February 28, 1916, an appraisal was had in Colorado at the fair market value of property which belonged to the decedent at the time of his death. Thereafter and on March 4, 1916, in the County Court of Boulder county, which is a court of record,
None of the defendants was personally served within the State of Colorado with any process or notice issuing out of any court of that State, or issued by any tax appraiser thereof, and none of the defendants was ever served by publication or substituted service with any process or notice, except that defendants did receive certain notices or papers through the mail. The first of these papers is dated February 11, 1916, and gives notice that the tax appraiser will on February 28, 1916, appraise at its fair market value all the property of the decedent. The second notice is signed by the clerk of the County Court and dated March 6, 1916. It gives notice that, by an order of said court entered on that day, the inheritance tax had been assessed as above mentioned. This second notice also states that if any person interested is dissatisfied with the assessment made or tax fixed he may appeal therefrom to the District Court within sixty days upon giving good and sufficient security, to the satisfaction of the county judge, to pay all costs and the taxes as fixed by the court. It further states that any person so dissatisfied may object thereto to the County Court within sixty days after the making of the assessment order and may, within ten days after the entry of judgment upon such objections, appeal therefrom to the District Court upon giving a bond to pay all costs and whatever taxes shall be fixed by the District Court on appeal. None of the property of the testator was, at the time of his death or subsequently, physically in Colorado or the custody or control of any court or official of that State.
After the death of decedent and prior to the institution of the Colorado proceedings and this action, Kate A. Harbeok acquired a residence and domicile within this State. The defendant United States Trust Company accepted a trust set
The complaint, after setting forth substantially the above facts, alleges that pursuant to said Inheritance Tax Law, the tax became due and payable at the death of the decedent, and, with the interest thereon from said date, became a lien on the personal estate of said decedent at that time and remains a hen thereon no matter into whose hands the same may come. It is further alleged upon information and belief that each of the defendants had due notice of the entry of said order of assessment and the amount of the tax; that the defendants received and now retain the property of said estate, which was impressed with said hen in favor of the plaintiff and that the defendants are personally liable for the tax. It is finally alleged that payment with interest from November 8, 1910, has been demanded, but not paid. Judgment is demanded against the executrix for the total amount of the tax and against each defendant for the amount of the tax assessed against him or her, including the United States Trust Company which was made a party because of the trust created in the will for the benefit of William H. Harbeck for life, remainder to the residuary estate.
The defendants contend that this action cannot be maintained because: First, all proceedings upon which this action is based were had in the State of Colorado, without personal service of process upon the defendants and without appearance by them, and are a nullity in so far as they and this action are concerned; second, there is no authorization whatever under the laws of Colorado or New York for this action; third, the alleged claim or cause of action is of such character that our courts cannot entertain it.
The Inheritance Tax Law of Colorado (Laws of 1913, chap.
The domicile of the testator was in Boulder, Colo., at the
“ In this view, the so-called inheritance tax of the State of New York is in reality a limitation upon the power of a testator to bequeath Ms property to whom he pleases; a declaration that, in the exercise of that power, he shall con
The court then quotes Chief Justice Taney in Mager v. Grima (8 How. [U. S.] 490, 493) as follows: “ * * * The law in question is nothing more than an exercise of the power which every State and sovereignty possesses, of regulating the manner and term upon which property real or personal within its dominion may be transmitted by last "will and testament, or by inheritance; and of prescribing who shall and who shall not be capable of taking it. * * * If a State may deny the privilege altogether, it follows that, when it grants it, it may annex to the grant any conditions which it supposes to be required by its interests or policy.”
A good illustration of the principle which enables a State to impose conditions upon those seeking the benefit of its laws is found in the statutes granting privileges to foreign corporations. It is customary and lawful to provide for other than personal service of process to fix a liability upon such corporations. (Flexner v. Farson, 248 U. S. 289; Sukosky v. Philadelphia & Reading Coal & Iron Co., 189 App. Div. 689.)
The defendants by absenting themselves from the State of Colorado made it impossible to proceed under sections 17, 18 and 19 of the Inheritance Tax Law of 1913. These sections provided for a review of the appraisal proceedings and the collection of the tax upon the service of a summons as in an action in rem. Nothing was required to be done under those sections to finally determine the tax and make it a binding obligation and hen. They will later be referred to in discussing defendants’ claim that the plaintiff’s only remedy for non-payment of the tax was contained therein and that they were exclusive in 'that regard.
In support of their contention that personal service of the notice in the appraisal proceedings was necessary to confer jurisdiction, the respondents have cited many cases that
It now becomes necessary to take up the question as to the plaintiff’s right to enforce this obligation in this State. It is contended by defendants that sections 17, 18 and 19 of the Colorado Inheritance Tax Law of 1913 contain the sole remedy open to the plaintiff for the collection of the taxes. We have seen that because of the absence from Colorado of the defendants and of any property therein belonging to the decedent, no proceedings could be had under those sections. The defendants, although they admit having received the notice by mail provided for in the Colorado statute, have not voluntarily submitted to the jurisdiction of that State or permitted personal service to be made upon them therein.
Section 17, in brief, gives the County Court jurisdiction over the property of a decedent and taxes thereon and provides that the County Court first acquiring jurisdiction shall retain the same “to the exclusion of every other ” (County Court). Section 18 provides that where the tax has not been paid the County Court shall issue a summons requiring the person interested in the property to appear on a day certain, not more than three months after the date of the summons, to show cause why the tax should not be paid. The summons may be served in every respect as provided for a summons in a civil action in rem unless otherwise provided in the act. Section 19 states that after the refusal or neglect to pay a tax within one year from the accrual thereof, and where no bond has been given, it shall be the duty of the Attorney-General to file a petition under section 18 and press it to a final conclusion. The Attorney-General is authorized to
The remedy sought by the plaintiff is not limited to its courts and adequate enforcement can be had in ours. (Howarth v. Angle, 162 N. Y. 179; Shipman v. Treadwell, 200 id. 472.) A different situation was presented in Marshall v. Sherman (148 N. Y. 9). There the action was brought by a creditor of a Kansas bank to enforce a statutory liability of a stockholder under a statute of that State. It was held that there was no reason why the plaintiff should be permitted to enforce the liability against a citizen of this State in a form of action different from that which a creditor of a domestic corporation may prosecute against a domestic stockholder. In the Howarth Case (supra), approved in Knickerbocker Trust Company v. Iselin (185 N. Y. 54, 59), it was held that the enforcement of a statutory liability against a resident stockholder for debts of an insolvent foreign corporation does not rest upon the theory that the laws of the foreign State are in force in this State, but upon the contractual obligation the shareholder assumes to meet the liability affixed by the statute
Public policy does not prohibit the assumption of juris-, diction by this court and the principle of comity demands it. (Loucks v. Standard Oil Company, 224 N. Y. 99.) The Inheritance Tax Law of Colorado has precisely the same design as a similar law in this State, and may indeed be said to be identical in its general provisions and scope. It was apparently to avoid the full force of the provisions of our own law that the defendants placed the decedent in the position of a non-resident of this State. As was said in the Loucks case: “A foreign statute is not law in this State, but it gives rise to an obligation, which, if transitory, ‘ follows the person and may be enforced wherever the person may be found.’ * * * ‘No law can exist as such except the law of the land; but * * * it is a principle of every civilized law that vested rights shall be protected.’ * * * The plaintiff owns something, and we help him to get it. * * * We do this unless some sound reason of public policy makes it unwise for us to lend our aid.”
The claim of certain defendants that they are exempt from payment of an inheritance tax because of provisions to that effect in the codicils, is a matter that the defendants must elsewhere adjust among themselves. The Colorado statute of 1902 (Laws of 1902, chap. 3, § 21, as amd. by Laws of 1909, chap. 193, § 1) provides that legacies shall be subject to the tax and that all heirs, legatees and devisees, administrators, executors and trustees shall be liable .for any and all such taxes until the same shall have been paid as therein directed. It follows, therefore, that all the defendants, including the United States Trust Company, are liable to the extent that the estate of the testator has come into their possession.
The judgment appealed from should be reversed, with costs, and judgment directed for the plaintiff as prayed for in the complaint, with costs. The conclusions of law numbered “ 2 ” to “ 10 ” inclusive should be reversed. Plaintiff’s proposed findings of fact numbered “ III,” “ XI ” and " XII ” should be found; also such conclusions of law as are in accord with the views expressed in this opinion. Submit, on notice,
Clarke, P. J., Laughlin, Smith and Merrell, JJ., concurred.
Judgment reversed, with costs, and judgment directed for plaintiff as prayed for in the complaint, with costs. Order to be settled on notice.