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Payment of Tax in Another State.

speaks of the transaction as a loan, yet the nephew was merely the agent of his uncle, and he, as well as the nephew, considered that the securities at all times belonged to the decedent, and inasmuch as the executor in settling with the nephew received $43,500 in stocks of foreign corporations and $400 in cash, the only part thereof liable to taxation was the cash, as the stocks of foreign corporations belonging to a nonresident decedent were not taxable. The executor appealed from the taxing order and Surrogate Thomas held that the nephew of testator was his debtor and not his agent and affirmed the taxing order. Matter of Shillito, N. Y. Law Journal, May 23, 1907.

269. Federal Bonds within This State Prior to 1892 Not Taxable.

Bonds of the United States belonging to a nonresident decedent actually within this State at the time of his death in 1891 were not "Property " within the meaning of the Tax Law prior to chapter 677, Laws of 1892, and are not subject to a transfer tax. Matter of Schemerhorn, 50 Misc. Rep. 233.

270. Payment of Tax in Another State Does Not Relieve Property Here from Taxation.

The fact that a transfer tax will be paid in the State of decedent's domicile upon property liable to taxation in this State does not relieve the property here from taxation. Matter of Daly, 100 App. Div. 373; affd., 182 N. Y. 524; Matter of Jacobs, N. Y. Law Journal, September 22, 1905.

271. Money in Savings Banks or Held by Decedent's Attorney Is Taxable.

Moneys of a nonresident decedent deposited in savings banks in this State, moneys in the hands of his

Legacy to Nonresident Beneficiary.

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attorney in this State, and bonds secured by mortgages on lands in this State held by said attorney, are taxable upon the death of such decedent, although the property is also taxable in the State of the decedent's domicile. Matter of Burr, 16 Misc. Rep. 89, 38 N. Y. S. 811.

272. Personal Property of Nonresidents Not Removed until after 1892.

After May 1, 1892, the ownership of real property, within this State, by a nonresident decedent, was not necessary to confer jurisdiction upon the surrogate, and where personal property of a nonresident within this State would not have been taxable under the Act of 1887 it did not become taxable under the Act of 1892, although allowed to remain in this State until after the Act of 1892 went into effect. Matter of Pettit, 65 App. Div. 30, 72 N. Y. S. 469; affd., on opinion below, 171 N. Y. 654.

273. Legacy to a Nonresident Beneficiary Is Taxable.

Where the beneficiaries of a transfer of property within this State by a resident, by a grant or gift intended to take effect in possession or enjoyment at or after the death of the grantor or donor, take the property under the laws of this State, it is not important for the purposes of the application of the Transfer Tax Act, whether they reside in this State or not at the time of the imposition of the tax. Matter of Greene, 153 N. Y. 223–228.

274. Money Transitorily Here Not Taxable.

Moneys which a nonresident had temporarily on deposit within this State for three days before his death for the purpose of investing them in the stock of a

§ 220

Loans Made by a Partner to His Firm.

foreign corporation are not subject to the transfer tax, although the decedent died before the transaction was completed. Matter of Leopold, 35 Misc. Rep. 369, 71 N. Y. S. 1032. To the same effect, see Matter of Phillips, N. Y. Law Journal, May 10, 1905, in reference to the amount paid on subscription for Japanese bonds, held not taxable.

275. Money Deposited by a Creditor to Pay Debt Due Nonresident.

A deposit in a bank by a resident debtor of money to meet the claim of a nonresident creditor is subject to tax upon the death of such creditor, it appearing that the representatives of the estate accepted such deposit in payment of the debt. Matter of Daly, 100 App. Div. 373; affd., 182 N. Y. 524, on opinion below. 276. When Debt Due Nonresident Decedent Was Held Not Taxable.

A debt due a nonresident decedent from a nonresident debtor, who merely did business as a banker in the State of New York and payable in the foreign State of the common residence of the parties, is not subject to the transfer tax. Matter of Bentley, 31 Misc. Rep. 656, 66 N. Y. S. 95.

277. Loans Made by a Partner to His Firm Are Taxable.

Except as between the partners themselves, money which one of them loaned to the firm, which it used, and upon which he received ratably such profits as were earned by the firm, is invested capital, and as such is subject to the transfer tax upon his death. Calling the transaction a loan does not transform its character as an investment of capital. Matter of Probst, 40 Misc. Rep. 431, 82 N. Y. S. 396.

Memoranda of Decisions.

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278. Debt on Open Account Due a Nonresident from Domestic

Associations.

A debt on an open account due by a domestic jointstock association to the estate of a nonresident decedent, who was at his death the president and owner of a majority of the stock of the association, is not subject to the transfer tax for the reason that it is a mere chose in action whose situs is the domicile of the decedent. Matter of Horn, 39 Misc. Rep. 133, 78 N. Y. S. 979.

279. Memoranda of Decisions as to Bonds and Stocks.

Bonds accompanied by mortgages on New York real estate which were owned by a nonresident and within this State at the time of decedent's death were held taxable. In re Romaine, 127 N. Y. 80-88.

Bonds of the United States were taxable (Wallace v. Meyer, 38 Fed. Rep. 184; under the Act of 1885, Matter of Sherman, 153 N. Y. 1), but were held not taxable under Act of 1892, owing to the wording of section 22 of said act, which referred to the definition of the word "property," as such, "over which this State has any jurisdiction for the purposes of taxation." See Matter of Whiting, 150 N. Y. 27, and Matter of Sherman, 153 N. Y. 1.

By chapter 88, Laws of 1898, section 242 (formerly section 22), was amended by omitting the words above quoted, and it was then held that bonds of the United States were taxable. Matter of Plummer, 161 N. Y. 631. This case was taken to the United States Supreme Court (Plummer v. Coler, 178 U. S. 115), and two questions presented by the executors of the estate. First. That an inheritance tax upon a legacy consisting of United States bonds came within the very

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Id.; Bonds and Stocks.

letter of the United States statute, which declares such bonds to be exempt from taxation in any form.

Second. That the State has no power to impose any tax which would have the effect to prevent the United States government from borrowing such amounts of money as it might require.

The court held, as to the first proposition, that the tax was not a tax upon the United States bonds which might happen to compose a part of a decedent's property, but was a tax upon rights and privileges created and regulated by the State.

As to the second contention the court held that the unconstitutional character of a particular tax must be shown by something more substantial than mere conjecture that the effect of the tax would be the impairment of the borrowing power of the government.

Bonds of domestic corporations owned by a nonresident, but within this State at the time of his death are subject to tax, although ancillary letters have not been issued in this State. Matter of Pullman, 46 App. Div. 574, 62 N. Y. S. 395.

Bonds of foreign corporations, both registered and coupon, physically present within this State and owned by a nonresident at the time of his death, are taxable. Matter of Whiting, 150 N. Y. 27; Matter of Morgan, 150 N. Y. 35.

Bonds secured by mortgages on New York real estate and owned by nonresidents, where such securities were held out of this State at the time of decedent's death, are not taxable. Matter of Preston, 75 App. Div. 250, 78 N. Y. S. 91.

Bonds which are pledged are not taxable, as the title is in the pledgee. Matter of Pullman (supra). If, however, the indebtedness is discharged before the ap