§ 221

Unreported Decisions Affecting Exemptions.

$2,000, and the Surrogate imposed a transfer tax thereon at 5 per cent. The attorney for the corporation appealed from the taxing order, claiming that People's Symphony Concerts is an educational corporation and upon the further ground that it is a charitable institution. On the argument before the Surrogate he entered an order Sept. 24, 1907, dismissing the appeal and affirming the taxing order.

New York Civil Service Reform Association - Transfer to Held Taxable. The will of Elial F. Hall, of Chautauqua county, gave sixteen shares of stock of the Title and Guaranty Trust Company of New York to the New York Civil Service Reform Association, and the pro forma order of the Surrogate exempted this legacy from a transfer tax. The Comptroller appealed and the Surrogate handed down a written opinion that the legacy should be taxed on two grounds: "First, that although the Legislature is constantly enlarging the list of those exempt from the inheritance tax, yet the courts hold that one claiming exemption from taxation must be able to point specifically to the statute creating that exemption, as an exemption will not be inferred or assumed. Vide Matter of Moore, 35 N. Y. S. 682; also Matter of Deutsch, 107 App. Div. 192; and second, if in the absence of a statute clearly exempting from taxation such corporations as the respondent in this case, a civil service reform association should be classed as an educational institution, it is difficult to say what organization of men would not be such. In the broad sense every debating society, every political party, indeed, every family, is an educational institution."

The American Society for Prevention of Cruelty to Animals; The New York Society for Prevention of Cruelty to Children; The Moses Taylor Hospital of Scranton, Pa. - Transfers to, Held Taxable.

George C. Taylor, late of Suffolk county, deceased, left an estate of nearly $8,000,000, a large portion of which he gave to various charitable, benevolent, and hospital corporations, all of which corporations the appraiser considered as embraced in the exempt class and the taxing order only imposed a tax on the legacies to the brother and sister and a large number of nephews and nieces. The Comptroller appealed claiming that a legacy of $50,000 to the American Society for Prevention of Cruelty to Animals- a legacy of $50,000 to the New York Society for the Prevention of Cruelty of Children, and the interest of the Moses Taylor Hospital, of Scranton, Pa., amounting to $750,000, were each taxable. On the argument of the appeal it was conceded that the two legacies of $50,000 each were taxable, but exemption was claimed for the Moses Taylor Hospital, of Scranton, Pa., by virtue of chapter 180 of the Laws of 1903, which gives the Moses Taylor Hospital power to erect, establish, and maintain a hospital for invalids in the township of West Seneca, Erie county," and when established "said hospital shall be subject to the supervision, inspection, and visitation of the State Board of Charities in the same manner as are hospital corporations organized under the laws of this State; and all the provisions of the Membership Corporation Law and other statutes of the State relating to hospital corporations, unless inconsistent with the provisions of the charter of such hospital, shall apply to said hospital."

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§ 221

It was argued that this statute makes the Moses Taylor Hospital a domestic hospital so that the amendment to section 221 by chapter 368, Laws of 1905, placing hospital corporations in the exempt class applies to it.

The Surrogate in a written opinion (not reported) held that the Moses Taylor Hospital, of Scranton, Pa., is no less a foreign corporation within the definition of such corporations in Matter of Prime, 136 N. Y. 347, and Matter of Balleis, 144 N. Y. 132, after the passage of the statute referred to than it was before such passage. That act does no more than permit this foreign corporation to erect a hospital in this State, and to conduct it under proper supervisions, and to give to that particular hospital, not the Moses Taylor Hospital generally, certain privileges under the statutes of the State. The former taxing order was amended by order of May 19, 1908, assessing a tax upon the three bequests above mentioned at 5 per cent.

New York Christian Home for Intemperate Men; The National Temperance Society; The Children's Aid Society in New York City; The Trustees of the Syrian Protestant College; The Ladies' Helping Hand Association; The Lincoln University, Oxford, Pa.; The American Sunday School Union - Transfers to, Held Taxable. By the will of Norman W. Dodge, of Rockland county, certain money legacies were given to each of the above-named institutions, and in transfer tax proceedings upon the decedent's estate an order was entered taxing each of said legacies.

The New York Christian Home for Intemperate Men and the Children's Aid Society in New York city appealed from the taxing order, and on March 25, 1909, the surrogate amended his taxing order by striking therefrom the tax upon the transfers to the appellants.

New York Society for the Prevention of Cruelty to Children Is Taxable.

Betsey Head, who died a resident of Suffolk county, January 13, 1907, gave one-half of her residuary estate to a large number of religious, benevolent, charitable, and hospital institutions, equally, and named the New York Society for the Prevention of Cruelty to Children as one of the institutions to receive an equal share, which amounted to $13,358.28. The other half of her residuary estate she gave to the city of New York, to be used for the improvement of grounds for the purpose of health and recreation within or near the city. The order entered upon the report of the appraiser assessed a tax only upon the share passing to the city of New York. The Comptroller appealed on the ground that the share passing to the New York Society for the Prevention of Cruelty to Children was taxable, and the Surrogate entered an amended order March 30, 1908, sustaining the appeal and taxing the transfer to the above society.

Western New York Society for the Protection of Homeless and Dependent Children - Transfer to, Not Taxable.

By the will of John H. Lee, of Chautauqua county, the Western New York Society for the Protection of Homeless and Dependent Children was given a legacy of $15,000, upon which a tax of 5 per cent. was assessed by the Surrogate.

The society appealed on the ground that it was an educational and

§ 221

Unreported Decisions Affecting Exemptions.

charitable corporation, and claimed exemption under section 221 of the Tax Law. The Surrogate modified his former taxing order by order dated September 14, 1908, exempting this legacy from transfer tax. National Association of Audubon Societies for the Protection of Wild Birds and Animals — Transfer to, Taxable.

By the will of Albert Willcox (New York county), he gave his brother a life estate in his residuary estate amounting to over one million dollars, and remainder therein equally to the National Association of Audubon Societies for the Protection of Wild Birds and Animals, and the Trustees of the Tuskagee Normal and Industrial Institute. The decedent had also given the association a specific bequest of $100,000. The value of the life estate and remainder was ascertained and order entered assessing a tax thereon respectively, and upon the other specific legacies under this will. The association appealed from the taxing order claiming that it was exempt as an educational corporation under the amendment of 1905. The Surrogate affirmed his taxing order.

Young Woman's Christian Association of Brooklyn; Brooklyn Home for Consumptives- Transfer to, Are Taxable.

In the appraisal of the estate of Mary H. Pratt (Kings county), the order failed to tax a legacy of $10,000 each to the Young Woman's Christian Association, of Brooklyn, and the Brooklyn Home for Consumptives. An appeal was taken by the attorney for the Comptroller, and Surrogate Ketcham, by order dated January 23, 1908, amended the former order by imposing a tax upon these two legacies.

St. Mary's College North East, Pa., and St. Mary's Novitiate House of the Redemptorist Fathers of Annapolis, Md.—Transfers to, Are Taxable.

Anthony Oechs, deceased, left a will, and in addition to money legacies to various institutions, he gave $5,000 each to St. Mary's College, North East, Pa., and St. Mary's Novitiate House of the Redemptorist Fathers, Annapolis, Maryland. The Surrogate of New York county included these bequests in the order assessing tax on the various transfers, and The Redemptorist Fathers of the State of Pennsylvania, a corporation of the State of Pennsylvania, owning and controlling the two institutions above named, appealed therefrom on the ground that they were engaged in erecting and maintaining churches of the Roman Catholic faith, and also erecting, maintaining, and conducting schools and colleges and imparting moral education to poor orphan children, and that such purposes were identical with the purposes of the Missionary Society of the Most Holy Redeemer, a New York corporation, and also a legatee under this decedent's will, and that no transfer tax was assessed upon the legacy to that institution. Surrogate Fitzgerald, on February 15, 1907, entered an order dismissing the appeal and affirming the former taxing order.

Individual Bequest to a Person Who Is a Bishop-Held Not Taxable. Margaret Condit died a resident of Albany county December 1, 1907, leaving a will whereby, after making certain bequests of money and articles of personal property to various relatives, she gave all the rest, residue, and remainder of her property, real and personal, to her

Unreported Decisions Affecting Exemptions.

§ 221

brother-in-law, William C. Doane, and to her sister, Sarah K. Doane, for and during their lives, and to the survivor of them for his or her life, with remainder to decedent's niece. The sister, Sarah K. Doane, predeceased the testatrix, and the appraiser therefor found the value of the life estate transferred to the brother-in-law William C. Doan, to be $13,456, and an order was entered assessing a tax thereon at 5 per cent. On the appraisal proceedings it was conceded that the brother-inlaw, William C. Doane, is a Bishop of the Protestant Episcopal Church, and is the Bishop of Albany, N. Y.

The executor appealed from the taxing order on the ground that the life estate of William C. Doane is not taxable because said William C. Doane is a Bishop, and under section 221 of the Transfer Tax Law any property devised or bequeathed to any person who is a Bishop is exempt. (Citing Matter of Palmer, 33 App. Div. 307.)

The Comptroller argued that inasmuch as the exemption to a person who is a Bishop occurs in the same sentence of the statute exempting a religious corporation, that such exemption was not intended to apply to an individual bequest to a person who is a Bishop, that the statute did not exempt a transfer by intestate laws if the person receiving the same is a Bishop, therefore the Legislature must have intended this exemption to apply only where the transfer was to be used by the Bishop in his official capacity for church and religious purposes; that under the appellant's contention if a father had two sons, one a Bishop, and the other one also a minister of the Gospel, if he left a will bequeathing to each son a taxable estate, the Bishop would be exempt, while the minister would be taxable, an anomaly which the Legislature could not possibly have intended, but if the father had died intestate, then both sons' shares would have been taxable.

The Surrogate without expressing an opinion in writing modified his taxing order in so far as it imposed a tax upon the value of the life estate of William C. Doane, and no appeal was taken by the Comptroller therefrom.

Legacy to Cooper Union for the Advancement of Science and ArtNot Taxable.

Felix Kucielski, a resident of Austria, bequeathed to "Cooper Institute in New York, America," a legacy of $5,000. In transfer tax proceedings upon his estate in New York county, an order was entered assessing the transfer tax thereon, including a tax of 5 per cent on the legacy to Cooper Union. Cooper Union for the Advancement of Science and Art appealed to the Surrogate, the main ground of appeal being that the passage by the Legislature of chapter 279 of the Laws of 1859, and the subsequent conveyance by Peter Cooper to the said Cooper Union for the Advancement of Science and Art constituted a contract between the State of New York and the said Peter Cooper, and the said Cooper Union for the Advancement of Science and Art, that the said property and all legacies and endowments (including the above legacy) which should thereafter be made to it should forever remain exempt from taxation, and that said Cooper Union should be entitled to receive said legacy without any deduction therefrom for inheritance, succession, or transfer tax. Surrogate Fitzgerald sustained the appeal, holding that this legacy was not taxable (citing People ex rel. Cooper Union v. Wells, 180 N. Y. 537). Matter of Kucielski, N. Y. Law Journal, Nov. 18, 1905. An appeal was taken by the Comptroller to the Appellate Division.

CHAPTER IX.

ACCRUAL AND PAYMENT OF TAX,
DISCOUNT AND INTEREST, § 223,