§ 222

Payment to Whom Made.

347. When Tax Did Not Accrue until Termination of Life Estate.

Where a decedent died in 1894 leaving a will giving his wife a life estate in all his property, provided she remained his widow, and it appears that an order was entered in transfer tax proceedings upon his estate, shortly after his death, holding that it was impossible at that time to compute the value of the life estate and remainders owing to the contingency of remarriage which would terminate the life estate, the widow having died April 1, 1907, it was an error for the surrogate to determine that the tax accrued February 13, 1894, the date of decedent's death, and that interest thereon at 6 per cent. should be charged from that date. On appeal the surrogate modified his taxing order holding that the tax on the life estate and remainder accrued and became due and payable on April 1, 1907, the date of death of the life tenant. Matter of Schirmer, Richmond county, November, 1907 (not reported).

348. Payment-To Whom Made.

The counties of Albany, Dutchess, Erie, Kings, Monroe, Nassau, New York, Oneida, Onondaga, Orange, Queens, Rensselaer, Richmond, Suffolk, and Westchester are the ones referred to in this section, in which the office of transfer tax appraiser is salaried, and the tax is therefore to be paid direct to the State Comptroller, at Albany, N. Y.

In the other counties the tax is payable to the treasurer of the county in which the proceedings are instituted.

349. Id.; When Estate Has Been Distributed.

It was held under the 1885 statute that the fact that an estate had been distributed is no excuse for non

payment of the tax. Matter of Hackett, 14 Misc. Rep. 282, 35 N. Y. S. 1051. And later, in case of a nonresident decedent, that the jurisdiction of the surrogate of the county in this State where the personal property was situated at the time of the death of the owner is not lost, where the executor has taken the property from this State and distributed it, but the proper surrogate can appoint an appraiser and fix the tax. Matter of Hubbard, 21 Misc. Rep. 566, 48 N. Y. S. 869. See also Matter of Fitch, 26 Misc. Rep. 353, 57 N. Y. S. 212; affd. on other points, 160 N. Y. 87.

350. Voluntary Payment.

Payment of the transfer tax by a nephew receiving a life estate by the will, withholding the fact that he had an unrecorded deed of the premises made in his favor by the testator in his lifetime, was held to be a voluntary payment not to be recovered back upon production of the deed eight years after the entry of the order assessing the tax upon the transfer to the nephew. Matter of Mather, 41 Misc. Rep. 414, 84 N. Y. S. 1105, 90 App. Div. 382, 85 N. Y. S. 657.

351. When Payment Not Deemed Voluntary.

Where, subsequent to the payment of a tax by the executor, the statute under which the tax was levied was thereafter declared unconstitutional, held, that

the act of the executor was done not under a mistake of law but rather as to the existence of the statute, and the remaindermen could recover back the amount with interest as the payment was not a voluntary one. Matter of O'Berry, 91 App. Div. 3, 86 N. Y. S. 269; affd., 179 N. Y. 285; Etna Ins. Co. v. Mayor, etc., of New York, 153 N. Y. 331.

A law supported only by an unconstitutional statute

§ 222

Id.; Life Estates and Remainders.

is simply void. Such a statute confers no right, imposes no duties, confers no power, and in legal contemplation is as inoperative for any purpose as if it had never been passed. Norton v. Selby County, 118 U. S. 425; Matter of Brenner, 170 N. Y. 185-194; Matter of O'Berry, 179 N. Y. 285.

352. Payment in Case of a Legacy in Trust for Life with Remainder over.

The rule that inheritance taxes on a money legacy may be deducted from the principal by the executors of the will does not apply to a legacy given them in trust for the benefit of one person for life with remainder to another, as neither of these later persons succeeds to or has anything more than a legal right in the fund, and from such right no such deduction can be made. In such case each beneficiary must pay his own tax and on the basis of his interest in the fund, and failing payment, nothing can be sold but the right in the fund of the party making default. The tax of the life tenant is payable from income while the tax of the remaindermen is presently payable by him. Matter of Hoyt, 37 Misc. Rep. 720, 76 N. Y. S. 504. But see Matter of Hoyt, 44 Misc. Rep. 76, 89 N. Y. S. 744; also Matter of Tracy, 179 N. Y. 501.

353. Payment of Tax on Remainders Act of 1887.

The life tenant is not liable to pay the tax upon remainders, but the same should be paid by the beneficiaries. Matter of McMahon, 28 Misc. Rep. 697, 60 N. Y. S. 64. Decision Act 1887.

354. Payment of Tax upon a Trust Estate.

The transfer tax upon a trust estate is to be paid out of the capital of the trust fund, including the part

When Not Payable from the Estate.

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assessed against the interest of the life beneficiary. Matter of Hoyt, 44 Misc. Rep. 76, 89 N. Y. S. 744.

355. Payment of Tax at Decedent's Domicile.

Payment of tax at the domicile of a nonresident decedent is no objection to imposing the tax here. Matter of Daly, 100 App. Div. 373, 91 N. Y. S. 858; affd., 182 N. Y. 524, mem.; Matter of Burr, 16 Misc. Rep. 89, 38 N. Y. S. 811; In re Jacobs, N. Y. Law Journal, September 22, 1905.

356. Provision of Section 222 Not Repealed by Implication.

The exception, in reference to the accrual of the tax, where persons beneficially entitled thereto shall come into the actual possession thereof, where, by reason of some limitation or condition, the fair market value cannot be ascertained at the time of the transfer, was not impliedly repealed by chapter 76, Laws of 1899, amending section 230, and providing for the immediate taxation of all remainder estates. Matter of Babcock, 37 Misc. Rep. 445-447, 75 N. Y. S. 926; affd., 81 App. Div. 645, 81 N. Y. S. 1117.

357. When Tax Not Payable from the Estate by the Words of a Will.

A provision in decedent's will, authorizing executors to pay legacies within one year after his death, "without any rebate or reduction whatever," does not entitle the legatee to receive the legacy entire and without the transfer tax thereon being deducted, and particularly so where the will was made before the enactment of the Transfer Tax Law. Jackson v. Tailer, 41 Misc. Rep. 36, 83 N. Y. S. 567; affd., 96 App. Div. 625.

§ 222

Payment from Residuary Estate.

358. Payment Made under Mistake of Fact as to Ownership of Property.

The question of the ownership of property in a transfer tax proceeding is one of fact, and a mistake as to ownership is a mistake of fact. A payment made under such a mistake is recoverable. Although due to an erroneous construction of the will of testator's father by the appraiser, the error is, nevertheless, one of fact. Matter of Willets, 119 App. Div. 119; affd., 190 N. Y. 527.

359. Payment of Tax from Residuary Estate.

Occasionally a decedent's will directs that all inheritance taxes on legacies shall be paid from his residuary estate, or as an expense of administration, and in the Matter of Swift, 137 N. Y. 77-87, the appraiser in ascertaining the value of the residuary estate for the purpose of taxation deducted the amount of the tax to be assessed on prior legacies. The surrogate in entering the order assessing a transfer tax held that there should be no deduction from the value of the residuary estate of the amount of the tax to be assessed, either upon prior legacies, or upon its value; that the legacies taxable should be reported, irrespective of the provision of the will, and that a mode of payment of the succession tax presented by will is something with which the statute is not concerned. Judge Gray, in writing the opinion of the Court of Appeals in the Swift case, says in this connection at page 87: "I am satisfied with his reasoning and can add nothing to its force. Manifestly, under the law, that which is to be reported by the appraiser for the purpose of the tax is the value of the interest passing to the legatee under the will, without any deduction for