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Penalty When Incurred.

422. Provisions of This Section Generally Complied with.

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There is no reported case where, under the former provisions of the statute, a safe-deposit company or other institution or person mentioned in this section has been called upon to pay the tax by reason of any failure to observe the requirements of this section, and a general compliance with the provisions of former section 228 of the Act of 1896, as amended, has been observed by safe-deposit companies, trust companies, and the others named.

423. Penalty for Failure to Comply with This Statute.

Failure to serve upon the Comptroller at least ten days' notice prior to the delivery of the property of a decedent to the executors, administrators, or legal representatives of the decedent, or to the survivor or survivors when held in the joint names of the decedent and one or more persons, or failure to allow the Comptroller or his representative to examine the securities, deposits, or other assets of the decedent, or failure to retain a sufficient portion or amount thereof to pay the transfer tax and interest upon such property renders the safe deposit company, trust company, corporation, bank, or other institution, person or persons, liable to the payment of the amount of tax and interest due, and (since May 18, 1908) in addition thereto a penalty of not less than five or more than twenty-five thousand dollars, unless the Comptroller consents thereto in writing.

The statute does not provide the manner in which the ten days' notice shall be served upon the Comptroller, but the practice has always been for the bank, safe-deposit company, or other depository to serve such notice by mail.

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How Consent of Comptroller Obtained.

424. Consent of Comptroller to Transfers - How Obtained.

It is the practice in reference to the estates of resident decedents for the Comptroller to give a written consent for the transfer of funds in bank, and stocks, bonds, or other securities as soon as the executor or administrator has qualified and application is made therefor by such representative or by the depositories named, and in case it is desired to transfer the contents of a safe-deposit box, the Comptroller will have a representative present to examine the contents of such box and will consent in writing to the transfer thereof to the proper representative. In the case of nonresident decedents, where ancillary letters have not been issued by a surrogate of this State, the consent of the Comptroller for the delivery or transfer of the securities, etc., is withheld until the question of the taxability of the property within this State is determined, and if taxable, the tax paid, after which the written consent to transfer each security or deposit will be given.

In several of the largest counties it has been the practice for the Comptroller to give the resident attorney a power of attorney to issue waivers and consents for the transfer of funds of a resident decedent in the banks and trust companies of such county respectively, and also to attend and represent the Comptroller at the opening of safe-deposit boxes, which avoids the necessary delay in making requests and obtaining waivers and consents through the mails.

425. Resident Transfer Agent Not Obliged to Obtain Consent for Transfer of Stock of Foreign Corporation When Owned by a Nonresident Decedent.

Where the stock of a New Jersey corporation was owned by a nonresident decedent, and the transfer

Bank or Depository to Give Notice.

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agent of such corporation was in this State, it was held in Dunham v. City Trust Co., 115 App. Div. 584, that in view of the fact that stock of a foreign corporation owned by a nonresident decedent was not taxable (Matter of Whiting, 150 N. Y. 27) that, therefore, the consent of the State Comptroller provided for by section 227 of the Transfer Tax Law was not necessary in order to protect the defendant.

426. Corporations Transfer at Their Peril, When.

In the Matter of Romaine, 127 N. Y. 80-86, under the provisions of the Act of 1887, the court stated that it appears from the provisions of the act, whenever any foreign executor or administrator shall assign or transfer any stocks or loans in this State standing in the name of a decedent, the tax shall be paid to the proper officer on such transfer, or the corporation permitting it shall become liable to pay the tax provided it had knowledge of the facts in time; that it was clear that the act is not confined to real estate, but embraces personal property also and includes evidences of debts, and "all administrators are made liable for the tax, and corporations can transfer stock standing upon their books in the name of a nonresident decedent only at their peril, until the tax is paid."

427. Obligation to Give the Notice Rests upon the Bank or Other Depository.

The obligation to give the notice to the State Comptroller rests upon the bank or other custodian, and not upon the representative of the estate.

In the Matter of Rathbone v. Bank of the Metropolis, N. Y. Law Journal of June 15, 1904, the bank refused to turn over moneys deposited to the executor of the estate, contending that they were justified in not doing

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Banks or Depository to Give Notice.

so because the plaintiff had failed to give the notice to the State Comptroller of the application to withdraw the funds, and the court said: "Under section 228 of chapter 908 of the Laws of 1896, as amended by chapter 101, Laws of 1902, the obligation to give the notice of delivery or transfer of deposits, etc., there required to be given to the State Comptroller, rests upon the bank and not upon the plaintiff. As soon as the demand on the bank is made it should determine whether or not it will make a delivery or payment. If it decides to pay, it should then notify the State Comptroller of its intention to do so, as provided in the statute referred to. For these reasons I think the plaintiff is not bound either to give the notice referred to or to prove that it was given. The failure of the bank to perform a duty in this respect imposed by statute cannot affect the right of the plaintiffs to recover."

It is customary with many of the banks and safedeposit companies, where two or more persons rent a box in their joint names, to make a contract with such persons, that either of said persons or the survivor shall have uninterrupted access to the deposit box, and the amendment of 1905 will doubtless change this practice.

428. Corresponding Provisions of Former Statutes; Relative to the Liability of Certain Corporations to Tax.

Section 11 of the Act of 1885 provided that, whenever a foreign executor or administrator should transfer any stocks or loans in this State liable to tax, such executor or administrator shall pay the tax; or otherwise the corporation permitting such transfer shall be liable for the tax, provided that such corporation had knowledge before such transfer that said stocks or

Former Statutes Relative to.

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loans were liable to said tax. Section 9 of the Act of 1892 contained a similar provision in reference to the foreign executor, administrator, or trustee paying the tax, and further provided that no safe-deposit company, bank, or other institution, person or persons holding securities or assets of a decedent shall deliver the same to such representatives, unless five days' notice of such intended delivery is given the county treasurer or Comptroller, who had the right to examine said securities or assets personally or by representative at the time of such delivery. Failure to secure such notice or allow the examination made the safe-deposit company and others named liable to the payment of any tax upon such securities or assets, and this same provision became section 228 of the Act of 1896.

Former section 228, as amended by chapter 173, Laws 1901, in effect April 1st of that year, provided that the payment of tax by such foreign executor and others named should be made to the treasurer of the proper county or the State Comptroller, and that no safe-deposit company, bank, etc., should deliver any securities or assets of a decedent without serving upon the State Comptroller a notice of the time and place of such intended transfer at least ten days prior thereto, and provided further that such safe-deposit company, etc., should not deliver any securities or assets of a nonresident decedent without retaining a sufficient amount thereof to pay any tax thereafter assessed upon such assets, unless the State Comptroller consent thereto in writing. Failure to give the notice or to retain sufficient to pay the tax rendered such safedeposit company and the others named liable to the payment of any tax upon such assets. Chapter 101, Laws 1902, in effect March 6th of that year, further

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