§ 232

Surrogate's Power to Modify Decree.

supported solely by an appraisal at a much lower figure by real estate brokers. Matter of Barnum, 129 App. Div. 418.

713. When Surrogate without Power to Modify a Decree.

A surrogate has no power to modify a decree of appraisal under the Transfer Tax Law on the ground that a sale of the property subsequent to the appraisal showed that the latter was too high. In the Matter of Lowry, 89 App. Div. 226, 85 N. Y. S. 924, it appears that, upon the appraisal of this decedent's real estate, its value was fixed at $200,000 one of the trustees under the will, who was acquainted with the values of real estate in the locality where this real estate was situated sufficiently to qualify him as an expert, testifying to such value. A few months afterwards the real estate in question was sold fairly and in good faith at public auction for $103,050. The surrogate thereafter modified the original order and report of the appraiser by reducing the value of this real estate to about the figure at which it was sold, holding that a "mistake of fact " had been made in fixing the value.

The Appellate Division reversed the order of the surrogate modifying the original order, and says: "Under the Transfer Tax Law the surrogate may do any act in relation to such a tax authorized by law to be done by a surrogate in other matters or proceedings coming within his jurisdiction.' (§ 229, now

§ 228.) (See § 2481, Code, subd. 6.) This includes the power to modify or set aside a decree for error in fact not arising upon the trial. (Code, § 1283.) In Morgan v. Cowie, 49 App. Div. 612, 63 N. Y. S. 608, it was held: The authority of a court to modify its own decree for an error in fact, newly-discovered evidence,

Where Statute Is Unconstitutional.

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or any cause extrinsic of the record, is an inherent one, and is vested in every court, with such restrictions as the Legislature has seen fit to impose.'"

Held, that an error of fact of this kind, provable as such only by subsequently-occurring facts, must be deemed to be an error arising upon a trial, and hence not within the purview of section 1283 of the Code, as made applicable to Surrogates' Courts by section 2481.

"A practice which would permit judgments fixing values to be opened from time to time in cases where a subsequent sale of the appraised property tended to show that the figure fixed by the judgment was too large or too small, would lead to intolerable uncertainty and confusion. In no view was this

proof in regard to the sale newly-discovered evidence such as the Code contemplates as the basis for setting aside a judgment."

Morgan v. Cowie (supra) criticised and distinguished where the court, speaking of the jurisdiction of the Surrogate's Court in transfer tax cases, says: "If facts have arisen since the imposition and payment of the tax showing it was improperly assessed or excessive in amount, or within the jurisdiction of the court to tax, then the court possesses the power to redress the wrong done." Matter of Fulton, 30 Misc. Rep. 70, 62 N. Y. S. 995, also criticised.

714. Decree Vacated Where Statute Unconstitutional.

Where both parties mistakenly supposed that the estate was, under the law, subject to a transfer tax, and the proposition was not litigated or decided, and it subsequently appears that the statute under which the surrogate assessed the tax was unconstitutional, the surrogate has power, under subdivision 6 of sec

$ 232

Where Time to Appeal Has Expired.

tion 2481 of the Code of Civil Procedure, and section 229 of the Tax Law (now § 228), to vacate the order, although the time to appeal therefrom has expired. Matter of Scrimgeour, 175 N. Y. 507, affg. 80 App. Div. 388, 80 N. Y. S. 636.

715. Order Modified, Although Time to Appeal Has Expired.

A transfer of United States bonds given by a specific legacy is not taxable under chapter 399, Laws 1892, and, although the time to appeal from an order imposing such a tax has expired, the surrogate has power, under the tax laws, to modify his order and direct the tax to be refunded, as its original imposition was without jurisdiction. Matter of Coogan, 27 Misc. Rep. 563, 59 N. Y. S. 111; affd., 162 N. Y. 613.

This decision was prior to chapter 382, Laws 1900, amending section 225, requiring the order to be modified or reversed within two years from the entry of the order fixing tax. See Matter of Hoople, 179 N. Y. 308.

716. When Surrogate Can Modify His Decree.

The court held in the Matter of Silliman, 79 App. Div. 98; affd., 175 N. Y. 513, that the surrogate could modify his order assessing the tax by deducting the commissions of executors, even where, after the payment of the tax, their commissions were increased by the conversion of real into personal property, and also where the executor's commissions as trustee had not been deducted, although the time to appeal had expired. Citing Matter of Coogan (supra), also Morgan v. Cowie, 49 App. Div. 612, 63 N. Y. S. 608.

717. Finality of Surrogate's Determination.

Where a surrogate has determined the cash value of an estate he has no power to modify his determina

Subdivision 6, Section 2481, of the Code.

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tion in order to allow the executor the amount of a judgment subsequently recovered against the estate by suit after he had rejected the claim. Matter of Connelly, 38 Misc. Rep. 466, 77 N. Y. S. 1032.

718. Surrogate's Power to Decree Previous Order Erroneous.

A surrogate has no power to make an order decreeing that an order of appraisal made in a transfer tax proceeding, and which has remained unreversed, was erroneous in certain respects and that a payment, in pursuance thereof, of the transfer tax so assessed, so far as it related to certain securities, was made in error. Matter of Schermerhorn, 38 App. Div. 350, 57 N. Y. S. 26.

719. Surrogate's Power under Subdivision 6, Section 2481, of the Code.

A surrogate has power, under subdivision 6 of section 2481 of the Code of Civil Procedure, to modify an order fixing the transfer tax upon an estate after the time to appeal therefrom has expired, where it is shown that certain legacies, upon which a 5-per cent. tax was imposed, had lapsed by the death of the legatees prior to that of the testator, and passed to testator's widow, in whose hands they were taxable at only 1 per cent. Morgan v. Cowie, 49 App. Div. 612, 63 N. Y. S. 608.

720. Modification of Order upon Error of Fact.

Ownership of property is a fact, and a mistake in that respect is one of fact, and the order can be modified within two years from the entry thereof under section 225. Matter of Willets, 51 Misc. Rep. 167–180, 119 App. Div. 119; affd., 190 N. Y. 527. If the ownership is established and a mistake is made as to the

§ 232

When Order Will Be Modified.

taxibility of the transfer, then the error would be one of law. (Idem.)

721. Id.; Failure to Give Notice of Appraisal.

Although transfer tax has been levied, the surrogate has power to modify his decree, when the remaindermen, who failed to appear on the appraisal were only notified that their father's estate would be appraised, and the appraisal included property belonging to a trust fund over which the father exercised an appointment in favor of such remaindermen. Matter of Backhouse, 110 App. Div. 737; affd., 185 N. Y. 545.

722. Id.; When Appeal Not a Bar to Subsequent Application to Amend Order.

Where an order is appealed from, and the interested parties stipulate that the report be referred back to the appraiser for the relief sought, such appeal not having been heard by the surrogate is not a bar to a subsequent application to amend the order entered on the supplemental report of the appraiser. Matter of Warren, 62 Misc. Rep. 444. Surrogate Heaton, Rensselaer county.

723. Id.; Order May Be Corrected When Made under a Mistake of Fact.

When a taxing order imposes a tax on bonds of a nonresident decedent where, as a matter of fact, such bonds were physically without this State at and before the time of decedent's death, the order was as to them made under a mistake of fact and may be corrected upon application to vacate the order and remit the report to the appraiser for further testimony in respect thereto. Matter of Boardman, N. Y. Law Journal, January 19, 1909. Surrogate Thomas.