§ 243

"Estate

- Prior to, and After, 1892.

781. The Word "Estate

as Interpreted Prior to 1892. Prior to the Act of 1892, the courts had decided that the word "estate," to which the limitation of $500 was attached, must necessarily mean the estate received by the particular successors, and not that of the testator or intestate upon which, as such and in the aggregate, no tax was imposed. Matter of Cager, 111 N. Y. 344; Matter of Howe, 112 N. Y. 100; Matter of Sterling, 9 Misc. Rep. 224, 30 N. Y. S. 385.

782. Same Construction in Reference to Property Passing to Lineals and Others.

By the amendment to section 1 of the Act of 1885, by chapter 215, Laws 1891, in effect April 20th of that year, the statute was extended so as to include within its operation shares and interests passing to lineals and others named in the statute, although the rate of taxation to such persons was less, and a limitation imposed applying the tax only where the personal property exceeded in value the sum of $10,000. This provision raised the same question as to lineals which had previously been determined as to collaterals, namely, which property was meant, whether that passing from the decedent or that passing to the particular successor, and by general consent it was determined in the same way and held to mean the specific share passing to the successor.

In the Matter of Hoffman, 143 N. Y. 327, in proceedings under the Act of 1892, the Court of Appeals decided that under the provisions of section 22 of the Act of 1892 (now § 243), the limitations applied to the aggregate value of all the property so transferred by a decedent, and not to the separate value of each several transfer. See also Matter of Hallock, 42 Misc.

What Included in Word " Property."

§ 243

Rep. 473, 87 N. Y. S. 255; Matter of Fisher, 96 App. Div. 133, 89 N. Y. S. 102, since the enactment of chapter 41, Laws 1903, first taxing the transfer of real property to the 1-per cent. class.

783. What Included in the Definition of the Word "Property."

In the Matter of Hellman, 174 N. Y. 254, the court said that the definition of the personal property upon which the transfer tax is imposed is not that of subdivision 5 of section 2 of the Tax Law but

is that contained in section 242, in the article relating to taxable transfers and applicable to the transfer tax alone, which provides that the words "estate" and property," as used in this article shall

66

include all property or interest therein, whether situated within or without this State; and therefore a seat in the New York Stock Exchange being 66 property,' within the meaning of this definition, is subject to a transfer tax upon the death of the owner thereof.

784. Property Exempted by the Definition in 1892.

In the Matter of Sherman, 153 N. Y. 1, the court held that United States bonds, owned by a resident decedent, which would otherwise be subject to valuation for the purpose of fixing the tax under the Transfer Tax Act of 1892, are exempt from such valuation by force of the provision which limits the meaning of the words" estate " and " property," as used in that act, to property over which the State has jurisdiction for the purposes of taxation. This decision was handed down May 4, 1897, and the next year section 242 was amended (chap. 88, Laws 1898, supra) by striking from the provision of this section the words "over which the State has any jurisdiction for the purpose of taxation."

§ 243

Ownership Is a Question of Fact.

After March 21, 1898, a transfer of United States bonds was again held taxable. Matter of Plummer, 30 Misc. Rep. 19, 62 N. Y. S. 1024; affd., 47 App. Div. 625, 62 N. Y. S. 1145, 161 N. Y. 631, on the authority of Matter of Sherman, 153 N. Y. 1; Plummer v. Coler, 178 U. S. 115.

785. Debt Owing by a Resident to a Nonresident Decedent Is Property.

A debt owing by a resident to a nonresident decedent is property under the definition in section 243. Matter of Daly, 100 App. Div. 373; affd., 182 N. Y. 524. 786. Ownership of Property Is a Question 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 of the Tax Law. If the ownership is established and a mistake is made as to the taxability of the transfer, then the error would be one of law. Matter of Willets, 51 Misc. Rep. 167-180; affd., 119 App. Div. 119, 190 N. Y. 527.

787. Title to Partnership Property.

Title to partnership property upon the death of one partner vests in the surviving partner, and all the executor has or can claim is the equitable interest in any surplus that remains after partnership affairs were liquidated. Williams et al. v. Whedon, 109 N. Y. 333; Russell v. McCall, 141 N. Y. 437, 450; Preston v. Fitch et al., 137 N. Y. 41-56; Menagh v. Whitehall et al., 52 N. Y. 146-158; Secor v. Tradesmans National Bank, 92 App. Div. 294.

Legacy Must Be Accepted.

788. Partnership Real Property.

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Where one of the partners die, after the payment of partnership debts, the fee of the real property is in the heirs of the deceased partner to the extent of such deceased partner's rights therein.

In the absence of an agreement, express or implied, between partners to the contrary, partnership real estate retains its character as realty with all the incidents of that species of property between partners themselves and also between a surviving partner and the real and personal representatives of a deceased partner, except that each share is impressed with the payment of debts and obligations of the partnership. Darrow v. Calkins, 154 N. Y. 503; Huber v. Chase, 93 App. Div. 479; Barney v. Pike, 94 App. Div. 199.

789. Meaning of "Transfer."

In the Matter of Gould, 156 N. Y. 423, the court said the word "transfer," in the act relating to taxable transfers of property, is used in its ordinary legal signification, namely, "that the owner of a thing delivers it to another with the intent of passing the rights which he has in it to the latter."

790. There Is No "Transfer" by Will, unless Legacy Is Accepted.

In the Matter of Wolfe, 89 App. Div. 349, 85 N. Y. S. 949, where a legatee in the 5-per cent. class refused his legacy, and the surrogate had nevertheless imposed a tax upon the gift at that rate, on the ground that the transfer took place at the moment of the decedent's death, and all the legatee could renounce was the legacy, less the transfer tax thereon, which was properly deductible from said legacy. The court held, in reversing the order of the surrogate, after quoting

§ 244

Exemptions in Article 1, Tax Law.

from the definition of the word "transfer," as defined in section 243, supra, that "the transfer tax therefore, which is the basis of the subject of this controversy, must be regarded as a tax, not upon the money which is the subject of the legacy, but upon the passing of that money under the will in possession or enjoyment It is solely upon the transfer, that is to say, upon the change in title or ownership. If no transfer is effected because the legatee

renounces the gift and refuses to accept it, no tax can be collected with respect to him, because there has been no transfer to him." This case was affirmed on opinion below, in 179 N. Y. 599.

791. Exemptions in Article One Not Applicable.

[§ 244, Tax Law.] The exemptions enumerated in section four, this chapter, shall not be construed as being applicable in any manner to the provisions of this article.1

792. First Included in the Transfer Tax Law in 1900.

This provision was added to article 10 of the Tax Law by chapter 382, Laws 1900, in effect April 11th of that year, and was re-enacted by chapter 368, Laws 1905, in effect June 1st of that year.

The effect of this section was to render taxable, legacies to various corporations and institutions which were exempt from taxation under section 4 of article 1 of the Tax Law, since article 10, relating to taxable transfers, became a part of the General Tax Law by

1. Chap. 382, Laws 1900- - in effect April 11 of that year. — First added this provision as a new section to the Transfer Tax Law.

Chap. 368, Laws 1905-in effect June 1 of that year. Makes no change therein.

Chap. 62, Laws of 1909 being chapter 60 of the Consolidated Laws changes the number of this section from 243 to 244, and makes slight changes in the phraseology thereof.