In re Transfer Tax Upon the Estate of Martin

This is a proceeding under the Transfer Tax Law. The decedent died in London, Eng., March 8,1914. In this proceeding to fix the transfer tax, commenced upon the petition of the state comptroller, the Metropolitan Trust Company, executor under the testator’s will, contends that the intangible property belonging to the estate is tax exempt, for the reason that the decedent died domiciled abroad. The tangible property belonging to the decedent in this jurisdiction is less than $600 and consists of wearing apparel and personal effects, paintings, some books and house furnishings.

The proceeding was originally referred to Mr. John F. Martin, appraiser, and affidavits were filed with him. Thereafter, upon his retirement from office, the proceeding was continued before Mr. William J. Campbell, appraiser, and it was stipulated that the proceedings already taken should be deemed to be taken before the new appraiser. In June, 1915, appraiser Campbell referred the matter to the surrogate for determination of the issue of decedent’s last domicile or residence. Thereafter and on October 22, 1915, the executor, who, in the petition for probate, had alleged that the decedent was resident in Paris, France, and who up to that time in this proceeding had made the contention of a domicile or residence in France, procured an order for the taking of depositions of four witnesses, residents of London, in order to prove that the decedent at the time of his demise was domiciled or resided in London. These depositions have been returned,. The matter now comes on before the surrogate for hearing upon these depositions and the testimony taken before the appraiser. Before entering on a consideration of the facts I will briefly refer to the law governing this matter.

The Transfer Tax Law classifies taxable transfers

The matter is a somewhat complicated one by reason of the extreme mobility of modern times. As Sir William Vernon Harcourt, once said (Foreign Relations U. S., 12431): “ Of all questions of law those which concern domicile are the most complicated and obscure, because they ultimately depend on the intention which is necessarily of all things the most difficult to determine. ’ ’ But perhaps we ought to note that at the time this was so said the books of the law were less clear than they are now on rules regulating proof of intention when regarded as an issuable fact. At the present day intention may be proved just as any other fact is proved, by any relevant evidence. Intention is no longer regarded as hermetically sealed up in a man’s inner consciousness and as incapable of proof. In other words, intent is no longer a “ hidden mystery.” A state of mind is now provable in the same manner as a state of health. Phipson Ev. 52,133, and cases there cited. Declarations of the person whose domicile is disputed are one mode of proving intention. Such declarations are always competent to prove animus or a state of mind or intent. Matter of Newcomb, 192 N. Y., 238 . Any other proof of intention, if legally relevant, is equally competent. But not all declarations of one deceased are of the same weight. Declarations are relevant when made under some circumstances and irrelevant or of trifling value when made under others.

Before entering on the consideration of the facts in this particular case, let me refer, also, to the rules regulating the weight of evidence in such matters as this. Where a domicile of origin or a later domicile of choice is once firmly established by the evidence, in the absence of further proof such domicile so established is presumed to continue, and the onus of proving the contrary is then on those asserting a change of such domicile or residence. Matter of Newcomb, 192 N. Y. 238 . In this matter the domicile of origin of the deceased, as well as his original residence, were established to be in this state. It is now alleged by the executors of Mr. Martin that his domicile of origin, or original residence if you please, was subsequently twice changed by Mr. Martin to a new domicile of his choice. The onus of making out this allegation undoubtedly rests as before stated on his executors in this case.

It will be observed that the Transfer Tax Act now under consideration does not speak of the domicile of taxable persons, but of their residence. In some of the books of the law “ domicile ” and “ residence ” are treated as convertible legal terms, but, as pointed out in Matter of Newcomb, 192 N. Y. 250 , domicile is a more exclusive term of art than residence. I observe that Matter of Newcomb was a succession case, and in some respects there is a distinction between a domicile when regarded for the purposes, of succession and a domicile

In some instances domicile and residence are convertible terms. In Lower Canada, where article 63, Civil Code, requires a marriage to be solemnized at the domicile of one of the parties, the term 61 domicile ’ ’ is held to mean residence, and not to refer to an international domicile. McMullen v. Wadsworth, 59 L. J. P. C. 7,14 App. Cas. 631. But on the other hand, Lord Westbury in Bell v. Kennedy, L. R. 1 Sc. App. 320, said: “ Residence and domicile are two perfectly distinct things. Domicile is an idea of law; it is the relation which the law creates between an individual and a particular locality or country.” Dicey (Conf. Laws, 83, notes) makes some discriminating comments on the confusion of the term “ residence ” as contradistinguished from domicile. In Matter of Newcomb, 192 N. Y. 238 , the Court of Appeals said: “ Residence means living in a particular locality, but domicile means living in that locality with intent to make it a fixed and permanent home. Eesidence simply requires bodily presence as an inhabitant in a given place, while

In Matter of Grant I referred to the principle that domicile always refers to territoriality, not to a particular place in a political territory. 83 Misc. Rep. 262 . In this regard Savigny properly says: “ The principle of domicile is to be regarded as determining, in the ordinary case, the peculiar territorial law to which, as his personal law, every individual is subject.” So Dicey’s Conflict of Laws (69) says: “Les domicilii means the law of the country where a person is domiciled. "The Scotch judge, Lord Jeffry, made the proper distinction in Arnott v. Groom (Ct. Sessions Cas., 1846, 9 D., p. 150): “ I cannot admit that in order to make a domicile it is necessary to have some particular spot within the territory of a law. * * * If the purpose of remaining in the territory be clearly proved, aliter, a particular home is not necessary. ” In my judgment domicile is in law that principle which permits a person to invoke the law of a particular country rather than that of another to which he was formerly subject either by reason of nativity or by subsequent choice. I shall not waste more time in demonstrating that, in the idea of all publicists, domicile relates to territory and not to locality within the territory of a particular state: An invocation of domicile is always an. invocation of the law of a country, not of the law of a city or town. A man is domiciled in a state, e. g., France, England or New York. He resides in London, Paris or Albany. This matter on the statute now before me involves more strictly an application of the legal meaning of the term 1 ‘ resident ’ ’ than an application of the legal meaning of the term 1 ‘ domicile. ’ ’

Whether or not the term residence is or is .not held to be equivalent to domicile at the present stage of legal development in this state, the adjudications on

If there is any distinction to be drawn between the terms domicile and legal residence, I take it that the looser term is residence, and that a change of residence is much more easily made out than a change of domicile. In the application of these abstractions to .this concrete case I shall assume that Mr. Martin’s change of residence could be more easily made out than his change of domicile.

There is another principle to be considered. The main rule governing taxation as applied to a state of our American Union is that its taxes must fall on subject matter within its territorial jurisdiction. Of course, personal property of residents of the state is only taxable because of its fictitious relation to legal residency. Personal property of non-residents is theoretically not within the jurisdiction of a state for the purposes of taxation. The adjudications to the contrary giving an independent situs irrespective of the domicile of the owner for taxing purposes only is an exception to a general rule of law, and consequently, as it ought to be, of very limited application.

In cases of this kind, where an obvious effort is made to escape taxation in the domicile of origin by a con

The decedent, Mr. Martin, was born in Albany, N. Y., in 1849 and was educated in Albany. He never married. It appears that Mr. Martin at one period became a member of the Tenth Regiment, National Guard of the state of New York, and was promoted to the rank of colonel in that organization. About 1885 Mr. Martin removed to New York city, and there he lived in a house on Twenty-first street, which was furnished with some articles taken from his parents’ home and brought to New York from Albany by Mr. Martin. Later it seems that Mr. Martin resided with his sister in the city of New York, and for a time at the Murray Hill Hotel, in the same city. Upon the opening of the Plaza Hotel, New York city, in October, 1907, Mr.

Mr. Martin’s places .of residence, sojourn and itinerary prior to 1904 are not so clearly set forth in the record as they are for the period subsequent to 1904. Mr. Martin’s movements during the later period are given in much greater detail by his man-servant, one Frederick C. Smith, who entered Mr. Martin’s employment in the autumn of 1904. Later we find Mr. Martin at the Berkeley Hotel, in London, after coming from Paris, and after staying in London for a week he came to New York, where he remained for about four months, then going to Palm Beach. About the month of July, loo's, Mr. Martin went to England and stayed there six weeks and then went to Scotland, where he remained about two months. Then after a stay in London, Mr. Martin returned to New York in October, 1905. In June, 1906, Mr. Martin went abroad and traveled about in England and Scotland until October, 1906, when he again returned to New York. After remaining in New York, stopping at the Murray Hill Hotel until the end of April, Mr. Martin visited Italy, and after a month’s sojourn in that country he went to Paris. During his stay in Paris, of about two months, he occupied rooms at the Palace Hotel, Champs

Thus it appears that from 1904 on and up to the time of his brother’s death in February, 1913, Mr. Frederick Townsend Martin always returned to the Plaza Hotel, New York city. He habitually wintered in New York, making a short trip during the season to Palm Beach, so as to be there during the gaiety. He usually went abroad in the early summer to England and the Continent and returned to New York to the Plaza Hotel in the autumn of each year.

While Mr. Martin was in England he ordinarily stopped at the Berkeley Hotel in Piccadilly. In December, 1913, upon the death of his intimate friend, Mr. Henry M. Sands, Mr. Martin was bequeathed all Mr. Sands’ jewelry and his furniture, books, paintings and household effects which were in the apartment at No. 48 Avenue Gabrielle, and he was also bequeathed the sum of $25,000. Mr: Martin voluntarily regarded the pecuniary bequest as one intended to provide a place where the articles left by Mr. Sands could be kept, but this was a sentimental reason only. It appears that in December, 1913, Mr. Martin made the first payment of £3,000 on the purchase of a dwelling house, known as No. 6 Great Cumberland place, London, agreeing to pay the balance on March 25,1914.

A considerable portion of the last few months of de7 cedent’s life was devoted to acquiring furniture, paintings and other articles suitable for fitting up the house at No. 6 Great Cumberland place, London, as a resi

In examining the contention of the estate in this proceeding and in determining whether or not the residence of Mr. Martin was within this jurisdiction at the time of his death, certain well -established principles must be applied. It is well settled that “ domicile ” includes something more than residence. As the decedent was born in this state, educated in this state and until 1890 did not maintain any semblance of a residence without the state, his domicile up to 1890 was undoubtedly within this state. As the executor urges a domicile outside of this jurisdiction, that domicile must be deemed to be one of choice. It superseded the domicile of origin. The burden, as stated before, is upon the executor to establish such change. Matter of Newcomb, 192 N. Y. 238 . The burden is not upon the state comptroller to establish a New York residence, as seems to be the contention of the learned counsel for the estate. That contention is based upon the assumption that a residence in Paris was established. The learned counsel for the state comptroller does not contend that the New York domicile originated only when the Paris residence ceased in 1915, but correctly urges that his domicile of origin was within this jurisdiction and that it continued the legal domicile. The testator’s domicile is deemed to continue here, in the absence of affirmative proof establishing a domicile elsewhere. The only facts and circumstances which are relied upon to point to a domicile in Paris are Mr. Martin’s temporary occupancy of the apartment, 48 Avenue Gabrielle, and various

A good deal of evidence has been directed to Mr. Martin’s declaration contained in his published writings. It seems to me that this is a very light character of evidence. Whatever Mr. Martin may have been, it is evident that he was not technically or professionally “ a man of letters.” He ought not, I think, to be held to account for volatile utterances contained in his slight literary performances. Declarations to be evidence must be made under more solemn circumstances than is evident in books such as Mr. Martin’s. Declarations to be evidence ought, to be spontaneous utterances connected with some competent res gestae. They should not be declamations or apostrophes contained in books published by an amiable and untrained

In my judgment too much attention has been paid to the nature of Mr. Martin’s Paris residence, as that fact is really immaterial, at this time, to a correct solution. During the time that the Paris apartment was maintained, as Mr. Martin had his rooms at the Plaza Hotel and his conduct in no way evidences a conclusive intention to make Paris his home, the evidence points emphatically to a continuation of the New York domicile of origin. When a notice was received, for example, from the commissioner of taxes in this city, Mr. Martin appeared on the 8th day of November, 1912, and procured an exemption on the ground that he had no taxable assets. The notice referred to Mr. Martin as of 505 Fifth avenue, and his deposition before the commissioner gives his residence at the Plaza Hotel. In the same year Mr. Martin was served with a notice to attend before, the commissioner of jurors, for the purpose of qualifying as a juror. Mr. Martin attended accordingly and claimed exemption on the ground that he had been a member of the National Guard. He did not urge non-residence though the notice addressed to him stated his residence at the Plaza, and his business address at 505 Fifth avenue, in the city of New York.

The will of the testator describes him as of the city and state of New York, and much importance is attached to this recital. The will was executed April 29,

The real inquiry concerns the assertion that Mr. Martin acquired a domicile in London- during the last few months of his life. As has been before pointed out, the executor first urged that Paris was Mr. Martin’s last residence. It was only after these proceedings had been begun that London was asserted to be his last legal residence. It is immaterial, for the purposes of this proceeding, that Mr. Martin sometimes resided in a particular country other than New York. The legal question is whether his domicile of origin in this state was ever relinquished in favor of a domicile or residence in England. In a determination of the latter question it is important, as a subordinate consideration, to notice that the executor bases the claim of exemption from taxation upon the acquisition of a domicile or residence in London, succeeding an earlier domicile in Paris. The executor did not at first urge

In or after 1914, it appears that Mr. Martin purchased a residence in London and devoted a considerable portion of his time to furnishing it. He went about among the London shops acquiring furniture and ornaments for this new house, and he purchased some of the contents of the house from one Mrs. G-oudy, the former owner of the premises. While making these purchases it seems that various declarations were made by Mr. Martin in the different shops which he visited. Such declarations are contained in the depositions of three of the witnesses. The substance of these declarations is that Mr. Martin intended to make his permanent residence at No. 6 Great Cumberland place, London. Up to this time this bachelor had for years really been without any regular home. He was a mere “ bird of passage,” stopping mainly at hotels. He had no regular residence; he was here to-day and off to-morrow. But when he acquired a dwelling house in London he did an act which in law

Before concluding I will for a moment consider the .alleged errors in the reception of evidence by the appraiser. The executor urges various errors. Petitioner’s exhibit “ D,” which is the letter head of the American Embassy Association, contains merely cumulative testimony and should be disregarded. The identity of the person referred to in exhibit “ C ” was sufficiently established to allow its introduction in evidence; not only was there a presumption of identity from similarity of names (Douler v. Prudential Ins. Co., 143 App. Div. 537 ), but there was also a positive identification. The appraiser excluded the record of the commissioner of jurors, and all that was before him was the jury notice, which was shown to have been received by Mr. Martin.

The letter which was offered in evidence as exhibits “ E,” “ F,” and “ G,” bearing date March 4, 1914, was properly received. The carbon copy of the letter was not introduced as secondary evidence or in any way in lieu of the original. The state comptroller did not offer the paper in evidence as a written declaration of the testator, but as Mr. Parsons’ memorandum of the verbal declarations made to him on March 4,1914,

In the case at bar, moreover, the memorandum can be disregarded. The witness Parsons stated that he could give the substance of the dictation without reference to the letter, though he did not remember the exact words. But any error in the reception of the memorandum is harmless in this case. Proceedings, before appraisers are in the nature of inquisitions, and the common-law rules of evidence regulating trial by jury ought not to be strenuously insisted on to the prejudice of the state. Substantial justice is all that can be required.

My final conclusion is that, the evidence makes out that for taxing purposes Mr. Martin’s last residence was in London, Eng., and nowhere else. I have given perhaps more consideration to this matter than its real importance required, but it concerns an issue now frequently arising in this jurisdiction.

Decreed accordingly.