In re Payment of Herr's Will — 27 N.Y. St. Rep. 591

Majority

p. 591

In the Matter of Payment of Legacy under Frederick Herr’s Will.

(Supreme Court, General Term, Second Department,

Filed December 9, 1889.)

Headnote

Collateral inheritance tax—Orphan asylum exempt from.

The Wortburgh Orphan Farm School of Mount Vernon, being clearly a house of industry, its personal property invested for that purpose is exempt from taxation under title 1, chap. 13, § 4, sub. 4, R. 8., and hence a legacy to it is exempt from the collateral inheritance tax under chapter 713, Laws 1887.

Appeal from decree of surrogate holding a legacy to appellant to be subject to collateral inheritance tax under chapter 713, Laws 1887.

J. F. Miller, for app’lt; D. E. Meeker, for resp’t

The testator by his will gave a legacy of $1,000 to the orphan asylum at Mt. Vernon.

The legislature by special act incorporated the Deaconville Institution of the Evangelical Lutheran Church by chapter 161, Laws of 1869. The object of the incorporation was to maintain an orphan farm school at Mt. Vernon.

The corporation was subjected to the restriction and was clothed with the privileges provided in the general law for the incorporation of religious and benevolent associations. Ho exemption from taxation was granted by the charter. The charter was amended by chapter 440, Laws of 1875, and was amended by chapter 106, Laws of 1884, and the name was changed to the Wortburgh Orphan. Farm School of the Evangelical Lutheran Church.

p. 592

¡Neither of these amending acts gave an exemption from taxation. The Wortburgh Orphan Farm School was intended to be the corporation to receive the legacy and the question presented is whether the legacy is subject to the collateral inheritance tax. There being no general exemption by the charter from taxation the collateral tax is chargeable unless there be a special exemption from the operation of the collateral tax law. Catlin v. Trinity College, 113 N. Y., 133 ; 22 N. Y. State Rep., 189.

This special exemption is clearly made in title 1, chapter 13, § 4, sub. 4, Revised Statutes.

This section reads as follows: “ The following property shall be exempt from taxation. * * * Every poor-house, alms-house, house of industry and every house belonging to a company incorporated for the reformation of offenders or to improve the moral condition of seamen, and the real and personal property used for such purposes belonging to or connected with the same.”

If this appellant, being clearly a house of industry, had personal property invested for the support and maintenance of this orphan home, it would be free from taxation under this subdivision. There is no reason why the general money or personal property used for the purposes of the incorporation should be restricted to the furniture of the home or to specific articles contained therein.

The fact that the legislature, in exempting schools and colleges, only exempted1 ‘the furniture belonging to each of them, ” shows that a larger exemption was designed by this section 4, For a school, the building and its furniture is sufficient, but for a home for orphans, who were to be clothed and maintained, something more was needed, and the legislature met this need by the personal property used for the purposes of its support.

In the next subdivision, 5, a complete exemption of libraries is made by the use of the same language as that contained in § 4.

Section 5 exempts “ the real and personal property of every public library.”

If the money is free from taxation after it is obtained, then under this collateral tax law it is free from the collateral tax of five per cent, for the orphan home was “ exempted by law from taxation ” under chapter 713, Laws of 1887.

This seems to be the true construction of § 4, subd. 4, of the title and chapter of the Revised Statutes cited above.

The decree should, therefore, be reversed, with costs to each party out of the estate.

Pratt, J., concurs; Cullen, J., dissents.