In re the Taxation of the Estate of Howard — 27 N.Y. St. Rep. 8

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In the Matter of the Taxation of the Estate of John P. Howard, Deceased.

(Supreme Court, General Term, First Department,

Filed November 7, 1889.)

Headnote

Collateral inheritance tax—Restitution — Code Civ. Pro., §1823.

Section 1323, Code Civ. Pro., does not include a proceeding for restitution of moneys paid for collateral inheritance taxes under an order which has been reversed. Application therefor should be made under § 12 of chap. 713, Laws of Í8S7.

Motion for an order for the restitution of moneys paid to the comptroller of the city of New York for collateral inheritance taxes.

S. B. Brownell, for motion; R. E. Selmes, opposed.

The money for which restitution has been applied for was paid over to the comptroller of the county of New York by the ancillary executors of the estate of John P. Howard, deceased. This payment was made under an order or decree of the surrogate, holding the estate to be liable to taxation under chapter 713 of the Laws of 1887. On appeal from the order, or decree, to the general term, it was reversed, and the decision is reported in 51 Hun, 213 ; 21 N. Y. State Rep., 191.

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The executors’ motion is made upon the fact of this reversal, for restitution of the money under § 1323 of the Code of Civil Procedure, providing that “ Where a final judgment, or order, is reversed, or modified, upon appeal, the appellate court, or the general term of the same court, as the case may be, may make, or compel, a restitution of property, or of a right lost by means of the erroneous judgment, or order.” But this section of the Code cannot be held to include the present application. For by the provisions contained in the law under which the payment was directed to be, and was in fact made, the tax so paid never became any part of the money or property of the city and county of New York It was, on the contrary, paid to and received by the comptroller for the benefit of the state, and under the act it has been made a state tax, and the comptroller was required by § 21 to pay over the amount so received by him to the state treasurer. This section has required taxes obtained in this manner to be reported to the state comptroller on the first Mondays of March and September in each year, and they are required to be paid by the comptroller-of the county to the state treasurer at the times mentioned in this section of the act.

It has not been asserted that the comptroller of the city and county has in any manner failed to discharge this duty. But it has been stated without contradiction, that the money was so paid over by him, as that was directed to be done by this statute, prior to the time when the order or decree of the surrogate was reversed by the general term.. He accordingly has no fund, or money, in his hands out of which restitution can be ordered, and the act does not contemplate that he shall be required to return it to the party who may become entitled to receive it after it has been paid over to the authorities of the state.

A different remedy has been prescribed by the act for the reimbursement of the money. That has been created by the 12th section declaring that, “ When any amount of said tax shall have been paid erroneously to the state treasurer, it shall be lawful for him, on satisfactory proof rendered to the comptroller by said county treasurer, or comptroller, of such erroneous payment, to refund and pay to the executor, administrator, person or persons, who have paid any such tax in error, the amount of such tax so paid, provided that such applications for the payment of such tax shall be made within five years from the date of such payment.”

This is a simple and available proceeding afforded to the party entitled to the reimbursement of the money paid for the tax, and it was without doubt intended to be exclusive for this object. This statute, and the law preceding it, have created a new liability not previously existing under the laws of the state. And a remedy by this section of the act of 1887 has been provided, and it is complete and effectual, to obtain the money after the reversal of the order or decree under which it may have been paid, and was intended, without doubt, to be the only mode of proceeding which should be adopted and followed for that purpose. For it could not have been intended that the law should receive such a con

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struction, or that an obligation should be imposed upon the person paying over the money under its directions to the state authorities, as that upon the reversal of the proceeding on appeal the officer in this manner paying it over should be bound to reimburse to the party making the payment to him the money so disposed of, under the authority and direction of the statute. His duties have been wholly confined to receiving the money, reporting and paying it over, and by discharging these duties in the manner provided by the act he will- relieve himself from all responsibility or liability to refund it upon a reversal of the order or decree requiring its payment

The case in this respect is similar in its principle to Dewey v. Supervisors, etc., 62 N. Y., 294 . There the county of Niagara was sued for the recovery of moneys which had been raised by assessments to pay the expenses of draining certain lowlands. The assessment proceeding had been reversed upon certiorari, but the money had been paid out and disposed of as the law directed it to be by the treasurer of the county before the action was commenced, and that was held to constitute a defense and prevent a recovery against the county. The same principle should be applied here, not only from the nature and provisions of the statute, but from the rule also in this manner maintained by the court. The motion will accordingly be denied.

Yan Brwt, P. J., and Brady, J., concur.