In re the Estate of Clark — 29 N.Y. St. Rep. 650

Majority

p. 650

In the Matter of the Estate of D. Lawrence Clark, Deceased.

(Surrogates Court, New York County,

Filed January 15, 1890.)

Headnote

Collateral inheritance tax — Funds oe non-resident decedents, WHEN SUBJECT TO.

Personal property of a non-resident decedent which consists of moneys on deposit or bonds secured by mortgage on property here is subject to the collateral inheritance tax under Laws lb87, chap. 713.

Proceedings to collect collateral inheritance tax.

Decedent was a non-resident of this state, but left both real and personal property herein.

Counsel for executor claims that the personal property, consisting of two bank accounts and a bond secured by mortgage on real estate within this county, is exempt because personal property follows the situs of the owner and this personal property is intangible here.

Section 1 of chap. 713, Laws of 1887, reads as follows: “After the passage of this act all property which shall pass by will * * * or if such decedent was not a resident of this state at the time of death, which property or any part thereof shall be within this state * * * shall be and is subject to a tax of five dollars on every hundred dollars.”

In the Matter of Enston, 113 N. Y., 174 ; 22 N. Y. State Rep., 569, the court of appeals, while holding that under the act of 1885 the property of a non-resident decedent was not subject to this tax, says: By chap. 713 of the Laws 1887, § 1 of the act of 1885 was so amended as to subject to its operation the property within this state of a non-resident decedent * * * ”

In a recent case, State v. Dalrymple, Atlantic Rep., vol. 17, 82, this question is discussgd fully.

The Maryland statute says: “All estates, real, personal and mixed, money, public or private securities for money of every kind, passing from any person who may die seized and possessed thereof, being in this state. * * * ” and the court of appeals held that “being in this state ” refers to the actual situation of the property and not to the constructive situation. The fact that the decedent was a non-resident did not affect the question.

Judge McSherry, in delivering the opinion of the court, says:

p. 651

il The tax, we have said, is on the transmission of the property i being in the state,’ and no reason has been assigned or can be suggested why the broad language of the statute and the evident design of the legislature should be so narrowed and restricted as to exempt from this tax the property of a non-resident actually here, notwithstanding that same property may, for other purposes, be treated as constructively elsewhere. If we adopt the view insisted' on by the appellees, it would result in a discrimination in favor of the non-resident, and against our own citizens, a discrimination, too, which the legislature certainly never intended to make, and -for which no warrant whatever can be found in the plain letter of the statute. In permitting property within the state, upion the death of its owner, to pass by devise, or descent, or distribution, the legislature has seen fit, where strangers or collateral kindred receive it, to exact as the condition upon which that privilege is granted, the tax in question. The imposition and collection of the tax cannot, therefore, depend upon the mere accidental residence of the owner.”

In the case of San Francisco v. Mackey, 22 Fed. Rep., 602 , cited by counsel for executor, Judge Swayne held “ that shares of stock in a corporation are intangible property, the situs of which follows that of the owner, and are tangible where the owner is tangible.” Such shares of stock are simply evidences of indebtedness not held by any person or corporation within the commonwealth, and such a case is easily distinguishable from the case at bar.

In this case the personal property consists of money on deposit, and a bond secured by a mortgage on property here, and in any question arising out of these deposits or this bond, the aid of the courts of this state must be invoked. This property has enjoyed the protection afforded by the laws of this state, and must pay, as the condition upon which the privilege of allowing it to pass is granted, the tax imposed by the law.

Submit order confirming the report of the appraiser and assessing and fixing the tax.