In re the Estate of Sherwell — 35 N.Y. St. Rep. 403

Majority

p. 403

In the Matter of the Estate of Benjamin W. Sherwell, Deceased.^[1]

(Court of Appeals,

Filed January 27, 1891.)

Headnote

Collateral inheritance tax—Exemption—Laws 1887, chap. 713.

Inheritance or testamentary gifts exceeding $500 are not exempt from taxation, under chap. 713, Laws 1887, to the extent of $500. If the inheritance or gift amounts to $500 or more, the act operates to create a liability in favor of the state to the extent mentioned; but if it is less, the act is wholly inoperative.

Appeal from order of the supreme court, general term, second department, reversing order of surrogate which declared that certain legacies, amounting in the aggregate to $4,896.25, were exempt to the extent of $1,500.

Chas. H. Otis, for app’It; P. E. Callahan, for resp’t

The question we are asked to review is, what construction shall be given to so much of § 1 of chapter 713 of the

p. 404

Laws of 1887, as reads: “All property which shall pass by will * * * from any person who may die seized or possessed of the same, * * * to any person or persons, * * * shall be and is subject to a tax of five dollars on every hundred dollars of the clear market value of such property, and at and after the same rate for any less amount, * * * for the use of the state, * * * provided that an estate which may he valued, at a less sum than Jive hundred dollars shall not he subject to such duty or tax.”

The surrogate held that it was the intention of the legislature that all taxable estates should be exempt from taxation to the extent of $500, and he, therefore, allowed a deduction from each of the legacies in question of that amount; leaving the balance for assessment for purposes of taxation under the act. The general term reversed this decision, holding, that the legislative intent was to limit the estates upon which the tax should be imposed.

"We think their decision was clearly right.

The legislature is not controlled as to the extent of taxation of property within the state, and in imposing a special tax upon all persons within a certain class there is no violation of fundamental principles. The tax is one which applies to all cases which are described in the act. Whether the object of the taxation be regarded as the property which passes, or the person who takes, is a wholly immaterial question. The legislature is not restricted in the selection of its subjects for the raising of revenue for state uses. In such respects it is sovereign, and is without other control than the restrictions found in the fundamental law of the state. What it has done in this act of legislation is to impose a •certain tax in every case where there is a succession to or devolution of property of the value.of $500 and upwards. As the tax is made to apply to every estate which is bequeathed or devised to, or inherited by, the persons specified in the act, it is equal, and therefore free from objection on legal grounds. It is not correct to say that this act is one which grants exemption from taxation in certain cases. It defines the cases in which the taxing power is applied as new objects for taxation. If the inheritance or the testamentary gift amounts to $500 or more, then the act operates to create a liability in favor of the state to the extent mentioned; but if it is less, the act is wholly inoperative.

The order of the general term should be affirmed, with costs.

All concur.