In re the Estate of Wolfe — 50 N.Y. St. Rep. 122

Majority

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In the Matter of the Estate of Catharine L. Wolfe, Deceased.

(Supreme Court, General Term, First Department,

Filed December 16, 1892.)

Headnote

Collateral inheritance tax—Liability of executors.

The surrogate having no jurisdiction in a proceeding under § 13 of the act of 1885 to determine the question of exemption of legatees, his adjudication on that question is no protection to the executors, and they remain personally liable for the tax on the legacies although they have paid over the legacies to the legatees in good faith.

Appeal by the district attorney of the county of New York from so much of the decree of the surrogate as exempts the executors of Miss Wolfe from personal liability for the collateral

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inheritance tax assessed against Grace church and the Metropolitan Museum of Art.

In this proceeding by the district attorney to compel payment of the collateral inheritance tax, it appeared that decedent died April 4, 1887; that a proceeding was begun by her executors in June, 1887, under the collateral inheritance tax act, chap. 483, Laws 1885, § 13, to appraise property passing to various legatees, in which an order was made in October, 1887, by the surrogate, declaring certain legacies not liable on the ground that the legatees were exempted by law from taxation. The executors subsequently paid over the legacies in full. The comptroller was not made a party to the proceedings. In October, 1890, the district attorney filed his petition, under §§ 16 and 17 of the act. to compel the executors and legatees to pay the tax upon the legacies, whereupon they pleaded the order of October, 1887, as an adjudication in bar to the proceedings. The surrogate overruled the defense as to the legatees, but held that, as the executors had acted in good faith upon the previous order in paying the legacies, they were relieved from personal liability under the statute.

De Lancey Nicoll, dist. att’y (B. P. Dos Passos, of counsel), for app’lt;

A P. Nash and H. H. Man, for resp’ts.

The facts involved in this appeal are the same as those in the case decided herewith, in which the question of the liability of Grace church and the Metropolitan Museum of Art to the tax has been discussed and disposed of, and, therefore, it is not necessary in this opinion to repeat what has already been said therein.

In the decree holding the said institutions liable for the tax, the learned surrogate also held that the executors of the decedent were not personally liable for the amount of the tax due upon the legacies to said legatees nor for the costs and disbursements herein.

The theory upon which the decision is based was that the executors had acted in good faith, relying upon the decree of the surrogate’s court, in paying over the legacies in question without retaining the amount of the tax. But if the view which we have arrived at upon the appeal relative to the liability of these institutions for the tax is correct, then we do not see how the executors can escape the liability imposed by statute. If the surrogate has no jurisdiction in the proceeding to entertain the question which he did of the exemption of these institutions from the inheritance tax, then it is difficult to see how such decree could be a protection to anybody for anything done in pursuance thereof.

If the surrogate had no jurisdiction, he had no power to make a decree which would be of any effect whatever.

If the question related merely to a matter of regularity in a proceeding of which the surrogate had jurisdiction, then, perhaps, the conclusion at which he arrived might have been upheld. But where no jurisdiction of the subject matter, viz., of the question of exemption of these corportions from the tax, has been obtained by the surrogate, his adjudication upon that subject is ab

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solutely null and void. Therefore, as we have held that the surrogate had no jurisdiction in the proceeding to determine this question of exemption, it necessarily follows that the liabilities of parties remained precisely the same as though no such proceedings had been instituted. We think, therefore, that this portion of the decree with reference to the personal liability of the executors was wrong, and should be reversed.

As to the question of costs and disbursements of the proceedings, that was a matter within the discretion of the surrogate, and he had a right to make the adjudication as to them which he did.

The decree, therefore, should be modified in the respect named, and affirmed as modified, without costs.

O’Brien and Barrett, JJ., concur.