#### Matter of the Application of Michael Coogan for a Writ of Mandamus, Etc.

(Supreme Court, Albany Special Term,

May, 1899.)

Taxable transfers — Refunded' after the time to appeal had expired — Mandamus.

A transfer of Ünited States government bonds, given by a specific legacy, is not taxable under chapter 399 of the Laws of 1892, and, although the time to appeal from an order imposing such a-tax has *564expired, the Surrogate has power under the Tax-Law (Laws of 1896,-chap. 908, § 225, as amended by Laws of 1897, chap: '284) to modify his order and direct the tax *té*be refunded, as its original imposition was without jurisdiction; and thereafter the Supreme Court will by mandamus compel the state Comptroller to procure the refund to be made.-

Motioh for a peremptory writ of mandamus.

Buchanan *&*Lawyer and Robert E. Whalen, for petitioner.

Robert B. Bach, for comptroller.

Chester, J.

The petitioner seeks by this proceeding to compel the refunding of a tax which he claims was erroneously paid - on the transfer to him of certain registered bonds of the United States, .under the will of Jesse B. Caster line, who died in Livingston county, November 14, 1894. The bonds in question, as well as other personal property, were- bequeathed to the petitioner under this will. By an order of the Surrogate’s Court of that county,made on the 6th day of May, 1895, a tax was assessed upon this legacy including these bonds, under the law relating to taxable transfers of property. • The amount of this tax upon the bonds, less the discount allowed by law for^payment thereof within six months, was paid by the executors of the- will to the county treasurer of Livingston county, May 13, 1895, and was in turn charged against the legacy of this petitioner, and deducted therefrom as appears by the final -account of the executors, which was judicially passed and settled by said Surrogate’s Court in 1895. On January 9, 1899, upon the application of this petitioner, the same Surrogate’s Court, after notice to thé comptroller of the State, made an order that so much of the order dated the 6th day of May, 1895, as fixed and decreed a tax upon the transfer of said registered bonds: of the United States be vacated, set aside and -in -all things held for naught. . A demand was then made upon the comptroller to direct the county treasurer of Livingston County to refund to the petitioner the amount of such tax, pursuant to section 225 of the Tax' Law. The comptroller having refused to comply with that- demand the petitioner now seeks to compel him so to do.'under the section last referred to. .

The law in respect to taxable transfers of-property in force at the time of the death of the testator only permitted, thefim-positiou*565of such tax upon property “ over which this state has any jurisdiction-for the purpose of taxation.” § 22, chap. 399, Laws 1892.

It does not require the citation of authorities to show that a state in the exercise of the power of taxation has no jurisdiction to tax the obligations of the United States in violation of the provisions of the United States statutes exempting them from taxation. And it has recently been held in this state that United States bonds are exempt from assessment and taxation under the Transfer Tax Law of 1892, because they are. property over which the state had no jurisdiction for the purposes of taxation. Matter of Sherman, 153 N. Y. 1; Matter of Whiting, 150 N. Y. 27.

That being so the surrogate had no jurisdiction to assess a tax on the transfer of these bonds and the tax was not merely an erroneous one, but illegal for want of any jurisdiction to imposó it. Williams v. Board of Supervisors, 78 N. Y. 561; Matter of New York Catholic Protectory, 77 N. Y. 342; National Bank of Chemung v. City of Elmira, 53 N. Y. 49.

The comptroller, however, questions the power of the surrogate to modify or vacate the order assessing the tax on the transfer of these bonds after the time to appeal therefrom has expired.

Under the Code of Civil Procedure, section 2481, subdivision 6, the surrogate has. power to open, vacate, modify or set aside a decree or order of his court “ in a like case, and in the same manner as a court of record, and of general jurisdiction exercises the same powers.”

This may be done upon the" application of any one for sufficient reason in furtherance of justice. Matter of Flynn, 136 N. Y. 287; Ladd v. Stevenson, 112 N. Y. 325.

The case presented to the surrogate was not one, as we have seen, where the order or decree was sought to be modified or vacated because of an irregularity, but because it was void as having been made without jurisdiction.

Freeman, in his well-known work on Judgments, 4th ed., section 98, says: “It is universally conceded that a judgment void for want of jurisdiction over the person of the defendant may be vacated on motion, irrespective of the lapse of time. * * * The decided preponderance of authority justifies, or rather requires, a court on motion being made to vacate its judgment because it was without jurisdiction over the person or the subject-matter, to inquire whether such is the fact, and if* so, to grant the relief sought.”

*566That the surrogate has ' power to vacate so much of a former- decree of his court ‘as- was made' without any jurisdiction, - after the : time to appeal therefrom had expired; was-distinctly held in the •Matter of Underhill, 117 N. Y. 471. That was a- case where a surrogate on a .final accounting of an executor under a will. gave. judgment as a part of a decree of that court, rendered upon the final accounting of an executor, in favor of the executor 'against a legatee for an amount found to have been overpaid to him by the executor, and afterwards vacated that part of the decree giving" such judgment, and an appeal was -taken to the Court of Appeals from an affirmance by the General Term of such order of vacation, and it was said by Mr. Justice Peckham, in writing the opinion of the Court of Appeals, (id. 479) ;

“It is, however, urged by the appellants that if there were no jurisdiction"to incorporate.in the decree the provision which the surrogate has set aside, such provision was but part of a decree upon . a subject-matter over which he had full jurisdiction;, and that any mistake made in any of its parts was an error reviewable on appeal, but the whole decree must stand as it was' entered until a reversal thereof' or a part of 'it on such appeal. This is no.t such a case.

“It is an affirmative, special and separate judgment; although in -form contained in' the general- decree. And it is a judgment which.. the .surrogate was,"as.we have seen, wholly without any jurisdiction to enter. He cannot obtain jurisdiction to enter it by. formally making it a part of a decree which he has authority to make, nor • does he by -such a movement change its essential character of. a ..separate judgment liable to be set aside on motion as was done .in this case.” • ’

• So here, .while the surrogate had authority to assess the estate of the décedéñt upon the value of the taxable estate transferred, under-his will, yet he had no power while exercising that jurisdie- ■ tion to assess a tax upon such transfer of United States bonds as a. part of such estate, because they were property over which this state 'then had ño jurisdiction for the purpese.-o£ taxation.' His order, therefore, to that- effect was an absolute nullity, made without any jurisdiction, and, if I am right-in regarding the Underhill ■ case as m point, he had a right to vacate so much of the order as imposed a tax fipon the transfer of these -bonds to the petitioner even after the time to appeal therefrom had expired.

It, therefore, appears that this petitioner has had his legacy "diminished by the amount which was paid by the executors under *567this transfer tax upon these bonds, which tax was imposed without any authority of law, and without jurisdiction, and that the state, or rather the county treasurer of Livingston county, as the collecting agency of the state, under the law relating to taxable transfers, has the amount which has been paid in liquidation of this unlawful tax, and the question is presented as to whether the state can be compelled to pay the same back to the petitioner. It never belonged to the state; it was unlawfully taken from the executors and by them in turn from the petitioner. He asks for a mandamus to compel it to be refunded to him under section 225 of the act in relation to taxation, as amended by chapter 284 of the Laws of 1897.

The portion of the section under which the application is made is as follows:

“ If after the payment of any tax in pursuance of an order fixing such tax, made by the surrogate having jurisdiction, such order be modified or reversed, on due notice to the comptroller of the state, the state comptroller shall, by order, direct and allow the treasurer of the county, or the comptroller of the city of Hew York, to refund to the executor, administrator, trustee, person or persons, by whom such tax had been paid, the amount of any moneys paid or deposited on account of such tax in excess of the amount of the tax fixed by the order modified or reversed, out of the funds in his hands' or custody, to the credit of such taxes, and to credit himself -with the same in his quarterly account rendered to the comptroller of the state under this act; but no application for such refund shall be made after one year from such reversal or modification.”

The order of January 9, 1899, made by the surrogate was in •effect an order modifying his prior order, fixing the tax, and the case is, therefore, brought within the provision of the statute above quoted.

This provision was first enacted in 1897. It matters not that it was not in the law in forcé at the time of the death of the testator for the procedure or mode of attaining a right is governed by the statute in force when the proceeding is commenced. Matter of Davis, 149 N. Y. 539.

But the statute in force at the time of the death of the testator (chap. 399, Laws of 1892, § 6) contained a provision requiring the comptroller to cause the amount of any erroneous or illegal payment of a tax under the. law to be refunded, so it is not a matter of *568much importance in my opinion which statute applies to this case. Both statutes, however, show that it has .been and, is the policy of the state as clearly expressed in these legislative, enactments to be just enough to its citizens to provide a remedy for refunding taxes under this law which have been erroneously or unlawfully exacted from them.

It is undoubtedly the general rule of law, as urged by the defendant, that an action cannot be maintained to' recover .an illegal tax voluntarily paid under a mistake of law. But that principle can have no application to a case .where, as here, the legislature has provided a remedy for refunding a tax unlawfully collected under this law, regardless of whether it was paid voluntarily or .under duress. Matter of Adams v. Supervisors, 154 N. Y. 619; People ex rel. Edison El. Ill. Co. v. Wemple, 141 N. Y. 471.

Ror do T think this application runs counter to the principle that a mandamus will not lie to compel a public officer to do an act with respect to which he may exercise his discretion, for this is not a case where the refunding rests in the discretion of the comptroller.

The language of the statute in question here is imperative and not permissive. It provides that the “state comptroller *shall*by order direct and allow the treasurer of the county to refund *”*the tax.

It has even been held that where the statute was permissive only and authorized a public officer to do an act for the sake of justice, it will be construed as imperative, and that the execution of the power may be enforced as a duty. People ex rel. Otsego County Bank v. Supervisors of Otsego County, 51 N. Y. 401; People ex rel. Oneida Valley Bank v. Supervisors of Madison County, 51 N. Y. 442; People ex rel. Conway v. Supervisors of Livingston County, 68 N. Y. 114; People ex rel. Reynolds v. Common Council, 140 N. Y. 300.

The motion for a peremptory writ of mandamus is granted, with $50 costs to the petitioner.

Motion granted, with $50 costs.