New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-10-05
GEORGE J. GOULD MUST PAY.
HELD LIABLE FOR INHERITANCE TAX
ON THE LEGACY FROM HIS FATHER
THE COURT OF APPEALS ALSO DECIDES THAT
JAY GoULD's ESTATE WAS NOT OVER
v~LuED-AN IMPORTANT PREC-
EDENT ESTABLISHED.


EDENT ESTABLISHED.
Albany. Oct. 4.-George J. Gould. by decision
OF the Court Of Appeals rendered to-day. Will
be compelled to pay the State S132.7S4 "A as a
tax on a bequest OF S5,OO0,0O0 left to him by his
father the late Jay Gould. The decision also
declares that the estate OF jay Gould was not
appraised S10.OO0.0OO in excess OF it's actual
value as was contended by the executors. The
Is one Of the most important decided by the
court In many months. II has been at Issue for
the last four years, and In Its disposition prec-
edent is established which In the future will
have great weight In the determination Of cases
arising under the administration of the Taxable
Transfer act
When jay Gould died and his will was offered
for probate the Surrogate Of New-York County
appointed David Mcclure Of New-York City as
appraiser. for the purpose of collecting a tax
under the collateral inheritance statute Of the
State He fixed the taxable value Of the estate
at ST3.615 437 0S and decided that Soooo,ooo LEFT
to George j. Could did not come within the
operation Of the act. it being alleged that the
sum in question was left by the father TO the
son in payment Of debt for services rendered
In a period Of twelve years. Two appeals were
taken from that decision. The executors appealed
from the appraised valuation Of the taxable
property alleging that there was oVerVaiuatlon
Of $40 900 and the Controller OF the state
appealed from the exemption OF the So,o".oW
from taxation contending that a debt, II one
really existed paid in that manner ala not
exempt the amount paid from the operations OF
the Taxable Transfer act. The Surrogate sus-
tanned the appraiser in both Of his conclusions.
The case was appealed TO the Appellate DIVISION
Of the Supreme Court. First Department. and
No cin M
gate. The case was carried to the Court OF APP
peals and argued before that court at Saratoga
In June last John F. Dillon attorney FOR the
Gould estate. presented the arguments for the
Goulds and ex-senator David p. Hill argued on
behalf Of the Controller of the State.
THE ARGUMENTS ON BOTH SIDES.
In relation TO the alleged generalization II was
contended that the appraiser had employed an
erroneous method in determining the market
value Of shares Of stock owned by the estate
He had appraised them at their market value
at the tima Of the appraisal which the Gould
executors declared would have deprecated TO
great extent If an attempt had been made TO
sell them in open market at that time. The
State appealed from tie exemption or the
81 600 OOO from taxation several grounds.
The first was that the alleged obligation OF inc
father to the son was preposterous ~ repL no
dating from the time George j. Gould was SIX
teen years Of age, which was much larger IMAM
that received by the highest salaried man IN
the United States. 1t was also contended that
IL was a subterfuge to defeat the operations or
the taxable transfer act and that If permitted
TO stand as legal would be a precedent that
many others might follow In order to escape
paying the tax imposed. The legal proposition
advanced by the State was that the payment
of debt by bequest succeeding death does not
exempt the property given as compensation
from taxation under the taxable transfer act
The State wins on both propositions. The ap-
praised valuation of the taxable property or
the estate stands. and a tax must be paid on
the S5OOOO00.
Ex-senator Hill said tonight that the case
was one of great Importance but as he had
not read the decision Of the Court OF Appeals
he was not prepared to discuss II. He SAID
that II meant much to the State as prece-
dent for future decisions under the taxable
transfer act. III the court had decided that a
debt paid in the form of bequest would be
exempted from the provisions Of the taxable
transfer act" he said nothing would pre-
vent a continuation Of that practice. perhaps
to degree which would entirely defeat the
operations Of the statute and deprive the State
Of large amount Of revenue to which 1t Is
legally entitled.